Dishman Carbogen Amcis Ltd Directors Report.

To

The Shareholders of

Dishman Carbogen Amcis Limited

[formerly Carbogen Amcis (India) Ltd.]

Your Directors have pleasure in presenting their Report along with the Audited Accounts (Standalone as well as Consolidated) of the Company for the year ended March 31, 2019.

FINANCIAL RESULTS

( In Crores)

Particulars Standalone Consolidated
2018-2019 2017-2018 2018-2019 2017-2018
Revenue from Operations 549.47 474.46 2058.60 1694.79
Earning Before Interest Tax Depreciation and
Amortisation (EBITDA) 193.79 166.30 551.90 445.35
Other Income 71.68 65.66 53.82 45.69
Depreciation & Amortisation (other than Goodwill) 47.85 45.99 151.92 122.96
Amortisation of Goodwill 88.46 88.46 88.46 88.46
Profit Before Interest and Tax 129.16 97.51 365.34 279.62
Finance Costs 47.43 35.34 56.55 48.83
Profit Before Tax 81.73 62.17 308.79 230.79
Tax Expense 25.72 25.10 98.46 76.22
Profit After Tax 56.01 37.07 210.33 154.57

PERFORMANCE AND OPERATION REVIEW Standalone Financial Results

In FY 2018-19, your Company achieved revenue of 549.47 crores as compared to 474.46 crores in FY 2017-18. Profit before tax stood at 81.73 crores in FY 2018-19 as against 62.17 crores in FY 2017-18. Profit after tax for the year remain at 56.01 crores in FY 2018-19 as compared to 37.07 crores in FY 2017-18.

Earning per share for the FY 2018-19 remains at 3.47 per share as against 2.30 per share in FY2017-18.

Consolidated Financial Results

In FY 2018-19, your Company achieved revenue of 2058.60 crores as compared to 1694.79 crores in FY 2017-18. Profit before tax stood at 308.79 crores in FY 2018-19 as against 230.79 crores in FY 2017-18. Profit for the year remains at 210.33 crores in FY 2018-19 as compared to 154.57 crores in FY2017-18.

Earning per share for the FY 2018-19 remains at 13.03 per share as against 9.58 per share in FY2017-18. Cash Earning per share for the current year works out to 34.03 as against 24.00 in the previous year.

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

Your Directors are pleased to recommend a final dividend of 0.20/- (10%) per equity share of 2/- each for the financial year ended March 31, 2019, 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 13th September, 2019.

The total dividend outgo for the year ended March 31, 2019 would be 389.14 lacs including dividend distribution tax of 66.35 lacs.

The Company has declared dividend in line with the compliance of Dividend Distribution Policy of the Company.

TRANSFER TO RESERVES

Due to amortization of Goodwill on account of merger, the Company has not transferred any amount to the General Reserves.

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.

OPERATIONS

The financial year that passed by was marked by some significant acceleration in the supplies of certain niche molecules on the commercial side and debottlenecking of capacity constraints on the product development side. Due to your Companys continued focus on developing and manufacturing complex niche new chemical entities APIs, the revenues as well as the profitability of your company grew substantially over the previous year, making it the best performing year of your company. Your company also underwent regulatory audits at various plant locations and due to the high level of ethical practices being followed in the company and increased levels of preparedness, there were no critical observations that were found.

Your Companys philosophy of "One Company, two Brands" helped the company immensely in obtaining more orders from your customers and converting them into high-growth financial numbers during the year. Due to sustained efforts of all your employees, your companys revenue grew by 21.47% and net profit grew by 36.08% in FY 2019 as compared to FY 2018 on consolidated basis. The growth was driven by India, Swiss and Dutch subsidiary financial performances.

CRAMS

With the focus on niche new chemical entities for development within some key therapeutic areas such as oncology, ophthalmic, cardiovascular, CNS and drugs under orphan category, the pipeline products of your company are ones which would address the diseases where there is a significant unmet need. This reinforces your companys philosophy to serve the human mankind and make the world a better place to live in.

Your company made investments in increasing the new product development capacity, one on the infrastructure i.e. the state-of-the-art laboratories required to develop new molecules and two on the people i.e. the world-class scientists who are focussed on developing novel molecules, which can make a difference to the world. Your customers are extremely comfortable in giving more repeat business to your company because of the high level of confidentiality regarding the intellectual property rights of the molecule that your people are able to maintain.

