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Dishman Carbogen Amcis Ltd.

BSE: 540701 Sector: Health care
NSE: DCAL ISIN Code: INE385W01011
BSE 00:00 | 10 May 193.55 9.60






NSE 00:00 | 10 May 193.60 9.45






OPEN 187.90
VOLUME 241992
52-Week high 216.65
52-Week low 63.45
Mkt Cap.(Rs cr) 3,035
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 187.90
CLOSE 183.95
VOLUME 241992
52-Week high 216.65
52-Week low 63.45
Mkt Cap.(Rs cr) 3,035
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 theAudited Accounts (Standalone as well as Consolidated) of the Company for the year endedMarch 31 2019.


(` 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


In FY 2018-19 your Company achieved revenue of ` 549.47 crores ascompared to ` 474.46 crores in FY 2017-18. Profit before tax stood at ` 81.73 crores in FY2018-19 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 asagainst ` 2.30 per share in FY2017-18.

Consolidated Financial Results

In FY 2018-19 your Company achieved revenue of ` 2058.60 crores ascompared to ` 1694.79 crores in FY 2017-18. Profit before tax stood at ` 308.79 crores inFY 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 asagainst ` 9.58 per share in FY2017-18. Cash Earning per share for the current year worksout to ` 34.03 as against ` 24.00 in the previous year.

A detail analysis of the performance of the company its subsidiariesand financial results is given in the Management Discussion and Analysis Report whichforms part of this report.


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 subjectto approval of shareholder at ensuing Annual General Meeting and will be paid out of theprofits of the Company for the year to all those equity shareholders whose names appear inthe Register of Members on the close of business hours as on 13th September2019.

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 ofDividend Distribution Policy of the Company.


Due to amortization of Goodwill on account of merger the Company hasnot transferred any amount to the General Reserves.


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


The financial year that passed by was marked by some significantacceleration in the supplies of certain niche molecules on the commercial side anddebottlenecking of capacity constraints on the product development side. Due to yourCompany's continued focus on developing and manufacturing complex niche new chemicalentities APIs the revenues as well as the profitability of your company grewsubstantially 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 thehigh level of ethical practices being followed in the company and increased levels ofpreparedness there were no critical observations that were found.

Your Company's philosophy of "One Company two Brands"helped the company immensely in obtaining more orders from your customers and convertingthem into high-growth financial numbers during the year. Due to sustained efforts of allyour employees your company's 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 IndiaSwiss and Dutch subsidiary financial performances.


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

Your company made investments in increasing the new product developmentcapacity one on the infrastructure i.e. the state-of-the-art laboratories required todevelop new molecules and two on the people i.e. the world-class scientists who arefocussed on developing novel molecules which can make a difference to the world. Yourcustomers are extremely comfortable in giving more repeat business to your company becauseof the high level of confidentiality regarding the intellectual property rights of themolecule that your people are able to maintain.

The most significant factor that plays extremely well in yourcompany's favour to attract the best customer pool is the new molecule developmentand manufacturing capability that you are able to offer across various locations such asSwitzerland India China and the UK. This is a unique feature of your organization whichno other company across the world has been able to replicate. Your company's strategyof focussing on small to mid-size biotechnology companies in addition to the large globalinnovators over the last 7-8 years is yielding extremely rich dividends to the group as awhole. Most of the molecules under development in the late phases are life-saving drugswhich could play an important role in achieving your company's vision of spreadinghappiness by reducing the number of patients suffering from chronic diseases. Yourcompany's subsidiary CARBOGEN AMCIS AG completed Phase I of themodification/expansion project for adding development capacities to the group especiallyfor the Highly Potent compounds. Your subsidiary also recruited scientists for undertakingnew projects for development of complex highly potent molecules. The incremental revenuefrom this Phase I project is expected to commence from FY 2020.

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

Hi-Po Unit

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

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

Vitamin D Analogues and Cholesterol

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

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

Generic API and Disinfectant Business

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

Performance of Major Subsidiary Associates

The major subsidiary Companies have performed quite satisfactorilyduring the year under review. CARBOGEN AMCIS AG Switzerland has performed quitesatisfactorily during the year under review. It has reported a healthy revenue of 1004.88crores and Profit after tax 128.36 crores. CARBOGEN AMCIS BV. perform well during theyear reported revenue of 265.10 crores and Profit after tax of 62.56 crores. CARBOGENAMCIS Ltd. (U.K.) reported a revenue of around 96.93 crores and Profit after tax of 7.79crores. CARBOGEN AMCIS (Shanghai) Co. Ltd. also perform well it was reported revenue of76.28 crores and Profit after tax of 5.25 crores. Other Subsidiaries has also performedreasonably well during the year under review.

