Themis Medicare Limited

Your Directors take pleasure in presenting the 54^th Annual Report along with the Audited Financial Statements for the financial year ended 31^st March, 2024. The Company operates only in one business segment viz., "Pharmaceuticals" and this report covers its Pharmaceutical business performance.

a. FINANCIAL RESULTS:

The Company's performance during the year ended 31^st March, 2024 as compared to the previous financial year, is summarized below:

(Rs. in lakhs)

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 and approved to transfer its Active Pharmaceutical Ingredients (API) Business to Themis Lifestyle Private Limited,( since name changed to Themis Chemicals Private Limited) its wholly owned subsidiary by way of a slump sale subject to requisite consents, approvals and completion of various formalities.

Post such approval, the Company has taken necessary steps to complete the transfer which involved approval from Gujarat Industrial Development Corporation (GIDC) and the Company's lenders. The Company has since received GIDC approval and the approval of the lenders is awaited.

c. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

As on the last day of the financial year, the Company had three non-material subsidiaries namely, Artemis Biotech Limited, Themis Chemicals Pvt Ltd. and Dr. Themis 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 2024 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. 0.50/- per equity share having face value of Re. 1/- each on 9,20,40,120 Equity shares, aggregating to Rs. 4,60,20,060/-. 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 Company's website at https://www.themismedicare.com/uploads/ statutory/pdf/dividend-distribution-policy.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 Company's 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 Regulations 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. 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.

l. 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 arm's 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 Company's website at the link: https://www. themismedicare.com/uploads/statutory/pdf/ related-partv-transaction-policv-25.pdf

m. 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 Company's Internal Control System. The Company's 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.

n. 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.

o. 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.

p. 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.

q. 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.

r. 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.

s. 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 202324 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 re-appointment. 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 Directors 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.

Pursuant to Section 161 of the Companies Act, 2013 the Board of Directors of the Company had appointed Mr. Shishir Dalal (DIN : 00007008) as an Independent Director of the Company and Dr. Adam Demeter (DIN: 10283162) as Non - Executive Non-Independent Director with effect from 11th September,2023. Their appointments were approved by the members through Postal Ballot.

Further Mrs. Reena Patel (DIN: 00228669), was

also appointed as Alternate director to Dr. Adam Demeter (DIN: 10283162) with effect from 11th September, 2023

Mr. Hariharan Subramaniam (DIN: 00162200) will be completing his second term as an Independent Director at the ensuing Annual General Meeting. Your Directors place on record their appreciation of the services rendered by him during his tenure as Director of the Company.

Mr. Vijay Agarwal (DIN: 00058548) ceased to be the Independent Director at the previous AGM held on 9th September, 2023 due to completion of his second term as Independent Director. Your Directors place on record their appreciation of the

services rendered by Mr. Vijay Agarwal during his tenure as Director of the Company.

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 Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31^st March, 2024, 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, 2024 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 AND CONSTITUTED BY THE BOARD OF DIRECTORS:

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, 2024:

Committees of the Board

i. Audit Committee;

ii. Stakeholders Relationship Committee;

iii. Nomination and Remuneration Committee;

iv. Corporate Social Responsibility Committee;

Committee constituted by the Board

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 whistle blower 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:

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 their functions effectively.

TheBoardandtheNominationand Remuneration 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 and related information 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 Directors or managerial personnel of the Company is in receipt of remuneration/ commission from any Subsidiary Company of the Company.

MEDICARE

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 2024-25 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 54th AGM of the Company.

d. SECRETARIAL AUDITORS:

The Board of Directors of the Company had appointed M/s. SAV & Associates LLP, Practicing Company Secretaries, Thane, to conduct Secretarial Audit for the financial year 2024-25. Secretarial Audit Report issued by M/s. SAV & Associates LLP, Practicing Company Secretaries, in Form MR-3 for the financial year 2024-25 forms part of Annual report. The Secretarial Audit Report is annexed here with as Annexure - III. There are no qualification, reservation or adverse remarks or disclaimer made by Statutory Auditor or Secretarial Auditor.

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, 2024 is available on the Company's 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, 2024, your Company has not received any complaint relating to sexual harassment.

e. SUB-DIVISION OF ORDINARY SHARES OF THE COMPANY:

On May 13, 2023, the Board of Directors of the Company, considered and approved the proposal for sub-division of 1 (one) equity share of the Company having face value of ^10/- each into 1 (one) equity share of the Company

having face value of ^1/- each ('sub-division') and consequential amendments in the Capital Clause of the Memorandum of Association of the Company and Articles of Association of the Company, subject to the approval of the Shareholders of the Company and other necessary approvals. The said proposal was approved by the Shareholders of the Company at the Annual General Meeting held on September 09, 2023. The Record Date for the sub-division was set as October 10, 2023 and consequently, the face value of the equity shares of the Company (fully paid-up and partly paid-up) was sub-divided to ^1/- each from ^10/- each.

