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Directors Report of Chembond Chemicals Ltd.

Mar 31, 2017

To

The Members,

The Directors take pleasure in presenting the 42nd Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2017.

Financial Results

The financial performance of your Company is as summarized below for the year under review:

(Rs. in Lakhs)

Particulars

Standalone

Consolidated

2016-17

2015-16

2016-17

2015-16

Revenue from Operations

21,681.78

21,563.77

28,052.40

27,104.71

Profit for the year

331.58

15,122.59

775.53

15,365.23

Add: Balance as per last year

17,790.52

3,359.89

18,087.15

6,586.04

Less: Effect of divestment in JV & conversion of Associate into Subsidiaries

-

-

-

3,041.65

Add: Pre-acquisition profit & previous year transaction

-

-

232.91

-

Total

18,122.10

18,482.48

19,095.59

18,909.62

Appropriation

General Reserves

-

-

70

70.00

Set off of Dividend Tax in respect of dividend from Subsidiary Company

(45.17)

(33.03)

(45.17)

(33.03)

Interim Dividend

-

601.49

-

601.49

Tax on Interim Dividend

-

122.45

-

182.50

Previous year Dividend

-

0.48

-

0.48

Tax on Previous year Dividend

-

0.58

-

1.03

Proposed Dividend

221.90

-

221.90

-

Tax on Proposed Dividend

45.17

-

92.03

-

Balance carried to Balance Sheet

17,900.20

17,790.52

18,756.84

18,087.15

Total

18,122.10

18,482.48

19,095.59

18,909.62

Performance Highlights

During the year under review, revenue from operations of your Company''s products and services was Rs. 21,681.78 lakhs compared with Rs. 21,563.76 lakhs in FY 2015-16. The Profit after Taxes was Rs. 331.58 lakhs compared with Rs. 15,122.59 lakhs in FY 2015-16. The sharp reduction is because of exceptional income on account of divestment of your Company''s stake in Henkel Chembond Surface Technologies Limited in the previous year.

Dividend

The Board of Directors has recommended final dividend of Rs. 1.65/- per share for the financial year ended 31st March 2017. The outflow on account of dividend payment amounts to Rs. 221.90 Lakhs.

Transfer to Reserves

Your Company does not propose to transfer any amount from the current year''s profits to the General Reserve. (Previous year Rs. Nil)

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and rules framed there under.

Directors and Key Managerial Personnel

The Board, in its meeting held on 28th May, 2016, on the recommendation of Nomination & Remuneration Committee of the Board, approved the re-appointment of Mr. Sameer V Shah (DIN: 00105721) and Mr. Nirmal V Shah (DIN: 00083853) as Chairman and Managing Director and Vice Chairman and Managing Director of the Company respectively. The re-appointment of Mr. Sameer V Shah and Mr. Nirmal V Shah was approved by shareholders at the 41st Annual General Meeting held on 30th July, 2016 for a term of three years with effect from 1st August, 2016. There was no change in any of Key Managerial Personnel during the year.

During the year, Mr. O. P. Malhotra (DIN: 00009086) ceased to be Director (Independent) on the Board of the Company with effect from 1st August, 2016 and the same was approved by the Board at its meeting held on 30th July, 2016.

Inter-se relationship between Directors

Mr. Sameer V Shah, Chairman & Managing Director and Mr. Nirmal V Shah, Vice Chairman & Managing Director are brothers.

Number of Board Meetings

Five (5) board meetings were convened and held during the year. Details of these meetings of the board are included in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Performance evaluation and its criteria

The Directors on the Board carried out an annual evaluation of the Board itself, its Committees and individual Directors. The entire Board carried out performance evaluation of each Independent Director excluding the Independent Director being evaluated. Nomination and Remuneration Committee also carried out evaluation of every Director''s performance.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, setting out parameters of evaluation. Evaluation parameters of the Board and Committees were mainly based on Disclosure of Information, Key functions of the Board and Committees, responsibilities of the Board and Committees, Corporate Governance Norms etc. Evaluation parameters of individual directors including the Chairman of the Board and Independent Directors were based on knowledge to perform the role, time and level of participation, performance of duties and level of oversight and professional conduct etc.

Independent Directors in their separate meeting held on 30th March, 2017 have also evaluated the performance of Non Independent Directors, Chairman of the Board and the Board as a whole.

Disclosures by the Directors

The Directors on the Board have submitted notice of interest under Section 184(1), intimation under Section 164(2) and declaration as to compliance with the Code of Conduct of the Company. All Independent Directors have also given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 (the "Act") and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors'' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors

The Statutory Auditors of your Company, M/s. Kastury & Talati, were appointed to hold office until the conclusion of the ensuing 42nd Annual General Meeting.

The term of M/s. Kastury & Talati, Chartered Accountants, Statutory Auditors of the Company, will expire at the end of the ensuing 42nd Annual General Meeting of the Company. M/s. Kastury and Talati had been the Statutory Auditors of the Company since inception of your Company. Being more than 10 years and as per the provisions of Section 139 of the Companies Act, 2013 and Rule 3 to 6 of the Companies (Audit and Auditors) Rules made there under, the Statutory Auditor firm, whose term expires, shall be replaced by a new Statutory Auditor.

In terms of the requirements of Section 139 of the Act read with rules made there under, the Board of Directors of the Company on the recommendation of the Audit Committee has appointed M/s. B. D. Jokhakar & Co., Chartered Accountants (Firm Registration No. 104345W) as the Statutory Auditors of the Company in the Board Meeting held on 24th May, 2017, for a term of 5 (five) consecutive years commencing from the conclusion of the ensuing 42nd Annual General Meeting till the conclusion of the 47th Annual General Meeting to be held in the year 2022, subject to the approval of the shareholders'' in the ensuing 42nd Annual General Meeting (AGM). M/s. B. D. Jokhakar & Co., Chartered Accountants have confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act and that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

The appointment of M/s. B. D. Jokhakar & Co., Chartered Accountants, as Statutory Auditors shall be subject to ratification by the shareholders at every Annual General Meeting during the remaining term of five years.

The Board places on record its appreciation for the services rendered by M/s. Kastury & Talati as Statutory Auditors of the Company.

Cost Auditors

On the recommendation of the Audit Committee, the Board has appointed Mr. R. S. Raghavan, Practicing Cost Accountant, as Cost Auditor of the Company for the financial year 2017-18 in accordance of Section 148 of the Companies Act, 2013 read with rules made there under.

Secretarial Auditor & Report

Mr. Virendra Bhatt, Practicing Company Secretary was appointed as Secretarial Auditor for the financial year 2016-17 by the Board. Mr. Bhatt has also been appointed as Secretarial Auditor for the financial year 2017-18. The report of Secretarial Auditor for the financial year 2016-17 is attached as Annexure-1.

Nomination & Remuneration Committee

The Company has a Nomination & Remuneration Committee of the Board, the details whereof are given in the Corporate Governance Report.

Subsidiary, Joint Venture or Associate Companies

Your Company has seven subsidiaries namely Chembond Solenis Water Technologies Limited, Protochem Industries Private Limited, Chembond Industrial Coatings Limited, Chembond Clean Water Technologies Limited, Chembond Enzyme Company Limited, Chembond Calvatis Industrial Hygiene Systems Limited and Chembond Chemicals (Malaysia) Sdn. Bhd. (formerly known as IChembond Water Sdn. Bhd.).

During the year, your Company acquired 100% stake in Chembond Chemicals (Malaysia) Sdn. Bhd. (Formerly known as IChembond Water Sdn. Bhd.), the erstwhile Joint Venture of your Company in Malaysia, thus making it your Company''s wholly owned subsidiary (WOS). Chembond Chemicals (Malaysia) Sdn. Bhd. is in the business of selling and servicing water treatment chemicals for industries in Malaysia.

