Directors Report of Hester Biosciences Ltd.

Mar 31, 2025

Your Directors are pleased to present the Thirty-Eighth Annual Report and the Audited Financial Statements for the financial year ended 31 March 2025.

FINANCIAL RESULTS

The financial statements of the Company have been prepared in accordance with the Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015.

A summary of the standalone and consolidated financial performance of the Company for the financial year ended 31 March 2025 is as follows:

(Amounts in INR million)
	Standalone		Consolidated
Particulars	For the year ended 31 March 2025	For the year ended 31 March 2024	For the year ended 31 March 2025	For the year ended 31 March 2024
Revenue from operations	2 ,864.66	2,851.55	3,111.02	3,045.46
Other income	47.64	42.62	39.24	106.38
Total Revenue	2,912.30	2,894.17	3,150.26	3,151.84
Profit before interest, depreciation, amortisation expenses and tax (PBIDT)	557.08	516.03	649.76	642.93
Less: Finance Cost	53.67	50.93	127.03	197.75
Less: Depreciation and Amortisation Expenses	85.81	97.78	168.02	171.74
Profit before Share of Profit in Joint Venture entity and Tax	417.60	367.32	354.71	273.44
Share of Profit in Joint Venture entity	-	-	41.00	46.09
Profit before tax	417.60	367.32	395.71	319.53
Less: Tax Expenses	99.18	95.73	107.45	107.87
Profit for the year (PAT)	318.42	271.59	288.26	211.66
Attributable to:
Owners	318.42	271.59	274.88	188.89
Non-Controlling Interest	-	-	13.38	22.77
Other Comprehensive Income /(Loss)	(3.63)	(0.24)	0.59	(0.33)
Attributable to:
Owners	(3.63)	(0.24)	0.78	(0.22)
Non-Controlling Interest		-	(0.19)	(0.11)
Total Comprehensive Income	314.79	271.35	288.85	211.33
Attributable to:
Owners	314.79	271.35	275.66	188.67
Non-Controlling Interest	-	-	13.19	22.66
Earnings Per Share (Basic & Diluted) (Face Value of Share INR 10 each) (INR)	37.43	31.93	33.89	24.88

There have been no significant changes or commitments impacting the financial position of the Company between the end of the financial year and the date of this report.

RESULTS OF OPERATIONS

Sales

During the year under review, the standalone revenue from operations was INR 2,864.66 million, as compared to INR 2,851.55 million in the previous year. The consolidated revenue from operation was INR 3,111.02 million in the financial year ended on 31 March 2025, as compared to INR 3,045.46 million in the previous year.

Profitability

The Company achieved a standalone profit before tax of INR 417.60 million, as compared to INR 367.32 million in the previous year. The consolidated profit before tax was INR 395.71 million in the financial year ended on 31 March 2025, as compared to INR 319.53 million in the previous year.

Earnings per share

The EPS on the standalone financials was INR 37.43 for the year ended on 31 March 2025 as against INR 31.93 as on 31 March 2024. The EPS on consolidated financials was INR 33.89 for the year ended on 31 March 2025 as against INR 24.88 as on 31 March 2024.

Transfer to Reserves

The Board of Directors of the Company has decided not to transfer any amount to the reserves for the year under review.

Share Capital

The paid-up equity share capital as on 31 March 2025 stood at INR 85.07 million.

Net Worth

The Company''s net worth on standalone basis as on 31 March 2025 was INR 3,390.87 million as compared to INR 3,127.12 million as on 31 March 2024. The Company''s net worth on consolidated basis as on 31 March 2025 was INR 3,142.55 million as compared to INR 2,917.93 million as on 31 March 2024.

DIVIDEND

Your Directors have recommended a dividend of INR 7 per equity share (70%) on 8,506,865 equity shares of INR 10 each, fully paid-up, for the financial year 202425, amounting to INR 59.55 million. This dividend is subject to approval by the Members at the ensuing Annual General Meeting (“AGM”) and will be disbursed to those shareholders whose names appear in the Register of Members as on the cut-off date.

The Dividend Pay-out Ratio for the year stands at 19% of standalone profits, in line with the Company''s Dividend Distribution Policy. Further details of the said policy, formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), are available on the Company''s website at: https://www.hester.in/corporate-governance

BORROWINGS

The Company''s outstanding long-term borrowings stood at INR 756.26 million as on 31 March 2025, as compared to INR 1,037.75 million as on 31 March 2024.

CONSOLIDATED FINANCIAL STATEMENTS The consolidated total income from operations is INR 3,111.02 million and total comprehensive income attributable to owners'' equity after non-controlling interest is INR 275.66 million for the financial year 2024-25 as compared to the consolidated total income from operations of INR 3,045.46 million and total comprehensive income attributable to owners'' equity after non-controlling interest of INR 188.67 million for the previous financial year 2023-24. Consolidated financial statements include the financial statements of the following entities:
1	Hester Biosciences Nepal Private Limited	Foreign Subsidiary
2	Texas Lifesciences Private Limited	Indian Subsidiary
3	Hester Biosciences Africa Limited	Foreign Wholly-owned Subsidiary
4	Hester Bioscience Kenya Limited	Foreign Wholly-owned Subsidiary
5	Hester Biosciences Tanzania Limited	Foreign Step-down Subsidiary (Wholly-owned
		Subsidiary of Hester Biosciences Kenya Limited)
6	Thrishool Exim Limited	Foreign Joint Venture Entity

In compliance with Indian Accounting Standard (Ind AS) - 110, ‘Consolidation of Financial Statements,'' and the provisions of the Companies Act, 2013 (referred to as the ‘Act''), read with Schedule III and related Rules made thereunder, along with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Annual Report includes the Audited Consolidated Financial Statements. These statements portray the combined financial position, including resources, assets, liabilities, incomes, profits, and other relevant details, of the Company, its subsidiaries (with non-controlling interest eliminated), and joint venture entities as a single entity.

SUBSIDIARY COMPANIES

As of 31 March 2025, your Company has two wholly-owned subsidiary companies: Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited. Additionally, your Company has two subsidiary companies, namely Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited. Furthermore, there is one step-down subsidiary company, Hester Biosciences Tanzania Limited, which is wholly-owned by Hester Biosciences Kenya Limited.

The business details of the subsidiary companies are as under:

Texas Lifesciences Private Limited (Texas Lifesciences)

Texas Lifesciences, a subsidiary of Hester Biosciences Limited, holds the majority stake (54.81%). The Company manufactures and supplies pharmaceutical formulations such as tablets, capsules, powders, and oral liquids for both the human and veterinary markets.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited, with a 65% stake in HBNPL. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Hester Biosciences Africa Limited (HBAL)

HBAL is a wholly owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL manufactures and markets veterinary vaccines in Tanzania and other African countries.

Hester Biosciences Kenya Limited (HBKL)

HBKL is a wholly owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of Trading of veterinary vaccines and animal health products in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is wholly owned subsidiary of HBKL and step-down subsidiary of Hester Biosciences Limited. HBTL is in the business of trading veterinary vaccines and animal health products in Tanzania and other African countries.

There have been no material changes in the nature of our subsidiaries business operations, as detailed in the financial statements. During the year under review, the Board diligently assessed the performance and operations of these subsidiary companies.

In compliance with Section 136 of the Act, we are not attaching the Balance Sheets, Profit and Loss Statements, and other pertinent documents of subsidiary companies with the Company''s Balance Sheet. However, these statements will be readily available to Members on the Company''s website. The Consolidated Financial Statements provided by the Company includes financial statements of subsidiaries

and joint venture entity. The highlights are given in this Board Report as Annexure - 1, according to the standards indicated in Form AOC-1.

In accordance with Section 129(3) of the Companies Act, 2013, and the accompanying Rules, we have provided a statement outlining the significant aspects of the financial statements of our subsidiaries. This statement adheres to the prescribed format as per the regulatory requirements. The policy regarding material subsidiaries, as approved by the Board, is accessible on the Company''s website via the following link: https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is a joint venture entity, with Hester Biosciences Limited holding a 50% stake, operating in Tanzania. TEL is a reputable supplier and distributor of a wide range of animal health and nutrition products sourced from various esteemed companies. Its diverse product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics, and equipment sourced from internationally renowned producers.

TEL has a large sourcing network, collaborating with prominent partners throughout Europe, Asia, and Southern Africa.

SHIFTING OF REGISTERED OFFICE

During the year under review, the Company shifted its Registered Office from Pushpak, 1st Floor, Panchvati Circle, Motilal Hirabhai Road, Ahmedabad - 380006, Gujarat, India to Village - Meda Adraj, Taluka - Kadi, District - Mehsana, Gujarat - 384441, India. The shift is outside the local limits of the city but remains within the same State of Gujarat and under the jurisdiction of the same Registrar of Companies.

The change was approved by the shareholders through the Postal Ballot process on 13 February 2025 as recommended by the Board of Directors, in accordance with the provisions of Section 12 of the Companies Act, 2013, and the applicable rules made thereunder. Necessary filings in respect of the change have been duly made with the Registrar of Companies. The relocation of the Registered Office is intended to enhance operational efficiency and administrative convenience.

INSURANCE

The Company has taken proactive steps to ensure comprehensive insurance coverage for its plants, properties, equipment, stocks and vehicles, safeguarding against all major risks. Additionally, a Directors'' and Officers'' Liability Policy has been secured to provide coverage for potential liabilities concerning the Company''s directors and officers.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditor, Cost Auditor, nor the Secretarial Auditor reported any instances of fraud committed against the Company by its officers or employees, as specified under Section 143(12) of the Companies Act, 2013, which would require disclosure in the Board''s Report.

RELATED PARTY TRANSACTIONS

All Related Party Transactions during the financial year were conducted in compliance with the applicable provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), and the Company''s Policy on Related Party Transactions.

These transactions were reviewed and approved by the Audit Committee and the Board of Directors, and where required, by the shareholders.

Details of material contracts and arrangements with related parties, in accordance with the Company''s Related Party Transactions Policy and as required under Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure-2. The disclosures pertaining to Related Party Transactions for the financial year 2024-25 are also provided in the Notes to the Financial Statements.

The Policy on Related Party Transactions, including the policy for determining material transactions, is available on the Company''s website and can be accessed at:

https://www.hester.in/corporate-governance

In compliance with Regulation 23(9) of the Listing Regulations, the Company has filed the necessary disclosures of related party transactions with the stock exchanges on the same day as the announcement of its standalone and consolidated financial results.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

COST ACCOUNTS AND RECORDS

The Company has prepared and maintained the cost accounts and records in accordance with the regulations outlined by the Central Government under section 148(1) of the Act and rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31 March 2025, the Company''s Board comprised ten Directors (excluding Alternate Director), each bringing significant experience and expertise in their respective fields. All other statutory disclosures pertaining to the Board and its functioning are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

Appointment and Cessation of Directors

There were no changes in the composition of the Board of Directors of the Company during the financial year under review.

Retirement by Rotations

In accordance with Section 152(6) of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), and the Articles of Association of the Company, Dr. Bhupendra Gandhi (DIN: 00437907), aged 82 years, Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for reappointment. The Board recommends his reappointment for shareholders'' approval.

Declaration of Independence

Pursuant to the provisions of Sections 149(6) and 149(7) of the Companies Act, 2013, and Regulations 16(1)(b) and 25 of the Listing Regulations, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence and are eligible to continue as Independent Directors of the Company. The Board has taken on record the declarations after duly assessing their veracity and has noted that there has been no change in the circumstances affecting their status as Independent Directors.

Profile of Directors seeking Appointment/ Reappointment

Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable provisions of the Secretarial Standards on General Meetings (SS-2), the brief profile and other relevant details of Directors seeking appointment or re-appointment at the ensuing Thirty-Eighth Annual General Meeting are provided in the Notice convening the said meeting.

Key Managerial Personnel

During the year under review, Mr. Nikhil Jhanwar resigned from the position of Chief Financial Officer of the Company with effect from 6 November 2024. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee,

Mr. Divyesh Maru was appointed as Chief Financial Officer with effect from 12 November 2024.

The following persons are designated as Key Managerial Personnel (KMP) in accordance with the provisions of the Companies Act, 2013, as of 31 March 2025:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Divyesh Maru, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary & Compliance Officer

Board Evaluation:

In accordance with the provisions of the Companies Act, 2013, and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015, the Board carried out an annual performance evaluation of its own performance, that of its Committees, and individual Directors including the Chairman and Independent Directors. The process was conducted with the aid of structured questionnaires and followed the guidelines prescribed under the Guidance Note on Board Evaluation issued by SEBI.

A separate meeting of the Independent Directors was held to review the performance of Non-Independent Directors, the Board as a whole, and the performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

Based on the feedback received and assessments conducted, the overall performance of the Board, its Committees and individual Directors was rated between Very Good to Good on different parameters. Further details on the evaluation process are provided in the Corporate Governance Report forming part of this Annual Report.

Nomination and Remuneration Policy

The Company has in place a Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee and approved by the Board. The Policy lays down the framework for selection, appointment and remuneration of Directors and Senior Management Personnel. During the year, the Policy was amended to align with recent changes in the Listing Regulations. The detailed Remuneration Policy is available in the Corporate Governance Report, which forms part of this Annual Report.

Pecuniary Relationship

During the year under review, except as disclosed in the audited financial statements, the Non-Executive Directors of the Company did not have any pecuniary relationship or transactions with the Company.

Board of Directors Meetings

During the financial year 2024-25, the Board of Directors met four (4) times. The Company has complied with the statutory requirement of not having an interval exceeding 120 days between two consecutive meetings. The details of the meetings held are provided in the Corporate Governance Report, which forms a part of this Annual Report.

Non-disqualification

None of the Directors of the Company are disqualified from being appointed or continuing as Directors under the provisions of Section 164(1) and 164(2) of the Companies Act, 2013, read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. Further, none of the Directors have been debarred or disqualified by the Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), or any other statutory authority.

DIRECTOR’S RESPONSIBILITY STATEMENT

In terms of section 134(3)(c) read with 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby make the following statements:

a) That in preparation of Financial Statements for the year ended 31 March 2025, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the Financial Statements for the year ended 31 March 2025 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

COMMITTEES OF BOARD OF DIRECTORS

Your Company has constituted several Committees as part of its commitment to sound corporate governance practices and in compliance with applicable statutory requirements. These Committees play a crucial role in supporting the Board in its oversight responsibilities and ensuring effective decision-making.

The Company has following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders'' Grievances and Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Management Committee

A detailed overview of each Committee, covering their composition, terms of reference, powers and the number of meetings held during the year, is provided in the Corporate Governance Report, which forms part of this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board of Directors confirms that it has accepted all the recommendations made by the Committees during the year under review.

CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

Pursuant to section 135 of the Act read with the relevant rules, the Board has constituted a Corporate Social Responsibility (“CSR”) Committee under the Chairmanship of Mr. Rajiv Gandhi. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the website of the Company: https:// www.hester.in/corporate-governance

During the year, the Company has spent INR 8.93 million on CSR activities. The disclosures with respect to CSR activities, as required under the Companies (CSR Policy) Rules, 2014, are annexed to the Board''s Report as Annexure-3.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has instituted a robust vigil mechanism to uphold ethical conduct, professionalism, and integrity across all levels.

In compliance with provisions of section 177(9) of the Act and rules made thereunder and regulation 22 of the Listing Regulations, the Company has established

vigil mechanism and framed Whistle Blower Policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct and SEBI (Prohibition of Insider Trading) Regulations, 2015. The Whistle Blower Policy is uploaded on Company''s website and the link of the same is provided in a separate section of Corporate Governance Report. No employee or Director was denied access to the Audit Committee during the year under review.

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

The Company has zero tolerance towards any form of sexual harassment and has 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 applicable rules.

The Company always endeavors to create and provide an environment to its employees and external individuals engaged with the Company that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the financial year 2024-25, the Company received no complaints related to sexual harassment at any of its locations.

INSIDER TRADING REGULATIONS

The Company has adopted the Code for Insider Trading as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. All other details on insider trading regulations are mentioned into the Corporate Governance Report, which forms a part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015 and amendments therein.

A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report. The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for the Board of Directors Meeting (SS-1) and General Meetings (SS-2) are applicable to the Company. The Company has complied with the provisions of all applicable Secretarial Standards.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (‘BRSR’)

Pursuant to Regulation 34 and Schedule V of the Listing Regulations, as well as the frequently asked questions published by the stock exchanges (BSE and NSE), the Business Responsibility and Sustainability Report (BRSR) of the Company for the financial year ended 31 March 2025 has been uploaded on the Company''s website and can be accessed at https:// www.hester.in/shareholders/reports-certificates This report includes disclosures on various initiatives undertaken by the Company from an environmental, social, and governance perspective.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report. The Audit Committee has reviewed the Management Discussion and Analysis of financial conditions and results of operations during the year under review.

AUDITORS

Statutory Auditor and Audit Report

Chandulal M. Shah & Co. (Firm Registration No. 101698W), Chartered Accountants, Ahmedabad, was appointed as the Statutory Auditors of the Company till the conclusion of Forty First Annual General Meeting. Chandulal M. Shah & Co., Chartered Accountants have furnished a declaration confirming their independence as well as their arm''s length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company.

The Board has duly reviewed the Statutory Auditors'' Report of Chandulal M. Shah & Co. for the year ended on 31 March 2025. The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditor and Audit Report

Ernst & Young LLP, Ahmedabad, has been the internal auditor of the Company for the FY 2024-25. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee and Management from time to time.

The Board has re-appointed Ernst & Young LLP, Ahmedabad for the FY 2025-26 as an Internal Auditor of the Company, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditor

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 202425, on the remuneration terms as approved by the members at the previous Annual General Meeting. The Cost Audit report for the financial year 2023-24 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2024-25 is within 180 days from 31 March 2025.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2025-26 as a Cost Auditor to audit the cost records of the Company on a remuneration up to INR 0.23 million plus applicable Goods and Services Tax and out of pocket expenses on actuals. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 38^th Annual General Meeting of the Company.

Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has reappointed Mr. Tapan Shah, a Peer Reviewed Practicing Company Secretary, to conduct the Secretarial Audit for the financial year 2024-25.

The Secretarial Audit Report for the financial year 2024-25 is attached to this Board''s Report as Annexure-4. The Board has thoroughly reviewed the Secretarial Auditor''s Report for the year ended 31 March 2025 and confirms that the report does not contain any qualifications, reservations, adverse remarks, or disclaimers.

In compliance with Regulation 24A of the Listing Regulations, the Audit Committee and the Board have recommended the appointment of Shah and Shah Associates, a Peer Reviewed Practicing Company Secretary Firm based in Ahmedabad, as the Secretarial Auditors of the Company for a term of five consecutive years, from FY 2025-26 to FY 2029-30. The authority to decide the remuneration

payable to them rests with the Audit Committee and the Board. The appointment of Shah and Shah Associates is subject to approval by the members at the forthcoming AGM.

Annual Secretarial Compliance Report

In compliance with regulation 24A (2) of the Listing Regulations, Mr. Tapan Shah, Practicing Company Secretaries issued Annual Secretarial Compliance Report for the Financial Year 2024-25. The Report, presented at the Board meeting held on 9 May 2025, confirmed that the Company has maintained proper records as stipulated under various Rules and Regulations and that, no action has been taken agains the Company or its material subsidiaries or promoters / directors by SEBI / BSE / NSE. The Company has submitted the Report to the Stock Exchanges within the prescribed time.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Board''s Report.

BUSINESS RISK MANAGEMENT

The Company has a comprehensive Risk Management procedure that addresses various risks, including Business, Operational, Financial, Sectorial, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks. These risks are systematically assessed, measured, and mitigated through continuous actions within the risk appetite approved by the Board of Directors. The risk management framework is periodically reviewed by both the Board and the Audit Committee. An overview of the key risks and concerns is provided in the Management Discussion and Analysis Report, which is part of this Annual Report.

In accordance with Section 134(3)(n) of the Companies Act, 2013, and Regulation 21 of the Listing Regulations, the Company has established a Risk Management Committee. The details of the Committee, along with its terms of reference, are outlined in the Corporate Governance Report, which is also part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has established a formal framework for Internal Financial Control (“IFC”) in compliance with the requirements of the Companies Act, 2013 and laid down the specific responsibilities related to IFC

have been defined for the Board, Audit Committee, Independent Directors and Statutory Auditors. Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

1. The orderly and efficient conduct of its business,

2. Safeguarding of its assets,

3. Prevention and detection of frauds and errors,

4. Accuracy and completeness of accounting records, and

5. Timely preparation of reliable financial information.

The audit committee and Board regularly reviews the effectiveness of the controls documented within the IFC framework and takes corrective and preventive actions as necessary when weaknesses are identified. This review encompasses entity-level controls, process-level controls, fraud risk controls and the Information Technology environment.

