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Directors Report of Fermenta Biotech Ltd.

Mar 31, 2023

The Board of Directors (''Board'') is pleased to present the 71st Annual Report along with the Audited financial statements for the financial year 2022-23 (FY 2022-23).

FINANCIAL HIGHLIGHTS

Particulars

(Rs. in Lakhs)

Standalone results Consolidated results

2022-23

2021-22

2022-23

2020-21

Total Revenue

33,648.05

39,548.68

35,763.77

40,665.16

Total Expenditure

33,557.92

35,292.44

38,103.45

37,970.85

Profit/ (Loss) before tax and Exceptional Items

90.13

4,256.24

(2,339.65)

2,694.31

Exceptional Items and Tax

(5,958.92)

-

(2,847.68)

-

Profit/ (Loss) before Tax

(5,868.79)

4,256.24

(5,187.36)

2,694.31

Less: Provision for tax (including deferred tax) and earlier years taxes

115.52

(1,232.51)

168.06

(1,188.25)

Profit/ (Loss) after tax

(5,753.27)

3,023.73

(5,355.42)

1,506.06

Non-Controlling interest

-

205.65

38.65

Share of interest in profit/(loss) of associates

-

-

Profit/(Loss) for the year

(5,753.27)

3,023.73

(5,149.77)

1,544.71

FINANCIAL RESULTS AND OPERATIONS OF THE COMPANY

During the year under review, the Company on a standalone basis registered total revenue of H33,648.05 Lakhs (Previous Financial year H39,548.68 Lakhs) and Net loss of H5,753.27 Lakhs as against profits of H3,023.73 Lakhs for the financial year 2021-22 (FY 2021-22), based on the performance of the Company.

In view of above, no amount was transferred to reserves for the year under review.

On a Consolidated basis, the Company in FY 2022-23 recorded total revenue of H35,763.77 Lakhs (Previous Year H40,665.16 Lakhs) and Net loss of H5,149.77 Lakhs (H1,544.71 Lakhs profit in the in the corresponding FY 2021-22).

DIVIDEND

The Board of Directors has recommended a final equity dividend of H1.25 (25%) per equity share for FY 202223 (Previous year H1.25 i.e., 25% per equity share) for members'' approval. The final equity dividend, if approved by the Members at the 71st Annual General Meeting (''AGM''), will result in a cash outflow of H36,788,733.75/. The said dividend recommendation is in accordance with the Dividend Distribution Policy of the Company which is available on the website of the Company at https://fermentabiotech.com/policies.php.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for FY 2022-23 ("CFS") include financials of its subsidiaries and associate companies (collectively referred as ''Subsidiaries/ Associate'') i.e. Fermenta Biotech (UK) Limited (United Kingdom), Fermenta Biotech GmbH (Germany), Fermenta USA LLC (USA), Fermenta Biotech USA LLC (USA), G. I. Biotech Private Limited, Aegean Properties Limited (''Subsidiaries''), and Health and Wellness India Private Limited (''Associate''). The CFS of the Company and its Subsidiaries/ Associate are prepared in accordance with the relevant Indian Accounting Standards (Ind AS) notified under the Company (Indian Accounting Standards) Rules, 2015 and other applicable provisions. CFS together with Auditors'' Report thereon forms part of this Annual Report.

COMPOSITE SCHEME OF AMALGAMATION

As reported earlier, the Company made an application to BSE Limited in FY 2021-22 to seek approval/ no objection for the Composite Scheme of Amalgamation and Arrangement amongst DVK Investments Private Limited ("Transferor Company 1") and Aegean Properties Limited ("Transferor Company 2") and Fermenta Biotech Limited ("Transferee Company" or "Company") and their respective Shareholders (''Composite Scheme of Amalgamation and Arrangement'').

Pursuant to No-Objection Letter dated May 30, 2022 issued by BSE Limited and subsequent filing of an application for the Composite Scheme of Amalgamation and Arrangement before the National Company Law Tribunal, Mumbai Bench (''NCLT'') and compliance of applicable regulatory provisions the NCLT vide its order dated May 08, 2023, approved the Composite Scheme of Amalgamation and Arrangement. The effective date for the said Composite Scheme of Amalgamation and Arrangement of the Transferor companies and Transferee Company was May 24, 2023 (''Effective Date'').

Post Effective Date, the Company issued and allotted 150,75,318 equity shares of face value of H5/- each, fully paid-up, to the members of the Transferor Company 1, whose names were registered as members in the Members'' Register of the Transferor Company 1 as on the Record Date i.e., of June 02, 2023, in accordance with the NCLT order.

Share capital:

The authorised and paid-up share capital of the Company remained unchanged during FY 2022-23.

However, in terms of the NCLT Order dated May 08, 2023, the Authorised Share Capital of the Company increased to H31,83,00,000 (Rupees Thirty-One Crores Eighty-Three Lakhs) divided into 6,35,00,000 (Six Crores, Thirty-Five Lakh) equity shares of H5/- (Rupees Five only) each, and 1,60,000 (One Lakh, Sixty Thousand) unclassified shares of H5/- (Rupees Five only) each, effective May 24, 2023. The Paid-up share capital of the Company remains unchanged.

SUBSIDIARY COMPANIES

The individual financial statements of the Company''s Subsidiaries / Associate are not attached to the financial statements of the Company for FY 2022-23. The financial information of the Company''s Subsidiaries/ Associate provided in this Section, shall be read with the information provided under the heading ''Consolidated Financial Statements'' in this report. In accordance with the provisions of Sub-Section (3) of Section 129 of the Companies Act, 2013 ("Act"), read with Rule 5 and Rule 8 of the Companies (Accounts) Rules, 2014 (as amended from time to time), a separate statement containing salient features of the financial statements of Company''s Subsidiaries / Associate in Form AOC-1 is attached to this report as Annexure I and forms part of this Board''s report. The audited accounts of the Company''s Subsidiaries and standalone and consolidated financial statements of the Company are available at the Company''s website at https://fermentabiotech.com/annual-report. php. Members may write to the Company at info@

fermentabiotech.com for a copy of separate financial statements of Company''s subsidiary(ies).

A strike-off application dated February 14, 2023 was made with the Ministry of Corporate Affairs (''MCA'') by the Company''s subsidiary named G I Biotech Private Limited (CIN U24230MH2004PTC148220). Thereafter, MCA approved the said strike off application.

As per the terms of NCLT Order dated May 8, 2023 regarding Composite Scheme of Amalgamation and Arrangement, the Company''s Holding company, DVK Investments Private Limited (Transferor Company 1) and the Company''s subsidiary, Aegean Properties Limited (Transferor Company 2) ceased to exist w.e.f. May 24, 2023.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

The Company is engaged in pharmaceuticals, manufacturing and marketing Active Pharmaceutical Ingredients (''APIs''), biotechnology and environmental solutions and renting of properties. MD&A covering details of the business of the Company is provided in Corporate Overview section and forms part of this report.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

In order to identify, analyse, and address potent risks in a systematic manner, your Company has developed and implemented risk management policy. It also maintains adequate internal control systems, commensurating to its size and nature of operations. Periodical reporting(s), compliance with applicable laws and Company''s procedures are duly complied.

The Company has in place defined processes and check including Risk Control Matrix in relation to internal financial control. All the risk control matrices are audited and commented upon by Internal Auditors as well. Company''s internal team reviews various Risk Audit Control Matrices including for Capex, logistics, human resource and payroll, treasury, Financial Statements Closure Policy, inventory production, order to cash, taxation, procure to pay, on regular intervals. The Company also operates in a different geographical segment mainly in Europe and USA through its wholly owned subsidiary companies respectively. The internal team of the Company manages this challenging job from Company''s Head Office at Thane, Maharashtra. The independent Auditors auditing the financials of these two subsidiaries confirm in their Audit reports about presence of strong internal control systems.

The Company''s internal control systems are routinely reviewed and certified by Statutory Auditors and Internal Auditors. During the year under review, the Company''s Internal Auditors, M. M. Nissim & Co., Chartered Accountants, conducted and reported the effectiveness and efficiency of internal control system including adherence to procedures as per the policies of the Company and regulatory requirements as well.

The Company has an experienced and qualified finance department which plays an important role in implementing and monitoring the internal control procedures and compliance with statutory requirements. The Audit Committee and the Board of Directors review the report(s) of the independent Internal Auditors at regular intervals along with the adequacy, effectiveness and observations of the Internal Auditors regarding internal control system and recommends improvements and remedial measures, wherever necessary. The Company has implemented the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") effective FY 2022-23.

HUMAN RESOURCES

The information required under sub rule (1) of rule 5 and sub rule (2) of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Sub-Section (12) of Section 197 of the Act in respect of employee remuneration and other details forms part of this report and provided as Annexure II. Other applicable information for the above provisions will be made available to the members upon request.

The Company had a headcount of 550 employees as on the end of financial year 2022-23. The Company maintained cordial relation with its employees at all locations.

Employee Stock Options

During FY 2022-23, the Company has not granted any options under ''Fermenta Biotech Limited- Employee Stock Option Plan 2019'' ("ESOP 2019").

Disclosures pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 read with SEBI Circular dated June 16, 2015 are provided at Company''s website at https:// fermentabiotech.com/investor_relations.php

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In accordance with the provisions of Sexual Harassment of Women at the Workplace (Prevention, Prohibition and

Redressa!) Act, 2013 and the Rules framed thereunder (''POSH'') as amended from time to time, the Company has formulated a code on ''Redressal of Grievances Regarding Sexual Harassment'' for redressal of grievances and to protect women against any harassment at workplace. The Internal Committee has been duly constituted in all locations of the Company in terms of the POSH Act and rules. The Company is committed to providing a safe and conducive work environment to all its employees and associates.

Details of complaints during the year under review.

a.

Number of complaints filed during the financial year

Nil

b.

Number of complaints disposed of during

Nil

the financial year

c.

Number of complaints pending as on end

Nil

of the financial year

INFORMATION TECHNOLOGY

Company has implemented a robust IT infrastructure within the organisation. The IT system enables your Company to be proactive and ensures a mechanism that predicts upcoming events and developments, and thus, helps it stay ahead of the competition. The efficient and agile IT ecosystem ensures lowering of errors/ duplications and, hence, enhances work efficiency and productivity across functions. Moreover, the system also strengthens business relationships due to its capability of managing an extensive business network.

We understand, significant disruptions of IT systems or breaches of information security could adversely affect our business. We extensively rely upon sophisticated IT systems (including cloud services) to operate our business. We produce, collect, process, store and transmit large amounts of confidential information (including personal information and intellectual property).

We are constantly enabling businesses with new, innovative platforms for ERP, CRM, Vendor Invoice Management that enable the evolution of a real time enterprise. FBL also continues to work with public cloud vendors selectively to move workloads wherever found economically viable.

Regular awareness and training programmes are being conducted around IT and Information Security to ensure that all employees understand the criticality of IT and use it judiciously for the betterment of the organisation."

DEPOSITS

In FY 2022-23, your Company has not accepted any deposits under Section 73 of the Act including

rules framed thereunder. There is no deposit with the Company which is not in compliance with the requirements of Chapter V of the Act. No principal or interest on deposit has remained unpaid or unclaimed as on March 31, 2023.

CREDIT RATING

As on March 31, 2023, there is a revision in Company Credit rating issued by CARE Ratings Limited as mentioned below:

I. Long-term Banking Facilities, the rating is CARE BBB ; Negative (Triple B Plus; Outlook: Negative) [Previous Year: CARE A-; Stable-Single A Minus; Outlook: Stable]

II. Short-term Banking Facilities, the rating is CARE A3 (A Three Plus) [Previous Year: CARE A2-A Two]

DIRECTORS

Independent Directors:

Independent Directors have made relevant declarations to the Company including confirmation(s) that the conditions of independence laid down in Sub-Section (6) of Section 149 of the Act and Regulation 25 of the Listing Regulations are duly complied. In the opinion of the Board, the Independent Directors of the Company possess necessary integrity, proficiency, expertise and experience.

Directors, and Key Managerial Personnel (''KMP''):

As reported earlier, the members have appointed the following Directors on the recommendation of the Board of Directors of the Company:

i. Mr. Pramod Kasat was appointed as an Additional Director w.e.f. May 30, 2022 and as an Independent Director w.e.f. August 12, 2022.

ii. Mr. Satish Varma (DIN: 00003255) as an Executive Director of the Company (Key Managerial Personnel) for a period of 3 years w.e.f. September 27, 2022.

iii. Ms. Anupama Datla Desai (DIN: 00217027) as an Executive Director of the Company (Key Managerial Personnel) for a period of 3 years w.e.f. September 27, 2022.

In accordance with provisions of the Act and the Articles of Association of the Company, Ms. Rajeshwari Datla, Non- Executive Director (DIN: 00046864) is liable to retire by rotation at the AGM and is eligible for re-appointment. Brief profile of Ms. Rajeshwari Datla is provided along with the Notice of the 71st Annual General Meeting and forms part of this report.

Except as mentioned above, no Director or KMP has resigned or appointed during the year under review.

ANNUAL PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Details of the annual performance evaluation are provided in the Corporate Governance Report, attached as Annexure III to this report.

AUDITORS

The Company appointed S R B C & Co. LLP, Chartered Accountants (ICAI Firm Registration No: 324982E/ E300003) as the Statutory Auditors of the Company at their 70th AGM held on August 12, 2022 for a term of five consecutive years from the conclusion of 70th AGM till the conclusion of 75th AGM of the Company to be held in the year 2027.

S R B C & Co. LLP, Chartered Accountants (ICAI Firm Registration No: 324982E/E300003) has issued Auditors'' Reports with unmodified opinion on the Audited Financial Statements (Standalone and Consolidated) for FY 2022-23. Auditors have not reported any offence or incident pertaining to Sub-Section (12) of Section 143 of the Act.

SECRETARIAL AUDIT REPORTS AND COMPLIANCE CERTIFICATE

In terms of Section of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and regulation 24A of Listing Regulations, Mr. Pradeep Purwar (Membership No FCS-5769), Pradeep Purwar and Associates, Company Secretaries (''Secretarial Auditor''), was appointed to conduct the Secretarial Audit of the Company for FY 2022-23.

The Secretarial Auditor has submitted: (a) an unqualified Secretarial Audit report; and (b) a certificate confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of the Company by any statutory authority, which are annexed to this report as Annexure IV and Annexure V, respectively and forms part of this report.

The Secretarial Auditor has issued Secretarial Compliance Report under regulation 24A of Listing Regulations for FY 2022-23 which has been filed with the BSE Limited within the statutory time period.

COST AUDITORS

Pursuant to the provisions of Sub-Section (1) of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 (as amended from time to time), the Company is required to maintain the

cost records, and conduct the cost audit in respect of applicable products manufactured by the Company for the year under review.

