Notes to Accounts of Camlin Fine Sciences Ltd.
Mar 31, 2022
6.1 The Company had invested '' 56.01 lakh (March 31, 2021 : '' 56.01 lakh) in the share capital of Solentus North America Inc., its wholly owned subsidiary company ("the subsidiaryâ). The Company has decided to close the said subsidiary and has initiated the process of closure, which is delayed due to technical reasons. Consequently, the Company has made full provision for impairment in the value of said investment.
6.2 The Company had provided a corporate guarantee against the payment of principal and interest on the loan utilised for acquisition of 65% stake in Dresen Quimica S.A.P.I De C.V. (Dresen Quimica). Pursuant to the re-finance of loan by another bank during the year, the corporate guarantee stands cancelled. The fair value of financial guarantee amounting to '' 78.08 lakh issued in respect of the loan remains as investment. 50,820,277 Equity Shares of Dresen Quimica pledged in respect of the aforesaid loan have been released.
Pursuant to the refinance of loan, the Company has provided a fresh corporate guarantee against the payment of principal and interest to the new lender The value of investment includes '' 3723 lakh towards fair value of the said financial guarantee issued to the new lender. 50,820,277 Equity Shares are pledged in respect of the aforesaid loan.
As per the amended shareholders agreement dated October 18, 2021 entered into by the Company with the minority shareholder of Dresen Quimica, on November 11, 2021, the Company has, through its wholly owned subsidiary CFS De Mexico Blends S.A.P.I. DE C.V. (CFS Blends) acquired 33.50% stake in Dresen Quimica for
a total consideration of US$ 8.50 million equivalent to '' 6,344.80 lakh. The balance 1.50% non-controlling interest will extinguish on payment of preferred dividend by Dresen Quimica over a period upto December 31, 2023 amouting to US$ 4.623 million as escalated by 3% per annum from January 1, 2021 till the date of respective payments. If the aforesaid payments are not made or are inadequate, then the amended agreement provides a put option to the non-controlling interest to sell 1.50% stake which will be valued at the unpaid portion of the preferred dividend. There will be no participating rights in any profits to the noncontrolling interest effective January 1, 2021.
The fair value of put option obligation is calculated based on ''Income Approach''. The fair value of put option being negligible, there is no recognition thereof as investment and there is no corresponding recognition of other equity and / or financial obligation.
The erstwhile put option for 35% based on original shareholders'' agreement has extinguished on entering into the amended agreement. The initial recognition of the fair value of esrtwhile put option as a financial obligation amounting to '' 615.15 lakh remains as investment. With extinguishment of this put option, the erstwhile put option liability has extinguished as on the date of amended agreement. The fair value of said put obligation was Nil as on March 31, 2021.
6.4''125.33 lakh (March 31, 2021: '' 125.33 lakh) towards fair value of financial guarantees issued to a Bank in relation to loan availed by CFS Europe S.p.A.
6.5 '' 5.93 lakh (March 31, 2021: '' 4.46 lakh) is towards fair value of employee stock options under CFS Employee Stock Option Scheme, 2018 (ESOP 2018) given to an employee of Industrias Petrotec de Mexico S.A. de C.V. (Refer Note 21(v)).
6.6 Includes '' 5.93 lakh (March 31, 2021: '' 4.46 lakh) towards fair value of employee stock options under CFS Employee Stock Option Scheme, 2018 (ESOP 2018) given to an employee of CFS Wanglong Flavours (Ningbo) Co. Ltd. (Refer Note 21(v)).
6.7 During the year, the Company has acquired equity stake and also invested in AlgalR Nutrapharms Private Limited (''AlgalR'') for a total investment amounting to '' 654.56 lakh. Pursuant to the above, the Company holds 80% stake in the equity share capital of AlgalR with effect from November 11, 2021.
6.8 During the year, the Company has participated in 49,999 shares of CFS De Mexico Blends S.A.PI. DE C.V. its wholly owned subsidiary. The amount towards the aforesaid subscription has not been remitted as on March 31, 2022.
Includes '' 126.58 lakh towards fair value of financial guarantees issued to a Bank in relation to loan availed for acquisition of 33.5% stake in Dresen Quimica 77,013,255 Equity Shares (March 31, 2021: Nil) of Dresen Quimica and 49,999 Equity Shares (March 31, 2021: Nil) of CFS Blends are pledged in respect of the aforesaid loan.
6.9 During the year, Fine Lifestyle Brand Limited (''associate'') made an application to the Registrar of Companies, under Section 248 of the Companies Act, 2013, for removal of its name from the register of companies (''register'') . Pursuant to such application, the name of associate has been struck off from the register with effect from February 01, 2022 and the said Company is dissolved. The amount of investment appearing in the financial statements has been written off during the year
6.10 The provision for impairment in the value of investments represents the provision in respect of investments in Fine Renewable Energy Limited and Solentus North America Inc.
7.1 The loans to subsidiaries have been made for general corporate purposes of each subsidiary. These loans are given at rates comparable to the average commercial rate of interest and in compliance with the provisions of Companies Act, 2013.
7.2 No loans are due from Directors or other officers of the Company either severally or jointly with any other person or amount due by firms or private companies in which any director is a partner, a director or a member.
7.3 The Company had given loans of '' 189.18 lakh ('' 242.27 lakh including interest of '' 53.09 lakh (Refer Note 17) to Solentus North America Inc., its wholly owned subsidiary company. The Company had also provided advances of '' 15.79 lakh to Solentus North America Inc. (Refer Note 17). The Company has decided to close the said subsidiary and has initiated the process of closure, which is delayed due to technical reasons. Consequently, the Company has made full provision for impairment of said loans and advances. (Refer Note 6.1).
8.1 The derivative asset '' 340.08 lakh (March 31, 2021: '' 9.97 lakh) represents the embedded derivative portion of compound financial instrument i.e. FCCB. The Company has measured the embedded derivative at FVTPL and the host contract has been accounted at amortised cost. The change in the carrying amount of the embedded derivative amounting to '' 330.10 lakh (2020-2021: '' 11.59 lakh) has been recognised in the Statement of Profit and Loss (Refer Note 32(b)).
19.1 The Company intends to dispose off freehold land situated at Pali in the next 12 months. This land was not utilised by the Company for its operations. No impairment loss is recognised on reclassification of the land as held for sale, as the management expects that the fair value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying amount.
d) Rights, preferences and restrictions attached to Equity Shares
The Company has only one class of shares having par value of '' 1 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 the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
f) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital:
i) The Company has 4,500,000 (March 31, 2021: Nil) Equity Shares reserved for issue under Employee Stock Option Plan, 2021 as at March 31, 2022. As on March 31, 2022, the Company has not issued grant letters to eligible employees under the said scheme.
ii) The Company has 3,912,096 (March 31, 2021: 3,912,096) Equity Shares reserved for issue under Employee Stock Option Plan, 2020 as at March 31, 2022 (Refer Note 35.2.1 for terms of employee stock options).
iii) The Company has 310,750 (March 31, 2021: 446,525) Equity Shares reserved for issue under Employee Stock Option Scheme, 2018 as at March 31, 2022 (Refer Note 35.2.2 for terms of employee stock options).
g) Terms of any securities convertible into equity shares issued along with earliest date of conversion
i) The Company has 10,241,714 (March 31, 2021: 8,603,029) Equity Shares reserved towards conversion of Foreign Currency Convertible Bonds.(Refer Note 22.1 for terms of Foreign Currency Convertible Bonds). Pursuant to the FCCB amendment agreement entered on October 29, 2021, the FCCB conversion price is changed to '' 105 per share from '' 125 per share. This has resulted in increase of equity shares reserved towards FCCB conversion to 10,241,714 equity shares as on March 31, 2022.
ii) The Company has Nil (March 31, 2021: 29,350,000) Equity Shares reserved for issue towards conversion of Preferential Share Warrants (Refer Note 21.6 for terms of preferential warrants)
i) Utilisation of the proceeds of Preferential Issue
On September 17, 2020, the Company had allotted 35,500,000 share warrants at a subscription price of ''4789 each amounting to proceeds of '' 17,000.95 lakh to select investors pursuant to Preferential Issue under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended.