Based on this evaluation, no significant events were identified during the year that materially affected, or are reasonably likely to materially affect, the Company''s IFC. Management concludes that the IFC and financial reporting were effective and adequate in line with the Company''s operations. The Statutory Auditors have audited the adequacy and operating effectiveness of the internal financial controls over financial reporting, and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditors'' Report in the Standalone and Consolidated Financial Statements, respectively.

CREDIT RATINGS

During the year, CARE Ratings Limited has reaffirmed the credit rating of “CARE BBB /Stable” for the Company''s long-term bank facilities and “CARE A2” for its short-term bank facilities. These ratings reflect the Company''s good financial position and its ability to meet financial obligations in a timely manner.

CERTIFICATIONS/ RECOGNITION/ ACCREDITATIONS

The Company having following Certifications/ Recognition/ Accreditations:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2015

4. ISO 14001:2015

5. ISO 45001:2018

6. DSIR approved R&D Centre

TRANSFER OF SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) ACCOUNT

During the year under review, in compliance with the provisions of sections 124 and 125 of the Act and Rules made thereunder the Company has transferred:

i. 3,955 equity shares of 29 (Twenty Nine) members whose dividend has remained unclaimed / unpaid for a consecutive period of seven years to IEPF.

ii. INR 0.83 million, being the unclaimed dividend, pertaining to the dividend for the financial 2016-17 (Final) and year 2017-18 (Interim) was transferred to IEPF after giving notice to the members to claim their unpaid / unclaimed dividend.

ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Subsection (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return of the Company for the financial year ended 31 March 2025, in Form MGT-7, has been uploaded on the Company''s website and can be accessed at www.hester.in

PARTICULAR OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure-5 to this report.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in Annexure-6 and forms part of this report.

GENERAL DISCLOSURES

Your Directors confirm that the Company has made the required disclosures in this report for the items prescribed under Section 134(3) of the Companies Act,

2013, and Rule 8 of the Companies (Accounts) Rules,

2014, to the extent that transactions took place on these items during the year.

Apart from the matters mentioned in this report, there are no material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

ACKNOWLEDGEMENT

The Directors would like to express their sincere appreciation for the continued cooperation and support extended to the Company by the Bank.

They also extend their gratitude to the Medical Professionals, Traders and Consumers for their continued patronage of the Company''s products.

The Directors take this opportunity to acknowledge the dedicated efforts and hard work of the employees at all levels, which remain instrumental to the Company''s success.

Furthermore, the Directors thank the Company''s vendors, investors, business associates, Stock Exchanges, the Government of India, State Governments and various departments and agencies for their ongoing support and collaboration.

Your Directors deeply appreciate and value the dedication, commitment, and contribution of every member of the Hester Biosciences family. Their collective efforts continue to drive the Company''s growth and success.

---

Mar 31, 2024

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

Summary of the standalone and consolidated financial performance of the Company for the financial year ended on 31 March 2024 as below:

(Amounts in ? million)

	Standalone		Consolidated
Particulars	For the year ended on 31 March 2024	For the year ended on 31 March 2023	For the year ended on 31 March 2024	For the year ended on 31 March 2023
Revenue from operations	2,851.55	2,540.00	3,045.46	2,660.91
Other income	42.62	53.23	106.38	151.51
Total Revenue	2,894.17	2,593.23	3,151.84	2,812.42
Profit before interest, depreciation and amortisation expenses, tax (PBIDT)	516.03	602.09	642.93	657.60
Less: Finance Cost	50.93	64.97	197.75	93.20
Less: Depreciation and Amortisation Expenses	97.78	97.88	171.74	206.95
Profit before Share of Profit in Joint Venture entity and Tax	367.32	439.24	273.44	357.45
Share of Profit in Joint Venture entity	-	-	46.09	44.09
Profit before tax	367.32	439.24	319.53	401.54
Less: Tax Expenses	95.73	115.82	107.87	121.19
Profit for the year (PAT)	271.59	323.42	211.66	280.35
Attributable to:
Owners	271.59	323.42	188.89	266.27
Non-Controlling Interest	-	-	22.77	14.08
Other Comprehensive Income /(Loss)	(0.24)	1.13	(0.33)	16.25
Attributable to:
Owners	(0.24)	1.13	(0.22)	16.26
Non-Controlling Interest	-	-	(0.11)	(0.01)
Total Comprehensive Income	271.35	324.55	211.33	296.60
Attributable to:
Owners	271.35	324.55	188.67	282.53
Non-Controlling Interest	-	-	22.66	14.07
Earnings Per Share (Basic and Diluted) (Face Value of Share ? 10 each)	31.93	38.02	24.88	32.96

There have been no significant changes or commitments impacting the financial position of the Company between the end of the financial year and the date of this report.

RESULTS OF OPERATIONS

Sales

During the year under review, the standalone revenue from operations was T 2,851.55 million, as compared to T 2,540.00 million in the previous year. The consolidated revenue from operation was T 3,045.46 million in the financial year ended on 31 March 2024, as compared to T 2,660.91 million in the previous year

Profitability

The Company achieved a standalone profit before tax of T 367.32 million, as compared to T 439.24 million in the previous year. The consolidated profit before tax was T 319.53 million in the financial year ended on 31 March 2024, as compared to T 401.54 million in the previous year.

Earnings per share

The EPS on the standalone financials was T 31.93 for the year ended on 31 March 2024 as against T 38.02 as on 31 March 2023. The EPS on consolidated financials was T 24.88 for the year ended on 31 March 2024 as against T 32.96 as on 31 March 2023.

Transfer to Reserves

The Board of Directors of the Company has decided not to transfer any amount to the reserves for the year under review.

Share Capital

The paid-up equity share capital as on 31 March 2024 stood at T 85.07 million.

Net Worth

The Company''s net worth on standalone basis as on 31 March 2024 was T 3,127.12 million as compared to T 2,923.82 million as on 31 March 2023. The Company''s net worth on consolidated basis as on 31 March 2024 was T 2,917.93 million as compared to T 2,797.30 million as on 31 March 2023.

DIVIDEND

Your Directors have recommended a dividend of T 6 per equity share (60%) on 8,506,865 equity shares of T 10 each fully paid-up for the financial year 202324, amounting to T 51.04 million. This dividend, subject to approval by the members at the ensuing Annual General Meeting (“AGM”), will be disbursed to shareholders whose names are recorded in the Register of Members on the cut-off date. The Dividend Pay-out Ratio for the current year stands at 19% of standalone profits, aligning with the Company''s Dividend Distribution Policy. Further details on the Company''s Dividend Distribution Policy, as per Regulation 43A of SEBI (LODR) Regulations, 2015 (as amended), can be found at the following web link: https://www.hester.in/corporate-governance

BORROWINGS

The Company''s outstanding long-term borrowings amounted to T 1,050.69 million as on 31 March 2024.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated total income from operations is T 3,045.46 million and total comprehensive income attributable to owners'' equity after non-controlling interest is T 188.67 million for the financial year 2023-24 as compared to the consolidated total income from operations of T 2,660.91 million and total comprehensive income attributable to owners'' equity after non-controlling interest of T 282.53 million for the previous financial year 2022-23. Consolidated financial statements include the financial statements of the following entities:

1	Hester Biosciences Nepal Private Limited	Foreign Subsidiary
2	Texas Lifesciences Private Limited	Indian Subsidiary
3	Hester Biosciences Africa Limited	Foreign Wholly-owned Subsidiary
4	Hester Bioscience Kenya Limited	Foreign Wholly-owned Subsidiary
5	Hester Biosciences Tanzania Limited	Foreign Step-down Subsidiary (Wholly-owned Subsidiary of Hester Biosciences Kenya Limited)
6	Thrishool Exim Limited	Foreign Joint Venture Entity

In compliance with Indian Accounting Standard (Ind AS) - 110, ‘Consolidation of Financial Statements,'' and the provisions of the Companies Act, 2013 (referred to as the ‘Act''), read with Schedule III and related Rules made thereunder, along with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Annual Report includes the Audited Consolidated Financial Statements. These statements portray the combined financial position, including resources, assets, liabilities, incomes, profits and other relevant details, of the Company, its subsidiaries (with non-controlling interest eliminated) and joint venture entities as a single entity.

SUBSIDIARY COMPANIES

As of 31 March 2024, your Company has two wholly-owned subsidiary companies: Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited. Additionally, your Company has two subsidiary companies, namely Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited. Furthermore, there is one step-down subsidiary company, Hester Biosciences Tanzania Limited, which is wholly-owned by Hester Biosciences Kenya Limited.

The business details of the subsidiary companies are as under:

Texas Lifesciences Private Limited (Texas Lifesciences)

Texas Lifesciences, a subsidiary of Hester Biosciences Limited, holds the majority stake (54.81%). The Company manufactures and supplies pharmaceutical formulations such as tablets, capsules, powders and oral liquids for both human and veterinary markets.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited, with a 65% stake in HBNPL. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Hester Biosciences Africa Limited (HBAL)

HBAL is a wholly owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL manufactures and markets veterinary vaccines and animal health products in Tanzania.

Hester Biosciences Kenya Limited (HBKL)

HBKL is a wholly owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of Trading of veterinary vaccines and animal health products in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is wholly owned subsidiary of HBKL and step-down subsidiary of Hester Biosciences Limited. HBTL is in the business of trading veterinary vaccines and animal health products in Tanzania and other African countries.

There have been no material changes in the nature of our subsidiaries business operations, as detailed in the financial statements. During the year under review, the Board diligently assessed the performance and operations of these subsidiary companies.

In compliance with Section 136 of the Act, we are not attaching the Balance Sheets, Profit and Loss Statements and other pertinent documents of subsidiary companies with the Company''s Balance Sheet. However, these statements will be readily available to Members of the Company on the Company''s website. The Consolidated Financial Statements provided by the Company includes

financial statements of subsidiary and joint venture entity. The highlights are given in this Board Report as Annexure - 1, according to the standards indicated in Form AOC-1.

In accordance with Section 129(3) of the Companies Act, 2013 and the accompanying Rules, we have provided a statement outlining the significant aspects of the financial statements of our subsidiaries. This statement adheres to the prescribed format as per the regulatory requirements. The policy regarding material subsidiaries, as approved by the Board, is accessible on the Company''s website via the following link: https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is a joint venture entity, with Hester Biosciences Limited holding a 50% stake, operating in Tanzania. TEL is a reputable supplier and distributor of a wide range of animal health and nutrition products sourced from various esteemed companies. Its diverse product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics and equipment sourced from internationally renowned producers.

TEL has a large sourcing network, collaborating with prominent partners throughout Europe, Asia and Southern Africa.

INSURANCE

The Company has taken proactive steps to ensure comprehensive insurance coverage for its plants, properties, equipment, stocks and vehicles, safeguarding against all major risks. Additionally, a Directors'' and Officers'' Liability Policy has been secured to provide coverage for potential liabilities concerning the Company''s directors and officers.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory nor the secretarial auditor had reported to the Audit Committee any instances of fraud committed against the Company by its officers or employees, as provided by section 143(12) of the Act, the details of which would need to be mentioned in the Board''s Report.

RELATED PARTY TRANSACTIONS

All Related Party transactions are carried out in compliance with the provisions of law and the Policy on Related Party Transactions. These transactions are reviewed and approved by the Audit Committee, Board and Shareholders as applicable.

The details of material contracts and agreements with related parties, as per the Company''s Related Party Transaction Policy and in compliance with Section 188(1) of the Companies Act, 2013, along with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed herewith as Annexure-2. The Related Party Transactions for the financial year 2023-24 have been disclosed in Notes to the Financial Statements of the Company.

The policy on Related Party Transactions, including material related party transactions, is available on the website and can be accessed via the web link https://www.hester.in/corporate-governance

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

COST ACCOUNTS AND RECORDS

The Company has prepared and maintained the cost accounts and records in accordance with the regulations outlined by the Central Government under section 148(1) of the Act and rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment of Directors

During the year, at the meeting held on 26 June 2023, the Board of Directors, upon the recommendation of the Nomination and Remuneration Committee, recommended the appointment of Mr. Anil Jain (DIN: 00805735) and Mr. Jatin Trivedi (DIN: 01618245) as independent directors for their first term of five years, effective from 26 June 2023, subject to members approval.

Members of the Company have approved the appointment of Mr. Anil Jain (DIN: 00805735) and Mr. Jatin Trivedi (DIN: 01618245) as Independent Directors of the Company at the 36^th Annual General Meeting held on 20 September 2023.

Retirement by Rotations

In compliance with Section 152(6) of the Companies Act, 2013, as well as Listing Regulations and the Articles of Association of the Company, Mr. Ravin Gandhi (DIN: 00438361), Non-Executive Director, is due to retire by rotation at the ensuing Annual General Meeting and being eligible, Mr. Ravin Gandhi has expressed his willingness for re-appointment. The Board recommends his re-appointment.

Declaration of Independence

The Company has received declarations of independence as required by sections 149(6) and

149(7) of the Companies Act, 2013 and regulations 16(1) (b) and 25 of the Listing Regulations from Independent Directors, confirming their eligibility to continue serving as Independent Directors. There have been no changes in the circumstances affecting their status as independent directors of the Company.

Profile of Directors seeking Appointment/Re-appointment

As per Regulation 36(3) of the SEBI (LODR)

Regulations, 2015, details of Directors seeking appointment or re-appointment at the ensuing Thirty-Seventh Annual General Meeting are enclosed with the notice convening the meeting.

Key Managerial Personnel

The following persons are designated as Key Managerial Personnel (KMP) in accordance with the provisions of the Companies Act, 2013, as of 31 March 2024:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Nikhil Jhanwar, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary

Board Evaluation

During the year, the evaluation of individual directors, including the Chairman of the Company and Independent Directors, as well as the Board and its Committees, was conducted in accordance with the provisions of the relevant Act, Rules and corporate governance standards outlined in Regulation 17 of the Listing Regulations. Additionally, guidelines from the Guidance Note on Board Evaluation were followed. The evaluation process for the board and its committees with the use of questionnaires.

Independent Directors held a separate meeting to assess the performance of Non-Independent Directors and the overall performance of the Board. They also conducted an evaluation of the Chairman of the Company, taking into consideration feedback from both Executive and Non-Executive Directors.

The Board of Directors reviewed individual directors'' performance following established standards. The functioning of the Board, its Committees and the performance of individual Directors were rated good. The Corporate Governance Report outlines how the evaluation was carried out.

Nomination and Remuneration Policy

The Board, upon the recommendation of the Nomination and Remuneration Committee, has established a policy governing the selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is detailed in the Corporate Governance Report, which is a part of this Annual Report.

Pecuniary Relationship

During the year under review, except those disclosed in the audited financial statements, the nonexecutive directors of the Company had no pecuniary relationships or transactions with the Company.

Board of Directors Meetings

The Board of Directors met 5 (Five) times during the financial year 2023-24, ensuring that there was no interval exceeding 120 days between consecutive meetings. The information on meetings of the Board of Directors is given in Corporate Governance Report, forming a part of this Annual Report.

DIRECTOR’S RESPONSIBILITY STATEMENT

In terms of section 134(3)(c) read with 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief and according to the informatioi and explanations provided to them, your Directors hereby make the following statements:

a) That in preparation of Financial Statements for the year ended 31 March 2024, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the Financial Statements for the year ended 31 March 2024 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

COMMITTEES OF BOARD OF DIRECTORS

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

? Audit Committee

? Nomination and Remuneration Committee

? Stakeholder''s Grievances and Relationship Committee

? Corporate Social Responsibility Committee

? Risk Management Committee

? Management Committee

A detailed note on the committees with respect to composition, meetings, powers and terms of reference is provided under the Corporate Governance Report section in this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board has accepted the recommendations of all the committees constituted by the Board.

CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

Pursuant to section 135 of the Act and the relevant rules, the Board has constituted a Corporate Social Responsibility (“CSR”) Committee under the Chairmanship of Mr. Rajiv Gandhi. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the website of the Company: https://www.hester.in/corporate-governance

During the year, the Company has spent T 10.38 million on CSR activities. The Disclosures with respect to CSR Activities forming part of Board''s Report as Annexure-3.

VIGIL MECHANISM /

WHISTLE BLOWER POLICY

The Company has in place a stringent vigil system to report unethical behaviour in order to promote professionalism, fairness, dignity and ethical behaviour in its employees.

In compliance with provisions of section 177(9) of the Act and rules made thereunder and regulation 22 of the Listing Regulations, the Company has established vigil mechanism and framed Whistle Blower Policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct and SEBI (Prohibition of Insider Trading) Regulations, 2015. Whistle Blower Policy is uploaded on Company''s website and the link of the same is provided in a separate section of Corporate Governance Report. No whistle blower has been denied access to the Audit Committee of the Board.

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

The Company has zero tolerance towards sexual harassment at the 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 made there under.

The Company always endeavors to create and provide an environment to its employees and external individuals engaged with the Company that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the financial year 2023-24, no complaints were received with regards to sexual harassment at any location of the Company.

INSIDER TRADING REGULATIONS

The Company has adopted the Code for Insider Trading as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. All other details on insider trading regulations are mentioned into the Corporate Governance Report, which forms a part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015 and amendments therein.

A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report. The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for the Board of Directors Meeting (SS-1) and General Meetings (SS-2) are applicable to the Company. The Company has complied with the provisions of all applicable Secretarial Standards.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (‘BRSR’)

Pursuant to Regulation 34 and Schedule V of the Listing Regulations, as well as the frequently asked

questions published by the stock exchanges (BSE and NSE), the Business Responsibility and Sustainability Report (BRSR) of the Company for the financial year ended 31 March 2024 has been uploaded on the Company''s website and can be accessed at https://www.hester.in/shareholders/reports-certificates

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report. The Audit Committee has reviewed the Management Discussion and Analysis of financial conditions and results of operations during the year under review.

AUDITORS

Statutory Auditor and Audit Report

Chandulal M. Shah & Co. (Firm Registration No. 101698W), Chartered Accountants, Ahmedabad, was appointed as the Statutory Auditors of the Company till the conclusion of Forty First Annual General Meeting. Chandulal M. Shah & Co., Chartered Accountants have furnished a declaration confirming their independence as well as their arm''s length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company.

The Board has duly reviewed the Statutory Auditors'' Report of Chandulal M. Shah & Co. for the year ended on 31 March 2024. The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditor and Audit Report

Ernst & Young LLP, Ahmedabad, has been the internal auditor of the Company for the FY 2023-24. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee and Management from time to time.

The Board has re-appointed Ernst & Young LLP, Ahmedabad for the FY 2024-25 as an Internal Auditor of the Company, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditor

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation

of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 202324, on the remuneration terms as approved by the members at the previous Annual General Meeting. The Cost Audit report for the financial year 2022-23 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2023-24 is within 180 days from 31 March 2024.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2024-25 as a Cost Auditor to audit the cost records of the Company on a remuneration up to T 0.23 million plus applicable Goods and Services Tax and out of pocket expenses on actuals. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 37th Annual General Meeting of the Company.

Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had re-appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2023-24. The Secretarial Audit Report for the FY 2023-24 is annexed to this Board''s Report as Annexure-4. The Board has duly reviewed the Secretarial Auditors'' Report for the year ended on 31 March 2024. The Auditors'' Report does not contain any qualification, reservation, adverse remark or disclaimer.

Further, as per regulation 24A(1) of the Listing Regulations, the secretarial audit reports of Texas Lifesciences Private Limited, unlisted material subsidiary company is annexed herewith as Annexure-4a.

ANNUAL SECRETARIAL COMPLIANCE REPORT

In compliance with regulation 24A (2) of the Listing Regulations, Mr. Tapan Shah, Practicing Company Secretaries issued Annual Secretarial Compliance Report for the Financial Year ended on 31 March 2024. The Report, presented at the Board meeting held on 10 May 2024, confirmed that the Company has maintained proper records as stipulated under various Rules and Regulations and that, no action has been taken against the Company or its material subsidiaries or promoters / directors by SEBI / BSE / NSE. The Company has submitted the Report to the Stock Exchanges within the prescribed time.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Board''s Report.

BUSINESS RISK MANAGEMENT

The Company has an elaborate Risk Management procedure covering various risks including Business, Operational, Financial, Sectorial, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks and its assessment, measurement and mitigation processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis within the risk appetite as approved from time to time by the Board of Directors. The risk management framework is reviewed periodically by the Board and the Audit Committee. Discussion on risks and concerns are covered in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

Pursuant to the provisions of section 134(3)(n) of the Act and regulation 21 of Listing Regulations, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, which forms a part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has a formal framework of Internal Financial Control (“IFC”) in alignment with the requirement of Companies Act, 2013 and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC.

Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

? The orderly and efficient conduct of its business,

? 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.

