DIRECTORS’ REPORT

Dear Shareholders,

Your directors have pleasure in presenting the 38*' Annual Report on business, operations, and achievements of the
company together with the audited financial statements for the financial year ended 31^st March 2023.

FINANCIAL HIGHLIGHTS

REVIEW OF PERFORMANCE

The current year consolidated revenues of '142366.34
Lakhs reflect a decrease compared to the previous year's
revenues of '155713.41 Lakhs. The decline in revenue
amounts to 8.57 percent on a year-on-year basis.

In the year under review, the share of export revenue in total
sales revenues has increased to 40 percent at '57249.13
Lakhs. Although there has been a marginal increase in
annual export revenues of around 3 percent, the rise in the
share of export revenue indicates a positive trend for the
company's international sales. During the period, the
company experienced significant growth in its exports to
Europe, with a notable increase of 31 percent. Exports to
Africa also witnessed a healthy growth rate of 24 percent.
On the other hand, the growth rate for exports to the USA
was relatively lower at 4 percent. In terms of domestic
business, the company experienced a decline of 15 percent.
There was also a decline in exports to Asia, with a decrease
of 13 percent.

The lower levels of current year revenues are attributed to

multiple factors, including market conditions and large
base effect of preceding year, on strength of staggering 30
percent revenue growth recorded during the financial year
ending 31^st March 2022.

During the year, the home diagnostics business experienced
a significant drop in its annual revenues, with a decline of
22 percent. Similarly, the Over the Counter (OTC) business
also faced a decline in revenues, with a drop of 11 percent.
The API (Active Pharmaceutical Ingredient) business

Sales

Since financial year 2004-05, the revenues of the company
are on growth trajectory with successive year of revenue
growth till 31^st March 2022. However, revenue growth has
taken a pause during the current year. The consolidated
sales revenues for the year under review are at lower levels,
at '141395.48 Lakhs, down by 8 percent against previous
year revenues of '154156.51 Lakhs. Total income for the
current year is at '142366.34 Lakhs against '155713.41
Lakhs in the preceding year. The export revenues at
'57249.13 Lakhs are up by 3 percent whereas domestic
sales revenues are down by 15 percent for the year under
review.

On standalone basis, the company registered sales
revenues of '133547.91 Lakhs against '144604.93 Lakhs
of revenues recorded during previous financial year, a
degrowth of 8 percent.

Material Cost

The material cost, as a percentage of sales at 67.59
percent, is 48 basis points lower against the previous year
material cost of 68.07 percent. The company is improving
its sourcing channels to save on input cost which can be
shared with its customers, bringing better value for money
for company's products.

Employee Cost

The current year employee cost at '15468.05 Lakhs is lower
against previous year cost of '16424.65 Lakhs. However,
on account of lower current year sales revenues, the
percentage employee cost to annual sales revenues has
jumped up to 10.94 percent against 10.65 percent in the
last financial year. The company continues to pay merit-
based employee compensation so as to retain best talent.

Other Expenses

The consolidated expenditure on manufacturing, sales &
marketing and the administrative activities at 16.09 percent
of sales revenues, is at higher levels, against 12.75 percent
recorded in the preceding financial year. Increased spend
on manufacturing, selling & distribution followed by

administrative activities has adversely impacted the bottom
line for the current year.

Finance Cost & Depreciation

Finance cost comprises of interest on working capital
facilities backed by fixed deposit made by the company, on
car loan interest pay outs and interest on delay payment of
advance income tax. Annual consolidated depreciation &
amortisation charge are marginally up at '2793.04 Lakhs
against '2764.25 Lakhs in the previous year.

Other Operating Income & Other Income

The consolidated other operating income represents export
incentives and others. The export incentives for the current
year at '314.15 Lakhs are marginally up against last year
amounting to '289.15 Lakhs. Other income for the current
year at '43.36 Lakhs is lower against '237.03 Lakhs in the
preceding year.

Consolidated other income representing currency
fluctuations, interest income and others is lower at
'613.34 Lakhs, against previous year of '1030.72 Lakhs.

