CONSOLIDATED ACCOUNTS 425 39. Capital management The Group’s capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term /long term debt as may be appropriate. The Group determines the amount of capital required on the basis of its product, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate. The capital structure is monitored on the basis of net debt to equity and maturity profile of overall debt portfolio of the Group. The retail loan finance business of the companies in financial service business is subject to the capital adequacy requirements of the Reserve Bank of India (RBI) and National Housing Bank (NHB). Under capital adequacy guidelines, these companies are required to maintain a capital adequacy ratio consisting of Tier I and Tier II Capital. The total of Tier II Capital at any point of time, shall not exceed 100 percent of Tier I Capital. The Group companies in the financial services business have complied with all regulatory requirements related to regulatory capital and capital adequacy ratios as prescribed by RBI and NHB. Net Debt and Equity other than financial services segment is given in the table below: Rupees crores Particulars 2024 2023 Total Equity.............................................................................................................................................................................................................................................. 57,534.48 50,346.37 Net Debt Short term debt...................................................................................................................................................................................................................................... 2,789.12 4,127.05 Long term debt........................................................................................................................................................................................................................................ 2,324.99 3,450.59 Gross Debt................................................................................................................................................................................................................................................... 5,114.11 7,577.64 Less: Current investments............................................................................................................................................................................................................................. 10,883.59 11,247.44 Cash and Bank Balances................................................................................................................................................................................................................... 10,472.04 7,312.77 Net Debt (16,241.52) (10,982.57) Total Capital deployed.................................................................................................................................................................................................................... 41,292.96 39,363.80 40. Financial instruments Financial Risk Management Framework In the course of its business, the Group is exposed to a certain financial risks namely credit risk, interest risk, currency risk & liquidity risk. The Group’s primary focus is to achieve better predictability of financial markets and seek to minimize potential adverse effects on its financial performance. The financial risks are managed in accordance with the risk management policy which has been approved by Board of Directors of the respective Group companies. Board of Directors of financial services businesses have established Asset and Liability Management Committee (ALCO), which is responsible for developing and monitoring risk management policies for their businesses. The financial services businesses are exposed to high credit risk given the unbanked rural customer base and diminishing value of collateral. The credit risk is managed through credit norms established based on historical experience. (a) Market Risk Management Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates etc. could affect the Group’s income or the value of its holdings of financial instruments including cash flow. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while maximising the return. (i) Currency Risk The Group’s exposure to currency risk relates primarily to the Group’s operating activities including anticipated sales & purchase and borrowings where the transactions are denominated in foreign currencies. The Group’s foreign currency exposures are managed within approved parameters. The Group hedges its foreign currency risk mainly by way of Forward Covers. Other derivative instruments may also be used if deemed appropriate. The carrying amounts of the Group’s foreign currency exposure at the end of the reporting period are as follows: Rupees crores Particulars US Dollar Euro JPY KRW Others Total As at 31st March, 2024 Financial Assets ............................................................................. 3,287.88 108.52 4.60 0.92 562.23 3,964.15 Financial Liabilities ....................................................................... 1,833.35 130.02 1,304.38 7.42 203.02 3,478.19 As at 31st March, 2023 Financial Assets ............................................................................. 1,055.27 1,944.10 1.36 — 877.51 3,878.24 Financial Liabilities ....................................................................... 1,577.52 2,013.41 1,750.01 3.08 80.85 5,424.87
RkJQdWJsaXNoZXIy NTE5NzY=