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Notes to Accounts of DIC India Ltd.

Dec 31, 2015

(a) Rights, preferences and restrictions attached to Equity Shares:

The Company has one class of Equity Shares having a par value of Rs.10.00 per Equity Share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) There were no shares issued pursuant to contracts without payment being received in cash, by way of bonus issue and no shares were bought back in the period of five years immediately preceding the date as at which the Balance Sheet is prepared.

1. (a) Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 5.72 Million (2014- Rs. 3.45 Million)

(b) Contingent Liabilities

Claims against the Company not acknowledged as debt :

i) Income Tax matters Rs.46.40 Million (2014 - Rs. 26.38 Million) pending in appeals.

ii) Disputed Indirect Tax matters for which appeals before the relevant authorities are pending disposal are as follows :

a) Custom Duty matters Rs.20.16 Million (2014 - Rs.0.16 Million)

b) Excise Duty matters Rs.45.22 Million (2014 - Rs.45.22 Million)

c) Service Tax matters Rs.42.09 Million (2014 - Rs.38.86 Million)

d) Sales Tax / VAT / Entry Tax matters Rs.18.66 Million (2014 - Rs.24.76 Million)

iii) Rent under dispute Rs.3.72 Million (2014 - Rs.3.72 Million) pending in appeals.

In respect of above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities.

* Figures are below the rounding off norm adopted by the Company (c) Mark-to-market losses provided for as at the year end Rs.0.31 Million (2014 - Rs. 0.28 Million)

2. Assets acquired under Operating Lease

(a) The Company's significant leasing arrangements are in respect of Operating leases for premises (like residential property, office premises, godowns etc). These leasing arrangements, which are cancellable, range between 11 months to 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals in this regard amounting to Rs.29.65 Million (2014 - Rs.25.07 Million) are charged as Rent under Note 25.

3. Provision for Taxation

Provision for taxation made in these accounts is based on the results for the current financial period including the results for the period from 1st January 2015 to 31st March 2015 forming part of the assessment year 2015-2016. Ultimate liability for taxation for the assessment year 2016-2017 will be determined on the basis of the results for the last nine months of the current financial period together with that of subsequent three months upto 31st March 2016 as one composite income.

Note :

The above particulars, as applicable, have been given in respect of Micro and Small Enterprises to the extent they could be identified on the basis of the information available with the Company.

* Amount is below the rounding off norm adopted by the Company.

4. Related Parties Disclosures (in accordance with Accounting Standard 18 specified under the Act) (i) Related Parties

Names of Related Parties Relationship

(A) Where control exists

DIC Corporation, Japan Ultimate Holding Company

DIC Asia Pacific Pte Ltd., Singapore Holding Company

(B) Others with whom transactions have taken place during the year

Benda-Lutz Werke GmbH Fellow Subsidiary

Coates Screen Inks GmbH. Fellow Subsidiary

DIC (Malaysia) Sdn. Bhd. Fellow Subsidiary

DIC (Shanghai) Co., Ltd. Fellow Subsidiary

DIC Alkylphenol Singapore Pte., Ltd. Fellow Subsidiary

DIC Australia Pty Ltd Fellow Subsidiary

DIC Compounds (Malaysia) Sdn. Bhd. Fellow Subsidiary

DIC Europe GmbH Fellow Subsidiary

DIC Fine Chemicals Private Limited Fellow Subsidiary

DIC Lanka (Private) Ltd. Fellow Subsidiary

DIC New Zealand Ltd Fellow Subsidiary

Hartmann Druckfarben GmbH Fellow Subsidiary

Nantong DIC Color Co., Ltd. Fellow Subsidiary

PT. DIC Graphics Fellow Subsidiary

Siam Chemical Industry Co. Ltd. Fellow Subsidiary

Sun Chemical AG Fellow Subsidiary

Sun Chemical Group S.P.A. Fellow Subsidiary

Sun Chemical N.V./S.A. Fellow Subsidiary

Sun Chemical ZAO Fellow Subsidiary

Sun Chemical (South Africa) (Pty.) Ltd. Fellow Subsidiary

Sun Chemical Limited Fellow Subsidiary

Tintas S.A.S Fellow Subsidiary

Sun Chemical Corp. Fellow Subsidiary

Sun Chemical Group Cooperatief U.A. Fellow Subsidiary

DIC Graphics (Thailand) Co. Ltd. Fellow Subsidiary

Sun Chemical (Chile) S.A. Fellow Subsidiary

Sun Chemical Sp (z.o.o) Fellow Subsidiary

DIC (Taiwan) Ltd. Fellow Subsidiary

Sun Chemical Turkey Fellow Subsidiary

Sun Chemical S.A. Fellow Subsidiary

Mr. Yasuo Ikeda Key Management Personnel

Mr. Samir Bhaumik Key Management Personnel (up to 26th April 2014)

Mr. Shailendra Hari Singh Key Management Personnel (w.e.f. 23rd March 2015)

Figures within brackets relate to previous year.

(1) Purchases of Goods from Fellow Subsidiaries include purchases from DIC Fine Chemicals Private Limited Rs.93.61 Million (2014 - Rs.87.73 Million), DIC Compounds (Malaysia) Sdn. Bhd. Rs.29.71 Million (2014 - Rs.22.20 Million) and Sun Chemical Limited Rs.29.05 Million (2014- Rs.28.76 Million).

(2) Sale of Products to Fellow Subsidiaries include sales to DIC Australia Pty Ltd. Rs. 78.27 Million (2014- Rs.68.25 Million), Sun Chemicals ZAO Rs. 26.44 Million (2014 - Rs.46.88 Million), DIC Lanka (Private) Ltd. Rs. 18.48 Million (2014 - Rs.14.99 Million) and Tintas S.A.S Rs. 19.74 Million (2014 - Rs.23.87 Million).

