Entero Healthcare Solutions Ltd

Dear Members,

On behalf of the Board of Directors ('the Board'), it is our pleasure to present the 6th Annual Report of the Company along with the Audited Financial Statements (standalone and consolidated) and Auditors Report for the Financial Year ended 31st March, 2024 ("FY 2023-24").

1. Key Financial Highlights (Standalone and Consolidated)

Financial highlights of the Company for FY 2023-24 as compared to the preceding financial year, on consolidated and standalone basis are given below.

(Rs. in million)

2. State of Company's affairs

The Standalone and Consolidated Financial Statements of your Company for FY 2023-24 are prepared in compliance with the applicable provisions of the Companies Act, 2013 ('the Act'), Indian Accounting Standards ('Ind AS') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('SEBI Listing Regulations').

The revenue from operations on standalone basis for FY 2023-24 stood at Rs. 3,181.61 million as against Rs. 1,776.90 million for FY 2023-24, whereas the profit for FY 2023-24 stood at Rs. 384.40 million as against Loss of Rs. 124.55 million for FY 2023-24.

The revenue from operations on consolidated basis for FY 2023-24 stood at Rs. 39,223.10 million as against Rs. 33,002.07 million for FY 2023-24. Whereas the Profit for FY 2023-24 stood at Rs. 397.99 million as against loss of Rs. 111.05 million for FY 2023-24.

The Company's performance has been discussed in detail in the "Management Discussion and Analysis Report" which forms a part of this Report.

3. Business Operations & Future Outlook

Please refer page 6 to 9 and 18 to 21 for the Business Operations & Future Outlook.

4. Transfer to Reserves

The Company does not propose to transfer any amount to the General Reserve.

5. Dividend

I n order to conserve the resources of the Company, the Board doesn't recommend any dividend for the Financial Year under review.

6. Initial Public Offering ("IPO") of Equity Shares

During the year under review, your Company made an Initial Public Offering ("IPO") consisting of fresh issue of 79,55,769 equity shares and offer for sale of 47,69,475 equity shares of face value of Rs. 10/- each of the Company for cash at a price of Rs. 1258/- per equity share including a premium of Rs. 1248/- aggregating to Rs. 15,999 million by allotment/ transfer. The IPO included reservation for employees of the Company and its subsidiaries and accordingly 15,268 equity shares of Rs. 10/- each were allotted at a premium of Rs. 1,129/-, being discount of Rs. 119/- per equity share, as permitted under applicable SEBI(ICDR) Regulations. The fresh issue consisted of approx. Rs. 10,000 million. The issue opened on Friday, 9th February, 2024 and closed on Tuesday, 13th February, 2024. The Company successfully completed the IPO process and the equity shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") on 16th February, 2024.

7. Utilization of Issue Proceeds

The details of utilization of Issue proceeds of the IPO are submitted to the Stock Exchanges on quarterly basis and are available on their websites. As on 31st March, 2024, there was no material variation between projected utilization of funds in the Offer document and the actual utilisation of funds.

The following table sets forth details of the utilisation of the Net Proceeds:

(Rs. in million)

In accordance with the requirements of SEBI (ICDR) regulations, the Company has appointed ICRA Limited as Monitoring Agency for review and certification of utilization of the IPO proceeds to the Company.

A. Authorised Share Capital

As on 31st March, 2024, Authorised Share Capital of the Company is Rs. 9,74,35,00,000/- (Nine Hundred Seventy-Four Crores and Thirty-Five Lakhs Only) divided into 7,45,70,000 (Seven Crores Forty-Five Lakhs Seventy Thousand Only) Equity Shares of Rs. 10/- each and 89,97,80,000 (Eighty-Nine Crores Ninety-Seven Lakhs Eighty Thousand Only) Compulsorily Convertible Cumulative Preference Shares ("CCPS") of '10/- each.

