hester biosciences ltd Directors report

FINANCIAL RESULTS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

The standalone and consolidated financial performance of the Company, for the financial year ended on 31 March 2023 is summarised below:

(Amounts in Rs million)

Particulars	Standalone		Consolidated
	31 March 2023	31 March 2022	31 March 2023	31 March 2022
Revenue from operations	2,540.00	2,193.51	2,660.91	2,350.06
Other income	53.23	46.57	151.51	137.41
Total Revenue	2,593.23	2,240.08	2,812.42	2,487.47
Profit before interest, depreciation, amortisation expenses and tax (PBIDT)	602.09	652.26	657.60	737.24
Less: Finance Cost	64.97	24.68	93.20	40.64
Less: Depreciation and Amortisation Expenses	97.88	95.02	206.95	165.81
Profit before Share of Profit in Joint Venture entity and	439.24	532.56	357.45	530.79
Tax
Share of Profit in Joint Venture entity	-	-	44.09	4.23
Profit before tax	439.24	532.56	401.54	535.02
Less: Tax Expenses	115.82	137.39	121.19	140.18
Profit for the year (PAT)	323.42	395.17	280.35	394.84
Attributable to:
Owners	323.42	395.17	266.27	393.20
Non-Controlling Interest	-	-	14.08	1.64
Other Comprehensive Income /(Loss)	1.13	(1.57)	16.25	8.21
Attributable to:
Owners	1.13	(1.57)	16.26	8.21
Non-Controlling Interest	-	-	(0.01)	-
Total Comprehensive Income	324.55	393.60	296.60	403.05
Attributable to:
Owners	324.55	393.60	282.53	401.41
Non-Controlling Interest	-	-	14.07	1.64
Earnings Per Share (Basic / Diluted)	38.02	46.45	32.96	46.41
(Face Value of Share Rs 10 each)

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

RESULTS OF OPERATIONS

Sales

During the year under review, the standalone revenue from operations was Rs 2,540.00 million, as compared to Rs 2,193.51 million in the previous year. The consolidated revenue from operation was Rs 2,660.91 million in the financial year ended on 31 March 2023, as compared to Rs 2,350.06 million in the previous year.

Profitability

The Company achieved a standalone profit before tax of Rs 439.24 million, as compared to Rs 532.56 million in the previous year. The consolidated profit before tax was Rs 401.54 million in the financial year ended on 31 March 2023, as compared to Rs 535.02 million in the previous year.

Earnings per share

The EPS on the standalone financials was Rs 38.02 for the year ended on 31 March 2023 as against Rs 46.45 as on 31 March 2022. The EPS on consolidated financials was Rs 32.96 for the year ended on 31 March 2023 as against Rs 46.41 as on 31 March 2022.

Share Capital

The paid-up equity share capital as on 31 March 2023 stood at Rs 85.07 million.

Net Worth

The Companys net worth on standalone basis as on 31 March 2023 was Rs 2,923.82 million as compared to

Rs 2,684.34 million as on 31 March 2022. The Companys net worth on consolidated basis as on 31 March 2023 was Rs 2,885.46 million as compared to Rs 2,673.93 million as on 31 March 2022.

Transfer to Reserves

The Board of Directors of the Company has decided not to transfer any amount to the reserves for the year under review.

DIVIDEND

Your Directors have recommended a dividend of Rs 8 per equity share (80%) on 8,506,865 equity shares of

Rs 10 each fully paid-up for the financial year 2022-23, amounting to Rs 68.05 million. The dividend, if declared by the members at the ensuing Annual General Meeting ("AGM"), will be paid to those shareholders, whose names registered in the Register of Members on cut-off date. The Dividend Pay-out Ratio for the current year is 21% of standalone profits. The dividend pay-out is in accordance with the Companys Dividend Distribution Policy. The Dividend Distribution Policy of the Company, in terms of Regulation 43A of SEBI (LODR) Regulations, 2015 (as amended from time to time), is available at the web link: https://www.hester.in/corporate-governance

BORROWINGS

The Company has long-term borrowings outstanding amounting to Rs 1,069.85 million as on 31 March 2023.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated total income from operations is Rs 2,660.91 million and total comprehensive income attributable to owners equity after non-controlling interest is Rs 282.53 million for the financial year 2022-23 as compared to the consolidated total income from operations of Rs 2,350.06 million and total comprehensive income attributable to owners equity after non-controlling interest of Rs 401.41 million for the previous financial year 2021-22. Consolidated financial statements include the financial statements of the following entitie

