To
The Shareholders of
Dishman Carbogen Amcis Limited
Your Directors have pleasure in presenting their Report along with the
Audited Accounts (Standalone as well as Consolidated) of your Company for the year ended
March 31, 2021.
FINANCIAL RESULTS
Particulars |
Standalone |
Consolidated |
|
2020-2021 |
2019-2020 |
2020-2021 |
2019-2020* |
Revenue from Operations |
208.01 |
580.74 |
1912.03 |
2043.60 |
Earning Before Interest Tax Depreciation and |
(57.46) |
173.58 |
274.35 |
497.56 |
Amortisation (EBITDA) |
|
|
|
|
Other Income |
66.15 |
69.55 |
38.45 |
44.46 |
Depreciation & Amortisation (other than Goodwill) |
54.76 |
52.19 |
219.49 |
194.41 |
Amortisation of Goodwill |
88.45 |
88.46 |
88.45 |
88.46 |
(Loss) / Profit Before Interest and Tax |
(134.52) |
102.48 |
4.86 |
259.15 |
Finance Costs |
34.17 |
47.02 |
47.61 |
61.95 |
(Loss) / Profit Before Tax and exceptional items |
(168.69) |
55.46 |
(42.75) |
197.20 |
Exceptional Items |
- |
- |
22.28 |
- |
(Loss) / Profit Before Tax |
(168.69) |
55.46 |
(65.03) |
197.20 |
Tax Expense |
64.12 |
16.94 |
100.10 |
38.69 |
(Loss) / Profit After Tax |
(232.81) |
38.52 |
(165.13) |
158.51 |
* Pl. refer "Impact of Adjustment in FY 2019-20"
PERFORMANCE AND OPERATION REVIEW Standalone Financial Results
In FY 2020-21, your Company achieved revenue of
208.01 crores as compared to 580.74 crores in FY 2019-20. Loss before
tax stood at (168.69) crores in FY 2020-21 as against Profit before tax 55.46 crores in FY
2019-20. Loss after tax for the year remain at (232.81) crores in FY 2020-21 as compared
to Profit after tax of
38.52 crores in FY 2019-20.
Earnings per share for the FY 2020-21 remains at (14.85) per share as
against 2.46 per share in FY2019-20.
Financial performance of your company was mainly impacted adversely due
to European Directorate for the Quality of Medicines & Health Care (EDQM) observations
that were pointed out at the conclusion of the audit conducted at Company's Bavla
site by the SwissMedic and EDQM in February 2020. Certain Certificate of Suitability
(CEPs) belonging to your Company were suspended due to said observations. A further
details on current status of EDQM Audit observations is given under the head "EDQM
Audit Update".
Consolidated Financial Results
In FY 2020-21, your Company achieved revenue of 1912.03 crores as
compared to 2043.60 crores in FY
2019-20. Loss before tax stood at (65.03) crores in FY 2020-21 as
against Profit before tax of 197.20 crores in FY 2019-20. Loss for the year remains at
(165.13) crores in FY 2020-21 as compared to Profit of 158.51 crores in FY 2019-20.
Earnings per share for the FY 2020-21 remains at (10.53) per share as
against 10.10 per share in FY 2019-20. Cash Earning per share for the current year works
out to 17.72 as against 25.02 in the previous year.
Impact of Adjustment in FY 2019-20
During the quarter ending September 30, 2020, one of the company's
subsidiaries, CARBOGEN AMCIS AG identified two projects pertaining to Q4 FY 2019-20 where
the Cost of Goods sold were now appropriately allocated to these projects in the relevant
period. Due to this adjustment, for Q4 and full year FY 2019-20, the Cost of Goods sold on
a consolidated basis increased by INR 24.88 crores and Deferred Tax Asset increased by INR
3.09 crores. Correspondingly, the retained earnings reduced by INR 21.79 crores at the
subsidiary level and on a consolidated basis as on March 31, 2020.
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.
IMPACT OF COVID 19
During the year under review, the company initiated implementation of
set of measures aimed at limiting any risk related to COVID-19 to Company's
employees, customers and associates. This impacted the deployment of optimal workforce at
the manufacturing plants. Moreover, in India, the company faced logistics issues on the
import of raw materials and export of finished goods. Due to these factors, the production
and revenue at the company's sites in India were impacted to certain extent. The
Company continues to monitor the impact of Covid-19 on recoverability of
receivables/advances, assessment of impairment of goodwill and intangibles, investments
and inventory.
EDQM AUDIT UPDATE
The observations that were pointed out at the conclusion of the audit
conducted at Company's Bavla site by the SwissMedic and European Directorate for the
Quality of Medicines & HealthCare (EDQM) in February 2020 are being addressed to by
your company in the best manner possible in order to ensure that such surprises are
avoided in the future.
