Nature of the Disclosure

This is a regulatory communication to shareholders and stock exchanges (BSE, NSE) regarding the process for Tax Deducted at Source (TDS) on an upcoming dividend payment, in compliance with the new Income Tax Act, 2025.

Key Quantitative Figures

  • Dividend Declared: ₹2.00 (Rupees Two Only) per Equity Share of ₹5 each.
  • TDS Exemption Threshold: No TDS for resident individuals if the aggregate dividend during the tax year does not exceed ₹10,000.
  • Standard TDS Rate: 10% for resident shareholders with a valid PAN.
  • Higher TDS Rate: 20% for resident shareholders without a valid PAN, an invalid PAN, or an inoperative PAN.

Parties Involved

  • Issuing Company: Chembond Material Technologies Limited (formerly Chembond Chemicals Limited) | Scrip Code: BSE: 530871, NSE: CHEMBOND | ISIN: INE995D01025 | CIN: L24100MH1975PLC018235.
  • Stock Exchanges: BSE Limited and National Stock Exchange of India Limited.
  • Registrar and Transfer Agent (RTA): MUFG Intime India Private Limited (for physical shareholders).
  • Depositories: National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) (for demat shareholders).
  • Company Officer: Suchita Singh, Company Secretary & Compliance Officer (signatory).

Purpose and Rationale

The purpose is to inform shareholders of the mandatory TDS requirements on dividends as per the new Income Tax Act, 2025, and to guide them through the process of submitting documents to avoid higher tax deduction rates.

Financial and Operational Impact

  • The dividend payout itself is contingent on shareholder approval at the AGM.
  • The direct financial impact on the company is the administrative cost of compliance. The primary financial impact is on the shareholders, whose dividend income will be subject to TDS as outlined.
  • The company explicitly states it is not obligated to apply beneficial Double Taxation Avoidance Agreement (DTAA) rates if documents are incomplete and that no claim shall lie against the company for taxes deducted.

Capital Structure Impact

There is no impact on the company's capital structure from this disclosure. It concerns the distribution of profits, not the alteration of share capital.

Cash Flow Implications

The disclosure confirms an anticipated cash outflow equivalent to the total dividend amount plus any associated compliance costs. The net cash received by shareholders will be the dividend amount minus the applicable TDS.

Forward-Looking Guidance

No forward-looking financial or operational guidance is provided by management in this disclosure.

Additional Instructions and Annexures

The document includes detailed instructions and annexures for shareholders:

  • Annexure 1: Form 121 for resident individuals to declare eligibility for nil TDS.
  • Annexure 2: A declaration form for specific exempt entities (e.g., Mutual Funds, AIFs, Insurance Companies) to confirm their status and beneficial ownership.
  • Annexure 3: A step-by-step procedure for non-resident shareholders to file Form 41 online on the income tax portal.
  • Annexure 4: A self-declaration form for non-resident shareholders to certify their eligibility for DTAA benefits.
  • KYC Compliance: Emphasis that dividend will be withheld for physical shareholders who are not KYC compliant as per SEBI directives, requiring submission of forms ISR-1, ISR-2, SH-13, or ISR-3, SH-14.
  • Bank Details: Physical shareholders must provide a cancelled cheque; demat shareholders must update details with their Depository Participant.