Atul Ltd 2008-09

Schedules forming part of the Account s | Annual Report 2008-09 SCHEDULE 16 NOTES FORMING PART OF THE ACCOUNTS (Contd.) 18 The use of Derivative instruments is governed by the policies of the Company approved by the board of Directors, which provide written principles on the use of such financial derivatives consistent with the risk management strategy of the Company. (1) The Company has entered into the following derivatives: (a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The following are the outstanding forward exchange contracts entered into by the Company: As at No of Type US$ equivalent contracts (lacs) March 31, 2008 33 Sell 400.00 March 31, 2009 31 Sell 57.00 (ii) Currency swaps to hedge against fluctuations in changes in exchange rate and interest rate: As at No of US$ equivalent Euro equivalent contracts (lacs) (lacs) March 31, 2008 4 60.76 23.37 March 31, 2009 2 36.01 - (b) Company has outstanding currency option contracts (hedging instruments) which are bought by the Company, in addition to forward contracts, to hedge a part of its highly probable forecasted export transactions. As at No of US$ equivalent contracts (lacs) March 31, 2008 7 540.00 March 31, 2009 8 515.00 (c) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency risk on its capital account. (i) Interest rate swaps to hedge against fluctuations in interest rate changes: As at No of US$ equivalent contracts (lacs) March 31, 2008 3 70.00 March 31, 2009 3 27.50 US$Euro Others Others US$Euro Others Others equivalent equivalent equivalent equivalent equivalent equivalent (lacs) (lacs) (lacs) (lacs) (lacs) (lacs) Debtors 167.79 34.41 0.65 324.56 67.09 0.75 Creditors 30.99 1.18 0.01 70.36 11.33 - Loans taken 193.93 - - 555.26 - - 77 (2) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: (a) Amounts receivable in foreign currency on account of the following: Particulars As at March 31, 2009 As at March 31, 2008