The Board reviews the effectiveness of controls documented as part of IFC framework and take necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology environment.

Based on this evaluation, no significant events had come to notice during the year that have materially affected, or are reasonably likely to materially affect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company. The Statutory Auditors of the Company have audited the adequacy of Internal Financial Controls over Financial Reporting and the operating effectiveness of such controls and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditors'' Report under Standalone Financial Statements and Consolidated Financial Statements respectively.

CREDIT RATINGS

During the year, CARE Ratings Limited has re-affirmed the credit rating of “CARE BBB /Stable” for long-term bank facilities and “CARE A2” for short-term bank facilities to the Company.

CERTIFICATIONS/ RECOGNITION/ ACCREDITATIONS

The Company having following Certifications/ Recognition/ Accreditations:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2015

4. ISO 14001:2015

5. ISO 45001:2018

6. DSIR approved R&D Center

TRANSFER OF SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) ACCOUNT

During the year under review, in compliance with the provisions of sections 124 and 125 of the Act and Rules made thereunder the Company has transferred:

i. 3,063 equity shares of 33 (Thirty Three) members whose dividend has remained unclaimed / unpaid for a consecutive period of seven years to IEPF.

ii. T 0.94 million being the unclaimed dividend, pertaining to the dividend for the financial year 2015-16 (Interim & Final) and 2016-17 (Interim) was transferred to IEPF after giving notice to the members to claim their unpaid / unclaimed dividend.

ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Sub

section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the copy of the Annual Return of the Company for the Financial Year ended on 31 March 2024 in Form MGT-7 is uploaded on website of the Company and can be accessed at www.hester.in

PARTICULAR OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure-5 to this report.

CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies(Accounts) Rules, 2014, is provided in Annexure-6 and forms part of this report.

GENERAL DISCLOSURES

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent the transactions took place on these items during the year.

Apart from what are mentioned in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by Bank. Your Directors also thank the Medical Professional, the Traders and Consumers for their patronage to the Company''s products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. The Directors also thank the Company''s vendors, investors, business associates, Stock Exchanges, Government of India, State Governments and various departments and agencies for their support and co-operation. Your Directors appreciate and value the contribution made by every member of the Hester Biosciences.

For and on behalf of Board of Directors

Rajiv Gandhi Priya Gandhi Date 10 May 2024

CEO & Managing Director Executive Director Place Ahmedabad

DIN: 00438037 DIN: 06998979

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Mar 31, 2023

Ihe financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

The standalone and consolidated financial performance of the Company, for the financial year ended on 31 March 2023 is summarised below:

(Amounts in W million)

Particulars	Standalone		Consolidated
	31 March 2023	31 March 2022	31 March 2023	31 March 2022
Revenue from operations	2,540.00	2,193.51	2,660.91	2,350.06
Other income	53.23	46.57	151.51	137.41
Total Revenue	2,593.23	2,240.08	2,812.42	2,487.47
Profit before interest, depreciation, amortisation expenses and tax (PBIDT)	602.09	652.26	657.60	737.24
Less: Finance Cost	64.97	24.68	93.20	40.64
Less: Depreciation and Amortisation Expenses	97.88	95.02	206.95	165.81
Profit before Share of Profit in Joint Venture entity and Tax	439.24	532.56	357.45	530.79
Share of Profit in Joint Venture entity	-	-	44.09	4.23
Profit before tax	439.24	532.56	401.54	535.02
Less: Tax Expenses	115.82	137.39	121.19	140.18
Profit for the year (PAT)	323.42	395.17	280.35	394.84
Attributable to:
Owners	323.42	395.17	266.27	393.20
Non-Controlling Interest	-	-	14.08	1.64
Other Comprehensive Income /(Loss)	1.13	(1.57)	16.25	8.21
Attributable to:
Owners	1.13	(1.57)	16.26	8.21
Non-Controlling Interest	-	-	(0.01)	-
Total Comprehensive Income	324.55	393.60	296.60	403.05
Attributable to:
Owners	324.55	393.60	282.53	401.41
Non-Controlling Interest	-	-	14.07	1.64
Earnings Per Share (Basic / Diluted) (Face Value of Share W 10 each)	38.02	46.45	32.96	46.41

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

RESULTS OF OPERATIONS

Sales

During the year under review, the standalone revenue from operations was T 2,540.00 million, as compared to T 2,193.51 million in the previous year. The consolidated revenue from operation was T 2,660.91 million in the financial year ended on 31 March 2023, as compared to T 2,350.06 million in the previous year.

Profitability

The Company achieved a standalone profit before tax of T 439.24 million, as compared to T 532.56 million in the previous year. The consolidated profit before tax was T 401.54 million in the financial year ended on 31 March 2023, as compared to T 535.02 million in the previous year.

Earnings per share

The EPS on the standalone financials was T 38.02 for the year ended on 31 March 2023 as against T 46.45 as on 31 March 2022. The EPS on consolidated financials was T 32.96 for the year ended on 31 March 2023 as against T 46.41 as on 31 March 2022.

Share Capital

The paid-up equity share capital as on 31 March 2023 stood at T 85.07 million.

Net Worth

The Company''s net worth on standalone basis as on 31 March 2023 was T 2,923.82 million as compared to T 2,684.34 million as on 31 March 2022. The Company''s net worth on consolidated basis as on 31 March 2023 was T 2,885.46 million as compared to T 2,673.93 million as on 31 March 2022.

Transfer to Reserves

The Board of Directors of the Company has decided not to transfer any amount to the reserves for the year under review.

DIVIDEND

Your Directors have recommended a dividend of T 8 per equity share (80%) on 8,506,865 equity shares of T 10 each fully paid-up for the financial year 2022-23, amounting to T 68.05 million. The dividend, if declared by the members at the ensuing Annual General Meeting (“AGM”), will be paid to those shareholders, whose names registered in the Register of Members on cut-off date. The Dividend Pay-out Ratio for the current year is 21% of standalone profits. The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy. The Dividend Distribution Policy of the Company, in terms of Regulation 43A of SEBI (LODR) Regulations, 2015 (as amended from time to time), is available at the web link: https://www.hester.in/corporate-governance

BORROWINGS

The Company has long-term borrowings outstanding amounting to T 1,069.85 million as on 31 March 2023.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated total income from operations is T 2,660.91 million and total comprehensive income attributable to owner''s equity after non-controlling interest is T 282.53 million for the financial year 2022-23 as compared to the consolidated total income from operations of T 2,350.06 million and total comprehensive income attributable to owner''s equity after non-controlling interest of T 401.41 million for the previous financial year 2021-22. Consolidated financial statements include the financial statements of the following entitie

1	Hester Biosciences Nepal Private Limited	Foreign Subsidiary
2	Texas Lifesciences Private Limited	Indian Subsidiary
3	Hester Biosciences Africa Limited	Foreign Wholly-owned Subsidiary
4	Hester Bioscience Kenya Limited	Foreign Wholly-owned Subsidiary
5	Hester Biosciences Tanzania Limited	Foreign Step-down Subsidiary (Wholly-owned Subsidiary of Hester Biosciences Kenya Limited)
6	Thrishool Exim Limited:	Foreign Joint Venture Entity

In accordance with the Indian Accounting Standard (Ind AS) - 110 Consolidation of Financial Statements and as provided under the provisions of the Companies Act, 2013 (hereinafter referred to as “Act”) read with Schedule III to the Act and Rules made thereunder and the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, incomes, profits and other details of the Company, its subsidiary Companies after elimination of minority interest, and joint venture entity as a single entity.

SUBSIDIARY COMPANIES

As on 31 March 2023, your Company has two wholly-owned subsidiary companies namely, Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited; and two subsidiary companies namely, Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited; and one step-down subsidiary company, Hester Biosciences Tanzania Limited (a wholly-owned subsidiary of Hester Biosciences Kenya Limited).

The business details of the subsidiary companies are as under:

Texas Lifesciences Private Limited (Texas Lifesciences)

Texas Lifesciences is a subsidiary of Hester Biosciences Limited and holds 54.81% stake. Texas Lifesciences is in the business of manufacturing and supplying pharma formulations, tablets, capsules, powder and oral liquid for human and veterinary markets.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited and holds 65% stake in HBNPL. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Hester Biosciences Africa Limited (HBAL)

HBAL is 100% wholly-owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL will be in the business of manufacturing veterinary vaccines and animal health product in Tanzania.

Hester Biosciences Kenya Limited (HBKL)

HBAL is 100% wholly-owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of Trading of veterinary vaccines and animal health product in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is subsidiary of HBKL and step-down subsidiary of Hester Biosciences Limited. HBTL is in the business of Trading of veterinary vaccines and animal health product in Tanzania and other Africa region.

There has been no material change in the nature of business of the subsidiaries. More details are provided into the financial statements. During the year under review, the Board has reviewed the performance / affairs of the subsidiary companies.

As provided in section 136 of the Act, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company.

The Company will make available free of cost the Audited Financial Statements of the subsidiary companies and the related detailed information to

any member of the Company who may be interested in obtaining the same. The Financial Statements of the subsidiary companies will also be kept open for electronic inspection. The Consolidated Financial Statements presented by the Company include financial statements and highlights of its subsidiary and joint venture entity are part of this Board Report as Annexure - 1 as prescribed in Form AOC-1.

As provided under section 129(3) of the Companies Act, 2013 and Rules made thereunder a statement containing the salient features of the financial statements of its subsidiaries in the format prescribed under the rules is attached to the financial statements. The policy relating to material subsidiaries as approved by the Board may be accessed on the Company''s website at the link: https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is 50% joint venture entity of Hester Biosciences Limited in Tanzania. TEL is a supplier and distributor of animal health and nutrition products of many companies. TEL''s product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics and equipment sourced from recognised international producers. TEL has an established sourcing network with globally positioned partners from Europe, Asia and Southern Africa.

INSURANCE

The Company''s plant, properties, equipment, stocks and vehicles are adequately insured against all major risks. The Company has also taken Directors and Officers Liability Policy to provide coverage against the liabilities arising on them.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditor nor the secretarial auditor have reported to the Audit Committee, under section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s Report.

RELATED PARTY TRANSACTIONS

All Related Party transactions are entered in compliance to the provisions of law, the Policy on Materiality of and dealing with Related Party Transactions (“Related Party Policy”) and were entered with the approval of Audit Committee, Board and Shareholders if and as applicable.

The particulars of material contracts and arrangements entered into with the related parties in accordance with the Related Party Policy of the Company and pursuant to the provisions of Section 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 are annexed herewith as Annexure-2.The Related Party Transactions for the financial year 2022-23 have been disclosed in Notes to the Financial Statements of the Company.

The policy on Related Party Transactions and material related party transaction are uploaded on the website of the Company and may be accessed through the web link:

https://www.hester.in/corporate-governance

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

COST ACCOUNTS AND RECORDS

The Company has made and maintained the cost accounts and records as specified by the Central Government under section 148 (1) of the Act and Rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Re-appointment and cessation of Directors

During the year, based on the recommendation of the Nomination and Remuneration Committee and the performance evaluation of directors, the Board of Directors, through circular resolutions passed on 27 March 2023, have approved and recommended the re-appointment of Ms. Sandhya Patel (DIN: 02215022) and Mr. Ashok Bhadakal (DIN: 00981201) as independent directors for the second term of five years with effect from 1 April 2023, subject to the approval of members.

Members of the Company have approved the reappointment of Ms. Sandhya Patel (DIN: 02215022) and Mr. Ashok Bhadakal (DIN: 00981201) as Independent Directors of the Company through the postal ballot process, and results were declared on 1 May 2023.

Pursuant to the provisions of the Companies Act, 2013, Mr. Naman Patel and Mr. Amit Shukla, Independent Directors of the Company, ceased to hold the office with effect from 1 April 2023, due to the completion of two consecutive terms as Independent Directors of the Company.

Retirement by Rotations

In accordance with the provisions of section 152 (6) of the Companies Act, 2013, Listing Regulations and in terms of the Articles of Association of the Company,

Mr. Sanjiv Gandhi (DIN: 00024548), Non-Executive Director will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his reappointment.

Declaration of Independence

The Company has received declaration of independence as stipulated under sections 149(6) and 149(7) of the Companies Act, 2013 and regulation 16(1) (b) and 25 of the Listing Regulations from Independent Directors confirming that they are not disqualified for continuing as an Independent Director. There has been no change in the circumstances affecting their status as an independent director of the Company.

Profile of Directors seeking Appointment/Re-appointment

As required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015, particulars of Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting are annexed to the notice convening Thirty Sixth Annual General Meeting.

Key Managerial Personnel

The followings persons are the Key Managerial Personnel (KMP) as per the provisions of the Companies Act, 2013, as on 31 March 2023:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Nikhil Jhanwar, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary

Board Evaluation:

During the year, the evaluation of the annual performance of individual directors, including the Chairman of the Company and Independent Directors, the Board, and Committees of the Board, was carried out under the provisions of the Act and relevant Rules and the corporate governance requirements as prescribed under Regulation 17 of the Listing Regulations, 2015, and the circulars with respect to the Guidance Note on Board Evaluation. The evaluation of the performance of the board as a whole and of the committees was conducted through questionnaires.

In a separate meeting of Independent Directors, the performance of Non-Independent Directors and the performance of the Board as a whole were evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-Executive Directors.

The Board of Directors reviewed the performance of individual directors on the basis of criteria fixed by the Board. The functioning of the Board, the Committees, and the performance of individual Directors were found satisfactory.

The way, the evaluation has been carried out has beer explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on selection and appointment of Directors, Senior Management Personnel and their remuneration The Remuneration Policy is stated in the Corporate Governance Report, which is a part of this Annual Report.

Pecuniary Relationship

During the year under review, except those disclosed in the audited financial statements, the nonexecutive directors of the Company had no pecuniary relationship or transactions with the Company.

Board of Directors Meetings

The Board of Directors met 5 (Five) times during the financial year 2022-23 and having gap of not more than 120 days between 2 (Two) consecutive Board Meetings. The information of meetings of the Board of Directors is given in Corporate Governance Report, forming a part of this Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT

In terms of section 134(3)(c) read with 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby make the following statements:

a) That in preparation of Financial Statements for the year ended 31 March 2023, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the Financial Statements for the year ended 31 March 2023 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

COMMITTEES OF BOARD OF DIRECTORS

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

i) Audit Committee

ii) Nomination and Remuneration Committee

iii) Stakeholder''s Grievances and Relationship Committee

iv) Corporate Social Responsibility Committee

v) Risk Management Committee

vi) Management Committee

A detailed note on the committees with respect to composition, meetings, powers and terms of reference is provided under the Corporate Governance Report section in this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board has accepted the recommendations of all the committees constituted by the Board.

CORPORATE SOCIAL RESPONSIBILITY

(“CSR”)

Pursuant to section 135 of the Act and the relevant rules, the Board has constituted a Corporate Social Responsibility (“CSR”) Committee under the Chairmanship of Mr. Rajiv Gandhi. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the website of the Company: https://www.hester.in/corporate-governance

During the year, the Company has spent T 10.20 million on CSR activities. The Disclosures with respect to CSR Activities forming part of Board''s Report as Annexure-3.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has in place a stringent vigil system to report unethical behaviour in order to promote professionalism, fairness, dignity and ethical behaviour in its employees.

In compliance with provisions of section 177(9) of the Act and rules made thereunder and regulation 22 of the Listing Regulations, the Company has established vigil mechanism and framed Whistle Blower Policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct and under the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015. Whistle Blower Policy is uploaded on Company''s website and the link of the same is provided in a separate section of Corporate Governance Report. No whistle blower has been denied access to the Audit Committee of the Board.

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

The Company has zero tolerance towards sexual harassment at the 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 made there under.

The Company always endeavors to create and provide an environment to its employees and external individuals engaged with the Company that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the financial year 2022-23, no complaints were received with regards to sexual harassment at any location of the Company.

INSIDER TRADING REGULATIONS

The Company has adopted the Code for Insider Trading as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. All other details on insider trading regulations are mentioned into the Corporate Governance Report, which forms a part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015 and amendments therein.

A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report. The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for the Board of Directors Meeting (SS-1) and General Meetings (SS-2) are applicable to the Company. The Company has complied with the provisions of all applicable Secretarial Standards.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to the provisions of the SEBI (Listing Obligation and Disclosure Requirements) Amendment Regulations, the SEBI has mandated the Top 1000 listed companies as per market capitalisation to prepare and publish the Business Responsibility and Sustainability Report (‘BRSR'') with effect from the financial year 2022-23 in a specific format.

As the Company is among the top 1000 listed companies by market capitalisation, it is mandated to disclose the initiative on environmental, social, and governance perspective and publish the BRSR report. The BRSR report is attached and forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report is set out in a separate section included in this Annual Report and forms part of this Report. The Audit Committee has reviewed the Management Discussion and Analysis of financial conditions and results of operations during the year under review.

AUDITORS

Statutory Auditor and Audit Report

Chandulal M. Shah & Co. (Firm Registration No. 101698W), Chartered Accountants, Ahmedabad, was appointed as the Statutory Auditors of the Company till the conclusion of Thirty Sixth Annual General Meeting. Chandulal M. Shah & Co., Chartered Accountants have furnished a declaration confirming their independence as well as their arm''s length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company.

The Audit Committee and the Board at their respective meetings held on 17 May 2023 recommended the re-appointment of Chandulal M. Shah & Co. as the Statutory Auditors of the Company for a further period

of 5 (five) consecutive years from the conclusion of Thirty Sixth AGM till the conclusion of Forty First AGM in year 2028, with an authority to the Audit Committee and the Board to decide the remuneration payable to them. Re-appointment of Chandulal M. Shah & Co. is subject to approval of members at the ensuing AGM.

The Board has duly reviewed the Statutory Auditor''s Report of Chandulal M. Shah & Co. for the year ended on 31 March 2023. The Notes on financial statement referred to in the Auditor''s Report are self-explanatory and do not call for any further comments. The Auditor''s Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditor and Audit Report

Ernst & Young LLP, Ahmedabad, has been the internal auditor of the Company for the FY 2022-23. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee and Management from time to time.

The Board has re-appointed Ernst & Young LLP, Ahmedabad for the FY 2023-24 as an Internal Auditor of the Company, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditor

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 202223, on the remuneration terms as approved by the members at the previous Annual General Meeting. The Cost Audit report for the financial year 2021-22 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2022-23 is within 180 days from 31 March 2023.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2023-24 as a Cost Auditor to audit the cost records of the Company on a remuneration up to T 0.23 million plus applicable Goods and Services Tax and out of pocket expenses on actuals. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 36^th Annual General Meeting of the Company.

Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had re-appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2022-23. The Secretarial Audit Report for the FY 2022-23 is annexed to this Board''s Report as Annexure-4. The Board has duly reviewed the Secretarial Auditor''s Report for the year ended on 31 March 2023. The Auditor''s Report does not contain any qualification, reservation, adverse remark or disclaimer.

Further, as per regulation 24A(1) of the Listing Regulations, the secretarial audit reports of Texas Lifesciences Private Limited, unlisted material subsidiary company is annexed herewith as Annexure-4A.

Annual Secretarial Compliance Report

In compliance with regulation 24A (2) of the Listing Regulations, Mr. Tapan Shah, Practicing Company Secretaries issued Annual Secretarial Compliance Report for the Financial Year ended on 31 March 2023. The Report, presented at the Board meeting held on 17 May 2023, confirmed that the Company has maintained proper records as stipulated under various Rules and Regulations and that, no action has been taken against the Company or its material subsidiaries or promoters / directors by SEBI / BSE / NSE. The Company has submitted the Report to the Stock Exchanges within the prescribed time.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Board''s Report.

BUSINESS RISK MANAGEMENT

The Company has an elaborate Risk Management procedure covering various risks including Business, Operational, Financial, Sectoral, Market, Regulatory and Compliance, Sustainability, Human Resources, Information and Cyber Security and Strategic Risks and its assessment, measurement and mitigation processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis within the risk appetite as approved from time to time by the Board of Directors. The risk management framework is reviewed periodically by the Board and the Audit Committee. Discussion on risks and concerns are covered in the Management Discussion and Analysis Report, which forms a part of this Annual Report.

Pursuant to the provisions of section 134(3)(n) of the Act and regulation 21 of Listing Regulations, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, which forms a part of this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has a formal framework of Internal Financial Control (“IFC”) in alignment with the requirement of Companies Act, 2013 and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC.

Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

1. The orderly and efficient conduct of its business,

2. Safeguarding of its assets,

3. The prevention and detection of frauds and errors,

4. The accuracy and completeness of the accounting records and

5. The timely preparation of reliable financial information.

The Board reviews the effectiveness of controls documented as part of IFC framework, and take necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology environment.

