Your Directors' take pleasure in presenting the 47th Annual Report on thebusiness and operations of your Company together with the audited financial statements forthe year ended 31st March 2022.
State of Company's Affairs
The financial performance of your Company is as summarized below for the year underreview:
(Rs. In lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2021-22 ||2020-21 ||2021-22 ||2020-21 |
|Revenue from Operations ||4616.64 ||4203.69 ||34941.63 ||27444.58 |
|Total expense ||4481.66 ||4129.99 ||33705.40 ||26124.75 |
|Profit Before Tax ||1092.78 ||1264.90 ||2053.76 ||2852.92 |
|Profit for the year ||874.37 ||967.32 ||1392.06 ||2034.43 |
|Add: Balance as per last year ||22005.74 ||21038.43 ||26071.82 ||24336.67 |
|Add: Effect of previous year transaction ||- ||- ||- ||- |
|Add: Addition during the year ||- ||- ||- ||400.72 |
|Less: Deduction during the year ||- ||- ||20.91 ||- |
|Total ||22880.11 ||22005.74 ||28072.98 ||26771.82 |
|Appropriation || || || || |
|General Reserves ||- ||- ||- ||70.00 |
|Set off of Dividend Tax in respect of dividend from Subsidiary Company ||- ||- ||- ||- |
|Interim Dividend ||- ||- ||- ||- |
|Tax on Interim Dividend ||- ||- ||- ||- |
|Dividend Paid ||302.59 ||- ||302.59 ||- |
|Tax on Dividend Paid ||4.41 ||- ||4.41 ||- |
|Balance carried to Balance Sheet ||22573.12 ||22005.74 ||27765.99 ||26701.82 |
|Total ||22880.11 ||22005.74 ||28072.98 ||26771.82 |
Results of Operations Income
During the year under review consolidated revenue from operations was Rs 34941.63lakhs as compared to Rs 27444.58 lakhs in the previous year. On the standalone basisyour
Company's revenue from operations was Rs 4616.64 lakhs as compared to Rs 4203.69lakhs in the previous year.
Profit Before Tax
Consolidated profit before tax for the current year was Rs 2053.76 lakhs as against Rs2852.92 lakhs in the previous year. On a standalone basis your Company's profit beforetax for the current year was Rs 1092.78 lakhs as against Rs 1264.90 lakhs in theprevious year.
Profit After Tax
Consolidated profit after tax for the current year was Rs 1392.06 lakhs as against Rs2034.43 lakhs in the previous year. On the standalone basis your Company's profit aftertax for the current year was Rs 874.37 lakhs as against Rs 967.32 lakhs in the previousyear.
Recent Developments at Micro and Macro Economic Levels
The "second wave's" economic effect was significantly less compared to theextensive lockdown in the first wave but the health consequences were far more severe.The Government's unique action plan included safety-nets to soften the impact onvulnerable sectors of society and the business sector a major increase in capitalinvestment to promote growth and supply-side reforms to ensure long-term expansion.
In the first half of 2021-22 India's foreign exchange surpassed US$ 600 billionreaching US$ 633.6 billion as of 31st December 2021. After China Japan andSwitzerland India was the world's fourth largest FX reserve holding country as of the endof November 2021. Despite restricted tourism income there was a large increase in netservices with both receipts and payments surpassing pre-pandemic levels.
Your Company is continuously monitoring the economic conditions and has outlinedcertain measures to combat the changing market conditions so as to minimize its impact onbusiness and safeguard the stakeholders.
Change in the Nature of Business
The Company continues to engage in manufacturing specialty chemicals like watertreatment polymers construction chemicals high performance coatings animal health andindustrial biotech products. There is no change in the nature of business or the businessline of the Company.
The Board of Directors have recommended final dividend of Rs 5/- per share (100%) forthe financial year ended
31st March 2022. In view of the changes made under the Income-tax Act 1961by the Finance Act 2020 dividends paid or distributed by the Company shall be taxable inthe hands of the Shareholders. Your Company shall accordingly make the payment of thefinal tax at source.
In accordance with Regulation 43A of the Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (the ListingRegulations') the Board of Directors of the Company has voluntarily adopted a DividendDistribution Policy (Policy') which endeavors for fairness consistency andsustainability while distributing profits to the shareholders. Dividend payout is inaccordance with the Policy which is available on the website of the Company i.e.http://www.chembondindia.com/policy.html.
