DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

On December 8, 2008, the Company entered into an interest rate swap with a notional amount of $20.0 million to economically hedge a portion of the cash flows from its floating rate revolving credit facility.  Under the terms of the interest rate swap, the Company paid a fixed rate of 2.4% on the $20.0 million notional amount and received payments from a counterparty based on the 1 month LIBOR rate for a term that ended December 8, 2011.  Interest rate differentials paid or received under the swap agreement were recognized as adjustments to interest expense.

The (losses) gains recognized in the Company’s Consolidated Statements of Operations as a result of the interest rate swap were as follows:

	Three months ended December 31,			Nine months ended December 31,
	2011			2011
Realized losses
Interest rate swap - included as a component of interest expense	$	(82,716	)	(305,459	)
Unrealized gains
Interest rate swap- included as a component of other income	$	108,975		319,235

The Company does not enter into derivative financial instruments for trading or speculative purposes.  The purpose of this swap was to reduce the exposure to variability in future cash flows attributable to a portion of its LIBOR-based borrowings.  The Company did not account for this swap using the cash flow hedge accounting provisions of FASB ASC Topic 815-10-15; therefore, the changes in fair value of the swap was included in earnings as other income or expenses.

By using derivative instruments, the Company is exposed to credit and market risk.  Credit risk, which is the risk that a counterparty to a derivative instrument will fail to perform, exists to the extent of the fair value gain in a derivative.  Market risk is the adverse effect on the financial instruments from a change in interest rates.  The Company manages the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken.  The market risk associated with derivatives used for interest rate risk management activities is fully incorporated in the Company’s market risk sensitivity analysis.