The Directors are pleased to present the 37^th Annual Report of SMS Pharmaceuticals Limited ("The Company”) along with the Audited
Financial Statements for the Financial Year ended 31^st March, 2025. The Consolidated performance of the Company has been referred
to wherever required.

FINANCIAL SUMMARY

The Audited Financial Statements of your Company as on 31^st March, 2025, are prepared in accordance with the relevant applicable Indian
Accounting Standards ("Ind AS”) and Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("SEBI Listing Regulations”) and the provisions of the Companies Act, 2013 ("Act”).

The summarized financial highlight is depicted below:

STATEMENT OF AFFAIRS AND COMPANY'S
PERFORMANCE

Financial & Production Performance

During the FY 2024-25 the Company had achieved production of
3,097.24 M.T. of APIs and their Intermediates in comparison with
2,247.88 M.T. for the previous FY 2023-24.

During the FY 2024-25 the Company recorded the net sales of
H 77,191.14 Lakhs as against H 69,232.52 Lakhs for the previous
FY 2023-24. The Company has recorded EPS of H 8.07 in the
FY 2024-25 as against H 5.84 for the previous FY 2023-24.

Subsidiaries and Associates

Your Company is having an Associate Company i.e., "VKT Pharma
Private Limited”. Your Company holds 34.83% of equity shares
in the said Associate Company during the Financial Year ended
31^st March, 2025 and the share of profit for your Company for the
Financial Year 2024-25 was H 173.68 lakhs.

Your Company is having a subsidiary Company i.e., "SMS
Peptides Private Limited” incorporated on November 01, 2024.
Your Company holds 93.00% equity shares in the said subsidiary
Company during the Financial Year ended 31^st March, 2025 and
the share of Loss for your Company for the Financial Year 2024-25
was H 0.78 lakhs.

Your Company has incorporated a Joint Venture (JV) in Spain in
the year 2021 with nomenclature of "CHEMO SMS ENTERPRISES
SL' in the capital ratio of 55:45 with a share of 45% contributed
by your Company.

There were no transactions during the reporting period, however,
all the JV product sales were routed directly from your Company
to the end customers during the reporting period as per JV
manufacturing arrangement.

The consolidated financial statements had been prepared as
per Accounting Standard (AS) 23 "Accounting for Investment in

Associates in Consolidated Financial Statements” specified under
Section 133 of Companies Act, 2013 for considering the financials
of Associate Company. The required form, as per the provisions of
the Sec. 129(3) read with Rule 5 of Companies (Accounts) Rules,
2014 i.e., Form AOC-1 forms part of the Report as Annexure 1.

CHANGE IN NATURE OF BUSINESS

As per the requirements of Rule 8 (5) (ii) of Companies (Accounts)
Rules, 2014, your Board of Directors specify that, there is no
significant change in the nature of business of the Company
during the financial year under review.

TRANSFER TO RESERVES

During the year, Your Company has transferred an amount of
H1000.00 Lakhs to General Reserve out of the amounts available
for appropriations.

DIVIDEND

Your Directors have pleasure in recommending the dividend of Re.

0.40 (i.e. 40%) per equity share of Re. 1/- face value, aggregating
to H3,54,60,812/- (Rupees Three Corers Fifty Four Lakhs Sixty
Thousand Eight Hundred and Twelve only) which shall be paid
within 30 days after the conclusion of the Annual General Meeting,
subject to the approval of the shareholders of the Company.
Payment of dividend to members will be subject to tax deduction
at source (TDS) as per statutory requirement.

Pursuant to Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Board of
Directors of the Company have adopted a Dividend Distribution
Policy. The policy lays down a broad framework and factors which
the Board considers for deciding the distribution of dividend to
its shareholders. The said policy is available on the Company's
website https://smspharma.com/wp-content/uploads/2022/08/
Dividend-Distribution-policy.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, the Company has key changes in its
Directors and Key Managerial Personnel.

(i) Appointment:

During FY 2024-25, pursuant to the recommendation
of the Nomination & Remuneration Committee and
approval of the Board:

a. Dr. Suresh Kumar Gangavarapu (DIN: 00183128) was
appointed as an Independent Director of the Company
for a term of Five consecutive years from 12^th August,
2024 to 11^th August, 2029.

b. Mrs. Shanti Sree Bolleni (DIN: 07092258) was appointed
as an Independent Director (Women Director) of the
Company for a term of Five consecutive years from 12^th
August, 2024 to 11^th August, 2029.

c. Mr. Trilok Potluri (DIN: 07634613) was appointed as
a Non-Executive Non Independent Director of the
Company w.e.f. 12^th August, 2024.

d. Dr. Sunkara Venkata Satya Shiva Prasad (DIN: 10404277)
was appointed as a Non-Executive Non Independent
Director of the Company w.e.f. 12^th August, 2024.

