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Schedules forming part of the accounts(All amounts in crores of rupees except share data and unless otherwise stated)Schedule 20: Significant accounting policies and notes to the accounts (Contd.)documentation to be contemporaneous in nature, the Company appoints independent consultants for conducting a TransferPricing Study to determine whether the transactions with associated enterprises are undertaken, during the financial year, on an“arms length basis”. Adjustments, if any, arising from the transfer pricing study in the respective jurisdictions are accounted foras and when the study is completed for the current financial year. However the management is of the opinion that its internationaltransactions are at arms’ length so that the aforesaid legislation will not have any impact on the financial statements.11. Derivative Financial InstrumentsThe Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities, forecasted cash flowsdenominated in foreign currency. The use of derivatives to hedge foreign currency forecasted cash flows is governed by theCompany’s strategy, which provide principles on the use of such forward contracts and currency options consistent with theCompany’s Risk Management Policy. The counter party in these derivative instruments are banks and the Company considersthe risks of non-performance by the counterparty as non-material. A majority of the forward foreign exchange/option contractsmature between one to twelve months and the forecasted transactions are expected to occur during the same period. TheCompany does not use forward contracts and currency options for speculative purposes.The following table presents the aggregate contracted principal amounts of the Company’s derivative contracts outstanding: -Foreign CurrencyAs at30 June 2010As at30 June 2009Sell CoversRupee EquivalentU.S. Dollar/INR 1,314.22 3,703.90Sterling Pound/INR 65.09 66.98Euro/INR 58.19 76.291,437.50 3,847.17Buy CoversU.S. Dollar/INR 366.88 -366.88 -OptionsAs at30 June 2010Rupee EquivalentAs at30 June 2009Purchase OptionsU.S. Dollar 65.02 -Range OptionsU.S. Dollar 139.32 -Euro/INR 28.52 -Total 232.86 -The following table summarizes activity in the Hedging Reserve related to all derivatives classified as cash flow hedges duringthe years ended 30 June 2010 and 2009.ParticularsYear ended30 June 2010Year ended30 June 2009Loss as at the beginning of the year (775.09) (490.63)Unrealized gain/ (losses) on cash ow hedging derivatives during the year 197.05 (591.68)Net losses reclassied into net income on occurrence of hedged transactions 478.07 244.52Net losses reclassied into net income as hedged transactions are not likely to occur - 62.70Loss as at the end of the year (refer note 1 and 2 below) (99.97) (775.09)91
Schedules forming part of the accounts(All amounts in crores of rupees except share data and unless otherwise stated)Schedule 20: Significant accounting policies and notes to the accounts (Contd.)As of the balance sheet date, the Company’s net foreign currency exposure that is not hedged is Rs. 3,754.76 (30 June 2009 –Rs. 2,332.10).Notes:1. Balance as at year end is gross of deferred tax assets of Rs. 7.51 crores (previous year Rs. 132.30 crores).2. At 30 June 2010, the estimated net amount of existing gains/ (loss) that is expected to be reclassified into the incomestatement within the next twelve months is Rs. 99.97 crores [previous year Rs. (609.34) crores].12. The details of investments in mutual funds/ bonds and their movements during the year are provided below:i) Details of Investments in bonds - Other than trade and unquotedParticulars Face Value Balance as at30 June 201092Balance as at30 June 2009Units Amount Units Amount10.75% Exim Bank Bonds 2008-09 (Series L-01) 1000000 - - 100 10.0011.10% Exim Bank Bonds 2008-09 (Series L-01) 1000000 - - 100 10.00IRFC Tax Free Bonds (Series 68) 100000 5,000 50.00Total 5,000 50.00 - 20.00ii) Details of Investments in mutual funds - Other than trade and unquoted-Long TermParticulars Face Value Balance as at30 June 2010Balance as at30 June 2009Units Amount Units AmountDSPML FMP- 12 M -Series 1 Growth 10 - - 10,000,000 10.00DSPML FMP- 12 M -Series 3 Growth 10 - - 10,000,000 10.00Total - 20.00iii) Details of Investments in mutual funds - Other than trade and unquoted - Current InvestmentsParticulars Face Value Balance as at30 June 2010Balance as at30 June 2009Units Amount Units AmountGrowthICICI Prudential Medium Term Plan-Prem Plus 10 94,513,918 95.00 - -Daily DividendIDFC Cash Fund Plan-C 10 4,414 0.00 - -Weekly DividendICICI Prudential Banking & PSU Debt Fund 10 25,030,125 25.08 - -Fortnightly DividendHDFC High Interest Fund-Short Term Plan 10 48,197,379 51.06 - -Monthly dividendBirla Sun Life Dynamic Bond Fund 10 83,300,723 86.66 - -Birla Sunlife Medium Term Plan 10 50,057,242 50.50 - -Birla Sunlife Saving Fund-Institutional 10 49,275,015 50.46 - -HDFC Cash Management Fund-Treasury Advantage 10 100,534,368 101.06 - -Plan -Whole saleHDFC Short Term Fund 10 14,791,788 15.28 - -ICICI Prudential Short Term Plan IP 10 20,809,636 25.18 - -IDFC Money Manager Fund-Investment Plan IP Plan B 10 101,566,031 102.03 - -Reliance Short Term Fund 10 66,649,228 70.91 - -SBI Short Horizon Debt Fund-Short Term 10 23,332,055 25.26 - -TATA Liquid Fund-Super High Investment Plan 1000 80,761 9.00 - -Tata Fixed Income Portfolio Fund SchemeA3 10 15,017,853 15.02 - -Reliance Quarterly Interval Fund Series III 10 24,993,796 25.00 - -TOTAL 747.50
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CONTENTSBoard of Directors 2Managem
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MANAGEMENT DISCUSSION AND ANALYSISI
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When looking at the growth opportun
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on reusable components and framewor
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developing best practices, developm
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Outsourcing costs includes (a) outs
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FISCAL 2010 COMPARED TO FISCAL 2009
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DIRECTORS’ REPORTDear Shareholder
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DEBENTURESDuring the year, the Comp
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eing, if the employee is satised, h
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(iii) Future plan of actionYour Com
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ANNEXURE 3 TO THE DIRECTORS’ REPO
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Administrator’s interpretation of
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independent view to the Company’s
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Nature of expertise in functional a
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5. Ms. Robin AbramsS. No. Name of t
Page 41 and 42: usiness environment including busin
Page 43 and 44: management, or their relatives, etc
Page 45 and 46: Nominations CommitteeThe Nomination
Page 47 and 48: General Body MeetingsThe location a
Page 49 and 50: The Bombay Stock Exchange Ltd. (BSE
Page 51 and 52: f) Categories of shareholders as on
Page 53 and 54: 158, Arcot Road VadapalaniChennai-
Page 55 and 56: Hyderabad CentersGround & First Flo
Page 57 and 58: AUDITORS’ CERTIFICATEREGARDING CO
Page 60: Financial Statements
Page 63 and 64: (iv)(v)(vi)(vii)(viii)(ix)In our op
Page 65 and 66: Balance Sheet as at 30 June 2010(Al
Page 67 and 68: Cash Flow statement for the year en
Page 69 and 70: Schedules to the accounts(All amoun
Page 77 and 78: Schedules forming part of the accou
Page 91: Schedules forming part of the accou
Page 104: Consolidated Statements
Page 107 and 108: Consolidated Balance Sheet(All amou
Page 109: Consolidated Cash flow statement(Al
Page 112 and 113: Schedules to the consolidated accou
Page 118 and 119: Schedules to the consolidated finan
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Statement regarding Subsidiary Comp
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Statement regarding Subsidiary Comp
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