Ipca Laboratories Ltd Management Discussions

a. Industry Structure and Development

The pharmaceutical industry is responsible for the research, development, manufacturing and distribution of medications. The entire world recognized the importance of healthcare and pharmaceuticals as the world battled the Covid-19 pandemic in the last 3 years. The pharmaceutical industry product landscape has since changed. New molecules such as cell and gene-therapy and mRNA have increased in the drug development pipeline. This change is likely to bring newer technologies, supply chain and unique product life cycle. Now out of crippling effect of pandemic, the pharmaceutical industry is estimated to grow to about US $ 2.4 trillion by 2030. Pharmaceutical industry is one of the top performing industries globally.

The new medications are being constantly developed, approved and marketed resulting in significant market growth. The other market growth drivers for the industry include the ageing population as seniors use more medicines per capita and rise in the prevalence and treatment of chronic diseases due to lifestyle changes. Oncology, immunology and neurology are the fastest growing therapy segments. The biologics market is also growing at a significant rate in the therapy areas such as oncology, diabetes and auto-immune diseases.

Though the pharmaceuticals industry is developing at a rapid pace, the growth wont come easily for this industry that is heavily influenced by the healthcare reforms, cost pressure, economic and geo-political fluidity, pricing regime, increased competition and challenging regulatory landscape with increased scrutiny.

b. Outlook, Risks and Concerns

The Indian pharmaceutical industry is globally respected and India is the largest provider of generic drugs globally and the country is known for its affordable vaccines and generic medications. Indian pharmaceutical industry is currently ranked third in pharmaceutical production by volume after evolving over time into a thriving industry. India is also the largest supplier of low cost quality generics drugs and vaccines to the world. Indian pharmaceutical companies have also carved out a niche in both the Indian and world market with expertise in reverse engineering new processes for manufacturing of pharmaceuticals at low cost, which became the advantage for this industry.

The contribution of the pharmaceutical industry to the countrys economy is immense. Apart from large employment generation, either directly or indirectly, this industry also contributes significantly to the countrys GDP. As per Indian Brand Equity Foundation (IBEF), a trust established by the Ministry of Commerce and Industry, Government of India, the Indian pharmaceutical industry is likely to reach a size of USD 130 billions in 2030, growing at a CAGR of about 12% from US$ 50 billions in 2021. The Indian pharmaceutical industry growth will be driven by R&D capabilities, cost efficiencies, huge talent pool of scientists and new opportunities in the emerging global economies.

I ndia is home to nearly 3,000 pharmaceutical companies with over 10,500 manufacturing units employing nearly 3 million people making it one of the largest employer industry in the country.

The Indian pharmaceutical industry is expected to out-perform the global pharmaceutical industry and emerge as one of the leading pharmaceutical market globally by absolute value. It is for this reason, India is truly hailed as the pharmacy of the world, providing essential low cost medicines to countries across the globe.

However, poor public healthcare funding and infrastructure, low per capita consumption of medicines in emerging economies including India, currency fluctuations, geo-political conflicts, regulatory issues, government mandated price control, inflation and resultant all round increase in input costs are a few causes of concern.

During the year under report, there was no change in the nature of Companys business.

c. Financial Performance and Operations Review

During the financial year under report, the Company registered on a standalone basis a total income of 5925.81 crores as against 5491.22 crores in the previous year, a growth of 8%. On a consolidated basis, the total income of the Company has increased by 8% to 6369.94 crores as against 5896.36 crores in the previous financial year.

During the financial year under report, the Earnings before interest, depreciation and taxation on a standalone basis amounted to Rs 1023.04 crores as against Rs 1291.00 crores in the previous financial year. The operations have resulted in a net profit of 505.70 crores during the financial year under report as against 860.37 crores in the previous financial year, a decline of 41%.

On a consolidated basis, the Earnings before interest, depreciation and taxation amounted to Rs 1052.39 crores as against Rs 1375.83 crores in the previous financial year. The consolidated operations have resulted in a net profit of 491.93 crores during the financial year under report as against 910.95 crores in the previous financial year, a decline of 46%.