Though the financial performance of your company was impacted adversely
due to these observations, it is expected to normalize during upcoming quarters due to
resumption of business operations in Bavla site. Moreover, the company has appointed world
renowned consultants to supplement the team in India in order to rectify the deficiencies
highlighted during EDQM audit. The company had submitted the Corrective Action Plan to the
EDQM authority on August 21, 2020 and started its implementation. On October 16, 2020, the
company received the Final Audit Closure Report from EDQM, wherein the company's
approach to remediate the deficiencies were considered as being appropriate.
The Company has been steadily ramping up manufacturing activities at
the Bavla site in order to meet the customer requirements. Two of the largest Global
Pharmaceutical companies have successfully audited the company's Bavla site during
the year. The implementation of the Corrective Action Plan submitted to the EDQM is also
underway and on track wherein the company should be able to successfully address the audit
observations.
DIVIDEND
The results of the Company do not permit payment of any dividend. Hence
your Directors do not recommend the payment of any dividend for the financial year ended
March 31, 2021.
TRANSFER TO RESERVES
Your Company has not transferred any amount to the general reserves.
DEPOSIT`
The Company has neither accepted nor invited any deposit from public,
falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies
(Acceptance of Deposits) Rules, 2014.
OPERATIONS
The company had a great year in terms of number of molecules moving
into Phase III validation and those moving from Phase III development to commercial
manufacturing. The company is expanding its operations in Switzerland in order to increase
its capacity for taking additional projects for development as well as for small scale
commercial manufacturing. The company is also forward integrating its business by setting
up formulation manufacturing facility in France, which will ensure that we truly become a
one-stop shop for our customers. The company's Shanghai operations turned profitable
for the first time ever due to increase in the number of projects serviced from that plant
for the projects won by CARBOGEN AMCIS AG. The Netherlands plant has been operating at
decent capacity utilization.
Though the company had faced operational challenges in its Bavla plant
in India due to EDQM observations received in March 2020, the company took it positively
to realign its management structure and undertook massive restructuring exercise to excel
the operational activities in Bavla facility for its global customers. The company had
been successful in undertaking risk assessments of the customers' products to their
satisfaction and also successfully pass audits undertaken by certain global pharmaceutical
customers at its Bavla operations. This helped the company to gradually restart
manufacturing of the products in the CRAMS segment and hence increase the production
quarter over quarter throughout the year at this manufacturing site. The company expects
the Bavla plant to return to its normal operations for the CRAMS products during the
course of the current financial year. The products for which the Certificate of
Suitability (CEPs) have been suspended would be restarted once the audit clearance from
the EDQM is received. The company expects the implementation of the Corrective Action Plan
to be completed during the current financial year after which the EDQM authority would be
invited to conduct a re-audit of the plant. Your company has achieved an important
milestone by receiving approval from the World Health Organization for its Bavla site in
January, 2021.
CRAMS
Your company's management major focus is on improving the
performance of the CRAMS segment by adding more niche molecules for development, which
would improve the chances of those molecules moving to Phase III development and
eventually commercial manufacturing. There has been a tremendous flow of molecules in
Phase III validation during the course of the last financial year in addition to many
molecules moving into commercial phase. This augurs very well for the future growth of the
company at a global level and helps your company achieve the objective of better utilizing
its capacity across the globe. Your company's strategy of moving more large scale
manufacturing of APIs or intermediates to India and China would help your company improve
revenues and profitability significantly over the next 3-5 years.
Your company is expandingheavilyitsCRAMS capabilities and capacities in
Switzerland and France, which will make sure that you are able to position yourself as a
company that is a unique company, one of its kind in the global pharmaceutical space,
catering to the entire needs of the global pharmaceutical companies for their outsourcing
services. Your company's focus would remain on developing and manufacturing APIs for
niche molecules and also forward integrate this business into manufacturing commercial
scale formulated products for your customers.
Vitamin D Analogues and Cholesterol
Your company's focus on manufacturing cholesterol and Vitamin D
analogues such as calcifediol and calcitriol, among others, has yielded very good results
for the whole group. Your company has partnered with the Boston University to undertake
clinical trials on patients who are suffering from obesity and have gone through gastric
bypass by administering calcifediol instead of the vitamin D3 and determining its
efficacy. Similarly your company has been undertaking clinical trials by administering
calcifediol to patients who have contracted certain viruses and suffering from certain
ailments. The preliminary sets of results have been very encouraging and should help the
company further its objective of finding cure for unaddressed diseases.
