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Atul Ltd | Annual Report 2013-14
Notes
to the Financial Statements
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
1 Convention:
These Financial Statements have been prepared on accrual basis and under historical cost convention and in
compliance, in all material aspects, with the generally accepted accounting principles in India. Consequent to
the clarification issued by the Ministry of Corporate Affairs, Government of India vide General Circular 08 | 2014
dated April 04, 2014, these Financial Statements have been prepared in accordance with the relevant provisions |
schedules | rules of the Companies Act, 1956, which inter alia include the applicable Accounting Standards
notified under Section 211 (3C).
A summary of applicable Accounting Policies which have been applied consistently, are set out below.
2 Basis of Preparation:
All the assets and liabilities have been classified as current or non-current as per the normal operating cycle
of the Company and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of
products and the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and
non-current classification of assets and liabilities.
3 Use of Estimates:
The preparation of the Financial Statements in conformity with generally accepted accounting principles
requires the 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. These estimates are based on the evaluation of the relevant facts and
circumstances as of the date of the Financial Statements by the Management, which may differ from future
revisions and actual results in subsequent period. Differences are adjusted in subsequent periods as they occur.
4 Fixed Assets:
a) Tangible Assets:
i) Fixed assets other than (ii) and (iii) below are carried at cost of acquisition | construction including
incidental expenses directly attributable to the acquisition| construction activity, as the case may be,
less accumulated depreciation, amortisation and impairment as necessary.
ii) Assets received free of cost on premature cancellation of a lease agreement are valued at fair value,
by credit to capital reserve less accumulated depreciation and impairment as necessary.
iii) Freehold land, lease hold land at Panoli and certain business premises have been revalued as per the
report of approved valuer.
iv) Spares specific to a machinery are carried at cost and allocated over the useful life of the asset.
v) Expenditure incurred on cultivation of plantations up to the date, they become capable of bearing
fruit are accumulated under ‘Capital work-in-progress’ and then capitalised as a fixed asset to be
depreciated over their estimated economic life.
b) 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.
5 Depreciation and Amortisation Expenses:
Depreciation:
Depreciation on building and plant and equipment is being provided on ‘Straight Line Method’ and on all
other assets on ‘Written Down Value’ basis in accordance with the provisions of Section 205 (2) (b) and 205
(2) (a) of the Companies Act, 1956, respectively, in the manner and at the rates specified in Schedule XIV to the
said Act. An amount in respect of assets revalued in the past, the depreciation charge over the enhancement
to cost is withdrawn from the revaluation reserves and adjusted against the depreciation charge each year. In
respect of assets received free of cost (see 4a ii), from this year, an amount equivalent to the depreciation is
withdrawn from capital reserve and transferred to general reserve.
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.
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.