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DCW Ltd (INDUSTRY : Petrochemicals)

  • BSE Code: 500117
  • NSE Symbol: DCW
  • ISIN Demat: INE500A01029
  • Book Value ( ₹ ) 27.07
  • Face Value ( ₹ ) 2
  • Market Cap ( ₹ Cr. ) 412.43
  • P/E (TTM): 45.14
  • EPS (TTM): 0.35
  • Div Yield (%): 0.00

To The Members,

Your Directors present their 80th Annual Report and Audited Accounts for the Financial Year ended 31st March, 2019

1. Financial Results

31-03-2019 31-03-2018
(in lakhs) (in lakhs)
Net Sales 135280.20 121340.71
Gross Profit 6149.06 3870.76
Less : Provisions
Depreciation 8335.56 8779.94
Profit Before Tax/(Loss) (2186.50) (4909.18)
Tax: Current Period - -
Previous Period - -
MAT Credit available for set off / Utilized - -
- -
Profit/(Loss) After Current Tax & Tax Adjustments (2186.50) (4909.18)
Deferred Tax (1759.47) (2889.02)
Profit after Tax/(Loss) (427.03) (2020.16)
Add: Balance brought forward 13665.99 15686.15
Profit available for Appropriation Appropriations: 13238.96 13665.99
General Reserves - -
Proposed Dividend - -
Dividend Distribution Tax - -
Balance carried forward 13238.96 13665.99

2. Dividend:

Due to loss during the year from the operations of the company your directors have not recommended any dividend for the year on the equity shares of the Company.

3. Operations:

The sales for the year are 135280.20 lakhs compared to 121340.71 lakhs in the previous year. The profit for the year (before depreciation) was 6149.08 lakhs against a profit of 3870.76 lakhs in the previous year. The loss before tax amounted to (2186.50) lakhs as against loss of (4909.18) lakhs in the previous year. The loss after provision of current tax / taxes for the year is (2186.50) lakhs against a loss of (4909.18) lakhs for previous year and loss after deferred tax was (427.03) lakhs against loss of (2020.16) lakhs for previous year.

4. Exports:

The Companys exports were of 21306.57 lakhs as compared to 15297.34 lakhs in the previous year. This increase in Export Turnover is on account of increase in sale and realization on sale of Synthetic Rutile (BI) during the year.

5. Division wise Performance:

a) PVC Division:

The turnover of the division was 53379.09 lakhs as compared to 54558.22 lakhs in the previous year, the turnover of this division is marginally lower compared to Previous year. this is due to lower production & sale of PVC during the year due to shortage of raw materials . The demand for PVC Continues to show positive growth. There is Demand Supply gap of PVC in domestic market about 50% of the local demand is being met from Imports.

The Government has identified irrigation, power and infrastructure, as thrust areas and increased activity in these sectors are likely to boost demand of PVC Resin.

b) Caustic Soda Division:

The turnover of the division was 47794.27 lakhs as compared to 40904.17 lakhs in the previous year, an increased of 17% in the turnover during the year. The increase in the turnover of this division was on account of better realization on the products being produced by this Division.

c) Soda Ash Division:

The turnover of the division was 21585.62 lakhs as compared to 20736.67 lakhs, an increase of 4% during the year. The marginal increase in turnover of this division was due to higher production and sale during the year. The demand for the product of this segment is consistent. Also looking to the demand and supply position in coming years and the Soda Ash industry growing at a robust rate of 4-5% per annum and this trend is expected to continue which will be able to absorb any additional capacities coming up in near furture.

d) Synthetic Iron Oxide Pigment:

The turnover of the division was 3260.84 lakhs as compared to 2595.82 lakhs in the previous year. An increase of 26% during the year. The product manufactured in this division have got good response from the user industry. Also this being specialty chemical the validation process was slow and longer. The company is in process of gradually ramping up the capacity and meet product variants as required by the customers.