The aforementioned appointments were further approved by
the Shareholders at the Annual General Meeting held on 30^th
September, 2024.

(ii) Re-appointment:

On the recommendation of Nomination and Remuneration
Committee, the Board of Directors at their meeting held on
1^st July, 2025 has re-appointed Mr. Vamsi Krishna Potluri
(DIN: 06956498) as a Whole-Time Director designated
as Executive Director of the Company for a second term
of Three Years (3) with effect from 1^st July, 2025 to 30^th
June, 2028, subject to the approval of the members at
the ensuing AGM.

(iii) Term Completion/ Retirement:

a. Mr. Sarath Kumar Pakalapati (DIN: 01456746) has
retired as an Independent Director of the Company on
account of completion of his second and final term
w.e.f. close of business hours on 11^th August 2024.

b. Mrs. Neelaveni Thummala (DIN: 00065571), has retired
as an Independent Director of the Company on account
of completion of her second and final term w.e.f. close
of business hours on 11^th August 2024.

(iv) Retirement by rotation:

In accordance with the provisions of section 152(6) of the Act
and in terms of the Articles of Association of the Company,
Mr. Trilok Potluri (DIN: 07634613), Non-Executive Non
Independent Director, will retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for
re-appointment. The Board recommends his re-appointment.

(v) Declaration of Independence:

The Company has received declarations of independence
from the Independent Directors as stipulated under
Section 149 (7) of the Companies Act, 2013, that each
Independent Director meets the criteria of Independence
laid down in the Section 149 (6) of the Companies Act,
2013 and Regulation 16(1)(b) of SEBI (Listing Obligations
and Disclosure Requirements), Regulations, 2015. All the
Independent Directors of the Company have enrolled in
the Independent Director databank maintained by Indian
Institute of Corporate Affairs (IICA) as per Companies
(Creation and Maintenance of databank of Independent
Directors) Rules, 2019.

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ('Listing Regulations'),
the Management Discussion and Analysis is presented in a
separate section forming part of this Annual Report for the year
ended 31^st March, 2025, as required under the provisions of the
Listing Regulations.

SHARE CAPITAL
Equity Share Capital:

During the year under review, the authorized share capital remained
unchanged at H 12,00,00,000/- divided into 12,00,00,000 equity
shares of H 1/- each. However, the paid-up share capital changed
from H8,46,520,300 to H 8,86,52,030/- comprising 8,86,52,030
equity shares of H 1/- each, consequent to the conversion of
40,00,000 warrants into 40,00,000 equity shares on 27^th March,
2025. A report on the same i.e., 'Equity Buildup Report' forms part
of this report as Annexure - 2.

Listing of shares: Equity shares of the Company are listed in
National Stock Exchange of India (NSE) and BSE Limited (BSE)
with effect from 28^th February, 2007. [Listing fees has been paid
for the year 2025-26 to both the Exchanges].

Conversion of Warrants into Equity Shares issued on a
private placement basis

Pursuant to the approval accorded by the members, at their Extra¬
Ordinary General Meeting held on 06^th March, 2023 the Securities
Allotment Committee of Board of Directors passed resolution
on 19^th March, 2024 for allotment of 90,00,000 (Ninety Lakh)
Convertible Warrants at an issue price of H127/- each Warrant
aggregating up to H114,30,00,000/- to promoters/promoters group
of the Company, upon receipt of upfront money of 25% of issue
price i.e., H31.75/- per warrant aggregating to H28,57,50,000/-.

During the financial year, the Company received the balance
75% of the issue price (i.e., H95.25 per warrant) aggregating to
H 38,10,00,000/- from two allottees holding 40,00,000 convertible
warrants. On 27 March 2025, the Securities Allotment Committee
converted these warrants into 40,00,000 equity shares of H1/-
each, in accordance with SEBI (ICDR) Regulations, 2018.

The Company duly submitted the required filings with the Ministry
of Corporate Affairs and submitted the documents for listing and
trading approvals with both the National Stock Exchange of India
Limited and BSE Limited.