Cautionary Statement:

The statements in the "Management Discussion and Analysis Report" describe your Company's 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 31st March, 2024, is as follows:

Total revenue from operations stood at Rs. 381.76 Crores for the year ended 31st March, 2024, as against Rs. 354.32 Crores for the corresponding previous period, an increase of 7.74 %

The total cost of raw materials rendered for the financial year ended 31st March, 2024 was Rs. 136.71 Crores as against Rs. 118.36 Crores for the corresponding previous period.

The EBIDTA (earnings before interest, depreciation and tax, excluding other income) was Rs. 51.51 Crores for the year ended 31st March, 2024, as against Rs. 67.45 Crores for the corresponding previous period, a decrease of 23.64%.

The finance cost for the financial year ended 31st March, 2024 was Rs. 9.38 Crores as against Rs. 9.56 Crores for the corresponding previous period.

The PAT (profit after tax) was Rs. 43.52 Crores for the year ended 31st March, 2024, as against Rs. 56.90 Crores for the corresponding previous period, a decline of 23.51%.

Resources and Liquidity:

The cash and cash equivalents at the end of 31st March, 2024 were Rs. 9.92 Crores. The total debt to equity ratio of the Company stood at 0.25 as on 31st March, 2024.

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 mitigation 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.

Credit Risk

To manage its credit exposure, Themis Medicare Limited (Themis Medicare) has a credit policy with credit limit requests and approval procedures. The Company does its own research of a counterparty's financial health and business prospects. Timely and rigorous process is follow 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 its 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.

1. Clinical Trials Market

• India is among the leaders in the clinical trial market.

• Due to a genetically diverse population and availability of skilled doctors, India has the potential to attract huge investments to its clinical trial market.

2. High-End Drugs

• Due to increasing population and income levels, demand for high-end drugs is expected to rise.

• Growing demand could open up the market for production of high-end drugs in India.

3. Penetration In Rural Market

• With 70% of India's population residing in rural areas, pharma companies have immense opportunities to tap this market.

• Demand for medicines in rural markets has seen a sharp growth. Various companies are investing in the distribution network in rural areas.

4. Crams

• Contract research and manufacturing services (CRAMS) is one of the fastest growing segments in the pharmaceutical and biotechnology industry. The pharmaceutical market uses outsourcing services from providers in the form of contract research organizations (CROs) and contract manufacturing organizations (CMOs).

Source: IBEF Report Dec 2023

• Varying regulatory requirements across domestic and export markets

Procurement and transferring drug management involves addressing current regulatory frameworks. In India, various laws regulate the flow and sale of medicines around the region, creating complexities for Supply Chain Management. The policy sets prescription costs and the state government implements various drug-pricing programs for multiple forms of medication. This kind of regulation of activities sometimes negatively affects the supply chain process. A variance in specifications and requirements, on the other hand, increases the expense and uncertainty of export markets. For example, Indian Pharma is now experiencing a growing onslaught of multinational companies' litigation in the US and Europe opposing their drugs on the grounds of product patent rights infringements. Also, the Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) stipulation made it overbearing for the Indian pharmaceutical companies to launch their R&D or face the challenge of being limited to having just off-patent drug suppliers.

• Increased competition

Competition is a topic that is always relevant to health care discussion and pharmaceuticals are no different. Over the past five to ten years, several markets have seen steady growth, including China, Germany, Brazil, Italy, etc. Currently, several products with identical characteristics, bioequivalence and price ranges are commercialized by several multinational companies. This increasing competition and the emergence of new competitors represent a significant threat to the pharmaceutical industry in India.

• Poor supplier service

In terms of APIs, Indian pharmaceutical companies extensively depend on China. Around 70% of the total raw material is imported from China. Therefore, it creates considerable uncertainty and vulnerability to disruption in the SCM, especially during the global crisis. This problem became acute when China was locked to seek to stop the COVID-19 disease. Pharmaceutical firms and the Government of India are deeply worried about the insecurity of the Indian PSC.

• Uncertainty in demand

The heterogeneity of customers leads to substantial volatility in drug demand. Pharmaceutical settings are typically highly diversified in the real world, with numerous products and decision-making phases. It becomes more crucial for the vendors due to these uncertainties in demand. For online pharmacy services, significant fines are sometimes imposed when consumer demand is unmet.

