dishman pharmaceuticals and chemicals ltdmerged Directors report

To

The Shareholders of

Dishman Pharmaceuticals and Chemicals Limited

Your Directors have pleasure in presenting their Report along with the Audited Accounts of the Company for the year ended March 31, 2015.

(Rs. in Lacs)

FINANCIAL RESULTS

	Standalone		Consolidated
Particulars	2014-2015	2013-2014	2014-2015	2013-2014
Net Sales	47869.31	47328.11	157518.77	138532.00
Profit before tax & other adjustments	10382.59	11883.64	15924.71	15640.24
Net current tax expenses	2701.64	2528.05	4088.38	3766.24
Deferred tax liability	1833.12	676.93	(144.57)	946.76
Profit After Tax	5847.83	8678.66	11980.90	10927.24
Balance of profit brought forward	11853.28	5807.56	42114.18	33819.88
Amount available for appropriation	17701.11	14486.22	54095.08	44747.12
Adjustment of Depreciation	(110.69)	-	(131.89)	-
Appropriations:
Transfer to debenture redemption reserve	-	-	-	-
Transfer to general reserve	1500.00	1500.00	1500.00	1500.00
Proposed dividend	1613.94	968.37	1613.94	968.37
Tax on proposed dividend	328.56	164.57	328.56	164.57
Balance carried to balance sheet	14147.92	11853.28	50520.69	42114.18

PERFORMANCE AND OPERATION REVIEW

Standalone Financial Results

In FY2014-15, your Company achieved a turnover of Rs. 47869.31 lacs as compared to Rs. 47328.11 lacs in FY2013-14. Profit before tax stood at Rs. 10382.59 lacs in FY2014-15 as against Rs. 11883.64 lacs in FY2013-14. Profit after tax for the year remain at Rs. 5847.83 lacs in FY2014-15 as compared to Rs. 8678.66 lacs in FY2013-14.

Earning per share for the FY2014-15 remains at Rs. 7.25 per share as against Rs. 10.75 per share in FY 2013-14.

Consolidated Financial Results

In FY2014-15, your Company achieved a turnover of Rs. 157518.77 lacs as compared to Rs. 138532.00 lacs in FY2013-14. Profit before tax stood at Rs. 15924.71 lacs in FY2014-15 as against Rs. 15640.24 lacs in FY2013-14. Profit after tax for the year remain at Rs. 11980.90 lacs in FY2014-15 as compared to Rs. 10927.24 lacs in FY2013-14.

Earning per share for the FY2014-15 remains at Rs. 14.85 per share as against Rs. 13.54 per share in FY 2013-14.

A detail analysis of the performance of the company, its subsidiaries and financial results is given in the Management Discussion and Analysis Report, which forms part of this report.

DIVIDEND

For the financial year 2014-2015, the Board of Directors of your Company have decided to increase dividend for higher return on investment made by the shareholders of the Company. Your Directors are pleased to recommend a final dividend of 100% on the paid-up equity share capital of Rs. 1613.94 lacs ( 2.00/- per equity share of Rs. 2/- each) (previous year 60% on the paid-up equity share capital of Rs. 1613.94 lacs, i.e. Rs. 1.20/- per equity share of Rs. 2/- each), subject to approval of shareholder at ensuing Annual General Meeting and will be paid out of the profits of the Company for the year to all those equity shareholders whose names appear in the Register of Members on the close of business hours as on 11th September, 2015.

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 15.00 crores (previous year Rs. 15.00 crores) to the General Reserves out of the amount available for appropriation.

DEPOSIT

The Company has neither accepted nor invited any deposit from public, falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

NON CONVERTIBLE DEBENTURES (NCDs)

• As you are aware, in February, 2010 your Company has issued Secured Redeemable Non Convertible Debentures of Rs. 75.00 crores in the form of Separately Transferable Redeemable Principle Parts ("STRPPs") of Rs. 10 lacs each fully paid-up on private placement basis and the said NCDs has been listed on the Bombay Stock Exchange Ltd. (BSE) in the list of securities of F Group - Debt Instrument w.e.f. 13th May, 2010. These NCDs will be redeemed at par at the end of 4th, 5th, 6th & 7th year in ratio of 20:20:30:30, respectively from the date of issue.

