v) Provisions, Contingent Liabilities and
Contingent Assets
Provisions are recognized for liabilities that can
be measured only by using a substantial degree
of estimation, if
(a) the Company has a present obligation as a
result of a past event;
(b) a probable outflow of resources is expected
to settle the obligation; and
(c) the amount of the obligation can be reliably
estimated.
Reimbursement expected in respect of
expenditure required to settle a provision is
recognised only when it is virtually certain that
the reimbursement will be received
Contingent liability is disclosed in case of
(a) present obligation arising from past events,
when it is not probable that an outflow
of resources will be required to settle the
obligation;
(b) a present obligation when no reliable
estimate is possible; and
(c) a possible obligation arising from past
events where the probability of outflow of
resources is not remote.
Contingent Assets are neither recognised, nor
disclosed.
Provision, Contingent Liabilities and Contingent
Assets are reviewed at each balance Sheet
date.
w) Dividend
The Company recognises a liability to make
cash distributions to equity holders when the
distribution is authorised and the distribution
is no longer at the d iscretion of the Compa ny.
As per the Companies Act,2013 in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount is
recognised directly in equity.
x) Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker
The preparation of the Company’s financial
statements requires the management to make
judgements, estimates and assumptions that
affect the reported amounts of revenues,
expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about
these assumptions and estimates could result
in outcomes that require a material adjustment
to the carrying amount of assets or liabilities
affected in future periods.
The areas involving critical estimates or
judgements are:
a. Property Plant & Equipment - Property,
plant and equipment represent a significant
proportion of the asset base of the
Company. The charge in respect of periodic
depreciation is derived after determining
an estimate of an asset’s expected useful
life and the expected residual value at the
end of its life. The useful lives and residual
values of Company’s assets are determined
by management at the time the asset is
acquired and reviewed at the end of each
reporting period. The lives are based on
historical experience with similar assets as
well as anticipation of future events, which
may impact their life, such as changes in
technology.
b. Provisions - Provision is recognised when
the Company has a present obligation as a
result of past event and it is probable that an
outflow of resources will be required to settle
the obligation, in respect of which a reliable
estimate can be made. These are reviewed
at each balance sheet date adjusted to
reflect the current best estimates.
c. Taxes - Significant judgements are involved
in determining the provision for income
taxes, including amount expected to be
paid / recovered for uncertain tax positions.
In assessing the realizability of deferred
tax assets arising from unused tax credits,
the management considers convincing
evidence about availability of sufficient
taxable income against which such unused
tax credits can be utilized. The amount of
the deferred income tax assets considered
realizable, however, could change if
estimates of future taxable income changes
in the future
d. Defined Benefit Obligations - The cost of
defined benefit gratuity plans, and post¬
retirement medical benefit is determined
using actuarial valuations. The actuarial
valuation involves making assumptions
about discount rates, future salary
increases, mortality rates and future
pension increases. Due to the long-term
nature of these plans, such estimates are
subject to significant uncertainty
The Ministry of Corporate Affairs has vide
notification dated 14 August 2024 and 9
September 2024 notified Companies (Indian
Accounting Standards) Amendment Rules,
2024 (the ‘Rules’) which amends certain
accounting standards, and are effective 1
April 2024. The Rules predominantly brings
new Ind AS 117 ‘Insurance Contracts’
replacing the existing Ind AS 104 “Insurance
Contracts and amends Ind AS 116, ‘Leases’.
As per the Management’s assessment,
these amendments are not expected to
have a material impact on the Company in
the current or future reporting periods and
on foreseeable future transactions.
16 d Terms and rights attached to Equity Shares
The Company has only one class of Equity Shares having a par value of '5/- per share. Each holder of equity
shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The
dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual
General Meeting.
In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to
the number of equity shares held by the shareholders.
Nature & Purpose:
a. General Reserve:
General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes.
