Your Directors have pleasure in presenting the Annual Report for the year endedDecember 31 2019.
The highlights of your Company's financial results for the financial year endedDecember 31 2019 ("FY 2019") are as follows:
| || ||Rs. in Lakhs |
|Particulars ||FY 2019 ||FY 2018 |
|Sales/ Operating Revenue ||79113.28 ||83795.97 |
|Other Income ||1298.75 ||1455.15 |
|Total Income ||80412.03 ||85251.12 |
|Profit/ (Loss) before Taxation and Exceptional Item ||1746.57 ||(588.97) |
|Tax Expenses ||(98.10) ||343.38 |
|Net Profit / (loss) ||1844.67 ||(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.79113.28 Lakhs as against Rs. 83795.97 Lakhs.The Company operates in two segments printing Inks and Lamination Adhesives. On an overallbasis the Company registered profit before tax of Rs. 1746.57 Lakhs for the year ended31st December 2019 against a Loss before tax (before exceptional item) of Rs. 588.97Lakhs in the previous year.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments have occurred after the closure of the year tillthe 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 duringthe financial year ended December 31 2019.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve for the financialyear ended December 31 2019.
The Board of Directors have recommended a final dividend of Rs. 4.50 (Four rupees andfifty paise) per equity share for FY 2019 for the approval of the Members at the ensuingAnnual General Meeting (AGM). The dividend if approved will be paid to the Shareholderswithin 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 millionand there has been no change in the capital structure of the Company.
The Company has not accepted any deposits during the year under review.
The Board evaluates all the decisions on a collective consensus. 6 Board Meetings wereheld during the year ended December 31 2019 on January 30 2019 April 26 2019 July 262019 October 9 2019 October 22 2019 and December 9 2019. The gap between any twoBoard 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 underClause 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 theirindependence pursuant to Section 149(6) of the Companies Act 2013 and the same have beenplaced and noted by the Board in its meeting held on February 1 2020.
A Nomination and Remuneration Policy formulated and adopted on December 5 2014pursuant to the provisions of Section 178 and other applicable provisions of the CompaniesAct 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 underSection 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 onDecember 5 2014 for determining the materiality of transactions with related parties anddealings with them. The said policy may be referred to at the Company's websitewww.dicindialtd.co. The Audit Committee reviews all related party transactions quarterly.
Further during the year there were no material related party contracts entered into bythe 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 andis annexed as Annexure A'.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
In terms of Regulation 25(3) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 a meeting of the IndependentDirectors was held on April 10 2019 to inter alia evaluate the performance of theNon-Independent Directors including the Chairman. The Board thereafter in its meetingheld on April 26 2019 evaluated the performance of the Independent Directors in terms ofSchedule IV of the Companies Act 2013.
As a familiarization programme to enable the Board members to take informed decisionsthe Management presents a quarterly review of the Industry outlook company performanceoperations 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 TechnologyAbsorption and Foreign Exchange earnings & outgo is annexed and forms a part of thisReport marked as Annexure B'.
SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES
The Company does not have any subsidiary/associate/joint venture company for the yearended December 31 2019.
In terms of the provisions of Section 73 to 76 of the Act read with the relevant rulesmade thereunder your Company has not accepted any deposit from the public.
DIC India believes that the Competence and Commitment of the employees are keydifferentiating factors which enable our organization to create value by offering qualityproducts & services to our customers. We strive to create a harmonious workenvironment & strengthen our work culture to drive high level of performance. As apart 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 312019 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 Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended forms part of this Report marked as AnnexureC'. As per the provisions of Section 197(12) of the Companies Act 2013 readwith rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Annual Report excluding the information on employee's particulars isbeing sent to the members which is however available for inspection at the RegisteredOffice of the Company during working hours. Any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished without anyfee.
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 (PreventionProhibition & Redressal) Act 2013 and Rules made thereunder your Company has inplace a Policy for Prevention of Sexual Harassment of Women at Work Place and constitutedan Internal Complaints Committees (ICC). No complaint has been raised during the yearended December 31 2019.
WHISTLE BLOWER MECHANISM
The Company has an updated Whistle Blower Policy in place. The said policy may bereferred to at the Company's website www.dicindialtd.co.
