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Notes to Accounts of Camlin Fine Sciences Ltd.

Mar 31, 2017

c. Utilization of proceeds of Qualified Institutions Placement (QIP)

On July 5, 2016, Company has allotted 6,519,500 equity shares of Rs.1 each at a premium of Rs.84.40 per share amounting to share proceeds of Rs.5,567.65 lakh on July 5, 2016 pursuant to a Qualified Institutions Placement (QIP) under Securities Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

a) Dividend paid includes Rs.29.30 lakh pertaining to payment of dividend with respect to financial year 2015-16 for equity shares allotted pursuant to QIP issue on July 5, 2016. Correspondingly tax on proposed dividend includes Rs.5.97 lakh related to aforesaid payment of dividend. Tax on proposed dividend also includes reversal of excess provision in earlier year of Rs.0.51 lakh.

b) During the year, Company has allotted 5,24,240 equity shares of Rs.1/- each at a premium of Rs.66 per share ((Previous Year 7,77,700 equity shares of Rs.1/- each at a premium of Rs.66 per share) under the ESOS Scheme, resulting in an increase in securities premium by Rs.346 lakh (Previous Year Rs.263 lakh).

a Foreign currency term loans

Foreign currency term loans as at 31 March 2016 comprised of two term loans, which were repayable in 21 substantially equal quarterly installments commencing after a moratorium of 24 months from the date of 1st disbursement i.e. March 3, 2011 and March 28, 2014 respectively. The loans were secured by

i) First pari passu mortgage and charge on mortgage and charge on the entire immoveable properties and moveable fixed assets of the Company, both present and future.

ii) Pledge of 100% of the equity shares of CFSL Mauritius Pvt. Ltd ("CFCL Mauritius”).

iii) Pledge of 100% equity stake of the CFS EUROPE S.p.A .Italy held by the CFCL Mauritius .

Collateral Security: 2nd pari passu charge on the entire current assets of the Company

These loans carried an interest rate 4.50% and 4.50% above LIBOR, respectively. The then current interest rate on these ranged from 4.89% to 4.95%.

b Rupee term loans

Rupee term loan from banks comprise term loans from EXIM Bank , State Bank of Patiala and Vehicle loans from HDFC Bank

Term loan from EXIM Bank is repayable in 28 & 21 equal quarterly installments commencing after a moratorium period of one year and two year from the date of first disbursement from 13 May, 2010 and 28 March 2014. The loan is secured by a first pari passu charge on all the fixed assets of the Company, both present and future. Collateral Securities: 2nd pari passu Charge on the entire Current assets of the Company. In addition to the above the loan disbursed on 28 March 2014 is also secured by way of 1)Pledge of 100% Shares of CFCL Mauritius Pvt. Ltd. held by the Company. (2) Pledge of 100% shares of CFS Europe S.P.A .Italy held by CFCL Mauritius Pvt. Ltd. The current interest rate on these ranges from 11.00 % to 11.50%

Term loan from State Bank of Patiala is repayable in 26 equal quarterly installments commencing from 31 December 2013. The loan is secured by first pari passu charge on all the fixed assets of the Company, both present and future. Collateral Security: 2nd pari passu Charge on the entire Current assets of the Company. The current interest rate is 11.65%.

Term loan from HDFC Bank is repayable in maximum tenure five to seven years. The loan is secured by hypothecation of vehicles. The current interest rate ranges from 11.50% to 12.50%.

a Does not include any amount due and outstanding to be credited to Investor Education and Protection Fund.

b The unclaimed fixed deposits of Rs.5.35 lakh outstanding at March 31, 2017 represent deposits taken under the Companies Act, 1956.

The Company has been unable to repay these deposits as certain cheques issued for repayment of the deposits have not been presented to the bank for payment and certain deposit holders have not submitted to the Company the original deposit receipts for repayment

a The Company has invested Rs.56.01 lakh (previous year Rs.56.01 lakh) in the share capital of Solentus North America Inc., its wholly owned subsidiary Company ("the subsidiary”) and given a loan of Rs.199.66 lakh (previous year Rs.160.33 lakh) to it (included in loans and advances) (See note 17) up to 31 March 2017. The subsidiary has negative net worth as at 31 March 2017 and is dependent upon the Company to enable it to meet its obligations as they become due. Based on the proposed plans for the subsidiary, management believes the loan to be fully recoverable and further believes that there is no diminution other than temporary in its investment in the share capital of the subsidiary

b On February 2, 2016 the Company had entered into share purchase agreement with the shareholders of Dresen Quimica SAPI, a company registered and situated in Mexico along with its five wholly owned subsidiaries in Mexico, Peru, Guatemala, Columbia and Dominican Republic, to acquire 65% of share capital. Dresen Quimica SAPI and its subsidiaries are engaged in manufacturing and marketing wide range of antioxidants, adsorbents, acidifying agents, bactericides, binders and mould inhibitors. Accordingly, on May 4, 2016, Company has invested a sum of Rs.1,303.15 lakh equivalent to US$ 19.50 lakh through an intermediary wholly owned subsidiary CFS Antioxidantes De Mexico, S.A.DE.C.V.(CFS de Mexico) which is registered in Mexico. For the purpose of this acquisition CFS de Mexico has borrowed US$ 5.85 million as a loan from EXIM Bank. Company has provided a corporate guarantee against the payment of interest and principal of the aforesaid loan amounting to US$ 6.435 million.