Based on this evaluation, no significant events had come to notice during the year that have materially affected, or are reasonably likely to materially affect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company. The Statutory Auditors of the Company have audited the adequacy of Internal Financial Controls over Financial Reporting and the operating effectiveness of such controls and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditor''s Report under Standalone Financial Statements and Consolidated Financial Statements respectively.

CREDIT RATINGS

During the year, CARE Ratings Limited has revised the credit rating of “CARE BBB /Stable” for long-term bank facilities from “CARE A-/Stable.” For short-term bank facilities, “CARE A2” has been re-affirmed to the Company.

CERTIFICATIONS/ RECOGNITION/ ACCREDITATIONS

The Company having following Certifications/ Recognition/ Accreditations:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2015

4. ISO 14001:2015

5. ISO 45001:2018

6. DSIR approved R&D Centre

TRANSFER OF SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) ACCOUNT

During the year under review, in compliance with the provisions of sections 124 and 125 of the Act and Rules made thereunder the Company has transferred:

1. 1,750 equity shares of 8 (Eight) members whose dividend has remained unclaimed / unpaid for a consecutive period of 7 (seven) years to IEPF.

2. ? 0.41 million held by 642 members, being the unclaimed dividend, pertaining to the dividend for the financial year 2014-15 was transferred to IEPF after giving notice to the members to claim their unpaid / unclaimed dividend.

ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Subsection (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the copy of the Annual Return of the Company for the Financial Year ended on 31 March 2023 in Form MGT-7 is uploaded on website of the Company and can be accessed at www.hester.in

PARTICULAR OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure-5 to this report.

CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in Annexure-6 and forms part of this report.

GENERAL DISCLOSURES

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent the transactions took place on these items during the year.

Apart from what are mentioned in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by Bank. Your Directors also thank the Medical Professional, the Traders and Consumers for their patronage to the Company''s products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. The Directors also thank the Company''s vendors, investors, business associates, Stock Exchanges, Government of India, State Governments and various departments and agencies for their support and co-operation.

Your Directors appreciate and value the contribution made by every member of the Hester Biosciences.

For and on behalf of Board of Directors

Rajiv Gandhi Priya Gandhi Date 17 May 2023

CEO & Managing Director Executive Director Place Ahmedabad

DIN: 00438037 DIN: 06998979

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Mar 31, 2018

Directors' Report

Your Directors are pleased to present the Thirty First Annual Report and the Audited Financial Statements for the financial year ended on 31 March 2018.

FINANCIAL RESULTS:

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements for the Financial Year ended on 31 March 2018 are the Companys' first Ind AS compliant annual financial statements with comparative figures for the year ended on 31 March 2017 also under Ind AS. The transition date of Ind AS is 1 April 2016.

The disclosure and effects of first time adoption of Ind AS are provided in the Notes of the Standalone Financial Statements and Notes of the Consolidated Financial Statements.

The standalone financial performance of the Company, for the financial year ended on 31 March 2018 is summarised below:

Â	Â	(Rs. in Million)
Â	Standalone
PARTICULARS	For the year ended on 31 March 2018	For the year ended on 31 March 2017
Revenue from operations and other income	1,371.30	1,263.04
Profit before interest, depreciation and tax (PBIDT)	514.73	418.04
Less: Finance Cost	23.15	32.08
Less: Depreciation	54.51	55.09
Profit before tax (PBT)	437.07	330.87
Less: Provision for tax	125.15	73.84
Deferred tax	6.34	7.63
Profit after tax (PAT)	305.58	249.40
Total Other Comprehensive Income	(1.22)	(0.97)
Total Comprehensive Income	304.36	248.43
Balance of profit and loss account	609.09	432.64
Profit available for appropriation	304.36	248.43
Less: Dividend (including Dividend Distribution Tax) on equity shares	40.95	30.72
Less: Reversal of Proposed Dividend (including Dividend Distribution Tax)	23.55	11.26
Less: Transfer to general reserve	50.00	30.00
Balance carried to balance sheet	798.95	609.09
Earnings per share (basic / diluted)	35.92	29.32

Figures for Financial Year 2016-17 have been restated as per Ind AS and therefore may not be comparable with financials for Financial Year 2016-17 approved by the Directors and disclosed in the Financial Statements of previous year.

RESULTS OF OPERATIONS

Sales

Your Company posted a turnover of Rs. 1,352.53 million in the financial year ended on 31 March 2018, as compared to Rs. 1,255.79 million in the previous year.

Profitability

Your Companys' profit before tax for the year ended 31 March 2018 was recorded at Rs. 437.07 million, as compared to Rs. 330.87 million in the previous year.

Earnings Per Share

EPS was at Rs. 35.92 as on 31 March 2018 as against Rs. 29.32 as on 31 March 2017.

Transfer to Reserves

Rs. 50 million is proposed to be transferred to the General Rs Reserve and Rs. 798.95 million is proposed to be retained in the surplus.

Net Worth

The Companys' net worth as on 31 March 2018 was at Rs. 1,460.78 million as compared to Rs. 1,220.92 million as on 31 March 2017.

DIVIDEND

During the year, your Directors declared and paid interim dividend of Rs. 4.00 per equity share for the financial year 2017-18. The resolution to pay interim dividend was passed in the meeting held on 9 November 2017. Further, your Directors have recommended a final dividend payment of Rs. 6.00 per equity share for the financial year 2017-18, making a total of Rs. 10.00 per equity share for the financial year as compared to Rs. 5.30 per equity share for the last year. This final dividend is subject to approval by the shareholders at the ensuing AGM. The total pay-out of dividend is 27.84% of the stand-alone profit, and is in line with the dividend policy adopted by the Company.

The total dividend appropriation (excluding dividend tax) for the current year is Rs. 53,593,249.50 as against Rs. 34,878,146.50 in the earlier year.

During the year, the unclaimed dividend pertaining to the dividend for the year ended 31 March 2010 was transferred to Investors Education and Protection Fund.

SHARE CAPITAL

The paid-up equity share capital as on 31 March 2018 stood at Rs. 85.07 million.

REVIEW OF OPERATIONS

The financial year saw an increase in sales by 8% and an increase in bottom line by 23%.

The growth in sales was less than forecasted while we achieved the targeted growth in the bottom line.

We added the vertical of Diagnostics to the already existing verticals of Poultry Vaccines, Poultry Health Products, Large Animal Vaccines and Large Animal Health Products.

The poultry vaccine division witnessed a growth of 3.57%, an increase in sales to Rs. 1,082.57 million from Rs. 1,045.22 million in the previous year. The lesser than forecasted growth was mainly due to capacity constraints. The new created capacity is now functional to address the normal demand for poultry vaccines. The poultry health products division witnessed a

growth of 57.57%, an increase in sales to Rs. 57.98 million as compared to sales of Rs. 36.80 million in the previous year. Over all poultry divisions combined grew at 5.41%

The large animal vaccine division witnessed a growth of 12.09%, an increase in sales to Rs. 77.41 million as against Rs. 69.06 million in the previous year. Tender business which was expected in the last quarter, did not materialise. These orders would now come up in the first two quarters of the financial year, thus would make up for the lesser sales. The large animal health products division saw a growth of 20.73%, an increase in sales to Rs. 101.17 million from Rs. 83.80 million. Over all large animal divisions combined grew at 16.83%

Exports sales were far below forecasts. Product registrations, which were expected in various countries did not come through. Besides, a lot of resources had to be used up in rationalising the distribution network. FAO international tenders for PPR were far below their projections. Exports therefore dipped by 11.99% to Rs. 126.99 million from Rs. 144.31 million in the previous year.

While no sales was reported in the diagnostics division, we got the licenses for 3 diagnostics kits in the month of March. Sales are expected to start from the second quarter of this financial year.

While over-all sales were below forecasts, the trend in this financial year surely indicates a good growth in the top line as well as a further improvement in the bottom line.

Our CARE credit rating was reaffirmed as:

• Long-term rating 'A- ("A" Minus)'

• Short-term rating 'A2'

We continue to hold the following certifications:

1. WHO-GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2008

4. IS014001:2004

5. OHSAS 180001:2007

6. DSIR approved R&D Centre

CONSOLIDATED FINANCIAL STATEMENTS

The Groups' consolidated total income from operations is  Rs. 1,389.59 million and total comprehensive income attributable  to owners' equity after non-controlling interest is Rs. 229.61 million for the financial year 2017-18 as compared to the  Groups' consolidated total income from operations of  Rs. 1,258.23 million and total comprehensive income attributable to owners' equity after non-controlling interest of Rs. 225.52  million for the previous financial year 2016-17. Consolidated  financial results include the financial results of following entities:

1. Hester Biosciences Nepal Private Limited - Foreign Subsidiary

2. Texas Lifesciences Private Limited - Subsidiary

3. Hester Biosciences Africa Limited - Foreign Wholly-owned Subsidiary

In accordance with the Indian Accounting Standard (Ind AS)-110 Consolidated Financial Statements and as provided under the provisions of the Companies Act, 2013 (hereinafter referred to as "Act") read with Schedule III to the Act and Rules made thereunder and the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, incomes, profits and other details of the Company, its subsidiary Companies after elimination of minority interest, as a single entity.

SUBSIDIARY, JOINT-VENTURE & ASSOCIATE COMPANIES

As on 31 March 2018, your Company has one wholly-owned subsidiary Company namely, Hester Biosciences Africa Limited and two subsidiary Companies namely, Hester Biosciences Nepal Private Limited and Texas Lifesciences Private Limited.

Further, there has been no material change in the nature of business of the subsidiary.

During the year, Hester Biosciences Limited acquired and invested about 54.80% in the capital of Texas Laboratories, a firm having a business place at Mehsana district of Gujarat. In June 2017, Texas Laboratories converted into private limited company under the Companies Act, 2013 namely, Texas Lifesciences Private Limited. Further, Hester Biosciences Limited incorporated 100% wholly-owned subsidiary Hester Biosciences Africa Limited in Tanzania.

The audited financial accounts of the Subsidiary Companies will be available for inspection during business hours at our registered office. Further, the financial highlights of Subsidiaries are part of this Annual Report as Annexure-2 as prescribed in Form AOC-1.

As provided under section 129(3) of the Companies Act, 2013 and Rules made thereunder a statement containing the salient features of the financial statements of its subsidiaries in the format prescribed under the rules is attached to the financial statements. The policy relating to material subsidiaries as approved by the Board may be accessed on the Companys' website at the link: https://www.hester.in/s/Policy-for-Determining-Material-Subsidiaries-gcgn.pdf

The performances of the Subsidiary Companies as under:

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited. Hester India holds 65% stake in HBNPL, hence becoming a subsidiary of Hester Biosciences Limited. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Texas Lifesciences Private Limited (Texas Lifesciences)

During the year, Hester Biosciences Limited acquired and invested in capital of Texas Laboratories, a firm having a business place at Mehsana district of Gujarat. In June 2017, Texas Laboratories converted into private limited company under the Companies Act, 2013 namely, Texas Lifesciences Private Limited. Hester India holds 54.80% stake in Texas Lifesciences, hence becoming a subsidiary of Hester Biosciences Limited. Texas Lifesciences is in the business of manufacturing and supplying pharma formulations, tablets, capsules, powder, and oral liquid for human and veterinary markets.

Hester Biosciences Africa Limited (HBAL)

During the year, Hester Biosciences Limited incorporated a 100% wholly-owned subsidiary in the name of Hester Biosciences Africa Limited (HBAL) in Tanzania. HBAL will be in the business of manufacturing veterinary vaccines and animal health product in Tanzania.

The board has approved the setting up of an animal vaccine manufacturing unit in Tanzania.

Hester sees a big potential in Africa for animal vaccines. More than 80% of the vaccines required in Africa are imported. Besides the common diseases, there are Africa-specific diseases, which currently remain unaddressed, thereby causing economical losses to poultry and livestock farmers.

The objective of the project is to bridge the quantitative and qualitative gap between demand and supply of animal vaccines among small holder farmers as well as amongst the commercial farmers in the African continent. The project would mainly manufacture vaccines against Africa-specific diseases, besides having the capability as well as the capacity to manufacture a bigger range of vaccines against other commonly occurring animal diseases.

Project Highlights:	Â
Name of entity:	Hester Biosciences Africa Limited
Ownership	Wholly-owned subsidiary of Hester Biosciences Limited, India
Type of company:	An export Oriented Unit registered under the Companies Act, 2002 of Tanzania
Export committment:	80% of the sales
Location:	Kibaha Coast Region, Tanzania
Capacity:	1.5 billion doses of vaccines
Revenue:	USD 30 million per year at full capacity
Employment generation:	200 direct & 300 indirect employees at full capacity

 

Project Cost (In USD):	Â
Land & Building:	7,000,000
Plant & Machinery:	7,000,000
Other Cost*:	4,000,000
Total Project Cost:	18,000,000

*Other Cost include preliminary & preoperative expenses, Technology adaption, Market survey and product Registration Costs

Source of Finance (In USD):

Equity Share	Hester Biosciences Limited	4,000,000
Capital	Â	Â
Secured Loan**	Bill & Melinda Gates	10,000,000
Â	Foundation, located in U.S.A.	Â
Grant**	Bill & Melinda Gates	4,000,000
Â	Foundation, located in U.S.A.	Â
Total Sources of Finance	Â	18,000,000

** Total Sanctioned Secured loan is USD 12,000,000. Disbursement of both the loan and the grant are pending the execution of definitive loan agreements and the Companys' satisfaction of relevant closing conditions.

Timeline of Project:	Â
Completion of Construction:	January 2020
Validation of facility:	April 2020
First commercial batch:	November 2020

In coming years, Africa is poised to become one of the major markets for animal vaccines. Tanzania, having the third largest herd of domestic livestock, will be the biggest market for animal vaccines in Africa.

Hester is also in the process of creating a strong distribution network in Africa. This network will service the backyard farmers, which constitute a big percentage of the animal population in Africa, as well as the organised poultry & livestock farmers.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

Appointment and Resignation of Directors

During the year, there is no appointment and resignation was done under review.

None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

Retirement by Rotations

In accordance with the provisions of section 152 (6) of the Act and in terms of the Articles of Association of the Company, Mr. Ravin Gandhi, Director (DIN - 00438361) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Profile of Directors Seeking Appointment / Re-appointment

As required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015, particulars of Directors seeking appointment / re-appointment at the ensuing Annual General Meeting are annexed to the notice convening 31st Annual General Meeting.

Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013. The terms and conditions of the Independent Directors are incorporated on the website of the Company as per Regulation 46(2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 at: https://www.hester.in/s/Terms-and-Conditions-lndependent-Director.pdf

Training of Independent Directors

To familiarise the new inductees with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Companys' strategy, operations, product and service offerings, organisation structure, finance, human resources, technology, quality and facilities. Further, the Company has devised a Familiarisation Program for Independent Directors as per Regulation 46 (2) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 and the same has been placed on the website of the Company at: https://www.hester.in/s/Familairisation-Programs-Details-of-lndependent-Director-2017-18.pdf

Key Managerial Personnel

Mr. Vinod Mali appointed as Company Secretary and Compliance Officer in place of Ms. Amala Parikh, who has resigned from the post of Company Secretary of the Company with effect from 14 May 2018. Mr. Rajiv Gandhi, CEO & Managing Director, Mr. Jigar Shah, Chief Financial Officer and Mr. Vinod Mali, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013.

Evaluation of Performance of the Board, its Committees and Individual Directors

During the year, the evaluation of the annual performance of individual directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act and relevant Rules and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations, 2015 and the circular issued by SEBI dated 5 January 2017 with respect to Guidance Note on Board Evaluation. The Nomination and Remuneration Committee had approved the indicative criteria for the evaluation based on the SEBI Guidance Note on Board Evaluation.

The evaluation for the performance of the Board as a whole and of the Committees were conducted by questionnaires.

In a separate meeting of Independent Directors held on 23 January 2018, performance of Non-independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-Executive Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as structure and diversity of the Board, experience of Directors, strategy and performance evaluation, secretarial support, evaluation of risk, evaluation of performance of the management and feedback, independence of the management from the Board and other indicators. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as knowledge and competency, fulfillment of functions, availability and attendance, initiative integrity contribution and commitment, independence, independent views and judgment among other components.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report, which is a part of this Annual Report.

Board of Director Meetings

The Board consists of eight members as on 31 March 2018, four of whom are Promoters and Non-independent Directors and the remaining four are Independent Directors.

Regular meetings of the Board are held at least once in a quarter, inter-alia, to review the quarterly, half yearly and annual financial results of the Company. Additional Board meetings are convened to discuss and decide on various business policies, strategies and other businesses.

During the year under review, the Board of Directors of the Company met four times: 8 May 2017, 28 July 2017, 9 November 2017 and 23 January 2018.

Committees of Board of Directors

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders' Grievances and Relationship Committee

• Corporate Social Responsibility Committee

• Management Committee

• Share Transfer Committee

A detailed note on the committees with respect to composition, meetings, powers, and terms of reference is provided under the Corporate Governance Report section in this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE ("CSR")

The CSR Committee is responsible for indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the Corporate Social Responsibility Policy and recommending the amount to be spent on CSR activities. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the web link: https://www.hester.in/s/Corporate-Social-Responsibility-Policy-6f83.pdf

Corporate Social Responsibility (CSR) Committee and Statutory Disclosures with respect to CSR Committee and an Annual Report on CSR Activities form part of this Directors' Report as Annexure-1.

PUBLIC DEPOSITS

During the period under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder.

FINANCE

The working capital requirement and all capital expenditures were funded through internal accruals. During the year, the Company has raised the finance through Working Capital Demand Loan (unsecured) facility from Yes Bank Limited.

INSURANCE

Assets of your Company are adequately insured against various perils.

VIGIL MECHANISM

The Company has established a vigil mechanism and framed a Whistle Blower Policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys' Code of Conduct or Ethics Policy. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. No whistle blower has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the Companys' website.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company. Its continuous endeavor of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company 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 thereunder.

During the year, under review there were no incidences of sexual harassment reported and received, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015. A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report. The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for the Board of Directors and General Meetings (SS-1 & SS-2) are applicable to the Company. The Company has complied with the provisions of both Secretarial Standards.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Your attention is drawn to the perception and business outlook of the management for your company for the current year and for the industry in which it operates including its position and perceived trends in near future. The Management Discussion and Analysis Report, as required under Regulations 34 of the SEBI (LODR) Regulations, 2015 is attached and forms part of this Directors' Report.

AUDITORS

Statutory Auditor and Their Report

Apaji Amin & Co. LLP, Chartered Accountants, Ahmedabad (Firm Registration No. 100513W/W100062), was appointed as a statutory auditor of your Company, and will hold Office until the conclusion of the 32nd AGM to be held in the year 2019. Apaji Amin & Co. LLP has submitted their resignation and shown their unwillingness to ratify their appointment due to their pre-occupation in other assignments.

The Board of Directors of the Company has filled this casual vacancy by recommending Shah Karia & Associates, Chartered Accountants, Ahmedabad, as statutory auditor of the Company in their Board meeting held on 14 May 2018, subject to approval of the members in the ensuing Annual General Meeting. Shah Karia & Associates (Firm Registration No. 131546W), Chartered Accountants, Ahmedabad, have expressed their willingness to be appointed as the statutory auditor of the Company. The Audit Committee has considered the qualifications and experiences of the proposed statutory auditor and has recommended their appointment. The Board of Directors has also considered and recommends appointment of Shah Karia & Associates, Chartered Accountants, as statutory auditor in place of the Apaji Amain & Co. LLP subject to approval of shareholder of the Company in ensuing Annual General Meeting of the Company. Written consent of the proposed auditor together with a certificate that the appointment, if made, shall be in accordance with the conditions specified in Rule 4 of the Companies (Audit and Auditors) Rules, 2014 has been received.

The Board has duly reviewed the Statutory Auditors' Report for the year ended on 31 March 2018 and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors as provided under section 134 of the Companies Act, 2013.

Internal Auditor and Their Report

Naresh J. Patel & Co., Chartered Accountants, Ahmedabad, has been the internal auditor of the Company for the FY 2017-18. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

The Board has appointed Naresh J. Patel & Co., Chartered Accountants, Ahmedabad for the FY 2018-19 as an Internal Auditor of the Company in the Board meeting held on 14 May 2018, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditor and Their Report

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2017-18, on the remuneration terms as approved by the members at the last Annual General Meeting held on 28 July 2017.

The Cost Audit report for the financial year 2016-17 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2017-18 is within 180 days from 31 March 2018.

The Board has appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2018-19 as a Cost Auditor of the Company in the Board meeting held on 14 May 2018, after obtaining its willingness and eligibility letter for appointment as Cost Auditor of the Company. As required under the Act and Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 31st Annual General Meeting of the Company.