The most significant factor that plays extremely well in your companys favour to attract the best customer pool is the new molecule development and manufacturing capability that you are able to offer across various locations such as Switzerland, India, China and the UK. This is a unique feature of your organization, which no other company across the world has been able to replicate. Your companys strategy of focussing on small to mid-size biotechnology companies in addition to the large global innovators over the last 7-8 years is yielding extremely rich dividends to the group as a whole. Most of the molecules under development in the late phases are life-saving drugs, which could play an important role in achieving your companys vision of spreading happiness by reducing the number of patients suffering from chronic diseases. Your companys subsidiary CARBOGEN AMCIS AG completed Phase I of the modification/expansion project for adding development capacities to the group especially for the Highly Potent compounds. Your subsidiary also recruited scientists for undertaking new projects for development of complex highly potent molecules. The incremental revenue from this Phase I project is expected to commence from FY 2020.

In the last financial year, your company experienced a significant increase in the sales orders for certain molecules, which received approvals from the regulatory agencies in the last 3-4 years. Your company expects this growth to continue in the future as well. Additionally, your company expects more molecules in Phase III development to get approval over the next 3-5 years. This will keep contributing to healthy revenue and profitability numbers over a sustained period of time.

Hi-Po Unit

Your companys Hi-Potency Unit 9 facility is a world-class, one of the best development and manufacturing facility for highly potent and such other niche molecules. It can handle molecules up to containment level four. One of the significant highly potent APIs was developed in Phase III in this plant and the end-product for one of the indications received approval from the USFDA in 2017. Your company expects more HiPo and such other niche molecules to receive approval over the next 3-4 years, which would be manufactured in this plant. This would require additional capacities in this plant to handle the increased demand for the already commercialized molecule as well as others which are in the late phase pipeline of development.

Your company has started expansion of two more manufacturing cells in the current HiPo plant and expects the same to be completed by end of the current financial year. The molecules manufactured in this plant would be extremely niche in nature and hence would be contributing heavily for improving the overall margin profile of your company.

Vitamin D Analogues and Cholesterol

Your companys subsidiary Carbogen Amcis BV had another great year in terms of financial performance, both in terms of revenue and profitability growth. Due to focus on high-margin analogues business and the cholesterol sales, your companys subsidiary was able to perform exceedingly well. Further, due to the unparalleled findings of synthetically developing a process to manufacture Vitamin D analogues, your company is expanding in the area of developing and manufacturing finished formulation of Vitamin D products, both for human consumption and cattle feed. The world market for Vitamin D products is expected to grow significantly over the next 3-5 years, which puts us in a sweet spot to capture a good market share of this growing market in the coming years.

During the year under review, the operating profitability margins have improved from 38% in FY 2017-18 to 41% in FY 2018-19, which are expected to be sustainable margins for the future.

Generic API and Disinfectant Business

Your company has remained focus on its changed strategy around generic APIs where it plans to develop and manufacture niche generic APIs. Your R&D team is doing development work on certain generic molecules and they would keep on filing DMFs for the generic APIs, which have a large market but even more importantly, a reasonable profit margin profile. Currently, generic APIs constitute an insignificant proportion of total revenues but with the change in strategy, this could play an important role in the overall revenues and profitability of your company. Your company has certain contracts for manufacturing and selling disinfectants finished formulation with a few customers. This is a stable business for your company and it is expected to yield stable margins in the future.

Performance of Major Subsidiary Associates

The major subsidiary Companies have performed quite satisfactorily during the year under review. CARBOGEN AMCIS AG, Switzerland has performed quite satisfactorily during the year under review. It has reported a healthy revenue of 1004.88 crores and Profit after tax 128.36 crores. CARBOGEN AMCIS BV., perform well during the year, reported revenue of 265.10 crores and Profit after tax of 62.56 crores. CARBOGEN AMCIS Ltd. (U.K.) reported a revenue of around 96.93 crores and Profit after tax of 7.79 crores. CARBOGEN AMCIS (Shanghai) Co. Ltd. also perform well, it was reported revenue of 76.28 crores and Profit after tax of 5.25 crores. Other Subsidiaries has also performed reasonably well during the year under review.