The movement of Equity Capital is as under:
|Particulars ||No. of Equity Shares ||Equity Share Capital ( ) |
|Equity Capital as on 1st April 2021 ||13448288 ||67241440 |
|Increase/ Decrease during the year ||Nil ||Nil |
|Equity Capital as on 31st March 2022 ||13448288 ||67241440 |
During the year 2021-22 there was no change in the authorized and paid-up capital ofthe Company.
Your Company has only one class of Equity Shares and it has neither issued shares withdiferential rights for dividend voting or otherwise nor issued shares (including sweatequity shares) to the employees or Directors of the Company under any Scheme.
No disclosure is required under Section 67(3)(c) of the Companies Act 2013 ("theAct") in respect of voting rights not exercised directly by the employees or KeyManagerial Personnel of the Company as the provisions of the Section are not applicable.
The Company has not accepted any deposits within the meaning of Section 73 of the Actread with the Companies (Acceptance of Deposits) Rules 2014 as amended from time to time.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profits for FY2021-22 in the retained earnings. (Previous year Nil)
Directors and Key Managerial Personnel
At present your Company has seven Directors consisting of four Independent Directors(60%) including a Woman Director two Executive Directors (30%) and one Non-executiveDirector (10%).
In accordance with the provisions of Section 152(6) of the Dividend after deductionAct Mr. Nirmal V. Shah (DIN: 00083853) Vice Chairman and Managing Director retires byrotation and being eligible offers himself for re-appointment. His background is given inthe Corporate Governance Report which forms part of this report.
Mr. Sameer V. Shah (DIN: 00105721) and Mr. Nirmal V. Shah (DIN: 00083853) Chairman andManaging Director and Vice Chairman and Managing Director of the Company respectivelywere appointed for a period of three years commencing from 1st August 2019 to31st July 2022 at the Board meeting held on 18th May 2019 whichwas further approved by Members at the 44th AGM held on 3rd August2019. Based on the recommendation of the Nomination and Remuneration Committee and theBoard of Directors at its meeting held on 14th May 2022 the Board of yourCompany has re-appointed them for further period of three years w.e.f. 1stAugust 2022 to 31st July 2025. The matter is being placed for your approvalat the ensuing 47th AGM.
Pursuant to the provisions of Section 203 of the Act Mr. Sameer V. Shah Chairman andManaging Director Mr. Nirmal V. Shah Vice Chairman and ManagingDirector Mrs. RashmiGavli Chief Financial Officer and Mrs. Suchita Singh Company Secretary are the KeyManagerial Personnel of the Company as on the date of this Report.
Inter-se relationship between Directors
Mr. Sameer V. Shah Chairman and Managing Director and Mr. Nirmal V. Shah ViceChairman and Managing Director are relatives (siblings). Apart from this none of theDirectors of the Company are in any way related to each other.
Declaration by Independent Directors
All the Independent Directors of the Company have furnished a declaration to the effectthat they meet the criteria of independence as provided in Section 149(6) of the Act andRegulation 16(1)(b) and Regulation 25 of the Listing Regulations. In the opinion of theBoard all the Independent Directors possess the integrity expertise and experienceincluding the proficiency required to be Independent Directors of the Company fulfil theconditions of independence as specified in the Act and the Listing
Regulations and are independent of the management and have also complied with the Codefor Independent Directors as prescribed in Schedule IV of the Act.
Further declaration of independence as required under the Lisiting Regulations werealso given as on 31st December 2021.
Policy on Directors appointment and remuneration
The Company has put in place an appropriate policy on appointment and remuneration ofDirectors and other matters provided under Section 178(3) of the Act. This policy isuploaded on the Company's website http://www.chembondindia.com/policy.html. Salientfeatures of the policy on remuneration of Directors have been disclosed in the CorporateGovernance section of this Report.
Number of Board Meetings
Four (4) meetings of the Board were held during the year under review details of whichare furnished in the Corporate Governance Report forming part of the Annual Report. Themaximum gap between two Board Meetings did not exceed 120 days as prescribed under theAct.
Performance evaluation and its criteria
The Board of Directors has carried out an evaluation of its own performance and thatof its Committees and of the individual Directors for the year pursuant to the provisionsof the Act and Corporate Governance requirements as prescribed by the Listing Regulations.
The performance of the Board and its Committees was evaluated by the Board afterseeking inputs from the Board / Committee Members based on criteria such as composition ofthe Board / Committees and structure effectiveness of the Board / Committee processesproviding of information and functioning etc. The Board and the Nomination andRemuneration Committee reviewed the performance of individual Directors based on criteriasuch as attendance in Board / Committee meetings contribution in the meetings likepreparedness on issues to be discussed etc.
