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• Annual Report 2018-19
Shaping the future of software driven business
The details of changes in Retained Earnings are as follows:
(In
`
Million)
Particulars
For the year
ended
March 31, 2019
For the year
ended
March 31, 2018
Opening balance
9,544.13
8,525.07
Net profit for the year
3,516.79
3,230.88
Other comprehensive income for the year (Remeasurements of defined
benefit schemes)
(47.15)
106.88
Dividend (including tax on dividend)
(1,017.41)
(950.23)
Transfer to general reserve
(1,260.03)
(1,368.47)
Transfer to capital redemption reserve
(8.81)
-
Transfer to Special Economic Zone re-investment reserve
(70.00)
-
Closing balance
10,657.52
9,544.13
Please refer “Other Equity” under Statement of Changes in Equity in the consolidated financials for details.
Effective portion of cash flow hedges
The Company derives a substantial part of its revenues in foreign currency while a major part of its expenses is incurred in
Indian Rupees. This exposes the Company to the risk of loss due to fluctuations in foreign currency rates.
The following chart shows movement of monthly spot and forward rates of the Rupee against the USD in Financial year 2018-19,
indicating the volatility that the currency faced throughout the year:
The Company follows a Foreign Exchange Risk Management Policy as approved by its Board of Directors to mitigate the
currency fluctuation risk. The Company has a 12-months forward cover at defined range of its net projected export earnings.
As per the accounting principles laid down in Ind AS 109 – “Financial Instruments” relating to cash flow hedges, derivative
financial instruments which qualify for cash flow hedge accounting are fair valued at balance sheet date and the effective
portion of the resultant loss / (gain) is debited / (credited) to the hedge reserve under other comprehensive income and the
ineffective portion is recognized in the statement of profit and loss. Derivative financial instruments are carried as forward
contract receivable when the fair value is positive and as forward contract payable when the fair value is negative.
Changes in the fair value of derivative instruments that do not qualify for hedge accounting are recognized in the statement
of profit and loss as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, or terminated, or exercised, or no longer
qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognized under other comprehensive
income is transferred to the statement of profit and loss when the forecasted transaction occurs or affects profit or loss or
when a hedged transaction is no longer expected to occur.
Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
66.61
66.00
67.00
68.00
69.00
70.00
71.00
72.00
73.00
74.00
66.65
67.54
68.47
68.61
70.96
72.48
73.59
71.64
70.61
71.05 71.16
69.11
66.83 66.87 67.11
67.00
67.37 67.33 67.10 67.17 66.95 67.33
68.33
Spot and Forward rate movement (USD/INR)
Closing
Avg Hedge Rate