Hester Biosciences Ltd Directors Report

Your Directors are pleased to present the Thirty-Eighth Annual Report and the Audited Financial Statements for the financial year ended 31 March 2025.

FINANCIAL RESULTS

The financial statements of the Company have been prepared in accordance with the Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015.

A summary of the standalone and consolidated financial performance of the Company for the financial year ended 31 March 2025 is as follows:

	Standalone		Consolidated
Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024	For the year ended 31 March 2025	For the year ended 31 March 2024
Revenue from operations	2 ,864.66	2,851.55	3,111.02	3,045.46
Other income	47.64	42.62	39.24	106.38
Total Revenue	2,912.30	2,894.17	3,150.26	3,151.84
Profit before interest, depreciation, amortisation expenses and tax (PBIDT)	557.08	516.03	649.76	642.93
Less: Finance Cost	53.67	50.93	127.03	197.75
Less: Depreciation and Amortisation Expenses	85.81	97.78	168.02	171.74
Profit before Share of Profit in Joint Venture entity and Tax	417.60	367.32	354.71	273.44
Share of Profit in Joint Venture entity	-	-	41.00	46.09
Profit before tax	417.60	367.32	395.71	319.53
Less: Tax Expenses	99.18	95.73	107.45	107.87
Profit for the year (PAT)	318.42	271.59	288.26	211.66
Attributable to:
Owners	318.42	271.59	274.88	188.89
Non-Controlling Interest	-	-	13.38	22.77
Other Comprehensive Income /(Loss)	(3.63)	(0.24)	0.59	(0.33)
Attributable to:
Owners	(3.63)	(0.24)	0.78	(0.22)
Non-Controlling Interest		-	(0.19)	(0.11)
Total Comprehensive Income	314.79	271.35	288.85	211.33
Attributable to:
Owners	314.79	271.35	275.66	188.67
Non-Controlling Interest	-	-	13.19	22.66
Earnings Per Share (Basic & Diluted) (Face Value of Share INR 10 each) (INR)	37.43	31.93	33.89	24.88

There have been no significant changes or commitments impacting 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 INR 2,864.66 million, as compared to INR 2,851.55 million in the previous year. The consolidated revenue from operation was INR 3,111.02 million in the financial year ended on 31 March 2025, as compared to INR 3,045.46 million in the previous year.

Profitability

The Company achieved a standalone profit before tax of INR 417.60 million, as compared to INR 367.32 million in the previous year. The consolidated profit before tax was INR 395.71 million in the financial year ended on 31 March 2025, as compared to INR 319.53 million in the previous year.

Earnings per share

The EPS on the standalone financials was INR 37.43 for the year ended on 31 March 2025 as against INR 31.93 as on 31 March 2024. The EPS on consolidated financials was INR 33.89 for the year ended on 31 March 2025 as against INR 24.88 as on 31 March 2024.

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.

Share Capital

The paid-up equity share capital as on 31 March 2025 stood at INR 85.07 million.

Net Worth

The Companys net worth on standalone basis as on 31 March 2025 was INR 3,390.87 million as compared to INR 3,127.12 million as on 31 March 2024. The Companys net worth on consolidated basis as on 31 March 2025 was INR 3,142.55 million as compared to INR 2,917.93 million as on 31 March 2024.

DIVIDEND

Your Directors have recommended a dividend of INR 7 per equity share (70%) on 8,506,865 equity shares of INR 10 each, fully paid-up, for the financial year 202425, amounting to INR 59.55 million. This dividend is subject to approval by the Members at the ensuing Annual General Meeting ("AGM") and will be disbursed to those shareholders whose names appear in the Register of Members as on the cut-off date.

