Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: empanelment :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: TDS :: list of goods taxed at 4%
 
 
« Forex »
 Perils of an ad hoc forex policy
 Rupee depreciated by 17 paise to Rs 45.62 a dollar in early trade
 Rupee strengthened by 7 paise against dollar
 Rupee up by 4 paise against dollar in early trade
 Rupee falls by 18 paise at 4-week low against dollar
 Rupee drops on weak shares; inflation eyed
 Rupee raises 6 paise against dollar in early trade
 Rupee among most traded in futures market
 Indian rupee gain 12 paise against US dollar
 Rupee marginally rise up by 1 paise against US dollar
 Rupee drops tracking euro, choppy shares

Forex losses eat into profits of India Inc
December, 14th 2009

Foreign exchange derivatives contracts, which a large number of Indian companies entered into in 2007 and 2008, have taken a heavy toll on India Incs financials during 2008-09. However, the impact went unnoticed because of some crucial changes in accounting norms last year allowing these losses to be kept off the profit & loss statement.

A report by Edelweiss Capital calculated that in BSE 100 companies which comprise the 100 most valued firms in India the total foreign exchange-related loss for the year was a whopping Rs 43,000 crore.

Of this number, mark-to-market (MTM) losses, which mainly relates to forex derivatives contracts, aggregated Rs 24,300 crore. The numbers were arrived at from individual disclosures by these companies in their annual reports, Edelweiss analysts said. These losses could be in multiples if one considers all the listed and unlisted companies in India which had bought forex exchange derivatives from a clutch of banks during 2007 and 2008.

The main reason for such huge losses was depreciation of the Indian rupee against US dollar during 2008-09. Edelweiss now expects that the appreciating rupee will lead to paring of these MTM losses for India companies. For every 10% appreciation of the rupee, aggregate MTM gains during the current financial year (FY10), for the BSE 100 companies, will be about Rs 12,200 crore, it said.

However, there is widespread expectation that based on the recovery in the US, the dollar is going to appreciate against most currencies, including the rupee. In case it does, these Indian companies could again stare at further MTM losses rather than gains as expected by the broking house, market players said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions