Atul Ltd 2012-13

103 Notes to Consolidated financial statements NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (contd) 4 Other Significant Accounting Policies 4.1 Basis of Preparation: 7KHVH ÀQDQFLDO VWDWHPHQWV KDYH EHHQ SUHSDUHG RQ DFFUXDO EDVLV DQG XQGHU KLVWRULFDO FRVW FRQYHQWLRQ and in compliance, in all material aspects, with the generally accepted accounting principles in India, WKH DSSOLFDEOH $FFRXQWLQJ 6WDQGDUGV QRWLÀHG XQGHU 6HFWLRQ & DQG WKH UHOHYDQW SURYLVLRQV RI WKH Companies Act, 1956. 7KH VLJQLÀFDQW $FFRXQWLQJ 3ROLFLHV DGRSWHG E\ WKH &RPSDQ\ DUH GHWDLOHG EHORZ $OO WKH DVVHWV DQG OLDELOLWLHV KDYH EHHQ FODVVLÀHG DV FXUUHQW RU QRQ FXUUHQW DV SHU WKH QRUPDO RSHUDWLQJ F\FOH 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 DQG QRQ FXUUHQW FODVVLÀFDWLRQ RI DVVHWV DQG OLDELOLWLHV 4.2 Use of Estimates: 7KH SUHSDUDWLRQ RI ÀQDQFLDO VWDWHPHQWV LQ FRQIRUPLW\ ZLWK JHQHUDOO\ DFFHSWHG DFFRXQWLQJ SULQFLSOHV requires the Management to make estimates and assumptions that affect the reported amounts of assets DQG OLDELOLWLHV DQG GLVFORVXUH RI FRQWLQJHQW OLDELOLWLHV DW WKH GDWH RI WKH ÀQDQFLDO VWDWHPHQWV DQG WKH UHVXOWV of operations during the reporting period. These estimates are based on the Management evaluation of WKH UHOHYDQW IDFWV DQG FLUFXPVWDQFHV DV RI WKH GDWH RI WKH ÀQDQFLDO VWDWHPHQWV ZKLFK PD\ GLIIHU IURP future revisions and actual results in subsequent period. Differences are adjusted in subsequent periods as they occur. 4.3 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. iii) Freehold land, lease hold land at Panoli and certain business premises have been revalued as per the report of approved valuer. LY 6SDUHV VSHFLÀF WR D PDFKLQHU\ DUH FDUULHG DW FRVW DQG DOORFDWHG RYHU WKH XVHIXO OLIH RI WKH DVVHW b) Intangible Assets: Computer software includes Enterprise Resource Planning Project and other cost relating to software ZKLFK SURYLGHV VLJQLÀFDQW IXWXUH HFRQRPLF EHQHÀW &RVWV FRPSULVH OLFHQVH IHHV DQG FRVW RI V\VWHP integration services. 4.4 Depreciation and Amortisation: 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 D RI WKH &RPSDQLHV $FW UHVSHFWLYHO\ LQ WKH PDQQHU DQG DW WKH UDWHV VSHFLÀHG LQ 6FKHGXOH 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.