 

‘oreign currency sensitivity analys:

Movement in the functional currencies of the various operations of the Company against major foreign currencies may impact the Company's
revenues from its operations. Any weakening of the functional currency may impact the Company's cost of imports and cost of borrowings and
consequently may increase the cost of financing the Company's capital expenditures.

‘The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency anda
parallel foreign exchange rates shift in the foreign exchange rates of each currency by 1%, which represents Management's assessment of the
reasonably possible change in foreign exchange rates.

‘The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financials instruments. The
following table details the Company’s sensitivity movement in the unhedged foreign exposure:

Currency 1% Strengthening of FC
December 31 March 312020 March 312019 March 312018

 

2020
usp (50.69) (3737) (38.67) (3431)
JPY (0.19) (0.02) (2.29) (1.43)
EUR (1.42) (1.89) (0.39) 1.01
SGD % < (0.00) (0.01)
GBP 0.00 (0.00) (038) 2
CHF % (0.00) (0.02) (0.00)

(52.30) (39.28) (41.75) (34.74)

A depreciation of foreign currencies would have the opposite effect to the impact in the table above.

‘The following table details the forward foreign currency contracts outstanding at the end of the reporting period:

Foreign Currency Equivalent value Fair value of contracts
Cash Flow Hedges December March31 December March31 December = March 31
312020 2020 312020 2020 312020 2020
Sell USD 4.91 0.15 361.07 10.70 358.51 11.18

Note:
Included in the balance sheet under ‘other current financial liabilities’. [Refer Notes 20 of Annexure VII]. For the purpose of relevance, details for
the two most recent reporting periods are disclosed.

Interest rate risk management:

‘The Company is exposed to interest rate risk pertaining to funds borrowed at both fixed and floating interest rates. The risk of floating interest
rates in foreign currency loans is managed by the Company by the use of interest rate swap contracts. Hedging activities are evaluated regularly
to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies.

Interest rate sensitivity analysis

‘The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period. For floating rate
liabilities which are unhedged, the analysis is prepared assuming that the amount of the liability as at the end of the reporting period was
outstanding for the whole year. An increase or decrease of 50 basis point in rupee interest rates and 25 basis points in USD libor rate is used
when reporting interest rate risk internally to key management personnel and represents Management's assessment of the reasonably possible
change in interest rates.

 

 

 

 

 

| | Effect of Change in interest -
Increase in Outstanding as on
Base Rate Bascrate rates
31-Dec-20 | 31-Mar-20 [ 31-Dec-20 | 31-Mar-20
USD Libor 25 bps 0.91 - 363.80 :
INR Baserate 50 bps 15.71 18.77 3,142.87 3,753.68
3,506.67 3,753.68

 

 

 

 

 

 

 

A decrease in interest rates would have the opposite effect to the impact in the table above.

Foreign currency and interest rate sensitivity analysis for swap contracts

‘The Company has taken interest rate swap (IRS) contracts for hedging its interest rate risks related to certain external commercial borrowings.

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