1 Hester Biosciences Nepal Private Limited	Foreign Subsidiary
2 Texas Lifesciences Private Limited	Indian Subsidiary
3 Hester Biosciences Africa Limited	Foreign Wholly-owned Subsidiary
4 Hester Bioscience Kenya Limited	Foreign Wholly-owned Subsidiary
5 Hester Biosciences Tanzania Limited	Foreign Step-down Subsidiary (Wholly-owned Subsidiary of Hester Biosciences Kenya Limited)
6 Thrishool Exim Limited:	Foreign Joint Venture Entity

In accordance with the Indian Accounting Standard (Ind AS) - 110 Consolidation of Financial Statements and as provided under the provisions of the Companies Act, 2013 (hereinafter referred to as "Act") read with Schedule III to the Act and Rules made thereunder and the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, incomes, profits and other details of the Company, its subsidiary Companies after elimination of minority interest, and joint venture entity as a single entity.

SUBSIDIARY COMPANIES

As on 31 March 2023, your Company has two wholly-owned subsidiary companies namely, Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited; and two subsidiary companies namely, Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited; and one step-down subsidiary company, Hester Biosciences Tanzania Limited (a wholly-owned subsidiary of Hester Biosciences Kenya Limited).

The business details of the subsidiary companies are as under:

Texas Life sciences Private Limited (Texas Life sciences)

Texas Life sciences is a subsidiary of Hester Biosciences Limited and holds 54.81% stake. Texas Life sciences is in the business of manufacturing and supplying pharma formulations, tablets, capsules, powder and oral liquid for human and veterinary markets.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited and holds 65% stake in HBNPL. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Hester Biosciences Africa Limited (HBAL)

HBAL is 100% wholly-owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL will be in the business of manufacturing veterinary vaccines and animal health product in Tanzania.

Hester Biosciences Kenya Limited (HBKL)

HBAL is 100% wholly-owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of Trading of veterinary vaccines and animal health product in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is subsidiary of HBKL and step-down subsidiary of Hester Biosciences Limited. HBTL is in the business of Trading of veterinary vaccines and animal health product in Tanzania and other Africa region.

There has been no material change in the nature of business of the subsidiaries. More details are provided into the financial statements. During the year under review, the Board has reviewed the performance / aRsairs of the subsidiary companies.

As provided in section 136 of the Act, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available free of cost the Audited Financial Statements of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Financial Statements of the subsidiary companies will also be kept open for electronic inspection. The Consolidated Financial Statements presented by the Company include financial statements and highlights of its subsidiary and joint venture entity are part of this Board Report as Annexure - 1 as prescribed in Form AOC-1.

As provided under section 129(3) of the Companies Act, 2013 and Rules made thereunder a statement containing the salient features of the financial statements of its subsidiaries in the format prescribed under the rules is attached to the financial statements. The policy relating to material subsidiaries as approved by the Board may be accessed on the Companys website at the link: https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is 50% joint venture entity of Hester Biosciences Limited in Tanzania. TEL is a supplier and distributor of animal health and nutrition products of many companies. TELs product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics and equipment sourced from recognised international producers. TEL has an established sourcing network with globally positioned partners from Europe, Asia and Southern Africa.

INSURANCE

The Companys plant, properties, equipment, stocks and vehicles are adequately insured against all major risks. The Company has also taken Directors and ORscers Liability Policy to provide coverage against the liabilities arising on them.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditor nor the secretarial auditor have reported to the Audit Committee, under section 143(12) of the Act, any instances of fraud committed against the Company by its oRscers or employees, the details of which would need to be mentioned in the Boards Report.

RELATED PARTY TRANSACTIONS

All Related Party transactions are entered in compliance to the provisions of law, the Policy on Materiality of and dealing with Related Party Transactions ("Related Party Policy") and were entered with the approval of Audit Committee, Board and Shareholders if and as applicable.