During the year, as per the terms of said NCD, on 18th February, 2015, the Company has redeem 20% of the Non convertible Debenture (first Trenche) issued by the Company in February, 2010 and accordingly; Company has paid Rs. 22.76 Cr. towards principal payment and interest thereon to the Debenture holders. Now, as on 31st March, 2015, there is an outstanding NCD -I (first trenche) amounting to Rs. 45.00 crores.

• In June, 2010, the Company has issued second trenche of its Secured Redeemable Non- convertible Debentures (NCD) of Rs. 75.00 crores in the form of Separately Transferable Redeemable Principle Parts ("STRPPs") of Rs. 1.00 lac each fully paid-up on private placement basis and the said NCDs have also been listed on the Bombay Stock Exchange Ltd. (BSE) in the list of securities of F Group - Debt Instruments w.e.f. 17th September, 2010. These NCDs will be redeemed at par at the end of 4th & 5th year in the ratio of 50:50, respectively from the date of issue.

During the year, as per the terms of said NCD, on 16th June, 2014, the Company has redeemed 50% of the NCD-II (second tranche) issued by the Company in June, 2010 and accordingly; Company has paid Rs. 38.25 crores towards principal payment and interest thereon to the Debenture holders. Now, as on 31st March, 2015, there is an outstanding NCD-II (second tranche) amounting to Rs. 37.50 crores.

The Company is paying interest on the said NCDs regularly on the due dates. As per the Circular No. 04/2013 dated 11th February, 2013 issued by Ministry of Corporate Affairs, Government of India, Company had created Debenture Redemption Reserve (DRR), in respect of both trenches of NCDs issued by the Company. The Company has deposited an amount of Rs. 9.00 Crores, by way of fixed deposit with Corporation Bank, being 15% of the maturing amount of Rs. 60.00 Crores, which is going to be matured during the Financial Year 2015-2016.

OPERATIONS

During the year, most of the key business verticals of the Company and also all major subsidiaries of the Company have performed reasonably well.

CRAMS

For the "CRAMS" segment of Dishman India, as you are aware, since the last three years, your Company has modified its focus and is now concentrating on a larger number of midsize contracts, instead of concentrating only on a few large MNCs. Your Companys strategy has started yielding fruits since last 2 years whereby apart from the big pharma companies your Company has been getting many orders from small and big and mid-sized pharma companies which has resulted into diversified portfolios in this segment in India and has also helped your Company in having a greater degree of predictability of the revenues. Your Companys 100% wholly owned subsidiary - CARBOGEN AMCIS AG Switzerland(CAAG), which is also operating in the CRAMS segment through its plant located in Switzerland and UK has done quite well during the year under review.In fact, CAAGs order book is almost full, and as a strategic measure, during the year under review, the China facility has been now put under the management of CAAG to cater to their gap of not having large volume manufacturing. We are happy to note that CAAG has expanded its markets significantly and also improved the product basket between Dishman India and Carbogen Amcis or Dishman Group, your Company now has the capability of offering complete solutions in the organic chemistry space in the CRAMS segment. Further, the performance of CARBOGEN AMCIS UK has also remained very satisfactory during the year under review.

We are also delighted to inform the members that during FY 2014-15, Dishman Group has also made remarkable progress specifically in terms of the Oncology space, thanks to the focused hard work in the development process by partnering with many Oncology companies over last few years. Thus Dishman Group bagged a prestigious order for supply of high value added Oncology API for a highly effective Lung Cancer drug to a leading mid size Oncology Formulation company based out of US. Further, many such products are in pipeline.

Your Company is confident of achieving a steady and sustainable growth in this segment in the coming years.

