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Dishman Carbogen Amcis Ltd.

BSE: 540701 Sector: Health care
NSE: DCAL ISIN Code: INE385W01011
BSE 00:00 | 18 Jan 227.00 -2.85






NSE 00:00 | 18 Jan 227.75 -3.05






OPEN 228.00
52-Week high 396.55
52-Week low 202.60
P/E 68.58
Mkt Cap.(Rs cr) 3,664
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 228.00
CLOSE 229.85
52-Week high 396.55
52-Week low 202.60
P/E 68.58
Mkt Cap.(Rs cr) 3,664
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dishman Carbogen Amcis Ltd. (DCAL) - Director Report

Company director report


The Shareholders of Dishman Carbogen Amcis Limited

[formerly Carbogen Amcis (India) Ltd.]

Your Directors have pleasure in presenting their Report along with the Audited Accountsof the Company for the year ended March 31 2018.

( Rs. In Crores)
Standalone Consolidated
Particulars 2017-2018 2016-2017 2017-2018 2016-2017
Revenue from Operations 474.46 451.49 1694.78 1713.69
Earning Before Interest Tax Depreciation and
Amortisation (EBITDA) 166.31 148.13 445.35 453.35
Other Income 65.66 70.80 45.69 26.13
Depreciation & Amortisation (other than Goodwill) 45.99 47.39 122.96 125.04
Amortisation of Goodwill 88.46 88.46 88.46 88.46
Profit Before Interest and Tax 97.52 83.08 279.61 265.98
Finance Costs 35.34 39.17 48.83 49.01
Profit Before Tax 62.17 43.91 230.79 216.08
Tax Expense 25.10 19.67 76.22 70.66
Profit After Tax 37.07 24.24 154.57 145.43


Standalone Financial Results

In FY 2017-18 your Company achieved revenue of Rs. 474.46 crores as compared to Rs.451.49 crores in FY 2016-17. Profit before tax stood at Rs. 62.17 crores in FY 2017-18 asagainst Rs. 43.91 crores in FY 2016-17. Profit after tax for the year remain at Rs. 37.07crores in FY 2017-18 as compared to Rs. 24.24 crores in FY 2016-17.

Earning per share for the FY 2017-18 remains at Rs. 2.30 per share as against Rs. 1.50per share in FY2016-17.

Consolidated Financial Results

In FY 2017-18 your Company achieved revenue of Rs. 1694.78 crores as compared to Rs.1713.69 crores in FY 2016-17. Profit before tax stood at Rs. 230.79 crores in FY 2017-18as against Rs. 216.08 crores in FY 2016-17. Profit for the year remains at Rs. 154.57crores in FY 2017-18 as compared to Rs. 145.43 crores in FY2016-17.

Earning per share for the FY 2017-18 remains at Rs. 9.58 per share as against Rs. 9.01per share in FY2016-17. Cash Earning per share for the current year works out to Rs. 24.00as agianst Rs. 18.50 in the previous year.

A detail analysis of the performance of the company its subsidiaries and financialresults is given in the Management Discussion and Analysis Report which forms part ofthis report.


Your Directors have considered it financially prudent in the long-term interest of theCompany to reinvest the profits into the business of the Company and therefore no dividendhas been recommended for the financial year ended March 31 2018.


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


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


During the year your company reinforced its philosophy of working towards achievingthe vision of developing and manufacturing novel drugs which are niche in nature and areable to address the world requirements by making the drugs available on an affordable andsustainable basis. Due to this focused approach the company has been able to successfullydevelop and is in the process of developing some very niche sustainable high valuemolecules. Your company's focus was to ensure that the operating margins are sustained inthe financial year ending March 31 2018 in spite of adverse macro and micro economicfactors. Moreover your company targeted to improve the net profit margin which it wasable to achieve due to sustained efforts on reducing the finance cost and bringing inoperational efficiencies. Due to the above efforts your company's net profit margin was9.36% in FY 2018 as compared to 8.90% in FY 2017. All key business verticals of theCompany and also all major subsidiaries of the Company have performed exceedingly well.


Your company's contract research business is an important gateway to successfullydeveloping and commercializing new chemical entities. The molecules under development havebeen increasing each year and your scientists have been diligently working on complexniche difficult to develop molecules which speaks volumes about the research talent poolwithin the company.