Profit after Tax

The consolidated profit before interest, depreciation and tax
is lower at '8566.65 Lakhs against '14697.96 Lakhs
generated in the previous year. Net profit after tax but
before share of profit from non-controlling interest is down
at '3867.55 Lakhs against '10168.13 Lakhs in last
financial year. The consolidated net profit, net of minority
share, at '3867.52 Lakhs is down by 61.97 percent over
previous years' profit of '10168.27 Lakhs. Total
Comprehensive Income for the current year is at
'3719.49 Lakhs against '10131.17 Lakhs earned in the
previous financial year.

On standalone basis, the net profit after tax for the year is at
'4624.29 Lakhs as against '10106.29 Lakhs during
previous financial year, a drop of 54.24 percent. Total
Comprehensive Income for the year is down by 55.51
percent, at '4479.51 Lakhs vis-a-vis '10069.44 Lakhs of
the preceding year.

Finished Formulations

The finished dosages business is now expanding its reach
and has recorded a sales revenue of '18537.25 Lakhs
during the current year against last year revenue of
'16866.90 Lakhs, a growth of 10 percent. The formulation
business has sustained its growth trajectory and has built up
the revenue, despite recording tremendous growth of 28
percent in the immediately preceding year.

At '6209.72 Lakhs, a growth of 25 percent was recorded in
the annual revenue for the branded formulation business
for the current year. Brand sharing generics business at
'6245.02 Lakhs have recorded a growth of 8 percent,
whereas contract manufacturing business at '6082.51
Lakhs has remained at previous year levels. Under the
Branded Prescription (Rx) product category, the top three
therapeutic categories namely Antibiotics, Gastroenteritis
and Vitamins collectively registered a growth of 18 percent.
In the current year, their annual revenues amounted to
'3587.95 Lakhs, whereas in the previous financial year,
sales revenue for these categories was '3050.29 Lakhs.

DIVIDEND

Given the growing resource needs for expanding the
business of the company, the directors do not recommend
any dividend for the year under review.

RESERVES

Standalone net profit after tax of '4624.29 Lakhs, has been
carried forward to the 'Retained Earnings' during the year.
No amount has been transferred to the general reserve
during the current year. A sum of '13798.35 Lakhs was
added to securities premium account during the year, on
account of issuance of 2,13,42,505 Equity Shares, to
banks, financial institutions and other at a premium of
'51.72/- per share and preferential issuance of

1.20.00. 000 Equity Shares at a premium of '23/- per share
to the entities belonging to promoter group (towards
conversion of fully convertible warrants).

A sum of '1875.00 Lakhs has been transferred to Capital
Reserve Account, being amount forfeited towards

3.00. 00.000 share warrants, which could not be
subscribed by the entities belonging to promoter group
within stipulated period and were therefore lapsed during
the year.

DEPOSITS

Your company has not accepted any deposits from the
public, during the year under review, within the meaning of
Section 73 of the Companies Act, 2013 ('the Act') read with
the Companies (Acceptance of Deposits) Rules, 2014.

FINANCES

The company continues to fund its growth through its
internal accruals without relying on any outside funding
support. A sum of '2250.00 Lakhs, brought in towards
balance 75 percent payment of 1,20,00,000 warrants,
issued to the entities belonging to promoter group, has
been used to fund working capital needs and others.

SHARE CAPITAL

During the year, the Equity Share Capital of the company
has gone up by '666.85 Lakhs to '10222.71 Lakhs against
'9555.86 Lakhs as of 31^st March 2022.

The company, during the current year, has issued

3.33.42.505 Equity Shares of '2/- each to banks, financial
institutions, promoter entities and other. Out of these

2.13.42.505 Equity Shares, were issued to banks, financial
institutions and other, at a premium of '51.72/- per share,
whereas 1,20,00,000 Equity Shares has been issued at a
premium of '23/- per share to the entities belonging to the
promoter group.

In respect of 50,38,983 Equity Shares surrendered with the
company for the cancellation, in compliance with Hon'ble
NCLT order dated 12.03.2018, the company has filed an
application with Stock Exchanges for the cancellation of
these equity shares from its total listed capital. The said
application is yet to be approved.