On 17^th June, 2025, the Company received trading approvals from
the stock exchanges for the 40,00,000 equity shares.

As a result, 50,00,000 out of the original 90,00,000 convertible
warrants (issued on 19 March 2024) remain pending for conversion.

MATERIAL CHANGES AND COMMITMENTS,
AFFECTING THE FINANCIAL POSITION OF THE
COMPANY:

There are no material changes and commitments which affect the
financial position of the Company that have occurred between the
end of the financial year to which the financial statements relate
and the date of this report.

EVALUATION OF PERFORMANCE OF BOARD OF
DIRECTORS:

The Company believes in creating value for its stakeholders
through strong corporate governance practices. Pursuant to the
provisions of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015,
the formal annual evaluation of the performance of the Board
as well as non-independent directors was undertaken by the
Nomination and Remuneration Committee. The performance of
Board Committees and of individual independent directors was
undertaken by the Board members.

The Board evaluation was conducted through a structured
questionnaire designed based on the criteria for evaluation laid
down by the Nomination and Remuneration Committee as per the
Guidance Note on Board Evaluation issued by the Securities and
Exchange Board of India.

Your Company had conducted two separate Meetings of
Independent Directors during the year on 05^th August, 2024 and
12^th February, 2025 in which they had evaluated the Performance of
Non Independent Directors and the Board as a whole, performance
of the Chairperson of the company, taking into account the views
of executive directors and non-executive directors. Further, at the
Board meeting held on 12^th February, 2025 the performance of the
Board, its committees, and individual directors was also discussed.
The evaluation had been made based on specified standards.

FAMILIARIZATION PROGRAMMES FOR INDEPENDENT
DIRECTORS:

Your Company has a strong induction process that enables
newly appointed Directors to familiarise them with the Company,
management, operations and pharmaceutical industry. All the
directors are made aware of their roles and duties at the time
of their appointment/re-appointment through a formal letter of
appointment which also stipulates other terms and conditions
of their appointment. The Directors are provided with all the
documents to enable them to have a better understanding
of the Company, its various operations, and the industry in
which it operates.

The Company has put in place a systematic familiarisation
program to deepen Directors understanding of the Company's
business, governance framework, strategic priorities, and risk
landscape. Independent Directors, in particular, are introduced
to their roles, rights, and responsibilities, the business model,
operational context, and broader market environment. The
Company also offers access to relevant external programs and
workshops for further development.

The Board members are periodically updated in its meetings on
topics such as industry trends, corporate performance, operational
strategy, compliance frameworks, governance developments, and
emerging risks and opportunities. These sessions encourage
active discussion and gather Directors' input on strategic
directions and business initiatives.

The details of these familiarization programs have been placed
on the Company's website at https://smspharma.com/investor-
relations/download/

COMMITTEES OF THE BOARD:

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Securities Allotment Committee

The details of all the above Committees (except for Risk
Management Committee) along with their composition, number of
meetings and attendance at the meetings are provided in detail in
the Corporate Governance Report annexed to this Board's Report.

RISK MANAGEMENT POLICY:

The Risk Management Committee of the Company have the
following Directors:

Mr. Ramesh Babu Potluri - Chairman
Mr. Vamsi Krishna Potluri - Member
Mr. Shravan Kudaravalli - Member.

The Committee created a Risk Management Policy to handle
various risks faced during the company's daily operations. This
policy details different types of risks and the measures the
Board should take to lessen them. The company has strong
internal controls and procedures to combat these risks. The
Audit Committee and the Board of Directors review these risk
management procedures every quarter when they examine the
company's financial results.

Brief description of terms of reference of the Committee, inter alia,

includes the following:

• managing and monitoring the implementation of action
plans developed to address material business risks within
the Company and its business units, and regularly reviewing
the progress of action plans;

• setting up internal processes and systems to control the
implementation of action plans;

• regularly monitoring and evaluating the performance of
management in managing risk;

• providing management and employees with the necessary
tools and resources to identify and manage risks;

• regularly reviewing and updating the current list of material
business risks;

• regularly reporting to the Board on the status of material
business risks;

• review and monitor cyber security; and

• Ensuring compliance with regulatory requirements and best
practices with respect to risk management.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies

Act, 2013 as amended, the Board of Directors confirm that:

1. in the preparation of the 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, if any.

