DIC India Director Discussions


Dear Shareholders,

Your Directors take pleasure in presenting the 75th Annual Report on the business and operations of DIC India Limited (Company), along with the summary of financial statements for the year ended December 31, 2022.

Financial Highlights (Rs.in Lakhs except EPS gure)

Year ended
Particulars December 31, 2022 December 31, 2021
(Audited) (Audited)
Revenue from Operations (Including other Operating Income) 87,199.01 74,482.95
Other Income 796.36 952.59
Total Income 87,995.37 75,435.54
Total Expenses 86,864.07 73,759.41
Pro t before Exceptional Item and Tax 1,131.30 1,676.13
Exceptional Item: 3,300.00 - -
Pro t Before Tax 4,431.30 1,676.13
Tax Expense - Current tax 375.34 407.51
- Deferred Tax Charge/ (Credit) (42.45) 29.77
Total Tax Expenses 332.89 437.28
Pro t for the Period/ Year 4,098.41 1,238.85
Other Comprehensive Income/ (Loss) (8.19) (34.68)
Total Comprehensive Income for the Period/ Year 4,090.22 1,204.17
Paid-up Equity Share Capital 917.90 917.90
Earnings per equity share (of Rs.10 each) (not annualised)
(a) Basic 44.65 13.50
(b) Diluted 44.65 13.50

State of Companys Affairs

Your Company recorded a turnover of Rs. 86,802.30 lakh in the current year against Rs. 74,214.90 lakh in the previous year. The sales volume was higher by 2% against 2021 with a value growth of 17%. The economic volatility witnessed in 2021 eased in 2022 but still faced several headwinds with global economic slowdown, impact of Covid-19 in some countries and the ongoing geo political con ict, leading to elevated input prices, tightening monetary policy, moderation of domestic consumption due to high in ation affecting the Packaging segment and volatility in exchange rates, affecting the overall business during the year.

The Company received during the year an additional consideration amounting to Rs. 3,300 lakhs as per the conveyance deed executed on June 18, 2020 towards sale of Land of the Company located at Chandivali, Mumbai to Godrej Properties Ltd. and has disclosed the same as an exceptional item in the current year.

The Company has decided to aggregate its two operating segments i.e. Inks and Lamination Adhesive as the management is of the view that Lamination Adhesive segment will not be of continuing significance to the Companys business and is expected to remain below the quantitative thresholds as stated in IND AS 108.

The Company registered a Pro t before tax and exceptional income (including Other Comprehensive Income) of Rs. 1,120.36 lakh for the year ended December 31, 2022 against a Pro t before tax (including the Comprehensive

Income) of Rs. 1629.78 lakh in the previous year. On an overall basis including the exceptional Income and Comprehensive Income, the Pro t before tax was Rs. 4431.30 lakh for the year ended December 31, 2022

ments for their consistent support and encouragement to the Company.

Management Discussion and Analysis

The Management Discussion and Analysis as required in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) is annexed to the report as Annexure A.

Dividend

The Board of Directors have recommended a nal dividend of Rs. 2.00 (Rupees Two only) per equity share for FY 2022 for the approval of the Members at the ensuing Annual General Meeting (AGM).

The dividend will be paid out of profits for the year. The dividend is subject to the approval of the Shareholders at the Annual General Meeting (AGM) scheduled to be held on Wednesday, March 22, 2023. The dividend once approved by Shareholders will be paid on and from April 5, 2023.

Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the shareholders effective April 1, 2020 and the Company is required to deduct tax at source from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

The Register of Members and Share Transfer Books of the Company will remain closed from March 16, 2023 to March 22, 2023 (both days inclusive).

Transfer to Reserves

The Company has not transferred any amount to the General Reserve for the financial year ended December 31, 2022.

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

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

Changes in the Nature of Business

There has been no fundamental change in the nature of business of the Company during the financial year ended December 31, 2022.

Change in Share Capital

The paid-up share capital of the Company as on December 31, 2022 was Rs. 917.89 Lakh and there has been no change in the capital structure of the Company.

