డైరెక్టర్ల నివేదిక Haleos Labs Ltd.

Mar 31, 2025

Your Directors have pleasure in presenting this 19^th (Nineteenth) Annual Report along with the Audited Financial
Statements for the year ended 31^st March, 2025.

FINANCIAL SUMMARY/PERFORMANCE/STATE OF COMPANY''S AFFAIRS

The Highlights of the standalone and consolidated financial Statements for the year 2024-25 (as per the IND-AS) are
as given below:

lakhs

PARTICULARS	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Revenue from operations	33,337.10	30,000.16	30,472.35	30,595.84
Other income	394.56	383.68	486.01	382.81
Profit Before Depreciation, Interest and Tax (PBDIT)	4,817.73	3,826.81	4,989.91	3,494.10
Finance Cost	788.07	890.23	871.26	1,015.67
Depreciation	1,025.55	1,025.35	1,499.67	1,493.76
Profit before Tax (PBT)	3,004.11	1,911.23	2,618.99	984.67
Tax expenses	867.03	604.69	745.75	351.89
Profit after Tax (PAT)	2137.08	1,306.54	1,873.24	632.78
Total Comprehensive Income (TCI)	2140.09	1,265.35	1,886.33	587.34
TCI attributable to:
- Equity holders of the parent	-	-	2,019.96	865.54
- Non-controlling interest	-	-	(133.63)	(278.20)
EPS in R	70.69	43.22	66.51	30.08

> Standalone Financial Statement:

During the year, your Company delivered a robust performance, revenue from operations stood at ^333.37 crores in
the year 2024-25, reflecting a growth of 11.12% over the previous year''s revenue of ^300.00 crores. EBITDA was at
^48.18 Crores, as against ^38.27 Crores during the previous year. Your Company created a provision of ^505.99 lakhs
for doubtful debts against outstanding trade receivables, leading to a decline in EBITDA to that extend.

Particulars	FY 2024-25	FY 2023-24	Change %age
PBT	^30.04 crores	^19.11 crores	57.20%
PAT	^21.37 crores	^13.07 crores	63.50%

> Consolidated Financial Statement:

Your Company reported revenue from operations of ^304.72 crores during the year 2024-25 as against ^305.96 crores
in the previous year. The Consolidated EBITDA stood at ^49.90 crores as compared to ^34.94 crores in the preceding
year. The Net Profit for the year under review was ^18.73 crores as against ^6.33 crores in the previous year, thereby
registering over a three-fold increase.

Mahi Drugs Private Limited (subsidiary)'' operational revenue for the year increased by 41% as compared to the
previous year and also net loss reduced by 50% as compared to the previous year. (Financials of the subsidiary is
available in the website of the Company at www.smslife.in/financials.php).

> USFDA inspection of subsidiary:

During the year, United States Food and Drug Administration (US FDA) conducted a successful inspection of
subsidiary company at its API manufacturing facility located at Plot No.82, Jawaharlal Nehru Pharma City, Parawada
Vishakhapatnam - 531019, with zero observations.

> Future outlook:

Your Company remains focused on driving sustainable growth through capacity expansion, strengthening of R&D and
process development capabilities and further consolidation of its presence in the global API and its intermediates.
Additionally, your Company is continuously exploring various verticals and opportunities across manufacturing, quality
control, supply chain and operational domains with the objective of enhancing process optimization, improving yield
and product quality, boosting operational efficiency and ensuring compliance.

> Management Discussion and Analysis report:

Report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 read with Schedule V
of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate Report in this
Report as Annexure 2.

> Dividend:

Your Directors are pleased to recommend a dividend of ^1.50 (Rupee One and Fifty paisa only) per equity share of the
face value of ^10/- each at a dividend payout ratio of 2.12% for the year ended 31^st March, 2025. Dividend Distribution
Policy pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is
not applicable to your Company.

> Name change of your Company:

Board of Directors of your Company in the meeting held on 29^th May, 2025 has approved to change the name of your
Company as "HALEOS LABS LIMITED" because the proposed name is intended to accurately reflect the core business
activities of the Company, enhance and reposition its brand identity and provide greater leverage to explore new
verticals and expand into broader geographical markets.

The term "Haleos" is a coined word derived from "Hale", meaning "Good Health" and "Leos", symbolizing "Strength".
The Board believes that the proposed name effectively aligns with your Company''s core objectives and long-term
vision. The rebranding initiative is designed to represent your Company''s commitment to "Chemistry for Good Health"
and to establish a distinct and focused identity within its industry peer group.

In this regard, your Company has obtained shareholders'' approval through Postal Ballot conducted between
1^st July, 2025 and 30^th July, 2025, and the results were declared on 1^st August, 2025. The requisite other regulatory
approvals are currently under process.

The Board members hereby assure that the objects and the line of business of your Company stays untouched. The
proposed change in name of your Company would not result in change of the legal status, constitution, turnover,
operations or activities of your Company, nor would it affect any rights or obligations of your Company or the
members and stakeholders.

> USFDA inspection:

During July 2025, your Company has received Establishment Inspection Report (EIR) with a Voluntary Action Indicated
(VAI) status from the U.S. Food and Drug Administration for its API manufacturing facility (Unit 1) located at Kazipally,
Telangana.

This reaffirms your Company''s commitment to maintaining global quality standards and enables access to the
regulated US market and other highly regulated global markets.

> Transfer to reserves:

Your Board of Directors has approved for transfer of ^200 lakhs to the general reserve. Current general reserves stand
at ^7,416.02 lakhs.

> Credit rating:

Details of credit rating ascribed by rating agencies are disclosed in the Corporate Governance Report forming part of
this Annual Report. The credit rating is a reflection of your Company''s strong financial position and discipline.

> Material changes and commitments:

Except otherwise stated herein in this Report, there are no material changes and commitment affecting financial
position of your Company from the closure of year ended on 31^st March, 2025 and till the date of this Annual Report.

> Change in the nature of business:

The Board of Directors hereby confirm that there is no change in the nature of business carried on by your Company
during the year ended 31^st March, 2025.

BOARD OF DIRECTORS

As on 31^st March, 2025, your Company''s Board had 7 (Seven) Directors comprising of 3 (three) Executive Directors and

4 (four) Non-Executive Independent Directors.

The Board consist of 2 (two) Women Directors. (1 Executive and 1 Independent Director).

The details of Directors and composition of various committees of the Board and other details are provided in

Corporate Governance Report forming part of the Annual Report.

Board is of the opinion that the Directors of your Company possess requisite qualifications, experience and expertise

(including the proficiency) and hold highest standards of integrity.

> Changes in Directors and Key Managerial Personnel:

During the year and between the end of the year and date of this report, following are the changes in Directors
and Key Managerial Personnel of your Company:

Appointment:

¦ The Board of Directors at their meeting held on 12^th February, 2025 and Shareholders of your Company through
Postal Ballot held between 1^st April, 2025 to 30^th April, 2025, result of which was declared on 2^nd May, 2025,
approved the appointment of Mrs. Sundaramma Patibandla (DIN: 02366355), as Non-Executive and Women
Independent Director of your Company, for a term of 5 (five) consecutive years w.e.f. 12^th February, 2025.

Reappointment:

¦ The Board of Directors at their meeting held on 12^th February, 2025 and Shareholders of your Company through
Postal Ballot held between 1^st April, 2025 to 30^th April, 2025, result of which was declared on 2^nd May, 2025,
approved the reappointment of Mr. TVVSN Murthy (DIN: 00465198), as Managing Director of your Company, for
a period of 3 (three) years w.e.f. 1^st June, 2025.

¦ The Board of Directors at their meeting held on 29^th May, 2025 and Shareholders of your Company through
Postal Ballot held between 1^st July, 2025 to 30^th July, 2025, result of which was declared on 1^st August 2025,
approved the reappointment of Mr. TV Praveen (DIN: 08772030), as Executive Director of your Company, for a
period of 3 (three) years w.e.f. 1^st September, 2025.

Retirement by Rotation:

¦ Mr. TV Praveen (DIN: 08772030), Executive Director of your Company, who retired by rotation at the
18^th AGM, was re-appointed by the Members of your Company pursuant to the provisions of Section 152(6) of
the Companies Act, 2013. Accordingly, Mrs. Sudeepthi Gopineedi, (DIN: 09102540), Whole-time Director of your
Company, is liable to retire by rotation and being eligible, offers herself for re-appointment at the 19^th AGM of
the Company.

Resolution seeking shareholders'' approval for her reappointment along with brief profile and other required
details as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 forming part of this Report as Annexure 1.

None of the aforesaid Directors are disqualified under Section 164(1) or 164(2) of the Companies Act, 2013 and are

not debarred from holding the office of Director pursuant to any order of SEBI or any other authority.

> Declaration by Independent Directors:

In terms with Section 149(7) of the Companies Act, 2013 read with Regulation 25(8) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, Independent Directors of your Company have submitted declarations that
they meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation
16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors
have also complied with the Code for Independent Directors as per Schedule IV of the Act. All our Independent
Directors are registered on the Independent Directors Databank.

> Formal Annual Evaluation:

Your Board of Directors carried out an annual evaluation of its own performance, of the Committees of the Board and
of the individual Directors including independent directors, pursuant to the provisions of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Performance evaluation was carried out based on criteria evolved, as provided by the guidance note on Board
evaluation issued by SEBI, seeking inputs from the Directors individually and the Committees through a structured
questionnaire which provides valuable feedback for contribution to the Board, improving Board effectiveness,
maximizing strengths and highlighting areas for further improvement, etc. In a separate meeting of the Independent
Directors, performance of the non-independent Directors and the Board was evaluated taking into account the views
of the non-independent Directors and the same was also reviewed in the Board meeting.

The Independent Directors noted that your Company does not have a full-time Chairman. Accordingly, in terms of
Clause 72 of the Articles of Association, the Board is required to elect one of the Directors present at the meeting to
act as chairman of that meeting.

Performance evaluation of Independent Directors is done by the entire Board of Directors (excluding the Directors
being evaluated). The meeting details of the independent directors are provided in the Corporate Governance Report
that forms part of this Report

> Directors'' Responsibility Statement:

Your Board of Directors would like to assure that the financial statements for the year under review is as per the
requirements of the Companies Act, 2013 and guidelines issued by SEBI and further confirm that:

¦ in the preparation of the annual financial statements for the year ended 31^st March, 2025, the applicable
accounting standards had been followed along with proper explanation relating to material departures.

¦ 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 your
Company as at the end of year and of the profit and loss of your Company for the year 2024-25.

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

¦ the annual accounts were prepared on a going concern basis;

¦ proper internal financial controls were in place and that such internal financial controls are adequate and were
operating effectively; and

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

> Code of Conduct for Directors and Senior Management:

Your Company has formulated a Code of Conduct for Directors and Senior Management Personnel. All Directors and
Senior Management Personnel had affirmed that they have complied with the provisions of the said code during the
year ended 31^st March, 2025. Certificate affirming the same is enclosed as Annexure 3 to this report.

> Nomination & Remuneration Policy:

The Board has, on the recommendation of the Nomination and Remuneration Committee, laid down following
polices for selection and appointment of the Directors, Key Managerial Personnel and Senior Management and their
remuneration.

Policy	Date of approval	Policy Weblink
Criteria for making payment / remuneration to the Non-Executive Directors	08.08.2023	www.smslife.in/pdf/Criteria%20of%20 making%20Payment%20to%20NED.pdf
Nomination and Remuneration Policy	08.08.2023	www.smslife.in/pdf/Nomination%20and%20 Remuneration%20Policy.pdf

The extract of the Nomination & Remuneration Policy covering the salient features are provided in the Corporate
Governance Report forming part of the Annual Report.

> Familiarization Programme:

Your Company has adopted familiarization Programme for Independent Directors with an objective of acquainting
them with the business and operations of your Company through various structured oriented programme. The
familiarization Programme also intends to update the Directors on a regular basis on any significant changes therein,
enabling them to take well informed and timely decision.

The induction programme includes:

¦ Independent Directors have one-to-one discussion with the Managing Director, Executive Director and Chief
Financial Officer to familiarise them with the Company''s operations.

¦ Compliance Officer makes presentations to the Board periodically on the amendments to applicable laws, new
enactments which are critical to the business operations of the Company and the compliance status of such laws.

Policy Weblink: www.smslife.in/pdf/familiarization-programme-for-independent-directors.pdf

> Key Managerial Personnel

The Key Managerial Personnel of your Company as on 31^st March, 2025 in accordance with the provisions of Section
2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is as below:

¦ Mr. TVVSN Murthy, Managing Director

¦ Mr. N Rajendra Prasad, Chief Financial Officer

¦ Mr. Trupti Ranjan Mohanty, Company Secretary

There is No change in KMP''s of your Company during the year.

> Directors and Officers Liability Insurance (''D&O'')

Your Company has suo-moto taken Directors and Officers Liability Insurance (''D&O insurance'') for all its Directors and
members of the Senior Management pursuant to Regulation 25(10) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

AUDITORS AND AUDITORS'' REPORT

> Statutory Auditors:

M/s. Rambabu & Co., Chartered Accountants (FRN: 002976S), were reappointed as Statutory Auditors of the Company
for a period of 5 consecutive years till the conclusion of 20^th AGM to be held in the year 2025-26.

The report given by M/s. Rambabu & Co., Chartered Accountants, Statutory Auditors on the financial statements of
the Company for the year 2024-25 forms part of the Annual Report.

The comments on statement of accounts referred to in the Auditors'' Report are self-explanatory. The Auditors'' Report
does not contain any qualification, reservation or adverse remark.

> Secretarial Auditors:

M/s. SVVS & Associates Company Secretaries LLP, (LLPIN - AAE-9368; ICSI UID: L2015MH000700) were appointed as
the Secretarial Auditors of the Company for the year 2024-25 at the Board meeting held on 27^th May, 2024 pursuant
to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.

The Secretarial Auditors, have issued following report for the year 2024-25:

¦ Secretarial Audit Report for the Company (Annexure 4)

¦ Secretarial Audit Report for the material subsidiary of the Company (Annexure 5)

The aforesaid report does not contain any qualification, reservation or adverse remarks.

