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Notes to Accounts of Chembond Chemicals Ltd.

Mar 31, 2017

1. Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. During the year under consideration the equity shares of the company have been subdivided from the earlier face value of Rs.10/- per share to the present face value of Rs. 5/- per share.

3. As per the terms of the Joint Venture agreement with Solenis International Holding Inc U.S.A. the Water Treatment Chemicals (WTC) business of Chembond Chemicals Ltd. had been merged with the joint venture Chembond Solenis Water Technologies Ltd."Profit Transferred to Subsidiary on WTC Business" aggregating Rs. 70.42 lakhs (Previous year Rs. 136.80 lakhs) included in Manufacturing Expenses represents transfer by overriding title to Chembond Solenis Water Technologies Ltd., the income arising on account of the said Water Treatment Chemicals business that arose in Chembond Chemicals Ltd.

4.. As per the terms of agreement the Enzyme Chemicals business of Chembond Chemicals Ltd. had been merged with Chembond Bioengineering Co Ltd.,(100% Subsidiary of Chembond Enzyme Company Ltd.) "Profit Transferred to Associate on Enzymes Business" aggregating Rs. Nil (Previous year 0.62 lakhs) included in manufacturing expenses represents transfer by overriding title to Chembond Bioengineering Co Ltd., the income arising on account of the said Enzyme Chemical business that arose in Chembond Chemicals Ltd.

5. As per the terms of agreement, the Industrial Coating business of Chembond Chemicals Ltd had been merged with the Chembond Industrial Coating Ltd. "Profit Transferred to Subsidiary on Industrial Coatings Business" aggregating Rs. 14.05 lakhs (Previous year Rs. 24.58 lakhs) included in manufacturing expenses represents transfer by overriding title to Chembond Industrial Coatings Ltd. the income arising on account of the said Industrial Coating business that arose in Chembond Chemicals Ltd.

6. Compensation Expenses represents amount payable to related party Protochem Industries Pvt. Ltd. on account of their Proprietary products being manufactured & sold by Chembond Chemicals Limited.

7. Segment Reporting

The Company has determined that it operates in a single business segment, namely "Specialty Chemicals". Therefore the information pursuant to the Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

8. During the year under consideration, the company has commissioned its pilot polymer plant, at Dudhwada.

9. Related Party Disclosures

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

10. Relationship:

11.. Subsidiary Companies:

Chembond Solenis Water Technologies Ltd., Protochem Industries Pvt. Ltd ., Chembond Clean Water Technologies Ltd. Chembond Industrial Coatings Ltd,Chembond Enzyme Company Ltd,and Chembond Calvatis Industrial Hygiene Systems Ltd (formerly Chembond Bioengieering Company Ltd.),Chembond Chemicals (Malaysia) SDN. BHD

12. Associates:

Chembond Distribution Ltd.

13. Key Management Personnel and their relatives (KMP)

Key Management Personnel:

Sameer V. Shah, Nirmal V. Shah, Ashwin R. Nagarwadia, Perviz H. Dastur, Bhadresh D. Shah, O.P. Malhotra, Mahendra K.Ghelani, Sushil U. Lakhani, Jawahar I. Mehta, Dr. Prakash D. Trivedi, Saraswati Sankar.

Relatives :

Dr. Vinod D. Shah, Padma V. Shah, Gulu P. Dastur, Dr. Shilpa S. Shah, Mamta N. Shah, Alpana S. Shah, Jyoti N. Mehta, Zarna K. Shah,Amrita S.Shah, Malika S.Shah

Entities over which Key Management personnel are able to exercise influence :

CCL Opto Electronics Pvt. Ltd., Finor Piplaj Chemicals Ltd., S and N Ventures Ltd., GTK Intermediates Pvt. Ltd., & Visan Holdings and Financial Services Pvt. Ltd., Oriano Clean Energy Pvt. Ltd.