The Independent Directors at its separate meeting held on 25th January2022 reviewed the performance of Non-Independent Directors and performance of the Boardas a whole performance of the Chairman of the Company taking into account the views ofExecutive and Non-executive Directors and assessed the quality quantity and timeliness offlow of information to the Board to perform their duties effectively and reasonably.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Act the Board of Directors to the best of theirknowledge and ability in respect of the year ended 31st March 2022 confirmthat:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairsof the Company at the end of the financialyear and of the profitthat period;
(c) they took proper and of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(d) they prepared the annual accounts on a going concern basis;
(e) they laid down internal financial controls to be followed by the Company and thatsuch internal financialcontrols are adequate and were operating effectively;
(f) they devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The details in respect of role/powers/composition of the Audit Committee and otherinformation are included in the Corporate Governance Report forming part of Annual Report.
Auditor's and Auditor's Report Statutory Auditors
M/s. Bathiya & Associates LLP
(FRN:101046W/W100063) were appointed as the Statutory Auditor of the Company for aperiod of 5 consecutive years at the 43rd Annual General Meeting (AGM) held on11th August 2018 until the conclusion of 48th AGM to be held in theFY 2023 at a remuneration mutually agreed upon by the Board of Directors and the StatutoryAuditor.
The Report given by the Auditors on the financial statement of the Company is part ofthis Report. There has been no modified opinion qualification reservation adverseremark or disclaimer given by the Auditors in their Report during the year under reviewand the observations and comments given in the report of the Statutory Auditors readtogether with Notes to Accounts are self-explanatory and hence do not call for any furtherexplanation or comments under Section 134 (f)(i) of the Act.
As per the requirement of Central Government and pursuant to Section 148 of the Actread with the Companies (Cost Records and Audit) Rules 2014 as amended from time to timeyour Company has been carrying out audit of cost records every year.
The Board of Directors on the recommendation of Audit Committee at their meeting heldon 14th May 2022 appointed M/s. Jitendrakumar & Associates Cost &Management Accountants Mumbai (FRN. 101561/Membership No. 30106) as the Cost Auditor toaudit the cost records of the Company for FY 2022-23. The Company is seeking the approvalof the Members for the remuneration to be paid to M/s. Jitendrakumar & AssociatesCost & ManagementAccountant for the FY ended 31st March 2023.
M/s. Jitendrakumar & Associates have confirmed that they are free fromdisqualification specified under Section 141(3) and proviso to Section 148(3) read withSection 141(4) of the Act and that the appointment meets the requirements of Section141(3)(g) of the Act. They have further confirmed their independent status and an arm'slength relationship with the Company.
The relevant Cost Audit Report for the FY 2020-21 was filed with Ministry of CorporateAffairs on 21st August 2021 in Form CRA-4.
Secretarial Auditor & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhas appointed Mr. Virendra G. Bhatt Practicing Company Secretary (C.P. No.: 124) toundertake the Secretarial Audit of the Company for the year ended 31st March2023. The Company has received their written consent and confirmation that the appointmentwill be in accordance with the applicable provisions of the Act and rules framedthereunder.
The Secretarial Audit Report in Form MR- 3 for the Financial Year ended 31st March2022 has been annexed as
There are no qualification reservation adverse remark disclaimer given by theSecretarial auditor in their report for the year under review.
Reporting of Fraud
During the year under review the Statutory Auditors Cost Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsofficers or employees to the Audit Committee under Section 143(12) of the Act details ofwhich needs to be mentioned in this Report.
Subsidiaries and Step-down subsidiaries
The Company has been carrying on its domestic and international operations through itswholly owned subsidiaries (WOS) and step-down subsidiaries (SDS) as detailed below:
Your Company has seven subsidiaries and four step-down subsidiaries namely;
i. Chembond Biosciences Limited
ii. Chembond Calvatis Industrial Hygiene Systems Ltd
iii. Chembond Distribution Limited
iv. Chembond Material Technologies Private Limited
v. Chembond Polymers and Materials Limited
vi. Chembond Water Technologies Limited
vii. Phiroze Sethna Private Limited Step-down subsidiaries
viii. Chembond Clean Water Technologies Limited
ix. Chembond Water Technologies (Malaysia) Sdn Bhd
x. Chembond Water Technologies (Thailand) Co. Ltd.
iv. Gramos Chemicals India Private Limited
The details of financial performance of the subsidiaries and step-down subsidiaries aregiven in AOC-I as Annexure 2.
Further pursuant to the provisions of Section 136 of theAct the standalone financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited financial statements in respect of subsidiaries are available on theCompany's website www.chembondindia.com.
Remuneration to Directors and Key Managerial Personnel
The information required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedis given in Annexure 3.