Secretarial Auditor and Their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2017-18. The Secretarial Audit Report for the FY 2017-18 is annexed to this Directors' Report as Annexure-6. The Board of Directors has duly reviewed the Secretarial Auditors' Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation/clarification by the Board of Directors as provided under section 134 of the Act.

The Board of Directors has appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2018-19 in the Board Meeting held on 14 May 2018.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

EXTRACT OF ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the extract of the Annual Return as at 31 March 2018 in Form MGT-9 forms part of this Annual Report as Annexure-3.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link: https://www.hester.in/s/ Related-Party-Transaction-Policy-jsdr.pdf

All contracts/arrangements/transactions entered by the Company during the previous financial year with the related parties were in the ordinary course of business and on arms' length basis. There were no materially significant related party transactions entered by the Company with its Promoters,

Directors, Key Managerial Personnels or other persons which may have potential conflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal business transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and accordingly, the required disclosures are made to the Committee on a quarterly basis in terms of the approval of the Committee.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC - 2 is not applicable for the current year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014 forms part of this directors' report as Annexure-4.

PARTICULAR OF EMPLOYEES

The information required under section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in this Annual Report as Annexure-5.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Directors' Report.

RISK MANAGEMENT POLICY & FRAMEWORK

Risk management is embedded in your Companys' operating framework. Your Company believes that managing risks helps in maximising returns. The Companys' approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee.

INTERNAL FINANCIAL CONTROL SYSTEMS & ITS ADEQUACY

The Company has its internal audit function which endeavours to make meaningful contributions to the organisations' overall governance, risk management and internal controls. The function reviews and ensures sustained effectiveness of Internal Financial Control by adopting a systematic approach to its work.

The Company has designed and implemented a process driven framework for Internal Financial Controls (IFC) within the meaning of the explanation to section 134 (5) (e) of the Act. For the year ended on 31 March 2018, the Board having opinion that the Company has sound Internal Financial Control commensurate with the size, scale and complexity of its business operations. The Internal Financial Control operates effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls whenever the effect of such gaps would have a material effect on the Companys' operations.

CREDIT RATING

CARE Ratings Limited has reaffirmed the credit rating of "CARE A- /Stable" for long-term bank facilities and "CARE A2" for short term bank facilities of the Company.

UNCLAIMED EQUITY SHARES

The Company has transferred 41,996 Equity Shares to Investor Education & Protection Fund pursuant to the provisions of Section 124(6) of Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), where the dividends for the last seven consecutive years have not been claimed by the concerned shareholders.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 134(3) (c) read with 134(5) of the Companies Act, 2013, Directors' subscribe to the "Directors' Responsibility Statement" and confirm that:

a) In preparation of annual accounts for the year ended 31 March 2018, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts for the year ended 31 March 2018 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

GENERAL

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent the transactions took place on these items during the year and no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS.

3. The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys' operations in future.

ACKNOWLEDGEMENT

Your Directors wish to thank all stakeholders, employees, Companys' bankers, various government authorities, members and business associates for their continued support and valuable co-operation.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

Â	For and on behalf of Board of Directors
Date: 14 May 2018	Rajiv Gandhi	Sanjiv Gandhi
Place: Ahmedabad	CEO & Managing Director	Director

---

Mar 31, 2017

The Directors are pleased to present the 30^th Annual Report with the Audited Accounts of the Company for the year ended 31 March 2017.

FINANCIAL RESULTS: (Rs. in million)

Particulars	Standalone
	2016-17	2015-16
Total income	1,239.42	1,017.64
Profit before depreciation and tax	384.47	305.81
Less: Depreciation	55.09	57.32
Profit before tax	329.38	248.49
Less: Provision for tax	72.36	29.86
Deferred tax	7.63	27.00
Income tax of earlier year	0.96	(0.60)
Net Profit after tax	248.43	192.23
Balance of profit and loss account	421.39	285.64
Interest capitalization	-	10.50
Profit available for appropriation	669.82	488.37
Less: Dividend on equity shares	45.09	34.88
Less: Dividend distribution tax	9.18	7.10
Less: Transfer to general reserve	30.00	25.00
Balance carried to balance sheet	585.55	421.39
Earnings per share (basic / diluted)	29.20	22.60

RESULTS OF OPERATIONS Sales

Your Company posted a turnover of Rs.1,232.16 million in the financial year ended on 31 March 2017, as compared to Rs.1,008.92 million in the previous year.

Profitability

Your Company’s Profit Before Tax for the year ended 31 March 2017 was recorded at Rs.329.38 million, as compared to Rs.248.49 million in the previous year.

Earnings Per Share

EPS was at Rs.29.20 as on 31 March 2017 as against Rs.22.60 as on 31 March 2016.

Transfer to Reserves

Rs.30 million is proposed to be transferred to the General Reserve and Rs.585.55 million is proposed to be retained in the surplus.

Net Worth

The Company’s net worth as on 31 March 2017 was at Rs.1,197.37 million as compared to Rs.1,003.21 million as on 31 March 2016.

DIVIDEND

During the year, your Directors declared and paid interim dividend of Rs.3.00 per equity share for the financial year 2016-17. The resolution to pay interim dividend was passed in the meeting held on 20 October 2016. Further, your Directors have recommended a final dividend payment of Rs.2.30 per equity share for the financial year 2016-17, making a total of Rs.5.30 per equity share for the financial year as compared to Rs.4.10 per equity share for the last year. This final dividend is subject to approval by the shareholders at the ensuing AGM.

The total dividend appropriation (excluding dividend tax) for the current year is Rs.45,086,384.50 as against Rs.34,878,146.50 in the earlier year, resulting in a pay-out of 18.15 per cent of the stand-alone profit, and is in line with the dividend policy adopted by the Company.

SHARE CAPITAL

The paid-up equity share capital as on 31 March 2017 stood at Rs.85.07 million.

REVIEW OF OPERATIONS

The financial year saw an increase in sales by 22 per cent and an increase in net profit after tax by 29 per cent.

The mandate for improving the bottom line was well regarded.

The business verticals continued to be:

1. Poultry vaccines

2. Poultry health products

3. Large animal vaccines

4. Large animal health products

The poultry vaccine division witnessed a growth of 19.62 per cent, an increase in sales to Rs.1,022.42 million from Rs.854.70 million in the previous year. The growth which was higher than budgeted, mainly came from sales through our distributor network across the country. Our growth being more than the growth of the poultry industry, has improved our market share in India.

The poultry health products division witnessed a growth of 9.20 per cent, an increase in sales to Rs.36.80 million as compared to sales of Rs.33.70 million in the previous year. This growth was below our budgeted figures mainly due to delay in the launch of new products. We have launched a few products in the last quarter which would show results in this financial year.

Overall, poultry divisions jointly grew at 19.22 per cent.

The large animal vaccine division achieved sales of Rs.68.23 million as against Rs.21.30 million in the previous year, registering a growth of 220 per cent. We launched the Brucella Abortus Live Vaccine, besides penetrating the market with the PPR vaccine.

The large animal health products division saw a growth of 15.43 per cent, an increase in sales to Rs.83.80 million from Rs.72.60 million. The year went in setting controls to ensure a strong foundation in terms of collection policies and rationalization of Stock Keeping Units. The positive impact is expected to be seen in this year.

Overall, large animal divisions jointly grew at 61.84 per cent.

Exports grew by 44 per cent; an increase in sales to Rs.144.31 million from Rs.100.20 million in the previous year. The exports comprised mainly of poultry and large animal vaccines. In the year 2016-17 we received registration approvals for 22 poultry vaccines in three countries.

Domestic sales grew by 21 per cent.

The launch of the diagnostics division which was slated for February 2017, got postponed to June 2017. This delay was due to getting regulatory approvals. With this division now launched, we hope to generate sales as well as have a captive consumption of diagnostic kits.

The Nepal plant commenced it sales by executing an order for PPR vaccine valuing Rs.13.10 million, for supplies to Africa.

During the year, CARE has upgraded our credit rating as follows:

Long-term rating A- (“A” Minus)’from‘BBB ’ Short-term rating A2’ from A3’

We continue to hold the following certifications:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2008

4. ISO 14001:2004

5. OHSAS 18001:2007

6. DSIR approved R&D centre

CONSOLIDATED FINANCIAL STATEMENTS

The Group’s consolidated total income from operations is Rs.1,230.40 million and net profit after minority interest is Rs.234.48 million for the financial year FY2016-17 as compared to the Group’s consolidated total income from operations of Rs.1,008.92 million and net profit after minority interest of Rs.191.96 million for the previous financial year FY2015-16. Consolidated financial results include the financial results of Hester Biosciences Nepal Private Limited, the Subsidiary of Hester Biosciences Limited.

In accordance with the Accounting Standard - AS-21 on Consolidation of Financial Statements and as provided under the provisions of the Companies Act, 2013 (hereinafter referred to as “Act”) read with Schedule III to the Act and Rules made there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, incomes, profits and other details of the Company, its subsidiary Company after elimination of minority interest, as a single entity.

SUBSIDIARY, JOINT-VENTURE AND ASSOCIATE COMPANIES

As on 31 March 2017, your Company has one subsidiary Company namely Hester Biosciences Nepal Private Limited.

Further, there has been no material change in the nature of business of the subsidiary.

During the year, Leruarua Vetcare (Proprietary) Limited, Botswana ceases to be an Associate Company due to buyback of entire shareholding by the Associate Company.

The audited financial accounts of the Subsidiary Company will be available for inspection during business hours at our registered office. Further, the financial highlights of Subsidiary are part of this Annual Report as Annexure-2 as prescribed in Form AOC-1.

As provided under section 129(3) of the Companies Act, 2013 and Rules made there under a statement containing the salient features of the financial statements of its subsidiaries in the format prescribed under the rules is attached to the financial statements. The policy relating to material subsidiaries as approved by the Board may be accessed on the Company’s website at the link: https://www.hester.in/corporate-governance/policy for determiningmaterialsubsidiaries.pdf

The performance of the Subsidiary Company is as under:

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited.

HBL holds 65 per cent stake in HBNPL, hence becoming a subsidiary of Hester Biosciences Limited. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment and Resignation of Directors

During the year, Ms. Priya Gandhi resigned as an alternate Director of Mr. Ravin Gandhi as on 7 May 2016. Further, Ms. Nina Gandhi was appointed as an Alternate Director of Mr. Ravin Gandhi from 7 May 2016.

None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

The terms and conditions of appointment are placed on the website of the Company: www.hester.in

Retirement by rotations

In accordance with the provisions of Section 152 (6) of the Act and in terms of the Articles of Association of the Company, Mr. Sanjiv Gandhi, Director (DIN - 00024548) will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his re-appointment.

Profile of Directors seeking appointment/re-appointment

As required under Regulation 36 (3) of the SEBI (LODR) Regulations, 2015, particulars of Directors seeking appointment/re-appointment at the ensuing Annual General Meeting are annexed to the notice convening 30th Annual General Meeting.

Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149 (6) of the Companies Act, 2013. The terms and conditions of the Independent Directors are incorporated on the website of the Company as per Regulation 46(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 at: https:// www.hester.in/information/termsandconditions-ofappointmentofindependentdirectors.pdf

Training of Independent Directors

To familiarize the new inductees with the strategies, operations and functions of our Company, the executive directors/senior managerial personnel make presentations to the inductees about the Company’s strategies, operations, product and service offerings, organization structure, finance, human resources, technology, quality and facilities. Further, the Company has devised a Familiarization Program for Independent Directors as per Regulation 46 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same has been placed on the website of the Company at: https://www.hester.in/familiarisation-programme-independent-directors2016-17.pdf

Key Managerial Personnel

Mr. Rajiv Gandhi, CEO & Managing Director, Mr. Jigar Shah, Chief Financial Officer and Ms. Amala Parikh, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013. There is no change in Key Managerial Personnel during the year.

The Board of Directors had, on recommendation of Nomination and Remuneration Committee, re-appointed Mr. Rajiv Gandhi as CEO & Managing Director of the Company for the three years starting from 1 April 2017 by passing resolution in the meeting dated 20 October 2016. The members of the Company had approved the reappointment of Mr. Rajiv Gandhi as CEO & Managing Director by postal ballot and results of the Postal Ballot Process was declared on 22 December 2016.

Board Evaluation

Pursuant to the provisions of the Act and the SEBI Regulations, the Board has carried out the annual performance evaluation of all the Independent Directors. Further all the Independent Directors have reviewed the performance of all non-independent Directors and the Board of Directors as a whole in their meeting held on 19 January 2017. The criteria applied in the evaluation process are explained in the Corporate Governance Report.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy on selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report, which is a part of this Annual Report.

Directors’ Responsibility Statement

As stipulated in Section 134(3)(c) read with 134(5) of the Companies Act, 2013, Directors’ subscribe to the “Directors’ Responsibility Statement” and confirm that:

a) In preparation of annual accounts for the year ended 31 March 2017, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts for the year ended 31 March 2017, on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

Board of Director Meetings

The Board consists of eight members as on 31 March 2017, four of whom are Promoters and Non-Independent Directors and the remaining four are Independent Directors.

Regular meetings of the Board are held at least once in a quarter, inter-alia, to review the quarterly, half yearly and annual financial results of the Company. Additional Board meetings are convened to discuss and decide on various business policies, strategies and other businesses.

During the year under review, the Board of Directors of the Company met six times: 7 May 2016, 29 June 2016, 29 July 2016, 20 October 2016,19 January 2017 and 22 March 2017.

Committees of Board of Directors

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders’ Grievances and Relationship Committee

- Corporate Social Responsibility Committee

- Management Committee

- Share Transfer Committee

A detailed note on the committees with respect to composition, meetings, powers, and terms of reference is provided under the corporate governance report section in this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (“CSR”)

The CSR Committee is responsible for indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the Corporate Social Responsibility Policy and recommending the amount to be spent on CSR activities.

Corporate Social Responsibility (CSR) Committee and Statutory Disclosures with respect to CSR Committee and an Annual Report on CSR Activities forms part of this Directors’ Report as Annexure-1.

PUBLIC DEPOSITS

During the period under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made there under.

FINANCE

The working capital requirement and all capital expenditures were funded through internal accruals. During the year, the company has raised the finance through working capital demand loan (unsecured) facility from Yes Bank Limited.

INSURANCE

Assets of your Company are adequately insured against various perils.

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report instances of unethical behaviour, actual or suspected fraud and violation of Company’s Code of Conduct to the management. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and also provide for adequate safeguards against victimisation of the whistle blower who avails of such mechanism and offers direct access to the Chairman of the Audit Committee in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. No whistle blower has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

During the year, under review there were no incidences of sexual harassment reported, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015. A separate section on detailed report on Corporate Governance practice followed by the Company under SEBI (LODR) Regulations, 2015 along with a certificate from Practicing Company Secretary, confirming the compliance forms a part of this report.

The Board of Directors supports the basic principles of corporate governance and lays strong emphasis on transparency, accountability and integrity.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your attention is drawn to the perception and business outlook of the management for your company for the current year and for the industry in which it operates including its position and perceived trends in near future. The Management Discussion and Analysis Report, as required under Regulations 34 of the SEBI (LODR) Regulations, 2015 with the Stock Exchanges is attached and forms part of this Directors’ Report.

AUDITORS

Statutory Auditors and their report

Apaji Amin & Co. LLP, Chartered Accountants, Ahmedabad (Firm Registration No. 100513W/W100062), who is the statutory auditor of your Company; hold Office until the conclusion of the 30th AGM to be held in the year 2017, subject to ratification of its appointment at every AGM. The Members, year on year, will be requested, to ratify its appointment as Auditor and to authorise the Board of Directors to fix their remuneration.

The Board has duly reviewed the Statutory Auditor’s Report for the year ended on 31 March 2017 and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation/ clarification by the Board of Directors as provided under section 134 of the Companies Act, 2013.

Internal Auditors and their report

Naresh J. Patel & Co., Chartered Accountants, Ahmedabad, has been the internal auditor of the Company for the FY 2016-17. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports and its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

The Board has appointed Naresh J. Patel & Co., Chartered Accountants, Ahmedabad for the FY 2017-18 as an Internal Auditor of the Company in the Board meeting held on 8 May 2017, after obtaining its willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditors and their report

Pursuant to provisions of Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors had, on recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2016-17, on the remuneration terms as approved by the members at the last Annual General Meeting held on 29 July 2016.

The Cost Audit report for the financial year 2015-16 was filed within the due date. The due date for submission of the Cost Audit Report for the financial year 2016-17 is within 180 days from 31 March 2017.

The Board has appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for the FY 2017-18 as a Cost Auditor of the Company in the Board meeting held on 8 May 2017, after obtaining its willingness and eligibility letter for appointment as Cost Auditor of the Company. As required under the Act and Rules made there under, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Kiran J. Mehta & Co. is included in the Notice convening 30th Annual General Meeting of the Company.

Secretarial Auditor and their report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed Mr. Tapan Shah, Practicing Company Secretary, to undertake the Secretarial Audit of the Company for the FY 2016-17.

The Secretarial Audit Report for the FY 2016-17 is annexed to this Directors’ Report as Annexure-7. The Board of Directors has duly reviewed the Secretarial Auditor’s Report and the observations, comments appearing in the report, are self-explanatory and do not call for any further explanation/clarification by the Board of Directors as provided under section 134 of the Act.

Accordingly the Board of Directors has appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2017-18 in the Board Meeting held on 8 May 2017.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

EXTRACT OF ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Subsection (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the extract of the Annual Return as at 31 March 2017 in Form MGT-9 forms part of this Annual Report as Annexure-3.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions that were entered during the financial year were in the ordinary course of business of the Company and were at arm’s length basis. There were no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other persons which may have potential conflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal business transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and accordingly, the required disclosures are made to the Committee on a quarterly basis in terms of the approval of the Committee.

The Policy on Related Party Transactions, as approved by the Board of Directors, is uploaded on the website of the Company: https://www.hester.in/corporate-governance/ relatedpartytransactionpolicy.pdf

All the related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis as provided in Annexure-4.

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

Information relating to conservation of energy, technology and foreign earning and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 forms part of this Directors’ Report as Annexure-5.

PARTICULAR OF EMPLOYEES

The information required under section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in this Annual Report as Annexure-6.

LISTING OF SECURITIES AND FEES

The Company’s Equity Shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company has already paid the listing fees to both the Stock Exchanges for the Financial Year 2017-18.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of financial year and the date of Directors’ Report.

RISK MANAGEMENT POLICY AND FRAMEWORK

Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has its internal audit function which endeavours to make meaningful contributions to the organization’s overall governance, risk management and internal controls. The function reviews and ensures sustained effectiveness of Internal Financial Control by adopting a systematic approach to its work.

As per the provisions of Section 177 of the Companies Act, 2013 (the Act) and one of the roles and responsibility of the Audit Committee, is to review the effectiveness of the Company’s internal control system, including financial controls, information technology security and its control. Section 143(3) of the Act, provides that the Statutory Auditor’s Report shall state whether the Company has an adequate Internal Financial Control system in place and the operating effectiveness of such controls, for FY2016-17 and beyond. As per Section 134 of the Act, Directors of listed companies, based on the representations received from the management, are to confirm in the Directors Responsibility Statement that Internal Financial Control are not only adequate, but are also operating effectively.

For the year ended on 31 March 2017, the Board having opinion that the Company has sound Internal Financial Control commensurate with the size, scale and complexity of its business operations. The Internal Financial Control operates effectively and no material weakness exists.

The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls whenever the effect of such gaps would have a material effect on the Company’s operations.

GENERAL

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent the transactions took place on these items during the year and no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS.

3. The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

ACKNOWLEDGEMENT

Your Directors express their appreciation for the assistance and co-operation received from the State Bank of India, various government authorities, customers, vendors and members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

By order of the Board

Date: 8 May 2017 Rajiv Gandhi

Place: Ahmedabad CEO & Managing Director

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 28th Annual Report with the Audited Accounts of the Company for the year ended 31 March 2015.

FINANCIAL RESULTS:

(RS In Million)

Particulars Standalone

2014-15 2013-14

Total income 903.66 698.22

Profit before depreciation and tax 247.43 196.69

Less: Depreciation 52.91 53.78

Profit before tax 194.52 142.91

Less: Provision for tax 40.62 -

Deferred tax 4.55 23.27

Income tax of earlier year 3.53 18.76

Fringe benefit tax -- --

Net Profit after tax 145.82 100.88

Balance of profit and loss account 256.69 200.71

Profit available for appropriation 402.51 301.59

Less: Dividend on equity shares 26.37 17.01

Less: Dividend tax 5.40 2.89

Less: Transfer to General reserve 25.00 25.00

Balance carried to Balance sheet 345.74 256.69

Earnings per share (basic/diluted) (in H) 17.14 11.86

FINANCIAL HIGHLIGHTS

Sales

Your Company posted a turnover of H900.37 million in the financial year ended on 31 March 2015, as compared to H690.48 million in the previous year.

