Zenith Drugs Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the 24^th Annual Report of Zenith Drugs Limited ("The Company"), accompanied by the Audited Financial Statements for the fiscal year ending March 31, 2024.

This report has been prepared in accordance with the Companies Act, 2013, including any modifications or re-enactments currently in effect, as well as the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. It provides a comprehensive overview of the financial performance and significant developments of the

Company for the year under review.

1. FINANCIAL HIGHLIGHTS AND PERFORMANCE:

The Standalone & Consolidated financial performance of the company for the financial year ended March 31, 2024 are summarised below:

(Amount in Lacs)

	Standalone Basis		Consolidated Basis
Particulars	For the Year Ended March 31, 2024	For the Year Ended March 31, 2023	For the Year Ended March 31, 2024	For the Year Ended March 31, 2023
Revenue from operations	13161.97	11451.91	13161.97	11451.91
Other Income	212.22	123.92	212.22	123.92
Total Expenses [excluding interest & depreciation]	11469.78	10548.77	11470.46	10546.90
Profit before Interest, Depreciation & Tax	1904.41	1027.06	1903.73	1028.93
Less: Depreciation	130.23	130.46	130.31	130.54
Less: Finance Cost	299.71	230.85	299.73	232.72
Profit / (Loss) Before Tax	1474.47	665.75	1473.69	665.66
Extraordinary Items	-145.25	0.00	-129.40	0.00
Less: Tax Expenses
1. Current Tax	384.94	175.81	389.04	175.81
2. Deferred Tax	-9.40	1.83	9.40	-1.83
Net Profit / (Loss) after Tax	953.68	488.11	964.65	488.02

2. STATE OF COMPANYS AFFAIRS / FUTURE OUTLOOK:

Standalone Performance

During the year under review, your Company has achieved total income and net profit of Rs. 13374.19 Lacs and Rs. 953.68 Lacs respectively as against total revenue and net profit of

Rs. 11575.83 Lacs and Rs. 488.11 Lacs respectively during the previous financial year ended 31st March, 2023.

Consolidated Performance

During the year under review, your Company has achieved total income and net profit of Rs. 13374.19 Lacs and Rs. 964.65 Lacs respectively as against total revenue and net profit of Rs. 11575.83 Lacs and Rs. 488.02 Lacs respectively during the previous financial year ended 31st March, 2023.

The Company is focussed on actions to secure the long term growth and sustainability of the Company as there is visibility on customer order flow for the short term, and processes are in place to ensure short-term execution. Project management will be critical to ensure delivery of projects and new products, as it will also be key to ensuring cost improvement programs and other strategic initiatives are on track. The Company will continue to keep quality at the top of the agenda, though it focuses on deepening current relationships and attracting new customers. The Company is continuously taking actions across the complete spectrum of the value chain to ensure it delivers value to all stakeholders and is one of the leading API partners of choice.

3. CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (referred to as "Listing Regulations"), and the relevant provisions of the Companies Act, 2013, including the rules issued thereunder, the Consolidated Financial Statements for the financial year 2023-24 have been prepared. These statements comply with the Companies Act, 2013 and are based on the audited financial statements of the Company and its subsidiaries, as approved by their respective Boards of

Directors. The Consolidated Financial Statements, along with the Auditors Report, are included as part of this Annual Report.

4. TRANSFER TO RESERVES AND IPO PROCEEDS UTILIZATION:

During the year ended 31st March 2024, the Company had completed the Initial Public Offer (IPO) of its equity shares comprising a fresh issue of 51,48,800 equity shares having a face value of Rs 10/- each at an offer price of Rs. 79/- per share aggregating to Rs. 4067.55 Lacs. Pursuant to the IPO, the Company incurred Rs. 486.83 Lacs as IPO related expenses (excluding taxes) which have been adjusted against securities premium. The utilisation of IPO proceeds out of fresh issue is summarized below:

Original Object	Modified Object, IfAny	Original Allocation	Modified Allocation,if any	Funds Utilized	Balance	Amount of Deviation / Variation for the quarter according to applicable object	Remarks if any
Purchase of Machinery &Equipment for Setting up	NA	1060.99	NA	214.00	846.99	NA	No deviation from object
New Unit Existing Manufacturing Block Up gradation	NA	210.59	NA	3.44	207.15	NA	No deviation from object
Working Capital Requirements	NA	1440.00	NA	2014.11	0.00	-574.11	Deviation in the amount of funds actually utilized as against which was originally disclosed
General corporate pur- poses (GCP)	NA	883.91	NA	574.11	309.80	0.00	No deviation from object