Nature and Purpose of Reserves:21.1 Equity component of Foreign Currency Convertible Bonds (FCCBs)
Pursuant to Ind AS 32, FCCBs issued by the Company are split into equity and liability component and presented under other equity and Non-Current Financial Liabilities respectively.
Capital Reserve comprises of amount received pursuant to preferential share warrants forfeited by the Company on account of warrants not exercised by the allottees.
The Securities premium account has been created to record the premium on issue of Equity Shares. This reserve is utilised in writing off the expenses incurred towards issue of preferential share warrants accordance with Section 52 of the provisions of the Companies Act, 2013
21.4Employee Stock Option Outstanding
The Company has Employees'' Stock Option Scheme/Plan under which options to subscribe to the Company''s shares have been given to certain employees of the Group. This reserve is used to recognise the value of equity settled share based payments provided to the employees, including Key Management Personnel, as a part of their remuneration.
The addition to Employee Stock Options Outstanding during the year is on account of CFS Employees'' Stock Option Scheme, 2018 and CFS Employees'' Stock Option Plan, 2020.
General Reserve is created from time to time by way of transfer of profits from Retained Earnings.
21.6Money received against Preferential Share Warrants
At the EOGM held on July 25, 2020, the shareholders had approved an issue of 35,500,000 warrants at a price of '' 4789 each on a preferential basis to certain proposed allottees aggregating to '' 17,000.95 lakh. An amount equivalent to 1/3rd price of '' 5,610.31 lakh was subscribed on September 17, 2020 on the issue of
the warrants. Each warrant is converted into 1 Equity Share at the face value of '' 1 and premium of '' 46.89 each on or before 18 months from the date of allotment of warrants by the Company.
On November 17, 2020, the investors exercised their option of conversion of 6,150,000 warrants by subscribing the balance amount of '' 1,973.21 lakh. Pursuant to this conversion, 6,150,000 equity shares have been issued on November 24, 2020. On February 23, 2022, the investors exercised their option of conversion of balance 29,350,000 warrants by subscribing the balance amount of '' 14,055.71 lakh. Pursuant to this conversion, 29,350,000 equity shares have been issued on February 23, 2022.
21.7 Issue expenses towards non-converted Preferential Share Warrants
Issue expenses towards non converted preferential share warrants comprise expenses incurred towards issue of preferential share warrants which have not been converted as on March 31, 2021. The same are transferred to Securities Premium on conversion of warrants to equity shares.
22.1Foreign Currency Convertible Bonds -Unsecured
Foreign Currency Convertible Bonds (FCCBs) denominated in US$ carried at '' 11,988.69 lakh as at March 31, 2022 (March 31, 2021: '' 11,194.98 lakh) represent 30 unsecured, unlisted and unrated FCCBs of US$ 5,00,000 each aggregating to US$ 15,000,000. FCCBs are convertible into Company''s fully paid equity shares of '' 1 each at a conversion price of '' 105 per share (March 31, 2021: '' 125 per share) at the option of the bond holder. If the conversion option is not exercised by the bond holder, the amount is payable in two equal instalments at the end of September 14, 2023 and September 14, 2024. Simple interest at the rate of 5.5% per annum from October 29, 2021 (4.5% per annum from inception upto October 28, 2021) is payable semi-annually on the outstanding amount of FCCBs, compound interest @ 1% per annum from October 29, 2021 (2% per annum from inception upto October 28, 2021) and additional interest @ 0.5% shall accrue on semi-annual basis and be payable in two equal instalments on the 5th and 6th anniversary of the FCCB subscription date.
22.2 Term Loans from Banks in Rupees - Secured
(a) '' Nil (March 31, 2021: '' 250.00 lakh) secured by a first pari passu charge on entire fixed assets of the Company, both present and future other than assets which are exclusively charged to other lenders. Further secured by second pari passu charge on the entire current assets of the Company, both present and future. The loan is fully repaid during the year
(b) '' 45.36 lakh (March 31, 2021: '' 152.00 lakh) secured by first pari passu charge on all current assets of the Company, both present and future. Further secured by second pari passu Charge on entire fixed assets of the Company, excluding fixed assets at Dahej and assets exclusively charged to other lenders. The loan is repayable in remaining 4 monthly instalments by July 2022. The current interest rate is equivalent to 1 year MCLR.
c) '' Nil (March 31, 2021: '' 590.00 lakh) secured by first pari passu charge on all current assets of the Company, both present and future. Further secured by second pari passu charge on entire fixed assets of the Company, excluding fixed assets at Dahej. Further secured by hypothecation of plant and machinery of the Company, excluding plant and machinery at Dahej. The loan is fully repaid during the year
(d) '' 1,463.80 lakh (March 31, 2021: '' 1,494.95 lakh) secured by first pari passu charge by way of hypthecation of inventories and book debts of the Company along with other working capital lenders. Further secured by second pari passu charge on equitable mortgage, excluding assets at Dahej and assets exclusively charged to other lenders. The loan is repayable in remaining 47 monthly instalments by March 2026. The current interest rate is at a spread of 100 basis points over 1 year MCLR.
(e) '' 565.00 lakh (March 31, 2021: '' Nil) secured by first pari passu charge by way of hypthecation of inventories and book debts of the Company along with other working capital lenders. Further secured by second pari passu charge on properties, land and building of the Company by way of equitable mortgage, excluding assets at Dahej and assets exclusively charged to other lenders. The loan is repayable in remaining 48 monthly instalments by June 2026. The current interest rate is at a spread of 100 basis points over 1 year MCLR.
(f) '' 1,581.35 lakh (March 31, 2021: '' Nil) secured by first pari passu charge by way of hypthecation of inventories and book debts of the Company. Further secured by second pari passu charge on properties, land and building of the Company by way of equitable mortgage, excluding assets at Dahej and assets exclusively charged to other lenders. The loan is repayable in remaining 47 monthly instalments by February 2026. The current interest rate is at a spread of 100 basis points over 6 months MCLR.
(g) '' 275.00 lakh (March 31, 2021: '' Nil) secured by second pari passu charge by way of hypthecation of inventories and book debts of the Company. Further secured by second pari passu charge on properties, land and building of the Company by way of equitable mortgage, excluding assets at Dahej and assets exclusively charged to other lenders. The loan is repayable in remaining 48 monthly instalments by July 2026. The current interest rate is at a spread of 100 basis points over 1 year MCLR.
22.3 Loan from others in Foreign Currency - Secured
'' 10,882.69 lakh (March 31, 2021: '' 3,538.10 lakh) secured by first ranking exclusive lien on all land fixed assets at Dahej. The loan is repayable in remaining 12 semi-annual instalments commencing after a moratorium period of three years from the date of first disbursement. The current interest rate is at spread of 400 basis points over 6 months LIBOR.
22.4 The Company does not have any charges which are yet to be registered with the Registrar of Companies (ROC) beyond the statutory period. Further, no certification in relation to the satisfaction of charge received from the banks are pending for submission with ROC.
25.1Loans repayable on demand - Secured
'' 17,322.15 lakh (March 31, 2021: '' 20,074.04 lakh) on account of working capital facilities availed from banks and are secured by first pari passu charge over Company''s current assets, both present and future. Further, secured by second pari passu charge by an equitable mortgage on the entire movable and immovable fixed assets of the Company, both present and future, excluding assets exclusively charged to other lenders. The said working capital facilities are additionally guaranteed by Mr Ashish Dandekar, as Chairman & Managing Director and promoter of the Company. The current interest rates range from 8.95% to 10.25% p.a.
