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Director's Report
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DIC India LtdIndustry : Chemicals
BSE Code:500089
ISIN Demat:INE303A01010
Book Value(Rs):324.56
NSE Symbol:DICIND
Div & Yield %:1.28
Market Cap (Rs Cr.):324.16
P/E(TTM):21.4
EPS(TTM):16.5
Face Value(Rs):10
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Dear Shareholder,

Your Directors have pleasure in presenting the Annual Report for the year ended December 31, 2019.

FINANCIAL HIGHLIGHTS

The highlights of your Company's financial results for the financial year ended December 31, 2019 ("FY 2019") are as follows:

Rs. in Lakhs
Particulars FY 2019 FY 2018
Sales/ Operating Revenue 79,113.28 83,795.97
Other Income 1,298.75 1,455.15
Total Income 80,412.03 85,251.12
Profit/ (Loss) before Taxation and Exceptional Item 1,746.57 (588.97)
Tax Expenses (98.10) 343.38
Net Profit / (loss) 1,844.67 (932.35)
Other Comprehensive Loss (41.06) (54.48)
Total Comprehensive income / (loss) 1803.61 (986.83)

STATE OF COMPANY'S AFFAIRS (OVERALL PERFORMANCE)

Your Company recorded a turnover of Rs.79,113.28 Lakhs as against Rs. 83,795.97 Lakhs. The Company operates in two segments printing Inks and Lamination Adhesives. On an overall basis, the Company registered profit before tax of Rs. 1,746.57 Lakhs for the year ended 31st December, 2019 against a Loss before tax (before exceptional item) of Rs. 588.97 Lakhs in the previous year.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments have occurred after the closure of the year till the date of this Report, which affect the financial position of the Company.

CHANGES IN THE NATURE OF BUSINESS

There has been no fundamental change in the nature of business of the Company during the financial year ended December 31, 2019.

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve for the financial year ended December 31, 2019.

DIVIDEND

The Board of Directors have recommended a final dividend of Rs. 4.50 (Four rupees and fifty paise) per equity share for FY 2019 for the approval of the Members at the ensuing Annual General Meeting (AGM). The dividend if approved will be paid to the Shareholders within 30 days of declaration.

CHANGE IN SHARE CAPITAL

The paid-up share capital of the Company as on December 31, 2019 was Rs. 91.79 million and there has been no change in the capital structure of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposits during the year under review.

BOARD MEETINGS

The Board evaluates all the decisions on a collective consensus. 6 Board Meetings were held during the year ended December 31, 2019 on January 30, 2019, April 26, 2019, July 26, 2019, October 9, 2019, October 22, 2019 and December 9, 2019. The gap between any two Board meetings during this period did not exceed one hundred and twenty days.

The details of the Board Meetings held during the F.Y. 2019 have been furnished under Clause 5 in the Corporate Governance Report forming a part of this Annual Report.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given declaration to the Company stating their independence pursuant to Section 149(6) of the Companies Act, 2013 and the same have been placed and noted by the Board in its meeting held on February 1, 2020.

REMUNERATION POLICY

A Nomination and Remuneration Policy formulated and adopted on December 5, 2014, pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto inter alia define the Companies policy on Directors' appointment and remuneration by the Nomination and Remuneration Committee.

The said policy may be referred to, at the Company's website www.dicindialtd.co.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan, guarantees or made any investments prescribed under Section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Related Party Policy has been adopted by the Board of Directors at its meeting held on December 5, 2014 for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to, at the Company's website www.dicindialtd.co. The Audit Committee reviews all related party transactions quarterly.

Further, during the year there were no material related party contracts entered into by the Company and all contracts were at arm's length and in ordinary course of business.

EXTRACT OF ANNUAL RETURN

As required under Section 92 as extract of Annual Return forms part of this report and is annexed as Annexure ‘A'.

ANNUAL EVALUATION OF BOARD'S PERFORMANCE

In terms of Regulation 25(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of the Independent Directors was held on April 10, 2019 to inter alia, evaluate the performance of the Non-Independent Directors, including the Chairman. The Board thereafter in its meeting held on April 26, 2019 evaluated the performance of the Independent Directors in terms of Schedule IV of the Companies Act, 2013.

As a familiarization programme to enable the Board members to take informed decisions, the Management presents a quarterly review of the Industry outlook, company performance, operations, financial statements etc before the Board.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

As required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo is annexed and forms a part of this Report marked as Annexure ‘B'.

SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES

The Company does not have any subsidiary/associate/joint venture company for the year ended December 31, 2019.

DEPOSITS

In terms of the provisions of Section 73 to 76 of the Act read with the relevant rules made thereunder, your Company has not accepted any deposit from the public.

HUMAN RESOURCES

DIC India believes that the Competence and Commitment of the employees are key differentiating factors which enable our organization to create value by offering quality products & services to our customers. We strive to create a harmonious work environment & strengthen our work culture to drive high level of performance. As a part of this culture, we are committed towards scaling up competence level of employees & offering them a long term career to attract & retain talent. As on December 31, 2019, the Company had 512 employees (previous year 525) on its direct pay roll.

Information in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this Report marked as Annexure ‘C'. As per the provisions of Section 197(12) of the Companies Act, 2013, read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Annual Report excluding the information on employee's particulars is being sent to the members which is, however, available for inspection at the Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has in place a Policy for Prevention of Sexual Harassment of Women at Work Place and constituted an Internal Complaints Committees (ICC). No complaint has been raised during the year ended December 31, 2019.