The other marketing subsidiaries viz. Dishman USA Inc. reported revenue of 110.39 crores and Profit after tax of 3.22 crores. Dishman Europe Ltd. reported a revenue of around 317.06 crores and Profit after tax of 61.73 crores during the year under review.

RESEARCH AND DEVELOPMENT

Research is a critical thrust area for the Company because it is the foundation upon which Companys strategy of manufacturing and marketing stands. As you know your company offers process development and optimization services from its Ahmedabad-based state-of-the-art R&D centre as well as from other locations outside India. Being a Research and Development driven company, Innovation is a constant factor in all activities undertaken at Dishman; be it processes, technologies or products. We continue our efforts in bringing more efficiency to processes in terms of environmental impact and to meet the new, stricter regulations from the various regulatory agencies. As members are aware and informed about our various focus areas viz: Vitamins, disinfectants, oncology products, MRI agents and catalysts. We have made progress on quite a few of these product ranges.

As you already know, we have been focusing on irradiation chemistry and related products for the last three years. In the last year, we made significant progress on this range of products. We have been very successful in optimizing the upstream chemistry which has helped us to improve the mass balance as well as reduce wastes. New irradiation equipment has been installed for niche vitamin D analogues.

We have filed DMF for one analogue and the other products will follow soon. We continue to invest in our R&D and analytical capabilities. This has helped us to win new CRAMS projects as customers get full service under one roof.

In the last two years, Dishman has developed four new disinfectant actives. These are showing excellent anti-microbial efficacy. Additional trials are underway at globally reputed centres. With the expanded capacity of disinfectant products, now Dishman will focus on institutional business for these disinfectant products.

We have continued to work on innovative processes for generic APIs. We have been granted two patents last year. Also, few more patents are filed. We have developed processes for 5 CNS stimulants. These are under process validation now and we expect the ASMF to be ready within a year.

Our soft gel pilot plant is fully operational and is being used for CRAMS as well as own products. We expect to file few dossiers soon. The large-scale manufacturing facility is under commissioning and will be fully operational by Q2 of FY 2019-20.

QUALITY, HEALTH, SAFETY & ENVIRONMENT (QHSE)

Company uphold its position as a leader in the fine chemical and pharmaceuticals manufacturing industry by conducting all business activities in a responsible manner to meet the expectations of quality, protect the environment & conserve the resources, health & safety of employees, interested parties and the community.

Measuring, Monitoring, Reviewing, analyzing, understanding the needs and expectations of workers and other interested parties, appraising and reporting on environmental, health and safety performance is an important part of continual improvement in our EHS performance. Dishmans Environment, Health and Safety (EHS) organization conducts strategic planning to establish short term as well as long-term EHS goals, with benchmarking to global pharmaceuticals companies assess resources required to achieve specific goals and ensure critical business alignment.

Dishman evaluate customer feedback and satisfaction by internal and external communication in proposing and establishing its long-term relations and to achieve goals in manufacturing operations. Companys 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, Qualitative 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 implemented to reduce the Significant Risk & Environment Impacts.

The Companys QHSE&S policy is being implemented, among others, through

(i) Segregation of waste water in terms of High COD and Low COD separately to achieve zero discharge by utilizing treated water for Utility services, washing activities and flushing activities; (ii) Stripper system, Multiple effect evaporator and ATFD for concentrated effluent stream;

(iii) For Dilute Stream , ETP plant consisting of Primary , Secondary and Tertiary treatment, followed by Two Stage R.O. System and Multiple Effect Evaporator.

(iv) Practicing On-site emergency plan by conducting periodic mock-drills;

(v) Replacement of hazardous process / chemical to non-hazardous process for converting to low hazards;

(vi) Latest technology for Fire detection and protection system , with alarm system.

(vii) Conducting intensive QHSE Training programs including contractor employees and monitoring the effectiveness of the same;

(viii) Participation of employees in Safety committee meetings at all levels and celebrating the National Safety Day / Week and World Environment Day as well as observing Fire Service Day; (ix) Tree plantation to increase the green cover at site; plantation of trees at periphery of premises.

