Clariant Chemicals (India) Limited (the ''Company'') is a public limited Company domiciled in India and
is listed on the Bombay
Stock Exchange (BSE) and the National Stock Exchange (NSE). The company is
engaged interalia, in manufacturing and selling of
Specialty Chemicals. The Company has its own
manufacturing sites in the State of Maharashtra, Tamil Nadu and Gujarat.
1. Significant accounting policies
(a) Basis of preparation of financial statements
These financial statements have been prepared in accordance with the generally accepted accounting
principles in India under the
historical cost convention on accrual basis. Pursuant to Section 133 of
the Companies Act, 2013 read with Rule 7 of the Companies
(Accounts) Rules, 2014, till the standards of
accounting or any addendum thereto are prescribed by Central Government in
recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified
the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have
been prepared to comply in all
material aspects with the accounting standards notified under Section
211(3C) of the Companies Act, 1956 [Companies (Accounting
Standards) Rules, 2006, as amended] and other
relevant provisions of the Companies Act, 2013.
All assets and liabilities have been classified as current or non-current as per the Company''s normal
operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013. Based on the
nature of products and the time between acquisition
of assets for processing and their realization in
cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose
of current/ non- current classification of assets and liabilities.
The accounting year of the company has been changed from January-December to April-March with effect from
the current year.
Consequently, the current year''s financial statement are for the 15 months from 1st
January, 2015 to 31st March, 2016.
(b) Revenue recognition
The Company recognizes sale of goods on transfer of significant risks and rewards of ownership of the
goods to the buyer as per
the terms of contract. Sales are net of excise duty, sales tax and trade
discounts, wherever applicable.
Income from services rendered is recognized based on agreements/ arrangements with the customers as the
service is performed
using the proportionate completion method and is recognized net of service tax, as
Interest Income is accounted on time proportion basis taking into account the amounts invested and the
rate of interest. Dividend
income on investments is accounted for when the right to receive the dividend
Income from export incentives such as duty drawback etc. are recognized on accrual basis to the extent
the ultimate realization
is reasonably certain.
Indenting commission is recognized based on the terms of agreement, when the right to receive the
commission is established.
Rental income is recognized on accrual basis.
(c) Excise duty
Excise duty payable on products is accounted for at the time of dispatch of goods from the factories and
is accrued for stocks
held at the period end.
Excise Duty related to the difference between the closing stock and opening stock of finished goods has
separately in Note 28 Other expenses.
(d) Employee benefits
(i) Post employment benefits and other long term employee benefits:
Defined contribution plans :
Company''s contribution to provident fund, superannuation fund, employee state insurance and other funds
are determined under the
relevant schemes and / or statute and charged to the Statement of Profit and
Loss. The Company has no further obligation under
Defined benefit plans and compensated absences : In respect of certain employees, provident fund
contributions are made to a
trust administered by the company. The interest rate payable to the members
of the trust shall not be lower than the statutory
rate of interest declared by the Central Government
under the Employees Provident Funds and Miscellaneous Provisions Act, 1952
and shortfall, if any, shall
be made good by the Company. The liability in respect of the shortfall of interest earnings of the
is determined on the basis of an actuarial valuation. The Company''s liability towards gratuity, ex-gratia
compensated absences are actuarially determined at each balance sheet date using the
projected unit credit method. Actuarial
gains and losses are recognized in the Statement of Profit and
Loss. The classification of the company''s net obligation into
current and non- current is as per the
actuarial valuation report.
(ii) Voluntary retirement scheme:
Expenditure incurred on voluntary retirement scheme is charged to the Statement of Profit and Loss in the
period in which it is
(e) Tangible assets
(i) All tangible assets are stated at acquisition cost net of accumulated depreciation and impairment
losses, if any.
(ii) Subsequent expenditures related to an item of fixed asset are added to its book value only if they
increase the future
benefits from the existing asset beyond its previously assessed standard of
(iii) Items of tangible assets that have been retired from active use and are held for disposal are
stated at the lower of their
net book value and net realizable value and are shown separately in the
financial statements under Other Current Assets. Any
expected loss is recognized immediately in the
Statement of Profit and Loss.
(iv) Losses arising from the retirement of, and gains or losses from disposal of fixed assets which are
carried at cost are
recognized in the Statement of Profit and Loss.
(v) Leasehold improvements are amortized on a straight line basis over the useful life of the assets or
over the lease period,
whichever is lower
(vi) Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful
lives of the assets which
are in line with the rates prescribed under Schedule II to the Companies Act,
2013 except in case of certain assets, wherein
based on technical evaluation, a different useful life
has been considered. The estimates of useful lives of assets is as under
[Further also refer note
Tangible assets individually costingRs, 5,000/- or less are depreciated fully in the period of
(f) Intangible assets:
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated
impairment losses, if any.