WHISTLE BLOWER MECHANISM

The Company has an updated Whistle Blower Policy in place. The said policy may be referred to, at the Company's website www.dicindialtd.co.

INTERNAL CONTROL SYSTEMS

The Company has an adequate system of internal control procedures which is commensurate with the size and nature of its business. Detailed procedural manuals are in place to ensure that all the assets are protected against loss and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports are reviewed by the Audit Committee of the Board of Directors. The observations and comments of the Audit Committee are placed before the Board.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been furnished under Clause 6 in the Corporate Governance Report forming a part of this Annual Report. There had been no instances where the Board has not accepted the recommendations of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Sec 135 of the Companies Act, 2013 and applicable Rules and recent amendment, for the year ended December 31, 2019, the Company was not required to make any expenditure towards CSR.

Acknowledging its responsibility towards the society, your Company has put in place a CSR Policy, which may be referred to at the Company's website www.dicindialtd.co. The CSR Committee guides and monitors the activity undertaken by the Company in this sphere.

CORPORATE GOVERNANCE

Your Company attaches considerable significance to good Corporate Governance as an important step towards building investor confidence, improving investors' protection and maximizing long-term shareholders' value. The certificate of the Statutory Auditors, M/s Deloitte Haskins & Sells LLPs, confirming compliance of conditions of Corporate Governance as stipulated under Schedule V(E) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed.

DIRECTORS

During the year under review, Mr. Manish Bhatia was appointed as Managing Director and Chief Executive Officer effective January 30, 2019. Further, Mr. Taishi Nojima was appointed as Whole Time Director w.e.f. April 26, 2019.

In terms of DIC Group Policy on superannuation, Mr. Subir Bose (DIN: 00048451) and Mr. Utpal Sengupta (DIN: 02577237) resigned as Independent Directors of the Company w.e.f. December 9, 2019. Further, upon their resignation, and in terms of Regulation 30 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015 they have submitted the confirmation that there is no material reason other than stated above for their resignation. The Confirmation so received have been duly intimated to the Stock Exchanges and also posted on Company's website www.dicindialtd.co.

In terms of Articles of Association of the Company, Mr. Masahiro Kikuchi retires from the Board by rotation and being eligible, offer himself for re-appointment.

The Board recommends re-appointment of Mr. Partha Mitra (DIN: 00335205) to the shareholders.

The detailed agenda forms part of Notice of Annual General Meeting.

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2 (51) and Section 203 of the Companies Act, 2013 read with the Rules framed thereunder.

1. Mr. Manish Bhatia Managing Director & Chief Executive Officer

2. Mr. Taishi Nojima- Whole Time Director

3. Mr. Sandip Chatterjee - Chief Financial Officer

4. Mr. Raghav Shukla General Manager-Legal & Company Secretary

COST AUDIT

In accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014, the Company is required to appoint a cost auditor to audit the cost records of the applicable products of the Company relating to the business of manufacturing printing inks. Accordingly, M/s. Sinha Chaudhuri & Associates, Cost Accountants (Firm regn. No. 000057) were appointed as the Cost Auditors for auditing the Company's cost accounts for the year ended December 31, 2019.

STATUTORY AUDITORS

As per the provisions of the Act, the Company appointedM/s. Deloitte Haskins & Sells LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of the ensuing 70th Annual General Meeting held on March 22, 2018.

STATUTORY AUDITORS' OBSERVATIONS

The notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report is an Un-modified report and does not contain any qualification, report of fraud, reservation, adverse remark or disclaimer and do not call for any further comments.

SECRETARIAL AUDITOR

The provisions of Section 204 of the Companies Act, 2013 mandates Secretarial Audit of the Company by a Company Secretary in Practice. The Board in its meeting held on February 12, 2020 appointed M/s. T. Chatterjee & Associates, Practicing Company Secretary (Firm Registration No. S2007WB097600) as the Secretarial Auditor for the financial year ending December 31, 2019. The Secretarial Auditors' Report for the financial year ending December 31, 2019 is annexed to the Boards' Report as Annexure ‘D'. There are no qualification, reservation, adverse remark or disclaimer in the said report and do not call for any further comments.

TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND

During the financial year ended December 31, 2019, unpaid or unclaimed dividend for the financial year ended December 31, 2011 amounting to Rs. 0.23 million along with 5149 equity shares to which it relates were transferred to the Investor Education and Protection Fund established by the Central Government, in compliance with section 125 of the Companies Act, 2013.

RISKS & MITIGATING STEPS

The Board has adopted a risk management policy where various risks faced by the Company have been identified and aframework for risk mitigation has been laid down. Even though not mandated, the Company has constituted a Risk Management Committee to monitor, review and control risks. The risks and its mitigating factors are discussed in the Board.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act, the Directors state that:

i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

ii. 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;

iii. 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;

iv. The Directors had prepared the annual accounts on a going concern basis;

v. 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

vi. 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.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the employees, customers, shareholders, suppliers, bankers, business partners/associates, financial institutions, Securities and Exchange Board of India and Central and State Governments for their consistent support and encouragement to the Company.

For and on behalf of the Board
Mr. Dipak Kumar Banerjee Mr. Manish Bhatia
Director Managing Director & Chief Executive Officer
February 12, 2020 DIN: 00028123 DIN: 08310936
Noida

   

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