14. Employee Stock Option Plan

The Board at its meeting held on July 30, 201 1, approved an issue of Stock Options up to a maximum of 5% of the issued Equity Share Capital of the Company aggregating to 6,36,000-Equity Shares in a manner provided in the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 subject to the approval of the shareholders under Section 81(1A) of the Companies Act, 1956. The Shareholders of the Company at the Annual General Meeting held on September 10, 2011 approved the aforesaid issue of 6,36,000-Equity Shares of the Company under one or more Employee Stock Option Scheme(s). The Compensation & Nomination Committee has approved the following grants to a list of senior level executives of the Company and some of its Subsidiaries in accordance with the Chembond Chemicals Employees'' Stock Option Plan, 2012

Out of the above option granted 3,38,098 options have been lapsed due to resignation of the employees and non exercising of Options

Out of 1,27,464 options exercised 72,964 options were exercised up to March 31, 2016 and further 54,500 Options were exercised and allotted during the year.

The fair value of options used to compute Proforma net profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent Consultant.

15. The previous year figures have been regrouped, reallocated or reclassified wherever necessary to conform to current year classification and presentation.


Mar 31, 2016

Contingent liability is disclosed in case of :

(a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

(b) a present obligation when no reliable estimate is possible; and

(c) a possible obligation arising from past events where the probability of outflow of resources is not remote. Contingent Assets are neither recognized, nor disclosed.

Provision, Contingent Liabilities and Contingent Assets are reviewed at each balance Sheet date. t Hedge Transactions

In case of forward exchange contracts, to hedge the foreign currency risk which is on account of a firm commitment, the premium or discount arising at the inception of the contract is amortized as expense or income over the life of the contract.

b Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of '' 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a Over draft facility are Secured against Fixed Deposit of Subsidiary Company Protochem Industries Pvt. Ltd.

b Working Capital / Buyers Credit loan is secured by charge on current asset, mortgage of Tangible Immovable Properties and charge on other Fixed Assets.

The information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

The Management has relied on the overall actuarial valuation conducted by the actuary. However experience adjustments on plan liabilities and assets are not readily available and hence not disclosed. The expected return on plan assets is as furnished by the Actuary appointed by the Company.

a. As per the terms of the Joint Venture agreement with Solenis International Holding Inc U.S.A. the Water Treatment Chemicals (WTC) business of Chembond Chemicals Ltd. had been merged with the joint venture Chembond Solenis Water Technologies Ltd. "Profit Transferred to Subsidiary on WTC Business" aggregating ''136.80 lakhs (Previous year ''90.95 lakhs) included in Manufacturing Expenses represents transfer by overriding title to Chembond Solenis Water Technologies Ltd., the income arising on account of the said Water Treatment Chemicals business that arose in Chembond Chemicals Ltd.

b. As per the terms of agreement the Enzyme Chemicals business of Chembond Chemicals Ltd. had been merged with Chembond Bioengineering Co Ltd.,(100% Subsidiary of Chembond Enzyme Company Ltd.) "Profit Transferred to Associate on Enzymes Business" aggregating '' 0.62 lakhs (Previous year '' 36.76 lakhs) included in manufacturing expenses represents transfer by overriding title to Chembond Bioengineering Co Ltd., the income arising on account of the said Enzyme Chemical business that arose in Chembond Chemicals Ltd.

c. As per the terms of agreement, the Industiral Coating business of Chembond Chemicals Ltd. had been merged with the Chembond Industrial Coating Ltd. "Profit Transferred to Subsidiary on Industrial Coatings Buisness" aggregating ''24.58 lakhs (Previous year ''44.37 lakhs) included in manufacturing expenses represents transfer by overriding title to Chembond Industrial Coatings Ltd. the income arising on account of the said Industrial Coating business that arose in Chembond Chemicals Ltd.

d. Compensation Expenses represents amount payable to related party Protochem Industries Pvt. Ltd. on account of their Proprietory products being manufactured & sold by Chembond Chemicals Limited.

1. Segment Reporting

The Company has determined that it operates in a single business segment, namely "Speciality Chemicals". Therefore the information pursuant to the Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

2. Related Party Disclosures

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

a) Relationship:

i. Subsidiary Companies:

Chembond Solenis Water Technologies Ltd., Protochem Industries Pvt. Ltd., Chembond Clean Water Technologies Ltd., Chembond Industrial Coatings Ltd., Chembond Enzyme Company Ltd. and Chembond Calvatis Industrial Hygiene Systems Ltd. (formerly Chembond Bioengieering Company Ltd.)

ii. Associates:

Chembond Distribution Ltd.

iii. Key Management Personnel and their relatives (KMP)

Key Management Personnel:

Sameer V Shah, Nirmal V Shah, Ashwin R. Nagarwadia, Perviz H. Dastur, Bhadresh D. Shah, O. P. Malhotra, Mahendra K.Ghelani, Sushil U.Lakhani, Jawahar I. Mehta, Dr. Prakash D. Trivedi, Saraswati Sankar.