The Equity Shares issued by the company are listed at
following Stock Exchanges as on 31^st March 2023:

1. National Stock Exchange of India Limited (NSE)

2. BSE Limited (BSE)

Annual listing fee for the financial year 2023-24 has been
paid to both the Stock Exchanges. The Equity Shares
continue to be listed on NSE and BSE.

SUBSIDIARIES / JOINT VENTURES / ASSOCIATES

The company has incorporated a new wholly owned
subsidiary namely, Morepen Rx Limited, to carry out and
focus more, on the 'Formulation business', post receipt of
requisite approvals, if any.

As on 31^st March 2023, the company has five (5)
subsidiaries, namely:

1. Dr. Morepen Limited

2. Morepen Devices Limited

3. Morepen Rx Limited

4. Total Care Limited (subsidiary of Dr. Morepen Ltd.)

5. Morepen Bio Inc., USA (Formerly Morepen Inc.)

Dr. Morepen Limited

The current year revenues for the over the counter (OTC)
business at '9349.37 Lakhs, has recorded revenue a dip of
around 11 percent, against last year revenues of
'10563.99 Lakhs. The drop in current sales have been
brought about by lower sales in top selling products like
Burnol, Lemolate, Isabgol and also fall in revenue for
grooming and covid products.

The current year combined sales revenues for primary
brands comprising of Burnol (Burn Cream), Lemolate
(Cough & Cold) and Fiber-X (Sat Isabgol) is at '1703.84
Lakhs against revenues of '1901.77 Lakhs posted in last
year.

OTC range, which refers to a range of other over-the -
counter products, has experienced a decline in annual
revenues. The revenue for OTC range is '2372.88 Lakhs , a
dip of 24 percent compared to previous year.

The brand sharing revenues have increased to '3006.50
Lakhs, representing a growth of 18 percent compared to
previous year revenues.

The grooming business, with its annual revenues of
'2275.09 Lakhs, have recorded a decline of 18 percent in
its annual revenues.

Online OTC revenues, at '2030.74 Lakhs has gone up by
23 percent during the year. During the current year, the
share of online business, has reached 22 percent from 16
percent in the last year.

On account of cleaning up of the trade channels filled with
excessive inventory, the company has called back its surplus
stocks from such channels, which have affected the sales
revenues for the year under review. However, it has helped
the company to use the inventory so released to cater to the
fresh demands generated and save on new investments to
be made on fresh buying.

The company has expanded its reach on the online
channels and intends to put more resources for the same as
it positively affects OTC trade channels as well.

Morepen Devices Limited & Morepen Rx Limited

No operating activities have been carried out during the
year.

Total Care Limited

The company is dealing in OTC & Health Care products.
The revenue during the year has been meagre at '3.04
Lakhs.

Morepen Bio Inc. (Formerly Morepen Inc.)

Morepen Bio Inc. has been the marketing and distribution
interface of the company in USA for its API business, various

OTC & other products. However the company intends to use
it presence in US markets for Bio similar and other
pharmaceuticals activities as and when any opportunity
arises. During the year, it has also bought Bulk Drugs ( i.e.
API) from its parents and sell in US and neighbouring
markets either directly or through local trade channels.

During the current year, the company has recorded revenue
of Rs. 2698.08 Lakhs ($3,281,931) as against '204.46
Lakhs ($270,205) of previous year. The company has
recorded 73 percent growth in post-tax profit at '112.38
Lakhs against profit of '65.09 Lakhs logged in the previous
year.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements for the year ended
31^st March 2023 have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 as
amended together with the comparative period data as at
and for the previous year ended 31^st March 2022.

In accordance with the Companies Act, 2013 and Indian
Accounting Standards (Ind AS) 110 on 'Consolidated
Financial Statements' read with Ind AS 112 on 'Disclosure of
interests in other entities', the Audited Consolidated
Financial Statements is provided in the Annual Report.