The product has been well accepted both in the international as well as domestic market and company is developing wider customer base for this product in both the markets.

e) C-PVC Division:

The turnover of the division was 8251.58 lakhs as compared to 2189.12 lakhs in the previous year. An increase of 277% during the year . The product has been well accepted by the customers and your company expects to benefit on the first move advantage under made in India.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

6.1 Industry Structure and Developments:

6.1.1 Caustic Soda is an Alkaline used in sector like Soap, Detergent, Paper and Chemicals (alumina sector), food, textile and petroleum products. The demand for caustic soda is driven by the upturn in the production growth in these sectors. The installed capacity of caustic soda is about 3.66 mill. MT out of which 50% of the capacities are in the Western part of India, 25% in Southern India and balance in rest of India.

6.1.2 Soda Ash is mainly used in industries such as Detergents, Dye intermediaries, Sodium Silicate, Ore Refining, Glass Industry, Pesticides, Paper, Pharmaceuticals and Mining Industries. Sodium Bicarbonate which is manufactured by Soda Ash Industries is being used in Bakeries and also by Chemical and Pharmaceuticals Industries. The total installed capacity in Soda Ash Industries is 3.36 mill. MT. All these capacities are concentrated in Western part of India due to availability of required raw material i.e. Salt, Lime Stone and Coal/Lignite. The demand for Soda Ash is increasing by 5% annually mainly due to demand from Detergent and Glass sector.

6.1.3 PolyVinyl Chloride (PVC)

PolyVinyl Chloride (PVC) is the most commonly used thermoplastic. PVC is produced from Vinyl Chloride Monomer (VCM), which is obtain from Ethylene Dichloride (EDC), a derivative of ethylene and chlorine. PVC is used in variety of items, such as Pipes and Fittings, Wires and Cables, Calendared Sheets, Blow Molded Bottles, Profiles, Footwear, Roofing, Automotive Parts, Table Clothes, Shower Curtains and Furniture. In India the per capita consumption of PVC is significantly less as compared with developed countries.

Total domestic installed capacity of PVC Industry is 1.35 Mill. TPA. The domestic demand of PVC is about 2.90 Mill. TPA. The short fall 1.55 Mill. TPA in supply is met by imports. The market for PVC is expanding by 5 to 6% p.a. and hence, there is scope for increasing capacities.

6.1.4 C-PVC

Chlorinated Polyvinyl Chloride (CPVC) is a specialty Polymer having characteristics such as high glass transition temperature, high heat deflection temperature, outstanding flame and smoke properties and chemical inertness due to these properties CPVC finds application in Hot water plumbing, Sanitary pipe, Industrial Pipes and fire- retardant systems.

CPVC is manufactured by chlorinating Polyvinyl Chloride. Polyvinyl Chloride normally contains 56-57% chlorine and when chlorinated further to 66-67%, it is called Chlorinated Polyvinyl Chloride. DCWs CPVC is produced under technical licenses from Arkema,, France,(Presently KEMONE) it is a most clean technology with zero effluent discharge.

C-PVC market is estimated to 125000 MT/year and growing at the CAGR of 15%. At present DCW is the only domestic producer having capacity of 12000 MT/year and rest of the demand is met by the imports.

61.5 Synthetic Iron Oxide Pigment (SIOP)

SIOP are widely used in Coating, Construction, Plastic and Paper Industries as a coloring matter. As a specialty pigment, the demand for this product is increasing due to growth in Infrastructure and Housing, Commercial Projects. Apart from catering to the domestic demand, the pigment are being exported to countries viz. U.S.A., Europe, Africa, Japan and to other Asian Countries.

6.2 Opportunities and Threats

The domestic demand for all the products manufactured by the Company is growing which gives opportunity to expand its production capacities and take benefits of the expanding market. Companys Caustic Soda, Synthetic Rutile and PVC Units are near to Tuticorin Port in Tamilnadu and this gives opportunity to the Company to easily export its products. Company has opportunity to go for backward/forward integration in the products it manufactures which can make the Company more competitive.

