To the esteemed stakeholders of VENUS REMEDIES LIMITED

Operations & Company's State of affairs (Rs. In Millions)

Operations & Company's State of affairs

During the year under review, your Company achieved a turnover Rs.3557.93 millions. There was decline in sale during 2017-18. The sales target of the company was adversely impacted due to the severe pricing pressures in generic product market. The business of the company also suffered many hardships including severe competition globally & several other extraneous factors .

VRL is a fully integrated company from research to market. The company is focused in manufacturing high growth therapeutic segments like Anti-infective (antibiotics), oncology, neurology, pain management, skin & wound care and is amongst the very few R&D focused Pharmaceuticals companies in India, working on to eradicate growing Anti-Microbial Resistance (AMR) recognized by WHO as being severe medical crisis across the globe.

Listing of Shares

The equity shares of the Company are listed on Bombay Stock Exchange Ltd.(BSE) and National Stock Exchange (India) Ltd. (NSE). The Company has paid the Annual listing fees for the financial year 2018-19 to both stock exchange.

Extract of Annual Report:

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format MGT 9 is appended as annexure-1 to the Board’s report.

Meetings of the Board of Directors:

The Board met 8 times during the financial year, the details are given in the Corporate Governance Report which forms part of the Annual Report.

Directors' Responsibility Statement

Your Directors pursuant to Section 134(3)(c) of the Companies Act, 2013 state as follows:

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

ii. 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;

iii. 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;

iv. the directors had prepared the annual accounts on a going concern basis;

v. the directors, in the case of a listed company, 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.

Declaration by Independent Directors:

The Company has received necessary declaration from each independent director under section 149(6) of the Companies Act, 2013.

Policy on directors' appointment and remuneration:

Policy on directors’ appointment and remuneration provided under section 178(3) of the Companies Act, 2013, adopted by the Board and is appended as Annexure 2 to the Board’s report as Nomination and remuneration Policy.

Auditors

M/s Prem Garg & Associates was appointed as the Statutory Auditors of the Company for FY 2017-18. M/s Prem Garg & Associates, have resigned from the position w.e.f. 28^th May 2018 due to pre-occupation. Company has appointed M/s Vinod Kumar & Associates, Chartered Accountants as the Statutory Auditors of the Company to fill the casual vacancy. The said appointment is subject to approval of members of the company. M/s Vinod Kumar & Associates will hold the office of statutory auditor upto the annual general meeting of the Company.

Further, the Company appointed M/s P Chadha & Associates, Company Secretaries as the Secretarial Auditor of the Company for financial year 2017-18. The secretarial audit report for FY 2017-18 forms part of Annual Report. Qualifications, if any, in the Statutory audit report and are mentioned in the reports which are the part of this Annual Report.

Company is required to maintain the cost records as specified by the Central Government under sub section (1) of section148 of Companies Act, 2013 and such accounts & records are duly maintained by the Company. M/s C. L. Bansal & Associates, Cost Accountants was appointed as cost auditors of the Company for financial year 2017-18.

Particulars of Loan, Guarantee or investment:

Company has provided guarantee/security under section 186 of the Companies Act, 2013 to banks for the credit facility provided to the company.

Particulars of Contract or Arrangements made with related parties:

Particulars of Contracts or Arrangements made with related parties referred in section 188(1) of the Companies Act, 2013 disclosed in form AOC-2 as annexure-3 and also forms part of the financial statement in annual report.

Transfer to Reserves:

During the period of review Company has not transferred any amount to Reserves & Surplus.

Dividend

The Board has not recommended the dividend for the year 2017-18.

Significant and material orders:

There are no material changes or commitments, effecting the Financial position of the Company happening between the end of the Financial Year of the Company and date of this Report

Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the going concerns status and Company's Operations in Future

There are no significant and material orders passed by the regulatory or courts or tribunals impacting the company’s operations in future.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The prescribed particulars as required under section 134(3)(m) of the Companies Act 2013 read with Companies (Accounts) Rules, 2014 are set out in the annexure-4 & 5 forming a part of this report.

Development and Implementation of Risk Management

The Company has in place comprehensive risk assessment and minimization procedures. The Company is exposed to inherent uncertainties owing to the sectors in which it operates. Many risks exist in a company’s operating environment and they emerge on a regular basis. The risks faced by the Company and their minimization procedures are assessed categorically under the broad heads of High, Medium and Low risks. Further, the Company identifies risks and control systems are instituted to ensure that the risks in each business process are minimized/mitigated. The Board provides oversight and reviews the Risk Management Policy on a regular basis.

Subsidiaries/Associates/Joint Ventures

The Company has no Joint Venture or Associates as defined in the Companies Act, 2013. The company has one wholly owned foreign subsidiary in the name of Venus Pharma GmbH in Germany. The financial statement of the subsidiary forming part of this annual report in consolidated financial statement. Separate audited accounts are placed on the Company website www.venusremedies.com. Report on the performance and Financial position of the Subsidiary Company in the specified format AOC-1 is annexed to the Directors’ Report as Annexure-6.