Source: httDs://www.emerald.com/insiaht/ con ten t/doi/10.1108/AGJSR-03-2023-0102/full/ html

Internal control system and adequacy:

The Company ensures the orderly and efficient conduct of its business, including adherence to Company's 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 assesses the risks it faces and develops 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.

Indian Pharmaceutical Overview

The pharmaceutical industry in India is expected to reach $130 Bn by 2030. The domestic pharmaceutical industry would likely reach US$ 57 billion by FY25 and see an increase in operating margins of 100-150 basis points (bps). India is a major exporter of Pharmaceuticals, with over 200+ countries served by Indian pharma exports. India supplies over 50% of Africa's requirement for generics, ~40% of generic demand in the US and ~25% of all medicine in the UK. India also accounts for ~60% of global vaccine demand, and is a leading supplier of DPT, BCG and Measles vaccines. 70% of WHO's vaccines (as per the essential Immunization schedule) are sourced from India.

During FY18 to FY23, the Indian pharmaceutical industry logged a compound annual growth rate (CAGR) of 6-8%, primarily driven by an 8% increase in exports and a 6% rise in the domestic market. The Indian pharmaceutical industry has seen a massive expansion over the last few years and is expected to reach about 13% of the size of the global pharma market while enhancing its quality, affordability, and innovation.

India is one of the biggest suppliers of low-cost vaccines in the world. Because of the low price and high quality, Indian medicines are preferred worldwide, thereby rightly making the country the 'Pharmacy of the World'. India has been traditionally quite strong in the pharma sector, with a low cost of manufacturing (30%-35% lower than in the US and Europe), cost-efficient R&D (about 87% less than in developed markets), and cheap skilled labour.

India, as the second-largest contributor to the global biotech and pharmaceutical workforce, plays a pivotal role on the global stage. The industry encompasses a diverse spectrum, including generic drug development, over-the-counter (OTC) medicines, bulk drug manufacturing, vaccines, contract research, biosimilars, and biologics.

The heart of this pharmaceutical revolution beats within India's 118 pharmaceutical clusters spread across 19 states and union territories. Maharashtra takes the lead with the highest number of 40 pharma clusters, followed by Gujarat, Andhra Pradesh, Himachal Pradesh, and other key regions contributing to this thriving ecosystem. In addition to pharma production, Telangana boasts India's largest medtech R&D and manufacturing cluster at the Medical Devices Park, attracting investors.

The future of India's pharmaceutical industry is not limited to domestic growth alone. Indian drugs are exported to over 200 countries, with the United States, Belgium, South Africa, UK, and Brazil leading as the top destination markets. The exports of Indian drugs and pharmaceuticals reached INR 2.04 trillion (US$24.51 billion) in 2022-23, constituting 5.71 percent of the country's total exports.

As we navigate this landscape, it is clear that India's pharmaceutical industry is on a trajectory of unprecedented growth, driven by supply-side and demand-side factors. This evolution is poised to redefine the global pharmaceutical landscape and create remarkable opportunities for investors, professionals, and healthcare providers.

In a world where healthcare is more vital than ever, India's pharmaceutical industry stands as a beacon of hope, innovation, and progress, dedicated to improving global health outcomes.

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

h ttps://www.linkedin.com/pulse/future-indian- pharma-opportunities-growth-projections- boyapati-a3bqc/

Government Initiatives

• The Union Cabinet, on April 26, 2023, approved the National Medical Devices Policy, 2023. The National Medical Devices Policy, 2023 is expected to facilitate an orderly growth of the medical device sector to meet the public health objectives of access, affordability, quality and innovation.

• Strengthening of Pharmaceutical Industry (SPI): The Ministry's scheme "Strengthening of Pharmaceutical Industry (SPI) with a total financial outlay of Rs. 500 crore (US$ 60.6 million) extends support required to existing pharma clusters and MSMEs across the country to improve their productivity, quality and sustainability.

• Pradhan Mantri Bhartiya Jan Aushadhi Kendras (PMBJKs): The Government has set a target to increase the number of PMBJKs to 10,500 by the end of March 2025. Product basket of PMBJP comprises of 1,451 drugs and 240 surgical instruments.

• Up to 100%, FDI has been allowed through automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and beyond that through government approval.

• The cumulative FDI equity inflow in the Drugs and Pharmaceuticals industry is US$ 21.58 billion during the period April 2000- September 2023. This constitutes almost 3.3% of the total FDI inflow received across sectors.

