Ishita Drugs & Industries Ltd Directors Report

Dear Shareholders,

We have pleasure in presenting the Thirty-First (31^st)Annual Report together with the Audited Financial Statement for the Financial Year ended 31^stMarch, 2024.

FINANCIAL RESULTS

The financial performance of the Company for the financial year ended 31^st March, 2024 is summarized below:

Rs.in Lacs

	For the year ended 31.03.2024	For the year ended 31.03.2023
Turnover & other incomes	1546.78	1227.29
Operating gross profit	118.88	96.23
Financial Charges	(8.98)	(5.36)
Depreciation	(11.17)	(12.93)
Profit before tax & after exceptional items	98.73	77.94
Provision for Income Tax	(24.00)	(21.00)
Provision for Deferred Tax	0.12	0.80
Net profit / loss (-)	74.85	57.74

REVIEW OF BUSINESS OPERATIONS & FINANCIAL PERFORMANCE

The Board is pleased to report that the total revenue of the Company during the year under review was the highest ever. The total revenue has gone up by 26.03% from Rs. 1227.29 lakh in the previous year to Rs. 1546.78 lakh during the year under review. This was largely due to the significant increase in exports of the company from Rs. 184.49 lakh in the previous year to Rs. 293.55 lakh in the year during review.

The higher turnover resulted in significantly higher operating profits for the Company. The operating profit of the Company increased from Rs. 96.23 Lakh in the previous year to Rs. 118.88 during the year under review, an increase of about 23.54%. The increased operating profits have led to higher net profits for the company at Rs. 74.85 Lakh in the year under review compared to Rs. 57.74 lakh in the previous year, an increase of about 29.62%.

During the year under review, the GMP certification of the manufacturing facility of the Company was renewed by the regulatory authorities. This will help the Company to continue to explore alternate export markets for its products.

FUTURE OUTLOOK

During the year under review, the Government of India amended the Schedule M of the Drugs and Cosmetics Act, 1940, in an effort to bring the nations pharmaceutical quality standards up to par with global standards. The Schedule M prescribes the Good Manufacturing Practices (GMP) and requirements of premises, plant, and equipment for pharmaceutical products. All pharmaceutical units have been given a deadline, based on their turnover, to comply with the requirements of the amended Schedule M. Based on the current guidelines, the Company has to comply with amended Schedule M by December 2024.

The Company will have to undertake a major renovation and upgradation of its manufacturing facility to meet the requirements of the amended Schedule M. The project will involve dismantling of some old production areas, construction of new buildings, purchase and installation of many new equipment, utilities etc. Due to this, there may be some disruption to production during the current year.

This is going to be a major challenge for the Company, in terms of availability of knowledge resources, skilled manpower and funds. The Company has already finalized the design and layout of the upgraded facility and is planning for the implementation phase.

The Company may have to raise debt to partially fund this major upgradation project. However, the Company has adequate built-up reserves and liquidity for its operational needs.

On account of these regulatory changes, the present business environment is quite challenging and uncertain. However, the Board is confident that your Company would be able to comply with the requirements of the amended Schedule M in due course. Once the facility is upgraded, the Company would be able to introduce newer products as also start exporting to regulated markets. This would provide a great impetus to its growth.

SHARE CAPITAL

There is no change in the share capital of the Company. During the year under review, the Authorised Share Capital of the Company is Rs. 6,00,00,000/- (Rupees Six Crore Only) divided into 60,00,000 (Sixty lakhs) Equity Shares of Rs. 10/- (Rupees Ten) each.

The Paid-up Capital of the Company as on 31^st March, 2024 remains the same at Rs. 2,99,03,000/- (Rupees Two Crores Ninety-Nine Lakhs Three Thousand Only) divided in to 29,90,300(Twenty-Nine lakh Ninety Thousand Three hundred) Equity share of Rs. 10/- (Rupees Ten Only) each.

