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Dishman Carbogen Amcis Ltd.

BSE: 540701 | NSE: DCAL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE385W01011 | SECTOR: Miscellaneous

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Annual Report

For Year :
2018 2017

Director’s Report


The Shareholders of

Dishman Carbogen Amcis Limited

[formerly Carbogen Amcis (India) Ltd.]

The Directors have pleasure in presenting their Report along with the Audited Accounts of the Company for the year ended March 31, 2018.


(Rs. In Crores)








Revenue from Operations





Earnings Before Interest Tax Deprecation and Amortisation (EBITDA)





Other Income





Depreciation & Amortisation (other than Goodwill)





Amortisation of Goodwill





Profit Before Interest and Tax





Finance Costs





Profit Before Tax





Tax Expense





Profit After Tax






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 as against Rs. 43.91 crores in FY 2016-17. Profit after tax for the year remain at Rs. 37.07 crores 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. 1.50 per 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 2017-18 as against Rs. 216.08 crores in FY 2016-17. Profit for the year remains at Rs. 154.57 crores 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. 9.01 per share in FY2016-17. Cash Earning per share for the current year works out to Rs. 24.00 as agianst Rs. 18.50 in the previous year.

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


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


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


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


During the year, your company reinforced its philosophy of working towards achieving the vision of developing and manufacturing novel drugs , which are niche in nature and are able to address the world requirements by making the drugs available on an affordable and sustainable basis. Due to this focused approach, the company has been able to successfully develop and is in the process of developing some very niche sustain able high value molecules. Your company’s focus was to ensure that the operating margins are sustained in the financial year ending March 31, 2018 in spite of adverse macro and micro economic factors. Moreover, your company targeted to improve the net profit margin, which it was able to achieve due to sustained efforts on reducing the finance cost and bringing in operational efficiencies. Due to the above efforts, your company’s net profit margin was 9.36% in FY 2018 as compared to 8.90% in FY 2017. All key business verticals of the Company and also all major subsidiaries of the Company have performed exceedingly well.


Your company’s contract research business is an important gateway to successfully developing and commercializing new chemical entities. The molecules under development have been increasing each year and your scientists have been diligently working on complex, niche, difficult to develop molecules , which speaks volumes about the research talent pool within the company.

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

The CRAMS segment across all locations has performed very well during the year under review on account of addition of new clients, new molecules and increase in repeat business from existing customers. Your company has a very strong relationship with the global pharma innovators and biotech companies, which is helping it immensely in acquiring new businesses. Your company has been focusing its efforts on diversifying its customer base and increasing the number of molecules under development as this acts as a good de-risking strategy from a customer concentration viewpoint and also increases the chances of more molecules being success fully developed and getting commercial approvals.

Your company’s subsidiary CARBOGEN AMCIS AG commenced incurring capital expenditure on the new building it acquired in January, 2017, for modification of the building to meet its developmental project requirements. This capital expenditure is part of group’s year 2020 strategy and your company expects the phase I of the expenditure for this building to be completed by Q1 of FY 2018-19. This will help your company’s subsidiary to take additional orders for development work and increase the pipeline of products under development, thus increasing the chances of more molecules getting commercialized.

Your company is seeing a significant increase in the order book for the APIs of the molecules commercialized in the last 2-3 years, which are very niche in nature and are very high in margin. Your company’s subsidiary CARBOGEN AMCIS AG is also seeing an increase in the quantities of already commercialized molecules, which along with your company’s increased order book, would add immensely to the contract manufacturing revenue over the next 2-3 years.

Lastly, it is significant to note that the entire focus of your company is to make a difference to this world by developing and manufacturing molecules, which would help people suffering from chronic diseases lead a better and happy life. This approach has yielded significant results for your company and will continue to do s o in the future.

Hi-Po Unit

Your company’s Hi-Potency -Unit 9 facility has been a key driver of the group’s strategy to develop and manufacture highly complex New Chemical Entities. The API for one of the significant formulated product of the customer, which received approval from the US FDA in the last financial year, was successfully developed in the HiPo facility in Phase III. Your company has a strong scientific capability in India in addition to the one in Switzerland. The synergies between these two entities have been growing tremendously and this has started yielding significant results. The API which was successfully developed in the HiPo Plant was developed initially at the company’s Swiss facility and then the molecule along with its technology was successfully migrated to the company’s HiPo unit in India in the later phases of development work. Your company now expects more molecules out of this unit to be successfully developed, which would present a tremendous growth opportunity to the group.