Joshi Apte & Associates, Cost Accountants (Firm Registration Number-00240) ("Cost Auditors") issued an unqualified Cost Audit report for the FY 2021-22 and the same was filed with Ministry of Corporate Affairs (MCA) within the due date.

The Cost Auditor will issue the Cost Audit Report for FY 2022-23 and the same will be reviewed by the Board and filed with MCA within the stipulated timeline.

On the recommendation of the Audit Committee, the Board of Directors appointed Joshi Apte & Associates, Cost Accountants (Firm Registration Number-00240), as the Cost Auditor of the Company for the financial year ending March 31, 2024, to conduct the cost audit in respect of applicable products manufactured by the Company.

Pursuant to the provisions of Sub-Section (3) of Section 148 of the Act read with Companies (Audit and Auditors) Rules, 2014 (as amended from time to time), members'' consent is sought for payment of remuneration to the Cost Auditor for FY 2023-24, as mentioned in item no. 4 to the Notice of 71st AGM of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of Sub-Section (5) of Section 134 of the Act, with respect to Directors'' Responsibility Statement for the year under review, it is hereby confirmed that:

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

(b) 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 the end of the financial year and of the profit and loss of the Company for that period.

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) the directors had prepared the annual accounts on a going concern basis.

(e) 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; and

(f) 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.

ANNUAL RETURN

Pursuant to Sub-Section (3) of Section 92 read with clause

(a) of Sub-Section (3) of Section 134 of the Act, a copy of Annual Return as on March 31, 2023, is available on the Company''s website at https://www.fermentabiotech. com/annual-returns.php

CODE OF CONDUCT

In accordance with provisions of Listing Regulations, the Company has formulated a Code of Conduct applicable to the Board Members and the Senior Management Personnel. The said code of conduct has been uploaded on the website of the Company at: https://fermentabiotech. com/policies.php. All the members of the Board of Directors and the Senior Management Personnel has affirmed annual compliance with the Code of Conduct, as on March 31, 2023.

Pursuant to the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors of the Company, inter-alia, adopted a Code of Conduct for Prohibition of Insider Trading Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information, as amended from time to time. Codes adopted by the Company pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, are displayed on the Company''s website at https:// fermentabiotech.com/policies.php

Mr. Srikant N Sharma is the Compliance Officer for the said Code of Conduct.

NOMINATION AND REMUNERATION POLICY

In accordance with Sub-Section (4) of Section 178 of the Act, the Nomination and Remuneration Policy (''Remuneration Policy'') of the Company, is available on Company''s website at https://fermentabiotech.com/ policies.php. The salient features of the Nomination and Remuneration Policy, inter alia, are: (a) Objectives,

(b) Matters to be recommended by the Committee to the Board, (c) Criteria for appointment of Director / KMP / Senior management, (d) Additional Criteria for Appointment of Independent Directors, (e) Appointment and Remuneration of Directors, (f) Policy on Board Diversity, (g) Appointment, removal, and Remuneration of KMP / Senior management and other employees of the Company, (h) Criteria for Evaluation of Independent Director and the Board, (i) Succession planning for appointment to the Board of Directors and Senior Management, (j) Directors'' and Officers'' (D & O) Liability Insurance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of any loans or guarantees provided or investments made by the Company covered under the provisions of Section 186 of the Act and Rules made thereunder during FY 2022-23 are as provided in the financial statements.

RELATED PARTY TRANSACTIONS

All related party transactions entered during FY 2022-23 were on an arm''s length basis and in the ordinary course of business. All ''material'' Related Party Transactions, which were repetitive in nature, were approved through omnibus route.

During FY 2022-23, the Company has not entered into any material related party transaction as per the provisions of the Act and Related Party Transactions Policy (''RPT Policy'') of the Company. In view of this, disclosure in form AOC-2 is not applicable. The brief particulars of the Company''s policy on dealing with RPT Policy are covered in Corporate Governance report. The RPT policy is available on Company''s website at https:// fermentabiotech.com/policies.php

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as per clause (m) of Sub-Section (3) of Section 134 of the Act read with Companies (Accounts) Rules, 2014 (as amended from time to time) forms part of this report and is given in Annexure VI to this report.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 read with Schedule V of Listing Regulations, the Corporate Governance Report along with the Corporate Governance Certificate issued by Mr. Pradeep Purwar (COP No. 5918), from Pradeep Purwar and Associates, Company Secretaries, for the financial year 2022-23 is provided as Annexure III and forms part of this report. Details of number of Board meetings, board diversity and expertise, composition of the Audit Committee and establishment of Vigil Mechanism as required under the Act are provided in the Corporate Governance Report. All mandatory recommendations made by the committee(s) were reviewed and accepted by the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY (''CSR'')

Based on CSR committee''s recommendations and as per the CSR Policy of the Company, the Board approved the CSR activities vis-a-vis Annual Action Plan, amount to be spent on CSR activities, implementation and monitoring of the same for the FY 2022-23. Annual report on CSR activities of the Company for FY 2022-23 including composition of the CSR Committee is provided in Annexure VII to this report and forms part of this report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Regulation 34 of Listing Regulations mandates certain companies to file Business Responsibility and Sustainability Report (''BRSR''). Though our Company is not within the parameters of Regulation 34, we have however submitted BRSR for FY 2022-23 under Regulation 34 of Listing Regulations (essential indicators) which forms part of this report and attached as Annexure VIII.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

During FY 2022-23, there was no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations.

OTHER DISCLOSURES:

During FY 2022-23:

I. There has been no change in the nature of business of the Company, as on the date of this Report;

II. No application was made or any proceedings were pending under the Insolvency and Bankruptcy Code, 2016;

III. Valuation related details for FY 2022-23 in respect of one-time settlement of loan from the Banks or Financial Institutions were not applicable; and

IV. There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

SECRETARIAL STANDARDS

During FY 2022-23, the Company has complied with the provisions of applicable Secretarial Standards issued by the Council of the Institute of Company Secretaries of India and approved by the Central Government.

DETAILS OF SHARES IN DEMATERIALISATION (DEMAT) SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

Pursuant to Regulation 34 read with Schedule V of Listing Regulations, the details of the shares in the Dematerialization Suspense Account/ Unclaimed Suspense Account for FY 2022-23 are as follows:

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the beginning of the year

Number of shareholders who approached the Company for transfer of shares from Suspense Account during the year

Number of shareholders to whom shares were transferred from Suspense Account during the year

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the end of the year

That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

184 number of shareholders and 79,770 Equity Shares of H5 each

5

5

179 number of shareholders and 68, 550 Equity Shares of H5 each

68,550 Equity Shares of H5 each

TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) (Disha to work)

The details and other information regarding unclaimed equity dividend that has been transferred to IEPF (upto FY 201415) are provided in the Notes Section to the Notice of 71st AGM.

ACKNOWLEDGEMENTS

The Board of Directors would like to express its appreciation to the employees of the Company at all levels, members, bankers, financial institutions, regulatory bodies and other business associates for their support during the year under review.

CAUTIONARY STATEMENT

Statements in this report including Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations, or predictions and/or in this report may be ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.


Mar 31, 2019

REPORT OF THE BOARD OF DIRECTORS

The Directors are pleased to present the 67th Annual Report of the Company along with the Audited financial statements for the financial year ended March 31, 2019.

Financial highlights:

(Rs. in Lakhs)

Standalone results

Consolidated results

2018-19

2017-18

2018-19

2017-18

Total Revenue

1,967.67

1,288.82

41,703.56

31,192.42

Total Expenditure

4,532.57

3,635.29

28,832.95

23,595.48

Profit before tax (''PBT'')

(2,564.90)

(2,346.47)

12,870.61

7,596.94

Less : Provision for tax (including deferred tax)

(2,297.83)

69.00

1,080.35

2,113.23

Profit after tax (''PAT'')

(267.07)

(2,415.47)

11,790.26

5,483.71

Non-Controlling interest

-

-

(711.81)

(1,262.84)

Share of interest in profit/(loss) of associates

-

-

(42.78)

(849.44)

Profit for the year

(267.07)

(2,415.47)

11,035.67

3,371.43

Proposed Dividend *

(114.66)

(114.66)

(114.66)

(114.66)

Dividend Distribution Tax *

(23.34)

(23.34)

(23.34)

(23.34)

Balance in Statement of Profit and Loss account

433.17

923.88

21,252.14

10,501.77

* Dividend at the rate of 25% (Rs. 1.25 per equity share of Rs. 5 each) as proposed by the Board of Directors, after close of balance sheet date, subject to approval of the members.

RESULTS FROM OPERATIONS

In financial year 2018-19 (''FY 2018-19''), the Company on a Standalone basis earned revenue of Rs. 1,967.67 Lakhs, compared to Rs. 1,288.82 Lakhs in the previous financial year 2017-18 (''FY 201718''). In FY 2018-19, the Company reported a loss of Rs. 267.07 Lakhs as against loss of Rs. 2,415.47 Lakhs in FY 2017-18.

On a consolidated basis, the Company recorded a revenue of Rs. 41,703.56 Lakhs in FY 2018-19 as compared to Rs. 31,192.42 Lakhs in FY 2017-18. Profit after tax for FY 2018-19 was Rs. 11,790.26 Lakhs, as against profit of Rs. 5,483.71 Lakhs in FY 2017-18

DIVIDEND

Your Directors are pleased to recommend an equity dividend of Rs. 1.25 per equity share (25%) of Rs. 5 each in FY 2018-19 (Previous year Rs. 1.25 per equity share). The equity dividend, if approved by the Members at the 67th Annual General Meeting (''AGM''), will result in a cash outflow of Rs. 138 lakhs including dividend distribution tax.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for FY 2018-19 including financials of its subsidiaries and associate company (collectively referred as ''Subsidiaries/ Associates'') i.e. Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, Aegean Properties Limited, CC Square Films Limited (Subsidiaries), Health and Wellness India Private Limited (associate company) are prepared in accordance with the relevant Indian Accounting Standards (Ind AS) notified under the Company (Indian Accounting Standards) rules, 2015 and other applicable provisions and shall form part of this Annual Report.

Agastya Films LLP and Zela Wellness Private Limited ceased to be joint venture entity and associate company w.e.f. January 01, 2019 and Novemeber 29, 2018 respectively. However, the financials of Agastya Films LLP and Zela Wellness Private Limited have been considered in Consolidated financial statements upto the date of cessation.

SUBSIDIARY COMPANIES

The individual financial statements of the Company''s Subsidiaries/ Associates have not been attached to the financial statements of the Company for FY 2018-19. The financial information of the Company''s Subsidiaries/ Associates provided in this section may be read along with the information provided under the heading ''Consolidated Financial Statements'' in this report. In accordance with the provisions of section 129 (3) of the Act, read with Rule 5 and Rule 8 of the Companies (Accounts) Rules, 2014 [as amended from time to time], a separate statement containing salient features of the financial statements of Company''s Subsidiaries/ Associates in Form AOC-I is attached to this Board''s report as Annexure II and forms part of this Board''s report.

The financial statements of the Company''s Subsidiaries/ Associates will be kept open for inspection at the registered office of the Company, from 10.00 a.m. to 5.00 p.m. on all working days i.e. Monday to Friday, from the date of dispatch of the AGM notice to the date of the 67th AGM of the Company.

The standalone and consolidated financial statements of the Company have been uploaded on the website of the Company (www.dil.net). Members interested in obtaining copies of the annual financial statements of the Company''s Subsidiaries/ Associates, may write to the Company Secretary at the registered office address of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

The Company focuses on the business of renting properties and has a strategic investment in its subsidiary Fermenta, which is engaged in pharmaceuticals, manufacturing and marketing APIs, biotechnology and environmental solutions. MD&A covering details of the business of the Company and its subsidiary, Fermenta Biotech Limited, is provided on page 47 and forms part of this Board''s Report.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

Internal controls system including the internal financial control is a crucial aspect of the Company''s risk management process. Potent risks are identified, analyzed and addressed by the Company in a systematic manner on concurrent basis to mitigate such risks. Your Company has developed and implemented risk management policy and maintains adequate internal control system, commensurate to its size, nature of operations, reporting(s) and compliance with applicable laws and procedures to identify and mitigate such risks. The Company''s internal control systems are regularly verified by Statutory Auditors and Internal Auditors. During the year under review, the Company''s Internal Auditors, M. M. Nissim & Co., Chartered Accountants, conducted and reported the effectiveness and efficiency of internal control system including adherence to procedures as per the policies of the Company.

The Company has an experienced and qualified finance department which plays an important role in implementing and monitoring the internal control procedures and compliance with statutory requirements. The Audit Committee and the Board of Directors review the report(s) of the independent Internal Auditors at regular intervals along with the adequacy, effectiveness and observations of the Internal Auditors regarding internal control system and recommends improvements and remedial measures, wherever necessary.

HUMAN RESOURCES

The information required under rule 5(1) and rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Section 197 (12) of the Act in respect of employee remuneration and other details forms part of this report and provided as Annexure IV. Other applicable information for the above provisions will be made available to the members upon their request.

The Company had a headcount of 25 employees with no major hiring done during the year under review.

The employee benefits were increased by extending the insurance benefit to the employees and their family. Employees'' engagement activities like children programmes, annual sports, festival celebrations, etc. were regularly carried by the Company to motivate employees and to develop cohesiveness. Regular organization development programmes were conducted by the Company in order to bring a planned, systemic improvement in the approaches and perceptions of employees for individual as well as Company''s growth.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company is committed to provide protection to women against sexual harassment at workplace and thus has in place a ''Code on Redressal of Grievances Regarding Sexual Harassment'' in accordance with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder (''POSH''). The Company has set up an ''Internal Complaints Committee'' (ICC) in accordance with the requirements of POSH. Details of complaints received / pending under POSH during FY 2018-19 are as follows:

a. number of complaints filed - NIL

b. number of complaints disposed of - NIL

c. number of complaints pending as on end of FY 2018-19 - NIL.

SCHEME OF AMALGAMATION

The Board of Directors of the Company at its meeting held on June 21, 2018, approved a Scheme of Amalgamation in terms of Sections 230 to 232 of the Companies Act, 2013, involving merger of Fermenta Biotech Limited (Transferor Company) with DIL Limited (Transferee Company). The Company has filed application with the National Company Law Tribunal (''NCLT''), Mumbai on November 12, 2018 and as on the date of this report, the same is pending before NCLT, Mumbai.

INFORMATION TECHNOLOGY

Information Technology (IT) continued to invest into advanced technology to adopt best IT practices and secured IT environment assuring support to future business growth. Alongside the investment in technology, the Company is also focusing on the solutions based on latest technologies which are necessary to cover unforeseen risks. The Company is committed to provide secured environment to all their operating locations by implementing applications to control and mitigate risks and to take corrective steps thereof.

DEPOSITS

In FY 2018-19, your Company has not accepted any deposits under Section 73 of the Act including rules framed thereunder, and no principal or interest remains unpaid or unclaimed on deposits as on March 31, 2019.