2. they had selected such accounting policies as notified &
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. they had taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 2013, 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 had been prepared on
going concern basis.

5. the Company has developed an effective mechanism for
internal financial controls to be followed by the Company
consistently and that such internal financial controls are
adequate and operating effectively;

6. they had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems
are adequate and operating effectively.

THE CRITERIA FOR APPOINTMENT OF DIRECTORS,
KMP AND SENIOR MANAGEMENT

A person for appointment as Director, KMP or in senior
management should possess adequate qualifications, expertise
and experience for the position considered for appointment.
The Nomination and Remuneration Committee decides whether
qualification, expertise and experience possessed by a person are
sufficient for the concerned position. The Committee ascertains
the credentials and integrity of the person for appointment as
Director, KMP or senior management level and recommends to
the Board his/ her appointment.

The Committee, while identifying suitable persons for appointment
to the Board, will consider candidates on merit against objective
criteria and with due regard for the benefits of diversity on the Board.

The Nomination and Remuneration Committee shall assess
the independence of directors at the time of appointment, re¬
appointment and the Board shall assess the same annually. The
Board shall re-assess determination of independence when any
new interests or relationships are disclosed by a Director.

The criterion of independence is as prescribed in the Act and the
listing regulations and the Independent Directors shall abide by
the Code specified for them in Schedule IV of the Act.

The Nomination and Remuneration Committee has the criteria for
appointing any Key Managerial Personnel (KMP) and nominating
directors on the Board. The appointment of any KMP is made
by the Nomination and Remuneration Committee based on
the requirement of the position and experience and skill sets of
the candidate.

COMPOSITION & NUMBER OF MEETINGS OF THE
BOARD AND AUDIT COMMITTEE

During the year under review, four (4) Board Meetings and four (4)
Audit Committee Meetings were duly convened and held. Detailed
information regarding these meetings is provided in the Corporate
Governance Report, which forms an integral part of this Report.
The intervals between the meetings were in compliance with the
timelines prescribed under the Companies Act, 2013, and the
Listing Regulations.

ANNUAL RETURN

The Annual Return of the Company as on 31^st March, 2025, in
terms of the provisions of Section 92(3) and 134(3)(a) of the Act,
2013 is available on the Company's website: https://smspharma.
com/annual-report/

CORPORATE GOVERNANCE

A separate section on Corporate Governance standards followed
by your Company, as stipulated under Schedule V of the SEBI
(LODR) Regulations, 2015, which is forming part of this report.
The requisite certificate from M/s. Suryanarayana & Suresh,
Chartered Accountants, confirming the compliance with the
conditions of Corporate Governance is annexed to the Report on
Corporate Governance.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT (BRSR)

The 'Business Responsibility and Sustainability Report' (BRSR) of
your Company for the year ended 31^st March, 2025, forms part of
this Annual Report as required under Regulation 34 (2) (f) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations,
2015 is available as a separate section in this Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has established a Vigil Mechanism and adopted
a Whistle Blower Policy to enable Directors and employees to
report concerns regarding unethical behavior, actual or suspected
fraud, or any violation of the Company's Code of Conduct or
Ethics Policy. The Policy ensures that all reported matters are
investigated in a fair and unbiased manner, and appropriate
corrective actions are taken to uphold the highest standards of
ethical and professional conduct.

The mechanism also includes safeguards to protect
whistleblowers from any form of retaliation or victimization and
provides for direct access to the Chairman of the Audit Committee
in exceptional circumstances.

During the year under review, the Company did not receive any
complaints, disclosures, or concerns under the Vigil Mechanism.
The Whistle Blower Policy is available on the Company's website at
https://smspharma.com/company-announcements/downloads/

DEPOSITS

The Company has not accepted any deposits from the public
within the purview of Chapter V of the Companies Act, 2013.
Hence, no amount on account of principal or interest on public
deposits was outstanding as on the date of the balance sheet.

LOANS, GUARANTEES AND INVESTMENTS

Particulars 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.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered by the Company
during the financial year 2024-25 with related parties were in the

ordinary course of business and on an arm's length basis and are
in compliance with the provisions of the Companies Act, 2013
and the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015. 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. All related party transactions
are presented to the Audit Committee on quarterly basis and were
also placed before the Board.

