Dai-ichi Karkaria Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the Sixtieth Annual Report together with the audited accounts for the year ended March 31, 2020.


(Rs. in Lakhs)

Particulars As on

31st March, 2020

As on

31st March, 2019

Revenue from operations 10717 9235
Other Income 384 324
Total Income 11101 9559
Loss before Depreciation/Amortization, Interest and Tax (124) (757)
Loss after exceptional item before tax (2494) (2436)
Earnings per equity share:
Basic and Diluted ( 10/- each) (33.47) (16.95)
Book Value of shares () 132.37 166.00


Considering the challenges faced by the Company during the financial year 2019-20, the Board of Directors have not recommended any dividend on equity shares for the financial year 2019-20.


There were several positive milestones the Company was able to achieve this year.

The Company had successfully executed and implemented Consent Terms dtd. November 1, 2019 with Hind Kamgar Sanghtana (HKS), an unrecognized union and certain retired / retrenched workers, to resolve the long pending labour matter. The settlement involved an amount of 3.65 crores (Rupees Three Crores Sixty Five Lakhs Only).

Pursuant to the settlement, all the litigations filed against the Company by HKS, were withdrawn in December, 2019 and the free movement of equipment & material to its newly established Dahej Plant became possible.

The Company executed a Memorandum of Understanding on December 24, 2019 with Pune based developer, for sale of its Kasarwadi Land Parcel. The Parties will be moving forward with Agreement for Sale on fulfillment of certain conditions precedent which are basically requisite permissions from the concerned authorities.

At the end of the year, the Company was granted a Labour NOC from Mantralaya, Government of Maharashtra for dealing in the Kasarwadi Land Parcel. Also, challan under the Urban Land Ceiling Act by Office of the Collector and Competent Authority, Urban Agglomeration, Pune is issued and the order under it is expected very soon


The pandemic of COVID - 19 is changing the dynamics of global trade and exports. One outcome could be that the economy which is already under recession would receive an irreversible blow due to the pandemic. And the other view is that the pandemic will just shift the axis of trade and India may significantly benefit from new opportunities. In any case it would probably take some months to recover.

Locally the COVID - 19 outbreak has had a significant impact on supply chains and emphasizes the key role that logistics play in supporting the business model.

We are therefore faced with a unique scenario of challenges which have opportunities and threats. There will be a change in markets and consumer behaviour depending on the verticals, whilst essential commodities and verticals like Agro, Cleaning and Home & Personal care may witness some growth opportunities.

The COVID pandemic has affected the fourth quarter results since most of our export consignments and local shipments could not be dispatched at the end of March due to the lockdown. In fact, in the month of February the highest sales for the year was achieved.

We are very hopeful that the new year will see some growth in some of our key verticals specifically the Oilfield business with our partners.

The Company has shown reasonable growth over the previous year despite losing substantial business at the end of the year due to COVID - 19 pandemic. However, in terms of meeting its budgeted targets there has been a shortfall amongst the following verticals - Construction Industry, Paints & Coatings Segment and the Textile Processing Industries.

The main hurdle in ramping up production at Dahej has been our inability to move certain key balancing equipment from Kasarwadi for the whole year. It is only after agreeing to settle an unreasonable demand made by an unrecognized union that we were able to settle the issue.

Equipment started getting dismantled by January and several key reactors moved out by February. Unfortunately, by mid-March the entire operation was halted as the Pimpri area went under lockdown. Though some equipment that reached Dahej were installed, many others remained uninstalled at Dahej due to lockdown and lack of contractors team.

In addition, there has been a general slowdown in the Indian Economy and though our exports picked up in February and March, we were unable to complete dispatches once the lockdown commenced.

Vertical wise Performance:

In the Agro vertical we mainly supply emulsifiers for bio pesticides and synthetic insecticides. Here we have seen a growth of 23% in terms of volume and 43% for the bio pesticide emulsifiers used for export formulations. Pesticides being a seasonal commodity, our agro business depends on the monsoon. Despite these uncertainties, the agro segment is likely to remain steady in the next two quarters and we are reasonably confident that in the following quarters this will remain an area of focus and growth.

In the area of Construction Chemicals our focus has been to develop additives that improve the quality of cement and our new formulations in this field are being evaluated and approved by several customers. However, the Q1 and Q2 business will be impacted due to the lockdown and the issues of migrant workforce keeping our Customers from evaluating our newly developed products.