Your company plans to utilize its softgel capsules facility located in
Bavla, India, by formulating the analogues into finished dosage form and then strategize
to market the final product either in own brand name and/or partnering with another
pharmaceutical company.
Generic API and Disinfectant Business
Your company had supplied disinfectants totalling 300 tonnes to the
entire world to fight against the COVID pandemic. Also, there was a massive distribution
of the disinfectants to employees, workers, policemen, social servants, etc. throughout
the course of the year.
Your company has taken a critical review of all the products under the
generic API, quats, intermediates and Phase Transfer Catalyst products, which are lower
margin yielding products and as a strategy, may decide to discontinue some of these
products in the future as the major focus of your company is to improve the profitability
margins over the next 3-5 years.
Capital Expenditure Plan at the Company's subsidiaries located at
Switzerland and France
Company has initiated Capital Expenditure Plans at the Company's
subsidiaries in Switzerland and France. The Company's subsidiaries will be investing
in two major expansion projects that will increase manufacturing capacity to better meet
the demands of the current market and its customers. The new facilities will be located in
Switzerland and France and will be completed in a phased manner over the next four years,
totaling investments in excess of CHF 100 million. This Capital Expenditure will be funded
by way of debt and cash accruals at the Company's Subsidiaries.
Performance of Major Subsidiary Associates
The major subsidiary companies have performed quite well during the
year under review. CARBOGEN AMCIS AG., Switzerland has performed quite satisfactorily as
it reported a healthy revenue of 1240.92 crores and operating profit of 210.57 Crores.
CARBOGEN AMCIS BV., perform well during the year, reported revenue of
275.39 crores and operating profit of 77.99 crores. CARBOGEN AMCIS Ltd. (UK) reported a
revenue of around 109.39 Crores and operating profit of 11.99 Crores. CARBOGEN AMCIS SAS
(RIOM) reported revenue of 40.96 crores and operating loss of 3.54 crores. CARBOGEN AMCIS
(Shanghai) Co. Ltd. has reported revenue of 94.28 crores and operating profit of 19.54
crores. Other subsidiaries have performed reasonably well during the year under review.
The other marketing subsidiaries viz. Dishman USA Inc. reported revenue
of 85.94 crores and operating profit of 6.26 Crores. Dishman CARBOGEN AMCIS (Europe) Ltd
reported revenue of 114.80 crores and operating loss of 5.86 Crores during the year under
review.
SEARCH CONDUCTED BY THE INCOME TAX DEPARTMENT
On 19th December 2019, the Income Tax Department conducted a
search at the Company's premises. As part of the process, the Company received notice
under the Income Tax Act for filing the Income Tax Returns for past years to which
necessary compliance has been made.
BUY BACK OF SHARES
As the members are aware that the Board of Directors at its meeting
held on 16th January, 2020 had approved the buy-back by the Company of its
equity shares from the open market through stock exchange mechanism as prescribed under
Buy-back regulations at the maximum price of 150.00 per share for an aggregate maximum
amount of 72.00 Crore.
The Buy-back was commenced on Monday, January 27, 2020 and closed on
Friday, July 24, 2020 (both days inclusive). Till the date of closure of the Buy-back, the
Company has bought back total 46,11,177 Equity Shares of 2/- each for an aggregate
consideration of 34,66,87,214/- (Rupees Thirty Four Crores Sixty Six Lakh Eighty Seven
Thousand Two Hundred and Fourteen Only) excluding Transaction Costs. Hence, the paid-up
share capital of the Company as on 31st March, 2021 is reduced to
31,35,66,190/- divided into 15,67,83,095 equity shares of 2/- each. All the Equity Shares
bought back under the Buy-back are extinguished in accordance with the provisions of the
Buy-back Regulations.
RESEARCH AND DEVELOPMENT
The year has seen some exciting developments within Company's R
& D Organisation. Company is now organised along therapeutic areas, with dedicated
teams focusing on highly potent projects, contrast agents, vitamin D technology and other
niche therapies alongside our traditional therapeutic areas. We are confident that this
strategy will allow our R & D teams to be even more effective in bringing new
medicines to both our customers and thus to patients of need around the world.
Company's focus remains solving complex technical challenges in
chemical development and preparing complex processes for routine manufacture and have seen
some great success in supporting its clients as well as working across our global platform
to innovate and bring new products to patients. A tangible demonstration of this has been
our vitamin D analogues where a global team made up of colleagues from India and Europe
have been able to supply a highly challenging API process that actually benefitted
patients in a recent clinical trial.
Company's global R & D pipeline remains at the highest level
and it believe that globally this remains its key driver for future success.
