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42ndbeverage and brewing industries. During the year, thecompany has built up its reference list in most of the usersegments and has obtained approvals therefrom. Theproduct technologies from Calvatis have been absorbedand sales and service network is now being expanded.The company expects to see strong performance andgrowth in successive years.Research & DevelopmentContinued research and development not only onproducts but also on the manufacturing floor hasresulted in the streamlining of manufacturing andintroduction of several new products. These activitieshave resulted in your Company being recognized as aninnovative company with a differentiated strategy.PolymersOur Kemylon series of PA610 made from renewableresources has been accepted by customers and isbeing used by them with promised results. The priceof competing polymers using the non-renewableresources route however has suddenly crashed therebymaking the cost effectiveness of our Kemylon series lessattractive to customers who can use non-renewableresources in their products. An adhesion promoterproduct developed and patented by us has howeverstarted generating revenues and has ensured that ourpolymer division plans stay on course. Your Companywas selected for product display at the InnovationGallery of an industry leading exhibition “Plastivision2017”. We also received DSIR recognition for our R&DLab for polymer research at Dudhwada while alsosuccessfully renewing the DSIR recognition for the R&DLab at Mahape.ANNUALR E P O RT2016-17with a flexibility of wide range of product categoriesand capable of handling the requirements of theCompany for the next several years. The plants aremodern, compliant with health, safety, and environmentnorms, and the team is well trained to use the bestmanufacturing ond has an objective of being the “supplier ofchoice” to its diverse customers. In order to achievethis objective, all manufacturing sites and functionshave targets on customer service, among others. YourCompany aims to continually improve these targetsthrough its Quality Management Systems.In addition to Quality, Safety, Health, and Environment(SHE) is an integral part of Chembond's business andoperations. Your Company’s Tarapur and Dudhwadaplants have implemented safety, health & environmentmanagement systems, which is integrated with itsQuality Management System. Your Company’s Tarapurplant underwent a major engineering revamp to complywith international SHE standards.Your Company follows an integrated SHE-QManagement System under which, the following plantsare certified:LocationsISO 9001:2008ISO14001OHSAS18001ISO/TS16949HO- facturingHuman ResourcesYour Company has existing manufacturing units atTarapur, Mahape, Dudhwada, Ranipet and Baddi. Withthis, your Company has the capability to efficientlyserve the customers' requirements in all parts of thecountry. The overall manufacturing capacity is elastic,The manpower strength of your Company was 336 atthe close of 2015-16 and it stood at 361 as of 31st March,2017. Average age of the workforce is 35 years. In 201617, employee relations in your Company continued tobe harmonious in all Plants and establishments. Talent5

retention was done and fresh talent was inducted forkey roles. At the beginning of the year business goalswere set for each Division, which were dovetailed todepartments and individual employees. Systems weresharpened to keep in focus ‘big-ticket’ activities, whichwere linked with the performance pay applicable tocertain key positions. In the annual sales meetingsbest performers were rewarded. ESOPs were madeavailable to employees, which added to the employeesatisfaction.Suitable Learning & Development initiatives wereorganized that included not only functional, technicaland behavioral aspects, but also SHE.Employee engagement initiatives were organized withsome innovative themes, which were well received andreinforced the team spirit.Internal Control Systems and theirAdequacyThe internal control system in place throughoutthe Company is aimed at systematic and thoroughidentification and assessment of all major risks, whichthreaten the achievement of objectives, includingrisks related to business operations, finance, legal andstrategic. It makes an important contribution towardsensuring compliance with the laws that apply as wellas providing assurance on the propriety and reliabilityof internal and external financial reporting. The internalcontrol system is therefore a significant factor in themanagement of process risks.Your Company has a “Risk Management Committee”comprising of Non-Executive Directors who are expertsin the field of finance, strategic management, operationsand law. Furthermore, the Company has engagedthe services of independent firms of professionals tofunction as internal auditors and provide reports andnecessary actions where required on various activitiescovering observation on adequacy of internal controlsand their recommendations.6Corporate Social Responsibility (CSR)The Chembond group believes that an organisationshould make decisions based not only on financialfactors, but also on the social and environmentalconsequences and do recognizes that its businessactivities have wide impact on the societies in whichit operates, and therefore an effective practice isrequired giving due consideration to the interests of itsstakeholders. The Company endeavors to make CSR akey business process for sustainable development and itis always committed to play active role in improving thelives of people. The Chembond Children’s Centre, is anon-formal educational centre at Pasthal and Shirgaon,near Tarapur, where English, Hindi, Marathi, Science,Mathematics, Social Studies, and General Knowledgeform the main subjects of curriculum. The Centrewas formed over fifteen years ago in partnership withChembond’s earlier joint venture partner, Henkel KGaA,and is now being continued by your Company. Inaddition to education, the Centre provides camps andworkshops in health care, life skills, and scholarshipsFurther details pertaining to CSR Committee, Policy etc.are given in the Report of the Board of Directors.OutlookThe investments made by your Company in technology,brands, people, and facilities over the past few yearshave begun to show some improvement in the last year.This is especially reflected in the performance of theconstruction chemicals and animal nutrition businesses.With the Indian economy steadily improving growthand a good monsoon to support the same, yourCompany will accelerate its strengths. While the impactof the divestment of your Company’s metal treatmentbusiness will still affect the consolidated earnings fromoperations for a few more quarters, it is the objectiveof the management to more than compensate for thesame by rapid growth in the new areas of business, likeanimal nutrition, construction chemicals, and industrialtechnologies, while maintaining better than GDP

