in a Dynamic Environment - Domain-b

Annual Report 2008-09The use of hedging instruments is governed by the Company's policies approved by the board of directors, whichprovide written principles on the use of such financial derivatives consistent with the Company's risk managementstrategy.Hedging instruments are initially measured at fair value, and are remeasured at subsequent reporting dates. Changesin the fair value of these derivatives that are designated and effective as hedges of future cash flows are recogniseddirectly in shareholders' funds and the ineffective portion is recognised immediately in profit and loss account.Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognisedin profit and loss account as they arise.Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or nolonger qualifies for hedge accounting. At that time for forecasted transactions, any cumulative gain or loss on thehedging instrument recognised in shareholders’ funds is retained there until the forecasted transaction occurs. If ahedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in shareholders' fundsis transferred to profit and loss account for the period.o) InventoriesRaw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost isdetermined on a weighted average basis. Purchased goods in transit are carried at cost. Work-in-progress is carriedat the lower of cost and net realisable value. Stores and spare parts are carried at cost, less provision for obsolescence.Finished goods produced or purchased by the Company are carried at the lower of cost and net realisable value. Costincludes direct material and labour cost and a proportion of manufacturing overheads.p) Government GrantsGovernment grants are recognised when there is reasonable assurance that the Group will comply with the conditionsattaching to them and the grants will be received.Government grants whose primary condition is that the Group should purchase, construct or otherwise acquirecapital assets are presented by deducting them from the carrying value of the assets. The grant is recognised asincome over the life of a depreciable asset by way of a reduced depreciation charge.Other government grants are recognised as income over the periods necessary to match them with the costs forwhich they are intended to compensate, on a systematic basis.q) Provisions, Contingent Liabilities and Contingent AssetsA provision is recognised when the Group has a present obligation as a result of past event and it is probable that anoutflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made.Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on bestestimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet dateand adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements.A Contingent asset is neither recognised nor disclosed in the financial statements.r) Cash and cash equivalentsThe Group considers all highly liquid financial instruments, which are readily convertible into cash and haveoriginal maturities of three months or less from the date of purchase, to be cash equivalents.2) a) Particulars of subsidiaries, associates and joint venturesName of the Company Country of Percentage of Percentage ofIncorporation voting power voting poweras at March 31, as at March 31,2009 2008Subsidiaries (held directly)APOnline Limited India 89.00 89.00C-Edge Technologies Limited India 51.00 51.00CMC Limited India 51.12 51.12Diligenta Limited UK 76.00 76.00MP Online Limited India 89.00 89.00172