(3) Commission Income from Fellow Subsidiaries include income from Sun Chemical N.V./S.A. Rs.0.33 Million (2014 - Rs. 0.04 Million) and Hartmann Druckfarben GmbH Rs.0.22 Million (2014 - Rs. Nil)

(4) Reimbursement of Expenses from Fellow Subsidiaries include reimbursement from Siam Chemical Industry Co.Ltd Rs.1.55 Million (2014 - Rs.1.41 Million)

(5) Trade Payables to Fellow Subsidiaries include payable to DIC Fine Chemicals Private Limited Rs. 17.89 Million (2014 - Rs.51.35 Million), Nantong DIC Color Co., Ltd. Rs. 6.33 Million (2014 - Rs.3.81 Million) and DIC Compounds (Malaysia) Sdn. Bhd. Rs. 5.25 Million (2014 - Rs. 11.83 Million)

(6) Trade Receivables from Fellow Subsidiaries include receivable from DIC Australia Pty Ltd. Rs. 33.52 Million (2014 - Rs.20.64 Million).

(7) Short-term Loans and Advances to Fellow Subsidiaries include receivable from Sun Chemical N.V./S.A. Rs. 0.31 Million (2014 - Rs.0.55 Million) and Siam Chemical Industry Co. Ltd. Rs. 0.27 Million (2014 - Rs.0.22 Million).

(8) Sale of Fixed Assets include sale to Mr. Samir Bhaumik Rs. Nil (2014 - Rs. 0.05 Million).

(9) Managerial Remuneration includes remuneration to Mr. Shailendra Hari Singh Rs. 8.82 Million (2014 - Rs. Nil), Mr. Yasuo Ikeda Rs. 11.28 Million (2014 - Rs. 6.52 Million) and Mr. Samir Bhaumik Rs. Nil (2014 - Rs. 5.79 Million).

(10) Advance recovered includes advance recovered from Mr. Samir Bhaumik Rs. Nil (2014 - Rs. 0.03 Million).

(11) Employee Related Liabilities includes payable to Mr. Shailendra Hari Singh Rs. 3.28 Million (2014 - Rs. Nil) and Mr. Yasuo Ikeda Rs. 3.63 Million (2014 - Rs. Nil).

* After considering exceptional item

Notes:

1 The Company has considered business segment as the primary segment for disclosure. The components of this business segment is Printing Inks (including allied products) and Adhesives.

2 The Segment wise revenue, results, assets and liabilities relate to the respective amounts directly identifiable to each of the segments. Unallocable income/ expenses refer to income/ expenses which relate to the Company as a whole and are not allocable to segments on a reasonable basis.

3 The Company operates predominantly within the geographical limits of India and accordingly secondary segments have not been considered.

* Restricted to lower of the amount per computation about and present value of any economic benefits available

in the form of refunds from the Plan or reductions in future contributions to the Plan.

* Recognised under "Contribution to Provident and Other Funds" in Note 22 for Pension and Gratuity and under "Staff Welfare Expenses" in Note 22 for Retirement Benefit

The estimate of future salary increases considered in the actuarial valuation takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company's policy for plan asset management and other relevant factors.

(b) In terms of Guidance on implementing Accounting Standard 15 (Revised 2005) on Employee Benefits issued by the Accounting Standard Board of the Institute of Chartered Accountants of India (ICAI), a provident fund set up by the Company is treated as a defined benefit plan in view of the Company's obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the balance sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the Company's contribution of Rs.14.84 Million (2014 - Rs.17.53 Million) to the Provident Fund Trust has been expensed under the 'Contribution to Provident and Other Funds' in Note 22. Disclosures given hereunder are restricted to the information available as per the Actuary's Report -

(c) During the year the Company has recognized an amount of Rs. 19.34 Million (2014 - Rs.17.81 Million) as expenditure towards defined contribution plans of the Company.

5. Exceptional Item represents separation costs pursuant to closure of the manufacturing unit relating to Printing Inks Segment of the Company located in Mumbai.

6. Effective 1st January, 2015, the Company has revised the useful lives of certain tangible Fixed Assets in keeping with the provisions of Schedule II to the Companies Act, 2013. As a result, depreciation expense for the year ended 31st December, 2015 is higher and profit before tax is lower by Rs. 47.52 Million and net book value aggregating Rs.20.70 Million (Net of Deferred Tax Rs.10.67 Million) relating to assets, where the revised useful lives have expired by 31st December, 2014 has been adjusted against opening balance of Retained Earnings (Note 2) as on 1st January, 2015.

The aforesaid revision of useful lives will result in decrease in depreciation expense in future periods by Rs. 16.15 Million as compared to the original useful life of the assets.

7. Previous year's figures have been re-grouped / re-arranged, wherever necessary to conform to current year's classification.


Dec 31, 2014

(a) Rights, preferences and restrictions attached to Equity Shares:

The Company has one class of Equity Shares having a par value of Rs.10 per Equity Share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) There were no shares issued pursuant to contracts without payment being received in cash, by way of bonus issue and no shares were bought back in the period of five years immediately preceding the date as at which the Balance Sheet is prepared.

2. (a) Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 3.45 Million (2013 - Rs. 3.13 Million)

(b) Contingent Liabilities

Claims against the Company not acknowledged as debt :

i) Income Tax matters Rs.26.38 Million (2013 - Rs. 19.99 Million) pending in appeals.

ii) Disputed Indirect Tax matters for which appeals before the relevant authorities are pending disposal are as follows :

a) Custom Duty matters Rs.0.16 Million (2013 - Rs.2.45 Million)

b) Excise Duty matters Rs.45.22 Million (2013 - Rs.46.93 Million)

c) ServiceTax matters Rs.38.86 Million (2013 - Rs.38.39 Million)

d) Sales Tax / VAT / Entry Tax matters Rs.24.76 Million (2013 - Rs.25.12 Million)

iii) Rent under dispute Rs.3.72 Million (2013 - Rs.1.99 Million) pending in appeals.

