themis medicare ltd Directors report

The Members,

Themis Medicare Limited

Your Directors take pleasure in presenting the 53^rd Annual Report along with the Audited Financial Statements for the financial year ended 31^st March, 2023. The Company operates only in one business segment viz., "Pharmaceuticals" and this report covers its Pharmaceutical business performance.

1. FINANCIAL STATEMENTS & RESULTS: a. Financial RESuLTS:

The Companys performance during the year ended 31^st March, 2023 as compared to the previous financial year, is summarized below:

Particulars	31st Mar, 2023	31st Mar, 2022
Income	36,582.81	40,115.51
Less: Expenses	30,691.95	31,721.61
Profit/(Loss) before tax	5,890.86	8,393.90
Current tax	1,500.00	1,675.00
Deferred tax	61.41	563.13
Profit after Tax	4,329.45	6,155.77

b. Operations:

The Company continues to be engaged in the activities pertaining to manufacturing of pharmaceutical products, especially in formulation and API activity.

There was no change in nature of the business of the Company, during the year under review.

During the year under review, the Company had, vide a Special Resolution passed through Postal Ballot resolved to transfer its Active Pharmaceutical Ingredients Business to Themis Lifestyle Private Limited, its wholly owned subsidiary subject to requisite consents, approvals and completion of various formalities.

c. REPORT ON PERFORMANCE OF SuBSIDIARIES, ASSOCIATES AND JOINT VENTuRE COMPANIES:

As on the last day of the financial year, the Company had two non-material subsidiaries namely, Artemis Biotech Limited and Themis Lifestyle Private Limited and two overseas subsidiaries in UK namely, Carpo Medical Limited & Carpo Investments Ltd.

The performance and financial position of each of the subsidiaries and associates for the year ended 31^st March 2023 in Form AOC-1 is attached and marked as Annexure I and forms part of this Report.

d. DIVIDEND:

Your Directors are pleased to recommend dividend of Rs.5/- per equity share having face value of Rs. 10/- each on 92,02,770 Equity shares, aggregating to Rs.460.14 Lakhs. The dividend, if declared at the AGM, would be paid/ dispatched within thirty days from the date of declaration of dividend to those Members/ Beneficial holders as on Book Closure date fixed for the said purpose.

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "SEBI Listing Regulations"), the top 1000 listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Accordingly, your Company has formulated its Dividend Distribution Policy, which is available on the Companys website at https:// www.themismedicare.com/uploads/statutory/ pdf/dividend-distribution-policy-300.pdf

e. TRANSFER TO RESERVES:

Your Board has not recommended transfer of any amount of profit to reserves during the year under review. The Company has not transferred any amount to reserves and not withdrawn any amount from the reserves.

f. REVISION OF FINANCIAL STATEMENT:

There was no revision of the financial statements for the year under review.

g. DEPOSITS:

The Company does not have any outstanding deposits from public.

Your Company has not accepted any deposits falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with Chapter V of the Act is not applicable.

h. DISCLOSURES UNDER SECTION 134(3)(l) OF THE ACT:

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and date of this report.

i. statement on declaration under section

149(6) Of THE ACT:

The Independent Directors of the Company have given the declaration and confirmation to the Company as required under Section 149(7) of the Act and Regulation 25(8) of the SEBI Listing Regulation confirming that they meet the criteria of independence and that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

j. STATEMENT uNDER SECTION 178 OF THE ACT:

Your Company has constituted Nomination and Remuneration Committee as well as Stakeholders Relationship Committee as provided under section 178(1) of the Act. The Nomination and Remuneration Committee considers that the qualifications, experience and positive attributes of the Directors on the Board of the Company are sufficient enough to discharge their duties as such. The remuneration is being paid to Managing and Whole time Directors in line with Schedule V of the Act as also commission and sitting fees are paid to other Directors for attending Board and Audit Committee meetings at present.

Policy on Nomination and Appointment of Directors/Criteria for appointment of Senior Management and Remuneration Policy as formulated under Section 178(3) of the Act is annexed as Annexure II and forms part of this Report.

k. COMMENTS OF THE BOARD ON AuDITORS REPORT:

i. Observations of Statutory Auditors on Accounts for the year ended 31^st March 2023:

There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in respect of financial

statements as on and for the year ended 31^st March, 2023.

ii. Secretarial Audit Report for the year ended

31^st March, 2023: Provisions of Section 204 read with Section 134(3) of the Act, mandates to obtain Secretarial Audit Report from a Practicing Company Secretary. M/s. SAV & Associates LLP, Practicing Company Secretaries were appointed to conduct Secretarial Audit and issue Report for the financial year 2022-23.