In line with the philosophy of the company to develop novel drugs which would addressthe unmet needs of the society your company has been focusing on five key therapeuticareas which are namely oncology ophthalmic cardiovascular CNS and drugs under orphancategory. The diseases in these therapeutic areas are one of the widest spreading as thereare billions of people world over who die from these diseases each year and hence there isa need for extensive research and innovation in these areas. The close integration betweenthe Swiss India and China operations is working exceedingly well for the group due towhich your company has been able to reap the benefits of the capabilities of each of theseentities. During the year one of the life-saving oncology drugs which received theapproval from the US FDA in FY 2017 received approval from the EU which reinforces thestrong technical know-how within the group.

The CRAMS segment across all locations has performed very well during the year underreview on account of addition of new clients new molecules and increase in repeatbusiness from existing customers. Your company has a very strong relationship with theglobal pharma innovators and biotech companies which is helping it immensely in acquiringnew businesses. Your company has been focusing its efforts on diversifying its customerbase and increasing the number of molecules under development as this acts as a goodde-risking strategy from a customer concentration viewpoint and also increases the chancesof more molecules being successfully developed and getting commercial approvals.

Your company's subsidiary CARBOGEN AMCIS AG commenced incurring capital expenditure onthe new building it acquired in January 2017 for modification of the building to meetits developmental project requirements. This capital expenditure is part of group's year2020 strategy and your company expects the phase I of the expenditure for this building tobe completed by Q1 of FY 2018-19. This will help your company's subsidiary to takeadditional orders for development work and increase the pipeline of products underdevelopment thus increasing the chances of more molecules getting commercialized. Yourcompany is seeing a significant increase in the order book for the APIs of the moleculescommercialized in the last 2-3 years which are very niche in nature and are very high inmargin. Your company's subsidiary CARBOGEN AMCIS AG is also seeing an increase in thequantities of already commercialized molecules which along with your company's increasedorder book would add immensely to the contract manufacturing revenue over the next 2-3years.

Lastly it is significant to note that the entire focus of your company is to make adifference to this world by developing and manufacturing molecules which would helppeople suffering from chronic diseases lead a better and happy life. This approach hasyielded significant results for your company and will continue to do so in the future.

Hi-Po Unit

Your company's Hi-Potency -Unit 9 facility has been a key driver of the group'sstrategy to develop and manufacture highly complex New Chemical Entities. The API for oneof the significant formulated product of the customer which received approval from the USFDA in the last financial year was successfully developed in the HiPo facility in PhaseIII. Your company has a strong scientific capability in India in addition to the one inSwitzerland. The synergies between these two entities have been growing tremendously andthis has started yielding significant results. The API which was successfully developed inthe HiPo Plant was developed initially at the company's Swiss facility and then themolecule along with its technology was successfully migrated to the company's HiPo unit inIndia in the later phases of development work. Your company now expects more molecules outof this unit to be successfully developed which would present a tremendous growthopportunity to the group. Your company has planned to undertake expansion of the currentinstalled capacities in this unit over the next 12 to 24 months. This expansion wouldlargely involve installing the machineries for the remaining two cells and the customblock as currently only two cells are operational and running at full capacity. As yourcompany sees sizeable order book going forward for this unit due to one of the moleculesbeing successfully developed this capacity increase is inevitable. Your company expectssignificant ramp up in the revenues from the HiPo unit on account of the strong pipelineof products which would be developed and manufactured in this plant. Due to the complexnature of the products that would be developed and eventually manufactured in this unityour company also expects the overall profitability margins to increase further as thecapacity utilization of this plant increases.

Vitamin D Analogues

Your company's subsidiary Dishman Netherlands continues to perform exceedingly well byproducing and selling quality Vitamin D analogues and cholesterol. Due to the change instrategy at Dishman Netherlands and the company's renewed focus on Vitamin D analogues andcholesterol business over the last 3-4 years the company has been able to achievesignificantly higher margins. Your company's R&D team under the guidance of yourChairman and Managing Director has made unparalleled findings in synthetically developinga mechanism to alleviate the Vitamin D deficiency in people found deficient of the same.Your company expects that as the knowledge of the newly developed process gains tractionin terms of market acceptance the revenues of Vitamin D analogues should also increase.Moreover your company is also making strides in the plans to manufacture finished dosageform of Vitamin D which would be forward integration of the Vitamin D analogues thatyour company's subsidiary already manufactures.

During the year under review the operating profitability margins have improved from34% in FY 2016-17 to 38% in FY 2017-18 which are expected to be sustainable margins forthe future.

Generic API and Disinfectant Business

Your company has remained focus on its changed strategy around generic APIs where itplans to develop and manufacture niche generic APIs. Your R&D team is doingdevelopment work on many HiPo generic molecules as they understand that space very welland there are many old molecules which have been discarded for development by largepharmaceutical companies but could have very significant value in terms of the efficacyon the patients suffering from those diseases. Currently generic APIs constitute aninsignificant proportion of total revenues but with the change in strategy this could bea significant growth driver for the future.