Company's global R & D teams continually demonstrate their skill and passion for
making the complex and challenging tasks that lie before them transition to real products
that are benefiting patients today.
Company's sole focus is to treat disease in all therapeutic areas
and do this using the vehicles of science, technology and a passion for solving problems.
At the core of Company's capabilities are its world class global R & D teams who
strive to solve complex technical challenges for its clients and then ensure that through
to manufacture of API's, complex starting materials and intermediates that the
products company deliver meet the industries stringent standards and advance its customers
new therapies towards market launch.
CRAMS pipeline continues to be healthy across the Dishman platform both
in terms of number of projects but also importantly in diversity of client base.
Company's product R & D teams also have a pivotal role to play
in the growth of our business by developing new Quartenary Compounds, Phase Transfer
Catalysts, Disinfectants and Vitamin D analogues to keep Dishman at the forefront of
innovation in these markets.
New chemical entities are becoming more and more complex and as such it
is vital that company continue to innovate and evolve its services and capabilities in
areas such as highly potent API, to continue the war against cancer and Company's
Antibody Drug Conjugates (ADC) capability has now started to bear fruit. Areas such as
chromatography, high pressure, low temperature, irradiation and containment technology
will continue to keep us at the forefront in the CRAMS sector globally.
Looking ahead to the coming year company's focus in CRAMS R &
D will be to better leverage the skills that exist across the Company's global R
& D platform in India, Switzerland, Holland, China and Manchester in a more
Co-ordinated way to further support company's customers changing and diverse needs.
In company's product R & D groups have an exciting and
challenging target list of new and improved products that company will begin to develop to
both ensure sustainability of its product business and to introduce new products to the
market especially in response to the ongoing challenges of disinfecting surfaces and
spaces under the dark shadow of the global pandemic our world is gripped with.
QUALITY, HEALTH, SAFETY & ENVIRONMENT _QHSE_
Dishman is responding to COVID 19 outbreak, consist with its belief
that the pharmaceutical industry has a humanitarian responsibility to serve the patient
who are in need. Your Company remain committed to the health & safety of its employees
and their families as well as business continuity to safety guard the interests of
company's patient, partners, customers and other stockholders. COVID measures
includes thermal & SPO2 screening at entrance, ensure social distancing at workplace
& during transportation, encourage hand sanitization at strategic locations, periodic
sanitization at workplaces & offices, training & counselling to company's
employees, procured Oxygen concentrators for employees & their families in need.
Company has also initiated vaccinated drive for its employees, their family members and
surrounding peoples.
Your Company is committed to ensuring that those working with the
Company are safe at work and that everyone takes responsibility for achieving this. We
include EHS and climate change-related considerations in our business decisions and strive
to minimize the environmental impact of our operations on the environment. Measuring,
appraising and reporting on environmental, health and safety performance is an important
part of continuous improvement in our EHS performance. 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 evaluate customer feedback and satisfaction by internal and
external communication in proposing and establishing its long-term relations and to
achieve goals in manufacturing operations. Dishman'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, Process Hazard Assessment, Identification of significant
environmental aspects, Safety Audits, customer audits, HAZOP study and Environment audits.
Safety & Environment Management Program are being taken to reduce the Significant Risk
& Environment Aspects.
The Company's QHSE policy is being implemented, among others,
through (i) Maintaining the "Zero Discharge" of waste water by series of
treatment; (ii) Stripper system, Multiple effect evaporator and ATFD for concentrated
effluent stream; (iii) 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 and 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 and improve ground water level.
Dishman continues to pursue world class operational excellence on
Process Safety Management (PSM). Dishman has established the capabilities within the
Company and developed in-house experts in various facets of PSM. Process Hazard Analysis
(PHA) at various plants is being carried out to reduce process safety risks.
Dishman, in its pursuit of excellence towards sustainable development
and to go beyond compliance, integrated its ISO 14001:2015 for EMS, ISO 9001:2015 for QMS
and BS ISO 45001:2018 for Occupational, Health and Safety Management systems. The company
is also certified EN/ISO 13485:2016 for Medical Device Quality Management System for
Disinfectant Products. The adopted systems are being monitored for continual improvements.
CREDIT RATING
India Ratings & Research Pvt. Ltd. ("Ind-Ra") has changed
Credit Rating Outlook from "Rating Watch Evolving" ("RWE") to
"Positive" after resolving RWE outlook. Ind-Ra has assigned both the Long Term
Loan and Short Term Loan rating of the Company as IND A+ with a Positive Outlook and IND
A1+, respectively.
Ind-Ra has evaluated the Company's rating during August, 2020.