Hi-Po Unit

The state-of-the-art Hi-Potency (Hi-Po unit) - Unit 9 at Bavla has performed well during the year under review. Your Company has started receiving regular as well as repeated orders from major global pharma MNCs who are very excited about the type of the facility and infrastructure created in this unit. Again noteworthy is the fact that, apart from the on going projects, your Company has successfully completed a few technology transfer projects from CARBOGEN AMCIS to this unit which implies a significant scaling up of the production of such high value-added and extremely potent pharma APIs mainly in the oncology category. As you are aware, this is one of its kind facility not only in India, but in the entire world, which is capable of handling extremely high potency molecules in large volumes with a specific focus on the therapeutic segments of oncology, steroids, among others. Regular business has started coming in steadily from leading Global MNCs. For the current year, your Company has already an order book/ visibility of around US$ 12 million for this unit with only 2 of the possible 5 cells fitted and at its optimum capacity the target is to achieve a top line of around US$ 25-30 million over next 2 to 3 years for which a good visibility exists. Again, this is a high-margin segment which will also help in improving the bottom line of your Company and more importantly, the products when launched, will improve the life expectancy of many unfortunate people affected with such deadly diseases.

Vitamin D3

During the year under review, the Vitamin D3 Business has also performed satisfactorily. This Business is of the WOS namely Dishman Netherland B.V., which is having its plant in Netherlands producing cholesterol, the key raw material for Vitamin D3. During the year under review, the said company has changed its strategy for this Business and is now concentrating on selective business, which has yielded good results in the form of increased profitability.

Generic API Business

The growth of Generic API business during the year has been slightly subdued, but still satisfactory. The idea is to take the advantage of several products already developed by the Company in the form of around 25 to 30 potential good generic APIs for which the Company has enough data available to immediately file the DMFs in the regulated market. The key focus will be only on the regulated markets where the Company would be in a position to get a better value addition and comfortable profit margin.

Performance of China WOS

As indicated earlier, during the year under review, post taking over of the operations of china plant by CAAG, its performance has improved and the losses have considerably reduced. In FY 2014-15. Your Company is fairly confident of turning around Dishman China in the fiscal year FY2015-16.

Performance of Major Subsidiaries

The major subsidiary Companies have performed quite satisfactorily during the year under review. CARBOGEN AMCIS AG., Switzerland has reported a healthy revenue of Rs. 786.91 crores as against Rs. 621.28 crores in the previous year and PBT of Rs. 67.42 crores as against Rs. 56.12 crores. CAROGEN AMCIS Ltd., UK has also reported a healthy revenue of Rs. 80.22 crores as against Rs. 52.27 crores in the previous year and PBT of Rs. 13.65 crores as against Rs. 8.34 crores.

The other marketing subsidiaries viz. Dishman Europe Ltd., reported a revenue of Rs. 257.93 crores and PBT of Rs. 1.76 crores as compared to Rs. 274.36 crores and PBT of Rs. 8.72 crores in the previous year. Dishman USA reported a revenue of Rs. 95.87 crores and PBT of Rs. 1.89 crores showing growth of 8.58% and 43.18%, respectively, as compared to last year.

Dishman Netherland BV., (DNBV) perform well during the year, revenue of DNBV increased by 10.94% during FY 2014-15, which stood at Rs. 196.52 crores and PBT has been increased to Rs. 31.89 crores from Rs. 6.66 crores in the previous year. Other subsidiaries has also performed reasonably well during the year under review.

RESEARCH AND DEVELOPMENT

We continue to focus on Research & Development as our core strength. Our research is the foundation upon which our strategy of manufacturing and marketing of Bulk Drugs, Intermediates (including contract manufacturing), Fine Chemicals, Quats & Specialty chemicals stands.

We offer process development and optimisation services from our Ahmedabad-based state-of-the-art R&D centre and from other locations outside of India. At the Ahmedabad R&D centre which is in operation since 2005, our Process R&D scientists work in well- equipped laboratories, with an excellent analytical set-up for monitoring the reactions. Our development programs are designed to meet diverse customer expectations varying from project to project. We are considering refurbishment of the R&D laboratories.

A majority of our process development activities are aimed towards optimising our existing processes. Our prime objective is to make these processes economically and environmentally viable. During the period of development, safety and efficiency parameters of these processes is assumed most significance.

Amidst the ongoing changing regulatory scenario on drug design, we develop processes capable of producing pure APIs, with impurities well below the acceptable levels. Currently, there are 25 NCE Molecules under the laboratory to pilot scale productionand some also at commercial scale due to the high volume requirement to supply material for multiple clinical trials for various indications.. The IPR of a few of these have been given to customers against "agreed-upon payments". Many of these IPR are owned by the Company.