Secretarial Audit Report issued by M/s. SAV & Associates LLP, Practicing Company Secretaries, in Form MR-3 for the financial year 2022-23 forms part of this report. The Secretarial Audit Report is annexed here with as Annexure III.

In respect of the observations made in the Secretarial Audit report, there are no qualifications, or adverse remarks by the Secretarial Auditor in respect of Secretarial Audit for the year ended 31^st March, 2023.

l. PARTICuLARS OF LOANS, GuARANTEES, INVESTMENTS AND SECuRITIES:

Details of Loans granted, Guarantees given or Investments made during the year under review, covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.

m. PARTICuLAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

Contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arms length basis and in the ordinary course of business.

All related party transactions are placed for the approval before the Audit Committee and also before the Board and Shareholders wherever necessary in compliance with the provisions of the Act and the SEBI Listing Regulations. The Audit Committee had granted omnibus approval for Related Party Transactions as per the provisions contained in the SEBI Listing Regulations.

The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board has been adopted by the Company and uploaded on the

Companys website at the link: https://www. themismedicare.com/uploads/statutory/pdf/ related-party-transaction-policy-25.pdf

n. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by your Company are adequate. During the year under review, no material or serious observations were received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

The Internal Financial Controls followed by the Company are adequate and commensurate with the size and nature of the business and were operating effectively during the year under review.

Internal Audit function of the Company is carried out through Independent Chartered Accountants Firms to test and verify the Companys Internal Control System. The Companys assets are adequately safeguarded against significant misuse or loss. The Company has in place, adequate Internal Financial Controls with respect to maintenance of accounting records and financial transactions. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

0. DISCLOSURE OF ORDERS PASSED BY

REGULATORS OR COURTS OR TRIBUNAL:

There are no orders passed by the regulators or courts or Tribunals for/or against the Company during the year under review.

p. DISCLOSURE UNDER SECTION 43(a)(ii) Of THE ACT:

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

q. DISCLOSURE UNDER SECTION 54(1)(d) OF THE ACT:

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the

Companies (Share Capital and Debenture) Rules, 2014 is furnished.

r. DISCLOSURE UNDER SECTION 62(1)(b) OF THE ACT:

As per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and other applicable Regulations, details of equity shares issued if any under Employees Stock Option Scheme during the financial year under review is furnished in Annexure IV attached herewith which forms part of this Report.

s. DISCLOSURE UNDER SECTION 67(3) OF THE ACT:

The provisions of Section 67(3) as well as disclosure under rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 are not applicable in respect of Equity shares allotted against ESOPs granted to employees.

t. BUSINESS Responsibility AND SUSTAINIBLITY REPORT (BRSR):

In accordance with Regulation 34(2) of the SEBI Listing Regulations, the inclusion of Business Reporting and Sustainability Report (BRSR) as a part of the Annual Report is mandated for top 1000 listed entities based on the market capitalization. BRSR for the financial year 202223 has been prepared in accordance with the format prescribed by SEBI. The summary of the BRSR is appended herewith as Annexure VIII to this Report.

2. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Rajneesh Anand (DIN: 00134856), Non - Executive Non-Independent Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board recommends to the members the re- appointment of Mr. Rajneesh Anand (DIN: 00134856) as a Director in the ensuing Annual General Meeting (AGM) of the Company.

Necessary resolution for the appointment/ reappointment of the aforesaid Director is included in the Notice convening the ensuing AGM and details of the proposal for appointment/re- appointment are mentioned in the Explanatory Statement to the Notice.

Mr. Vijay Agarwal (DIN: 00058548) will be completing his second term as an Independent Director at the ensuing AGM. Your Directors place on record their appreciation of the services rendered by him during his tenure as Director of the Company.

During the year, Mr. Lajos Kovacs, representative of foreign collaborator has resigned as a Non-Executive Director of the Board w.e.f. 6^th September, 2022. Your Directors place on record their appreciation of the services rendered by Mr. Kovacs during his tenure as Director of the Company.

Mr. Hoshang Sinor (DIN: 00074905) ceased to be the Chairman and Independent Director at the previous AGM held on 19^th September, 2022 due to completion of his second term as Independent Director. Your Directors place on record their appreciation of the services rendered by Mr. Sinor during his tenure as Chairman and Director of the Company.

Further, after completion of the financial year, Mr. Gabor Gulacsi (DIN: 06975242), Non - Executive Non-Independent Director of the Company, has resigned from the directorship of the Company w.e.f. 2^nd May, 2023. Consequently, the office of Mrs. Reena Patel (DIN: 00228669), Alternate Director to Dr. Gabor Gulasci also gets vacated pursuant to section 161 of the Act and she ceases to be an Alternate Director with effect from 2^nd May, 2023. Directors have placed on record their appreciation of the services rendered by both Directors during their tenure as Director of the Company.

3. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a. BOARD MEETINGS:

A calendar of regular meetings is prepared and circulated in advance to the Directors. Pursuant to the provisions of the Companies Act, 2013 and rules made thereunder, the Board met four (4) times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and the SEBI Listing Regulations.

b. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Act, in relation to the audited financial statements of the Company for the year ended 31^st March, 2023, the Board of Directors hereby confirms that:

i. in the preparation of the annual accounts, the applicable accounting standards had been followed and there is no material departure according to the accounting standards;

ii. such accounting policies have been selected and applied consistently and the Directors 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 as at 31^st March, 2023 and of the profit of the Company for that year;

iii. proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts of the Company have been prepared on a going concern basis;

v. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively ;

vi. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

c. COMMITTEES OF THE BOARD OF DIRECTORS / OTHER COMMITTEES:

In compliance with the requirement of applicable laws and as part of best governance practices, the Company has following Committees as on 31^st March, 2023:

i. Audit Committee

ii. Stakeholders Relationship Committee

iii. Nomination and Remuneration Committee

iv. Corporate Social Responsibility Committee

v. Risk Management Committee

The details with respect to the aforesaid Committees form part of the Corporate Governance Report.

d. VIGIL MECHANISM Policy/ WHISTLE BLOWER Policy For THE DIRECTORS AND EMPLOYEES:

The Board of Directors of the Company has, pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil

Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc.

As per SEBI (Prohibition of Insider Trading) (Amendment) Regulation, 2018 which amends SEBI (Prohibition of Insider Trading) Regulation, 2015, the listed company shall have a whistleblower policy and make employees aware of such policy to enable employees to report instances of leak of unpublished price sensitive information.

Considering the above amendment in SEBI (Prohibition of Insider Trading) Regulations, 2015, the Vigil Mechanism Policy of the Company was amended with effect from 1^st April, 2019 to enable employees to report instances of leak of unpublished price sensitive information.

The employees of the Company have the right/ option to report their concern/grievance to the Chairman of the Audit Committee.

The said Policy is available on the website of the Company at https://www.themismedicare. com/uploads/statutory/pdf/vigil-mechanism- whistle-blower-policy-31.pdf The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

e. RISK MANAGEMENT:

We have an integrated approach to managing risks inherent in various aspect of our business.

As per amendment prescribed under Regulation 21 of the SEBI Listing Regulations, the Company was required to constitute a Risk Management Committee.

Accordingly a Risk Management Committee of the Company has been constituted by the Board on 11^th February, 2022 comprising four Board members and a Senior Executive of the Company.

The composition of the Risk Management Committee of the Company is as under:

i. Mr. Bhaskar V. Iyer
ii. Ms. Manjul Sandhu	Directors & Members
iii. Mr. H Subramaniam
iv. Dr. Sachin D. Patel
v. Mr. Tushar Dalal	Member & Chief Financial Officer

The mandate of the Risk Management Committee is to discuss various aspects involved in Business risks to the Company and the manner to mitigate the same.

f. CORPORATE SOCIAL RESPONSIBILITY POLICY:

As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee.

Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been appended as Annexure V and forms an integral part of this Report.

The Company has formulated policy for CSR activities and is placed on the website of the Company at https://www.themismedicare.com/ uploads/statutorv/pdf/csr-policv-29.pdf

During the year under the review one CSR committee meeting has been conducted.

g. annual evaluation of directors, committee AND BOARD:

The Board of Directors has carried out an annual evaluation of its own performance, Board , Committees and Individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by the SEBI Listing Regulations.

The performance of the Board was evaluated by the Board with the help of inputs received from all the Directors on the basis of the criteria such as the Board Composition and structure, effectiveness of Board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board with the help of inputs received from the Committee members on the basis of the criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The Board concluded that all Board Committees were discharging its functions effectively.

The Board andtheNominationandRemuneration Committee reviewed the performance of the Individual Directors on the basis of the criteria such as the contribution of the Individual Director to the Board and Committee meetings like ability to contribute and monitor our corporate governance practices, meaningful and constructive contribution in the issues discussed in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its Committees and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The Board was overall of the opinion that the Independent Directors have contributed through the process of Board and Committee meeting of which they are members in effective manner as per as their expertise in their field and needs of the organization. The suggestions and contributions of the Independent Directors in the working of the Board\Committee were satisfactory and the value addition made by such Independent Directors individually and as a team is commendable.

Also, the Company had provided facility of performance evaluation to Directors through online platform for convenience of the Board members.

h. DISCLOSURE UNDER SECTION 197(12) OF THE ACT AND OTHER DISCLOSURES AS PER RULE 5 Of COMPANIES (APPOINTMENT & REMuNERATION) RuLES, 2014:

The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review has been marked as Annexure VI.

i. particulars of employees

The information required under Section 197

of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appended as Annexure VI to this report.