In respect of above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect ofthe above contingent liabilities.

3. Assets acquired under Operating Lease

(a) The Company''s significant leasing arrangements are in respect of operating leases for premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are cancellable, range between 11 months to 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals in this regard amounting to Rs.25.07 Million (2013 - Rs.23.80 Million) are charged as Rent under Note 25.

4. Provision for Taxation

Provision for taxation made in these accounts is based on the results for the current financial period including the results for the period from 1st January 2014 to 31st March 2014 forming part of the assessment year 2014- 2015. Ultimate liability for taxation for the assessment year 2015-2016 will be determined on the basis of the results for the last nine months ofthe current financial period together with that of subsequent three months upto 31st March 2015 as one composite income.

5. Related Parties Disclosures (in accordance with Accounting Standard 18 prescribed under the Companies Act, 1956)

(i) Related Parties

Names of Related Parties Relationship

(A) Where control exists

DIC Corporation, Japan Ultimate Holding Company

DIC Asia Pacific Pte Ltd., Singapore Holding Company

(B) Others with whom transactions have taken place during the year

Benda-Lutz Werke GmbH Fellow Subsidiary

Coates Screen Inks GmbH. Fellow Subsidiary

DIC (Malaysia) Sdn. Bhd. Fellow Subsidiary

DIC (Shanghai) Co. Ltd. Fellow Subsidiary

DIC Alkylphenol Singapore Pte. Ltd. Fellow Subsidiary

DIC Australia Pty Ltd Fellow Subsidiary

DIC Compounds (Malaysia) Sdn. Bhd. Fellow Subsidiary

DIC Europe GmbH Fellow Subsidiary

DIC Fine Chemicals Private Limited Fellow Subsidiary

DIC Graphics (Hong Kong) Ltd. Fellow Subsidiary

DIC Lanka (Private) Ltd. Fellow Subsidiary

DIC New Zealand Ltd Fellow Subsidiary

DIC Performance Resins GmbH Fellow Subsidiary

Hartmann Druckfarben GmbH Fellow Subsidiary

Nantong DIC Color Co., Ltd. Fellow Subsidiary

P.T. Pardic Jaya Chemicals Fellow Subsidiary

PT. DIC Graphics Fellow Subsidiary

Siam Chemical Industry Co. Ltd. Fellow Subsidiary

Sun Chemical AG Fellow Subsidiary

Sun Chemical Group S.P.A. Fellow Subsidiary

Sun Chemical N.V./S.A. Fellow Subsidiary

Sun Chemical ZAO Fellow Subsidiary

Sun Chemical (South Africa) Fellow Subsidiary (Pty.) Ltd.

Sun Chemical Ltd. Fellow Subsidiary

Tintas S.A.S Fellow Subsidiary

Sun Chemical Corp. Fellow Subsidiary

Sun Chemical Group Cooperatief U.A. Fellow Subsidiary

Deqing DIC Synthetic Resins Ltd. Fellow Subsidiary

DIC Graphics (Thailand) Co. Ltd. Fellow Subsidiary

Mr. Yasuo Ikeda Key Management Personnel (w.e.f. 1st January, 2014)

Mr. Samir Bhaumik Key Management Personnel (up to 26 th April, 2014)


Dec 31, 2013

1. (a) Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 3.13 Million (2012- Rs. 15.70 Million)

(b) Contingent Liabilities

Claims against the Company not acknowledged as debt :

i) Income Tax matters Rs.19.99 Million (2012 - Rs. 20.39 Million) pending in appeals.

ii) Disputed Indirect Tax matters for which appeals before the relevant authorities are pending disposal are as follows :

a) Custom Duty matters Rs.2.45 Million (2012 - Rs.9.31 Million)

b) Excise Duty matters Rs.46.93 Million (2012 - Rs.45.02 Million)

c) Service Tax matters Rs.38.39 Million (2012 - Rs.37.10 Million)

d) Sales Tax / VAT matters Rs.25.12 Million (2012 - Rs.202.12 Million)

iii) Rent under dispute Rs. 1.99 Million (2012 - Rs. Nil) pending in appeals.

In respect of above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities.

2. Assets acquired under Operating Lease

(a) The Company''s significant leasing arrangements are in respect of operating leases for premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are cancellable, range between 11 months to 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals in this regard amounting to Rs.23.80 Million (2012 - Rs.19.33 Million) are charged as Rent under Note 24.

(b) The Company acquired certain assets under Operating lease, which are non-cancellable for a period of 4 years with option to renew the same for a further period at a minimum rent. Details of Lease payments outstanding as at 31st December 2013 are given below:

3. Provision for Taxation

Provision for taxation made in these accounts is based on the profit for the current financial period including the results of the operations for the period from 1st January 2013 to 31st March 2013 forming part of the assessment year 2013-2014. Ultimate liability for taxation for the assessment year 2014-2015 will be determined on the basis of the profit for the last nine months of the current financial period together with that of subsequent three months upto 31st March 2014 as one composite income.

4. Previous Year Figures

Previous year''s figures have been re-grouped / re-arranged, wherever necessary to conform to current year''s classification.


Dec 31, 2012

A) Rights, preferences and restrictions attached to Equity Shares:

The Company has one class of Equity Shares having a par value of Rs. 10.00 per Equity Share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B) There were no shares issued pursuant to contracts without payment being received in cash, by way of bonus issue and no shares were bought back in the period of five years immediately preceeding the date as at which the Balance Sheet is prepared.

1. Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 15.70 Million (2011-Rs. 48.01 Million)

2. Contingent Liabilities

(a) Contingent Liabilities not provided for in respect of:

i) Income Tax matters Rs. 20.39 Million (2011 - Rs. 32.67 Million) pending in appeals.

ii) Disputed Sales Tax, Excise Duties, etc. Rs. 293.55 Million (2011 - Rs. 288.75 Million) for which appeals before the relevant authorities are pending disposal.

The future cash outflow on account of above cannot be determined at this stage.

(b) Commitments not provided for in respect of:

Guarantee or Counter Guarantee or Counter Indemnity given by the Company to banks Rs. 42.02 Million. (2011-Rs. NIL)

3. Assets acquired under Operating Lease

(a) The Company''s significant leasing arrangements are in respect of operating leases for premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are not non-cancelable, range between 11 months to 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Note 24.

(b) The Company acquired certain assets under Operating lease, which are non-cancelable for a period of 4 years with option to renew the same for a further period at a minimum rent. Details of Lease payments outstanding as at 31 st December 2012 and amount paid during the year are given below:

4. Provision for Taxation

Provision for Taxation made in these accounts is based on the profit for the current financial period including the results of the operations for the period from 1st January 2012 to 31st March 2012 forming part of the Assessment Year 2012-2013. Ultimate liability for Taxation for the Assessment Year 2013-2014 will be determined on the basis of the profit for the last nine months of the current financial period together with that of subsequent three months upto 31 st March 2013 as one composite income.

Notes:

(1) This information has been determined to the extent such parties have been identified on the basis of the information available with the Company.

(2) Included in SI No. (v) above is Rs. 5.59 Million (2011 - Rs. 4.53 Million) being Interest on amount outstanding as at the beginning of the accounting year.

Figures within brackets relate to previous year.

(1) Purchase from fellow Subsidiaries includes purchase from Aekyung Chemicals Co. LtdRs.33.93 Million (2011 - Rs.20.66 Million), Dequing DIC Synthetic Resins Ltd Rs.36.80 Million (2011 - Rs.39.34 Million), Hartman Drukfarben GmBH Rs. 42.38 Million (2011- Rs. 51.90 Million) andNantong DIC Color Co. Ltd. Rs. 71.49 Million (2011 - Rs. 70.22 Million).

(2) Sale to fellow Subsidiaries includes sales to DIC Australia Pty Ltd. Rs. 50.72 Million (2011- Rs.29.26 Million), DIC Lanka (Pvt) Ltd. Rs. 12.04 Million (2011 - Rs. 12.55 Million), Sun Chemicals S.A./N.V.(Ink Division) Rs. 13.47 Million (2011 - Rs. 5.92 Million) and Sun Chemicals Zao Rs. 11.83 Million (2011 - Rs. 7.67 Million).

(3) Rendering of services to fellow Subsidiary includes services rendered to Sun Chemicals NV Rs. 0.25 Million (2011 - Rs. 0.23 Million)

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, seniority, supply and demand in the employment market etc. The expected return on Plan Assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

In terms of the Guidance on implementing Accounting Standard 15 on Employee Benefits issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, the Provident Fund set up by Company is a Defined Benefit plan in view of the Company''s obligation to meet shortfall, if any, on account of interest. Unlike previous year, consequent upon issuance of Guidance Note by the Institute of Actuaries of India in 2011-12, actuarial valuation of Provident Fund as at the year end has been done under the Deterministic Method and the resultant charge was Rs.NIL. Disclosures given hereunder are restricted to the information available as per the Actuary''s Report.

5. Note on Changes in Acounting Policy

With effect from 1 st April 2012 the Company has changed the basis of valuation of all categories of Inventory except for Stores and Spare parts from Weighted Average Cost to First in First out (FIFO) basis. If the Company would have valued the same under Weighted Average Cost method, the profit for the year and carrying amount oflnventory would have been higher by Rs.4.83 Million.

6. Previous Year Figures

The financial statements for the year ended 31 st December 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 st December 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Dec 31, 2011

1. Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 48,013,347 (2010-Rs. 82,869,014)

2. Contingent Liabilities

Contingent Liabilities not provided for in respect of:

(a) Income Tax matters Rs. 32,665,150 (2010 - Rs. 30,986,350) pending in appeals.

(b) Disputed Sales Tax, Excise Duties, etc. Rs.288,746,552 (2010 - Rs. 161,399,243) for which appeals before the relevant authorities are pending disposal.

(c) In respect of Bills Discounted Rs. NIL (2010-Rs.2,505,254)

The future cash outflow on account of above cannot be determined at this stage.

3. Secured Loans

The Company's borrowings from the Consortium of Banks are secured by:

(a) Mortgage of immovable properties of industrial land at Plot 633 & 634 at Vatwa Industrial Estate at Ahmedabad; Transport Depot Road, Kolkata; Chandivali Farm, Mumbai; Plot C-55ANoida Phase II, U.P. (together with all structures thereon) and also by deposit of title deeds/share certificates in respect of the residential flats at Mumbai, Kolkata, Chennai and New Delhi.

(b) Hypothecation of movable properties of the Company, including Plant and Machinery, Spares, Stores, Tools and Accessories both present and future;

(c) Hypothecation of Stock- in- Trade of the Company both present and future; and

(d) Hypothecation of Book Debts of the Company both present and future.

The consortium of banks shares the relevant securities on pari passu basis. It is, however, agreed that the banks will release the first charge in case the Company borrows in future against securities mentioned in Item 3(a) above.