Profitability

Your Company's PBT for the year ended 31 March 2015 was recorded at Rs.194.52 million, as compared to Rs.142.91 million in the previous year.

Earnings per share

EPS was at Rs.17.14 as on 31 March 2015 as against Rs.11.86 as on 31 March 2014.

Transfer to Reserves

Rs.25 million is proposed to be transferred to the General Reserve and Rs.345.74 million is proposed to be retained in the surplus.

Net Worth

The Company's net worth as on 31 March 2015 was at Rs.860.28 million as compared to Rs.759.72 million as on 31 March 2014.

Dividend

Your Directors have recommended a dividend payment of Rs.3.10 per equity share of Rs.10 each for the financial year 2014-15, as compared to Rs.2 per equity share in the earlier year. This dividend is subject to approval by the shareholders at the ensuing AGM.

The total dividend appropriation (excluding dividend tax) for the current year is Rs.26,371,080 as against Rs.17,013,600 in the earlier year, resulting in a payout of 18.08% of the stand-alone profit, and is in line with the dividend policy adopted by the Company.

REVIEW OF OPERATIONS

The financial year saw an increase in sales by 30%.

We started off the year with a clear objective to increase our market share as well as add new products.

The business got clearly divided into four divisions:

1. Poultry vaccines

2. Poultry health products

3. Large animal vaccine

4. Large animal health products

The poultry vaccine division saw a growth of 29%, an increase in sales to Rs.827.20 million from Rs.641.10 million in the previous year. The growth in this division came from increasing our market share as well as from the growth of the poultry industry. Another hallmark achieved is that the sales have been fully derived from our own produced vaccines, without any dependency on any intermediate, as what we were otherwise dependent on till 2012-13. We have 40 licensed poultry vaccines and hope to add eight more in the current financial year.

The poultry health products division, being one year old, has just taken off, generating sales of Rs.7.70 million as compared to negligible sales of Rs.3.90 million from the previous year. The range includes one medicine, seven feed supplements and one disinfectant. We hope to substantially increase the range in all the three subdivision.

The large animal vaccine division, having started on 25 March 2015, had negligible contribution in the sales in the financial year. We have two licensed large animal vaccines, PPR and Goat Pox, and hope to add five more in the current financial year.

The large animal health products division saw a growth of 19%, an increase in sales to Rs.54.20 million from Rs.45.50 million. In the current financial year, we hope to grow by over 40%. The current range includes 14 medicines, six feed supplements and three disinfectants and we hope to add more products in this financial year.

Exports grew by 55%; an increase in sales to Rs.50.89 million from Rs.32.83 million in the previous year. The exports comprised mainly of poultry vaccines. Having registered at least one product in 13 countries and with on-going registrations in 23 countries, the exports are poised to grow at over 100% on a year-to-year basis for the next few years.

The Company earned a non-recurring operational income for Rs.11.30 million.

The Nepal plant would be commissioned in October 2015. During the year, CARE upgraded our credit ratings as follows:

* Long-term rating from 'BBB' to 'BBB '

* Short-term rating from 'A3' to 'A3 '

Current certifications held by us are:

1. WHO-GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2008

4. ISO 14001:2004

5. OHSAS 18001:2007

6. DSIR approved R&D centre

CONSOLIDATED FINANCIALS

The Group's consolidated total income from operations is Rs.909.36 million and net profit after minority interest is Rs.123.88 million for the financial year 2014-15 as compared to the Group's consolidated total income from operations of Rs.696.54 million and net profit after minority interest of Rs.94.54 million for the previous financial year 2013-14.

Consolidated financial results include the financial results of Hester Biosciences (Mauritius) Limited, Gujarat Agrofarm Limited and Diavetra Lifesciences Private Limited, the wholly owned subsidiaries of Hester Biosciences Limited and Hester Biosciences Nepal Private Limited, the step down subsidiary of Hester Biosciences Limited.

LISTING OF SECURITIES

The Company's Equity Shares are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange India Limited (NSE).

During the year, the Company has obtained the final approval letter of the listing of its equity shares on NSE and the trading for the equity shares of the Company at the NSE was started with effect from 13 March 2015.

The Company has already paid the listing fees to the both the Stock Exchanges for the Financial Year 2015-16.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board Meeting

The Board consist of Eight members as on 31 March 2015, four of whom are Promoters and Non Independent Directors and remaining four are Independent Directors.

Regular meetings of the Board are held at least once in a quarter, inter-alia, to review the quarterly results of the Company. Additional Board meetings are convened to discuss and decide on various business policies, strategies and other businesses.

During the year under review, Board of Directors of the Company met Seven times, viz 7 April 2014, 30 May 2014, 24 July 2014, 18 October 2014, 24 December 2014, 21 January 2015 and 28 March 2015.

Committee of Board

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

* Audit Committee

* Nomination and Remuneration Committee

* Stakeholders' Grievances and Relationship Committee

* Corporate Social Responsibility Committee

* Management Committee

* Share Transfer Committee

A detailed note on the committees with respect to composition, meeting, powers, and terms of reference is provided under the corporate governance report section in this Annual Report.

Appointment, Re-appointment and Resignation of Directors

During the year, Ms. Nina Gandhi was appointed as an Alternate Director for Mr. Ravin Gandhi in place of Mr. Parimal Tripathi with effect from 30 May 2014. Subsequently, Ms. Priya Gandhi was appointed as an Alternate Director for Mr. Ravin Gandhi in place of Ms. Nina Gandhi with effect from 18 October 2014.

Mr. Darayus Lakdawalla has resigned as an Independent Director of the Company with effect from 24 July 2014. The terms of appointment of Mr. Vimal Ambani, as an Independent Director of the Company, has expired with effect from 1 April 2015. Further, Dr. Siba Samal has resigned from the Board with effect from 10 August 2015. The Board places on record their appreciation for the services rendered by them during their tenure with the Company.

Ms. Grishma Nanavaty was appointed as an Independent Director of the Company with effect from 24 July 2014. The said appointment was approved by the Members at the last Annual General Meeting.

During the year, Mr. Rajiv Gandhi, CEO and Managing Director of the Company was re-appointed, for a further period of three years, with effect from 1 April 2014. Members have approved the said re-appointment through Postal Ballot.

After the completion of the term of appointment for Mr. Vishwesh Patel, Ms. Grishma Nanavaty and Dr. Siba Samal as an Independent Directors of the Company, the Board of Directors have appointed all of them as an Additional Directors of the Company, with effect from 01 April 2015.

Considering their valuable contribution to the organisation, the Nomination and Remuneration Committee has recommended appointment of all the three Independent Directors for the next term of five consecutive years i.e. up to 31 March 2020. The Company has received requisite notice in writing from a member proposing Mr. Vishwesh Patel, Ms. Grishma Nanavaty and Dr. Siba Samal for appointment as an Independent Directors of the Company. Members in their ensuing General Meeting shall consider their appointment for further period up to 31 March 2020.

Mr. Naman Patel was appointed as an Alternate Director for Dr. Siba Samal with effect from 18 October 2014 and subsequently resigned as on 30 June 2015. Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and Articles of Association of the Company, Mr. Naman Patel was appointed as an Additional Director designated as an Independent Director with effect from 30 June 2015. Further, Mr. Am it Shukla was appointed as an Additional Director of the Company with effect from 11 August 2015. They both shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing them for appointment as an Independent Directors of the Company. Further, Nomination and Remuneration Committee of the Company has recommended their appointment for a period up to 31 March 2020.

In terms of the provision of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a Company shall have at least one Woman Director on the Board of the Company. Your Company has Ms. Grishma Nanavaty as an Independent Director on the Board of the Company.

In accordance with the provisions of the Articles of Association and Section 152 of the Companies Act 2013, Mr. Ravin Gandhi, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

Declaration by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The terms and conditions of the Independent Directors are incorporated on the website of the Company at: http://www.hester.in/polices.php

Training of Independent Directors

To familiarise the new inductees with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, organisation structure, finance, human resources, technology, quality and facilities. Further, the Company has devised a Familiarisation Programme for Independent Directors and the same been placed on the website of the Company at: http://www.hester.in/polices.php

Details of Key Managerial Personnel

Mr. Rajiv Gandhi, CEO & Managing Director, Mr. Jigar Shah, Chief Financial Officer and Ms. Amala Parikh, Company Secretary of the Company are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and were already in the office before the commencement of the Companies Act, 2013.

None of the Key Managerial Personnel has resigned or appointed during the year under review.

Nomination and Remuneration Policy

The Company has, in order to attract motivated and retained manpower in competitive market, and to harmonise the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the listing agreement as amended from time to time, devised a policy on the nomination and remuneration of Directors, key managerial personnel and senior management. Key points of the policy are:

A. Policy on appointment of Directors, key managerial personnel and senior management personnel

* The policy is formulated to identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP and senior management personnel and recommend to the Board for his/her appointment.

* A person should possess adequate qualification, ex- pertise and experience for the position he/she is con- sidered for appointment.

* In case of appointment of Independent Director, the Committee shall satisfy itself with regard to the inde- pendent nature of the Director vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.

B. Policy on remuneration of Director, key managerial personnel and senior management personnel

The Company's remuneration policy is driven by the success and performance of the Director, KMP and Senior Management Personnel vis-a-vis the Company. The Company's philosophy is to align them and provide adequate compensation with the Objective of the Company so that the compensation is used as a strategic tool that helps us attract, retain and motivate highly talented individuals who are committed to the core value of the Company. The Company follows a combination of fixed pay, benefits and performance-based variable pay. The Company pays remuneration by way of salary, benefits, perquisites and allowance. The remuneration and sitting fees paid by the Company are within the salary scale approved by the Board and Shareholders.

Board Evaluation

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and individual Director. Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by the entire Board of Directors excluding the director being evaluated.

A structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and Committees, culture, execution and performance of specific duties, obligation and governance.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as suggested by the Nomination and Remuneration Committee.

The performance evaluation of the Independent Directors was completed. During the year under review, the Independent Directors met on 28 March 2015 interalia, to discuss:

* Performance evaluation of Non Independent Directors and Board of Directors as a whole;

* Performance evaluation of the Chairman of the Company;

* Evaluation of the quality of the flow of information between the Management and Board for effective performance by the Board.

The Board of Directors expressed their satisfaction with the evaluation process.

CORPORATE SOCIAL RESPONSIBILITY ("CSR")

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy ("CSR Policy") indicating the CSR activities to be undertaken by the Company, which has been approved by the Board.

The CSR policy encompasses the Company's philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for welfare and sustainable development of the community at large. The CSR Policy may be accessed on the company's website at: http://www.hester.in/polices. php

The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the education, health, safety and environment aspects.

Aligning with the guidelines, your Company has constituted a Corporate Social Responsibility Committee. The CSR Committee is responsible for indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the Corporate Social Responsibility Policy and recommending the amount to be spent on CSR activities.

Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to CSR Committee and an Annual Report on CSR Activities form part of this Directors' Report as Annexure-1.

SUBSIDIARY, JOINT-VENTURE AND ASSOCIATES COMPANIES

As on 31 March 2015, your Company has four subsidiary companies namely Hester Biosciences (Mauritius) Limited, Gujarat Agrofarm Limited and Diavetra Lifesciences Private Limited (wholly owned subsidiaries) and Hester Biosciences Nepal Private Limited (step-down subsidiary).

Further, there has been no material change in the nature of business of the subsidiaries.

The Board of Directors of the Company has formulated a policy for determining "Material Subsidiaries" to comply with the requirement of Clause 49 of the Listing Agreement for such material subsidiaries. However, the Company has no material subsidiary Company as defined under Clause 49 of the Listing Agreement. The policy for determining "Material Subsidiaries" may be accessed on the Company's website at the link: http://www.hester.in/polices.php.

During the year, Gujarat Agrofarm Limited became a wholly owned subsidiary of the Company.

The Company does not have any joint ventures as on 31 March 2015. There is one Associate Company, namely Innoves Animal Health Pvt. Ltd.

The audited financial accounts of the Subsidiary Companies will be available for inspection during business hours at our registered office. Further, the financial highlights of Subsidiary, Joint Venture and Associates Companies are part of this Directors' Report as Annexure-2 as prescribed in Form AOC-1.

The performances of the Subsidiary Companies are as under:

Hester Biosciences (Mauritius) Limited (HBML)

This Company was incorporated in 2011, as a wholly (100%) owned subsidiary of Hester Biosciences Limited. The Company has not yet started its activities and hence, only administrative expensed are incurred.

Diavetra Lifesciences Private Limited

This Company, though established with an objective to develop and market veterinary diagnostics kits, it has not yet started its activities and hence, only administrative expensed are incurred.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of HBML. HBML holds 79.20% stake in HBNPL, hence becoming an indirect subsidiary of Hester Biosciences Limited. HBNPL will be in the business of manufacturing large animal vaccines in Nepal. The project is expected to complete before the end of the current financial year.

Gujarat Agrofarm Limited (GAFL)

In November, 2014, the Company has formed a new subsidiary namely Gujarat Agrofarm Limited with an objective of manufacturing, selling and distributing growth media used for animal vaccines industries.

PUBLIC DEPOSITS

During the period under review, the Company has not accepted deposits from shareholders and public falling within the ambit of Section 73 of the Companies Act, 2013 and rules made thereunder. Further, as per Section 74 of the Companies Act, 2013, the Company has repaid all the existing deposit accepted under the Companies Act, 1956. There were no deposits, which were claimed and remained unpaid by the Company as on 31 March 2015.

SHARE CAPITAL

The paid up equity share capital as at 31 March 2015 stood at Rs.85.07 million. During the year under review, the Company has not issued any share capital.

FINANCE

The working capital requirement was funded through enhanced bank limits. The capital expenditures were funded through the additional working capital and term loans from the bank as well as through internal accruals.

SCHEME OF ARRANGEMENT

The Board of Directors has approved the draft Scheme of Arrangement involving the amalgamation of Hester Biosciences (Mauritius) Limited, Gujarat Agrofarm Limited and Diavetra Lifesciences Private Limited to Hester Biosciences Limited and demerger of the trading unit of Innoves Animal Health Private Limited into Hester Biosciences Limited, between the Companies and its Equity Shareholders and Creditors, in its meeting held on 24 December 2014, pursuant to the provisions of Sections 391 to 394 and Section 261 to 264 of the Mauritius Companies Act, 2001 and other applicable provisions of the 1956 Act, the Companies Act, 2013 ("the 2013 Act") and the Mauritius Companies Act, 2001. The same scheme was filed with the stock exchanges as on 9 March 2015 at BSE and 20 March 2015 at NSE. The Company has received final observations letters from both the Stock Exchanges for the Scheme. The above Scheme is yet to be filed with the Hon'ble High Court of Gujarat.

VIGIL MECHANISM

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report instances of unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct to the management. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safeguards against victimisation of the Whistle Blower who avails of such mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. No whistle blower has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

There were no incidences of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance and the certificate obtained from practicing Company Secretary confirming its compliance is provided separately and forms a part of this Report. The Board of Directors supports the basic principles of corporate governance. In addition to this, the Board lays strong emphasis on transparency, accountability and integrity.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your attention is drawn to the perception and business outlook of your management for your company for current year and for the industry in which it operates including its position and perceived trends in near future. The Management Discussion and Analysis Report, as required under Clause 49 of the Listing Agreement with the Stock Exchange is attached and forms part of this Directors' Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There was a fire in one of the secondary production buildings at Hester's Mehsana plant at 5 pm on Monday 29 June 2015. The fire was completely brought under control by 7 pm. There had been no loss or damage to any life. Having a full insurance cover, the company has claimed INR 13.20 million from the insurance company. The fire had caused a temporary loss in production which has not much impacted our sales.

EXTRACT OF ANNUAL RETURN

Pursuant to Sub-section 3(a) of Section 134 and Sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the extract of the Annual Return as at 31 March 2015 in Form MGT-9 forms part of this Directors' Report as Annexure-3.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions that were entered during the financial year were in the ordinary course of business of the Company and were on arm's length basis. There were no materially significant related party transactions entered by the Company with its Promoters, Directors, Key Managerial Personnel or other persons which may have potential conflict with the interest of the Company.

All Related Party transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval for normal business transactions is also obtained from the Audit Committee for the related party transactions which are of repetitive nature and accordingly, the required disclosures are made to the Committee on a quarterly basis in terms of the approval of the Committee.

The policy on Related Party Transactions, as approved by the Board of Directors, is uploaded on the website of the Company www.hester.in. All the related party transactions entered into by the Company were in the ordinary course of business and were on an arm's length basis as provided in Annexure 4.

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

Information relating to conservation of energy, technology and foreign earning and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 forms part of this Directors' Report as Annexure 5.

PARTICULAR OF EMPLOYEES

The ratio of remuneration of each Director to the median employee's remuneration and other details in terms of Sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Directors' Report as Annexure 6.

The details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel), 2014 is not applicable as there is no employee (except Managing Director and CFO) in the Company employed throughout the financial year with salary above Rs.60 lac p.a. or employed in part of the financial year with average salary above Rs.5 lac per month.

Further, there is no employee employed throughout the financial year or part thereof, who was in receipt of remuneration of in aggregate is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds, by himself or along with his spouse and dependent children, not less than two percent (2%) of the equity shares of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has laid down the set of standards, processes and structure which enables it to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively. To maintain the objectivity and independence of internal audit, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with the operating systems, accounting procedures and policies of the Company. Based on the report of Internal Auditor, the process owners undertake the corrective action in their respective areas and thereby strengthen the control. Significant audit observation and corrective actions thereon are presented to the Audit Committee of the Board.

AUDITORS Statutory Auditors

M/s. Shah Narielwala & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 109708W), was appointed as the Statutory Auditors of the Company, to hold the office from the conclusion of the 27th Annual General Meeting to the conclusion of the 28th Annual General Meeting.

Further, M/s. Shah Narielwala & Co., Chartered Accountants, Ahmedabad, has shown unwillingness to act as Statutory Auditor of the Company after completion of audit for the FY2014-15. He has resigned as an Auditor due to his preoccupation with other professional assignment, with effect from 27 June 2015. Due to this casual vacancy, the Company has recommended M/s. Apaji Amin & Co. LLP, Chartered Accountants, Ahmedabad, as the Statutory Auditors of the Company in the terms of the provisions of the companies Act, 2013 and the rules made thereunder, subject to approval by the members in the ensuing Annual General Meeting. The Company has received the consent from M/s Apaji Amin & Co. LLP, Chartered Accountants confirming that they are not disqualified to be appointed as the Auditors of the Company.

Accordingly the Board of Directors, based on recommendation made by the Audit Committee, has recommended the appointment of M/s. Apaji Amin & Co. LLP, Chartered Accountants, Ahmedabad, as the Statutory Auditors of the Company to hold the office from the ensuing AGM till the conclusion of the next AGM on such remuneration, as may be determined by the Audit Committee, in consultation with the auditors.

Internal Auditors and their report

M/s Apaji Amin & Co., Chartered Accountants, Ahmedabad, has been the internal auditor of the Company for the FY2014-15. The Internal Auditor is appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings on the internal audit of the Company to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee.

The Company has appointed M/s Naresh J. Patel & Co., Chartered Accountants, Ahmedabad for the FY2015-16 in the Board meeting held on 28 May 2015, after obtaining his willingness and eligibility letter for appointment as Internal Auditor of the Company.

Cost Auditors and their report

As per Section 148 read with Companies (Audit & Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013 the Board of Directors of your Company has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2015-16 on the recommendations made by the Audit Committee subject to the approval of the Central Government. The remuneration proposed to be paid to the Cost Auditors, subject to the ratification by the members at the ensuing Annual General Meeting, will be Rs.125,000 (Rupees hundred and twenty five thousand only) excluding out of pocket expenses, if any.

The Cost Audit report for the financial year 2013-14 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2014-15 is within 180 days from 31 March, 2015.

Secretarial Auditor and their report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. Tapan Shah, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the FY 2014-15. The Secretarial Audit Report for the FY 2014-15 is annexed to this Directors' Report as Annexure-7.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 134(3) (c) read with 134(5) of the Companies Act, 2013, Directors subscribe to the "Directors' Responsibility Statement" and confirm that:

a) In preparation of annual accounts for the year ended 31 March 2015, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts for the year ended 31 March 2015 on going concern basis.

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

AUDITORS' REPORT

The Auditors' Report on the accounts of the Company for the accounting year ended 31 March 2015 is self-explanatory and does not call for further explanations or comments that may be treated as adequate compliance of Section 134 of the Companies Act, 2013.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and ESOS.