B. Changes in Issued, Subscribed and Paid-up Share Capital

During the FY 2023-24, the changes in Issued, Subscribed and Paid-up Equity Share Capital of your Company was as follows:

During the FY 2023-24, the changes in Issued, Subscribed and Paid-up Compulsorily Convertible Cumulative Preference Share Capital of your Company was as follows:

All the Compulsorily Convertible Cumulative Preference Shares were converted into equity shares on 12 th July, 2023and 27th January, 2024. **Details of A5 CCPS issued and allotted during the financial year 2023-24 are as follows:

Details of Equity Shares allotted due to conversion of CCPS during the financial year 2023-24 are as follows:

Details of Equity Shares allotted due to Initial Public Offering ("IPO") during the financial year 2023-24 are as follows:

Alteration of MOA

During FY 2023-24, the Object clause of the Memorandum of Association was altered, pursuant to approval of the members of the Company, at their Extraordinary General Meeting held on 30th May 2023, to include service related to marketing and / or promotion of products offered by the Company.

During FY 2023-24, pursuant to approval of the members of the Company, at their Extraordinary General Meeting held on 8th July 2023, Clause V of the MoA was amended to reflect the increase in authorized share capital of the Company from Rs. 8,043,500,000 divided into 4,570,000 Equity Shares of Rs. 10/- each, 565,847,000 Series A1 CCPS of Rs. 10 each, 193,564,100 Series A2 CCPS of Rs. 10/- each, 3,996,900 Series A3 CCPS of Rs. 10/- each, and 36,372,000 Series A4 CCPS of Rs. 10/- each to Rs. 9,743,500,000 divided into 74,570,000 Equity Shares of Rs. 10/- each, 565,847,000 Series A1 CCPS of Rs. 10/- each, 193,564,100 Series A2 CCPS of Rs. 10/- each, 3,996,900 Series A3 CCPS of Rs. 10/- each, 36,372,000 Series A4 CCPS of Rs. 10/- each and 100,000,000 Series A5 CCPS of Rs. 10/- each.

Pursuant to approval of the members of the Company, at their Annual General Meeting held on 7th August, 2023, Clause I of the MoA was amended to reflect the change in name of your Company from "Entero Healthcare Solutions Private Limited" to "Entero Healthcare Solutions Limited" pursuant to conversion of your Company from a private limited company to a public limited company, and references to the Company were accordingly updated in the MoA.

Alteration of AOA

During FY 2023-24, pursuant to approval of the members of the Company, at their Extraordinary General Meeting held on 17th July 2023, new set of Articles of Association was adopted by the Company to, inter alia, set forth the terms of Series A5 Compulsorily Convertible Cumulative Preference Shares.

I n relation to the IPO and consequent listing of Equity Shares of the Company on stock exchanges, the Articles of Association of the Company were amended/revised in accordance with listing requirements in the Annual General Meeting held on 7th August, 2023. However, in order to retain certain provisions of the investor related restrictions (entrenchment provisions) the Articles of Association prior to amendment were retained and renamed as Part B and a new set of Articles titled Part A was added such that Part A and Part B would co-exist together till filing of Red Herring Prospectus with the Registrar of Companies and upon filing of the same, Part B would automatically stand deleted without any further action in this regard.

During FY 2023-24, pursuant to approval of the members of the Company, at their Extraordinary General Meeting held on 7th September, 2023, Part B of the Articles of Association were altered in accordance with the requirements of Shareholders' Addendum Agreement dated 6th September, 2023. With effect from the date of filling of Red Herring Prospectus of your Company with Registrar of Companies, i.e. 5th February, 2024, Part A of the AOA continues to be effective and Part B has become ineffective.

10. Employees' Stock Option Plans ("ESOPs")

Your Company has Employee Stock Option Plan namely, Entero Employees Stock Option Plan, 2023 ("ESOP 2023"). The said ESOP 2023 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (hereinafter referred to as "SEBI SBEB & SE Regulations") and have also been approved by the Members of the Company on 7th September, 2023.