The statement containing names of employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary at sangameshwar.iyer@themismedicare.com.

j. PAYMENT OF remuneration / COMMISSION TO DIRECTORS FROM HOLDING OR SuBSIDIARY COMPANIES:

None of the managerial personnel i.e. Managing Director and Whole time Directors of the Company is in receipt of remuneration/ commission from any Subsidiary Company of the Company.

k. DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Non-Executive Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and the SEBI Listing Regulation as amended.

4. AuDITORS REPORTS:

a. APPOINTMENT OF AuDITORS:

M/s Krishaan & Co., were appointed as Statutory Auditors of the Company at the 52^nd Annual General Meeting of the Company to hold office from the conclusion of the said meeting till the conclusion of the 57^th Annual General Meeting.

b. MAINTENANCE OF COST RECORDS :

Maintenance of cost records is required as specified by the Central Government under sub-section (1) of section 148 of the Act, and accordingly such accounts and records are made and maintained.

c. COST AuDITORS:

Pursuant to the provisions of Section 148 of

the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors on recommendation of the Audit Committee, appointed M/s. B. J. D. Nanabhoy & Co., Cost Accountants as the Cost Auditors of the Company for the financial year 2023-24 for the applicable Product(s).

Pursuant to Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, appropriate resolution seeking your ratification to the remuneration of the said Cost Auditors is appearing in the Notice convening the 53^rd AGM of the Company.

d. SECRETARIAL AUDITORS:

The Board of Directors of the Company had appointed M/s. SAV & Associates LLP, Practicing Company Secretaries, Mumbai, to conduct Secretarial Audit for the financial year 2022-23.

The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

The Secretarial Audit Report and the Secretarial Compliance Report forms a part of this report.

5. other disclosures

Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:

a. ANNuAL RETuRN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31^st March, 2023 will be available on the Companys website on https://www.themismedicare.com.

b. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND Foreign EXCHANGE EARNINGS AND OuTGO:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure VII which forms part of this Report.

c. CORPORATE GOVERNANCE:

Report on Corporate Governance and Certificate of Practicing Company Secretary regarding compliance of the Conditions of Corporate Governance as stipulated in regulation 17 to

27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 of the SEBI Listing Regulations with the Stock Exchanges, are enclosed as a separate section and forms part of this report.

d. PREVENTION OF SEXuAL HARASSMENT:

We have zero tolerance for sexual harassment at the workplace and have adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of Complaints of Sexual Harassment at the workplace.

During the financial year ended 31^st March, 2023, your Company has not received any complaint relating to sexual harassment.

6. MANAGEMENT DISCuSSION & Analysis: Cautionary Statement:

The statements in the "Management Discussion and Analysis Report" describe your Companys objectives, projections, estimates and expectations which may be "forward-looking statements" within the meaning of the applicable laws and regulations. The actual results could differ materially from those expressed or implied, depending upon the economic and climatic conditions, government policies, taxation and other laws and other incidental factors. financial Overview:

The financial performance of the Company for the financial year ended 31^st March, 2023, is as follows: Total consolidated revenue from operations stood at Rs. 354.32 Crores for the year ended 31^st March, 2023, as against Rs. 394.61 Crores for the corresponding previous period, a decrease of 10.21%, FY22 includes one-time COVID related export order.

The total cost of raw materials rendered for the financial year ended 31^st March, 2023 was Rs. 118.36 Crores as against Rs. 148.14 Crores for the corresponding previous period.

The EBIDTA (earnings before interest, depreciation and tax, excluding other income) was Rs. 67.45 Crores for the year ended 31^st March, 2023, as against Rs. 95.64 Crores for the corresponding previous period, a decrease of 29.47%.

The finance cost for the financial year ended 31^st March, 2023 was Rs. 9.56 Crores as against Rs. 8.77

Crores for the corresponding previous period.

The PAT (profit after tax) was Rs. 56.90 Crores for the year ended 31^st March, 2023, as against Rs. 72.88 Crores for the corresponding previous period, a decline of 21.93%.

Resources and Liquidity:

The cash and cash equivalents at the end of 31^st March, 2023 were Rs. 12.55 Crores. The total debt to equity ratio of the Company stood at 0.27 as on 31^st March, 2023.

Business category wise performance:

The Company operates in one segment i.e. pharmaceuticals. The results of the Company under review depict business growth during the period. The Company is presently manufacturing formulations and API.

