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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