Break-up of Sales (standalone)

(Rs Crores)

	2022-23	2021-22
	Domestic	Exports	Total	Growth	Domestic	Exports	Total	Growth
Formulations	2760.71	1639.19	4399.90	10%	2508.27	1486.74	3995.01	12%
APIs & Intermediates	373.05	1004.23	1377.28	-	358.70	1021.39	1380.09	-8%
Total Sales	3133.76	2643.42	5777.18	7%	2866.97	2508.13	5375.10	6%
Growth	9%	5%	7%		21%	-8 %	6%

Key Financial Ratios (standalone)

	31st March, 2023	31st March, 2022
Debtors Turnover Ratio	6.60	6.70
Inventory Turnover Ratio	1.20	1.08
Interest Coverage Ratio	24.00	173.97
Current Ratio	2.91	3.13
Debt Equity Ratio	0.24	0.14
Operating Profit Margin (%)	12.28%	18.33%
Net Profit Margin (%)	8.53%	15.67%
Return on Net Worth (%)	8.60%	15.71%

Due to lower business growth, increase in the material cost, energy cost as well as increase in the other overhead expenses due to inflationary trend in the economy, the operating margins have reduced. This has resulted in lower operating profit margin, lower net profit margin and lower return on net worth as compared to previous financial year.

d. International Business

The products of the Company are now exported to over 100 countries across the globe. During the financial year under report, the international business amounted to 2643.42 crores as against 2508.13 crores in the previous year, a growth of 5%. Formulation exports of the Company has increased by 10% to Rs 1639.19 crores and exports of APIs and Drug Intermediates have de-grown by 2% to Rs 1004.23 crores.

The Companys formulations manufacturing sites at Silvassa and SEZ Indore and APIs manufacturing site at Ratlam continue to be under US FDA import alert. In April 2023, the US FDA conducted the inspection of the Companys formulations manufacturing unit situated at Piparia (Silvassa) from 18^th April, 2023 to 26^th April, 2023. At the conclusion of the inspection, the US FDA issued a Form 483 with 3 (three) observations. The Company has submitted its comprehensive response on these observations to the US FDA within the stipulated time and shall work closely with the agency to resolve these issues at the earliest.

The Company takes the quality and compliance issues with utmost importance and remains committed to maintain the highest standards of quality and compliance across all its facilities.

The Company has implemented comprehensive remedial measures at all its manufacturing sites to ensure quality and regulatory compliances. These remedial measures included review of all processes and procedures, revamping of training system, recruitment of senior quality personnel as well as automation of quality control laboratories. The Company is committed to its philosophy of highest quality in manufacturing, operations, systems, integrity and cGMP culture.

Except US FDA import alert on three of its manufacturing sites, none of the Companys manufacturing sites have any outstanding regulatory or compliance issues with any other regulatory agency.

Continent-wise Exports

(Rs Crores)

Continent	2022-23	2021-22
	Formulations	APIs and Intermediates	Total	% to exports	Formulations	APIs and Intermediates	Total	% to exports
Europe	486.11	273.53	759.64	29%	436.49	232.76	669.25	27%
Africa	416.76	55.05	471.81	18%	409.85	62.00	471.85	19%
Americas	163.17	297.79	460.96	17%	162.80	340.48	503.28	20%
Asia	110.82	341.52	452.34	17%	98.91	357.52	456.43	18%
CIS	188.44	32.53	220.97	8%	134.07	25.72	159.79	6%
Australasia	273.89	3.81	277.70	11%	244.62	2.91	247.53	10%
Total	1639.19	1004.23	2643.42	100%	1486.74	1021.39	2508.13	100%

Formulation Exports - Therapeutic Contribution

Therapeutic Group	2022-23	2021-22
Cardiovasculars & Anti-diabetics	24%	25%
Pain Management	28%	24%
Anti-malarials	22%	24%
Anti-bacterials	6%	6%
Anthelmintics	8%	5%
Central Nervous System (CNS) products	5%	7%
Gastro Intestinal (G.I) products	5%	6%
Cough Preparations	1%	2%
Others	1%	1%
TOTAL	100%	100%

Europe

The Company achieved European export sales of 759.64 crores during the financial year under report as against sales of 669.25 crores in the previous year, a growth of 14%.