In the month of April, 2017, your Company acquired additional 45% stake from its erstwhile jv partner Solenis in the material subsidiary - Chembond Solenis Water Technologies Limited, thus making it a wholly owned subsidiary of your Company.

The details of financial performance of the subsidiaries, associates and joint venture Companies are given in AOC-I (Annexure 2 to the Directors Reports).

Remuneration to Directors

The details of remuneration paid to Directors of the Company including the Executive Directors are given in the Report on Corporate Governance.

Particulars of employees

The information required under Section 197 of the Companies Act, 2013 & Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below:

a) Ratio of remuneration of each Director to the median employee''s remuneration for the financial year.

Name

Designation

Ratio

Sameer V Shah

Chairman and Managing Director

21.36:1

Nirmal V Shah

Vice - Chairman and Managing Director

10.37:1

For this purpose, sitting fees paid to Non Executive Directors (NEDs) have not been considered as remuneration. b) Percentage increase in remuneration of each Director, CFO and CS.

Name

Designation

% increase

Sameer V Shah

Chairman and Managing Director

14

Nirmal V Shah

Vice Chairman and Managing Director

0

Rashmi S. Gavli

Chief Financial Officer

15

Jay Mistry

Company Secretary

8.60

c) The percentage increase in the median remuneration of employees: 3%

d) The number of permanent employees: 361

e) Average percentile increase made in the salaries of employees other than key managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average increase made in the salaries of employees other than key managerial personnel during the year is 11.87% versus 9.45% increase in managerial remuneration.

There are no other exceptional circumstances for increase in the remuneration of key managerial personnel and increase in remuneration has been in accordance with the Company''s policies. The increment given to each individual employee is based on the employees'' potential, experience as also their performance and contribution to the Company''s progress over a period of time.

f) The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

Particulars of employees as per Rule 5(2) & Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The information as per Rule 5(2) & Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request. In terms of Section 136 of the Companies Act 2013, the Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid details, which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such members may write to the Company Secretary in this regard.

Remuneration to Managing Director from wholly owned subsidiary

During the financial year 2016-17, Mr. Nirmal V Shah, Vice - Chairman & Managing Director, received remuneration of Rs. 44,66,528/- (excluding contribution to LIC under Group Gratuity Scheme & Superannuation Scheme) from Chembond Solenis Water Technologies Limited (CSWTL), wholly owned subsidiary Company. CSWTL, previously a subsidiary, became a wholly owned subsidiary of the Company in the month of April, 2017 pursuant to acquisition of additional 45% shares by your Company.

Pecuniary relationships with Non-Executive Directors

The Company paid sitting fees to Non-Executive Directors (NEDs) for attending the meetings. Criteria of making payments to NEDs is available on Company''s website at http://www.chembondindia.com/investors. The number of shares held by NEDs as on 31st March, 2017 is as follows:

Name of NED

Shares held

Ashwin R. Nagarwadia

10,81,264

Perviz H. Dastur

3,14,120

Mahendra K. Ghelani

0

Jawahar I. Mehta

7,400

Sushil U. Lakhani

0

O. P. Malhotra#

N.A.

Saraswati Sankar

0

Prakash D. Trivedi

0

#ceased to be Director (Independent) of the Company with effect from 1st August, 2016.

Employees Stock Option Scheme*

Pursuant to the approval accorded by the shareholders at the thirty sixth Annual General Meeting of the Company held on 10th September, 2011 for issue of 6,36,000-Options, the Compensation Committee had formulated the Chembond Chemicals Employees Stock Option Plan 2012 and approved a grant of 4,65,562-options to the employees of the Company and its subsidiaries under the said Scheme. As required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, (SEBI ESOP Regulations), Companies (Share Capital and Debentures) Rules, 2014 and other applicable provisions of the Companies Act, 2013, the following details of this scheme as on 31st March, 2017 are being provided:

Sr. No.

Nature of Disclosure

Particulars*

A

The Pricing Formula

At a price not less than lower of the average of weekly high and low of closing price of six months or two weeks on the Bombay Stock Exchange (BSE) prior to the date of grant of the options with a discount not more than 10% of the minimum applicable price i.e. Rs. 76.50/- per share.

B

Options Outstanding at the beginning of the year

2,06,482

C

Options Granted during the year

Nil

D

Options Vested

85,020

E

Options Exercised & Exercise Price

54,500, Exercise Price Rs. 76.50/-

F

The total no. of shares arising as a result of exercise of option*

54,500

G

Options Lapsed/ Surrendered/cancelled

3,38,098

H

Variation of Terms of Option

Please refer note below*

I

Money realized by exercise of Options*

Rs. 41,69,250/-

J

Total no of Options in force

Nil

K

Employee wise details of Options granted to-

As follows

i) Details of Options granted to senior management personnel

No new options were granted to senior management personnel during the year under review. For Options granted to them earlier, please refer Annexure 3

ii) Any other employee who received a grant in any one year of Option amounting to 5% or more of Options granted during the year

Nil

iii) Employees who were granted Options, during any one year, equal to or exceeding 1% of the issued capital of the company at the time of grant

Nil

L

Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting standard AS-20

M

(i) Difference between the compensation cost using the intrinsic value of the stock Options (which is the method of accounting used by the company) and the compensation cost that would have been recognized in the accounts if the fair value of Options had been used as the method of accounting.

The employee compensation cost for the year would have been higher by Rs. 14.46 Lakhs had the Company used the fair value of options as the method of accounting instead of intrinsic value.

(ii) Impact of the difference mentioned in (i) above on the profits of the Company

The stock-based compensation cost calculated as per the intrinsic value method upto 31st March, 2017 is Rs. (16.11) Lacs. If the stock-based compensation cost was calculated as per the fair value method prescribed by SEBI, the total cost to be recognized in the financial statements for the period ended 31st March, 2017 would be Rs. (1.65 Lakhs).

(iii) Impact of the difference mentioned in (i) above on the EPS of the company

Had the Company accounted the Options as per fair value the diluted EPS would have been 2.47 per share instead of 2.47 per share.

N

(i) Weighted Average exercise price of Options

Rs. 76.5/-

(ii) Weighted average fair value of Options

Rs. 34/-

O

(i) Method used to estimate the fair value of Options

Black Scholes Options Pricing Model

(ii) Significant assumptions used (weighted average information relating)

(a) Risk -free interest rate

8.25 %

(b) Expected life of the Option

3.34 years

(c) Expected volatility

42 %

(d) Expected dividend yields

1.38 %

(e) Price of the underlying share in the market at the time of Option grant

Rs. 85/-

The certificate from the statutory auditor as required under the SEBI ESOP Regulations, confirming that the Company''s Employees Stock Option Plan 2012 has been implemented in accordance with the SEBI ESOP Regulations and shareholders resolution, will be placed before the shareholders at the ensuing Annual General Meeting.

*During the year shares of Company were sub-divided from one share of Rs. 10/- each into two shares of Rs. 5/- each with effect from 7th September, 2016. The Options and Exercise price were adjusted to give effect to the sub-division of the equity shares of the Company. All the numbers mentioned have been arrived at after giving effect of the subdivision of equity shares.

The exercise period for the options vested/to be vested under the Scheme expired on 31st March, 2017, hence all the shares granted and vested under the Scheme, which remain un-exercised on 31st March, 2017 lapsed.

Policies and Disclosure Requirements

In terms of provisions of the Act and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted all the applicable policies. The policies are available on Company''s website - www.chembondindia. com and the web link is http://www.chembondindia.com/investors

It is confirmed that all Directors and Senior Management Personnel have affirmed their adherence to the provisions of the Code of Conduct during the financial year 2016-17.

The Company''s policy on Directors'' appointment, remuneration and other matters provided in Section 178(3) of the Act forms part of Nomination and Remuneration Policy and has been disclosed in the Corporate Governance report.