The amount transferred to reserves is summarized below:

(Amount in Lacs)

Particulars of Securities Premium Account	As at March 31, 2024	As at March 31, 2023
Balance as at the beginning of the year	20.00	20.00
Add: Share Premium (51,48,800*69)	3552.67	-
Less: IPO Expense	486.83	-
Total	3065.84	20.00

5. DIVIDEND:

On May 29, 2024, the Board of Directors recommended a dividend of Rs. 0.5 (Fifty Paise) per equity share on 1,71,48,800 equity shares having face value of Rs. 10/- each (i.e. 5%) for the financial year ended March 31, 2024. The dividend is subject to approval by the members at the upcoming Annual General Meeting ("AGM").

6. DEPOSITS:

The company has neither accepted nor renewed any deposits from public during the year under review to which the provisions of the Chapter V of the Companies Act 2013 or Companies (Acceptance of Deposits) Rules 2014 applies. As such no particulars required under Rule 8 (5)(v) of the Companies (Accounts) Rules 2014 are given.

As on 31st March 2024, the company has outstanding unsecured loan of Rs. 465.74 Lacs, from the

7. CHANGE IN THE NATURE OF BUSINESS:

There has been no change in the nature of Business of the Company during the year under review.

8. MATERIAL CHANGES & COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

During the period under review, the following material changes have significantly impacted the companys financial position:

Conversion of company from Private Limited to Public Limited

With a view to offer the equity shares of the Company to public, the Company was converted from "Private Limited" to "Public Limited" and consequently the name of the Company be changed from ‘Zenith Drugs Private Limited to ‘Zenith Drugs Limited by deleting the word "Private" from the name of the Company at the Extra-Ordinary General Meeting of the Company held on September 05, 2023. The Registrar of Companies, issued a fresh certificate of incorporation consequent upon conversion to public company on September 13, 2023.

Initial Public Offer:

During the Financial Year under review, your Company offered and issued 51,48,800 equity shares of Rs. 10/- each to the public at a premium of Rs. 69/- per share to raise Rs. 4067.55 Lacs. The issue received an exceptional response, with substantial oversubscription across all categories. The retail category was subscribed 139.28 times, the Qualified Institutional Buyers (QIB) category was subscribed 106.72 times, and the Non-Institutional Investors (NII) category was subscribed 368.77 times. The Companys equity shares were officially listed on NSE Emerge effective February 27, 2024.

9. SHARE CAPITAL:

During the year under review, the company increased the Authorized Share Capital from existing Rs. 2,40,00,000/- (Rupees Two Crore Forty Lacs) divided into 24,00,000 (Twenty-Four Lacs) equity shares of Rs. 10/- (Rupees Ten) each to Rs. 22,40,00,000/- (Rupees Twenty-Two Crore Forty Lacs) divided into 2,24,00,000 (Two Crore Twenty-Four Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each.

The paid-up Equity share capital of Company as on 31st March 2024 is Rs. 17,14,88,000/- (Seventeen Crore Fourteen Lacs Eighty-Eight Thousand) divided into 1,71,48,800 (One Crore Seventy-One Lacs Forty-Eight Thousand Eight Hundred) equity shares of Rs. 10/- (Rupees Ten) each. During the year under review, the paid-up capital has increased via following events:

a. Bonus Shares:

As approved by the members in the Extra-Ordinary Meeting of the company held on September 16, 2023, during the financial year the company has issued 1,16,00,000 (One Crore Sixteen Lacs) equity shares of Rs. 10/- (Rupees Ten) each as bonus shares in the ratio of 29:1 to the existing shareholders by capitalization of reserves.

b. Fresh Issue of Shares:

During the year under review, Company came up with its Initial Public Offer of 51,48,800 (Fifty One Lacs Forty Eight Thousand Eight Hundred) equity shares at Rs. 79/- (including premium of Rs. 69/-) total amount aggregating to Rs. 40,67,55,200/- was raised from the Initial public offer. The Board approved the allotment of total 51,48,800 equity shares of the Company on February 23, 2024. Equity shares, aggregating to 1,71,48,800 equity shares were listed on the NSE SME platform of NSE Emerge on February 27, 2024.