Risk & Concerns:

The business of the Company is exposed to certain risks. Risks, liabilities and losses are part and parcel of any industry and need to be tackled through well forecasted strategies and actions.

unfavorable Policy Changes

In the past few years, the Government of India has made frequent changes in the drug pricing and other laws impacting the operations of the Company. Further adverse changes in government policies with respect to essential medicines and pricing with respect to the products may impact margins of the Company. The Government policies are creating new risks for domestic market by including new molecules to the price control umbrella and also by issuing ban on various Fixed Dose Combinations.

Credit Risk

To manage its credit exposure, Themis Medicare has determined a credit policy with credit limit requests and approval procedures. The Company does its own research of a counterpartys financial health and business prospects. Timely and rigorous process is followed up with clients for payments as per schedule. The Company has suitably streamlined the process to develop a focused and aggressive receivables management system to ensure timely collections.

Interest Rate Risk

The Company has judiciously managed the debt- equity ratio. It has been using a mix of loans and internal cash accruals. Themis Medicare has well

managed the working capital to maintain the overall interest cost at reasonable levels.

Competition Risk

Like in most other industries, growth opportunities lead to a rise in competition. We face different levels of competition, from domestic as well as multinational companies. Themis Medicare has created strong differentiators in execution, quality and delivery which make it resilient to competition. Furthermore, the Company continues to invest in R&D and its people to maintain a competitive edge. Stable and long-standing client relationships further help maintain a strong order book and insulate the Company from this risk. We also mitigate this risk with the quality of our infrastructure, our product portfolio and specialized formulation methodologies, coupled with prudent financial and human resources management and better control over costs.

Input Cost Risk

Our profitability and cost effectiveness may be affected due to change in the prices of raw materials, power and other input costs.

opportunities & THREATS Opportunities

India is the largest provider of generic drugs globally and is known for its affordable vaccines and generic medications. The Indian Pharmaceutical industry is currently ranked third in pharmaceutical production by volume after evolving over time into a thriving industry growing at a CAGR of 9.43% since the past nine years. India has the most number of pharmaceutical manufacturing facilities that are in compliance with the US Food and Drug Administration (USFDA) and has 500 API producers that make for around 8% of the worldwide API market.

Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK. The domestic pharmaceutical industry includes a network of 3,000 drug companies and ~10,500 manufacturing units. The country also has a large pool of scientists and engineers with a potential to steer the industry ahead to greater heights. Over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms. India is rightfully known as the "pharmacy of

the world" due to the low cost and high quality of its medicines.

Source: https://www.ibef.ora/industrv/ pharmaceutical-india

Threats

Adoption of cost control policies along with tightening of rules by governments in key markets are expected to affect the growth prospect of the global pharmaceuticals industry. Pharmaceuticals companies are forced to reduce their research and development (R&D) spending due to slowdown of growth in last few years, which is also expected to hamper growth of the global pharma market as new drugs revenue form large part of pharma firms revenue due to exclusivity of the drug. Apart from this generics pharma market is facing decreasing return on investment due to price erosion in key markets which is forcing many firms to look for other avenues and markets to sustain growth.

Source: https://www.globenewswire.com/ news-release/2020/01/17/1972092/0/en/ Global-Pharmaceuticals-Industry-Analysis-and- Trends-2023.html

Internal control system and adequacy:

The Company ensures the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. This involves the timely and accurate communication of financial and operational information to stakeholders, both internal and external. The company identifies and asses the risks it faces and develop necessary strategies to mitigate or manage those risks.

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. Other statutory requirements especially, in respect of pharmaceutical business are also vigorously followed in order to have better internal controls over the affairs of the Company.

Outlook on Indian Pharmaceutical Industry:

The pharmaceutical industry in India is a significant part of the nations foreign trade and

offers lucrative potential for investors. Millions of people around the world receive affordable and inexpensive generic medications from India, which also runs a sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA).

Among nations that produce pharmaceuticals, India has long held the top spot. Medicine spending in India is projected to grow 9-12% over the next five years, leading India to become one of the top 10 countries in terms of medicine spending. Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, antidiabetes, anti-depressants and anti-cancers, which are on the rise.

In addition, the Indian pharmaceutical industry placed a high value on research and development. By expanding its R&D ecosystem and increasing pharmaceutical exports, India has emerged as a global medical giant in 2022. The COVID-19 pandemic has altered public perception of pharmaceutical research. It has demonstrated the significance of investigating novel therapeutic modalities, conducting complex clinical studies, and cultivating specialized knowledge and abilities to navigate the drug research and development process.

According to the EY FICCI report, the Indian pharmaceutical market is expected to reach $130 billion in value by the end of 2030, as there has been a growing consensus on providing new innovative therapies to patients. Meanwhile, the global market for pharmaceutical products is expected to exceed $1 trillion by 2023. This is due in part to the thousands of compounds that are currently in the final stages of clinical development, as well as hundreds of new products that are expected to be approved in 2023 and beyond. This concentration of pharmaceutical products is unusual and has not been seen in over a decade.

