The Directors hereby present their report on the business and operations of the Company and the financial accounts for the year ended 31^st March, 2018.

1. FINANCIAL RESULTS

(Rs. in Lakhs)

Your Company has prepared the Financial Statements for the financial year ended March 31, 2018 under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and has recast the Financial Statements relating to the previous financial year ended March 31,2017 to make them comparable.

2. OVERVIEW OF COMPANY PERFORMANCE

The financial statements for the year ended 31^st March, 2018 are the first, your Company has prepared under Ind AS (Indian Accounting Standards). The financial statements for the year ended 31^st March, 2017 have been restated in accordance with Ind AS for comparative information.

Your Company’s business falls within a single business segment i.e. Electrolytic Products. Your Company manufactures a wide range of products in this segment such as anodes, cathodes, electrochlorinators etc.

During the year under review, your Company reported a marginal top line decline over the previous year. The gross revenue from operations stood at Rs. 2725.59 lakhs compared with Rs. 2756.47 lakhs in the previous year representing a static trend. Your Company registered a net profit of Rs. 169.03 Lakhs for the financial year under review as compared to Rs. 298.03 Lakhs of previous year recording a decline of 43% on account of various grounds such as dynamic regulatory changes which further enhanced administrative costs, challenging business environment, marked increase in raw material cost and scarcity of noble metals which resulted in erosion of margins etc. Your Company continues to focus on judicious management of its working capital and has initiated cost cutting and other remedial measures to arrest this decline.

3. DIVIDEND

Your Directors recommend dividend for approval of the Members on Equity shares @ 10% (i.e. Rs. 1 per equity share of Rs. 10/- each) for the financial year ended 31^st March, 2018 payable to those Members whose names appear in the Register of Members as on the Book Closure Date. The dividend, if approved by the Members at the Annual General Meeting (“AGM”), will result in a cash outflow of Rs. 53.08 lakhs excluding the corporate dividend distribution tax, as applicable.

4. RESERVES

Under the Companies Act, 2013, there is no requirement to transfer any sum to General Reserve in relation to the payment of dividend. Accordingly, the entire undistributed Profit after Tax is carried forward in the Profit and Loss Account.

5. SHARE CAPITAL

The paid-up equity share capital of your Company as on March 31, 2018 was Rs. 530.86 lakhs comprising of 53,08,634 shares of Rs. 10 each. During the year under review there has been no change in the capital structure of your Company.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Board has constituted a Corporate Social Responsibility (CSR) Committee of the Board under the Chairmanship of an Independent Director. A dedicated CSR team undertakes and monitors all CSR projects of your Company under the guidance and supervision of the CSR Committee and the Board. During the year under review, as part of its CSR activities, your Company focused on promotion of education and employment enhancing skills training initiatives by sponsoring vocational courses for underprivileged girls. Your Company also distributed water purifiers to various schools in the vicinity of the Company in alignment of its core CSR area of making available safe drinking water. Further, your Company also supported and contributed towards the educational needs of the differently abled children.

A brief outline of the Corporate Social Responsibility (‘’CSR’’) Policy of your Company and the initiatives undertaken by your Company on CSR activities during the year are set out in ‘Annexure I’ of this report in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the website of your Company at the link www.denoraindia.com/Company/Investors/ ShareholderInformation/Policies&Codes.

7. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

Your Company is committed to good corporate governance practices and lays strong emphasis on transparency, accountability and integrity in its conduct of business. In terms of Regulation 34 of the Listing Regulations, a Report on Corporate Governance along with Compliance Certificate issued by a Practicing Company Secretary is attached as ‘Annexure II’.

Further, the Management Discussion and Analysis Report on the operations of the Company as stipulated under the Listing Regulations is also appended to the Board’s Report as ‘Annexure III’.

8. DIRECTORS

a. Changes in the composition of the Board of Directors ('Board')

During the year under review, Mr. Angelo Ferrari, Non-Executive Director (DIN: 00436116), who retired by rotation at the 28^th AGM, was re-appointed as a Director of the Company. However, due to personal commitments, he resigned from the Board with effect from 15^th January, 2018. Your Board of Directors places on record their appreciation of the valuable advice and guidance given by Mr. Ferrari while he was a Director of your Company.

Your Board has appointed Mr. Francesco L’Abbate as Non-Executive Director with effect from 29^th January, 2018 in the casual vacancy caused by the resignation of Mr. Angelo Ferrari.