The Secretarial Auditors of your Company have provided a certificate stating that the aforesaid ESOP Plans have been implemented in accordance with SEBI SBEB & SE Regulations and are in accordance with the approval of shareholders of the Company. The said certificate will be placed before the members at the AGM. The disclosures as required under Regulation 14 of SEBI SBEB & SE Regulations, are available on the website of the Company at https://www.enterohealthcare.com/

11. Credit Rating

The Company has obtained Credit Ratings from India Ratings and Research, a Fitch Group Company for its term loans. ("Credit Rating Agency"). The Credit rating(s) were as follows:

12. Deposits

The Company has not accepted or renewed any deposit as covered under Section 73 of the Companies Act, 2013, from its members or the public or others, during FY 2023-24. Further, no amount on account of principal or interest on deposits from the public was outstanding as on 31st March, 2024.

Further the disclosure as per Rule 8(3) of the Companies (Accounts) Rules, 2014 is as follows: *

*Note: Disclosure pursuant to Rule 2(lXcXviii) of Companies (Acceptance of Deposits) Rules, 2014: No declaration is required as the Company has not received any monies from the Directors during the year.

13. Material Changes and Commitments affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of the Company which had occurred between the end of the financial year and the date of this Report.

14. Adequacy of Internal Financial Controls with Reference to the Financial Statements

The Board has adopted systems, policies and procedures for efficient conduct of business, operations, safeguarding its assets and prevention of frauds. This ensures accuracy and completeness of accounting records and its timely preparation.

15. Subsidiaries, Associates and Joint Ventures

Your Company has the following subsidiaries as on 31st March, 2024. The details are as follows:

* Out of the above, during the FY2023-24, your Company has acquired 100% of the shareholding of Entero R. S. Enterprises Private Limited and thus it has become wholly-owned subsidiary of your Company.

# Further, during the FY 2023-24, your Company has acquired 80% of the shareholding of Dhanvanthri Super Speciality Private Limited and thus it has become Subsidiary of your Company.

Your Board reviewed the affairs of subsidiaries and there has been no material change in the nature of the business of such subsidiaries. Further, no Company ceased to be a subsidiary of the Company during FY 2023-24.

There are no associate companies or joint venture companies within the meaning of section 2(6) of the Companies Act, 2013 ("Act").

In accordance with the requirements of Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company and all its subsidiaries are prepared in accordance with the provisions as specified in the Companies (Accounts) Rules, 2014, form part of the Annual Report. Further, a statement containing the salient features of the financial statement of the Company's subsidiaries in the prescribed form AOC-1 is attached as "Annexure-I" to the Board's Report. This statement also provides the details of the performance and financial position of each subsidiary.

I n accordance with Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection on demand in electronic form. These will also be available on the Company's website at https://www.enterohealthcare.com/

16. Particulars of Loans, Guarantees or Investments

The Company makes investments or extends loans/ guarantees to its subsidiaries/wholly owned subsidiaries for their business purpose. Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, form part of the notes no 52 to the standalone financial statements forming part of this Annual Report.

17. Corporate Governance and Additional Shareholders' Information

Your company practices a culture that is built on transparency and ethical values. A detailed Report on the corporate governance systems and practices of the Company is given separately in this Annual Report.

A certificate from the Secretarial Auditor of the Company confirming compliance with the conditions of corporate governance is attached to the Report on corporate governance.

18. Management Discussion and Analysis

A detailed Report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 of the SEBI (Listing Regulations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), is provided as a separate chapter in the Annual Report.

19. Business Responsibility and Sustainability Report

The Business Responsibility and Sustainability Report of the Company for the year ended 31st March, 2024, is provided in a separate section and forms part of this Annual Report and is also made available on the website of the Company at https://www.enterohealthcare.com/.

20. Board of Directors and Key Management Personnel Appointment/ Re-appointment of Directors

Your Company has an optimum combination of Directors on its Board of Directors ('Board'). As on 31st March, 2024, the Board consisted of two (2) Executive Directors, three (3) Non-Executive Independent Directors including one (1) Woman Independent Director and three (3) Non-Executive Directors (Nominee Directors), including one (1) Woman Director, in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. Your Directors are eminent individuals of diverse backgrounds with skills, experience and expertise in various field, the complete list of which has been provided in the Corporate Governance Report forming part of this Report.

