2.0.0.10 false Note 20 - Derivative Instruments Hedging and Risk Management Activities 00919 - Disclosure - Note 20 - Derivative Instruments Hedging and Risk Management Activities true false false false 1 usd $ false false Dollars Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 2 Notes to Financial Statements [Abstract] 0 pbra_NotesToFinancialStatementsAbstract pbra false na duration string No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false No definition available. false 3 Note 20 - Derivative Instruments, Hedging and Risk Management Activities 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> 20.  Derivative Instruments, Hedging and Risk Management Activities The Company is exposed to a number of market risks arising from its normal course of business. Such market risks principally involve the possibility that changes in interest rates, foreign currency exchange rates or commodity prices will adversely affect the value of the Companys financial assets and liabilities or future cash flows and earnings. The Company maintains a corporate risk management policy that is executed under the direction of the Companys executive officers. In 2004, the Executive Committee of Petrobras set up the Risk Management Committee composed of executive managers from all the business departments and from a number of corporate departments. This committee, as well as having the objective of assuring integrated management of exposures to risks and formalizing the main guidelines for the Companys operation, aims at concentrating information and discussing actions for risk management, facilitating communication with the executive offices and the Board of Directors in aspects related to best corporate governance practices. The risk management policy of the Petrobras System aims at contributing towards an appropriate balance between its objectives for growth and return and its level of risk exposure, whether inherent to the exercise of its activities or arising from the context within which it operates, so that, through effective allocation of its physical, financial and human resources the Company may attain its strategic goals. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> The Company may use derivative and non-derivative instruments to implement its corporate risk management strategy. However, by using derivative instruments, the Company exposes itself to credit and market risk. Credit risk is the failure of a counterparty to perform under the terms of the derivative contract. Market risk is the possible adverse effect on the value of an asset or liability, including financial instruments that results from changes in interest rates, currency exchange rates, or commodity prices. The Company addresses credit risk by restricting the counterparties to such derivative financial instruments to major financial institutions. Market risk is managed by the Companys executive officers. The Company does not hold or issue financial instruments for trading purposes. a)   Commodity price risk management The Company is exposed to commodity price risks as a result of the fluctuation of crude oil and oil product prices. The Companys commodity risk management activities are primarily undertaking through the uses of future contracts traded on stock exchanges; and options and swaps entered into with major financial institutions. The Company does not use derivatives contracts for speculative purposes. The Company does not usually use derivatives to manage overall commodity price risk exposure, taking into consideration that the Companys business plan uses conservative price assumptions associated to the fact that, under normal market conditions, price fluctuations of commodities do not represent a substantial risk to achieving strategic objectives. The decision to enter into hedging or non-hedging derivatives is reviewed periodically and recommended, or not, to the Risk Management Committee. If entering into derivative is indicated, in scenarios with a significant probability of adverse events, and such decision is approved by the Board of Directors, the derivative transactions should be carried out with the aim of protecting the Companys solvency, liquidity and execution of the corporate investment plan, considering an integrated analysis of all the Companys risk exposures. Outstanding derivatives contracts were entered into in order to mitigate price risk exposures from specific transactions, in which positive or negative results in the derivative transactions are totally or partially offset by the opposite result in the physical positions. The transactions covered by commodity derivatives are: certain cargoes traded from import and export operations and transactions between different geographical markets. As a result of the Company currently price risk management, the derivatives are contracted as short term operations, to mitigate the price risk of specific forecasted transactions. The operations are carried out on the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE), as well as on the international over-the-counter market. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> a)   Commodity price risk management (Continued) The Companys exposure from these contracts is limited to the difference between the contract value and market value on the volumes contracted. Crude oil future contracts are marked-to-market and related gains and losses are recognized in currently period earnings, irrespective of when the physical crude sales occur. The main parameters used in risk management for variations of Petrobras oil and oil products prices are the cash flow at risk (CFAR) for medium-term assessments, Value at Risk (VAR) for short-term assessments, and Stop Loss. Corporate limits are defined for VAR and Stop Loss. The hedges settled during the period from January to December 2009 corresponded to approximately 17% of the traded volume of imports and exports to and from Brazil plus the total volume of the products traded abroad. The main counterparts of operations for derivatives for oil and oil products are the New York Stock Exchange (NYMEX), Intercontinental Exchange (ICE), BP North America Chicago, Morgan Stanley and TOTAL. The commodity derivatives contracts are reflected at fair value as either assets or liabilities on the Companys consolidated balance sheets recognizing gain or losses in earnings, using market to market accounting, in the period of change. As of December 31, 2009, the Company had the following outstanding commodity derivative contracts that were entered into: <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''''''''Times New Roman'''''''''''''''; FONT-SIZE: 9pt" border="0" cellspacing="0"> <tr> <td></td> <td width="2%"></td> <td width="40%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Commodity Contracts Maturity 2009 </td> <td style="BORDER-BOTTOM: #000000 1px solid"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Notional amount in thousands of bbl* As of December 31, 2009 </td> </tr> <tr> <td colspan="3"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Futures and Forwards contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">9,585 </td> </tr> <tr valign="bottom"> <td align="left">Options contracts </td> <td> </td> <td align="right">1,150 </td> </tr> <tr> <td colspan="3" align="left"></td> </tr> <tr valign="bottom"> <td colspan="3" align="left">* A negative notional value represents a sale position.