INVESTOR EDUCATION AND PROTECTION FUND _IEPF_
Pursuant to the provisions of Section 124(5) and 125 of the Companies
Act, 2013, the Company has transferred the unpaid or unclaimed dividend upto and for the
financial year 2012-13, to the Investor Education and Protection Fund (IEPF) established
by the Central Government.
Year wise amount of unpaid/unclaimed dividend lying in the unpaid
account upto the Year and the corresponding shares, which are liable to be transferred to
the IEPF, and the due dates for such transfer are given in details in the report on
Corporate Governance which forms part of this Annual Report.
LISTING
The equity shares of the Company are listed on the National Stock
Exchange of India Ltd., Mumbai (NSE) and BSE Ltd., Mumbai. Annual listing fees for the FY
2021-22, as applicable, have been paid before due date to the concerned Stock Exchanges.
FORMATION OF VARIOUS COMMITTEES
Your Company has several Committees which have been established as part
of the best Corporate Governance practices and are in compliance with the requirements of
the relevant provisions of applicable laws and statutes.
The Company has following Committees of the Board:
Audit Committee
Stakeholders Relationship Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Risk Management Committee
Management Committee
Internal Complaints Committee (for redressal of Sexual
Harassment complaint)
During the year, the Board has accepted all the recommendations made by
various committees including Audit Committee. The details with respect to the
compositions, powers, terms of reference, number and dates of meetings of such committees
held during the year are given in details in the report on Corporate Governance which
forms part of this Annual Report.
DISCLOSURES UNDER THE COMPANIES ACT, 2013 i) Annual Return
In accordance with the Companies Act, 2013, the annual return in the
prescribed format is available at https://imdcal.com/images/files/Investor-Relations/
Annual%20Return/Annual%20Return%20for%20 the%20year%20ended%2031.03.2021.pdf
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 2020-21, the Board met Five (5) times i.e. on 3rd
June, 2020, 13th August, 2020, 8th September, 2020, 12th
November, 2020 and 11th February, 2021. The Board of Directors has also passed
circular resolutions on 23rd March, 2021. Detailed information on the meetings
of the Board is included in the report on Corporate Governance, which forms part of this
Annual Report.
iii) Related Party Transactions
All Related Party Transactions are placed before the Audit Committee
and also the Board for approval. All the related party transactions entered into during
the financial year were on an 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
A 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
The details of Loans, Investments and Guarantees covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the
Financial Statements forming part of Annual Report.
v) Material Changes and Commitments affecting the Financial Position of
the Company occurred a_er the end of Financial Year
There are no material changes and commitments affecting the Financial
Position of the Company occurred after the end of financial year.
vi) Subsidiaries, Joint Ventures and Associate Companies
During the year following changes happened in Subsidiary, Joint
Ventures and Associate Companies:
During the year, name of wholly owned subsidiary company viz.
"Dishman Europe Ltd." has been changed to "Dishman CARBOGEN AMCIS (Europe)
Ltd."
On 19th November, 2020, a new step-down subsidiary
company namely "CARBOGEN AMCIS REAL ESTATE" has been incorporated in France. The
said subsidiary is wholly-owned subsidiary of Company's one of the step-down
wholly-owned subsidiaries viz. CARBOGEN AMCIS INNOVATIONS AG.
On 19th March, 2021, a new wholly owned subsidiary
company namely "Invisible Biotech Pvt. Ltd." has been incorporated in India.
Subsequently, it has been converted into Public Limited Company w.e.f. 11th
May, 2021.
In view of the above, the total number of subsidiaries including step
down subsidiaries as on 31st March, 2021 was Twenty Two (22).
CONSOLIDATED FINANCIAL STATEMENT
Pursuant to the provisions of Section 129, 134 and 136 of the Companies
Act, 2013 read with rules framed thereunder and pursuant to Regulation 33 of SEBI (LODR)
Regulations, 2015, your Company had prepared consolidated financial statements of the
company and its subsidiaries and a separate statement containing the salient features of
financial statement of subsidiaries, joint ventures and associates in Form AOC-1 forms
part of the Annual Report.
The annual financial statements and related detailed information of the
subsidiary companies will be provided on specific request made by any shareholders and the
said financial statements and information of subsidiary companies are open for inspection
at the registered office of the company during office hours on all working day except
Saturdays, Sunday and Public holidays between 2 p.m. to 4 p.m. The separate audited
financial statement in respect of each of the subsidiary companies is also available on
the website of the Company at www.imdcal.com.
As required under Regulation 33 of SEBI (LODR) Regulations, 2015 and in
accordance with the requirements of Ind AS 110, the Company has prepared Consolidated
Financial Statements of the Company and its subsidiaries and is included in the Annual
Report.