Your company has planned to undertake expansion of the current installed capacities in this unit over the next 12 to 24 months . This expansion would largely involve installing the machineries for the remaining two cells and the custom block as currently only two cells are operational and running at full capacity. As your company sees sizeable order book going forward for this unit due to one of the molecules being successfully developed, this capacity increase is inevitable. Your company expects significant ramp up in the revenues from the HiPo unit on account of the strong pipeline of products, which would be developed and manufactured in this plant. Due to the complex nature of the products that would be developed and eventually manufactured in this unit, your company also expects the overall profitability margins to increase further as the capacity utilization of this plant increases.

Vitamin D Analogues

Your company’s subsidiary Dishman Netherlands continues to perform exceedingly well by producing and selling quality Vitamin D analogues and cholesterol. Due to the change in strategy at Dishman Netherlands and the company’s renewed focus on Vitamin D analogues and cholesterol business over the last 3-4 years, the company has been able to achieve significantly higher margins. Your company’s R&D team under the guidance of your Chairman and Managing Director has made unparalleled findings in synthetically developing a 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 traction in 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 dosage form of Vitamin D, which would be forward integration of the Vitamin D analogues, that your company’s subsidiary already manufactures.

During the year under review, the operating profitability margins have improved from 34% in FY 2016-17 to 38% in FY 2017-18, which are expected to be sustainable margins for the future.

Generic API and Disinfectant Business

Your company has remained focus on its changed strategy around generic APIs where it plans to develop and manufacture niche generic APIs. Your R&D team is doing development work on many HiPo generic molecules as they understand that space very well and there are many old molecules, which have been discarded for development by large pharmaceutical companies, but could have very significant value in terms of the efficacy on the patients suffering from those diseases. Currently, generic APIs constitute an insignificant proportion of total revenues but with the change in strategy, this could be a significant growth driver for the future.

Your company’s strategy of entering into long term agreements with certain global pharmaceutical companies for developing and manufacturing formulations for them is working quite well. This will help your company in better utilizing the assets for disinfectant plant in a better manner. However, your company’s strategy is clear that it would not be manufacturing disinfectant products at the cost of margins. Your company expects this business to be a steady business in the coming years.

Performance of Major Subsidiary Associates

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

Dishman Netherland BV., per form well during the year, reported revenue of Rs. 196.26 crores and Profit after tax of Rs. 57.92 crores. CARBOGEN AMCIS Ltd. (U.K.) reported a revenue 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 and Profit before tax of Rs. 0.17 crores. Other Subsidiaries has also performed reasonably well during the year under review.

The other marketing subs idiaries viz. Dishman USA In c. reported revenue of Rs. 121.62 crores an d Profit after tax of Rs. 1.70 crores. Dishman Europe Ltd. reported a revenue of around Rs. 217.31 crores and Profit after tax of Rs. 14.48 crores during the year under review.


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

We continue our efforts in bringing more efficiency to processes in terms of environmental impact and to meet the new, stricter regulations from the various regulatory agencies.

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

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

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

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

Our vitamin D team in the Netherlands and the R&D team in India work closely together to bring excellent outcomes of trials which are well designed an d thoroughly investigated.

Dishman has a leadership position in disinfectant actives. This year, we have developed new disinfectants with better efficacy against wide spectrum of microorganisms. Few trials are underway on various new applications. The capacity of disinfectant manufacturing facility has also been expanded to meet the demands that we foresee for these new products.

On generics, we have completed development of three contrast agents, 3 DMFs have been filed and this year, we plan to file 2 more DMFs for this product category. We continue 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 category for the coming years. We are exploring the possibilities to re-purpose certain actives in specific finished formulations through adequate clinical trials.

This year, our R&D developed processes for some KSMs and RSMs of key commercial products enabling us to bring their manufacturing in-house or at locally outsourced facilities. This has reduced our dependence on imports significantly and brought about supply chain security for most of the high value commercial products.

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


Your Company is committed towards excellence in Quality, Health, Safety and Environment Management and ensures that those working with the Company are safe at work and that everyone takes responsibility for achieving this. We include EHS and climate change-related considerations in our business decisions and strive to minimize any adverse impact on environment by our operational activities. Measuring, Monitoring, Reviewing, analyzing, appraising and reporting on environmental, health an d safety performance is an important part of continual improvement in our EHS performance.