Further, the Board of Directors at its meeting held on 29^th May, 2025, have appointed M/s. SVVS & Associates
Company Secretaries LLP, (LLPIN - AAE-9368; ICSI UID: L2015MH000700), as the Secretarial Auditors of the Company
to undertake the Secretarial Audit for a term of five consecutive years i.e. from the year 2025-26 to the year 2029-30,
subject to approval of the shareholders.

Resolution seeking shareholders'' approval for the reappointment along with brief profile and other required details as
required under Regulation 36(5) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are
provided in the explanatory statement to the AGM notice.

Further, Company has obtained Annual Secretarial Compliance Report from Mr. C. Sudhir Babu, Practicing Company
Secretary (Proprietor, CSB Associates) on 29^th May, 2025, pursuant to Regulation 24A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Annexure 6) and the same was also submitted to the Stock Exchange(s)
on 30^th May, 2025.

The aforesaid Report has below observation:

Compliance Requirement (Regu¬ lations / circulars / guidelines including specific clause)	SEBI has issued framework for restricting trading by Designated Persons ("DPs") by freezing PAN for the Company at security level.
Regulation / Circular No.	SEBI circular no, SEBI/HO/ISD/ISD-PoD-2/P/CIR/2023/124 dated 19th July, 2023.
Deviations	Company unfreezed PAN of Mr. Praveen during the trading window period.
Action Taken by	NA
Type of Action	Cautionary measures advised
Details of Violation	No violation
Fine Amount	Nil
Observations /Remarks of the Practicing Company Secretary	PAN unfreezing should not be permitted, once the same is mandatorily freezed.
Management Response	¦ Mr. TV Praveen has purchased equity shares of the Company on 28.03.2024 (i.e. prior to the commencement of the trading window closure), ¦ Due to the long weekend, the said shares could not be settled and credited to the demat account of Mr. Praveen was deferred to 01.04.2024 (i.e. commencement of trading window closure) ¦ In the meanwhile, his PAN was frozen by the depository with effect from 01.04.2024 ¦ To facilitate the credit of the purchased shares to Mr. Praveen''s demat account, the PAN was unfrozen. ¦ It is further clarified that no trading activity was undertaken during the trading window closure period. The unfreezing of the PAN was purely technical in nature and not indicative of any malafide intent on the part of the Company. ¦ Accordingly, the Board is of the considered view that there was no violation with respect to the Trading Window Closure requirements as prescribed under the SEBI (Prohibition of Insider Trading) Regulations, 2015.
Remarks	In concurrence with the management Response. However, management has been advised to avoid such instances in future.

> Cost Auditors:

M/s. Harshitha Annapragada & Co., Cost Accountants, was appointed as the Cost Auditors of the Company to carry
out the audit of cost records of the Company as specified by the Central Government under Sub-Section (1) of Section
148 of the Companies Act, 2013, as made and maintained by the Company, for the year 2024-25, at the Board meeting
held on 27^th May, 2024.

There was no qualification, reservation or adverse remark or observation/suggestion in the Cost Audit Report for the
year 2024-25.

Further, based on the recommendation of Audit Committee, M/s. Harshitha Annapragada & Co., Cost Accountants,
being eligible, have also been appointed by the Board at its meeting held on 29^th May, 2025 as Cost Auditors to audit
the cost records of the Company for the year 2025-26. The remuneration payable to M/s. Harshitha Annapragada &
Co for the year 2025-26 is subject to ratification by the Members at the ensuing AGM.

> Internal Auditors:

Your Company continues to engage M/s Adusumilli & Associates, Chartered Accountants (Firm No. 06983S) as the
Internal Auditors in accordance with the provisions of Section 138 of the Companies Act, 2013 read with Companies
(Accounts) Rules, 2014. Internal Auditors submit their report on quarterly basis to the Audit Committee. Based on the
report of internal audit, management undertakes corrective action in the respective areas and takes necessary steps
to strengthen the levels of Internal Financial and other operational controls.

> Reporting of fraud by the Auditors:

During the year, none of the auditors have reported any instance of fraud committed as prescribed under Section
143(12) of the Companies Act, 2013 in the Company by its officers or employees.

> Internal Financial Controls:

Your Company has in place adequate internal financial controls with reference to its financial statements. These
controls ensure the accuracy and completeness of the accounting records and the preparation of reliable financial
statements.

Details in respect of internal financial controls and their adequacy is included in the Management Discussion and
Analysis Report, which forms part of this Annual report. Certificate pursuant to Regulation 17(8) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, is enclosed as Annexure 7 to this report.

> Vigil Mechanism / Whistle Blower Policy:

Your Company has a Whistle Blower Policy and has established the necessary vigil mechanism for Directors and
Employees in conformation with Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, to report concerns about unethical behaviour, actual or
suspected fraud or violation of the Company''s code of conduct or ethics policy.

Employees and other stakeholders are required to report actual or suspected violations of applicable laws and
regulations and the Code of Conduct. Such genuine concerns can be raised by a Whistle-blower through an e-mail or
a letter to the Chairman of the Audit Committee.

Your Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to
ensure that requisite standards of professional and ethical conduct are always upheld. This mechanism also provides
for adequate safeguards against victimization of director(s)/ employee(s) who avail the mechanism and also provide
for direct access to the Chairman of the Audit Committee.

Policy Weblink: www.smslife.in/pdf/Whistle%20Blower%20Policy.pdf

SUBSIDIARY/ ASSOCIATE/ JOINT VENTURE COMPANIES

Your Company has only 1 (one) Subsidiary with 60% stake i.e. Mahi Drugs Private Limited (also material subsidiary
in accordance with Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015),
which operates manufacturing and sale of Intermediates of Active Pharma Ingredients. The products being sold under
this segment are of similar nature and comprises of pharmaceutical products only.

¦ Your Company has no joint venture or Associate Companies as on 31^st March, 2025.

¦ No company has ceased to be a subsidiary/ associate/ joint venture of the Company during the year.

The contribution of Subsidiary to the overall performance of the Company is outlined in the Consolidated Financial
Statements for the year 2024-25, forming part of the Annual Report and a statement in Form AOC-1 containing the
salient features of the financial statements of the Company''s subsidiary for the year 2024-25 is also attached forming
part of the Annual Report as Annexure 8.

Policy Weblink: www.smslife.in/pdf/Policv%20for%20determinine%20Material%20Subsidiaries.pdf
DEPOSITS

Your Company has not accepted any deposits from the public covered by provisions of Section 73 of the Companies
Act, 2013, no amount on account of principal or interest on deposits from public was outstanding as on the date of
the balance sheet.

MEETINGS OF THE BOARD OF DIRECTORS

During the year, 4 (four) Board meetings were convened and held. The intervening gap between the meetings
was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The details of all Board/ Committee meetings held during the year 2024-25 are
given in the Corporate Governance Report.

> Sub-committees of Board:

Pursuant to the requirements under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board of Directors has constituted various Committees of Board such as Audit
Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social
Responsibility Committee. The details of composition and terms of reference of these Committees are mentioned in
the Corporate Governance Report.

> Corporate Governance Report:

The Company firmly believes in adhering to Corporate Governance codes to ensure protection of its investor''s interest
as well as healthy and sustainable growth of the Company. It upholds and adheres to highest standards of Corporate
Governance and the requirements set out by the SEBI and other statutory bodies.

In compliance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, the Corporate Governance Report for the year 2024-25 as required under SEBI (Listing Obligations
and Disclosure Requirement) Regulations, 2015 of the Company is attached to this report as Annexure 9.

The certificate from M/s. Rambabu & Co., Statutory Auditors of the Company with regard to compliance of conditions
of corporate governance as stipulated under Schedule V (E) of Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 is annexed to the Report on Corporate Governance as Annexure 9A.

Further, a Certificate from Mr. C. Sudhir Babu, Company Secretary in Practice, Hyderabad (ICSI Memb. No. 2724 and
C.P. No. 7666) pursuant to the provisions of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, that none of the Directors on the Board of the Company have been debarred
or disqualified from being appointed or continuing as Directors of companies by SEBI / Ministry of Corporate Affairs or
any such statutory authority, is provided in Annexure 10 of this Report.

SHARE CAPITAL

As on 31^st March, 2025, the Authorized Share Capital of the Company was ^3,50,00,000/- (Rupees Three Crore and
Fifty Lakhs only) divided into 35,00,000 (Thirty Five lakhs) Equity Shares of face value of ^10/- each.

As on 31^st March, 2025, the issued, subscribed and paid-up Equity Share Capital of the Company was ^3,02,32,870/-
(Rupees Three Crore Two lakhs Thirty Two Thousand Eight Hundred and Seventy only) comprising of 30,23,287 (Thirty
Lakhs Twenty Three Thousand Two Hundred and Eighty Seven) Equity Shares of face value of ^10/- each.

During the year under review:

¦ There was no change in capital structure of your Company.

¦ The Promoter''s Shareholding as on 31^st March, 2025 has increased from 71.19% to 71.41% and Public
shareholding has decreased from 28.81% to 28.59%.

Equity shares of your Company are listed in National Stock Exchange of India (NSE) and BSE Limited (BSE) and the
Company has paid the necessary Annual Listing Fees for the year 2025-26.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has also issued Corporate Guarantee to the Bankers for the loans sanctioned to Mahi Drugs
Private Limited and the guarantees provided are well within the limits prescribed under Section 186 of the
Companies Act, 2013.

RELATED PARTY TRANSACTIONS

All the Related Party Transactions executed during the year were with the requirements of the Companies Act, 2013,
the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the Policy on Materiality of Related
Party Transactions and dealing with Related Party Transactions.

Policy Weblink: www.smslife.in/pdf/Policv%20on%20materialitv%20of%20Related%20Partv%20Transactions%20
&%20dealine%20with%20Relat.pdf

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions
between the Company and related parties. All Related Party Transactions are placed before the Audit Committee for
review and approval.

Prior approval is obtained for Related Party Transactions for transactions which are of repetitive nature. All contracts
and arrangements with related parties were at arm''s length and in the ordinary course of business of the Company.
There are no materially significant Related Party Transactions entered into by the Company with related parties which
may have potential conflict of interest with the Company. Statement of transactions with related parties during the
year is given at note no. 45 to the notes of standalone financial statements.

In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars
of the contracts or arrangements with related parties referred to in Section 188(1) of the Act, in Form AOC-2 is attached
as Annexure 11 to this Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The ratio of the remuneration of each Director to the median''s employee''s remuneration and other details in terms
of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Companies Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are provided in separate annexure forming part of this report as
Annexure 12.

Disclosure as per Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is as mentioned below:

Name	Mr. TVVSN Murthy	Mr. TV Praveen
Age	65 years	41 years
Designation	Managing Director	Executive Director
Remuneration	^2.00 Crores1	^1.20 Crores##
Qualification	Graduate in Chemistry	Post Graduate in Management (Strategy & Marketing) from Indian Institute of Management, Kozhikode (IIMK) and Engineering graduate from Birla Institute of Technology & Science (BITS), Pilani.
Experience	More than 40 years'' experience in Pharma sector	More than 15 years'' experience in Pharma sector
Date of commencement of employment	01.04.2016	21.08.2020
Nature of employment	: Contractual (as approved by shareholders)	Contractual (as approved by shareholders)
Last employment	SMS Pharmaceuticals Limited	SMS Pharmaceuticals Limited
Shareholding as on 31st March, 2025	15.88%	8.36%
Relationship with other Directors	Father of Mr. TV Praveen, Executive Director and Mrs. Sudeepthi Gopineedi, Whole-time Director.	Son of Mr. TVVSN Murthy, Managing Director and Brother of Mrs. Sudeepthi Gopineedi, Whole-time Director.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is deeply committed to discharging its social responsibility as an integral aspect of its Corporate
Governance philosophy, consistently acting in an ethical and socially motivated manner and contributing to the
development of society. Efforts to touch and transform lives are focused by promoting healthcare, education and rural
development.

During the year, the Company has spent ^37 lakhs towards CSR projects In terms of Section 135 of the Companies Act,
2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Annual Report on CSR Activities is
attached with this report as Annexure 13.

> Environmental Sustainability Governance:

Your Company is committed to building sustainable business and has initiated various ESG initiatives like, water
conservation, energy conservation projects, tree plantation and others with goal to achieve planet resilience and a
commitment towards carbon neutral environment.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is are
provided in separately forming part of this report as Annexure 14.

OTHER STATUTORY REPORTS

> Transfer of unpaid/ unclaimed dividend to IEPF:

All the unpaid or unclaimed dividends including the shares on which dividend has not claimed are required to be
transferred by the Company to the IEPF Authority after the completion of 7 (seven) years in accordance with the
applicable provisions of the Companies Act, 2013 read with the Companies Investor Education and Protection Fund
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"). The Shareholders are requested to
read the instructions given in Note no. 21 to the AGM Notice, forming a part of this Annual Report.

During the year, your Company was not required and had not transferred any unclaimed dividend amount or shares
to the IEPF Authority. However, the unclaimed fractional sale proceeds amounting to ^5,97,721/- arising pursuant
to the demerger, was transferred to the Investor Education and Protection Fund (IEPF) on 10^th January, 2025. Eligible
claimants are required to approach the IEPF Authority directly to claim their respective unclaimed amounts.

Details of unclaimed dividends and sale proceeds of fractional shares are available on the website of the Company at
www.smslife.in/shareholdine-information.php.

> Details of Nodal Officer:

The details of the Nodal Officer appointed under the provisions of Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, are given below and the same is disseminated on the website
of the Company.

Name of the Nodal	Designation	Address	Email ID &
Officer			Contact Number
Mr. Trupti Ranjan Mohanty (w.e.f. 27.05.2024 )	Company Secretary and Compliance Officer	Plot No.19-III, Road No.71, Jubilee Hills, Opp. Bharatiya Vidya Bhavan Public School, Hyderabad - 500096	[email protected] 6628 8888

> Business risk management

Your Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities.
This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the
Company''s competitive advantage. The business risk framework defines the risk management approach across the
Company at various levels including documentation and reporting. The framework has different risk models which
help in identifying risks trend, exposure and potential impact analysis at a Company.

Policy Weblink: www.smslife.in/pdf/Risk-Manaeement-Policv.pdf

> Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013:

Your Company has in place an Internal Complaints Committee (ICC) to redress complaints received regarding sexual
harassment at the workplace pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Companies (Accounts) Second Amendment Rules, 2025.

