FINANCIAL RESULTS
 
                                                       (Rs. in Million)
 
                                                      2011        2010
 
 Net Sales                                         6747.55     5533.61
 
 Other Income                                        52.64      119.07
 
 Total Income                                      6800.19     5652.68
 
 Operating Profit                                   416.58      344.57
 
 Other Non Operating Income                            Nil       50.54
 
 Profit before Taxation & Extraordinary Items       381.90      372.81
 
 Extra Ordinary Income                                 Nil      275.69
 
 Provision for Taxation including deferred 
 taxation                                           117.39      141.10
 
 Profit after Tax                                   264.51      507.40
 
 Balance brought forward from previous year        1096.68      693.79
 
 Making a total available for appropriation        1361.19     1201.19
 
 Out of which Directors have transferred to 
 General Reserve                                     26.45       51.00
 
 Your Board recommends for distribution as 
 Dividend at the rate of Rs.4.00/- Share on 
 9,178,977 Equity Shares (together with Tax
 on Dividend & Surcharge) absorbing in all           42.68       53.51
 (Previous year: Rs.5.00 per share on 
 9,178,977 equity share)
 
 Leaving a balance carried forward of              1292.06     1096.68
 
 PERFORMANCE REVIEW
 
 During the year under review, your Company''s overall net sales
 increased from Rs.5533.61 million to Rs.6747.55 million registering an
 increase of 21.94% in terms of value and 8.2% in terms of volume.
 During the year under review, the Company witnessed a significant
 increase in raw material cost partly due to the impact of a major Rupee
 depreciation in the second half. The Company could pass only a part of
 the increased input cost to the market.  However, due to better product
 mix and strong cost control, the Company was able to increase its
 overall operating profit from Rs.344.57 million to Rs.416.58 million
 which translates into a growth of20.89% as compared to previous year.
 Your Company recorded a Pre-tax profit of Rs.381.90 million compared to
 Rs.322.27 million (excluding Rs.50.54 million towards dividend received
 from subsidiary) earned in the previous year registering an increase of
 18.50%. The post tax profit recorded was Rs. 264.51 million as against
 Rs.507.40 million of previous year. The results of your Company against
 last year are not comparable due to the fact that the Company had
 recorded extra- ordinary income in the financial year ended 31 st
 December 2010 on account of sale of its stake in its wholly owned
 subsidiary, DIC Coatings India Limited.
 
 ACCOUNTS OF SUBSIDIARY COMPANY
 
 The Company has no subsidiary.
 
 DIVIDEND
 
 Considering the performance of the Company and keeping in mind the need
 to conserve resources for future growth, your Board recommends the rate
 of dividend declared to be Rs.4.00 per share (FY2010 Rs.5.00 per
 share), subject to approval of shareholders at the ensuing Annual
 General Meeting.
 
 CAPITAL EXPENDITURE
 
 Capital expenditure during the year amounted to Rs.138.64 million, a
 major part of which was spent on plant & equipment and building
 renovation.
 
 ENERGY, TECHNOLOGY & FOREIGN EXCHANGE
 
 As required under Section 217(1 )(e) of the Companies Act, 1956, read
 with the Companies (Disclosure of Particulars in the Report of the
 Board of Directors) Rules, 1988, the information relating to
 conservation of energy, technology absorption and foreign exchange
 earnings & outgo is annexed and forms a part of this Report.
 
 DEPOSITS FROM PUBLIC
 
 The Company had total unclaimed deposit amounting to Rs.0.25 million at
 the beginning of the year. After repaying the depositors, the balance
 amount of Rs.0.20 million remaining unpaid on expiry of 7 years as
 specified under the Companies Act, 1956 have been transferred to the
 Investor Education & Protection Fund. Pursuant to such transfer, no
 claim lies against the Company for unclaimed fixed deposits.
 
 As on 31st December 2011, the Company has no unclaimed deposit lying
 against it.
 
 HUMAN RESOURCES
 
 Your Company believes that the competence and commitment of the people
 are the principle drivers of competitive advantage that enable the
 enterprise to create and deliver value. The industrial relations
 climate of your Company continues to remain harmonious with focus on
 improving productivity, quality and safety. Efforts are being made to
 strengthen organizational culture in order to attract and retain the
 best talent in the industry. Training needs are identified in a
 systematic manner and regular training programmes are organised, both
 in-house and external where employees are nominated to participate. The
 Board records its appreciation of the commitment and support of the
 employees and looks forward to their continued support. As on 31st
 December 2011, the Company had 630 employees on the pay roll.
 
 Information in accordance with the provisions of Section 217(2A) of the
 Companies Act, 1956 read with Companies (Particulars of Employees)
 Rules, 1975, as amended, forms part of this Report. However, as per the
 provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, this
 Report and Accounts are being-sent to all the Members of the Company,
 excluding the Statement of Particulars of Employees. Any member
 interested in obtaining a copy of the said Statement may write to the
 Senior Executive Vice President (Corporate Affairs and Legal) & Company
 Secretary of the Company.
 
