Atul Ltd 2008-09

| Annual Report 2008-09 Annexure referred to in Note 14 in Schedule 16 of the Accounts for the year ended March 31, 2009. Statement of Significant Accounting Policies: 1 System of Accounting: 1.1 The Company, generally, follows the mercantile system of accounting and recognises income and expenditure on an accrual basis except those with significant uncertainties. 1.2 Financial statements are based on historical cost. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money except in case of freehold land, lease hold land Panoli and certain business premises at fair market value as determined by an independent valuer appointed for the purpose which was revalued in the year 1985 and resultant surplus is kept credited under revaluation reserves and assets received free of cost on premature cancellation of lease agreements with one lessee which are at fair value. 2 Principles of consolidation: 2.1 The Consolidated Financial Statements relate to 'ATUL LTD' (The Parent Company) and 'Ameer Trading Corporation Ltd India', 'Atul Americas Inc U S A’, ‘Atul Europe Ltd U K’, 'Atul Deutschland GmbH Germany', and 'Atul International Trading (Shanghai) Co. Ltd China’ (the wholly owned subsidiary companies). 2.2 The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS - 21) "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India. 2.3 The investments in associates are accounted in these Consolidated Financial Statements in accordance with the requirements of Accounting Standard 23 (AS - 23) - 'Accounting for Investments in Associates in Consolidated Financial Statements', issued by the Institute of Chartered Accountants of India. (for details refer Note no 17 in Schedule 16 to the Accounts). 2.4 The Financial Statements of the Parent Company and its Subsidiary Companies have been combined on a line by line basis by adding together book values of the items of assets, liabilities, income and expenses, after fully eliminating intra- group balances and intra-group transaction resulting in unrealised profits or losses. 2.5 The Consolidated Financial Statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Parent Company' s separate financial statements. 2.6 Financial statement of integral foreign subsidiaries translated into Indian rupees pursuant to Accounting Standards 11 (AS-11) (revised 2003) 'The effects of changes in foreign currency rate' are as follows: 2.6.1 Revenues and expenses are translated into Rupees at the average of monthly average exchange rates, which is not as per requirements of AS-11, but having no material effect on the results of consolidated accounts. 2.6.2 Monetary items are translated into rupees using the year end rate. 2.6.3 Non-monetary items are translated using exchange rate at the date of transaction. 3 Other Significant Accounting Policies: 3.1 These are set out in the notes to accounts under "Statement of Accounting Policies" of the financial statements of the Parent Company and its subsidiaries. 109