During FY 2023-24, the following changes took place in the Board composition:

Appointment(s)

Mr. Sujesh Vasudevan (DIN: 08240092) was appointed as an Additional (Independent) Director w.e.f. 25th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved his appointment as a Non-Executive - Independent Director for a term of 3 years, w.e.f. 25th August, 2023, not liable to retire by rotation. Mr. Vasudevan has been designated as the Chairman of the Board w.e.f. 26th August, 2023.

Mrs. Sandhya Gadkari Sharma (DIN: 02005378) was appointed as an Additional (Independent) Director w.e.f. 25th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved her appointment as a Non-Executive - Independent Director for a term of 3 years, w.e.f. 25th August, 2023, not liable to retire by rotation.

Mr. Rajesh Shashikant Dalal (DIN: 03504969) was appointed as an Additional (Independent) Director w.e.f. 25th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved his appointment as a Non-Executive - Independent Director for a term of 3 years, w.e.f. 25th August, 2023, not liable to retire by rotation.

Mr. Vipul Indravadan Desai (DIN: 08350894) was reappointed as Non-Executive Non-Independent Director (a nominee of Prasid Uno Family Trust) w.e.f. 25th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved his appointment as a Non-Executive NonIndependent Director (Nominee Director), liable to retire by rotation.

Mr. Arun Sadhanandham (DIN: 08445197) was re-appointed as Non-Executive Non-Independent Director (a nominee of Orbimed Asia III Mauritius Limited) w.e.f. 25th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved his appointment as a Non-Executive Non-Independent Director (Nominee Director), liable to retire by rotation.

Ms. Sumona Chakraborty (DIN: 09597426) was appointed as Additional Non-Executive Non-Independent Director (a nominee of Orbimed Asia III Mauritius Limited) w.e.f. 24th August, 2023 and subsequently, the members at their Extra Ordinary General Meeting held on 7th September, 2023 have approved her appointment as a Non-Executive Non-Independent Director (Nominee Director), w.e.f. 7th September, 2023, liable to retire by rotation.

Mr. Prabhat Agrawal was re-appointed as Managing Director and Chief Executive Officer of the Company w.e.f. 26th August, 2023 for a period of 5 years, liable to retire by rotation.

Mr. Prem Sethi was re-appointed as Whole-time Director and Chief Operating Officer of the Company w.e.f. 26th August, 2023 for the period of 5 years, liable to retire by rotation.

Cessation(s) / Resignation(s)

Mr. Sunny Sharma, Non-Executive Director, resigned from the Board w.e.f. 23rd August, 2023. The Board places on record appreciation for his invaluable contribution and guidance during his tenure.

Retire by Rotation of Ms. Sumona Chakraborty (DIN: 09597426), Non-Executive Non-Independent Director (Nominee)

All the Directors (other than the Independent Directors), on the Board of your Company are liable to retire by rotation. In terms of the provisions of Section 152(6) of the Act and the Rules made thereunder, Ms. Sumona Chakraborty (DIN: 09597426), Non-Executive Non-Independent Director (Nominee) is scheduled for retirement by rotation at the ensuing AGM. Ms. Sumona Chakraborty, being eligible, has offered herself for re-appointment. Based on the recommendations of the Nomination & Remuneration Committee, the Board recommends the re-appointment of Ms. Sumona Chakraborty at the ensuing AGM.

A brief resume, nature of expertise, details of directorships held by Ms. Sumona Chakraborty in other companies along with her shareholding in the Company as stipulated under the Secretarial Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as an Annexure to the Notice of the ensuing AGM.

Ms. Sumona Chakraborty is not debarred or disqualified from holding the office of Director by virtue of SEBI Order or any other authority pursuant to BSE Circular pertaining to enforcement of SEBI Orders regarding appointment of Directors by Listed Companies.

