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Diamines & Chemicals Ltd.

BSE: 500120 Sector: Industrials
NSE: N.A. ISIN Code: INE591D01014
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VOLUME 6488
52-Week high 86.70
52-Week low 34.00
P/E 16.25
Mkt Cap.(Rs cr) 69
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Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 70.00
CLOSE 71.00
VOLUME 6488
52-Week high 86.70
52-Week low 34.00
P/E 16.25
Mkt Cap.(Rs cr) 69
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Diamines & Chemicals Ltd. (DIAMINESCHEM) - Director Report

Company director report

BOARD'S REPORT

To the Members

Your Directors are pleased to present the 41st Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March2017.

1. FINANCIAL RESULTS:

The Company's financial performances for the year under review along with previousyear's figures are given hereunder:

( Rs. in Lacs)

Particulars 2016-17 2015-16
Total Revenue (including Excise & Sales tax) 3884.19 3984.76
Total Revenue (net of taxes) 3496.77 3593.59
Profit before interest depreciation & taxation 936.55 482.18
Interest & financial expenses 172.77 275.11
Depreciation 184.77 198.55
Profit/(Loss) before tax 579.01 8.52
Provision for tax 151.32 (16.81)
Net Profit/(Loss) after tax 427.69 25.33
Add: balance profit brought forward 1585.98 1560.65
Profit available for appropriation 1929.59 1585.98
Transfer to General Reserve - -
Equity Dividend - -
Tax on dividends - -
Balance profit carried to balance sheet 1929.59 1585.98

2. DIVIDEND:

The Board of Directors recommended a dividend of Rs. 1.50 per Ordinary share on9783240 Ordinary shares of Rs. 10/- each for the year ended on March 31 2017. The Companyhas not declared any dividend in the previous financial year.

3. TRASFER TO RESERVES:

Pursuant to provisions of Section 134(3)(j) of the Companies Act 2013 the companyhas not proposed to transfer any amount to general reserves account of the company duringthe year under review.

4. REVIEW OF BUSINESS OPERATIONS PERFORMANCE HIGHLIGHTS AND FUTURE PROSPECTS

Your Directors wish to present the details of Business operations done during the yearunder review: The period under review was a favorable year for your Company whichalso reflects in its performance.

Total income for the year 2016-17 was registered at Rs. 3884.19 (Gross) lacs ascompared to income of

Rs. 3984.80 lacs (Gross) for the year 2015-16.

While net profit/(Loss) after tax reported at Rs. 427.69 lacs as compared to Rs. 25.33lacs of previous financial year.

Sales volumes for the year 2016-17 were at 1746.962 MT as compared to 1402.282 MT forthe year 2015-16.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

In terms of Section 124and Section 125 of the Companies Act 2013 unclaimed or unpaidFinal Dividend relating to the financial year 2009-10 is due for remittance on 28th August2017 and Interim Dividend relating to the financial year 2010-11 is due for remittance on30th November 2017 which has not been claimed by shareholders of the Company.Shareholders are required to lodge their claims with the Company's RTA MCS Share TransferAgent Limited for unclaimed dividend. Pursuant to the provisions of Investor Education andProtection Fund the Company has uploaded the details of unpaid and unclaimed amountslying with the Company on the website of the Company (www.dacl.co.in) as also on thewebsite of the Ministry of Corporate Affairs (www.mca.gov.in).

6. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITIONOFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT

There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the Financial Year of theCompany to which the Financial Statements relate and the date of this Report.

7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year pursuant to Regulation 34(2)(e)of SEBI (Listing Obligations and Disclosures Requirement) Regulations 2015 forms part ofthe Annual Report attached herewith as "ANNEXURE-A".

8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in ANNEXURE– B and is attached to this report. Your Company understands and appreciates theresponsibility and importance of conservation of energy and continues to put efforts inreducing or optimizing energy consumption for its operations.

The Company has taken various measures for conservation of energy such as:

- Reduction in steam consumptions electricity and cooling water by debottlenecking ofvarious operations

- Improvement in the yields and planned increase in throughput

- Improved steam condensate recovery by installing new designs of traps and monitoringtrap performance

- Utilization of by-products steams

- Modification in coal fired boiler to improve efficiency by increasing coal to steamratio

9. SAFETY HEALTH AND ENVIRONMENT: a) Safety:

The Company encourages a high level of awareness of safety issues among its employeesand strives for continuous improvement. All incidents are analysed in the safety committeemeetings and corrective actions are taken immediately. Employees are trained in safepractices to be followed at work place.