The low cost imports coming in to the country can be a threat in future. However, Companys efforts over the years have made it a low cost producer and hence the Company is capable of facing international competition.

6.3 Segment-wise or product-wise performance.

6.3.1 Caustic Soda Division:

The Company continues to be a major player in South India with a market share of approximately 20%. The demand for caustic soda is expected to grow at a steady rate, due to increased demand from alumina manufacturers. The Company has captive use of HCL & Chlorine which helps to maintain Caustic Production at full level.

6.3.2 Soda Ash Division:

The Soda Ash Industry continues to grow at a compounded rate of 4% - 5% per annum and this trend is expected to continue. There has been capacity addition, however, the Soda Ash industry is growing at at robust rate of 4-5% per annum and this trend is expected to continue and would be able to absorb additional quantity.

6.3.3 PVC Division:

The Company, one of the countrys five producers of PVC resin, has maintained its market share of nearly 7%. Antidumping duty imposed on PVC resin imports from China, USA, Mexico, European Union, Indonesia will protect the domestic industry against dumping of PVC resin from these countries. Automation cum De-bottlenecking program implemented in this unit will help the Company in reducing cost and increasing production of this division.

6.3.4 Synthetic Iron Oxide Pigment Division:

With starting of Synthetics Iron Oxide Pigment (SIOP) Division, the company entered into specialty chemical business. The plant was under stabilisation stage and has since started production. This plant has been established with companys patented technology and technological help from Huntsman pigments (formerly Rockwood Pigments). This plant will consume leach liqour generated from Synthetic Rutilke plant and will help in reducing pollution. This division once fully operational will give more stability to the bottom line.

6.3.5 C-PVC:

The new C-PVC Plant which was commissioned and has since stabilized is a specialty chemical and your company is first in India to manufacture C-PVC domestically. At present entire C-PVC demand is being met by way of imports. This plant will help the country to conserve foreign exchange and also will help the country to move towards Make in India.

6.4 Outlook

The Company has diversified operations with five business segments viz. PVC, CPVC, Chlor- Alkali, SIOP & Soda Ash. It is thus reasonably protected from the vagaries of individual business cycles of these products. By the commencement of commercial production at companys new Synthetic Iron Oxide Pigment plant and C-PVC plant, the company has entered into specialty chemical segment and this will give more stability to the bottom line of the company in coming years.

6.5 Risks and concerns

The Companys performance depends upon number of factors viz., fluctuations in the exchange rates of Rupee with major International currencies, change in raw-material prices, change in duty structure on the raw material imported and Companys various products, change in Government policies in the sectors in which company operates etc.

6.6 Internal Control systems and their adequacy

Company has adequate internal control system commensurating with the nature of its business and size of its operations. Internal Audit is conducted on a regular basis by a reputed firm of Chartered Accountants. The reports of the internal audit along with comments from the management are placed for review before Audit Committee.

6.7 Financial Performance with respect to Operative Performance

The Gross Revenue of the Company for the year was 1352.80 crores against the gross revenue of 1213.40 crores of the previous year. The Profit/(Loss) Before Tax was (21.87) crores compared to (49.09) crores of the previous year. The EBIDTA of the company has improved 165.53 crores, as against 131.91 crores, in previous year,

6.8 Material Developments in Human Resources/Industrial Relation front, including number of people employed.

Company continues to give at most importance to human resources development and keeps relations cordial. Number of permanent employees have been mentioned hereinafter.

7 Cautionary Note:

Statement in this report describing the companys objectives, projections, estimates, expectation and prediction may be "forward looking statements". Actual results could differ materially from those expressed or implied due to variations in prices of raw materials and realization of finished goods, changes in government regulation, tax regimes, economic developments and other incidental factors.

8. Directors & Key Managerial Personnel (KMPs):

In accordance with the provisions of Section 152(6) Shri. Mudit Sharadkumar Jain (DIN No. 00647298) retires by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, offer himself for re-appointment. The Board on the recommendation of the Nomination & Remuneration Committee (NRC) has recommended his re-appointment.