The Dividend Pay-out Ratio for the year stands at 19% of standalone profits, in line with the Companys Dividend Distribution Policy. Further details of the said policy, formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), are available on the Companys website at: https://www.hester.in/corporate-governance

BORROWINGS

The Companys outstanding long-term borrowings stood at INR 756.26 million as on 31 March 2025, as compared to INR 1,037.75 million as on 31 March 2024.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated total income from operations is INR 3,111.02 million and total comprehensive income attributable to owners equity after non-controlling interest is INR 275.66 million for the financial year 2024-25 as compared to the consolidated total income from operations of INR 3,045.46 million and total comprehensive income attributable to owners equity after non-controlling interest of INR 188.67 million for the previous financial year 2023-24. Consolidated financial statements include the financial statements of the following entities:

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 compliance with Indian Accounting Standard (Ind AS) - 110, ‘Consolidation of Financial Statements, and the provisions of the Companies Act, 2013 (referred to as the ‘Act), read with Schedule III and related Rules made thereunder, along with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Annual Report includes the Audited Consolidated Financial Statements. These statements portray the combined financial position, including resources, assets, liabilities, incomes, profits, and other relevant details, of the Company, its subsidiaries (with non-controlling interest eliminated), and joint venture entities as a single entity.

SUBSIDIARY COMPANIES

As of 31 March 2025, your Company has two wholly- owned subsidiary companies: Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited. Additionally, your Company has two subsidiary companies, namely Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited. Furthermore, there is one step-down subsidiary company, Hester Biosciences Tanzania Limited, which is wholly-owned by Hester Biosciences Kenya Limited.

The business details of the subsidiary companies are as under:

Texas Lifesciences Private Limited (Texas Lifesciences)

Texas Lifesciences, a subsidiary of Hester Biosciences Limited, holds the majority stake (54.81%). The Company manufactures and supplies pharmaceutical formulations such as tablets, capsules, powders, and oral liquids for both the human and veterinary markets.

Hester Biosciences Nepal Private Limited (HBNPL)

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

Hester Biosciences Africa Limited (HBAL)

HBAL is a wholly owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL manufactures and markets veterinary vaccines in Tanzania and other African countries.

Hester Biosciences Kenya Limited (HBKL)

HBKL is a wholly owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of Trading of veterinary vaccines and animal health products in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is wholly owned subsidiary of HBKL and step- down subsidiary of Hester Biosciences Limited. HBTL is in the business of trading veterinary vaccines and animal health products in Tanzania and other African countries.

There have been no material changes in the nature of our subsidiaries business operations, as detailed in the financial statements. During the year under review, the Board diligently assessed the performance and operations of these subsidiary companies.

In compliance with Section 136 of the Act, we are not attaching the Balance Sheets, Profit and Loss Statements, and other pertinent documents of subsidiary companies with the Companys Balance Sheet. However, these statements will be readily available to Members on the Companys website. The Consolidated Financial Statements provided by the Company includes financial statements of subsidiaries and joint venture entity. The highlights are given in this Board Report as Annexure - 1, according to the standards indicated in Form AOC-1.

In accordance with Section 129(3) of the Companies Act, 2013, and the accompanying Rules, we have provided a statement outlining the significant aspects of the financial statements of our subsidiaries. This statement adheres to the prescribed format as per the regulatory requirements. The policy regarding material subsidiaries, as approved by the Board, is accessible on the Companys website via the following link: https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is a joint venture entity, with Hester Biosciences Limited holding a 50% stake, operating in Tanzania. TEL is a reputable supplier and distributor of a wide range of animal health and nutrition products sourced from various esteemed companies. Its diverse product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics, and equipment sourced from internationally renowned producers.

TEL has a large sourcing network, collaborating with prominent partners throughout Europe, Asia, and Southern Africa.

SHIFTING OF REGISTERED OFFICE

During the year under review, the Company shifted its Registered Office from Pushpak, 1st Floor, Panchvati Circle, Motilal Hirabhai Road, Ahmedabad - 380006, Gujarat, India to Village - Meda Adraj, Taluka - Kadi, District - Mehsana, Gujarat - 384441, India. The shift is outside the local limits of the city but remains within the same State of Gujarat and under the jurisdiction of the same Registrar of Companies.