Risk Management

The Board of Directors has formed a Risk Management Committee. The details of Committee are set out in the Corporate Governance Report forming part of the Directors'' Report. The Company has its Risk Management Plan & Policy in place which is also displayed on the website of the Company. In the opinion of the Board, during the financial year 2016-17, the Board has not noticed any elements of risk which may threaten the existence of the Company.

Internal Financial Controls

For the year ended 31st March, 2017, the Board is of the opinion that the Company has sound Internal Financial Controls commensurate with the nature and size of its business operations wherein controls are in place and operating effectively and no material weaknesses have been noticed. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Company''s operation.

Vigil Mechanism

The Company has a vigil mechanism in place in accordance with the Companies Act, 2013. The policy has also been uploaded on the website of the Company.

Corporate Social Responsibility (CSR)

The criteria prescribed under Section 135 of the Act with respect to constituting CSR committee, adopting CSR policy and spending amount on CSR activities in accordance with the Act do not apply to the Company. However Company has voluntarily framed CSR Policy and constituted CSR Committee, as good corporate governance practice. The CSR Committee composition is as follows:

The CSR Committee composition is as follows:

Mahendra K. Ghelani

Chairman & Independent Director

Sushil U. Lakhani

Independent Director

Sameer V Shah

Managing Director

Ashwin R. Nagarwadia

Director

The Company''s CSR Policy is available on the website of the Company at http://www.chembondindia.com/investors Related Party Transactions

All transactions entered into with Related Parties during the financial year were in the ordinary course of business and on arm''s length basis and do not attract the provisions of Section 188(1) of the Companies Act, 2013. For material transactions with related parties, the Company has obtained members'' approval by way of voting through postal ballot including e-voting results of which were declared on 19th March, 2015. Suitable disclosures as required by the Accounting Standards (AS-18) have been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company''s website. Necessary disclosures in Form AOC-2 are attached as Annexure 4.

The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The related information is provided in Annexure 5, which is attached to this report.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments have been disclosed in the Financial Statements.

Extract of the Annual Return

An extract of the annual return in Form MGT-9 is provided herewith as Annexure 6.

Management Discussion and Analysis Report

Management Discussion and Analysis Report is separately provided in this Annual Report.

Corporate Governance Report

A separate report on Corporate Governance is attached as a part of this Annual Report along with the Auditor''s Certificate on its compliance.

Prevention, Prohibition and Redressal of Sexual Harassment of Women

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint has been received during the year under review.

Significant and Material Orders Passed

No significant and material order has been passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.

Acknowledgements

Your Board takes this opportunity to express its deep thanks to the customers, vendors, shareholders and bankers for the faith they have reposed in the Company. Your Directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work and cooperation.

On behalf of the Board

Sameer V. Shah Nirmal V. Shah

Chairman & Managing Director Vice - Chairman & Managing Director

Mumbai 6th May, 2017


Mar 31, 2016

Directors'' Report

To

The Members,

The Directors take pleasure in presenting the 41st Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2016.

Financial Results

The financial performance of your Company is as summarized below for the year under review:

(Rs, in Lakhs)

Particulars

Standalone

Consolidated

2015-16

2014-15

2015-16

2014-15

Revenue from Operations

21,563.77

21,674.90

27,104.71

30,022.85

Profit for the year

15,122.59

558.33

15,365.23

1,237.86

Add: Balance as per last year

3,359.89

3,057.54

6,586.04

5,794.48

Less: Effect of divestment in JV & conversion of Associate into Subsidiaries

-

-

3,041.65

-

Less: Transitional Depreciation Provision

-

34.11

-

41.33

Add: Transfer from Revaluation Reserve

-

54.04

-

54.05

Total

18,482.48

3,635.80

18,909.62

7,045.06

Appropriation

General Reserves

-

50.00

70.00

182.42

Set off of Dividend Tax in respect of dividend from Subsidiary Company

(33.03)

(13.86)

(33.03)

(13.86)

Interim Dividend

601.49

-

601.49

-

Tax on Interim Dividend

122.45

-

182.50

-

Previous year Dividend

0.48

-

0.48

-

Tax on Previous year Dividend

0.58

-

1.03

-

Proposed Dividend

-

199.81

-

199.81

Tax on Proposed Dividend

-

39.95

-

90.64

Balance carried to Balance Sheet

17,790.52

3,359.89

18,087.15

6,586.04

Total

18,482.48

3,635.80

18,909.62

7,045.06

Performance Highlights

During the year under review, revenue from operations of your Company’s products and services was Rs, 21,563.77 lakhs compared with Rs, 21,674.90 lakhs in FY 2014-15. The Profit after Taxes was Rs, 15,122.59 lakhs compared with Rs, 558.33 lakhs in FY 2014-2015.

Dividend

During the financial year 2015-16, the Board of Directors had declared first interim dividend of Rs, 6/- per share and second interim dividend of Rs, 3/- per share on the equity shares of the Company in November, 2015 and March, 2016 respectively. In view of two interim dividends declared during the year, the Board of Directors of the Company has not recommended final dividend for the financial year ended 31st March 2016.

Transfer to Reserves

Your Company does not propose to transfer any amount from the current year’s profits to the General Reserve. (Previous year Rs, 50 Lakhs)

Deposits

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and rules framed there under.

Directors and Key Managerial Personnel

The Board, in its meeting held on 21st May, 2015 appointed Dr. Prakash D. Trivedi (DIN: 00231288) as an Additional (Independent) Director of the Company. The shareholders of the Company at the 40th Annual General Meeting appointed him as an Independent Director for a period of five years from 21st May, 2015 up to 21st May, 2020.

Mr. Jay Mistry was appointed as Company Secretary & Compliance Officer of the Company by the Board in its meeting held on 6th February, 2016. Mr. Varadvinayak Khambete resigned as a Company Secretary with effect from 23rd December, 2015.

The Board in its meeting held on 24th March, 2015 has appointed Mrs. Saraswati Sankar as an Additional (Independent) Director of the Company. Mrs. Sankar was appointed as an Independent Director of the Company by the shareholders at the 40th Annual General Meeting held on 8th August, 2015 for a term of five years from 24th March, 2015 up to 24th March, 2020.

Inter-se relationship between Directors

Mr. Sameer V. Shah, Chairman and Managing Director and Mr. Nirmal V. Shah, Vice Chairman and Managing Director are brothers.

Number of Board Meetings

Seven (7) board meetings were convened and held during the year. Details of these meetings of the board are included in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Performance evaluation and its criteria

The Directors on the Board carried out an annual evaluation of the Board itself, its Committees and individual Directors. The entire Board carried out performance evaluation of each Independent Director excluding the Independent Director being evaluated. Nomination and Remuneration Committee also carried out evaluation of every Director''s performance.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, setting out parameters of evaluation. Evaluation parameters of the Board and Committees were mainly based on Disclosure of Information, Key functions of the Board and Committees, responsibilities of the Board and Committees, Corporate Governance Norms etc. Evaluation parameters of individual directors including the Chairman of the Board and Independent Directors were based on knowledge to perform the role, time and level of participation, performance of duties and level of oversight and professional conduct etc.

Independent Directors in their separate meeting have also evaluated the performance of Non- Independent Directors, Chairman of the Board and the Board as a whole.

Disclosures by the Directors

The Directors on the Board have submitted notice of interest under Section 184(1), intimation under Section 164(2) and declaration as to compliance with the Code of Conduct of the Company. All Independent Directors have also given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 (the "Act") and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors'' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors

The Statutory Auditors of your Company, M/s. Kastury & Talati, were appointed to hold office until the conclusion of the ensuing Annual General Meeting. The Company has received the certificate from them to the effect that their re-appointment, if made, would be in compliance of the Companies Act, 2013.

The Company has appointed Mr. R. S. Raghavan, Practising Cost Accountant, as Cost Auditor of the Company for the financial year 2016-17.