DIVIDEND

Keeping in view the future strategic initiatives of the Company, the Board has not recommended any dividend for the year ended 31^st March, 2024.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate and effective internal controls to provide reasonable assurance on achievement of its operational, compliance and reporting objectives. The Internal Financial Controls of the Company encompasses the policies, standard operating procedure manuals, and risk & control measures adopted by the Company for ensuring the orderly and efficient conduct of its business and support functions, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting record.

DETAILS OF SUBSIDIARY/JOINT VENTURES /ASSOCIATE COMPANIES

Your Company does not have any Subsidiary or Joint Venture or Associate Company.

DEPOSITS

During the year ended March 31,2024, the Company has not accepted any public deposits and as such, no amounts on account of principal or interest on public deposits were outstanding as on the date of the Balance Sheet.

EXTRACT OF THE ANNUAL RETURN

The extract of the annual return in Form No. MGT - 9 shall form part of the Boards report and is set out as Annexure A to this Report.

DISCLOSURES RELATING TO MANAGERIAL REMUNERATION

The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors / employees of your Company is set out in Annexure B to this report. Company does not have any employee, who was in receipt of remuneration in excess of limits specified in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

STATUTORY AUDITORS:

Pursuant to the provisions of Section 139 and other applicable provisions, if any of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, including any amendments if any thereof, Company proposes to appoint,M/s Jaymin Shah & Associates, Chartered Accountants (FRN: 129406W) as Statutory Auditors of the Company, for the period of one year i.e., from the conclusion of this (31^st) AGM till the conclusion of next (32^nd) AGM of the Company.

The Auditors Report on the financial statements for the financial year 2023-24 does not contain any qualification, reservation, or adverse remarks. The remarks made in the Auditors report are self-explanatory.

SECRETARIAL AUDIT

Pursuant to the provision of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s Meenu Maheshwari & Associates, Company Secretaries in Practice, to undertake the Secretarial Audit of the Company.

Secretarial Audit Report given by Ms. Meenu Maheshwari, Practicing Company Secretary [COP No. 8953] is set out as Annexure C and Certificate of Non disqualification of Directors as Annexure D to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India (“ICSI”) on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2).

NUMBER OF BOARD MEETINGS CONDUCTED DURING THEYEAR

During the year under review, 4 (Four) meetings of the Board of Directors were held. Details on Composition of the Board and its Committees, including the dates and terms of reference is provided in the Corporate Governance Report which forms part of this Annual Report.

MATERIAL CHANGES AND COMMITMENTS

There are no such material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year ended March 31,2024 and the date of report.

PARTICULARS OF EMPLOYEE

There are no employees employed by the Company throughout the financial year or for a part of the financial year who were drawing remuneration above the limits provided in section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and therefore there are no details required to be given in the report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Mr. Jagdishprasad Agrawal [DIN: 01031687]: The present term of Mr. Jagdishprasad Agrawal expires on 30^th September, 2024. It is, therefore, proposed to reappoint Mr. Jagdishprasad Agrawal as Managing Director of the Company for a further period of three years with the effect from 1^st October, 2024, under schedule V of the Companies Act, 2013.

b. Mrs. Abha Agrawal [DIN: 01589479]: retires by rotation, and being eligible, has offered herself for reappointment. The Board has recommended her reappointment.

c. Ms. Dhwani Solanki [DIN: 10299290]:The Board of Directors of the Company proposes the appointment of Ms. Dhwani Solanki [DIN: 10299290] as an Independent Director (Non-executive) of the Company for a term of Five years, subject to the approval of shareholders.

d. In the current year Mr. Niranjan Agarwal [DIN: 06503361]had resigned from the position of NonExecutive Independent Director,with effect from the close of business hours on 13^th August, 2024, due to personal reasons. The director confirms that there are no material reasons for the resignation other than those mentioned in the respective resignation letter. The board at its meeting held on 13^th August, 2024 accepted his resignation and appreciatedhis contribution and guidance to the Company during his tenure.

Declaration by an Independent Director(s):

All Independent Directors have submitted requisite declarations confirming that they:

i. Continue to meet the criteria of independence as prescribed under section 149(6) and 149(7) of the Companies Act, 2013 and regulation 16(1)(b) of the SEBI Listing regulations; and there has been no change in the circumstances affecting their status as an independent director of the Company.

ii. Are compliant of the code of conduct laid down under Schedule IV of the Act.