The Company has developed and submitted 98 generic formulation dossiers for registration in Europe out of which 89 dossiers are registered. The Company has also obtained certificate of suitability (COS) of 57 APIs from European Directorate for Quality Medicines (EDQM).

The Company has now started marketing generic formulations in the United Kingdom in its own label.

Africa

The Company achieved export sales of 471.81 crores to Africa during the financial year under report as against 471.85 crores in the previous year.

The Company exports branded and generic formulations as well as APIs to many African countries. The Company markets branded formulations in Africa through dedicated field force. The Company also supplies generics formulations to South Africa.

The Company is expanding its branded formulations business in this continent through expansion of geographical coverage and increase in the number of branded formulations marketed. Your Company is also is in the process of expanding its field force in this continent. The Company is also continuously filing new formulation dossiers for registration in the African countries.

Americas

The Company achieved sales of 460.96 crores in this continent as against 503.28 crores in the previous year, a decline of 8%. As reported earlier, the US formulations and APIs business continues to be impacted due to ongoing US FDA import alert for three of the Companys manufacturing facilities.

44 ANDA applications of generic formulations developed by the Company are filed with US FDA out of which 18 ANDA applications are granted till date. 55 DMFs of the Company are also currently filed with US FDA.

Asia

The Asian business (excluding India) recorded sales of 452.34 crores as against 456.43 crores in the previous year. The Company exports formulations as well as APIs to several Asian countries. In countries like Nepal, Sri Lanka, Myanmar, Philippines and Vietnam, the Company markets its branded formulations through dedicated field force.

Confederation of Independent States (CIS)

The Companys CIS business recorded sales of 220.97 crores as against Rs 159.79 crores in the previous year, a growth of 38%. Most of the business is from branded formulation sales in Russia, Ukraine, Kazakhstan and Belarus. The Companys branded formulations are marketed in this continent by its own field force appointed through its non-trading offices.

But for geo-political conflict in this region, the Companys export business in this sub-continent could have been even better.

Australasia

The Company exports APIs to Australia and formulations to Australia and New Zealand in this sub-continent. The business from this continent was 277.70 crores during the financial year under report as against 247.53 crores in the previous year, a growth of 12%.

The Company has developed and submitted 76 generic formulation dossiers for registration in this market out of which 73 dossiers are registered.

. Domestic Formulations Business

The Companys branded formulations business in India now comprises of 21 marketing divisions focusing on key therapeutic segments with a portfolio of about 161 brands. Your Company is now the 17^th largest in the domestic formulations market as per IQVIA - MAT March, 2023.

In order to increase the coverage and facilitate launch of new therapy divisions/new products, the Company has added nearly 1500 medical representatives in the domestic market during the last 2 financial years.

During the financial year under report, the domestic formulations business recorded a growth of 10% at 2760.71 crores as against 2508.27 crores in the previous year.

Domestic Branded Formulations - Therapeutic Contribution

Therapeutic segment	2022-23	2021-22
	% to sales	% to sales
Pain Management	52%	49%
Cardiovasculars & Anti-diabetics	16%	17%
Anti-malarials	3%	5%
Anti-bacterials	6%	7%
Dermatology	6%	5%
Gastro Intestinal (G I) products	2%	3%
Cough Preparations	5%	5%
Neuro Psychiatry	3%	3%
Urology	4%	3%
Neutraceuticals	1%	1%
Others	2%	2%
Total	100%	100%

f. Active Pharmaceutical Ingredients (APIs) and Intermediates Business

During the financial year under report, the APIs and Intermediates business recorded sales of Rs 1377.28 crores as against Rs 1380.09 crores in the previous financial year. Nearly 73% of the APIs and Intermediates business is from exports.

The Company exports its APIs across the globe. Most of the international customers of the Company are end user formulations manufacturers including several multinational companies.