India is working to develop a policy framework that includes intellectual property and technology commercialization, government procurement, scientificresearch,education, andskilldevelopment, as well as ease of doing business, regulatory legislation, and tax and financial incentives. These

regulatory changes will allow for additional private- sector investment in pharmaceutical R&D.

Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

Themis Medicare is prepared to seize the opportunity because to its extensive experience in the field of producing APIs and medicinal formulations. It is present in a number of drug delivery systems and is thinking about extending its portfolio in this area as well.

The long-term market outlook for hospitals in India is stable, with annual revenues likely to grow robustly over the next few years on account of rising domestic demand for healthcare as well as medical tourism.

While metropolitan cities like Delhi, Mumbai, Chennai, and Kolkata host super specialty hospital groups (Apollo, Fortis, Max, etc.) with world class infrastructure, healthcare players are now looking to expand in Tier-2 and Tier-3 cities, such as Nashik (Maharashtra), Indore (Madhya Pradesh), Visakhapatnam (Andhra Pradesh), Jaipur (Rajasthan), Mohali (Chandigarh), Surat (Gujarat), and Dehradun (Uttarakhand).

The hospital industry in India offers huge investment opportunities for both global and domestic investors. At present, there are 582 investment opportunities worth US$32.16 billion in the medical infrastructure sector.

Source: https://www.ibef.org/industrv/ pharmaceutical-india

https://www.livemint.com/companies/news/what-

pharmaceutical-india-has-accomplished-in-2022-

what-to-expect-in-2023-11672160844579.html

Government Initiatives

The government has a role in boosting research and manufacturing capacities, as well as expanding the PLI scheme so that more local manufacturers can access incentives and support needed to play in the API sector. Additionally, the centers recent decision to make the QR code mandatory on the packaging label of the top 300 drug formulations is a much-needed and well-thought-out step by the government. It will likely curb the sale of spurious

and counterfeit drugs in India.

The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The National Health Protection Scheme, which aims to offer universal healthcare, the ageing population, the rise in chronic diseases, and other government programmes, including the opening of pharmacies that offer inexpensive generic medications, should all contribute to boost the Indian pharmaceutical industry.

Source: https://www.ibef.ora/industry/ pharmaceutical-india

https://www.livemint.com/companies/news/what-

pharmaceutical-india-has-accomplished-in-2022-

what-to-expect-in-2023-11672160844579.html

As per the Union Budget 2022-23:

Rs. 3,201 crore (US$ 419.2 million) has been set aside for research and Rs. 83,000 crore (US$ 10.86 billion) has been allocated for the Ministry of Health and Family Welfare.

Rs. 37,000 crore (US$ 4.83 billion) has been allocated to the National Health Mission. Rs. 10,000 crore (US$ 1.28 billion) has been allocated to Pradhan Mantri Swasthya Suraksha Yojana.

The Ministry of AYUSH has been allocated Rs. 3,050 crore (US$ 399.4 million), up from Rs. 2,970 crore (US$ 389 million). In March 2022, under the Strengthening of Pharmaceutical Industry (SPI) Scheme, a total financial outlay of Rs. 500 crore (US$ 665.5 million) for the period FY 2021-22 to FY 2025-26 were announced.

To achieve self-reliance and minimize import dependency in the countrys essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme to promote domestic manufacturing by setting up greenfield plants with minimum domestic value addition in four separate Target Segments with a cumulative outlay of Rs. 6,940 crore (US$ 951.27 million) from FY21 to FY30. Source: https://www.ibef.org/industrv/ pharmaceutical-india

Outlook on Global Pharmaceutical Industry

Global pharmaceutical market is expected to grow in the upcoming years despite recent slowdown in key markets across the globe. The reasons are simple: aging and growing population, rising

income levels, and emerging medical conditions and emergence of new diseases.

The global pharmaceutical industry will worth USD

1.57 trillion by 2023. The growth in this market is predicted on the basis of various factors like market drivers, current and upcoming trends, current growth pattern, and market challenges.

North America is expected to retain its leading position in the global pharmaceuticals market with market share of 45.33% in 2023 improving on its market share compared to 2017. Europe on the contrary is expected to see a decline in its market share compared to 2017 and be worth 20.24% of global pharma industry in 2023.

Asia Pacific pharmaceuticals market is expected to retain its second position with a market share of 24.07% in 2023. Latin America and Middle East and Africa (MEA) are expected to retain 7.53% and 2.96% market share of global pharmaceuticals market in 2023. This growth is fueled by the growing and ageing population in key markets.