Your company's strategy of entering into long term agreements with certain globalpharmaceutical companies for developing and manufacturing formulations for them is workingquite well. This will help your company in better utilizing the assets for disinfectantplant in a better manner. Howeveryour company's strategy is clear that it would not bemanufacturing disinfectant products at the cost of margins. Your company expects thisbusiness to be a steady business in the coming years.

Performance of Major Subsidiary Associates

The major subsidiary Companies have performed quite satisfactorily during the yearunder review. CARBOGEN AMCIS AG Switzerland has performed quite satisfactorily during theyear under review. It has reported a healthy revenue of Rs. 973.33 crores and Profit aftertax Rs. 148.30 crores.

Dishman Netherland BV. perform well during the year reported revenue of Rs. 196.26crores and Profit after tax of Rs. 57.92 crores. CARBOGEN AMCIS Ltd. (U.K.) reported arevenue of around Rs. 49.55 crores and Profit after tax of Rs. 8.45 crores. CARBOGEN AMCIS(Shanghai) Co. Ltd. also perform well it was reported revenue of Rs. 46.79 crores andProfit before tax of Rs. 0.17 crores. Other Subsidiaries has also performed reasonablywell during the year under review.

The other marketing subsidiaries viz. Dishman USA Inc. reported revenue of Rs. 121.62crores and Profit after tax of Rs. 1.70 crores. Dishman Europe Ltd. reported a revenue ofaround Rs. 217.31 crores and Profit after tax of Rs. 14.48 crores during the year underreview.


Dishman is a Research and Development driven company. Innovation is a constant factorin all activities undertaken at Dishman; be it processes technologies or products.

We continue our efforts in bringing more efficiency to processes in terms ofenvironmental impact and to meet the new stricter regulations from the various regulatoryagencies.

As members are aware and informed about our various focus areas viz: Vitaminsdisinfectants oncology products MRI agents and catalysts. We have made progress on quitea few of these product ranges.

Dishman has been in the vitamin D business for more than a decade.

Since past two years besides the regular Contract Research Projects for customersDishman has invested considerably in research in irradiation chemistry. This technology isused extensively in the manufacture of Vitamin D analogues. A lot of work has been done atDishman to bring efficiency into upstream chemistry steps in order to have better massbalance and hence costs in the irradiation steps. Our efforts continue in this directionto bring newer more efficient processes to manufacture these very important products.

We are adding capacity to our existing irradiation unit as well as putting newstate-of-the-art irradiation units for specialized UV reactions at targeted wavelengths toget the desired conversions.

Our vitamin D team in the Netherlands and the R&D team in India work closelytogether to bring excellent outcomes of trials which are well designed and thoroughlyinvestigated.

Dishman has a leadership position in disinfectant actives. This year we have developednew disinfectants with better efficacy against wide spectrum of microorganisms. Few trialsare underway on various new applications. The capacity of disinfectant manufacturingfacility has also been expanded to meet the demands that we foresee for these newproducts. On generics we have completed development of three contrast agents 3 DMFs havebeen filed and this year we plan to file 2 more DMFs for this product category. Wecontinue to develop niche generic molecules and will file DMFs for regulated markets.

We have initiated activities in CNS stimulants space and are focusing on this categoryfor the coming years. We are exploring the possibilities to re-purpose certain actives inspecific finished formulations through adequate clinical trials. This year our R&Ddeveloped processes for some KSMs and RSMs of key commercial products enabling us to bringtheir manufacturing in-house or at locally outsourced facilities. This has reduced ourdependence on imports significantly and brought about supply chain security for most ofthe high value commercial products.

To support these activities we have invested in sophisticated analytical instrumentsand added new instruments to our existing set up.


Your Company is committed towards excellence in Quality Health Safety and EnvironmentManagement and ensures that those working with the Company are safe at work and thateveryone takes responsibility for achieving this. We include EHS and climatechange-related considerations in our business decisions and strive to minimize any adverseimpact on environment by our operational activities. Measuring Monitoring Reviewinganalyzing appraising and reporting on environmental health and safety performance is animportant part of continual improvement in our EHS performance. Dishman’sEnvironment Health and Safety (EHS) organization conducts strategic planning to establishlong-term EHS goals assess resources required to achieve specific goals and ensurecritical business alignment. Dishman considers feedback from internal and externalstakeholders in proposing and establishing its long-term goals in manufacturingoperations. Company’s products and processes are developed in accordance withstrictly defined local and international rules to ensure safety and Health of workers aswell as the environment. This is achieved by conducting the Risk Assessment QualitativeRisk Assessment Process Hazard Assessment Identification of significant environmentalaspects Safety Audits customer audits HAZOP study and Environment audits. Safety &Environment Management Program are being taken to reduce the Significant Risk &Environment Impacts.