Your Company continue to commercialize new APIs for the global market.

g. New APIs manufacturing unit at Dewas (M.P.)

Your Directors are pleased to inform you that second plant out of the two manufacturing plants set-up for manufacturing of Drug Intermediates and Active Pharmaceuticals Ingredients (APIs) at the Companys new green field manufacturing unit at Dewas (Madhya Pradesh) has also commenced trial production in the month of September, 2022.

With this, the Dewas APIs manufacturing unit is now fully functional.

h. Intellectual Property Protection

The Company has created intellectual property management group within the Research and Development centers to deal with management and protection of intellectual property. The Company has filed many patent applications till date in India, USA and other countries. These applications relate to novel and innovative manufacturing processes for the manufacture of APIs and pharmaceutical formulations.

i. Internal Control Systems and its adequacy

The Company has adequate internal control systems including suitable monitoring procedures commensurate with its size and the nature of the business. The internal control systems provide for all documented policies, guidelines, authorization and approval procedures. The Company has an internal audit department which carries out audits throughout the year. 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.

j. Human Resources

The human resource plays a vital role in the growth and success of an organization. The Company has maintained cordial and harmonious relations with employees across various locations.

During the year under review, various training and development workshops were conducted to improve the competency level of employees with an objective to improve the operational performance of individuals. The Company has built a competent team to handle challenging assignments. The Company strives to enhance the technical, work related and general skills of employees through dedicated training programs on a continuous basis.

The Company has 16,167 permanent employees (including 813 overseas employees) as on 31^st March, 2023. Out of this, 8,626 employees are engaged in the marketing and distribution activities.

k. Cautionary Statement

Certain statement in the management discussion and analysis may be forward looking within the meaning of applicable securities law and regulations and actual results may differ materially from those expressed or implied. Factors that would make differences to Companys operations include competition, price realization, currency fluctuations, regulatory issues, changes in government policies and regulations, tax regimes, economic development within India and the countries in which the Company conducts business and other incidental factors.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR

No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements in this report relate and the date of this report except the proposed acquisition of the substantial shares in Unichem Laboratories Ltd., a listed entity, as detailed hereinbelow.

SHARE CAPITAL

The paid-up share capital of the Company as at 31^st March, 2023 was 25,37,04,218 equity shares of Rs 1/- each aggregating to 25.37 crores.

EMPLOYEES STOCK OPTION SCHEME (ESOS)

The Company has now proposed a new scheme, Ipca Laboratories Ltd. - Employees Stock Option Scheme - 2023 (ESOS), which was approved by the Board of Directors at their meeting held on 29^th May, 2023. The said ESOS scheme will be placed for approval before the shareholders at the ensuing Annual General Meeting. This ESOS is in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

However, currently there are no outstanding options issued under the Companys ESOS.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Trophic Wellness Pvt. Ltd.

During the financial year under report, the Company has acquired further 6.53% of the paid-up equity share capital of Trophic Wellness Private Ltd., a company engaged in the business of manufacturing and marketing several SKUs of Neutraceuticals under the brand name "Nutricharge". With this acquisition, the Company now holds 58.88% of the paid-up equity share capital of the said company.

Lyka Labs Ltd.

During the financial year under report, the Company has acquired, thru preferential allotment, further 4.78% of the paid-up equity share capital of Lyka Labs Ltd, a listed company, engaged in the business of manufacturing and marketing of injectables, lyophilized injectables and topical formulations. Also, in the month of April, 2023, the Company acquired another 4.98% of the paid-up share capital of the said company thru part conversion of warrants issued on preferential basis. With these share allotments, the Company now holds 36.34% of the paid-up equity share capital of Lyka Labs Ltd.

Unichem Laboratories Ltd.

The Company entered into a definitive Share Purchase Agreement (SPA) on 24^th April, 2023 for acquisition of 2,35,01,440 fully paid-up equity shares of 2/- each, constituting about 33.38% of the paid up equity share capital of Unichem Laboratories Ltd., a listed entity, from one of its promoter shareholder at a price @ 440/- per equity share aggregating to Rs 1034.06 Crores. This proposed acquisition is subject to, inter-alia, approval of the Competition Commission of India (CCI) under the Competition Act, 2002. The Company has already made an application to CCI seeking its approval for this transaction.