The Company has appointed Mr. Virendra Bhatt, Practising Company Secretary, as Secretarial Auditor for the financial year 2015

16. The report of Secretarial Auditor is attached as Annexure-1.

Audit Committee

Please refer the details given in the Corporate Governance Report.

Subsidiary, Joint Venture or Associate Companies

During the year, two Companies have become your Company''s subsidiaries i.e. Chembond Enzyme Company Limited & Chembond Calvatis Industrial Hygiene Systems Limited (formerly known as Chembond Bioengineering Company Limited) and one company has ceased to be your Company''s Joint Venture i.e. Henkel Chembond Surface Technologies Limited. A separate statement containing salient features of financial statements of your Company''s subsidiaries in Form AOC-1 is attached as Annexure-2. The report on the performance and financial position of the subsidiaries, associates, and joint venture companies forms a part of the Management Discussion & Analysis.

During the year, your Company has entered into an agreement with I-Chem Solution Sdn Bhd, Malaysia for forming a joint venture Company in Malaysia to do the business of selling and servicing water treatment chemicals for industries in Malaysia.

Particulars of employees

The information required under Section 197 & Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below.

a) Ratio of remuneration of each Director to the median employee''s remuneration for the financial year.

Name

Designation

Ratio

Sameer V. Shah

Chairman and Managing Director

19.41:1

Nirmal V. Shah

Vice Chairman and Managing Director

10.75:1

For this purpose, sitting fees paid to NEDs have not been considered as remuneration. b) Percentage increase in remuneration of each Director, CFO and CS.

Name

Designation

% increase

Sameer V. Shah

Chairman and Managing Director

81.00

Nirmal V. Shah

Vice Chairman and Managing Director

0

Rashmi S. Gavli

Chief Financial Officer

9

Jay Mistry *

Company Secretary

N.A.

* Mr. Jay Mistry was appointed as Company Secretary w.e.f. 6th February, 2016.

c) The percentage increase in the median remuneration of employees: 6.00%

d) The number of permanent employees: 336

e) The explanation on the relationship between average increase in remuneration and company performance: The average increase in remuneration during the year is 6% which is in line with market trends.

f) Comparison of remuneration of each key managerial personnel against the performance of the Company.

Name

Designation

CTC (as on 31st March, 2016) (Rs, in Lakh)

%

increase in CTC

PAT (Rs, in Lakh)

% increase in PAT compared to previous year

Sameer V. Shah

MD

65.01

81

151.23

2,708.54

Nirmal V. Shah

MD

36.00

0

Rashmi S. Gavli

CFO

32.39

9

Jay Mistry *

CS

5.90

N.A.

* Mr. Jay Mistry was appointed as a Company Secretary w.e.f. 6th February, 2016.

g) Variations in the market capitalization of the Company, price-earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the company.

Date

Issued Capital (shares)

Closing Market Price per share in Rs,

EPS

P-E Ratio

Market capitalization (In Lakhs Rs,)

31.03.2015

6,660,412

342.00

8.38

40.81

22,778.61

31.03.2016

6,696,894

417.30

226.45

1.84

27,946.14

Increase /(Decrease)

36,482 #

75.30

218.07

-

5,167.53

% of Increase /(Decrease)

0.55

22.02

2,602.27

-

22.69

Issue Price of the share at the last Pubic Offer (IPO)

-

15.00

-

-

-

Increase in market price as on 31.03.2016 as compared to issue price of IPO

402.30

Increase in %

-

2,682.00

-

-

-

# Out of 36,482 options exercised,15,950 options were exercised upto 31st March, 2015 and 15,950 equity shares were allotted on 9th April, 2015 and further 20,532 Options were exercised and allotted during the year.

h) Average percentile increase made in the salaries of employees other than key managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average increase made in the salaries of employees other than key managerial personnel during the year is 3%. Pursuant to the provisions of Section 149 196, 197 and 203 of the Companies Act, 2013, there was revision in the remuneration of Mr. Sameer V. Shah and Mr. Nirmal V. Shah, Managing Directors of the Company w.e.f. 1st April, 2015 till the remaining period of tenure i.e. up to 31st July, 2016 which was approved by the shareholders of the Company at the 40th Annual General Meeting. On that account, average increase in the managerial remuneration in the year is 32.92%.

There are no other exceptional circumstances for increase in the remuneration of key managerial personnel and increase in remuneration has been in accordance with the Company''s policies. The increment given to each individual employee is based on the employees'' potential, experience as also their performance and contribution to the Company''s progress over a period of time.

i) Key parameters for any variable component of remuneration availed by the directors. - N.A.

j) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year. : N.A.

k) The Company affirms that the remuneration is as per the Remuneration Policy of the Company.

Disclosure under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to any of the employees of the Company.

Remuneration to Managing Director from subsidiary

During the financial year 2015-16, Mr. Nirmal V. Shah, Vice Chairman and Managing Director, received remuneration of Rs, 4,478,263 (excluding contribution to LIC under Group Gratuity Scheme & Superannuation Scheme) from Chembond Solenis Water Technologies Limited, subsidiary Company.

Pecuniary relationships with Non-Executive Directors

The Company paid sitting fees to Non-Executive Directors (NEDs) for attending the meetings. Criteria of making payments to NEDs is available on Company''s website at http://www.chembondindia.com/investors. The number of shares held by NEDs as on 31st March, 2016 is as follows:

Name of NED

Shares held

Ashwin R. Nagarwadia

5,40,632

Perviz H. Dastur

1,57,060

Mahendra K. Ghelani

9,300

Jawahar I. Mehta

2,800

Sushil U. Lakhani

4,800

O.P.Malhotra

1,600

Saraswati Sankar

0

Prakash D. Trivedi

0

Employees Stock Option Scheme

Pursuant to the approval accorded by the shareholders at the thirty sixth Annual General Meeting of the Company held on 10th September, 2011 for issue of 3,18,000 Options, the Compensation Committee had formulated the Chembond Chemicals Employees Stock Option Plan 2012 and approved a grant of 232,781 options to the employees of the Company and its subsidiaries under the said Scheme. As required under the Securities and Exchange Board of India (Employees Stock Option and Employees Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines), the following details of this scheme as on 31st March, 2016 are being provided:

Sr. No.

Nature of Disclosure

Particulars

A

The Pricing Formula

At a price not less than lower of the average of weekly high and low of closing price of six months or two weeks on the Bombay Stock Exchange (BSE) prior to the date of grant of the options with a discount not more than 10% of the minimum applicable price i.e. Rs, 153/- per share.

B

Options Outstanding at the beginning of the year

1,56,999

C

Options Granted during the year

Nil

D

Options Vested

28,498

E

Options Exercised

20,532

F

The total no. of shares arising as a result of exercise of option*

36,482

G

Options Lapsed/ Surrendered

33,226

H

Variation of Terms of Option

No

I

Money realized by exercise of Options*

Rs, 31,71,996

J

Total no of Options in force

1,03,241

K

Employee wise details of Options granted to-

As follows

(i) Details of Options granted to senior management personnel

As per Annexure 3.

(ii) Any other employee who received a grant in any one year of Option amounting to 5% or more of Options granted during the year

Nil

(iii) Employees who were granted Options, during any one year, equal to or exceeding 1% of the issued capital of the company at the time of grant

Nil

L

Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting standard AS-20

M

(i) Difference between the compensation cost using the intrinsic value of the stock Options (which is the method of accounting used by the company) and the compensation cost that would have been recognized in the accounts if the fair value of Options had been used as the method of accounting.

The employee compensation cost for the year would have been higher by Rs, 12.53 Lakhs had the Company used the fair value of options as the method of accounting instead of intrinsic value.

(ii) Impact of the difference mentioned in (i) above on the profits of the Company

The stock-based compensation cost calculated as per the intrinsic value method upto 31st March, 2016 is Rs, (2.01) Lacs. If the stock-based compensation cost was calculated as per the fair value method prescribed by SEBI, the total cost to be recognized in the financial statements for the period ended 31st March, 2016 would be Rs, 10.52 Lakhs.