GENERAL DISCLOSURE i) Issue of Equity Shares with differential rights
as to dividend, voting or otherwise:
During the year 2020-21, the Company has not issue any of Equity Shares
including sweat equity 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 holding /subsidiary
companies :
Mr. Arpit J. Vyas, Global Managing Director of the Company has received
remuneration as a Director from one foreign wholly owned subsidiary company namely
CARBOGEN AMCIS AG., Switzerland, which is in compliance with the provisions of the
Companies Act, 2013. He being a Partner of Adimans Technologies LLP, a holding LLP of the
Company, has right to receive profit in the ratio of 20% from the said LLP.
Mrs. Deohooti J. Vyas, Whole-time Director, being a Partner of Adimans
Technologies LLP, a holding LLP of the Company, has right to receive profit in the ratio
of 40% from the said LLP.
Mr. Arpit J. Vyas and Mrs. Deohooti J. Vyas have voluntarily decided
not to draw any remuneration from the Company during financial year 2020-21. Other details
of remuneration pertaining to Mr._ Arpit J. Vyas and Mrs. Deohooti J. Vyas have been
disclosed in report on Corporate Governance.
iv) Any significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and 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 2020-21. 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.
DIRECTORS & KMPS Retire by Rotation
Mr. Arpit J. Vyas, Director of the Company retire by rotation at the
forthcoming Annual General Meeting and being eligible offers himself for re-appointment. A
resolution seeking shareholders' approval for his reappointment forms part of the
Notice.
Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Act, the Key
Managerial Personnel of the Company as on March 31, 2021 are i) Mr. Arpit J. Vyas, Global
Managing Director; ii) Mr. Harshil R. Dalal, Global Chief Financial Officer and iii) Ms.
Shrima Dave, Company Secretary.
Statement of Declaration by Independent Directors
The Company has received the necessary declaration from each
Independent Director in accordance with Section 149(7) of the Companies Act, 2013, read
with Regulations 25(8) of the SEBI (LODR) Regulation, 2015 ("Listing
Regulations") that he/she meets the criteria of independence as laid out in the
Companies Act, 2013 and the Listing Regulations.
Also, Independent Directors affirmed that they have complied with the
Code for Independent Directors prescribed in Schedule IV to the Act as well as Code of
Conduct for Directors and senior management personnel formulated by the Company.
Board Evaluation & Criteria
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17
of SEBI (LODR) Regulations, 2015, a structured questionnaire was prepared after taking
into consideration the various aspects of the Board's functioning, composition,
effectiveness of processes & information etc. 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 after seeking inputs from all the members of the Board and its
Committees. The Board of Directors expressed their satisfaction with the evaluation
process.
Nomination and Remuneration Committee also reviewed the performance of
individual directors on the basis of criteria such as the contribution of the individual
director to the Board and Committee Meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in meetings, etc.
Independent Directors' Meeting
A Separate meeting of Independent Directors held on 11th
February, 2021 without the attendance of Non-Independent Directors and members of the
Management. In the said meeting, Independent Directors reviewed the followings:
Performance evaluation of Non Independent Directors and Board of
Directors as a whole;
Performance evaluation of the Chairperson of the Company taking
into account the views of executive directors and nonexecutive directors;
Evaluation of the quality of flow of information between the
Management and Board for effective performance by the Board.
The Independent Directors expressed their satisfaction with the
evaluation process.
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 company's website www.imdcal.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
https://imdcal.com/images/files/Investor-Relations/ Po l i c i e s % 2 0 of % 2 0 Di s h m
a n % 2 0 C a r b o g e n % 2 0 Amcis%20Limited/Policy%20on%20Remuneration%20 o f % 2 0 D
i r e c t o r s , % 2 0 Ke y % 2 0 M a n a g e r i a l % 2 0
Personnel%20&%20Senior%20Employees%20AND%20 Succession%20Policy.pdf
DISCLOSURE UNDER RULE 5 OF THE COMPANIES _APPOINTMENT &
REMUNERATION_ RULES, 2014
The information required under Section 197 of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as
Annexure B.
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 C.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTOR
The Independent Directors are provided with necessary documents,
brochures, reports and internal policies to enable them to familiarize with the
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.