Further, the appointment of Ms. Supriya Banerji, as a Non-Executive Director (DIN: 05209284) in casual vacancy, which was caused by the resignation of Mr. Krishan Khanna is due to conclude at the forthcoming AGM. Pursuant to the recommendation of the Nomination & Remuneration Committee and based on the report of performance evaluation, the Board at its meeting held on August 06, 2018 decided to place the proposal for appointment of Ms. Supriya Banerji as an Independent Director for a term of 5 years from September 26, 2018 to September 25, 2023, for approval of the members at the 29^th AGM. Accordingly, necessary resolution is being placed for approval of the Members at the 29^th AGM of the Company.

Further, in accordance with the provisions of the Companies Act, 2013 and the Rules made thereunder and the Articles of Association of the Company, Mr. Robert Scannell (DIN: 06818489) Non-Executive Director, retires by rotation at the ensuing AGM of the Company and being eligible, offers himself for reappointment.

The Members may note that consequent to the changes made in the Companies Act, 2013 by the Ministry of Corporate Affairs (MCA) vide Companies (Amendment) Act, 2017 which came into effect from 9^th February, 2018, any appointment of a Director in casual vacancy by the Board of Directors shall be subsequently approved by the Members in the immediate next general meeting. Accordingly, the appointment of Mr. Francesco L’Abbate as a Non-Executive Director in casual vacancy caused by the resignation of Mr. Angelo Ferrari is proposed for approval of the Members at the ensuing AGM. Brief Profile and other information of Mr. Robert Scannell, Ms. Supriya Banerji and Mr. Francesco L’Abbate as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard - 2 is given in the Notice of the AGM of the Company which forms part of the Annual Report.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as Directors in terms of Section 164(2) of the Companies Act, 2013.

b. Committees of the Board

Your Board of Directors have constituted the following committees to effectively cater its duties towards the diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: -

i. Audit Committee

ii. Nomination & Remuneration Committee

iii. Stakeholder’s Relationship Committee

iv. Corporate Social Responsibility Committee

The composition, terms of reference, number of meetings held and business transacted by the Committees is given in the Corporate Governance Report.

c. Board Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has devised a policy on evaluation of the performance of the Board of Directors, Committees and individual Directors. Accordingly, your Board had carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Board Committees. A structured performance evaluation was done after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, effectiveness of Board processes, execution and performance of specific duties, obligations and governance.

The performance of individual Directors was evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company, relationship with peers and Company Management etc. A separate exercise was carried out to evaluate the performance of the various Committees of the Board based on criteria such as the composition of the Committees, the Committee mandates, the effectiveness of the discussions at the Committee meetings etc.

The performance evaluation of the Independent Directors was also carried out by the entire Board considering the time devoted and attention given to professional obligations for independent decision making and acting in the best interest of the Company, strategic guidance to the Company etc. The performance evaluation of the Non-Independent Directors was carried out by the Independent Directors.

The outcome of the evaluation process was discussed and deliberated at the next Board meeting. Your Board of Directors also expressed their satisfaction towards the process followed by the Company for evaluating the performance of the Directors, Board and its Committees.

d. Board Meetings

During the financial year, five meetings of the Board of Directors were held, the details of which are given in the Corporate Governance Report of the Company, which forms a part of the Board’s Report.

9. DIRECTOR’S RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

- in the preparation of the annual financial statements for the year ended 31 ^st March, 2018, the applicable accounting standards have been followed and that there are no material departures;

- Your Directors have, in the selection of the accounting policies, consulted the Statutory Auditors and have 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 of the Company for that year;

- Your Directors have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- Your Directors have prepared the annual accounts on a going concern basis;

- Your 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;

- Your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and were operating effectively.

10. AUDIT COMMITTEE

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which forms part of this Report. Recommendations made by the Audit Committee are generally accepted by your Board.

11. REMUNERATION POLICY

Your Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for identification, selection, appointment and remuneration of Directors, Key Managerial Personnel & Senior Management Employees. The policy provides for the criteria for appointment and remuneration of the Directors, KMPs and Senior Management Employees of your Company. For the purpose of selection of any Directors and Key Managerial Personnel, the Nomination & Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws. In respect of the appointment of the Senior Management Employees the N&RC is guided by the provisions of the Nomination and Remuneration Policy alongwith the Company procedures. In compliance with the provisions of Section 178 of the Companies Act, 2013, the Nomination cum Remuneration Policy of the Company is placed on the website of the Company and the link to the same is as follows: www.denoraindia. com/Company/Investors/ShareholderInformation/ Policies&Codes.

Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. We affirm that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.