Key Managerial Personnel (KMPs) and Senior Managerial Personnel (SMPs)

The following persons have been designated as the Key Managerial Personnel pursuant to Sections 2(51) and 203 read with Companies (Appointment and Qualifications of Directors) Rules, 2014 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

• Mr. Prabhat Agrawal, Managing Director and Chief Executive Officer

• Mr. Prem Sethi, Whole-time Director and Chief Operating Officer

• Mr. Jayant Prakash, Vice President - General Counsel, Company Secretary and Compliance Officer

• Mr. Venkataramana Ram Chebolu("CV Ram"), Group Chief Financial Officer

The details of the Senior Managerial Personnel of the Company are as mentioned below:

• Mr. Sambit Mohanty, President Institutional Business

• Mr. Shashwat Nigam, Vice President - Head Retail Pharma Business

21. Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

22. Familiarisation Programme for Directors

Disclosure pertaining to familiarisation programmes for Directors is provided on the website of the Company i.e. https://www.enterohealthcare.com/

23. Meetings

During the Financial year 2023-24, Twenty-Six (26) meetings of Board of Directors were held. The maximum gap between two Board Meetings did not exceed 120 days.

Details of Board Meetings and attendance of the Directors are provided in Corporate Governance Report which forms a part of this Report.

24. Performance Evaluation

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee, has adopted a Policy and criteria for evaluation of the Board, its Committees and Individual Directors. The performance of the Board and its Committees were evaluated after seeking inputs from all the Directors on the basis of criteria such as the composition and meetings, role & responsibilities and overall effectiveness of the Board & Committees. Evaluation of the performance of all Individual Directors (including Independent Directors and Chairman) was also done during the year. The details of the Board Evaluation process are mentioned in the Corporate Governance Report forming part of this Report.

Pursuant to Schedule IV of the Act read with Regulation 25 of SEBI Listing Regulations, the Independent Directors met on 2nd December, 2023 and 22nd March 2024 without the presence of Non-Independent Directors. Further, details regarding this are mentioned in the Corporate Governance Report forming part of this Report.

25. Policy for Appointment of Directors and Remuneration

The Nomination and Remuneration Policy of the Company provides roles and responsibilities of the Nomination and Remuneration Committee and the criteria for evaluation of the Board and compensation of the Directors and Senior Management. Further the assessment and appointment of members to the Board is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise and specific qualification required for the position. The potential Independent Board member is also assessed on the basis of independence criteria defined in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

In accordance with Section 178(3) of the Companies Act, 2013 and Regulation 19(4) of the Listing Regulations and on recommendation of the Nomination and Remuneration Committee, the Board has adopted a policy including criteria for determining the qualification, positive attributes, independence and other matters for appointment and remuneration of Directors, Key Management Personnel and Senior Managerial Personnel. The said Policy is uploaded on the website of your Company at https://www.enterohealthcare.com and is followed for respective appointment(s).

We affirm that the remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

26. Board Committees

In compliance with the Statutory requirements, the Company has constituted committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholder Relationship Committee, Risk Management Committee. The Company had also constituted IPO Committee and Committee of Independent Directors, for matters related to Initial Public Offering of the Company, which stand dissolved w.e.f. 8th March 2024.

A detailed update on the Board, its composition, governance of committees, terms and reference of various committees, number of committee meeting held during the year is provided in the Corporate Governance Report, which forms a part of this Report.

During the year, all recommendations made by the committees were approved by the Board.

27. Business Risk Management

Your Company has developed and implemented the risk management policy for the company. The risk management policy approved by the Board of Directors in their meeting held on 25th August, 2023 is available on the website of the company at https://www.enterohealthcare.com/investor/ corporate-governance/policies.php.

The Company has established a well documented and robust risk management framework under the provisions of Companies Act, 2013. Under this framework, risks are identified across all business process of the Company on continuous basis. Once identified, they are managed systematically by categorizing them. It has been identified as one of the key enablers to achieve the Company's objectives. Increased competition, impact of recessionary trends on the award of jobs and manpower attrition are some of the major risks faced in the industry. However, your Company has adopted risk mitigation steps so as to protect the profitability of the business.

