president & cfo - UB Group

Schedules forming part of account for the year ended March 31, 2009 (Contd.)11. Borrowing Costs Rs. Million2009 2008Interest included in the Closing Stock of Malt and Grape Spirit under maturation 82.643 38.11712. Foreign Currency Transactionsa) The Company has marked to market all the outstanding derivative contracts on the Balance Sheet date and hasrecognised the resultant loss amounting to Rs. Nil (2008: Rs 55.238 Million) during the year.b) As on March 31, 2009, the Company has the following derivative instruments outstanding:i) Interest and currency swap arrangement (USD-INR) amounting to USD 35 Million (2008: USD 35 Million).c) The year end foreign currency exposures that have not been hedged by a derivate instrument or otherwise are asunder:i) Loans and Advances to Subsidiaries USD 76.086 Million, GBP 55.200 Million, Euro 24.750 Million (2008: USDii)216.400 Million, GBP 57.850 Million, Euro 19.250 Million).FCNR Nil (2008: USD 22.260 Million).d) The central Government vide notification dated March 31, 2009 has amended Accounting Standard (AS-11)- TheEffects of changes in Foreign Exchange Rates, notified under the Company’s (Accounting Standard) Rules, 2006.The Company has exercised the option stated in Paragraph 46 of AS 11 retrospectively from April 1, 2007.As a result, the Company has changed its accounting policy for recognition of exchange differences arising onreporting of long term foreign currency monetary items, with the exception of exchange differences arisingon a monetary item that, in substance, forms part of an enterprise’s net investment in a non-integral foreignoperation, at rates different from those at which they were initially recorded during the period or reported inprevious financial statements, which hitherto were charged to the Profit and Loss Account, as below:(i) In so far as they relate to the acquisition of depreciable capital assets, are added to or deducted from thecost of asset and are depreciated over the balance life of the asset. This, however, did not have any impacton the results for the year ended March 31, 2009; and(ii) In other cases, the said exchange differences are accumulated in a ‘Foreign Currency Monetary Item TranslationDifference Account’ and amortised over the balance period of such long term asset/liability but not beyondMarch 31, 2011. Exchange difference recognised in the Profit and Loss Account upto last financial year endingMarch 31, 2008 relating to said long term monetary items in foreign currency aggregating to Rs.93.245Million (net of deferred tax Rs. 48.014 Million) has been debited to the opening revenue as provided in therules. As a result of this change in accounting for exchange difference, net profit for the year is lower byRs.170.089 Million. The amount remaining to be amortised in the financial statement as on March 31, 2009is Rs.311.347 Million.59