In the Home & Personal Care vertical, we have been able to achieve certain milestones after having received the Kosher, Halal and FSSAI certificates for some of our products. This has resulted in our expanding the customer base and ensuring that we get orders from customers for spice oil and food grade emulsifiers.

In the Oilfield segment which is a vital segment for our company, the growth has been good and we have achieved considerable sales over the previous year. Our products have been approved in various regions from the Gulf, Middle East and Asia Pacific regions and sales through our partner company are robust. We believe in the coming year this will be our area of focus and growth despite the current slowdown in the oil field industry.

In the Paints & Coatings segment, our performance has been affected mainly due to the sales of our pigment dispersants, which have witnessed a slow down due to the slowing down of pigment manufacturing business based around Ahmedabad region. The uncertainty in this Industry remains as of now and this will not be our area of focus for the next two quarters.

In the area of Rayon, we are supplying our products to all the major Rayon producing units in the country and our customer base has grown in the past year. We have successfully developed not only new customers but also some new products which have been well accepted. However, due to the lockdown there will be a slowdown in the first quarter of the current year.

In the Sizing chemicals vertical, we have achieved a major breakthrough as one of our large customers requires our specialized product for their fabrics to be made into haz-mat suits for PPE. This has resulted in bagging a contract order for the first quarter and may continue as we progress through the year. However, a majority of small and medium Polyester units in Surat region remained closed and will be affected due to the uncertainty of the Pandemic. We do not expect these units to start immediately since the buyers of the fabric produced are also not operational.

The textile processing vertical continues to suffer from issues of pollution and delayed payments. Stricter norms by the Pollution Control Boards at key markets of Rajasthan and Ahmedabad are forcing units to operate at lower capacities to meet the limits on quantity of water that can be discharged into common effluent treatment plants. The Company has not put in much efforts in going after this vertical due to the very large number of players including small scale units and the problem of payment risk.

Our Company was fortunate that we were able to start production by April 6 because we are manufacturing specialty chemicals that goes into haz - mat suits for PPE. As a result, we have been able to meet some of our export demand and were able to retain some labour who were around our Plant at that time. We had made arrangements for them to stay at our site in a clean safe way and are therefore not facing too many difficulties on the labour front. Of course, we are operating at only 40% level presently. With regard to our Chemists we had made arrangements for them to stay in hotels nearby and therefore our production continues as far as possible.


As per the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the significant changes (i.e. changes exceeding 25%) in the key financial ratios along with explanations are given below:

Particulars As at


As at


Variance Explanation for variance
Interest Coverage Ratio -1.04 -2.36 56% The Ratio improved in FY 2019-20, due to increase in EBIT on account of decrease in losses as compared to last year.
Debt Equity Ratio 1.10 0.84 31% During FY 2019-20, the debt equity ratio increased due to net increase in borrowings to the tune of 5 crores and decrease in reserves on account of losses.
Operating Profit/ Loss Margin (%) -16% -20% 20% Improvement in Operating Margin due to higher sales in FY 2019-20 lead to improvement in the ratio
Return on Net Worth


-25% -10% -150% Due to loss in the year 2019-20, return on net worth is negative.


The Company has a Joint venture with CTI Chemicals Asia Pacific Pte. Ltd., an Ecolab Company in Champion X Dai-ichi India Private Limited (formerly known as Nalco Champion Dai-ichi India Private Limited) in the ratio of 50:50.

Ecolab Inc. has spun off its Upstream energy businesses as a stand-alone publicly-traded company. The new Upstream energy business named as ChampionX - will be singularly focused on the upstream oil and gas markets. The JV partner CTI Chemicals Asia Pacific Pte. Ltd. will continue to hold the 50% stake in the Joint Venture Company (JVC) and will be transferred to ChampionX. The name of the JVC was thus changed to ChampionX Dai-ichi India Private Limited w.e.f. January 2, 2020.

The Company has a Subsidiary, Dai-ichi Gosei Chemicals (India) Limited.

The Annual accounts of the Subsidiary Company are placed on the website of the Company and will be provided to the members on request.

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies Act, 2013 and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its Joint Venture Company, ChampionX Dai- ichi India Private Limited (formerly known as Nalco Champion Dai-ichi India Private Limited) and Subsidiary Company, Dai-ichi Gosei Chemicals (India) Limited., duly audited by the Statutory Auditors are attached to the financials.