28. Directors' Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, your Directors state that:

1. in the preparation of the annual accounts for the FY 2023-24, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

2. the directors have 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 for the financial year ended 31st March, 2024, and of the profits and loss of the Company for that period;

3. 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;

4. the directors have prepared the annual accounts on a going concern basis;

5. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; and

6. 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.

29. Related Party Transactions

Your Company has formulated a Policy on Related Party Transactions in accordance with the provisions of Sections 177 and 188 of the Act and Rules made thereunder read with Regulation 23 of SEBI Listing Regulations, and the same is available on the website of your Company at https://www.enterohealthcare.com.

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between your Company and its related parties. All Related Party contracts or arrangements or transactions entered during the year were on arm's length basis and in the ordinary course of business and in compliance with the applicable provisions of the Act/ SEBI Listing Regulations. No material Related Party Transactions i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, were entered during the year by your Company.

None of the contract or arrangement or transaction with any of the Related Parties was in conflict with the interest of your Company. Since all the transactions with related parties during the year were on arm's length basis and in the ordinary course of business, hence, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company for FY 2023-24.

Details of related party transactions entered into by your Company, in terms of Ind AS-24 have been disclosed in the Note 45 of the standalone and Note 49 of the consolidated financial statements, respectively, forming part of this Report.

30. Compliance with Downstream Investment requirements

During the year under review, the Company had complied with applicable requirements in respect of Downstream Investment(s) made during the year, as per Foreign Exchange Management (Non-debt Instruments) Rules, 2019, issued by Reserve Bank of India ("RBI") and has obtained a certificate from the Statutory Auditors of the Company in respect of the same. The auditors certificate would be available at Annual General Meeting for inspection by members.

There were certain delays in respect of certain reporting requirements of Downstream Investment pertaining to years prior to FY 2023-24, and the Company had filed an application for compounding to the RBI for such delay for the downstream investments made in 17 of the Company's Subsidiaries. The Company had received the compounding order from RBI dated 4th January, 2024, and has paid the requisite fee of Rs. 4.74 million during FY 2023-24.

31. Vigil Mechanism/ Whistle Blower Policy

The Company has Whistle-Blower Policy (Whistle-Blower/ Vigil Mechanism) to report concerns. Under this policy, provisions have been made to safeguard persons who use this mechanism from victimization.

The policy also provides access to the chairperson of the Audit Committee under certain circumstances. The said Policy is also available on the Company's website https://www.enterohealthcare.com/

A. Statutory Auditors

The Members at the AGM held on 24th December, 2019, approved the appointment of M/s. M S K A & Associates (Firm Registration No. 105047W), Chartered Accountants, as the statutory auditors of your Company for a period of five years commencing from the conclusion of the 1st AGM held on 24th December, 2019, until the conclusion of 6th AGM of your Company to be held in the year 2024.

The report of the Statutory Auditors forms part of the Annual Report for FY 2023-24. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

Your Company, based on the recommendation of the Audit Committee and the Board of Directors vide their resolution of even date 29th May, 2024, proposes and recommends to the members of the Company for re-appointment of M/s. M S K A & Associates (Firm Registration No. 105047W), Chartered Accountants, as the statutory auditors of your Company for the second term of 5 (Five) consecutive years from the conclusion of the ensuing 6th AGM till the conclusion of 11th AGM of the Company to be held in the calendar year 2029.

B. Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, M/s. Ranjeet Pandey & Associates, Practicing Company Secretaries (Membership No. F5922, Certificate of Practice 6087) were appointed to conduct the Secretarial Audit of the Company for Financial Year 2023-2024. The Secretarial Audit Report for FY 2023-24 is attached as "Annexure-M".

The Secretarial Auditor's certificate confirming compliance with conditions of corporate governance as stipulated under Listing Regulations, for financial year ended 31st March, 2024 also forms part of this Report.