25.2 Other Short Term Borrowings - Secured
'' 642.05 lakh (March 31, 2021: Nil) towards buyers credit availed from banks and are secured by security stated against Note 25.1.
25.3 The Company does not have any charges which are yet to be registered with the Registrar of Companies (ROC) beyond the statutory period. Further, no certification in relation to the satisfaction of charge received from the banks are pending for submission with ROC.
25.4 During the year, the Company has entered into a consortium agreement with its working capital lenders. the Company has submitted stock statements, debtors statements and other information / returns as required by the lender on a monthly as well as quarterly basis. Such monthly / quarterly statements and returns are generally in agreement with the books of accounts except for differences in some cases on account of valuation, provisions etc, the impact of which is not material.
27.1 There are no amounts due to be credited to Investor Education and Protection Fund in accordance with Section 125 of the Companies Act, 2013 as at the year end.
27.2 The unclaimed public deposits of '' 2.30 lakh outstanding at March 31, 2022 (March 31, 2021: '' 2.30 lakh) 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.
35.1Employee Benefit Plans(a) Other long term employment benefits
Leave encashment is payable to the employees of the Company due to death, retirement, superannuation or resignation. Employees are entitled to encash leave while in service. The leave encashment benefit is payable to all the eligible employees of the Company at the rate of daily salary as per current accumulation of leave days.
The Privilege leave encashment liability and amount charged to Statement of Profit and Loss determined on actuarial valuation using basis projected unit credit method are as under:
(b) Defined Contribution Plans:
The contributions to the Provident Fund of eligible employees are made to a Government administered Provident Fund and there are no further obligations beyond making such contribution. Under the plan, the Company has contributed '' 218.07 lakh (2020-21: '' 167.11 lakh).
The Company makes contributions to the Group Gratuity cum Life Assurance Scheme administered by the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. On retirement / resignation, the Scheme provides for payment as per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service. On death / permanent disablement in service, vesting period is not applicable.
The most recent actuarial valuation of plan assets and present value of defined benefit obligation of gratuity was carried out as at March 31, 2022. The present value of defined benefit obligation and the related current service cost and past service cost were measured using the Projected Unit Credit Method. The following table summaries the net benefit expense recognised in the Statement of Profit and Loss, the details of the defined benefit obligation and the funded status of the Company''s gratuity plan:
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting year, which is the same method as applied in calculating the defined benefit obligation as recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
40 CORPORATE SOCIAL RESPONSIBILITY
The Company has spent '' 42.00 lakh during the financial year (2020-2021: '' 20.38 lakh) as per the provisions of Section 135 of the Companies Act, 2013 read with Schedule VII thereof, towards Corporate Social Responsibility (CSR) activities.
a) Gross amount required to be spent by the Company during the year - '' 41.97 lakh (2020-2021: '' 20.38 lakh)
c) Nature of CSR activities during the year
The Company operates CSR Policy in the areas of promoting healthcare, education including special education and employment enhancing vocation skills especially among children, the differently abled, tribal communities and measures for reducing inequalities faced by socially and economically backward classes. The projects identified and adopted are as per the activities included and amended from time to time in Schedule VII of the Companies Act, 2013.
During the year, the Company has spent '' 42.00 lakh towards CSR activities through NGOs operating in the said areas.
41 OPERATIONS AT CFS WANGLONG FLAVORS (NINGBO) Co. Ltd.
Supreme People''s Court of China vide its judgement dated February 19, 2021 had imposed a penalty of RMB 159.32 million (about US$ 25 million / '' 18,000 lakh) including right protection cost of RMB 3.49 million (about US$ 0.55 million / '' 390 lakh) on our JV partner Wanglong Technology (being 49% stake holder in Company''s subsidiary CFS Wanglong Flavors (Ningbo) Co. Ltd. (''the subsidiary'')) and others for alleged infringement of intellectual property used in the process for manufacturing Vanillin. Further, 7% of the aforesaid penalty amounting to RMB 11.15 million (about US$ 1.70 million / '' 1,265 lakh) has also been levied on the subsidiary. Consequent to the Order, as an abundant legal caution, the production of Vanillin at the subsidiary''s manufacturing facility in China has been stopped till further directions of the Court.
In the opinion of the management and based on the discussions with the JV Partner, the findings and allegations of the Honourable Court are not based on the facts and that the order passed by the Court is arbitrary. As a co-defendant with the JV Partner, the subsidiary has preferred an application for retrial of the aforesaid order before Supreme People''s Court of China which was heard in the month of October 2021, the decision thereof is awaited. The management is confident of favourable decision in the retrial proceedings and that no penalty is sustained and consequently the production is expected to restart in a very near future.
Further in terms of the shareholders'' agreement dated April 28, 2017 and its subsequent amendments, the Company and its subsidiary are indemnified against penalty and/ or legal consequences emanating from the violation of IP rights.
Under these circumstances, no impairment of the investment value of the subsidiary and / or other receivables is envisaged in the financial statements.
Exceptional item for 2020-2021 pertains to impairment in the value of investment of CFS International Trading (Shanghai) Ltd, a wholly owned subsidiary, amounting to '' 50.32 lakh.
43 EARNINGS PER SHAREa) Basic Earnings Per Share
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders and weighted average number of ordinary shares outstanding.
The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders and weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.
45.1 Pursuant to the refinance of borrowing availed by Dresen Quimica S.A.P.I. de C.V. (Dresen Quimica) during the year, corporate guarantee amounting to '' 4,730.03 lakh as on March 31, 2021, issued against the aforesaid borrowing stands cancelled.
The Company has issued a fresh corporate guarantee amounting to '' 1,920.53 lakh towards the new lender during the year.
45.2 Pursuant to the directions of the Honorable Supreme Court dated December 14, 2020, National Green Tribunal had reheard the matter and vide its direction dated January 24,2022 had enhanced the portion of compensation attributable to the Company for alleged violations of environmental norms by manufacturers at Tarapur MIDC for an amount of '' 1,712.31 lakh from '' 515.56 lakh. The Honourable Supreme Court vide its order dated April 27, 2022 has stayed the proceedings of the aforesaid directions until the matter is heard. Further the Honourable Supreme Court has directed to deposit '' 515.56 lakh until the matter is heard. The Company has deposited '' 154.97 lakh which is disclosed as recoverable advance (Refer Note 18). Based on the assessment of the management, the Company believes that it has strong grounds to defend its position against these directions and hence no provision for the compensation is considered necessary in the financial statements.
45.3 There are numerous interpretative issues relating to the Supreme Court judgements on Provident Fund dated February 28, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the Supreme Court Order and the provisions will be updated on receiving further clarity on the subject.
b) Fair value hierarchy (Refer Note B to significant accounting policies)c) Measurement of Fair Value
The fair values of financial assets or liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent in both the year The following methods and assumptions are used to estimate the fair values:
(i) The Management assesses that fair values of trade receivables, cash and cash equivalents, other bank balances, loans, trade payables, current borrowings and other financial liabilities approximate to their carrying amounts largely due to the short-term maturities of these instruments. The Company does not anticipate that the carrying amount would be significantly different from the values that would eventually be received or settled.
(ii) The embedded derivative in FCCB is fair valued by an external independent valuer by computing the average cash flows determined through the Monte Carlo Simulation technique based on the market observable rates and published price.
(iii) The fair value of forward contracts is determined using FEDAI forward exchange rates for the remaining maturity period of the forward contracts. The fair value so determined is not discounted.
Unobservable inputs used in Level 3 of fair value hierarchy
The fair value of put option is calculated by independent expert based on the shareholders agreement using ''Income Approach''. The unobservable inputs used in fair valuation under level 3 are determined by considering historical financial statements, management''s estimates of probability of put option being exercised by the minority shareholders, Share Holder''s Agreement, discount rate and the review of projected revenue and profit after tax.