4. Assets acquired under Operating Lease

(a) The Company's significant leasing arrangements are in respect of operating leases tor premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are not non- cancelable, range between 11 months to 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 16.

(b) The Company acquired certain assets under operating lease, which are non-cancelable for a period of 4 years with option to renew the same for a further period at a minimum rent. Details of lease payments outstanding as at 31.12.2011 and amount paid during the year are given below :

5. Provision for Taxation

Provision for taxation made in these accounts is based on the profit for the current financial period including the results of the operations for the period from 1st January 2011 to 31st March 2011 forming part of the Assessment Year 2011-2012. Ultimate liability for taxation for the Assessment Year 2012-2013 will be determined on the basis of the profit for the last nine months of the current financial period together with that of subsequent three months upto 31st March 2012 as one composite income.

* Included in Serial No.5 above is Rs.4,528,329 (2010 - Rs.4,140,921) being interest on amount outstanding as at the beginning of the Accounting Year.

* Under the Industrial Policy Statement dated 24th July 1991 and the Notification issued thereunder, no licensing is required for the Company's products.

** As certified by the Management.

Figures within brackets related to previous year.

* The entire processing of Lamination Adhesive of 1,782 M.T. (2010- 1,998 M.T.) is done on behalf of the Company by Valspar (India) Coatings Corporation Pvt. Ltd. (erstwhile DIC Coatings India Limited), as a job worker pursuant to an agreement with effect from May 2006.

Figures within brackets relate to previous year.

Figures within brackets relate to previous year.

(1) Purchase from Fellow Subsidiary includes purchase from Hartman Drukfarben GMBH Rs.51,896,190 (2010 - Rs.56,091,240), Dequing DIC Synthetic Resins Ltd. 39,337,204 (2010 - Rs. Nil) and Nantong DIC Color Co. Ltd. Rs.70,216,906 (2010-Rs.89,245,815).

(2) Sale to Fellow Subsidiary includes sales to DIC Australia Pty Ltd. Rs.29,263,264 (2010 - Rs.20,229,972), DIC Lanka (Pvt) Ltd. Rs.12,548,826 (2010 - Rs.8,851,080), DIC Pakistan Rs. Nil (2010 - Rs.13,406.723) and Sun Chemicals Zao Rs.7,673,452 (2010-Rs.Nil)

(3) Rendering services to Fellow Subsidiary includes services rendered to DIC Fine Chemicals Pvt. Ltd. Rs. Nil (2010 - Rs.2,500,000), Sun Chemicals NVRs.231,791 (2010-Rs.Nil)and DIC(Malayasia)SdnBhd.Rs.l34,554(2010-Rs.557,983)

(4) Expenses incurred by the Company on behalf of the Fellow Subsidiary relates to DIC Fine Chemicals Pvt. Ltd.

Note:

1. The Company has considered business segment as the primary segment for disclosure. The components of this business segment are Printing Inks and Adhesives.

2. The Segment wise revenue, results, assets and liabilities relate to the respective amounts directly identifiable to each of the segments. Unallocable income/expenditure refers to income/expenditure incurred on common services at corporate level.

6. Retirement Benefit

The Company operates Defined Contribution Schemes like Provident Fund and Superannuation Schemes. Contributions to Provident Funds are made by the Company, based on current salaries, to recognized funds maintained by the Company. In case of Provident Fund Schemes, contributions are also made by the employees. The interest rate payable to the members of the trust are not lower than the statutory rate of interest declared by the Central Government and shortfall if any is made good by the Company. Implication of Guidance Note 29 issued by the Institute of Actuaries of India during the year, on the valuation of interest rate guarantee on Exempt Provident Fund under Accounting Standard 15 (Revised), is currently being examined by the Company and not considered for the purpose of these accounts, financial impact not being material. Contribution to Superannuation Schemes are applicable for certain categories of employees and the contribution by the Company is invested with Insurance Companies and charges to Profit & Loss Account.

Defined Pension benefits offer specified benefits to certain categories of employees on retirement. The Company has discontinued the Defined Pension Benefit Scheme with effect from 1.5.2009 and all the employees who were erstwhile member of the Defined Pension Benefit Scheme has been brought under the Defined Contribution Scheme for benefit provisions under the Pension Plan. The present value of benefit obligation on 31.12.2011 is calculated by discounting the present value of crystalized pension as at 30.4.2009 by an independent actuary in compliance with Accounting Standard 15 (Revised 2005) on Employees Benefits.

The Company also operates defined benefit schemes like retirement, gratuity and post retirement benefits. The Company has its own recognized Gratuity Fund and all contribution are given to the Fund for investment. Post retirement benefit is given in the form of a fixed amount to certain category of employees on resignation/retirement subject to a minimum service period. However, liability in the accounts have been provided as per actuarial valuation in respect of the above.

The Company also pays the amount due on accumulated leave on retirement. The liability under this Scheme is also actuarially valued and provided for in the Accounts.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, seniority, supply and demand in the employment market etc. The expected return on Plan Assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated term of the obligations.

Amount recognized as an expense:

Contribution to Provident and other Funds in Schedule 16 includes contribution on account of Gratuity Rs.70,05,000 (2010 - Rs.30,272,000) and contribution on account of Pension Plan Rs.4,386,000 (Cr.) [2010 -Rs. 14,211,000 (Cr.)].

Contribution to Provident and other Funds in Schedule 16 includes contribution to Defined Contribution Plans like Provident and Superannuation Fund amounting to Rs. 40,341,486 (2010 - Rs. 35,960,096).

7. Previous years, figures have been regrouped/rearranged wherever considered necessary.


Dec 31, 2010

1. Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.82,869,014 (2009 - Rs.37,777,107).

