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Clariant Chemicals India
BSE: 506390|NSE: CLNINDIA|ISIN: INE492A01029|SECTOR: Dyes & Pigments
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« Dec 12
Accounting Policy Year : Dec '13
(a) Basis of preparation of financial statements
 
 The financial statements have been prepared on historical cost
 convention. The company follows the accrual basis of accounting.  The
 financial statements are prepared in accordance with the accounting
 standards specified in the Companies (Accounting Standards) Rules, 2006
 notified by the Central Government in terms of Section 211(3C) of the
 Companies Act, 1956 (the Act) (which continue to be applicable in
 respect of Section 133 of the Companies Act, 2013 in terms of General
 Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate
 Affairs).
 
 Assets and liabilities are classified as current if it is expected to
 realise or settle within 12 months after Balance Sheet date.
 
 (b) Revenue recognition
 
 The Company recognises sale of goods on transfer of significant risks
 and rewards of ownership of the goods to the buyer. Sales are net of
 excise duty, sales tax and trade discounts, wherever applicable.
 
 Dividend income on investments is accounted for when the right to
 receive the payment is established.
 
 (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 year end.
 
 Excise Duty related to the difference between the closing stock and
 opening stock of finished goods has been recognised separately in Note
 27 Other expenses to the Statement of Profit and Loss.
 
 (d) Employee benefits
 
 (i) Short term employee benefit obligations are estimated and provided
 for.
 
 (ii) 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.
 
 Defined benefit plans and compensated absences :
 
 Company''s liability towards gratuity, ex-gratia gratuity and
 compensated absences are actuarially determined at each balance sheet
 date using the projected unit credit method. Actuarial gains and losses
 are recognised in the Statement of Profit and Loss.
 
 (e) Voluntary retirement scheme
 
 Expenditure incurred on voluntary retirement scheme is charged to the
 Statement of Profit and Loss in the year in which it is incurred.
 
 (f) Fixed assets and Depreciation / Amortisation
 
 (i) All fixed assets are stated at cost less depreciation, wherever
 applicable. Cost comprises the purchase price and any other
 attributable cost of bringing the asset to its working condition for
 its intended use. Borrowing cost relating to funds borrowed for
 acquisition of qualifying assets up to the date the assets are put to
 use is included in cost.
 
 (ii) The cost of leasehold land is amortised over the period of the
 lease.
 
 (iii) Depreciation on tangible assets is calculated on the straight
 line method at the rates and in the manner specified in Schedule XIV of
 the Companies Act, 1956 except for :
 
 - certain items of office equipment, air conditioners, plant and
 equipment on which a depreciation rate of 20% on straight line method
 is applied,
 
 - electronic data processing (EDP) hardware such as servers on which a
 depreciation rate of 20% and for other EDP equipment including personal
 computers and printers on which depreciation rate of 25% on straight
 line method is applied,
 
 - Motor cars on which depreciation rate of 25% on straight line method
 is applied.  (iv) Fixed assets held for disposal are stated at lower of
 net book value and net realisable value.
 
 (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 recognised 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 recognised impairment loss is
 further provided or reversed depending on changes in circumstances.
 
 (h) Inventories
 
 Inventories are valued at the lower of cost and estimated net
 realisable value after providing for obsolescence. The cost of
 inventories is arrived at on the following basis :
 
 Raw materials, packing materials, trading items -????Weighted average
 cost.  and stores and spares
 
 Finished goods and work-in-progress -????Absorption costing at works
 cost.
 
 (i) Trade receivables / Loans and advances
 
 Trade receivables and loans and advances are stated after making
 adequate provision for doubtful debts / advances.
 
 (j) Investments
 
 Long term 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 value.
 
 (k) Leases
 
 Leases where the lesser effectively retains substantially all the risks
 and benefits of ownership of the leased assets are classified as
 operating leases. Operating lease payments are recognised as an expense
 in the Statement of Profit and Loss on a straight- line basis over the
 lease term.
 
 (l) Foreign currency translations
 
 (i) Foreign currency transactions are accounted at the rate prevailing
 on the date of transaction. Monetary items denominated in foreign
 currency outstanding as at year end are translated at the exchange rate
 prevailing on the last day of the accounting year. In respect of items
 covered by forward contracts, the premium or discount arising at the
 inception of such a forward exchange contract is amortised as expense
 or income over the life of the contract. Any profit or loss arising on
 cancellation of such a forward exchange contract is recognised 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 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 year. The deferred tax
 charge or credit is recognised 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 recognised only if there is virtual certainty of realization. Other
 deferred tax assets are recognised only to the extent there is
 reasonable certainty of realisation in future. The carrying amount of
 deferred tax assets/liabilities are reviewed at each Balance Sheet
 date.
 
 (n) Contingencies / Provisions
 
 Provision is recognised when the Company has a present obligation as a
 result of past event; it is probable that an outflow of resources
 embodying economic benefit will be required to settle the obligation, in
 respect of which a reliable estimate can be made. Provisions are not
 discounted to its present value and are determined based on best
 estimate of the expenditure required to settle the obligation at the
 Balance Sheet date. These are reviewed at each Balance Sheet date and
 adjusted to reflect the current best estimate. A contingent liability is
 disclosed, unless the possibility of an outflow of resources embodying
 the economic benefit is remote.
 
 (o) Use of estimates
 
 The presentation of the financial statements requires 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
 recognised in the period in which the results are known / materialised.
 
 2d Rights, preferences and restrictions attached to the shares
 
 The Company has only one class of equity share having a par value of
 Rs. 10/- per share. Each shareholder has the following voting rights
 (i) On a show of hands: one vote for a member present in person and
 (ii) On a poll: one vote for each equity share registered in the name
 of the member or held by the beneficial owner. The dividend proposed by
 the Board of Directors is subject to the approval of the shareholders
 in the ensuing annual general meeting, except in case of interim
 dividend. In the event of winding up, the liquidator may, with the
 sanction of a special resolution of the Company and any other sanction
 required by the Act, divide amongst the members, in specie or kind, the
 whole or any part of the assets of the company, whether they shall
 consist of property of the same kind or not.
Source : Dion Global Solutions Limited
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