Meetings of the Board and Committees of the Board

The Board met ve times during the year under review. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 (the Act) and the SEBI Listing Regulations. The Committees of the Board usually meet the day before or on the day of the Board meeting, or whenever the need arises for transacting business. Details of composition of the Board and its Committees as well as details of Board and Committee meetings held during the year under review are given in the Corporate Governance Report.

Declaration By Independent Directors

The Company has received the necessary declaration from each Independent Director in accordance with Section

149(7) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations, that he/she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulation16(1)(b) of the SEBI Listing Regulations.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including pro ciency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.

Evaluation of Boards Performance

The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors, pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The Board sought the feedback of Directors on various parameters including:

Degree of ful llment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.);

Structure, composition, and role clarity of the Board and Committees;

Extent of co-ordination and cohesiveness between the Board and its Committees;

Effectiveness of the deliberations and process management;

Board/Committee culture and dynamics; and

Quality of relationship between Board Members and the Management.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole, and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.

In the Board meeting that followed the meeting of the independent directors and the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was discussed.

The evaluation process endorsed the Board Members con dence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management, and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties.

Familiarisation Programme for Directors

As a practice, all new Directors (including Independent Directors) inducted to the Board are given a formal orientation. The familiarisation programme for our Directors is customised to suit their individual interests and area of expertise. The Directors are usually encouraged to interact with members of Senior Management as part of the induction programme. The Senior Management make presentations giving an overview of the Companys strategy, operations, products, markets and Group structure, Board constitution and guidelines, and the major risks and risk management strategy. This enables the Directors to get a deep understanding of the Company, its people, values and culture and facilitates their active participation in overseeing the performance of the Management.

Remuneration Policy

A Nomination and Remuneration Policy formulated and adopted pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto inter alia de ne the Companies policy on appointment and remuneration by the Nomination and Remuneration Committee.

The said policy may be referred to, at the Companys website https://www.dic.co.in/sites/default/ les/2021-01/remuneration-policy.pdf.

Particulars of Loans, Guarantees or Investments

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

During the year under review, the Company has acquired 5.1% of issued and paid-up Capital of Solarstream Renewable Services Pvt. consisting of 4,96,000 equity shares of Rs. 10/- each as captive consumer for solar power in terms of the (Indian) Electricity Act, 2013.

Subsidiary/Associates/Joint Venture Companies

The Company does not have any subsidiary/associate/joint venture company for the year ended December 31, 2022.

Deposits

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

Annual Return

The Annual Return for financial year 2022 as per provisions of the Act and Rules thereto, is available on the Companys website at https://www.dic.co.in/investors/corporate-news.

Energy, Technology & Foreign Exchange

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

Human Resources

DIC India believes that the Competence and Commitment of our employees are the key differentiating factors which enable our organization to create value by offering quality products & services to our customers. We strive to create a harmonious work environment & strengthen our work culture to drive high level of performance orientation. As a part of the culture, we are committed towards scaling up competence level of employees & offering them a long term career to attract & retain talent. As on December 31, 2022, the Company had 474 employees (previous year 492) on its direct pay roll.

Information in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this Report as Annexure C. As per the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report excluding the information on employees particulars under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is being sent to the members which is, however, available for inspection in electronic mode. Members can inspect the same by writing to investors@dic.co.in. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

Disclosures Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has in place a Policy for Prevention of Sexual Harassment of Women at Work Place and constituted an Internal Complaints Committees (ICC). No complaint has been received during the year ended December 31, 2022.

Audit Committee

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

Particulars of Contracts or Arrangements with Related Parties

Related Party Policy has been adopted by the Board of Directors for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to, at the Companys website https://www.dic.co.in/sites/default/ les/2021-01/related-party-policy.pdf. The Audit Committee reviews all related party transactions quarterly.