Relatives :

Dr. Vinod D. Shah, Padma V Shah, Gulu P. Dastur, Dr. Shilpa S. Shah, Mamta N. Shah, Alpana S. Shah, Jyoti N. Mehta, Zarna K. Shah, Amrita S. Shah, Malika S. Shah

Entities over which Key Management personnel are able to exercise influence :

CCL Opto Electronics Pvt. Ltd., Finor Piplaj Chemicals Ltd., S and N Ventures Ltd., GTK Intermediates Pvt. Ltd., & Visan Holdings and Financial Services Pvt. Ltd.

The net worth of these subsidiaries/associate has eroded. The Company has written off Debtors and Loans & Advances in respect of both the subsidiaries of '' 238.46 lakhs and provision for the balance amount of '' 1,201.68 lakhs has not been considered necessary by the Company as the investments are long term and losses are temporary in nature.

3 Employee Stock Option Plan

The Board at its meeting held on July 30, 2011, approved an issue of Stock Options up to a maximum of 5% of the issued Equity Share Capital of the Company aggregating to 3,18,000 Equity Shares in a manner provided in the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 subject to the approval of the shareholders under Section 81(1A) of the Companies Act, 1956. The Shareholders of the Company at the Annual General Meeting held on September 10, 2011 approved the aforesaid issue of 3,18,000 Equity Shares of the Company under one or more Employee Stock Option Scheme(s). The Compensation & Nomination Committee has approved the following grants to a list of senior level executives of the Company and some of its Subsidiaries in accordance with the Chembond Chemicals Employees'' Stock Option Plan, 2012

Out of the above option granted 93,058 options have been lapsed due to resignation of the Employees .

Out of 36,482 options exercised,15,950 options were exercised up to March 31, 2015 and further 20,532 Options were exercised and allotted during the year.

The fair value of options used to compute Performa net profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent Consultant.

4. Derivative Instruments

a The Company has entered into forward contracts to hedge the foreign currency risks arising from amounts designated in foreign currency. The counter party to such forward contract is a bank. Forward contracts outstanding at the yearend are:

5. The previous year figures have been regrouped, reallocated or reclassified wherever necessary to conform to current year classification and presentation.


Mar 31, 2013

1 During the year Company has commenced the manufacturing of Anti Corrosive Coatings Chemicals at its Dhudhwada Plant.

2 SEGMENT REPORTING

The Company has determined that it operates in a single business segment, namely "Speciality Chemicals". Therefore the information pursuant to the Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

3 EMPLOYEE STOCK OPTION PLAN a) Employee Stock Option Plan

The Board at its meeting held on July 30, 2011, approved an issue of Stock Options up to a maximum of 5% of the issued Equity Capital of the Company aggregating to 3,18,000 Equity Shares in a manner provided in the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 subject to the approval of the shareholders under section 81(1A) of the Companies Act, 1956. The Shareholders of the Company at the Annual General Meeting held on September 10, 2011approved the aforesaid issue of 3,18,000 Equity Shares of the Company under one or more Employee Stock Option Scheme(s). The Compensation & Nomination Committee has approved the following grants to a list of senior level executives of the Company and some of its Subsidiaries in accordance with the Chembond Chemicals

Out of the above option granted 4800 options has been lapsed due to resignation of the Employees.

The fair value of options used to compute Proforma net profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent Consultant.

4 RELATED PARTY DISCLOSURES

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

a) Relationship:

i. Subsidiary Companies:

Chembond Ashland Water Technologies Ltd., Protochem Industries Pvt. Ltd., H2O Innovation India Ltd & Chembond

Inver Coatings Ltd. ii. Joint Venture:

Henkel Chembond Surface Technologies Ltd. iii. Associates:

Chembond Distribution Ltd., Chembond Enzyme Company Ltd. & Chembond Bioengineering Company Ltd.

(Subsidiary of Associate) iv. Key Management Personnel (KMP) and their relatives

Key Management Personnel:

Sameer V. Shah, Nirmal V. Shah, Ashwin R. Nagarwadia, Perviz H. Dastur, Bhadresh D. Shah, O.P. Malhotra, Jayantilal S.