12. RELATED PARTY TRANSACTIONS

During the financial year ended March 31, 2018, all transactions with the Related Parties as defined under the Companies Act, 2013 read with Rules framed thereunder were in the ‘ordinary course of business’ and ‘at arm’s length’ basis. Your Company did not enter into any Related Party Transactions during the year under review, which require prior approval of the Members or which were materially significant having any potential conflict with the interest of the Company. Accordingly, the disclosure of related party transactions, as required under Section 134(3) (h)of the Act, in Form AOC 2 is not applicableto your Company. All Related Party Transactions of your Company had prior approval of the Audit Committee and the Board of Directors, as required under the Listing Regulations.

Further, Audit Committee and the Board have also reviewed all the Related Party Transactions on a quarterly basis. The necessary disclosures required under Ind AS 24 have been made in Note No. 29 of the Notes to the Financial Statements for the year ended March 31, 2018.

In line with the requirements of the Companies Act, 2013 and Listing Regulations, the Company has formulated a Policy on Related Party Transactions which can be accessed on the Company’s website at www.denoraindia.com/Company/Investors/ShareholderInformation/Policies&Codes.

13. PARTICULARS OF REMUNERATION OF DIRECTORS, KMP’s AND EMPLOYEES

Disclosure with respect to the remuneration of Directors and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is annexed as ‘Annexure IV’ which forms part of this Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, is not provided since there were no employees who were drawing remuneration more than ' 8.5 lakhs per month during whole or part of the financial year under review.

14. SECRETARIAL AUDIT

Your Board of Directors have appointed Mr. Sadashiv V. Shet, Practising Company Secretary as the Secretarial Auditor of the Company under Section 204 of the Companies Act, 2013, and rules made thereunder, for conducting the Secretarial Audit for the financial year 2017-18 and to submit Secretarial Audit Report in Form No. MR-3. The said report does not contain any adverse remark, qualification or reservation which requires any explanation/comments by the Board and is annexed as ‘Annexure V’ which forms part of this Report.

15. PARTICULARS OF INVESTMENTS, LOANS AND GUARANTEES

The particulars of investment, loans/advances and guarantees under Section 186 of the Companies Act, 2013 for the financial year are given in the notes to Financial Statements, which forms part of this Annual Report. Your Company has not given any guarantee or provided any security during the year under review.

16. WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has formulated a Vigil Mechanism/ Whistle Blower Policy with a view to providing a mechanism for employees to report violations and assure them of the process that will be followed to address the reported violation. The Policy also lays down the procedures to be followed by Senior Management for tracking of complaints, giving feedback, conducting investigations and taking disciplinary actions. No personnel have been denied access to the Chairman of the Audit Committee. The Whistle Blower Policy of the Company is available on the website of the Company and can be accessed at the web link: www.denoraindia.com/Company/ Investors/ShareholderInformation/Policies&Codes. The provisions of this policy are in line with the provisions of Section 177 (9) of the Companies Act , 2013 and Regulation 22 of the SEBI (LoDR) Regulations, 2015. During the year under review, there has been no incidence reported which requires action by the Audit Committee.

17. ADEQUACY OF INTERNAL FINANCIAL CONTROLS (‘IFC’)

Your Company has an Internal Financial Control System commensurate with the nature of its business and size and complexity of its operations. The main aim of the IFC is to ensure that all the assets of the Company are safeguarded and protected, proper prevention and detection of frauds and errors and all transactions are authorized, recorded and reported appropriately. These controls are routinely tested and certified by the Statutory as well as the Internal Auditors. Significant audit observations and follow up actions thereon if any, are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Company’s internal control systems and monitors the implementation of the audit recommendations.

During the year, the internal auditors had been engaged for aiding in reviewing and testing the IFC framework. As required under Section 143 of the Companies Act, 2013, the Statutory Auditors have evaluated and expressed an opinion on the Company’s IFC over financial reporting based on an audit. In their opinion, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018.

Your Board has also implemented systems to ensure compliance of all applicable laws, these systems were effective and operative. At regular intervals, the Management places before the Board a certificate certifying compliance of laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all functional heads responsible for compliance of such applicable laws and regulations.

18. STATUTORY AUDITORS

In terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Associates LLP, Chartered Accountants, Mumbai (ICAI Firm Registration No. 116231W/W-100024), the Auditors of your Company shall hold office till the conclusion of the ensuing AGM and they shall not be eligible for re-appointment due to expiry of the maximum permissible tenure as the Auditors of your Company. Your Board places on record its deep appreciation for the valuable contributions of the Auditors during their long association with the Company and wishes them success in the future.