Following details are reported as on 31^st March, 2025,

¦ Number of sexual harassment complaints received during the year: 0

¦ Number of complaints disposed of during the year: 0

¦ Number of complaints pending for more than 90 days: 0

¦ Number of employees as on the closure of financial year: Female: 30 & Male: 562
Website Weblink: www.smslife.in/pdf/Prevention%20of%20Sexual%20Harassment.pdf

> Statement on Compliance with the Maternity Benefit Act, 1961:

Your Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable
amendments and rules framed thereunder. The Company is committed to ensuring a safe, inclusive and supportive
workplace for women employees.

> Code for Prevention of Insider Trading:

The objective of the aforesaid Code is to regulate, monitor and report trading by its Designated Persons and Immediate
Relatives of Designated Persons towards achieving and protecting the interest of Stakeholders at large. In compliance
with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, a Structured Digital Database is
maintained by the Company with adequate internal controls and trading restrictions are imposed on the designated
persons and their immediate relatives in accordance with the Code of Conduct to regulate, monitor and report trading
in securities of the Company.

Code Weblink: www.smslife.in/pdf/Code%20of%20Conduct%20for%20prevention%20of%20Insider%20Trading.pdf

> Designated person with respect to beneficial interest in shares:

Mr. TVVSN Murthy, Managing Director of the Company is designated person for furnishing, and extending co¬
operation for providing, information to the Registrar or any other authorised officer with respect to beneficial interest
in shares of the Company pursuant to Section 89 of the Companies Act, 2013 read with Rule 9(4) of the Companies
(Management and Administration) Rules, 2014 and other applicable provisions.

> Compliance with Secretarial Standards:

During the year, your Company has complied with the applicable Secretarial Standards issued by the Institute of
Company Secretaries of India.

> Annual Return:

The Annual Return of the Company pursuant to Sections 92(3) and 134(3)(a) and of the Companies Act, 2013 is
available on the website of the Company.

Policy Weblink: www.smslife.in/financials.php

> Weblink of policies:

Company has adopted various statutory policies / codes as required under Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015.

Policy Weblink: www.smslife.in/policies.php

GENERAL DISCLOSURE:

Your Directors states that no disclosure or reporting is required in respect of the following matters under the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, either on account
of the absence of any transaction or the inapplicability of the provisions:

¦ No agreement has been executed by the shareholders, promoters, promoter group related parties, Directors,
KMPs and employees of the Company and its Subsidiary pursuant to Regulation 30A of SEBI (Listing Obligations
and Disclosure Requirements) Regulations 2015 which might Impact the management or control of the Company
/ Impose any restriction on the Company, except in normal course of business.

¦ No special rights have been granted to any shareholders of the Company, hence no compliance pursuant to
Regulation 31B of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is required.

¦ There are no significant material orders passed by the Regulators / Courts which would impact the going concern
status of the Company and its future operations.

¦ No shares pursuant to differential rights / sweat equity shares / Employees Stock Option Scheme were issued
during the year and accordingly, no information was required to be furnished.

¦ No remuneration or commission was received by Managing Director or the Whole-time Directors of the Company
from the Subsidiary Company as per section 197(14) of the Companies Act, 2013.

¦ Business Responsibility and Sustainability Report (ESG reporting) is not applicable to the Company.

¦ There was no revision in the financial statements.

¦ There were no instances of failure of implementation of any Corporate Actions.

¦ Company has not defaulted in payment of interest and/ or repayment of loans to any of the financial institutions
and/ or banks during the year under review.

¦ There were no proceedings against your Company under the Insolvency and Bankruptcy Code, 2016 and no one
time settlement of financial dues during the period under review.

¦ No transactions, with person(s) or entity(ies) belonging to the Promoter / Promoter Group which hold(s)
10% or more shareholding in the Company, as per Schedule V (2A) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, during the period under review, except the managerial remuneration paid to
Mr. TVVSN Murthy, Promoter and Managing Director of the Company.

The additional information required to be given under the Companies Act, 2013 and the Rules made thereunder, has
been laid out in the Annexures and Notes attached to the Financial Statements forming part of this report.

ACKNOWLEDGEMENTS:

Your Company''s organizational culture upholds professionalism, integrity and continuous improvement across all
functions, as well as optimum utilization of the Company''s resources for sustainable and profitable growth.

We wish to place on record our appreciation to business partners, members, bankers and other stakeholders for their
continued support during the year. We also place on record our appreciation to all employees for their hard work,
dedication and contributions to the growth of the Company. Your Directors also extend sincere gratitude to the Central
Government, State Governments and all other Government agencies for their continued co-operation, assistance and
encouragement.

By Order of the Board
For SMS Lifesciences India Limited

TV Praveen TVVSN Murthy

Date : 11.08.2025 DIN: 08772030 DIN: 00465198

Place: Hyderabad Executive Director Managing Director

1

Includes perquisites |^##indudes commission

The remuneration paid to Directors, Key Managerial Personnel and other employees of the Company during the
year 2024-25 was in conformity with the Nomination and Remuneration Policy of the Company and within the limits
approved by the shareholders.

---

Mar 31, 2024

Your Directors have pleasure in presenting this 18^th (Eighteenth) Annual Report along with the Audited Financial Statements for the year ended 31^st March, 2024.

1) FINANCIAL SUMMARY/PERFORMANCE/STATE OF COMPANY''S AFFAIRS:

The Highlights of the standalone and consolidated financial Statements for the financial year 2023-24 as per the IND-AS are given below:

(^in Lakhs)

PARTICULARS	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Revenue from operations	30,000.16	31,524.18	30,595.84	31,556.03
Other income	383.68	288.17	382.81	307.24
Profit Before Depreciation, Interest	3,826.81	3,163.98	3,494.10	3,417.64
and Tax (PBDIT) Finance Cost	890.23	509.44	1,015.67	679.49
Depreciation	1,025.35	817.30	1,493.76	1,078.86
Profit before Tax (PBT)	1,911.23	1,837.24	984.67	1,659.29
Tax expenses	604.69	515.48	351.89	521.54
Profit after Tax (PAT)	1,306.54	1,321.76	632.78	1,137.74
Total Comprehensive Income (TCI)	1,265.35	1,326.75	587.34	1,140.17
TCI attributable to: - Equity holders of the parents			865.54	1,149.74
- Non-controlling interests	-	-	(278.20)	(9.57)
EPS (excl. of Exceptional income) in ^	43.22	36.34	30.08	30.53
EPS (incl. of Exceptional income) in ^	43.22	43.72	30.08	37.92

J Standalone Financial summary:

During the FY 2023-24, your Company achieved an operating revenue of ^300.00 crores against ^315.24 crores in 2022-23. The Gross Profit before interest, depreciation and taxes during the year stood at ^38.27 crores as against ^31.64 crores in 2022-23, which is a growth of 21%. However, after providing for interest expense, depreciation, the Profit before tax of the Company for the year was ^19.11 Crores against ^18.37 crores in 2022-23. Total Comprehensive Income stood at ^12.65 crores during 2023-24 against ^13.27 crores in 2022-23.

J Consolidated Financial summary:

On consolidation basis, the revenue from operations for the year was ^305.96 crores against ^315.56 crores in 2022-23. The Gross Profit before interest, depreciation and taxes during the year stood at ^34.94 crores as against ^34.18 crores in 2022-23, which is a meager growth of 2.22%. However, after providing for interest expense, depreciation, the Profit before tax of the Company for the year was ^9.84 Crores against ^16.59 crores in 2022-23. Total Comprehensive Income stood at ^5.87 crores during 2023-24 against m.40 crores in 2022-23.

Mahi Drugs Private Limited (subsidiary) has reported a net loss of ^691.24 lakhs during the period under review as compared to net loss of ^21.36 lakhs in the previous year. The main reason for loss is due to low operations / less margins, delay in regulatory approvals and increase in deprecation cost on account of capitalization in the later part of the year 2022-23. (Financials of the subsidiary is available in the website of the Company at www.smslife.in/financials.php)

Silver-lining being, the manufacturing facility of the subsidiary is ready to meet the high standards of regulatory compliances of USFDA & EDQM and currently awaiting for regulatory approvals and accordingly the Subsidiary Company is hopeful that in the ensuing years both the topline and bottom-line shall improve considerably.

J Earnings Per Share (EPS):

The Standalone operational EPS for continuing operations of the Company stood at ^43.22 for the year ended 31st March, 2024 as against ^36.34 for the FY ended 31^st March, 2023, with a growth of 19% as compared to previous year

J Capex and Liquidity:

During the year, the Company has spent ^754.52 lakhs towards capital expenditure, largely towards balancing facilities and essential sustenance capital items. As on 31^st March, 2024, consolidated cash and cash equivalent stood at ^56.95 lakhs. The Company''s working capital management is robust and involves a well-organized process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.

J Future Outlook:

During the year, your Company has filed DMF for 1 (one) product and CEP for 2 (two) products, which will elevate the financial position of the Company in the comming years. Further, the management is continuously working to improve the performance and there have been efforts to identify new products and devise a better product mix. Details is provided in Management Discussion and Analysis report.

J Management Discussion and Analysis report:

Report on the Management Discussion and Analysis in terms of the provisions of Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented as a separate Report in this Report as Annexure II.

J Corporate Governance Report:

The Company firmly believes in adhering to Corporate Governance codes to ensure protection of its investor''s interest as well as healthy and sustainable growth of the Company. It upholds and adheres to highest standards of Corporate Governance and the requirements set out by the SEBI and other statutory bodies.

In compliance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Corporate Governance Report for the year 2023-24 as required under SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 of the Company is attached to this report as Annexure III.

The certificate from M/s. Rambabu & Co., Statutory Auditors of the Company with regard to compliance of conditions of corporate governance as stipulated under Schedule V (E) of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to the Report on Corporate Governance as Annexure IIIA.

Further, a Certificate from Mr. C. Sudhir Babu, Company Secretary in Practice, Hyderabad (ICSI Memb. No. 2724 and C.P. No. 7666) pursuant to the provisions of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by SEBI / Ministry of Corporate Affairs or any such statutory authority, is provided in Annexure IV of this Report.

J Material changes and commitments.

Except otherwise stated herein in this Report, there are no material changes and commitment affecting financial position of the Company from the closure of year ended on 31^st March, 2024 and till the date of this Annual Report (i.e. between 1^st April 2024 and 9^th August, 2024). Further, there is no change in the nature of business carried on by your Company during the year ended 31^st March, 2024.

2) DIVIDEND:

Your Directors are pleased to recommend a dividend of ^1.50 (Rupee One and Fifty paisa only) per equity share of the face value of ^10/- each for the year ended 31^st March, 2024.

The Dividend, shall be subject to the approval of the Members at the 18^th Annual General Meeting ("AGM") to be held on Monday, 30^th September, 2024 and shall be paid within a period of 30 days from the date of AGM to the Shareholders whose names appear in the Register of Members of the Company as on Monday, 23^rd September, 2024, in respect of shares held in dematerialized form, it will be paid to Shareholders, whose names are furnished by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), as the beneficial owners as on the even date, out of the profits of the Company.

Dividend Distribution Policy pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

J Transfer to reserves.

During the period under review, your Board of Directors in its meeting held on 27^th May, 2024 has approved for transfer of ^200 lakhs to the general reserve. Current general reserves stand at ^7,212.02 lakhs.

J Transfer of unpaid/ unclaimed dividend:

In accordance with the applicable provisions of the Companies Act, 2013, read with the Companies Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all the Unpaid or Unclaimed dividends including the Shares on which dividend has not claimed are required to be transferred by the Company to the IEPF Authority after the completion of 7 (seven) years.

During the period under review, the Company was not required and had not transferred any amount or shares to the IEPF Authority. However, the unclaimed fractional share amount remaining unclaimed shall become due for transfer to IEPF on 15^th December, 2024, upon expiry of 7 (Seven) years from the sale proceeds payout date pursuant to demerger order, in terms of Section 124 of the Companies Act, 2013. The Shareholders are requested to read the instructions given in Note no. 22 to the AGM Notice, forming a part of this Annual Report.

Details of unclaimed dividends and sale proceeds of fractional shares are available on the website of the Company at www.smslife.in/shareholdine-information.php.

3) RESEARCH & DEVELOPMENT (R&D):

Your Company has always considered Research and Development (R&D) as crucial for the sustained growth of the Company. In the recent years, the Company has stepped-up investments in R&D to keep pace with the changing domestic and global scenario.

The Company has R&D centers at Hyderabad is duly recognized by the Government of India, Ministry of Science and Technology, Department of Scientific & Industrial Research (DSIR). The R&D expenditure of the Company during the financial year was ^599.33 lakhs (2.00% of the turnover) as against ^453.73 lakhs (1.44% of the turnover) in the previous year.

With qualified and experienced research scientists and engineers manning the research and development activities, the Company has focused its thrust on new and innovative process and product development for the manufacture of APIs with non-infringing processes.

4) CREDIT RATING:

The Company has obtained the Credit ratings from CARE Ratings Limited (CARE) and it has assigned the Company'' facilities. Detail provided in the Corporate Governance Report forming part of the Annual Report.

5) SHARE CAPITAL DETAILS:

Authorized Share capital	^3,50,00,000 divided into 35,00,000 equity shares of ^10/- each
Subscribed, Issued and Paid-up Share capital	^3,02,32,870 divided into 30,23,287 equity shares of ^10/- each

During the year under review, there was no change in capital structure of your Company.

J Listing on Stock Exchanges:

Equity shares of your Company are listed in National Stock Exchange of India (NSE) and BSE Limited (BSE). J Promoters holding:

The Promoter Shareholding in the Company stands increased to 71.19% as on 31^st March, 2024 as compared to 70.32% on 31^st March, 2024. The details of Shareholding of promoter / promoter group of the Company as on 31^st March, 2024 as stated in the notes to the financial statements forms part of this annual report and list of Top 10 shareholders (other than Promoters) of the Company as on 31^st March, 2024 is provided separately in Annexure V.

6) FIXED DEPOSITS:

During the FY 2023-24, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits), Rules 2014 and as such no amount of principal or interest was outstanding as on the balance sheet date.