42ndgrowth in the more established business, like watertreatment chemicals.Forward Looking StatementsThis report contains statements, which may constitute‘forward looking statements’ within the meaning ofthe applicable securities laws and regulations. Forwardlooking statements are based on certain assumptionsand expectations of the future events. Actual resultscould differ materially from those expressed or implied.Important factors that could impact the Company’sperformance include, among others, economicconditions affecting the demand / supply and priceconditions in the markets in which the CompanyANNUALR E P O RT2016-17operates, changes in the Government policies,regulations, tax laws, other statutes and incidentalfactors.The Company undertakes no obligations to updateor revise forward-looking statements based on anysubsequent developments, information, or events.On behalf of the BoardSameer V. ShahChairman &Managing DirectorNirmal V. ShahVice - Chairman &Managing DirectorMumbai6th May, 20177

Standalone Sales24,00020,13221,00012,00011,092 11,44213,224Consolidated Sales35,00030,00017,44718,00015,00021,429 21,435 003,000-5,0002008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2265,0003,9284,2063,1353,0001,000-2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17Book Value146.94 ,0001,00020.5235.072008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 d AssetsFixed Assets6,0002,36238.8416.412008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-173,00027,015Product Margin (in %)18.2017.0216.7526,34122,8452008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-1719.3617.9429,43214,218Product Margin (in 008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-1718016014012010080604020-2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17Book Value154.12 158.9532.9339.3548.0957.1660.7264.3671.502008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17for the year ended on March, 2017all numbers in Lakhs except Book Value and EPSNumbers adjusted for issue of Bonus Shares in March 2010 in the ratio of 1 : 1Numbers adjusted for Subdivision of Shares from face value of 10/- each to 5/- each

-1065.87** Current Liabilites excludes Short Term Borrowing and Current maturites of Long term 3,180.972007-08( in Lakhs except per share data and ratios)ANNUALREPORT* Adjusted for issue of Bonus Shares in March 2010 in the ratio of 1 : 1 and Subdivision of Shares in September 2016 from face value of 10/- each to 5/- each158.951.65Dividend Per ShareBook Value Per Share*5.780.92Earning Per Share (Basic)*(Net Sales divided by Total Assets)Asset Turnover Ratio(Current Assets divided by Current Liabilities**)Current Ratio3.183.91%(PBIT divided by Average Fund Employed Excluding Deftax liab)Gross Gearing %(Debt as a percentage of Debt plus Equity)7.77%5.21%Return on Average Capital Employed % ( ROCE)(PAT divided by Average Networth)Return on Average Networth %(RONW)Ratios4,913.3521,376.54Net Block (Asset)20,704.13Net Worth672.41Reserves (Less Revaluation Reserve & Misc exp)Equity Share CapitalFinancial Position221.901,094.89Dividend on Equity SharesPAT380.47Depreciation1,606.37102.26Finance CostPBT619.8328,052.402016-17Other IncomeRevenue From OperationsOperating ResultHighlights10 Years’ Financial Performance Consolidated42nd2016-179

nd on Equity 3238.29262.3911,494.262009-10** Current Liabilites excludes Short Term Borrowing and Current maturites of Long term 2007-08( in Lakhs except per share data and ratios)* Adjusted for issue of Bonus Shares in March 2010 in the ratio of 1 : 1 and Subdivision of Shares in September 2016 from face value of 10/- each to 5/- each147.351.65Book Value per Share*2.47Dividend Per Share0.84Earning Per Share (Basic)*(Net Sales divided by Total Assets)Asset Turnover Ratio(Current Assets divided by Current Liabilities**)Current Ratio2.863.56%(PBIT divided by Average Fund Employed Excluding Deftax liab)Gross Gearing %(Debt as a percentage of Debt plus Equity)2.36%1.68%Return on Average Capital Employed % ( ROCE)(PAT divided by Average Networth)Return on Average Networth %(RONW)Ratios3767.5019815.66Net WorthNet Block (Asset)19143.25Reserves (Less Revaluation Reserve & Misc exp)Equity Share Capital672.4163.88Finance CostFinancial Position549.2321681.782016-17Other IncomeRevenue From OperationsOperating ResultHighlights10 Years’ Financial Performance Standalone