In accordance with the provisions of Section 129(3) of the
Act, read with the Companies (Accounts) Rules, 2014, a
report on the performance and financial position of each of
the subsidiaries is attached as ANNEXURE 'A' to this Report
in the prescribed form, AOC-1.

DIRECTORS & KEY MANAGERIAL PERSONNEL
Changes in Directors & Key Managerial Personnel

I. Mrs. Anju Suri (DIN:00042033), a Non-Executive
Director, Non-Independent Director, has resigned from
the directorship of the company on 22^nd June 2022.

II. The members in their 37*' Annual General Meeting
(AGM) held on 27"' September 2022, approved the
appointment of Mr. Sanjay Suri (DIN: 00041590), who
retired by rotation at said annual general meeting and
being eligible, offered himself for re-appointment.

III. Pursuant to approval of members at 37" AGM, the term
of Mr. Sanjay Suri (DIN: 00041590) as a whole-time
director has been extended for a period of 3 years
commencing from 13 ^th August 2022 till 12" August
2025.

The existing term of Mr. Sushil Suri (DIN: 00012028) as
Chairman & Managing Director of the company, is going to
be completed on 19^th October 2023. In view of aforesaid,

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Act, your
Directors, to the best of their knowledge and belief and
according to the information and explanations obtained by
them, confirm that:

a) in the preparation of annual accounts, the applicable
accounting standards have been followed, along with
proper explanation relating to material departures,
wherever applicable, within statutory prescribed
timeline.

b) your directors have selected such accounting policies
and applied them consistently and made judgements
and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the
company at the end of the financial year and of the
profit and loss of the company for that period;

c) your directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of the Act for
safeguarding the assets of the company and for
prevention and detecting of fraud and other
irregularities;

d) the annual accounts have been prepared on a going
concern basis;

e) internal financial controls to be followed by the
company have been laid down and such internal
financial controls are adequate and were operating
effectively;

f) proper systems to ensure compliance with the
provisions of all applicable laws have been devised and
that such systems were adequate and operating
effectively.

MANAGERIAL REMUNERATION AND OTHER

DISCLOSURES

Disclosure pursuant to Section 197 of the Act read with Rule

5 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014:

a) Ratio of the remuneration of each Director to the
median remuneration of the employee's (MRE) and
other details pursuant to Section 197 (12) of the Act
read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 is annexed and forms part of this report as
ANNEXURE 'B'.

b) The Statement containing the particulars of employees
as required under section 197(12) of the Act read with
Rule 5(2) and other applicable Rules (if any) 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 at the Registered and Corporate office of the
company during the working hours. Any member

to be a material subsidiary, in accordance with second
proviso of Regulation 15 (2) (a) of the Listing Regulations.

The annexed Secretarial Audit Report of Dr. Morepen
Limited is of the second financial year, out of total three
succeeding financial years from the financial year in which
the status of Dr. Morepen Limited has been changed from
the material subsidiary company to subsidiary company.

EXPLANATION TO SECRETARIAL AUDIT REPORT

The notes referred to in the secretarial auditor's report of the
company are self-explanatory and do not call for any
further comments. The secretarial auditor' report does not
contain any qualification, reservation, adverse remark or
disclaimer.

The observations made in point no. (g) i.e., cancellation of
equity shares surrendered by FD holders, the company has
filed application with the Stock Exchanges to take effect of
such cancellation of equity shares from total listed capital of
the company and awaiting their response, although said
shares were cancelled by the Board of Directors. Further, in
point no. (h) i.e., appointment of Central Government
Nominee Directors, the requisite explanations are already
given in point (i) of 'Legal and Corporate Matters', in this
report.

The notes referred to in the secretarial auditor's report of Dr.
Morepen Ltd., are self-explanatory and do not call for any
further comments. The secretarial auditor' report does not
contain any qualification, reservation, adverse remark or
disclaimer.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The company being the part of top 1000 listed entity based
on the market capitalisation as on 31^st March 2022, is
required to annex Business Responsibility & Sustainability
Report in compliance with Regulation 34(2)(f) of the
Listing Regulations, with Annual Report, in enclosed as
ANNEXURE 'D'.

