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Atul Ltd
|
Annual Report 2009-10
11 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 Company’s risk
management strategy.
(a) The Company has entered into the following derivatives:
(1) 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
Contracts
Type
US$
equivalent
(crores)
March 31, 2009
31
Sell
0.57
March 31, 2010
3
Buy
0.04
(2) The Company has outstanding currency option contracts (hedging instruments) which are bought in addition
to forward contracts, to hedge a part of its highly probable forecasted export transactions.
As at
No of
Contracts
US$
equivalent
(crores)
March 31, 2009
8
5.15
March 31, 2010
8
3.35
(3) 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
Contracts
US$
equivalent
(crores)
March 31, 2009
3
0.28
March 31, 2010
-
-
(ii) Currency Swap to hedge against fluctuations in changes in exchange rate and Interest Rate
As at
No of
contracts
US$
equivalent
(crores)
Euro
equivalent
(crores)
March 31, 2009
2
0.36
-
March 31, 2010
2
0.20
-
(b) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise
are given below:
Amounts receivable or payable in foreign currency on account of the following:
Current Year
Previous Year
Particulars
US$
equivalent
(crores)
Euro
equivalent
(crores)
Others
equivalent
(crores)
US$
equivalent
(crores)
Euro
equivalent
(crores)
Others
equivalent
(crores)
Debtors
2.34
0.45
0.01
1.68
0.34
0.01
Creditors - (GBP 1402.41)
0.92
-
0.02
0.31
0.01
-
Loans Taken
1.44
-
-
1.94
-
-
Schedule
forming part of the Consolidated accounts
SCHEDULE 16 NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
(contd)
127