Camlin Fine Sciences Limited has been informed by their joint venture partner Wanglong Technology Company Limited on 28th February, 2021 that a penalty of RMB 159.32 million has been levied by Supreme Court of China on Wanglong Technology for alleged infringement of intellectual property used in the process for manufacturing Vanillin.
Out of the total penalty imposed on Wanglong Technology, 7% of the aforesaid penalty amounting to RMB 11.15 million has been attributed to the joint venture, namely CFS Wanglong Flavors (Ningbo) Company Limited. CFS Wanglong is a joint venture of the Company in which Wanglong Technology hold 49% and the Company holds 51%.
In terms of the shareholders agreement entered into with Wanglong Technology, Wanglong Technology is required to indemnify CFS Wanglong from any economic consequences emanating from any such infringement.
CFS Wanglong is awaiting a translated copy of the court order and is in the process of seeking legal advice in relation to this order including taking appropriate steps to resume operations. Until then, as an abundant caution, CFS Wanglong has decided to extend the maintenance shut‐down of its plant located in Xiaocao's Town, Yuyao City, Zhejiang Province, China.
In the Financial year 2020, CFS Wanglong contributed revenues amounting to Rs17,652.61 lakh [16.83%] of the total consolidated revenues of the Company and incurred loss of Rs2,034.92 lakh. The networth contributed by CFS Wanglong during Financial Year 2020 was Rs2,635.54 contributing to 6.54% of the consolidated networth of the Company.