3. The Managing Director of the Company has not received any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

ACKNOWLEDGEMENT

Your Directors express their appreciation for the assistance and cooperation received from the State Bank of India, various government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

By order of the Board Date: 11 August 2015 Rajiv Gandhi Place: Ahmedabad CEO & Managing Director

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Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 27th Annual Report with the Audited Accounts of the Company for the year ended 31.3.2014.

FINANCIAL RESULTS: (Rs. In Million)

Particulars Current year Previous Year

Total Income 698.22 653.08

Profit before Depreciation & Tax 196.69 194.22

Less : Depreciation 53.78 43.95

Profit Before Tax 142.91 150.27

Less : Provision for Tax - 51.83

Deferred Tax 23.27 1.51

Income tax of earlier year 18.76 0.03

Net Profit After Tax 100.88 96.90

Balance of Profit & Loss Account 200.71 148.72

Profit available for appropriation 301.59 245.62

Dividend on equity shares 17.01 17.01

Dividend Tax 2.89 2.89

General Reserve 25.00 25.00

Balance carried to Balance sheet 256.69 200.72

Earnings per share (Basic/Diluted) 11.86 13.44

FINANCIAL HIGHLIGHTS

Sales

Your company posted a turnover of H690.48 million in the financial year ended on 31.3.2014, as compared to Rs. 651.04 million in the previous year.

Profitability

Your company''s PBT for the year ended 31.3.2014 was recorded at Rs. 142.91 million, as compared to Rs. 150.27 million in the previous year.

Earnings Per Share

EPS was at Rs. 11.86 as on 31.3.2014 as against Rs. 13.44 as on 31.3.2013.

Net Worth

The company''s net worth as on 31.3.2014 was at Rs. 759.72 million as compared to H678.75 million as on 31.3.2013.

Dividend

Your Directors have recommended a dividend payment of Rs. 2 per equity share of H10 each for the financial year 2013-14, which is equal to the dividend declared for 2012-13. This dividend is subject to approval by the shareholders at the ensuing AGM. The company has now formulated a dividend policy that would be implemented from the current financial year. The proposed policy endeavors to maintain a minimum dividend payout @ of 18% of PAT.

REVIEW OF OPERATIONS AND FUTURE PROSPECTS

The last financial year saw a small growth in the sales. The year began on an anxious note, having lost the number one product which contributed 23% to the total sales in the earlier year. As the year progressed, we not only made up those lost sales with our other products as well as by adding large animal health products, but we ensured that a higher profitability is achieved in the year. We therefore achieved our 2 objectives as defined last year to gain a higher market share in India and to increase the product range.

Though we are yet struggling in the LAH division, we are confident of turning it around by reaching at a breakeven in the current financial year. The addition of Large Animal vaccines in the third quarter will accelerate the growth of this division.

We have successfully re-launched our bivalent Marek''s Disease Live vaccine for the poultry, containing HVT & SB1 strains, which contributed 23% to sales in 2012-13, after removing the dependency on imported intermediate. We proudly say that we are no more dependent on any intermediate imports towards manufacturing any vaccines. In the current financial year, we hope to recover a sizable portion of the lost market besides providing a cost advantage to the Indian poultry farmers.

The important volume building large animal vaccines to be launched in the third quarter of this financial year are PPR vaccine for sheep & goat and Brucella vaccine for cattle. These 2 vaccines would contribute towards the disease eradication programs of the Government of India.

During the last year, Hester terminated its JV (in the name of Diavetra Lifesciences Private Limited) with Ubio Biotechnology Systems Private Limited. The JV was set up with an objective to manufacture veterinary diagnostics. Hester still independently pursues the objective to manufacture veterinary diagnostics. This initiative shall gain momentum in 2015-2016.

During the year, Hester did not renew its agreement with CRISIL but entered into a contractual agreement with CARE towards credit rating. Our current CARE ratings are as follows:

* Long Term rating: CARE BBB

* Short Term rating: CARE A3

Company and product registration activities are ongoing in over 15 countries. The fruits of this would be seen mainly from 2015-2016, which would have an upward spiral in exports. It is estimated that in 4 years, international business would be equal or more than the domestic sales.

In March 2014, the company got the recognition by DSIR (department of Science and Industrial Research), Government of India. This recognition entails a tax benefit of 200% on capital and revenue expenditure incurred by Hester on in-house R&D activities. Besides working on applied R&D, the company has embarked on basic R&D activities towards the development of recombinant vaccines.

ENERGY CONSERVATION

(Information under section 217(1 )(e) of the Companies Act, 1956.)

The increase in energy cost has been mainly due to hike in prices of unit cost of electricity and of diesel. Nonetheless, the company has a continuous focus on energy conservation. Regular studies are conducted to analyse quantitative energy conservation patterns. In order to address the high rising costs of energy, the company has embarked on strict audit and conservation measures.

DIRECTORS

In accordance with the provisions of the Articles of Association and of the Companies Act 1956, Mr. Sanjiv Gandhi, Director of the Company, retiring by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for re- appointment.

The brief particulars of all directors, for which approval of members for their appointments or re-appointments are sought, have been provided in the Notice of The Annual General Meeting pursuant to Clause 49 of the Listing Agreement relating to Corporate Governance.

Impending notification of Section 149 and other applicable provisions of the Companies Act, 2013, your directors are seeking appointment of Mr. Vimal Ambani, Mr. Vishwesh Patel, Dr. Siba Samal and Ms. Grishma Nanavaty, as Independent Directors for a term upto 31st March, 2015.

All the Directors of the Company are qualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

For the perusal of shareholders, a brief resume of the above said director, nature of his expertise, his shareholding in the company and other required details are given in the section of Corporate Governance Report elsewhere in the Annual Report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of the section 205A(5) and 205C of the Companies Act, 1956 and corresponding section 124 of the Companies Act, 2013 which mandates that companies transfer dividend that has been unclaimed for a period of seven years from the unpaid dividend account to the to the Investor Education and Protection Fund. The company has duly complied the above provisions by transferring the amount of unclaimed or unpaid dividend to the Investor Education and Protection Fund within the due dates.

Pursuant to the provisions of the Investor Education and Protection Fund (uploading of information regarding unpaid and unclaimed amounts lying with the Company as on 30th September, 2013 (date of last Annual General Meeting) on the website of the Company (www.hester.in) as also on the Ministry of Corporate Affairs website.

LISTING OF SECURITIES

8,506,800 equity shares of Rs. 10/- each fully paid, are listed on the following Stock Exchanges:

The Bombay Stock Exchange Ltd. (BSE)

The company has already paid listing fee to the Bombay Stock Exchange for the financial year 2014-2015.

PUBLIC DEPOSITS

Your Company has started accepting of Fixed Deposit w.e.f. 20th August 2013, Company has received total deposit of Rs. 12.16 million during financial year 2013-2014. Since 1st April, 2014 Company is not accepting Fixed Deposit under New Companies Act, 2013.

FINANCE

The working capital requirement was funded through enhanced bank limits. The capital expenditures were funded through the additional working capital & term loans from the bank as well as through internal accruals.

SUBSIDIARY COMPANY

Your Company has three subsidiary Companies namely Hester Biosciences (Mauritius) Limited (Wholly Owned Subsidiary), Diavetra Lifesciences Private Limited (Wholly Owned Subsidiary) and Hester Biosciences Nepal Private Limited (Step down subsidiary), Details of all the subsidiaries are as under:

Hester Biosciences (Mauritius) Limited (HBML)

This Company has been incorporated in the Month of February 2011, as a wholly (100%) owned subsidiary of Hester Biosciences Limited. The Company has not yet started its activities and hence only administrative expensed are incurred.

Diavetra Lifesciences Private Limited

The company though established with an objective to develop and market Veterinary Diagnostics Kits, it has not yet started its activities and hence only administrative expensed are incurred.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of HBML. HBML holds 65% stake in HBNPL, hence becoming an indirect subsidiary of Hester Biosciences Limited. HBNPL will be in the business of manufacturing large animal vaccines in Nepal and the commencement of business will be in this financial year.

CHANGE IN LEGISLATION GOVERNING COMPANIES IN INDIA

During the year under review, the provisions of the new Companies Act have been made effective replacing the Companies Act of 1956 vintage by the induction of the Companies Act, 2013. The Government has notified 287 sections out of total 470 sections, which covers all the material provisions of the new Companies Act, 2013.

However, as clarified by the Ministry of Corporate Affairs, the provisions of Companies Act, 1956 would remain applicable in respect of financial accounts, auditor''s report and directors'' report thereon for the financial year ended on 31st March, 2014.

CHANGE IN NOMENCLATURE OF COMMITTEES AND ENHANCED THEIR SCOPE

Pursuant to the introduction of the Companies Act, 2013 and the rules thereunder the Nomenclature of the Shareholders Grievance Committee has been changed to "Security holders'' Grievances Committee" and the nomenclature of Remuneration Committee has been changed to "Nomination and Remuneration Committee".

The scope of terms of reference/scope for Audit Committee has been enhanced in line with the provisions of Section 177 of the Companies Act, 2013 with additional scope on vigil mechanism, safeguards against victimization of persons who use such mechanism, direct access to chairman of audit committee in appropriate or exceptional cases etc.

VIGIL MECHANISM

The provisions of section 177 (9) and (10) of the Companies Act, 2013 mandates every listed company to establish vigil mechanism for directors and employees to report genuine concern in such manner as may be prescribed. The provisions of the said policy, provided for adequate safeguards against the victimization of persons who use such mechanism and make provisions for direct access to the chairman of the Audit Committee in appropriate or exceptional cases.

The Board of Directors of the Company have at their meeting held on 28th May, 2014, approved whistle blower policy to be in line with the provisions of Companies Act , 2013 read with the listing agreement.

Any director or employee of the company, who observes any Unethical Behavior or Improper Practices or Wrongful Conduct and/or financial or non financial malpractices or non- compliance with legal requirements concerning the company, is free to report to the specified officer in the mode as provided in the policy.

CORPORATE SOCIAL RESPONSIBILITY

The Company is contributing to sustainable development by its economic activities combined with the fulfillment of its social responsibilities relating to the education, health, safety and environment aspects.

As per the Companies Act, 2013 all the Companies having net worth of Rs. 500 Crores or more, or turnover of Rs. 1000 Crores or more or a net profit of Rs. 5 Crores or more during any financial year will be required to constitute a Corporate Social Responsibility Committee of the Board of Directors comprising three or more director, at least one of whom will be an independent director. Aligning with the guidelines, your Company has constituted a Corporate Social Responsibility Committee comprising of Mr. Rajiv Gandhi, CEO and Managing Director as a Chairman, Mr. Vishwesh Patel, Non - Executive & Independent Director as a Member and Ms. Grishma Nanavaty, Non - Executive & Independent Director as a Member. The CSR Committee is responsible for formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the Corporate Social Responsibility Policy and recommending the amount to be spent on CSR activities.

COMPLIANCE OF SECTION 212 OF THE COMPANIES ACT, 1956

In terms of general exemption granted by Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8.2.2011, under section 212(8) of the Companies Act, 1956, the Audited Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of our subsidiaries need not to be attached with the Balance Sheet of the Company subject to complying with the certain conditions. These documents will be made available upon request by any member of the Company interested in obtaining the same. However, the brief financial details of the subsidiaries have been furnished under "Financial details of Subsidiary Company", forming part of the Annual Report. Further, pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes financial information of its subsidiaries. These documents will also be available for inspection during business hours at our registered office. The details of the accounts of individual subsidiary companies are available on the website of the Company.

CORPORATE GOVERNANCE:

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance and certificate obtained from practicing Company Secretary confirming its compliance, is provided separately and forming part of this Report. The Board of Directors support the basic principles of corporate governance. In addition to this, the board lays strong emphasis on transparency, accountability and integrity.

Report on Management Discussion and Analysis is provided in separate section, forming part of this report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the annexed Corporate Governance Report which forms part of this report.

PARTICULARS OF EMPLOYEES:

The information required under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees is not applicable to the Company, as no employees drawing remuneration of H6,000,000 or more per annum employed throughout the year or H500,000 or more per month employed for a part of the year.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 would like to state the following:

In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

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, at the end of the financial year ended on 31st March2014.

The Directors have 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.

The Directors have prepared the attached statements of accounts for the year ended 31st March, 2014 on a going concern basis.

AUDITORS & AUDITORS REPORT

M/s. Shah Narielwala & Co.; Chartered Accountants, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

Notes forming part of the accounts are self explanatory and therefore, do not require any further comments.

ACKNOWLEDGEMENT

Your Directors express their appreciation for the assistance and cooperation received from State Bank of India, various government authorities, customers, vendors and members during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the company.

By order of the Board

Place: Ahmedabad Rajiv Gandhi Date: 30 May, 2014 CEO & Managing Director

---

Mar 31, 2013

Dear Shareholder''s

The Directors are pleased to present the 26th Annual Report with the Audited Accounts of the Company for the year ended 31.3.2013.

FINANCIAL RESULTS (Rs. Millions)

Particulars Current year Previous year

Total Income 653.38 485.07

Profit before Depreciation & Tax 194.22 163.24

Less : Depreciation 43.95 41.23

Profit Before Tax 150.27 122.01

Less: Provision for Tax 1.51 (0.98)

Current Tax 51.83 45.00

Income tax of earlier year 0.03 0.08

Fringe Benefit Tax - -

Net Profit After Tax 96.90 77.91

Balance of Profit & Loss Account 148.72 117.40

Profit available for appropriation 245.62 195.31

Dividend on equity shares 17.01 5.67

Dividend Tax 2.89 0.92

General Reserve 25.00 40.00

Balance carried to Balance sheet 200.72 148.72

Earnings per share (Basic/Diluted) 13.44 13.74

FINANCIAL HIGHLIGHTS

Sales

Your company posted a turnover of Rs. 651.04 million in the financial year ended on 31.3.2013, as compared to Rs. 482.64 million in the previous year.

Profitability

Your company''s PBT for the year ended 31.3.2013 was recorded at Rs. 150.27 million, as compared to Rs. 122.03 million in the previous year.

Earnings Per Share

EPS was at Rs.13.44 as on 31.3.2013 (on the enhanced post bonus equity) as against Rs. 13.74 as on 31.3.2012.

Net Worth

The company''s net worth as on 31.3.2013 was at Rs. 678.75 million as compared to Rs. 600.50 million as on 31.3.2012.

Issue of Bonus Shares

The Board of Directors of your Company have issued Bonus Equity Shares, to its existing members, by capitalizing a sum of Rs. 28,356,000 (Rupees Twenty Eight Million, Three Hundred and Fifty Six Thousand Only) from the Securities Premium Account and other reserves, in the ratio of 1:2, i.e., One new equity share for every Two existing equity shares held. The Bonus Shares were allotted on 01.10.2012. The said shares are listed and traded on The Bombay Stock Exchange.

Dividend

Your Directors have recommended a dividend payment of Rs. 2 per equity share of Rs. 10 each for the financial year 2012-13, as compared to the last year''s dividend of Re.1 per equity share. This dividend is subject to approval by the shareholders at the ensuing AGM. This year, the dividend is on the enhanced share capital after giving bonus shares in a ratio of 1 new equity share for every 2 existing equity shares held.

REVIEW OF OPERATIONS AND FUTURE PROSPECTS

The last financial year saw a leap in the sales. We started off the year with 2 clear objectives - To gain a higher market share in India and to increase the product range. Our strategy paid off. Besides making a sizable growth in the revenues from poultry vaccines, the top line further grew due to the increased product range of poultry and other animal health products.

The acquisition of the business of INNOVES through a BTA in October 2012, provided the company a marketing and a distribution platform in the non-poultry segment of the Indian veterinary market, besides increasing our top line marginally. The Innoves range of products include growth promoters, vitamin premixes, antibiotics and disinfectants mainly for the cattle and sheep.

During the year, the company embarked on many projects which would ensure a fast growth in the coming years, as well as establish Hester as a truly global animal health company.

Through collaborative efforts, we embarked on the development of the bivalent Marek''s Disease Live vaccine for the poultry, containing HVT & SB1 strains. Currently trials are being conducted and we hope to launch the product in October 2012. The market for this vaccine is approximately INR 300 million. At present, nearly 50% of this vaccine requirement is imported. Hester''s local production of this vaccine will be an import replacement, besides providing a cost advantage to the Indian poultry farmers.

In collaboration with IVRI (Indian Veterinary Research Institute), we are currently developing 5 types of cattle vaccines. Of these, the PPR vaccine for sheep and goat and Brucella vaccine for cattle would contribute towards the disease eradication programs of the Government of India. The total addressable market in these 5 vaccines would be INR 2.5 billion

In December 2012, Hester formed a subsidiary in the name of DIAVETRA LIFESCIENCES PRIVATE LIMITED with an objective to manufacture veterinary diagnostics. The veterinary diagnostics business is a very fast growing segment with a worldwide market of over USD 1 billion. With the cost advantages within India, Hester is confident of making a dent in this segment during this current financial year. The technologies would be developed in-house as well as acquired from Indian and international sources. Diavetra would have a focus towards the international market.

During the year, CRISIL upgraded our credit ratings as follows:

MLong Term rating from ''BBB-'' to ''BBB ''

-Short Term rating from ''A3'' to ''A3 ''

We were successful in getting the WHO-GMP certification in February 2013. This certification would help Hester in hastening the registration process in many countries, as well as in opening the registration doors in the regulated markets.

In December 2012, we have made an application for Recognition of In-House R&D unit with the Department of Scientific & Industrial Research (DSIR), Ministry of Science & Technology, Government of India. We hope to get this recognition shortly.

ENERGY CONSERVATION

(Information under section 217(1 )(e) of the Companies Act, 1956.)

The company has a continuous focus on energy conservation. Regular studies are conducted to analyse quantitative energy conservation patterns. Variances are rigorously scrutinised. The company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies, towards getting the cost of energy down for every unit produced.

FOREIGN EXCHANGE EARNINGS & OUTFLOW

Foreign exchange earnings during the year towards sale of goods were Rs. 43.82 million as compared to Rs. 29.21 million during the previous year. Total outflow of foreign exchange during the year towards purchase of materials, trading goods, travelling expenses and purchase of capital items was Rs. 74.79 million as compared to Rs. 56.70 million during the previous year.

DIRECTORS

In accordance with the provisions of the Articles of Association and of the Companies Act 1956, Dr. Bhupendra Gandhi and Mr. Ravin Gandhi, Directors of the Company, retiring by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for re-appointment.

The brief particulars of all directors, for which approval of members for their appointments or re-appointments are sought, have been provided in the Notice of The Annual General Meeting pursuant to Clause 49 of the Listing Agreement relating to Corporate Governance.

PUBLIC DEPOSITS

The company has not invited or accepted any deposits under Section 58A of the Companies Act, 1956, from the public, during the year.

FINANCE

The working capital requirement was funded through enhanced bank limits. The capital expenditures were funded through the additional working capital & term loans from the bank as well as through internal accruals.

SUBSIDIARY COMPANY

Your Company has three subsidiary Companies namely Hester Biosciences (Mauritius) Limited (Wholly Owned Subsidiary), Diavetra Lifesciences Private Limited (Subsidiary) and Hester Biosciences Nepal Private Limited (Step down subsidiary), Details of all the subsidiaries are as under:

Hester Biosciences (Mauritius) Limited (HBML)

This Company has been incorporated in the Month of February 2011, as a wholly (100%) owned subsidiary of Hester Biosciences Limited. The Company has not yet started its activities and hence only administrative expensed are incurred.

Diavetra Lifesciences Private Limited

On 26.12.2012, the company has formed a subsidiary namely Diavetra Lifesciences Private Limited with an objective to develop and market Veterinary Diagnostics Kits.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of HBML. HBML holds 65% stake in HBNPL, hence becoming an indirect subsidiary of Hester Biosciences Limited. HBNPL will be in the business of manufacturing large animal vaccines in Nepal.

COMPLIANCE OF SECTION 212 OF THE COMPANIES ACT, 1956

In terms of general exemption granted by Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8.2.2011, under section 212(8) of the Companies Act, 1956, the Audited Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of our subsidiaries need not to be attached with the Balance Sheet of the Company subject to complying with the certain conditions. These documents will be made available upon request by any member of the Company interested in obtaining the same. However, the brief financial details of the subsidiaries have been furnished under "Financial details of Subsidiary Company", forming part of the Annual Report. Further, pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes financial information of its subsidiaries. These documents will also be available for inspection during business hours at our registered office. The details of the accounts of individual subsidiary companies are available on the website of the Company.

CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance and certificate obtained from practicing Company Secretary confirming its compliance, is provided separately and forming part of this Report. The Board of Directors support the basic principles of corporate governance. In addition to this, the board lays strong emphasis on transparency, accountability and integrity.

Report on Management Discussion and Analysis is provided in separate section, forming part of this report.

FORMATION OF VARIOUS COMMITTEES

Details of various committees constituted by the Board of Directors are given in the annexed Corporate Governance Report which forms part of this report.