Since this proposed acquisition of the shareholding in Unichem Laboratories Ltd. is more than the threshold limit under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Company has also made an open offer to the public shareholders of Unichem Laboratories Ltd. to acquire from them upto another 26% of the paid up equity share capital of the said company at a price @ 440/- per share aggregating to 805.44 crores.

These acquisitions will be funded out of the Companys retained earnings.

Merger of Ramdev Chemical Pvt. Ltd. and Tonira Exports Ltd., wholly owned subsidiaries with the Company

The Honable National Company Law Tribunal, Mumbai Bench vide its order dated 27^th April, 2023 has approved the merger of M/s. Ramdev Chemical Pvt. Ltd. and M/s. Tonira Exports Ltd., Companys wholly owned subsidiaries with the Company with effect from 1^st April, 2022.

There has been no material change in the nature of the business of the subsidiaries. The Company has no subsidiary which can be considered as material within the meaning of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In accordance with the provisions of Section 136(1) of the Companies Act, 2013, the following have been placed on the website of the Company www.ipca.com.

a) Annual Report of the Company containing therein its standalone and the consolidated financial statements; and

b) Audited annual accounts of each of the subsidiary companies.

As required, the financial data of the subsidiaries, joint venture and associate companies is furnished in the prescribed Form AOC-1 as an Annexure to the consolidated financial statements.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company are attached.

RESEARCH & DEVELOPMENT (R&D)

The Company has always considered Research and Development (R&D) as crucial for the sustained growth of the Company. In the recent years, the Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario.

The Company has R&D centers at Mumbai, Ratlam, Athal (Silvassa) and Ranu (Vadodara) which are duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR).

The R&D expenditure of the Company during the financial year was Rs 156.49 crores (2.71% of the turnover) as against Rs 141.46 crores (2.65% of the turnover) in the previous year.

With qualified and experienced research scientists and engineers manning the research and development activities, the Company has focused its thrust on new and innovative process and product development for the manufacture of APIs with non-infringing processes. Apart from development of new dosage forms and drug delivery systems, improvement in processes and yield as well as cost reduction are also focus areas.

DIVIDEND

Your directors have already announced and paid in the month of December 2022 an interim dividend of 4/- per share (400%) on the face value of Rs 1/- each, for the financial year under report. It is not proposed to declare any further dividend for the financial year ended 31^st March, 2023. The interim dividend paid for the financial year under report is in line with the Companys dividend distribution policy which is placed on the Companys website www.ipca.com.

The dividend amounting to Rs 101.48 crores paid as interim dividend will be appropriated out of the profits for the year.

INVESTORS EDUCATION AND PROTECTION FUND (IEPF)

The Company has transferred to the Investors Education and Protection Fund (IEPF) all the unpaid dividend amounts required to be so transferred on or before the due date(s) for such transfer. The Company has also transferred to IEPF, such of the Companys equity shares in respect of which the dividend declared has not been paid or claimed for seven consecutive years.

The details of the unpaid / unclaimed dividends for the last seven financial years are available on the website of the Company www.ipca.com. The Company has appointed its Company Secretary as the nodal officer under the provisions of IEPF.

DIRECTORS

Mr. Prashant Godha and Mr. Premchand Godha retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment.

Mr. Anand T. Kusre was re-appointed as Independent Director for a second term of five consecutive years from 1^st April, 2019 and Dr. (Mrs.) Manisha Premnath was re-appointed as Independent Director for a second term of five consecutive years from 21^st September, 2019, through postal ballot on 27^th March, 2019. The shareholders have also approved the appointment of Mr. Kamal Kishore Seth as an Independent Director for a period of 5 years from 29^th March, 2019.

During the year under report, Dr. Narendra Mairpady (DIN 00536905) was appointed as an Independent Director of the Company with effect from 20^th October, 2022. The shareholders have since approved his appointment as an Independent Director for a period of 5 years from 20^th October, 2022 through postal ballot.