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

Company ‘s products and processes are developed in accordance with strictly defined local and international rules to ensure safety and Health of workers as well as the environment. This is achieved by conducting the Risk Assessment, Qualitative Risk Assessment, Process Hazard Assessment, Identification of significant environmental aspects, Safety Audits, customer audits, HAZOP study and Environment audits. Safety & Environment Management Program are being 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 to achieve zero discharge by utilizing treated water for Utility services, washing activities and flushing activities. (ii) Stripper system, Multiple effect evaporator and ATFD for concentrated effluent stream; (iii) Biological Effluent Treatment System, Tertiary treatment, Two Stage R.O. System and Multiple Effect Evaporator for Dilute Stream Effluent. (iv) Practicing On-site emergency plan by conducting mock-drills; (v) Replacement of hazardous process / chemical to non-hazardous process for converting to low hazards; (vi) Fire detection an d protection system available at site; (vii) Conducting intensive QHSE Training programs including contractor employees and monitoring the effectiveness of the same (viii) Participation of employees in Safety committee meetings at all levels and celebrating the National Safety Day / Week and World Environment Day as well as observing Fire Service Day (ix) Tree plantation to increase the green cover at site (x) Independent safety and environment audits at regular intervals by third party and also in-house by cross functional team; (xi) In-house medical and health facility at site for pre- employment & periodical medical check-up of all employees including contract employees;(xii) Additional health checkup for employees based on their occupational needs (xiii) Blood Donation Camp at site in association with the Ahmedabad Red Cross Society for social cause; (xiv) Rain water Harvesting System to conserve rain water an d improve ground water level.

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

In its pursuit of excellence towards sustain able development and to go beyond compliance, Dishman integrated its ISO 14001:2015 for EMS, ISO 9001:2015 for QMS and BS OHSAS 18001:2007 for Occupational, Health and Safety Management systems. The company is also certified EN/ISO 13485:2012 for Medical Device Quality Management System for Disinfectant 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 order dated 16th December, 2016 sanctioned a Scheme of Arrangement and Amalgamation amongst the Company; Dishman Pharmaceuticals and Chemicals Limited (DPCL); Dishman Care Limited (DCL) and their respective shareholders and Creditors (“Scheme”) in terms of the provisions of Section 391 to 394 of the Companies Act, 1956. Upon Scheme becoming effective Name of the Company has been Changed from “Carbogen Amcis (India) Limited” to “Dishman Carbogen Amcis Limited” w.e.f. 27th March, 2017 vide fresh certificate of Incorporation pursuant to change of name issued by the Office of Registrar of Companies, Gujarat.

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

Accounting Impact

The amalgamation has been accounted under the “Purchase Me thod” as per the then prevailing Accounting Standard 14 - Accounting for Amalgamations, as referred to in the Scheme of Amalgamation approved by the Hon’ble High Court, Gujarat, which is different from Ind AS 103 “Business Combinations”. Accordingly, the assets and liabilities of DPCL and DCL have been recorded of their fair value as on Appointed Date. The purchase consideration of Rs. 4810 crores payable by way of issue of shares of the Company has been disclosed as Share Suspense Account under other equity. The excess of consideration payable over net assets acquired has been recorded as goodwill amounting Rs. 1326.86 crores, represented by underlying intangible assets acquired on amalgamation and is being amortized over the period of 15 years from the Appointed Date. Had the goodwill not been amortized as required under Ind AS 103, the Depreciation and Amortization expense for the year ended March 31, 2018 would have been lower by Rs. 88.46 crores and the Profit Before Tax 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 16,13,94,272 equity s hares of Rs. 2/- each, as fully paid-up equity shares to the shareholders of erstwhile Dishman Pharmaceuticals and Chemicals Limited in the ratio of 1 (one) share of Dishman Carbogen Amcis Limited for every 1 (one) share held in erstwhile Dishman Pharmaceuticals and Chemicals 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 the Scheme of arrangement and amalgamation.


After the Scheme became effective, pursuant to the documents submitted on 22nd March, 2017, Part B approval of SEBI was received from BSE Ltd. on 12th May, 2017. Thereafter, the Company has fixed 31st May, 2017 as record date for the purpose of deciding the members who shall be eligible for allotment of equity shares pursuant to Scheme and necessary intimation of the same has been given to Stock Exchanges on 19th May, 2017. In this regard, the Company has received Suspension Letter dated 22nd May, 2017 issued by National Stock Exchange of India Limited and Notice of No Dealing dated 22nd May, 2017 issued by BSE Limited intimating that trading in the equity shares of DPCL shall be suspended with effect from May 30, 2017 due to procedural purpose till the new shares to be allotted to the DPCL’s shareholders get listed on both the Stock Exchanges. Thereafter, on 6th June, 2017, the Company has made allotment of 16,13,94,272 equity shares of the Company to the shareholders of DPCL in the ratio of 1:1 i.e. Share Exchange Ratio, fixed under the Scheme of merger.

