2007-08 - Aditya Birla Nuvo, Ltd

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SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTSSCHEDULE 20SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS(A)ACCOUNTING POLICIES1. ACCOUNTING CONVENTIONThe Consolidated Financial Statements (CFS) comprises the financial statement of Aditya Birla Nuvo Ltd. (“Company”)and its Subsidiaries, Joint Ventures and Associates (herein after referred to as “Group Companies” and together as“Group”). The financial statements of the Group have been prepared under the historical cost convention on anaccrual basis in compliance with material aspect of the applicable Accounting Standards prescribed by the Instituteof Chartered Accountant of India (ICAI) and in case of Birla Sun Life Insurance Company Limited (BSLI) guidelines,issued by Insurance Regulatory and Development Authority.2. ACCOUNTING ESTIMATESCONSOLIDATED ACCOUNTSThe preparation of Financial Statements requires management to make estimates and assumption thataffect reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of thefinancial statements and the results of operations during the reporting period end. Although, these estimates arebased upon management best knowledge of current event and actions, actual results could defer from theseestimates.3. PRINCIPLES OF CONSOLIDATIONThe financial statements of the Company and its subsidiary companies 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 intragroupbalances and transactions as per Accounting Standard (AS) 21 “Consolidated Financial Statements” issued bythe Institute of Chartered Accountants of India (ICAI).Investments in Associate Companies have been accounted under the equity method as per AS 23 — “Accountingfor Investments in Associates”.Interests in Joint Ventures have been accounted by using the proportionate consolidation method as per AS 27 —“Financial Reporting of Interests in Joint Ventures”.The excess/deficit of cost to the Company of its investment over its portion of net worth in the consolidatedentities at the respective dates, on which the investment in such entities was made, is recognised in the CFS asgoodwill/capital reserve.Entities acquired during the year have been consolidated from the respective dates of their acquisition.List of Companies included in consolidation are mentioned in Annexure “A”.4. FIXED ASSETSFixed Assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises thepurchase price and any attributable cost of bringing the asset to its working condition for its intended use.5. DEPRECIATION/AMORTISATIONFixed AssetsThe Group provide depreciation on straight line method over useful life estimated by the management.The rates of depreciation for Fixed Assets are not lower than the rates prescribed in Schedule XIV of the CompaniesAct, 1956.(132)
SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTSFixed Assets, individually costing less than Rs. Five thousands, are fully depreciated in the year of purchase.Intangible Assets are amortised as under:Estimated Useful LifeTrademarks/BrandsSoftwareEntry and Licence Fees10 years3 to 5 yearsOver period of leaseThe Group does not amortise Goodwill except in case of BSAMC, where Goodwill is being amortised over a periodof 10 years.The Goodwill is tested for impairment as at Balance Sheet Date.6. IMPAIRMENT OF ASSETSThe carrying amounts of assets are reviewed at each Balance Sheet date, if there is any indication of impairmentbased on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds itsrecoverable value. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which an assetis identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is anindication that the impairment losses recognised for the assets no longer exist or have decreased.7. BORROWING COSTBorrowing Costs attributable to acquisition and construction of qualifying assets are capitalised as a part of thecost of such assets upto the date when such assets are ready for its intended use. Other borrowing costs arecharged to the Profit and Loss Account.8. TRANSLATION OF FOREIGN CURRENCY ITEMSTransactions in foreign currency are recorded at the rate of exchange prevailing on the date of transaction. ForeignCurrency monetary items are reported using closing rate of exchange at the end of the year. The resulting exchangegain/loss is reflected in the Profit and Loss Account. Other non-monetary items, like fixed assets, investments inequity shares, are carried in terms of historical cost using the exchange rate at the date of transaction. Premium/Discount in respect of forward foreign