As the general reserve is created by a transfer from one component of equity to another and is not an item of
other comprehensive income, items included in the General Reserve will not be reclassified subsequently to
statement of profit and loss.
b. Securities Premium :
Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the
provisions of the Companies Act , 2013.
c. Retained Earnings:
Retained Earnings are the profits of the Company earned till date net of appropriations.
d. Capital Reserve:
The capital reserve represents the excess of net assets acquired over the consideration paid during business
combinations such as amalgamations, mergers, or acquisitions. This reserve arises primarily from the
cancellation of shares of the amalgamated or merged entities and is maintained to facilitate future corporate
restructuring activities, including mergers, demergers, or other forms of business combinations.
Audit fees for the current and previous financial year includes the audit fees of transferor companies amaglamated
purusant to scheme of arrangement and the effect of proportionate audit fees transferred to resulting company with
respect to Construction Chemicals and Water Technologies chemicals business.
b Corporate Social Responsibility
As per section 135 of the Companies Act 2013, a CSR committee has been formed by the Company.
Identification of deserving areas for the Company’s CSR activities has been done during the year. With water
being the business of the company, The Management has identified village for carrying out CSR activities.The
funds were utilised through the year on these activities which were specified in Schedule VII of the Companies
Act, 2013.
- Gross amount required to be spent by the company during the year Rs. 18.60 lakhs. (Previous Year 13.26
Lakhs)
35 Segment Reporting
As per Ind AS 108 - Operating Segment (‘Ind AS 108’), if a financial statement contains both consolidated
financial statements of a Company that is within the scope of this Ind AS as well as the Company separate
financial statements, segment information is required only in the consolidated financial statements.
Accordingly, information required to be presented under Ind AS 108 - Operating Segment has been given in the
consolidated financial statements.
36 Financial instruments - Fair values and risk management
A. Accounting classification and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including
their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial
liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
Fair values for financial instruments carried at amortised cost approximates the carrying amount, accordingly the
fair values of such financial assets and financial liabilities have not been disclosed separately.
B. Measurement of fair values
Ind AS 107, ‘Financial Instrument - Disclosure’ requires classification of the valuation method of financial
instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects
the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority
to un-observable inputs (Level 3 measurements). Fair value of derivative financial assets and liabilities are
estimated by discounting expected future contractual cash flows using prevailing market interest rate curves.
The three levels of the fair-value-hierarchy under Ind AS 107 are described below:
Level 1: Heirarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market are determined using
valuation techniques which maximise the use of observable market data and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instrument is
included in level 3. e.g. unlisted equity securities.
Transfers between Levels
There are no transfers betweeen the levels
C. Financial risk management
The Company’s activities expose it to Credit risk, liquidity risk and market risk.
i. Risk management framework
Risk Management is an integral part of the Company’s plans and operations. The Company’s board of
directors has overall responsibility for the establishment and oversight of the Company risk management
framework. The board of directors is responsible for developing and monitoring the Company risk
management policies.
The audit committee oversees how management monitors compliance with the Company’s risk
management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by
internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s receivables from
customers and investments in debt securities, cash and cash equivalents, mutual funds, bonds etc.
The carrying amount of financial assets represents the maximum credit exposure.
Trade and other receivables
Credit risk is the risk of possible default by the counter party resulting in a financial loss.
The Company manages credit risk through various internal policies and procedures setforth for effective
control over credit exposure. These are managed by way of setting various credit approvals,evaluation
of financial condition before supply terms, setting credit limits, industry trends,ageing analysis and
continuously monitoring the creditworthiness of customers to which the Company grants credit terms in
the normal course of business.
Based on prior experience and an assessment of the current economic environment, management
believes that sufficient provision is made based on expected credit loss model for credit risk wherever
credit is extended to customers.
Cash and cash equivalents
Credit risk from balances with banks is managed by the Company’s treasury department in accordance
with the Company’s policy. Investment of surplus funds are made in mainly in mutual funds with good
returns and with high credit ratings assigned by International and domestic credit ratings agencies.
Other than trade and other receivables, the Company has no other financial assets that are past due but
not impaired.
iii. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risk to the Company’s reputation.