The particulars of material contracts and arrangements entered into with the related parties in accordance with the Related Party Policy of the Company and pursuant to the provisions of Section 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are annexed herewith as Annexure-2.The Related Party Transactions for the financial year 2022-23 have been disclosed in Notes to the Financial Statements of the Company.

The policy on Related Party Transactions and material related party transaction are uploaded on the website of the Company and may be accessed through the web link: https://www.hester.in/corporate-governance

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

COST ACCOUNTS AND RECORDS

The Company has made and maintained the cost accounts and records as specified by the Central Government under section 148 (1) of the Act and Rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Re-appointment and cessation of Directors

During the year, based on the recommendation of the Nomination and Remuneration Committee and the performance evaluation of directors, the Board of Directors, through circular resolutions passed on 27 March 2023, have approved and recommended the re-appointment of Ms. Sandhya Patel (DIN: 02215022) and Mr. Ashok Bhadakal (DIN: 00981201) as independent directors for the second term of five years with eRsect from 1 April 2023, subject to the approval of members.

Members of the Company have approved the reappointment of Ms. Sandhya Patel (DIN: 02215022) and Mr. Ashok Bhadakal (DIN: 00981201) as Independent Directors of the Company through the postal ballot process, and results were declared on 1 May 2023.

Pursuant to the provisions of the Companies Act, 2013, Mr. Naman Patel and Mr. Amit Shukla, Independent Directors of the Company, ceased to hold the oRsce with eRsect from 1 April 2023, due to the completion of two consecutive terms as Independent Directors of the Company.

Retirement by Rotations

In accordance with the provisions of section 152 (6) of the Companies Act, 2013, Listing Regulations and in terms of the Articles of Association of the Company, Mr. Sanjiv Gandhi (DIN: 00024548), Non-Executive Director will retire by rotation at the ensuing Annual General Meeting and being eligible, oRsers himself for re-appointment. The Board recommends his reappointment.

Declaration of Independence

The Company has received declaration of independence as stipulated under sections 149(6) and 149(7) of the Companies Act, 2013 and regulation 16(1) (b) and 25 of the Listing Regulations from Independent Directors confirming that they are not disqualified for continuing as an Independent Director. There has been no change in the circumstances aRsecting their status as an independent director of the Company.

Profile of Directors seeking Appointment/Reappointment

As required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015, particulars of Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting are annexed to the notice convening Thirty Sixth Annual General Meeting.

Key Managerial Personnel

The followings persons are the Key Managerial Personnel (KMP) as per the provisions of the Companies Act, 2013, as on 31 March 2023:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Nikhil Jhanwar, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary

Board Evaluation:

During the year, the evaluation of the annual performance of individual directors, including the Chairman of the Company and Independent Directors, the Board, and Committees of the Board, was carried out under the provisions of the Act and relevant Rules and the corporate governance requirements as prescribed under Regulation 17 of the Listing Regulations, 2015, and the circulars with respect to the Guidance Note on Board Evaluation. The evaluation of the performance of the board as a whole and of the committees was conducted through questionnaires.

In a separate meeting of Independent Directors, the performance of Non-Independent Directors and the performance of the Board as a whole were evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-Executive Directors.

The Board of Directors reviewed the performance of individual directors on the basis of criteria fixed by the Board. The functioning of the Board, the Committees, and the performance of individual Directors were found satisfactory.

The way, the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report, which is a part of this Annual Report.

Pecuniary Relationship

During the year under review, except those disclosed in the audited financial statements, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

Board of Directors Meetings

The Board of Directors met 5 (Five) times during the financial year 2022-23 and having gap of not more than 120 days between 2 (Two) consecutive Board Meetings. The information of meetings of the Board of Directors is given in Corporate Governance Report, forming a part of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of section 134(3)(c) read with 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby make the following statements:

a) That in preparation of Financial Statements for the year ended 31 March 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

b) 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 aRsairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and suRscient care 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;

d) The Directors had prepared the Financial Statements for the year ended 31 March 2023 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effsectively; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effsectively.

COMMITTEES OF BOARD OF DIRECTORS

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

i) Audit Committee

ii) Nomination and Remuneration Committee

iii) Stakeholders Grievances and Relationship Committee

iv) Corporate Social Responsibility Committee

v) Risk Management Committee

vi) Management Committee

A detailed note on the committees with respect to composition, meetings, powers and terms of reference is provided under the Corporate Governance Report section in this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board has accepted the recommendations of all the committees constituted by the Board.