7) PROCEEDINGS UNDER IBC CODE / ONE-TIME SETTLEMENT:

There were no proceedings against your Company under the Insolvency and Bankruptcy Code, 2016 and no one time settlement of financial dues during the period under review.

8) PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES:

Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report

During the year under review, your Company has not given any loan or provided any security which are covered under the provisions of Sections 186 of the Companies Act, 2023.

9) DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Board composition is in accordance with the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, with an optimum combination of Executive Directors and Independent Directors. The affairs of your Company are being managed by Executive Directors comprising of eminent personalities having experience and expertise to guide the Company in the right direction.

(Details of the Board Members are provided in the Corporate Governance Report).

J Retirement by rotation:

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Talluri Venkata Praveen (DIN: 08772030), retires at the ensuing Annual General Meeting (AGM), and being eligible, offers himself for reappointment under the category of Director retire by rotation. The Board considering his vast experience, knowledge, expertise, performance, enriched guidance role, recommends his reappointment.

A resolution seeking shareholders'' approval for his reappointment along with brief profile and other required details as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forming part of this Report as Annexure I.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses, if any.

J Appointment & Cessation:

During the year under review, there was no change in the Board composition.

J Declaration by Independent Directors:

All Independent Directors have given a declaration that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the Independent Directors of the Company have registered their names with the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs (IICA).

Further, in terms of Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstances or situation which exist or may be anticipated, that could impair or impact their ability to discharge their duties. Further, in the opinion of the Board, Independent Directors qualify the criteria of Independent Director as mentioned in the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the management.

The Board opines that all the Independent Directors of the Company strictly adhere to corporate integrity, possesses requisite expertise, experience and qualifications to discharge the assigned duties and responsibilities as mandated by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

J Directors'' Responsibility Statement:

Your Directors would like to assure the members that the financial statements for the year under review is as per the requirements of the Companies Act, 2013 and guidelines issued by SEBI. Further, pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, to the best of their knowledge and based on the information and explanations received from the Company, your Directors confirm that:

a) in the preparation of the annual financial statements for the year ended 31^st March, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) the accounting policies selected and applied consistently, give a true and fair view of the state of affairs of the Company and of the profits for the year 2023-24.

c) proper and sufficient care had been taken 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 annual accounts were prepared on a going concern basis;

e) proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively; and

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

J Board Evaluation:

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 conducted by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be conducted by the entire Board of Directors, excluding the Director being evaluated.

The Annual Performance Evaluation was conducted for all Board Members, for the Board and its Committees for the financial year 2023-24 in the Nomination and Remuneration Committee meeting held on 10^th February, 2024. The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board evaluation was conducted through questionnaires designed with qualitative parameters based on ratings.

Evaluation of Committees was based on criteria such as adequate independence of each Committee, frequency of meetings and time allocated for discussions at meetings, functioning of Board Committees and effectiveness of its recommendation & suggestions to the Board, etc.

Evaluation of Directors was based on criteria such as participation and contribution in Board and Committee meetings, representation of shareholders interest and enhancing shareholders value, experience, and expertise to provide feedback and guidance to top management on business strategy, governance, risk and understanding of the Company''s operations.

The Board of Directors in the meeting held on 27^th May, 2024 evaluated the individual performance of the Independent Directors of the Company based on the specified criteria pursuant to Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and were satisfied with their performance.

? Disclosure of Expertise / Skills / Competencies of the Board of Directors:

The list of core skills / expertise / competencies identified by the Board of Directors of the Company as required in the context of its business and sector(s) for it to function effectively and those actually available with the Board, form part of the Corporate Governance Report.

? Nomination & Remuneration on Policy:

The Company has formulated the Nomination and Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

The Policy is available on the website of the Company at www.smslife.in/pdf/Nomination%20and%20 Remuneration%20Policy.pdf

? Remuneration of Non- Executive Directors:

Non-Executive Directors (Independent Director) are entitled to receive sitting fees for attending the meetings of the Board or Committees thereof, as approved by the Board and within the overall limits prescribed under the Companies Act, 2013 and rules thereunder. Details of sitting fees paid to Independent Directors are provided in Corporate Governance Report.

The Criteria for determining independence of Director are based on the academic accomplishments, qualifications, expertise and experience in the respective fields, diversity of the Board, global exposure, professional network, technical expertise, functional domain expertise, independence and innovation.

The Criteria for making payment / remuneration to the Non-Executive Directors as approved by the Board in the meeting held on 8^th August, 2023 is available on the website of the Company at www.smslife.in/pdf/ Criteria%20of%20makine%20Pavment%20to%20NED.pdf

J Familiarization Programme:

The Company has in place the familiarization program for the Independent Directors appointed from time to time. The program aims to familiarize the Independent Directors with various aspects of the Company including the nature of industry, operations and performance of the Company and its subsidiaries, roles, rights and responsibilities of the Independent Directors and other relevant information required by Independent Directors to discharge their functions as well as with the nature of industry and business model of the Company. The Director are also explained in detail the compliance required under the Companies Act, 2013, the SEBI Regulations and other relevant regulations and affirmation are taken with respect to the same.

The induction programme includes:

¦ Independent Directors have one-to-one discussion with the Managing Director, Executive Director and Chief Financial Officer to familiarise them with the Company''s operations.

¦ Compliance Officer makes presentations to the Board periodically on the amendments to applicable laws, new enactments which are critical to the business operations of the Company and the compliance status of such laws.

The details of familiarization programmes are provided on the website of the Company and can be accessed at www.smslife.in/pdf/familiarisation-proeram-for-independednt-directors-2022.pdf

J Key Managerial Personnel:

The Key Managerial Personnel of the Company as on 31^st March, 2024 in accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is as below:

¦ Mr. TVVSN Murthy, Managing Director.

¦ Mr. N Rajendra Prasad, Chief Financial Officer

¦ Mr. Trupti Ranjan Mohanty, Company Secretary There is No change in KMP''s of the Company during the year.

J Directors and Officers Liability Insurance (''D&O'')

The Company has suo-moto taken Directors and Officers Liability Insurance (''D&O insurance'') for all its Directors and members of the Senior Management pursuant to Regulation 25(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

10) MEETINGS OF THE BOARD OF DIRECTORS

Your Board of Directors met four (4) times during the year under review.

Sl No.	Date and time	No. of Directors present
1.	29th May, 2023 [05.00 pm]	06
2.	8th August, 2023 [05.30 pm]	05
3.	11th November, 2023 [04.30 pm]	06
4.	10th February, 2024 [12.30 pm]	06

J Details of Sub-committees of Board:

The details of sub-committees of the Board of Directors are provided in the Corporate Governance Report which forms a part of this Report. Further, there were no instances where the Board has not accepted the recommendation of any sub-committees.

J Separate Independent Directors Meeting:

In terms of requirements of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors of the Company was held on 10^th February 2024 at the Registered Office of the Company located at Hyderabad to review:

¦ The performance of Non-Independent Directors (i.e. Executive Directors) and the Board as a whole and its Committees thereof;

¦ To assess the quality, quantity and timeliness of the flow of information between the Management and the Board.

¦ The Independent Directors noted that there is no full time Chairman.

They also concluded that the Board as a collective body is also performing satisfactorily and the flow of information between the Company''s Management and the Board in terms of quality, quantity and timeliness is satisfactory. Further, the Independent Directors had appreciated the quality of discussions at the Board and the Committee Meetings and commended for improvement of the corporate governance structure that allows and encourages the Board to fulfill its responsibilities.

11) CODE OF CONDUCT:

Pursuant to Regulation 17(5) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has a Code of Conduct for its Directors and Senior Management (Code). The Codes provides guidance and support needed for ethical conduct of business and compliance of law. The said code of conduct is posted on Company''s website www.smslife.in/pdf/Code%20of%20conduct%20of%20Board%20of%20Directors%20 and%20Senior%20Management.pdf

The Code has been circulated to Directors and Senior Management Personnel, and its compliance is affiirmed by them as per Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Certificate of the Managing Director of the Company is enclosed as Annexure VI to this report.

12) ANNUAL RETURN:

In accordance with Section 92(3) and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, every company shall place a copy of the annual return on the website of the Company, if any, and the web-link of such annual return shall be disclosed in the Board''s report.

Accordingly, a copy of the Annual return of the Company is available on the website of the Company on www. smslife.in/financials.php under the "Investors Relations" section.

13) AUDITORS & AUDITORS'' REPORT

? STATUTORY AUDITORS:

M/s. Rambabu & Co. (Firm Registration No. 002976S) were appointed as Statutory Auditors of your Company in the 15^th Annual General Meeting (AGM) held on 30^th September, 2021 for a term of 5 (Five) consecutive years pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

The Auditor''s Report for the year ended 31^st March, 2024, on the financial statements of the Company is provided along with financial statements forming part of this Report and the same does not contain any qualification, adverse remark, reservation or disclaimer and therefore, does not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

? COST AUDITOR:

The cost records are required to be maintained by your Company and the same are required to be audited, pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Rules, 2014. Accordingly, the Company maintains the required cost accounts and records as per the requirements of Section 148 of the Companies Act, 2013.

The Board has appointed M/s. Harshitha Annapragada & Co., Cost Accountants, Hyderabad (Firm Registration No. 006031), as Cost Auditors of the Company for conducting the cost audit for the year 202425, subject to ratification of their remuneration at the ensuing 18^th Annual General Meeting.

? SECRETARIAL AUDITOR:

Board of Directors had reappointed M/s. SVVS & Associates Company Secretaries LLP, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of your Company for the year 2023-24 pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report issued by M/s. SVVS & Associates Company Secretaries LLP, Secretarial Auditors for the year ended 31^st March, 2024, which is an unqualified report, is annexed herewith as Annexure VII.

Board of Directors has at its Meeting held on 27^th May, 2024, re-appointed M/s. SVVS & Associates Company Secretaries LLP, as the "Secretarial Auditors" of your Company for the year 2024-25.

¦ Annual Secretarial Compliance Report:

Company has obtained Annual Secretarial Compliance Report from Mr. C. Sudhir Babu, Practicing Company Secretary (Proprietor, CSB Associates) on 27^th May, 2024, pursuant to SEBI circular no. CIR/ CFD/CMD1/27/2019 dated 8^th February, 2019; forms part of this Report as Annexure VIII and the same was also submitted to the Stock Exchange(s) on 30^th May, 2024. The aforesaid Report do not contain any qualification, reservation or adverse remarks.

¦ Secretarial Audit of Material Unlisted Subsidiary:

Secretarial Audit of Mahi Drugs Private Limited, the material unlisted subsidiary of the Company was also undertaken by M/s. SVVS & Associates Company Secretaries LLP for the year 2023-24 and the same forms part of this Report as Annexure IX in terms of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

? INTERNAL AUDITOR:

The Company continues to engage M/s Adusumilli & Associates, Chartered Accountants (Firm No. 06983S) as the Internal Auditors of the in accordance with the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

The Internal Auditors submit their report on quarterly basis to the Audit Committee. Based on the report of internal audit, management undertakes corrective action in the respective areas and takes necessary steps to strengthen the levels of Internal Financial and other operational controls.

14) REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, the Cost Auditors, Internal Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its Directors or Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013.

15) CODE FOR PREVENTION OF INSIDER TRADING:

The Board of Directors in the Meeting held on 29^th May, 2023, have revised the following codes/ policies pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015:

? Code of practices and procedures for fair disclosure of Unpublished Price Sensitive Information along with Policy for Determination of Legitimate Purposes.

? Code of Conduct for Prevention of Insider Trading.

? Policy and procedures for inquiry in case of leak of UPSI.

? Whistle Blower/ Vigil Mechanism Policy.

The objective of the aforesaid Code is to regulate, monitor and report trading by its Designated Persons and Immediate Relatives of Designated Persons towards achieving and protecting the interest of Stakeholders at large and the same has been made available on the Company''s website at www.smslife.in/policies.php.

Further details provided in the Corporate Governance Report forming part of this Annual Report.

16) MARKET CAPITALIZATION [RANKING]:

Stock Exchanges have released a list of ranking of the Companies as on 31^st March, 2024 based on the Market capitalization and the ranking of your Company is as under:

Stock Exchange	Rank as per Market Capitalization
National Stock Exchange of India Limited	1,708
BSE Limited	1,959

Note -

Based on the aforesaid ranking, following compliances are not applicable to the Company:

? Constitution of Risk Management Committee.

? Adopting Dividend Distribution Policy.

? Appointment of Women Independent Director.

17) COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and during the year under review, your Company has complied with the Secretarial Standards issued by ICSI on Board Meeting (SS - 1) and General Meetings (SS - 2).

18) SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company has at present 1 (one) subsidiary (with 60% stake) which is also material subsidiary of the Company as per the definition of Regulation 16(1) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015.

Statement containing salient features of the financial statements of the aforesaid subsidiary in the prescribed Form AOC-1 forms part of the Annual Report as Annexure X. Further, the policy for determining material subsidiary pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is available on the website of the Company at www.smslife.in/policies.php

Your Company has no joint venture or Associate Companies as on 31^st March, 2024. No company has ceased to be a subsidiary/ associate/ joint venture of the Company during the year.

19) CORPORATE SOCIAL RESPONSIBILITY (CSR):

The annual report on Corporate Social Responsibility (''CSR'') containing details of CSR Policy, composition of the CSR Committee, CSR projects undertaken and web-link thereto on the website of the Company, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out in Annexure XI to this Report.

Details of the CSR Committee has been provided in Corporate Governance Report, which is a part of this Annual Report.

20) DEPOSITORY SYSTEM:

Your Company''s Equity Shares are available for dematerialization through National Securities Depository Limited ("NSDL") and Central Depository Services (India) Limited ("CDSL").

The ISIN Number of your Company for both NSDL and CDSL is INE320X01016.

21) RELATED PARTY TRANSACTIONS:

During the year, all the Related Party Transactions entered into by the Company were at arm''s length basis and are in the ordinary course of business. Further, all the transactions entered with Related Parties were in accordance with the Related Party Transactions Policy of the Company and in pursuance of quarterly review by the Audit Committee. Details of related party disclosures as stated in the notes to the financial statements forms part of this annual report.