Particulars of employees
The statement containing particulars of employees as required under Section 197 oftheAct read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended will be provided upon request to the Company. None ofthe employees of the Company are being paid remuneration exceeding the prescribed limitunder the said provisions and rules.
Remuneration to Managing Director from wholly owned subsidiary
During the financial year 2021-22 Mr. Sameer V. Shah Chairman and Managing Directorreceived remuneration of Rs. 27.56 lakhs from Chembond Biosciences LimitedWOS Companyand Mr. Nirmal V. Shah Vice - Chairman and Managing Director received remuneration of Rs48.95 Lakhs from Chembond Water Technologies Limited WOS Company.
Policies and Disclosure Requirements
In terms of provisions of the Act and the Listing Regulations the Company has adoptedall the applicable policies. The policies are available on the website of the Company athttp://www.chembondindia.com/policy.html.
All Directors and Senior Management Personnel have affirmed their adherence to theprovisions of the Code of Conduct during the financial year 2021-22.
The Company's policy on Directors' appointment remuneration and other matters providedin Section 178(3) of the Act forms part of Nomination and Remuneration Policy and has beendisclosed in the Corporate Governance Report.
The Company has its Risk Management Plan & Policy in place which is also displayedon the website of the Company i.e. http://www.chembondindia.com/policy.html. In theopinion of the Board during the financial year 2021-22 no elements of risk which maythreaten the existence of the Company were noticed by the Board. The Committee monitorsthe risk management plan and ensures its effectiveness. The detailsofCommitteearesetoutintheCorporateGovernanceReport.
Internal Financial Control System
The Board is responsible for establishing and maintaining adequate internal financialcontrol as per Section 134 of the Act.
Your Company has in place an adequate system of internal controls to ensure compliancewith various policies practices and statutes. The internal financial control systems arecommensurate with the size and nature of business of the Company. Management exercisesfinancial controls on the operations through standard operating procedures covering allfinancial and operating functions which is designed to provide a reasonable assurance withregards to maintaining of proper accounting controls for ensuring reliability of financialreporting monitoring of operations protecting assets from unauthorized use or losses andcompliance with regulations. Key controls have been tested during the year and correctiveand preventive action has been taken for any weakness. During the year no frauds have beendetected or reported to the Audit Committee.
Corporate Governance & Vigil Mechanism
A separate Corporate Governance Report on compliance with Corporate Governancerequirements as required under Regulation 34(3) read with Schedule V of the ListingRegulations forms part of this Annual Report. The same has been reviewed and certified byMr. Virendra G. Bhatt Practicing Company Secretary the Secretarial Auditor of theCompany and Compliance Certificate in respect thereof is attached as Annexure 4.
The Company has formulated a Whistle Blower Policy details of which are furnished inthe Corporate Governance Report thereby establishing a vigil mechanism for Directors andpermanent employees for reporting genuine concerns or grievances if any about unethicalbehaviour actual or suspected fraud or violation of Company's Code of Conduct orpolicies. It also provides adequate safeguards against the victimization of employees andallows direct access to the chairperson of Audit Committee in appropriate or exceptionalcases. The vigil mechanism / whistle blower policy is available on Company's website http://www.chembondindia.com/policy.html.
Corporate Social Responsibility (CSR)
Pursuant to Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 as amended from time to time the Board of Directors ofthe Company has duly constituted the Corporate Social Responsibility Committee adoptedCSR policy and spent amount on CSR activities in accordance with the Act applicable toyour Company.
The Company reviews and revises its CSR Policy pursuant to the Companies (CorporateSocial Responsibility) Amendment Rules 2021 from time to time. The CSR policy isavailable on Company's website at http://www.chembondindia.com/policy.html.
The key philosophy of all CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which is a part of thisreport.
During the year the Company has spent Rs 9.03 lakhs on CSR activities. The Company hasidentified focus areas of engagement which have been enumerated in the Annual Report onCSR Activities attached as Annexure 5. Chembond Water Technologies Limited a WOS ofthe Company spent an amount of Rs 26.09 lakhs on CSR activities.
Particulars of Related Party Transactions
All transactions entered into with related parties during the financial year were inthe ordinary course of business and on arm's length basis and do not attract theprovisions of Section 188(1) of the Act. Suitable disclosures as required by the IndianAccounting Standards (Ind AS-24) have been made in the notes to the Financial Statements.The Board has a policy for related party transactions which has been uploaded on theCompany's website http://www.chembondindia.com/policy.html. There were no material RelatedParty Transactions during the year. Accordingly Form No. AOC-2 prescribed under theprovisions of Section 134 (3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules2014 for disclosure of details of Related Party Transactions which are not "not atarm's length basis" and also which are "material and arm's length basis"is not provided as an annexure to this Report as it is not applicable.