The Company is active member of local Crisis group such as Offsite Industrial EmergencyControl Room (OIECR). External safety audits are carried out from time to time and auditrecommendations are implemented.

Safety promotional activities such as celebration of National Safety day arrangingposter competition slogan competition and prize distribution are conducted every year toencourage safety culture.

Company also conducts Mock drill regularly on quarterly basis and outcome of Mock drillis analyzed and necessary improvements are implemented regularly. Company also makescontinuous efforts to increase Safety awareness with regular and contractual employees andworkers.

b) Health:

Your Company attaches utmost importance to the health of its employees. Periodiccheckup of employees is done to monitor their health. Company also has Occupational HealthCenter open for 24 hours and Ambulance facility at its Manufacturing site. Health relatedissues if any are discussed with visiting Medical Officer. Company also has a tie up withone hospital in the City to provide timely medical assistance to the employees/workers incase of emergencies.

c) Environment:

Company always strives hard to give importance to environmental issues in normal courseof operations. Adherence to Environmental and pollution control Norms as per GujaratPollution Control guidelines is of high concern to the Company. The Company is alsosignatory to "Responsible Care" a voluntary initiative of International Councilof Chemical association (ICC) being implemented by Indian Chemical Council to safelyhandle the products from inception in research laboratory through manufacturing anddistribution to utilization reuse recycle and finally their disposal.

d) Renewable Source of Energy:

Your Company is also contributing in reducing Carbon foot printing from the Environmentby generating power through renewable sources and by harnessing wind Energy. The Companyhas installed 3 (three) Wind Turbine Generators (WTG) of total 3.50 MW Capacity and arealways ensured in full operational mode.

10. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES AND POLICY:

The Company has not implemented any Corporate Social Responsibility initiatives as theprovisions of Section 135 of the Act and Rules made there under governing Corporate SocialResponsibility are not applicable for the financial year under review. The same shall beapplicable to the Company for financial year 2017-18 as the Net Profit as on 31st March2017 exceeds the prescribed limits.

11. Particulars of Loans Guarantees or Investments made under section 186 of theCompanies Act 2013

The particulars of Loans guarantees or investments made under Section 186 arefurnished in ANNEXURE-C and are attached to this report.

12. MATERIAL ORDERS PASSED BY REGULTORY/COURT:

During the year under review TheHon'ble High Court of Gujarat Ahmedabad passed anorder for Amalgamation of Diamines Speciality Chemicals Limited a wholly-owned SubsidiaryCompany (Transferor Company) with Diamines and Chemicals Limited (Transferee Company)dated 16th September 2016 pursuant to which all the Assets and liabilitiesof the Transferor Company weretransferred to Diamines and Chemicals Limited with effectfrom 30th September 2016.

13. INTERNAL FINANCIAL CONTROLS:

The Board of Directors of the Company has laid down adequate internal financialcontrols which are operating effectively. The Company has an Internal Control Systemcommensurate with the size scale and complexity of its operations. During the yearpolicies and procedures are adopted by the Company for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets the prevention and detection of its frauds and errors the accuracy andcompleteness of the accounting records and the timely preparations of reliable financialinformation. The scope of Internal Audit is well defined in the organization. The InternalAudit report regularly placed before the Audit Committee of the Board. The Managementmonitors and evaluates the efficacy and adequacy of internal control systems in theCompany its compliance with operating systems accounting procedures and policies. Basedon the report of Internal Auditors process owners undertake corrective action in theirrespective areas and thereby strengthening the controls continuously. Significant auditobservations if any and corrective actions suggested and taken are presented to theAudit Committee of the Board.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All transactions entered into with the Related Parties as defined under the CompaniesAct 2013 read with Regulation 23 of the SEBI (Listing Obligations And DisclosureRequirements) Regulations 2015 during the financial year were in the ordinary course ofbusiness and on arm's length basis and do not attract the provisions of Section 188 of theCompanies Act 2013.

All other Related Party Transactions are placed before the Audit Committee as also theBoard for approval. The policy on materiality of related party transactions and dealingwith related party transactions is uploaded on the Company'swebsite"www.dacl.co.in".