The Company’s QHSE policy is being implemented among others through (i)Segregation of waste water in terms of High COD and Low COD and treated separately toachieve zero discharge by utilizing treated water for Utility services washing activitiesand flushing activities. (ii) Stripper system Multiple effect evaporator and ATFD forconcentrated effluent stream; (iii) Biological Effluent Treatment System Tertiarytreatment Two Stage R.O. System and Multiple Effect Evaporator for Dilute StreamEffluent. (iv) Practicing On-site emergency plan by conducting mock-drills; (v)Replacement of hazardous process / chemical to non-hazardous process for converting to lowhazards; (vi) Fire detection and protection system available at site; (vii) Conductingintensive QHSE Training programs including contractor employees and monitoring theeffectiveness of the same (viii) Participation of employees in Safety committee meetingsat all levels and celebrating the National Safety Day / Week and World Environment Day aswell as observing Fire Service Day (ix) Tree plantation to increase the green cover atsite (x) Independent safety and environment audits at regular intervals by third party andalso in-house by cross functional team; (xi) In-house medical and health facility at sitefor pre- employment & periodical medical check-up of all employees including contractemployees;(xii) Additional health checkup for employees based on their occupational needs(xiii) Blood Donation Camp at site in association with the Ahmedabad Red Cross Society forsocial cause; (xiv) Rain water Harvesting System to conserve rain water and improve groundwater level.

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

In its pursuit of excellence towards sustainable development and to go beyondcompliance Dishman integrated its ISO 14001:2015 for EMS ISO 9001:2015 for QMS and BSOHSAS 18001:2007 for Occupational Health and Safety Management systems. The company isalso certified EN/ISO 13485:2012 for Medical Device Quality Management System forDisinfectant Products. The adopted systems are being monitored for continual improvements.


As the members are aware that the Hon’ble High Court of Gujarat vide its orderdated 16th December 2016 sanctioned a Scheme of Arrangement and Amalgamation amongst theCompany; Dishman Pharmaceuticals and Chemicals Limited (DPCL); Dishman Care Limited (DCL)and their respective shareholders and Creditors (“Scheme”) in terms of theprovisions of Section 391 to 394 of the Companies Act 1956. Upon Scheme becomingeffective Name of the Company has been Changed from “Carbogen Amcis (India)Limited” to “Dishman Carbogen Amcis Limited” w.e.f. 27th March 2017 videfresh certificate of Incorporation pursuant to change of name issued by the Office ofRegistrar of Companies Gujarat.

The appointed date for the Scheme was 1st January 2015. A certified copy of the saidorder of Hon’ble High Court of Gujarat alongwith the Scheme has been received by theCompany on 2nd March 2017. The Scheme has become effective upon filing of certified copyof said order of Hon’ble High Court with the Office of Registrar of CompaniesGujarat/MCA on 17th March 2017 (“Effective Date”). Accordingly DPCL as a goingconcern stands amalgamated with the Company with effect from the Appointed Date i.e. 1stJanuary 2015.

Accounting Impact

The amalgamation has been accounted under the "Purchase Method" as per thethen prevailing Accounting Standard 14 -Accounting for Amalgamations as referred to inthe Scheme of Amalgamation approved by the Hon'ble High Court Gujarat which is differentfrom Ind AS 103 "Business Combinations".Accordingly the assets and liabilitiesof DPCL and DCL have been recorded of their fair value as on Appointed Date. The purchaseconsideration of Rs. 4810 crores payable by way of issue of shares of the Company has beendisclosed as Share Suspense Account under other equity. The excess of considerationpayable over net assets acquired has been recorded as goodwill amounting Rs. 1326.86crores represented by underlying intangible assets acquired on amalgamation and is beingamortized over the period of 15 years from the Appointed Date. Had the goodwill not beenamortized as required under Ind AS 103 the Depreciation and Amortization expense for theyear ended March 31 2018 would have been lower by Rs. 88.46 crores and the Profit BeforeTax for the year ended March 31 2018 would have been higher by an equivalent amount.