2. Contingent Liabilities

Contingent Liabilities not provided for in respect of:

(i) Income Tax matters Rs.30,986,350 (2009 - Rs.30,986,350) pending in appeals.

(ii) Disputed Sales Tax, Excise Duties, etc. Rs.l6l,399,243 (2009 - Rs.121,484,125) for which appeals before the relevant authorities are pending disposal.

(iii) In respect of Bills Discounted Rs.2,505,254 (2009 - Rs.Nil)

The future cash outflow on account of above cannot be determined at this stage.

3. Secured Loans

The Companys borrowings from the Consortium of Banks are secured by:

(i) Mortgage of immovable properties of industrial land at Plot 633 & 634, Vatwa Industrial Estate, Ahmedabad; Transport Depot Road, Kolkata; Chandivali Farm, Mumbai; Plot C-55A Noida Phase II, U.P. (together with all structures thereon) and also by deposit of title deeds/share certificates in respect of the residential flats at Mumbai, Kolkata, Chennai and New Delhi;

(ii) Hypothecation of movable properties of the Company, including Plant & Machinery, Spares, Stores, Tools and Accessories both present and future;

(iii) Hypothecation of Stock-in-Trade of the Company both present and future; and

(iv) Hypothecation of Book Debts of the Company both present and future.

The consortium of Banks shares the relevant securities on pari passu basis. It is, however, agreed that the Banks will release the first charge in case the Company borrows in future against securities mentioned in Item 3(0 above.

4. Assets Acquired under Operating Lease

(i) The Companys significant leasing arrangements are in respect of operating leases for premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are not non-cancelable, range between 11 months and 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 16.

5. Extraordinary Item

Extraordinary Item represents profit (net-off relevent expenses amounting Rs.17,461,193) arising out of sale of shares in the wholly owned subsidiary, DIC Coatings India Ltd. in accordance with the Share Purchase Agreement dated 26th March, 2010.

6. Provision for Taxation

Provision for Taxation made in these accounts is based on the profit for the current financial period including the results of the operations for the period from 1st January, 2010 to 31st March, 2010 forming part of the assessment year 2010-2011. Ultimate liability for taxation for the assessment year 2011-2012 will be determined on the basis of the profit for the last nine months of the current financial period together with that of subsequent three months upto 31st March, 2011 as one composite Income.

7. Related Parties disclosure pursuant to Accounting Standard 18 issued by the Institute of Chartered Accountants of India

(i) Names of Related Parties

(a) Holding Company

DIC Asia Pacific Pte Ltd., Singapore

(b) Ultimate Holding Company (as certified by the Management) DIC Corporation, Japan

(c) Subsidiary

DIC Coatings India Limited, till 31st May, 2010

8. Retirement Benefit

The Company operates Defined Contribution Schemes like Provident Fund and Superannuation Schemes. Contributions to Provident Funds are made by the Company, based on current salaries, to recognized funds maintained by the Company. In case of Provident Fund Schemes, contributions are also made by the employees. Contributions to Superannuation Schemes are applicable for certain categories of employees and the contribution by the Company is invested with Insurance Companies.

The Company also operates Defined Benefit Schemes like Retirement Gratuity, Defined Pension Benefits and post Retirement Benefits. The Company has its own recognized Gratuity Fund and all contributions are given to the Fund for investment, however liability in the accounts has been provided as per actuarial valuation. Post Retirement Benefit is given in the form of a fixed amount to certain category of employees on resignation/retirement subject to a minimum service period. The Pension Benefits offer specified benefits to certain categories of employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employees Benefits.

The Company also pays the amount due on accumulated leave on retirement. The liability under this scheme is also actuarially valued and provided for in the accounts.

The Company has discontinued the Defined Pension Benefit Scheme with effect from 1st May, 2009 and all the employees who were erstwhile members of the Defined Pension Benefit Scheme have been brought under the Defined Contribution Scheme for benefit provisions under the Pension Plan. The present value of benefit obligation on 31st December, 2010 is calculated by discounting the preset value of crystalized pension as at 30th April, 2009-

9. Previous years figures have been regrouped/rearranged wherever considered necessary.


Dec 31, 2009

1. Capital Commitments

Estimated amount of contracts remaining to be executed on Capital Account Rs.37,777,107 (2008 - Rs.47,641,150).

2. Contingent Liabilities

Contingent Liabilities not provided for in respect of:

(i) Income Tax matters Rs.30,986,350 (2008 - Rs.9,091,4l9);

ii) Disputed Sales Tax, Excise Duties, etc. Rs.121,484,125 (2008 - Rs.235,548,644) for which appeals before the relevant authorities are pending disposal; iii) In respect of Bills Discounted Rs.Nil (2008 - Rs.88,938,247);

The future cash outflow on account of above cannot be determined at this stage.

3. Secured Loans

The Companys borrowings from the Consortium of Banks are secured by:

(i) Mortgage of immovable properties of industrial land at Plot 633 & 634 at Vatwa Industrial Estate at Ahmedabad; Transport Depot Road, Kolkata; Chandivali Farm at Mumbai; Plot C-55A Noida Phase II, U.P. (together with all structures thereon) and also by deposit of title deeds/share certificates in respect of the residential flats at Mumbai, Kolkata, Chennai and New Delhi;

(ii) Hypothecation of movable properties of the Company, including Plant & Machinery, Spares, Stores, Tools and Accessories both present and future;

(iii) Hypothecation of Stock-in-trade of the Company both present and future; and

(iv) Hypothecation of Book Debts of the Company both present and future;

The consortium of Banks shares the relevant securities on pari passu basis. It is, however, agreed that the banks will release the first charge in case the Company borrows in future against securities mentioned in item 3(0 above.