Generally, site visits to various plant locations are organized for the Directors to
enable them to understand the operations of the Company. However, due to COVID-19 pandemic
such visits were not organised during the financial year 2020-21. The details of such
familiarisation programmes have been disclosed on the Company's website at https://
imdcal.com/images/files/Investor-Relations/Policies%20
of%20Dishman%20Carbogen%20Amcis%20Limited/ Familiarisation%20Programme.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, state that :
In the preparation of the annual accounts for the financial year
ended 31st March, 2021, the applicable accounting standards have been followed
along with proper explanation relating to material departures;
The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for that period;
The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
The Directors have prepared the annual accounts on a going
concern basis;
The Directors, have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively;
The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were adequate and
operating effectively.
INTERNAL FINANCIAL CONTROL SYSTEM
The details in respect of internal financial control system and their
adequacy are included in Management Discussion and Analysis Report, which forms part of
this report.
INSURANCE
Assets of your Company are adequately insured against various perils.
RISK MANAGEMENT FRAMEWORK & POLICY
In compliance with the provisions of Regulation 21 of SEBI (LODR)
Regulations, 2015, the Board of Directors has constituted a Risk Management Committee. The
details of Committee and its terms of reference are set out in the Corporate Governance
Report forming part of the Director's Report. The Risk Management policy is
formulated and implemented by the Company in compliance with the provisions of the
Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The policy helps to identify the
various elements of risks faced by the Company, which in the opinion of the Board may
threatens the existence of the Company.
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.
Risk management is an integral part of business practices of the
Company. The framework of risk management concentrates on formalising a system to deal
with the most relevant risks, building on existing management practices, knowledge and
structures.
The Company has framed formal Risk Management framework to identify,
evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an
ongoing process within the Organization. The Company's Risk Management framework is
well-defined to identify, monitor and minimizing/mitigating risks. While defining and
developing the formalized risk management system, leading standards and practices have
been considered. The risk management system is relevant to business reality, pragmatic and
simple.
The Risk Management framework has been developed and approved by the
Risk Management Committee in accordance with the business strategy. Risk Management and
Risks & concerns have also been discussed in the Management Discussion and Analysis,
which forms part of this report.
The key elements of the framework include: Risk Structure; Risk
Portfolio and Risk Measuring & Monitoring and Risk Optimising. The implementation of
the framework is supported through criteria for Risk assessment, Risk forms & MIS.
The brief role of Risk Management Committee as per amended Listing
Regulations are:
To formulate a detailed Risk Management Policy;
To ensure that appropriate methodology, processes and systems
are in place to monitor and evaluate risks associated with the business of the Company;
To monitor and oversee implementation of the risk management
policy, including evaluating the adequacy of risk management systems;
To periodically review the risk management policy including by
considering the changing industry dynamics and evolving complexity;
To keep the board of directors informed about the nature and
content of its discussions, recommendations and actions to be taken.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy pursuant to the
requirements of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The Policy
empowers all the stakeholders to raise concerns by making protected disclosures as defined
in the Policy.
The policy also provides for adequate safeguards against victimization
of whistle blower who avail of such mechanism and also provides for direct access to the
Chairman of the Audit Committee, in exceptional cases. The details of the Whistle Blower
Policy are explained in the Report on Corporate Governance and the Policy is available on
the website of the Company at www.imdcal.com.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place an Anti-Sexual Harassment Policy in line with
the requirements of Sexual Harassment of Women at the Workplace (Prevention, Prohibition
& Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. The company has complied with
provisions relating to the constitution of Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
There were no incidences of sexual harassment reported during the year
under review, in terms of the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, (Firm
Registration No. 110240W) and M/s. Haribhakti & Co. LLP, Chartered Accountants,
Mumbai, (Firm Registration No. 103523W/W100048) were appointed as Joint Statutory Auditors
of the Company by the members of the Company at their Annual General Meeting (AGM) held on
28th September, 2017 for the term of four years starting from 10th
AGM till the conclusion of 14th AGM to be held in the year 2021.
Accordingly, the term of existing joint statutory auditors gets
completed on conclusion of 14th AGM of the Company in terms of the said
approval and Section 139 of the Companies Act, 2013 read with the Companies (Audit and
Auditors) Rule, 2014. As their term will expire on conclusion of 14th AGM and
they are Joint Statutory Auditors of the Company since FY 2015-16, the Board of Directors
of the Company proposes to change the Statutory Auditors as part of good corporate
governance. The Audit Committee and the Board of Directors at their meetings held on 11th
May, 2021, after considering various parameters and subject to approval of the
shareholders, recommended the appointment of M/s. T R Chadha & Co. LLP, Chartered
Accountants (Firm Registration No.006711N/ N500028) as Statutory Auditors in place of
retiring Joint Statutory Auditors, for a term of 5 (five) consecutive years commencing
from conclusion of this 14th AGM till the conclusion of 19th AGM.