CREDIT RATING

The Company did not have credit ratings since there was no loan outstanding from banks during FY 2018-19. The Company has not defaulted in payment of its obligations to any financial institutions during FY 2018-19.

DIRECTORS

Independent Directors:

(a) Independent Directors have made declarations to the Company, confirming that the conditions of independence laid down in sub section 6 of section 149 of the Act and Regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") are duly complied.

(b) Terms of Mr. Sanjay Buch and Mr. Vinayak Hajare, Independent Directors, came to an end on March 31, 2019. As per the Board''s recommendation at its meeting held on February 12, 2019, re-appointment of Mr. Sanjay Buch and Mr. Vinayak Hajare, as Independent Directors of the Company for a period of five years w.e.f. April 1, 2019 is proposed for members'' approval.

(c) The members of the Board of Directors appointed Dr. Gopakumar Nair as an Additional (Independent) Director w.e.f. May 17, 2019. His appointment as an Independent Director on the Board of Directors of the Company w.e.f. May 17, 2019 for a term of 5 (Five) consecutive years is proposed for members'' approval.

Retirement by rotation:

Mr. Satish Varma (DIN - 00003255) retires by rotation at the 67th AGM and being eligible, offers himself for re-appointment. Brief profile of Mr. Satish Varma is provided on page no. vii (of the Notice) of this Annual Report.

Directors and Key Managerial Personnel:

No Director or Key Managerial Personnel resigned or was appointed during the year under review.

ANNUAL PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Details of the annual performance evaluation have been provided in the Corporate Governance Report attached as Annexure III to this Board''s report.

AUDITORS

As per the members'' approval at the AGM dated September 28, 2018, Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration No: 117366W/W- 100018) have been appointed as Statutory Auditors of the Company and to hold office from the conclusion of 66th AGM until the conclusion of 70th AGM of the Company.

In terms of Section 134 of the Act and regulation 34 of Listing Regulations, the Statement on Impact of Audit Qualifications as stipulated in regulation 33(3)(d) including the qualification(s) made by the Auditors in their report for the FY 2018-19 and the explanation(s) of the Board thereof is stated in page no. 77 of the Corporate Governance Report.

SECRETARIAL AUDITORS REPORTS AND CERTIFICATE

Mr. V. N. Deodhar (Membership No. FCS-1880), Proprietor of V. N. Deodhar & Co., Practicing Company Secretaries (''Secretarial Auditor''), was appointed to conduct the Secretarial Audit of the Company for FY 2018-19 as per the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and regulation 24A of Listing Regulations read with the Securities and Exchange Board of India (''SEBI'') Circular CIR/CFD/CMD1/27/2019 dated February 08, 2019.

The Secretarial Auditor has submitted: (a) an unqualified Secretarial Audit report; and (b) a certificate confirming that none of the directors on the board of the Company have been debarred or disqualified from being appointed or continuing as directors of the Company by SEBI/Ministry of Corporate Affairs or any other statutory authority, which are annexed to this Board''s report as Annexure V and Annexure VI and forms part of this Board''s report. The Secretarial Compliance Report for FY 2018-19 is being filed with the BSE Limited within the stipulated time period in terms of the said circular.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of sub-section 5 of Section 134 of the Act, with respect to Directors'' Responsibility Statement for the year under review, it is hereby confirmed that:

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

(b) 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 and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) 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; and

(f) 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.

ANNUAL RETURN FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2019

Extract of the annual return for FY 2018-19 in form MGT-9 is enclosed to this Board''s Report as Annexure I and forms part of this Board''s Report. Annual Return for FY 2017-18 is available on the Company''s website at www.dil.net

CODE FOR PREVENTION OF INSIDER TRADING

Policies and codes adopted by the Company pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, are displayed on the Company''s website i.e. http:// www.dil.net/Company-Policies.html.

NOMINATION AND REMUNERATION POLICY

Pursuant to Section 178(4) of the Act, the Nomination and Remuneration Policy (''Remuneration Policy'') of the Company, including changes therein, if any, is available on Company''s website at http:/ /www.dil.net/Company-Policies.html. The salient features of the Nomination and Remuneration Policy, inter alia, are: (a) Objectives, (b) Matters to be recommended by the Committee to the Board, (c) Criteria for appointment of Director / KMP / Senior management, (d) Additional Criteria for Appointment of Independent Directors, (e) Appointment and Remuneration of Directors, (f) Policy on Board Diversity, (g) Appointment and Remuneration of KMP / Senior management and other employees of the Company, (h) Criteria for Evaluation of Independent Director and the Board, (i) Removal, (j) Succession planning for appointment to the Board of Directors and Senior Management, (k) Directors'' and Officers'' (D & O) Liability Insurance.

COST RECORDS

The provisions of Section 148(1) of the Act are not applicable to the Company for FY 2018-19.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees or made investments covered under the provisions of Section 186 of the Act during FY 2018-19.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during FY 2018-19 were on an arm''s length basis and in the ordinary course of business. During FY 2018-19, the Company has not entered into any material related party transaction. In view of this, disclosure in form AOC-2 is not applicable. The brief details of the Company''s policy on dealing with Related Party transactions (RPT Policy) are covered in Corporate Governance report. The RPT policy is available on Company''s website at http:// www.dil.net/ Company-Policies.html

INFORMATION IN ACCORDANCE WITH PROVISIONS OF SECTION 134(3)(M) OF THE COMPANIES ACT, 2013

(A) Conservation of energy and Technology absorption -

Information with respect to conservation of energy and technology absorption is not applicable to the present activities of the Company.

(B) Foreign Exchange Earnings and Outgo -

During FY 2018-19, there were no foreign exchange earnings.

CORPORATE GOVERNANCE REPORT

The Corporate Governance Report along with the Corporate Governance Certificate issued by Mr. V. N. Deodhar (Membership No. FCS-1880), Proprietor of V. N. Deodhar & Co., Practising Company Secretaries, in terms of Regulation 34 read with Schedule V of Listing Regulations, for FY 2018-19 is annexed as Annexure III and forms part of this Board''s Report.

Details of number of Board meetings, composition of the Audit Committee and establishment of Vigil Mechanism as required under the Act and Listing Regulations are provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company was not required to do CSR spending in FY 2018-19 in terms of Section 135 of the Act. Therefore, no disclosure is required as per Companies (Corporate Social Responsibility Policy) Rules, 2014.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in business and in the nature of business of your Company during the FY 2018-19.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

There was no order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations during FY 2018-19.

SECRETARIAL STANDARDS

During FY 2018-19, the Company has complied with the provisions of applicable Secretarial Standards issued by the Council of the Institute of Company Secretaries of India and approved by the Central Government.

DETAILS OF SHARES IN DEMATERIALIZATION SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

Pursuant to Regulation 34 read with Schedule V of Listing Regulations, the details of the shares in the Dematerialization Suspense Account/ Unclaimed Suspense Account are as follows:

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the beginning of the year (01.04.2018)

237 number of shareholders and 10,463* Equity Shares of Rs. 10 each

Number of shareholders who approached the Company for transfer of shares from Suspense Account during the year

1

Less: Number of shareholders to whom shares were transferred from Suspense Account during the year

NIL

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the end of the year (31.03.2019)

255 number of shareholders and 43,928* Equity Shares of Rs. 5 each

That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

43,928* Equity Shares

*During Ayugust 2018, the Company''s shares were sub-divided from face value of Rs. 10 each to face value of Rs. 5 each and thereafter the Company declard bonus issue of shares in the proportion of 1:1

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation to the employees of the Company at all levels, members, bankers, financial institutions, regulatory bodies and other business associates for their support during the year under review.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions and/or in this report may be ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.

For and on behalf of the Board of Directors

Sanjay Buch

Chairman

(DIN: 00391436)

May 24, 2019

Thane

Registered Office:

A -1601, Thane One, DIL Complex,

Ghodbunder Road, Majiwada,

Thane (West) - 400 610

Maharashtra, India.


Mar 31, 2018

Dear Members

The Directors are pleased to present the 66th Annual Report along with the Audited financial statements for the financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS (As per IND-AS):

(Amount Rs. in Lakhs)

Standalone results

Consolidated results

2017-18

2016-17

2017-18

2016-17

Total Revenue

1,288.82

596.48

31,192.42

16,847.09

Total Expenditure

3,635.29

2,393.92

23,595.48

17,399.94

Profit before tax (‘PBT’)

(2,346.47)

(1,797.44)

7,596.94

(552.85)

Less : Provision for tax (including deferred tax)

69.00

32.75

2,113.23

270.11

Profit after tax (‘PAT’)

(2,415.47)

(1,830.19)

5,483.71

(822.96)

Non Controling interest

-

-

(1,262.84)

(280.20)

Share of interest in profit/(loss) of associates

-

-

(652.12)

(39.26)

Profit for the year

(2,415.47)

(1,830.19)

3,568.75

(1,142.42)

Proposed Dividend*

(114.66)

(57.33)

(114.66)

(57.33)

Dividend Distribution Tax

(23.34)

(11.67)

(23.34)

(11.67)

Balance in Statement of Profit and Loss account

923.88

3,355.67

10,671.80

7,150.15

* Dividend at the rate of 25% (Rs. 1.25 per equity share of Rs. 5 each) as proposed by the Board of Directors, after close of balance sheet date, subject to approval of shareholders.

RESULTS FROM OPERATIONS

In financial year 2017-18 (‘FY 2017-18’), the Company on a Standalone basis earned revenue of Rs. 1,288.82 Lakhs, compared to Rs. 596.48 Lakhs in the previous financial year 2016-17 (‘FY 2016-17’). In 2017-18, the Company reported a loss of Rs. (2,415.47) Lakhs as against loss of Rs. 1,830.19 Lakhs in FY 2016-17.

On a consolidated basis, the Company recorded a revenue of Rs. 31,192.42 Lakhs in FY 2017-18 as compared to Rs. 16,847.09 Lakhs in FY 2016-17. Profit after tax for FY 2017-18 was Rs. 5,483.71 Lakhs, as against loss of Rs. 822.96 Lakhs in FY 2016-17.

DIVIDEND VIS-A-VIS CHANGE IN CAPITAL

At the meeting of the Board of Directors held on May 15, 2018, your Directors recommended an equity dividend of Rs. 2.50 per equity share (25%) on 22,93,198 equity shares of Rs. 10 each, for members’ approval.

However, pursuant to members’ approval by way of postal ballot including e-voting dated July 25, 2018 for (i) split/ sub-division of shares from face value of Rs. 10 each to face value of Rs. 5 each (‘Split’) and (ii) issue of bonus equity shares in a ratio of 1:1 i.e. 1 new fully paid-up equity share of Rs.5 each for every 1 existing fully paid-up equity share of Rs. 5 each (‘Bonus’), the Board of Directors in its meeting held on August 10, 2018 approved issue of Split share certificates and allotment of Bonus equity shares. Accordingly, the:

(a) new paid up share capital of the Company is Rs. 4,58,63,960 comprising of 91,72,792 equity shares of Rs. 5 each; and (b) revised authorised share capital of the Company is Rs. 5,00,00,000 comprising of 98,40,000 equity shares of Rs. 5 each and 1,60,000 unclassified shares of Rs. 5 each.

In view of revised paid up share capital, post Split and Bonus issue, the Board of Directors at its meeting held on August 14, 2018, revised its earlier recommendation of May 15, 2018, of final equity dividend from 25% (Rs. 2.50 per equity share) on 22,93,198 equity shares of Rs. 10 each to 25% (Rs. 1.25 per equity share) on 91,72,792 equity shares of Rs. 5 each, for members’ approval at the 66th Annual General Meeting (‘AGM’). The equity dividend, if approved by the Members at the 66th Annual General Meeting (‘AGM’), will result in a cash outflow of Rs. 138 Lakhs including dividend distribution tax.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for FY 2017-18 include financials of its subsidiaries, joint venture entity and associate companies (collectively referred as ‘Subsidiaries/ Associates’) i.e. Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, Aegean Properties Limited, CC Square Films Limited (Subsidiaries), Agastya Films LLP (joint venture entity); Health and Wellness India Private Limited and Zela Wellness Private Limited (associate companies). The consolidated financial statements of the Company and its Subsidiaries/ Associates entities are prepared in accordance with the relevant Indian Accounting Standards (Ind AS) notified under the Company (Indian Accounting Standards) rules, 2015 together with the comparative period data as at and for the previous year ended March 31, 2017, along with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’) and the Companies Act, 2013 (‘Act’), shall form part of this Annual Report.

SUBSIDIARY COMPANIES

The individual financial statements of the Company’s Subsidiaries/ Associates have not been attached to the financial statements of the Company for FY 2017-18. The financial information of the Company’s Subsidiaries/ Associates provided in this section may be read along with the information provided under the heading ‘Consolidated Financial Statements’ in this report. In accordance with the provisions of section 129 (3) of the Act, read with Rule 5 and Rule 8 of the Companies (Accounts) Rules, 2014 [as amended from time to time], a separate statement containing salient features of the financial statements of Company’s Subsidiaries/ Associates in Form AOC I is attached to this Board’s report as Annexure II and forms part of this Board’s report.

The financial statements of the Company’s Subsidiaries/ Associates will be kept open for inspection at the registered office of the Company, from 10.00 a.m. to 5.00 p.m. on all working days i.e. Monday to Friday, up to the date of the 66th AGM of the Company.

The standalone and consolidated financial statements of the Company, have been uploaded on the website of the Company (www.dil.net). Members interested in obtaining copies of the annual financial statements of each of the Company’s Subsidiaries/ Associates, may write to the Company Secretary at the registered office address of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

The operations of your Company during FY 2017-18 mainly include:

a. Pharmaceuticals; Research, development and product delivery across biotechnology and environmental solutions operations are pursued through its subsidiary, Fermenta Biotech Limited (FBL); and

b. Property rentals and production of motion pictures.

The detailed MD&A report forms part of this Board’s Report as povided on page 25.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

Internal Controls Systems including internal financial control are an integral part of the risk management process. Major risks identified by the management and business functions are systematically addressed through mitigating actions on a continuing basis. In order to identify and mitigate risks, your Company has developed and implemented risk management policy and maintains adequate internal control systems, commensurate to its size, nature of operations, reporting(s) and compliance with applicable laws and Company’s procedures. The Company’s internal control systems are routinely tested and certified by Statutory as well as Internal Auditors. During the year under review, the Company’s Internal auditors, M. M. Nissim & Co., Chartered Accountants, conducted and reported the effectiveness and efficiency of these systems including the adherence to procedures as per the policies of the Company.

The Company has a well-staffed, experienced and qualified finance department which plays an important role in implementing and monitoring the internal control procedures and compliance with statutory requirements. The Audit Committee and the Board of Directors review the report(s) of the independent Internal Auditor at regular intervals along with the adequacy and effectiveness of internal control systems and suggest improvements and corrective actions, wherever necessary.