As per World Population Prospects by United Nations, the worldwide population is likely to cross 9.3 billion by 2050 and around 21% of this population is expected to be aged 60 and above. Apart from ageing and rising population the improvements in purchasing power and access to quality healthcare and pharmaceuticals to poor and middle-class families worldwide also is driving the growth of global pharma industry.

The active pharmaceutical ingredients (API) market was valued at approximately USD 177.05 billion in 2021, and it is expected to reach USD 258.60 billion by 2027, registering a CAGR of nearly 7.50% during the forecast period 2022-2027. The API market has traditionally been dominated by drugs, such as anti- infectives and diabetes, cardiovascular, analgesics, and pain management drugs. However, as per the R&D trends, the demand is shifting toward developing complex APIs used in novel formulations, targeting niche therapeutic areas. The key factors boosting the growth of the active pharmaceutical ingredients market are the rising drug research and development activities for drug manufacturing, the increasing importance of generics, and the increasing uptake of biopharmaceuticals. However, the unfavourable drug price control policies across various nations and high manufacturing costs are expected to hinder the markets growth.

The global sales of the critical care drugs market are

projected to grow at a steady CAGR of around 5% to 6% between 2022 and 2032, generating substantial revenues by the end of the forecast period. Growth in the market is attributable to the increasing prevalence of various chronic diseases across the world along with the rising need for better pain management during complex surgeries.

Another aspect, which is leading this growth, is rising focus of pharmaceuticals companies to tap the rare and speciality diseases market. Innovations in advanced biologics, nucleic acid therapeutics, cell therapies and bioelectronics & implantables has attracted investments in the industry by even non-pharma companies like Facebook, Qualcomm etc. which is also driving the global pharmaceuticals industry growth.

Source: https://www.alobenewswire.com/ news-release/2020/01/17/1972092/0/en/ Global-Pharmaceuticals-Industry-Analysis-and- Trends-2023.html

https://www.mordorintelliaence.com/industry- reports/alobal-active-pharmaceutical-inaredien ts- api-market

https://www.futuremarketinsiah ts.com/reports/ critical-care-druas-market

Indian & Global Hospital Sector

The long-term market outlook for hospitals in India is stable, with annual revenues likely to grow robustly over the next few years on account of rising domestic demand for healthcare as well as medical tourism.

While metropolitan cities like Delhi, Mumbai, Chennai, and Kolkata host super specialty hospital groups (Apollo, Fortis, Max, etc.) with world class infrastructure, healthcare players are now looking to expand in Tier-2 and Tier-3 cities, such as Nashik (Maharashtra), Indore (Madhya Pradesh), Visakhapatnam (Andhra Pradesh), Jaipur (Rajasthan), Mohali (Chandigarh), Surat (Gujarat), and Dehradun (Uttarakhand).

The hospital industry in India offers huge investment opportunities for both global and domestic investors. At present, there are 582 investment opportunities worth US$32.16 billion in the medical infrastructure sector.

In recent years, the hospital sector has undergone significant changes due to technological advancements, changes in healthcare policy, and

increasing patient demands. The COVID-19 pandemic has also had a profound impact on the hospital sector, leading to changes in healthcare delivery and a shift towards virtual care.

Despite these challenges, the hospital sector is expected to grow in the future. According to a report by Grand View Research, the global hospital market is projected to reach USD 7.1 trillion by 2028, with a compound annual growth rate (CAGR) of 8.9% from 2021 to 2028. The growing demand for healthcare services, increasing prevalence of chronic diseases, and technological advancements in medical devices and equipment are some of the key factors driving this growth.

Source: https://www.india-briefina.com/news/indias-healthcare-ecosvstem-kev-seaments-market-arowth- prospects-26225.h tml/

Key Developments during the year:

• Central Licensing Authority conveyed a no objection to the Company for manufacturing and marketing a key product, i.e. Diclofenac Injection 75mg/ml which the Company had stopped manufacturing and marketing pursuant to a directive from the State Food and Drug Administration authorities

• Received approval from Drug Controller General of India (DCGI) for import & marketing of Remifentanil 1 mg/2mg Powder for Injection. Remifentanil Hydrochloride is a potent opioid analgesic used for pain management in critically ill patients

• Launched a new product - Lenzetto Global brand of Estradiol Novel Drug Delivery System for treatment of Menopausal symptoms"

• Entered into a partnership to develop NFL-101 with NFL BIOSCIENCES, a biopharmaceutical company developing botanical drugs for the treatment of addictions, the companys drug candidate for smoking cessation, for the Indian market. Themis Medicare will purchase from NFL Biosciences NFL-101 Active Pharmaceutical Ingredient (API). And NFL will also receive double digit royalties on sales

Companys Strategy

Companys focus continuous to be on the Hospital business and expand its presence throughout the country. We see many opportunities in the hospital business backed by a strong product offering. TML is among top 3 players in the country and offers complete range of products for Anesthesia which is favorable for Hospital business. Critical care and Intensive care are other divisions in the Hospital business which forms part of the long term growth strategy.