The Company has obtained fund and non-fund based working capital lines from various banks. The
Company also constantly monitors funding options available in the debt and capital markets with a view
to maintaining financial flexibility. Accordingly, liquidity risk is perceived to be low.
The following table shows the maturity analysis of financial liabilities of the Company based on
contractually agreed undiscounted cash flows as at the Balance Sheet date:
iv. Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse
changes in market rates and prices (such as interest rates, foreign currency exchange rates ). Market risk
is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and
payables and all short term and long-term debt. The Company is exposed to market risk primarily related to
foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company’s
exposure to market risk is a function of investing and borrowing activities and revenue generating and
operating activities in foreign currencies.
a) Currency risk
The Compnay is exposed to currency risk to the extent that there is a mismatch between the currencies
in which sales, purchase, and other expenses are denominated and the functional currency of the
Company. The functional currency of the Company is Indian Rupees (INR). The currencies in which these
transactions are primarily denominated are EURO and USD.
b) 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. Investment committee manages and constantly reviews the
interest rate movements in the market. This risk is mitigated by the Company by investing the funds in
varioustenors depending on the liquidity needs of the Company. The Company’s exposures to interest
rate risk is not significant.
37 Employee Benefit obligations
(A) Defined contribution plan
Contributions are made to Employee Provident Fund (EPF), Employees State Insurance Scheme (ESIC) and
other Funds which covers all regular employees. Both the employees and the Company make predetermined
contributions to the Provident Fund and ESIC. The contributions are normally based on a certain percentage
of the employee’s salary. Amount recognised as expense in respect of these defined contribution plans, is as
detailed below.
38 Related Party Disclosures
Related party disclosures as required under Accounting Standard on “Related Party Disclosures” issued by the
Institute of Chartered Accountants of
a) Relationship:
i. Subsidiary Companies:
Chembond Biosciences Limited
ii. Key Management Personnel and their relatives (KMP)
Key Management Personnel:
Sameer V. Shah, Nirmal V. Shah, Ashwin Nagarwadia, Jayesh P. Shah, Dr. Prakash D. Trivedi, Gorsi
A. Parekh , Mayank P. Shah, Rashmi S. Gavli, Suchita H. Singh, Bhadresh D. Shah, Mahendra Ghelani,
Sushil Lakhani
Relatives :
Sameer Shah HUF, Shilpa Shah, Padma Shah, Raunaq Shah, Mallika Shah, Amrita Shah, Shashank
(Amrita Husband), Alpana Shah, Jyoti Mehta, Nirmal Vinod Shah HUF, Mamta Shah, Rahil Shah,Kshitija
Shah, Sameer L. Gavli, Madan Nilkhanthrao Tipnis, Rati M. Tipnis, Nupur S. Gavli, Tushar M. Tipnis,
Yogita Tushar Tipnis, Hemant Singh, Ranganath Shastri, Mohan Sharma, Premlata Shastri, Shreeya Singh,
Krishna Singh.
iii. Entities over which Key Management personnel are able to exercise influence :
CCL Opto Electronics Pvt Ltd., Finor Piplaj Chemicals Ltd., S and N Ventures Private Ltd., Visan Holdings
Pvt Ltd and ., Visan Trust, Chembond Water Technologies Ltd.Chembond Clean Water Technologies
Ltd,Chembond Distribution Ltd, CCL Products LLC
39 Capital Management
For the purpose of the Company’s capital management, capital includes issued capital and all other equity
reserves attributable to the equity shareholders of the Company. The primary objective of the Company when
managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital
structure so as to maximize shareholder value.
As at 31st March, 2025, the Company has only one class of equity shares and has low debt. Consequent to
such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an
optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into
business based on its long term financial plans.
46 Additional regulatory information not disclosed elsewhere in the financial information
A The Company do not have any Benami property and no proceedings have been initiated or pending against
the Company and its Indian subsidiaries for holding any Benami property, under the Benami Transactions
(Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder.