Thereafter, on 22nd Jun e, 2017, Application for Listing and seeking exemption from Rule 19(2)(b) of Securities Contract (Regulation) Rules, 1957 was filed with BSE Ltd. and National Stock Exchange of India Ltd. In this regard, In-principle approvals has been received from National Stock Exchange of India Limited on 14th July, 2017 and from the BSE Limited on 20th July, 2017 for listing of 16,13,94,272 Equity Shares of Rs. 2/- each. The Company has also received SEBI approval Letter dated 13th September, 2017 approving Listing application seeking exemption from Rule 19(2)(b) of SCRR, 1957. After receipt of SEBI approval, NSE and BSE issued Listing and Trading Permission Notice dated 19th September, 2017 regarding to start trading in the shares of the Company from Thursday, September 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 date to the concerned Stock Exchanges.


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

The Company has following Committees of the Board:

- Audit Committee

- Stakeholder Relationship Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Management Committee

- Sexual Harassment Committee

During the year, the Board has accepted all the recommendations made by various committees including Audit Committee. The details with respect to the compositions, powers, terms of reference etc. of relevant committees are given in details in the Report on 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 Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is annexed herewith as Annexure A to this Report.

ii) Board Meetings

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

During the FY 2017-18, the Board met Five (5) times i.e. on 3rd April, 2017, 16th May, 2017, 10th August, 2017, 9th November, 2017 and 24th January, 2018. Detailed in formation on the meetings of the Board is included in the report on Corporate Governance, which forms part of this Annual Report.

iii) Related Party Transactions

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Since all the related party transactions entered into during the financial year 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 Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure B to this Board’s report. The policy on Related Party Transactions has been approved by the Board and uploaded on the website of the Company. The details of the transactions with Related Party are provided in the accompanying financial statements vide note no.31 of notes on financial statement as per requirement of Ind AS 24 -related party disclosure. These transactions are not likely to conflict with the interest of the Company at large. All significant transaction with related parties is placed before audit committee periodically.

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

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

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

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

vi) Subsidiaries, Joint Ventures and Associate Companies

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

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

Also, as reported last year, as a part of global restructuring process, during the year, 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 a consideration of RMB 189.51 million. Further, the DCASPL h as transferred its stake in CASCL to the Company’s wholly owned subsidiary namely CARBOGEN AMCIS Holding AG., Switzerland (“CAHAG”), by way of share swap. After, this restructuring the Company’s stake in CAHAG has been reduced to 91.50% and remain ing 8.50% has been held by DCASPL.

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

Restructuring of Wholly Owned Subsidiaries

i) Transfer of equity stake of Company’s wholly owned step down subsidiary namely Dishman Netherlands BV (“DNBV”) to Company’s another wholly owned subsidiary company namely CARBOGEN AMCIS Holding AG (“CAHAG”) CARBOGEN AMCIS Holding AG is an overseas wholly owned subsidiary of the Company, which is currently holding investments in its four subsidiaries namely i) CARBOGEN AMCIS AG, Switzerland; ii) CARBOGEN AMCIS SAS, France; iii) CARBOGEN AMCIS Limited, UK and iv) CARBOGEN AMCIS (Shanghai) Co. Limited, China. The Company, directly and indirectly, currently owns 100% shares in all these subsidiaries.

As a part of the global restructuring process, the Company’s wholly owned subsidiary Dishman Europe Limited (“DEL”) intends to transfer its shareholding in Dishman Netherlands BV to CAHAG by way of a share swap arrangement for a consideration of approximately EUR 91 million. The company intends to first transfer the shares of DNBV from DEL to Dishman Carbogen Amcis (Singapore) Pte Limited (“DCASPL”) and then from DCASPL to CAHAG by way of a share swap. The company also intends to change the name of Dishman Netherlands BV to CARBOGEN AMCIS Netherlands BV. This will help the company in realigning the operations globally and ensuring that all overseas manufacturing entities are consolidated under one overseas holding company.

ii) Restructuring of Dishman Japan’s Share Capital

As a part of restructuring process, Company’s wholly owned subsidiary namely Dishman Japan Ltd.(“DJL”), will issue new shares to CARBOGEN AMCIS Holding AG (“CAHAG”) and after this restructuring of DJL’s Share Capital, DJL becomes step 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 changed to Dishman Carbogen Amcis (Japan) Ltd.