(x) Independent safety and environment audits at regular intervals by third party and also in-house by cross functional team;

(xi) In-house medical and health facility at site for pre- employment & periodical medical check-up of all employees including contract employees;

(xii) Additional health checkup for employees based on their occupational needs;

(xiii) Blood Donation Camp at site in association with the Ahmadabad Red Cross Society for social cause; (xiv) Rain water Harvesting System to conserve rain water and improve ground water level.

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 14001:2015 for EMS, ISO 9001:2015 for QMS and BS ISO 45001:2018 for Occupational, Health and Safety Management systems. The company is also certified EN/ISO 13485:2016 for Medical Device Quality Management System for Disinfectant Products. The adopted systems are being monitored for continual improvements.

CREDIT RATING

India Ratings & Research Pvt. Ltd. (“Ind-Ra”) has affirmed/assigned both the Long Term Loan and Short Term Loan rating of the Company as IND A+/Stable (Affirmed) and IND A1+ (Affirmed), respectively. There is no change in rating assigned by Ind-Ra compared to last rating. Ind-Ra has evaluated the Companys rating during September, 2018.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124(5) and 125 of the Companies Act, 2013, the Company has transferred the unpaid or unclaimed dividend upto and for the financial year 2010-2011, to the Investor Education and Protection Fund (IEPF) established by the Central Government.

The resultant benefits arising out of shares already transferred to the IEPF is 736.40/- towards 10% dividend recommended by the board of Directors of the Company for the financial year 2018-19, subject to approval of shareholder at ensuing Annual General Meeting.

Year wise amount of unpaid/unclaimed dividend lying in the unpaid account upto the Year and the corresponding shares, which are liable to be transferred to the IEPF, and the due dates for such transfer are given in details in the report on Corporate Governance which forms part of this Annual Report.

ACCOUNTING IMPACT PURSUANT TO SCHEME OF ARRANGEMENT AND AMALGAMATION

As the members are aware that the Honble High Court of Gujarat, vide its order dated 16th December, 2016 sanctioned a Scheme of Arrangement and Amalgamation amongst the Company; Dishman Pharmaceuticals and Chemicals Limited (DPCL); Dishman Care Limited (DCL) and their respective shareholders and Creditors (“Scheme”) in terms of the provisions of Section 391 to 394 of the Companies Act, 1956. The appointed date for the Scheme was 1st January, 2015. The Scheme has become effective upon filing of certified copy of said order of Honble High Court with the Office of Registrar of Companies, Gujarat/ MCA on 17th March, 2017. Accordingly, DPCL as a going concern, stands amalgamated with the Company with effect from the Appointed Date i.e. 1st January, 2015.

Accounting Impact

The amalgamation has been accounted under the “Purchase Method” as per the then prevailing Accounting Standard 14 Accounting for Amalgamations, as referred to in the Scheme of Amalgamation approved by the Honble High Court, Gujarat, which is different from Ind AS 103 “Business Combinations”. Accordingly, the assets and liabilities of DPCL and DCL have been recorded of their fair value as on Appointed Date. The purchase consideration of 4810 crores payable by way of issue of shares of the Company has been disclosed as Share Suspense Account under other equity. The excess of consideration payable over net assets acquired has been recorded as goodwill amounting 1326.86 crores, represented by underlying intangible assets acquired on amalgamation and is being amortized over the period of 15 years from the Appointed Date. Had the goodwill not been amortized as required under Ind AS 103, the Depreciation and Amortization expense for the year ended March 31, 2019 would have been lower by 88.46 crores and the Profit Before Tax for the year ended March 31, 2019 would have been higher by an equivalent amount.

LISTING

The equity shares of the Company are listed on the National Stock Exchange of India Ltd., Mumbai (NSE) and BSE Ltd., Mumbai. Annual listing fees for the FY 2019-2020, as applicable, have been paid before due date to the concerned Stock Exchanges.