Mr. Anand Kusre, Dr. (Mrs.) Manisha Premnath, Mr. Kamal Kishore Seth and Dr. Narendra Mairpady, who are independent directors, have submitted declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations and there has been no change in the circumstances which may affect their status as independent directors during the year.

At the meeting of the Board of Directors of the Company held on 14^th February, 2023 and as recommended by the Nomination and Remuneration Committee :

i. Mr. Premchand Godha was re-appointed as the Whole-time Director designated as the Executive Chairman of the Company for a further period of 5 years commencing 1^st April, 2023.

ii. Mr. Ajit Kumar Jain was re-designated/appointed as the Managing Director of the Company with effect from 1^st April, 2023 for the remainder period of his current tenure of appointment till 20^th August, 2024.

iii. Mr. Pranay Godha was re-designated/appointed as the Managing Director and CEO of the Company with effect from 1^st April, 2023 for the remainder period of his current tenure of appointment till 10^th November, 2023.

The necessary shareholders approval for these changes were obtained by the Company thru special/ordinary resolutions thru postal ballot.

At the meeting of the Board of Directors of the Company held on 29^th May, 2023 and as recommended by the Nomination and Remuneration Committee, Mr. Pranay Godha is re-appointed as the Managing Director of the Company for a further period of 5 years with effect from 11^th November, 2023. This re-appointment is subject to the approval of the shareholders at the ensuing Annual General Meeting.

During the year under report:

Mr. M. R. Chandurkar, Promoter of the Company who was also the Director/Managing Director of the Company for nearly four decades from 1975 expired on 20^th June, 2022. The Company has immensely benefited from the services rendered by him during his tenure as a Director/ Managing Director of the Company.

Mr. Dev Parkash Yadava, an Independent Director of the Company expired on 2^nd August, 2022. Mr. Yadava was the Independent Director of the Company since April 2012. The Company has immensely benefited from his knowledge of pharma industry and guidance / advice given by him during his tenure as an Independent Director all these years.

The Board places on record its sincere appreciation for the services rendered by them during their tenure as Directors of the Company.

None of the directors of the Company are debarred from holding the office of Director by virtue of any SEBI order or order by any other competent authority.

In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required.

A brief note on Directors retiring by rotation and eligible for re-appointment is furnished in the Report on Corporate Governance annexed herewith.

KEY MANAGERIAL PERSONNEL

During the financial year under report, the following persons continue to be the Key Managerial Personnel of the Company:

Mr. Premchand Godha - Chairman & Managing Director/CEO

(Executive Chairman from 1^st April, 2023)

Mr. Ajit Kumar Jain - Joint Managing Director / CFO

(Managing Director / CFO from 1^st April, 2023)

Mr. Pranay Godha - Executive Director

(Managing Director/CEO from 1^st April, 2023)

Mr. Prashant Godha - Executive Director

Mr. Harish P. Kamath - Corporate Counsel & Company Secretary

There was no change in the Key Managerial Personnel during the financial year under report.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration including criteria for determining qualification, positive attributes and independence of a Director. The following attributes/criteria for selection have been laid by the Board on the recommendation of the Committee:

• the candidate should possess the positive attributes such as leadership, entrepreneurship, business advisor or such other attributes which in the opinion of the Committee are in the interest of the Company;

• the candidate should be free from any disqualification as provided under Sections 164 and 167 of the Companies Act, 2013;

• the candidate should meet the conditions of being independent as stipulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in case of appointment as an independent director; and

• the candidate should possess appropriate educational qualification, skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, infrastructure, medical, social service, professional teaching or such other areas or disciplines which are relevant for the Companys business.

BOARD EVALUATION

The Nomination and Remuneration Committee lays down the criteria for performance evaluation of independent directors, Board of Directors and Committees of the Board. The criteria for performance evaluation is based on the various parameters like attendance and participation at meetings of the Board and Committees thereof, contribution to strategic decision making, review of risk assessment and risk mitigation, review of financial statements, business performance and contribution to the enhancement of brand image of the Company.