The Company''s business activities expose it to a variety of financial risks, namely credit risk, liquidity risk and market risks. Market risks comprise of currency risk and interest rate risk. The Company''s Senior Management and Key Management Personnel have the ultimate responsibility for managing these risks. The Company has a process to identify and analyse the risks faced by the Company, to set appropriate risk limits, to control and monitor risks and adherence to these limits. Risk Management policies and systems are reviewed regularly to reflect changes in market conditions and Company''s activities. Further, Audit Committee undertakes regular reviews of Risk Management Controls and Procedures.
Credit risk is the risk that a customer or counterparty fails to meet its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and from its financing activities including investments in mutual funds, deposits with banks and financial institutions and financial instruments.
Credit risk from trade receivables is managed by establishing credit limits, credit approvals and monitoring creditworthiness of the customers. Outstanding customer receivables are regularly monitored. The Company has computed credit loss allowances based on Expected Credit Loss Model, which excludes transactions with subsidiaries.
Term Deposits and Bank Balances
The Company''s exposure in term deposits with banks is limited, as the counterparties are highly rated banks.
(ii) Liquidity Risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company''s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.
Tabulated below are the Company''s remaining contractual maturities of financial liabilities as at the reporting date with agreed repayment periods. The tables have been drawn up considering the undiscounted contractual cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows.
# The contractual cash flows of FCCBs are calculated on the assumption that the FCCBs will not get converted into equity shares of the company before the maturity date.
* The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.
The Company''s operations result in it being exposed to foreign currency risk on account of trade receivables, trade payables, borrowings and lendings. The foreign currency risk may affect the Company''s income and expenses, or its financial position and cash flows. The objective of the Company''s Management of foreign currency risk is to maintain these risk within acceptable parameters, while optimising returns.
The primary objective of the Company''s capital management is to maintain an efficient capital structure and to maximise shareholder''s value. The Management seeks to maintain a balance between higher returns that is achieved by raising funds through equity and the advantages by a sound capital position.
The Company monitors capital using a ratio of ''Net Debt to Equity''. For this purpose, Capital includes issued capital and all other equity reserves. Net Debt is defined as total borrowings less cash & bank balances and other current investments.
49 DISCLOSURES U/S 186(4) OF THE COMPANIES ACT, 2013
a Details of investments made are disclosed in Note 6.
b Details of Loans given to subsidiaries, associates, firms/companies in which directors are interested are disclosed in Note 7 and 16.
c Details of Guarantee given on behalf are disclosed in Note: 45(I)(c) and (d).
50 DISCLOSURES MADE IN TERMS OF SCHEDULE V OF THE SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
For disclosure of loans, investments and Guarantee- ''Refer Note 49''. Further, there is no investment in shares of the Company by the parties to whom loan have been given.
Mar 31, 2018
Note 1:
A. Corporate Information
Camlin Fine Sciences Limited (âthe Companyâ) is a public company incorporated under the provisions of the Companies Act, 1956 and domiciled in India having its registered office at WICEL, Plot No. F/11-12, WICEL, Opposite SEEPZ Main Gate, Central Road, Andheri (East), Mumbai - 400 093. Its shares are listed on BSE Limited (BSE) and the National Stock Exchange in India (NSE). The Company is engaged in research, development, manufacturing and marketing of speciality chemicals which are used as antioxidants, industrial chemicals and aroma products.
B. Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 to be read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016. The Companyâs Financial Statements for the year ended March 31, 2018 comprises of the Balance Sheet, Statement of Profit and Loss, Statement of Cash Flows, Statement of Changes in Equity and Notes to Financial Statements.
For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Indian Generally Accepted Accounting Practices (IGAAP), including Accounting Standards (ASs) specified under Section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014, as amended, to the extent applicable.
The Financial Statements of the Company for the year ended March 31, 2018 are approved by the Board of Directors on May 24, 2018. These financial statements are the Companyâs first Ind AS financial statements and are covered by Ind AS 101, First-time adoption of Indian Accounting Standards. An explanation of how the transition to Ind AS has affected the Companyâs equity, financial position, financial performance and its cash flows is provided in Note 51
Current versus non-current classification:
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time taken between acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle as twelve months for the purpose of the classification of assets and liabilities into current and non-current.
Functional and Presentation Currency
The financial statements are presented in Indian rupee, which is the functional currency of the Company. All financial information has been rounded to the nearest lakhs, unless otherwise indicated.
Basis of Measurement
The Ind AS Financial Statements have been prepared on a going concern basis using historical cost convention and on accrual method of accounting, except for certain financial assets and liabilities, including financial instruments which have been measured at fair value as described below and defined benefit plans which have been measured on the basis of actuarial valuation as required by relevant Ind ASs.
Key Accounting Estimates and Judgements:
The preparation of financial statements requires management to make judgments, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable. Revisions to accounting estimates are recognised prospectively. Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities, are included in the following notes:
(i) Determination of the estimated useful lives of property, plant and equipment and intangible assets.
(ii) Recognition and measurement of defined benefit obligations, key actuarial assumptions.
(iii) Fair valuation of employee share options, key assumptions made with respect to expected volatility and dividend yield.
(iv) Recognition and measurement of provisions and contingencies, key assumptions about the likelihood and magnitude of an outflow of resources.
(v) Recognition of deferred tax assets.
(vi) Fair value of financial instruments.
(vii) Applicable discount rate.
Measurement of fair values
The Companyâs accounting policies and disclosures require the financial instruments to be measured at fair values.
The Company has an established control framework with respect to measurement of fair values. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information such as broker quotes or pricing services, is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusions that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
C. Recent Accounting Developments
Standards issued but not yet effective
In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, Revenue from Contract with Customers, Appendix B to Ind AS 21, Foreign currency transactions and advance consideration and amendments to certain other standards. These amendments are in line with recent amendments made by International Accounting Standards Board (IASB). These amendments are applicable to the Company from 1st April, 2018. The Company will be adopting the amendments from their effective date.
a. Ind AS 115 - Revenue from Contract with Customers:
As per notification dated March 28, 2018, the Ministry of Corporate Affairs amended the Companies (Indian Accounting Standards) Amendments Rules, 2018, notifying âInd AS-115 relating to Revenue from Contracts with Customersâ and related amendments to other standards on account of notification of Ind AS 115. Ind AS 115 supersedes Ind AS 18, Revenue. The effective date of adoption of this standard is annual periods beginning on or after April 1, 2018 onwards. The Company is currently evaluating the effect of the above amendments.
b. Appendix B to Ind AS 21 - Foreign Currency transactions and advance consideration:
The appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the asset, expense or income (or part of it) is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration towards such asset, expense or income. If there are multiple payments or receipts in advance, then an entity must determine transaction date for each payment or receipts of advance consideration. The Group is currently evaluating the effect of the above amendments.
D. First time adoption of Ind AS
The Company has prepared the opening Balance Sheet as per Ind AS as of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets and liabilities which are not permitted by Ind AS, by reclassifying items from IGAAP to Ind AS as required by Ind AS and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company. The significant items are as follows:
a. Deemed cost for Property, Plant and Equipment, Investment Property and Intangible Assets:
The Company has elected to measure all its property, plant and equipment and intangible assets at the IGAAP carrying amount as its deemed cost on the date of transition to Ind AS.
b. Deemed cost of Investment in subsidiaries and associate:
The Company has elected to measure investments in subsidiaries and associate at the IGAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e, April 1, 2016.
c. Share based payment:
The Company has elected not to apply Ind AS 102, âShare-Based Paymentâ to grants that vested prior to the date of transition to Ind AS. Accordingly, the Company has measured only unvested stock options on the date of transition as per Ind AS 102.
