The Members,

Themis Medicare Limited

The Directors take pleasure in presenting the 48^th Annual Report along with the Audited Financial Statements for the financial year ended 31^st March, 2018. The Company operates only in one business segment viz., "Pharmaceuticals" and this report covers its Pharmaceutical business performance.

1. FINANCIAL STATEMENTS & RESULTS:

a. FINANCIAL RESULTS:

The Company's performance during the year ended 31^st March, 2018 as compared to the previous financial year, is summarized below:

(Rs, in laths)

b. OPERATIONS:

The Company continues to be engaged in the activities pertaining to manufacturing of pharmaceutical products, especially in Formulation and API activity.

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

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

During the year under review, the Company had entered into a Joint Venture Agreement (JVA) with Well Medical Limited (UK) and in pursuance of the said JVA, a Joint Venture Company in the name and style of Crapo Medical Limited was incorporated in the United Kingdom (UK)., Wherein Themes Medicare Limited and Well Medical Limited (UK) hold 90% and 10% of the share capital respectively.

As on the last day of the financial year, the Company had two non material subsidiaries namely, Artemis Biotech Limited and Themis Lifestyle Private Limited and two Joint Venture Companies namely, Richter Themis Medicare (India) Private Limited and Crapo Medical Limited (UK).

The performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended 31^st March,

2018 in Form AOC-1 is attached and marked as Annexure - I and forms part of this Report.

d. DIVIDEND:

With a view to conserve resources, your Directors have not recommended dividend for the financial year under review.

e. TRANSFER TO RESERVES:

Your Board has not recommended transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year has been carried forward to the Statement of Profit and Loss.

f. REVISION OF FINANCIAL STATEMENT:

There was no revision of the financial statements for the year under review.

g. DEPOSITS:

Except for unclaimed deposits of Rs,3.20 lakhs, the Company does not have outstanding deposits from public. The Company has repaid outstanding deposits from Directors and Promoter Members for which the Humble Company Law Board, Regional Bench, Mumbai, had allowed repayment on or before 31.03.2018 on the original terms & conditions of deposits. Your Company has not accepted any deposits falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with Chapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

k. COMMENTS OF THE BOARD ON AUDITORS' REPORT:

i. Observations of Statutory Auditors on Accounts for the year ended 31^st March, 2018: There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in respect of financial statements as on and for the year ended 31^st March, 2018.

ii. Secretarial Audit Report for the year ended 31^st March, 2018: Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from a Practicing Company Secretary. M/s. Shirish Shetye and Associates, Practicing Company Secretaries were appointed to conduct Secretarial Audit and issue Report for the financial year 2017-18. Secretarial Audit Report issued by M/s. Shirish Shetye and Associates, Practicing Company Secretaries in Form MR-3 for the financial year 2017-18 forms part of this report. The Secretarial Audit Report does not contain any Qualifications/observations/ adverse remarks. The Secretarial Audit Report is annexed herewith as Annexure - III.

l. Particulars OF LOANS, Guarantees, INVESTMENTS AND Securities:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

m. Particulars OF CONTRACTS OR

ARRANGEMENT WITH RELATED PARTIES:

Contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. All related party transactions are placed for the approval before the Audit and Risk Management Committee and also before the Board wherever necessary in compliance with the provisions of the Act and Listing Regulations. The Audit & Risk Management Committee had granted omnibus approval for Related Party Transactions as per the provisions contained in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, the Company has not entered into any contracts/ arrangements/transactions with related parties which could be considered material

In terms of Special Resolution passed by members of the Company in Extra Ordinary General meeting held on 10^th June, 2016, the Company had issued and allotted 1,25,000 Equity Shares upon conversion of Warrants at the rate of Rs,500/- consisting of Rs,10/- as Face value and Rs,490/- as Premium, in accordance with SEBI (ICDR) Regulations, 2009. The said Warrants were issued subjected to the condition that an amount equivalent to at least 25% of the price shall become payable on or before the date of allotment of warrants and balance amount shall be paid before Conversion of warrants into equity shares.