Furthermore, in accordance with the provisions of Section 134(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the details of ''material'' Related Party Transactions which were approved by the shareholders in the 17^th Annual General Meeting is provided in form AOC-2 as Annexure XII to this Annual Report.

? Material Related Party Transactions:

During the year under review, there were no Material Related Party Transactions pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

? Policy on Related Party Transactions:

The "Policy on materiality of Related Party Transactions and dealing with Related Party Transactions" can be accessed from the website of the Company at www.smslife.in/policies.php.

22) ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEM:

The Internal Financial Controls of the Company encompasses the policies, standards operating procedural manuals (SOPs), approval matrix and risk & control matrices adopted by the company for ensuring the orderly and efficient conduct of its business & support functions, adherence to these policies & procedures, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information during the process of financial reporting.

Audit Committee annually reviews and evaluates the effectiveness of internal financial control.

The Statutory Auditors of the Company has shown their satisfaction on the Internal Financial Controls established by the Company over Financial Reporting System in compliance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

? Vigil Mechanism/Whistle Blower Policy:

Your Company has established a vigil mechanism under Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which enables the Directors and the employees report genuine concerns.

The Company encourages its employees who have concerns about unethical practices, fraud and mismanagement, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy and any leak/suspected leak of Unpublished Price Sensitive Information or gross misconduct by the employees of the Company, if any, that can lead to financial loss or reputational risk to the Company, to come forward and express their concerns without fear of punishment or unfair treatment.

The mechanism allows direct access to Chairperson of the Audit Committee and Chief Financial officer of the Company in exceptional cases and provides safeguard against the victimization of whistle blowers. The Whistle Blower Policy as approved by the Board in the meeting held on 29^th May, 2023 is available on the website at www.smslife.in/pdf/Whistle%20Blower%20Policy.pdf

During the year under review, no complaint pertaining to the Company was received under the Whistle Blower mechanism.

23) RISK MANAGEMENT:

The Company identifies the various risks and challenges, internally as well as externally and takes appropriate measures with timely actions to mitigate risk. Audit Committee periodically oversee and advise on current risk exposures of the Company and future risk strategies and also recommend the Board about risk assessment and minimization procedures. The Audit Committee has additional oversight in the area of financial risks and controls. To ensure the mitigation of risk the Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

Your Company has framed a Risk Management Policy in the Board meeting held on 11^th November, 2023 to ensure that the Company has proper and continuous risk identification and management process in place to manage the risks associated with its activities.

The Policy is available on the website of the Company at https://www.smslife.in/pdf/Risk-Manaeement-Policv.pdf

24) SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company believes in fair employment practices and is committed to provide an environment that ensures that every employee is treated with dignity and respect and is provided equitable treatment. Your Company has adopted a Policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

During the year under review, there was NO COMPLAINT received by the Committee.

25) CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as required to be furnished as per the provisions of Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed herewith as Annexure XIII.

J Safety, Environment and Health:

The Company considers safety, environment and health as the management responsibility. Regular employee training programmes are carried out in the manufacturing facilities on safety, environment and health. Your Company has ensured the Implementation of E-Waste (Management) Rules, 2022 and is an Extended Producer Responsibility (EPR) complaint.

26) MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES:

The ratio of the remuneration of each director to the median''s employee''s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in separate annexure forming part of this report as Annexure XIV.

Disclosure as per Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is as mentioned below:

Name	Mr. TVVSN Murthy
Age	65 years
Designation	Managing Director
Remuneration	^2.03 Crores**
Qualification	Graduate in Chemistry
Experience	More than 40 years'' experience in Pharma sector
Date of commencement of employment	01.04.2016
Nature of employment	Contractual (as approved by shareholders)
Last employment	SMS Pharmaceuticals Limited
Shareholding as on 31st March, 2024	23.86% (including indirect holding)
Relationship with other Directors	Father of Mr. TV Praveen, Executive Director and Mrs. Sudeepthi Gopineedi, Whole-time Director.

**Includes salary & other perquisites.

The remuneration paid to Directors, Key Managerial Personnel and other employees of the Company during the year 2023-24 was in conformity with the Nomination and Remuneration Policy of the Company and within the limits approved by the shareholders.

27) WEBLINK OF POLICIES

Company has adopted various statutory policies / codes as required under Companies Act, 2013 and various SEBI

Regulations and the same can be accessed from the website of the Company at www.smslife.in/policies.php

28) GENERAL DISCLOSURE:

Your Directors states that no disclosure or reporting is required in respect of the following matters under the

Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, either on

account of the absence of any transaction or the inapplicability of the provisions:

? No agreement has been executed by the shareholders, promoters, promoter group related parties, Directors, KMPs and employees of the Company and its Subsidiary pursuant to Regulation 30A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which might Impact the management or control of the Company / Impose any restriction on the Company, except in normal course of business.

? No special rights have been granted to any shareholders of the Company, hence no compliance pursuant to Regulation 31B of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is required.

? No shares pursuant to differential rights / sweat equity shares / Employees Stock Option Scheme were issued during the year and accordingly, no information was required to be furnished.

? No remuneration or commission was received by Managing Director or the Whole-time Directors of the Company from the Subsidiary Company as per section 197(14) of the Companies Act, 2013.

? There are no significant and material orders passed by the Courts or Regulators against the Company.

? Business Responsibility and Sustainability Report (ESG reporting) is not applicable to the Company.

? There was no revision in the financial statements.

? There were no instances of failure of implementation of any Corporate Actions.

? Company has not defaulted in payment of interest and/ or repayment of loans to any of the financial institutions and/ or banks during the year under review.

? No transactions, with person(s) or entity(ies) belonging to the Promoter / Promoter Group which hold(s) 10% or more shareholding in the Company, as per Schedule V (2A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the period under review, except the managerial remuneration paid to Mr. TVVSN Murthy, Promoter and Managing Director of the Company.

The additional information required to be given under the Companies Act, 2013 and the Rules made thereunder,

has been laid out in the Annexures and Notes attached to the Financial Statements forming part of this report.

ACKNOWLEDGEMENTS:

The Board is grateful and thankful to all the Banks, Financial Institutions who have fully supported your Company''s initiatives. The Board is grateful to the Central and State Government and the Central Drugs Standard Control Organization and State Food Safety and Drugs Administration (State FDAs) for their continued support to the Company''s business plans. The Board places on record their appreciation of the support provided by the employees, customers, suppliers, service providers, business partners and most importantly the shareholders of the Company.

By Order of the Board For SMS Lifesciences India Limited

TV Praveen TVVSN Murthy

Date: 09.08.2024 DIN: 08772030 DIN: 00465198

Place: Hyderabad Executive Director Managing Director

---

Mar 31, 2023

Your Directors have pleasure in presenting this 17^th (Seventeenth) Directors'' Report along with the Audited Financial
Statements for the year ended 31^st March, 2023.

1. FINANCIAL SUMMARY OF THE COMPANY:

The standalone and consolidated financial statements for the financial year ended 31^st March, 2023, forming
part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as
notified by the Ministry of Corporate Affairs.

Key highlights of financial performance of your Company are summarised below:

in Lakhs
	Standalone		Consolidated
PARTICULARS
	2022-23	2021-22	2022-23	2021-22
Revenue from operations	31,524.18	34,562.81	31,556.03	35,007.12
Other income	288.17	153.55	307.25	173.98
Profit Before Depreciation, Interest and Tax (PBDIT)	3,163.98	4,559.24	3,417.64	4,891.08
Finance Cost	509.44	462.50	679.49	617.39
Depreciation	817.30	799.04	1,078.86	1,000.60
Profit before Tax (PBT)	1,837.24	3,297.70	1,659.29	3,273.09
Tax expenses	515.48	759.57	521.55	743.11
Profit after Tax (PAT)	1,321.76	2,538.13	1,137.74	2,529.98
Total Comprehensive Income (TCI)	1,326.75	2,533.10	1,140.17	2,526.40
TCI attributable to:
- Equity holders of the parents	-	-	1,149.74	2,528.63
- Non-controlling interests	-	-	(9.57)	(2.23)
EPS (incl. of Exceptional income) in ^	43.72	83.95	37.92	83.76
EPS (excl. of Exceptional income) in ^	36.34	50.24	30.53	50.04

2. OVERVIEW OF FINANCIAL PERFORMANCE OF THE COMPANY AND ITS SUBSIDIARIES:

Company:

? Your Company is in the Business of manufacturing of Active Pharmaceutical Ingredients (API''s) and its
intermediates and sells its products in India and overseas market.

? Standalone income, comprising Revenue from Operations and other income, for the year was ^318.12
Crore, i.e. 8.37% decline as compared to ^347.16 Crore in previous year.

Revenue from Operations	PBT (Exd. Exceptional Income)			PAT (Exd. Exceptional Income)
___	* 19.35 1		_____	------j
| | .| W 0 l		1	¦ ‘ 16.0/	i	.....1	^ 10.99 ||
F21 F22 F23	F21	F22	F23	F21	F22	F23

? Consolidated income, comprising Revenue from Operations and other income, for the year was
^318.63 Crore, i.e.9.43% decline as compared to ^351.81 Crore in previous year.

(^ in Crores)

Revenue from Operations	PBT (Excl. Exceptional Income)	PAT (Excl. Exceptional Income)
1 1	iii mm	i......n
F21 F22 F23	F21 F22 F23	F21 F22 F23

Financial Liquidity: Consolidated cash and cash equivalent as on 31^st March, 2023 stood at ^127.78 lakhs vis¬
a-vis ^98.60 lakhs in the previous year. The Company''s working capital management is robust and involves a
well-organized process, which facilitates continuous monitoring and control over receivables, inventories and
other parameters.

Subsidiary Company:

Mahi Drugs Private Limited (subsidiary) reported a net loss of ^22.14 lakhs during the period under review as
compared to ^8.15 lakhs profit during the previous year 2021-22 and the revenue from operations was ^35.47
crores during the year as compared to ^32.37 crores in the previous year. (Financials of the subsidiary is available
in the website of the Company at www.smslife.in/financials.php)

Mahi Drugs is currently in the process of revamping the infrastructure by incurring capital expenditure in order
to streamline the manufacturing facilities as per the United States Food and Drug Administration (USFDA) and
European Union (EU) guidelines, in order to cater to the regulated markets, in addition to the domestic market.

3. DIVIDEND

Your Directors are pleased to recommend a dividend of ^1.50 (Rupee One and Fifty paisa only) per equity share
of the face value of ^10/- each for the year ended 31^st March, 2023.

The Dividend, shall be subject to the approval of the Members at the 17^th Annual General Meeting ("AGM") to
be held on Friday, 29^th September, 2023 and shall be paid within a period of 30 days from the date of AGM to the
Shareholders whose names appear in the Register of Members of the Company as on Friday, 22^nd September,
2023, in respect of shares held in dematerialized form, it will be paid to Shareholders, whose names are furnished
by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), as the
beneficial owners as on the even date, out of the profits of the Company.

Dividend Distribution Policy pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is not applicable to the Company.

4. TRANSFER OF UNPAID/ UNCLAIMED DIVIDEND

There were no amounts which were required to be transferred to the Investor Education and Protection Fund
by the Company in the year 2022-23 as required under Section 124(6) of the Companies Act 2013. However, the
Shareholders are requested to read the instructions given in Note no. 21 to the AGM Notice, forming a part of
this Annual Report.

Details of unclaimed dividends and sale proceeds from fractional shares are available on the website of the
Company at www.smslife.in/shareholding-information.php.

5. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM
THE END OF THE FINANCIAL YEAR AND TILL THE DATE OF THIS REPORT

No material change and commitment affecting the financial performance of the Company which occurred
between the end of the financial year of the Company to which the financial statements relate and the date of
this Report (i.e. from 1^st April, 2023 to 8^th August, 2023).

> Update on Covid19:

World Health Organization (WHO) on 5^th May, 2023 released a statement citing the end of Covid-19 related
public health emergency. However, the virus causing Covid-19 disease will remain as a permanently established
pathogen in humans for the foreseeable future but the pandemic has now nearly reached the endemic stage.

6. PROCEEDINGS UNDER IBC CODE / ONE-TIME SETTLEMENT

There were no proceedings against your Company under the Insolvency and Bankruptcy Code, 2016 and No one
time settlement of financial dues during the period under review.

7. CHANGE IN THE NATURE OF BUSINESS

We would like to inform that there has been no change in the nature of business of your Company during the
year under review.

8. TRANSFER TO RESERVES

During the period under review, your Board of Directors in its meeting held on 29^th May, 2023 has approved to
transfer ^200 lakhs to the general reserve.

Details of General reserves: i_n l_akh_sl

As on 31.03.2022	Transfer	As on 31.03.2023
6,816.02	200.00	7,016.02

9. CREDIT RATING

CARE Ratings Limited (CARE) has reaffirmed its ratings of "CARE BBB ; Stable" on the long term bank facilities
of the Company and "CARE BBB ; Stable" on the long term bank facilities of the subsidiary Company. Detailed
report can be accessed from www.smslife.in/corporate-announcements.php

10. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES

Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part
of the notes to the financial statements provided in this Annual Report

During the year under review, your Company has not given any loan or provided any security which are covered
under the provisions of Sections 186 of the Companies Act, 2023. However, Company has written off 500 equity
share of face value of ^100/- each of Jeedimetla Effluent Treatment Limited (JETL) in the Board meeting held on
29^th May, 2023.

Authorized Share capital	^3,50,00,000 divided into 35,00,000 equity shares of ^10/- each
Subscribed, Issued and Paid-up Share capital	^3,02,32,870 divided into 30,23,287 equity shares of ^10/- each
[as on 31st March, 2023]

During the year under review, there was no change in capital structure of your Company.

Listing of shares: Equity shares of your Company are listed in National Stock Exchange of India (NSE) and BSE
Limited (BSE). [Listing fees has been paid for the year 2023-24 to both the Exchanges].

12. DEPOSITS

No public deposits have been accepted or renewed by your Company during the year under review pursuant to
the provisions of Section 73 and 74 of the Companies Act, 2023 read together with the Companies (Acceptance
of Deposits) Rules, 2014.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Company is maintaining an optimum combination of Independent / Executive Directors on the Board, who
have vast experience in Pharma and other relevant fields.

(Details of the Board Members are provided in the Corporate Governance Report).