The change was approved by the shareholders through the Postal Ballot process on 13 February 2025 as recommended by the Board of Directors, in accordance with the provisions of Section 12 of the Companies Act, 2013, and the applicable rules made thereunder. Necessary filings in respect of the change have been duly made with the Registrar of Companies. The relocation of the Registered Office is intended to enhance operational efficiency and administrative convenience.

INSURANCE

The Company has taken proactive steps to ensure comprehensive insurance coverage for its plants, properties, equipment, stocks and vehicles, safeguarding against all major risks. Additionally, a Directors and Officers Liability Policy has been secured to provide coverage for potential liabilities concerning the Companys directors and officers.

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, Cost Auditor, nor the Secretarial Auditor reported any instances of fraud committed against the Company by its officers or employees, as specified under Section 143(12) of the Companies Act, 2013, which would require disclosure in the Boards Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions during the financial year were conducted in compliance with the applicable provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), and the Companys Policy on Related Party Transactions.

These transactions were reviewed and approved by the Audit Committee and the Board of Directors, and where required, by the shareholders.

Details of material contracts and arrangements with related parties, in accordance with the Companys Related Party Transactions Policy and as required under Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure-2. The disclosures pertaining to Related Party Transactions for the financial year 2024-25 are also provided in the Notes to the Financial Statements.

The Policy on Related Party Transactions, including the policy for determining material transactions, is available on the Companys website and can be accessed at:

https://www.hester.in/corporate-governance

In compliance with Regulation 23(9) of the Listing Regulations, the Company has filed the necessary disclosures of related party transactions with the stock exchanges on the same day as the announcement of its standalone and consolidated financial results.

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 prepared and maintained the cost accounts and records in accordance with the regulations outlined by the Central Government under section 148(1) of the Act and rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31 March 2025, the Companys Board comprised ten Directors (excluding Alternate Director), each bringing significant experience and expertise in their respective fields. All other statutory disclosures pertaining to the Board and its functioning are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

Appointment and Cessation of Directors

There were no changes in the composition of the Board of Directors of the Company during the financial year under review.

Retirement by Rotations

In accordance with Section 152(6) of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), and the Articles of Association of the Company, Dr. Bhupendra Gandhi (DIN: 00437907), aged 82 years, Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for reappointment. The Board recommends his reappointment for shareholders approval.

Declaration of Independence

Pursuant to the provisions of Sections 149(6) and 149(7) of the Companies Act, 2013, and Regulations 16(1)(b) and 25 of the Listing Regulations, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence and are eligible to continue as Independent Directors of the Company. The Board has taken on record the declarations after duly assessing their veracity and has noted that there has been no change in the circumstances affecting their status as Independent Directors.

Profile of Directors seeking Appointment/ Reappointment

Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable provisions of the Secretarial Standards on General Meetings (SS-2), the brief profile and other relevant details of Directors seeking appointment or re-appointment at the ensuing Thirty-Eighth Annual General Meeting are provided in the Notice convening the said meeting.

Key Managerial Personnel

During the year under review, Mr. Nikhil Jhanwar resigned from the position of Chief Financial Officer of the Company with effect from 6 November 2024. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee,

Mr. Divyesh Maru was appointed as Chief Financial Officer with effect from 12 November 2024.

The following persons are designated as Key Managerial Personnel (KMP) in accordance with the provisions of the Companies Act, 2013, as of 31 March 2025:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Divyesh Maru, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary & Compliance Officer

Board Evaluation:

In accordance with the provisions of the Companies Act, 2013, and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, the Board carried out an annual performance evaluation of its own performance, that of its Committees, and individual Directors including the Chairman and Independent Directors. The process was conducted with the aid of structured questionnaires and followed the guidelines prescribed under the Guidance Note on Board Evaluation issued by SEBI.

A separate meeting of the Independent Directors was held to review the performance of Non-Independent Directors, the Board as a whole, and the performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

Based on the feedback received and assessments conducted, the overall performance of the Board, its Committees and individual Directors was rated between Very Good to Good on different parameters. Further details on the evaluation process are provided in the Corporate Governance Report forming part of this Annual Report.