The other marketing subsidiaries viz. Dishman USA Inc. reported revenueof 110.39 crores and Profit after tax of 3.22 crores. Dishman Europe Ltd. reported arevenue of around 317.06 crores and Profit after tax of 61.73 crores during the year underreview.


Research is a critical thrust area for the Company because it is thefoundation upon which Company's strategy of manufacturing and marketing stands. Asyou know your company offers process development and optimization services from itsAhmedabad-based state-of-the-art R&D centre as well as from other locations outsideIndia. Being a Research and Development driven company Innovation is a constant factor inall activities undertaken at Dishman; be it processes technologies or products. Wecontinue our efforts in bringing more efficiency to processes in terms of environmentalimpact and to meet the new stricter regulations from the various regulatory agencies. Asmembers are aware and informed about our various focus areas viz: Vitamins disinfectantsoncology products MRI agents and catalysts. We have made progress on quite a few of theseproduct ranges.

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

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

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

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

Our soft gel pilot plant is fully operational and is being used forCRAMS as well as own products. We expect to file few dossiers soon. The large-scalemanufacturing facility is under commissioning and will be fully operational by Q2 of FY2019-20.


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

Measuring Monitoring Reviewing analyzing understanding the needsand expectations of workers and other interested parties appraising and reporting onenvironmental health and safety performance is an important part of continual improvementin our EHS performance. Dishman's Environment Health and Safety (EHS) organizationconducts strategic planning to establish short term as well as long-term EHS goals withbenchmarking to global pharmaceuticals companies assess resources required to achievespecific goals and ensure critical business alignment.

Dishman evaluate customer feedback and satisfaction by internal andexternal communication in proposing and establishing its long-term relations and toachieve goals in manufacturing operations. Company's products and processes aredeveloped in accordance with strictly defined local and international rules to ensuresafety and Health of workers as well as the environment. This is achieved by conductingthe Risk Assessment Qualitative Risk Assessment Process Hazard AssessmentIdentification of significant environmental aspects Safety Audits customer audits HAZOPstudy and Environment audits. Safety & Environment Management Program are beingimplemented to reduce the Significant Risk & Environment Impacts.

The Company's QHSE&S policy is being implemented amongothers through

(i) Segregation of waste water in terms of High COD and Low CODseparately to achieve zero discharge by utilizing treated water for Utility serviceswashing activities and flushing activities; (ii) Stripper system Multiple effectevaporator and ATFD for concentrated effluent stream;

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

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

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

(vi) Latest technology for Fire detection and protection system withalarm system.

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

(viii) Participation of employees in Safety committee meetings at alllevels and celebrating the National Safety Day / Week and World Environment Day as well asobserving 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 bythird 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 theiroccupational needs;

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

Dishman continues to pursue world class operational excellence onProcess Safety Management (PSM). Dishman has established the capabilities within theCompany 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 gobeyond compliance Dishman integrated its ISO 14001:2015 for EMS ISO 9001:2015 for QMSand BS ISO 45001:2018 for Occupational Health and Safety Management systems. The companyis also certified EN/ISO 13485:2016 for Medical Device Quality Management System forDisinfectant Products. The adopted systems are being monitored for continual improvements.


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


Pursuant to the provisions of Section 124(5) and 125 of the CompaniesAct 2013 the Company has transferred the unpaid or unclaimed dividend upto and for thefinancial year 2010-2011 to the Investor Education and Protection Fund (IEPF) establishedby the Central Government.

The resultant benefits arising out of shares already transferred to theIEPF is 736.40/- towards 10% dividend recommended by the board of Directors of the Companyfor the financial year 2018-19 subject to approval of shareholder at ensuing AnnualGeneral Meeting.

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


As the members are aware that the Hon'ble High Court of Gujaratvide its order dated 16th December 2016 sanctioned a Scheme of Arrangement andAmalgamation 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 CompaniesAct 1956. The appointed date for the Scheme was 1st January 2015. The Scheme has becomeeffective upon filing of certified copy of said order of Hon'ble High Court with theOffice of Registrar of Companies Gujarat/ MCA on 17th March 2017. Accordingly DPCL as agoing concern stands amalgamated with the Company with effect from the Appointed Datei.e. 1st January 2015.

