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Diamines & Chemicals Ltd.

BSE: 500120 Sector: Industrials
NSE: N.A. ISIN Code: INE591D01014
BSE 00:00 | 24 Jan 157.85 5.80
(3.81%)
OPEN

153.75

HIGH

162.00

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151.55

NSE 05:30 | 01 Jan Diamines & Chemicals Ltd
OPEN 153.75
PREVIOUS CLOSE 152.05
VOLUME 43907
52-Week high 165.95
52-Week low 77.80
P/E 10.28
Mkt Cap.(Rs cr) 154
Buy Price 158.00
Buy Qty 10.00
Sell Price 158.65
Sell Qty 1.00
OPEN 153.75
CLOSE 152.05
VOLUME 43907
52-Week high 165.95
52-Week low 77.80
P/E 10.28
Mkt Cap.(Rs cr) 154
Buy Price 158.00
Buy Qty 10.00
Sell Price 158.65
Sell Qty 1.00

Diamines & Chemicals Ltd. (DIAMINESCHEM) - Director Report

Company director report

To the Members

Your Directors are pleased to present the 43rd Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March2019.

1. Financial Results

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

(र In Lakhs)

Particulars Year Ended
March 31 2019 March 31 2018
Net Sales and Other Income 4828.11 4001.11
Profit before Finance costs and Depreciation 1989.61 1203.24
Finance cost 7.06 31.98
Depreciation and amortisation expenses 200.64 194.81
Profit from ordinary activities before tax and Exceptional
Item 1781.91 976.45
Exception Items - 152.52
Profit from ordinary activities before tax 1781.91 823.93
Tax expense
Current tax 447.20 216.55
Tax relating to earlier year (6.41) -
Deferred tax 27.94 (101.52)
Net Profit from ordinary activities after tax 1313.18 708.90
Other comprehensive income /(expense) (net of tax) (47.14) (28.89)
Total comprehensive income for the period 1266.04 680.01
Net Profit / (loss) attributable to a a
a) Owners of the Company 1313.18 708.90
b) Non controlling interest NIL NIL
Other comprehensive income attributable to a a
a) Owners of the Company (47.14) (28.89)
b) Non controlling interest NIL NIL
Total comprehensive income attributable to a a
a) Owners of the Company 1266.04 680.01
b) Non controlling interest NIL NIL
Balance of profit brought forward 2706.96 2176.96
Dividend paid a a
- Interim of current year (293.50) NIL
- Proposed Final of previous year (244.58) (146.75)
Corporate Dividend Tax (107.91) (29.87)
Transfer to General Reserve
Balance carried to Balance Sheet 3368.13 2706.96
Basic & diluted earning per equity share on Net profit from ordinary activities after tax (face value र 10/- each) (In Rupees) 13.42 7.25

2. Dividend

The Board of Directors recommended a final dividend of र 2 per Ordinary share on9783240 ordinary shares of र 10/- each for the year ended on 31st March 2019.The Dividend for the year ended 31st March 2019 is subject to the approval ofmembers at the Annual General Meeting on 9th August 2019 and will be paidwithin statutory time period if approved by the members at the Annual General Meeting.

3. Transfer to Reserves

Pursuant to provisions of Section 134(3)(j) of the Companies Act 2013 the company hasnot proposed to transfer any amount to general reserves account of the company during theyear 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 2018-19 was registered at �.11 lakhs as compared to income of र 4001.11 lakhs for the year 2017-18.

Net profit after tax was र 1313.18 lakhs as compared to र 708.90 lakhs in previousfinancial year. Sales volumes for the year 2018-19 were at 2322.15 MT as compared to1952.45 MT for the year 2017-18.

5. Transfer of Unclaimed Dividend to Investor Education And Protection Fund

In terms of Section 124 and Section 125 of the Companies Act 2013 unclaimed or unpaidFinal Dividend relating to the financial year 2011-12 is due for remittance on 14thSeptember 2019 which has not been claimed by shareholders of the Company. Shareholdersare required to lodge their claims with the Company's RTA for unclaimed dividend. Pursuantto the provisions of Investor Education and Protection Fund the Company has uploaded thedetails of unpaid and unclaimed amounts lying with the Company on the website of theCompany (www.dacl.co.in) as also on the website of the Ministry of Corporate Affairs(www.mca.gov.in).