A statement of all Related Party Transactions is being presented
before the Audit Committee on Quarterly basis specifying the
nature, value and terms and conditions of the transactions. A
Policy on Related Party Transactions approved by the Board
is uploaded on the Company's website at the web link https://
smspharma.com/wp-content/uploads/2024/11/updated-Policy-
on-Related-Party-Transactions-08.11.2024.pdf

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. Further details required
to disclose as per Accounting Standard form part of the notes to
the financial statements provided in the annual report. The Form
AOC-2 is attached to the Report as Annexure - 3.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act,

2013, read with the Companies (Corporate Social Responsibility
Policy) Rules, 2014, the Company has duly constituted a Corporate
Social Responsibility (CSR) Committee.

A brief overview of the Company's CSR Policy, details of the
CSR Committee, and the initiatives undertaken by the Company
during the financial year are provided in Annexure-4 to this
Report, in the format prescribed under the Companies (Corporate
Social Responsibility Policy) Rules, 2014.The CSR Policy of the
Company is also available on the Company's website at: https://
smspharma.com/wp-content/uploads/2025/02/Corporate-
Social-Responsibility-Policy.pdf

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197(12) of the
Companies Act, 2013, read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,

2014, the requisite disclosures pertaining to remuneration and
other relevant details are provided in the 'Employees Remuneration
Report', which forms an integral part of this Report and is annexed
herewith as Annexure - 5.

Further, the statement containing particulars of employees as
required under Section 197(12) of the Act, read with Rules 5(2)
and 5(3) of the said Rules, has not been included in this Report.
However, in terms of the provisions of Section 136 of the Act,
the said statement is available for inspection by members. Any
member desirous of obtaining a copy of the same may make a

written request by sending an email to the Company Secretary at
cs@smspharma.com

PREVENTION OF INSIDER TRADING

To ensure compliance with the SEBI (Prohibition of Insider Trading)
Regulations, 2015, the Company has adopted a comprehensive
Insider Trading Policy aimed at regulating, monitoring, and
reporting trading activities by designated persons. This Policy
encompasses detailed procedures for the fair disclosure of
unpublished price-sensitive information, along with provisions
for initial and continual disclosures, in accordance with the
applicable regulatory framework. The Board periodically reviews
the Policy, as and when required. The Policy is available on the
Company's website at: https://smspharma.com/company-
announcements/downloads/

The Company undertakes various initiatives to educate and
sensitize its employees regarding the provisions of the Insider
Trading Code. These include the periodic dissemination of
informative communications on the prevention of insider trading,
guidelines outlining Do's and Don'ts, notifications regarding the
closure of trading windows, and timely clarifications provided to
designated persons. Such initiatives have significantly enhanced
awareness and understanding of insider trading compliance
among the designated individuals.

ENVIRONMENT, HEALTH AND SAFETY ENVIRONMENT

The Company continuously monitors its energy consumption,
regulates emissions, and manages waste generation to minimize
its environmental footprint. We are committed to adopting
responsible water usage practices and continuously seek
innovative ways to reduce resource consumption. Our dedication
to environmental protection and occupational health and safety
is firmly embedded in our corporate policies and guides all our
operational decisions.

To ensure a safe and healthy workplace, the Company regularly
conducts comprehensive training programmes and mock drills
that enhance employee awareness, preparedness, and response
capabilities. We proactively identify high-risk areas and invest in
advanced technological solutions, such as automation and real¬
time monitoring systems, to mitigate potential hazards. Awareness
campaigns and safety workshops are conducted regularly to
foster a strong safety culture across all levels of the organization.

In addition, the Company has implemented ergonomic
assessments to optimize workplace design and reduce strain-
related injuries. To support employee well-being beyond the
workplace, free health check-up programmes are organized
periodically, alongside mental health awareness sessions
and wellness initiatives such as fitness challenges and stress
management workshops.

Our ongoing efforts to improve environmental sustainability and
employee safety are reinforced through continuous feedback

mechanisms and audits, ensuring that we adapt and enhance our
practices to meet evolving standards and best practices.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION

The information required under Section 134(3)(m) of the
Companies Act, 2013 read with the applicable Rules forms part of
this report as Annexure-6.

FOREIGN EXCHANGE EARNINGS AND OUTGO

AUDITORS APPOINTMENT AND THEIR REPORTS
Statutory Auditors

The Company appointed M/s. Suranarayana & Suresh, Chartered
Accountants, (Firm Registration No. 006631S), Hyderabad as
Statutory Auditors of the Company at the Annual General Meeting
held on 30^th September, 2022 for a second term of five (5) years
i.e., from the conclusion 34^th AGM till the conclusion of 39^th Annual
General Meeting to be held in the year 2027.