c On April 15, 2016, Company has incorporated a subsidiary in the free trade zone of China, namely, CFS International Trading (Shanghai) Ltd. The Company has subscribed US$ 75,000 as capital during the year,

d On March 22, 2017, Company has been allotted 62,67,003 equity shares of Chemolutions Chemicals Ltd (CCL) of Rs.10 each at a share premium of Rs.5 per equity share on conversion of Inter Corporate Deposit of Rs.940.05 lakh Pursuant to this allotment, CCL has become subsidiary of the Company with effect from March 22, 2017,

e The provision for diminution in the value of investments represents the provision in respect of investments in Fine Renewable Energy Limited and Fine Lifestyle Brand Limited.

a On December 23, 2016, Company has entered into share purchase agreement with Ningbo Wanglong Technology Limited, a company registered in China for acquisition of 51% equity stake in its Vanillin manufacturing facility, for a consideration of US$ 6.28 million, by the Company or its subsidiaries. The process of acquisition is expected to be completed in the first half of next financial year on completion of certain conditions by the counter party. As per the terms of share purchase agreement, the first tranche of consideration of US$ 0.628 million equivalent to Rs.419.38 lakh being 10% of the consideration has been transferred to an Escrow Account on February 28, 2017. This advance has been disclosed as "Advance for Investment in Subsidiary” Under Note 17 : Short term loans and advances

b Loans and advances to related parties include loans / advances to subsidiaries and associates as follows

Board of Directors of the Company has approved conversion of advance amounting to Rs.940.05 lakh into equity share capital of Chemolutions Chemicals Limited (CCL). Pursuant to this capitalization CCL has issued 62,67,003 equity shares of Rs.10 each at a share premium of Rs.5 per equity share amounting to Rs.940.05 lakh. Accordingly, Company has reinstated the advance to CCL written off in earlier years aggregating Rs.867.80 lakh which is disclosed under the head "Other Income”.

i. The Company granted options to its eligible employees under "Camlin Fine Sciences Employees Stock Option Scheme, 2008” (ESOS 2008), "Camlin Fine Sciences Employees Stock Option Scheme, 2012”(ESOS 2012) and "Camlin Fine Sciences Employees Stock Option Scheme, 2014” (ESOS 2014). The options granted under these schemes are equity settled. The other details of the schemes are summarized below:

The company has adopted intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares is based on the latest available closing market price, prior to the date of meeting of the board of directors, in which the options were granted, on the stock exchange in which the shares of the company are listed. The difference between the intrinsic value and the exercise price is being amortized as employee compensation cost over the vesting period.

The total expense charged to the statement of profit and loss in respect of the options granted aggregated '' Nil lakh (previous year Rs.3.69 lakh).

Had the fair value method of accounting for options been followed the net profit for the year would have been lower by Rs.49.72 lakh (previous year Rs.233.91 lakh).

ii Gratuity

The following tables summaries the net benefit expense recognized in the Statement of Profit & Loss, the details of the defined benefit obligation and the funded status of the Company''s gratuity plan

The Company expects to contribute Rs.70 lakh to gratuity in the next year (Previous year Rs.35 lakh).

The amount of defined benefit obligation, plan assets, the deficit thereof and the experience adjustments on plan asset and plan liabilities for the current and previous fours years are as follows

The gratuity fund is entirely invested in a group gratuity policy with the Life Insurance Corporation of India. The information on the allocation of the fund into major asset classes and the expected return on each major class is not readily available.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors.

iii Leave Encashment

The accumulated balance of leave encashment (unfunded) provided in the books as at 31 March 2017 Rs.246.77 Lakh (previous year Rs.210.20 Lakh), determined on actuarial basis using projected unit credit method.

1 Exceptional Item

On 16th June 2013, a fire had occurred at the Company''s factory at Tarapur as a result of which there was a loss of inventory and fixed assets. Company had preferred an insurance claim which was settled during the previous year. The resultant loss on final settlement of the insurance claim amounting to Rs.454.73 lakh has been disclosed as an exceptional item in the previous year

2 Leases General description of operating lease

The significant leasing arrangements are in respect of residential flats, warehouses etc. taken on lease. The arrangements range between 11 months to five years and are generally renewable by mutual consent or mutually agreeable terms. Under these arrangements refundable interest-free deposits have been given.

3 Segment information

The Company operates primarily in the segment of Fine Chemicals and hence has only one reportable segment Geographical segment disclosure for year ended March 31, 2017 Domestic sale is Rs.9,963.94 lakh (previous year Rs.8,437.09 lakh) and Export sale is Rs.23,356.55 lakh (previous year Rs.33,214.80 lakh)

* Includes Central Excise and Customs duty demand of Rs.356.02 lakh received dated April 13, 2017 for which the period of filing of appeal has not expired.

Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs.725 Lakh. (Previous year Rs.5.48 Lakh)

The information in respect of commitment has been given only in respect of capital commitment in order to avoid providing excess details that may not assist user of financial statements

4 Disclosure on Specified Bank Notes (SBNs)

During the year, the company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:

*For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.”

**Permitted receipts pertain to SBN''s received from debtors by Company''s sales representatives prior to November 7, 2016.

***Permitted payments include transactions of SBN as permitted pursuant to notifications issued by Reserve Bank of India.

