Atul Ltd 2012-13

Atul Ltd | Annual Report 2012-13 Notes to Consolidated financial statements NOTE 1 SIGNIFICANT ACCOUNTING POLICIES 1 System of Accounting: 1.1 The Company, generally, follows the mercantile system of accounting and recognises income and H[SHQGLWXUH RQ DQ DFFUXDO EDVLV H[FHSW WKRVH ZLWK VLJQLÀFDQW XQFHUWDLQWLHV 7KH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV DUH EDVHG RQ KLVWRULFDO FRVW 7KHVH FRVWV DUH QRW DGMXVWHG WR UHÁHFW the impact of the changing value in the purchasing power of money except in case of freehold land, certain leasehold land, building premises and plant and machinery which have been revalued and resultant surplus is kept credited under revaluation reserves. 2 Principles of Consolidation: 7KH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV LQFOXGH WKH ÀQDQFLDO VWDWHPHQWV RI $WXO /WG WKH SDUHQW FRPSDQ\ and all of its subsidiary companies (collectively referred to as ‘the Group’), in which the Company has more than one-half of the voting power of an enterprise or where the Company controls the composition of the Board of Directors. 7KH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV DUH SUHSDUHG LQ DFFRUGDQFH ZLWK $FFRXQWLQJ 6WDQGDUG ‘Consolidated Financial Statements’, issued by the Institute of Chartered Accountants of India. 7KH LQYHVWPHQWV LQ DVVRFLDWH FRPSDQLHV DUH DFFRXQWHG LQ WKHVH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV LQ accordance with the requirements of Accounting Standard-23 ‘Accounting for Investments in associate companies in Consolidated Financial Statements’, issued by the Institute of Chartered Accountants of India. (for details see Note No 27.9) 7KH LQYHVWPHQWV LQ -RLQW 9HQWXUH FRPSDQLHV DUH DFFRXQWHG LQ WKHVH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV LQ accordance with the requirements of Accounting Standard-27 ‘Financial Reporting of Interest in Joint Venture Company’ issued under the Companies (Accounting Standards) Rules 2006 on proportionate FRQVROLGDWLRQ PHWKRG 7KXV WKH *URXS·V 6WDWHPHQW RI 3URÀW DQG /RVV %DODQFH 6KHHW DQG &DVK )ORZ 6WDWHPHQW LQFRUSRUDWH WKH *URXS·V VKDUH RI LQFRPH H[SHQVHV DVVHWV OLDELOLWLHV DQG FDVK ÁRZV RI WKH -RLQW Venture on a line-by-line basis. 7KH ÀQDQFLDO VWDWHPHQWV RI WKH SDUHQW FRPSDQ\ DQG LWV VXEVLGLDU\ FRPSDQLHV KDYH EHHQ FRPELQHG RQ D line by line basis by adding together book values of the items of assets, liabilities, income and expenses, DIWHU IXOO\ HOLPLQDWLQJ LQWUD JURXS EDODQFHV DQG LQWUD JURXS WUDQVDFWLRQ UHVXOWLQJ LQ XQUHDOLVHG SURÀWV RU losses. 7KH FRQVROLGDWHG ÀQDQFLDO VWDWHPHQWV DUH SUHSDUHG E\ DGRSWLQJ XQLIRUP $FFRXQWLQJ 3ROLFLHV IRU OLNH transactions and other events in similar circumstances and are presented to the extent possible, in the VDPH PDQQHU DV VWDQGDORQH ÀQDQFLDO VWDWHPHQWV RI WKH SDUHQW FRPSDQ\ 2.7 Financial statement of integral foreign subsidiary companies translated into Indian rupees pursuant to Accounting Standards-11 (revised 2003) ‘The effects of changes in foreign exchange rate’ are as follows: 2.7.1Revenues and expenses are translated into Indian rupees at average exchange rate, which is not as per requirements of Accounting Standards-11, but having no material effect on the results of consolidated accounts. 2.7.2Monetary items are translated into Indian rupees using the year end rate. 2.7.3Non-monetary items are translated using exchange rate at the date of transaction. 7KH QHW H[FKDQJH GLIIHUHQFH UHVXOWLQJ IURP WKH WUDQVODWLRQ RI LWHPV LQ ÀQDQFLDO VWDWHPHQW RI WKH VXEVLGLDU\ companies is recognised as income or expense under the head ‘Exchange difference on translation of foreign subsidiary companies.’ 3 6LJQLÀFDQW $FFRXQWLQJ 3ROLFLHV DQG 1RWHV WR WKHVH &RQVROLGDWHG )LQDQFLDO 6WDWHPHQW DUH LQWHQGHG WR VHUYH DV D means of informative disclosure and a guide to better understand the consolidated position of the Companies. 5HFRJQLVLQJ WKH SXUSRVH WKH &RPSDQ\ KDV GLVFORVHG RQO\ VXFK 3ROLFLHV DQG 1RWHV IURP WKH LQGLYLGXDO ÀQDQFLDO statements,which fairly present the required disclosures.