2.A.1 Capital Work-in-Progress includes INR 54.88 lakhs (Previous Year March 31, 2017: INR 24.11 lakhs; April 1, 2016: INR Nil), as borrowing costs capitalised during the year. The average capitalisation rate for borrowing cost is 11.26% (Previous Year March 31, 2017: 11.59%; April 1, 2016: Nil).
2.A.2 Refer Note 44(H) for disclosure of contractual commitments for the acquisition of Property, Plant and Equipment.
3.1 The Company has availed the deemed cost exemption in relation to Investment Property on the date of transition and hence the net carrying amount has been considered as the gross carrying amount on that date. The gross carrying amount and net carrying amount as at April 1, 2016 under IGAAP was INR 207.19 lakhs.
3.2 Refer Note 21 and 24 for information on investment property pledged as security for borrowings.
3.3 Fair Value Hierarchy
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and experience in the location and category of the property being valued.
The fair value measurement for investment property has been categorised as Level 3 based on inputs to the valuation technique used.
3.4 Description of valuation technique used.
The Company obtains independent valuation of its investment property as at each year end. The fair value of the investment property has been derived using âSelling Price Methodâ. Under this approach, enquiries are made with local architects, builders, local real estate consultants and other related agencies about the current market rates in area and on that basis, fair market value of the property is ascertained. This approach leads to reasonable estimation of the prevailing market value.
4.1 The Company has availed the deemed cost exemption in relation to Intangible Assets on the date of transition and hence the net carrying amount has been considered as the gross carrying amount on that date. Refer Note 4.2 below for the gross carrying amount and the accumulated depreciation on April 1, 2016 under IGAAP.
5.1 The Company has availed the deemed cost exemption under Ind AS 101 in relation to investments in subsidiaries and associate on the date of transition and hence the net carrying amount has been considered as the deemed cost on that date.
5.2 132,000 (Previous Year March 31, 2017: 132,000; April 1, 2016 : 132,000) Equity Shares pledged in respect of term loan availed by the Company.
5.3 The Company has invested INR 56.01 lakhs (Previous Year March 31, 2017: INR 56.01 lakhs; April 1, 2016: INR 56.01 lakhs) in the share capital of Solentus North America Inc., its wholly owned subsidiary company (âthe subsidiaryâ) and given a loans and advances of INR 211.86 lakhs (Previous Year: March 31, 2017: INR 199.66 lakhs; April 1, 2016 INR 160.33 lakhs). The subsidiary has negative net worth as at 31 March 2018 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.
5.4 On February 2, 2016, the Company had entered into Share Purchase Agreement with the shareholders of Dresen Quimica S.A.P.I de. C.V (âDresen Quimicaâ), a company registered and situated in Mexico having its five wholly owned subsidiaries in Mexico, Peru, Guatemala, Columbia and Dominican Republic, to acquire 65% of the share capital of Dresen Quimica. Dresen Quimica and its subsidiaries are engaged in the manufacturing and marketing of wide range of antioxidants, adsorbents, acidifying agents, bactericides, binders and mould inhibitors. Accordingly, on May 4, 2016, Company has invested a sum of INR 1,303.15 lakhs equivalent to US$ 1.95 million in its intermediate wholly owned subsidiary CFS Antioxidantes De Mexico S.A.de C.V. (âCFS de Mexicoâ) 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 on the aforesaid loan amounting to US$ 6.435 million. 34,343 Equity Shares (Previous Year: March 31, 2017: 34,343 Equity Shares; April 1, 2016: Nil) pledged in respect of the said term loan availed by CFS de Mexico.
5.5 It includes INR 78.08 lakhs (Previous Year March 31, 2017: INR 78.08 lakhs; April 1, 2016: INR Nil) towards adjustment on account of fair value of financial guarantees issued to a Bank in relation to loan availed by CFS de Mexico.
5.6 INR 125.33 lakhs (Previous Year March 31, 2017: INR Nil; April 1, 2016: INR Nil) towards adjustment on account of fair value of financial guarantees issued to a Bank in relation to loan availed by CFS Europe S.p.A.
5.7 INR 111.61 lakhs (Previous Year March 31, 2017: INR 83.66 lakhs; April 1, 2016: INR Nil) towards adjustment on account of fair value of employee stock options given to an employee of Industrias Petrotec de Mexico S.A. de C.V.
5.8 On March 22, 2017, Company had been allotted 6,267,003 Equity Shares of Chemolutions Chemicals Limited (CCL) of INR 10 each at a premium of INR 5 per Equity Share on conversion of Inter Corporate Deposit of INR 940.05 lakhs. Pursuant to the allotment, CCL has become a subsidiary of the Company with effect from March 22, 2017.
5.9 On April 15, 2016, the Company had incorporated a subsidiary in the free trade zone of China, namely CFS International Trading (Shanghai) Limited. The Company had subscribed US$ 75,000 (April 1, 2016: Nil) as capital.
5.10 The Company had entered into share purchase agreement on December 23, 2016 with Ningbo Wanglong Technology Limited, a company registered in Peopleâs Republic of China (PRC) for acquisition of 51% equity stake in CFS Wanglong Flavours (Ningbo) Co. Ltd. (erstwhile Ningbo Wanglong Flavors & Fragrances Co. Ltd.) for its Vanillin manufacturing facility by the Company or its subsidiaries, for a consideration of US$ 6.28 million. The acquisition was completed in current 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 INR 419.38 lakhs, being 10% of the consideration was transferred to an Escrow Account on February 28, 2017.
5.11 The provision for impairment in the value of investments represents the provision in respect of investments in Fine Renewable Energy Limited and Fine Lifestyle Brand Limited.
6.1 The loans to subsidiaries have been made for general corporate purposes of each subsidiary. These loans are given at rates comparable to the average commercial rate of interest.
7.1 The Company had entered into share purchase agreement on December 23, 2016 with Ningbo Wanglong Technology Limited, a company registered in Peopleâs Republic of China (PRC) for acquisition of 51% equity stake in CFS Wanglong Flavours (Ningbo) Co. Ltd. (erstwhile Ningbo Wanglong Flavors & Fragrances Co. Ltd.) for its Vanillin manufacturing facility by the Company or its subsidiaries, for a consideration of US$ 6.28 million. The acquisition was completed in current 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 INR 419.38 lakhs, being 10% of the consideration was transferred to an Escrow Account on February 28, 2017.
8.1 Capital Advances include INR 352.20 lakhs (Previous Year March 31, 2017: INR 352.20 lakhs; April 1, 2016 INR Nil) towards Related Parties.
9.1 No trade or other receivable are due from Directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.
9.2 Details of allowance for doubtful debts
The Company has used practical expedient by computing expected credit loss allowance for trade receivable by taking into consideration historical credit loss experience and adjusted for forward looking information. The expected credit loss is based on ageing of the days the receivables are due and the expected credit loss rate. The Company is still pursuing the recovery of the receivables for which allowance is made for doubtful debts.
