Atul Ltd 2018-19

1 The useful lives have been determined based on technical evaluation done by the Management experts which are ēĿljljĚƑĚŠƥ ljƑūŞ ƥĺĚ ƭƙĚljƭŕ ŕĿljĚ ƎƑĚƙČƑĿċĚē ĿŠ ¡îƑƥ ūlj ¬ČĺĚēƭŕĚ TT ƥū ƥĺĚ Čƥȡ ĿŠ ūƑēĚƑ ƥū ƑĚǜĚČƥ ƥĺĚ îČƥƭîŕ ƭƙîijĚ ūlj ƥĺĚ îƙƙĚƥƙȦ The residual values are not more than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. gîŠē îČČūƭŠƥĚē ƭŠēĚƑ ǛŠîŠČĚ ŕĚîƙĚ Ŀƙ îŞūƑƥĿƙĚē ūŠ î ƙƥƑîĿijĺƥȹŕĿŠĚ ċîƙĿƙ ūǄĚƑ ƥĺĚ ƎƑĿŞîƑǋ ƎĚƑĿūē ūlj ŕĚîƙĚȦ The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount. ƙƙĚƥƙ ĺĚŕē ƭŠēĚƑ ǛŠîŠČĚ ŕĚîƙĚƙ îƑĚ ēĚƎƑĚČĿîƥĚē ūǄĚƑ ƥĺĚĿƑ ĚǊƎĚČƥĚē ƭƙĚljƭŕ ŕĿǄĚƙ ūŠ ƥĺĚ ƙîŞĚ ċîƙĿƙ îƙ ūǅŠĚē îƙƙĚƥƙȦ However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives. h) Intangible assets: Computer software includes enterprise resource planning project and other cost relating to such software which provides ƙĿijŠĿǛČîŠƥ ljƭƥƭƑĚ ĚČūŠūŞĿČ ċĚŠĚǛƥƙȦ ¹ĺĚƙĚ Čūƙƥƙ ČūŞƎƑĿƙĚ ŕĿČĚŠƙĚ ljĚĚƙ îŠē Čūƙƥ ūlj ƙǋƙƥĚŞ ĿŠƥĚijƑîƥĿūŠ ƙĚƑǄĿČĚƙȦ Development expenditure qualifying as an intangible asset, if any, is capitalised, to be amortised over the economic life of the product | patent. Computer software cost is amortised over a period of three years using the straight-line method. i) Investment properties: Property that is held for long-term rental yields or for capital appreciation or both, and that is not in use by the Company, Ŀƙ ČŕîƙƙĿǛĚē îƙ ĿŠǄĚƙƥŞĚŠƥ ƎƑūƎĚƑƥǋȦ gîŠē ĺĚŕē ljūƑ î ČƭƑƑĚŠƥŕǋ ƭŠēĚƥĚƑŞĿŠĚē ljƭƥƭƑĚ ƭƙĚ Ŀƙ îŕƙū ČŕîƙƙĿǛĚē îƙ îŠ ĿŠǄĚƙƥŞĚŠƥ property. Investment property is measured at its acquisition cost, including related transaction costs and where applicable, borrowing costs. j) Impairment of assets: The carrying amount 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 is 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, ǅĺĿČĺĚǄĚƑ Ŀƙ ĺĿijĺĚƑȦ ØĺĿŕĚ îƙƙĚƙƙĿŠij ǄîŕƭĚ ĿŠ ƭƙĚȡ ƥĺĚ ĚƙƥĿŞîƥĚē ljƭƥƭƑĚ Čîƙĺ ǜūǅƙ îƑĚ ēĿƙČūƭŠƥĚē ƥū ƥĺĚ ƎƑĚƙĚŠƥ ǄîŕƭĚ ċǋ using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount that will be determined if no impairment loss had previously been recognised. k) Cash and cash equivalents: Cash and cash equivalents include cash in hand, demand deposits with bank and other short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an ĿŠƙĿijŠĿǛČîŠƥ ƑĿƙŒ ūlj ČĺîŠijĚƙ ĿŠ ǄîŕƭĚȦ l) Trade receivables: Trade receivables are recognised when the right to consideration becomes unconditional. These assets are held at amortised cost, using the effective interest rate (EIR) method where applicable, less provision for impairment based on expected credit loss. m) Trade and other payables: ¹ĺĚƙĚ îŞūƭŠƥƙ ƑĚƎƑĚƙĚŠƥ ŕĿîċĿŕĿƥĿĚƙ ljūƑ ijūūēƙ îŠē ƙĚƑǄĿČĚƙ ƎƑūǄĿēĚē ƥū ƥĺĚ ūŞƎîŠǋ ƎƑĿūƑ ƥū ƥĺĚ ĚŠē ūlj ǛŠîŠČĿîŕ ǋĚîƑ which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method. n) Inventories: Inventories (other than harvested product of biological assets) are stated at cost or net realisable value whichever is lower. Cost is determined on moving weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Corporate Overview 01-22 Statutory Reports 23-105 Financial Statements 107-250 126 Atul Ltd | Annual Report 2018-19