(iii) Impact of the difference mentioned in (i) above on the EPS of the company

Had the Company accounted the Options as per fair value the diluted EPS would have been 223 per share instead of 226.45 per share.

N

(i) Weighted Average exercise price of Options

Rs, 153/-

(ii) Weighted average fair value of Options

Rs, 68/-

O

(i) Method used to estimate the fair value of Options

Black Scholes Options Pricing Model

(ii) Significant assumptions used (weighted average information relating)

(a) Risk -free interest rate

8.25 %

(b) Expected life of the Option

3.34 years

(c) Expected volatility

42 %

(d) Expected dividend yields

1.38 %

(e) Price of the underlying share in the market at the time of Option grant

Rs, 170/-

The certificate from the statutory auditor as required under the SEBI Guidelines, confirming that the CompanyRs,s Employees Stock Option Plan 2012 has been implemented in accordance with the SEBI Guidelines and shareholders resolution, will be placed before the shareholders at the ensuing Annual General Meeting.

* During the year 15,950 equity shares were allotted on 9th April, 2015 and 20,532 equity shares were allotted on 1st February, 2016. The 15,950 options for 15,950 equity shares were exercised upto 31st March, 2015. The disclosure in respect of 15,950 equity shares was made in the previous year annual report.

Policies and Disclosure Requirements

In terms of provisions of the Act and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted all the applicable policies. The policies are available on Company''s website - www.chembondindia. com and the web link is http://www.chembondindia.com/investors

It is confirmed that all Directors and Senior Management Personnel have affirmed their adherence to the provisions of the Code of Conduct during the financial year 2015-16.

The Company''s policy on Directors'' appointment, remuneration and other matters provided in Section 178(3) of the Act forms part of Nomination and Remuneration Policy and has been disclosed in the Corporate Governance report.

Risk Management

The Board of Directors has formed a Risk Management Committee. The details of Committee are set out in the Corporate Governance Report forming part of the Directors'' Report. The Company has its Risk Management Plan & Policy in place which is also displayed on the website of the Company. In the opinion of the Board, during the financial year 2015-16, the Board has not noticed any elements of risk which may threaten the existence of the Company.

Internal Financial Controls

For the year ended 31st March, 2016, the Board is of the opinion that the Company has sound Internal Financial Controls commensurate with the nature and size of its business operations wherein controls are in place and operating effectively and no material weaknesses have been noticed. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Company''s operation.

Corporate Social Responsibility

The criteria prescribed under Section 135 of the Act with respect to constituting CSR committee, adopting CSR policy and spending amount on CSR activities in accordance with the Act do not apply to the Company. However Company has voluntarily framed CSR Policy and constituted CSR Committee, as good corporate governance practice. The CSR Committee composition is as follows:

Mahendra K. Ghelani

Chairman & Independent Director

Sushil U. Lakhani

Independent Director

Sameer V. Shah

Managing Director

Ashwin R. Nagarwadia

Director

The Company''s CSR Policy is available on the website of the Company at http://www.chembondindia.com/investors

Related Party Transactions

All transactions entered into with Related Parties during the financial year were in the ordinary course of business and on arm''s length basis and do not attract the provisions of Section 188(1) of the Companies Act, 2013. For material transactions with related parties, the Company has obtained members'' approval by way of voting through postal ballot including e-voting results of which have been declared on 19th March, 2015. Suitable disclosures as required by the Accounting Standards (AS18) have been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company''s website. Necessary disclosures in Form AOC-2 are attached as Annexure 4.

The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The related information is provided in Annexure 5, which is attached to this report.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments have been disclosed in the Financial Statements.

Extract of the Annual Return

An extract of the annual return in Form MGT-9 is provided herewith as Annexure 6.

Management Discussion and Analysis Report

Management Discussion and Analysis Report is separately provided in this Annual Report.

Corporate Governance Report

A separate report on Corporate Governance is attached as a part of this Annual Report along with the Auditor''s Certificate on its compliance.

Prevention, Prohibition and Redressal of Sexual Harassment of Women

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaint has been received during the year under review.

Significant and Material Orders Passed

No significant and material order has been passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future.

Acknowledgements

Your Board takes this opportunity to express its deep thanks to the customers, vendors, shareholders and bankers for the faith they have reposed in the Company. Your Directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work and cooperation.

On behalf of the Board

Sameer V. Shah Nirmal V. Shah

Chairman & Managing Director Vice Chairman & Managing Director

Mumbai 28th May, 2016


Mar 31, 2013

To The Members,

The Directors hereby present the 38th Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March, 2013

FINANCIAL RESULTS:

The financial performance of your Company is as summarized below for the year under review:

(Rs. In Lakhs)

Standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Net Sales 17,446.82 15,197.21 26,231.01 22,845.39

Profit for the year 347.76 664.23 708.41 1,253.01

Add: Balance as per last year 2,783.15 2,314.32 5,320.59 4,559.36

Add : Transfer from Revaluation Reserve 1.89 1.89 1.89 1.89

Total 3 ,132.80 2,980.44 6,030.89 5,814.28

Appropriation General Reserves 39.95 70.00 268.27 286.02

Set off of Dividend Tax in respect of dividend from (32.26) (46.43) (32.26) (46.43) Subsidiary Company.

Proposed Dividend 189.82 149.47 189.82 149.47

Tax on Proposed Dividend 32.26 24.25 127.51 104.63

Balance carried to Balance Sheet 2,903.03 2,783.16 5,477.54 5,320.59

Total 3,132.80 2,980.44 6,030.89 5,814.28

DIVIDEND

The Board of Directors recommend a dividend of Rs. 2.85 per equity share (Previous year Rs. 2.35) for the financial year ended 31st March, 2013. The total outflow on account of dividend amounts to Rs. 189.82 Lakhs. The Company has also transferred an amount of Rs. 39.95 Lakhs (Previous year Rs. 70.00 Lakhs) from its current years profit to General Reserves

DEPOSITS

The Company accepted deposits from the public as per Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There were no dues and unclaimed deposits during the year under review.

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. O. P. Malhotra and Mr. Jayantilal S. Vasani retire by rotation at the ensuing Annual General Meeting. Mr. Jayantilal S. Vasani has been on the Board of Directors of your company since 28th August, 1994. His role on the Board and as a member of the committees has been invaluable. Mr. Vasani has expressed his desire to retire and hence does not seek re-appointment as a Director of your Company at the ensuing Annual Genera Meeting. The Board respects his decision and places on record its sincere gratitude to Mr. Vasani for the contributions made by him towards guiding the Company over the years.

Mr. O. P. Malhotra, being eligible, offers himself for re-appointment as a Director of your Company at the ensuing Annua General Meeting.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs vide their Letter no. 5/12/2007-CL-III dated 8th February, 2011 has granted a genera exemption under Section 212(8) of the Companies Act, 1956 for publication of the Accounts of subsidiary companies, subject to fulfillment of certain conditions. In view of the same, your Company is also exempted from publication of the accounts of its subsidiaries under the provisions of Section 212 of the Companies Act, 1956. The Annual Accounts of the Subsidiary Companies and related detailed information will be made available to shareholders seeking such information at any point of time and the Annual Accounts of the Subsidiary Companies will be available for inspection at the registered office of the Company. The statement as required under Section 212(1)(e) of the Companies Act, 1956 and the statement containing the details of the Subsidiary Companies as required to be given as per the above exemption letter are enclosed herewith and forms a part of this annual report.

Further, as stipulated by Clause 32 of the Listing Agreement and as per the conditions stated in the above letter, the Company, in accordance with the requirements of Accounting Standard 21 and Accounting Standard 27 on consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, has prepared the Consolidated Financial Statements for the year ended 31st March, 2013 and the same is attached to this Annual Report.