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

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

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


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 with differential rights as to dividend, voting or otherwise.

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

During the year, the Company has not issued any shares under Employee Stock Option Scheme.

iii) Whether the Managing Director or the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries :

Mr. Arpit J. Vyas , Managing Director & CFO of the Company has received remuneration as a Director from two Foreign wholly owned subsidiary companies namely Dishman Europe Ltd., and CARBOGEN AMCIS AG., Switzerland AND from the Company as a Managing Director, which is in compliance with the provisions of the Companies Act, 2013.

Also, Mr. Janmejay R. Vyas, Chairman & Managing Director of the Company has received remuneration as a Director from one of the Foreign wholly owned subsidiary company namely Dishman Europe Ltd., and from the Company as a Chairman & Managing Director, which is in compliance with the provisions of the Companies Act, 2013.

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

iv) Any significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future:

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

v) Secretarial Standards

Secretarial Standards issued by the Institute of Company Secretaries of India as applicable to the Company were followed and complied with during 2017-18. The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.


Retire by Rotation

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


The term of office of Mr. Ashok C. Gandhi and Mr. Sanjay S. Majmudar, as an Independent Directors, will expire on 31st March, 2019. The Board of Directors, on recommendation of the Nomination and Remuneration Committee has recommended reappointment of Mr. Ashok C. Gandh i and Mr. Sanjay S. Majmudar, 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.

Key Managerial Personnel

The Board of Directors on recommendation of Nomination and Remuneration Committee has re-appointed Mr. Arpit J. Vyas as Managing Director of the Company for a further period of 5 (five) years with effect from 1st June, 2019, subject to approval of shareholders, 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, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub section (6).

Board Evaluation & Criteria

Pursuant to the provisions of the Companies Act, 2013 an d Regulation 17 of SEBI (LODR) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its committees. The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees and Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

Board diversity

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

Policy on Director’s appointment and remuneration

The salient features of the Policy on Directors’ appointment and remuneration of Directors, KMP & senior employees and other related matters as provided under Section 178(3) of the Companies Act, 2013 is stated in the report on Corporate Governance which is a Part of the Board’s Report. The detailed Policy is placed on the website of the Company at http://www.dishmangroup.com/Files/DishmanGroup/Investor-Relations/Policy%20on%20Remuneration%20of%20Directors, %20Key%20Managerial%20Personnel%20&%20%20Senior%20Employees%20AND%20Succession%20Policy.pdf


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

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


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


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

- Performance evaluation of Non In dependent Directors and Board of Directors as a wh ole;

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

- Evaluation of the quality of flow of information between the Management and Board for effective per formance by the Board.

The In dependent Directors expressed their satisfaction with the evaluation process.


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

- that in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent s o as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

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

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

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

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


The details in respect of internal financial control sys tem and their adequacy are included 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 formal Risk Management framework for risk assessment and risk minimization for Indian operation which is periodically reviewed by the Board of Directors to ensure smooth operations and effective management control. The Audit Committee has additional oversight in the area of financial risks and control.


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

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


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

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


Statutory Auditors

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

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

The Notes on Financial Statements referred to in th e Auditors’ Report are self-explanatory and do not call for any further comments. The Auditor’ Report does not contain any qualification or reservation.

Internal Auditors

M/s. Shah & Shah Associates, (Firm Registration No. 113742W) Chartered Accountants, Ahmedabad has been internal auditor of the Company. Internal auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor’s reports and their findings on the internal audit, has been reviewed by the Audit Committee on a quarterly basis. The scope of internal audit is also reviewed and approved by the Audit Committee.

Secretarial Auditors

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

Cost Audit

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


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

In compliance with one of the Corporate Governance requirements as per Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, the Company has formulated and implemented a Code of Conduct for all Board members and senior management personnel of the Company, who have affirmed compliance thereto.


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


Corporate Social Responsibility (CSR) is not just a duty; it is an approach towards existence. The Company see CSR as a creative opportunity to fundamentally strengthen the Company’s business , while contributing to the society and creating social, environmental and economic impact. The Company’s motto is to build a sustainable life for the weaker and under-privileged sections of the Society. The Company continued extending help towards social and economic development of the villages and the communities located close to its operations and also providing assistance to improving their quality of life. Company’s intention is to ensure that we meet the development needs of the local community.

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


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


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


Your Directors would like to express their appreciation for the assistance and co-operation received from foreign institutions, banks, associates, Government authorities, customers, supplier, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services an d teamwork by the executives, staff members and workers of the Company for enthusiastic 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 - 0000 4730

Director’s Report