Vasani

Relatives :

Dr. Vinod D.Shah, Padma V. Shah, Gulu P. Dastur, Dr Shilpa S. Shah, Mamta N. Shah, Alpana S. Shah, Jyoti N. Mehta,

Zarna K. Shah

Entities over which Key Management personnel are able to exercise influence:

CCL Optoelectronics Pvt Ltd., Finor Piplaj Chemicals Ltd., S and N Ventures Ltd., GTK Intermediates Pvt. Ltd., Bentec

Organo Clays Pvt. Ltd. & Visan Holdings and Financial Services Pvt Ltd.

5 INFORMATION ON JOINT VENTURES

Henkel Chembond Surface Technologies Ltd. (on the basis of Audited Financial Statements)

a Jointly Controlled Entity - Henkel Chembond Surface Technologies Ltd

Country of Incorporation - India

Percentage of ownership interest - 49% b Interest in the assets, liabilities, income and expenses with respect to jointly controlled enterprises.

6 The Ministry of Corporate Affairs, Government of India vide its General Circular No.2/2011 (No.51/12/2007-CL-III) dated February 08, 2011 issued under section 212(8) of the Companies Act, 1956 has exempted the Company from attaching the Balance Sheet And Profit and Loss Account of its subsidiary Companies. As per the order, key details of each subsidiary are attached along with the Statement under Section 212 of the Companies Act, 1956.

7 Contingent Liabilites not provided for are in respect of :

As at 31/3/2013 As at 31/3/2012 (Rs. In lakhs) (Rs. In lakhs)

a. Outstanding LCs & Bank Guarantees issued by Bankers. 67.48 153.66

b. Corporate Guarantee given to Bank of India by the company on behalf of 900.00 900.00 Subsidiaries Chembond Ashland Water Technologies Ltd. & H2O Innovation India Ltd.

c. Income Tax matter under appeal 1.35 1.35

d. Balance Payment for Capital Commitments 52.40 8.57

e. Claim against the Company not acknowledged as debts 9.60 9.60

8 Derivative Instruments

a. The Company has entered into forward contracts to hedge the foreign currency risks arising from amounts designated in foreign currency. The counter party to such forward contract is a bank. Forward contracts outstanding at the year end are:

9 The previous year figures have been regrouped, reallocated or reclassified wherever necessary to conform to current year classification and presentation.


Mar 31, 2012

A Shares issued for consideration other than cash and bonus shares issued:

Out of the issued, subscribed and paid up share capital, during the last five years

i 1,90,206 (1,90,206) Equity Shares of Rs. 10/- each have been issued for consideration other than cash

ii 31,80,206 (31,80,206) Equity Shares of Rs. 10/- each have been issued as fully paid Bonus Shares by way of capitalization of Reserves & Surplus

b Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1 The company had received "In Principle" approval from the Bombay Stock Exchange (BSE) for issue of 3,00,000 Convertible Warrants on preferential basis to company's promoters & promoter group, at a price of 7 183.97 per warrant, aggregating Rs. 551.91 Lakhs. Each warrant is convertible into one equity share of Rs. 10each within 18 months from the date of allotment of warrants. The approval from BSE was received on 7th May, 2012 and the allotment made on 12th May, 2012. As per the SEBI ICDR Regulation, 2009, 25% of the amount called for pending allotment and received as on 31st March, 2012 aggregating Rs.137.98 Lakhs has been shown as "Convertible warrants money pending allotment".

a On the basis of a Revaluation Report obtained from an Approved Chartered Engineer, the company had revalued all the fixed assets existing as on 31st March, 1994. The fixed assets had accordingly been written-up by creating a Revaluation Reserve of Rs. 91.53 Lakhs and the valueof fixed asset is stated in the Balance Sheet at revalued figure.

b Depreciation on fixed assets is consistently being provided on the straight line method on the revalued figure for all the assets acquired upto 31st March, 1994 and additional depreciation due to revaluation aggregating Rs. 1.89 lakhs has been transferred from revaluation reserve to the profit & loss account during the year under consideration.