5 MICRO,SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT,2006

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relating to Micro and Small Enterprises as at March 31,2017 are as under:

6 Prior year comparatives

Prior year figures have been reclassified, where necessary to confirm to current year''s classification.


Mar 31, 2016

1. Other current liabilities

a Does not include any amount due and outstanding to be credited to Investor Education and Protection Fund

b The unclaimed fixed deposits of Rs, 5.35 outstanding at March 31, 2016 represent deposits taken under the Companies Act, 1956.

The Company has been unable to repay these deposits as certain cheques issued for repayment of the deposits have not been presented to the bank for payment and certain deposit holders have not submitted to the Company the original deposit receipts for repayment.

The Company has revised depreciation rates on fixed assets effective 1 April 2014 in accordance with requirements of Schedule II of the Act.

The remaining useful life has been revised by adopting standard useful life as per the Act. The carrying amount as on 1 April, 2014 is depreciated over the revised remaining useful life. As a result of these changes

(a) the depreciation charge for year ended 31st March, 2015 is higher by Rs, 108.45 Lacs respectively.

(b) there is a debit to retained earnings of Rs, 48.73 Lacs net (net of deferred tax) for the assets whose remaining life on 1 April, 2014 is reduced to NIL in accordance with revised life as considered by management.

a. The Company has invested Rs, 56.01 Lacs (previous year Rs, 56.01 Lacs) in the share capital of M/s. Solentus North America Inc., its wholly owned subsidiary Company ("the subsidiary") and given a loan of Rs, 160.33 Lacs ( previous year Rs, 122.89 Lacs) to it (included in loans and advances) (See Note 17) upto 31 March 2016. The subsidiary has negative net worth as at 31 March 2016 and is dependent upon the Company to enable it to meet its obligations as they become due. Based on the proposed plans for the subsidiary, management believes the loan to be fully recoverable and further believes that there is no diminution other than temporary in its investment in the share capital of the subsidiary.

b. The provision for diminution in the value of investments represents the provision in respect of investments in Fine Renewable Energy Limited and Fine Lifestyle Brand Limited.

c. On May 4, 2016, CFS Antioxidants De Mexico S.A. de C. V., the Company''s wholly owned subsidiary in Mexico has acquired a 65% stake for USD 7.80 million in Dresen Quimica S.A.P.I.de C.V., Mexico along with its five wholly owned subsidiaries in Mexico, Peru, Guatemala, Columbia and Dominican Republic.

d. On 15th April, 2016, Company has incorporated a subsidiary in the free trade zone of China,namely, CFS International Trading (Shanghai) Ltd. for trading in specialty chemicals.

The Company has adopted intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares is based on the latest available closing market price, prior to the date of meeting of the board of directors, in which the options were granted, on the stock exchange in which the shares of the Company are listed. The difference between the intrinsic value and the exercise price is being amortized as employee compensation cost over the vesting period.

2. Commission to Directors

The members at their 20th Annual General Meeting have approved the payment of remuneration by way of commission to its Non-Executive Directors, of an amount not exceeding 1% of the Net Profits, for a period of 5 years from the FY 2012-13. During the FY 2015-16, the Company has made a provision of Rs, 36.00 Lacs towards commission payable to Non-executive Directors.

3. Exceptional Item

On 16th June 2013, a fire had occurred at the Company''s factory at tarapur as a result of which there was a loss of inventory and fixed assets. Company had preferred an insurance claim which was settled during the year. The resultant loss on final settlement of the insurance claim amounting to Rs, 454.73 Lacs has been disclosed as an exceptional item.

4. Related party transactions

a The related parties with whom the Company had transactions during the year are summarized below:

Name of the related party Nature of relationship

CFCL Mauritius Pvt. Ltd. Subsidiary

CFS DO BRASIL INDÚSTRIA, COMÉRCIO, IMPORTAÇÃO E Subsidiary

EXPORTAÇÃO DE ADITIVOS ALIMENTÍCIOS LTDA.

Solentus North America Inc. Subsidiary

CFS Europe S.p.A Subsidiary

CFS North America LLC Subsidiary

CFS Antioxidantes De Mexico S.A.DE C.V. Subsidiary

Fine Lifestyle Brands Ltd. Associate

Fine Lifestyle Solutions Ltd. Significant influence by Managing Director

Fine Renewable Energy Ltd. Significant influence by Managing Director

Focussed Event Management Pvt. Ltd Significant influence by Managing Director

Vibha Agencies Pvt. Ltd. Owned by Managing Director

Name of the related party Nature of relationship

Key managerial personnel and their relatives

Mr. D. D. Dandekar Chairman

Mr. A. S. Dandekar Managing Director

Mr .D. R. Puranik Executive Director & CFO

Ms. L. Dandekar Executive Director

Mr. S. D. Dandekar Management Consultant/Relative of Managing

Director

Mrs. R. S. Dandekar Management Consultant/Relative of Managing

Director

Mr. R. D. Sawale Company Secretary

Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs, 5.48 Lacs. (Previous year Rs, 122.87 Lacs)

The information in respect of commitment has been given only in respect of capital commitment in order to avoid providing excess details that may not assist user of financial statements

5. Segment information

The Company operates primarily in the segment of Fine Chemicals and hence has only one reportable segment Geographical segment disclosure For year ended March 2016 Domestic sale is Rs, 8,437.09 Lacs (previous year Rs, 10,013.29 Lacs) and Export sale is Rs, 33,214.79 Lacs (previous year Rs, 34,010.80 Lacs)

6. Prior year comparatives

Prior year figures have been reclassified, where necessary to confirm to current year''s classification.