The Company had raised Rs,468.75 lakhs through preferential issue as the balance amount of Rs,375/- per share was paid upon conversion of 1,25,000 warrants into Equity Shares allotted to promoters during the year.

i. STATEMENT ON DECLARATION UNDER SECTION 149(6) OF THE COMPANIES ACT, 2013

The Board has received declarations from the Independent Directors under section 149(6) of the Companies Act, 2013 that they are not otherwise disqualified to be Independent Directors and meet the criteria of independence laid down in Regulation 25 of the Listing Regulations. The Board further states that all the Independent Directors are persons of integrity and possess relevant expertise and experience to discharge their duties and roles as Independent Directors of the Company.

j. STATEMENT UNDER SECTION 178:

Your Company has Constituted Nomination and Remuneration Committee as well as Stakeholders Relationship Committee as provided under section 178(1) of the Companies Act, 2013. The Nomination and Remuneration Committee considers that the qualifications, experience and positive attributes of the Directors on the Board of the Company are sufficient enough to discharge their duties as such. In view of inadequacy of profits, remuneration is being paid to Managing and Whole time Directors in line with Schedule V of the Companies Act,

2013 as also only sitting fees are paid to other Directors for attending Board and Audit and Risk Management Committee meetings at present. Nomination and Remuneration Policy as formulated under Section 178(3) of the Companies Act, 2013 is annexed as Annexure - II and forms part of this Report.

q. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013:

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules,

2014 is furnished.

r. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013:

As per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and other applicable Regulations, details of equity shares issued under Employees Stock Option Scheme during the financial year under review is furnished in Annexure - IV attached herewith which forms part of this Report.

s. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

The provisions of Section 67(3) as well as disclosure under rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 are not applicable in respect of Equity shares allotted against ESOPs granted to employees.

2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, following changes took place in the Board Composition and Key Managerial Personnel:

Mr. Prakash D. Naringrekar ceased to be associated with the Company as Company Secretary on attaining the age of superannuation with effect from close of office hours on 30^th June, 2017. The Board places on record its appreciation for the services rendered by Mr. Prakash D. Naringrekar during his tenure as Company Secretary of the Company.

Mr. Sangameshwar Iyer was appointed as the Company Secretary and Compliance Officer of the Company w.e.f 21^st August, 2017. Upon such appointment, Mr. Sangameshwar Iyer is considered as the Key Managerial Personnel pursuant to the provisions of Section 203 of the Companies Act, 2013 and also the Compliance Officer of the Company under Regulation 6(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Mr. Sangameshwar Iyer, is a Qualified Company Secretary & Law Graduate with an extensive experience of over 2 decades in Company Secretarial & Legal functions in various

in accordance with policy of the Company on material related party transactions or under section 188(1) of the Act. Accordingly, there are no particulars to report in Form AOC-2. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board has been adopted by the Company and uploaded on the Company's website at the link: http:// www.themismedicare.com/wp-content/uploads/2015/08/Related-Party-Policy.pdf

n. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by your Company are adequate. During the year under review, no material or serious observations were received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

The Internal Financial Controls followed by the Company are adequate and commensurate with the size and nature of the business and were operating effectively during the year under review.

Internal Audit function of the Company is carried out through Independent Chartered Accountants Firms to test and verify the Company's Internal Control System. The Company's assets are adequately safeguarded against significant misuse or loss. The Company has in place, adequate Internal Financial Controls with respect to maintenance of accounting records and financial transactions. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

o. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

There are no orders passed by the regulators or courts or Tribunals for/or against the Company during the year under review.

p. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013:

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

re-appointment of the aforesaid Directors are included in the Notice convening the ensuing AGM and details of the proposal for re-appointment are mentioned in the Explanatory Statement to the Notice.

DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES a. BOARD MEETINGS:

A calendar of regular meetings was prepared and circulated in advance to the Directors. Pursuant to the provisions of the Companies Act, 2013 and rules made there under, the Board met seven (7) times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b. DIRECTOR'S RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31^st March, 2018, the Board of Directors hereby confirms that:

i. in the preparation of the annual accounts, the applicable accounting standards had been followed and there is no material departure according to the accounting standards;

ii. such accounting policies have been selected and applied consistently and the Directors 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 as at 31^st March, 2018 and of the profit of the Company for that year;

iii. proper and sufficient care was taken 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;

iv. the annual accounts of the Company have been prepared on a going concern basis;

v. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively ;

types of companies, both in the manufacturing and service sector.

Dr. Gabor Glacis, ceased to be a Director of the Company on account of vacation of his office as Director of the Company pursuant to Section 167(1)(b) of the Companies Act, 2013 with effect from 27^th March, 2018.