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

Whistle Blower Mechanism

The Company has an updated Whistle Blower Policy in place. The said policy may be referred to, at the Companys website https://www.dic.co.in/sites/default/ les/2021-04/Whistle_Blower_Policy_0.pdf

Internal Control Systems

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

Risks & Mitigation Steps

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

Corporate Social Responsibility (CSR)

Acknowledging its responsibility towards the society, your Company has put in place a CSR Policy, which may be referred to at the Companys website https://www.dic.co.in/sites/default/ les/2022-02/CSR%20Policy.pdf. The CSR Committee guides and monitors the activity undertaken by the Company in this sphere.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and applicable Rules, for the year ended December 31, 2022, the Company had a corpus of Rs. 33.58 Lakh in its CSR funds to be spent towards CSR activity.

DIC India comes forward to help the community in line with the United Nations social development goals with “Deeksha” and “Saksham” programs.

As a part of DIC India Corporate Social Responsibility, the Company has identified Education and Health as the two (2) thematic areas for intervention. These are the areas identified as per the guidelines laid down in Section 135 of the Companies Act.

In year 2022, the Company actively worked on the following CSR initiatives under the thematic areas chosen:

The “Deeksha” program for Children education is being implemented to further the Sustainable Development Goals adopted by the United Nations focusing on Quality Education, Gender Equality, and Decent Work and Economic Growth. We at DIC India envisage to help in child education and nurture a better community around our upcoming mother plant in Bharuch. This shall not only improve the education level of children but also improve on quality employable manpower in the near future.

Under the “Deeksha” programs, children from underprivileged families have been brought under our wings to be guided and groomed for a successful future with quality education. Our program of Deeksha is executed by our experienced NGO partner Jeevan Tirth, who have expertise in execution of United Nations sustainable goals. "Saksham" program is with Taluka Health Of cer/ Centre, catering for local population in effective delivery of health services.

Through the “Deeksha” program DIC India has ensured that quality education to be imparted to the future stars with interactive learning modules. Children are being educated under the “Deeksha” program will be provided free books & course material for a quality sustainable education in line with New Education Policy 2020

As a part of “Saksham”, our commitment to help the local community around Saykha, Bharuch, DIC India provided Digital X- Ray Machine to enable effective medical facility to the needy people of the surrounding villages. In absence of the such facility, they were commuting to Bharuch. With availability of Digital X Ray Machine at Taluka Centre, diagnosis has become expeditious and response time has considerably reduced.

The Company, in the Financial Year 2022 could not utilize the full CSR Corpus, as Rs. 1.93 Lakh out of 33.58 Lakh. The Company had proposed to set-up a library at Saykha, Gujarat for children in Partnership with NGO Partner Jeevan Tirth with an estimated budget of Rs, 2 Lakh. However, due to lack of proper infrastructure the Project could not go through. Consequently, the Company has transferred the unspent CSR Fund of Rs. 2 Lakh to Prime Minister National Relief Fund. CSR Annual Report is annexed to this report as Annexure D.

Corporate Governance

Your Company attaches considerable significance to good Corporate Governance as an important step towards building investor con dence, improving investors protection and maximizing long-term shareholders value.

Pursuant to the SEBI Listing Regulations, the Corporate Governance Report is annexed to this report as Annexure E. Further, the certificate of the Statutory Auditors, M/s Deloitte Haskins & Sells LLPs, confirming compliance of conditions of Corporate Governance as stipulated under Schedule V(E) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this report as Annexure F.

Secretarial Standards

The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

Directors

During the year under review, there were no changes in the Directors of the Company.

Mr. Ho Yeu Guan (DIN: 08066136), Consequent to his superannuation from the Group, has resigned from the Board effective from February 08, 2023.

Mr. Adnan Wajhat Ahmad (DIN: 00046742), on February 8, 2023, was appointed as an Additional Director (Non-Executive Independent) on the Board of the Company to hold office till ensuing AGM. The Board recommends his appointment as Non-Executive Independent Directors w.e.f. February 8, 2023 till March 31, 2026.