</td> </tr> </table> </div>   At December 31, 2009, the portfolio for commercial operations carried out abroad, as well as the derivatives for their protection through derivatives for oil and oil products, presented a maximum estimated loss per day (VAR - Value at Risk), calculated at a reliability level of 95%, of approximately US$26. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> b)   Foreign currency risk management Exchange risk is one of the financial risks that the Company is exposed to and it originates from changes in the levels or volatility of the exchange rate. With respect to the management of these risks, the Company seeks to identify and handle them in an integrated manner, seeking to assure efficient allocation of the resources earmarked for the derivative. Taking advantage of operating in an integrated manner in the energy segment, the Company seeks, primarily, to identify or create natural risk mitigation, benefiting from the correlation between its income and expenses. In the specific case of exchange variation inherent to the contracts with the cost and remuneration involved in different currencies, this natural risk mitigation is carried out through allocating the cash investments between the real and the US dollar or another currency. The management of risks is done for the net exposure. Periodical analyses of the exchange risk are prepared, assisting the decisions of the executive committee. The exchange risk management strategy involves the use of derivative instruments to minimize the exchange exposure of certain Companys obligations. Petrobras Distribuidora (wholly owned subsidiary) entered into an over the counter contract, not designated as hedge accounting, for covering the trading margins inherent to exports (aviation segment) for foreign clients. The objective of the operation, contracted contemporaneously with the definition of the cost of the products exported, is to lock the trading margins agreed with the foreign clients. Internal policy limits the volume of derivative contracts to the volume of products exported. The volume of hedge executed for the exports occurring between January and December 2009 represented 66.0% of the total exported by Petrobras Distribuidora. The settlements of the operations that matured between January 1 and December 31, 2009 generated a positive result for the Company of US$19. The over the counter contract is reflected at fair value as either assets or liabilities on the Companys consolidated balance sheets recognizing gains or losses in earnings, using market to market accounting, in the period of change. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> As of December 31, 2009, the Company had the following foreign currency derivative contracts, not designated as hedging accounting, that were entered into: <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''''''Times New Roman'''''''''''''; FONT-SIZE: 9pt" border="0" cellspacing="0"> <tr> <td width="25%"></td> <td></td> <td width="25%"></td> </tr> <tr valign="bottom"> <td align="left"> </td> <td> </td> <td align="right">Notional </td> </tr> <tr valign="bottom"> <td align="center">Foreign Currency </td> <td> </td> <td align="right">Amount </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Maturing in 2009 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">US$ million </td> </tr> <tr> <td colspan="3"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Sell USD / Pay BRL </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">76 </td> </tr> </table> </div>   At December 31, 2009, the forward derivative contract presented a maximum estimated loss per day (VAR Value at Risk), calculated at a reliability level of 95%, of approximately US$1. At December 31, 2009, REFAP did not have any outstanding foreign currency swap transactions. Cash flow hedge In September 2006, the Company contracted a hedge known as a cross currency swap for coverage of the bonds issued in Yens in order to fix the Companys costs in this operation in dollars. In a cross currency swap there is an exchange of interest rates in different currencies. The exchange rate of the Yen for the US dollar is fixed at the beginning of the transaction and remains fixed during its existence. The Company does not intend to settle these contracts before the end of the term. The Company has elected to designate its cross currency swap as cash flow hedges. Both at the inception of a hedge and on an ongoing basis, a cash flow hedge must be expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the hedge. Derivative instruments designated as cash flow hedges are reflected as either assets or liabilities on the Companys consolidated balance sheets. Change in fair value, to the extent the hedge is effective, is reported in accumulated other comprehensive income until the cash flows of the hedged item occurs. Effectiveness tests are conducted quarterly in order to measure how the changes in the fair value or the cash flow of the hedged items are being absorbed by the hedge mechanisms. The effectiveness calculation indicated that the cross currency swap is highly effective in offsetting the variation in the cash flows of the bonds issued in Yens. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> As of December 31, 2009, the Company had the following cross currency swap, which was entered into: <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''Times New Roman'''''''''; FONT-SIZE: 9pt" border="0" cellspacing="0"> <tr> <td width="40%"></td> <td width="2%"></td> <td width="13%"></td> <td width="2%"></td> <td></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="left">Cross Currency Swaps Maturing in 2016 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">% </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">Notional Amount (Million) </td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Fixed to fixed </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> </tr> <tr valign="bottom"> <td align="left">Average Pay Rate (USD) </td> <td> </td> <td align="center">5.69 </td> <td> </td> <td align="right">US$298 </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Average Receive Rate (JPY) </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">2.15 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">JPY$35,000 </td> </tr> </table> </div>   At December 31, 2009, the cross currency swap presented a maximum estimated loss per day (VAR - Value at Risk), calculated at a reliability level of 95%, of approximately US$19. c) Interest rate risk management The Companys interest rate risk is a function of the Companys long-term debt and to a lesser extent, its short-term debt. The Companys foreign currency floating rate debt is principally subject to fluctuations in LIBOR and the Companys floating rate debt denominated in Reais is principally subject to fluctuations in the Brazilian long-term interest rate (TJLP) as fixed by the National Monetary Council. The Company currently does not utilize derivative financial instruments to manage its exposure to fluctuations in interest rates. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> d)   Tabular presentation of the location and amounts of derivative fair values The effect of derivative instruments on the statement of financial position for the year ended December 31, 2009. <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''''Times New Roman'''''''''''; FONT-SIZE: 8pt" border="0" cellspacing="0"> <tr> <td></td> <td width="1%" align="center"></td> <td width="20%" align="center"></td> <td width="1%" align="center"></td> <td width="10%" align="center"></td> <td width="1%" align="center"></td> <td width="20%" align="center"></td> <td width="1%" align="center"></td> <td width="10%" align="center"></td> </tr> <tr valign="bottom"> <td align="center">In millions of dollars </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" colspan="3" align="center">Asset Derivatives </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid; TEXT-INDENT: 5px" colspan="3" align="center">Liability Derivatives </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">As of December 31, </td> <td style="BORDER-BOTTOM: #000000 1px solid"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" colspan="3" align="center">2009</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" colspan="3" align="center">2009</td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td align="center">Balance Sheet </td> <td> </td> <td align="center">Fair </td> <td> </td> <td align="center">Balance Sheet </td> <td> </td> <td align="center">Fair </td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Location </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Value </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Location </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Value </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Derivatives designated as hedging instruments under Codification Topic 815 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 2px" align="left">    Foreign exchange contracts </td> <td> </td> <td align="left">Other current assets </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">65 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">-</td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total </td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">65 </td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">-</td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Derivatives not designated as hedging instruments under Codification Topic 815 </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff; TEXT-INDENT: 2px" align="left">    Foreign exchange contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Other current assets </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">1 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Other payables and accruals </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">-</td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 2px" align="left">    Commodity contracts </td> <td> </td> <td align="left">Other current assets </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">35 </td> <td> </td> <td align="left">Other payables and accruals </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(51)</td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">36 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">(51)</td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total Derivatives </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">101 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">(51)</td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%"> The effect of derivative instruments on the statement of financial position for the year ended December 31, 2008. <div align="left"> <table style="FONT-SIZE: 8pt; WIDTH: 100%; FONT-FAMILY: ''''''''''Times New Roman''''''''''" cellspacing="0" border="0"> <tr> <td></td> <td width="1%"></td> <td width="20%"></td> <td width="1%"></td> <td width="10%"></td> <td width="1%"></td> <td width="20%"></td> <td width="1%"></td> <td width="10%"></td> </tr> <tr valign="bottom"> <td align="center">In millions of dollars </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Asset Derivatives </td> <td> </td> <td style="TEXT-INDENT: 6px; BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">Liability Derivatives </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">As of December 31, </td> <td style="BORDER-BOTTOM: #000000 1px solid"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2008</td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" colspan="3">2008</td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td align="center">Balance Sheet </td> <td> </td> <td align="center">Fair </td> <td> </td> <td align="center">Balance Sheet </td> <td> </td> <td align="center">Fair </td> </tr> <tr valign="bottom"> <td align="center"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Location </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Value </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Location </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Value </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 1px; BACKGROUND-COLOR: #cceeff" align="left">Derivatives designated as hedging instruments under Codification Topic 815 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 3px" align="left">Foreign exchange contracts </td> <td> </td> <td align="left">Other current assets </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right"> 47 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right"> - </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> <tr valign="bottom"> <td align="left">Total </td> <td> </td> <td align="left"> </td> <td> </td> <td align="right">47 </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 1px" align="left">Derivatives not designated as hedging instruments under Codification Topic 815 </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> <td> </td> <td align="left"> </td> </tr> <tr valign="bottom"> <td style="TEXT-INDENT: 3px; BACKGROUND-COLOR: #cceeff" align="left">Foreign exchange contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Other