Mar 31, 2014

1. EMPLOYEE STOCK OPTIONS

The Company has Employee Stock Option Scheme called "Camlin Fine Sciences Employees Stock Option Scheme, 2008"

Which was approved on 8 August 2008. The scheme is an employee share based payment plan administered through employee stock option. Each option under the scheme will entitle one fully paid-up equity share of Rs. 2/- each of the Company.

In the Annual General Meeting held on 1 August 2012, the members have approved ''Camlin Fine Sciences Employees

Stock Option Scheme, 2012''. In accordance with this scheme, the company has granted 7,47,000 options on 19 November 2012 to the employees, where each option will entitle one fully paid-up equity share of Rs. 2/- each of the company.

2. COMMISSION TO DIRECTORS

During the year the company has made a provision towards commission payable to Non-executive Directors of Rs. 32.00 lacs for the financial year 2013-2014 subject to overall ceiling of 1% of net profits of the company. As required by section 309(4)(b) of the Companies Act, 1956, the company has obtained necessary approval of the members by passing a special resolution in the ensuing Annual General Meeting.

3. INSURANCE CLAIM

On 16th June, 2013 a fre occurred at the company''s factory at Tarapur as a result of which there was a loss of inventory and fixed assets. The Company is fully insured against this loss and a claim with the insurance has been lodged which is in progress. The Company has received a partial payment of Rs. 1,000 lacs against the said claim in January 2014. The Company is confdent of recovery of the entire loss. However, a suitable provision on a prudential basis has been made in the books for any part of the claim that may not be recovered.

4. CONTINGENT LIABILITIES

(Rs. in Lacs)

Particulars March 31, 2014 March 31, 2013

(a) In respect of Bills of Exchange/cheque discounted with the Bankers 4,943.51 4,360.35

(b) In respect of Bank Guarantees issued to VAT and Custom Authorities 257.75 336.86

(c) In respect of Corporate Bank Guarantees issued against the borrowings of:

(i) CFS Europe S.p.A. - Subsidiary Company 5,392.00 1,900.00

(d) In respect of Corporate Guarantees issued against the contractor''s payment obligations and supply of material:

(i) CFS Europe S.p.A. - Subsidiary Company 3,671.06 3,849.10

5. COMMITMENTS

(a) Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 29.91 Lacs. (Previous year Rs. 7.57 Lacs).

(b) The total investment in the joint venture company Dulcette Technologies LLC, USA with Viachem Company LLC, USA is expected to be to the tune of USD 3,00,000 with Camlin Fine Sciences Ltd''s share of 51%. Total capital contribution of the company as on March 31, 2014 is USD 76,000 equivalent to Rs. 32.53 Lacs.

(c) The total investment in the subsidiary company Solentus do Brasil Indústria, Comércio, Importação e Exportação de Aditivos Alimentícios Ltda. is expected to be to the tune of USD 5,75,000 with Camlin Fine Sciences Ltd''s share of 100%. Total capital contribution of the company as on March 31, 2014 is USD 3,30,000 equivalent to Rs. 203.50 lacs (7,78,737 shares).

(d) The total investment in the subsidiary company Solentus North America Inc. is expected to be to the tune of USD 90,090 with Camlin Fine Sciences Ltd''s share of 100%. Total capital contribution of the company as on March 31, 2014 is USD 70,000 equivalent to Rs. 43.92 lacs (77,000 shares)

(e) The information in respect of commitment has been given only in respect of capital commitment in order to avoid providing excess details that may not assist user of financial statements.

6. Previous year''s fgures have been regrouped/rearranged whereever necessary.


Mar 31, 2013

Accounting convention

The accompanying fnancial statements have been prepared under the historical cost convention, in accordance with generally accepted accounting principles in India. The company has prepared these fnancial statements to comply in all material respects with accounting standards notifed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

1. EMPLOYEE STOCK OPTIONS

The Company has Employee Stock Option Scheme called "Camlin Fine Sciences Employees Stock Option Scheme, 2008" which was approved on 8th August, 2008. The scheme is an employee share based payment plan administered through Employee Stock Option. Each option under the scheme will entitle one fully paid-up equity share of Rs. 2/- each of the Company.

In the Annual General Meeting held on 1st August, 2012, the members have approved ‘Camlin Fine Sciences Employees Stock Option Scheme, 2012''. In accordance with this scheme, the company has granted 7,47,000 options on 19th November, 2012 to the employees, where each option will entitle one fully paid-up equity share of Rs. 2/- each of the company.

2. COMMISSION TO DIRECTORS

During the year the Company has made a provision towards commission payable to Non-executive Directors @ 1% of net profts of the Company for the fnancial year 2012-2013 subject to overall ceiling of Rs. 12.00 lacs. As required by Section 309(4)(b) of the Companies Act, 1956, the Company will obtain necessary approval of the members by passing a special resolution in the ensuing Annual General Meeting.