A. RETIREMENT BY ROTATION

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 read with the Articles
of Association of the Company, at least 2/3^rd of the total number of Directors of a public company shall
be liable to retire by rotation and 1/3^rd of such Directors shall retire by rotation at every AGM, However,
"Independent Directors" are out of the ambit of retiring by rotation.

Further, as Mrs. Sudeepthi Gopineedi was appointed by rotation in the 16^th AGM, so Board has proposed
Mr. TVVSN Murthy as the Director to "Retire by rotation" in the ensuing 17^th AGM.

Detailed information as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as Annexure-I forming part of this Report.

B. APPOINTMENT AND CESSATION

During the year under review and until the approval of this Directors Report, there was following changes
in Board composition:

Appointment / reappointment:
Name	Designation	DIN	Event date
Mr. Sarath Kumar Pakalapati**	Independent Director	01456746	11.02.2022
Mr. TVVSN Murthy##	Managing Director	00465198	28.05.2022
**Re-appointed for the second term of 5 (five) years as "Independent Director" w.e.f. 25th May, 2022.
##Re-appointed for further period of 3 (three		) years as "Managing Director" w.e.f. 1st June, 2022.
Resignation:
Name	Designation	DIN	Event date
Mr. Venkatasubbarao Potluri	Independent Director	00099066	10.02.2023

C. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have furnished declarations of independence under Section 149 of the
Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. They have also confirmed that they are not aware of any circumstance or situation,
which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgment and without any external influence.

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

> Registration of Independent Directors in Independent Directors Databank:

All the Independent Directors of the Company have been registered and are members of Independent
Directors Databank maintained by Indian Institute of Corporate Affairs (IICA), in terms of the provisions
of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2019 and the Companies
(Creation and Maintenance of Databank of Independent Directors) Rules, 2019.

In terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014
dealing with the requirement for Independent Directors to pass proficiency self-assessment test conducted
by IICA, following are the details:

Name of Independent Directors	Registration details	Validity	Status of Proficiency exam
Mr. P Sarath Kumar	IDDB-DI-202002-012216	Lifetime	Exempted
Mr. Srinivas Samavedam	IDDB-DI-202111-039492	Lifetime	Cleared
Mr. Mannam Malakondaiah	IDDB-DI-202110-039289	Lifetime	Exempted

> Vigil Mechanism/Whistle-Blower Policy:

Over the years, the Company has established a reputation for doing business with integrity and maintained
zero tolerance towards any form of unethical behavior.

Your Company has formulated a Vigil Mechanism and Whistle-Blower Policy intending to provide a
mechanism for employees to report violations. It also assures them of the process that will be observed
to address the reported violation. The Policy also lays down the procedures to be followed for tracking
complaints, conducting investigations and taking disciplinary actions. It also provides assurances and
guidelines on confidentiality of the reporting process and protection from reprisal to complainants.

Protected disclosures can be made by a whistle-blower to report actual or suspected frauds and violation of
the Company''s Code of Conduct. The Policy also provides a mechanism to encourage and protect genuine
Whistleblowing among the Vendors.

No personnel have been denied access to the Audit Committee of the Board and Audit Committee oversees
the functioning of Vigil Mechanism/Whistle-Blower Policy.

The Whistle-Blower Policy of your Company is available on the website of the Company and can be accessed
at https://www.smslife.in/policies.php. The policy was last reviewed and amended by the Board in the
meeting held on 29^th May, 2023. The contact details for the vigil mechanism are available at the website of
the Company at www.smslife.in/contact-us.php.

D. DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors would like to assure the members that the financial statements for the year under review is as per
the requirements of the Companies Act, 2013 and guidelines issued by SEBI. Further, pursuant to the provisions
of Section 134(3)(c) of the Companies Act, 2013, to the best of their knowledge and based on the information
and explanations received from the Company, your Directors confirm that:

? in the preparation of the annual financial statements for the year ended 31^st March, 2023, the applicable
accounting standards had been followed along with proper explanation relating to material departures, if
any;

? the accounting policies selected and applied consistently, give a true and fair view of the state of affairs of
the Company and of the profits for the year 2022-23.

? proper and sufficient care had been taken 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;

? the annual accounts were prepared on a going concern basis;

? proper internal financial controls were in place and that such internal financial controls are adequate and
were operating effectively; and

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

> Non-disqualification of Directors:

None of the Directors of the Company is disqualified under the provisions of the Companies Act, 2013 or under
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company has obtained a Certificate from Mr. C. Sudhir Babu, Company Secretary in Practice, Hyderabad
(ICSI Memb. No. 2724 and C.P. No. 7666) pursuant to the provisions of Regulation 34(3) read with Schedule
V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 provided as Annexure II,
certifying that none of the Directors of the Company have been debarred or disqualified from being appointed
or continuing as Directors of companies by the Securities and Exchange Board of India (SEBI) or by the Ministry
of Corporate Affairs (MCA) or by any such statutory authority.

> Code of conduct for Directors and Senior Management:

Board of Directors in the meeting held on 29^th May, 2023 have reviewed and approved the Code of conduct for
Board of Directors and Senior Management pursuant to Regulation 17(5) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and can be accessed from the website of the Company at www.
smslife.in/policies.php

Further, in accordance with Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, declaration from Managing Director of the Company has been received confirming that all
the Directors and the Senior Management Personnel of the Company have complied with the aforesaid Code of
Conduct for the year 2022-23 forming part of the report as Annexure III.

E. BOARD PERFORMANCE ANNUAL EVALUATION.

In terms of requirements of the Companies Act, 2013 read with the Rules issued thereunder and SEBI (Listing
Obligations and Disclosure Requirements) regulations 2015, the Nomination and Remuneration Committee in its
meeting held on 10^th February, 2023 carried out the annual performance evaluation of the Board of Directors as
a whole, Committees of the Board and individual Directors. The members have expressed their satisfaction with
the evaluation process.

The Board of Directors in the meeting held on 29^th May, 2023 evaluated the individual performance of the
Independent Directors of the Company based on the specified criteria pursuant to Regulation 17(10) of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 and were satisfied with their performance.

> Disclosure of Expertise / Skills / Competencies of the Board of Directors:

The list of core skills / expertise / competencies identified by the Board of Directors of the Company as required
in the context of its business and sector(s) for it to function effectively and those actually available with the
Board, form part of the Corporate Governance Report.

F. REMUNERATION POLICY AND APPOINTMENT CRITERIA:

Your Company has in place a policy for remuneration of Directors, Key Managerial Personal (KMPs) and Senior
Management Personal (SMPs) as well as a well-defined criterion for the selection of candidates for appointment
to the said positions, which has been approved by the Board.

The following policies broadly lays down the guiding principles, philosophy and the basis for payment of
remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and
SMPs. The criteria for the selection of candidates for the above positions cover various factors and attributes,
which are considered by the Nomination and remuneration Committee and the Board of Directors while selecting
candidates.

? Criteria for making payment / remuneration to the Non-Executive Directors.

? Nomination and Remuneration Policy

Aforesaid policies as recommended by the Nomination and Remuneration Committee and approved by the
Board in their respective meeting held on 8^th August, 2023 can be accessed from the website of the Company at
www.smslife.in/policies.php

Details of Managerial Remuneration:				(^ in Lakhs)
Sl No.	Name of Executive Directors**	Salary	Perks	Total
1)	Mr. TVVSN Murthy, MD	198.00	4.58	202.58
2)	Mr. TV Praveen, ED	72.00	-	72.00
3)	Mrs. Sudeepthi Gopineedi, WTD	24.00	-	24.00
Total		294.00	4.58	298.58
	**MD - Managing Director | ED - Executive Director | WTD -			Whole-time Director

G. FAMILIARIZATION PROGRAMME OF THE INDEPENDENT DIRECTORS:

Your Company follows an induction programme for Independent Directors at the time of their joining to provide
them with an opportunity to familiarize themselves with the Company, its management, its operations and the
industry in which the Company operates.

Independent Directors are also explained in detail the compliance required from by them under the Companies
Act, 2023, the SEBI Regulations and other relevant regulations and affirmation taken with respect to the same.

The induction programme includes:

? Independent Directors have one-to-one discussion with the Managing Director, Executive Director and
Chief Financial Officer to familiarise them with the Company''s operations.

? Compliance Officer makes presentations to the Board periodically on the amendments to applicable laws,
new enactments which are critical to the business operations of the Company and the compliance status of
such laws.

The details of familiarization programmes are provided on the website of the Company and can be accessed at
www.smslife.in/pdf/familiarisation-proeram-for-independednt-directors-2022.pdf

H. MEETINGS OF THE BOARD OF DIRECTORS

Your Boar	d of Directors met four (4) times during the year	under review.
Sl.No.	Date and time	No. of Directors present
1.	28th May, 2022 [01.30 pm]	06
2.	9th August, 2022 [05.00 pm]	06
3.	14th November, 2022 [01.30 pm]	06
4.	10th February, 2023 [01.15 pm]	06

> Details of Sub-committees of Board:

The details of sub-committees of the Board of Directors are provided in the Corporate Governance Report
which forms a part of this Report. Further, there were no instances where the Board has not accepted the
recommendation of any sub-committees.

I. SEPARATE INDEPENDENT DIRECTORS MEETING:

In terms of requirements of Schedule IV of the Companies Act, 2013, a separate meeting of Independent
Directors of the Company was held on 10^th February 2023 at the Registered Office of the Company located at
Hyderabad to review:

? The performance of Non-Independent Directors (i.e. Executive Directors) and the Board as a whole and its
Committees thereof;

? To assess the quality, quantity and timeliness of the flow of information between the Management and the
Board.

In the aforesaid meeting, the Independent Directors noted that there is no full time Chairman.

They also concluded that the Board as a collective body is also performing satisfactorily and the flow of
information between the Company''s Management and the Board in terms of quality, quantity and timeliness is
satisfactory. Further, the Independent Directors had appreciated the quality of discussions at the Board and the
Committee Meetings and commended for improvement of the corporate governance structure that allows and
encourages the Board to fulfill its responsibilities.

J. KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of the Company as on 31^st March, 2023 in accordance with the provisions of
Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is as below:

? Mr. TVVSN Murthy, Managing Director.

? Mr. N Rajendra Prasad, Chief Financial Officer

? Mr. Trupti Ranjan Mohanty, Company Secretary

There is No change in KMP''s of the Company during the year.

> Directors and Officers Liability Insurance (''D&O'')

The Company has suo-moto taken Directors and Officers Liability Insurance (''D&O insurance'') for all its Directors
and members of the Senior Management pursuant to Regulation 25(10) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(3) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, forms part of the Annual Report in
Annexure IV.

15. ANNUAL RETURN

Annual Return pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of
the Companies (Management and Administration) Rules, 2014, the copy of Annual Return for the year 2022-23,
will be available on the website of the Company at www.smslife.in/financials.php.

16. RECLASSIFICATION OF PROMOTERS

During the year under review, following erstwhile members of Promoter group were reclassified into public
category, as approved by the Stock Exchanges on 13^th April, 2022.

Sl. No.	Name of the erstwhile promoters group	No. of Shares	% of holding
1.	Mr. Suresh Babu Potluri	2,539	0.08
2.	Mr. Hari Kishore Potluri	8,664	0.29

The details of Shareholding of promoter / promoter group of the Company as on 31^st March, 2023 as stated in
the notes to the financial statements forms part of this annual report and list of Top 10 shareholders (other than
Promoters) of the Company as on 31^st March, 2023 is provided separately in Annexure V.

17. AUDITORS & AUDITORS'' REPORT

A. STATUTORY AUDITORS:

M/s. Rambabu & Co. (firm Registration No. 002976S) were appointed as Statutory Auditors of your
Company in the 15^th Annual General Meeting (AGM) held on 30^th September, 2021 for a term of 5 (Five)
consecutive years pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies
(Audit and Auditors) Rules, 2014.

The Auditor''s Report for the year ended 31^st March, 2023, on the financial statements of the Company
is provided along with financial statements forming part of this Report and the same does not contain
any qualification, adverse remark, reservation or disclaimer and therefore, does not call for any further
explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

B. COST AUDITOR:

The cost records are required to be maintained by your Company and the same are required to be audited,
pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules,
2014 and the Companies (Cost Records and Audit) Rules, 2014. Company accordingly maintains the
required cost accounts and records as per the requirements of Section 148 of the Companies Act, 2013.

The Board has, on the recommendations made by the Audit Committee in their meeting held on 29^th May,
2023, reappointed Mr. KSN Sarma, Cost Accountant, Hyderabad (Registration No. 102145 and Membership
no. 6875), as Cost Auditor of the Company for conducting the cost audit for the year 2023-24, subject to
ratification of their remuneration at the ensuing 17^th (Seventeenth) Annual General Meeting.

C. SECRETARIAL AUDITOR:

Board of Directors had, upon recommendation of the Audit Committee, at its Meeting held on
28^th May, 2022, appointed M/s. SVVS & Associates Company Secretaries LLP, a firm of Company Secretaries
in Practice to undertake the Secretarial Audit of your Company for the year 2022-23 pursuant to the
provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014. The Secretarial Audit Report issued by M/s. SVVS & Associates
Company Secretaries LLP, Secretarial Auditors for the year ended 31^st March, 2023, which is an unqualified
report, is annexed herewith as Annexure VI.

Board of Directors has, upon recommendation of the Audit Committee, at its Meeting held on
29^th May, 2023, re-appointed M/s. SVVS & Associates Company Secretaries LLP, as the "Secretarial Auditors"
of your Company for the year 2023-24. Further, Company has received consent from M/s SVVS & Associates
Company Secretaries LLP to act as the auditor for conducting an audit of the secretarial records for the year
ending 31^st March, 2024.

> Annual Secretarial Compliance Report:

Company has obtained Annual Secretarial Compliance Report from Mr. C. Sudhir Babu, Practicing
Company Secretary (Proprietor, CSB Associates) on 29^th May, 2023, pursuant to SEBI circular no. CIR/
CFD/CMD1/27/2019 dated 8^th February, 2019; forms part of this Report as Annexure VII and the same
was also submitted to the Stock Exchange(s) on 29^th May, 2023. The aforesaid Report do not contain any
qualification, reservation or adverse remarks.