9.3 The carrying amount of trade receivables include receivables discounted with banks, which are with re-course to the Company. Accordingly, the Company continues to recognise the transferred receivables in its Balance Sheet. The carrying amount of these receivables is INR 1,896.03 lakhs (Previous Year March 31, 2017: INR 912.48 lakhs; April 1, 2016 INR 5,109.82 lakhs). The corresponding carrying amount of associated liabilities are recognised as short term borrowings - (Refer Note 24.2 (b))
10.1 Earmarked balances with banks refers to balance carried in designated bank account towards unclaimed dividend.
11.1 The l oans to subsidiaries have been made for general corporate purposes of each subsidiary. These loans are given at rates comparable to the average commercial rate of interest.
a) During the year, the Company has issued 278,422 Equity Shares (Previous Year March 31, 2017: 524,240 Equity Shares; April 1, 2016: 777,700 Equity Shares) under the Employee Stock Option Scheme, 2014.
b) Rights, preferences and restrictions attached to Equity Shares
The Company has only one class of shares having par value of INR 1 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 the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Equity Shares Reserved for Issue Under Options
The Company has 583,988 (Previous Year March 31, 2017: 903,760; As at April 1, 2016: 1,513,500) Equity Shares reserved for issue under Employee Stock Option Scheme as at March 31, 2018 (Refer Note 34.2 (a))
d) Utilisation of the proceeds of Qualified Institutions Placement (QIP)
i. On July 5, 2016, the Company had allotted 6,519,500 Equity Shares of INR 1 each at a premium of INR 84.40 per share amounting to share proceeds of INR 5,567.65 lakhs pursuant to a Qualified Institutions Placement (QIP) under Securities And Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
ii On November 23, 2017, the Company has allotted 17,241,379 Equity Shares of INR 1 each at a premium of INR 86 per share amounting to share proceeds of INR 15,000 lakhs pursuant to a Qualified Institutions Placement (QIP) under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
The Company has utilized the proceeds as per the object of the issue as follows:
Nature and Purpose of Reserves:
12.1 Capital Reserve
Pursuant to preferential issue to promoter group during financial year ended March 31, 2008, promoters and entities belonging to âPromoter Groupâ were issued 1,550,000 warrants, to be converted to one ordinary share of the Company against payment of cash. These warrants were exercisable at INR 52 each. As per SEBI Guidelines, an amount equivalent to 10% of the price that is INR 5.20 per warrant had been received from the concerned individuals / entities on allotment of these warrants. The Applicants had not exercised the option on these warrants within the stipulated period and hence the options had lapsed. As per the SEBI Guidelines and terms of issue, the advance received against these warrants of INR 80.60 lakhs was forfeited by the Company and transferred to Capital Reserve.
12.2 Securities Premium
The Securities premium account has been created to record the premium on issue of Equity Shares. This reserve is utilised in writing off the expenses incurred towards Qualified Institutions Placement accordance with Section 52 of the provisions of the Companies Act, 2013.
12.3 Employee Stock Option Outstanding
The Company has Employee Stock Option Scheme under which options to subscribe to the Companyâs shares have been given to certain employees of the Company. This reserve is used to recognise the value of equity settled share based payments provided to the employees, including Key Management Personnel, as a part of their remuneration.
12.4General Reserve
General Reserve is created from time to time by way of transfer of profits from Retained Earnings.
12.5 Money received against Preferential Share Warrants
At the EOGM held on December 26, 2017, the shareholders have approved an issue of 9,000,000 warrants at a price of INR 92.69 each on a preferential basis to certain proposed allottees aggregating to INR 8,342.10 lakhs. 25% of the price was to be subscribed initially and the balance 75% of the consideration shall be paid at the time of allotment of Equity Shares pursuant to exercise of option against each such warrant by the proposed allottees. Each warrant will be converted into 1 equity share at the face value of INR 1 and premium of INR 91.69 on or before the end of 18 months from the date of allotment of warrants. Accordingly, the initial 25% of the warrant price amounting to INR 2,085.53 lakhs was received on February 8, 2018 and warrants were issued to the proposed allottees on February 9, 2018.
13.1 Term Loans from Banks in Foreign Currency
INR Nil (Previous Year March 31, 2017: INR Nil; April 1, 2016: INR 147.67 lakhs) secured by first pari passu charge on all movable and immovable assets of the Company, both present and future. Further secured by second pari passu charge on current assets of the Company, both present and future.
13.2 Term Loans from Banks in Rupees
(a) INR 695.17 lakhs (Previous Year March 31, 2017: INR Nil; April 1, 2016: INR Nil) secured by first pari passu charge on all movable and immovable assets of the Company, both present and future other than assets which are exclusively charged to other lenders. Further, secured by second pari passu charge on current assets of the Company, both present and future to be shared with other lenders. The loan is repayable in 72 monthly instalments starting from 24th month from the date of first disbursement of term loan. The current interest rate is 12.35%.
(b) INR 750.00 lakhs (Previous Year March 31, 2017: INR 1,083.33 lakhs; April 1, 2016: INR 1,416.67 lakhs) secured by a first pari passu charge on entire fixed assets of the Company, both present and future other than assets which are exclusively charged to other lenders. Further secured by second pari passu Charge on the entire current assets of the Company, both present and future. The loan is repayable in 21 equal quarterly instalments commencing after a moratorium period of two years from the date of first disbursement. The current interest rate is 10.80%.
(c) INR Nil (Previous Year March 31, 2017: INR Nil; April 1, 2016, INR 414.30 lakhs) secured by first pari passu charge on all the fixed assets of the Company, both present and future. Further secured by second pari passu Charge on the entire Current assets of the Company.
(d) INR 4.69 lakhs (Previous Year March 31, 2017: INR 21.92 lakhs; April 1, 2016: INR 21.74 lakhs) secured by hypothecation of vehicles. The loan is repayable in tenure of five to seven years. The current interest rate ranges from 11.50% to 12.50%.
14.1 Loans repayable on demand - Secured
INR 16,364.75 lakhs (Previous Year March 31, 2017: INR 19,259.89 lakhs; April 1, 2016: INR 10,968.46 lakhs) on account of cash credit availed from banks and are secured by first pari passu charge over Companyâs current assets, both present and future. Further, secured by second pari passu charge on all movable and immovable fixed assets of the Company, both present and future. The current interest rates range from 10.50% to 11.80%.
14.2 Other Short Term Borrowings - Secured
(a) INR 1,768.66 lakhs (Previous Year March 31, 2017: INR 2,103.23 lakhs; April 1, 2016, INR 1,607.46 lakhs) towards External Commercial Borrowings (ECB) availed from banks and is secured by security stated against Note 24.1. The current interest rates range from 3.81% to 4.81%
(b) INR 1,896.03 lakhs (Previous Year March 31 2017: INR 912.48 lakhs; April 1, 2016: INR 5,109.82 lakhs) towards Export Bill Discounting (EBD) availed from banks and is secured by security stated against Note 24.1. The current interest rates range from 3.25%.
15.1 There are no amounts due to be credited to Investor Education and Protection Fund in accordance with Section 125 of the Companies Act, 2013 as at the year end.
15.2 The unclaimed fixed deposits of INR 4.10 lakhs outstanding at March 31, 2018 (Previous Year March 31, 2017: INR 5.35 lakhs; April 1, 2016, INR 5.35 lakhs) 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.
16.1 Consequent to the introduction of Goods and Services Tax (GST) with effect from July 1, 2017, Central Excise and Value Added Tax (VAT) have been subsumed into GST. In accordance with Indian Accounting Standard 18 on Revenue and Schedule III of the Companies Act, 2013 unlike excise duty, GST and VAT are not part of revenue. Accordingly, the figures for the year ended March 31, 2018, is not strictly relatable to the previous year. The following additional information is provided to facilitate such understanding:
17.1 Income from Investment measured at FVTPL includes fair valuation impact of INR 166.75 lakhs (Previous Year March 31, 2017: INR 54.65 lakhs)
17.2 Board of Directors of the Company had approved conversion of advance amounting to INR.940.05 lakhs into equity share capital of Chemolutions Chemicals Limited (CCL). Pursuant to this capitalisation CCL had issued 62,67,003 equity shares of INR 10 each at a share premium of INR 5 per equity share amounting to INR 940.05 lakhs. Accordingly, Company had reinstated the advance to CCL written off in earlier years aggregating INR 867.80 lakhs.
18.1 Employee Benefit Plans
(a) Other long term employment benefits
Leave encashment is payable to the employees of the Company due to death, retirement, superannuation or resignation. Employees are entitled to encash leave while serving in the Company. The leave encashment benefit is payable to all the eligible employees of the Company at the rate of daily salary as per current accumulation of leave days.