In the Generic API segment, we are focusing on new and niche therapeutic areas in the segment of generic APIs. For developmental activities, our research scientists have access to online databases for all types of information requirement.

In this year, about 150 projects are at different stages of development of these, 100 CRAMS projects, 25 Generic APIs, about 25 NCE Molecules are currently under laboratory/pilot scale and commercial production IPR for some of them are given to customers against agree-upon payments but for many of them IPR is owned by Dishman.

QUALITY, HEALTH, SAFETY & ENVIRONMENT (QHSE)

Your company is committed to ensuring that those working with the Company are safe at work, and that everyone takes responsibility for achieving this. We include EHS and climate change-related considerations in our business decisions and strive to minimize the environmental impact of our operations on the environment. Measuring, appraising and reporting on environmental, health and safety performance is an important part of continuous improvement in our EHS performance.

Dishmans Environment, Health and Safety (EHS) organization conducts strategic planning to establish long-term EHS goals, assess resources required to achieve specific goals, and ensure critical business alignment. Dishman considers feedback from internal and external stakeholders in proposing and establishing its long-term goals in manufacturing operations.

Dishmans products and processes are developed in accordance with strictly defined local and international rules to ensure safety and Health of workers as well as the environment. This is achieved by conducting the Risk Assessment, Process Hazard Assessment, identification of significant environmental aspects, Safety Audits, customer audits, HAZOP study and Environment audits. Safety & Environment Management Program are being taken to reduce the Significant Risk & Environment Aspects.

The Companys QHSE policy is being implemented, among others, through (i) Maintaining the "Zero Discharge" of waste water by series of treatment; (ii)Stripper system, Multiple effect evaporator and ATFD for concentrated effluent stream; (iii) Practicing Onsite emergency plan by conducting mock-drills; (iv) Replacement of hazardous process / chemical to non-hazardous process for converting to low hazards; (v) Fire detection and protection system available at site; (vi) Conducting intensive QHSE training programs including contractor employees; (vii) Participation of employees in Safety committee meetings at all levels and celebrating the National Safety Day, Fire Service Day, World Environment Day and World Earth Day; (viii) Independent safety and environment audits at regular intervals by third party and also in-house; (ix) In-house medical and health facility at site for pre-employment & periodical medical check-up of all employees including contract employees; (x) Blood Donation Camp at site for social cause; (xi) Participation and paper presentation on good practices adopted by dishman on SHE management in National and International Conferences. (xii) Rated low risk facility by various international Customer by conducting EHS audit in depth.

Dishman continues to pursue world class operational excellence on Process Safety Management (PSM). Dishman has established the capabilities within the Company and developed in-house experts in various facets of PSM. Process Hazard Analysis (PHA) at various plants is being carried out to reduce process safety risks.

In its pursuit of excellence towards sustainable development and to go beyond compliance, Dishman integrated its ISO:14001 EMS, ISO:9001 QMS and ISO:18001 OSHA management systems and certified for HACCP and FAMI-Qs for Vitamin D3 plant. The company is in process of getting the ISO 13485 Certification for Medical Disinfectant Products.

Your Companys efforts are recognized by State Level, National Level and International level Awards from time to time. This year Company has been awarded the most prestigious award by way of Certificate of Appreciation for Naroda Site from National Safety Council.

Indian chemical Council (ICC) has authorized Dishman Pharmaceuticals for use of Responsible Care Logo.

LISTING

The equity shares of the Company are listed on the National Stock Exchange of India Ltd., Mumbai (NSE) and Bombay Stock Exchange Ltd., Mumbai (BSE). Annual listing fees for the FY 2015-2016, as applicable, have been paid before due date to the concerned Stock Exchanges.

The Secured Redeemable Non-Convertible Debentures (NCDs) of Rs. 150 crores issued by the Company in two trenches is also listed at Bombay Stock Exchange Ltd., Mumbai (BSE). Annual listing fees for the FY 2015-2016, as applicable, have also been paid before due date to the BSE.

FORMATION OF VARIOUS COMMITTEES

Your Company has several Committees which have been established as part of the best Corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

• Audit Committee

• Stakeholder Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Management Committee

During the year, the Board has accepted all the recommendations made by various committees including Audit Committee. The details with respect to the compositions, powers, terms of reference etc of relevant committees are given in details in the Corporate Governance Report which forms part of this Annual Report.