Nomination and Remuneration Policy

The Company has in place a Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee and approved by the Board. The Policy lays down the framework for selection, appointment and remuneration of Directors and Senior Management Personnel. During the year, the Policy was amended to align with recent changes in the Listing Regulations. The detailed Remuneration Policy is available in the Corporate Governance Report, which forms part of this Annual Report.

Pecuniary Relationship

During the year under review, except as disclosed in the audited financial statements, the Non-Executive Directors of the Company did not have any pecuniary relationship or transactions with the Company.

Board of Directors Meetings

During the financial year 2024-25, the Board of Directors met four (4) times. The Company has complied with the statutory requirement of not having an interval exceeding 120 days between two consecutive meetings. The details of the meetings held are provided in the Corporate Governance Report, which forms a part of this Annual Report.

Non-disqualification

None of the Directors of the Company are disqualified from being appointed or continuing as Directors under the provisions of Section 164(1) and 164(2) of the Companies Act, 2013, read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. Further, none of the Directors have been debarred or disqualified by the Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), or any other statutory authority.

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 2025, 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 affairs 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 sufficient 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 2025 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 effectively; 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 effectively

COMMITTEES OF BOARD OF DIRECTORS

Your Company has constituted several Committees as part of its commitment to sound corporate governance practices and in compliance with applicable statutory requirements. These Committees play a crucial role in supporting the Board in its oversight responsibilities and ensuring effective decision-making.

The Company has following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Grievances and Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Management Committee

A detailed overview of each Committee, covering their composition, terms of reference, powers and the number of meetings held during the year, is provided in the Corporate Governance Report, which forms part of this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board of Directors confirms that it has accepted all the recommendations made by the Committees during the year under review.

CORPORATE SOCIAL RESPONSIBILITY ("CSR")

Pursuant to section 135 of the Act read with 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 INR 8.93 million on CSR activities. The disclosures with respect to CSR activities, as required under the Companies (CSR Policy) Rules, 2014, are annexed to the Boards Report as Annexure-3.

VIGIL MECHANISM /

WHISTLE BLOWER POLICY

The Company has instituted a robust vigil mechanism to uphold ethical conduct, professionalism, and integrity across all levels.

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 SEBI (Prohibition of Insider Trading) Regulations, 2015. The 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 employee or Director was denied access to the Audit Committee during the year under review.

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

The Company has zero tolerance towards any form of sexual harassment and has 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 applicable rules.

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 2024-25, the Company received no complaints related to sexual harassment at any of its locations.

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 (‘BRSR)

Pursuant to Regulation 34 and Schedule V of the Listing Regulations, as well as the frequently asked questions published by the stock exchanges (BSE and NSE), the Business Responsibility and Sustainability Report (BRSR) of the Company for the financial year ended 31 March 2025 has been uploaded on the Companys website and can be accessed at https:// www.hester.in/shareholders/reports-certificates This report includes disclosures on various initiatives undertaken by the Company from an environmental, social, and governance perspective.

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 Forty First 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 Board has duly reviewed the Statutory Auditors Report of Chandulal M. Shah & Co. for the year ended on 31 March 2025. 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 2024-25. 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 2025-26 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 202425, on the remuneration terms as approved by the members at the previous Annual General Meeting. The Cost Audit report for the financial year 2023-24 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2024-25 is within 180 days from 31 March 2025.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2025-26 as a Cost Auditor to audit the cost records of the Company on a remuneration up to INR 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 38^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 has reappointed Mr. Tapan Shah, a Peer Reviewed Practicing Company Secretary, to conduct the Secretarial Audit for the financial year 2024-25.

The Secretarial Audit Report for the financial year 2024-25 is attached to this Boards Report as Annexure-4. The Board has thoroughly reviewed the Secretarial Auditors Report for the year ended 31 March 2025 and confirms that the report does not contain any qualifications, reservations, adverse remarks, or disclaimers.