• Indian pharma companies have a substantial share in the prescription market in the US and EU. The largest number of FDA-approved plants outside the US is in India.

As per the Union Budget 2023-24:

For innovation in the pharmaceutical sector, through centres of excellence, a new initiative to encourage pharmaceutical research and innovation will be implemented. The government persuades business to spend money on R&D in a few chosen priority fields. At the grassroots level, government has also announced on building 157 nursing colleges in colocation with government medical colleges.

• Ayushman Bharat Digital Mission (ABDM): Under the ABDM, citizens will be able to create their ABHA (Ayushman Bharat Health Account) numbers, to which their digital health records can be linked. This will enable creation of longitudinal health records for individuals across various healthcare providers and improve clinical decision making by healthcare providers.

• The pilot of ABDM is completed in the six Union Territories of Ladakh, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Puducherry, Andaman and Nicobar Islands and Lakshadweep with successful demonstration of technology platform developed by the NHA.

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

Outlook on Indian Pharmaceutical Sector:

The pharmaceutical industry in India is a significant part of the nation's 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 therapies such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers for chronic diseases, which are on the rise.

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.org/industry/ pharmaceutical-india

ACTIVE PHARMACEUTICAL INGREDIENTS (APIS)

• Active Pharmaceutical Ingredient (or API) is a crucial segment of the pharma industry, contributing to around 35% of the market. API is the biologically active component of a drug that causes an intended medical effect.

• India is the 3rd largest producer of API accounting for an 8% share of the Global API Industry. About 500+ different APIs are manufactured in India, and it contributes 57% of APIs to prequalified list of the WHO.

FORMULATIONS

• India is the largest exporter of formulations in terms of volume, with 14% market share and 12th in terms of export value.

• Double-digit growth is expected over the next five years.

• According to Allied Market Research, the Indian pharmaceutical packaging market was valued at US$ 1,434.1 million in 2020 and is expected to reach US$ 3,027.14 million by 2030, at a CAGR of 7.54%.

Supply-side drivers of Indian pharmaceuticals sector

• Following the introduction of product patents, several multinational companies are expected to launch patented drugs in India.

• Growth in the number of lifestyle diseases in India could boost the sale of drugs in this segment.

• High Court allowing to export patent drugs, to foreign players in the Indian market.

• The presence of a skilled workforce as well as high managerial and technical competence is a source of attraction for private players. Pharma companies have already increased spending in the country to tap rural markets and develop better infrastructure.

• Promotion of Medical Devices Parks: Objective of the scheme is Creation of world class infrastructure facilities in order to make Indian medical device industry a global leader

• About 120 drugs are expected to go off-patent

over the next 10 years; with expected worldwide revenue between US$ 80 to 250 billion.

• A draft notification issued by the Union health ministry has proposed that the 16 drugs, which include common antipyretic medicine such as paracetamol 500 mg, some laxatives, nasal decongestants and topical antifungal creams be included in the OTC drug category.

Demand drivers of Indian pharmaceuticals sector

• Rising levels of education to increase acceptability of pharmaceuticals.

• Patients to show greater propensity to self- medicate, boosting the OTC market.

• Acceptance of biologics and preventive medicines to rise.

• Surge in medical tourism due to increased patient inflow from other countries

• As per Mckinsey's report (July 2019), > US$ 200 billion to be spent on medical infrastructure in the next decade.

• New business models expected to penetrate tier-2 and 3 cities.

• Over 160,000 hospital beds expected to be added each year in the next decade.

• India's generic drugs account for 20% of global exports in terms of volume, making the country the largest provider of generic medicines globally.

• Patient pool expected to increase over 20% in the next 10 years (until 2030), mainly due to rise in population.

• New diseases and lifestyle changes to boost demand.

Source: IBEF Report Dec 2023

Outlook on Global Pharmaceutical Industry

The Global Pharmaceutical Manufacturing Market is projected to reach a size of US$ 2,346.33 billion by 2032, up from US$ 859.5 billion in 2023, at a CAGR of 11.56% during the forecast period 20242032.

Digitalization and automation trends are transforming the landscape of pharmaceutical manufacturing market, resulting in greater efficiency and cost savings. Furthermore, drug manufacturers are increasingly outsourcing parts of their R&D to clinical research organizations (CROs) as a cost-reduction strategy. The application of big data in clinical research is another significantdevelopment within the pharmaceutical R&D sphere.

The projections indicate that top global biopharma drugs could achieve lifetime sales of up to $28 billion by 2028. However, pharmaceutical companies face patent expiration risks between 2023-2028, with estimated revenue losses ranging from $23-28 billion.