4. Assets Acquired under Operating Lease

(i) The Companys significant leasing arrangements are in respect of operating leases for premises (like residential property, office premises, stores, godowns etc). These leasing arrangements, which are not non-cancelable, range between 11 months and 4 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule 16.

5. Provision for Taxation

Provision for taxation made in these accounts is based on the profit for the current financial period including the results of the operations for the period from 1st January, 2009 to 31st March, 2009 forming part of the assessment year 2009-2010. Ultimate liability for taxation for the assessment year 2010-2011 will be determined on the basis of the profit for the last nine months of the current financial period together with that of subsequent three months upto 31st March, 2010 as one composite income.

6. Related Parties disclosure pursuant to Accounting Standard 18 issued by the Institute of Chartered Accountants of India

(i) Names of Related Parties

(a) Holding Company

DIC Asia Pacific Pte Ltd., Singapore

(b) Ultimate Holding Company (as certified by the Management) DIC Corporation, Japan

(c) Subsidiary

DIC Coatings India Limited

(d) Fellow Subsidiaries (as certified by the Management)

Aekyung Chemical Co. Ltd

Allmake Rollers Ltd

Bridgestone REI Komposit Sdn. Bhd

Camus Water Technologies LLC

Changzhou Huari New Material Co. Ltd

Chia Lung Chemical Industrial Corp

Coates Brothers (Caribbean) Ltd

Coates Brothers (East Africa) Ltd

Coates Brothers (South Africa) Limited

Coates Brothers (West Africa) Ltd

Coates Brothers (Zambia) Ltd. (formerly: Coates Zambia Ltd.)

Coates Brothers (Zimbabwe) Private Ltd

Coates Lorilleux Murekkep Ve Kimya

San.Tic.A.S.

Coates Screen Inks GmbH

Coates Thailand Ltd

CST Grafiska AB, Dainichi Building Materials,

Inc

Dainippon Ink & Chemicals (HK) Ltd

Dainippon Ink & Chemicals (Philippines) Inc

Dainippon Ink & Chemicals (Thailand) Co. Ltd

Dainippon Ink Eco-Engineering Co. Ltd

Deqing DIC Synthetic Resins Ltd

DH Material Inc

DIC Logistics China Co. Ltd

DIC (MALAYSIA) Sdn. Bhd

DIC (Taiwan) Ltd

DIC (Vietnam) Co., Ltd

DIC Alkylphenol Singapore Pte. Ltd

DIC Americas Inc

DIC Australia Pty Ltd

DIC Bayer Polymer Ltd

DIC Berlin GmbH R&D Laboratory

DIC Capital Corp

DIC Career Co. Ltd

DIC Coatings, S.L

DIC Color (Thailand) Co., Ltd

DIC Color Coating, Inc

DIC Colorants Inc

DIC Colorants Taiwan Co. Ltd

DIC Colour & Design Co. Ltd

DIC Compounds (Malaysia) Sdn. Bhd

DIC EP Inc

DIC Epoxy (Malaysia) Sdn. Bhd

DIC Europe GmbH

DIC Express Co. Ltd

DIC Filtec Inc

DIC Fine Chemicals Private Limited

DIC Global Logistics Co. Ltd

DIC Graphics (Guangzhou) Ltd

DIC Graphics (Hong Kong) Ltd

DIC Graphics (Shenzhen) Ltd

DIC Holdings Austria GmbH

DIC Holdings B.V

DIC Imaging Products U.S.A., LLC

DIC India Ltd

DIC Information Service Inc *

DIC Interior Co. Ltd

DIC International (Thailand) Co. Ltd

DIC International (USA) LLC

DIC International Chemicals(S) Pte. Ltd

DIC Investments Japan Inc

DIC Korea Corp

DIC Lanka (Private) Ltd

DIC Lifetec Co. Ltd

DIC Machinery & Printers Supplies Inc

DIC New Zealand Ltd

DIC Pakistan Ltd

DIC Performance Resins GmbH

DIC Plapallet Pte., Ltd

DIC Plastics Inc

DIC Precision Corp

DIC Space Amenity Co. Ltd

DIC Synthetic Resins (Zhongshan) Co. Ltd

DIC Technologies Ltd

DIC Technology Corp

DIC Zhangjiagang Chemicals Co. Ltd

DIC (China) Co. Ltd

Earthrise Nutritionals LLC

ECG Holdings Ltd

Eques Coatings B.V.

Eques Coatings C.V.

European Manufacturers Insurance Co.Ltd

Fuji Label Co. Ltd

General Printing Ink Corp

Gibbon Finecal Ltd

Glenside Properties Limited

Guangzhou DIC International Co. Ltd

Gunma Kosoku Offset Inc

Hainan DIC Microalgae Co. Ltd

Hamamatsu Dainippon Ink Hanbai Inc

Hartman d.o.o.

Hartmann Druckfarben GmbH

Hartmann-Sun Chemical EOOD

IMS Concepts, S.A./N.V.

Inmobiliaria Sunchem S.A. de C.V.

Interbak Ambalaj Sanayii Ve Ticaret Anonim

Sirketi (Interbak AS)

Japan Fine Coatings Inc

Japan Formalin Company Inc

Japan Vilene Co. Ltd

Kangam Chemical Co. Ltd

Kitanihon DIC Co. Ltd

Kyodo Printing Co.(Spore) Pte. Ltd

Kyushu Polymer Co. Ltd

Lidye Chemical Co. Ltd

Lorilleux Maroc S.A.