10. DETAILS OF SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COM-

PANIES:

The Company has following subsidiaries, joint ventures or associate companies:

S.No. Particulars	Subsidiary/ Joint Venture / Associate Companies
1. MY Med Private Limited	Subsidiary

No company has become or ceased to be the Companys subsidiaries, joint ventures or associate companies during the year under review.

Further, a statement containing the salient features of the financial statement of subsidiary in the prescribed format AOC1 is annexed to this Directors Report. The statement also provides the details of performance, financial positions of each of the subsidiaries.

11. REVISION MADE IN FINANCIAL STATEMENTS/BOARDS REPORT:

The Company has not revised the Financial Statements or Boards Report in respect of any of the three preceding financial years.

12. ANNUAL RETURN:

The Annual Return in Form MGT-7 as required under Section 92(3) of the Act shall be hosted on the website of the Company viz. www.zenithdrugs.com.

13. COMPOSITION OF BOARD AND VARIOUS COMMITTEES AND THEIR MEETINGS:

The Board of Directors along with its committees provide leadership and guidance to the Management and directs and supervises the performance of the Company, thereby enhancing stakeholder value.

Composition of Board:

S. No. Name	Category	Designation
1 Mr. Sandeep Bhardwaj	Executive Director	Managing Director
2 Mr. Bhupesh Soni	Executive Director	Director
3 Mr. Ajay Singh Dassundi	Executive Director	Director
4 Mr. Anil Malik	Non-Executive Director	Director
5 Mr. Deendayal Kumawat	Independent Director	Independent Director
6Ms. Ranjana Sureshkumar Sehgal	Independent Director	Independent Director

The composition of Board complies with the requirements of the Companies Act, 2013 ("Act"). Further, in pursuance of Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company is exempted from the requirement of having composition of Board as per Regulation 17 of Listing Regulations.

None of the Directors of the Company is serving as a Whole-Time Director in any other Listed

Company and the number of their directorship is within the limits laid down under Section 165 of the Companies Act, 2013.

Changes in the Board Composition:

• In the Board Meeting held on 16th September, 2023:

Mr. Sandeep Bhardwaj (DIN: 00539347) was appointed as the Chief Financial Officer of the Company and Ms.Sakshi Bhawsar as the Company Secretary and Compliance officer of the Company, with effect from September 16, 2023.

Mr. Poonam Chand Sharma (DIN: 08401212), Director was resigned from the Board of the Company with effect from September 16, 2023.

• In the Extra-Ordinary General Meeting held on 16th September, 2023:

Mr. Sandeep Bhardwaj (DIN: 00539347) was appointed as Managing Director and Ms. Ranjana Sureshkumar Sehgal (DIN: 01979256) as an Independent Non-Executive Director of the Company, for a period of 5 (Five) years with effect from September 16, 2023.

• In the Annual General Meeting held on 25th September, 2023:

Mr. Deendayal Kumawat (DIN: 10332223) was appointed as an Independent Non-Executive Director of the Company for a period of 5 (Five) years and Mr. Anil Malik (DIN: 07192307) was appointed as a Non-Executive Director of the Company, with effect from September 25, 2023.

• In the Board Meeting held on 31st August, 2024:

Mr. Sandeep Bhardwaj (DIN: 00539347) resigned as the Chief Financial Officer of the Company with effect from 31st August, 2024 and Mr. Neeraj Pandey was appointed as Chief Financial Officer, with effect from 01st September, 2024.

Appointment / Retirement by rotation and subsequent re-appointment:

• Mr. Bhupesh Soni (DIN: 00539355), Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting, pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and being eligible has offered himself for re-appointment.

• Appropriate business for his re-appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the Notice convening the ensuing AGM of the Company.

• The relevant details, as required under Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Secretarial Standard, of the person seeking re-appointment/ appointment as Director are also provided in Explanatory statements annexed to the Notice convening the 24th Annual General Meeting.

Key Managerial Personnel (KMP):

S.No. Name of the KMP	Designation
1 Mr. Neeraj Pandey	CFO
2 Ms. Sakshi Bhawsar	Company Secretary & Compliance Officer

Independent Directors:

S.No. Name of the Director	Date of Appointment	Date of Resignation
1Ms. Ranjana Sureshkumar Sehgal (DIN: 01979256)	16/09/2023	-
2Mr. Deendayal Kumawat (DIN: 10332223)	25/09/2023	-

Board Meetings:

The Board of the Company regularly meets to discuss various Business opportunities. Additional Board meetings are convened, as and when required to discuss and decide on various business policies, strategies and other businesses.