On 6th June 2017 the Company has issued and allotted 161394272 equity shares ofRs. 2/- each as fully paid-up equity shares to the shareholders of erstwhile DishmanPharmaceuticals and Chemicals Limited in the ratio of 1 (one) share of Dishman CarbogenAmcis Limited for every 1 (one) share held in erstwhile Dishman Pharmaceuticals andChemicals Limited to those shareholders whose names appear in the Register of Members /List of Beneficial owners as on the Record Date i.e. on 31st May 2017 pursuant to theScheme of arrangement and amalgamation.


After the Scheme became effective pursuant to the documents submitted on 22nd March2017 Part B approval of SEBI was received from BSE Ltd. on 12th May 2017. Thereafterthe Company has fixed 31st May 2017 as record date for the purpose of deciding themembers who shall be eligible for allotment of equity shares pursuant to Scheme andnecessary intimation of the same has been given to Stock Exchanges on 19th May 2017. Inthis regard the Company has received Suspension Letter dated 22nd May 2017 issued byNational Stock Exchange of India Limited and Notice of No Dealing dated 22nd May 2017issued by BSE Limited intimating that trading in the equity shares of DPCL shall besuspended with effect from May 30 2017 due to procedural purpose till the new shares tobe allotted to the DPCL’s shareholders get listed on both the Stock Exchanges.Thereafter on 6th June 2017 the Company has made allotment of 161394272 equityshares of the Company to the shareholders of DPCL in the ratio of 1:1 i.e. Share ExchangeRatio fixed under the Scheme of merger.

Thereafter on 22nd June 2017 Application for Listing and seeking exemption from Rule19(2)(b) of Securities Contract (Regulation) Rules 1957 was filed with BSE Ltd. andNational Stock Exchange of India Ltd. In this regard In-principle approvals has beenreceived from National Stock Exchange of India Limited on 14th July 2017 and from the BSELimited on 20th July 2017 for listing of 161394272 Equity Shares of Rs. 2/- each. TheCompany has also received SEBI approval Letter dated 13th September 2017 approvingListing application seeking exemption from Rule 19(2)(b) of SCRR 1957. After receipt ofSEBI approval NSE and BSE issued Listing and Trading Permission Notice dated 19 thSeptember 2017 regarding to start trading in the shares of the Company from ThursdaySeptember 21 2017 on both the Stock Exchanges i.e. BSE (under Scrip Code: 540701) and NSE(under Symbol: DCAL).

Annual listing fees for the FY 2018-2019 as applicable have been paid before due dateto the concerned Stock Exchanges.


Your Company has several Committees which have been established as part of the bestCorporate Governance practices and are in compliance with the requirements of the relevantprovisions 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

Sexual Harassment Committee

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


i) Extract of Annual Return

The extracts of Annual Return pursuant to the provisions of sub-section 3(a) of Section134 and sub-section (3) of Section 92 of the Companies Act 2013 read with Rule 12 of theCompanies (Management and administration) Rules 2014 is annexed herewith as Annexure A tothis Report. ii) Board Meetings

Regular meetings of the Board are held inter-alia to review the financial result ofthe Company. Additional Board meetings are convened to discuss and decide on variousbusiness policies strategies and other businesses. Due to business exigencies certainbusiness decisions are taken by the board through circulation from time to time. Duringthe FY 2017-18 the Board met Five (5) times i.e. on 3rd April 2017 16th May 2017 10thAugust 2017 9th November 2017 and 24th January 2018. Detailed information on themeetings of the Board is included in the report on Corporate Governance which forms partof this Annual Report. iii) Related Party Transactions

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Since all the related party transactions entered into during the financialyear were on an arm’s length basis and were in the ordinary course of business.Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended asAnnexure Bto this Board’s report. The policy on

Related Party Transactions has been approved by the Board and uploaded on the websiteof the Company. The details of the transactions with Related Party are provided in theaccompanying financial statements vide note no.31 of notes on financial statement as perrequirement of Ind AS 24 -related party disclosure. These transactions are not likely toconflict with the interest of the Company at large. All significant transaction withrelated parties is placed before audit committee periodically.

iv) P articulars of Loans Guarantees or Investments under Section 186

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

v) Material Changes and Commitments Affecting the Financial Position of the Companyoccurred after the end of Financial year

There are no material changes and commitments affecting the Financial Position of theCompany 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 AssociateCompanies:

During the last quarter of the year under review the Company has initiated theprocedure to struck-off/ wound-up of its two dormant wholly owned subsidiaries namelyInnovative Ozone Services Inc. (I03S) and Dishman Switzerland Ltd.