CORPORATE SOCIAL RESPONSIBILITY ("CSR")

Pursuant to section 135 of the Act and the relevant rules, the Board has constituted a Corporate Social Responsibility ("CSR") Committee under the Chairmanship of Mr. Rajiv Gandhi. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the website of the Company: https://www.hester.in/corporate-governance

During the year, the Company has spent Rs 10.20 million on CSR activities. The Disclosures with respect to CSR Activities forming part of Boards Report as Annexure-3.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has in place a stringent vigil system to report unethical behaviour in order to promote professionalism, fairness, dignity and ethical behaviour in its employees.

In compliance with provisions of section 177(9) of the Act and rules made thereunder and regulation 22 of the Listing Regulations, the Company has established vigil mechanism and framed Whistle Blower Policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct and under the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015. Whistle Blower Policy is uploaded on Companys website and the link of the same is provided in a separate section of Corporate Governance Report. No whistle blower has been denied access to the Audit Committee of the Board.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE PREVENTION, PROHIBITION AND REDRESSALRs ACT, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under.

The Company always endeavors to create and provide an environment to its employees and external individuals engaged with the Company that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the financial year 2022-23, no complaints were received with regards to sexual harassment at any location of the Company.

INSIDER TRADING REGULATIONS

The Company has adopted the Code for Insider Trading as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. All other details on insider trading regulations are mentioned into the Corporate Governance Report, which forms a part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015 and amendments therein.

A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report. The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for the Board of Directors Meeting (SS-1) and General Meetings (SS-2) are applicable to the Company. The Company has complied with the provisions of all applicable Secretarial Standards.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to the provisions of the SEBI (Listing

Obligation and Disclosure Requirements) Amendment Regulations, the SEBI has mandated the Top 1000 listed companies as per market capitalisation to prepare and publish the Business Responsibility and Sustainability Report (‘BRSR) with eRsect from the financial year 2022-23 in a specific format.

As the Company is among the top 1000 listed companies by market capitalisation, it is mandated to disclose the initiative on environmental, social, and governance perspective and publish the BRSR report. The BRSR report is attached and forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report. The Audit Committee has reviewed the Management Discussion and Analysis of financial conditions and results of operations during the year under review.

AUDITORS

Statutory Auditor and Audit Report

Chandulal M. Shah & Co. (Firm Registration No. 101698W), Chartered Accountants, Ahmedabad, was appointed as the Statutory Auditors of the Company till the conclusion of Thirty Sixth Annual General Meeting. Chandulal M. Shah & Co., Chartered Accountants have furnished a declaration confirming their independence as well as their arms length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company.

The Audit Committee and the Board at their respective meetings held on 17 May 2023 recommended the re-appointment of Chandulal M. Shah & Co. as the Statutory Auditors of the Company for a further period of 5 (five) consecutive years from the conclusion of Thirty Sixth AGM till the conclusion of Forty First AGM in year 2028, with an authority to the Audit Committee and the Board to decide the remuneration payable to them. Re-appointment of Chandulal M. Shah & Co. is subject to approval of members at the ensuing AGM.

The Board has duly reviewed the Statutory Auditors Report of Chandulal M. Shah & Co. for the year ended on 31 March 2023. The Notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditor and Audit Report

Ernst & Young LLP, Ahmedabad, has been the internal auditor of the Company for the FY 2022-23. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee and Management from time to time.

The Board has re-appointed Ernst & Young LLP, Ahmedabad for the FY 2023-24 as an Internal Auditor of the Company, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditor

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2022-23, on the remuneration terms as approved by the members at the previous Annual General Meeting. The Cost Audit report for the financial year 2021-22 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2022-23 is within 180 days from 31 March 2023.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2023-24 as a Cost Auditor to audit the cost records of the Company on a remuneration up to Rs 0.23 million plus applicable Goods and Services Tax and out of pocket expenses on actuals. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 36^th Annual General Meeting of the Company.

Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had re-appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2022-23. The Secretarial Audit Report for the FY 2022-23 is annexed to this Boards Report as Annexure-4. The Board has duly reviewed the Secretarial Auditors Report for the year ended on 31 March 2023. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Further, as per regulation 24A(1) of the Listing Regulations, the secretarial audit reports of Texas Lifesciences Private Limited, unlisted material subsidiary company is annexed herewith as Annexure-4A.