DISCLOSURES UNDER THE COMPANIES ACT, 2013

i) Extract of Annual Return

The extracts of Annual Return pursuant to the provisions of sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is annexed herewith as Annexure A to this Report.

ii) Board Meetings

Regular meetings of the Board are held inter-alia, to review the quarterly results of the Company. Additional Board meetings are convened to discuss and decide on various business policies, strategies and other businesses. Due to business exigencies, certain business decisions are taken by the board through circulation from time to time.

During the FY 2014-15, the Board met Five (5) times i.e. 16th May, 2014, 28th May, 2014, 13th August 2014, 13th November, 2014 and 13th February, 2015. Detailed information on the meetings of the Board is included in the report on Corporate Governance, which forms part of this Annual Report.

iii) Related Party Transactions

Since all the related party transactions entered into during the financial year were on an arms length basis and were in the ordinary course of business. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure B to this Boards report. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. The policy on Related Party Transactions has been approved by the Board and uploaded on the website of the Company. The details of the transactions with Related Party are provided in the accompanying financial statements vide note no. 27.15 of notes on financial statement as per requirement of Accounting Standard

18-related party disclosure issued by ICAI. These transactions are not likely to conflict with the interest of the Company at large. All significant transaction with related parties is placed before audit committee periodically.

iv) Particulars of Loans, Guarantees or Investments under Section 186

During the year under review, the Company has made investments, Loan, guarantee in compliance of Section 186 of the Companies Act, 2013, the said details are given in the notes to the financial statements.

v) Material Changes and Commitments Affecting the Financial Position of the Company

There are no significant and material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

vi) Subsidiaries, Joint Ventures and Associate Companies

During the year following changes happened in Subsidiary, Joint Ventures and Associate Companies:

• Dishman Arabia Ltd. liquidated during the year under review.

• Dishman Japan Ltd. became wholly owned subsidiary of the Company (earlier Company holds 85%)

• Shanghai Yiqian International Trade Co. Ltd. formed by our wholly owned subsidiary company Shanghai International Trading Co. Ltd.

In view of the above, the total number of subsidiaries including wholly owned subsidiaries as on 31 March, 2015 was Eighteen (18), One (1) Joint Venture and one (1) Associate company.

CONSOLIDATED FINANCIAL STATEMENT

Pursuant to the provisions of Section 129, 134 and 136 of the Companies Act, 2013 read with rules framed thereunder and pursuant to Clause 41 of the Listing Agreement, your Company had prepared consolidated financial statements of the company and its subsidiaries and a separate statement containing the salient features of financial statement of subsidiaries, joint ventures and associates in Form AOC-1 forms part of the Annual Report.

The annual financial statements and related detailed information of the subsidiary companies will be provided on specific request made by any shareholders and the said financial statements and information of subsidiary companies are open for inspection at the registered office of the company during office hours on all working day except Sunday and holidays between 2 p.m. to 4 p.m. The separate audited financial statement in respect of each of the subsidiary companies is also available on the website of the Company.

As required under Clause 32 of Listing Agreement with the stock exchange(s) and in accordance with the requirements of Accounting Standard (AS-21) issued by the Institute of Chartered Accountants of India, the Company has prepared Consolidated Financial Statements of the Company and its subsidiaries and is included in the Annual Report.

While preparing the consolidated financial statements, Company has consolidated the accounts of one Joint Venture companies namely Schutz Dishman Biotech Ltd. (22.33% holding by the Company) and one associate company namely, Bhadra Raj Holdings Pvt. Ltd. (40% holding by the Company), as per the requirements of Accounting Standard 27 (AS-27) and Accounting Standard 23 (AS-23) respectively.

GENERAL DISCLOSURE

i) Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

During the year 2014-2015, the Company has not issue any of Equity Shares with differential rights as to dividend, voting or otherwise.

ii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS. :

During the year under review, the Company has passed enabling resolution for issue of shares under ESOS to the employee of the company and employee of subsidiary company by way of postal ballot which was approved by the shareholder on 13th January, 2015. However, the Company has not issued any shares under ESOS.

iii) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. :

Managing Director and Whole time Director of the Company has not received any remuneration and commission from any Indian subsidiaries during the year under review.

iv) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

There are no significant and material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status and the Companys future operations.

