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Atul Ltd | Annual Report 2010-11

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES:

These financial statements have been prepared on an accrual basis and under historical cost convention and in

compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting

standards notified under Section 211 (3C) and the relevant provisions of the Companies Act, 1956. The significant

accounting policies adopted by the Company are detailed below.

1. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires

Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent liabilities at the date of the financial statements and the results of operations during

the reporting period. Although these estimates are based upon Management’s best knowledge of current

events and actions, actual results could differ from these estimates. Differences between actual results and

estimates are recognised in the period in which the results are known | materialised.

2. Fixed Assets: (Tangible and Intangible)

1. Tangible Assets:

i) Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated

depreciation, amortisation and impairment except freehold land, lease hold land Panoli and certain

business premises at fair market value, assets received free of cost on premature cancellation of lease

agreement with one lease which are at fair value.

ii) Spares for specific machinery are carried at cost less amortisation.

2. Intangible Assets:

Computer software includes Enterprise Resource Planning project and other cost relating to software which

provides significant future economic benefit. Costs comprise license fees and cost of system integration

services.

3. Depreciation and Amortisation:

Amortisation:

i) Premium on lease hold land is amortised over the period of lease.

ii) Cost of spares for specific machinery is amortised over balance period of life of related machinery.

iii) Computer Software is being amortised over a period of three years.

iv) Other fixed assets:

Depreciation on buildings and plant and machinery 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.

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.

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.

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.

Annexure

referred to in Note 22 in Schedule 16 of the Accounts for the

year ended March 31, 2011