Also as reported last year as a part of global restructuring process during theyear the Company has transferred its 100% stake in CARBOGEN AMCIS (Shanghai) Co. Ltd.("CASCL") to its another wholly owned subsidiary namely Dishman Carbogen Amcis(Singapore) Pte. Ltd. ("DCASPL") by way of share swap arrangement for aconsideration of RMB 189.51 million. Further the DCASPL has transferred its stake inCASCL to the Company's wholly owned subsidiary namely CARBOGEN AMCIS Holding AG.Switzerland ("CAHAG") by way of share swap. After this restructuring theCompany's stake in CAHAG has been reduced to 91.50% and remaining 8.50% has been held byDCASPL.

As on 31 March 2018 the total number of subsidiaries including step down subsidiarieswas Sixteen (16).

Restructuring of Wholly Owned Subsidiaries i) Transfer of equity stake ofCompany’s wholly owned step down subsidiary namely Dishman Netherlands BV

(“DNBV”) to Company’s another wholly owned subsidiary company namelyCARBOGEN AMCIS Holding AG (“CAHAG”)

CARBOGEN AMCIS Holding AG is an overseas wholly owned subsidiary of the Company whichis currently holding investments in its four subsidiaries namely i) CARBOGEN AMCIS AGSwitzerland; ii) CARBOGEN AMCIS SAS France; iii) CARBOGEN AMCIS Limited UK and iv)CARBOGEN AMCIS (Shanghai) Co. Limited China. The Company directly and indirectlycurrently owns 100% shares in all these subsidiaries.

As a part of the global restructuring process the Company’s wholly ownedsubsidiary Dishman Europe Limited (“DEL”) intends to transfer its shareholdingin Dishman Netherlands BV to CAHAG by way of a share swap arrangement for a considerationof approximately EUR 91 million. The company intends to first transfer the shares of DNBVfrom DEL to Dishman Carbogen Amcis (Singapore) Pte Limited (“DCASPL”) and thenfrom DCASPL to CAHAG by way of a share swap. The company also intends to change the nameof Dishman Netherlands BV to CARBOGEN AMCIS Netherlands BV. This will help the company inrealigning the operations globally and ensuring that all overseas manufacturing entitiesare consolidated under one overseas holding company. ii) Restructuring of DishmanJapan’s Share Capital

As a part of restructuring process Company’s wholly owned subsidiary namelyDishman Japan Ltd.(“DJL”) will issue new shares to CARBOGEN AMCIS Holding AG(“CAHAG”) and after this restructuring of DJL’s Share Capital DJL becomesstep down subsidiary of the Company and Company’s holding will reduce to 49% and 51%will be held by CAHAG. Subsequently the name of the Dishman Japan Ltd. will be changedto Dishman Carbogen Amcis (Japan) Ltd.


Pursuant to the provisions of Section 129 134 and 136 of the Companies Act 2013 readwith rules framed thereunder and pursuant to Regulation 33 of SEBI (LODR) Regulations2015 your Company had prepared consolidated financial statements of the company and itssubsidiaries and a separate statement containing the salient features of financialstatement of subsidiaries joint ventures and associates in Form AOC-1 forms part of theAnnual Report.

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

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


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

During the year 2017-2018 the Company has not issue any of Equity Shares withdifferential rights as to dividend voting or otherwise.

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

During the year the Company has not issued any shares under Employee Stock OptionScheme.

iii) W h e ther the Managing Director or the Whole-time Directors of the Companyreceive any remuneration commission from any of its subsidiaries :

Mr. Arpit J. Vyas Managing Director & CFO of the Company has received remunerationas a Director from two Foreign wholly owned subsidiary companies namely Dishman EuropeLtd. and CARBOGEN AMCIS AG. Switzerland AND from the Company as a Managing Directorwhich is in compliance with the provisions of the Companies Act 2013. Also Mr. JanmejayR. Vyas Chairman & Managing Director of the Company has received remuneration as aDirector from one of the Foreign wholly owned subsidiary company namely Dishman EuropeLtd. and from the Company as a Chairman & Managing Director which is in compliancewith the provisions of the Companies Act 2013.

Details of remuneration received by Mr. Arpit J. Vyas and Mr.Janmejay R. Vyas has beendisclosed in report on Corporate Governance. iv) Any significant or material orders werepassed by the Regulators or Courts or Tribunals which impact the going concern status andCompany’soperations in future:

There are no significant and material orders passed by the Regulators or Courts orTribunals which could impact the going concern status and the Company’s futureoperations. v) Secretarial Standards

Secretarial Standards issued by the Institute of Company Secretaries of India asapplicable to the Company were followed and complied with during 2017-18. The Company hasdevised proper systems to ensure compliance with the provisions of all applicableSecretarial Standards issued by the Institute of Company Secretaries of India and thatsuch systems are adequate and operating effectively.