HUMAN RESOURCES

The provisions of Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules’) read with Section 197(12) of the Act are not applicable, as no employee of the Company has received remuneration equal to or exceeding the limits specified therein, during the year under review.

The Company had a headcount of 31 employees during the year under review.

The information required under Rule 5(1) of the aforesaid Rules read with Section 197 (12) of the Act in respect of ratio of the remuneration of each director to the median employee’s remuneration and other details (collectively referred as ‘Employee Information’) forms part of this report. However, in terms of Section 136 of the Act, this report including financial statements is being sent to the Members and others entitled thereto, excluding the Employees Information.

For the next financial year, the Company’s main focus would be to enhance Human Resource automation pertaining to Performance & Employee Database Management. The organisation has subscribed for three modules of SAP Success Factors namely Employee Central, Performance Management & Compensation Management. The Objective Setting process would be revamped and uploaded on SAP Success Factors.

Members can inspect the said information at the Registered Office of the Company during business hours on any working day i.e. Monday to Friday up to the date of this 66th AGM or can obtain its copy by writing to the Company Secretary at the registered office address of the Company.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has formulated a code on ‘Redressal of Grievances Regarding Sexual Harassment’ in accordance with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, with an objective to provide safe working environment to the employees. An ‘Internal Complaints Committee’ has been set up by the Company for redressal of grievances and to protect women against harassment of the employees.

No complaints/grievances were reported or pending during FY 2017-18.

SCHEME OF AMALGAMATION

The Board of Directors of the Company at its meeting held on June 21, 2018, has approved a Scheme of Amalgamation in terms of Sections 230 to 232 of the Companies Act, 2013, involving merger of Fermenta Biotech Limited (Transferor Company) with DIL Limited (Transferee Company). The said scheme is subject to the approval of the respective shareholders and creditors, National Company Law Tribunal and other regulatory and statutory approvals as applicable.

INFORMATION TECHNOLOGY

Information Technology (IT) acted as an enabler of productivity by implementing sophisticated application environments (e.g. SAP HANA, ITSM Platform for ERP) and will continue to invest in Cloud based CRM and HRIS Platform.

Your Company’s IT Team manages Company’s operations with state-of-the-art technology and has been incorporating new technologies into the system. In addition, mobility solution and support has played a key role in achieving improved deliverables in Company’s operations and objectives. Your Company continues to drive excellence through a strong focus on managing the details, and a culture ingrained with continuous improvements.

Annual Application & Control Audits are undertaken to ensure consistent remediation of any business and process risks. Alongside the investment in technology, the Company is also improving its service management processes to prevent any defects in the IT environment and to enable faster resolution of any such incidents with minimum business disruption.

DEPOSITS

In FY 2017-18, your Company has not accepted any fixed deposits under Section 73 of the Act including rules framed thereunder, and no principal or interest remains unpaid or unclaimed as on March 31, 2018.

CREDIT RATING

During FY 2017-18, the Company has withdrawn its ratings from CARE, as it does not have any loans from banks. During FY 2017-18, the Company has not defaulted in payment of its obligations to any financial institutions.

DIRECTORS

Independent Directors:

Independent Directors have made declarations to the Company, confirming that the conditions of independence laid down in sub section 6 of section 149 of the Act and Regulation 25 of the SEBI Listing Regulations are duly complied.

Retirement by rotation:

Ms. Rajeshwari Datla (DIN - 00046864) retires by rotation at the 66th AGM and being eligible, offers herself for re-appointment. Brief profile of Ms. Rajeshwari Datla is provided on page no. 50 of this Annual Report.

Directors and Key Managerial Personnel:

No Director or Key Managerial Personnel resigned or was appointed during the year under review.

ANNUAL PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Details of the annual performance evaluation have been provided in the Corporate Governance Report attached as Annexure III to this Board’s report.

AUDITORS

The members in the 65th AGM of the Company held on September 29, 2017 approved the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration No: 117366W/W-100018) as Statutory Auditors of the Company and to hold office from the conclusion of 65th Annual General Meeting (AGM) until the conclusion of 70th AGM of the Company, subject to ratification of their appointment by the Members at every AGM of the Company during the above term, on such remuneration as may be mutually agreed between the Board of Directors and the Statutory Auditors.

However, with effect from May 07, 2018, the Companies (Amendment) Act, 2017 has dispensed with the requirement of the ratification of Statutory Auditor’s appointment by the members of the Company at every AGM during their tenure.

Therefore, in view of the aforesaid amendment vide Companies (Amendment) Act, 2017, and to partially modify the members’ approval at the 65th AGM for the appointment Statutory Auditors of the Company, the approval of the members is sought to ratify the appointment of Deloitte Haskins & Sells LLP as Statutory Auditors of the Company for their remaining term i.e. till the conclusion of 70th AGM of the Company.

Deloitte Haskins & Sells LLP has expressed its willingness and confirmed its eligibility and qualification to act as Statutory Auditors of the Company in terms of sections 139 and 141 of the Companies Act, 2013 and rules made thereunder.

The qualification(s) made by the Auditors in their report for the FY 2017-18 and the explanation(s) of the Board thereof is stated in page no. 55 of the Corporate Governance Report.

SECRETARIAL AUDIT REPORT

The Board of Directors has appointed Mr. V. N. Deodhar (Membership No. FCS-1880), Proprietor of V. N. Deodhar & Co., Practising Company Secretaries, as Secretarial Auditor of the Company for FY 2017-18 as per the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Auditor has submitted an unqualified report as annexed to this Board’s report as Annexure IV and forms part of this Board’s report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to provisions of sub-section 5 of Section 134 of the Act, with respect to Directors’ Responsibility Statement for the year under review, it is hereby confirmed that:

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

(b) 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 and loss of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis;

(e) 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; and

(f) 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.

EXTRACT OF ANNUAL RETURN FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2018

The extract of the annual return in form MGT-9 is enclosed to this Board’s Report as Annexure I and forms part of this Board’s Report.

CODE FOR PREVENTION OF INSIDER TRADING

Pursuant to provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015, your Company has adopted (a) Code of Conduct to regulate, monitor and report trading by Insiders, applicable to Promoters, Promoter’s Group, Directors and such Designated Employees who are expected to have access to unpublished price sensitive information of the Company; and (b) The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.

The aforesaid Codes are displayed on the Company’s website i.e. http://www.dil.net/Company-Policies.html.

NOMINATION AND REMUNERATION POLICY

Pursuant to Section 178(4) of the Act, the Nomination and Remuneration Policy (‘Remuneration Policy’) of the Company, including changes therein, if any, is available on Company’s website at http:/ /www.dil.net/Company-Policies.html. The salient features of the Nomination and Remuneration Policy, inter alia, are: (a) Objectives, (b) Matters to be recommended by the Committee to the Board, (c) Criteria for appointment of Director / KMP / Senior management, (d) Additional Criteria for Appointment of Independent Directors, (e) Appointment and Remuneration of Directors, (f) Policy on Board Diversity, (g) Appointment and Remuneration of KMP / Senior management and other employees of the Company, (h) Criteria for Evaluation of Independent Director and the Board, (i) Removal, (j) Succession planning for appointment to the Board of Directors and Senior Management, (k) Directors’ and Officers’ (D & O) Liability Insurance.

COST RECORDS

Provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the Company for the period under review.

CORPORATE ACTIONS

The Board of Directors, at its meeting held on June 18, 2018, has approved the following items, subject to members’ and necessary statutory approvals:

a) Split/sub-division of shares of the Company from face value of Rs. 10 (Rupees Ten Only) each to face value of Rs. 5 (Rupees Five Only) each;

b) Issue of bonus equity shares in the proportion of 1:1 i.e. for 1 (One) new fully paid-up equity share of Rs. 5 (Rupees Five only) each for every 1 (One) existing fully paid-up equity share of Rs. 5 (Rupees Five only) each held by the members;

c) Amendment to the Capital Clause of the Company i.e. Clause V of the Memorandum of Association, consequent to the aforesaid split and bonus Issue;

d) Amendment to the Objects Clause of the Company.

The members accorded their consent to the above items on July 25, 2018. All Statutory approvals for the same have been obtained by the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees or made investments covered under the provisions of Section 186 of the Act during FY 2017-18.

RELATED PARTY TRANSACTIONS

All related party transactions entered into during FY 2017-18 were on an arm’s length basis and in the ordinary course of business. During FY 2017-18, the Company has not entered into any material related party transaction. In view of this, disclosure in form AOC-2 is not applicable.

The brief details of the Company’s policy on dealing with Related Party transactions (RPT Policy) are covered in Corporate Governance report. The RPT policy is available on Company’s website at http:// www.dil.net/ Company-Policies.html

INFORMATION IN ACCORDANCE WITH PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013

(A) Conservation of energy and Technology absorption -

Information with respect to conservation of energy and technology absorption is not applicable to the present activities of the Company.

(B) Foreign Exchange Earnings and Outgo -

During FY 2017-18, there were no foreign exchange earnings.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations, the Corporate Governance Report along with the Corporate Governance Certificate issued by Mr V. N. Deodhar (Membership No. FCS-1880), Proprietor of V. N. Deodhar & Co., Practising Company Secretaries, for the financial year 2017-18 is provided as Annexure III and forms part of this Report.

Details of number of Board meetings, composition of the Audit Committee and establishment of Vigil Mechanism as required under the Act are provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

No CSR spending was required in FY 2017-18 in terms of Section 135 of the Act. Hence, no disclosure is required as per Companies (Corporate Social Responsibility Policy) Rules, 2014.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in business and in the nature of business of your Company during the FY 2017-18

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There was no order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s operations during FY 2017-18.

SECRETARIAL STANDARDS

During FY 2017-18, the Company has complied with the provisions of applicable Secretarial Standards issued by the Council of the Institute of Company Secretaries of India and approved by the Central Government.

DETAILS OF SHARES IN DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations, the details of the shares in the Dematerialisation Suspense Account/ Unclaimed Suspense Account are as follows:

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the beginning of the year (01.04.2017)

Number of shareholders who approached the Company for transfer of shares from Suspense Account during the year

Number of shareholders to whom shares were transferred from Suspense Account during the year

Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the end of the year (31.03.2018)

That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

NIL

2

NIL

237 number of shareholders and 10463 Equity Shares

10463 Equity Shares

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation to the employees of the Company at all levels, members, bankers, financial institutions, regulatory bodies and other business associates for their support during the year under review.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions and/or in this report may be ‘forward-looking statements’ within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.

For and on behalf of the Board of Directors

Sanjay Buch

Chairman

Thane (DIN: 00391436)

August 14, 2018

Registered Office:

A -1601, Thane One, DIL Complex,

Ghodbunder Road, Majiwada,

Thane (West) - 400 610 Maharashtra, India.


Mar 31, 2016

The Members,

The Directors are pleased to present the 64th Annual Report along with the Audited financial statements for the financial year ended March 31, 2016.

FINANCIAL HIGHLIGHTS (Amount - Rs. in Lakhs)

STANDALONE RESULTS

CONSOLIDATED RESULTS

2015 - 2016

2014 - 2015

2015 - 2016

2014 - 2015

Total Revenue

728.14

1,352.39

15,606.22

14,181.80

Total Expenditure

1,292.99

1,062.79

13,460.45

12,585.48

Profit before Interest, Depreciation, Amortization Expense and Tax (‘EBIDTA’)

(564.85)

289.60

2,145.77

1,596.32

Financial Cost

176.97

2.87

614.69

450.16

Depreciation and Amortization Expense

179.52

181.63

835.00

857.85

Profit before tax (‘PBT’)

(921.34)

105.10

696.08

288.31

Less : Provision for tax (including deferred tax)

(7.62)

32.24

424.82

192.93

Profit after tax (‘PAT’)

(913.72)

72.86

271.26

95.38

Minority interest

—

—

(329.81)

(7.29)

Share of interest in profit/(loss) of associates

—

—

(54.87)

(41.71)

Profit for the year

(913.72)

72.86

(113.42)

46.38

Balance brought forward *

3,706.28

3,771.42

5,988.78

6,080.40

Balance for appropriations

2,792.56

3,844.28

5,875.36

6,126.78

Appropriations

Proposed Dividend

(57.33)

(114.66)

(57.33)

(114.66)

Dividend Distribution Tax

(1167)

(23.34)

(1167)

(23.34)

Balance in Statement of Profit and Loss account

2,723.56

3,706.28

5,806.36

5,988.78

* Net of adjustment of effect of depreciation

RESULTS FROM OPERATIONS

RESULTS FROM OPERATIONS

During the year under review, the Company on a Standalone basis earned revenue of Rs.728.14 lakhs, (Previous year Rs.1,352.39 lakhs). In 2015-16, the Company reported a loss of Rs.(913.72) as against a profit after tax of Rs.72.86 lakhs in the previous year.

The Company on a consolidated basis recorded revenue of Rs.15,606.22 lakhs in the financial year 2015-2016 (Previous year Rs.14,181.80 lakhs). In the financial year 2015-16, the profit after tax was Rs. 271.26 lakhs as against Rs.95.38 lakhs in the previous year.

DIVIDEND

Your Directors are pleased to recommend a final equity dividend of Rs.2.50 per equity share of Rs.10 each (25%) [previous year Rs.5 per equity share] for the year ended March 31, 2016. Total cash outflow in relation to the equity share dividend will be Rs.69 Lakhs (previous year Rs.138 Lakhs), including dividend distribution tax of Rs.11.67 Lakhs (previous year Rs.23.34 Lakhs).

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company for the financial year 2015-16 includes financials of its subsidiaries, joint venture entities and associate entities (collectively referred as ''Subsidiaries/ Associates'') i.e. Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, Aegean Properties Limited, CC Square Films Limited (Subsidiaries), Vasko Glider s.r.o. and Agastya Films LLP (joint venture entities); Health and Wellness India Private Limited and Zela Wellness Private Limited (associate entities). The consolidated financial statements of the Company and its Subsidiaries/ Associates entities are prepared in accordance with the relevant Accounting Standards (AS) i.e. AS 21, AS 23 and AS 27, issued by the Institute of Chartered Accountants of India, provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013 (''Act''), shall form part of this Annual Report.

SUBSIDIARY COMPANIES

The individual financial statements and other reports of the Company''s Subsidiaries/ Associates have not been attached to the financial statements of the Company for the financial year 2015-16. Any member seeking information on the annual financial statements of the Company''s Subsidiaries/ Associates may write to the Company Secretary at the registered office of the Company.

The financial information of the Company''s Subsidiaries/ Associates provided in this section may be read along with the information provided under the heading ''Consolidated Financial Statements'' of this report. In accordance with the provisions of section 129 (3) of the Act, read with Rule 5 and Rule 8 of the Companies (Accounts) Rules, 2014 [as amended from time to time], the Company has attached a separate statement, containing salient features of the financial statements of Company''s Subsidiaries/ Associates in Form AOC I on page no. 30, of this report.