Since there were no materially significant Related Party transaction during the yearunder review the details required in AOC-2 is not applicable to the Company.

15. EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS

OR DISCLAIMERS MADE BY THE AUDITORS AND PRACTICING COMPANY SECRETARY IN THEIR REPORTS:

There were no qualifications reservations or adverse remarks made either by theStatutory Auditors or by the Practicing Company Secretary in their respective reports.

16. EXTRACTS OF ANNUAL RETURN:

In accordance with Section 134 (3) (a) of the Companies Act 2013 the extracts ofAnnual Return pursuant to the provisions of Section 92 (3) in prescribed form MGT-9 isfurnished in ANNEXURE-C and forms part of this report.

17. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

The Company had 5 (Five) Board meetings during the financial year. During the yearunder review Board Meetings were held respectively on 12th May 2016 11thAugust 2016 8th September 2016 8th November 2016 and 25thJanuary 2017. Details of attendance at the Board Meetings and Annual GeneralMeeting for each Director along with their other Directorships are as stated herein below:

Sr. No. Name of the Director No. of Board Meetings attended out of 6 held
1. Mr. Yogesh M. Kothari 5
2. Mr. Amit M. Mehta 5
3. Mr. Kirat Patel 5
4. Mr. DhruvKaji 1
5. Mr. Rajendra Chhabra 5
6. Mr. G.S. Venkatachalam 5
7. Dr. Ambrish Dalal 1
8. Mr. Shreyas Mehta 1
9. Mrs. Darshana Mankad 2

18. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement that:—

a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

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

c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.-and

f) The directors haddevised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

19. SUBSIDIARY COMPANY IT'S PERFORMANCE & FINANCIAL POSITION:

During the year under review with effect from 16th September 2016 vide anorder passed by The Hon'ble High Court of Gujarat Ahmedabad M/s. Diamines SpecialityChemicals Limited a wholly-owned Subsidiary Company is amalgamated with M/s. Diamines andChemicals Limited pursuant to which as on the date of this report there is nosubsidiary or associate company of M/s. Diamines and Chemicals Limited.

20. DEPOSITS:

The Company has neither accepted nor renewed any deposits falling within the purview ofSection 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules2014 as amended from time to time during the year under review and therefore detailsmentioned in Rule 8(5)(v) & (vi) of Companies (Accounts) Rules 2014 relating todeposits covered under Chapter V of the Act is not required to be given.

21. DIRECTORS:

Mr. Yogesh Kothari (DIN: 00010015) and Mr. Amit Mahendra Mehta (DIN:00073907)directors of the company retires at this Annual General Meeting and being eligibleoffer themselves for re-appointment. Your Directors recommend their/his re-appointment.

None of the Directors is disqualified for appointment/re-appointment under Section 164of the Companies Act 2013. As required by law this position is also reflected in theAuditors' Report. The composition of the Board meetings of the Board held during the yearand the attendance of the Directors there at have been mentioned in the Report onCorporate Governance in the Annual Report.

22. DECLARATIONS OF INDEPENDENT DIRECTORS:

All the Independent Directors have submitted their declaration to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.

23. Familiarization Programmes:

The Company has adopted a familiarization policy for independent directors. The policyas well as the details with regard to no. of hours and details of imparting the trainingto the independent directors of the Company are available on the Company's website"www.dacl.co.in"

24. BOARD EVALUATION:

Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 mandates that the Board shall monitor and review the Board evaluationframework. The Companies Act 2013 states that a formal annual evaluation needs to be madeby the Board of its own performance and that of its committees and individual directors.Schedule IV of the Companies Act 2013 states that the performance evaluation ofindependent directors shall be done by the entire Board of Directors excluding thedirector being evaluated. The evaluation of all the directors and the Board as a whole wasconducted based on the criteria and frame work adopted by the Board. The Board approvedthe evaluation results as collated by the nomination and remuneration committee. None ofthe independent directors are due for re-appointment.

25. PARTICULARS REGARDING EMPLOYEES REMUNERATION:

The statement containing particulars of employees as required under Section 197 (12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report as "ANNEXURE–D."26. KEY MANAGERIAL PERSONNEL:

As required under Section 203 of the Companies Act 2013 the Company has noted thatMr.G. S.Venkatachalam Executive Director of the Company Mr. A. R. Chaturmutha ChiefFinancial Officer and Ms. Scany Parmar Company Secretary are the Key Managerial Personnelof the Company.