B The Company do not have any transactions with struck off companies under section 248 of the Companies
Act, 2013 or section 560 of the Companies Act, 1956, during the FY 24-25 & FY 23-24
C The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall: directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Group (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries
D The Company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Funding Party(Ultimate Beneficiaries) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
E The Company has not undertaken any transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax
Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
F The Company has not traded or invested in Crypto currency or Virtual Currency during the current or
previous year.
G The Company has not been declared as a ‘Wilful Defaulter’ by any bank or financial institution (as defined
under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India.
H The company has complied with the number of layers prescribed under clause (87) of section 2 of the
Act read with Companies (Restriction on number of Layers) Rules, 2017.
47 Working Capital Facilities:-
Details of credit facilities from banks:
The Company has sanctioned credit facilities from HDFC Bank of Rs. 472.50 lakhs and Bank of India of Rs.
100.00 Lakhs (i.e cash credit facility - Rs.320.00 lakhs, letter of credit - Rs. 209.60 lakhs and Bank Guarantee -
Rs. 42.89 lakhs)
The Company has not utilised cash credit facilities at the year end.
Terms of loan
a) The credit facility carries interest at mutually agreed rates,(interest payable on monthly rests).
b) The credit facility is secured by : Hypothecation of stocks and bookdebts, Factory land & building.
Utilisation of borrowings :
(a) The Company has used the borrowings from banks and financial institutions for the specific purpose for
which it was taken at the balance sheet date.
(b) The quarterly returns/statements of current assets filed by the Company with banks or financial institutions
in relation to secured borrowings wherever applicable, are in agreement with the books of accounts.
48 Audit Trail
The Ministry of Corporate Affairs (MCA) has issued a notification - Companies (Accounts) Amendment Rules,
2021 which is effective from 1st April, 2023. The amendment requires that every company which uses an
accounting software for maintaining its books of account shall use an accounting software where there is
feature of recording audit trail of each and every transaction and further creating an edit log of each change
made to the books of account along with the date when such changes were made and ensuring that the audit
trail cannot be disabled.
The Company uses an accounting software for maintaining books of account which has a feature of recording
audit trail and edit log facility and that has been operative throughout the financial year for the transactions
recorded in the software impacting books of account at the application level. The software being managed on
public cloud, users do not have access to enable, disable, deactivate or tamper with the audit trail setting.
The Company also uses software for payroll application and employee reimbursement. In both the software
there is a feature of audit log for recording audit trail and the same cannot be disabled or modified.
The audit trail feature is not enabled at the database level in respect of these software.
49 Events occurring After Balance sheet date
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior
to approval of the financial statements to determine the necessity for recognition and / or reporting of any of
these events and transactions in the financial statements. Pursuant to the Composite Scheme of Arrangement
approved by the Hon’ble NCLT on April 7, 2025 Further the Company has filed the certified copy of the said
order with the Registrar of Companies on 3rd May 2025. These events, occurring after the reporting date but
before the approval of the financial statements, have been Adjustred and Disclosed in accordance with Ind AS
110.
Composite scheme of arrangement:
Chembond Chemicals Limited (Demerged / CCL / Company), Chembond Chemical Specialties Limited
(“"Resulting Company””, CCSL), Chembond Clean Water Technologies Limited (CCWTL), Chembond Material
Technologies Private Limited (CMTPL), Phiroze Sethna Private Limited (PSPL) and Gramos Chemicals India
Private Limited (GCIPL) and their respective shareholders have entered into a Composite Scheme of Arrangement
under Sections 230 to 232 of the Companies Act, 2013 (“"Scheme””) which contemplates Amalgamation of
CMTPL, PSPL and GCIPL with CCL, demerger of “Construction Chemicals and Water Technologies chemicals”
business from CCL to CCSL and amalgamation of CCWTL into CCSL, as on the Appointed Date of 1st April,
2024. The said Scheme was approved by the National Company Law Tribunal, Mumbai Bench (“”NCLT””) on
7th April, 2025 and the Company has received the certified order copy on 22nd April 2025. The Company has
filed the certified copy of the said order with the Registrar of Companies for CCL, CCSL, CMTPL, PSPL, GCIPL
and CCWTL on 29/04/2025, 30/04/2025, 01/05/2025, 01/05/2025, 02/05/2025 and 03/05/2025 respectively,
as such the Scheme has become effective from the respective dates for all the companies involved in the
Scheme.
