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Notes to Accounts of Camlin Fine Sciences Ltd.

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.

 
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