Accounting Impact

The amalgamation has been accounted under the “PurchaseMethod” as per the then prevailing Accounting Standard 14 Accounting forAmalgamations as referred to in the Scheme of Amalgamation approved by the Hon'bleHigh 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 fairvalue as on Appointed Date. The purchase consideration of 4810 crores payable by way ofissue of shares of the Company has been disclosed as Share Suspense Account under otherequity. The excess of consideration payable over net assets acquired has been recorded asgoodwill amounting 1326.86 crores represented by underlying intangible assets acquired onamalgamation 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 andAmortization expense for the year ended March 31 2019 would have been lower by 88.46crores and the Profit Before Tax for the year ended March 31 2019 would have been higherby an equivalent amount.


The equity shares of the Company are listed on the National StockExchange of India Ltd. Mumbai (NSE) and BSE Ltd. Mumbai. Annual listing fees for the FY2019-2020 as applicable have been paid before due date to the concerned Stock Exchanges.


Your Company has several Committees which have been established as partof the best Corporate Governance practices and are in compliance with the requirements ofthe 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 byvarious committees including Audit Committee. The details with respect to thecompositions powers terms of reference number and dates of meetings of such committeesheld during the year are given in details in the report on Corporate Governance whichforms part of this Annual Report.


i) Extract of Annual Return

The extracts of Annual Return pursuant to the provisions of sub-section3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013 read withRule 12 of the Companies (Management and administration) Rules 2014 is annexed herewithas Annexure A to this Report.

ii) Board Meetings

Regular meetings of the Board are held inter-alia to review thefinancial result of the Company. Additional Board meetings are convened to discuss anddecide on various business policies strategies and other businesses. Due to businessexigencies certain business decisions are taken by the board through circulation fromtime to time.

During the FY 2018-19 the Board met Eight (8) times i.e. on 16thMay 2018 1st June 2018 2nd July 2018 25th July2018 1st November 2018 28th November 2018 23rdJanuary 2019 and 30th March 2019. Detailed information on the meetings of theBoard is included in the report on Corporate Governance which forms part of this AnnualReport. iii) Related Party Transactions

All Related Party Transactions are placed before the Audit Committeeand also the Board for approval. All the related party transactions entered into duringthe financial year were on an arm's length basis and were in the ordinary course ofbusiness. Particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as AnnexureB to this Board's report. The policy on Related Party Transactions has beenapproved by the Board and uploaded on the website of the Company. The details of thetransactions with Related Party are provided in the accompanying financial statements videnote no.31 of notes on financial statement as per requirement of Ind AS 24 -related partydisclosure. These transactions are not likely to conflict with the interest of the Companyat large. All significant transaction with related parties is placed before auditcommittee periodically.

iv) Particulars of Loans Guarantees or Investments under Section 186

During the year under review the Company has made investments Loanguarantee in compliance of Section 186 of the Companies Act 2013 the said details aregiven in the notes to the financial statements.

v) Material Changes and Commitments Affecting the Financial Position ofthe Company occurred after the end of Financial year

There are no material changes and commitments affecting the FinancialPosition 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 JointVentures and Associate Companies:

• During the year two dormant wholly owned subsidiaries viz.Dishman Switzerland Limited and Innovative Ozone Services Inc. (IO3S) were struckoff/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 subsidiariesincluding step down subsidiaries was Fourteen (14).

Expansion programme:

Your company's subsidiary CARBOGEN AMCIS AG had bought a buildingin Switzerland to debottleneck its new product development capacity constraint in 2017. Inthe last financial year the Phase I of modification of this building was completed sothat additional development and analytical laboratories can start functioning. Additionalscientists were also hired for undertaking the new projects. Moreover one of thebuildings in the existing campus in Bubendorf Switzerland facility which was on leasewas given away to the lessor and the development projects were shifted to this newbuilding.


Pursuant to the provisions of Section 129 134 and 136 of the CompaniesAct 2013 read with rules framed thereunder and pursuant to Regulation 33 of SEBI (LODR)Regulations 2015 your Company had prepared consolidated financial statements of thecompany and its subsidiaries and a separate statement containing the salient features offinancial statement of subsidiaries joint ventures and associates in Form AOC-1 formspart of the Annual Report.