3. CONTINGENT LIABILITIES

(Rs. in Lacs)

Particulars March 31, 2013 March 31, 2012

(a) In respect of Bills of Exchange/cheque discounted with the Bankers 4,360.35 3,213.28

(b) In respect of Bank Guarantees issued to VAT and Custom Authorities 336.86 364.99

(c) In respect of Corporate Bank Guarantees issued against the borrowings of:

(i) CFS Europe S.p.A. - Subsidiary Company 1,900.00 1,900.00

(ii) Chemolutions Chemicals Ltd. Nil 500.00

(d) In respect of Corporate Guarantees issued against the contractor''s payment obligations and supply of material:

CFS Europe S.p.A. - Subsidiary Company 3,849.10 Nil

4. COMMITMENTS

(a) Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 7.57 Lacs. (Previous year Rs. 12.99 Lacs).

(b) The total investment in the joint venture company Dulcette Technologies LLC, USA is expected to be to the tune of USD 3,00,000 with Camlin Fine Sciences Ltd''s share of 61%. Total capital contribution of the company as on March 31, 2013 is USD 76,000 equivalent to Rs. 32.53 Lacs.

(c) The information in respect of commitment has been given only in the respect of capital commitment in order to avoid providing excess details that may not assist user of fnancial statements.


Mar 31, 2012

(a) Details of Shares allotted as fully paid up pursuant to contracts without payment being received in cash

During financial year ended 31st March, 2007 the company had issued 48,00,000 equity shares of Rs. 10/- each as fully paid up to the shareholders of Camlin Limited pursuant the Scheme of Arrangement without payment being received in cash.

(b) Shares reserved for issue under options

For details of shares reserved for issue under employees stock option (ESOP) plan of the company, refer note 26.

Note:

Opening balance as of 01.04.2011 includes Rs. 16 lacs transferred on account of amalgamation of Sangam Laboratories Ltd. in financial year 2010-11 which is not available for distribution of dividends.

1. LONG-TERM BORROWINGS (Contd.)

(a) Foreign currency term loans:

Foreign currency term loan from Exim Bank is repayable in 21 substantially equal quarterly installments commencing after a moratorium of 24 months from the date of 1st disbursement i.e 03.03.2013. The Loan is secured by (a) First pari passu mortgage and charge on the entire immoveable properties and moveable fixed assets of the company, both present and future, (b) Pledge of 100% equity stake of the SVP of CFSL set up in Mauritius, (c) ledge of 100% equity stake of the CFS EUROPE S.p.A, Italy held by the Mauritius SPV of CFSL.

(b) Term loans from Bank

Term loan from Exim Bank is repayable in 28 equal quarterly installments commencing after a moratorium period of one year from the date of first disbursement commencing from May,13 2010. The loan is secured by First pari passu charge on all the fixed assets of the Company, both present and future.

Term loan from State Bank of Patiala is repayable in 26 equal quarterly installments commencing from 31.12.2013. The loan is secured by a) First pari passu charge on all the fixed assets of the Company, both present and future including Mortgage of MIDC lease hold land at Tarapur, (b) Assets including land and building of Tarapur Pharma Chem Pvt Ltd plant comprising of 4050 sq mts land & bldg. plant & machinery. Collateral Security: Second pari passu Charge on the entire Current assets of the Company.

Term loan from HDFC Bank is repayable in maximum tenure five years. The loan is secured by hypothecation of vehicles.

Term loan from ICICI Bank is repayable in maximum tenure five years. The loan is secured by hypothecation of vehicles

(c) Finance lease obligations

Loan against lease assets from L&T Finance Ltd. is repayable in maximum tenure of three years. The loan is secured by furniture & fixture taken on lease.

(d) Deposits from Public

Deposits from public is repayable in maximum tenure of three years

Total outstanding includes overdue amount of Rs. 0.73 Lacs pertaining to financial years 2010-11 & 2011-12. However, the Company has prepaid entered amount before balance sheet date irrespective of repayment schedule and hence the entire outstanding is considered as currents borrowings.

2. RIGHT ISSUE

During the financial year 2010-2011, the company raised Rs. 549.39 Lacs through issue of 34.88 Lacs equity shares of face value of Rs.10/- each at premium of Rs. 5.75 per share on right basis. The proceeds (net of expenses of Rs. 18.37 Lacs) of the right issue had been utilised for meeting capital expenditure for development of plant process and de-bottlenecking as mentioned in the Letter of Offer.

3. EMPLOYEE STOCK OPTIONS

The Company has Employee Stock Option Scheme called "Camlin Fine Sciences Employees Stock Option Scheme, 2008" which was approved on 8th August 2008. The scheme is an employee share based payment plan administered through Employee Stock Option. Each option under the scheme will entitle one fully paid up equity share of Rs. 2 each of the Company

* Being, the average share price at the Recognized Stock Exchange on the date of exercise of the option.

** Exercise price is the price payable by employee for exercising the option granted.

*** Market price is the latest available closing price, prior to the date of the meeting of board of directors in which options are granted.

The Company has adopted intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares is based on the latest available closing market price, prior to the date of meeting of the board of directors, in which the options were granted, on the stock exchange in which the shares of the company are listed. The difference between the intrinsic value and the exercise price is being amortised as employee compensation cost over the vesting period. The details thereof are:

Accordingly, during the year, 264,375 equity shares of Rs. 2/- each (Previous Year 3,315 equity shares of Rs. 10/- each) have been issued under the ESOS Scheme. Correspondingly, the share premium related to these shares amounting to Rs. 26.86 lacs has been accounted.

4. COMMISSION TO DIRECTORS

During the year the Company has made a provision towards commission payable to Non-executive Directors @ 1% of net profits of the Company for the financial year 2011-2012 subject to overall ceiling of Rs. 8.00 lacs. As required by Section 309(4)(b) of the Companies Act, 1956 the Company will obtain necessary approval of members by passing special resolution in the ensuing Annual General Meeting.

