Annual Report 2016-17

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148 • Annual Report 2016-17
The details of changes in Retained Earnings are as follows:
(In ` Million)
Particulars For the year
ended
March 31, 2017
For the year
ended
March 31, 2016
Opening balance 7,303.39 6,664.37*
Net proot for the year 3,014.65 2,772.99
Other comprehensive income for the year (Remeasurements of deoned beneot
schemes)
(39.13) 179.60
Dividend (including dividend distribution ta[) (577.72) (1,251.73)
Transfer to general reserve (1,176.12) (1,061.84)
Closing balance 8,525.07 7,303.39
*After considering Ind AS adjustments of ` 571.51 Million on orst time adoption
Please refer “Other Equity” under Statement of Changes in Equity in the consolidated onancials for details.
Effective portion of cash pow hedges
The Company derives a substantial part of its revenues in foreign currency while a major part of its e[penses are
incurred in Indian Rupees. This e[poses the company to the risk of puctuations in foreign currency rates. During the
year, the Company has increased its global footprint whereby there is an increase in e[penditure in foreign currency,
which has resulted in a reduction in net foreign currency e[posure.
The following chart shows movement of monthly closing rates of the Rupee against the USD in Financial year 2016-17,
indicating the volatility that the currency faced throughout the year:
66.50
67.08
67.51
67.04 67.04
66.61 66.87
68.64
67.95 67.87
66.76
64.85
63
64
65
66
67
68
69
USD/INR
MONTH
Closing Rate
The Company follows a Foreign E[change Risk Management Policy as approved by its Board of Directors to mitigate the
currency puctuation risk. The Company hedges a deoned range of its net projected e[port earnings on 12 months rolling
basis through forward contracts with banks.
As per the accounting principles laid down in Ind AS 109 – “Financial Instruments” relating to cash pow hedges,
derivative onancial instruments which qualify for cash pow 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 proot and loss. Derivative onancial 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 proot and loss as they arise.