Statement containing salient features of the financial statement of subsidiary/ associate company/ joint venture are attached to the financials.


Mrs. Shernaz Vakil retires from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 2013 and Articles of Association of the Company. Being eligible for reappointment, she has offered herself for re-appointment. The Board of Directors recommends her re-appointment. The information required to be furnished under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 & Secretarial Standards is given in the Notice of the 60th Annual General Meeting.

Mr. Behram Sorabji, Independent Director of the Company resigned from Directorship of the Company w.e.f. closing of business hours of June 8, 2020 on account of his pre - occupation and ongoing health issues. He has confirmed that there are no other material reasons for his resignation. The Board acknowledges his significant contribution as a Board & Committee Member of the Company during his tenure.

The Members of the Company had appointed Dr. Anil Naik, Mr. Kavas Patel and Mr. Keki Elavia as Independent Directors under the Companies Act, 2013, not liable to retire by rotation and to hold office upto the conclusion of 63rd Annual General Meeting. All Independent Directors have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

During the financial 2019-20, Mr. Nitin Nimkar on reaching the retirement age as per the Companys policy, ceased to be the Chief Financial Officer (CFO) of the Company w.e.f. June 30, 2019. Pursuant to the recommendations of the Nomination and Remuneration Committee (‘NRC), the Board of Directors, at its meeting held on November 13, 2019, appointed Mr. Shailesh Chauhan as Chief Financial Officer (CFO) of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2020 are Mrs. Shernaz Vakil, Chairperson & Managing Director, Ms. Meher Vakil, Wholetime Director, Mr. Shailesh Chauhan, Chief Financial Officer and Mrs. Kavita Thadeshwar, Company Secretary.


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:

a) In the preparation of the annual accounts, for the financial year ended March 31, 2020, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) 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 March 31, 2020 and of the profit and loss of the company for that period;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The annual accounts have been prepared on a ‘going concern basis;

e) Proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively;

f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.


The Board of Directors have laid down Internal Financial Controls within the meaning of the explanation to Section 134(5)(e) (“IFC”) of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Companys operations.


Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, individual directors and its committees. In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairperson of the Company was evaluated, taking into account the views of executive directors and non-executive directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.


Details regarding Board / Committees, its composition, number of meetings held, terms of reference, policies adopted are provided under the Corporate Governance Report forming part of the Annual Report.

corporate social responsibility (csr) initiatives:

Due to extreme cashflow issues, the Company was not able to undertake CSR activities during the FY 2019-20. Detailed report on CSR is annexed to the report as ‘Annexure A.


All manpower requirements are assessed and filled in a timely manner. The Company has a sound knowledge pool of experienced employees, which helps it to maintain consistency in performance across all disciplines. It has built a team of dedicated employees, who work with commitment and a sense of belonging towards the growth of the Company.

Following areas are given special attention to enhance performance of the employees.

• Identification of training & development needs and upgrade job specific skills
• Compensation, recognition & rewards
• Career growth plan through annual assessment.
• Supporting employment related legislative compliance.
• Promoting excellence in human resource management
• The promotion of an atmosphere of mutual respect, fairness and concern.
• Company has extended its facility for Apprentice Scheme, to needy and economical weak youths for pursuing special industrial training.

As on March 31, 2020, the total numbers of employees on the payrolls of the company are 174.


The information required pursuant to Section 197(12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may email to the Company in this regard.



BSR & Co. LLP were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 57th Annual General Meeting upto the conclusion of 62nd Annual General Meeting of the Company. The Auditors Report for the year under review does not contain any qualifications, reservations or adverse remarks.


B.K. Khare & Co., Chartered Accountants, are the Internal Auditors of the Company. The Management regularly reviews the findings of the Internal Auditors and effective steps to implement any suggestions/observations of the Internal Auditors are taken and monitored regularly. In addition, the Audit Committee of the Board regularly addresses significant issues raised by the Internal Auditors.

B. K. Khare & Co. were the Internal Auditors of the Company since financial year 2008 - 09. Though rotation of Internal Auditor is not mandatory, as a good corporate governance practice, the Audit Committee and Board of Directors have decided to rotate the Internal Auditors. Mazars Business Advisors Private Limited are appointed as the Internal Auditors of the Company w.e.f. financial year 2020 - 21.


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 has appointed M/s. Kaushik M. Jhaveri & Co., a firm of Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the F.Y 2019-20 is annexed herewith as ‘Annexure B.