Based on the recommendation of the Audit Committee, your Board at its meeting held on August 6, 2018 appointed M/s. MSKA & Associates, Chartered Accountants (ICAI Firm Registration No. 105047W), as the Auditors of the Company, in place of the retiring auditors B S R & Associates LLP, Chartered Accountants for a period of 5 years, to hold office from the conclusion of the ensuing 29^th AGM until conclusion of the 34^th AGM of your Company to be held in the year 2023, subject to approval of the Members of the Company at the ensuing AGM. The first year of audit for M/s. MSKA & Associates, will be of the financial statements for the financial year ended 31^st March, 2019.

M/s. MSKA & Associates, Chartered Accountants, have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of Section 139 and Section 141 of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014, as amended. They have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as prescribed under the provisions of Regulation 33 of the Listing Regulations. The proposal for their appointment has been included in the Notice convening the 29^th AGM for obtaining approval of the Members of the Company.

During the year, no frauds have been reported by the auditors under sub-section (12) of Section 143 of the Companies Act, 2013 either to Audit Committee of the Company or to the Central Government. The Statutory Auditor’s Report does not contain any qualifications, reservations or adverse remarks on the financial statements of the Company.

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

Conservation of Energy

The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. Though the manufacturing activities of the Company involve consumption of energy, it is not of major significance and no additional investment is required to be made for reduction of energy consumption. However, efforts would be initiated by the Company to conserve energy in the best possible way in the future.

Research and Development (‘R&D’) & Technology absorption

The Company has an ongoing technical collaboration for Ion Exchange Membrane Electrolysers for chlor-alkali industry, electrochlorinators for water treatment and cathodic protection (anti corrosion) systems. These agreements are performed through Industrie De Nora S.p.A. The Company did not incur any expenditure on R&D during the year under review.

Foreign Exchange Earnings & Outgo

Foreign Exchange Earnings - Rs. 238.86 Lakhs

Foreign Exchange Outgo - Rs. 1158.64 Lakhs

20. SUBSIDIARY COMPANIES

Your Company does not have any subsidiary, associate company or a joint venture.

21. SELECTION OF NEW DIRECTORS AND BOARD MEMBERSHIP CRITERIA

In the selection of Directors on the Board, your Company is guided by the provisions of the Companies Act, 2013 and the Listing Regulations. Your Company has also framed a Policy on Board Diversity and Board Recruitment and Succession Policy which lays down broadly the criteria for membership to the Board. The Nomination and Remuneration Policy also governs the identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company.

Accordingly, your Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) of the Company based on his/ her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at the General Meetings. Some of the aspects considered while appointing or reappointing a Director on the Board are skills and experience, age, conflict of interests, directorships in other Companies, independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner, outcome of the performance evaluation of Directors eligible for reappointment etc.

22. RISK MANAGEMENT

Your Company believes that periodical review of various risks associated with the business and operations is vital to proactively manage uncertainty and changes in the internal and external environment.

It has therefore institutionalized a strong risk management framework to identify, monitor, minimize and report risks. It has laid down robust and credible procedures to inform the Board members about the risk assessment and risk minimization measures.

The assessment of the risks covers business risks, operational risks, physical risks, regulatory risks, fraud risks, people risk, information risk, Information Technology risks and other risks which are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the Senior Management on a yearly basis. The Audit Committee of the Board of Directors of the Company assists the Board in overseeing that all the risks that the organization faces have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

23. COMPLAINTS RELATING SEXUAL HARASSMENT

Your 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. An Internal Complaints Committee (ICC) has been constituted to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. During the year under review, no complaints were reported to the Board.

24. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return as on March 31, 2018 in the prescribed Form No. MGT - 9 is appended as ‘Annexure VI’ to this report.

25. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a. Details relating to deposits covered under Chapter V of the Companies Act, 2013;

b. No change in the nature of business of your Company during the financial year ended 31^st March, 2018.

c. No change in Key Managerial Personnel during the year;

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations;

e. No material changes and commitments occurred during April 1, 2017 till the date of this Report which would affect the financial position of your Company;

f. No issue of any equity shares with differential rights as to dividend, voting or otherwise;

g. No of Sweat Equity Shares or Bonus Shares during the year under review;

h. No Employee Stock Option and Employee Stock Purchase Schemes were launched during the year under review

26. ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation to all of your Company’s employees for their enormous personal efforts as well as their collective contribution to your Company’s performance. Your Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, employee unions, regulatory & government authorities, stock exchanges and all the other business associates for the continuous support given by them to your Company and their confidence in its Management.

For and on behalf of the Board of Directors

For De Nora India Limited

M. A. Sundaram

Place: Kundaim, Goa Chairman

Date : August 06, 2018 DIN: 00144607