Further, the report of the Statutory Auditors along with notes to
accounts forms part of the Annual Report. There has been no
other qualification, reservation, adverse remark or disclaimer
given by the Auditors in their Report.

Internal Auditor

The Board has appointed M/s. Adusumilli and Associates,
Chartered Accountants, as an Internal Auditors of the Company
for a period of one year from 01.04.2025 to 31.03.2026 under
Section 138 of the Companies Act, 2013, in accordance with the
scope as defined by the Audit Committee.

Secretarial Auditor

As per 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
Company Secretaries LLP to undertake Secretarial Audit of the
Company for the Financial Year ended on 2024-2025. Secretarial
Audit Report in Form MR-3 for the financial year 2024-2025 forms
part of this report as Annexure - 7.

There has been no qualification, reservation, adverse remark
or disclaimer given by the Auditors in their Report. However,
an observation related that under Regulation 19(1 )(c) of SEBI
(LODR) Regulations, 2015 to Non-compliance pertaining to the
composition of Nomination and Remuneration Committee of the
Board for the period from 12^th August, 2024 to 07^th November,
2024. This was brought to the notice of the Board and the
management has clarified that the Company has complied with
the said provision w.e.f. 7^th November, 2024 and a fine of H 2,000/-
per day by each stock exchange from 12^th August 2024 to 7^th
November, 2024 was paid. However, during the said period the
company has not conducted any Nomination and Remuneration
Committee Meetings. It was an inadvertent and isolated
oversight and unintentional nature prompt corrective action was
taken immediately.

The Board on recommendations of the Audit Committee has
approved and recommended to the members the appointment of
M/s. SVVS Associates Company Secretaries LLP, as Secretarial
Auditor of the Company for a period of five consecutive years from
financial year 2025-26 to 2029-30.

Brief details as required under the Listing Regulations, are provided
in the Notice of 37^th AGM. The Directors recommend the same for
approval by the Members.

Annual Secretarial Compliance Report

As per Regulation 24A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Company has
obtained the Annual Secretarial Compliance Report which forms
part of this Report as Annexure-B from Mr. C. Sudhir Babu,
Practicing Company Secretary (Proprietor, CSB Associates) and
submitted the same to the Stock Exchanges where the shares of
the Company are listed.

Cost Auditor

As per 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 Company maintains Cost Records. Your Board has, upon
the recommendations of the Audit Committee, appointed
M/s. Harshitha Annapragada & Co., Cost Accountants (Firm
Registration No. 006031 and Membership No. 39895) as Cost
Auditor of the Company for the financial year 2024-2025.

The Board of Directors on the recommendations of the Audit
Committee, appointed M/s. Harshitha Annapragada & Co., Cost
Accountants (Firm Registration No. 006031 and Membership No.
39895) as Cost Auditors of the Company for the financial year
2025-2026. As required under the Act and Rules made thereunder,
the remuneration payable to the Cost Auditors is required to be
placed before the Members at a general meeting for ratification.
Accordingly, a resolution seeking ratification of the remuneration
payable to M/s. Harshitha Annapragada & Co., Cost Accountants,
by the members is included in the Notice convening 37^th Annual
General Meeting.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Your Company believes that employees are its most valuable
assets, and it is the responsibility of the Company to provide support
and care to all its employees. It strives to create an environment
conducive to employees' development. Through ongoing learning,
development initiatives, and collaborative experiences, we foster
a culture of continuous improvement, teamwork, and shared
success that drives both individual potential and the sustained
performance of our organization.

SHARE TRANSFER SYSTEM

Pursuant to Regulation 40(1) of SEBI (LODR) Regulations,
2015, as amended from time to time, transfer, transmission
and transposition of securities shall be effected only in
dematerialised form.

SEBI vide its circular no. SEBI/HO/MIRSD/MIRSD_RTAMB/P/
CIR/2022/8 dated 25^th January, 2022, has made it mandatory
for listed companies to issue shares only in demat form while
processing investor service requests viz., issue of duplicate
securities certificate, claim from Unclaimed Suspense Account,
renewal / exchange of securities certificate, endorsement, sub-

division / splitting of securities certificate, consolidation of
securities certificates / folios, transmission and transposition.
Listed entities/ RTAs are now required to issue a 'Letter of
Confirmation' in lieu of the share certificate while processing any
of the aforesaid investor service requests.