The Privilege leave encashment liability and amount charged to Statement of Profit and Loss determined on actuarial valuation using basis projected unit credit method are as under:.
(b) Defined Contribution Plans:
The contributions to the Provident Fund of certain employees are made to a Government administered Provident Fund and there are no further obligations beyond making such contribution. Under the plan, the Company has contributed INR 118.04 lakhs (Previous Year March 31, 2017: INR 123.94 lakhs).
(c) Defined Benefit Plans:
The Company makes contributions to the Group Gratuity cum Life Assurance Schemes administered by the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The Scheme provides for payment as under:
(i) On normal retirement / early retirement / resignation:
As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
(ii) On death in service:
As per the provisions of the Payment of Gratuity Act, 1972 without any vesting period.
The most recent actuarial valuation of plan assets and present value of defined benefit obligation of gratuity was carried out as at March 31, 2018. The present value of defined benefit obligations and the related current service cost and past service cost were measured using the Projected Unit Credit Method. The following table summaries the net benefit expense recognised in the Statement of Profit & Loss, the details of the defined benefit obligation and the funded status of the Companyâs gratuity plan:
The sensitivity analysis have been determined based on reasonably possible changes in the respective assumptions occurring at the end of the reporting year, holding all other variables constant. The sensitivity analysis presented above may not be representative of the actual change in the Projected Benefit Obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the Projected Benefit Obligation has been calculated using the projected unit credit method at the end of the reporting year, which is the same method as applied in calculating the projected benefit obligation as recognised in the Balance Sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
18.2 Employee Stock Option Scheme
The Company has granted options on December 30, 2014 and February 12, 2016 to its eligible employees of Group under âCamlin Fine Sciences Employees Stock Option Scheme, 2014â (ESOS 2014) approved by the Board of Directors, Shareholders and Remuneration Committee. The options granted under these schemes are equity settled. The details of the scheme are summarised below:
19 Corporate Social Responsibility
The Company has spent INR 45.50 lakhs during the financial year (Previous Year March 31, 2017: INR 72.15 lakhs) as per the provisions of Section 135 of the Companies Act, 2013 read with Schedule VII thereof, towards Corporate Social Responsibility (CSR) activities.
a) Gross amount required to be spent by the Company during the year - INR 45.50 lakhs (Previous Year March 31, 2017: INR 72.15 lakhs)
b) Amount spent during the year on:
20 Research and Development Expenses
Total revenue expenditure on Research and Development (R&D) eligible for weighted deduction under section 35(2AB) of the Income Tax Act, 1961 aggregates to INR 188.15 lakhs (Previous Year March 31, 2017: INR 255.59 lakhs). The details are as below:
21 Earnings Per Share
a) Basic Earnings Per Share
The calculation of basic earnings per share is based on the loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding.
i) Loss attributable to ordinary shareholders (Basic)
b) Diluted Earnings Per Share
The calculation of diluted earnings per share is based on the loss attributable to ordinary shareholders and weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.
22 Leases
Assets taken on operating lease:
The Companyâs significant leasing arrangements are in respect of operating leases for premises (Commercial, Residential, Warehouses, etc). Lease expenditure for operating leases is recognised on a straight line basis over the period of lease. The leasing 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 security deposits have been given. The particulars of the premises taken on operating lease are as under:
23 Segment Reporting
As per the requirements of Ind AS 108 on âOperating Segmentsâ, segment information has been provided under the Notes to Consolidated Financial Statements.
#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.
24 Details of dues to Micro and Small Enterprises as defined under Micro, Small And Medium Enterprises Development Act, 2006
The amount due to Micro and Small Enterprises as defined in the âThe Micro, Small and Medium Enterprises Development Act, 2006â has been determined to the extent such parties have been identified on the basis of collected by the Management. This has been relied upon by the auditors. The credit period varies as per the contractual terms with suppliers. No interest is generally charged by the suppliers. The disclosure relating to Micro and Small Enterprises is as under:
25 Related Party disclosures I List of Related Parties as required by Ind AS 24,âRelated Party Disclosuresâ, are given below: i Related parties where control exists Subsidiaries
CFCL Mauritius Private Limited
CFS Do Brasil Industria, Comercio, Importacao De Exportacao De Aditivos Alimenticios LTDA (herein after referred as âCFS do Brazilâ)
Solentus North America Inc
CFS North America LLC
CFS Antioxidantes S.A. De.C.V.
CFS International Trading (Shanghai) Limited (since April 15, 2016)
Chemolutions Chemicals Limited (Since March 22, 2017)
CFS Wanglong Flavors (Ningbo) Company Ltd.(Since July 12, 2017)
Step down subsidiaries
CFS Europe S.P.A.
Dresen Quimica S.A.P.I. De.C.V. (Since May 4, 2016)
Industrias Petrotec de Mexico S.A.De.C.V. (Since May 4, 2016)
Britec S.A. (Since May 4, 2016)
Inovel S.A.S (Since May 4, 2016)
Nuvel S.A.C (Since May 4, 2016)
Grinel S.R.L (Since May 4, 2016)
ii Associate
Fine Lifestyle Brands Limited
iii Key Management Personnel (KMP)
Mr. Dilip D. Dandekar - Non Executive Director (Chairman)
Mr. Ashish S. Dandekar - Managing Director
Ms. Leena Dandekar - Executive Director (upto April 5, 2017)
Ms. Anagha Dandekar - Additional Director (from August 28, 2017)
Mr. Nirmal V. Momaya - Non Executive Director
Mr. Ajit S. Deshmukh - Non Executive Director
Mr. Sharad M. Kulkarni - Non Executive Director (Independent)
Mr. Pramod M. Sapre - Non Executive Director (Independent)
Mr. Abeezar E, Faizullabhoy - Non Executive Director (Independent)
Mr. Bhargav A. Patel - Non Executive Director (Independent)
Mr. Atul R. Pradhan - Non Executive Director (Independent)
Mr. Nicola A. Paglietti - Non Executive Director (Independent)
Mr. Dattatraya Puranik - Executive Director & CFO till February 9, 2017 and thereafter Executive Director till May 19, 2017 Mr. Santosh Parab - Chief Financial Officer (from February 10, 2017)
Mr. Rahul Sawale - Company Secretary
iv Relatives of Key Management Personnel
Mr. Subhash D. Dandekar - Management Consultant / Relative of Managing Director Mrs. Rajani S. Dandekar - Management Consultant / Relative of Managing Director
v Entities where control / significant influence by KMPs and their relatives exist and with whom transactions have taken place
Fine Lifestyle Solutions Limited
Focussed Event Management Private Limited
Vibha Agencies Private Limited
Abana Medisys Private Limited
Pagoda Advisors Private Limited
HSA Advocates
Hardware Renaissance, USA w.e.f August 28, 2017 MK Falcon Agrotech Private Limited Pillar Properties Private Limited V R Momaya & Associates
vi Post-employment benefit plan
Camlin Fine Sciences Limited Group Gratuity Scheme
b) Fair value hierarchy
The fair value of financial instruments as referred to in note (a) above have been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).
The categories used are as follows:
Level 1 - Quoted prices (unadjusted) for identical assets and liabilities in an active markets.
Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
c) Measurement of Fair Value
The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent in all the years. The following methods and assumptions were used to estimate the fair values:
(i) The fair values of investments in mutual fund units is based on the net asset value (âNAVâ) as stated by the issuers of mutual funds. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors.
(ii) The Management assesses that fair values of trade receivables, cash and cash equivalents, other bank balances, loans, trade payables, current borrowings, other current liabilities and other financial liabilities (current), approximate to their carrying amounts largely due to the short-term maturities of these instruments.