During the year under review, Board of Directors of the Company duly met 16 (Sixteen) times and in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for the purpose.

The dates of the Board Meeting held during the year review is as mentioned hereunder:

The details of attendance of each Director at the Board Meetings are as given below:

Name of Director	Date of Original Appoint- ment	Date of Cessa- tion	Number of Board Meetings Eligible to attend	Number of Board Meetings attended
Sandeep Bhardwaj	31/10/2003	-	16	16
Bhupesh Soni	15/03/2001	-	16	16
Ajay Singh Dassundi	25/06/2015	-	16	16
Deendayal Kumawat	25/09/2023	-	8	1
Anil Malik	25/09/2023	-	8	1
Ranjana Sureshkumar Sehgal	16/09/2023	-	9	1
Poonam Chand Sharma	30/03/2019	16/09/2023	7	7

The gap between two consecutive meetings was not more than one hundred and twenty days as provided in Section 173 of the Act.

COMMITTEE DETAILS:

The Board of Directors, in line with the requirement of the act, has formed various committees, details of which are given hereunder:

AUDIT COMMITTEE

As on 31st March 2024, the Audit Committee comprised of the following Members:

DIN	Name of the Director	Designation in Committee	Nature of Directorship
10332223	Mr. Deendayal Kumawat	Chairman	Independent Director
01979256	Ms. Ranjana Sureshkumar Sehgal	Member	Independent Director
00539347	Mr. Sandeep Bhardwaj	Member	Managing Director

Majority of the Members of the Committee are Independent Directors and possess accounting and financial management knowledge. All the recommendations made by the Audit Committee are accepted and implemented by the Board of Directors.

NOMINATION AND REMUNERATION COMMITTEE

As on 31st March 2024, the Nomination and Remuneration Committee comprised of the following Members:

DIN	Name of the Director	Designation in Committee	Nature of Directorship
01979256	Ms. Ranjana Sureshkumar Sehgal	Chairman	Independent Director
10332223	Mr. Deendayal Kumawat	Member	Independent Director
07192307	Mr. Anil Malik	Member	Non-Executive Direc- tor

Nomination and Remuneration Policy

Nomination and Remuneration Policy in the Company is designed to create a high performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the

Company. The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Executive Directors and Key Managerial Personnel. Annual increments are decided by the

Nomination and Remuneration Committee within the salary scale approved by the members and are effective from April 1, of each year.

The Nomination and Remuneration Policy, as adopted by the Board of Directors, is placed on the website of the Company

STAKEHOLDER RELATIONSHIP COMMITTEE

As on 31st March 2024, the Stakeholder Relationship Committee comprised of following Members:

DIN	Name of the Director	Designation in Committee	Nature of Directorship
10332223	Mr. Deendayal Kumawat	Chairman	Independent Director
01979256	Ms. Ranjana Sureshkumar Sehgal	Member	Independent Director
00539355	Mr. Bhupesh Soni	Member	Executive Director

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As on 31st March, 2024, the Corporate Social Responsibility Committee comprised of following Members:

DIN	Name of the Director	Designation in Committee	Nature of Directorship
10332223	Mr. Deendayal Kumawat	Chairman	Independent Director
07192307	Mr. Anil Malik	Member	Non-Executive Director
00539347	Mr. Sandeep Bhardwaj	Member	Managing Director

14. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Guidance Note on Board evaluation issued by SEBI, the Board of Directors of your Company carried out a formal annual evaluation of its own performance and of its committees and individual directors. The process was conducted by allowing the Board to engage in candid discussions with each Director with the underlying objective of making the best possible decisions in the interest of the Company and its stakeholders. The Directors were individually evaluated on parameters which, inter alia, comprised of, level of engagement, their contribution to strategic planning, and other criteria based on performance and personal attributes of the Directors. During the process of evaluation, the performance of the Board was evaluated by the Board after seeking inputs from all the Directors. The performance of the committees was evaluated by the Board after seeking inputs from the respective Committee members on the basis of criteria such as the composition of committees, effectiveness of the committees, structure of the committees and meetings, contribution of the committees, etc. The Board evaluated the performance of the individual director based on the criteria as per the aforesaid Guidance Note of

SEBI and evaluation criteria framed by the Nomination and Remuneration Committee.