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

• Risk Management Committee

• Management Committee

• Sexual Harassment 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, number and dates of meetings of such committees held during the year are given in details in the report on Corporate Governance 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 financial result 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 2018-19, the Board met Eight (8) times i.e. on 16th May, 2018, 1st June, 2018, 2nd July, 2018, 25th July, 2018, 1st November, 2018, 28th November, 2018, 23rd January, 2019 and 30th March, 2019. 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

All Related Party Transactions are placed before the Audit Committee and also the Board for approval. 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. 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.31 of notes on financial statement as per requirement of Ind AS 24 -related party disclosure. 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 occurred after the end of Financial year

There are no material changes and commitments affecting the Financial Position of the Company occurred after the end of financial year.

vi) Subsidiaries, Joint Ventures and Associate Companies

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

• During the year, two dormant wholly owned subsidiaries viz. Dishman Switzerland Limited and Innovative Ozone Services Inc. (IO3S) were struck off/wound-up.

• During the year, name of wholly owned subsidiary company viz. "Dishman Netherland B. V." has been changed to "CARBOGEN AMCIS B. V."

• During the year, name of wholly owned subsidiary company viz. "Dishman Japan Ltd." has been changed to "Dishman CARBOGEN AMCIS (Japan) Ltd."

As on 31st March, 2019, the total number of subsidiaries including step down subsidiaries was Fourteen (14).

Expansion programme:

Your companys subsidiary CARBOGEN AMCIS AG had bought a building in Switzerland to debottleneck its new product development capacity constraint in 2017. In the last financial year, the Phase I of modification of this building was completed so that additional development and analytical laboratories can start functioning. Additional scientists were also hired for undertaking the new projects. Moreover, one of the buildings in the existing campus in Bubendorf, Switzerland facility, which was on lease, was given away to the lessor and the development projects were shifted to this new building.

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 Regulation 33 of SEBI (LODR) Regulations, 2015, 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 Saturdays, Sunday and Public 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 at www.dishmangroup.com.

As required under Regulation 33 of SEBI (LODR) Regulations, 2015 and in accordance with the requirements of Ind AS 110, the Company has prepared Consolidated Financial Statements of the Company and its subsidiaries and is included in the Annual Report.

GENERAL DISCLOSURE

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

During the year 2018-2019, 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, the Company has not issued any shares including sweat equity under Employee Stock Option Scheme. iii) Whether the Managing Director or the Whole-time Directors of the Company receive any remuneration or commission from any of its holding /subsidiary companies :

Mr. Arpit J. Vyas, Global Managing Director of the Company has received remuneration as a Director from two Foreign wholly owned subsidiary companies namely Dishman Europe Ltd. and CARBOGEN AMCIS AG., Switzerland AND from the Company as a Managing Director, which is in compliance with the provisions of the Companies Act, 2013. He is being a Partner of Adimans Technologies LLP, a holding LLP of the Company, has right to receive profit in the ratio of 20% from the said LLP.

Also, Mr. Janmejay R. Vyas, Chairman of the Company has received remuneration as a Director from one of the Foreign wholly owned subsidiary company namely Dishman Europe Ltd., and from the Company as a Chairman & Managing Director, which is in compliance with the provisions of the Companies Act, 2013. Mr. J. R. Vyas being a Partner of Adimans Technologies LLP, a holding LLP of the Company, has right to receive profit in the ratio of 40% from the said LLP.

Mrs. Deohooti J. Vyas, Whole-time Director, being a Partner of Adimans Technologies LLP, a holding LLP of the Company, has right to receive profit in the ratio of 40% from the said LLP.

Details of remuneration received by Mr. Arpit J. Vyas, Mr. Janmejay R. Vyas and Mrs. Deohooti J. Vyas have been disclosed in report on Corporate Governance.

iv) Any 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.

v) Secretarial Standards

Secretarial Standards issued by the Institute of Company Secretaries of India as applicable to the Company were followed and complied with during 2018-19. The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

INTIMATION RECEIVED FROM HOLDING COMPANY

During the year under review, the Company has received the intimation under SEBI (PIT) Regulations, 2015 and SEBI (SAST) Regulations, 2011 from its holding company viz. Bhadra Raj Holdings Pvt. Ltd. ("BHPL"), regarding transfer of its holding (61.40%) in the Company to Adimans Technologies Pvt. Ltd. ("ATPL") pursuant to Scheme of Amalgamation amongst BHPL and ATPL and their respective shareholders and creditors duly approved by the Honble NCLT, Ahmedabad Bench vide its order dated 14th November, 2018. Subsequently, ATPL has been converted into LLP viz. Adimans Technologies LLP w.e.f. 28th January, 2019 and in this regard, necessary disclosures under SEBI (PIT) Regulations, 2015 and SEBI (SAST) Regulations, 2011 have also been received by the Company. Accordingly, now Adimans Technologies LLP became a holding company.

