Godavari Drugs Ltd

The Members,

Your Directors have pleasure in presenting the 36th Annual Report on the business and operations of Godavari Drugs Limited ('the Company' or 'GDL') and the Audited Financial Statements for the financial year ended March 31,2024.

1. Financial Highlights

During the year under review, performance of your company is as under:

2. Company Performance

For the financial year 2023-2024, your Company recorded a turnover of Rs. 15732.94 Lakhs and earned a net profit of Rs. 554.89 Lakhs as compared to the previous year's turnover of Rs. 16028.01 Lakhs and net profit of Rs. 378.58 Lakhs.

To address future challenges and revitalize company performance, your pharmaceutical company should focus on strategic measures. It is crucial to strengthen the supply chain by identifying alternative suppliers, improving inventory management, and optimizing logistics and distribution channels. This will mitigate disruptions and ensure the timely delivery of products to meet customer demand. Additionally, staying informed about regulatory changes, enhancing customer engagement and support, and adapting marketing and sales strategies to the changing landscape will be key factors in revitalizing performance and re-establishing your company as a leader in the pharmaceutical industry.

3. Transfer to Reserve

The Company has not made any appropriations to the General Reserve. A sum of ?554.89 lakhs is proposed to be carried forward as retained earnings in the Statement of Profit and Loss.

4. Dividend

To Conserve the Funds for Operations of the Company, the Board does not recommend any dividend for the year ended March 31, 2024.

5. Material Changes and Commitments

There were no material changes and commitments affecting the financial position of your Company that have occurred between the end of the financial year 2023-24 and the date of this report.

6. Share Capital

During the year under review, there was no change in the paid up share capital of your Company. The paid up Equity Share Capital of your Company as on 31st March, 2024 stood at was Rs.7,53,05,000, comprising of 75,30,500 Equity shares of face value of Rs. 10/- each. During the year under review, your Company has neither issued any shares with differential voting rights nor has granted any stock options or sweat equity

7. Details of Subsidiary, Joint Venture or Associates

During the Financial Year 2023-24 your company does not have any Subsidiaries, associates or joint ventures.

8. Listing of Equity Shares

Your Company's equity shares are listed on the following Stock Exchanges:

(i) BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai- 400 001, Maharashtra, India;

Your Company has paid the Annual Listing Fees to the said Stock Exchanges for the Financial Year 2023-24.

9. Corporate Social Responsibility

Your Company, as part of its Corporate Social Responsibility (CSR) initiative, undertook and supporting other government institutions and community support to villages in the neighbourhood to our factory.

Your Company has a Policy on Corporate Social Responsibility (CSR). The Annual Report on CSR activities as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as "Annexure IV" to this report. The CSR Policy is posted on the website of your Company which may be accessed at www. godavaridrugs.com

Further, pursuant to the provisions of Section 135 of the Companies Act, 2013 your Company was required to spend an amount of Rs. 11.79 Lakhs towards CSR Activities. The Board in compliance with the provisions of Section 135(9) of the Companies Act, 2013, and rules made thereunder has not constituted CSR Committee as the amount required to be spent on CSR activities does not exceed 50 Lakh rupees and the functions of such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of the company.

10. Internal Control Systems & their adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to your Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

11. Statutory Auditors

M/s Ayyadevara & Co (FRN: 000278S)., Chartered Accountants, were appointed as Statutory Auditors of the Company at the 34th AGM held on 16th May, 2022, to hold office till the conclusion of 6th Consecutive Annual General Meeting of the Company to be held in the year 2026-27, at such remuneration as may be mutually agreed upon between the Board of Directors and Statutory Auditors.

M/s Ayyadevara & Co (FRN: 000278S)., Chartered Accountants has confirmed that they are not disqualified from continuing as Statutory Auditors of the Company. The profile of the Statutory Auditors is available on the website of the Company at https://godavaridrugs.com/.

The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year 2023-24 and the Auditor's Report forms part of this Annual Report.

12. Secretarial Auditors

tPursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s VSS & Associates, Company Secretaries, Hyderabad as the Secretarial Auditor of the Company for the financial year 2023-2024. Secretarial Audit Report issued by Sri Vidya Harkut, Practising Company Secretary (CP No.7534), Partner, M/s VSS & Associates, Company Secretaries, Hyderabad in Form MR-3 is enclosed vide "Annexure IN" forming part of this report and does not contain any qualification.

The Board of Directors has appointed M/s VSS & Associates, Company Secretaries, Hyderabad as the Secretarial Auditor of the Company for the financial year 2024-2025. Necessary consent has been received from them to act as Secretarial Auditors. M/s VSS & Associates, Company Secretaries, Hyderabad holds Peer

Review Certificate No. 4615/2023 dated October 06, 2023, issued by the Institute of Company Secretaries of India, which is valid for a period of five years from the date of issue.