 WEBSITE OF THE COMPANY
 
 The Company has launched a new website www.dicindialtd.co where
 detailed information of the Company and its.  products are provided.
 
 INTERNAL CONTROL SYSTEMS
 
 Your Company has an adequate system of internal control procedures
 which is commensurate with the size and nature of business. Detailed
 procedural manuals are in place to ensure that all the assets are
 safeguarded, 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 periodically reviewed by the Audit
 Committee of the Board of Directors. The observations and comments of
 the Audit Committee are placed before the Board.
 
 RELATED PARTIES
 
 Notes to the Accounts sets out the nature of transactions with related
 parties. Transactions with Related Parties are carried out at arm''s
 length. The details of such transactions are placed before the Audit
 Committee.
 
 FINANCE
 
 The Company''s relationships with its consortium and other bankers
 continued to be cordial throughout the year. The Company would like to
 thank its Bankers for their support.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 While we do not have a formalized policy in this regard, the Company
 does support, in a small way, community welfare initiatives. DIC India
 Ltd''s employees are committed to contribute to the realization of
 sustainable development through their everyday activities. The Company
 promotes the exchange of information to encourage greater awareness of
 CSR among its employees, as well as voluntary participation in related
 initiatives.
 
 Determined to prevent disasters at manufacturing facilities, DIC
 conducts a variety of accident and safety drills and has taken the
 necessary steps to ensure full preparation against unforeseeable
 crises.
 
 Guided by the principle of sustainable development, DIC implements a
 variety of measures aimed at reducing the environmental footprint. DIC
 strives to reduce the consumption of resources and energy to facilitate
 the efficient use of finite natural resources.
 
 CORPORATE GOVERNANCE
 
 Your Company attaches considerable significance to good Corporate
 Governance as an important step towards building investor confidence,
 improving investors'' protection and maximizing long-term shareholders
 value. The certificate of the Auditors, M/s Lovelock & Lewes,
 confirming compliance of conditions of Corporate Governance as
 stipulated under Clause 49 of the Listing Agreement of the Stock
 Exchanges is annexed.
 
 SAFETY AND ENVIRONMENT
 
 Highest priority is accorded to environment, occupational health and
 safety by your Company. Your Company''s factories at Kolkata, Noida,
 Mumbai and Ahmedabad are all ISO certified by BVQI. Kolkata andNoida
 plant are ISO 9001:2008, ISO 14001:2004 and BS OHSAS 18001:2007
 certified while Mumbai and Ahmedabad plant are ISO 9001:2008 certified.
 Your Directors, through the Company''s Safety, Health and Environment
 Department, oversee and review the integrated Environment, Occupational
 Health and Safety Audits which ensure comprehensive coverage of all
 Company locations. Various proactive measures have been adopted and
 implemented which inter- alia include adoption of cleaner technology,
 conservation of resources through waste reduction, recycling and reuse
 of waste materials and ongoing training of employees. Your Company''s
 focus on sustainable development will continue to be reinforced by
 improving standards of safety and environmental protection and further
 strengthened by the association with DIC Corporation, Japan which
 accords vital importance to these aspects.
 
 As you are aware that the Ministry of Corporate Affairs (MCA) has vide
 its Circular No. 17/2011 dated 21st April 2011 and Circular No. 18/2011
 dated 29th April 2011 (available on the website www.mca.gov.in) has
 introduced ''Green Initiative'' whereby companies can now send various
 notices/documents/Annual Reports to their shareholders through
 electronic mode at the registered email address of the shareholders.
 The Company has accordingly initiated steps in this matter. Further,
 the Report and Accounts of your Company will also be available at the
 ''Investors'' section of your Company''s website, www.dicindialtd.co in a
 user friendly, downloadable format.
 
 INFORMATION SYSTEM
 
 The Company runs on ORACLE E-Business Suite Version 11.5 to remain
 updated with the latest system for better operational and timely
 information management. Pursuant to the ORACLE license period coming to
 an end, the Company is in the process of installing SAP ERP suite for a
 reliable, high end, comprehensive, disciplined and integrated business
 solution.
 
 DIRECTORS
 
 To broadbase the Board of Directors of the Company, Mr.Utpal Sengupta
 was inducted into the Board with effect from 26th July 2011 as an
 Additional Director. Mr U Sengupta''s appointment is valid till the
 date of forthcoming Annual General Meeting. The Company has received a
 notice from a shareholder pursuant to Section 257 of the Companies Act,
 1956 proposing his re-appointment. Appropriate resolution seeking his
 appointment is appearing in the Notice convening the Annual General
 Meeting of the Company.
 
 Mr U Sengupta, an Independent Director, is not related to any of the
 other Director in the Company and does not hold any shares in the
 Company.
 
