Atul Ltd 2012-13

Atul Ltd | Annual Report 2012-13 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (contd) 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. Depreciation is adjusted in subsequent periods to allocate the revised carrying amount of assets after the recognition of an impairment loss on a systematic basis over its remaining useful life of assets. Amortisation: a) Premium on lease hold land is amortised over the period of lease. b) Computer software is amortised over a period of three years. 4.5 Impairment of Assets: The carrying amounts of assets are reviewed at each Balance Sheet date to assess if there is any indication of impairment based on internal | external factors. An impairment loss on such assessment will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use whichever is higher. While assessing value in use, WKH HVWLPDWHG IXWXUH FDVK ÁRZV DUH GLVFRXQWHG WR WKH SUHVHQW YDOXH E\ XVLQJ ZHLJKWHG DYHUDJH FRVW RI capital. A previously recognised impairment loss is further provided or reversed depending on changes in the circumstances. 4.6 Borrowing Costs: Borrowing costs in relation to acquisition and construction of qualifying assets are capitalised as part of cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as expense in the year in which these are incurred. 4.7 Investments: ,QYHVWPHQWV WKDW DUH LQWHQGHG WR EH KHOG IRU PRUH WKDQ D \HDU IURP WKH GDWH RI DFTXLVLWLRQ DUH FODVVLÀHG as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments. 4.8 Inventories: D 5DZ PDWHULDOV SDFNLQJ PDWHULDOV SXUFKDVHG ÀQLVKHG JRRGV ZRUN LQ SURJUHVV ÀQLVKHG JRRGV IXHO VWRUHV DQG VSDUHV RWKHU WKDQ VSHFLÀF VSDUHV IRU PDFKLQHU\ DUH YDOXHG DW FRVW RU QHW UHDOLVDEOH YDOXH whichever is lower. Cost is arrived at on moving weighted average basis. b) Goods-in-transit and in bonded warehouse are stated at the cost to the date of Balance Sheet. c) ‘Cost’ comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present location and condition. d) Due allowances are made for obsolete inventory based on technical estimates made by the Company. 4.9 Foreign Currency Transactions: a) Initial recognition: Transactions denominated in foreign currencies are recorded at the rate prevailing on the date of the transaction. b) Conversion: At the year end, monetary items denominated in foreign currencies remaining unsettled are converted into rupee equivalents at the year end exchange rates. Non-monetary items which are carried in terms Notes to Consolidated financial statements