For API, currently, three products are in validation, which are expected to go into commercial production by second half of this year. With strong R&D pipeline, the Company is confident to take two exhibit batches per quarter of current financial year and typically it takes about six months for exhibit batch or validation batch to reach commercial launch. Forward integration of in-house APIs is also implemented in certain important FDFs to be used in Hospital business.

As part of our strategy to concentrate on both the API and the Hospital Business, the Company recently demerged and transferred the API segment of the Company, including both the API production facilities, to a 100% owned subsidiary company, Themis Lifestyle Private Limited.

Outlook

Over the next five years, Indias medical spending is expected to increase by 9-12%, making it one of the top 10 countries in the world. The ability of company to orient its product portfolio towards chronic therapies for diseases like cardiovascular, anti-diabetes, anti-depressants, and anti-cancers, which are on the rise, will also play a role in future domestic sales growth. The quick entry of generic medications into the market has remained a priority and is anticipated to help the company.

A lot of opportunities are foreseen in the hospital business backed by strong product offering. Themiss expertise in Anaesthesia makes it one of the top players in the country and a complete range of portfolio gives the company an additional benefit for entering the hospital segment. Other segments of the hospital business where TML has a presence and is expanding, including critical care and intensive care, are included

in the long-term growth strategy. The company has also planned few new product launches to make sure a complete product portfolio for generics support its incremental penetration into the Hospitals.

The Company is also infusing CapEx towards R&D to enhance capabilities by adding more skilled manpower to the existing team, establishing new R&D lab at Baroda and making investments in Hyderabad facility.

The Indian API (Active Pharmaceutical Ingredient) market is expected to grow at a compound annual growth rate (CAGR) of around 8-9% between 2021 and 2026. This growth can be attributed to factors such as increasing demand for generic drugs, rising prevalence of chronic diseases, and the governments initiatives to promote domestic manufacturing of APIs. Themis Medicare will continue on investing in the R&D facility for in-house API development, which will help the business to reach new heights. Three products under API segment are currently undergoing validation and should enter commercial production by the second half of this year.

As part of its recent strategy, change to focus more on the hospital business, the board recently decided to demerge and transfer the companys API sector, including both API production facilities, to a 100% owned subsidiary company, Themis Lifestyle Private Limited. The company will be able to strategically focus on both the API and the Hospital Business by doing this.

Due to its considerable experience in the field of creating APIs and pharmaceutical formulations, Themis Medicare is prepared to take advantage of the opportunity prevailing in the Indian Pharmaceutical sector. It is present in many drug delivery systems and is considering expanding its product line in this sector as well.

c) Segment-wise or product-wise performance:

The Company operates in single segment i.e., pharmaceuticals. The results of the Company under review depict business growth during the period.

d) Discussion on financial performance with respect to operational performance

In the previous fiscal year, FY22, the Company experienced a notable order directly influenced by the Covid pandemic within the hospital segment. Therefore, when reviewing the financials for the current year under consideration, it is essential to consider the impact of this extraordinary order.

The consolidated Net Profit after Tax decreased by 22.16% compared to previous year. The production capacity was utilized to the maximum level during the year.

e) Material developments in Human Resources / Industrial Relations front, including number of people employed

The core of the Human Resource philosophy at Themis Medicare Ltd. is empowering human resources towards achievement of company aspirations. Your Company has a diverse mix of youth and experience which nurtures the business. As on 31st March, 2023 the total employee strength was 996.

f) Details of significant changes in key financial ratios (i.e. change of 25% or more as compared to the immediately previous financial year):

Sr. No. Particulars	2022-23	2021-22
1 Debtors Turnover ( in days)	150 days	93 days
2 Inventory Turnover (in days)	213 days	150 days
3 Interest Coverage Ratio	7.16 : 1	10.57 : 1
4 Current Ratio	1.71 : 1	1.76 : 1
5 Debt Equity Ratio	0.37 : 1	0.38 : 1
6 Operating Profit Margin (%)	19%	23%
7 Net Profit Margin (%)	12%	16%

g) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.:

Financial year	2022-23	2021-22
Return on net worth (%)	17%	29%

7. ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, collaborators, employees, financial institutions and Central and State Governments for their consistent support and encouragement to the Company.

	for and on behalf of the Board of Directors
Sd/-	Sd/-
Dr. Sachin D. Patel	Vijay Agarwal
Managing Director & CEO	Independent Director
DIN:00033353	DIN:00058548
Place: Mumbai
Dated: 13th May, 2023