Atul Ltd 2011-12

Atul Ltd | Annual Report 2011-12 Notes to financial statements NOTE 1 SIGNIFICANT ACCOUNTING POLICIES General information Founded by Mr Kasturbhai Lalbhai in 1947, Atul Ltd has emerged, starting with the manufacture of a few dyes, as one of the diverse chemical companies, serving industries such as Adhesives, Aerospace, Agriculture, Animal feed, Automobile, Chemical, Composites, Construction, Cosmetics, Defence, Dyestuff, Electrical & Electronics, Flavour & Fragrance, Glass, Home Care, Paint & Coatings, Paper, Personal Care, Pharmaceutical, Plastic, Polymer, Rubber, Soap & Detergent, Textile and Tyre. The Company has established subsidiary companies in Brasil, China, Germany, the UK and the USA to work closely with its customers and expand its business. The Company is listed on Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd and has about 32,000 Shareholders. The Promoter group holds a little in excess of 50% of the equity capital. 1 Basis of preparation: These financial statements have been prepared on 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. 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. 2 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 on best knowledge of current events and actions of the Management, actual results may differ from these estimates. Differences between actual results and estimates are recognised in the period in which the results are known | materialised . 3 Fixed Assets: a) Tangible Assets: i) Fixed assets are carried at cost of acquisition including incidental expenses, less accumulated depreciation, amortisation and impairment. Freehold land, lease hold land at Panoli and certain business premises and assets received free of cost on premature cancellation of a Lease Agreement are valued at fair value. ii) Spares for specific machinery are carried at cost less amortisation. b) Intangible Assets: Computer software includes Enterprise Resource Planning project and other cost relating to software which provides significant future economic benefit. Cost comprise license fees and cost of system integration services. 4 Depreciation and Amortisation: Depreciation: Depreciation on building and plant and equipment is being provided on ‘Straight Line Method’ basis 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.