Pursuant to the provisions of the Companies Act, 2013 ("Act"), the shareholders at the 75th AGM of your Company held on 13th August, 2014 appointed Smt. Sujata Rangnekar (DIN:06425371) and Shri. Salil Kapoor (DIN: 02256540) as Independent Non-Executive Directors to hold office for a term of 5 (five) consecutive years upto the conclusion of the 80th AGM of the Company in the calendar year 2019. The Board of Directors, based on the performance evaluation and as per the recommendation of the NRC has recommended re-appointment of Smt. Sujata Rangnekar and Shri. Salil Kapoor as Independent Non-Executive Directors for a second term of five consecutive years upto the conclusion of the 85th Annual General Meeting of the Company to be held in the calendar year 2024. The Board considers that, given their background, experience and contributions made by them during their tenure, the continued association of Smt. Sujata Rangnekar and Shri. Salil Kapoor would be beneficial to the Company.

Shri. Pradip Madhavji (DIN: 00549826), Independent Director of the Company has resigned from the Directorship of the Company w.e.f. March 31,2019 due to other commitments. Shri. Pradip Madhavji has also confirmed in his resignation letter that there is no other material reason other than the reason mentioned above.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR).

Pursuant to provisions of Section 203 of the Companies Act, 2013, Shri Pramodkumar Jain, (DIN: 00380458), Chairman & Managing Director; Shri Bakul Jain (DIN: 00380256), Shri Vivek Jain (DIN: 00502027), Shri Mudit Jain (DIN: 00647298), Managing Directors, Shri Vimal Jain, Chief Financial Officer and Smt. Jigna Karnick, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year.

Smt. Jigna Karnick resigned on May 31,2019 as Company Secretary & Compliance Officer of the Company. Shri Dilip Vishnubhai Darji is appointed as Company Secretary & Compliance Officer of the Company w.e.f. June 1, 2019.

9. Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) 2015, the Board has carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various Committees. The Board of Directors expressed their satisfaction with the evaluation process.

The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors at their separate meeting held on March 13, 2019. The Independent Directors expressed their satisfaction with the evaluation process.

The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination & Remuneration Committee, Independent Directors and Board at their respective meetings.

10. Succession Plan

The Board of Directors has satisfied itself that plans are in place for orderly succession for appointment to the Board of Directors and Senior Management.

11. Particulars of employees

11.1 The information required under Section 197 of the Companies Act, 2013 and Rule 5 (2) of Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as Annexure A.

11.2 Information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year*

Managing Directors Ratio to median remuneration
Shri Pramodkumar Jain -
Shri Bakul Jain -
Shri Mudit Jain -
Shri Vivek Jain -

* Managing Directors, to strengthen the finances of the Company, as a gesture of goodwill, waived their salary for the period 1/4/2018 to 31/3/2019.

* Non Executive and Independent Directors have not been included as they were not paid any commission and the sitting fees paid to them have not been considered as remuneration.

b. The percentage increase in remuneration of each director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the financial Year.

There was no increase in the Remuneration of Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary in the Financial Year.

c. The percentage increase in the median remuneration of employees in the financial year : 4.46%

d. The number of permanent employees on the rolls of Company : 1839

e. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average increase in remuneration is 4.46% for employees other than Managerial Personnel and there was no increase in the Managerial remuneration.

f. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirm that the remuneration is as per the remuneration policy of the Company.

12. Statutory Auditors

The Shareholders of the Company at the 78th Annual General Meeting of the Company held on 28th September, 2017, had appointed M/s. Chhajed & Doshi, Chartered Accountants (ICAI Firm Registration No. 101794W), as Statutory Auditors of the Company for the period of 5 (five) years to hold office until the conclusion of the 83rd Annual General Meeting to be held in the calendar year 2022 to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.