EPS for financial year 2010-2011 has been restated for split of share from Rs. 10/- per share to Rs. 2/- per share

(ii) Foreign Currency Transactions:

Exchange variation (Net) arising on translation of Foreign Currency transactions charged off to the Profit & Loss Account is Rs. 110.38 Lacs (Previous Year Profit of Rs. 14.47 Lacs).

There are no outstanding hedged exposures in foreign currency transactions as on March 31, 2012.

(iii) Retirement Benefits:

(a) Defend Contribution Plans

Company's Contribution paid/payable during the year to Provident Fund, Superannuation Fund are charged to the Profit & Loss Account.

(ii) Leave Encashment:

The accumulated balance of Leave Encashment (Unfunded) provided in the books as at 31st March 2012 Rs.78.04 Lacs (Previous year Rs.61.24 Lacs), determined on actuarial basis using projected unit credit method

(iv) Related Party Disclosures:

Note: Chemolutions Chemicals Ltd ceased to be Associate Company with effect from September 5, 2011.

(vi) Segmental Reporting

The Company predominantly deals in manufacture of food and industrial antioxidants and has enhanced its product portfolio to include those used in food chemistry, biotechnology, biochemistry etc. During the year, the Company has increased business by trading in these products. Accordingly, as per the provisions of AS-17, Segmental Reporting, the Company now operates in two business segments namely Manufactured and Traded Products. There are no inter segment transaction during the year. Prior to the current year, the Company's operations consisted predominantly of sale of manufactured products and hence comparative segmental disclosures for earlier corresponding year are not provided.

5. CONTINGENT LIABILITIES

(Rs.in Lacs) Particulars March 31, 2012 March 31, 2011

(a) In respect of Bills of Exchange/ cheque discounted with the Bankers 3,213.28 2,490.42

(b) In respect of Bank Guarantees issued to VAT and Custom Authorities 364.99 364.99

(c) In respect of Corporate Bank Guarantees issued against the borrowings of:

(i) CFS Europe S.p.A. - Subsidiary Company 1,900.00 -

(ii) Chemolutions Chemicals Ltd. 500.00 500.00



6. COMMITMENTS

(a) Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 12.99 Lacs. (Previous year Rs.25.40 Lacs).

(b) The total investment in the joint venture company Dulcette Technologies LLC, USA with Viachem Company LLC, USA is expected to be to the tune of USD 3,00,000 with Camlin Fine Sciences Ltd's share of 51%. Total capital contribution of the company as on March 31, 2012 is USD 76,000 equivalent to Rs. 32.53 Lacs.

(c) The information in respect of commitment has been given only in the respect of capital commitment in order to avoid providing excess details that may not assist user of financial statements.

7. The financial statements for the year ended March 31, 2011 had been prepared as per the applicable, pre-revised Schedule VI to the Companies Act, 1956. Financial Statements for the year ended March 31, 2012 has been prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

(i) Contingent Liabilities:

(a) In respect of Bills of Exchange/cheque discounted with the Bankers Rs. 2490.42 Lacs. (Previous year Rs. 1898.81 Lacs).

(b) In respect of bank guarantees aggregating to Rs. 364.99 Lacs issued to VAT and Customs authorities. (Previous year Rs. 366.65 Lacs).

(c) In respect of corporate bank guarantee amounting to Rs. 500 Lacs (Previous year Rs. 500 Lacs) issued against the borrowings of Chemolutions Chemicals Ltd, an associate of the Company.

(ii) Commitments:

(a) Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 4.97 Lacs. (Previous year Rs. 25.40 Lacs).

(b) The Company has entered into an agreement on March 13, 2007 with Viachem Company LLC, USA to incorporate a joint venture company Dulcette Technologies LLC, USA for marketing of Companys products in international markets. The total investment in this joint venture is expected to be to the tune of USD 3,00,000 with Camlin Fine Chemicals Ltds share of 51%. Total capital contribution of the Company is USD 76,000 equivalent to Rs. 32.53 Lacs.

(iii) Right Issue

During the year, the Company has raised Rs. 549.39 Lacs through issue of Rs. 34.88 Lacs equity shares of face value of Rs. 10/- each at premium of Rs. 5.75 per share on right basis.

Proceeds of the issue are to be utilised for meeting capital expenditure for development of plant process and de-bottlenecking, and expenses of the issue. The proceeds (net of expenses of Rs. 18.37 Lacs) of the right issue has been utilised as follows:

(i) Capital expenditure amounting to Rs. 451.19 Lacs.

(ii) Balance Proceeds are being utilised as working capital for the short term until the ultimate utilisation for the aforesaid purposes.

(iv) Pursuant to the scheme of amalgamation (the scheme) of Sangam Laboratories Ltd. (Sangam) a wholly owned subsidiary of the Company, with the Company as sanctioned by the Honorable High Court of Bombay vide its order dated 21st April, 2011 the entire business and all the assets and liabilities, duties and obligations of Sangam were transferred to and vested in the Company from 1st April, 2010. Upon necessary filings with the Registrar of Companies, the Scheme has become effective on 19th May, 2011.

The accounting for the amalgamation was done as per pooling of interest method as modified under the scheme and approved by the Honorable High Court and the same has been given effect to in the financial statement as under:

(i) The assets and liabilities of Sangam were recorded in the books of the Company at their respective book values.

