Directors' Report

Dear Members,

Your Directors are pleased to present the 36th Annual Report and the Audited
Financial Statements for the financial year ended 31st March,

2025.


1. Financial Highlights

A summary of the Company's financial results for the year ended 31st March,
2025 compared to the financial results for the previous year ended 31st March,
2024, is as under:


  

    

    

    
(Figures in lakhs)
  
  

    
Particulars
    
Financial Year 2024-25
    
Financial Year 2023-24
  
  

    
Revenue from operations
    
12,600.79
    
12764.31
  
  

    
Other Income
    
8.88
    
7.55
  
  

    
Total Income
    
12,609.67
    
12771.86
  
  

    
Expenses
    
1 1382.57
    
11568.74
  
  

    
Profit before Depreciation, Finance Cost and Tax
    
1227.1
    
1203.12
  
  

    
Less: Finance Cost
    
187.00
    
140.85
  
  

    
Less: Depreciation expenses
    
550.10
    
565.30
  
  

    
Profit Before Tax (PBT)
    
490.00
    
496.97
  
  

    
Tax Expense
    
133.71
    
137.94
  
  

    
Profit for the year
    
356.29
    
359.03
  
  

    
Other Comprehensive Income (Net of Tax)
    
16.48
    
16.08
  
  

    
Total Comprehensive Income for the year
    
372.76
    
375.1 1
  



2. Operational Performance and State of Company's Affairs:

During the year under review, Net Sales & Other Income of the Company was Rs
12,609.67 lakhs as compared to Rs 12,771.86 lakhs in the previous year registering
decrease of 1.27% over the previous year.

The Profit for the year was Rs. 356.29 lakhs compared to Rs. 359.03 lakhs in the
previous year registering a decrease of 0.76%. The profitability was effected due to
decrease in sales by 1.28%, increase in finance cost and other expenses by 32.76 % and
6.48% inspite of decrease in raw material consumption by 9.42% .

A detailed overview has been provided under Management Discussion and Analysis Report.


3. Dividend

Based on the Company's Performance, the Board recommended a Dividend of Rs. 1.5/- per
equity share (15%) on equity share capital of 1,14,46,290 equity shares of Rs. 10/- each
for the year ended 31st March, 2025 as against Rs. 1.5/- per equity share (15
%) for the year ended 31st March 2024.


4. Transfer to Reserves

During the year under review, the Board does not propose to transfer any amount to
general reserve.


5. Material changes and commitments, if any, affecting the financial position of the
company, having occurred since the end of the Year and till the date of the Report

There have been no material changes and commitments affecting the financial position of
the Company which have occurred between the end of the financial year of the Company to
which the financial statements relate and the date of this Report.


6. Share Capital

The paid up Equity Share Capital as at 31st March, 2025 stood at Rs.
1144.629 lakhs. During the year under review, the Company did not issue any Equity Shares.
Further, the Company has not issued any convertible securities or shares with differential
voting rights nor has granted any stock options or sweat equity or warrants. There has
been no change in the capital structure of the Company during the year.


7. Human Resource Development (HRD) & Industrial Relations

The Company continues to focus on the development of its human resources to improve its
performance and skills. The Company has approximately 267 employees and it is their
precious contribution that has primarily resulted in our Company's position in the
industry.

The Company has adopted a safety first theme across all plants. Visible controls and
fool proof systems are being provided to ensure prevention of accidents. Regular
communication, periodic reviews of practices and training has also been conducted on a
continuous basis to maintain world class safety standards.

The relationship with the workmen and staff remained cordial and harmonious during the
year and management received full cooperation from employees at all the units and
locations.


8. Management Discussion and Analysis

Please refer to the detailed Management Discussion and Analysis on page no 14.


9. Cautionary Statement

Statements in this Management Discussion and Analysis section of this report describing
the Company's objectives, estimates and expectations may be "forward looking
statements" within the meaning of the applicable laws and regulations. Actual results
might differ materially from those either expressed or implied.


10. Internal Control Systems

The Company has adequate internal control procedures commensurate with the size of the
company and the nature of its business with regard to purchases of inventory, fixed assets
and with regard to the sale of goods.


11. Key Financial Ratios

Refer Note No 44 to the Notes to Standalone Financial Statement as on 31st
March, 2025.


12. Directors' Responsibility Statement

As stipulated under the provisions contained in Section 134(3) (c) read with Section
134(5) of the Companies Act, 2013 ("Act"), the Board of Directors, to the best
of its knowledge and belief and according to the information and explanations obtained by
it, hereby states that:

i. in the preparation of the annual accounts, the applicable accounting standards have
been followed and there are no material departures;

ii. the directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company for that period;

iii. the directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act, for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts of the Company on a going concern
basis;

v. the directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and are operating
effectively; and

vi. the directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems are adequate and operating effectively.


13. Directors and Key Managerial Personnel

The Board of Directors is chaired by Executive Promoter Chairman and Managing Director
and has an optimum combination of Executive, Non- Executive and Independent Directors.

Ms. E. Smruthi (DIN:09268342) is retiring by rotation and being eligible offers herself
for reappointment. You are requested to appoint her.

