2007-08 - Aditya Birla Nuvo, Ltd

SCHEDULES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS10. INVESTMENTSInvestments are recorded at cost on the date of purchase, which includes brokerage and stamp duty, taxes,etc. Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost afterdeducting provisions made, if any, for permanent diminution in the value.Investments of Life Insurance Business:Investments are made in accordance with the Insurance Act, 1938, the Insurance Regulatory and DevelopmentAuthority (Investment) Regulations, 2000, the Insurance Regulatory and Development Authority (Investment)(Amendment) Regulations, 2001, and various other circulars/notifications issued by the IRDA in this context fromtime to time.All debt securities are considered as ‘held to maturity’ and stated at amortised cost.The discount or premium, which is the difference between the purchase price and the redemption amount of thesecurities, is amortised and offset against interest income in the revenue account or the Profit and Loss Account, asthe case may be, on a straight line basis over the remaining period to maturity of these securities.Mutual fund investments are valued at realisable net asset value.CONSOLIDATED ACCOUNTSListed equity shares are valued and stated at fair value, being the last quoted closing prices on the Stock Exchange,Mumbai, and/or the National Stock Exchange, whichever is lower, at the Balance Sheet date.Unlisted equity shares are stated at historical cost. A provision is made for diminution, if any; in the value of theseshares to the extent that such diminution is other than temporary. Equity shares acquired through primary marketsand awaiting listing are valued at their issue prices.11. INVENTORIESRaw materials, components, stores and spares are valued at lower of cost and net realisable value. However, theseitems are considered to be realisable at cost if the finished products, in which they will be used, are expected to besold at or above cost.Work-in-progress and finished goods are valued at lower of cost and net realisable value. Finished goods and workin-progressinclude costs of conversion and other costs incurred in bringing the inventories to their present locationand condition.Cost of inventories is computed on a weighted-average/FIFO basis.Proceeds in respect of sale of raw materials/stores are credited to the respective heads. Obsolete, defective andunserviceable inventory is duly provided for.12. GOVERNMENT GRANTSGovernment Grants are recognised when there is reasonable assurance that the same will be received. Revenuegrants are recognised in the Profit and Loss Account. Capital grants relating to specific fixed assets are reducedfrom the gross value of the respective fixed assets. Other capital grants are credited to capital reserve.13. REVENUE RECOGNITIONFor Manufacturing Business, revenue is recognised as follows:Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goodshave passed to the buyer.Sales are recorded net of trade discounts, rebates and include excise duty.(134)