The Board has carried out evaluation of its own performance as well as that of the Committees of the Board and all the Directors.

The annual evaluation was carried out in the following manner:

Sr. No.	Performance evaluation of	Performance evaluation performed by
1.	Board and individual directors	Board after seeking inputs from all directors
2.	Board Committees	Board seeking inputs from all committee members
3.	Individual Directors	Nomination and Remuneration committee
4.	Non-independent directors, Board as a whole and the Chairman	Separate meeting of independent directors after taking views from executive directors
5.	Board, its Committees and individual Directors	At the board meeting held after the meeting of the independent directors based on evaluation carried out as above.

PROFICIENCY OF DIRECTORS

All the independent directors of the Company have registered their names in the database maintained by the Indian Institute of Corporate Affairs, Manesar, Haryana. Those of the independent directors who are not otherwise exempted have appeared and passed the common proficiency test conducted by the said institute within the prescribed time.

REMUNERATION POLICY

The objective and broad framework of the Companys Remuneration Policy is to consider and determine the remuneration based on the fundamental principles of payment for performance, for potential and for growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interests of the Company and its shareholders, promoting a culture of meritocracy and creating a linkage to corporate and individual performance and emphasising on line expertise and market competitiveness so as to attract the best talent. It also ensures the effective recognition of performance and encourages a focus on achieving superior operational results. The Nomination and Remuneration Committee recommends the remuneration of Directors and Key Managerial Personnel which is approved by the Board of Directors, subject to the approval of shareholders, where necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the directors, key managerial personnel and other employees of the quality required to run the Company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. The remuneration to directors, key managerial personnel and senior management personnel should also involve a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals. The Remuneration Policy is placed on the Companys website www.ipca.com.

Information about elements of remuneration package of individual directors is provided in the Annual Return as provided under Section 92(3) of the Companies Act, 2013 which is placed on the website of the Company.

FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS

Details of the familiarisation programs for independent directors are disclosed on the website of the Company www.ipca.com.

MEETINGS OF THE BOARD AND COMMITTEES THEREOF

This information has been furnished under Report on Corporate Governance, which is annexed.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors confirm:

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

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

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

iv) that your Directors have prepared the annual accounts on a going concern basis;

v) that 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; and

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

CORPORATE GOVERNANCE

As per the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements of Corporate Governance in all material aspects.

A report on Corporate Governance (Annexure 1) together with a certificate of its compliance from a Practising Company Secretary, forms part of this report.

FIXED DEPOSITS

During the year under review, the Company has not accepted any fixed deposits and as such no amount of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

AUDIT COMMITTEE

Details of the Audit Committee along with its constitution and other details are provided in the Report on Corporate Governance.

AUDITORS, AUDIT REPORT AND AUDITED ACCOUNTS

M/s. Natvarlal Vepari & Co., Chartered Accountants, Firm Registration No. 106971W were appointed as the Statutory Auditors (in place of M/s. G.M. Kapadia & Co., whose term of appointment has came to an end on the conclusion of the 72^nd AGM) to carry out statutory audit activities of the Company for a period of 5 (five) years from the conclusion of the 72^nd AGM of the Company and till conclusion of 77^th AGM of the Company.

The Auditors Report read with the notes to the accounts referred to therein are self-explanatory and therefore, do not call for any further comments. There are no qualifications, reservations or adverse remarks made by the Auditors.

COST AUDIT

Pursuant to the provisions of Section 148 of the Companies Act, 2013, M/s. ABK & Associates, Cost Accountants (Firm Registration No. 000036) were appointed as the Cost Auditors to conduct audit of cost records of the Company for the financial year 2022-23.

The Cost Audit Report for the financial year 2021-22, which was due to be filed with the Ministry of Corporate Affairs by 8^th September, 2022 was filed on 2^nd September, 2022.

The Company has maintained the cost accounts and cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, M/s. Parikh & Associates, Practising Company Secretaries were appointed as the Secretarial Auditors for auditing the secretarial records maintained by the Company for the financial year 2022-23.

