SMS Lifesciences India Ltd

[for the year ended 31^st March 2024]

TO THE MEMBERS,

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:

(Rs.in Lakhs)

J Standalone Financial summary:

During the FY 2023-24, your Company achieved an operating revenue of Rs.300.00 crores against Rs.315.24 crores in 2022-23. The Gross Profit before interest, depreciation and taxes during the year stood at Rs.38.27 crores as against Rs.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 Rs.19.11 Crores against Rs.18.37 crores in 2022-23. Total Comprehensive Income stood at Rs.12.65 crores during 2023-24 against Rs.13.27 crores in 2022-23.

J Consolidated Financial summary:

On consolidation basis, the revenue from operations for the year was Rs.305.96 crores against Rs.315.56 crores in 2022-23. The Gross Profit before interest, depreciation and taxes during the year stood at Rs.34.94 crores as against Rs.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 Rs.9.84 Crores against Rs.16.59 crores in 2022-23. Total Comprehensive Income stood at Rs.5.87 crores during 2023-24 against m.40 crores in 2022-23.

Mahi Drugs Private Limited (subsidiary) has reported a net loss of Rs.691.24 lakhs during the period under review as compared to net loss of Rs.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 Rs.43.22 for the year ended 31st March, 2024 as against Rs.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 Rs.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 Rs.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 Rs.1.50 (Rupee One and Fifty paisa only) per equity share of the face value of Rs.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 Rs.200 lakhs to the general reserve. Current general reserves stand at Rs.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 Rs.599.33 lakhs (2.00% of the turnover) as against Rs.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:

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.

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:

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:

**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.