Integrated Annual Report 2024-25 324 (ii) The movements in Cash Flow Hedge Reserve for instruments designated in a cash flow hedge are as follows: Rupees crores Particulars 2025 2024 Balance as at the beginning of the year................................................................................................................................................... 3.44 7.16 (Gains) / Losses transferred to Profit or Loss on occurrence of the forecast transaction................................... 0.65 (12.37) Change in fair value of effective portion of cash flow hedges................................................................................................. (1.49) 7.40 Total.................................................................................................................................................................................................................................... (0.84) (4.97) Deferred tax effect on above............................................................................................................................................................................ 0.21 1.25 Balance as at the end of the year................................................................................................................................................................. 2.81 3.44 Of the above: Balance relating to continuing hedges........................................................................................................................................................ 2.81 3.44 (iii) Sensitivity Analysis Foreign Currency Sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. Rupees crores Particulars Currency Change in rate Effect on profit before tax Effect on pre-tax equity* Year ended 31st March, 2025.................................................................................... USD / INR 10% 61.74 — EUR / INR 10% (0.75) — Year ended 31st March, 2024........................................................................................ USD / INR 10% 38.98 — EUR / INR 10% 1.46 — * Related to items directly accounted in reserves only. The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. (b) Credit risk management Credit Risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company’s exposure are continuously monitored. (i) Financial Guarantees In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks. The Company’s maximum exposure in this respect is the maximum amount, the Company would have to pay, if the guarantee is called on. The amount recognised in Balance Sheet as other financial liabilities and maximum exposure details are as given below: Rupees crores Particulars 2025 2024 Maximum exposure................................................................................................................................................................................................... 1,222.25 828.51 Amount recognised as liability ........................................................................................................................................................................ 6.58 11.22 39. Financial instruments (contd.)
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