Derivative Instruments And Hedging Activities

9 Months Ended

Sep. 30, 2011

Derivative Instruments And Hedging Activities [Abstract]

Derivative Instruments And Hedging Activities

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company enters into foreign exchange forward contracts & currency option contracts where the counter party is a bank. The Company purchases foreign exchange forward contracts & currency option contracts to mitigate the risk of changes in foreign exchange rates on cash flows denominated in certain foreign currencies. These contracts are carried at fair value with resulting gains or losses included in the consolidated statements of income in other income.

During the quarter ended September 30, 2011, the Company entered into foreign exchange forward contracts with a notional amount of $55.0 million and with maturity dates of one to four months. During the quarter ended September 30, 2011, contracts amounting to $10.0 million expired. At September 30, 2011, foreign exchange forward contracts amounting to $75.0 million were outstanding. The fair value of the foreign exchange forward contracts of $4.41 million is reflected in other current libilities in the balance sheet of the Company as at September 30, 2011. During the quarter ended September 30, 2011, forward contract loss of $3.39 million, pertaining to direct client related contracts is recorded as negative other income and forward contract loss of $2.40 million, pertaining to intercompany related contracts is recorded as other comprehensive income/(loss).

During the quarter ended September 30, 2011, the Company did not enter into currency option contracts.