Mr MRV , i beg to differ...financial derivatives maybe dangerous but they have a purpose. People also lose money on Equity shares...isnt that a gamble ? would you then stop stock exchanges?
Use of exchange traded derivatives makes it very transparent compared to OTC derivatives. It would be infact very good for the Indian markets if exchange traded derivatives are used. also if ICICI lost money on derivatives, were u not happy when TCS used them to protect their margins against Re appreciation..
corporates have exposures to Forex risks and not using derivatives (not hedging) is also a gamble.
what needs to be ensured is that they donot indulge in speculation.(which is not their job). But its up to the boards to decide whether they allow speculation or not.Its a corporate governance and control issue.
I have traded copper derivatives in my previous job and it serves a purpose in managing the company risks...it helps to smooth ur profits and ensure u r protected against Currencies and Copper..
just because a few organisations go wrong, doesnt mean u throw out the baby with the bath water. One needs to be prepared for what is there rather than dig ur head into the ground like an ostrich hoping tht danger will pass away.
as far ICAI is concerned...i am not too sure how much they understand what they are dealing with anyway. I guess IFRS will give us a very good guidance as to what needs to be followed.( i dont rate ICAI too highly, its just an organisation pr