> Secretarial Audit of Material Unlisted Subsidiary:

Secretarial Audit of Mahi Drugs Private Limited, the material unlisted subsidiary of the Company was
also undertaken by M/s. SVVS & Associates Company Secretaries LLP for the year 2022-23 and the same
forms part of this Report as Annexure VIII in terms of Regulation 24A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

D. INTERNAL AUDITOR:

Board of Directors had, upon recommendation of the Audit Committee, at its Meeting held on 27^th July,
2020, reappointed M/s Adusumilli & Associates, Chartered Accountants (Firm No. 06983S) as the Internal
Auditors of the Company (perpetually, unless decided otherwise by the Board), in accordance with the
provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

The Internal Auditors submit their report on quarterly basis to the Audit Committee. Based on the report of
internal audit, management undertakes corrective action in the respective areas and takes necessary steps
to strengthen the levels of Internal Financial and other operational controls.

> Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors, the Cost Auditors, Internal Auditors and Secretarial
Auditors have not reported any instances of fraud committed in the Company by its Directors or Officers or
Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which is
required to be mentioned in this Report.

18. CODE FOR PREVENTION OF INSIDER TRADING

The Board of Directors, based on the recommendations of the Audit Committee, in the Meeting held on
29^th May, 2023, have revised the following codes/ policies pursuant to SEBI (Prohibition of Insider Trading)
Regulations, 2015:

? Code of practices and procedures for fair disclosure of Unpublished Price Sensitive Information along with
Policy for Determination of Legitimate Purposes.

? Code of Conduct for Prevention of Insider Trading.

? Policy and procedures for inquiry in case of leak of UPSI.

? Whistle Blower/ Vigil Mechanism Policy.

The objective of the aforesaid Code is to regulate, monitor and report trading by its Designated Persons and
Immediate Relatives of Designated Persons towards achieving and protecting the interest of Stakeholders at
large and the same has been made available on the Company''s website at www.smslife.in/policies.php.

Report pursuant to Clause I of Schedule B (Minimum Standards for Code of Conduct) of SEBI (Prohibition of
Insider Trading) Regulations, 2015 and Clause 6 of Code for Regulation & Prohibition of Insider Trading of the
Company, is submitted to the Board of Directors on a quarterly basis.

Company has implemented Structural Digital Database (SDD) w.e.f. 27^th October, 2022 pursuant to provisions of
Regulation 3(5) and 3(6) of SEBI (Prohibition of Insider Trading) Regulations, 2015.

Mr. Trupti Ranjan Mohanty, Compliance Officer has been authorised for setting forth the procedures and
implementation of the aforesaid codes.

19. MARKET CAPITALIZATION [RANKING]

Stock Exchanges have released a list of ranking of the Companies as on 31^st March, 2023 based on the Market
capitalization; Ranking of your Company is as under:

Stock Exchange	Rank as per Market Capitalization
National Stock Exchange of India Limited	1504
BSE Limited	1729

Note -

Based on the aforesaid ranking, following compliance are not applicable to the Company:

? Constitution of Risk Management Committee.

? Adopting Dividend Distribution Policy.

? Appointment of Women Independent Director.

20. CORPORATE GOVERNANCE

In compliance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, the Corporate Governance Report for the year 2022-23 as required under SEBI
(Listing Obligations and Disclosure Requirement) Regulations, 2015 of the Company is attached to this report as
Annexure IX.

The certificate from M/s. Rambabu & Co., Statutory Auditors of the Company with regard to compliance of
conditions of corporate governance as stipulated under Schedule V (E) of Regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations 2015 is annexed to the Report on Corporate Governance
as Annexure IXA.

21. SECRETARIAL STANDARDS

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS - 1)
and General Meetings (SS - 2) issued by the Institute of Company Secretaries of India (ICSI) and approved by the
Central Government.

22. UPDATION OF EMAIL IDS FOR RECEIVING NOTICES / DOCUMENTS IN ELECTRONIC MODE

Shareholders who have not registered their email addresses with the Company are requested to register their
email addresses with the Company to enable the Company to deliver notices /documents through e-mail.
Shareholders holding their shares in demat mode also have an option to register / update their email addresses,
KYC and Bank details with their depository, through their depository participant.

Detailed procedure can be accessed at www.smslife.in/investors/Procedure%20for%20attending%20AGM.pdf

23. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company has 1 (one) subsidiary (with 60% stake) which is also material subsidiaries of the Company as per
the definition of Regulation 16(1) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015.

In this regard, Board of Directors of the Company in the meeting held on 28^th May, 2022 had:

? Appointed Secretarial Auditor in Mahi Drugs for the year 2022-23, pursuant to Regulation 24A of SEBI
(Listing Obligations and Disclosure Requirements) Regulations. 2015.

? Nominated Independent Director on the Board of Mahi Drugs, pursuant to Regulation 24(1) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations. 2015.

Statement containing salient features of the financial statements of the aforesaid subsidiary in the prescribed
Form AOC-1 forms part of the Annual Report as Annexure X. Further, the policy for determining material
subsidiaries pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is available
on the website of the Company at www.smslife.in/policies.php

Your Company has no joint venture or Associate Companies as on 31^st March, 2023.

No company has ceased to be a subsidiary/ associate/ joint venture of the Company during the year.

24. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Pursuant to the provisions of Section 135 and Schedule VII of the Companies Act, 2013, CSR Committee of
the Board of Directors had framed the policy on Corporate Social Responsibility (Details are provided in the
Corporate Governance Report) and the Annual report on CSR initiatives undertaken during the year 2022-23
have been provided in Annexure XI. Chief Financial Officer of the Company has furnished the certificate under
Rule 4 of the Companies (CSR) Rules, 2014.

25. DEPOSITORY SYSTEM

Your Company''s Equity Shares are available for dematerialization through National Securities Depository Limited
("NSDL") and Central Depository Services (India) Limited ("CDSL").

The ISIN Number of your Company for both NSDL and CDSL is INE320X01016.

26. RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the year under review were in the ordinary course
of business and on an arm''s length basis and were in compliance with the applicable provisions of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 read with rules made
there under. Details of related party disclosures as stated in the notes to the financial statements forms part of
this annual report.

> Material Related Party Transactions:

During the year under review, following is Material Related Party Transactions pursuant to Regulation 23 of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Name of Related party	Nature of Transaction	Threshold Limit*	Aggregate Transaction value
Mahi Drugs Private Lim¬ ited, Subsidiary Company.	Sale & Purchase of Goods & Services and Renting of property.	34.94	35.62

*10% of consolidated turnover (^349.74 Crores) of the Company for the year 2021-22

The aforesaid Material Related Party Transactions were approved by the Shareholders pursuant to Regulation 23(4)
of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by Postal Ballot, which commenced on
26^th July, 2022 and concluded on 24^th August, 2022.

Particulars of contracts or arrangements entered by the Company with related parties referred to in Section
188(1) are furnished under Form AOC-2 as Annexure XII.

> Policy on Related Party Transactions:

In accordance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 as amended by SEBI notification dated 9^th November, 2021 read with
clarification issued by SEBI dated 30^th March, 2022 and 8^th April, 2022, your Company has amended the "Policy
on materiality of Related Party Transactions and dealing with Related Party Transactions" in the Board meeting
held on 28^th May, 2022 and the same can be accessed from the website of the Company at www.smslife.in/
policies.php.

27. INTERNAL FINANCIAL CONTROLS

The internal financial controls with reference to the Financial Statements, apart from statutory audit, internal
audit and cost compliance, are adequate to the size and operations of the Company.

Audit Committee annually reviews and evaluates the effectiveness of internal financial control.

28. RISK MANAGEMENT

The Company identifies the various risks and challenges, internally as well as externally and takes appropriate
measures with timely actions to mitigate risk. Audit Committee periodically oversee and advise on current risk
exposures of the Company and future risk strategies and also recommend the Board about risk assessment
and minimization procedures. The Audit Committee has additional oversight in the area of financial risks and
controls. To ensure the mitigation of risk the Company manages monitors and reports on the principal risks and
uncertainties that can impact its ability to achieve its strategic objectives.

29. SIGNIFICANT OR MATERIAL ORDER PASSED BY REGULATORS/COURTS

There are no significant and material orders passed by the Courts or Regulators against the Company.

30. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013

Your Company believes in fair employment practices and is committed to provide an environment that ensures
that every employee is treated with dignity and respect and is provided equitable treatment. Your Company
has adopted a Policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules there under. Internal Complaints Committee (ICC) has been
set up to redress complaints received regarding sexual harassment.

During the year under review, there was NO COMPLAINT received by the Committee.

31. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO

The particulars as required to be furnished as per the provisions of Section 134(3) of the Companies Act, 2013
read with Rule 8 of the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo is annexed herewith as Annexure XIII.

32. MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The ratio of the remuneration of each director to the median''s employee''s remuneration and other details
in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Companies
Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in separate annexure
forming part of this report as Annexure XIV.

Disclosure as per Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is as mentioned below:

Name	Mr. TVVSN Murthy
Age	63 years
Designation	Managing Director
Remuneration	^2.03 Crores
Qualification	Graduate in Chemistry
Experience	More than 40 years'' experience in Pharma sector
Date of commencement of employment	01.04.2016
Nature of employment	Contractual (as approved by shareholders)
Last employment	SMS Pharmaceuticals Limited
Shareholding as on 31st March, 2023	23.86% (including indirect holding)
Relationship with other Directors	Father of Mr. TV Praveen, Executive Director and Mrs. Sudeepthi Gopineedi, Whole-time Director.

The remuneration paid to Directors, Key Managerial Personnel and other employees of the Company during the
year 2022-23 was in conformity with the Nomination and Remuneration Policy of the Company and within the
limits approved by the shareholders.

33. MD AND CFO - COMPLIANCE CERTIFICATION

Certificate of the Managing Director and Chief Financial Officer of the Company on financial statements and
applicable internal controls as stipulated under Regulation 17(8) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is enclosed as Annexure XV to this report.

34. WEBLINK OF POLICIES

Company has adopted various statutory policies / codes as required under Companies Act, 2013 and SEBI
Regulations and the same can be accessed from the website of the Company at www.smslife.in/policies.php

35. GENERAL DISCLOSURE

Your Directors states that no disclosure or reporting is required in respect of the following matters under the
Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, either on
account of the absence of any transaction or the inapplicability of the provisions:

? No agreement has been executed by the shareholders, promoters, promoter group related parties,
Directors, KMPs and employees of the Company and its Subsidiary pursuant to Regulation 30A of SEBI
(Listing Obligations and Disclosure Requirements) Regulations 2015 which might Impact the management
or control of the Company / Impose any restriction on the Company., except in normal course of business
/ Impose any liability on the Company., except in normal course of business.

? No special rights have been granted to any shareholders of the Company, hence no compliance pursuant to
Regulation 31B of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is required.

? No shares pursuant to differential rights / sweat equity shares / Employees Stock Option Scheme were
issued during the year and accordingly, no information was required to be furnished.

? No remuneration or commission was received by Managing Director or the Whole-time Directors of the
Company from the Subsidiary Company as per section 197(14) of the Companies Act, 2013.

? Business Responsibility and Sustainability Report (ESG reporting) is not applicable to the Company.

? There was no revision in the financial statements.

? There were no instances of failure of implementation of any Corporate Actions.

? Company has not defaulted in payment of interest and/ or repayment of loans to any of the financial
institutions and/ or banks during the year under review.

? No transactions, with person(s) or entity(ies) belonging to the Promoter / Promoter Group which hold(s)
10% or more shareholding in the Company, as per Schedule V (2A) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, during the period under review, except the managerial remuneration
paid to Mr. TVVSN Murthy, Promoter and Managing Director of the Company.

The additional information required to be given under the Companies Act, 2013 and the Rules made thereunder,
has been laid out in the Annexures and Notes attached to the Financial Statements forming part of this report.

36. ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank Company''s employees at all levels for their hard work and commitment.
Your Board also places on record its sincere appreciation for the continued support received from the customers,
members, suppliers, bankers, financial institutions and all other business partners/associates.

By Order of the Board
For SMS Lifesciences India Limited

TV Praveen TVVSN Murthy

Date: 08.08.2023 DIN: 08772030 DIN: 00465198

Place: Hyderabad Executive Director Managing Director

---

Mar 31, 2018

Dear Shareholders,

The Directors have pleasure in presenting the 12th Annual Report on the operations of the Company and the audited financials for the financial year ended 31st March, 2018.

Financial Results: (Rs. in Lakhs)

Particulars	2018	2017
Gross Sales	22,618.30	22,438.77
Net sales	20,449.83	21,071.58
Other Operating income	413.94	358.70
Net Revenue from Operations	21,748.17	22,791.92
Other Income	307.72	172.58
Finance Cost	417.92	616.47
Depreciation	570.36	555.45
Profit Before Tax	639.66	1,846.21
Taxation	(10.47)	551.89
Profit After Tax	650.13	1,294.32
Earnings per share (In Rupees)
Basic-	21.50	12,943.19
Diluted -	21.50	42.81

STATE OF COMPANY AFFAIRS

During the year 2017-18 the Company had achieved production of 1729 M.T of APIs and their Intermediaries in comparison with 1997 M.T for the FY 2016-17. The net sales of the Company for the FY 2017-18 have reached Rs.20,449.83 lakhs as against Rs.22,273.20 lakhs for the FY 2016-17.

ACQUISITION OF MAHI DRUGS PRIVATE LIMITED

The Board approved the acquisition of Mahi Drugs Private Limited (Mahi Drugs), a Bulk Drugs manufacturing Company located at Vishakhapatnam, Andhra Pradesh, as a wholly owned (100%) subsidiary of SMS Lifesciences India Limited by entering into a share purchase agreement and the Company has acquired 19% shareholding by the reporting date. Mahi drugs has a manufacturing plant spread across 4.5 Acres in Ramky Pharma City, Parawada with reactor capacity of around 90 KL. It has well established infrastructure in production, utilities, warehousing and effluent management. Your Company will expand the existing business in anti ulcer segment and also plan for manufacturing new API/intermediates by increasing the capacity. Strategy is to go for USFDA approval from this site and cater to regulated markets. USFDA INSPECTION

The Company takes pride in informing that it is has successfully completed USFDA audit during April, 2018 of Unit 1, Khazipally, Hyderabad. This is the 1st FDA audit of this site in 30 years of its operations. This will help in enhancing sale of intermediates to regulated markets and API in key markets. Also this site has approval from Japan PMDA, Korea FDA, COFEPRIS Mexico and WHO GMP.