 Pursuant to the approval of the members in their Annual General Meeting
 held on 28th April 2011, Dr P K Dutt was appointed as the Chairman of
 the Company till 31st March 2012 in the Wholetime capacity. Pursuant to
 the completion of his tenure, the Board in their meeting held on 8 th
 February 2012 appointed Dr. P K Dutt as the non- executive Chairman of
 the Company with effect from 1st April 2012.
 
 In terms of Articles of Association of the Company, Mr D Banerjee, Mr P
 Koek and Mr B Choudhuri retire from the Board by rotation and being
 eligible, offer themselves for re-appointment. They do not hold any
 shares of the Company.
 
 The appointments of Dr P K Dutt, Mr D Banerjee, Mr P Koek, Mr B
 Choudhuri and Mr U Sengupta, form part of the Notice of Annual General
 Meeting and the Resolutions are recommended for your approval.
 
 Profile of these Directors, as required under Clause 49 of the Listing
 Agreement entered into with the Stock Exchanges, is given in the Notice
 of the Annual General Meeting.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Section 217 (2 AA) of the Act, the
 Directors state that:
 
 a) in the preparation of the annual accounts for the year ended 31st
 December 2011, applicable accounting standards have been followed with
 no material departure;
 
 b) your Directors have selected such accounting policies and applied
 them consistently and made judgements and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at 31st December 2011 and of the profit for the year
 ended on that date;
 
 c) your Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities; and
 
 d) the accounts for the year ended 31st December 2011 have been
 prepared on a going Concern basis.
 
 AUDITORS
 
 Messrs Lovelock & Lewes, Chartered Accountants, retiring Auditors,
 being eligible, offer themselves for re-appointment.
 
 TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
 
 The Company has transferred a total sum of Rs.0.41 million during the
 financial year 2011 to the Investor Education & Protection Fund
 established by the Central Government, in compliance with Section 205C
 of the Companies Act, 1956. The said amount represents unclaimed
 dividend amounting to Rs.0.16 million and a further Rs.0.25 million
 towards unclaimed fixed deposits & interests which has been lying with
 the Company for a period of 7 years from their respective due dates of
 payment.
 
 RISKS & MITIGATING STEPS 
 
 Financial Risk
 
 In the present scenario of interest volatility, the Company avails of
 various financing options to minimize the effect of interest risk.
 
 Information Technology Risk
 
 The Company is in the process of shifting from ORACLE to SAP in line
 with the Group policy. To ensure a smooth transition, the Company has a
 dedicated team of professionals who are going about to bring the
 change.
 
 Operational Risk
 
 The Company has a certified occupational health and safety management
 system which benefits to mitigate the risk associated with the health
 and safety of employees.
 
 BUSINESS OUTLOOK AND FUTURE PROSPECTS
 
 Inspite of slowdown in the economy, India is expected to register a
 growth of 7.6% for the fiscal year 2011-2012.  According to reports,
 the main factors that could adversely impact the markets include oil
 prices, inflation, high rates and slowing growth.
 
 Although there is a concern that further deterioration of economic
 crisis might occur, we expect that considering sustained domestic
 demand and its inherent strength, Indian economy would show rapid
 improvement.
 
 Your Company''s business strategy for the current financial year would
 be to consolidate the business which showed an impressive growth during
 last year and to focus on high quality market segment. By integrating
 individual technologies and functions from our Group''s wide range of
 products, your Company will facilitate the development of new and high
 performance products. Further, your Company would focus on improving
 the operating margins through better productivity, greater focus on
 logistics and effective working capital management.
 
 Your Company''s continued focus on Research & Development enabled it to
 develop several environment friendly products including certain
 products in the field of high performance to cater to some niche
 markets. The R & D Centre is recognized by the Central Government,
 Ministry of Science and Technology. Your Company has a basket of
 several internationally recognised products and has plans to exploit
 these as well as to increase sales through new product launches and
 expanding market network.
 
 The Company has continued its effort to implement all round cost saving
 measures and improving productivity to ensure that the Company''s growth
 rate continues. The investment in Research and Development measures to
 upgrade its product portfolio and manufacturing process to cater to the
 future demands would be continued to maintain your Company''s leadership
 in the market. It is the endeavour of your Company to deploy resources
 in a balanced manner so as to secure the interest of the shareholders
 in the short, medium and long term. With a significant improved
 customer base, experience in varied markets, continuous technical
 assistance from DIC Corporation, Japan, the world''s largest ink
 manufacturing company and strong management team, your Company feels
 confident of sustained growth in all the market segments.  
 
 ACKNOWLEDGEMENT
 
 The Board of Directors takes this opportunity to express its sincere
 appreciation for the continued support and confidence received from
 customers, distributors, suppliers, bankers, shareholders and other
 business associates.
 
 Your Directors place on record their deep appreciation of the dedicated
 efforts and contribution of the employees at all levels and look
 forward to their continued support in the future as well.
 
 Your Directors look forward to the future with confidence.
 
                                                On behalf of the Board
 
                                                           DR P K DUTT
 
                                                              Chairman
 
 Kolkata                                                     S BHAUMIK
 
 8th February 2012                                   Managing Director