13. Cost Auditor

In terms of Section 148 of the Companies Act, 2013 (the Act) read with Companies (Cost Records and Audit) Rules, 2014, as amended, the Board of Directors has appointed to M/s. Bharathula & Associates, Cost Accountants (Firm Registration No. 101019) as Cost Auditor for the financial year 2024-2025. The Audit Committee recommended his appointment and remuneration subject to the compliance of all the requirements as stipulated under the Act and circulars issued thereunder. As specified by the Central Government under Section 148(1) of the Companies Act, 2013, the cost records are required to be maintained by the Company and accordingly such accounts and records are made and maintained.

14. Internal Auditor

Pursuant to Section 138 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, the Internal Audit Records maintained by the Company.

During the year 2023-24, the Board has appointed S.K. Lahoti Associates, Chartered accountants as Internal Auditors to undertake the Internal Audit of the Company.

Further, the appointment of M/s. S.K. Lahoti Associates, Chartered accountants as Internal Auditors for financial year 2024- 25 was approved by the Board upon the recommendation of the Audit Committee upon such terms and conditions as mutually agreed, in its meeting held on 30.05.2024.

15. Explanation to Auditor's Remarks

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

16. Reporting of Frauds

During the year under review, there was no instance of fraud, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

17. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company appointed , M/s. VSS & Associates, Company Secretaries (Peer Review Number: 4615/2023) to undertake the Secretarial Audit of your Company for the FY 2023-24.The Secretarial Audit Report confirms that your Company has complied with the provisions of the Act, Rules, Regulations, and Guidelines and that there were no deviations or non-compliances. The Secretarial Audit Report of the Company as per Regulation 24(A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in "Annexure III" to this Report

Further, we would like to clarify that the said Secretarial Audit Report does not contain any observations or qualifications or reservations or adverse remarks or disclaimers.

18. Compliance with Secretarial Standards

Your Company has devised proper systems to ensure compliance with the provisions of all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. During the year under review, your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India.

19. Details Of Directors Or Key Managerial Personnel Who Were Appointed Or Have Resigned During The Financial Year

The Board of directors of your Company has an optimum combination of Executive, Non-Executive and Independent Directors including Women Directors.

i. Independent and Non-Executive Directors

In the opinion of the Board all the Independent Directors of your Company possess integrity, experience, expertise, and the requisite proficiency required under all applicable laws and the policies of your Company.

All the Independent Directors have given declarations stating that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of your Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, all the Independent Directors of your Company have got their names included in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

During the year under review

1. Mr. Ramesh Babu Telugu (DIN: 03613926) has been resigned as Independent Director w.e.f., 11th August, 2023 on attaining the age of Seventy Five Years.

2. Mr. Rashmi Agarwal has been appointed as a Company Secretary and Compliance Officer of the Company w.e.f., 29th, May, 2023.

3. Mr. Dinesh Udpa (DIN: 10503106) has been Appointed as Independent Director of the Company w.e.f., 13th February, 2024.

iii. Directors

Mr. Ghanshyam Jaju (DIN: 00104601) has been reappointed as Non-Executive Non-Independent Director upon attaining age of Seventy Five Years w.e.f., 27th December, 2022 through postal ballot subject to the approval of the members.

Mr. Ghanshyam Jaju (DIN: 00104601) of the Company is liable to retire by rotation at the ensuing Annual General Meeting (AGM), and being eligible, offers himself for re-appointment. Necessary resolution for her re-appointment is being placed for approval of the members at the AGM. The Board recommends his re-appointment as a Director of the Company. A brief resume of Mr. Ghanshyam Jaju and other relevant information have been furnished in the notice convening the AGM.

i. Audit Committee

Your Board has in place, a duly constituted Audit Committee as per the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The composition, attendance, powers and role of the Audit Committee are included in Corporate Governance Report which forms part of this Annual Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

ii. Other Committees

Apart from the Audit Committee, the Board has also constituted the following committees, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, which are in place and are discharging their functions as per terms of reference entrusted by the Board:

Nomination and Remuneration Committee

Stakeholders Relationship Committee

The composition, attendance, powers and role of the Committees are included in Corporate Governance Report which forms part of this Annual Report.

(a) Procedure for Nomination and Appointment of Directors:

The Nomination and Remuneration Committee has been formed in compliance with Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to Section 178 of the Companies Act, 2013. The main object of this Committee is to identify persons who are qualified to become directors and who may be appointed in senior management of your Company, recommend to the Board their appointment and removal and shall carry out evaluation of every Director's performance, recommend the remuneration package of both the Executive and the Non-Executive Directors on the Board and also the remuneration of Senior Management, one level below the Board. The Committee reviews the remuneration package payable to Executive Director(s), makes appropriate recommendations to the Board and acts in terms of reference of the Board from time to time.