In compliance with Regulation 24A of the Listing Regulations, the Audit Committee and the Board have recommended the appointment of Shah and Shah Associates, a Peer Reviewed Practicing Company Secretary Firm based in Ahmedabad, as the Secretarial Auditors of the Company for a term of five consecutive years, from FY 2025-26 to FY 2029-30. The authority to decide the remuneration payable to them rests with the Audit Committee and the Board. The appointment of Shah and Shah Associates is subject to approval by the members at the forthcoming AGM.

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 2024-25. The Report, presented at the Board meeting held on 9 May 2025, 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, affecting 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 a comprehensive Risk Management procedure that addresses various risks, including Business, Operational, Financial, Sectorial, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks. These risks are systematically assessed, measured, and mitigated through continuous actions within the risk appetite approved by the Board of Directors. The risk management framework is periodically reviewed by both the Board and the Audit Committee. An overview of the key risks and concerns is provided in the Management Discussion and Analysis Report, which is part of this Annual Report.

In accordance with Section 134(3)(n) of the Companies Act, 2013, and Regulation 21 of the Listing Regulations, the Company has established a Risk Management Committee. The details of the Committee, along with its terms of reference, are outlined in the Corporate Governance Report, which is also part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has established a formal framework for Internal Financial Control ("IFC") in compliance with the requirements of the Companies Act, 2013 and laid down the specific responsibilities related to IFC have been defined for the Board, Audit Committee, Independent Directors and Statutory Auditors. Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

1. The orderly and efficient conduct of its business,

2. Safeguarding of its assets,

3. Prevention and detection of frauds and errors,

4. Accuracy and completeness of accounting records, and

5. Timely preparation of reliable financial information.

The audit committee and Board regularly reviews the effectiveness of the controls documented within the IFC framework and takes corrective and preventive actions as necessary when weaknesses are identified. This review encompasses entity-level controls, process-level controls, fraud risk controls and the Information Technology environment.

Based on this evaluation, no significant events were identified during the year that materially affected, or are reasonably likely to materially affect, the Companys IFC. Management concludes that the IFC and financial reporting were effective and adequate in line with the Companys operations. The Statutory Auditors have audited the adequacy and operating effectiveness of the internal financial controls over financial reporting, and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditors Report in the Standalone and Consolidated Financial Statements, respectively.

CREDIT RATINGS

During the year, CARE Ratings Limited has reaffirmed the credit rating of "CARE BBB+/Stable" for the Companys long-term bank facilities and "CARE A2" for its short-term bank facilities. These ratings reflect the Companys good financial position and its ability to meet financial obligations in a timely manner.

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 (IEPF) 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:

i. 3,955 equity shares of 29 (Twenty Nine) members whose dividend has remained unclaimed / unpaid for a consecutive period of seven years to IEPF.

ii. INR 0.83 million, being the unclaimed dividend, pertaining to the dividend for the financial 2016-17 (Final) and year 2017-18 (Interim) 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 the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return of the Company for the financial year ended 31 March 2025, in Form MGT-7, has been uploaded on the Companys website 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 confirm that the Company has made the required disclosures in this report for the items prescribed under Section 134(3) of the Companies Act,

2013, and Rule 8 of the Companies (Accounts) Rules,

2014, to the extent that transactions took place on these items during the year.

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

ACKNOWLEDGEMENT

The Directors would like to express their sincere appreciation for the continued cooperation and support extended to the Company by the Bank.

They also extend their gratitude to the Medical Professionals, Traders and Consumers for their continued patronage of the Companys products.

The Directors take this opportunity to acknowledge the dedicated efforts and hard work of the employees at all levels, which remain instrumental to the Companys success.

Furthermore, the Directors thank the Companys vendors, investors, business associates, Stock Exchanges, the Government of India, State Governments and various departments and agencies for their ongoing support and collaboration.

Your Directors deeply appreciate and value the dedication, commitment, and contribution of every member of the Hester Biosciences family. Their collective efforts continue to drive the Companys growth and success.

For and on behalf of Board of Directors
Rajiv Gandhi	Priya Gandhi	Date	9 May 2025
CEO & Managing Director	Executive Director	Place	Kadi, Mehsana
DIN: 00438037	DIN: 06998979