AUDITORS

The Statutory Auditors of your Company, M/s. Kastury & Talati, Chartered Accountants, Mumbai who were appointed as Auditors to hold office until the conclusion of the ensuing Annual General Meeting are eligible for re-appointment. The Company has received the Certificate from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956.

The Company has also appointed M/s. R. S. Raghavan, Practicing Cost Accountant as Cost Auditor of the Company for the financial year ended 2012-13.

DISCLOSURE UNDER SECTION 274(1) (g)

None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 274(1) (g) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

CODE OF CONDUCT

Your Company has introduced the Code of Conduct as per revised clause 49 of the Listing Agreement applicable to all the Directors and Senior Management of the Company. Pursuant to said regulation, the Company has received a confirmation from all the Directors and Senior Management of the Company about the compliance of the said code of conduct during the financial year ended 31st March, 2013.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditor''s Statement on its compliance.

EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval accorded by the shareholders at the thirty sixth Annual General Meeting of the Company held on 10th September, 2011, the Compensation Committee had formulated the Chembond Chemicals Employee''s Stock Option Plan 2012. During the year under review, out of the 3,18,000 options approved by the shareholders of the Company, 2,32,781 options were granted to the employees of the Company and its subsidiaries under the said scheme. As required under the Securities and Exchange Board of India (Employees Stock Option and Employees Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines), the following details of this scheme as on 31 March, 2013 are being provided:

Sr. No. Nature of Disclosure Particulars

Total No. of Options approved Total 3,18,000 Nos. of options as per the scheme approved

by the Compensation Committee of the Board as per the resolution passed by the members of the Company in their Annual General Meeting held on 10th September, 2011 entitling the holder thereof to be issued and allotted one Equity Share in the Company for each Option held. A Options Granted 2,32,781 Nos.

B The Pricing Formula The options were granted at an exercise price by following

formula: price of the equity shares not less than lower of the average of weekly high and low of closing price of six months or two weeks on the Stock Exchange i.e. Bombay Stock Exchange (BSE) prior to the date of grant of the options with a discount not more than 10% of the minimum applicable price.

C Options Vested Nil

D Options Exercised Nil

E The total no. of shares arising as a result of Not Applicable

exercise of option F Options lapsed/ Surrendered 4,800

G Variation of terms of Option No.

H Money realized by exercise of options Not Applicable

I Total no. of Options in force 90,019

J (i) Details of Options granted to Senior As per Annexure 1

Management Personnel (ii) Any other employee who received a grant Nil in any one year of Option amounting to 5% or more of Options granted during the year

(iii) Employees who were granted Options, Nil

during any one year, equal to or exceeding 1% of the issued capital of the Company at the time of grant K Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting standard AS-20

(i) Difference between the compensation cost The employee compensation cost for the year would have been using the intrinsic value of the stock Options higher by Rs. 25.90 Lakhs had the Company used the fair value of (which is the method of accounting used options as the method of accounting instead of intrinsic value. by the Company) and the compensation cost that would have been recognized in the accounts if the fair value of Options had been used as the method of accounting. (ii) Impact of the difference mentioned in (i) The stock-based compensation cost calculated as per the above on the profits of the Company. intrinsic value method upto 31st March, 2013 is Rs. 9.98 Lakhs

If the stock-based compensation cost was calculated as per the fair value method prescribed by SEBI, the total cost to be recognized in the financial statements for the period ended 31st March, 2013 would be approximately Rs. 35.89 lakhs. (iii) Impact of the difference mentioned in (i) Had the Company accounted the Options as per fair value the above on the EPS of the Company diluted EPS would have been Rs. 5.34 per share instead of Rs. 5.73 Oer share.

(i) Weighted Average exercise price of Options Rs. 153/-

(ii) Weighted average fair value of Options Rs. 68/- M (i) Method used to estimate the fair value of Black Scholes Options Pricing Model Options (ii) Significant assumptions used (weighted average information relating)

(a) Risk -free interest rate 8.25%

(b) Expected life of the Option 3.34 years

(c) Expected volatility 42%

(d) Expected dividend yields 1.38%

(e) Price of the underlying share in the Rs. 170/- market at the time of Option grant

The certificate received from the statutory auditor as required under the SEBI Guidelines, confirming that the Company''s Employees Stock Option Plan, 2012 has been implemented in accordance with the SEBI Guidelines and shareholders resolution, will be placed before the shareholders at the ensuing Annual General Meeting.

SHARE CAPITAL

On 25th March, 2013 the Company has allotted 300,000 Nos. fully paid Equity shares of Rs. 10/- each at a premium of Rs. 173.97 as against exercise of options attached to 300,000 Convertible Warrants issued to the Promoters & Promoters Group entitling them to subscribe to one equity shares against each warrant in accordance with provisions specified under Chapter VII of SEBI (ICDR) Regulations, 2009 and as per the In Principle Approval received from Bombay Stock Exchange (BSE) on May 07, 2012. The Auditors Certificate for compliance under the Chapter VII of SEBI (ICDR) Regulations, 2009 will be placed before the members at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors give hereunder Directors'' Responsibility Statement pertaining to the accounts of the Company:

i) that in preparation of the Annual Accounts for the year ended 31st March, 2013, the applicable accounting standards have been followed;

ii) that the Directors have selected and applied such accounting policies consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the financial year ended 31st March, 2013 and the profit of the Company for the year under review;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) that the annual accounts for the year ended 31st March, 2013 have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, & FOREIGN EXCHANGE EARNINGS AND OUTGO

The prescribed particulars as per Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy, Technol- ogy Absorption, and Foreign Exchange Earnings and outgo are furnished in Annexure 2 to this Report.

PARTICULARS OF EMPLOYEES

None of the employees are covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to express its deep thanks to the customers, vendors, shareholders and bankers for the faith they have reposed in the Company. Your Directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work, and cooperation.

For and on behalf of the Board,

Sameer V. Shah Nirmal V. Shah

Chairman & Managing Director Vice Chairman & Managing Director

Mumbai May 30, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 37th Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March, 2012.

FINANCIAL RESULTS:

2011-12 2010-11 (Rs.In lakhs)(Rs.In lakhs)

Turnover of Sales 16,881.16 14,679.35

Less: Excise Duty 1,683.95 1,454.88

Net Sales 15,197.21 13,224.47

Profit Before Tax 801.05 817.88

(Less): Deferred Tax_ (32.82) (25.71)

Less: Provision for Taxation (103.98) (144.80)

Profit after Tax 664.25 645.48

Add: Balance as per last year_: 2,314.31 1,872.59

Add : Transfer from Revaluation Reserve 1.89 1.89

Total 2,980.45 2,519.97

Appropriation

General Reserves 70.00 65.00

Set off of Dividend Tax in respect of dividend from Subsidiary (22 18) (18 27) Company.

Proposed Dividend 149.47 136.75

Tax on Proposed Dividend Nil 22.18

Dividend on Shares issued on Amalgamation - -

Balance carried to Balance Sheet 2,783.16 2,314.30

Total 2,980.451 2,519.90

PERFORMANCE REVIEW

Your Company has recorded an increase in Sales of 14.92% with an increase in profit after tax (PAT) by 2.91 %. The Earning per Share (EPS) increased to Rs. 10.44 as at 31st March, 2012 from Rs. 10.15 at the end of the previous fiscal year. A separate section on Management Discussion and Analysis follows in this annual report where in the Company Performance, Industry Environment, Economy, and the other aspects of your company's business are highlighted.

DIVIDEND

The Board of Directors recommends a dividend of Rs. 2.35 per Equity Share (Previous year Rs. 2.15) for the financial year ended 31st March, 2012. The total outflow on account of dividend amount to Rs. 149.47 Lakhs. The Company has also transferred the amount of Rs. 70 Lakhs (Previous year Rs. 65 Lakhs) from its current year's profit to General Reserves.