Intangible assets are amortized on a straight line basis over their estimated
useful lives, as follows :
Goodwill 10 Years
Trademarks 10 Years
Non-compete fees 3 Years
(g) Impairment of assets
The carrying amounts of assets are reviewed at each Balance Sheet date to assess whether there is any
indication of impairment
based on internal / external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its
estimated recoverable amount. The recoverable amount is
greater of the asset''s net selling price and value in use. In assessing
the value in use, the estimated
future cash flows are discounted to the present value using the weighted average cost of capital.
Previously recognized impairment loss is further provided or reversed depending on changes in
Inventories are valued at the lower of cost and net realizable value. Cost is computed on a weighted
average basis. The net
realizable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and
estimated costs necessary to make the sale. Finished
goods and work- in-progress include all costs of purchases, conversion costs
and other costs incurred in
bringing the inventories to their present location and condition.
(i) Trade receivables / loans and advances
Trade receivables and loans and advances are stated after making adequate provision for doubtful debts /
Investments that are readily realizable and are intended to be held for not more than one year from the
date on which such
investments are made, are classified as current investments. All other investments
are classified as non-current investments.
Non-current investments are stated at cost less provision for
diminution in value, other than temporary. Current investments are
stated at the lower of cost and fair
(k) Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the less or
are classified as
operating leases. The company is both a lessee and a less or under such arrangements.
Payments and receipts under such leases are
charged or credited to the Statement of Profit and Loss on a
systematic basis over the primary period of the lease.
(l) Foreign currency translations
(i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction.
denominated in foreign currency outstanding as at period end are translated at the
exchange rate prevailing on the last day of
the accounting period. In respect of items covered by
forward contracts, the premium or discount arising at the inception of such
a forward exchange contract
is amortized as expense or income over the life of the contract. Any profit or loss arising on
cancellation of such a forward exchange contract is recognized as income or expense for the period.
(ii) Non monetary items which are carried in terms of historical cost denominated in a foreign currency
are reported using the
exchange rate at the date of transaction.
(iii) Gain or loss arising out of settlement of such transactions or from translation/conversion is taken
credit for or charged
to the Statement of Profit and Loss.
(m) Income tax
Income-tax expense comprises current tax and deferred tax charge or credit. The current tax is determined
as the amount of tax
payable in respect of the estimated taxable income for the period. The deferred tax
charge or credit is recognized using
prevailing enacted or substantively enacted tax rates at the
Balance Sheet date. Where there is unabsorbed depreciation or carry
forward losses, deferred tax assets
are recognized only if there is virtual certainty of realization. Other deferred tax assets
recognized only to the extent there is reasonable certainty of realization in future. The carrying amount of
assets/liabilities are reviewed at each Balance Sheet date for any write- down or reversal,
as considered appropriate.
(n) Provisions and contingent liabilities
Provisions are recognized when there is a present obligation as a result of a past event, it is probable
that an outflow of
resources embodying economic benefits will be required to settle the obligation and
there is a reliable estimate of the amount of
the obligation. Provisions are measured at the best
estimate of the expenditure required to settle the present obligation at the
balance sheet date and are
not discounted to its present value. These are reviewed at each period end date and adjusted to
the best current estimate.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be
confirmed only by the occurrence or non occurrence of one or more uncertain
future events not wholly within the control of the
company or a present obligation that arises from past
events where it is either not probable that an outflow of resources will be
required to settle the
obligation or a reliable estimate of the amount cannot be made.
(o) Cash and cash equivalents
In the cash flow statement, cash and cash equivalents include cash in hand, term deposits with banks and
other short-term highly
liquid investments with original maturities of three months or less.
(p) Earnings per share
Basic earnings per share is calculated by dividing the net profit for the period attributable to equity
shareholders by the
weighted average number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding
during the period and for all periods presented is adjusted
for events, such as bonus shares, other than the conversion of
potential equity shares that have changed
the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of
calculating diluted earnings per share, the net profit for the period attributable to equity shareholders
the weighted average number of shares outstanding during the period is adjusted for the effects of
all dilutive potential equity
(q) Use of estimates
The presentation of the financial statements in conformity with the generally accepted accounting
principles requires that the
management makes certain estimates and assumptions. These estimates and
assumptions affect the reported amount of assets and
liabilities on the date of the financial statements
and the reported amount of revenues and expenses during the reporting period.
Difference between the
actual results and estimates if any, is recognized in the period in which the results are known /