The Notes on Financial Statements referred to in the Auditors'
Report are self-explanatory and do not call for any further comments. The Auditor'
Report does not contain any qualification or reservation. There is also no fraud has been
reported by the Auditors in their Audit Report for the year ended March 31, 2021.
Internal Auditors
M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad (Firm
Registration No. 113742W) has been internal auditor of the Company for the year 2020-2021.
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.
M/s. Shah & Shah Associates, Chartered Accountants are associated
with the Company as an Internal Auditors since year 2015, hence, as a part of good
corporate governance, the Board of Directors at their meeting held on 11th May,
2021, on the recommendation of the Audit Committee appointed M/s. Sharp & Tannan
Associates, Chartered Accountants (Firm Registration No. 109983W) as an Internal Auditors
of the Company for the financial year 2021-22.
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 D to the Directors' Report. The observations and comments, if
any, appearing in the Secretarial Audit Report are self-explanatory and do not call for
any further explanation / clarification. The Secretarial Auditors Report does not contain
any qualification, reservation or adverse remark and also no fraud has been reported for
the year ended March 31, 2021.
Cost Audit
Central Government has notified rules for Cost Audit and as per
Companies (Cost Records and Audit) Rules, 2014 issued by Ministry of Corporate Affairs;
Company is not falling under the Industries, which will subject to Cost Audit. Therefore,
filing of cost audit report for the FY 2020-21 is not applicable to the Company. However,
as required under Section 148(1) of the Companies Act, 2013, Company has maintained
necessary Cost Records.
CORPORATE GOVERNANCE, MANAGEMENT DISCUSSION ANALYSIS REPORT
As per Regulation 34 of SEBI (LODR) Regulations, 2015, a separate
section on corporate governance practices followed by the Company, as well as
"Management Discussion and Analysis" confirming compliance, is set out in the
Annexure forming an integral part of this Report. A certificate from Practicing Company
Secretary regarding compliance with corporate governance norms stipulated in Regulation 34
of SEBI (LODR) Regulations, 2015 is annexed to the report on Corporate Governance.
In compliance with one of the Corporate Governance requirements as per
Regulation 34 read with Schedule V of the SEBI (LODR) Regulations, 2015, the Company has
formulated and implemented a Code of Conduct for all Board members and senior management
personnel of the Company, who have affirmed compliance thereto.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
Information of conservation of energy, technology absorption and
foreign exchange earnings and outgo as required under Section 134 (3) (m) of the Companies
Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014, is given in the Annexure
E and forms part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
As a part of Corporate Social Responsibility (CSR), the Company
continued extending help towards social and economic development of the villages and the
communities located close to its operations and also providing assistance to improving
their quality of life. Company's intention is to ensure that we meet the development
needs of the local community. CSR is not just a duty; it is an approach towards existence.
The Company see CSR as a creative opportunity to fundamentally strengthen the
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 has constituted CSR Committee and has framed a CSR Policy.
The brief details of CSR Committee and contents of CSR Policy is provided in the report on
Corporate Governance. The details of CSR activities carried out by the Company are
appended in the Annexure F to the Director's Report. The CSR Policy is
available on the website of the Company at www.imdcal.com.
URL:
https://imdcal.com/images/files/Investor-Relations/Policies%20of%20Dishman%20Carbogen%20 A
m c i s % 2 0 L i m i t e d / C o r p o r a t e % 2 0 S o c i a l % 2 0
Responsibility%20Policy..pdf
BUSINESS RESPONSIBILITY REPORT
In pursuance of Regulation 34 of SEBI (LODR) Regulations,2015, top 1000
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 G.
DIVIDEND DISTRIBUTION POLICY
As per amended Regulation 43A of SEBI (LODR) Regulations, 2015, top
1000 companies based on market capitalization (calculated as on March 31 of every
financial year) are required to formulate Dividend Distribution Policy. In this regard,
the Board has approved the Dividend Distribution Policy in line with said Regulation. The
said policy is available on website of the Company and can be accessed at https://imdcal.
com/images/files/Investor-Relations/Policies%20 of%20Dishman%20Carbogen%20Amcis%20Limited/
Dividend%20Distribution%20Policy.pdf.
ACKNOWLEDGEMENT
Your Directors would like to express their appreciation for the
assistance and co-operation received from foreign institutions, banks, associates,
Government authorities, customers, supplier, vendors and members during the year under
review. Your Directors also wish to place on record their deep sense of appreciation for
the committed services and teamwork by the executives, staff members and workers of the
Company for enthusiastic contribution to the growth of Company's business.
For and on behalf of the Board of Directors
Janmejay R. Vyas
Chairman DIN - 00004730
Date: 11th May, 2021
Place: Ahmedabad
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