Dr. Gabor Glacis was appointed as an Additional Director by the Board with effect from 27^th March, 2018, as a representative of Gideon Richter Plc, Hungary, Joint Venture Partners of the Company. Dr. Gabor Glacis holds office up to the ensuing Annual General Meeting of the Company and is eligible for appointment as Director in compliance with Section 160 of the Companies Act, 2013. A brief profile of Dr. Gabor Glacis is given in the Notice convening the Annual General Meeting. The Company has received notice under Section 160 of the Companies Act, 2013 from a member company signifying its intention to propose the candidature of Dr. Gabor Glacis for the office of Director. The Board recommends to the members the appointment of Dr. Gabor Glacis as a Director in the ensuing Annual General Meeting of the Company.

The office of Mrs. Reena S. Patel, an Alternate Director to Mr. Lajos Kovacs, got vacated on arrival of Mr. Lajos Kovacs in India on 27^th March, 2018 in accordance with the provisions of second proviso to section 161(2) of the Companies Act, 2013.

Mrs. Reena Patel was appointed as an Alternate Director to Mr. Lajos Kovacs to attend Board meetings of the Company during his absence with effect from 30^th March, 2018.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Rajneesh K. Anand (DIN 00134856), Non - Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends to the members the appointment of Mr. Rajneesh K. Anand as a Director in the ensuing Annual General Meeting (AGM) of the Company.

In accordance with the provisions of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (effective from April 1, 2019), approval of members is sought through Special Resolution for continuation of Mr. Homerun Dhanrajgir (DIN : 00004006) as Director of the Company, who has already attained the age of Seventy-five years.

Necessary resolutions for the appointment/

f. CORPORATE SOCIAL RESPONSIBILITY POLICY:

As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee.

The composition of the CSR Committee of the Company is as under:

i. Mr. Humayun Dhanrajgir, Chairman of the Committee,

ii. Mr. H. Subramaniam, Member and

iii. Dr. Sachin D. Patel, Member

The Company has formulated policy for CSR activities and is placed on the website of the Company at http://www.themismedicare.com/ wp-content/uploads/2016/12/CSR-Policy.pdf

Annual report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure - V and forms an integral part of this Report.

In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014 as amended ("CSR Rules") and in accordance with the CSR Policy, during the financial year 2017-18, the Company has spent two percent of the average net profits of the Company during the three immediately preceding financial years. The detailed information on CSR activities are provided in the Annual Report on CSR activities.

g. ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

The Board of Directors at its meeting held on 27^th March, 2018 has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI Listing Regulations"). The performance of the Board was evaluated by the Board with the help of inputs received from all the Directors on the basis of the criteria such as the Board Composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board with the help of inputs

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

c. COMMITTEES OF THE BOARD OF DIRECTORS:

In compliance with the requirement of applicable laws and as part of best governance practices, the Company has following Committees of the Board as on 31^st March, 2018:

i. Audit and Risk Management Committee

ii. Stakeholders Relationship Committee

iii. Nomination and Remuneration Committee

iv. Corporate Social Responsibility Committee The details with respect to the aforesaid Committees forms part of the Corporate Governance Report.

d. VIGIL MECHANISM POLICY/ WHISTLE BLOWER POLICY FOR THE DIRECTORS AND EMPLOYEES: The Board of Directors of the Company has, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.

The employees of the Company have the right/ option to report their concern/grievance to the Chairman of the Audit and Risk Management Committee.

The said Policy is available on the website of the Company at http://www.themismedicare.com/ wp-content/uploads/whistle-blower-policy.pdf The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

e. RISK MANAGEMENT:

We have an integrated approach to managing risks inherent in various aspect of our business. The Audit and Risk Management Committee and the Board discuss various aspects involved in Business risks to the Company and the manner to mitigate the same.

received from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The Board concluded that all Board Committees were discharging its functions effectively.

The Board and the Nomination and Remuneration Committee reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and Committee meetings like ability to contribute and monitor our corporate governance practices, meaningful and constructive contribution in the issues discussed in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The Board was overall of the opinion that the Independent Directors have contributed through the process of Board and Committee meeting of which they are members in an effective manner as per as their expertise in their field and needs of the organization. The suggestions and contributions of the Independent Directors in the working of the Board/Committee were satisfactory and the value addition made by such Independent Directors individually and as a team is commendable.