33. Board's Response on Auditors Qualification, Reservation or Adverse Remark

• There are no qualifications, reservations or adverse remarks made by the Statutory Auditors, in their Report for the financial year ended 31st March, 2024. The Report is enclosed with financial statements in this Annual Report.

• The Secretarial Auditors Report for the financial year ended 31st March, 2024 doesn't contain any qualification, reservations or adverse remarks.

34. Reporting of Frauds

Pursuant to provisions of the Section 143(12) of the Companies Act, 2013, neither the Statutory Auditors nor the Secretarial Auditor has reported any incident of fraud during the year under review.

35. Significant and Material Orders Passed by the Courts/ Regulators

During FY 2023-24, there were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Company's operations in future.

36. Corporate Social Responsibility

Based on the applicable provisions, your Company has adopted a CSR Policy. The said Policy is also available on the Company's website https://www.enterohealthcare.com

However, provisions relating to CSR spent were not applicable to the Company during FY 2023-24. Therefore, there is no requirement of providing Annual Report on CSR activities, in terms of Section 135 of the Act and the Rules framed thereunder.

37. Information Required Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and redressal of complaints of sexual harassment at workplace. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office premises or women service providers are covered under this Policy.

All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under the Prevention of Sexual Harassment Act to redress complaints received regarding sexual harassment.

The necessary disclosure in terms of requirements of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 in this regard is given below:

a. No. of complaints filed during the Financial Year: Nil

b. No. of complaints disposed off during the Financial Year: Nil

c. No. of complaints pending as on end of Financial Year: Nil

38. Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2, relating to 'Meeting of Board of Directors' and 'General Meetings' respectively have been duly complied by the Company.

39. Awards and Recognitions

Please refer page 27 for the awards/recognitions received by the Company and its subsidiaries.

40. Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached as Annexure III forming part of this Report.

In terms of 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, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of this Report. Considering the provisions of Section 136 of the Act, the Annual Report, excluding the aforesaid information, is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection at the registered office of your Company or through electronic mode during business hours on working days up to the date of the forthcoming AGM, by Members. Any Member interested in obtaining a copy thereof may send an e-mail to co.sec@ehspl.com. or investor.grievance@ehspl.com.

41. Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo (A) CONSERVATION OF ENERGY-

(B) TECHNOLOGY ABSORPTION-

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO-

During the year under review, total Foreign Exchange Earnings and Outgo on actual inflow and outflow basis, is as under:

(Rs. In lakhs)

42. Copy of Annual Return

Pursuant to Section 92(3) and Section 134(3Xa) of the Companies Act, 2013, the Company will place a copy of the Annual Return as of 31st March, 2024, on its website at https://www.enterohealthcare.com

43. DISCLOSURES

Your Directors state that for the Financial Year 2023-24, no disclosures are required in respect of the following items and accordingly affirm as under:

• The provisions relating to maintenance of cost records under sub section (1) of Section 148 of the Companies Act, 2013 are not applicable on the Company during the financial year.

• No amount or Shares were required to be transferred to the Investor Education and Protection Fund under the provisions of the Act.

• Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.

• No Buyback of shares was undertaken by the Company during FY 2023-24.

• There was no change in the nature of the business of the Company.

• There were no instances where your Company required the valuation for one-time settlement or while taking the loan from the Banks or Financial Institutions.

• No petition/application has been admitted against the Company, under Insolvency and Bankruptcy Code, 2016, by the National Company Law Tribunal.

• Neither the Managing Director nor the Whole-time Director of the Company receives any remuneration or commission from any of its subsidiaries.

• The Company has software for maintaining its books of account and has a feature of recording audit trail for each transaction with audit log.

44. Acknowledgement

We thank our customers, vendors, investors, bankers, employees, for their continued support during the year. We place on record our appreciation for the contribution made by our employees at all levels. Our growth was made possible by their hard work, co-operation and support. We further place on record their sincere appreciation for the assistance and co-operation received from Financial Institutions, Banks, Government Authorities and Business Partners.