PARTICULARS OF EMPLOYEES

The information required under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees is not applicable to the Company, as no employees drawing remuneration of Rs. 6,000,000 or more per annum employed throughout the year or Rs. 500,000 or more per month employed for a part of the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956 I would like to state the following:

In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

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, at the end of the financial year ended on 31st March 2013.

The Directors have 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.

The Directors have prepared the attached statements of accounts for the year ended 31st March, 2013 on a going concern basis.

AUDITORS & AUDITORS REPORT

M/s. Shah Narielwala & Co.; Chartered Accountants, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

Notes forming part of the accounts are self explanatory and therefore, do not require any further comments.

ACKNOWLEDGEMENT

Your Directors express their appreciation for the assistance and cooperation received from Bank of India, various government authorities, customers, vendors and members during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the company.

By order of the Board

30 May, 2013 Rajiv Gandhi

Ahmedabad CEO & Managing Director

---

Mar 31, 2012

The Directors are pleased to present the 25th Annual Report with the Audited Accounts of the Company for the year ended 31.3.2012.

Financial Results: (Rs. In Millions)

Particulars Current Year Previous Year

Total Income 485.07 421.03

Profit before Depreciation & Tax 163.24 156.62

Less: Depreciation 41.23 44.78

Profit Before Tax 122.01 111.84

Less: Provision for Tax

Deferred Tax (0.98) (1.09)

Current Tax 45.00 40.00

Income tax of earlier year 0.08 (3.03)

Fringe Benefit Tax

Net Profit After Tax 77.91 75.96

Balance of Profit & Loss Account 117.40 82.62

Profit available for appropriation 195.31 158.58

Dividend on equity shares 5.67 18.17

Dividend Tax 0.92 3.02

General Reserve 40.00 20.00

Balance carried to Balance sheet 148.72 117.39

Earnings per share (Basic/Diluted) 13.74 14.63

Financial Highlights

Sales

Your company posted a turnover of Rs. 482.63 million in the financial year ended on 31.3.2012, as compared to Rs. 419.71 million in the previous year.

Profitability

Your company's PBT for the year ended 31.3.2012 was recorded at Rs. 122.02 million, a compared to Rs. 111.84 million in the previous year.

Earnings Per Share

EPS was at Rs. 13.74 as on 31.3.2012 as against Rs. 14.63 as on 31.3.2011.

Net Worth

The Company's net worth as on 31.3.2012 was at Rs. 600.50 million as compared to Rs. 479.85 million as on 31.3.2011.

Preferential Allotment of Shares

Your company has converted 480,000 Equity Warrants into Equity Shares by making an allotment of Equity Shares. These shares were allotted on 11 February 2012 at a price of Rs. 137 per share (including a share premium of Rs. 127 per share). The said shares are listed at The Bombay Stock Exchange. With this allotment, the Paid-up share capital of the Company stands enhanced to Rs. 56.71 Million

Dividend

Your Directors have recommended a dividend payment of Re. 1 per equity share of Rs. 10 each for the financial year 2011-12. This dividend is subject to approval by the shareholders at the ensuing AGM. Historically, we have been declaring higher dividends. This year, though our profits do substantiate giving as much dividend as last year, the board has proposed to conserve the internal accruals for the upcoming capital expenditure towards constructing a new QC laboratory. With the completion of this QC laboratory, Hester would qualify to get international accreditions, which would help towards registering its products in the regulated markets in Europe and in Asia.

Issue of Bonus Shares

The Board of Directors of your Company have proposed the issue of Bonus Equity Shares, to its existing members, by capitalising a sum of Rs. 28,356,000 (Rupees Twenty Eight Million, Three Hundred and Fifty Six Thousand Only) from the credit of Securities Premium Account and/or any other reserves, by way of issue of 1 (One) new equity share for every 2 (Two) existing equity shares held.

Review of Operations

The last financial year saw a steady growth in the sales. The sales area coverage within India remained the same, thereby giving an indication of growth in terms of market share.

CRISIL upgraded our credit rating on various banking facilities from 'BBB-' to 'BB '.

A major breakthrough for us this year has been that we have developed a thermo-stable New Castle Disease live vaccine for poultry. Till date, we have been manufacturing the conventional Newcastle Disease live vaccine which requires a cold chain during transportation and during storage. Unlike the conventional vaccine, our thermo-stable vaccine would be able to withstand temperatures up to 35 degrees Celsius. Rural India as well as Rural Africa (our target markets) both have limitations in maintaining a cold chain. Due to this limitation, backyard poultry farmers are unable to have access to this vaccine. Backyard poultry farms have a very high mortality rate due to Newcastle Disease. Newcastle disease is a disease of great economic importance. An outbreak of Newcastle disease deprives the farmer from his livelihood. The use of this thermo- stable vaccine would change the economics of backyard farmers. The vaccine is currently under registration and we hope to start commercial sales by January 2013.

Certifications

We continue to be a GMP and an ISO 9001-2008 certified company. Besides, we have now been granted additional certifications: GLP (Good Laboratory Practices), Environmental Management Systems (EMS) ISO 14001:2004 and Occupational Health and Safety (OHSAS) 18001:2007 certifications.

Future Prospects

Our company is poised for a upward spiral growth in the coming years. Beginning this financial year, Hester has launched 3 additional divisions - Large Animal Biologicals, Large Animal healthcare and Poultry healthcare, besides its existing Poultry Biologicals division. The products in the new division would be launched in phases beginning from October 2012. With the launch of these divisions, Hester expects a better penetration in the domestic as well as in the international veterinary market.

Energy Conservation

(Information under section 217(1)(e) of the Companies Act, 1956.)

The Company has a continuous focus on energy conservation. Regular studies are conducted to analyses quantitative energy conservation patterns, and variances are rigorously scrutinised. The Company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies, towards getting the cost of energy down for every unit produced.

Total energy consumption and energy consumption per unit of production:

Particulars 31.03.2012 31.03.2011

(A) Power & Fuel Consumption:

Electricity:

(a) Purchased Units Kwh 3497955.00 3059660.00

Total Amount Rs. 22380361.00 18222772.59

Rate/Unit Rs. 6.40 5.96

(b) Own Generation through Diesel Genset

Units Kwh 60466.00 56925.00

Units per Litre of Diesel Oil Kwh 3.05 3.09

Cost/Unit Rs. 14.98 14.06

(B) Consumption per Unit of production:

Electricity consumed per vial (in units) 1.61 2.35

Foreign Exchange Earnings & Outflow

Foreign exchange earnings during the year towards sale of goods were Rs. 29.21 million as compared to Rs. 32.98 million during the previous year. Total outflow of foreign exchange during the year towards purchase of materials, trading goods, travelling expenses and purchase of capital items was Rs. 56.70 million as compared to Rs. 47.81 million during the previous year.

Directors:

In accordance with the provisions of the Articles of Association and of the Companies Act 1956, Mr. Sanjiv Gandhi and Mr. Darayus Lakdawalla, Directors of the Company, retiring by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Rajiv Gandhi, CEO and Managing Director of the Company, whose term expired on 31 December, 2011, was re-appointed for further period of 3 years, with effect from 1 January, 2012.

The brief particulars of all directors, for which approval of members for their appointments or re-appointments are sought, have been provided in the Notice of The Annual General Meeting pursuant to Clause 49 of the Listing Agreement relating to Corporate Governance.

Public Deposits:

The Company has not invited or accepted any deposits under Section 58A of the Companies Act, 1956, from the public, during the year.

Finance:

The working capital requirement was funded through enhanced bank limits. The capital expenditures were funded through the additional working capital & term loans from the bankers as well as through internal accruals.

"Group" For Inter Se Transfer Of Shares

As required under Clause 10(1) (a) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011, persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practice Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 3 & 4 of the aforesaid SEBI Regulations are given as under:

List of Persons

1. Rajiv Gandhi 11. Darayus Lakdawalla

2. Nina Gandhi 12. Zubin Lakdawalla

3. Ravin Gandhi 13. Kanti Gandhi

4. Bela Gandhi 14. Dinesh Gandhi

5. Bhupendra Gandhi 15. Urmilaben Gandhi

6. Shaila Gandhi 16. Yash Gandhi

7. Sanjiv Gandhi 17. Priya Gandhi

8. Hetal Gandhi 18. Biolink Healthcare Limited

9. Madhuri Kapadia 19. Hester Diagnostics Private Limited

10. Anup kapadia 20. Hester Coatings Private Limited

Subsidiary Company

Your Company has two subsidiary Companies namely Hester Biosciences (Mauritius) Limited and Hester Biosciences Nepal Private Limited. The former is Wholly Owned Subsidiary Company and later is Step down subsidiary, wherein Hester Biosciences (Mauritius) Limited is holding 65 % stake in Hester Biosciences Nepal Private Limited. Details for both the subsidiaries are as under:

Hester Biosciences (Mauritius) Limited (HBML)

This Company has been incorporated in the Month of February 2011, as a wholly (100%) owned subsidiary of Hester Biosciences Limited. The Company has not yet started its activities and hence only administrative expensed are incurred.

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of HBML. HBML holds 65% stake in HBNPL, hence becoming an indirect subsidiary of Hester Biosciences Limited. HBNPL will be in the business of manufacturing large animal vaccines in Nepal.

Compliance of Section 212 of the Companies Act, 1956

In terms of general exemption granted by Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8.2.2011, under section 212(8) of the Companies Act, 1956, the Audited Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of our subsidiaries need not to be attached with the Balance Sheet of the Company subject to complying with the certain conditions. These documents will be made available upon request by any member of the Company interested in obtaining the same. However, the brief financial details of the subsidiaries have been furnished under "Financial details of Subsidiary Company", forming part of the Annual Report. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes financial information of its subsidiaries. These documents will also be available for inspection during business hours at our registered office. The details of the accounts of individual subsidiary companies are available on the website of the Company.

Corporate Governance:

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance and certificate obtained from practicing Company Secretary confirming its compliance, is provided separately and forming part of this Report. The Board of Directors supports the basic principles of corporate governance. In addition to this, the board lays strong emphasis on transparency, accountability and integrity.

Report on Management Discussion and Analysis is provided in separate section and forming part of this report.

Formation of Various Committees:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report annexed which forms part of this report.

Particulars of Employees:

The information required under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees is not applicable to the Company, as no employees drawing remuneration of Rs. 6,000,000 or more per annum employed throughout the year or Rs. 500,000 or more per month employed for a part of the year.

Directors' Responsibility Statement:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 I would like to state the following:

In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

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, at the end of the financial year ended on 31 March, 2012.

The Directors have 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.

The Directors have prepared the attached statements of accounts for the year ended 31 March, 2012 on a going concern basis.

Auditors & Auditors Report:

M/s. Shah Narielwala & Co.; Chartered Accountants, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re- appointed.

Notes forming part of the accounts are self explanatory and therefore, do not require any further comments.

Acknowledgement:

Your Directors express their appreciation for the assistance and cooperation received from Bank of India, various government authorities, customers, vendors and members during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

By order of the Board

14 August, 2012 Rajiv Gandhi

Ahmedabad CEO & Managing Director

---

Mar 31, 2011

Dear Shareholder:

The Directors are pleased to present the 24th Annual Report with the Audited Accounts of the Company for the year ended 31.3.2011.

FINANCIAL RESULTS : (Rs. In Millions)

Particulars Current Year Previous Year

Total Income 421.03 376.13

Profit before Depreciation & Tax 156.62 138.33

Less:Depreciation 44.78 42.33

Profit Before Tax 111.84 96.00

Less : Provision for Tax

Deferred Tax (1.09) 0.66

Current Tax 40.00 32.51

Income tax of earlier year (3.03) 2.50

Fringe Benefit Tax - -

Net Profit After Tax 75.96 60.33

Balance of Profit & Loss Account 82.62 55.85

Profit available for appropriation 158.58 116.18

Dividend on equity shares 18.17 15.57

Dividend Tax 3.02 2.59

General Reserve 20.00 15.40

Balance carried to Balance sheet 117.39 82.62

Earnings per share (Basic/Diluted) 14.63 11.62

FINANCIAL HIGHLIGHTS Sales

Your company posted a turnover of Rs. 419.71 million in the financial year ended on 31.3.2011, as compared to Rs. 375.32 million in the previous year.

Profitability

Your company’s PBT for the year ended 31.3.2011 was recorded at Rs. 111.84 million, a compared to Rs. 96.00 million in the previous year.

Earning per share

EPS was at Rs.14.63 as on 31.3.2011 as against Rs. 11.62 as on 31.3.2010.

Net Worth

The company’s net worth as on 31.3.2011 was at Rs. 479.85 million as compared to Rs. 408.64 million as on 31.3.2010.

Dividend

Your Directors have recommended a dividend payment of Rs. 3.50 per equity share of Rs. 10 each for the financial year 2010-11. This dividend is subject to approval by the shareholders at the ensuing AGM.

REVIEW OF OPERATIONS

The last financial year was attributed towards consolidation as well as towards embarking on global activities. Exports went up by a little over 4 times.

A JV was set-up in Nepal to facilitate the manufacture of specific animal vaccines for international markets. This JV is expected to go on-stream in early 2013. The total outlay of the project is INR 150 million. The proposed project would the first vaccine manufacturing project in Nepal.

New technology was acquired during the year. We signed a technology transfer agreement with Indian Veterinary Research Institute for acquiring the technology to manufacture PPR and Sheep Pox vaccines.

CAPACITY UTILISATION

The company has reached 58% capacity utilisation as on 31.3.2011 by producing 2763.25 million doses.

GMP AND ISO CERTIFICATION

We continue to be a GMP and an ISO 9001-2008 certified company. We hope to get Environmental Management Systems (EMS) ISO 14001:2004 and Occupational Health and Safety (OHSAS) 18001:2007 certifications by December 2011.

FUTURE PROSPECTS

PPR disease is part of the Government of India’s National Disease Eradication Program. The disease eradication program will generate a big demand for the PPR vaccine within India, notwithstanding the demand in the neighboring countries.

Newer markets for poultry vaccines (international) and newer vaccines (large animal vaccines) for India are the two main growth propelling factors for our company.

Looking at the well established infrastructure for sales and distribution, your company is planning to establish an Animal Health Division. This proposed division would introduce poultry and large animal health/medicinal products and feed additives.

Toll manufacturing opportunities are being looked into which would partly utilize our capacity, thereby reducing the average fixed cost.

Clinical trials of animal vaccines are a new area which is being explored by our company.

ENERGY CONSERVATION

(Information under section 217(1)(e) of the Companies Act 1956)

The company has a continuous focus on energy conservation. Regular studies are conducted to analyses quantitative energy conservation patterns, and variances are rigorously scrutinised. The company regularly benchmarks its energy conservation levels and consistently works towards improving efficiencies, towards getting the cost of energy down for every unit produced.

TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION:

Particulars 31-03-2011 31-03-2010

(A) Power and Fuel Consumption:

Electricity:

(a) Purchased

Units Kwh 3,059,660.00 2,852,640.00

Total Amount Rs. 18,222,772.59 18,151,076.81 Rate/ Unit Rs. 5.96 6.38

(b) Own Generation through Diesel Generator set

Units Kwh 56,925.00 60,822.00

Unit per liter of Diesel Oil Kwh 3.09 3.07

Cost/Unit Rs. 14.06 12.12

(B) Consumption per Unit of Production :

Electricity consumed per vial (in units ) 2.35 1.97

RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

R&D work is currently on-going towards developing new vaccines from new field strains isolated from various parts of the country.

The technology received from Indian Veterinary Research Institute is currently being adapted to our production system.

Our endeavor continues to improvise production processes as well as yields.

FOREIGN EXCHANGE EARNINGS & OUTFLOW:

Foreign exchange earnings during the year were Rs. 32.98 million (Previous Rs.7.78 million) towards sale of goods. Total outflow of foreign exchange towards purchase of materials, trading goods, travelling expenses, purchase of capital items during year was Rs. 47.81 million as compared to Rs. 31.93 million during the previous year.

DIRECTORS:

In accordance with the provisions of the Articles of Association and of the Companies Act 1956, Mr. Abhinava Shukla and Mr. Vimal Ambani, Directors of the Company, retiring by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Praful Amin has resigned as a Director with effect from 19th March, 2011. The Board appreciated the contribution made by him during his tenure.

The brief particulars of all directors, for which approval of members for their appointment or re-appointment are sought, have been provided in the Notice of Annual General Meeting pursuant to Clause 49 of the Listing Agreement relating to Corporate Governance.

PUBLIC DEPOSITS:

The company has not invited or accepted any deposits under Section 58A of the Companies Act, 1956, from the public, during the year.

FINANCE:

The working capital requirement was funded through enhanced bank limits. The capital expenditures were funded through the additional working capital & term loan from the bankers and internal accruals.

PREFERENTIAL ALLOTMENT:

To meet the additional funds requirement of the Company for future expansion and diversification in various related products, the Board of Directors of the Company have issued 480,000 Share Warrants to Promoters and to non-promoters, on a preferential allotment basis, with each warrant convertible in to one equity share of the Company of nominal value of Rs. 10 per share, at a price of Rs, 137 per share, which includes premium of Rs. 127 per share, as determined under the SEBI (Issue of Capital and Disclosures requirements) Regulation, 2009. Allotment of warrants was made as on 12th August 2010. This will generate an inflow of Rs. 65.76 Million in the Company.

"GROUP" FOR INTER SE TRANSFER OF SHARES

As required under Clause 3(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeo- vers) Regulations, 1997 persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practice Act, 1969) fpr the purpose of availing exemption from applicability of the provisions of Regulation 10 to 13 of the aforesaid SEBI Regulation are given as under :

Sr.No. List of persons

1. Rajiv D. Gandhi

2. Nina R. Gandhi

3. Ravin Gandhi

4. Bela Gandhi

5. Bhupendra Gandhi

6. Shaila Gandhi

7. Sanjiv Gandhi

8. Hetal Gandhi

9. Madhuri Kapadia

10. Anup Kapadia

11. Darayus Lakdawalla

12. Zubin Lakdawalla

13. Kanti Gandhi

14. Dinesh Gandhi

15. Urmilaben Gandhi

16. Yash Gandhi

17. Priya Gandhi

18. Biolink Healthcare Limited

19. Hester Diagnostics Private limited

20. Hester Coatings Private Limited

SUBSIDIARY COMPANY

The Company has one subsidiary namely Hester Biosciences (Mauritius) Limited (a wholly owned subsidiary - 100% holding). A statement pursuant to Section 212 of the Companies Act, 1956 is attached to the Accounts.

In terms of general exemption granted by Ministry of Corporate Affairs vide General Circular No. 2/2011 dated 8.2.2011, under section 212(8) of the Companies Act 1956, the Audited Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of our subsidiary need not be attached with the Balance Sheet of the Company subject to complying with certain conditions. These documents will be made available upon request by any member of the Company interested in obtaining the same. However, the brief financial details of the subsidiary have been furnished under "Financial details of Subsidiary Company", forming part of the Annual Report. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, consolidated Financial Statements presented by the Company includes financial information of its subsidiary. These documents will also be available for inspection during business hours at our registered office.

CORPORATE GOVERNANCE:

Pursuant to clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance and certificate obtained from practicing Company Secretary confirming its compliance, is provided separately and forming part of this Report. The Board of Directors supports the basic principles of corporate governance. In addition to this, the board lays strong emphasis on transparency, accountability and integrity.

Report on Management Discussion and Analysis is provided in separate section, forming part of this report.

FORMATION OF VARIOUS COMMITTEES:

Details of various committees constituted by the Board of Directors are given in the Corporate Governance Report which is annexed and which forms part of this report.

PARTICULARS OF EMPLOYEES:

The information required under section 217(2A) of the Companies Act 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, the names and other particulars of employees are not applicable to the Company, as no employees are drawing remuneration of Rs. 6,000,000 or more, per annum, employed throughout the year, or Rs. 500,000 or more, per month, employed for a part of the year.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act 1956, I would like to state the following:

In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

The Directors have selected such accounting policies and have applied them consistently and made judgments and estimates which 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 2010-2011.

The Directors have 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.

The Directors have prepared the attached statements of accounts for the year ended 31st March 2011 on a going concern basis.

AUDITORS & AUDITORS REPORT:

M/s. Shah Narielwala & Co.; Chartered Accountants, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept the office, if re-appointed.

Notes forming part of the accounts are self explanatory and therefore, do not require any further comments.

ACKNOWLEDGEMENT:

The Directors express their appreciation to Bank of India, its own employees at all levels and customers for their sustained support.

Last but not the least, the directors convey their gratitude to the esteemed shareholders whose perennial support has been the main source of inspiration.

By order of the Board

Rajiv Gandhi CEO & Managing Director

24th May 2011 Ahmedabad