As per Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audits) Rules, 2014, the Board of Directors on recommendation of the Audit Committee, approved the appointment of Mr. Sudhir Govind Jog, Cost Accountant, (Membership no. 5599), Pune as the Cost Auditor to conduct audit of the cost records of the Company for the financial year ending March 31, 2021. The Company has received written consent and certificate of eligibility in accordance with Section 148 read with Section 141 and other applicable provisions of the Act and Rules made thereunder.

In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to the Cost Auditor has to be ratified by the Members of the Company. Accordingly, the matter relating to ratification of the remuneration payable to the Cost Auditor for the financial year ending March 31, 2021 is being placed at the 60th AGM.


The Company has not provided any loan or given any guarantee / security to any person.

Details of investment made by the Company are provided in the financial statements, under Investment Schedule. PARTICULARS OF CONTRACTS AND ARRANGEMENT COVERED UNDER SECTION 188 OF THE COMPANIES ACT, 2013:

All Related Party Transactions that were entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that would require Shareholder approval under the Listing Regulations.

The Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. Details of Related Party Transaction Policy are provided in Corporate Governance Report.


Pursuant to Sections 92 and 134(3) of the Act and Rule 12 ofthe Companies (Management and Administration) Rules,2014, the extract of Annual Return in Form MGT-9 is attached as Annexure C. The extract of the Annual Return of the Company can also be accessed on the website of the Company at http://www.dai-ichiindia.com/wp-content/uploads/2014/08/Extract-of-Annual- Return_31.3.2020.pdf.


A separate report on Corporate Governance is attached as a part of the Annual Report along with the certificate from Vinod Kothari & Company, Practicing Company Secretaries on its compliance.


The Equity Shares of your company are presently listed on BSE Ltd. and the Company has paid the annual listing fees for the financial year 2020-2021.


Health, Safety & Protection of the Environment are the priority areas for the Company. The Company continues to put special emphasis in this area at every stage, from conception and design of new products, optimization of process, to commercial manufacturing and delivery of goods to the customers. Recently company has successfully completed DNV-GL Periodic Audit of ISO 14001:2015 & OHSAS 18001:2007 and Certification Audit of ISO 9001:2015. We are going for the transition of OHSAS 18001:2007 to ISO 45001:2018 in FY 2020-21

(a) Health:

A special committee ensures good sanitation and hygienic condition in the plant and canteen. Medical examination of all the employees is carried out annually. Six monthly medical examinations are conducted for the employees who are working in Hazardous Areas. Health awareness trainings and programs are being conducted regularly.

(b) Safety:

Internal and External Safety Audit, regular inspections pertaining to risks and hazards for Ethoxylation/ Propoxylation process are carried out as per the provisions of Factories Act. New PLC system has been installed for Ethoxylation/ Propoxylation process to ensure enhanced safety features and automation to nullify human errors. HAZOP Study and Risk Assessment are carried out to identify the potential hazards as proactive measures to enhance safety. Appropriate corrective actions are implemented.

Un-planned Mock drills are conducted to ensure the Emergency Preparedness as per the requirement of The Factories Act, 1948 & planned Mock drills are conducted to train the employees.

Every year Safety week is celebrated from 4th March to 11th March during which competitions, lectures and training sessions are organized to inculcate and enforce the need for a safe working environment and Emergency Planning.

“Goal Zero” campaign is started to achieve Zero accident, Zero incident & Zero pollution.

(c) Environment:

Regular environment monitoring is carried out to ensure pollution levels for air and water are below the specified limits by the State Pollution Control Board. Strict adherence to environment rules is ensured by conducting inspections and environment audit.

Environment programs and trainings conducted to inculcate a sense of conservation of environment.

Effluent Treatment Plant is upgraded with SUF (submersible ultra-filtration) technology and treated effluent is used in various processes, thus, increasing water conservation.


As mentioned in the Management and Discussion Analysis Report, all the pending litigations against the Company related to Labour matters are withdrawn.

Industrial relations at Dahej and Kurkumbh Plants remained cordial during the year.


The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 are annexed to this report as ‘Annexure D.


As per the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2019-20;

- No of complaints received: Nil

- No of complaints disposed off: Nil


Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.


Certain statements in the Directors Report and Management & Discussion Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

For and on behalf of the Board
Place: Mumbai Mrs. Shernaz Vakil
Date: June 8, 2020 Chairperson & Managing Director