Mizushima Kasozai Inc

Mondis Manufacturers Insurance Company N.V

Nantong DIC Color Co. Ltd

New England Manufacturers Insurance Corp

Nichiei Development Co. Ltd

Nichiei Plastics Inc

Nihon Packaging Material Co. Ltd

Nippon DecorInc

Nippon Epoxy Resin Manufacturing Co. Ltd

Nippon Plapallet Co

Nishinihon Butylphenol Inc

Oxirane Chemical Corp

P.T. DIC Astra Chemicals

P.T. Pardic Jaya Chemicals

Parker Williams Design Ltd

PT. DIC Graphics

Qingdao DIC Finechemicals Co. Ltd

Qingdao DIC Liquid Crystal Co. Ltd

Renaissance Inc

Rycoline Products LLC

Samling Housing Products Sdn. Bhd

SC Funding LLC

Seiko PMC (Shanghai) Commerce & Trading Corp

Seiko PMC (Zhangjiagang) Corp

Seiko PMC Corp

Shanghai DIC Ink Co. Ltd

Shanghai DIC International Trading Co. Ltd

Shanghai DIC Pressure-sensitive Adhesive

Materials Co. Ltd

Shanghai Long Feng Food Additives Co. Ltd

Shanghai Showa Highpolymer Co. Ltd

Shenzhen Coates Lorilleux Chemicals Ltd

Shenzhen-DIC Co. Ltd

Shin DIC Kako Co. Ltd

Shin Nihon Kasei Inc

Siam Algae Co. Ltd

Siam Chemical Industry Co. Ltd

Sinclair del Centro America S.A.

Sinclair S.A. *

Societe Fonciere de la Manche

Sun Chemical (Chile) S.A.

Sun Chemical (Colores) S.A. de C.V.

Sun Chemical A/S (Denmark)

Sun Chemical A/S (formerly:Coates Lorilleux

A/S) (Norway)

Sun Chemical AB

Sun Chemical AG

Sun Chemical AG (S.A. Ltd)

Sun Chemical B.V

Sun Chemical Central Europe Beteiligungs

GmbH

Sun Chemical Central Europe Holding & Co KG

Sun Chemical Corp

Sun Chemical de Centro America S.A. de C.V.

Sun Chemical de Panama S.A.

Sun Chemical do Brasil Ltda

Sun Chemical Group B.V.

Sun Chemical Group S.p.A.

Sun Chemical Holding B.V.

Sun Chemical Holding GmbH

Sun Chemical Ink Ireland

Sun Chemical Inks A/S

Sun Chemical Inks S.A.

Sun Chemical Investments LLC

Sun Chemical Lasfelde GmbH

Sun Chemical Ltd. (Canada)

Sun Chemical Ltd. (U.K.)

Sun Chemical Management LLC

Sun Chemical Murekkep ve Kimya Sanayi ve

Ticaret A.S.

Sun Chemical N.V./S.A.

Sun Chemical Nyomdafestek Kereskedelmi Es

Gyatro KFT (Sun Chemical KFT)

Sun Chemical of Michigan LLC

Sun Chemical Osterode Druckfarben GmbH

Sun Chemical Oy

Sun Chemical Pigments S.L.(formerly:Coates

Lorilleux S.A.)

Sun Chemical Portugal-Tintas Graficas Ltda

Sun Chemical Printing Ink d.o.o.

Sun Chemical S.A.

Sun Chemical S.A. de C.V.

Sun Chemical S.A.S.

Sun Chemical s.r.l.

Sun Chemical Sp (z.o.o) (formerly:Sun

Chemical Sp (z.o.o) Ltd)

Sun Chemical Ukraine Ltd

Sun Chemical Zagreb d.o.o.

Sun Chemical ZAO

Sun Chemical, d.o.o.e.l

Sun Chemical

S.r.o. (Czech Republic)

Sun Chemical

S.r.o. (Slovakia)

SUNDIC Incorporated

Suzhou Lintong Dyestuff Chemical Co. Ltd

Taiyuan Coates Lorilleux Chemicals Ltd

Techno Science Inc

TFE Company Ltd

Tien Lee Hong Co. Ltd

Tintas S.A

TOA-DIC Zhangjiagang Chemicals Co. Ltd

TOPIC.Co. Ltd

Tsuruga Chemicals Service Co

Tsuruga Terminals Co

Watt Gilchrist Ltd

Weesp Finance C.V.

Weesp Unlimited

Wuxi DIC Epoxy Co. Ltd

YD Plastics Co. Ltd

Yunnan DIC Ink Co. Ltd

Zhaoqing DIC Gum Rosins Ltd

Zhongshan DIC Colour Co. Ltd

(e) Key Management Personnel

(i) Dr P K Dutt - Chairman & Chief Executive Officer *

(ii) Mr A D Chatterjee - Wholetime Director

(iii) Mr S Bhaumik - Wholetime Director

7. Retirement Benefit

The Company operates Defined Contribution Schemes like Provident Fund and Superannuation Schemes. Contributions to Provident Funds are made by the Company, based on current salaries, to recognized funds maintained by the Company. In case of Provident Fund Schemes, contributions are also made by the employees. Contribution to Superannuation Schemes are applicable for certain categories of employees and the contribution by the Company is invested with Insurance Companies.

The Company also operates Defined Benefit Schemes like Retirement Gratuity, Defined Pension Benefits and post Retirement Benefits. The Company has its own recognized Gratuity Fund and all contribution are given to the Fund for investment, however liability in the accounts have been provided as per actuarial valuation. Post Retirement Benefit is given in the form of a fixed amount to certain category of employees on resignation/retirement subject to a minimum service period. The Pension Benefits offer specified benefits to certain categories of employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance "with Accounting Standard 15 (revised 2005) on Employees Benefits.

The Company also pays the amount due on accumulated leave on retirement. The liability under this scheme is also actuarially valued and provided for in the accounts.

8. Previous years figures have been regrouped/rearranged wherever considered necessary.



 
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