SECRETARIAL STANDARDS

The company has devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards issued by the Institute of Company Secretaries of
India and that such systems are adequate and operating
effectively.

COST AUDIT

Pursuant to Section 148 of the Act, read with the Companies
(Cost Records and Audit) Rules, 2014, the Cost Accounting
Records maintained by the company are required to be
audited by the Cost Auditors. The Board of Directors of the
company on the recommendation of the Audit Committee,
has appointed M/s. Vijender Sharma & Co., Cost

Accountants, as the Cost Auditor of the company for the
financial year ended 31^st March 2024, at a remuneration of
'2.50 Lakhs, subject to the ratification of their
remuneration by the members at the ensuing AGM.

INTERNAL FINANCIAL CONTROLS

The company has an Internal Control System,
commensurate with the size, scale, and complexity of its
operations. The internal financial controls are adequate
and are operating effectively to ensure orderly and efficient
conduct of business operations. The company's internal
financial control procedures ensure that company's
financial statements are reliable and prepared in
accordance with the applicable laws.

Based on the internal audit report, process owners
undertake corrective action in their respective areas and
thereby strengthening the controls. Significant audit
observations and corrective actions thereon are presented
to the Audit Committee of the Board. The internal auditor
carries out extensive audits throughout the year across all
functional areas and submits its reports from time to time to
the Audit Committee of the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility ('CSR') Committee of
the company was constituted by the Board to monitor
implementation of CSR activities by the company in
accordance with Section 135 read with Schedule VII of the
Act read with (Corporate Social Responsibility Policy) Rules,
2014, as amended. The composition of the CSR
Committee, CSR Policy and Projects approved have been
placed on the website of the company. Based on the
recommendation of the CSR Committee, your Board has
adopted a CSR Policy indicating the activities to be
undertaken by the Company as specified in Schedule VII.

The Report on CSR Activities with details of the composition
of CSR Committee, CSR Policy, CSR initiatives and activities
during the year is annexed and forms part of this report as
ANNEXURE 'E'.

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

The company has in place a policy on Prevention,
Prohibition and Redressal of Sexual Harassment of Women
at Workplace pursuant to the requirements of The Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. An Internal
Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. The
policy has set guidelines on the redressal and enquiry
process that is to be followed by complainants and the ICC,

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
ANT OUTGO

The information relating to Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings
and outgo, as required under Section 134(3)(m) of the Act
read with the Companies (Accounts) Rules, 2014 is annexed
and forms part of this report as ANNEXURE 'F'.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

Details of Loans, Guarantees and Investments covered
under the provisions of Section 186 of the Act are given in
the notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES

All the related party transactions that were entered into
during the financial year were on arm's length basis and in
the ordinary course of business. During the year under
review there were no materially significant related party
transactions, including arm's length transactions; hence,
disclosure in Form AOC - 2 is not required.

The complete details with respect to contracts or
arrangements with related parties as required to be given
under the Act and Part C of Schedule V of Listing Regulations
is given in the 'Corporate Governance Report'.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of the operations and performance of the
Company is set out in the Management Discussion and
Analysis Report pursuant to Part B of Schedule V of Listing
Regulations which forms part of the Annual Report for the
year under review as ANNEXURE 'G'.

HUMAN RESOURCES

A detailed review of Human Resources of the company is
set out in the Management Discussion and Analysis Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a certificate
from the Practicing Company Secretary regarding
compliance with conditions of Corporate Governance as
stipulated in Part E of Schedule V of Listing Regulations
forms part of this report and is annexed as ANNEXURE 'H'.

ACKNOWLEDGMENTS

The Directors would like to express their gratitude to various
stakeholders for their cooperation, continuous support,
and confidence in the management of the company. They
extend their thanks to the shareholders, customers,
dealers, suppliers, bankers, governments, and all other
business associates for their valuable contributions to the
company's success. Their support has been instrumental in
the company's growth and achievements.

For and on behalf of Board of Directors

Sushil Suri

Place: Gurugram, Haryana (Chairman & Managing Director)

Date: 05^th August 2023 DIN: 00012028