Scheduleforming part of the Balance Sheet - Domain-b

Annual Report 2007-2008
Schedule 12 : Notes on Consolidated Balance Sheet and Profit and Loss Account
1. Basis of Consolidation:
(a) The Consolidated Financial Statements relate to The Indian Hotels Company Ltd. (‘the Company’) its Subsidiaries,
Jointly Controlled Entities and Associates. The Company, its subsidiaries and jointly controlled entities together consti
tute ‘the Group’. The Consolidated Financial Statements have been prepared on the following basis:
— The financial statements of the Company and its Subsidiaries have been combined on a line-by-line basis by
adding together the book values of like items of assets, liabilities, income and expenses, after eliminating intragroup
balances, intra-group transactions and unrealised profits or losses as per Accounting Standard 21 ‘Consoli
dated Financial Statements’, as notified by the Companies (Accounting Standards) Rules, 2006.
— In case of foreign subsidiaries and foreign jointly controlled entities, revenue items are consolidated at the average
exchange rate prevailing during the year. The opening balance in Profit and Loss Account and the opening balance
in Reserves and Surplus have been converted at the rates prevailing as at the respective Balance Sheet dates. All
assets and liabilities as at the year-end are converted at the rates prevailing as at the end of the year. Any exchange
difference arising on consolidation is shown under Foreign Currency Translation Reserve on Consolidation.
— Investments in Associate Companies have been accounted for under the equity method, as per Accounting Stan
dard 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’, as notified by the
Companies (Accounting Standards) Rules, 2006.
— Interests in Jointly Controlled Entities have been accounted for by using the proportionate consolidation method,
as per Accounting Standard 27 ‘Financial Reporting of Interests in Joint Ventures’, as notified by the Companies
(Accounting Standards) Rules, 2006.
— The financial statements of Subsidiaries, Jointly Controlled Entities and Associates used in the consolidation are
drawn upto the same reporting date as that of the Company.
— The excess of cost to the Company, of its investment in the Subsidiaries and Jointly Controlled Entities over the
Company’s portion of equity, as at the date of making the investment, is recognised in the financial statements as
Goodwill.
— The excess of Company’s portion of equity of the Subsidiaries and Jointly Controlled Entities over the cost of
acquisition of the respective investments, as at the date of making the investment, is treated as Capital Reserve.
— Goodwill/Capital Reserve arising on investments in Associate Companies is retained/adjusted under the head
“Investments in Associate Companies”.
— Goodwill arising out of consolidation is not amortised.
— Minority Interest in the net assets of Subsidiaries consists of :
i. the amount of equity attributable to the minorities at the date on which investment in a Subsidiary is made and
ii. the minorities’ share of movements in equity since the date the parent-subsidiary relationship came into existence.
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