15. DECLARATION BY INDEPENDENT DIRECTORS:

All Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. Based on the declarations submitted by the Independent Directors, Board is of the opinion that the Independent Directors fulfil the conditions specified in the Act and Listing Regulations and are independent of the Management.

Independent Directors have also confirmed of having complied with Rule 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, by including/ registering their names in the data bank of Independent Directors maintained with Indian Institute of Corporate Affairs.

In the opinion of the Board, all the Independent Directors have the integrity, expertise and experience, including the proficiency required to effectively discharge their roles and

16. DETAILS WITH RESPECT TO THE PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS

The familiarization programme aims to provide Independent Directors with the industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant them to take well informed decisions in a timely manner. The familiarization program also seeks to update the Directors on the roles, responsibilities, rights and duties under the Act and other statutes.

17. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (‘the Act) your Directors confirm that:

a. in the preparation of the annual accounts for the financialyear ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

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 financial year and of the profit of the Compa -ny for that period;

c. the directors had taken proper and sufficient care 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;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down 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 and that such systems were adequate and operating effectively.

18. AUDIT AND AUDITORS:

i. Statutory Auditors and their report:

The Members of the Company, at the 20th Annual General Meeting ("AGM") of the Company held on December 31, 2020, had approved the appointment of M/s. VDS & Co., Chartered Accountants, Indore (Firm Registration No. 004029C), as Statutory Auditors of the Company, to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2025. The Company has received a certificate from the auditors confirming their eligibility and willingness for their appoint -ment and affirmation that the appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE STATUTORY AUDITORS:

S. No. Auditors Remarks	Boards Reply
1. Other Matters: Separate bank account not opened to keep IPO proceeds as required.	Company has fully utilized IPO proceed on or before 30th June, 2024.
2. Other Matters:	IPO proceeds allocated to general corporate purpose has been used in working capital requirement (which is also one of the objective/purposes of the IPO) to the extent of Rs.574.11 Lakhs.
As per proposed schedule of implementa- tion and deployment of net proceeds mentioned in prospectus. There is varia- tion in the utilization of IPO proceeds, the amount allocated towards General Corpo- rate Purpose is used towards working cap- ital (another objective in schedule) without passing resolution in the Board Meeting.
	In the Board Meeting convened on 29/05/2024, a resolution was passed formally ratifying the reallocation of funds towards working capital.
Details of variation provided in notes to financial reporting.
3. Other Matters:	The company has filed a complaint with the Ministry of Corporate Affairs (MCA) requesting an update to the Master Data. The resolution provided is that when filing Form MGT-7 (Annual Return), the field "Whether shares list - ed on recognized Stock Exchange(s)" should be marked as ‘YES. This will ensure that the Corporate Identifica - tion Number (CIN) is updated to reflect that the company is listed.
Ministry of Corporate Affair showing sta- tus of company as unlisted
4 Annexure ‘A to the Independent Auditors Report:	The statements filed with the banks are based on financial statements which are prepared on provisional basis.
The quarterly returns or statements filed by the company with banks are not in the agreement with the books of accounts of the company.

ii. Secretarial Auditors and their report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, inter-alia, requires every listed Company to annex to its Boards report, a Secretarial Audit Report, given in the prescribed form, by a

Company Secretary in Practice.

The Board of Directors had appointed M/s. Geetika Agrawal & Co., Practising Company Secretaries,

Indore, as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended March 31, 2024 and their report in Form MR-3 are annexed to this Directors Report.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE SECRETARIAL AUDITOR:

S. No. Auditors Remarks	Boards Reply
1. It was noted that the company failed to submit the voting results in XBRL format as required by Regulation 44 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, within the stipulated 2 working days. The NSE imposed a penalty of Rs. 10,000.00 + GST.	The company recognizes that the submission was delayed by one day. However, to address this, the company has already paid the fine of Rs. 10,000.00 + GST, demonstrating its commitment to compliance and prompt resolution of the issue.
2. It was observed that the company omitted one page of the cash flow statement from Financial Results for the half year ended and financial year ended on March 31, 2024, in PDF format as required by Regu- lation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As a consequence, the NSE imposed a penalty of Rs. 70,000.00 + GST.	The company requested a penalty waiver, asserting that it complied fully by submitting the complete financial results in XBRL format within 24 hours of the initial PDF submission. It has adhered to all filing regula- tions and has not demonstrated any non-compliance or delays.