The annual financial statements and related detailed information of thesubsidiary companies will be provided on specific request made by any shareholders and thesaid financial statements and information of subsidiary companies are open for inspectionat the registered office of the company during office hours on all working day exceptSaturdays 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 at

As required under Regulation 33 of SEBI (LODR) Regulations 2015 and inaccordance with the requirements of Ind AS 110 the Company has prepared ConsolidatedFinancial Statements of the Company and its subsidiaries and is included in the AnnualReport.


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

During the year 2018-2019 the Company has not issue any of EquityShares with differential rights as to dividend voting or otherwise.

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

During the year the Company has not issued any shares including sweatequity under Employee Stock Option Scheme. iii) Whether the Managing Director or theWhole-time Directors of the Company receive any remuneration or commission from any of itsholding /subsidiary companies :

Mr. Arpit J. Vyas Global Managing Director of the Company has receivedremuneration as a Director from two Foreign wholly owned subsidiary companies namelyDishman Europe Ltd. and CARBOGEN AMCIS AG. Switzerland AND from the Company as a ManagingDirector which is in compliance with the provisions of the Companies Act 2013. He isbeing a Partner of Adimans Technologies LLP a holding LLP of the Company has right toreceive profit in the ratio of 20% from the said LLP.

Also Mr. Janmejay R. Vyas Chairman of the Company has receivedremuneration as a Director from one of the Foreign wholly owned subsidiary company namelyDishman Europe Ltd. and from the Company as a Chairman & Managing Director which isin compliance with the provisions of the Companies Act 2013. Mr. J. R. Vyas being aPartner of Adimans Technologies LLP a holding LLP of the Company has right to receiveprofit in the ratio of 40% from the said LLP.

Mrs. Deohooti J. Vyas Whole-time Director being a Partner of AdimansTechnologies LLP a holding LLP of the Company has right to receive profit in the ratioof 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 orCourts or Tribunals which impact the going concern status and Company's operations infuture:

There are no significant and material orders passed by the Regulatorsor Courts or Tribunals which could impact the going concern status and the Company'sfuture operations.

v) Secretarial Standards

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


During the year under review the Company has received the intimationunder SEBI (PIT) Regulations 2015 and SEBI (SAST) Regulations 2011 from its holdingcompany viz. Bhadra Raj Holdings Pvt. Ltd. ("BHPL") regarding transfer of itsholding (61.40%) in the Company to Adimans Technologies Pvt. Ltd. ("ATPL")pursuant to Scheme of Amalgamation amongst BHPL and ATPL and their respective shareholdersand creditors duly approved by the Hon'ble NCLT Ahmedabad Bench vide its order dated14th November 2018. Subsequently ATPL has been converted into LLP viz. AdimansTechnologies LLP w.e.f. 28th January 2019 and in this regard necessary disclosures underSEBI (PIT) Regulations 2015 and SEBI (SAST) Regulations 2011 have also been received bythe Company. Accordingly now Adimans Technologies LLP became a holding company.


Retire by Rotation

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


During the year the Board of Directors appointed Ms. Maitri K. Mehtaas an Additional Director designated as an Independent Director with effect from 1stApril 2019 to hold office up to the date of the forthcoming Annual General Meeting. Thematter of appointing her as regular Director in Independent Director category alongwithjustification 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 anIndependent Directors will expire on 14th December 2019 and 1stApril 2020 respectively. The Board of Directors on recommendation of the Nomination andRemuneration 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 membersfor their re-appointment as an Independent Directors alongwith rational for suchre-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. MarkGriffiths from Director & Global CEO of the Company to new role of Director (GlobalMarketing & Strategy) w.e.f. 7th February 2019.

Key Managerial Personnel

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

The Board of Directors on recommendation of Nomination and RemunerationCommittee 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. 28thNovember 2018 with his existing remuneration and to perform the duties which may beperformed by Key Managerial Personnel of the Company under the Companies Act 2013.

During the year Mr. Janmejay R. Vyas who was Chairman & ManagingDirector of the Company has decided to step down from the role of Managing Director witheffect from 18th February 2019 as part of the Company's succession planand his roles & responsibilities shall be handed over to Mr. Arpit J. Vyas GlobalManaging Director of the Company.