a As per the terms of the Joint Venture agreement with Henkei KGA, Germany, the Pre Treatment Chemicals (PTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Henkel Chembond Surface Technologies Ltd "PTC compensation expenses" aggregating X 27.53 lakhs (Previous year t 90.35 lakhs) included in Manufacturing Expenses represents transfer by overriding title to Henkei Chembond Surface Technologies Ltd. the income arising on account of the said Pre Treatment Chemicals business that arose in Chembond Chemicals Ltd. b As per the terms of the Joint Venture agreement with Ashland International Holding Inc U.S.A. the Water Treatment Chemicals (WTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Chembond Ashland Water Technologies Ltd. "WTC compensation expenses" aggregating Rs. 18.56 lakhs (Previous yearRs. 25.97 lakhs) included in Manufacturing Expenses represents transfer by overriding title to Chembond Ashland Water Technologies Ltd. the income arising on account of the said Water Treatment Chemicals business that arose in Chembond Chemicals Ltd. c As per the terms of agreement the Enzyme Chemicals business of Chembond Chemicals Ltd has been merged with the new company Chembond Habio Bioengineering Co. Ltd. "Enzyme compensation expenses" aggregating Rs. 17.05 lakhs (Previous year Rs. 3.43 lakhs) included in manufacturing expenses represents transfer by overriding title to Chembond Habio Bioengineering Co. Ltd. the income arising on account of the said Enzyme Chemical business that arose in Chembond Chemicals Ltd.

2 SEGMENT REPORTING

The Company has determined that it operates in a single business segment, namely "Speciality Chemicals". Therefore the information pursuant to the Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable.

3 RELATED PARTY DISCLOSURES

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below: a Relationship:

i. Subsidiary Companies:

Chembond Ashland Water Technologies Ltd., Protochem Industries Pvt. Ltd. & H20 Innovation India Ltd.

ii. Joint Venture:

Henkel Chembond Surface Technologies Ltd.

iii. Associates:

Chembond Distribution Ltd., Chembond Enzyme Company Ltd. & Chembond Habio Bioengineering Company Ltd.

iv Key Management Personnel and their relatives

Key Management Personnel: (KMP)

Dr. Vinod D.Shah, Sameer V. Shah, Nirmal V. Shah, Ashwin R. Nagarwadia, Perviz H. Dastur, Bhadresh D. Shah

v. Relatives :

Mrs. Padma V. Shah, Mrs. Gulu P. Dastur, Dr. Shilpa S. Shah, Mrs. Mamta N Shah, Mrs. Alpana S. Shah, Mrs. Jyoti N. Mehta, Mrs. Zarna K. Shah

Entities over which Key Management personnel are able to exercise influence - CCL Opto Electronics Pvt. Ltd., Finor Piplaj Chemicals Ltd., S and N Ventures Ltd. & Visan Holdings and Financial Services Pvt Ltd.

4 INFORMATION ON JOINT VENTURES

Henkel Chembond Surface Technologies Ltd.

(on the basis of Audited Financial Statements)

a Jointly Controlled Entity - Henkel Chembond Surface Technologies Ltd.

Country of Incorporation - India

Percentage of ownership interest - 49%

b Interest in the assets, liabilities, income and expenses with respect to jointly controlled enterprises

5 The Ministry of Corporate Affairs, Government of India vide its General Circular No 2/2011 :No51/12/2007-CL-i!i) dated February, 08, 2011 issued under section 212(8) of the Companies Act, 1956 has exempted the Companies from attaching the Balance Sheet And Profit and Loss Account of its subsidiary Companies. As per the order, key details of each subsidiary are attached along with the Statement under Section 212 of the Companies Act, 1956.

6 Contingent Liabilities not provided for are in respect of:-

Particulars As at 31/3/2012 As at 31/3/2011 In lakhs) Rs. In lakhs

a Outstanding L.C & Bank Guarantees issued by Bankers. 153.66 100.72

b. Corporate Guarantee given to Bank of India by the company on behalf of Subsi diaries Chembond Ashland Water Technologies Ltd. SH20 Innovation

India Ltd 900 900

c. Income Tax matter under appeal 1.35 135

d. Balance Payment for Capital Commitments 8.57 4 13

e. Claim against the Company not acknowledged as debts 9.60 9.60

7 The previous year figures have been regrouped, reallocated or reclassified wherever necessary to confirm to current year classification and presentation.


Mar 31, 2011

1. Previous years figures have been regrouped, reallocated, or reclassified wherever necessary, to conform to this year's classification.