SAFETY, HEALTH, ENVIRONMENT, AND QUALITY (SHEQ)

Your Company follows an integrated SHE-Q Management System under which, the Tarapur plants are ISO 9001, ISO 14001, OHSAS 18001 and ISO/TS 16949 certified. The corporate office and the Baddi and Dudhwada plants are ISO 9001 certified and the Company is in process to obtain ISO 14001 and OHSAS 18001 for its Baddi and Dudhwada Plant.

DEPOSITS

The Company has accepted deposits from the public as per the Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There were no dues and unclaimed deposits during the year under review.

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. Mahendra K. Ghelani and Mr. Ashwin R. Nagarwadia, Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs vide their Letter no. 5/12/2007-CL-lll dated 8th February, 2011 has granted a general exemption under Section 212(8) of the Companies Act, 1956 for publication of the Accounts of subsidiary companies , subject to fulfillment of certain conditions. In view of the same, your company is also exempted from publication of the accounts of its subsidiaries under the provisions of Section 212 of the Companies Act, 1956. The Annual Accounts of the Subsidiary Companies and related detailed information will be made available to shareholder seeking such information at any point of time and the Annual Accounts of the Subsidiary Companies will be available for inspection at the registered office of the Company. The statement as required under Section 212(1 )(e) of the Companies Act, 1956 and the statement containing the details of the Subsidiary Companies as required to be given as per the above exemption letter are enclosed herewith and forms part of this annual report.

Further, as stipulated by Clause 32 of the Listing Agreement and as per the conditions stated in the above letter, the Company, in accordance with the requirements of Accounting Standard 21 and Accounting Standard 27 on consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, has prepared the Consolidated Financial Statements for the year ended 31st March, 2012 and the same is attached to this Annual Report.

AUDITORS

The Statutory Auditors of your Company M/s. Kastury & Talati, Chartered Accountants, Mumbai who were appointed as Auditors to hold office until the conclusion of the ensuing Annual General Meeting are eligible for re-appointment. The Company has received the Certificate from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1 -B) of the Companies Act, 1956.

DISCLOSURE UNDER SECTION 274(1) (g)

None of the Directors of the company are disqualified for being appointed as Directors as specified under Section 274(1 )(g) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

CODE OF CONDUCT

The Company has introduced the Code of Conduct as per revised clause 49 of the Listing Agreement applicable to all the Directors and Senior Management of the Company. Pursuant to said regulation, the Company has received a confirmation from all the Directors and Senior Management of the Company about the compliance of the said code of conduct during the financial year ended 31st March, 2012.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditor's Statement on its compliance.

CORPORATE SOCIAL RESPONSIBILITY

Your Company continued its CSR initiatives. Please refer to the Report on Corporate social Responsibility for more information on these activities.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors give hereunder Director's Responsibility Statement pertaining to the accounts of the Company

i) that in preparation of the Annual Accounts for the year ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii) that the directors had selected such accounting policies and applied consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2012 and the profit of the Company for the year under review;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts for the year ended 31st March, 2012 have been prepared on a 'going concern basis'.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The prescribed particulars Under Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange and outgo are furnished in Annexure to this Report.

PARTICULARS OF EMPLOYEES

None of the employees is covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank the customers, vendors, shareholders and bankers for the faith reposed in the Company. Your directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work and cooperation.

For and on behalf of the Board of Directors

of Chembond Chemicals Limited

Dr. Vinod D. Shah

Executive Chairman

Place: Mumbai

Date: 28th July, 2012


Mar 31, 2011

The Members,

The Directors have pleasure in presenting the 36th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March 2011.

FINANCIAL RESULTS:

2010 – 2011 2009 – 2010

(In Rs. '000) (In Rs. '000)

Turnover of Sales 1,467,935 1,247,502

Less: Excise Duty 145,488 103,344

Net Sales 1,322,447 1,144,158

Profit Before Tax 81,788 64,736

(Less)/Add: Deferred Tax (2,571) (5,705)

Less: Provision for Taxation (14,480) (7,300)

Profit after Tax 64,737 51,731

Add: Balance as per last year 187,259 153,461

Total 251,996 205,192

Appropriation

General Reserves 6,500 5,500

Set off of Dividend Tax in respect of dividend from Subsidiary Company. (1,827) (1,178)

Proposed Dividend 13,675 11,131

Tax on Proposed Dividend 2,218 1,849

Dividend on Shares issued on Amalgamation - 631

Balance carried to Balance Sheet 231,430 187,259

Total 251,996 205,192

PERFORMANCE REVIEW

A separate section on Management Discussion and Analysis follows in this annual report where in the company performance, industry environment, economy, and the other aspects of your company's business are highlighted. Your Company has recorded an increase in Sales of 15.58% and an increase of 26.34% and 25.14% in Profits before Tax (PBT) and Profit after Tax (PAT) respectively over the previous year. The Earning per Share (EPS) increased to Rs. 10.18 as at March 31, 2011 from Rs. 8.13 at the end of the previous fiscal year.

DIVIDEND

The Board of Directors recommends a dividend of Rs. 2.15 per Equity Share for the financial year ended 31st March, 2011. The total outflow on account of dividend and the tax thereon amounts to Rs. 15,893.30 Thousand. The Company has also transferred the amount of Rs. 6,500 thousand (Previous year Rs. 5,500 thousand) from its current years profit to Reserve account.

SAFETY, HEALTH, ENVIRONMENT, AND QUALITY (SHEQ)

Your Company follows an integrated SHEQ Management System under which, the Tarapur plants are ISO 9001, ISO 14001, and ISO/TS 16949 certified. The corporate entity and the Baddi and Dudhwada plants are ISO 9001 certified.

DEPOSITS

The Company accepted deposits from the public as per the Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There were no dues and unclaimed deposits during the year under review.

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. Jawahar I. Mehta and Mr. Perviz H. Dastur, Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

SUBSIDIARY COMPANIES

The Ministry of Corporate Affairs vide their Letter no. 5/12/2007-CL-III dated 8th February, 2011 has granted a general exemption under Section 212(8) of the Companies Act, 1956 for publication of the Accounts of subsidiary companies , subject to fulfillment of certain conditions. In view of the same, your company is also exempted from publication of the accounts of its subsidiaries under the provisions of Section 212 of the Companies Act, 1956. The Annual Accounts of the Subsidiary Companies and related detailed information will be made available to shareholder seeking such information at any point of time and the Annual Accounts of the Subsidiary Companies will be available for inspection at the registered office of the Company. The statement as required under Section 212(1)(e) of the Companies Act, 1956 and the statement containing the details of the Subsidiary Companies as required to be given as per the above exemption letter are enclosed herewith and forms part of this annual report.

Further, as stipulated by Clause 32 of the Listing Agreement and as per the conditions stated in the above letter, the Company, in accordance with the requirements of Accounting Standard 21 and Accounting Standard 27 on consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, has prepared the Consolidated Financial Statements for the year ended 31st March, 2011 and the same is attached to this Annual Report.

AUDITORS

The Statutory Auditors of your Company M/s. Kastury & Talati, Chartered Accountants, Mumbai who were appointed as Auditors to hold office until the conclusion of the ensuing Annual General Meeting are eligible for re-appointment. The Company has received the Certificate from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956.

DISCLOSURE UNDER SECTION 274(1) (g)

None of the Directors of the company are disqualified for being appointed as Directors as specified under Section 274(1)(g) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

CODE OF CONDUCT

The Company has introduced the Code of Conduct as per revised clause 49 of the Listing Agreement applicable to all the Directors and Senior Management of the Company. Pursuant to said regulation, the Company has received a confirmation from all the Directors and Senior Management of the Company about the compliance of the said code of conduct during the financial year ended 31st March 2011.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditor's Statement on its compliance.