Statement of Declaration by Independent Directors

The Company has received the necessary declaration from eachIndependent Director in accordance with Section 149(7) of the Companies Act 2013 readwith Regulations 16 and 25(8) of the SEBI (LODR) Regulation 2015 ("ListingRegulations") that he/she meets the criteria of independence as laid out in Section149(6) of the Companies Act 2013 and Regulations 16(1)(b) and 25(8) of the ListingRegulations.

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

Board Evaluation & Criteria

Pursuant to the provisions of the Companies Act 2013 and Regulation 17of SEBI (LODR) Regulations 2015 a structured questionnaire was prepared after takinginto consideration the various aspects of the Board's functioning composition of theBoard and its committees. The Board has carried out an annual performance evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Committees and Independent Directors. The Board of Directors expressed theirsatisfaction with the evaluation process.

Board diversity

The Company recognizes and embraces the importance of a diverse boardin its success. We believe that a truly diverse board will leverage differences inthought perspective knowledge skill regional and industry experience cultural andgeographical background age ethnicity race and gender which will help to retain ourcompetitive advantage. The Board has adopted the Board Diversity Policy which sets out theapproach to diversity of the Board of Directors. The Board Diversity Policy is availableon our website

Policy on Director's appointment and remuneration

The salient features of the Policy on Directors' appointment andremuneration of Directors KMP & senior employees and other related matters asprovided under Section 178(3) of the Companies Act 2013 is stated in the report onCorporate Governance which is a Part of the Board's Report. The detailed Policy isplaced on the website of the Company at ht tps: //ww w.di shmangroup.c om/ File s/DishmanGroup/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%20Succession%20 Poli cy.pdf


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

Annexure C.

The statement containing particulars of employees as required underSection 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 thisreport as Annexure D.


The independent Directors are provided with necessary documentsbrochures reports and internal policies to enable them to familiarize with theCompany's procedures and practices. The Company undertook various steps to make theIndependent Directors have full understanding about the Company. The Company has throughpresentations at regular intervals familiarized and updated the Independent Directorswith 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 tounderstand the operations of the Company. The details of such familiarisation programmeshave been disclosed on the Company's website at


A Separate meeting of Independent Directors held on 23rdJanuary 2019 without the attendance of Non-Independent Directors and members of theManagement. In the said meeting Independent Directors reviewed the followings:

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

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

• Evaluation of the quality of flow of information between theManagement and Board for effective performance by the Board.

The Independent Directors expressed their satisfaction with theevaluation process.


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

• in the preparation of the annual accounts for the financial yearended 31st March 2019 the applicable accounting standards have been followedalong with proper explanation relating to material departures;

• the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give 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;

• the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

• the directors have prepared the annual accounts on a goingconcern basis;

• the directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

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


The details in respect of internal financial control system and theiradequacy are included in Management Discussion and Analysis Report which forms part ofthis report.


Assets of your Company are adequately insured against various perils.


The Board of Directors has constituted a Risk Management Committee on23rd 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 theCorporate Governance Report forming part of the Director's Report.

Risk management is an integral part of business practices of theCompany. The framework of risk management concentrates on formalising a system to dealwith the most relevant risks building on Existing management practices knowledge andstructures.

The Company has framed formal Risk Management framework to identifyevaluate business risks and opportunities. Corporate Risk Evaluation and Management is anongoing process within the Organization. The Company's Risk Management framework iswell-defined to identify monitor and minimizing/mitigating risks. While defining anddeveloping the formalized risk management system leading standards and practices havebeen considered. The risk management system is relevant to business reality pragmatic andsimple.

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

The key elements of the framework include: Risk Structure; RiskPortfolio and Risk Measuring & Monitoring and Risk Optimising. The implementation ofthe framework is supported through criteria for Risk assessment Risk forms & MIS. Theobjectives 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 thelocal legal requirements and SEBI (LODR) Regulations;

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

Defining framework for identification assessment monitoringmitigation and reporting of risks.

Risk Management Policy

As per Regulation 17(9) of SEBI (LODR) Regulations 2015 the Companyhas framed formal Risk Management framework for risk assessment and risk minimization forIndian operation which is periodically reviewed by the Board of Directors to ensure smoothoperations and effective management control. The Audit Committee has additional oversightin the area of financial risks and control.


The Company has adopted a Whistle Blower Policy pursuant to therequirements of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. The Policyempowers all the stakeholders to raise concerns by making protected disclosures as definedin the Policy.