Internal Audit for the Financial Year 2023-24 was conducted by M/s. Jain Arora and Associates, Chartered Accountants, Indore (Firm Registration No. 017967C). The idea behind conducting Internal Audit is to examine that the company is carrying out its operations effectively and performing the processes, procedures and functions as per the prescribed norms. The Internal Auditors reviewed the adequacy and efficiency ofthekey internal controls guided by the Audit Committee.

iv. Cost Auditor

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to maintain cost records for few of its products and accordingly, such accounts are made and records have been maintained by the Company and M/s Nikhil Jain & Associates, Cost Accountants as a cost auditor for conducting the audit of cost records of the company for the financial year 2023-24.

The board of directors on the recommendation of the audit committee, appointed M/s Nikhil Jain & Associates, Cost Accountants (Registration No. 06363), as the cost auditors of the Company to audit the cost records for the financial year ended on March 31, 2025 as per Section 148 of the Act. M/s Nikhil Jain & Associates, Cost Accountants have confirmed that their appointment is within the limits of Section 141 (3) (g) of the Act and have also certified that they are free from any disqualifications specified under proviso to Section 148141(3) read with Section and 141 (4) of the Act.

As per the provisions of the Act, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to M/s Nikhil Jain & Associates, cost auditors forms part of the notice convening the AGM.

The Cost Audit report for the Financial Year 2023-24 will be filed with the Central Government within the stipulated timeline.

19. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, the Secretarial Auditors, the Cost Auditors and the Internal Auditors have not reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.

20. PARTICULARS OF EMPLOYEES

Information required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate Annexure forming part of this report.

Information required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this report.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has constituted the Corporate Social Responsibility Committee in accordance with

Section 135 of the Companies Act, 2013, the details of which have been stated aforesaid in this Board Report. The Company has adopted its Corporate Social Responsibility Policy (CSR Policy) in line with the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, as applicable, from time to time. The CSR Policy deals with objectives, scope/areas of CSR activities, implementation and monitoring of CSR activities, CSR budget, reporting, disclosures etc. The same is uploaded and available on the website of the Company and the web link of the same is www. zenithdrugs.com.

As per the provisions of Section 135 of the Act and the Rules made thereunder, the Company was required to spend 10,43,874/- for the financial year 2023-24, i.e., at least 2% of the average net profits of the Company made during the three immediately preceding financial years. The Com -pany, however, spent an amount of 10,45,000/- towards CSR activities during the financial year 2023-24.

The brief outline of the CSR Policy of the Company, initiatives undertaken by the Company on CSR activities during the year under review and details regarding CSR Committee are annexed to this

Directors Report.

22. MANAGEMENT DISCUSSION & ANALYSIS REPORT

In terms of the Regulation 34(2)(E), and Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, The Management Discussion & Analysis Report, which forms part of this Annual Report.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

The particulars of investments made and loans granted by the Company as covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Standalone Financial Statements forming part of the Annual Report. Further, your Company has not extended a corporate guarantee on behalf of any other Company, during the year under review.

24. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all related party transactions entered into by the Company, were at arms length and in the ordinary course of business to further the business interests of the Company. Prior approval of Audit Committee is obtained for related party transactions.

The disclosure of particulars of contracts or arrangements with Related Parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 (‘the Act) including certain arms length transactions under the third proviso thereto and forming part of the Directors Report in the prescribed Form No. AOC-2 pursuant to Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 are annexed to this Directors Report.

25. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING 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, 2015 in respect of conservation of energy, technology absorption, etc. are as mentioned below:

i. Conservation of Energy:

Steps taken or impact on conservation of energy	The Company lays great emphasis on saving consumption of energy. Achieving reductions in energy consumption is an ongoing exercise in the Company. Effective measures have been taken to minimize the loss of energy, wherever possible.
Steps taken by the company for utilizing alternate sources of energy Capital investment on energy conservation equipment

ii. Technology Absorption:

Efforts made towards technology absorption
Benefits derived like product improvement, cost reduction, product Nil development or import substitution	Nil
In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
Details of technology imported	Nil
Year of import	Not Applicable
Whether the technology has been fully absorbed	Not Applicable
If not fully absorbed, areas where absorption has not taken place, and the reasons thereof Expenditure incurred on Research and Development	Not Applicable Nil

iii. Foreign Exchange Earnings and Outgo:

In compliance with the Companies (Accounts) Rules, 2014, the following details of foreign exchange earnings and expenditures for the financial year are provided:

S. No. Particulars	(Amount in Lacs)
(a) Foreign exchange earnings	14.40
(b) Foreign exchange outgo	0.00

26. INTERNAL FINANCIAL CONTROLS:

The Company has established a robust internal financial control system appropriate to its size and business nature, and is committed to continually enhancing these control processes. These systems offer reasonable assurance regarding the accuracy of financial and operational information, compliance with applicable laws, protection of the Companys assets, and adherence to corporate policies.