exchange contract is recognised over the life of the contracts.CONSOLIDATED ACCOUNTSTranslation of foreign subsidiary is done in accordance with AS–11 (Revised) “The Effects of Changes in ForeignExchange Rates”. In the case of subsidiaries, the operation of which are considered as integral, the balance sheetitems have been translated at the closing rate except the share capital and fixed assets, which have been translatedat the transaction date. The income and expenditure items have been translated at the average rate for the year.Exchange gain/(loss) are recognised in the Profit and Loss Account.In case of subsidiaries, the operation of which are considered as non-integral, all assets and liabilities are convertedat the closing rate at the end of the year, and items of income and expenditure have been translated at the averagerate for the year. Exchange gain/(loss) arising on conversion are recognised under Foreign Currency TranslationReserve.9. DERIVATIVE INSTRUMENTSDerivative financial instruments, such as forward exchange contracts, currency swaps and interest rate swaps, areused to hedge risks associated with foreign currency fluctuations and interest rate. Currency and interest rateswaps are accounted in accordance with their contract.(133)
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Mr. G. D. Birla and Mr. Aditya Birl
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THE CHAIRMAN’S LETTER TO SHAREHOL
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THE CHAIRMAN’S LETTER TO SHAREHOL
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ADITYA BIRLA NUVO LIMITEDBOARD OF D
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FINANCIAL HIGHLIGHTS - STANDALONERs
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MANAGEMENT’S DISCUSSION AND ANALY
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CORPORATE GOVERNANCE REPORTGovernan
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CORPORATE GOVERNANCE REPORT1. Manag
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CORPORATE GOVERNANCE REPORTEmployee
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CORPORATE GOVERNANCE REPORTAll the
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CORPORATE GOVERNANCE REPORTMEANS OF
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SOCIAL REPORTTranscending BusinessS
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SOCIAL REPORTMaking a difference -
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ENVIRONMENT REPORTElements for the
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SHAREHOLDER INFORMATION6c. Domestic
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SHAREHOLDER INFORMATION12. Share Tr
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SHAREHOLDER INFORMATION16. Demateri
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SHAREHOLDER INFORMATION21. Per Shar
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SHAREHOLDER INFORMATIONAccordingly,
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DIRECTORS’ REPORT TO THE SHAREHOL
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ANNEXURE ‘A’ TO THE DIRECTORS
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ANNEXURE ‘B’ TO DIRECTORS’ RE
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AUDITORS’ REPORT TO THE MEMBERSAn
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AUDITORS’ REPORT TO THE MEMBERS(x
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PROFIT & LOSS ACCOUNT FOR THE YEAR
Page 83 and 84: SCHEDULESSCHEDULE 2RESERVES & SURPL
Page 85 and 86: SCHEDULESRs. CroresAs atAs atFace V
Page 87 and 88: SCHEDULESSCHEDULE 7INVENTORIESAs at
Page 89 and 90: SCHEDULESRs. CroresYear EndedYear E
Page 91 and 92: SCHEDULESSCHEDULE 19SIGNIFICANT ACC
Page 93 and 94: SCHEDULESSCHEDULE 19 (Contd.)SIGNIF
Page 121 and 122: SEGMENT DISCLOSURES FOR THE YEAR EN
Page 123 and 124: CASH FLOW STATEMENT FOR THE YEAR EN
Page 125 and 126: AUDITORS’ REPORT ON THE CONSOLIDA
Page 127 and 128: CONSOLIDATED PROFIT & LOSS ACCOUNT
Page 129 and 130: SCHEDULES FORMING PART OF CONSOLIDA
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Page 151 and 152: SEGMENT DISCLOSURES FOR THE YEAR EN
Page 153 and 154: CONSOLIDATED CASH FLOW STATEMENT AS
Page 156 and 157: ANNEXURE ‘1’ OF STATEMENT PURSU
Page 158 and 159: STATEMENT PURSUANT TO SECTION 212(8
Page 160 and 161: ANNEXURE ‘A’ OF STATEMENT U/S 2
Page 162 and 163: ANNEXURE ‘A’ OF STATEMENT U/S 2
Page 164: ADITYA BIRLA NUVO LIMITEDRegistered
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2007-08 - Aditya Birla Nuvo, Ltd

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