(iii) The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amount would be significantly different from the values that would eventually be received or settled.
d) Risk Management Framework
The Companyâs business activities expose it to a variety of financial risks, namely credit risk, liquidity risk and market risks. Market risks comprise currency risk and interest rate risk. The Companyâs Senior Management and Key Management Personnel have the ultimate responsibility for managing these risks. The Management has a process to identify and analyse the risks faced by the Company, to set appropriate risk limits and to control and to monitor risks and adherence to these limits. Risk Management policies and systems are reviewed regularly to reflect changes in market conditions and Companyâs activities. Further, Audit Committee undertakes regular reviews of Risk Management Controls and Procedures.
(i) Credit risk
Credit risk is the risk that a customer or counterparty fails to meet its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (trade receivables) and from its financing activities including investments in mutual funds, deposits with banks and financial institutions and financial instruments.
Trade Receivables
Credit risk from trade receivables is managed by establishing credit limits, credit approvals and monitoring creditworthiness of the customers. Outstanding customer receivables are regularly monitored. The Company has computed credit loss allowances based on Expected Credit Loss Model, which excludes transactions with subsidiaries.
The ageing of trade receivables is as follows:
Investments in Mutual Funds, Term Deposits and Bank Balances
The Companyâs exposure in term deposits with banks and investments in Mutual Funds is limited, as the counterparties are highly rated banks and financial institutions.
(ii) Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Companyâs approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.
The following tables detailed the Companyâs remaining contractual maturities of financial liabilities as at the reporting date with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows.
The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.
(iii) Currency Risk
The Companyâs operations result in it being exposed to foreign currency risk on account of trade receivables, trade payables, borrowings and lendings. The foreign currency risk may affect the Companyâs income and expenses, or its financial position and cash flows. The objective of the Companyâs Management of foreign currency risk is to maintain these risk within acceptable parameters, while optimising returns.
The Companyâs exposure to foreign currency risk denominated monetary assets and liabilities at the end of the reporting period expressed in INR (in lakhs), is as follows:
Sensitivity for above exposures
A fluctuation in the exchange rates of 5% with other conditions remaining unchanged would have the following effect on Companyâs profit or loss before tax and equity as at 31st March 2018 and 31st March 2017:
(iv) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to risk of change in market interest rates relates primarily to its borrowings. The Companyâs borrowings are at floating rates and its future cash flows will fluctuate because of changes in market interest rates.
The interest rate profile of the Companyâs interest bearing financial instruments at the end of the reporting period is as follows:
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rate would have resulted in variation in the interest expense for the Company by the amounts indicated in the table below. This calculation assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the period.
26 Capital Management
The primary objective of the Companyâs capital management is to maintain an efficient capital structure and to maximise shareholderâs value. The Management seeks to maintain a balance between higher returns that is achieved by raising funds through equity and the advantages by a sound capital position.
The Company monitors capital using a ratio of âNet Debt to Equityâ. For this purpose, Capital includes issued capital and all other equity reserves. Net Debt is defined as total borrowings less cash & bank balances and other current investments.
The Companyâs Net Debt to Equity ratios are as follows:
27 Disclosures u/s 186(4) of the Companies Act, 2013
a Details of investments made are disclosed under Note 5.
b Details of Loans given to subsidiaries, associates, firms/companies in which directors are interested are disclosed in Note:16.1, 16.2 and 16.3. c Details of Guarantee given on behalf are disclosed in Note: 44(I)(c) and (d).
28 Disclosures made in terms of Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015
The disclosure for Loans, Investments and Guarantees refer note 49. Further, there are no advances given by the company.
Notes to the Reconciliations:
1 Capitalisation of borrowing costs on qualifying asset
Borrowing costs incurred towards qualifying asset have been capitalised to capital Work-in-Progress.
2 Recognition of investment property
Under Indian GAAP, there was no requirement to present investment property separately and the same was included under property, plant and equipment. Under Ind AS, investment property is required to be presented separately in the balance sheet. Accordingly, the carrying value of investment property as at April 1, 2016 and March 31, 2017 under Indian GAAP has been reclassified to a separate line item in Balance Sheet.
3 Discounting of Financial Assets
Under IGAAP, interest free rent deposits given was carried at cost. Under Ind AS, such interest free deposit are measured at fair value . Difference between fair value and deposit amount is recognised as âDeferred Lease Expenseâ at initial recognition and amortised over the period of lease on straight line basis. Deposit is measured at amortised cost subsequently by recognising interest income.
4 Fair valuation of Investments
Under IGAAP, current investments were measured at lower of cost or NRV (Net Realisable Value). Under Ind AS, these financial assets have been classified as FVTPL investments. Ind AS requires such investments to be measured at fair value.
5 Bills of exchange discounted with banks
Under IGAAP, trade receivables derecognised by way of bills of exchange were shown as contingent liability since there is a recourse clause. Under Ind AS, the trade receivables have been restated with corresponding recognition of short term borrowings.
6 Impairment of Trade Receivables
Under IGAAP, the Company has created provision for impairment of receivables based on provision matrix. Under Ind AS, the impairment allowance has been determined based on Expected Credit Loss (ECL) model.
7 Proposed Dividend
Under IGAAP, proposed dividends including Dividend Distribution Tax (DDT) are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, proposed dividend is recognised as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.
8 Revenue
Under IGAAP, revenue from sale of products was presented excluding excise duty. Under Ind AS, revenue from sale of products is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as part of expenses.
9 Re-measurement of Employee Defined Benefit Plans
Under IGAAP, re-measurement of defined benefit plans (gratuity), arising primarily due to change in actuarial assumptions was recognised as employee benefit expenses in the Statement of Profit and Loss. Under Ind AS, such re-measurement of defined benefit plans, along with related tax effects are recognised in Other Comprehensive Income (OCI).
10 Employee Stock Option Plan (ESOP)
Under IGAAP, intrinsic value of employee stock option plan was recognised as expense over the vesting period. Under Ind AS, the compensation cost of employee stock option plan is recognised based on the fair value of options determined using an appropriate pricing model at the date of grant. Further, employee stock options granted to employees of subsidiary have also been recognised as an investment based on the fair value of options granted to them.
11 Impact on Cash Flow
The transition from Previous GAAP to Ind AS has no material impact on the statement of cash flow except bank overdraft which has been considered as part of cash and cash equivalents.
12 Deferred Taxes on Ind AS adjustments
IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of the balance sheet approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP. In addition, various transitional adjustments led to temporary differences. The Company has accounted for such differences.
13 Financial guarantees
Under Ind AS, the Company has recognised fair value of financial guarantees provided to its subsidiary companies. The fair value of such financial guarantee has been recognised as additional investment in subsidiaries. The financial guarantee to subsidiaries are amortised over the tenure of loan. The impact of amortisation of fair value of financial guarantee has been recognised under Other Income in the Statement of Profit and Loss.
29 Previous yearsâ figures have been regrouped / restated wherever necessary to conform to current yearâs classification.
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 Mauritiusâ).
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 subsidiaryâ) 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 Subsidiaryâ 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 Incomeâ.
i. The Company granted options to its eligible employees under "Camlin Fine Sciences Employees Stock Option Scheme, 2008â (ESOS 2008), "Camlin Fine Sciences Employees Stock Option Scheme, 2012â(ESOS 2012) and "Camlin Fine Sciences Employees Stock Option Scheme, 2014â (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.â
**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, 2006â 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 INDÃSTRIA, COMÃRCIO, IMPORTAÃÃO E Subsidiary
EXPORTAÃÃO DE ADITIVOS ALIMENTÃCIOS 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 AlimentÃcios
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 ÂCamlin 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 ÃCamlin Fine
Chemicals Employees Stock Option Scheme, 2008Ã 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 ÃAdvances
recoverable in cash or kindÃ.
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 à 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,
ÃFine 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 Ãsupplier 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 ÃPromoter 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 ÃCamlin Fine
Chemicals Employees Stock Option Scheme, 2008Ã 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 à 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,
ÃFine ChemicalsÃ, 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 Ãsupplier 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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