Atul Ltd 2008-09

Annexure referred to in Note 19 in Schedule 16 of the Accounts for the year ended March 31, 2009. | Annual Report 2008-09 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 Fixed Assets and depreciation: 2.1.1 Fixed assets are carried at cost of acquisition or construction including incidental expenses, less accumulated depreciation, amortisation and impairment except 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 is at revalued value and assets received free of cost on premature cancellation of lease agreement with one lessee which are at fair value. 2.1.2 Spares for specific machinery are carried at cost less amortisation. 2.2 Depreciation and amortisation: 2.2.1 Lease hold land: Premium on lease hold land is amortised over the period of lease. 2.2.2 Other fixed assets: 2.2.2.1 Aromatics Unit: (i) Depreciation on buildings (other than roads) and plant & machinery, except on ancillary equipments to plant & machinery taken on lease, is being provided on "Straight Line Method" basis in accordance with provisions of Section 205(2)(b) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act and on all other assets is being provided on "Written Down Value" basis in accordance with the provisions of Section 205(2)(a) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act. (ii) Depreciation on ancillary equipment to plant & machinery taken on lease on or after April 01, 1991 has been provided on equated installments basis over the primary lease period of said machinery viz. 20% (corresponding rate under Schedule XIV 10.34%). (iii) Depreciation on assets sold, scrapped or discarded during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or discarded, as required by Schedule XIV to the Companies Act, 1956. (iv) Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rate with reference to the month of acquisition | installation as required by Schedule XIV to the Companies Act, 1956. 2.2.2.2 Atul Unit : (i) Depreciation on building, plant & machinery pertaining to plants commissioned up to December 31, 1967 and on further additions thereto, is being provided on "Written Down Value" basis in accordance with the provisions of Section 205(2)(a) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act. (ii) Depreciation on building, plant & machinery pertaining to plants commissioned on or after January 01, 1968 is being provided on "Straight Line Method" basis, in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act. (iii) Depreciation on assets other than buildings, plant & machinery is being provided on "Written Down Value" basis in accordance with the provisions of Section 205(2)(a) of the Companies Act, 1956 in the manner and at the rates specified in Schedule XIV to the said Act. (iv) Depreciation on additions to the assets during the year is being provided on pro-rata basis at their respective rates as required by Schedule XIV to the Companies Act, 1956 with reference to the month of acquisition | installation. (v) Depreciation on assets sold, scrapped or demolished during the year is being provided at their respective rates up 81