DIRECTORS & KMPs

Retire by Rotation

Mr. Mark Griffiths, Director of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for reappointment.

Appointment

During the year, the Board of Directors appointed Ms. Maitri K. Mehta as an Additional Director designated as an Independent Director with effect from 1st April, 2019, to hold office up to the date of the forthcoming Annual General Meeting. The matter of appointing her, as regular Director in Independent Director category, alongwith justification for such appointment, appears as Item No.4 in Notice of the Annual Report.

The term of office of Mr. Subir Kumar Das and Mr. Rajendra Shah, as an Independent Directors, will expire on 14th December, 2019 and 1st April, 2020 respectively. The Board of Directors, on recommendation of the Nomination and Remuneration Committee has recommended re-appointment of Mr. Subir Kumar Das and Mr. Rajendra Shah, as an Independent Directors of the Company for a second term of five (5) consecutive years on the expiry of their current term of office. The approval of members for their re-appointment as an Independent Directors alongwith rational for such re-appointment is being sought vide Item Nos. 5 & 6 in Notice of the Annual Report.

During the year, the Board of Directors elevated the role of Mr. Mark Griffiths from Director & Global CEO of the Company to new role of Director (Global Marketing & Strategy) w.e.f. 7th February, 2019.

Key Managerial Personnel

During the year, Mr. Arpit J. Vyas, who was Managing Director and CFO of the Company, has been elevated to the role of Global Managing Director and in view of the said new role, on his request, Mr. A. J. Vyas has been released from the duty of CFO w.e.f. 28th November, 2018.

The Board of Directors on recommendation of Nomination and Remuneration Committee and Audit Committee appointed Mr. Harshil R. Dalal, Sr. Vice President (Finance & Accounts) of the Company as Global Chief Financial Officer (CFO) w.e.f. 28th November, 2018 with his existing remuneration and to perform the duties which may be performed by Key Managerial Personnel of the Company under the Companies Act, 2013.

During the year, Mr. Janmejay R. Vyas who was Chairman & Managing Director of the Company has decided to step down from the role of Managing Director with effect from 18th February, 2019 as part of the Companys succession plan and his roles & responsibilities shall be handed over to Mr. Arpit J. Vyas, Global Managing Director of the Company.

Statement of Declaration by Independent Directors

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013, read with Regulations 16 and 25(8) of the SEBI (LODR) Regulation, 2015 ("Listing Regulations") that he/she meets the criteria of independence as laid out in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the Listing Regulations.

Also, Independent Directors affirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act as well as Code of Conduct for Directors and senior management personnel formulated by the Company.

Board Evaluation & Criteria

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (LODR) Regulations, 2015, 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 and Independent Directors. 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 salient features of the Policy on Directors appointment and remuneration of Directors, KMP & senior employees and other related matters as provided under Section 178(3) of the Companies Act, 2013 is stated in the report on Corporate Governance which is a Part of the Boards Report. The detailed Policy is placed on the website of the Company at ht tps: //ww w.di shmangroup.c om/ File s/Di shmanGroup/I nves tor-Rel ations/P olic y%20 on%2 0Rem une rati on%2 0of%20Di rect ors, %20Key%20Manage rial %20P ersonnel %20 &%20 %20Senior%20 Empl oyee s%20 AND%20Succe ssion%20 Poli cy.pdf

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 independent Directors are provided with necessary documents, brochures, reports and internal policies to enable them to familiarize with the Companys procedures and practices. The Company undertook various steps to make the Independent Directors have full understanding about the Company. The Company has through presentations at regular intervals, familiarized and updated the Independent Directors with the strategy, operations and functions of the Company and Pharma Industry as a Whole. Site visits to various plant locations are organized for the Directors to enable them to understand the operations of the Company. The details of such familiarisation programmes have been disclosed on the Companys website at https://www.dishmangroup.com/Files/DishmanGroup/Investor-Relations/Familiarisation%20Programme.pdf.