Agastya Films LLP, a film production entity, was incorporated on November 20, 2015 under the Limited Liability Partnership Act, 2008. Your Company is a partner in Agastya Films LLP holding 50% of the total capital in Agastya Films LLP

During the year under review, no company has become or ceased to be a subsidiary, joint venture entity or associate entity, except as mentioned above.

The financial statements of the Company''s Subsidiaries/ Associates will be kept open for inspection at the registered office of the Company, from 9.00 a.m. to 5.00 p.m. on all working days, except Saturdays and Sundays, up to the date of the 64th AGM of the Company.

The standalone and consolidated financial statements of the Company, along with the financial statements of the Company''s Subsidiaries/ Associates and its related information as attached to this report, have been uploaded on the website of the Company (www.dil.net).

Members interested in obtaining copies of the annual financial statements of each of the Company''s Subsidiaries/ Associates, may write to the Company Secretary at the registered office address of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

The operations of your Company during the financial year 2015-16 mainly include:

a. Ongoing Strategic investments in pharmaceuticals and wellness management;

b. Pharmaceuticals; Research, development and product delivery across biotechnology and environmental solutions are pursued through its subsidiary, Fermenta Biotech Limited (FBL); and

c. Property rentals, treasury operations and production of motion pictures.

This MD&A section as discussed below, includes the management perspective and operational performance of the Company and its subsidiary, FBL.

The MD&A pertaining to pharmaceutical, biotech and environmental solutions are as follows:

Industry perspective:

In the backdrop of reforms initiated by the new government, interspersed with improved economic scenario, the Indian pharmaceutical sector is poised to consolidate its position as a key contributor to the global pharmaceutical industry. The Indian pharmaceutical sector accounts 2.4% of the global pharmaceutical industry in terms of value and 10% in terms of volume, including 20% contribution in global generics export. Factors like increased incidence of lifestyle and age related diseases have propelled the market demand dynamics while the improved technology in Active Pharmaceutical Ingredients (API) manufacturing processes with integrated novel processes including enzymatic have helped greatly to bridge the supply demand gap. The global API market is expected to touch US$ 2051.51 billion by 2020 from US$ 150 billion in 2015, with an expected Compound Annual Growth Rate (CAGR) of 6.5% during the forecasted period.

Indian biotechnology space is on a growth trajectory and has competitive advantage to expand across different business verticals in the ensuing years. Presently, the Indian biotech sector accounts 2% of the global biotech business. The Indian biotechnology industry, is valued at US$ 7 billion and growing at a CAGR of 30%.

The active participation of the Government in effectively implementing the waste water discharge norms across municipal bodies, industrial, commercial and residential users has been the proactive driver for expanding the environmental solution segment. The above initiatives combined with public awareness and the accessibility to new age remediation technologies have nurtured a conducive environment for public-private participations as well as large scale corporate commitment in this segment.

Performance:

Despite the sustained business challenges, FBL stood its ground to post a standalone gross revenue of Rs.14,973.46 lakhs, (Previous year Rs.12,931.10 lakhs). The profit before tax for the year under review was Rs.1,617.54 lakhs (previous year Rs.189.40 lakhs) and profit after tax was Rs.1,188.92 lakhs for the year under review as against Rs.32.60 lakhs in the previous year.

FBLRs.s consolidated financials recorded revenue of Rs.14,974.60 lakhs in the financial year 2015-2016 (Previous year Rs.12,931.10 lakhs). The profit after tax was Rs.1,180.76 lakhs as against Rs.25.43 lakhs in the previous year.

Opportunities and Outlook:

The Indian pharmaceutical sector is growing at CAGR of 16.5%. Sustained and balanced growth is driven by various market demands like more prevalent lifestyle diseases, prolonged diseases management, affordable health care coupled with health insurance spectrum and preventive medicines. Cost advantages and availability of technical and skilled personnel in India are the key factors in projecting India as a major manufacturing hub for generic. India''s generic accounts 20% of global exports in terms of volume, making our country as the largest provider of generic medicines globally.

The global industrial enzyme market is growing at a CAGR of 5%, which spans across various segments like food, pharma, textiles, feed and fine chemicals. The Indian enzyme players are experiencing a critical business momentum towards focused R&D and knowledge based innovation efforts in providing novel, eco-efficient enzymatic solutions to enable competitively sustainable processes. The industrial biocatalysis using enzymes for various antibiotics as well as valued added products is at a tipping point, which has already gone as a mainstream process and the commitment of more players into this new age manufacturing platform adds fillip to business competitiveness.

Stringent implementation of waste disposal standards across various industries, in combination with increased government participation on water reuse and recycling, is widening the business horizon for water & waste management and recycling segments. With a market size of over US$ 4 billion, the Indian water and wastewater market is growing at 10-12 % a year.

Moving forward, FBL''s increased production capacity combined with process efficiency will help to consolidate and to sustain its competitiveness advantages, amortize fixed cost effectively and will enhance the confidence of clients seeking long term supply arrangements. FBL continues to improve its innovation, overall operational efficiency, widen its distribution network and to achieve increased market footprints, globally.

Threats and Concerns:

The Indian pharmaceutical industry has been facing stiff competitions from its Asian competitors which may be a constant feature going forward. Indian APIs manufacturers are working on various methods to mitigate the competitive strategies of the Asian competitors and one such major attempt is to reduce its dependency in relation to import of bulk drugs from Asian competitors.

Aggressive marketing strategy from principal competitors could affect short term realizations of FBL. Volatile price fluctuations of key raw materials may affect the overall pricing in general and more specifically of enzymatic products.

Implementation of environment projects with stringent regulatory norms and adherence to timelines has been challenging. Procuring and executing customized projects with specific requirements would be the key to stay competitive in environment business.

PROPERTY DEVELOPMENT AND RENTALS

Industry Perspective:

As reported earlier, the Government of Maharashtra introduced its new Information Technology/ Information Technology Enabled Services (IT/ITES) Policy in 2015. Further, in 2016, the Maharashtra Government has substantially broadened the definition of ''back office operation'' by amending the IT/ITES Policy, 2015. The new back office operation definition includes administrative and support services of banks, insurance companies, mutual fund and non-banking finance companies and other support services.

With the introduction of the Real Estate (Regulation and Development) Act, 2016; this sector will witness regulated protection of interests of stakeholders and promote overall growth of the real estate sector in India.

The Union Budget 2016 has been reasonably conducive to real estate segment by taking into consideration some of the sector''s requirement though not in entirety. Fast growth of infrastructure, competitive rentals, better connectivity and proximity to important commercial and industrial areas in the Mumbai Metropolitan region, Thane''s commercial office sector expects significant gains in the coming years.

Performance:

In 2015-16, your Company reported a decrease in rental income from Rs.1,065.54 lakhs in the previous year to Rs.613.31 lakhs in the year under review. Low revenue earnings in this segment are mainly due to the impact of no rent fit out period in Thane One, non renewal/termination of existing Licence agreements and stagnancy in rental income from Company''s property.

The Occupation certificate for the Company''s IT/ITES project, Thane One was issued by the Thane Municipal Corporation on December 31, 2015.

Opportunities and Outlook:

Planned developments, easy connectivity, good infrastructural supports and working class residents have projected Thane as a viable option to corporate houses to relocate their offices in and around Thane. Competitive rentals and minimizing commuting time between office and home - walk to work concept -in Thane are viewed positively by the business entities. These developments, coupled with overall improvement in the office space rentals and the convenient location of Thane One, would contribute to yield better rentals in Thane One office space activities.

Challenges and Concerns:

Delays in government approvals process and lack of a single-window clearance system mainly hinder completion of projects as per the planned time schedule. Delay in completion of projects leads to escalation of total project cost vis a vis interest cost. High cost of borrowings is also a major challenge to the real estate sector. Matching needs of demanding and cost conscious clients and to close such transactions is challenging in the growing and competitive office rental space.

ENTERTAINMENT DIVISION (WHITE STRIPES ENTERTAINMENT):

Industry Perspective:

The Indian media and entertainment sector grew 12% to reach $25.13 billion (Rs.1.68 trillion) in 2015, according to Price water house Coopers (PwC)''s Global Entertainment and Media Outlook 2016-20. This industry is expected to exceed US$ 40 billion by 2020 growing at an average annual rate of 10.3% between 2016 and 2020. In terms of admission, India will remain the largest cinema market in the world till 2020 , with a CAGR of 6.6%.

Performance:

In 2015-16, the Company has entered into a strategic partnership with an Indian entity to produce a hindi film which is currently under production. Creating good content and owning intellectual rights are the areas identified by the company to meet the future industry requirement and to mitigate the challenges of the industry in order to expect good returns in the future.

Opportunities and Outlook:

The Indian film industry is expected to touch US$3.4 billion by 2019, at a CAGR of 11.2 per cent. Increasing digital screens and innovative screening of films are expected to propel the growth of the industry. Government''s policies like ease of doing business and amending regulations to suit the requirements of the entertainment industry will foster the growth of the sector. With these changing industry landscapes, White Stripes would evaluate projects, including the strategic partnership with an international production house for the Company''s remake rights.

Concerns and challenges:

Considering the population and appetite for cinema, India remains underserved in terms of multiplexes and screens in the country. Screen growth, high tax structure and real estate prices are impacting the growth of the entertainment industry. Increased competition from regional and foreign films and menace of piracy has been affecting the revenues of this industry. Unless the film fraternities join hand, piracy shall remain a nagging problem.

Treasury Operations:

As reported earlier, the Company has been divesting its mutual funds and fixed deposits investments on need basis to meet the project cost of Thane One. In the year under review, the investment committee evaluated investment proposals in terms of the approved principles and statutory regulation governing such investments. In 2015-16, the revenue earned from treasury operations dropped to Rs.114.64 lakhs (Previous year Rs.281.25 lakhs), mainly due to divestment of investment corpus.

INTERNAL CONTROL SYSTEMS

The Company maintains appropriate internal control systems, commensuration to its size, nature of operations, reporting(s) and compliance with applicable laws and Company''s procedures. The Company''s internal control systems are routinely tested and certified by Statutory as well as Internal Auditors. During the year under review, the Company''s Internal auditors, M. M. Nissim & Co., Chartered Accountants, conducted and reported the effectiveness and efficiency of these systems including the adherence of procedures as per the policies of the Company.

The Company has a well staffed, experienced and qualified Finance Department who plays an important role in implementing and monitoring the internal control procedures and compliance with statutory requirements. The Audit Committee and the Board of Directors reviews the report(s) of the independent Internal Auditor at regular intervals along with the adequacy and effectiveness of Internal Control systems and suggest improvements and corrective actions.

HUMAN RESOURCES

The Company continues to focus on-the-job trainings, competency building, reward and retention programmes. Mapping competencies and performance management of employees are conducted through various innovative programmes for development and operational growth of the employees and the Company.

The Company conducts various relation building activities outside of routine job responsibilities with an objective to improve employees'' motivation and to reinforce employer and employees trusting relationship.

Your Company in the financial year 2015-2016 closed with a stable headcount of 43 personnel across all levels.

The provisions of Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (''Rules'') read with Section 197 (12) of the Act is not applicable, as no employee of the Company has received remuneration equivalent or exceeding the limits specified therein, during the year under review.

The information required under Rule 5(1) of the aforesaid Rules read with Section 197 (12) of the Act in respect of ratio of the remuneration of each director to the median employee''s remuneration and other details (collectively referred as ''Employee Information'') forms part of this report. However, in terms of Section 136 of the Act, this report including financial statements is being sent to the members and others entitled thereto, excluding the Employees Information. Members can inspect the said information at the Registered Office of the Company during business hours on any working day (excluding Saturdays) up to the date of this 64th Annual General Meeting (AGM) or can obtain its copy by writing to the Company Secretary at the registered office address of the Company.

Your Company continues to provide a safe working environment for its employees. The Company has framed a code on ''Redressal of Grievances regarding sexual harassment'' and has constituted an ''Internal Complaints Committee'' for redressal of grievances as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made there under. There were no cases / grievances reported or pending during the year under review.

INFORMATION TECHNOLOGY:

Information Technology (IT) continues to support business operations in the Company, through continued investment in the enterprise wide ERP platform including Data Reporting. The Company''s IT Team manages various locations with state-of-the-art technology and has been incorporating new technologies into the system. In addition, mobility solution and support has played a key role in achieving improved deliverables in Company''s operations and objectives. Your Company continues to drive resilience through targeted remediation of high risk operating systems, applications and its related areas. Annual Application & Control audits are undertaken to ensure consistent remediation of any business and process risks. Alongside the investment in technology, the Company is also improving its service management processes to prevent any defects in the IT environment and to enable faster resolution of any such incidents with minimum business disruption.

DEPOSITS

In 2015-16, your Company has not accepted any fixed deposits and no principal or interest is due to the public as on March 31, 2016.

CREDIT RATING

During the year under review, the Company has received ''Long Term'' Credit rating of ''CRISIL BB /Stable'' as reaffirmed by CRISIL. This rating reflects moderate risk of default regarding timely servicing of financial obligations.

DIRECTORS

Independent Directors:

The Independent Directors have made declarations to the Company, confirming that the conditions of independence laid down in sub section 6 of section 149 of the Act and Regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are duly complied.

Retirement by rotation:

Ms. Rajeshwari Datla (DIN - 00046864), retires by rotation at the Annual General Meeting and being eligible, offers herself for re-appointment. Brief profile of Ms. Rajeshwari Datla is provided on page no. 33 of this Annual Report.

Directors and Key Managerial Personnel:

No Director or Key Managerial Personnel resigned or was appointed during the year under review.

AUDITORS

The members in the 62nd AGM of the Company held on September 24, 2014 approved the appointment of SRBC & Co. LLP, Chartered Accountants (ICAI Firm Registration No: 324982E/E300003) as Statutory Auditors of the Company to hold office from the conclusion of 62nd Annual General Meeting (AGM) until the conclusion of 65th AGM of the Company in place of the retiring Auditors, S.R. Batliboi& Associates LLP, Chartered Accountants (Firm Registration no. 101049W), subject to ratification by the members at every AGM of the Company. SRBC & Co. LLP has expressed its willingness and confirmed its eligibility to act as Statutory Auditors of the Company for the financial year 20161 7. The qualifications made by the Auditors in their report and the justification of the Board is provided in Page No. 39 of this Annual Report.

SECRETARIAL AUDIT REPORT

The Board of Directors has appointed Mr. V. N. Deodhar (Membership No. FCS-1880), Proprietor of V. N. Deodhar & Co., Practicing Company Secretaries as Secretarial Auditor of the Company for the financial year 201516 as per the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Secretarial Auditor has submitted an unqualified report and is annexed to this Board''s report as Annexure IV. The Secretarial Audit report forms part of this Board''s report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of sub-section 5 of Section 134 of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial year ended March 31, 2016 the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) Appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 and loss of the Company for the year under review;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts for the financial year ended March 31, 2016 have been prepared on a ''going concern'' basis.

v) Proper internal financial controls are devised to ensure compliance with the provisions of all applicable laws and that such internal financial controls were adequate and operating effectively.

vi) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2016

The details forming part of the extract of the annual return is enclosed as Annexure II to this Report and forms part of this Report.