The Secretarial Auditors Report is annexed hereto. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to good corporate citizenship. As a part of its corporate social responsibility, the Company continues to undertake a range of activities including healthcare and education to improve living conditions of the needy people. The CSR policy of the Company is placed on the website of the Company (https://www.ipca.com/wp-content/pdf/corporate-policy/2023/corporate-social-responsibility- policy.pdf).

During the year under report, the Company has also supported healthcare and educational projects undertaken by charitable institutions and organizations.

In accordance with the provisions of Section 135 of the Companies Act, 2013, an abstract on Companys CSR activities is furnished as Annexure 2 to this report.

SAFETY, ENVIRONMENT AND HEALTH

The Company considers safety, environment and health as the management responsibility. Regular employee training programmes are carried out in the manufacturing facilities on safety, environment and health.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loans or guarantees or made any investments in contravention of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans and guarantees given and investments made by the Company are provided in the notes to the financial statements.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of Companys business. The Company has not entered into any contract, arrangement or transaction with any related party which could be considered as material as defined under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board has approved a policy for related party transactions which has been uploaded on the website of the Company (https://www.ipca. com/wp-content/pdf/corporate-policy/Policy_on_Related_Party_Transactions.pdf).

All the related party transactions are placed before the Audit Committee as well as the Board for approval on a quarterly basis. Omnibus approval was also obtained from the Audit Committee and the Board on an annual basis for repetitive transactions.

Related party transactions under Indian Accounting Standard - Ind AS 24 are disclosed in the notes to the financial statements. Prescribed Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is furnished as Annexure 3 to this report.

EMPLOYEES

Pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration and other details as set out in the said Rules is furnished under Annexure 4 to this report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours excluding Saturdays and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

CODE OF CONDUCT

The Board has laid down a code of conduct for board members and senior management personnel of the Company. The code incorporates the duties of independent directors as laid down in the Companies Act, 2013. The said code of conduct is posted on Companys website www. ipca.com. The Board members and senior management personnel have affirmed compliance with the said code of conduct. A declaration in this regard signed by the Managing Director / CEO is given at the end of the Corporate Governance Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

There is a Whistle Blower Policy in the Company and that no personnel have been denied access to the Chairman of the Audit Committee. The policy provides for adequate safeguards against victimization of persons who use vigil mechanism. The Whistle Blower Policy is posted on the website of the Company www.ipca.com.

PREVENTION OF INSIDER TRADING

The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, senior management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under Report, there has been due compliance with the said code of conduct for prevention of insider trading.

CONSTITUTION OF COMMITTEE UNDER SEXUAL HARRASSMENT OFWOMEN ATWORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has adopted a policy in line with the requirements of Prevention of Sexual Harassment of Women at the Workplace and a Committee has been set-up to redress sexual harassment complaints received. The necessary annual report has been submitted to the competent authority in this regard.

BUSINESS RISK MANAGEMENT

Pursuant to the provisions of Section 134 of the Companies Act, 2013, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are provided in the Report on Corporate Governance, which is annexed.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations.

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

In accordance with the requirements of Section 134 of the Companies Act, 2013, statement showing particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is furnished as Annexure 5 to this report.

ANNUAL RETURN

In accordance with the requirements of Section 92 (3) of the Companies Act, 2013 and rule 12 (1) of the Companies (Management and Administration) Rules, 2014, a copy of Annual Return in Form MGT-7 is placed on the Companys website www.ipca.com (weblink : https:// www.ipca.com/investors-annual-return/).

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report of the Company for the financial year ended 31^st March, 2023 forms part of this Report. The same is also uploaded on the Companys website www.ipca.com as a part of the Annual Report.

SECRETARIAL STANDARDS

The Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the continued co-operation and support extended to the Company by the bankers and financial institutions. Your Directors also thank the medical profession, the trade and consumers for their patronage of the Companys products. Your Directors also place on record their profound admiration and sincere appreciation of the continued hard work put in by employees at all levels.

	For and on behalf of the Board
	Premchand Godha
Mumbai, 29th May, 2023	Executive Chairman