INDEPENDENT DIRECTORS MEETING

A Separate meeting of Independent Directors held on 23rd January, 2019 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 Independent 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 :

• in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

• 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;

• 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

The Board of Directors has constituted a Risk Management Committee on 23rd January, 2019 in compliance with the provisions of SEBI (LODR) Regulations, 2015. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Directors Report.

Risk management is an integral part of business practices of the Company. The framework of risk management concentrates on formalising a system to deal with the most relevant risks, building on Existing management practices, knowledge and structures.

The Company has framed formal Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organization. The Companys Risk Management framework is well-defined to identify, monitor and minimizing/mitigating risks. While defining and developing the formalized risk management system, leading standards and practices have been considered. The risk management system is relevant to business reality, pragmatic and simple.

The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy.

The key elements of the framework include: Risk Structure; Risk Portfolio and Risk Measuring & Monitoring and Risk Optimising. The implementation of the framework is supported through criteria for Risk assessment, Risk forms & MIS. The objectives and scope of Risk Management Committee broadly comprises of:

Oversight of risk management performed by the executive management;

Reviewing the Corporate Risk Management Policy and framework within the local legal requirements and SEBI (LODR) Regulations;

Reviewing risks and evaluate treatment including initiating mitigation actions and ownerships as per a predefined cycle;

Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

Risk Management Policy

As per Regulation 17(9) of SEBI (LODR) Regulations, 2015, 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 SEBI (LODR) Regulations, 2015. 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 Policy 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. The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 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

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) were appointed as Joint Statutory Auditors of the Company to hold office until the conclusion of 14th AGM to be held in the year 2021.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the requirement of ratification of appointment of Statutory Auditors in every AGM subsequent to their appointment has been dispensed.

The Company has received a confirmation 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) to the effect that they are not disqualified from continuing as Auditors of the Company.

The Notes on Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditor Report does not contain any qualification or reservation. There is also no fraud has been reported by the Auditors in their Audit Report for the year ended March 31, 2019.

Internal Auditors

M/s. Shah & Shah Associates (Firm Registration No. 113742W) Chartered Accountants, Ahmedabad has been internal auditor 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. The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark and also no fraud has been reported for the year ended March 31, 2019.

Cost Audit

Central Government has notified rules for Cost Audit and as per 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 2018-19 is not applicable to the Company. However, as required under Section 148(1) of the Companies Act, 2013, Company has maintained necessary Cost Records.

CORPORATE GOVERNANCE, MANAGEMENT DISCUSSION ANALYSIS REPORT

As per Regulation 34 of SEBI (LODR) Regulations, 2015, 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 Regulation 34 of SEBI (LODR) Regulations, 2015 is annexed to the report on Corporate Governance.

In compliance with one of the Corporate Governance requirements as per Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, 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 a part of Corporate Social Responsibility (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. CSR is not just a duty; it is an approach towards existence. The Company see CSR as a creative opportunity to fundamentally strengthen the Companys business, while contributing to the society and creating social, environmental and economic impact. The Companys motto is to build a sustainable life for the weaker and under-privileged sections of the Society. The Company has constituted CSR Committee and has framed a CSR Policy. The brief details of CSR Committee and contents of CSR policy is provided in the report on Corporate Governance. 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 at www.dishmangroup.com (URL: http://www.dishmangroup.com/Files/DishmanGroup/Investor-Relations/Corporate%20Social%20Responsibility%20Policy.pdf )

BUSINESS RESPONSIBILITY REPORT

In pursuance of Regulation 34 of SEBI (LODR) Regulations,2015, top 500 companies based on market capitalization (calculated as on March 31 of every financial year) are required to prepare and enclose with its Annual Report, a Business Responsibility Report describing the initiatives taken by them from an environmental, social and governance perspectives. A separate report on Business Responsibility is annexed herewith as Annexure H.

DIVIDEND DISTRIBUTION POLICY

As per Regulation 43A of SEBI (LODR) Regulations, 2015, top 500 companies based on market capitalization (calculated as on March 31 of every financial year) are required to formulate Dividend Distribution Policy. Accordingly, the Board has approved the Dividend Distribution Policy in line with said Regulation. The said policy is available on www.dishmangroup.com. The Policy is annexed as Annexure I to the Directors Report.

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 of Directors
Janmejay R. Vyas
Date : 15th May, 2019 Chairman
Place : Ahmedabad DIN - 00004730