Annual Secretarial Compliance Report

In compliance with regulation 24A (2) of the Listing Regulations, Mr. Tapan Shah, Practicing Company Secretaries issued Annual Secretarial Compliance Report for the Financial Year ended on 31 March 2023. The Report, presented at the Board meeting held on 17 May 2023, confirmed that the Company has maintained proper records as stipulated under various Rules and Regulations and that, no action has been taken against the Company or its material subsidiaries or promoters / directors by SEBI / BSE / NSE. The Company has submitted the Report to the Stock Exchanges within the prescribed time.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, aRsecting the financial position of the Company which has occurred between the end of financial year and the date of Boards Report.

BUSINESS RISK MANAGEMENT

The Company has an elaborate Risk Management procedure covering various risks including Business, Operational, Financial, Sectoral, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks and its assessment, measurement and mitigation processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis within the risk appetite as approved from time to time by the Board of Directors. The risk management framework is reviewed periodically by the Board and the Audit Committee. Discussion on risks and concerns are covered in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

Pursuant to the provisions of section 134(3)(n) of the Act and regulation 21 of Listing Regulations, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, which forms a part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has a formal framework of Internal Financial Control ("IFC") in alignment with the requirement of Companies Act, 2013 and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC.

Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

1. The orderly and eRscient conduct of its business,

2. Safeguarding of its assets,

3. The prevention and detection of frauds and errors,

4. The accuracy and completeness of the accounting records and

5. The timely preparation of reliable financial information.

The Board reviews the eRsectiveness of controls documented as part of IFC framework, and take necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology environment.

Based on this evaluation, no significant events had come to notice during the year that have materially aRsected, or are reasonably likely to materially aRsect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was eRsective during the year and is adequate considering the business operations of the Company. The Statutory Auditors of the Company have audited the adequacy of Internal Financial Controls over Financial Reporting and the operating eRsectiveness of such controls and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditors Report under Standalone Financial Statements and Consolidated Financial Statements respectively.

CREDIT RATINGS

During the year, CARE Ratings Limited has revised the credit rating of "CARE BBB+/Stable" for long-term bank facilities from "CARE A-/Stable." For short-term bank facilities, "CARE A2" has been re-aRsrmed to the Company.

CERTIFICATIONS/ RECOGNITION/ ACCREDITATIONS

The Company having following Certifications/ Recognition/ Accreditations:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2015

4. ISO 14001:2015

5. ISO 45001:2018

6. DSIR approved R&D Centre

TRANSFER OF SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND RsIEPFRs ACCOUNT

During the year under review, in compliance with the provisions of sections 124 and 125 of the Act and Rules made thereunder the Company has transferred:

1. 1,750 equity shares of 8 (Eight) members whose dividend has remained unclaimed / unpaid for a consecutive period of 7 (seven) years to IEPF.

2. Rs 0.41 million held by 642 members, being the unclaimed dividend, pertaining to the dividend for the financial year 2014-15 was transferred to IEPF after giving notice to the members to claim their unpaid / unclaimed dividend.

ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Subsection (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the copy of the Annual Return of the Company for the Financial Year ended on 31 March 2023 in Form MGT-7 is uploaded on website of the Company and can be accessed at www.hester.in

PARTICULAR OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure-5 to this report.

CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in Annexure-6 and forms part of this report.

GENERAL DISCLOSURES

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent the transactions took place on these items during the year.

Apart from what are mentioned in this report, there are no material changes and commitments aRsecting the financial position of the Company between the end of the financial year and the date of this report.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by Bank. Your Directors also thank the Medical Professional, the Traders and Consumers for their patronage to the Companys products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. The Directors also thank the Companys vendors, investors, business associates, Stock Exchanges, Government of India, State Governments and various departments and agencies for their support and co-operation.

Your Directors appreciate and value the contribution made by every member of the Hester Biosciences.

For and on behalf of Board of Directors
Rajiv Gandhi	Priya Gandhi	Date 17 May 2023
CEO & Managing Director	Executive Director	Place Ahmedabad
DIN: 00438037	DIN: 06998979