2. Closing Stock has been taken, valued and certified by the Management.

3. a) On the basis of a Revaluation Report obtained from an Approved Chartered Engineer, the company had revalued all the fixed assets existing as on 31st March 1994. The fixed assets had accordingly been written- up by creating a Revaluation Reserve of Rs. 9153 Thousand and the value of the fixed assets is stated in the balance sheet at the revalued figure.

b) Depreciation on fixed assets is consistently being provided on the straight line method on the revalued figure for all the assets acquired upto 31st March 1994 and additional depreciation due to revaluation aggregating Rs. 189 Thousand has been transferred from revaluation reserve to the Profit & Loss Account during the year under consideration.

4. In the opinion of the Board, Current Assets and Loans & Advances are approximately of the value stated, if realised in the ordinary course of business. Provisions for all known liabilities are made and the same are adequate and not in excess of the amount reasonably necessary.

5. Contingent Liabilities not provided for are in respect of :

Sr Particulars 2010-11 2009-10

No Rs. in '000 Rs. in '000

a Outstanding L.C & Bank Guarantees issued by Bankers. 10,072 9,404

b Corporate Guarantee given to Bank of India by the company on behalf of Subsidiaries Chembond Ashland Water Technologies Ltd. & H2O Innovation India Ltd. 90,000 60,000

c Income Tax matter under appeal 135 135

d Balance Payment for Capital Commitments 413 1,028

e Claim against the Company not acknowledged as debts 960 960

6. During the year under consideration, the Company established a subsidiary Company - H2O Innovation India Ltd. for water treatment systems and maintenance services to industrial, commercial and residential markets with a shareholding of 51%. The balance 49% is held by collaborator H2O Innovation Inc., Canada.

7. a) As per the terms of the Joint Venture agreement with Henkel KGA Germany. the Pre Treatment Chemicals (PTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Henkel Chembond Surface Technologies Ltd "PTC compensation expenses" aggregating Rs. 9,034.88 Thousand (Previous year Rs. 3,574.74 Thousand) included in Manufacturing Expenses represents transfer by overriding title to Henkel Chembond Surface Technologies Ltd. the income arising on account of the said Pre Treatment Chemicals business that arose in Chembond Chemicals Ltd.

b) As per the terms of the Joint Venture agreement with Ashland International Holding Inc U.S.A. the Water Treatment Chemicals (WTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Chembond Ashland Water Technologies Ltd."WTC compensation expenses" aggregating Rs. 2,596.92 Thousand (Previous year Rs. 5,012.52 Thousand) included in Manufacturing Expenses represents transfer by overriding title to Chembond Ashland Water Technologies Ltd. the income arising on account of the said Water Treatment Chemicals business that arose in Chembond Chemicals Ltd.

c) As per the terms of agreement, the Enzyme Chemicals business of Chembond Chemicals Ltd has been merged with the new company, Chembond Habio Bioengineering Co. Ltd. "Enzyme compensation expenses", aggregating Rs. 343.46 Thousand (Previous year NIL) included in manufacturing expenses represents transfer by overriding title to Chembond Habio Bioengineering Co. Ltd. the income arising on account of the said Enzyme Chemical business that arose in Chembond Chemicals Ltd.

8. Debtors include following debts due from companies under the same management as defined under section 370 ( 1 – B ) of the Companies Act,1956 :- a) Subsidiary Companies – Chembond Ashland Water Technologies Ltd. Rs. 21,782.27 Thousand (Rs. 6,885.48 Thousands),Protochem Industries Pvt Ltd. Rs. 4,808.89 Thousand (Rs. 1,386.40 Thousand), H2O Innovation India Ltd. Rs. 4,619.15 Thousand (NIL)

b) Joint Venture Company – Henkel Chembond Surface Technologies Ltd. Rs. 84,188.38 Thousand (Rs. 112,907.04 Thousand).

c) Associate Company – Chembond Distribution Ltd. (formerly CCL Building Systems Ltd.) Rs. 3,233.48 Thousand (Rs. 2,773.31 Thousand).

9. Sundry creditors and unsecured loans includes amounts aggregating Rs. 11,132.05 Thousand (Rs. 6,155.41 Thousand) and Rs. 39,742.45 Thousand (Rs. 31,177.83 Thousand) respectively being due to directors, their relatives and firms and companies in which Directors are interested.