Pursuant to amendment to Section 139 (1) of the Companies Act, 2013, ratification of appointment of Statutory Auditor at every Annual General Meeting is not required.

As required under the provisions of Section 139(1) and 141 of the Companies Act, 2013 read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the auditors to the effect that they are eligible to continue as Statutory Auditor of the Company.

The Statutory Auditors report contain the remarks for delay in depositing various statutory dues with appropriate authorities within prescribed due dates, as detailed in point (vii) of Annexure A to Statutory Auditors Report.

Managements Reply: The delay in depositing statutory dues were due to Companys operating cash flows issues during the financial year.

13. Cost Auditor And Cost Audit Report

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Board of Directors on the recommendation of the Audit Committee have appointed M/s. N.D. Birla & Co., Ahmadabad and M/s. R. Nanabhoy & Co., Mumbai, Practising Cost Accountants for conducting cost audit of the cost records maintained by the company for the financial year 2019-20.

M/s. N.D. Birla & Co., Ahmadabad and M/s. R. Nanabhoy & Co., Mumbai, Practising Cost Accountants have confirmed that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and have also certified that there are free from any disqualification specified under Section 141 and proviso to Section 148(3) of the Act.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Shareholders in a General Meeting for their ratification. Accordingly, a resolution seeking Shareholders ratification for remuneration payable to M/s. N.D. Birla & Co., Ahmadabad and M/s. R. Nanabhoy & Co., Mumbai, Practising Cost Accountants is included in the Notice convening the Annual General Meeting.

14. Secretarial Auditor and Secretarial Audit Report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s S.K Jain & Co., Practising

Company Secretaries, to conduct the secretarial audit of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2019, is annexed herewith and marked as Annexure B to this Report. The Secretarial Audit Report contain the following remarks:

1. The Company has delayed submission of unaudited quarterly standalone financial results for the quarter ended 30th September, 2018, along with Limited Review Report to the BSE Limited and National Stock Exchange of India Limited by one day i.e. on November 15, 2018. However, the Company has paid the penalty as levied by the said Stock Exchanges for delayed submission of the said financial results.

2. During the Financial Year under review, the Company has delayed in depositing employers and employees share of contribution towards Provident Fund within prescribed due dates with DCW Trust. However, though the Company has deposited entire portion of employees Provident Fund contribution in May 2019, it has still to deposit employers portion of Provident Fund contribution to the trust.

Managements Reply: The Company has delayed in depositing Provident Fund (PF) contribution to the PF trust due to Companys operating cash flows issues during the financial year. However, the Company has fully deposited employees contribution to the Provident Fund and is depositing employers contribution in installments.

15. Secretarial Standards:

The Company has complied with the applicable Secretarial Standards. The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively have been duly followed by the Company.

16. Conservation of Energy, Technology and Foreign Exchange.

Information on conservation of energy, technology absorption, foreign exchange earnings and out go, required to be given pursuant to provision of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is annexed here to marked "Annexure C" and forms part of this report.

17. Deposits / Loans & Advances, Guarantees Or Investments

Your Company has not accepted any deposits from the public during the year under review. The particulars of loans/ advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

18. Risk Management

Your Company laid down Risk Management Policy and it is made available on the website of the Company. However, the provisions related to Risk Management Committee is not applicable to the Company.

19. Establishment Of Vigil Mechanism

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

20. Board Meetings

During the Financial Year 2018-19, 7 (Seven) number of Board Meetings were held. For details thereof kindly refer to the section Board of Directors " - "Board Meetings, in the Corporate Governance Report.

21. Committees of the Board.

The Board has constituted the following mandatory committees viz., Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Internal Compliance Committee. The terms of reference of these committees are as required under the provisions of the respective Acts /SEBI (Listing obligations and Disclosure Requirements) 2015 and as determined by the Board. Meeting of each of these committees are convened by the respective Chairman of the Committees and minutes of the meetings of these committees are placed at the Board Meetings. The details of these committees are stated in this Report / Annexures to this Report.