DIRECTORS & KMPs

Retire by Rotation

Mr. Arpit Vyas, Managing Director of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offer himself for reappointment.

Reappointment of Director

The term of Ms. Deohooti J. Vyas as whole time Director expires on 2nd September, 2016. The Board, therefore, recommends their re-appointment as Whole time director of the Company for the approval of the members at the ensuing Annual General Meeting.

Appointment of Director

The Board of Directors at their meeting held on 13th August, 2014, have approved the appointment of Mr. Mark Christopher Griffiths, a Global CEO of the Company, as an Additional Director of the Company, with the effect from September 1, 2014, whose term of office is upto the date of this Annual General Meeting in accordance with the applicable provisions of the Articles of Association and the Companies Act, 2013. The matter of appointing him, as regular director, liable to retire by rotation, appears as Item No. 6 in the Notice of the 32nd Annual General Meeting.

Mr. Subir Kumar Das and Mr. Rajendra S. Shah were appointed as an Additional Directors designated as an Independent Director w.e.f. 15th December, 2014 and 2nd April, 2015, respectively. The approval of members for their appointment as an Independent Directors is being sought vide item Nos. 7 & 8 in the Notice of the 32nd Annual General Meeting.

Statement of Declaration by Independent Directors

The Independent Directors have submitted the Declaration of their Independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub section (6).

Cessation

During the year, Mr. Yagneshkumar B. Desai, resigned as a Director of the Company with effect from 13th December, 2014. The Directors place on record their appreciation of the valuable advice and guidance given by him during his tenure.

Key Managerial Personnel

During the year under review, Mr. Rajashekhar Bhat, Chief Financial Officer has been appointed as Key Managerial Personnel w.e.f. 1st April, 2014 in terms of Section 203 of the Companies Act, 2013. Mr. Rajashekhar Bhat, Chief Financial Officer has resigned from the Company w.e.f. 20th January, 2015.

Board Evaluation & Criteria

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its committees. 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 Committees. The Board of Directors expressed their satisfaction with the evaluation process.

Board diversity

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help to retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website, www.dishmangroup.com.

Policy on Directors appointment and remuneration

The Companys Policy on Directors appointment and remuneration of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is available on the website of the Company.

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014

The information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure C.

The statement containing particulars of employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report as Annexure D.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTOR

The Company undertook various steps to make the Independent Directors have full understanding about the Company. The details of such familiarisation programmes have been disclosed on the Companys website at www.dishmangroup.com.

INDEPENDENT DIRECTORS MEETING

A Separate meeting of Independent Directors held on 13th February, 2015 without the attendance of Non-Independent Directors and members of the Management. In the said meeting, Independent Directors reviewed the followings:

• Performance evaluation of Non Independent Directors and Board of Directors as a whole;

• Performance evaluation of the Chairperson of the Company taking into account the views of executive directors and nonexecutive directors;

• Evaluation of the quality of flow of information between the Management and Board for effective performance by the Board. The Board of Directors expressed their satisfaction with the evaluation process.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state that :

• that in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

• that the Directors have 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 or loss of the Company for that period;

• that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• the directors have prepared the annual accounts on a going concern basis;

• the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

• the director have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROL SYSTEM

The details in respect of internal financial control system and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report.

INSURANCE

Assets of your Company are adequately insured against various perils.

RISK MANAGEMENT POLICY

As per Clause 49 of the Listing Agreement, the Company has framed formal Risk Management framework for risk assessment and risk minimization for Indian operation which is periodically reviewed by the Board of Directors to ensure smooth operations and effective management control. The Audit Committee has additional oversight in the area of financial risks and control.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy pursuant to the requirements of the Companies Act, 2013 and the Listing Agreement. The Policy empowers all the stakeholders to raise concerns by making protected disclosures as defined in the Policy.