The policy also provides for adequate safeguards against victimizationof whistle blower who avail of such mechanism and also provides for direct access to theChairman of the Audit Committee in exceptional cases. The details of the Whistle BlowerPolicy are explained in the Report on Corporate Governance and the Policy is available onthe website of the Company at


The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The company has complied withprovisions relating to the constitution of Internal Complaints Committee under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Therewere no incidences of sexual harassment reported during the year under review in terms ofthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.


M/s. V. D. Shukla & Co. Chartered Accountants Ahmedabad (FirmRegistration No. 110240W) and M/s. Haribhakti & Co. LLP Chartered AccountantsMumbai (Firm Registration No. 103523W) were appointed as Joint Statutory Auditors of theCompany 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 7thMay 2018 by the Ministry of Corporate Affairs the requirement of ratification ofappointment of Statutory Auditors in every AGM subsequent to their appointment has beendispensed.

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 theeffect 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 beenreported 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. Internalauditors are appointed by the Board of Directors of the Company on a yearly basis basedon the recommendation of the Audit Committee. The Internal Auditor's reports andtheir findings on the internal audit has been reviewed by the Audit Committee on aquarterly basis. The scope of internal audit is also reviewed and approved by the AuditCommittee.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and the rules made thereunder the Company had appointed Mr. Ashok P. Pathak PracticingCompany Secretary (Membership No. ACS: 9939; CP No: 2662) as Secretarial Auditors toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is appendedin the Annexure E to the Directors' Report. The observations and comments if anyappearing in the Secretarial Audit Report are self-explanatory and do not call for anyfurther explanation / clarification. The Secretarial Auditors Report does not contain anyqualification reservation or adverse remark and also no fraud has been reported for theyear ended March 31 2019.

Cost Audit

Central Government has notified rules for Cost Audit and as perCompanies (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. Thereforefiling of cost audit report for the FY 2018-19 is not applicable to the Company. Howeveras required under Section 148(1) of the Companies Act 2013 Company has maintainednecessary Cost Records.


As per Regulation 34 of SEBI (LODR) Regulations 2015 a separatesection on corporate governance practices followed by the Company as well as“Management Discussion and Analysis” confirming compliance is set out in theAnnexure forming an integral part of this Report. A certificate from Practicing CompanySecretary regarding compliance with corporate governance norms stipulated in Regulation 34of SEBI (LODR) Regulations 2015 is annexed to the report on Corporate Governance.

In compliance with one of the Corporate Governance requirements as perRegulation 34 read with Schedule V of the SEBI (LODR) Regulations 2015 the Company hasformulated and implemented a Code of Conduct for all Board members and senior managementpersonnel of the Company who have affirmed compliance thereto.


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


As a part of Corporate Social Responsibility (CSR) the Companycontinued extending help towards social and economic development of the villages and thecommunities located close to its operations and also providing assistance to improvingtheir quality of life. Company's intention is to ensure that we meet the developmentneeds 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 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 has constitutedCSR Committee and has framed a CSR Policy. The brief details of CSR Committee and contentsof CSR policy is provided in the report on Corporate Governance. The details of CSRactivities carried out by the Company are appended in the Annexure G to theDirector's Report. The CSR Policy is available on the website of the Company (URL:


In pursuance of Regulation 34 of SEBI (LODR) Regulations2015 top 500companies based on market capitalization (calculated as on March 31 of every financialyear) are required to prepare and enclose with its Annual Report a BusinessResponsibility Report describing the initiatives taken by them from an environmentalsocial and governance perspectives. A separate report on Business Responsibility isannexed herewith as Annexure H.


As per Regulation 43A of SEBI (LODR) Regulations 2015 top 500companies based on market capitalization (calculated as on March 31 of every financialyear) are required to formulate Dividend Distribution Policy. Accordingly the Board hasapproved the Dividend Distribution Policy in line with said Regulation. The said policy isavailable on The Policy is annexed as Annexure I to theDirector's Report.


Your Directors would like to express their appreciation for theassistance and co-operation received from foreign institutions banks associatesGovernment authorities customers supplier vendors and members during the year underreview. Your Directors also wish to place on record their deep sense of appreciation forthe committed services and teamwork by the executives staff members and workers of theCompany for enthusiastic contribution to the growth of Company's business.

For and on behalf of the Board of Directors
Janmejay R. Vyas
Date : 15th May 2019 Chairman
Place : Ahmedabad DIN - 00004730