INSIDER TRADING CODE

Pursuant to provisions of SEBI (Prohibition of Insider Trading) Regulation, 2015, your Company has adopted

(a) Code of Conduct to regulate, monitor and report trading by Insiders, applicable to Promoters, Promoter''s Group, Directors and such Designated Employees who are expected to have access to unpublished price sensitive information of the Company; and (b) ''The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) The aforesaid Codes are displayed on the Company''s website i.ehttp://www.dil.net/Company-Policies.html

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration policy of the Company (''Remuneration Policy'') inter alia, lays down the criteria for (a) appointment and payment of remuneration to Directors, Key Managerial Personnel and senior management of the Company; (b) criteria for appointment of Independent Director; and (c) evaluation of performance of Directors.

The brief details of the Remuneration Policy including the manner in which evaluation of Directors is conducted are provided in the Corporate Governance report, as annexed to this report. The Remuneration Policy can be viewed at Company''s website at http:/ /www.dil.net/Company-Policies.html.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, as on March 31, 2016 are as follows:

Particulars

Amount (Rs. in lakhs)

Loans given

13

Investment made

268

Corporate Guarantee given

-

RELATED PARTY TRANSACTIONS

All related party transactions entered into during the year under review were on arms length basis and in the ordinary course of business. During the year under review, the Company has not entered into any material related party transaction. In view of this, disclosure in form AOC-2 is not applicable to the Company.

The brief details of the Company''s policy on dealing with Related Party transactions (RPT Policy) are covered in Corporate Governance report. The RPT policy can be viewed at the Company''s website at http:// www.dil.net/ Company-Policies.html

INFORMATION IN ACCORDANCE WITH PROVISION OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013:

(A) Conservation of energy and Technology absorption

Information in accordance with provision of Section 134(3)(m) of the Act, with respect to Conservation of energy and technology absorption is not applicable to the present activities of the Company.

(B) Foreign Exchange Earnings and Outgo

During the year under review, there were no Foreign Exchange earnings. Foreign Exchange outgoings are provided in Note No. 38 to the Financial Statements.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 4 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report along with the Corporate Governance Certificate issued by Mr V. N. Deodhar (Membership No. FCS-1880), Proprietor of V.N. Deodhar & Co, Practising Company Secretaries is provided in Annexure III and forms part of their Report.

Details of number of Board meetings, composition of the Audit Committee, details of risk management policy and establishment of Vigil Mechanism as required under the Companies Act, 2013 are provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Annual Report on CSR as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - 1 and forms an integral part of this Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in business and in the nature of business of your Company during the year under review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There was no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations during the year under review.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation to the employees of the Company at all levels, members, bankers, financial institutions, regulatory bodies and other business associates for their support during the year under review.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions and/or in this report may be ''forward-looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.

For and on behalf of the Board of Directors

Sanjay Buch

Chairman

Registered Office :

''DIL'' Complex,

Ghodbunder Road, Majiwada,

Thane (West) - 400 610,

Maharashtra, India.

August 12, 2016.


Mar 31, 2014

Dear Members,

The Directors are pleased to present the 62nd Annual Report along with the Audited financial statements for the financial year ended March 31, 2014.

FINANCIAL HIGHLIGHTS (Amount - in Lakhs)

Stand alone results 2013-2014 2012-2013

Total Revenue 1,521.91 1,806.36

Total Expenditure 1,090.63 895.36

Profit before Interest, Depreciation and Tax (''EBIDTA'') 431.28 910.73

Financial Cost 4.90 21.41 Depreciation and Amortization Expense 224.57 225.04

Interest Income (4.73) -

Profit before tax (''PBT'') 206.54 664.28

Less : Provision for tax (including deferred tax) 64.38 130.26

Profit after tax (''PAT'') 142.16 534.02

Balance brought forward 3,912.55 4,033.53

Balance for appropriations 4,054.71 4,567.55 Appropriations

Interim Dividend 171.99 343.98

Proposed Dividend 57.33 171.99

Dividend Distribution Tax 38.97 85.03

Transfer to General Reserve 15.00 54.00

Balance in Statement of Profit and Loss 3,771.42 3,912.55

4,054.71 4,567.55 Consolidated results

Total Revenue 14,137.47 11,834.50

Total Expenditure 11,290.06 9,388.04

Profit before Interest, Depreciation and Tax (''EBIDTA'') 2,847.41 2,446.46

Financial Cost 530.54 501.79

Depreciation and Amortization Expense 984.10 939.56

Interest Income (4.73) (5.04)

Profit before tax (''PBT'') 1,337.50 1,010.15

Less : Prior period amortization expense (102.83) -

Less : Provision for tax (including deferred tax) 339.05 367.15

Profit after tax (''PAT'') 1,101.28 643.00

Minority interest (225.50) (30.01)

Share of interest in profit/(loss) of associates (87.91) (197.08)

Net Profit 787.87 415.91

Balance brought forward 5,587.59 5,826.68

Balance for appropriations 6,375.46 6,242.59 Appropriations

Interim Dividend 171.99 343.98

Proposed Dividend 57.33 171.99

Dividend Distribution Tax 38.97 85.03

Transfer to General Reserve 15.00 54.00

Balance in Statement of Profit and Loss 6,092.17 5,587.59

6,375.46 6,242.59

RESULTS FROM OPERATIONS

During the year under review, the Company on a Standalone basis, recorded a revenue of Rs. 1,521.91 lakhs, (Previous year Rs. 1,806.36 lakhs). The profit before tax for the year under review was Rs. 206.54 lakhs (previous year Rs. 664.28 lakhs) and profit after tax was Rs. 142.16 lakhs for the year under review as against Rs. 534.02 lakhs in the previous year.

The Company on a consolidated basis recorded a revenue of Rs. 14,137.47 lakhs in the financial year 2013-2014 (Previous year Rs. 11,839.50 lakhs). The profit after tax was Rs. 1,101.28 lakhs as against Rs. 643 lakhs in the previous year.

DIVIDEND

During the year under review, the Board of Directors had declared and paid an interim dividend of Rs. 7.50 per equity share of Rs. 10 each (75%) for the financial year 2013-14. Your Directors also recommend a final dividend of Rs. 2.50 per equity share of Rs. 10 each (25%) for the year ended March 31, 2014, subject to the approval of the Members at this Annual General Meeting.

TRANSFER TO RESERVE

Your Directors propose to transfer Rs. 15 lakhs to General Reserve out of Rs. 4,054.71 lakhs i.e. the amount available for appropriations. An amount of Rs. 3,771.42 lakhs is proposed to be retained in the Statement of Profit and Loss for the financial year 2013-14.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been made as per the Listing Agreement with the Stock Exchange and the relevant Accounting Standards issued by the Institute of Chartered Accountants of India. The consolidated financial statements of the Company for the financial year 2013-14 includes financials of its subsidiaries i.e. Aegean Properties Limited, Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, CC Square Films Limited; its Joint Venture company, VasKo Glider s.r.o.; and associate companies, Health and Wellness India Private Limited and Zela Wellness India Private Limited.

INTERNAL CONTROL SYSTEMS

The Company has adopted an internal control system commensurate with its size, nature of operations, reporting(s) and compliance with applicable laws and regulations. The Internal Audit is conducted by an independent Chartered Accountant firm.

The Company has a well staffed, experienced and qualified Finance Department who play an important role in implementing and monitoring the internal control environment and compliance with statutory requirements. The Audit Committee and the Board of Directors review the report(s) of the independent Internal Auditor at regular intervals on the adequacy and effectiveness of Internal Control system and suggest ways to improve it.

HUMAN RESOURCES

The year 2013-2014 was focused on Organisation Development (OD) interventions and retention programmes across levels.

The developmental interventions include Personal Profile Analysis and Human Job Analysis using behaviour assessment tools from Thomas Assessments, which facilitated an initial level of competency mapping for each job role.

Various retention & benefits strategies were initiated to maintain attrition levels as per industry standards. Compensation & Benefits surveys were also conducted to facilitate industry benchmarking. The team now looks forward to strengthen OD interventions and introduce Executive Development Programmes through IIMs for the senior management. As on March 31, 2014, the employee strength stands 45 for the Company and 283 for the other group companies.

Information as per Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, forming part of the Directors'' Report for the year ended March 31, 2014 is given as an Annexure to this report.

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year under review.

DIRECTORS

Ms. Rajeshwari Datla (DIN: 00046864), Director retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Mr. G. G. Desai, Mr. Sanjay Buch and Mr. Vinayak Hajare were appointed as Directors since November 29, 2001, April 28, 2007 and June 18, 2009 respectively. In accordance with the erstwhile provisions of the Companies Act, 1956, office of Mr. Sanjay Buch and Mr. Vinayak Hajare as Non Executive Directors of the Company was liable to retire by rotation. However, Mr. G. G. Desai being the Chairman was not liable to retire by rotation as per the relevant provisions of the Articles of Association of the Company. Mr. G. G. Desai, Mr. Sanjay Buch and Mr. Vinayak Hajare are presently the independent directors of the Company as per the provisions of the Listing Agreement.

In view of above and as per the provisions of the Companies Act, 2013, and Rules made thereunder, read with Clause 49 of the Listing Agreement, the Independent Directors will hold office for a period of five consecutive years. Accordingly, it is proposed to appoint Mr. G.G Desai, Mr. Sanjay Buch and Mr. Vinayak Hajare as independent directors for a period of five consecutive years effective from April 1, 2014, not liable to retire by rotation.

Brief profile of the Directors proposed for appointment at the Annual General Meeting is provided at page nos. 19 and 20 of this Annual Report.

AUDITORS

The Company has received a letter from S. R. Batliboi & Associates LLP, Chartered Accountants expressing its unwillingness to continue as the statutory auditors of the Company upon the conclusion of the next Annual General Meeting of the Company. A Special Notice under Section 1 40(4) read with Section 1 1 5 of the Companies Act, 2013 has been received by the Company from a Member proposing appointment of SRBC & Co. LLP Chartered Accountants (SRBC & Co LLP) as Statutory Auditors in place of S.R. Batliboi & Associates LLP, Chartered Accountants, the retiring Statutory Auditors. The Company has sent a copy of the said Special Notice to the retiring Statutory Auditors.

SRBC & Co. LLP has expressed its willingness and confirmed its eligibility under the provisions of Companies Act, 2013, the Chartered Accountants Act, 1949, rules and regulations made thereunder.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 of the Company for the year under review;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended March 31, 2014 have been prepared on a ''going concern'' basis.

SUBSIDIARY COMPANIES

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and in accordance with the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors consented that the Statement of Profit and Loss, Balance Sheet and other reports of the subsidiary companies will not be attached to the financial statements of the Company for the financial year 2013-2014. A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2014 is included in the Annual Report. The annual financial statements of the subsidiary companies and the related detailed information will be made available to any member of the Company seeking information at any point of time. The financial statements of the subsidiary companies will be kept open for inspection at the registered office of the Company.

The consolidated financial statements presented by the Company include financial information of its subsidiaries, Joint Venture and associate companies prepared in compliance with applicable Accounting Standards.

DISCLOSURES UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

(A) Energy Conservation Measures and Technology Absorption, Adoption and Innovation

Information in accordance with provision of Section

21 7(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to Conservation of energy and technology absorption is not applicable to the present activities of the Company and hence no annexure forms part of this report.

(B) Foreign Exchange Earnings and Outgo

During the year under review, there were no Foreign Exchange earnings. Foreign Exchange outgoings are provided in Note No. 34 to the Financial Statements.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, the Report on Corporate Governance along with the Corporate Governance Certificate issued by V N Deodhar & Co, Practicing Company Secretaries, forms part of this Report.

CORPORATE SOCIAL RESPONSIBILITY

Continuing with the legacy of practicing CSR activities of our founder members, your Company has been committed to the cause of CSR for many years. Over the years, the CSR activities have diversified and expanded into new communities and in turn benefitted more and more stakeholders. Today your Company firmly believes that corporate citizens have a vital role to play in empowering and enriching the communities and its stakeholders.

The Board of Directors of the Company pursuant to the provisions of Section 1 35 of the Companies Act, 2013 (Act) read with Companies (CSR Policy) Rules, 2014, has constituted a Corporate Social Responsibility (CSR) Committee of the Board with effect from May 30, 2014.

Based on CSR Committee recommendations, the Board of Directors of the Company approved the Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for assistance and co-operation received from the banks, Government authorities, consultants, service providers, customers, 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 by the employees of the Company.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be ''forward- looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.

Notes:

1. The gross remuneration shown above is subject to tax, and comprises salary, allowances, monetary value of perquisites as per income tax rules and the Company''s contribution to provident fund and gratuity fund.

2. The above employment is contractual in nature.

For and on behalf of the Board of Directors

G. G. Desai Chairman

Thane, August 12, 2014 Registered Office : ''DIL'' Complex, Ghodbunder Road, Majiwada, Thane (West) - 400 610.


Mar 31, 2013

Dear Members,

The Directors are pleased to present the 61st Annual Report and the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL HIGHLIGHTS (Amount - Rs.in Lakhs)

Stand alone results 2012-2013 2011-2012

Total Revenue 1,806.36 2,752.00

Total Expenditure 895.36 744.16

Profit before Interest, Depreciation and Tax (''EBIDTA'') 910.73 2,007.84

Financial Cost 21.41 7.45

Depreciation and Amortization Expense 225.04 170.98

Interest Income - 11.40

Profit before tax (''PBT'') 664.28 1,840.81

Less : Provision for tax (including deferred tax) 130.26 372.70

Profit after tax (''PAT'') 534.02 1,468.11

Balance brought forward 4,033.53 3,514.98

Balance for appropriations 4,567.55 4,983.09

Appropriations

Interim Dividend 343.98 343.98

Proposed Dividend 171.99 343.98

Dividend Distribution Tax 85.03 111.60

Transfer to General Reserve 54.00 150.00

Balance in Statement of Profit and Loss 3,912.55 4,033.53

4,567.55 4,983.09

Consolidated results

Total Revenue 11,834.50 1,3301.37

Total Expenditure 9,388.04 8,814.42

Profit before Interest, Depreciation and Tax (''EBIDTA'') 2,446.46 4,486.95

Financial Cost 501.79 387.47

Depreciation and Amortization Expense 939.56 776.07

Interest Income (5.04) (13.03)

Profit before tax (''PBT'') 1,010.15 3,336.44

Less : Provision for tax (including deferred tax) 367.15 640.18

Less : Provision for tax in respect of earlier years written back - 0.35

Profit after tax (''PAT'') 643.00 2,695.91

Minority interest (30.01) (297.53)

Share of interest in profit/(loss) of associates (197.08) (172.65)

Net Profit 415.91 2,225.73

Balance brought forward 5,826.68 4,550.51

Balance for appropriations 6,242.59 6,776.24

Appropriations

Interim Dividend 343.98 343.98

Proposed Dividend 171.99 343.98

Dividend Distribution Tax 85.03 111.60

Transfer to General Reserve 54.00 150.00

Balance in Profit and Loss account 5,587.59 5,826.68

6,242.59 6,776.24

RESULTS FROM OPERATIONS

During the year under review, the Company on a Stand alone basis, recorded a revenue of Rs. 1,806.36 lakhs, (Previous year Rs. 2,763.40 lakhs). The profit before tax for the year under review was Rs. 664.28 lakhs (previous year Rs. 1,840.81 lakhs) and profit after tax was Rs.534.02 lakhs for the year under review as against Rs.1,468.11 lakhs in the previous year.