(ii) The Company credited to its General Reserve Rs. 16.00 Lacs, being the excess of the value of the net assets of Sangam over the value of investment in Sangam, the face value of share cancelled and debit balance in Profit and Loss Account of Sangam transferred to the Company. As per the scheme, the aforesaid amount shall not be utilised for the purpose of the declaring dividend in future, and to that extend it will not be a free reserve.

Had the scheme not prescribed the above treatment, the aforesaid amount of Rs. 16.00 Lacs would have been credited to Capital Reserve and accordingly the General Reserve would have been lower by the same amount.

(iii) As per the scheme the authorised share capital of Sangam is to be added to form part of the authorised share capital of the Company. Accordingly the authorised share capital of the Company has been so added and disclosed at schedule 1 to balance sheet.

(iv) On account of above merger, the figures for current year are not strictly comparable with that of previous year.

(v) Employee Stock Option Scheme

The Company has Employee Stock Option Scheme called “Camlin Fine Chemicals Employees Stock Option Scheme, 2008” which was approved on 8th August, 2008. The scheme is an employee share based payment plan administered through Employee Stock Option. Each option under the scheme will entitle one fully paid up equity share of Rs. 10/- each of the Company.

(vi) Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Foreign currency term loan from bank are secured by first pari-passu mortgage and charge on the entire immovable properties and movable fixed assets of the Company, both present and future, pledge of 100% equity stake of the Company in its subsidiary CFCL Mauritius Pvt. Ltd. and pledge of 100% equity stake of CFCL Mauritius Pvt. Ltd. in its subsidiary Borregaard Italia s.p.a. Italy.

Cash Credits/Packing Credit from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified immovable and movable Fixed Assets of the Company ranking pari passu by way of second charge.

Vehicle Loans are secured by hypothecation of related vehicles.

Loans amounting to Rs. 175.87 Lacs (Previous Year Rs. 660.11 Lacs) are guaranteed by Managing Director.

Loan against leased Assets are secured by furniture & fixtures taken on lease.

(vii) On 14th December, 2010, the Company has entered into share purchase agreement with the shareholders of Borregaard Italia s.p.a. a Company registered and situated in Italy, to purchase entire share capital. Accordingly, the Company has invested a sum of Rs. 516.37 Lacs equivalent to EURO 8,14,463 through an intermediary subsidiary CFCL Mauritius Pvt. Ltd. which is registered in the country of Mauritius. The balance consideration of EURO 6,00,000 is payable in the month of February 2012, after certain milestones stated in the aforesaid agreement. For the purpose of the balance consideration, the Company through EXIM Bank has arranged a bank guarantee from an Italian Bank Banca Popolare di Sondrio amounting to EURO 6,00,000 against a 100% margin deposit. The margin deposit of EURO 6,00,000 equivalent to Rs. 377.07 Lacs has been included and disclosed under the head “Advances recoverable in cash or kind”.

CFCL Mauritius Pvt. Ltd. has also incurred acquisition cost of Rs. 121.51 Lacs which is over and above aforesaid consideration of Rs. 516.37 Lacs.

(ix) Remuneration to Directors:

(a) To Chairman – Professional Fess Rs. 12.00 Lacs (Previous year Rs. 6.00 Lacs).

(b) To Managing Director

(Within limits specified in the Schedule XIII of the Companies Act, 1956)

(xi) Disclosures pursuant to the requirements of Accounting Standards issued by Institute of Chartered Accountants of India.

(b) Since, the Company operates in a single business segment namely, ‘Fine Chemicals, the segment-wise disclosure is not required. Further, in the opinion of the management, there is no reportable geographical segment.

(c) Foreign Currency Transactions:

Exchange variation (Net) arising on translation of Foreign Currency transactions credited to the Profit & Loss Account is Rs. 13.34 Lacs (Previous Year Profit of Rs. 104.63 Lacs).

(e) Retirement Benefits:

Defined Contribution Plans

Companys Contribution paid/payable during the year to Provident Fund, Superannuation Fund are charged to the Profit & Loss Account.

Defined Benefit Plans

(i) Gratuity as per Actuarial valuation

(ii) Leave Encashment: The accumulated balance of Leave Encashment (Unfunded) provided in the books as at 31st March, 2011 Rs. 61.24 Lacs (Previous year Rs. 50.99 Lacs), determined on actuarial basis using projected unit credit method.

(f) Related Party Disclosures

(a) Subsidiaries, Joint Venture & Associate Companies

Name of the Related Party Nature of Relationship

CFCL Mauritius Private Limited Subsidiary Company from 25th January, 2011.

Borregaard Italia s.p.a. Step down Subsidiary from 8th March, 2011.

Chemolutions Chemicals Ltd. Subsidiary Company till 4th March, 2011 there after Associate Company.

Dulcette Technologies LLC Subsidiary Company (Joint Venture with Viachem LLC with 51% stake)

Fine Lifestyle Brands Ltd. Subsidiary Company till 12th August, 2010 thereafter Associate Company.

Fine Lifestyle Solutions Ltd. Step down Subsidiary Company till 12th August, 2010 thereafter Associate Company.

Fine Renewable Energy Ltd. Subsidiary Company till 6th January, 2011.