During the period under review Ms. Scany Parmar an associate member of the Instituteof Company Secretaries of India has been appointed as a Company Secretary of the Companywith effect from 12th May 2016.

27. AUDITORS: a. STATUTORY AUDITOR

M/s. Bansi S. Mehta& Co. Chartered Accountants was appointed as StatutoryAuditors in the Annual General Meeting held on 12.08.2014. Their continuance ofappointment and payment of remuneration are to be ratified in the ensuing Annual GeneralMeeting. The Company has received a certificate from the above Auditors to the effect thatif they are reappointed it would be in accordance with the provisions of Section 141 ofthe Companies Act 2013. b. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Sandip Sheth & Associates. Company Secretaries as secretarialauditors of the Companyto undertake the Secretarial Audit of the Company. The Report ofthe Secretarial Audit Report is annexed herewith as "ANNEXURE-E".

28. INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.

29. RISK MANAGEMENT POLICY:

The Company has a risk management policy which from time to time is reviewed by theAudit Committee of the Directors as well as by the Board of Directors. The policy isreviewed quarterly by assessing the threats and opportunities that will impact theobjectives set for the Company as a whole. The policy is designed to provide thecategorization of this into threats and its cause impact treatment and control measures.As part of the risk management policy the relevant parameters for manufacturing sites areanalyzed to minimize risk associate with protection of environment safety of operationsand health of people at work and monitor regularly with reference to statutory regulationsand guidelines define by the company. The company fulfills its legal requirementconcerning ambition waste water and waste disposal. Improving work place safety continuedtop priority at manufacturing site.

30. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The Company has in place an Audit Committee in terms of requirements of the applicableprovisions of the Companies Act 2013 Rules made there under and Listing (Obligations andDisclosure Requirements) Regulations 2015.The details of the composition of the AuditCommittee terms of reference and meetings held are provided in the Corporate GovernanceReport which forms part of this Report.

The Company has established a vigil mechanism and oversees through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.

The Company has disclosed information about establishment of the Whistleblower Policyon its website (Link: http://www.dacl.co.in/investors/Whistle_blower_policy-DACL.pdf).

31. SHARES:

a. SHARE CAPITAL

During the year under review the Total Authorized Share Capital is Rs. 175500000/-(Rupees Seventeen Crore Fifty-Five Lacs Only) and paid-up issued and subscribed sharecapital of the company is Rs. 97832400/- (Rupees Nine Crore Seventy-Eight LacsThirty-Two Thousand Four HundredOnly).

b. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

c. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

d. BONUS SHARES

No Bonus Shares were issued during the year under review.

e. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

32. INSURANCE:

All the properties and assets of the Company are adequately insured.

33. CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior management which is available on Company's website. All Board membersand senior management personnel have affirmed compliance with the Code of Conduct.

34. INSIDER TRADING POLICY:

As required under the new Insider Trading Policy Regulations of SEBI your Directorshave framed new Insider Trading Regulations and Code of Internal Procedures and Conductsfor Regulating Monitoring and Reporting of Trading by Insider. For details please referto the company's website.

Web link is http://www.dacl.co.in/investors/SEBI_Disc.pdf

35. NOMINATION AND REMUNERATION POLICY:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed and adopted a policy for selection andappointment of Directors Senior Managementand their remuneration. The Remuneration Policy on the appointment and remuneration ofDirectors and Key Managerial Personnel provides a framework based on which our humanresources management aligns their recruitment plans for the strategic growth of theCompany. The policy is available on our website at following linkhttp://www.dacl.co.in/investors/Remuneration%20policy%20DACL.pdf

36. CORPORATE GOVERNANCE:

Pursuant to the Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section forming part of this report and titledas "Corporate Governance" is attached herewith as "ANNEXURE-F".

37. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

In line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has set up InternalComplaints Committees at its workplaces to redress complaints received regarding sexualharassment. No complaints have been reported during the financial year 2016-17. Allemployees (permanent contractual temporary trainees) are covered under this policy.

38. ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board of Directors
Mumbai Dated: April 28 2017 Yogesh M. Kothari
Chairman