DIRECTORS & KMPs Retire by Rotation

Mrs. Deohooti J. Vyas Whole-time Director of the Company retire by rotation at theforthcoming Annual General Meeting and being eligible offers herself for reappointment.


The term of office of Mr. Ashok C. Gandhi and Mr. Sanjay S. Majmudar as an IndependentDirectors will expire on 31st March 2019. The Board of Directors onrecommendation of the Nomination and Remuneration Committee has recommended reappointmentof Mr. Ashok C. Gandhi and Mr. Sanjay S. Majmudar as an Independent Directors of theCompany for a second term of five (5) consecutive years on the expiry of their currentterm of office.

Key Managerial Personnel

The Board of Directors on recommendation of Nomination and Remuneration Committee hasre-appointed Mr. Arpit J. Vyas as Managing Director of the Company for a further period of5 (five) years with effect from 1st June 2019 subject to approval ofshareholders as his current term of office is upto 30th May 2019.

Statement of Declaration by Independent Directors

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

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 considerationthe various aspects of the Board’s functioning composition of the Board and itscommittees. The Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsCommittees and Independent Directors. The Board of Directors expressed their satisfactionwith 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 perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help to retain our competitive advantage. TheBoard has adopted the Board Diversity Policy which sets out the approach to diversity ofthe Board of Directors. The Board Diversity Policy is available on our

Policy on Director’s appointment and remuneration

The salient features of the Policy on Directors’ appointment and remuneration ofDirectors KMP & senior employees and other related matters as provided under Section178(3) of the Companies Act 2013 is stated in the report on Corporate Governance which isa Part of the Board’s Report. The detailed Policy is placed on the website of theCompany at


The information required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as

Annexure C

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


The independent Directors are provided with necessary documents brochures reports andinternal policies to enable them to familiarize with the Company’s procedures andpractices. The Company undertook various steps to make the Independent Directors have fullunderstanding about the Company. The Company has through presentations at regularintervals familiarized and updated the Independent Directors with the strategyoperations and functions of the Company and Pharma Industry as a Whole. Site visits tovarious plant locations are organized for the Directors to enable them to understand theoperations of the Company. The details of such familiarisation programmes have beendisclosed on the Company’s website at


A Separate meeting of Independent Directors held on 24th January 2018without the attendance of Non-Independent Directors and members of the Management. In thesaid meeting Independent Directors reviewed the followings:

P erformance evaluation of Non Independent Directors and Board of Directors as a whole;

P erformance evaluation of the Chairperson of the Company taking into account the viewsof executive directors and nonexecutive directors;

Evaluation of the quality of flow of information between the Management and Board foreffective performance by the Board.

The Independent Directors expressed their satisfaction with the evaluation process.


Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state that : that in the preparation of the annualaccounts for the financial year ended 31st March 2018 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures; that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period; that theDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; thedirectors have prepared the annual accounts on a going concern basis; the directors havelaid down internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively.

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


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


Assets of your Company are adequately insured against various perils.


As per Regulation 17(9) of SEBI (LODR) Regulations 2015 the Company has framed formalRisk Management framework for risk assessment and risk minimization for Indian operationwhich is periodically reviewed by the Board of Directors to ensure smooth operations andeffective management control. The Audit Committee has additional oversight in the area offinancial risks and control.


The Company has adopted a Whistle Blower Policy pursuant to the requirements of theCompanies Act 2013 and the SEBI (LODR) Regulations 2015. The Policy empowers all thestakeholders to raise concerns by making protected disclosures as defined in the Policy.

The policy also provides for adequate safeguards against victimization of whistleblower who avail of such mechanism and also provides for direct access to the Chairman ofthe Audit Committee in exceptional cases. The details of the Whistle Blower Policy areexplained in the Report on Corporate Governance and the Policy is available on the websiteof the Company at .


The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.

There were no incidences of sexual harassment reported during the year under review interms of the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


Statutory Auditors

M/s. V. D. Shukla & Co. Chartered Accountants Ahmedabad (Firm Registration No.110240W) and M/s. Haribhakti & Co. LLP Chartered Accountants Mumbai (FirmRegistration No. 103523W) were appointed as Joint Statutory Auditors of the Company forperiod of 4 years at the 10th Annual General Meeting (AGM) held on Septmebr 28 2017 andhold office until the conclusion of the 14th AGM subject to ratification by the Members atevery AGM. In accordance with the Companies Amendment Act 2017 enforced on 7th May 2018by the Ministry of Corporate Affairs the requirement of ratification of appointment ofStatutory Auditors in every AGM subsequent to their appointment has been dispensed. HenceCompany has not taken the agenda of Ratification of appointment of joint statutoryauditors in the notice of ensuing annual general meeting.