In cases where the securities holder / claimant fails to submit
the demat request to the depository participant within a period of
120 days from the date of issuance of the Letter of Confirmation
from RTA / listed companies, the said securities are credited to
'Suspense Escrow Demat Account'. Securities which are moved to
'Suspense Escrow Demat Account' may be claimed by the security
holder / claimant by submitting a duly executed Form ISR- 4 and
self-attested KYC documents.

In view of the above and to eliminate risk associated with
physical shares and to avail various benefits of dematerialisation,
shareholders are advised to dematerialize their shares held
in physical form.

The Stakeholders Relationship Committee meets as often as
required to approve share transfers and to attend to any grievances
or complaints received from the members.

GENERAL DISCLOSURE

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

a) No material changes and commitments affecting the
financial position of the Company between the financial year
ended 31^st March, 2025 and the date of this report.

b) No fraud has been reported by the Auditors to the Audit
Committee or to the Board.

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

d) Company has complied with the requirements of the
Secretarial Standards issued by Institute of Company
Secretaries of India.

e) There are no instances where the Board has not accepted
the recommendation of Audit Committee.

f) Cost records are maintained as per the requirements of
Section 148 of the Act.

g) The extract of Annual Return is disclosed on the
Company's website.

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

Your Company is dedicated to maintaining a workplace free from
sexual harassment and has implemented a comprehensive policy
aimed at preventing, prohibiting, and addressing any incidents of
sexual harassment in accordance with the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013, along with its applicable rules. The Company upholds a strict
zero-tolerance stance towards any form of sexual harassment
within the work environment.

In compliance with Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013,
statement of complaints for the financial year ended March 31,
2025, is as follows:

COMPLIANCE WITH SECRETARIAL STANDARDS

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

MATERNITY BENEFIT ACT, 1961

The Company affirms that it has duly complied with all provisions
of the Maternity Benefit Act, 1961, and has extended all statutory
benefits to eligible women employees during the year.

INSURANCE:

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

RATING

CARE Rating Limited has assigned its rating of 'CARE A'; 'Stable'
(Single A; Outlook Stable) on the Long Term Bank Facilities
of the Company and 'CARE A2 ' on the Short Term Bank
Facilities of the Company

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

During the year under review, there were no significant material
orders passed by the Regulators / Courts which would impact the
going concern status of the Company and its future operations.

DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS
BINDING ON THE COMPANY:

During the period under the review the Company does not enter
into any agreement(s) which were falling under clause 5A of
para A of part A of schedule III of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

APPLICATION MADE OR ANY PROCEEDING PENDING
UNDER THE INSOLVENCY AND BANKRUPTCY CODE:

During the year M/s. Sai Sreyas Pharmaceutical Pvt Ltd
(Petitioner), an Operational Creditor has filed a petition under
Section 9 of the Insolvency and Bankruptcy Code, 2016, before
the National Company Law Tribunal (NCLT), Hyderabad Bench
seeking initiation of Corporate Insolvency Resolution Process
against the Company alleges default in the payment of unpaid
operational debt amounting to ?3.02 Crores. The Company has
previously raised concerns regarding the quality of materials
supplied by the aforementioned Operational Creditor and had
requested them to take back the disputed material. In spite
of this, the petitioner filed an application under IBC and the

Company has received a communication from the Hon'ble NCLT, Hyderabad in relation to the above registration of the said
petition. The Company is taking necessary legal steps against the Operational Creditor.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their sincere appreciation for the continued cooperation and support extended to the Company
by the Banks & Financial Institutions. The Board also takes this opportunity to thank all Shareholders, Analysts, Business Partners,
Government and Regulatory Authorities, Distributors, Suppliers, Business Associates, Medical professionals, and Customers for their
invaluable guidance, encouragement, and unwavering support.

The Board of Directors further expresses its deep sense of gratitude for the dedicated and committed services rendered by the Company's
executives, staff, and workers.

The Directors also wish to convey their heartfelt thanks to the investors for the confidence and trust they have continued to repose
in the Company.

By the order of the Board
Ramesh Babu Potluri

Place: Hyderabad Chairman and Managing Director

Date: 09.08.2025 (DIN:00166381)