INTERNAL CONTROL SYSTEMS
The Company has an adequate system of internal control procedures which is commensuratewith the size and nature of its business. Detailed procedural manuals are in place toensure that all the assets are protected against loss and all transactions are authorizedrecorded and reported correctly. The internal control systems of the Company are monitoredand evaluated by internal auditors and their audit reports are reviewed by the AuditCommittee of the Board of Directors. The observations and comments of the Audit Committeeare 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 / Tribunalswhich would impact the going concern status of the Company and its future operations.
The composition and terms of reference of the Audit Committee has been furnished underClause 6 in the Corporate Governance Report forming a part of this Annual Report. Therehad been no instances where the Board has not accepted the recommendations of the AuditCommittee.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of Sec 135 of the Companies Act 2013 and applicable Rulesand recent amendment for the year ended December 31 2019 the Company was not requiredto make any expenditure towards CSR.
Acknowledging its responsibility towards the society your Company has put in place aCSR Policy which may be referred to at the Company's website www.dicindialtd.co. The CSRCommittee guides and monitors the activity undertaken by the Company in this sphere.
Your Company attaches considerable significance to good Corporate Governance as animportant step towards building investor confidence improving investors' protection andmaximizing long-term shareholders' value. The certificate of the Statutory Auditors M/sDeloitte Haskins & Sells LLPs confirming compliance of conditions of CorporateGovernance as stipulated under Schedule V(E) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed.
During the year under review Mr. Manish Bhatia was appointed as Managing Director andChief Executive Officer effective January 30 2019. Further Mr. Taishi Nojima wasappointed 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 theSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulations 2015 they have submitted the confirmation that there is no material reasonother than stated above for their resignation. The Confirmation so received have been dulyintimated 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 fromthe Board by rotation and being eligible offer himself for re-appointment.
The Board recommends re-appointment of Mr. Partha Mitra (DIN: 00335205) to theshareholders.
The detailed agenda forms part of Notice of Annual General Meeting.
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2 (51) and Section 203 of the Companies Act 2013 read with the Rulesframed 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
In accordance with the provisions of Section 148 of the Companies Act 2013 and theCompanies (Audit & Auditors) Rules 2014 the Company is required to appoint a costauditor to audit the cost records of the applicable products of the Company relating tothe business of manufacturing printing inks. Accordingly M/s. Sinha Chaudhuri &Associates Cost Accountants (Firm regn. No. 000057) were appointed as the Cost Auditorsfor auditing the Company's cost accounts for the year ended December 31 2019.
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 offive years commencing from the conclusion of the ensuing 70th Annual General Meeting heldon March 22 2018.
STATUTORY AUDITORS' OBSERVATIONS
The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report is anUn-modified report and does not contain any qualification report of fraud reservationadverse remark or disclaimer and do not call for any further comments.
The provisions of Section 204 of the Companies Act 2013 mandates Secretarial Audit ofthe Company by a Company Secretary in Practice. The Board in its meeting held on February12 2020 appointed M/s. T. Chatterjee & Associates Practicing Company Secretary (FirmRegistration No. S2007WB097600) as the Secretarial Auditor for the financial year endingDecember 31 2019. The Secretarial Auditors' Report for the financial year ending December31 2019 is annexed to the Boards' Report as Annexure D'. There are noqualification reservation adverse remark or disclaimer in the said report and do notcall for any further comments.
TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
During the financial year ended December 31 2019 unpaid or unclaimed dividend for thefinancial year ended December 31 2011 amounting to Rs. 0.23 million along with 5149equity shares to which it relates were transferred to the Investor Education andProtection Fund established by the Central Government in compliance with section 125 ofthe Companies Act 2013.
RISKS & MITIGATING STEPS
The Board has adopted a risk management policy where various risks faced by the Companyhave been identified and aframework for risk mitigation has been laid down. Even thoughnot mandated the Company has constituted a Risk Management Committee to monitor reviewand 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 ortribunals 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 hadbeen followed along with proper explanation relating to material departures if any;
ii. 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;
iii. 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;
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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors take this opportunity to thank the employees customers shareholderssuppliers bankers business partners/associates financial institutions Securities andExchange Board of India and Central and State Governments for their consistent support andencouragement 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 || || |