21.1 Corporate Social Responsibility (CSR) Committee

Pursuant to Section 135 of the Companies Act, 2013 and the relevant rules, the Board has constituted the Corporate Social Responsibility (CSR) Committee under the Chairmanship of Shri Pramodkumar Jain, Chairman of the Board. The other members of the Committee are Shri Krishnamoorthy Krishnan, an Independent Director and Shri. Bakul Jain, Managing Director. A detailed CSR Policy has also been framed which is placed on the companys website. Other details for the CSR activities as required under Section 135 of the Companies Act 2013 are given in the CSR Report at "Annexure D".

21.2 Internal Compliance Committee

In terms of the provisions of the Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013. Your Company laid down Prevention of Sexual Harassment Policy and it is made available on the website of the Company. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

21.3 Audit Committee

Audit Committee comprises 3 Independent Directors and Ms. Sujata Rangnekar is the Chairperson of the Committee and other members of the Committee are Shri Pradip Madhavji and Shri Krishnamoorthy Krishnan and they possess sound knowledge on accounts, audit, finance, taxation, Internal Control etc. The details of the composition of the Audit Committee are given in the Corporate Governance Report.

The Company Secretary of the Company acts as Secretary of the Committee.

During the year there are no instances where the Board had not accepted the recommendation of Audit Committee.

21.4 Nomination & Remuneration Committee & Policy

The Company has duly constituted Nomination & Remuneration Committee to align with the requirements prescribed under the provisions of the Companies Act, 2013 and SEBI (Listing obligations and Disclosure Requirements) Regulation 2015 comprises 3 Independent Directors and Ms. Sujata Rangnekar is the Chairperson of the Committee and other members of the Committee are Shri Pradip Madhavji and Shri Krishnamoorthy Krishnan.

The details of the Composition of the Nomination & Remuneration Committee are given in the Corporate Governance Report.

The Board has framed a policy for selection and appointment of Directors, Senior Management and their Remuneration. The policy provides for determining qualification, positive attributes, and independence of a Director.

22. Extract of the Annual Return

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March 2019 made under the provisions of Section 92 (3) of the Act in Form MGT-9 is annexed herewith as Annexure "E".

23. Details in respect of adequacy of internal financial controls with reference to the financial statements.

A strong internal control culture is pervasive in the company. The Company has implemented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. The Internal Auditors continuously monitor efficiency of internal controls with objective of providing to the audit committee and the board of directors an independent, objective and reasonable assurance on the adequacy and effectiveness of the organizations risk management, controls and governance processes.

Your Company operates in SAP, ERP environment and has its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. Your Company has automated processes to ensure accurate and timely updation of various master data in the underlying ERP system.

24. Related Party Transactions:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the audit committee on a quarterly basis specifying the nature value and terms and conditions of the transactions.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is put up on the Companys website and can be accessed at http://www.dcwltd.com/PDF/policy/policy. zip. The details of transaction with Related Party are provided in the accompanying financial statements.

25. Corporate Governance Report

The report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report as Annexure "F". The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

26. Directors Responsibility Statement

In terms of section 134 (3) (c) of the Companies Act, 2013, your Directors have:

A. in the preparation of the annual accounts, 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 and of the profit and loss of the company for that period;

C. 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;

D. the directors had prepared the annual accounts on a going concern basis; and

E. 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.

F. 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.

27. Significant/Material Orders passed by the Regulators

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in future.

28. Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments 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 this report.

29. Details in respect of fraud reported by Auditors other than those which are reportable to Central Government

The Statutory Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.

30. Industrial Relations:

The relations between the employees and the management were cordial and an atmosphere of understanding prevailed throughout the year.

31. Acknowledgements

The Board places on record their grateful appreciation for the assistance and co-operation received from the shareholders, customers, vendors, bankers, financial institutions regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board of Directors

Sd/-

Pramodkumar Jain

Chairman & Managing Director

DIN:00380458

Place: Mumbai

Date: 28th May, 2019