Mr. Ryohei Kohashi (DIN: 10043620), on February 8, 2023, was appointed as an Additional Director (Non-Executive Non-Independent) on the Board of the Company to hold office till ensuing AGM. The Board recommends his appointment as Non-Executive Non-Independent Directors w.e.f. February 8, 2023.

Further, in terms of Applicable provisions of the Act and the Articles of Association of the Company, Mr. Masahiro Kikuchi (DIN: 08024525), Director of the Company retires at the ensuing AGM and being eligible, seeks reappointment.

The necessary resolutions for appointment of Mr. Adnan Wajhat Ahmad, Mr. Ryohei Kohashi and re-appointment of Mr. Masahiro Kikuchi forms part of the Notice convening the ensuing AGM scheduled to be held on Wednesday, March 22, 2023.

The pro le and particulars of experience, attributes, and skills that qualify Mr. Ahmad, Mr. Kohashi and Mr. Kikuchi, for Board membership, are disclosed in the said Notice.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel of the Company are:

1. Mr. Manish Bhatia Managing Director & Chief Executive Of cer

2. Mr. Taishi Nojima- Whole Time Director

3. Mr. Sandip Chatterjee - Chief Financial Of cer

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

During the year under review, there has been no change in the Key Managerial Personnel.

Directors Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors to the best of their knowledge and ability con rms that:

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

ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the Pro t and Loss of the company for that period;

iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

v. The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Statutory Auditors

As per the provisions of the Act, the Company appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of ve years commencing from the conclusion of the 70th Annual General Meeting held on March 22, 2018 till the conclusion of 75th Annual General Meeting.

The Company Proposes to appoint a new audit firm to audit its books of account for the financial year ending December 31, 2023 and onwards. The Audit Committee of the Board considered and recommended appointment of M/s Price Waterhouse Chartered Accountants LLP (FRN: 012754N/N500016) as the Statutory Auditors of the Company for a period of ve years commencing from the conclusion of the ensuing 75th Annual General Meeting scheduled to be held on March 22, 2023. The Board, at its meeting held on February 24, 2023 accepted the decision of the Audit Committee and recommends for your approval the appointment M/s Price Waterhouse Chartered Accountants LLP (FRN: 012754N/N500016) as the Statutory Auditor of the Company to hold office till the conclusion of Eightieth Annual General Meeting.

Statutory Auditors Observations

The Auditors Report on the Financial Statements for the Financial Year ended December 31, 2022 is an Un-modi ed report and does not contain any quali cation, report of fraud, reservation, adverse remark or disclaimer and do not call for any further comments. In respect of the comments by Auditors, in item No. 1(b) of Audit Report, please refer to note no. 47 of the notes to accounts forming part of financial statements.

Secretarial Auditor

The provisions of Section 204 of the Companies Act, 2013 mandates Secretarial Audit of the Company by a Company Secretary in Practice. The Board appointed M/s. T. Chatterjee & Associates, Practicing Company Secretary (Firm

Registration No. P2007WB067100) as the Secretarial Auditor for the financial year ending December 31, 2022. The Secretarial Auditors Report for the financial year ended December 31, 2022 is annexed to this Report as Annexure G. There are no quali cation, reservation, adverse remark or disclaimer in the said report and do not call for any further comments.

Cost Auditor

M/s. Sinha Chaudhuri & Associates, Cost Accountants (Firm regn. No. 000057) were appointed as the Cost Auditors for auditing the Companys cost accounts for the year ended December 31, 2022.

Transfer to Investor Education & Protection Fund

During the financial year ended December 31, 2022, No unpaid or unclaimed dividend or shares were liable to be transferred to Investor Education and Protection Fund.

Signi cant and Material Orders

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

Acknowledgement

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

For and on behalf of the Board
February 24, 2023 Sd/- Partha Mitra Sd/- Manish Bhatia
Noida Director Managing Director &
DIN: 00335205 Chief Executive Of cer
DIN: 08310936