current assets </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">- </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Other payable and accruals </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">2 </td> </tr> <tr valign="bottom"> <td align="left"> Commodity contracts </td> <td> </td> <td align="left">Other current assets </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right"> 69 </td> <td> </td> <td style="TEXT-INDENT: 1px" align="left">Other payables and accruals </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">7 </td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">69 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="right">9 </td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="9"> </td> </tr> <tr valign="bottom"> <td align="left">Total Derivatives </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">116 </td> <td> </td> <td align="left"> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 3px double" align="right">9 </td> </tr> </table> </div>   </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%"> The effect of derivative instruments on the statement of financial position for the year ended 31, December 2009. <div align="left"> <table style="FONT-SIZE: 9pt; WIDTH: 100%; FONT-FAMILY: ''''''''''''''Times New Roman''''''''''''''" cellspacing="0" border="0"> <tr> <td></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="17%"></td> <td width="1%"></td> <td width="21%"></td> <td width="1%"></td> <td width="19%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Derivatives in Codification Topic 815 Cash Flow Hedging Relationship </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) reclassified from Accumulated OCI into Income (Effective portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in income on derivative (Inefective Portion and Amount Excluded from Effectiveness Testing) </td> </tr> <tr valign="bottom"> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2009 </td> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2009 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2009 </td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Foreign exchange contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">9 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial Expenses </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">18 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">9 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">18 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> </table> </div>   The effect of derivative instruments on the statement of financial position for the year ended 31, December 2008. <div align="left"> <table style="FONT-SIZE: 9pt; WIDTH: 100%; FONT-FAMILY: ''''''''''''''Times New Roman''''''''''''''" cellspacing="0" border="0"> <tr> <td></td> <td width="1%"></td> <td width="19%"></td> <td width="1%"></td> <td width="17%"></td> <td width="1%"></td> <td width="21%"></td> <td width="1%"></td> <td width="19%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Derivatives in Codification Topic 815 Cash Flow Hedging Relationship </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) reclassified from Accumulated OCI into Income (Effective portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in income on derivative (Inefective Portion and Amount Excluded from Effectiveness Testing) </td> </tr> <tr valign="bottom"> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2008 </td> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2008 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2008 </td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Foreign exchange contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">(20)</td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial Expenses </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">(10)</td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> <tr> <td colspan="9"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">(20)</td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">(10)</td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> </table> </div>     </div> <div style="PADDING-RIGHT: 0%; PADDING-LEFT: 0%"> <div align="left"> <table style="FONT-SIZE: 9pt; WIDTH: 100%; FONT-FAMILY: '''''''''''''Times New Roman'''''''''''''" cellspacing="0" border="0"> <tr> <td width="30%"></td> <td width="2%"></td> <td width="42%"></td> <td width="2%"></td> <td width="24%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Derivatives Not Designated as Hedging Instruments under Codification Topic 815 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) Recognized in Income on Derivative </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in Income on Derivative </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2009 </td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Foreign Exchange Contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial income/expenses net </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">(32)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Commodity contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial income/expenses net </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">(150)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Total </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">(182)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr> <td style="BACKGROUND-COLOR: #cceeff" colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Derivatives Not Designated as Hedging Instruments under Codification Topic 815 </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center" rowspan="2">Location of Gain or (Loss) Recognized in Income on Derivative </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Amount of Gain or (Loss) Recognized in Income on Derivative </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">December 31, 2008 </td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Foreign Exchange Contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial income/expenses net </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">(32)</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Commodity contracts </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="center">Financial income/expenses net </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">243</td> </tr> <tr> <td colspan="5"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Total </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left"> </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">211</td> </tr> </table> </div>     </div> 20.  Derivative Instruments, Hedging and Risk Management Activities The Company is exposed to a number of market risks arising from its normal course of false false false This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 false false 1 2 false UnKnown UnKnown UnKnown false true