Annual Report cb smile - Jet Airways

Significant Accounting Policies and Notes to Accounts (contd.)
j) Income Tax demands which are under appeals are Rs. 1,386 lakhs (Previous Year Nil).
The Company is a party to various legal proceedings in the normal course of business and does not expect the
outcome of these proceedings to have any adverse effect on its financial conditions, results of operations or cash
flows.
3) During the year the Company purchased and sold Current Investments in Debt Schemes of various Mutual Funds
as detailed below :
Mutual Fund No. of Units Face Value Cost of Units
(in lakhs) (Rupees) (in lakhs)
SBI Mutual Fund 31,576 10 631,850
Reliance Mutual Fund 368 10 7,701
Barclays Global Investors Mutual Fund
- EURO 10 1 Euro 675
-USD 352 1 USD 17,010
-GBP 315 1 GBP 23,359
4) DISCLOSURE ON DERIVATIVES
(a) The Company has entered into certain derivative contracts viz. interest rate swaps (IRS), currency options, IRS
cum currency swaps, etc in order to hedge and manage its foreign currency exposures towards future export
receivables and foreign currency borrowings. Such derivative contracts which are in the nature of firm
commitments and highly probable forecast transactions are entered into by the company for hedging purposes
only and does not use the same for trading or speculation purposes.
Nominal amounts of derivatives contracts entered into by the Company and outstanding as on 31st March, 2010
amount of Rs. 126,036 lakhs (Previous Year Rs. 165,638 lakhs). The category-wise break-up thereof is as
under:
Amount (Rs. in lakhs)
Particulars 2009-10 2008-09
No. of Amount No. of Amount
Contracts Contracts
Interest Rate Swaps 3 106,413 3 120,206
Currency Options 1 12,123 1 18,259
Currency Swaps - - 1 12,173
IRS cum Currency Swaps 1 7,500 2 15,000
Based on the Announcement of The Institute of Chartered Accountants of India “Accounting for Derivatives”
along with the principles of prudence as enunciated in Accounting Standard (AS-1) “Disclosure of Accounting
Polices” the Company has accounted for outstanding derivative contracts at fair values as at the balance sheet
date.
On that basis, the fair value of the derivative instruments as at 31st March, 2010 aggregating to Rs. 7,045 lakhs
has been credited (Previous Year Rs. 10,073 lakhs has been debited) to the Profit and Loss Account and
disclosed as exceptional item in the current year. The (credit) / charge on account of derivative (gains)/losses
has been computed on the basis of MTM values based on the confirmations from the counter parties.
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