Focussed Event Management Pvt. Ltd. Associate Company

Vibha Agencies Pvt. Ltd. Associate Company

Abana Medisys Pvt. Ltd. Associate Company

(b) Key Management Personnel & their relatives

Name of the Person Nature of Relationship

Mr. A. S. Dandekar Managing Director

Mr. S. D. Dandekar Management Consultant

Mr. D. D. Dandekar Chairman

Mrs. L. A. Dandekar Promoter Group

Vivek A. Dandekar Promoter Group

Abha A. Dandekar Promoter Group

(xii) Based on the information available with the Company, no creditors have been identified as ‘supplier within the meaning of Micro, Small & Medium Enterprises Development Act, 2006 as on 31st March, 2011.

(xiii) Previous years figures are recast/regrouped wherever necessary.


Mar 31, 2010

(i) Contingent Liabilities:

(a) In respect of Bills of Exchange/cheque discounted with the Bankers Rs. 1,898.81 Lacs . (Previous Year Rs. 1,738.24 Lacs).

(b) In respect of bank guarantees aggregating to Rs. 366.65 Lacs issued to VAT and Customs authorities. (Previous Year Rs. 285.99 Lacs).

(c) In respect of corporate bank guarantee amounting to Rs. 500 Lacs issued against the borrowings of Chemolutions Chemicals Ltd., a subsidiary of Company.

(ii) Commitments:

(a) Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 25.40 Lacs. (Previous Year Rs. 179.50 Lacs).

(b) The Company has entered into an agreement on March 13, 2007 with Viachem Company LLC, USA to incorporate a Joint Venture Company Dulcette Technologies LLC, USA for marketing of Companys products in international markets. The total investment in this Joint Venture is expected to be to the tune of USD 3,00,000 with Camlin Fine Chemicals Ltd.s share of 51%. Total capital contribution of the Company is US $ 76,000 equivalent to Rs. 32.53 Lacs.

(iii) Pursuant to the preferential issue to promoter group made in fnancial year ended March 31, 2008, certain relatives of Promoters and entities belonging to ‘Promoter Group were issued 15,50,000 warrants, each of which was entitled to one ordinary share of the Company against payment of cash. As per the SEBI Guidelines, an amount equivalent to 10% of the price that is Rs. 5.20 per warrant had been received from the concerned individuals/entities on allotment of these warrants. These warrants were exercisable at Rs. 52 each on or before June 20, 2009. The concerned promoters and entities have not exercised the option on these warrants by the stipulated date and hence the options have lapsed. As per the SEBI Guidelines and terms of the issue, the advance paid against these warrants of Rs. 80.60 Lacs has been forfeited by the Company and transferred to the Capital Reserve.

(iv) Employee Stock Option Scheme

The Company has Employee Stock Option Scheme called “Camlin Fine Chemicals Employees Stock Option Scheme, 2008” which was approved by the members on 8th August, 2008. The scheme is an employee share based payment plan administered through Employee Stock Option. Each option under the scheme will entitle one fully paid up equity share of Rs. 10/- each of the Company.

The Company has adopted intrinsic value method in accounting for employee cost on account of ESOS. The intrinsic value of the shares is based on the latest available closing market price, prior to the date of meeting of the board of directors, in which the options were granted, on the stock exchange in which the shares of the Company are listed. The difference between the intrinsic value and the exercise price is being amortised as employee compensation cost over the vesting period. The details thereof are:

Accordingly, during the year, 14,480 Equity Shares of Rs. 10/- each have been issued under the ESOS Scheme. Correspondingly, the share premium related to these shares amounting to Rs. 7,21,500 has been accounted.

(v) Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Cash Credits from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified Immovable and Movable Fixed Assets of the Company ranking pari passu by way of second charge.

Vehicle Loans are secured by hypothecation of related vehicles.

During the year the Company has registered the aforesaid charges with the concerned authorities.

Loans amounting to Rs. 660.11 Lacs (Previous Year Rs. 1,120.20 Lacs) are guaranteed by Managing Director.

Loan against Leased Assets are secured by furniture & fxtures taken on lease.

(vi) The Company has transferred Investments in Equity Shares of Saraswat Co-operative Bank Ltd. in its name.

(viii) Remuneration to Directors :

(a) To Chairman – Professional Fess Rs. 6.00 Lacs (Previous year Rs. 3.50 Lacs)

(b) To Managing Director

(Within limits specified in the Schedule XIII of the Companies Act, 1956)

As the future liability for gratuity and leave encashment is provided on the actuarial basis for the Company as a whole, the amount pertaining to the director is not ascertainable and, therefore, not included in above.

(b) Since, the Company operates in a single business segment namely, ‘Fine Chemicals’, the segment- wise disclosure is not required. Further, in the opinion of the management, there is no reportable geographical segment.

(e) Retirement Benefits:

Defined Contribution Plans

Companys Contribution paid/payable during the year to Provident Fund, Superannuation Fund are

charged to the Profit & Loss Account.

(ii) Leave Encashment: The accumulated balance of Leave Encashment (Unfunded) provided in the books as at 31st March, 2010 Rs. 50.99 Lacs (Previous Year Rs. 43.44 Lacs), determined on actuarial basis using projected unit credit method.

(ix) Based on the information available with the Company, no creditors have been identified as ‘supplier within the meaning of Micro, Small & Medium Enterprises Development Act, 2006 as on 31st March, 2010.

(x) Previous years figures are recast/regrouped wherever necessary.

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