10. The Company is a recommended supplier under the Supplier Financing Services rendered by Deutsche Bank to Henkel Chembond Surface Technologies Ltd., the Joint Venture Company. The Company has assigned claims against supplies as on 31.03.2011 aggregating to Rs. 99,559.47 thousand to Deutsche Bank and the amount realised has been credited to the account of Henkel Chembond Surface Technologies Ltd.

The Management has relied on the overall actuarial valuation conducted by the actuary. However, experience adjustments on plan liabilities and assets are not readily available and hence not disclosed. The expected return on plan assets is as furnished by the Actuary appointed by the Company.

11. The Ministry of Corporate Affairs, Government of India vide its General Circular No.2/2011 (No.51/12/2007-CL- III) dated February, 08, 2011 issued under section 212(8) of the Companies Act, 1956 has exempted the Companies from attaching the Balance Sheet and Profit and Loss Account of its subsidiary Companies. As per the order, key details of each subsidiary are attached along with the Statement under Section 212 of the Companies Act, 1956.

12. Segment Reporting

Based on expert opinion the company has determined that it operates in a single business segment, namely "Speciality Chemicals". Therefore the information pursuant to the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountant of India is not applicable.

13. Related Party Disclosures

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:- a) Relationship:

i. Subsidiary Companies.

Chembond Ashland Water Technologies Ltd.,Protochem Industries Pvt Ltd,H2O Innovation India Ltd.

ii. Joint Venture.

Henkel Chembond Surface Technologies Ltd.

iii. Associates.

Chembond Distribution Ltd. (formerly CCL Building System Ltd.), Chembond Enzyme Company Ltd., Chembond Habio Bioengineering Company Ltd.

iv. Key Management Personnel, and their relatives.

Key Management Personnel

Dr. Vinod D. Shah, Sameer V. Shah, Nirmal V. Shah, Ashwin R. Nagarwadia, Perviz H. Dastur, Bhadresh D Shah.

Relatives

Mrs. Padma V.Shah, Mrs. Gulu P. Dastur, Mrs. Shilpa S. Shah, Mrs. Mamta N.Shah, Mrs. Alpana S. Shah,

Mrs. Jyoti N.Mehta, Ms.Zarna B Shah

Entities over Which Key management personnel are able to exercise influence CCL Optoelctronics Pvt. Ltd, Finor Piplaj Chemicals Ltd, S and N Ventures Ltd. Visan Holdings & Financial Services Private Ltd.

14. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

15. Information pursuant to paras 3,4- C and 4-D of Part II of Schedule VI to the Companies Act, 1956 (as certified by the Management)


Mar 31, 2010

1. Previous years figures have been regrouped, reallocated, or reclassified wherever necessary, to conform to this years classification.

2. Closing Stock has been taken, valued and certified by the Management.

3. a) On the basis of a Revaluation Report obtained from an Approved Chartered Engineer, the company had revalued all the fixed assets existing as on 31st March 1994. The fixed assets had accordingly been written- up by creating a Revaluation Reserve of Rs. 9153 Thousands and the value of the fixed assets is stated in the balance sheet at the revalued figure.

b) Depreciation on fixed assets is consistently being provided on the straight line method on the revalued figure for all the assets acquired upto 31st March 1994 and additional depreciation due to revaluation aggregating Rs 189 Thousands has been transferred from revaluation reserve to the Profit & Loss Account during the year under consideration.

4. In the opinion of the Board, Current Assets and Loans & Advances are approximately of the value stated, if realised in the ordinary course of business. Provisions for all known liabilities are made and the same are adequate and not in excess of the amount reasonably necessary.