The global active pharmaceutical ingredients (API) market continues to grow, reaching a value of $238.47 billion in 2023. This market is expected to expand at a CAGR of 6.6% from 2024 to 2032, with the Asia-Pacific region holding the largest share in 2023. China maintains its position as the largest producer and exporter of APIs worldwide.

Contract manufacturing organizations (CMOs) are vital components of the pharmaceutical industry. The global pharmaceutical contract manufacturing market was valued at $172.8 billion in 2023, projected to grow at a CAGR of 7.7% from 2024 to 2032. Pharmaceutical companies benefit from outsourcing to CMOs, reducing costs, enhancing efficiency, and allowing them to focus on core competencies.

The United States holds the highest pharmaceutical spending per capita globally, reaching $1,310 in 2022. Germany and Japan follow with per capita spending of $883 and $864 respectively. These figures underscore the substantial role pharmaceutical spending plays in the overall healthcare expenditures of many nations.

Overall, against the backdrop of evolving technologies, shifting demographics, and persistent health challenges, the global pharmaceutical sector stands poised for continued growth and advancement, offering investors and stakeholders abundant opportunities to contribute to improved health outcomes and societal well-being.

Source: https://www.globenewswire.com/ news-release/2024/04/16/2863741/0/en/ Pharmaceutical-Manufacturing-Market-to- Surpass-USD-2-301-6-Billion-By-2032-Generic- Prescription-Drugs-to-Remain-at-Top-with- Over-61-Contribution-Says-Astute-Analytica. html#:~:text=New%20Delhi%2C%20April%20 16%2C%202024,the%20forecast%20period%20 2024%E2%80%932032.

Indian & Global Hospital Sector

The Indian hospital industry is set to grow at a healthy Compound Annual Growth Rate (CAGR) of approximately 12 per cent over the next three fiscal years, driven by a confluence of positive factors driven by factors such as increasing healthcare awareness, a surge in lifestyle diseases, a growing elderly population, expanded health insurance coverage, improved disposable income, augmented public expenditure on healthcare, and the rise in medical tourism.

The global hospital services market was valued at USD 12.31 trillion in 2023 and is expected to reach around USD 22.57 trillion by 2033 and is poised to grow at a compound annual growth rate (CAGR) of 6.05% during the forecast period 2024 to 2033.

Rising cancer incidence globally, increasing number of knee replacement surgeries, and availability of next-generation stents are key factors that are anticipated to drive the global hospital services industry over the years. However, high cost of surgical procedures coupled with lack of insurance coverage will subsequently restrain the market growth.

Cost of medical facilities has seen a spike in the past few decades. Advanced diagnostic technologies have paved their way for early and improved detection of disease as well as supported research for terminal disease treatment such as cancer. Due to increasing affordability and awareness among people, medical services market expected to spur, which is already evident in many countries, as it contributes significantly towards the growth of Gross Domestic Product (GDP). Pharmaceutical companies, term care services, medical devices sector, medical consumables industry, and healthcare facility management services together contribute prominently toward the healthcare services market. As an end-use segment, hospitals capture significant consumer base in the healthcare industry.

Hospitals, therefore, are an integral part of healthcare industry as well as a major revenue source for the overall industry that also fuels research & innovation in the stream. Various healthcare product manufacturers invest prominently in terms of both marketing strategies and revenue to promote their product and services among hospitals. Hence, strategic decisions within the hospital sector affects notably to the other associated industry within healthcare steam. Source: https://www.business-standard.

com/industrv/news/hospital-industrv-set-to- grow-at-12-cagr-driven-bv-post-pandemic- recoverv-123121101085 1.html https://www.precedenceresearch.com/hospital- services-market

Company's Strategy

The company is focusing primarily on expanding its presence in the hospital business across the country. We believe there are numerous opportunities in this sector, especially with our strong lineup of products.

TML is one of the top three players in the country and offers a comprehensive range of anesthesia products, which is advantageous for the hospital business. We also have divisions in critical care and intensive care, which are key parts of their longterm growth plan.

Besides the hospital and API business, the company is also investing in trade and co-marketing, seeing them as areas with potential for growth.

Discussion on financial performance with respect to operational performance

The consolidated Profit after Tax decreased by 23.51% compared to previous year. The production capacity was utilized to the optimum level during the year. Your Company has generated profit during the year under review as well as in the previous year.

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 31^st March, 2024 the total employee strength was 1541.

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

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

The Return on net worth decreased during the year 2023-24 as compared to previous year 2022-23 due to decrease in Net Profit after tax compare to increase in Shareholders' equity.

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