The Company has received a confirmation from M/s. V. D. Shukla & Co. CharteredAccountants Ahmedabad (Firm Registration No. 110240W) and M/s. Haribhakti & Co.LLPChartered Accountants Mumbai (Firm Registration No. 103523W) to the effect that theyare not disqualified from continuing as Auditors of the Company.

The Notes on Financial Statements referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditor’Report doesnot contain any qualification or reservation.

Internal Auditors

M/s. Shah & Shah Associates (Firm Registration No. 113742W) Chartered AccountantsAhmedabad has been internal auditor of the Company. Internal auditors are appointed by theBoard of Directors of the Company on a yearly basis based on the recommendation of theAudit Committee. The Internal Auditor’s reports and their findings on the internalaudit has been reviewed by the Audit Committee on a quarterly basis. The scope ofinternal 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 madethereunder the Company had appointed Mr. Ashok P.Pathak Practicing Company Secretary(Membership No. ACS: 9939; CP No: 2662) as Secretarial Auditors to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is appended in the AnnexureE to the Directors’Report. The observations and comments if any appearing in theSecretarial Audit Report are self-explanatory and do not call for any further explanation/ clarification. The Secretarial Auditors Report does not contain any qualificationreservation or adverse remark.

Cost Audit

Central Government has notified rules for Cost Audit and as per new Companies (CostRecords and Audit) Rules 2014 issued by Ministry of Corporate Affairs; Company is notfalling under the Industries which will subject to Cost Audit. Therefore filing of costaudit report for the FY 2018-19 is not applicable to the Company. However as requiredunder Section 148(1) of the Companies Act 2013 Company has maintained necessary CostRecords.


As per Regulation 34 of SEBI (LODR) Regulations 2015 a separate section on corporategovernance practices followed by the Company as well as “Management Discussion andAnalysis” confirming compliance is set out in the Annexure forming an integral partof this Report. A certificate from Practicing Company Secretary regarding compliance withcorporate governance norms stipulated in Regulation 34 of SEBI (LODR) Regulations 2015 isannexed to the report on Corporate Governance. In compliance with one of the CorporateGovernance 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 allBoard members and senior management personnel of the Company who have affirmed compliancethereto.


Information of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under Section 134 (3) (m) of the Companies Act 2013 readwith rule 8 of the Companies (Accounts) Rules 2014 is given in the Annexure F and formspart of this Report.


Corporate Social Responsibility (CSR) is not just a duty; it is an approach towardsexistence. The Company see CSR as a creative opportunity to fundamentally strengthen theCompany’s business while contributing to the society and creating socialenvironmental and economic impact. The Company’s motto is to build a sustainable lifefor the weaker and under-privileged sections of the Society. The Company continuedextending help towards social and economic development of the villages and the communitieslocated close to its operations and also providing assistance to improving their qualityof life. Company’s intention is to ensure that we meet the development needs of thelocal community.

The Company has constituted Corporate Social Responsibility (CSR) Committee and hasframed a CSR Policy. The brief details of CSR Committee and contents of CSR policy isprovided in the Report on Corporate Governance. The details of CSR activities carried outby the Company are appended in theAnnexure G to the Director’s Report. The CSR Policyis available on the website of the Company.


In pursuance of Regulation 34 of SEBI (LODR) Regulations 2015 top 500 companies basedon market capitalization (calculated as on March 31 of every financial year) are requiredto prepare and enclose with its Annual Report a Business Responsibility Report describingthe initiatives taken by them from an environmental social and governance perspectives. Aseparate report on Business Responsibility is annexed herewith asAnnexure H.


As per Regulation 43A of SEBI (LODR) Regulations 2015 top 500 companies based onmarket capitalization (calculated as on March 31 of every financial year) are required toformulate Dividend Distribution Policy. Accordingly the Board has approved the DividendDistribution Policy in line with said Regulation. The said policy is available The Policy is annexed as Annexure I to the Director’s Report.


Your Directors would like to express their appreciation for the assistance andco-operation received from foreign institutions banks associates Governmentauthorities customers supplier vendors and members during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the committedservices and teamwork by the executives staff members and workers of the Company forenthusiastic contribution to the growth of Company’s business.

For and on behalf of the Board of Directors
Janmejay R. Vyas
Date : 16th May 2018 Chairman & Managing Director
Place : Ahmedabad DIN - 00004730