The Company on a consolidated basis recorded a revenue of Rs.11,839.54 lakhs for the financial year 2012-2013 (Previous year 13,314.40 lakhs). The profit after tax was Rs.643 lakhs as against Rs.2,695.91 lakhs in the previous year.

DIVIDEND

During the year under review, the Board of Directors had declared and paid an interim dividend of Rs.15 per equity share of Rs. 10 each (150%) for the financial year 2012-13. Your Directors also recommend a final dividend of Rs.7.50 per equity share of Rs. 10 each (75%) for the year ended March 31, 2013, subject to the approval of the shareholders at this Annual General Meeting. The total equity dividend for the financial year 2012-13 will amount to Rs.22.50 per equity share (225%).

TRANSFER TO RESERVE

Your Directors propose to transfer Rs. 54 lakhs to General Reserve out of Rs. 4,567.55 lakhs i.e. the amount available for appropriations. An amount of Rs. 3,912.55 lakhs is proposed to be retained in the Profit and Loss Accounts for the financial year 2012-13.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been made as per the Listing Agreement with the Stock Exchange and the relevant Accounting Standards issued by the Institute of Chartered Accountants of India. The consolidated financial statement of the Company for the financial year 2012-13 includes financials of its subsidiaries i.e. Aegean Properties Limited, Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, CC Square Films Limited; Joint Venture Company, VasKo Glider s.r.o. and associate companies, Health and Wellness India Private Limited and Zela Wellness India Private Limited.

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTORS

Mr. Vinayak Hajare, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

AUDITORS

S. R. Batliboi & Associates LLP, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from them confirming that such appointment if made will be in compliance of Section 224(1B) of the Companies Act, 1956

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended March 31, 2013, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 of the Company for the year under review;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended March 31, 2013 have been prepared on a ''going concern'' basis.

SUBSIDIARY COMPANIES

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and in accordance with the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors consented that the Statement of Balance Sheet, Profit and Loss and other documents of the subsidiary companies will not be attached to the Balance Sheet of the Company for the financial year 2012-2013. A statement containing the brief financial details of the Company''s subsidiaries for the financial year ended March 31, 2013 is included in the Annual Report. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company seeking information at any point of time. The financial accounts of the subsidiary companies will be kept open for inspection at the registered office of the Company.

The consolidated financial statements presented by the Company include financial information of its subsidiaries, Joint Venture and associate companies prepared in compliance with applicable Accounting Standards.

DISCLOSURES UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

(A) Energy Conservation Measures and Technology Absorption, Adoption and Innovation

Information in accordance with provision of Section 217(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to Conservation of energy and technology absorption is not applicable to the present activities of the Company and hence no annexure forms part of this report.

(B) Foreign Exchange Earnings and Outgo

During the year under review, there were no Foreign Exchange earnings. Foreign Exchange outgoings are provided in Note No. 35 to the Accounts.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, the Report on Corporate Governance along with the Corporate Governance Certificate issued by V N Deodhar & Co, Practicing Company Secretaries, forms part of this Report.

SOCIAL INITIATIVES

Your Company has been associated with charitable organizations that provide educational support to needy children such as building of schools and providing other required facilities. The Company has initiated necessary steps to make donations to Prime Minister''s National Relief Fund and a NGO to support the victims of floods and landslides experienced in Uttarakhand during June 2013.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for assistance and co-operation received from the banks, Government authorities, consultants, service providers, customers, 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 by the employees of the Company.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations or predictions may be ''forward- looking statements'' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.



For and on behalf of the Board of Directors



G. G. Desai

Chairman

Thane, August 14, 2013

Registered Office :

''DIL'' Complex,

Ghodbunder Road, Majiwada,

Thane (West) - 400 610.


Mar 31, 2012

The Directors are pleased to present the 60th Annual Report and the Audited Accounts for the financial year ended March 31, 2012.

(Amount - Rs.in Lakhs)

FINANCIAL HIGHLIGHTS 2011-2012 2010-2011

Stand alone results

Total Revenue 2,763.40 3,824.34

Total Expenditure 744.16 977.24

Profit before Interest, Depreciation and Tax ('EBIDTA') 2,019.24 2,847.10

Financial Cost 7.45 6.96

Depreciation and Amortization Expense 170.98 116.58

Profit before tax ('PBT') 1,840.81 2,723.56

Less : Provision for tax (including deferred tax) 372.70 546.72

Profit after tax ('PAT') 1,468.11 2,176.84

Balance brought forward 3,514.98 2,235.77

Balance for appropriations 4,983.09 4,412.61

Appropriations

Interim Dividend 343.98 343.98

Proposed Dividend 343.98 229.32

Dividend Distribution Tax 111.60 94.33

Transfer to General Reserve 150.00 230.00

Balance in Statement of Profit and Loss 4,033.53 3,514.98

4,983.09 4,412.61 Consolidated results

Total Revenue 1,3314.40 9,891.55

Total Expenditure 8814.30 5,693.60

Earning before Interest, Depreciation and Tax ('EBIDTA') 4,500.10 4,197.95

Financial Cost 387.59 148.31

Depreciation and Amortization Expense 776.07 415.03

Profit before tax ('PBT') 3,336.44 3,634.61

Less : Provision for tax (including deferred tax) 640.18 834.92

Add : Provision for tax in respect of earlier years written back (0.35) (0.37)

Profit after tax ('PAT') 2,695.91 2,799.32

Minority interest (297.53) (123.58)

Share of interest in profit/(loss) of associates (172.65) (142.89)

Net Profit 2,225.73 2,532.85

Balance brought forward 4,550.51 2,985.29

Balance for appropriations 6,776.24 5,518.14

Appropriations

Interim Dividend 343.98 343.98

Proposed Dividend 343.98 229.32

Dividend Distribution Tax 111.60 94.33

Transfer to General Reserve 150.00 230.00

Transfer to Capital Redemption Reserve – 70.00

Balance in Profit and Loss account 5,826.68 4,550.51

6,776.24 5,518.14

RESULTS FROM OPERATIONS

During the year under review, the Company on a Stand alone basis, recorded a revenue of Rs.2,763.40 lakhs, as compared to the revenue in the previous year of Rs.3,824.34 lakhs. The profit before tax for the year under review was Rs.1,840.81 lakhs (previous year Rs.2,723.56 lakhs) and consequently profit after tax was Rs.1,468.11 lakhs for the year under review against Rs.2,176.84 lakhs for the previous year.

The consolidated revenue of the Company also recorded a favourable growth of 35% with Rs.13,314.40. lakhs for the financial year 2011-2012 as compared to Rs.9,891.55 lakhs in the previous year . The profit after tax was Rs.2,695.91 lakhs (previous year Rs.2,799.32 lakhs).

DIVIDEND

During the year under review, the Board of Directors had declared and paid an interim dividend of Rs.15 per equity share (150%) for the financial year 2011-12. Your Directors also recommend a final dividend of Rs.15/- per equity share (150%) for the year ended March 31, 2012, subject to the approval of the shareholders at the Annual General Meeting. The total equity dividend for the financial year 2011-12 will amount to Rs.30 per equity share (300%).

TRANSFER TO RESERVE

Your Directors propose to transfer Rs.150.00 lakhs to General Reserve out of Rs.4,983.09 lakhs i.e. the amount available for appropriations. An amount of Rs.4,033.53 lakhs is proposed to be retained in the Statement of Profit and Loss for the financial year 2011-12.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been made as per the Listing Agreement with the Stock Exchange and the relevant Accounting Standards issued by the Institute of Chartered Accountants of India. The consolidated financial statement of the Company for the financial year 2011-12 includes financials of its subsidiaries i.e. Aegean Properties Limited, Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, CC Square Films Limited, VasKo Glider s.r.o. its joint venture company and share of profit (loss) in the associate company.

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTORS

Mr. Satish Varma, Director retires by rotation and being eligible, has consented for his re-appointment as Director at the ensuing Annual General Meeting.

AUDITORS

Messrs S. R. Batliboi & Associates, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from them confirming that such appointment if made will be in compliance of Section 224(1B) of the Companies Act, 1956. With reference to point no. 4 (i.e. unaudited total loss of an associate company) of the Auditor's Report - Consolidated Balance sheet, it is clarified that the associate company's Balance sheet and Statement of Profit and Loss account has now been audited.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Act, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 of the Company for the year under review;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended March 31, 2012 have been prepared on a 'going concern' basis.

SUBSIDIARY COMPANIES

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and in accordance with the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors consented that the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies will not be attached to the Balance Sheet of the Company for the financial year 2011-2012. A statement containing the brief financial details of the Company's subsidiaries for the financial year ended March 31, 2012 is included in the Annual Report: 'Financial Highlights of Subsidiary Companies'. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company seeking information at any point of time. The financial accounts of the subsidiary companies will be kept open for inspection at the Registered Office of the Company.

The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.

DISCLOSURES UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

(A) Energy Conservation Measures and Technology Absorption, Adoption and Innovation

Information in accordance with provision of Section 217(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy is not applicable to the present activities of the Company and hence no annexure forms part of this report.

(B) Foreign Exchange Earnings and Outgo

Foreign Exchange outgoings are provided in Note No. 35 of the Financial Statement for the year.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, the Report on Corporate Governance is appended herewith along with the Corporate Governance Certificate issued by V. N. Deodhar & Co, Practising Company Secretaries.

SOCIAL INITIATIVES

Your company continues to support charitable organizations by providing support, training and development programmes to needy children. Educational resources and donation(s) were provided to charitable organizations also form part of the social initiative of the Company.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for assistance and co-operation received from the banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the devoted services by the executives and staff of the Company.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward- looking statements' within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statements.

For and on behalf of the Board of Directors

G. G. Desai Chairman

Thane, August 14, 2012

Registered Office : 'DIL' Complex,

Ghodbunder Road, Majiwada, Thane (West) – 400 610.


Mar 31, 2011

Dear Members,

The Directors are pleased to present the 59th Annual Report and the Audited Accounts for the financial year

ended March 31, 2011.

FINANCIAL HIGHLIGHTS (Amount - Rs. in Lakhs)

Stand alone results 2010-2011 2009-2010

Total Revenue 3,824.34 2,183.17

Total Expenditure 977.24 1,036.13

Profit before Interest, Depreciation and Tax ('EBIDTA') 2,847.10 1,147.04

Interest 6.96 3.45

Depreciation 116.58 112.82

Profit before tax ('PBT') 2,723.56 1,030.77

Less : Provision for tax (including deferred tax) 546.72 265.86

Add : Provision for tax in respect of earlier years written back – 0.09

Profit after tax ('PAT') 2,176.84 765.00

Balance brought forward 2,235.77 1,973.21

Balance for appropriations 4,412.61 2,738.21

Appropriations

Interim Dividend 343.98 171.99

Proposed Dividend 229.32 171.99

Dividend Distribution Tax 94.33 58.46

Transfer to General Reserve 230.00 100.00

Balance in Profit and Loss account 3,514.98 2,235.77

4,412.61 2,738.21

Consolidated results

Total Revenue 9,891.55 7,423.77

Total Expenditure 5,714.12 5,329.28

Profit before Interest,Depreciation and Tax ('EBIDTA') 4,177.43 2,094.49

Interest 127.79 142.37

Depreciation 415.03 442.93

Profit before tax ('PBT') 3,634.61 1,509.19

Less : Provision for tax (including deferred tax) 834.92 326.19

Add : Provision for tax in respect of earlier years written back (0.37) (0.32)

Profit after tax ('PAT') 2,799.32 1,182.68

Minority interest (123.58) (5.75)

Share of interest in profit/ (loss) of associates (142.89) (24.93)

Net Profit 2,532.85 1,152.00

Balance brought forward 2,985.29 2,335.73

Balance for appropriations 5,518.14 3,487.73

Appropriations

Interim Dividend 343.98 171.99

Proposed Dividend 229.32 171.99

Dividend Distribution Tax 94.33 58.46

Transfer to General Reserve 230.00 100.00

Transfer to Capital Redemption Reserve 70.00 –

Balance in Profit and Loss account 4,550.51 2,985.29

5,518.14 3,487.73

RESULTS FROM OPERATIONS

During the year under review, the Company on a Stand alone basis, recorded a revenue of Rs.3,824.34 lakhs, depicting a growth of 75% as compared to the revenue in the previous year of Rs. 2,183.17 lakhs. The profit before tax for the year under review was Rs.2,723.56 lakhs (previous year Rs. 1,030.77 lakhs) and profit after tax grew considerably by 185% with Rs.2,176.84 lakhs for the year under review against Rs. 765.00 lakhs in the previous year.

The consolidated revenue of the Company also recorded a favourable growth of 33% with Rs.9,891.55 lakhs for the financial year 2010-2011 as compared to Rs. 7,423.77 lakhs in the previous year. The profit after tax was Rs. 2,799.32 lakhs (previous year Rs. 1,182.68 lakhs) showing a rise of 137%

During the year under review, your Company along with its subsidiary, Fermenta Biotech Limited (FBL) had executed definitive agreements with a private equity investor in Mauritius, Evolvence India Life Sciences Fund LLC (EILSF) on December 10, 2010. The transactions contemplated under the agreements were for sale of 1,915,036 equity shares held by your Company in FBL to EILSF and issue of an equal number of fresh equity shares by FBL to EILSF, for a total consideration of Rs. 40 crores, and at a price per share of Rs. 104.44. The transactions were successfully completed as per the terms of the agreements in January 2011.

DIVIDEND

During the year under review, the Board of Directors had declared and paid an interim dividend of Rs.15 per equity share (150%) for the financial year 2010-11. Your Directors also recommend a final dividend of Rs. 10/- per equity share (100%) for the year ended March 31, 2011, subject to the approval of the shareholders at the Annual General Meeting. The total equity dividend for the financial year 2010-11 will amount to Rs.25 per equity share (250%).