6. Material Changes And Commitment if any affecting the Financial Position ofthe 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 bydebottlenecking of various operations

• Improvement in the yields and planned increase in throughput

• Improved steam condensate recovery by installing new designs of traps andmonitoring trap performance

• Utilization of by-products steams

• Modification in coal fired boiler to improve efficiency by increasing coal tosteam ratio

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 basisand outcome of Mock drill is analyzed and necessary improvements are implementedregularly. Company also makes continuous efforts to increase Safety awareness with regularand contractual employees and workers.

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 believes in contributing to harmonious and sustainable development ofsociety and that a company's performance must be measured not only by its bottom line butalso with respect to the social contributions made by the company while achieving itsfinancial goals. During the year the CSR Expenditure incurred by the company was र 10.40Lakhs in the area of Education and Empowerment. The CSR policy of the Company may beaccessed on the Company website at the link: http:// www.dacl.co.in/investors/CSR.pdf. TheAnnual Report on CSR Activities is annexed herewith as

ANNEXURE – C.

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

The particulars of Loans guarantees or investments made in earlier years under Section186 are furnished in ANNEXURE-D and are attached to this report.

12. Material Orders Passed by Regulatory/Court:

There were no significant and material orders passed by any regulators and/or courtsand tribunals which may have the impact on the going concern status and company'soperations in future.

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's websitehttp://www.dacl.co.in/investors/RPT_Policy.pdf.

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 ordisclaimers 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-E and forms part of this report.

17. Number of Board Meetings conducted during the year under review:

The Company had 4 (Four) Board meetings during the financial year. During the yearunder review Board Meetings were held respectively on 4th May 2018 6thAugust 2018 26th October 2018 and 12th February 2019. YourDirectors confirm that to the best of their knowledge and belief applicable provisionsrelated to Secretarial Standards on the Meetings of the Board of Directors issued by theInstitute of Company Secretaries of India and approved by the Central Government havebeen complied with. The details of attendance at the Board Meetings is stated herein belowfor each Director and the details of attendance at Annual General Meeting for eachDirector along with their other Directorships is stated in the Corporate Governance Reportwhich forms part of this Report. :

Sr. No. Name of the Director No. of Board Meetings attended out of 6 held
1. Mr. Yogesh M. Kothari 4
2. Mr. Amit M. Mehta 4
3. Mr. Kirat Patel 4
4. Mr. Dhruv Kaji (Upto 11.02.2019) 2
5. 4
6. 4
7. Dr. Ambrish Dalal 4
8. Mr. Shreyas Mehta 1
9. Mrs. Kejal Pandya (w.e.f. 27.04.2018) 4

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 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 had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

19. Subsidiary Company its Performance & Financial Position:

During the year under review company did not have any subsidiary or associate or jointventure 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. Amit Mehta (DIN:00073907) and Mr. G. S. Venkatachalam (DIN:02205898) Directors of the company retire at this Annual General Meeting and beingeligible offer themselve for re-appointment. Your Directors recommend theirre-appointment.

During the year under Mrs. Kejal Pandya Independent women director appointed witheffect from 27th April 2018. Also Mr. Dhruv Kaji Independent non-executiveDirector of the Company resigned from the Directorship of the Company with effect from 12thFebruary 2019 before the expiry of his tenure. The reason for his resignation isthat he has been appointed as a Director on Boards of number of Companies and he wasfacing problems of clashing meeting dates as well as lack of time to do justice to hisrole in the Company. The Board confirmed that there is no other material reason other thanprovided by him. None of the Directors is disqualified for appointment/re-appointmentunder Section 164 of the Companies Act 2013. The Certificate issued by the practicingCompany Secretary is also attached herewith as "ANNEXURE H". As requiredby law this position is also reflected in the Auditors' Report. The composition of theBoard meetings of the Board held during the year and the attendance of the Directorsthere at have been mentioned in the Report on Corporate 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 websitewww.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 framework adopted by the Board. The Board approved theevaluation results