The Conservation of Energy Technology Absorption
Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption and foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theAct read with Rule 8(3) of the Companies (Account) Rules 2014 as amended from time totime are provided in Annexure 6.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments have been disclosed in the FinancialStatements.
The Promoter Groups holding in the Company as on 31st March 2022 was 65.28%of the Company's paid-up Equity Capital. The members may note that the shareholding andother details of Promoters has been provided in Annual Return as mentioned below.
Annual Return as on 31st March 2022
The Annual Return as provided under Section 92(3) read with Section 134(3)(a) of theAct as prescribed in Form No. MGT-7 of the Companies (Management and Administration)Rules 2014 is available on the website of the company athttp//www.chembondindia.com/annual-report.html.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review as stipulatedunder the Listing Regulations is presented in a separate section forming part of thisReport.
Transfer to Investor Education and Protection Fund
Members are requested to note that all unpaid / unclaimed dividends for a period ofseven consecutive years from the date of transfer to the Company's Unpaid DividendAccount shall be transferred by the Company to the Investor Education and Protection Fund(IEPF Fund) established by the Central Government. Further pursuant to the provisions ofSection 124 of the Act read with Investor Education and Protection Fund Authority(Accounting Audit Transfer and
Refund) Rules 2016 as amended from time to time all shares on which dividend has notbeen paid or claimed for seven consecutive years or more shall be transferred to IEPFAuthority as notified by the Ministry of Corporate Affairs.
The Company has transferred shares to the demat account of the IEPF authority inrespect of which dividend has not been claimed for seven consecutive years or more. TheCompany had communicated to all the concerned shareholders individually whose shares wereliable to be transferred to IEPF. The Company had also given newspaper advertisementsbefore such transfer in favour of IEPF. The Company has also uploaded the details of suchshareholders and shares transferred on the website of the Company.
The Members/Claimants whose shares and unclaimed dividend amount have been transferredto IEPF may claim the shares or apply for refund by making an application to IEPFAuthority in Form IEPF-5 (available on www.iepf.gov.in). The Member/Claimant can file onlyone consolidated claim in a Financial Year as per the IEPF Rules.
Prevention Prohibition and Redressal of Sexual
Harassment of Women
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. The policy for Prevention of Sexual Harassment at Workplace is available on thewebsite of the Company http://www.chembondindia.com/policy.html. Internal ComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary and trainees) are coveredunder this policy. They are also provided training about the Act.
During the year under review no complaint was received.
Business Responsibility Report
The Business Responsibility Report for the year ended 31st March 2022 asstipulated under Regulation 34 of the Listing Regulations is annexed as Annexure 7.
Material changes and commitment
There was a fire incident at Tarapur Maharashtra Plant on 21st April 2022.The fire resulted in 1 fatality. Details about the losses etc. is mentioned in the Notesto Financial attached to this Report.
Except as disclosed elsewhere in the Report there have been no material changes andcommitment there was fire insident at Tarapur Maharashtra plant on 21st April2022 affecting the financial position of your Company which have occurred between theend of the financial year of the Company and the date of this Report.
Significant and Material Orders
During the year under review there has been no significant and material order passed bythe Regulators or Courts or Tribunals impacting the going concern status of the Companyand its future operations.
Proceedings pending under the Insolvency and Bankruptcy Code
There are no such proceedings or appeals pending and no applications has been filedunder Insolvency and Bankruptcy Code 2016 during the year under review and from the endof the financial year upto the date of this report.
The details of difference between amount of the valuation done at the time of One-timesettlement and the valuation done while taking loan from the Banks or FinancialInstitutions
No such instance of One-time settlement or valuation was done while taking ordischarging loan from the Banks/ Financial Institutions occurred during the year.
Compliance with Secretarial Standards
In terms of Section 118(10) of the Act the Company is complying with the SecretarialStandards issued by the Institute of Company Secretaries of India (ICSI) with respect toMeetings of Board of Directors and General Meetings and such systems were adequate andoperating effectively.
Your Board wish to place on record their appreciation and acknowledge with gratitudethe support and co-operation extended by the Government authorities Bankers customersvendors employees and members during the year under review and look forward to theircontinued support.
|On behalf of the Board || |
|sd/- ||sd/- |
|Sameer V. Shah ||Nirmal V. Shah |
|Chairman and Managing Director ||VC and Managing Director |
|Mumbai || |
|14th May 2022 || |