TRANSFER TO RESERVE

Your Directors propose to transfer Rs.230.00 lakhs to General Reserve out of Rs. 4,412.61 lakhs i.e. the amount available for appropriations. An amount of Rs.3,514.98 lakhs is proposed to be retained in the Profit and Loss Accounts for the financial year 2010-11.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been made as per the Listing Agreement with the Stock Exchange and the relevant Accounting Standards issued by the Institute of Chartered Accountants of India. The consolidated financial statement of the Company for the financial year 2010-11 includes financials of its subsidiaries i.e. Aegean Properties Limited, Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited, CC Square Films Limited and VasKo Glider s.r.o.

MANAGEMENT DISCUSSION AND ANALYSIS

Your Company continues its presence in the pharmaceutical segment concentrating on research, manufacturing and marketing of niche active pharmaceutical ingredients (API) & biotech products through its subsidiary Fermenta Biotech Limited (FBL). While its core focus lies in this area, the Company has strategic investments in contract research and development and health and wellness management businesses and is also into treasury operations, property rentals and production and distribution of motion pictures.

i. Pharmaceuticals – Manufacturing and Marketing:

During the year under review, FBL has not only reported a 36 % growth in its revenues and 126% increase in the profit after tax, but also reinvested in its business with the objective to make its growth sustainable. This was largely the result of volume and margin growth in its Vitamin D3 (pharma, food and feed applications) vertical on the one hand and enhanced revenues derived from the manufacture of Phenyramidol and Activated Dimethicone Powder (anti-flatulent)

FBL's Phenyramidol API business achieved much of its international potential. The business received repeat orders from clients leading to the possibility of growing volumes over the foreseeable future.

FBL Biotech division has successfully demonstrated its new enzyme catalyst Novel Penicillin G Acylase (NPGA) – FERMASE NA 150 to its various clients in 2010-11 and is on the verge of commercial supplies.

FBL Environmental Life Sciences division comprises of three segments – sewage treatment plant (STP), lake & pond remediation and oil remediation. This Environmental solutions division reported revenues of Rs. 96 lakhs during the year under review.

ii. Research and Development

During the year under review FBL has invested significantly in research efforts in improving manufacturing processes of its API products as well as introducing different Vitamin D3 formulations across various segments. FBL has also been able to introduce an improved version of its proprietary enzyme for synthesis of beta lactams and their intermediates.

Out of the patent applications filed on NPGA, the European and US Patent Office have reviewed most of our applications favourably.

iii. Manufacturing and regulatory approvals

Year 2010 - 11 saw good progress in FBL's Facility Certifications and product Compliance goals.

Key highlights include:

- WHO – cGMP

- ISO 9001:2008

- ISO 14001:2004

- OHSAS 18001:2007

Important Product Certifications include:

- EDQM – CEP for Vitamin D3

- Kosher & Halal Certifications

- HACCP

iv. Exports:

During the year under review, FBL has entered geographies like France, El Salvador, Syria, Nepal, and the United Kingdom (UK). FBL has presence in the United States of America, UK, Germany, Belgium, Netherlands, China, Brazil, Spain, France, Mexico, Switzerland, Turkey, Saudi Arabia, Israel, New Zealand, Sri Lanka, Syria, Nepal and El Salvador, among others.

v. Facilities expansion

FBL commissioned a new manufacturing facility at Dahej SEZ, Gujarat. The new manufacturing site will help FBL in providing larger production capabilities, better economies, wider international presence and enhanced overall competitiveness.

The industry structure, opportunities, strength and concerns in relation to the activities of the Company and its subsidiary companies i.e. pharmaceuticals, biotech and environmental solutions are reviewed, as under:

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTORS

Mr. Sanjay Buch retires by rotation and being eligible, has consented for his re-appointment as Director at the ensuing Annual General Meeting.

AUDITORS

Messrs S. R. Batliboi & Associates, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from them confirming that such appointment if made will be in compliance of Section 224(1B) of the Companies Act, 1956

AUDITORS' REPORT

With reference to the observation(s) made by the Auditors in Point No (v)(b) in the Annexure referred to in paragraph 3 of the standalone Auditor's Report, considering the royalty income earned in the technology, the Company has decided to transfer the technology for a consideration of Rs. 1,50,00,000 (Rupees One Crore Fifty Lakhs only) to FBL. As the technology is unique hence no comparative analysis is available.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Act, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 of the Company for the year under review;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended March 31, 2011 have been prepared on a 'going concern' basis.

SUBSIDIARY COMPANIES

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and in accordance with the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors consented that the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies will not be attached to the Balance Sheet of the Company for the financial year 2010-2011. A statement containing the brief financial details of the Company's subsidiaries for the financial year ended March 31, 2011 is included in the Annual Report. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company seeking information at any point of time. The financial accounts of the subsidiary companies will be kept open for inspection at the Registered Office of the Company.

The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.

DISCLOSURES UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

(A) Energy Conservation Measures and Technology Absorption, Adoption and Innovation

Information in accordance with provision of Section 217(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy is not applicable to the present activities of the Company and hence no annexure forms part of this report.

(B) Foreign Exchange Earnings and Outgo

Foreign Exchange outgoings are provided in Note No. 7 under Schedule 16 of the Accounts.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, the Report on Corporate Governance is appended herewith along with the Corporate Governance Certificate issued by S.N Ananthasubramanian & Co, Practicing Company Secretaries.

SOCIAL INITIATIVES

Your company continues to support charitable organizations by providing support, training and development programmes to needy children. Donations to Maataram Foundation and United Way of Mumbai also form part of the social initiative of the Company.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for assistance and co-operation received from the banks, Government authorities, customers, 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 by the executives and staff of the Company.

For and on behalf of the Board of Directors

G. G. Desai Chairman

Thane, August 10, 2011

Registered Office : 'dil' Complex, Ghodbunder Road, Majiwada, Thane (West) – 400 610.


Mar 31, 2010

The Directors are pleased to present the 58th Annual Report and the Audited Accounts for the financial year ended March 31, 2010.

FINANCIAL HIGHLIGHTS (Amount - Rs. in Lakhs)

Stand alone results 2009-2010 2008-2009

Total Revenue 2,183.17 1,240.87

Total Expenditure 1,036.13 783.59

Profit before Interest, Depreciation & Tax (EBIDTA) 1,147.04 457.28

Interest 3.45 115.05

Depreciation 112.82 109.18

Exceptional item – depreciation written back - 179.72

Profit before tax (PBT) 1,030.77 412.77

Less : Provision for tax (including deferred tax) 265.86 70.78

Add : Provision for tax in respect of earlier years written back 0.09 (0.65)

Profit after tax (PAT) 765.00 341.34

Balance brought forward 1,973.21 2,069.31

Balance for appropriations 2,738.21 2,410.65

Appropriations

Interim Dividend 171.99 171.99

Proposed Dividend 171.99 171.99

Dividend Distribution Tax 58.46 58.46

Transfer to General Reserve 100.00 35.00

Balance in Profit & Loss account 2,235.77 1,973.21

2,738.21 2,410.65

Consolidated results 2009-2010 2008-2009

Total Revenue 7,423.77 6,760.57

Total Expenditure 5,329.28 5,714.97

Profit before Interest, Depreciation & Tax (EBIDTA) 2,094.49 1,045.60

Interest 142.37 302.17

Depreciation 442.93 469.35

Impairment loss -- 5.94

Exceptional item – depreciation written back -- 364.83

Profit before tax (PBT) 1,509.19 632.97

Less : Provision for tax (including deferred tax) 326.19 179.67

Add : Provision for tax in respect of earlier years written back (0.32) (0.77)

Profit after tax (PAT) 1,182.68 452.53

Minority interest (5.75) 131.65

Share of interest in profit/(loss) of associates (24.93) --

Balance brought forward 2,335.73 2,188.99

Balance for appropriations 3,487.73 2,773.17

Appropriations

Interim Dividend 171.99 171.99

Proposed Dividend 171.99 171.99

Dividend Distribution Tax 58.46 58.46

Transfer to General Reserve 100.00 35.00

Balance in Profit & Loss account 2,985.29 2,335.73

3,487.73 2,773.17

RESULTS FROM OPERATIONS

During the year under review, the Company, on a Stand alone basis, recorded a revenue of Rs.2,183.17 lakhs (previous year Rs.1,240.87 lakhs) which includes profit of Rs.607.83 lakhs on sale of equity shares of Evotec (India) Private Limited (earlier known as Research Support International Private Limited), erstwhile wholly owned subsidiary of the Company. Consequently the profit before tax for the year was Rs.1,030.77 lakhs (previous year Rs.412.77 lakhs) and profit after tax was Rs.765 lakhs (previous year Rs.341.34 lakhs).

Secondly, the consolidated revenue of the Company was Rs.7,423.77 lakhs (previous year Rs.6,760.57 lakhs) and the profit after tax is at Rs.1,182.68 lakhs (previous year Rs.452.53 lakhs). This is mainly in view of the profit on sale of equity shares as stated above.

During the year under review, the Company has transferred 2,54,94,000 equity shares of Rs.2 each i.e. 70% of the paid-up equity capital of Evotec (India) Private Limited to Evotec AG for Rs.1,117 lakhs. Consequently Evotec (India) Private Limited and its subsidiary Evotec - RSIL Limited ceased to be subsidiaries of the Company w.e.f. September 01, 2009 and accordingly the consolidated financial statements of the Company includes the financials of Evotec (India) Private Limited and its subsidiary, Evotec – RSIL Limited upto August 31, 2009. In view of above and w.e.f. September 01, 2009 the Company is not in the day to day management of Evotec (India) Private Limited and its subsidiary Evotec – RSIL Limited.

DIVIDEND

During the year under review, the Board of Directors had declared and paid an interim dividend of Rs.7.50 per equity share (75%) for the financial year 2009-10 aggregating to Rs.171.99 lakhs. Your Directors also recommend a final dividend of Rs.7.50 per equity share (75%) for the year ended March 31, 2010. The total Dividend for the financial year 2009-10 will amount to Rs.15 per equity share (150%).

TRANSFER TO RESERVE

Your Directors propose to transfer Rs.100 lakhs to General Reserve out of the amount available for appropriations and an amount of Rs.2,235.77 lakhs is proposed to be retained in the Profit and Loss Accounts for the financial year 2009-10

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been made as per the Listing Agreement with the Stock Exchange and the relevant Accounting Standards issued by the Institute of Chartered Accountants of India. The consolidated financial statement of the Company for the financial year 2009-10 includes Aegean Properties Limited, Fermenta Biotech Limited, Fermenta Biotech (UK) Limited, G.I. Biotech Private Limited and VasKo Glider s.r.o and the financial statements of Evotec (India) Private Limited and its subsidiary Evotec-RSIL Limited is up to August 31, 2009.

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTORS

Mr. Satish Varma, Executive Director of the Company, tendered his resignation as the Executive Director of the Company with effect from April 30, 2010. He will however act as a Non – Executive Director of the Company.

Mr. Krishna Datla was re-appointed as the Managing Director of the Company with effect from May 9, 2010.

Ms. Rajeshwari Datla retires by rotation and being eligible, has consented for her re-appointment as Director at the ensuing Annual General Meeting.

AUDITORS

Messrs S. R. Batliboi & Associates, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Company has received a certificate from them to the effect that their appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of Section 226 of the Act.

AUDITORS REPORT

With reference to the observation(s) made by the Auditors in paragraph No. 5 in the consolidated Auditors Reports in the consolidation of financial statements of VasKo Glider s.r.o., a Joint Venture entity which are prepared as per the accounting policies prevailing in the Czech Republic, Company has decided to obtain financial statements of VasKo Glider s.r.o., which will conform with the accounting principles generally accepted in India.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Act, with respect to Directors Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed;

ii) appropriate accounting policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably 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 of the Company for the year under review;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts for the financial year ended March 31, 2010 have been prepared on a going concern basis.

SUBSIDIARY COMPANIES

Ministry of Corporate Affairs, New Delhi vide letter no. 47/336/2010-CL-III dated April 21, 2010 has granted exemption to the Company under Section 212(8) of the Companies Act, 1956 from attaching the financials of subsidiary companies to the Annual Report 2009- 10. Financial information of the subsidiary companies is disclosed in the Annual Report as per the provisions of Section 212 of the Companies Act, 1956. The Company will provide the financial statements of the subsidiary companies to any member of the Company who may be interested in obtaining the same. The Company shall put the details of Accounts of individual subsidiary companies on its website.

Your Company had executed a Share Purchase and a Shareholders Agreement with Evotec AG, concerning transfer of 2,54,94,000 equity shares i.e. 70% of the paid up equity share capital of Evotec (India) Private Limited held by the Company. Post transfer of such shares in Evotec (India) Private Limited, Evotec AGs equity holding constitutes 70% and your Companys equity holding constitutes 30% of the paid up equity share capital in Evotec (India) Private Limited.

DISCLOSURES UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956

Particulars of employees as required under Section 217(2A) of the Act read with Companies (Particulars of Employees) Rules, 1975, as amended, is given in the annexure to this Report.

DISCLOSURES UNDER SECTION 217(1)(E) OF THE COMPANIES ACT, 1956

(A) Energy Conservation Measures and Technology Absorption, Adoption and Innovation

Information in accordance with provision of Section 217(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to conservation of energy is not applicable to the present activities of the Company and hence no annexure forms part of this report.

(B) Foreign Exchange Earnings and Outgo

Foreign Exchange outgoings are provided in Note No. 7 under Schedule 15 of the Accounts.

CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement, the Report on Corporate Governance is appended herewith along with the Corporate Governance Certificate issued by S.N. Ananthasubramanian & Co., Practicing Company Secretaries.

HUMAN RESOURCES

With our new organizational horizon, the Human Resources function has evolved in the last year. Along with inducting talent, value adding through employee development activities, this year, we have benchmarked our compensation and benefits with the other prominent players in the market. This is done to ensure we not only attract the best available resources but we also retain the human capital. This year we have also ventured in the direction of job - behavior analysis which further enhances employee productivity and morale. As on 31st March 2010, the employee strength stands 50 for the company and 155 for the other group companies.

INTERNAL CONTROL SYSTEMS

The Company has adopted an internal control system commensurate with its size, nature of operations, reporting(s) and compliance with applicable laws and regulations.

The Company has a well staffed, experienced and qualified Finance Department who play an important

role in implementing and monitoring the internal control environment and compliance with statutory requirements.

The Internal Audit is conducted by an independent firm of Chartered Accountants

The Audit Committee and the Board of Directors reviews the report(s) of an independent Internal Auditor on regular interval, on the adequacy and effectiveness of Internal Control system and suggests ways to improve it.

SOCIAL INITIATIVES

Your company continues to support charitable organization(s) by providing support, training and development programmes to needy children.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for assistance and co-operation received from the banks, Government authorities, customers, 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 by the executives and staff of the Company.

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward- looking statements within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in the statement.

For and on behalf of the Board

G. G. Desai Chairman

Thane, August 13, 2010

Registered Office : dil Complex,

Ghodbunder Road, Majiwada, Thane (West) – 400 610.

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