CORPORATE SOCIAL RESPONSIBILITY

Your Company cotinued its CSR initiatives please refer to the Report on Corporate Social Responsibility for more information on these activites.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors give hereunder Director's Responsibility Statement pertaining to the accounts of the Company

i) that in preparation of the Annual Accounts for the year ended 31st March 2011, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii) that the directors had selected such accounting policies and applied consistently and made judgements and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2011 and the profit of the Company for the year under review;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual accounts for the year ended 31st March 2011 have been prepared on a 'going concern basis'.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The prescribed particulars Under Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange and outgo are furnished in Annexure to this Report.

PARTICULARS OF EMPLOYEES

None of the employees is covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank the customers, vendors, shareholders and bankers for the faith reposed in the Company. Your directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work and cooperation.

For and on behalf of the Board of Directors

of Chembond Chemicals Limited

Dr. Vinod D. Shah

Executive Chairman

Place: Mumbai

Date: 30th July, 2011


Mar 31, 2010

The Directors have pleasure in presenting the 35th Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March 2010.

FINANCIAL RESULTS:

2009 - 2010 2008 - 2009

(In Rs 000) (In Rs 000)

Turnover of Sales 1,247,502 1,257,592

Less: Excise Duty 103,344 148,416

Net Sales 1,144,158 1,109,176

Profit Before Tax 64,736 55,477

(Less)/Add: Deferred Tax (5,705) (2,369)

Less: Provision for Taxation (7,300) (4,150)

Fringe Benefit Tax - (930)

Profit after Tax 51,731 48,028

Prior period adjustment - 334

Profit After Prior Period Adjustment 51,731 48,362

Add: Balance as per last year 153,461 119,974

Total 205,192 168,336

Appropriation

General Reserves 5,500 5,000

Set off of Dividend Tax in respect

of dividend from Subsidiary Company. (1,178) (1,179)

Proposed Dividend 11,131 10,500

Ta x on Proposed Dividend 1,849 1,784

Dividend on Shares issued on

Amalgamation 631 -

Addition of Amalgamation of SMEPL - (1230)

Balance carried to Balance Sheet 187,259 153,461

Total 205,192 168,336

PERFORMANCE REVIEW

A separate section on Management Discussion and Analysis follows in this annual report wherein the company performance, industry environment, economy, and the other aspects of your companys business are highlighted. Your Company has recorded an increase in Sales of 3.15% and an increase of 16.8% and 7.4% in Profits before Tax (PBT) and Profit after Tax (PAT) respectively over the previous year. The Earning per Share (EPS) increased to Rs 8.13 as at March 31, 2010 from Rs 7.60 at the end of the previous fiscal year on the expanded equity of your company after the 1:1 bonus issue.

DIVIDEND

The Board of Directors recommends a dividend of Rs 1.75 per Equity Share for the financial year ended 31st March, 2010. The total outflow on account of dividend and the tax thereon amounts to Rs 12,979.42 Thousand. The Company has also transferred the amount of Rs 5,500,000 (Previous year Rs 50,00,000) from its current years profit to Reserve account. SAFETY, HEALTH, ENVIRONMENT, AND QUALITY (SHEQ)

Your Company follows an integrated SHEQ Management System under which all plants are certified to the applicable standards. The Tarapur plants are ISO 9001, ISO 14001, and ISO/TS 16949 certified. The corporate entity and the Baddi and Dudhwada plants are ISO 9001 certified.

DEPOSITS

The Company accepted deposits from the public as per Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. There were no dues and unclaimed deposits during the year under review.

DIRECTORS

In accordance with the Articles of Association of the Company, Mr. Jayant Vasani and Mr. O. P. Malhotra, Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Sanjay N. Nene resigned from the Board of Directors wef 31st December, 2009. The Board records its appreciation for the contribution made by him during his tenure with the Company.

Dr. Vinod D. Shah will be appionted as Executive Chairman wef 1st August, 2010 for a period of 3 years.

Mr. Sameer V. Shah will be appionted as Vice Chairman and Managing Director wef 1st August, 2010 for a period of 3 years.

Mr. Nirmal V. Shah will be appionted as Joint Managing Director wef 1st August, 2010 for a period of 3 years.

SUBSIDIARY COMPANIES

The Central Government has vide its letter no. 47/464 /2010 -CL-III dated 21st May, 2010 exempted the Company from attaching the financial report of the Subsidiary Companies to this annual report. However, the Annual Accounts of the Subsidiary Companies and related detailed information will be made available to shareholders seeking such information at any point of time and the Annual Accounts of the Subsidiary Companies will be available for inspection at the registered office of the Company. The statement

as required under Section 212(1)(e) of the Companies Act, 1956 and the statement containing the details of the Subsidiary Companies as required to be given as per the above exemption letter are enclosed herewith and forms part of this annual report.

Further, as stipulated by Clause 32 of the Listing Agreement and as per the conditions stated in the above letter, the Company, in accordance with the requirements of Accounting Standard 21 and Accounting Standard 27 on consolidated Financial Statements read with Accounting Standard 23 on Accounting for Investments in Associates, has prepared the Consolidated Financial Statements for the year ended 31st March, 2010 and the same is attached to this Annual Report.

AUDITORS

The Statutory Auditors of your Company M/s. Kastury & Talati, Chartered Accountants, Mumbai who were appointed as Auditors to hold office until the conclusion of the ensuing Annual General Meeting are eligible for re-appointment. The Company has received the Certificate from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

DISCLOSURE UNDER SECTION 274(1) (g)

None of the Directors of the company are disqualified from being appointed as Directors as specified under Section 274(1)(g) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

CODE OF CONDUCT

The Company has introduced the Code of Conduct as per revised clause 49 of the Listing Agreement applicable to all the Directors and Senior Management of the Company. Pursuant to said regulation, the Company has received a confirmation from all the Directors and Senior Management of the Company about the compliance of the said code of conduct during the financial year ended 31st March 2010.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors Statement on its compliance.

CORPORATE SOCIAL RESPONSIBILITY

Your Company aims to play a role in improving the lives of people living among the communities where we operate. Your Company continues to support the Visan Trust in its objective of providing the girl child in tribal areas with educational and vocational opportunities and in enhancing their self-esteem. Around 300 girls between the ages of 4 and 18 from areas around Tarapur attend the Childrens Center. Among their achievements, three girls completed their HSC levels, 16 girls appeared for Xth standard exams out of which 11 passed including 4 girls who obtained first class. On the non-academic front, several students now enter regional competitions in Karate, Chess, and Malkhamb with exemplary performance as a result of the training imparted at the center. Your Company supplied small hand operated, membrane-based water purification equipment, which removes suspended solids and organisms to villages in Maharashtra and Gujarat.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors give hereunder Directors Responsibility Statement pertaining to the accounts of the Company

i) that in preparation of the Annual Accounts for the year ended 31st March 2010, the applicable accounting standards had been

followed along with proper explanation relating to material departures, if any;

ii) that the Directors had selected such accounting policies and applied consistently and made judgements and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March 2010 and the profit of the Company for the year under review;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the annual accounts for the year ended 31st March 2010 have been prepared on a going concern basis.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUT GO

The prescribed particulars Under Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo are furnished in Annexure to this Report.

PARTICULARS OF EMPLOYEES

The Information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is given as under

Employee Name Designation Age Qualification

Dr. Vinod D. Shah Executive 78 Years Doctorate in Chemical

Chairman Engineering

Employee Name Remuneration * No. of Shares Held

Dr. Vinod D. Shah Rs 31,50,000 901,232

(14.17%) * Excluding the perquisites which shall not be included in the computation of the ceiling limits of remuneration.

ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank the customers, vendors, shareholders and bankers for the faith reposed in the Company. Your directors also place on record their sincere appreciation of the contribution of its employees for their competence, hard work and cooperation.

For and on behalf of the Board of Directors of Chembond Chemicals Limited



Sameer V. Shah Nirmal V. Shah

Vice Chairman & Managing Director Joint Managing Director

Place: Navi Mumbai

Date: 31st July, 2010

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