The policy also provides for adequate safeguards against victimization of whistle blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and the Policy is available on the website of the Company at www.dishmangroup.com.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

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

There were no incidences of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

As members are aware, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad have resigned from the office of Statutory Auditors of the Company due to unavoidable circumstances, resulting into a casual vacancy in the office of Statutory Auditors of the Company and thus, M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, (Firm Registration No. 110240W) has been appointed as Statutory Auditors of the Company by the members in their Extra Ordinary General Meeting held on 14th August, 2015.

The audited financial results have been reviewed by the Audit Committee and taken on record by the Board of Directors at their meetings held on 22nd August, 2015.

The Notes on Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any further comments.

M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, (Firm Registration No. 110240W) and M/s. Haribhakti & Co., LLP, Chartered Accountants, Mumbai, (Firm Registration No. 103523W) are proposed to be appointed as Joint Statutory Auditors of the Company provided that the appointment of M/s. V. D. Shukla & Co., shall be from the conclusion of this 32nd Annual General Meeting till the conclusion of 36th Annual General Meeting and the appointment of M/s. Haribhakti & Co. LLP, shall be from the conclusion of this 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting, subject to ratification of the appointment by the members at every AGM held after the ensuing 32nd Annual General Meeting.

As required under Section 139 of the Companies Act, 2013, the Company has received a written consent from M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, (Firm Registration No. 110240W) and M/s. Haribhakti & Co., LLP, Chartered Accountants, Mumbai, (Firm Registration No. 103523W) for such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made thereunder.

The Audit Committee and Board of Directors recommend the appointment of statutory auditors as mentioned in resolutions no.4 of the accompanying notice of ensuing Annual General Meeting.

Internal Auditors

M/s. Talati & Talati, Chartered Accountants, Ahmedabad has been internal auditors of the Company. Internal auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditors reports and their findings on the internal audit, has been reviewed by the Audit Committee on a quarterly basis. The scope of internal audit is also reviewed and approved by the Audit Committee.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company had appointed Mr. Ashok P. Pathak, Practicing Company Secretary (Membership No. ACS: 9939; CP No: 2662), as Secretarial Auditors to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is appended in the Annexure E to the Directors Report. The observations and comments, if any, appearing in the Secretarial Audit Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors.

Cost Auditors

M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad has been reappointed as Cost Auditor by the Board of Directors of the Company for the financial year 2014-15, which was ratified by the shareholders in the previous Annual General Meeting held on 4th September, 2014. Thereafter, Central Government has notified new rules for Cost Audit and as per new Companies (Cost Records and Audit) Rules, 2014 issued by Ministry of Corporate Affairs; Company is not falling under the Industries, which will subject to Cost Audit. Therefore filing of cost audit report for the FY 2014-15 is not applicable to the Company.

M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad has submitted their Cost Audit Report for the financial year 2013-14 to the Central Government on 26th September, 2014. which was within due date for filing the same.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION ANALYSIS REPORT

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on corporate governance practices followed by the Company, as well as "Management Discussion and Analysis confirming compliance, is set out in the Annexure forming an integral part of this Report. A certificate from Practicing Company Secretary regarding compliance with corporate governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

In compliance with one of the Corporate Governance requirements as per the Clause 49 of the Listing Agreement, the Company has formulated and implemented a Code of Conduct for all Board members and senior management personnel of the Company, who have affirmed compliance thereto.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

Information of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 read with rule 8 of The Companies (Accounts) Rules, 2014, is given in the Annexure F and forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

As part of CSR, the Company continued extending help towards social and economic development of the villages and the communities located close to its operations and also providing assistance to improving their quality of life. Companys intention is to ensure that we meet the development needs of the local community. Dishman has a long and strong tradition of supporting the larger communities that it connects with - from health, education etc.

The Company has constituted Corporate Social Responsibility (CSR) Committee and has framed a CSR Policy. The brief details of CSR Committee and contents of CSR policy is provided in the Corporate Governance Report. The details of CSR activities carried out by the Company are appended in the Annexure G to the Directors Report. The CSR Policy is available on the website of the Company.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance and co-operation received from foreign institutions, banks, associates, Government authorities, customers, supplier, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services and teamwork by the executives, staff members and workers of the Company for enthusiastic contribution to the growth of Companys business.

	For and on behalf of the Board
Place : Ahmedabad	Janmejay R. Vyas
Date : 22nd August, 2015	Chairman & Managing Director