25. Particulars regarding Employees Remuneration:

Disclosure pertaining to the remuneration and details as required under Section 197(12)of the Act and the Rules framed thereunder is enclosed as "ANNEXURE –F" to the Director's Report. The information in respect of employees of thecompany required pursuant to rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136 ofthe Companies Act 2013 the Report and Accounts are being sent to the Members and otherentitled thereto excluding the aforesaid Annexure which is available for inspection bythe Members at the Registered Office of the Company during business hours on working daysof the Company up to the date of the ensuing Annual General Meeting. In any member isinterested in obtaining a copy thereof such Member may write to the Company Secretary inthis regard.

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. Dipen Ruparelia ChiefFinancial Officer and Ms. Hemaxi Pawar Company Secretary are the Key Managerial Personnelof the Company.

Mr. Sudip Ray Chief Financial Officer resigned from the Company with effect from 14thOctober 2018. The Board has accepted his resignation and relieved him from duties. TheBoard Members appointed Mr. Dipen Ruparelia holding ICAI membership number as 141542 asthe Chief Financial Officer of the Company with effect from 12th February2019.

Ms. Scany Parmar Company Secretary has also resigned from the Company with effect from24th November 2018. During the period under review Ms. Hemaxi Pawar anassociate member of the Institute of Company Secretaries of India has been appointed asCompany Secretary of the Company with effect from 12th February 2019.

27. Auditors:

a. Statutory Auditors

In accordance with the provisions of Companies Act 2013 at the 42nd AnnualGeneral Meeting held on 6th August 2018 the shareholders had appointed M/sK.C Mehta & Co. Chartered Accountants (ICAI Firm Registration No. 106237W) asStatutory Auditors of the Company for a period of 5 years i.e. up to the conclusion of 47thAnnual General Meeting to be held for the adoption of accounts for the financial yearending 31st March 2023. As Companies (Amendment) Act 2017 has done away withthe requirement of ratification at every Annual General Meeting no ratification for theappointment is required. There is no qualification or adverse remark in Auditors' report.As regards the comments made in the Auditors' Report the Board is of the opinion that thesame are self-explanatory and does not require further clarification.

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 secretarial auditorsof the Company to undertake the Secretarial Audit of the Company. The Report of theSecretarial Audit Report is annexed herewith as "ANNEXURE-G".

c. Internal Auditors

Pursuant to provisions of section 138(1) of the Companies Act 2013 the Company hasappointed M/s. Anirudh Sonpal & Associates Chartered Accountants as Internalauditors of the Company to undertake the Internal Audit of the Company.

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 SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The details of the compositionof the Audit Committee terms of reference and meetings held are provided in the CorporateGovernance Report 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 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 र 175500000/-(Rupees Seventeen Crore Fifty-Five Lakhs Only) and paid-up issued and subscribed sharecapital of the company is र 97832400/- (Rupees Nine Crore Seventy-Eight LakhsThirty-Two Thousand Four Hundred Only).

b. BUY BACK OF SECURITIES

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

b. SWEAT EQUITY

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

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. 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 Insider Trading Policy Regulations of SEBI and amendmentsthereto your Directors have framed Insider Trading Regulations and Code of InternalProcedures and Conducts for Regulating Monitoring and Reporting of Trading by Insider aswell as Code of Practices and Procedures for Fair Disclosure of Unpublished PriceSensitive Information. The same is also posted on the website of the Company.

35. Nomination And Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committeeframed and adopted a policy for selection and appointment 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 website of the Company at link http://www.dacl.co.in/investors/Remuneration%20policy%20DACL.pdf

36. Compliance with Secretarial Standards:

The Board of Directors of the Company has complied with the all the applicablesecretarial standards as issued by the Institute of Company Secretaries of India andapproved by the Central Government from time to time.

37. Corporate governance:

Pursuant to the Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and amendments thereunder a separate section forming partof this report and titled as "Corporate Governance" is attached herewith as "ANNEXURE-I".

38. 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 2018-19. Allemployees (permanent contractual temporary trainees) are covered under this policy.

39. 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
Place : Mumbai Chairman
Date : May 17 2019 DIN : 00010015