Also, the Company had provided facility of performance evaluation to Directors on online platform for convenience of the Board members.

h. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

The ratio of the remuneration of each Director to the median remuneration of the employees

of the Company for the financial year under review has been marked as Annexure - VI.

i. PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARY COMPANIES:

None of the managerial personnel i.e. Managing Director and Whole time Directors of the Company is in receipt of remuneration/ commission from the Holding or Subsidiary Company of the Company.

4. AUDITORS' REPORTS:

a. APPOINTMENT OF AUDITORS:

M/s. R. P. Sardar & Co., Chartered Accountants (FRN - 109273W), the Statutory Auditors of the Company, were appointed by the members at the 47^th Annual General Meeting (AGM) to hold such office till conclusion of the 52^nd AGM subject to ratification of their appointment by the members at every intervening AGM held after 47^thAGM.

The Ministry of Corporate Affairs (MCA), vide its commencement Notification No. SO 1833(E) dated 7th May, 2018, has notified and amended the relevant provision of the Companies Act, 2013 relating the requirement of placing the matter relating to ratification of appointment of Statutory Auditors by members at every Annual General Meeting. The said amendment has done away with the requirement of Ratification of appointment of the Statutory Auditors. Therefore, M/s. R. P. Sardar & Co., Chartered Accountants (FRN - 109273W), will continue to hold office till conclusion of the 52^nd AGM and their appointment will not be subject to ratification by the members at every intervening AGM held after 47^th AGM.

b. COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors on recommendation of the Audit and Risk Management Committee, appointed M/s. B. J. D. Nanabhoy & Co., Cost Accountants as the Cost Auditors of the Company for the financial year 2018-19 for the applicable Product.

Pursuant to Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, appropriate resolutions seeking your ratification to the remuneration of the said Cost Auditors

are appearing in the Notice convening the 48^th AGM of the Company.

5. OTHER DISCLOSURES

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules,

2014 are furnished as under:

a. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)

(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31^st March, 2018 made under the provisions of Section 92(3) of the Act is attached as Annexure

- VII which forms part of this report.

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

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure - VIII which forms part of this Report.

c. CORPORATE GOVERNANCE:

Report on Corporate Governance and Certificate of Practicing Company Secretary regarding compliance of the Conditions of Corporate Governance as stipulated in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are enclosed as a separate section and forms part of this report.

d. PREVENTION OF SEXUAL HARASSMENT:

We have zero tolerance for sexual harassment at the workplace and have adopted a Policy on prevention, prohibition and redresses of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013 and the Rules there under for prevention and redresses of Complaints of Sexual Harassment at the workplace.

During the financial year ended 31^st March, 2018, your Company has not received any complaint relating to sexual harassment.

6. MANAGEMENT DISCUSSION & ANALYSIS:

(a) Industry structure and developments:

During the year under review, the Pharmaceutical Industry in India which was experiencing double digit growth was impacted to some extent due to demonetization and implementation of Goods and Services (GST) Tax Act.

However, it is expected that the Industry will continue to grow going forward. In line with the National Health Policy, the Government of India has issued a draft Pharmaceutical Policy and sought opinions from various stakeholders. The draft policy aims to streamline the systems of manufacturing and marketing of pharmaceuticals/medicines to achieve the primary goals of the Health Policy to provide affordable health care to all. The Industry continued to face challenges due to imposition of price controls and bringing many products under the ambit of National List of Essential Medicines.

The Industry consisting of Indian and foreign players is witnessing increased spends on R&D initiatives focusing on expanding traditional generic portfolios.

(b) Opportunities and Threats. :

Pharma business being associated with basic human needs, introduction of newer and cost effective medicines in different therapeutic groups provides maximum opportunities in a densely populated country like India.

The share of generic drugs is expected to continue increasing; Due to their competence in generic drugs, growth in this market offers a great opportunity for Indian firms. Generic drug market is expected to grow in the next few years with many drugs going off-patent in the US and other countries.