5. Contingent Liabilities not provided for are in respect of : -

Sr Particulars 2009-10 2008-09

No Rs in 000 Rs in 000

a Outstanding L.C & Bank Guarantees issued by Bankers. 9404 24477

b Corporate Guarantee given to Bank of India by the company on behalf of Subsidiary, Chembond Ashland 60000 60000

Water Technologies Ltd.

c Income Tax matter under appeal 135 NIL

d Balance Payment for Capital Commitments 1,028 1187

e Claim against the Company not acknowledged as debts 960 NIL

6. a) As per the terms of the Joint Venture agreement with Henkel KGA Germany, the Pre Treatment Chemicals (PTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Henkel Chembond Surface Technologies Ltd "PTC compensation expenses" aggregating Rs 3574.74 Thousands (Previous year NIL) included in Manufacturing Expenses represents transfer by overriding title to Henkel Chembond Surface Technologies Ltd. the income arising on account of the said Pre Treatment Chemicals business that arose in Chembond Chemicals Ltd.

b) As per the terms of the Joint Venture agreement with Ashland International Holding Inc U.S.A. the Water Treatment Chemicals (WTC) business of Chembond Chemicals Ltd. has been merged with the joint venture Chembond Ashland Water Technologies Ltd. (formely ChembondDrewtreat Ltd.) "WTC compensation expenses" aggregating Rs.5,012.52 Thousands (Previous year Rs 9,967.01 Thousands) included in Manufacturing Expenses represents transfer by overriding title to Chembond Ashland Water Technologies Ltd. the income arising on account of the said Water Treatment Chemicals business that arose in Chembond Chemicals Ltd.

c) As per the terms of Joint Venture agreement with Chembond Enzyme Company Ltd. the Enzyme Chemicals business of Chembond Chemicals Ltd has been merged with the new joint venture company Chembond Enzyme Company Ltd. "Enzyme compensation expenses" aggregating Rs 1,177.65 Thousand (Previous year Rs 1,394.05 Thousand) included in manufacturing expenses represents transfer by overriding title to Chembond Enzyme Company Ltd.. the income arising on account of the said Enzyme Chemical business that arose in Chembond Chemicals Ltd.

7. Debtors include following debts due from companies under the same management as defined under section 370 ( 1B ) of the Companies Act,1956 :-

a) Subsidiary Companies – Chembond Ashland Water Technologies Ltd. Rs.6,885.48 Thousand (Rs.13,687.03 Thousand), Protochem Industries Pvt Ltd. Rs 1,386.40 Thousand (NIL).

b) Joint Venture Company – Henkel Chembond Surface Technologies Ltd. Rs 112,907.04 Thousand (Rs 76,622.70 Thousands).

c) Associate Company – CCL Building Systems Ltd.Rs 2,773.31 Thousand (Rs 3,437.19 Thousand).

8. Sundry creditors and unsecured loans includes amount aggregating Rs 6,155.41 Thousand (Rs 1,077.81 Thousand) and Rs 31,177.83 Thousand (Rs 14,662.00 Thousand) respectively being due to directors, their relatives and firms and companies in which Directors are interested.

9. The Department of Company Affairs, Government of India vide its order No.47/464/2010-CL-III dated May, 21, 2010 issued under section 212(8) of the Companies Act, 1956 has exempted the Company from attaching the Balance Sheet And Profit and Loss Account of its subsidiary Companies Chembond Ashland Water Technologies Ltd. (CAWTL) & Protochem Industries Pvt Ltd. under Section 212(1) of the Companies Act, 1956. As per the order, key details of each subsidiary are attached along with the Statement under Section 212 of the Companies Act, 1956.

10. Segment Reporting

Based on expert opinion the company has determined that it operates in a single business segment, namely "Speciality Chemicals". Therefore the information pursuant to the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountant of India is not applicable.

11. Related Party Disclosures

Related party disclosures as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:- a) Relationship:

i. Subsidiary Companies

Chembond Ashland Water Technologies Ltd.,Protochem Industries Pvt Ltd.

ii. Joint Venture

Henkel Chembond Surface Technologies Ltd.

iii. Associates

CCL Building Systems Ltd., Chembond Enzyme Company Ltd.

iv. Key Management Personnel, and their relatives

Key Management Personnel

Dr. Vinod D. Shah, Mr. Sameer V. Shah,Mr. Nirmal V. Shah, Mr. Bhadresh D. Shah.

Relatives

Mrs. Padma V.Shah,Mrs.Shilpa S.Shah,Mrs. Mamta N.Shah,Mrs. Alpana Shah,Mrs.Jyoti N.Mehta, Ms.Zarna B Shah

Entities over Which Key management personnel are able to exercise influence

CCL Optaelectronics Pvt. Ltd, Finor Piplaj Chemicals Ltd, S and N Ventures Ltd., Visan Holdings and Financial Services Private Ltd.

12. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

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