SCHEME OF ARRANGEMENT:

The Demerger Scheme sanctioned by the National Company Law Tribunal (NCLT) vide its order dated 15-052017 received by the Company on 17-05-2017 has been implemented with appointed date as 01st April, 2016 as provided in the Scheme. Accordingly, the Semi Regulated Facilities i.e., Unit I, IV and V along with (i) premises situated at Industrial Estate, Sanath Nagar, Hyderabad;

(ii) Industrial Development area, Jeedimetla, Hyderabad;

(iii) Flat No. 417, Nilgiri, Aditya Enclave, Ameerpet, Hyderabad and (iv) Vacant Land admeasuring Ac 19.00 situated at Pharma City, Parawada, Vishakapatnam. Along with these assets the company has conferred with the liabilities mentioned in the books of the demerged company as on the appointed date.

LISTING OF SHARES

Pursuant to the scheme of arrangement, the equity shares of the Company were listed in the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) w.e.f 17th August 2017.

SHARE CAPITAL:

Upon the coming into effect of the Scheme, the Authorized Share Capital of the Company shall stand increased from Rs. 25,00,000/- (Rupees Twenty Five Lakh only) divided into 2,50,000 Equity Shares of Rs.10/-(Rupees Ten) each to Rs. 3,50,00,000/- (Rupees Three Crore Fifty lakh only) divided into 35,00,000 Equity Shares of Rs. 10/- (Rupees Ten) each.

The Company allotted 30,23,287 equity shares of Rs.10 each to the shareholders of SMS Pharmaceuticals Limited (transferor Company) on 27^th June, 2017 in pursuance of demerger scheme out of General Reserve. Hence the paid up capital of the Company is Rs.3,02,32,870.

TRANSFER TO RESERVES:

During the year Your Company has not transferred any amount to General Reserve.

DIVIDEND:

The Board of Directors has not considered the dividend for the FY 2017-18 in order to conserve the financial resources keeping in view of the ongoing expansion of operations.

CHANGE IN NAME AND NATURE OF BUSINESS OF THE Company:

During the year under review there is no change in the nature of business of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL: Directors:

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Mr.TVVSN Murthy, Director is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible, offered himself for reappointment.

The Board of Directors has approved the appointment of Mr.TVVSN Murthy, as Managing Director of the Company w.e.f 01st June 2017 for a period of five years and designated as Key Managerial Personnel of the Company.

Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sarath Kumar Pakalapati and Mrs. Thummala Neelaveni were appointed as Additional Directors (Independent) w.e.f. 25th May, 2017 and Mr.Shravan Kudaravalli was appointed as Additional Director (independent) w.e.f 28.05.2018 and shall hold office up to the date of ensuing Annual General Meeting. Being eligible, the Board recommends their appointment as Independent Directors of the Company in terms of section 149(10) of the Companies Act, 2013 for a continuous period of 5 (five) years.

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management.

Key Managerial Personnel:

The Company has appointed Mr.Pavan Pise as Company Secretary and Compliance Officer w.e.f 21st April 2017. The Board in their meeting held on 25th May 2017 appointed Mr.Nadella Rajendra Prasad, Chartered Accountant, as Chief Financial Officer (CFO) w.e.f 01st June 2017.

PERFORMANCE EVALUATION

Board Evaluation: The annual evaluation framework for assessing the performance of Directors comprises of the following key areas:

i) Attendance for the meetings, participation and independence during the meetings.

ii) Interaction with Management.

iii) Role and accountability of the Board.

iv) Knowledge and proficiency.

The evaluation involves assessment by the Nomination and Remuneration Committee and Board of Directors. A member of the Nomination and Remuneration Committee and Board does not participate in the discussion of his/her evaluation.

MEETINGS OF THE BOARD OF DIRECTORS

During the year under review the Board of Directors of the Company met Seven times viz. 25th May 2017, 29th May, 2017, 27th June,2017, 13th September, 2017, 13th December,2017, 5th February 2018, 8th February 2018 (Adjourned) and 23rd February 2018.

EXTRA ORDINARY GENERAL MEETING:

The Company convened an Extra Ordinary general meeting of the members of the Company on 10th May 2017 to transact the following business:

a) Appointment of Auditor to fill the Casual Vacancy;

b) To borrow Money;

c) To create charge on the assets of the Company;

d) Alteration of Articles of Association of the Company. COMMITTEES OF THE BOARD

The details of the Committees of the Board viz., Audit Committee, Nomination and Remuneration Committee, CSR Committee and Stakeholders Relationship Committee are reported in the Report on Corporate Governance, which forms part of the Board’s Report.

DECLARATION BY INDEPENDENT DIRECTORS

The independent directors have submitted the declaration of independence stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE Company:

The Company does not have any subsidiary, joint venture and associate Company.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposits in terms of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014.

AUDITORS:

Statutory Auditors:

The Board of Directors in their meeting held on 03rd April 2017 have recommended for appointment of M/s. Rambabu & Co., Chartered Accountants, Hyderabad as statutory auditors of the Company to fill the casual vacancy arised out of resignation of M/s. Adusumilli & Associates, Chartered Accountants. The said appointment was approved by the shareholders in the Extra Ordinary General meeting held on 10th May, 2017 to continute till the conclusion of 11th Annual General Meeting.

Further, the appointment of M/s.Rambabu & Co. as Statutory Auditors of the Company for a further period of four years was approved by the Shareholders commencing from the conclusion of 11th Annual General Meeting till the conclusion of 15th Annual General Meeting of the Company.

The Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditors:

In terms of Section 138 of the Companies Act, 2013 and the relevant Rules, the Company appointed M/s. Adusumilli & Associates, Chartered Accountants, as Internal Auditor. The Internal Auditor directly reports to the Audit Committee.

Cost Auditor:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, and the Companies (Cost Records & Audit) Amendment Rules, 2014, the Board in their meeting held on 28^th May 2018, has appointed Mr. K.S.N. Sarma having Registration No.102145 and Membership No.6875 as Cost Auditor of the Company for the financial year 2018-19. The provisions also require that the remuneration of the Cost Auditor is to be approved by the shareholders as mentioned in the AGM Notice.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s SVVS & Associates, Practicing Company Secretaries LLP, to undertake the secretarial audit of the Company for the Financial Year ended 31st March, 2018. The Secretarial Audit Report is annexed herewith as ‘Annexure VI’. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

CORPORATE SOCIAL RESPONSIBILITY:

As per the provisions of the Section 135 of the Act, the average net profits of the Company during the preceding three years (2014-15, 2015-16, 2016-17) stands as Rs. 604.34 lakhs hence the Company is required to spend a sum of Rs. 12.08 lakhs towards CSR Expenditure in FY 2017-18.

The Company has come under the purview of CSR provisions for the first time and the Company is chalking out the actions to execute the CSR activities hence the CSR obligation of Rs. 12.08 lakhs for 2017-18 could not be met on account of short time. But henceforth the Company will ensure and will make all possible efforts to fulfill the CSR obligations.

MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis Report is annexed, which forms part of this Report as Annexure I.

LOANS, GUARANTEES AND INVESTMENTS:

The Board of the Company approved the acquisition of Mahi Drugs Private Limited in its meeting held on 23.02.2018. The particulars of investments as on 31st March, 2018 are furnished in financial Statement forming part of this Annual Report as ‘Annexure II’.

TRANSACTION WITH RELATED PARTY:

All contracts/arrangements/transactions entered by the Company during the financial year 2017-18 with related parties were in the ordinary course of business and at an arm’s length basis and are in compliance with the provisions of the Companies Act. There are no materially significant related party transactions made by the Company with Promoters, Directors and Key Managerial Personnel etc. which may have potential conflict with the interest of the Company. A Policy on Related Party Transactions is uploaded on the Company’s website at the web link http://www.smslife.in/investors/policy. The particulars of contracts or arrangements entered into by the Company with related parties referred to in Section 188(1) are kept by the Company in Statutory Form AOC-2 as ‘Annexure III’.

HUMAN RESOURCES

‘Human Resources’ are recognised as a key pillar of any successful organisation and so is for SMS Lifesciences. The Company puts constant efforts in recruiting and training the employees and ensures to bring out the best of them. The Company adopts a HR policy and ensures that all the employees are aware of personnel policies. The needs of the employees are addressed with high importance and efforts are made to provide a highly challenging and healthy environment. Besides all these, the Company places high emphasis on professional etiquette required of every employee

RISK MANAGEMENT

The provisions related to the Risk Management Committee of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company. The Company has a Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to minimise adverse impact on the business objectives and enhance the Company’s competitive advantage. The risk framework defines the risk management approach across the enterprise at various levels.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit is decided by the Audit Committee and the Board. To maintain objectivity and independence, the Board has appointed an Internal Auditor, which reports to the Audit Committee of the Board on a periodic basis. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies for various functions of the Company. Audit observations and actions taken thereof are presented to the Audit Committee of the Board.

WHISTLE BLOWER POLICY/VIGIL MECHANISM:

The Company has established a mechanism through which all the stakeholders can report the suspected frauds and genuine grievances to the appropriate authority. The whistle Blower Policy which has been approved by the Board of Directors of the Company has been uploaded on the Company’s website (http://www. smslife.in/investors/whistle-blower-protection-policy). During the year under review the Company has not received any complaint(s) under this policy.

BOARD’S RESPONSE ON AUDITORS QUALIFICATIONS, OBSERVATIONS, RESERVATION OR ADVERSE REMARKS OR DISCLAIMERS MADE:

There are no qualifications, observations, reservation or adverse remarks made by the Statutory Auditors in their report.

CORPORATE GOVERNANCE

A separate section on Corporate Governance practices followed by your Company, as stipulated under Schedule V(C) of the SEBI (LODR) Regulations, 2015 is enclosed forming part of this report. The certificate of M/s. Rambabu & Co, Statutory Auditors, with regard to compliance of conditions of corporate governance as stipulated under Schedule V (E) of the SEBI (LODR) Regulations, 2015 is annexed to the Report on Corporate Governance as ‘Annexure IV’.

EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT-9 is given as Annexure V and forms part of this Report.

REPORTING ON SEXUAL HARASSMENT:

The Company has zero tolerance for sexual harassment at workplace and has adopted a “Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women 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 for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to provide equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company’s office premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

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

[Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014]

i. Conservation of Energy

In keeping up with the Company’s commitment towards conservation of energy, the Company has taken various optimization and innovative measures accordingly it has taken initiative to reduce power consumption by fixing of LED bulbs and other measures are taken to reduce energy consumption by using energy efficient equipments. The Company is identifying cheaper power sources both in-house and external and utilizing alternative sources of energy.

ii. Technology Absorption

No technology absorption is involved.

iii. Foreign Exchange earnings and outgo

- Earnings:

- FOB value of Exports- - Rs.107,20,70,537.

- Outgo:

- Sales Commission - Rs.1,16,75,767

- Travelling Expenses - Rs.40,507

- CIF value of Imports - Rs. 69,06,63,613 (Raw Materials)

Particulars of Employees and related disclosures:

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:.

(i) & (ii) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year, the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name	Designation	Ratio of remuneration of each director to the median remuneration of employees	% Increase in remuneration during FY 2017-18*	Remuneration for FY 2017-18 (Rs. In lakhs)
Mr. TVVSN Murthy,	Managing Director	1 : 88.29	NA	242.07
Mr.Nadella Rajendra Prasad	Chief Financial Officer	NA	NA	13.70
Mr.Pavan Pise	Company Secretary	NA	NA	4.47

(iii) As the demerger took place during the current year and this is the first year of operations after completion

*The increase in remuneration cannot be calculated as no remuneration was paid to the Managing Director during the previous year, as he drawn the remuneration in SMS Pharmaceuticals Limited (Demerged Company). Subsequently, necessary approvals were obtained during the current year and remuneration was paid accordingly. CFO and Company Secretary were appointed during the current year, Hence no Comparison is available.. of Demerger, the percentage of increase in median remuneration of employees cannot be calculated.

(iv) the number of permanent employees on the rolls of Company as on 31.03.2018 - 326.

(v) As the demerger took place during the current year and this is the first year of operations after completion of Demerger, the average percentile increase in the salaries of employees cannot be ascertained.

(vi) The key parameters for any variable component of remuneration availed by the Directors - In case of Non-Executive Directors, Payment of sitting fees for Board / Committee Meetings are on the basis of their attendance. Commission to Directors is determined by the Nomination & Remuneration Committee with reference to a threshold of eligible profits within the statutory limits and performance evaluation.

(vii) Affirmation that the remuneration is as per the Remuneration Policy of the Company:

It is affirmed that the remuneration paid to all the Key management Personnel was in accordance with remuneration policy adopted by the Company.

DIRECTOR’S RESPONSIBILITY STATEMENT:

The Directors’ Responsibility Statement referred to in clause (c) of Sub- section (3) of Section 134 of the Companies Act, 2013 shall state that

1) in the preparation of financial statements for the year ending 31st March, 2018 the applicable accounting standards had been followed along with proper explanation relating to material departures, if any:

2) the directors had selected such accounting policies notified and modified by ICAI 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 and loss of the Company for that period;

3) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act as amended from time to time for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4) the annual accounts of the Company had been prepared on a going concern basis;

5) the directors had laid down internal financial control to be followed by the Company and that such internal financial control are adequate and were operating effectively

6) 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.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND Company’S OPERATIONS IN FUTURE:

No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

ACKNOWLEDGEMENTS:

The Directors place on record their sincere appreciation for the significant contribution made by the employees through their dedication, hard work and commitments. The Directors gratefully acknowledge and appreciate the support extended by the Banks, Financial Institutions, various Government authorities, customers and also shareholders of the Company, for their continued support and confidence reposed in the Company.

For and on behalf of the Board of Directors

(Ramesh Babu Potluri) (TVVSN Murthy)

Director Managing Director

DIN:00166381 DIN:00465198

Place: Hyderabad

Date: 28^th May, 2018