42ndANNUALREPORT2016-17Directors' ReportToThe Members,Your Directors take pleasure in presenting the 42nd Annual Report on the business and operations of your Company togetherwith the Audited Financial Statements for the year ended 31st March, 2017.Financial ResultsThe financial performance of your Company is as summarized below for the year under review:( in Lakhs)ParticularsStandalone2016-17Revenue from OperationsProfit for the yearAdd: Balance as per last .2317,790.523,359.8918,087.156,586.04Less: Effect of divestment in JV &conversion of Associate into Subsidiaries---3,041.65Add: Pre-acquisition profit & previous 918,909.62TotalAppropriationGeneral ReservesSet off of Dividend Tax in respect ofdividend from Subsidiary CompanyInterim 49-601.49182.50Tax on Interim Dividend-122.45-Previous year Dividend-0.48-0.48Tax on Previous year ed DividendTax on Proposed DividendBalance carried to Balance 22.1018,482.4819,095.5918,909.62Performance HighlightsDuring the year under review, revenue from operations of your Company’s products and services was 21,681.78 lakhs comparedwith 21,563.76 lakhs in FY 2015-16. The Profit after Taxes was 331.58 lakhs compared with 15,122.59 lakhs in FY2015-16. The sharp reduction is because of exceptional income on account of divestment of your Company’s stake in HenkelChembond Surface Technologies Limited in the previous year.DividendThe Board of Directors has recommended final dividend of 1.65/- per share for the financial year ended 31st March 2017. Theoutflow on account of dividend payment amounts to 221.90 Lakhs.Transfer to ReservesYour Company does not propose to transfer any amount from the current year’s profits to the General Reserve. (Previous year Nil)DepositsThe Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and rules framedthereunder.11

Directors and Key Managerial PersonnelThe Board, in its meeting held on 28th May, 2016, on the recommendation of Nomination & Remuneration Committee ofthe Board, approved the re-appointment of Mr. Sameer V. Shah (DIN: 00105721) and Mr. Nirmal V. Shah (DIN: 00083853) asChairman and Managing Director and Vice Chairman and Managing Director of the Company respectively. The re-appointmentof Mr. Sameer V. Shah and Mr. Nirmal V. Shah was approved by shareholders at the 41st Annual General Meeting held on 30thJuly, 2016 for a term of three years with effect from 1st August, 2016. There was no change in any of Key Managerial Personnelduring the year.During the year, Mr. O. P. Malhotra (DIN: 00009086) ceased to be Director (Independent) on the Board of the Company witheffect from 1st August, 2016 and the same was approved by the Board at its meeting held on 30th July, 2016.Inter-se relationship between DirectorsMr. Sameer V. Shah, Chairman & Managing Director and Mr. Nirmal V. Shah, Vice Chairman & Managing Director are brothers.Number of Board MeetingsFive (5) board meetings were convened and held during the year. Details of these meetings of the board are included inthe Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under theCompanies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.Performance evaluation and its criteriaThe Directors on the Board carried out an annual evaluation of the Board itself, its Committees and individual Directors. The entireBoard 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 outparameters 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 onknowledge to perform the role, time and level of participation, performance of duties and level of oversight and professionalconduct etc.Independent Directors in their separate meeting held on 30th March, 2017 have also evaluated the performance of NonIndependent Directors, Chairman of the Board and the Board as a whole.Disclosures by the DirectorsThe Directors on the Board have submitted notice of interest under Section 184(1), intimation under Section 164(2) anddeclaration as to compliance with the Code of Conduct of the Company. All Independent Directors have also given declarationsthat they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 (the “Act”) andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.Directors’ Responsibility StatementPursuant to Section 134 of the Compan

Consolidated The highlights of the consolidated financial performance are as follows: ( in Lakhs) Particulars 2016-17 2015-16 % Δ Ratio Analysis Particulars 2016-17 2015-16 Product Margin, % of Sales 33.25 31.22 Gross Margin, % of Sales 26.37 25.48 Selling & Admin Costs, % of Sales 24.77 24.10 Employee Costs, % of Sales 14.04 13.08