With 70 per cent of India's population residing in rural areas, pharmacy companies have immense opportunities to tap this market. Demand for generic medicines in rural markets has seen a sharp growth. Various companies are investing in the distribution network in rural areas. Availability of sub-standards products in the market, fierce competition as well as Government intervention in the pricing policies are major threats to the business stability for a relatively small size Company like ours. However,

the management is taking all necessary steps and continuously adopting strategies not only to stand in the market but to perform impressively under the current scenario. Your Company's strong foothold on R&D has contributed for introduction of many new products over the years. The present thrust in mainly in introduction of marketing of differentiated injectables in India and abroad.

Indian pharmacy companies will face competition from big pharmacy companies, backed by huge financial muscle. Generic drugs offer a cost effective alternative to drugs innovators and significant savings to customers.

(c) Segment-wise or product-wise performance.

The Company operates in a single segment

i.e. Pharmaceuticals. However, the Company has given more thrust for last many years on Formulations SKUs as compared to API. The results of the Company under review also depict that Formulation business has grown at a much faster rate than APIs.

(d) Outlook: Duet the price cuts on various products, and temporary impact of demonetization and GS T, the growth of Indian Pharmaceutical Market was muted in the financial year 2017-18. The market research reports indicate that the Indian Pharmaceuticals Market is expected to continue to grow at about 9% per annum over the next five years. Your Company's capabilities are in introduction of new and differentiated pharmaceutical formulations. Fully aware of its strength, the Company is going ahead with hand holding strategy with Indian and International Pharmaceutical majors. This strategy has paid well in the recent past with introduction of the differentiated Pain management injections with support of an international major pharmacy company in India. The Company is also finding new avenues in the international market also and the work in this area is in advanced stage. Your Company will continue to work on productivity enhancement and efficiencies in supply chain management.

(e) Risks and concerns. The business of your Company is also exposed to few risks.

In the past few years, the Government of India has made frequent changes in the drug pricing and other laws impacting the operations of the Company. Further adverse changes in government policies with respect to essential medicines and pricing with respect to the products may reduce margins of the Company. The proposed Pharmaceutical Policy, 2017 has stricter requirements and compliances which will require the Company to change some of its processes. This may enhance the cost of operations.

The proposal on prescription of products only by generic name, without mentioning the brand name may change the way the pharmaceutical products are promoted in India. In case of implementation of this proposal, the Company will have to rework its promotional strategies. Risks, liabilities and losses are part and parcel of any industry and need to be tackled through well forecasted strategies and actions. To mitigate and avoid risks in the current scenario, the Company is focusing on shifting API to Formulation business and also improving its market access for the existing products.

Besides, the risks in Domestic market there are various risks in the International markets as well, an important one being regulatory risk, Plant inspections, vendor approvals, etc.

(f) Internal control systems and their adequacy. :

The Company ensures the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. The Statutory Auditors while conducting the statutory audit, review and evaluate the internal controls and their observations are discussed with the Audit Committee of the Board. Internal Financial Control Audit is also conducted on continuous basis to plug the loop holes in the system, if any. Other statutory requirements especially, in respect of pharmaceutical business are also vigorously followed in order to have better internal controls over the affairs of the Company.

(g) Discussion on financial performance with respect to operational performance.

The operational performance during the year under review was on expected lines. Shift of business focus to Formulation activity has started showing positive operational performance results. The financial performance is getting improved due to better margins, control over cost as well as reduction of interest cost in view of repayment of term loan installments and Public Deposits. Your Company has wiped off past losses and expects to continue with good operational results in the years to come.

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed:

The core of the Human Resource philosophy at Themes is empowering human resources towards achievement of Company aspirations. The overall industrial relations atmosphere continued to be cordial. Your Company has a diverse mix of youth and experience which nurtures the business. As on March 31, 2018 the total employee strength was 1229. Our objective to build organizational capability through skill development across levels ensures that we invest in training and enhancing people skills in line with the dynamic business needs. In our Endeavour to be employee centric, your Company revamped existing HR policies to be more people friendly and offered them a better work life balance. We continued to rely on technology to reach out to employees and improve efficiencies by automating policies and work flows. During the current year, HR would focus on enabling change to deliver the desired business outcomes. The objective is to create an HR organization focusing on responding to business challenges of tomorrow.

7. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, collaborators, employees, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

For and on behalf of the Board of Directors

SD/- SD/-

Dr. Sachin D. Patel Mr. H. Dhanrajgir

Managing Director & CEO Independent Director

DIN - 00033353 DIN - 00004006

Place: Mumbai

Dated: 9^th May, 2018