Dear Members,

The Directors are pleasured to present the 37^th ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2017-18 ended 31^st March, 2018.

1. FINANCIAL RESULTS :

(Amount in Lakh)

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1^st April, 2018 and date of this report.

2. DIVIDEND:

With a view to conserve the resources for the working capital requirement of the Company, the Board of Directors has not recommend any dividend s for the year under review ended on 31^st March, 2018.

3. OPERATIONS:

The revenue from operations i.e. transfusion solution in Bottles and Plastic Bottles stood at Rs. 108.23 Crore during the financial year 2017-18 under review compared to Rs. 118.12 Crore of previous year 2016-17. The facility was inspected by Food and Drug Control Administration (FDCA), Gandhinagar along with CDSO for the renewal of its World Health Organization-Good Manufacturing Practices (WHO-GMP) and certification validity of WHO GMP has been extended The Company’s manufacturing license is valid till August 2019.

During the year under review, the export market was explored in more detail and I.V. products in plastic bottles were exported to new destinations. Further efforts are underway for increasing exports to various countries.

4. NEW PROJECTS:

The Management has envisaged an increased demand for various I. V. fluids in India in the future considering the development of health related instruments and steady population increase.

Addition of 100 ML products to our ‘Aquapulse’ Brand

We are in the process of implementing a project that will add 100 ml Eurohead products to our portfolio. Based on feedback from our Marketing Team and due to the fact that our Eurohead 500 ML was received well we are confident of expanding our reach in the Eurohead Category with this project. We expect the project to be operational in H2 FY19.

5. LISTING:

The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2018-19.

The Company, being listed at BSE Limited (Designated & Nationwide Stock Exchange), received a letter dated 2^nd November, 2017 from The Ahmedabad Stock Exchange Limited (ASEL) intimating delisting of securities from ASEL pursuant to the SEBI directions.

6. INCREASE IN AUTHORISED SHARE CAPITAL:

The Authorised Equity Share Capital of the Company has been increased to Rs. 16 crores divided into 1,60,00,000 Equity Shares of Rs.10/- each upon passing of resolutions in the Extra Ordinary General Meeting held on 20^th May, 2017.

7. NEW SET OF ARTICLES OF ASSOCIATION:

The Company after obtaining necessary approval of the Members at the Extra Ordinary General Meeting held on 20^th May, 2017, have adopted new set of Articles of Association.

8. RIGHTS ISSUE OF EQUITY SHARES:

The Company, after obtaining necessary approvals, has allotted 21,34,872 Equity Shares of Rs. 10/- each at premium of Rs. 74/- per Equity Share on 25^th October, 2017 to the existing shareholders of the Company on ‘Rights Basis’ after complying provisions and guidelines under the Companies Act, 2013, SEBI & Listing Regulations. The said 21,34,872 Equity Shares were issued in the ratio of 2 (Two) new Rights Equity Share of Rs. 10/ each against existing 11 (Eleven) Equity Share of Rs. 10/ each held.

There is no material variation between the projections and actual utilization of the funds raised through Rights Issue by the Company during the year 2017-18.

9. DIRECTORS:

9.1 One of your Directors viz. Ms. Anar H. Patel retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers herself for re-appointment.

9.2 The Board of Directors duly met 10 times during the financial year under review.

9.3 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act.

9.4 Dr. Himanshu C. Patel was re-appointed as Managing Director of the Company for a period of three years w.e.f. 1^st August, 2017.

9.5 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.6 DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had 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 31^st March, 2018 being end of the financial year 2017-18 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for 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;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

(v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

11. MANAGERIAL REMUNERATION:

The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Company’s website www.denischemlab.com

12. KEY MANAGERIAL PERSONNEL: % INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

$Ms. Khushbu H. Shah resigned from the post of Company Secretary w.e.f. 19^th July, 2018.

#Ms. Anal R. Desai appointed as Company Secretary and Compliance Officer of the Company w.e.f. 20^th July, 2018.

13. PERSONNEL AND H. R. D.:

13.1 INDUSTRIAL RELATIONS

The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D.

The number of Employees of the Company are 221 .The relationship between average increase in remuneration and Company’s performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors’ Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at www.denischemlab.com

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure- A.

16. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance, Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.

17. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - C. The remarks of Auditor are self explanatory.

18. EXTRACT OF ANNUAL RETURN:

The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure - D.

19. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’ RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate Governance Report.

20. GENERAL:

20.1. AUDITORS:

STATUTORY AUDITORS:

At the 36^th Annual General Meeting held on 26^th September, 2017, M/s. H. K. Shah & Co., Chartered Accountants, Ahmedabad were appointed as Statutory Auditors of the Company to hold office for the period of 5 years i.e. for the financial years 2017-18 to 2021-22.

The remarks of Auditor are self explanatory and have been explained in Notes on Accounts.

COST AUDITORS:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company has been carrying out audit of cost records every year.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, (Firm Registration Number 000025) as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-19.

As required under the Companies Act, 2013, a resolution seeking Shareholders’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

20.2 INSURANCE:

The movable and immovable properties of the Company including plant and Machinery and stocks wherever necessary and to the extent required have been adequately insured against the risks of fire, riot, strike, malicious damage etc. as per the consistent policy of the Company.

20.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there were no overdue deposits.

20.4 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiaries/ Associates Companies / JVs.

20.5 RISK MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work and monitored regularly with reference to statutory regulations and guidelines defined by the Company.

20.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

20.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There has been no significant and material order passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

20.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

20.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

20.10 GRATUITY:

The Company has entered in to an agreement with Life Insurance Corporation of India for covering its Gratuity Liability and has thus provided for the same. A Gratuity Trust Fund has been created with Life Insurance Corporation of India.

20.11 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

21. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

22. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN allotted is INE051G01012.

23. FINANCE:

23.1 The Company’s Income-tax Assessment has been completed up to the Assessment Year 2014-15 and Sales tax Assessment is completed up to the Financial Year 2013-2014.

23.2 The Company is enjoying Working Capital facilities, Corporate Loan and Term Loan from Axis Bank Limited and Bank of India. The Company is generally regular in payment of interest and principal.

24. ACKNOWLEDGMENT:

Your Directors express their sincere thanks and appreciation to Promoters and Shareholders for their constant support and co operation. Your Directors also place on record their grateful appreciation and co operation received from Bankers, Financial Institutions, Government Agencies and employees of the Company.

For and on behalf of the Board,

Place : Ahmedabad Dinesh B. Patel

Date : 20^th July, 2018 Chairman