Atul Ltd 2008-09

to the month in which such assets are sold, scrapped or demolished, as required by Schedule XIV to the Companies Act, 1956. 2.2.2.3 Colors (West) Unit: (i) Depreciation on addition to Fixed Assets up to December 31, 1987 is being provided on "Straight Line Method" basis pursuant to circular No.1-1 | 1986, CLV No. 14(50)84 CL VI dated May 21, 1986 issued by the Department of Company Affairs and in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956, at the rates corresponding to the rates (inclusive of multiple shift allowance) applicable under Income Tax Rules in force at the time of acquisition | installation. (ii) Depreciation on additions on or after January 01, 1988 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 sold, scrapped or discarded during the year is being provided at their respective rates up to the date of sale, scrapping or demolition of such assets, as required by Schedule XIV to the Companies Act, 1956. 2.2.2.4 P P Site: (i) Depreciation on buildings constructed and plant & machinery commissioned up to December 31, 1967 is being provided on "Written Down Value" basis in accordance with the provisions of Section 205(2)(a) in the manner and at the rates specified in Schedule XIV to the said Act. (ii) Depreciation on buildings constructed and plant & machinery commissioned on or after January 01, 1968 except on ancillary equipment to plant & machinery taken on lease on or after April 01, 1990 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 leased assets 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 rates specified in Schedule XIV to the said Act, (see para 8 below). (iv) Depreciation on ancillary equipments to plant & machinery taken on lease on or after April 01, 1990 is being provided on equated installments basis over a primary lease period of machinery taken on lease viz. 20% (corresponding rates under Schedule XIV on "Straight Line Method" basis 10.34%). (v) Depreciation on assets other than buildings and 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 at the rates specified in Schedule XIV to the said Act. (vi) 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. (vii) Depreciation on assets sold, scrapped or demolished during the year is being provided at their respective rates up to the month in which such assets are sold, scrapped or demolished, as required by Schedule XIV to the Companies Act, 1956. 2.3 Cost of spares for specific machinery is amortised over balance period of life of related machinery. 2.4 Depreciation on assets after recognising impairment loss: Depreciation is adjusted in subsequent periods to allocate the assets revised carrying amount after the recognition of an impairment loss on a systematic basis over its remaining useful life. 2.5 Amortisation on intangible assets: Computer software is being amortised over a period of three years. 3 Impairment of Assets: The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal | external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in circumstances. 4 Borrowing Costs: Borrowing costs in relation to acquisition and construction of assets are capitalised as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred. 5 Investments: 82