Board Evaluation:

The evaluation of all the directors and board as a whole has made as per the Companies Act, 2013. Criteria and framework as adopted by the Board is explained in the Corporate Governance Report which forms part of the Annual Report.

Key Managerial Personnel:

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has adopted a policy for prevention of Sexual Harassment of women at work place. Company has complied with provisions relating to the constitution of Internal Complaint Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.During the year, Company has not received any complaint of harrasement.

Share Capital

- ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS

Company has not issued any shares with Differential Rights.

- ISSUE OF SWEAT EQUITY SHARE

During the year under review, Company has not issued any Sweat Equity shares or Employee Stock Options.

Corporate Social Responsibility

For financial year 2017-18, Company does not cover under any of the parameter as mentioned under the preview of Section 135 of the Companies Act, 2013, and rules made thereunder. Company has prepared the policy on CSR which is available at Company’s website www.venusremedies.com. Company has also constituted the CSR committee, details of which available in Corporate Governance which forms part of Annual Report.

CSR Spending of the year:

Management discussion and analysis

A detailed report on the Management discussion and analysis is provided as a separate section in the annual report.

Events having bearing on affairs of the Company

The Company is under CDR mechanism and repaying the debt as per the approved CDR package, however there are delays in making interest and principle repayments to the financial Institutions & banks. Further, during the year Company & its directors were declared as willful defaulters by the bank.

However, Company has clarified to the bank that delay in making payments are due to liquidity problems. Hence, company & its directors are not willful defaulters.

Pledge of Promoter's shareholding

The promoters have pledged 4630000 shares as collateral security to bank for credit facility sanctioned to the Company.

Change in the Nature of Business

There is no change in the nature of business of the Company

Deposits:

Your Company has not accepted any fixed deposits and no amount of principal or interest was outstanding during the year.

Particulars of Employees:

During FY 2017-18 no employee is taking remuneration more than one crore and two lakh rupees in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personal) Rules, 2014.

Corporate Governance:

The company operates not only within the regulatory framework, but is also guided by broader business ethics. The idea is to ensure good conscience, transparency, integrity and openness which would lead to accountability of the persons in charge of the company and bring benefits to investors, customers, creditors, employees and the society at large.

Share/ warrants issued during the year:

During the year Company has not issued or allotted any shares or warrants.

Transfer of unpaid and Unclaimed Amounts to Investor Education and Protection Fund

In terms of Section 125 of the Companies Act, 2013, the Unclaimed Dividend of Rs. 5,93,757/- relating to the financial years 2009-10 was transferred to the Investor Education and Protection Fund established by the Central Government. Unclaimed dividend for the year 2010-11 is due to be transferred to the Investor Education and Protection Fund on 29.09.2018.

Disclosure of Accounting Treatment

The Company has followed prescribed Indian Accounting Standards(Ind AS) in preparation of its financial statements.

Cash Flow Analysis

In conformity with the provisions of Clause 34(2) of SEBI (LODR) Regulations, 2015, the Cash Flow Statement for the year ended on 31st March, 2018 forms an integral part of the Financial Statements.

Vigil Mechanism/Whistle Blower Policy

Company has adopted Vigil Mechanism/ Whistle blower policy and same is available on Company Website www. venusremedies.com

Committees of the Board:

A detailed note on the Board and committee meetings including the composition is given in the Corporate Governance Report which forms part of the Annual Report.

Directors

Due to pre-occupation Mr. Jagdish Chander, (DIN-00444226) resigned as director (Non- Executive & Independent director) of the Company w.e.f. 01.02.2018.

Mr. Pravindra Singh Chauhan, (DIN-08068504) has been appointed as the Additional Director (Non- Executive & Independent director) of the Company w.e.f. 13.02.2018

Mrs. Manu Chaudhary, (DIN-00435834) retires at the ensuing Annual General meeting and being eligible, seeks reappointment. The Board recommends her re-appointment. The details of the appointment are mentioned in the Notice of the meeting.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

Internal Financial Control followed by the Company which helps in ensuring 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 timely preparation of reliable financial information.

The Company has appointed auditors for internal financial control. Auditors work in line with accounting standards. Various policies and SOPs have been formed for various process. They are continuously monitor the efficacy of internal controls/ compliance with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization's risk management, control and governance processes.

Acknowledgments

The Board sincerely thanks employees for their dedicated services at all levels. We also acknowledge the support and wise counsel extended to us by the analysts, bankers, government agencies, and investors at large, the advisers on our panel, all concerned regulatory authorities, our business associates, suppliers, the medical fraternity, patients and last but not the least, our shareholders for their unflinching support, constant guidance and trust in Venus Remedies Limited.

For and on behalf of Board of Directors,

For VENUS REMEDIES LIMITED

Pawan Chaudhary

Sd/-

Place: Panchkula Chairman & Managing Director

Date: 13.08.2018 DIN-00435503