On the recommendation of the Nomination and Remuneration Committee, the Board has adopted and framed a Remuneration Policy for the Directors, Key Managerial Personnel and other Employees pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations and the same is posted on the website of your Company which may be accessed at www.godavaridrugs.com

The remuneration determined for Executive/Non-Executive Directors is subject to the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors. The Non-Executive Directors are entitled to sitting fees for the Board/Committee Meetings. The remuneration paid to Directors and Key Managerial Personnel and all other employees is in accordance with the Remuneration Policy of your Company.

Brief terms of Nomination and Remuneration Policy and other matters provided in Section 178(3) of the Act and Regulation 19 of SEBI Listing Regulations are disclosed in the Corporate Governance Report, which forms part of this Report.

(b) Familiarisation/ Orientation program for Independent Directors:

A formal familiarization program was conducted apprising the directors of the amendments in the Companies Act, rules prescribed thereunder, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other applicable laws to your Company. All the directors were also apprised about the business activities of your Company.

It is the general practice of your Company to notify the changes in all the applicable laws to the Board of Directors, from time to time. The objective of the program is to familiarize Independent Directors on the Board with the business of your Company, industry in which your Company operates, business model, challenges etc. through various programs such as interaction with experts within your Company, meetings with our business leads and functional heads on a regular basis.

22. Annual Evaluation of Board Performance and Performance of its Committees and Individual Directors

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and all other committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of your Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Independent Director being evaluated.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of your Company was evaluated, taking into account the views of the Executive Directors & Non-Executive Directors who also reviewed the performance of the Secretarial Department. The Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

The Directors expressed their satisfaction with the evaluation process.

23. Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments made during the financial year ended 31st March, 2024, covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, are given in the notes to the Financial Statements

24. Fixed Deposits

Your Company has neither accepted nor renewed any fixed deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and as such, no principal or interest was outstanding as on the date of the Balance Sheet.

25. Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them,

i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of your Company at the end of the financial year 2023-24 and of the profit or loss of your company for that period;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts for the year 2023-24 have been prepared on a going concern basis.

v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

vi) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

26. Vigil Mechanism

Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors had formulated Vigil mechanism which is in compliance with the provisions of section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI Listing Regulations. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.godavaridrugs.com

27. Risk Management

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

28. Particulars of Contracts or Arrangements with Related Parties

All Related Party Transactions that were entered during the financial year under review were on an arm's length basis and in the ordinary course of business and is in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company during the year that required shareholders' approval under Regulation 23 of the Listing Regulations.

None of the transactions entered with related parties falls under the scope of Section 188(1) of the Act.

The Company has adopted a Policy for dealing with Related Party Transactions. The Policy as approved by the Board may be viewed on the Company's website.

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 shall be disclosed in Form No. AOC-2. As "Annexure I."

29. Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Act, the Annual Return of the Company as on 31st March 2024 is available on the Company's www.godavaridrugs.com.

30. Management Discussion & Analysis

Pursuant to the provisions of Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a report on Management Discussion & Analysis is herewith annexed as "Annexure VI" to this report.

31. Change in the nature of business

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

32. Particulars of Employees

The information required pursuant to Section 197 of the Companies Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is herewith annexed as "Annexure V" to this report.

33. Corporate Governance

Your Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Corporate Governance for the year 2023-24 and a Certificate from M/s. VSS & Associates, Practicing Company Secretary is furnished which form part of this Annual Report.

34. Human Resources

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind your Company's vision. Your Company appreciates the spirit of its dedicated employees.

35. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Work place

Your Company strongly supports the rights of all its employees to work in an environment that is free from all forms of harassment. Your Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. Your Company has also constituted an Internal Complaints Committee, known as Anti Sexual Harassment Committee to address the concerns and complaints of sexual harassment and to recommend appropriate action.

Your Company has not received any complaint on sexual harassment during the year

36. Energy conservation, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure II " to this report.

37. Significant and material orders passed by the regulators or courts

Appeal Pending with CESTAT, Mumbai amounting Rs. 16, 29,999/-

In Respect of Service Tax and Appeal Pending with CESTAT, Mumbai amounting Rs. 3,97,766/-

38. Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year:

No application was made or any proceedings pending under the IBC, 2016 during the year ended on 31st March, 2024.

39. Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof:

During the year under review, the Company has not made any one-time settlement while taking any loans from the Banks or Financial Institutions

40. Green initiative in corporate governance

The ministry of corporate affairs ( MCA) has taken a green initiative in corporate governance by allowing paperless compliance by the companies and permitted the service of annual reports and documents to the shareholders through electronic mode subject to certain conditions and the company continues to send annual report and other communications in electronic mode to the members having email addresses.

41. Acknowledgment

The Directors express their sincere appreciation to the employees, valued shareholders, customers, bankers suppliers and government authorities for their continued support.