Upon demerger, the Resulting Company is required to issue its equity shares to each shareholder of the
Demerged Company as on record date in 1:2 swap ratio (i.e., for every one share held in the Demerged Company,
two shares of Rs. 5 each will be issued by the Resulting Compnay). The said allotment of 2,68,96,576 shares
has been approved by the Allotment Committee of CCSL on 13/05/2025 and the equity shares were allotted to
the shareholders in the said ratio.
50 Accouting Treatment as per IND AS 103- Business Combination:
Pursuant to the Composite Scheme of Arrangement the following transactions related to CMTL were
effected:
Demerger of (WT) and (CC ) Undertaking of CMTL and transfered to CCSL
The Water Technologies (WT) and Construction Chemicals (CC) business undertaking of Chembond Material
Technologies Limited (“the Demerged Company” formerly Known as Chembond Chemicals Limited) was
demerged and transferred to Chembond Chemical Specialties Limited (“CCSL” or “the Resulting Company”)
with effect from the Appointed Date, i.e., 1st April 2024.
Amalgamation of CMTPL, PSPL & GCIPL with CMTL.
Subsequently, Chembond Material Technologies Private Limited (CMTPL), Phiroze Sethna Private Limited
(PSPL) & Gramos Chemicals India Private Limited (GCIPL) was amalgamated with CMTL as part of the Scheme.
The above transactions has been accounted for as a common control business combination in accordance
with Appendix C of Ind AS 103 - Business Combinations, using the pooling of interest method. Accordingly:
(a) The assets, liabilities, and reserves of CMTPL, PSPL & GCIPL have been transferred to and vested in CMTL
at their respective carrying values.
(b) The standalone financial results for the quarter and year ended 31st March 2025 include the merged
financial results of the CMTPL, PSPL & GCIPL and effect of Demerger of CMTL for the relevant period
as per the method of accounting prescribed in the Scheme and in accordance with principles of Indian
Accounting Standards, including IND AS 103 (Business Combinations)
(c) The comparative figures year ended 31st March 2024, have been restated to include the corresponding
financial results of the CMTPL, PSPL & GCIPL and demerger of CMTL for those periods, to ensure
comparability.
51. Pursuant to Part IV of Composite scheme of arrangement which was approved by the National Company
Law Tribunal, Mumbai Bench (“NCLT”) on 7th April, 2025, Chembond Chemicals Limited is now renamed as
“Chembond Material Technologies Limited”(“CMTL”) with effect from 27th May 2025.
52. Fire Incident:
Exceptional Item of '154.74 lakhs, arising on account of full and final settlement of insurance claim related
to Replacement value of Property plant & Equipement that had damaged due to fire incident occurred at the
Tarapur plant in the month of April 2022.
53. The company has evaluated the option permitted under section 115BAA of the Income Tax Act, 1961 (the “Act”)
as introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, the Company has presently
decided to continue with the existing tax structure.
54. In addition to the restatement pursuant to scheme of arrangement as per note 50 above, the previous year
figures have been regrouped, reallocated and reclassified wherever necessary to confirm with current year
classification and presentation.
As per our attached report of even date On behalf of the Board of Directors
For S H B A & CO LLP Sameer V. Shah Jayesh Shah
(Formerly known as Bathiya & Associates LLP) Chairman & Managing Director Director
Chartered Accountants DIN: 00105721 DIN: 00138346
FRN - 101046W/W100063
Jatin A. Thakkar Rashmi S. Gavli Suchita Singh
Partner Chief Financial Officer Company Secretary
Membership No. : 134767
Mumbai, 30th May 2025 Mumbai, 30th May 2025
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