The internal financial controls are sufficient to ensure the accuracy and completeness of account -ing records, timely and reliable financial reporting, prevention and detection of fraud and errors, and protection of assets. They also ensure that business operations are conducted in an orderly and efficient manner. The Audit Committee regularly assesses the adequacy of these controls. Throughout the year, the controls were tested, and no significant material weaknesses were iden -tified. Additionally, the system guarantees that all transactions are properly authorized, recorded, and reported.

27. RISK MANAGEMENT:

The Company has established a Risk Management policy to address business-related risks, including those from new products, information security, and digitization. A comprehensive risk management framework is in place to identify, monitor, and mitigate risks, with ongoing evaluation and remediation efforts. Internal controls and periodic audits ensure reliable financial reporting and legal compliance. The Company remains dedicated to a strong risk management framework, regularly reviewing and updating processes to promptly address emerging risks.

Our internal control encompasses various management systems, structures of organization, standards, and codes of conduct which are all put together to help manage the risks associated with the Company.

In order to ensure the internal control systems are meeting the required standards, it is reviewed at periodical intervals. If any weaknesses are identified in the process of review the same are addressed to strengthen the internal controls which are also revised at frequent intervals. Some of the risks that may pose challenges are set out in the Management Discussion and Analysis Report, which forms part of this Annual Report.

28. CORPORATE GOVERNANCE:

The disclosure requirements as prescribed under Para C of the Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (‘LODR) are not applicable to the Company pursuant to Regulation 15(2) of the LODR as the Company is listed on the SME Exchange.

29. LISTING STATUS:

The Companys equity shares are listed on SME Platform of National Stock Exchange of India Limited ("NSE EMERGE"). The Company has paid the listing fees to National Stock Exchange of India Limitedforthefinancial

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is committed to provide a safe and secure working environment for all employees and create ambience in which all employees can work together without any apprehension of sexual harassment.

In accordance with the requirements of the sexual harassment of women at workplace (prevention, prohibition & redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has formulated and implemented a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. During the year under review, the Company has not received any complaint under the policy. Appropriate reporting mechanisms are in place for ensuring protection against Sexual Harassment and the right to work with dignity.

31. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy.

The policy enables the employees to report to the management instances of unethical behaviour actual or suspected fraud or violation of Companys Code of Conduct.

Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safe guards against victimization of the Whistle

Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit

Committee from time to time. None of the Whistle blowers has been denied access to the Audit

Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company.

32. OTHER DISCLOSURES:

1. The Company does not have any Employee Stock Option Scheme & Employee Stock Purchase Scheme for its Employees/ Directors.

2. The Company has not issued sweat equity shares and shares with differential rights as to dividend, voting or otherwise.

3. The Company has complied with Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, issued by the Institute of Company Secretaries of India.

4. There were no significant or material orders passed by the regulators or courts or tribunals which could impact the going concern status of the Company and its future operations.

5. Pursuant to Section 197 (14) of the Act, the Managing Director of the Company did not receive any remuneration or commission from its subsidiaries/ holding company.

6. There are no applications made or proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016.

7. The Company has not entered into one time settlement with any Banks or Financial Institutions during the year. Hence, disclosure pertaining to difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan is not applicable.

33. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the continued co-operation and support extended to the Company by government authorities, customers, vendors, regulators, banks, financial institutions, rating agencies, stock exchanges, depositories, auditors, legal advisors, consultants, business associates, members and other stakeholders during the year. The Directors also convey their appreciation to employees at all levels for their contribution, dedicated services and confidence in the management.

For Zenith Drugs Limited

Sd/-	Sd/-
Sandeep Bhardwaj	Bhupesh Soni
Managing Director	Director
(DIN: 00539347)	(DIN: 00539355)

 

Date: 31/08/2024

Place: Indore