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Atul Ltd | Annual Report 2012-13
Notes
to financial statements
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
(contd)
e) Derivatives:
Where the Company has entered into derivative contracts such as Interest Rate Swaps, Currency Swaps, and
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commitments where these exposures exist at the Balance Sheet date the hedging instruments are initially
measured at fair value, and are remeasured at subsequent reporting dates. The revalorisation gain or loss
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on account of choice exercised as per (c) above MTM gains and losses on instruments intended to hedge
long-term foreign currency borrowings utilised to acquire depreciable assets are recognised to offset foreign
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f) Changes in fair value of derivative instruments intended to hedge future exposures resulting out of ‘highly
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are recognised directly under ‘Hedging Reserve’ in shareholders’ funds, and the ineffective portion, if any, is
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Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised,
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or loss on the hedging instrument recognised in shareholders’ funds is retained there until the forecasted
transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss
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10 Revenue Recognition:
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from the sale of goods.
a) Sale of goods and services:
i) Domestic sales are accounted for on dispatch from the point of sale.
ii) Export sales are accounted on the basis of dates of on board Bill of Lading and | or Air Way Bill.
iii) Service income is recognised, net of service tax, when the related services are rendered.
b) Other revenues:
i) Eligible export incentives are recognised in the year in which the conditions precedent is met and there
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ii) Lease rental income is recognised on accrual basis.
iii) Dividend income is accounted for in the year in which the right to receive the same is established.
iv) Interest income is recognised on a time proportion basis taking into account the amount outstanding
and the rate applicable.
11 Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving a substantial degree of estimation in measurement are recognised when there is a present
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discounted to its present value and is determined based on the best estimate required to settle an obligation at
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12 Research and Development Expenditure:
Research and Development expenditure is charged to revenue under the natural heads of account in the year
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13 Employee Benefits:
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Contribution paid | payable by the Company during the period to Provident Fund, Super Annuation Fund,
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and Loss.