The composition of Board of Directors of the Company is in compliance with the requirements prescribed under the Companies Act, 2013 and SEBI Listing Regulations.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the contracts/agreements/transactions entered into with Related Parties as per the Act and Regulation 23 of the SEBI Listing Regulations during the year were in the ordinary course of business and on arms length basis and do not attract the provision of Section 188 of the Companies Act, 2013.The required statements and disclosures with respect to the related party transactions are placed before the Audit Committee for the prior approval.The particulars of such contracts and arrangements with related parties are given in notes to the Financial Statements, forming part of this Annual Report.

However, Company has not entered in any transaction attracting provision of Section 188 of Companies Act, 2013. Hence AOC-2 is not required to be attached.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134(5) of the Act, with respect to Directors responsibility Statement, it is hereby \ confirmed that:

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

ii. The 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 ended 31^st March, 2024 and of the profit of the Company for the financial year ended 31^st March, 2024;

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

iv. The Directors have prepared the annual accounts on a going concern basis.

v. They have laid down internal financial controls, which are adequate and are operating effectively;

vi. The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT POLICY

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, this in the opinion of the Board may threaten the existence of the Company.

The Board of Directors has duly developed and implemented a risk management policy for the Company. The Policy mandates the ways in which respective risks are expected to be mitigated and monitored. The risk management framework is reviewed periodically by the Board.

CODEOFCONDUCT

The Board has laid down a Code of Conduct for Board Members and for Senior Management and Employees of the Company (“Code”). All the Board Members and Senior Management Personnel have affirmed compliance with these Codes. A declaration signed by the Managing Director to this effect is enclosed at the end of this Report.

The Board has also laid down a Code of Conduct for Independent Directors pursuant to section 149(8) and Schedule IV to the Companies Act, 2013 via terms and conditions for appointment of Independent Directors, which is a guide to professional conduct for Independent Directors and is uploaded on the website of the Company.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

In accordance with the Section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI Listing Regulations, the Company has formulated the Vigil Mechanism and whistle blower policy for Directors and employee to report illegal or unethical behavior, actual or suspected fraud or violation of the Companys Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or the Compliance Officer. The mechanism provides ethical code of conduct of the highest degree of transparency, integrity, accountability and responsibility.

The Whistle Blower Policy has been appropriately communicated within the Company. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. No personnel have been denied access to the Audit Committee.

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT. 2013

The Company has in place an Anti-harassment Policy in line with the requirements of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee is set up to redress complaints received regularly, is monitored and directly report to the Chairman & Managing Director.

During the year under review, the Company deputed its employees to attend a “Awareness Workshop for the Corporate Sector”, which was organized by National Commission for Women, for giving training on POSH.

There was no complaint received from employee during the financial year 2023-24 and hence no complaint is outstanding as on 31.03.2024 for redressal.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going Concern status of your Company and its operations in future.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The statement containing the necessary information required under Section 134(3)(m) of the Companies Act, 2013, read With Rule 8(3) of the Companies (Accounts) Rules, 2014 [Chapter IX] is annexed herewith as Annexure E.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis, for the year under review, as stipulated in SEBI (LODR), 2015, is presented in a separate section forming part of this Annual Report.

CORPORATE GOVERNANCE

Provisions of Regulation 27 of the SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015, relating to Corporate Governance are not applicable to the Company. However, with a view to increase investors trust and transparency in its operations, the Board has decided to voluntarily adopt and follow some of the provisions of the aforesaid regulations. A separate Report on Corporate Governance forms part of this Annual Report.

ACKNOWLEDGMENT

The Directors place on record deep appreciation and gratitude for the co-operation and assistance received by the Company from the staff and employees. The Board further thanks bankers, business associates, regulatory and government authorities for their continued support to the Company.

By order of the Board of Directors	Sd/-
For Ishita Drugs & Industries Ltd.	Abha Agrawal
Place: Ahmedabad	Director
Dated: 30th May, 2024	DIN: 01589479