Denis Chem Lab Ltd

Dear Members/ Shareholders,

Your Directors are pleasured to present the 43RD ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2023-24 ended 31st March, 2024.

1. FINANCIAL RESULTS :

(Rs. in Lakh)

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1st April, 2024 and date of this report.

2. DIVIDEND:

The Board of Directors is pleased to recommend for your approval a final dividend of Rs. 2.50 per equity share on the face value of Rs.10/- each for the year ended 31st March, 2024 (previous year Rs. 2/- per equity share). The total final dividend amounts to Rs. 346.92 Lakh. You are requested to approve the same. The final dividend, if declared, shall be payable subject to deduction of tax at source, as applicable.

3. OPERATIONS:

The revenue from operations i.e. transfusion solution in Bottles and Plastic Bottles stood at Rs.167.82 Crores during the financial year 2023-24 under review compared to Rs. 160.84 Crores of previous year 2022-23. The Company's manufacturing license is valid till December 2027.

During the year under review, the domestic market was expanded with the acquisition of new customers, especially in the premium "Euro head" segment. The Company also undertook efforts to enhance the geographical reach by enhancing penetration of sales force and distributors. The Company is also actively enhancing its product baskets in the Injectable space via 3rd Party Manufacturing so that the Company's existing distribution infrastructure can be utilized more optimally. The third party segment is scaling up as expected and the Company is exploring other opportunities in this segment.

4. NEW PROJECTS:

The Company intends to pursue its growth plans and also increase its focus on cost cutting measures. The Company aims to increase segmentation in its customer base by introducing innovative containers. This will help the company access underserved markets while enabling better utilization of its existing manufacturing and distribution networks.

5. LISTING:

The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2024-25.

6. SHARE CAPITAL:

The paid up Share Capital of the Company as on 31st March, 2024 was Rs. 1387.67 Lakhs. As on 31st March, 2024, the Company has not issued shares with differential voting rights nor granted stock options nor do sweat equity and none of the Directors of the Company hold any convertible instruments.

7. RESERVES:

Your Company does not propose to transfer any amount to general reserve.

8. DIRECTORS:

8.1 Ms. Anar H. Patel (DIN: 01335025) retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers herself for re-appointment.

8.2 In the 42nd Annual General Meeting held on 29th September, 2023, Mr. Himanshu C. Patel (DIN: 00087114) was re-appointed as Managing Director of the Company for a period of 3 years w.e.f. 1st August, 2023.

8.3 The Board, based on the recommendations of the Nomination and Remuneration Committee and subject to approval of members/shareholders, has appointed Mr. Hemang Patel (DIN:00273995) and Mr. Dipak Patel (DIN: 02052080) as Non Executive - Independent Directors of the Company for a term of five consecutive years w.e.f. 1st September, 2024.

8.4 The Board, based on the recommendations of the Nomination and Remuneration Committee and subject to approval of members/shareholders, has re- appointed Mr. Hemendrakumar Shah (DIN: 00077654) as Independent Director of the Company for his 2nd term of five consecutive years w.e.f. 24th February, 2025.

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

8.6 In terms of provisions of Section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Amendment Rules, 2019 the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, Manesar (‘IICA').

8.7 Brief profile of the Directors being appointed /re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings are provided in the Notice for the forthcoming AGM of the Company.

8.8 The Board of Directors duly met 6 times during the financial year under review. The details of Board Meeting convened and held, are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and circulars and regulations issued under SEBI (LODR) Regulations, 2015 as amended from time to time.

8.9 Formal Annual Evaluation:

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

8.10 DIRECTORS' RESPONSIBILITY STATEMENT:

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

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

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at 31st March, 2024 being end of the financial year 2023-24 and of the profit of the Company for the year;

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

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

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

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

8.11 With respect to the loans advanced by the Directors to the Company, the Company has received necessary declarations from Directors that the said loan is not given out of funds acquired by them by borrowing or accepting loans or deposits from others.

9. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

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

10. MANAGERIAL REMUNERATION:

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

The Nomination and Remuneration Policyare available on the Company's website www.denischemlab.com

% INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

12. PERSONNEL AND H. R. D.:

12.1 INDUSTRIAL RELATIONS

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

The number of Employees of the Company is 182. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

12.2 PARTICULARS OF EMPLOYEES:

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

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

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

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

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

EARNINGS AND OUTGO:

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

15. CORPORATE GOVERNANCE AND MDA:

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

16. SECRETARIAL AUDIT REPORT:

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

17. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has constituted a Corporate Social Responsibility ("CSR") Committee in terms of the provisions of Section 135 of the Companies Act, 2013 consisting of three Directors viz. Mr. Gaurang Dalal (as Chairman), Ms. Anar H. Patel and Dr. Himanshu C. Patel, as members and has laid down a Corporate Social Responsibility Policy (CSR Policy). The CSR Policy is available on the Company's website at www.denischemlab.com.

Some of the core areas identified by the Committee are Education, Health, Environment, women empowerment, Animal Welfare, Hungeretc. The Company spent Rs. 15.17 lakh towards CSR during the financial year 2023-24.

As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014 the Annual Report on CSR Activities has been attached herewith as Annexure – E.

Further, the Board of Directors in their meeting held on 24th July, 2024 has reconstituted the Corporate Social Responsibility of the Company w.e.f. 1st September, 2024 comprising of Mr. Hemang Patel@, Ms. Anar Patel & Mr. Himanshu Patel as members.

@ Appointed as Independent Director of Company w.e.f 1st September, 2024.

18. ANNUAL RETURN:

The Annual Return as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company and can be accessed at www.denischemlab.com.

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

The details of various committees as on the date of this report and their functions are part of Corporate Governance Report.

Further, the Board of Directors in their meeting held on 24th July, 2024 has:

- Reconstituted the Audit Committee of the Company w.e.f. 1st September, 2024 comprising of Mr. Hemang Patel@, Mr. Dipak Patel@ & Mr. Dinesh Patel as members.

- Reconstituted the Nomination & Remuneration Committee of the Company w.e.f. 1st September, 2024 comprising of Mr. Hemang Patel@, Mr. Dipak Patel@ & Ms. Anar Patel as members.

- Reconstituted the Stakeholders Relationship Committee of the Company w.e.f. 1st September, 2024 comprising of Ms. Anar Patel, Mr. Dipak Patel@ & Mr. Himanshu Patel as members.

@ Appointed as Independent Director of Company w.e.f 1st September, 2024.

20. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI, your Directors have framed and approved Insider Trading Policy for the Company i.e. ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' and ‘Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons/Insiders'. The Policy is available on the company's website.

21. AUDITORS:

STATUTORY AUDITORS:

At the 41st Annual General Meeting held on 28th September, 2022, M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad were appointed as Statutory Auditors of the Company to hold office for theperiod of 5 years i.e. for the financial years 2022-23 to 2026-27.

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

COST AUDITORS:

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

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, (Firm Registration Number 000025) as Cost Auditor to audit the cost accounts of the Company for the financial year 2023-24.

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

22. GENERAL:

22.1. INSURANCE:

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

22.2 FIXED DEPOSITS:

The Company has not accepted any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

22.3 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiaries/ Associates Companies / Joint Venture Company.

22.4 RISK MANAGEMENT POLICY:

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

22.5 CODE OF CONDUCT:

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

22.6 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR

TRIBUNALS:

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

22.7 ENVIRONMENT AND SAFETY:

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

22.8 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

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

22.9 GRATUITY:

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

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

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

22.11 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

22.12 DETAILS OF PROCEEDINGS UNDER IBC & OTS, IF ANY:

There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. Further, there was no instance of one time settlement with any Bank or Financial Institution.

23. DISCLOSURE OF ACCOUNTING TREATMENT:

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

24. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN No. allotted is INE051G01012.

25. FINANCE:

25.1 The Company's Income-tax Assessment has been completed up to the Assessment Year 2023-24 and Sales tax / GST Assessment is completed up to the Financial Year 2021-22.

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

26. AGREEMENTS EFFECTING THE CONTROL OF THE COMPANY:

No agreements have been entered / executed by the parties as mentioned under clause 5A of paragraph A of Part A of Schedule III of SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 which, either directly or indirectly effect / impact the Management or Control of the Company or impose any restriction or create any liability upon the Company.

27. ACKNOWLEDGMENT:

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