Based on the recommendation of Nomination and Remuneration Committee, the Board of
Directors at its meeting held on 04th February, 2025 had re-appointed Mr E.
Purushotham (DIN No: 00033583) as Managing Director of the Company, for a period of three
(3) years w.e.f 01st April, 2025 with revised terms and conditions. Being in
the interest of the company, you are requested to consider reappointment of Mr E
Purushotham as Managing Director of the Company.

Based on the recommendation of Nomination and Remuneration Committee, the Board of
Directors at its meeting held on 04th February, 2025 had re-appointed Mr E.
Swapnil (DIN No: 01241535) as Joint Managing Director of the Company, for a period of
three (3) years w.e.f 01st June, 2025 with revised terms and conditions. Being
in the interest of the company, you are requested to consider reappointment of Mr E
Swapnil as Joint Managing Director of the Company.

The Company has Code of Conduct for Directors and senior management personnel. All the
Directors and senior management personnel have confirmed compliance with the said code.

None of the Directors is disqualified as on 31st March, 2025 from being
appointed as a Director under Section 164 of the Act. As required by law, this position is
also reflected in the Auditors' Report.

Details with respect to the composition of the Board, the meetings of the Board held
during the year and the attendance of the Directors thereat have been provided separately
in the Annual Report, as a part of the Report on Corporate Governance.


14. Key Managerial Personnel

In terms of Section 203 of the Act, the Company has the following Key Managerial
Personnel: Mr. E Purushotham, Chairman and Managing Director, Mr. E Swapnil, Managing
Director and Chief Financial Officer and Ms Urvashi Khanna, Company Secretary.


15. Board Evaluation

In terms of the applicable provisions of the Act, the SEBI Listing Regulations,
Nomination and Remuneration Committee and the Board of Directors have approved a
framework, which lays down a structured approach, guidelines and processes to be adopted
for carrying out an evaluation of the performance of all the Directors, the Board as a
whole and its Committees. The evaluation process has been separately explained in this
Annual Report, as a part of the Report on Corporate Governance. For the year under review,
the Board carried out the evaluation of its own performance and that of its Committees and
the individual Directors and the evaluation results, as collated and presented, were noted
by the Board.


16. Meetings of the Board

The Board met 4 (Four) times during the financial year. The meeting details are
provided in the Report on Corporate Governance that forms part of this Annual Report.

The maximum interval between any two meetings did not exceed 120 days, as prescribed in
the Act and the SEBI Listing Regulations.


17. Internal Financial Control systems and their adequacy

The details in respect of internal financial control and their adequacy are included in
the Management Discussion and Analysis, which is a part of this report.


18. Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with
Companies (Audit and Auditors) Rules, 2014, in the 33rd Annual General Meeting
M/s. Gokhale & Sathe, Chartered Accountants, Mumbai (Reg. No.: 103264W) were appointed
as the Statutory Auditors of the Company for a term of five years commencing from
Financial year 20222023 to 2026-2027.

The Auditors' Report on the Financial Statements of the Company for the year under
review, is clean and there are no qualifications in the Report. Also, no frauds in terms
of the provisions of Section 143(12) of the Act have been reported by the Statutory
Auditors in their report for the year under review. The Notes to the Financial Statements
are selfexplanatory and do not call for any further comments.


19. Secretarial Audit Report

The Secretarial Audit Report submitted by the Secretarial Auditor Mr. H.R. Thakur,
Practicing Company Secretary, Mumbai, in the prescribed form MR-3 is attached as
"Annexure - I" and forms part of this report.

There are no qualifications or adverse remarks in the Report.

Further the Company has also obtained from the Secretarial Auditor, the Annual
Secretarial Compliance Report for the financial year ended 31st March, 2025,
thereby confirming compliance of the applicable SEBI Regulations and circulars /
guidelines issued thereunder, on behalf of the Company.

The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.


20. Cost Audit

For Financial Year 2025-2026, the Company has re-appointed M/s. Shrinivas Diddi and
Associates, Cost Accountants, Solapur for conducting cost audit of its cost records
pertaining to the products falling under the product categories - Drugs and
pharmaceuticals. M/s. Shrinivas Diddi and Associates are appointed on a remuneration of Rs
55,000 plus GST and out of pocket expenses.

The Company is seeking the ratification of the Shareholders for the remuneration to be
paid to the cost auditors vide Resolution No. 5 of the Notice of the ensuing Annual
General Meeting.


21. Conservation of Energy, Technology Absorption & Foreign Exchange

The statement giving the particulars relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, as required in terms of Section
134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is
annexed to this Report as "Annexure II".


22. Particular regarding Employees Remuneration

Disclosure comprising particulars with respect to the remuneration of directors and
employees, as required to be disclosed in terms of the provisions of Section 197(12) of
the Act and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is annexed to this Report as "Annexure III".


23. Particulars of Loans, Guarantees or Investments

Company did not give any loans, guarantees and make any Investment covered under the
provisions of Section 186 of the Companies Act, 2013.


24. Related Party Transactions

Related Party Transactions entered into during the year under review were approved by
the Audit Committee and the Board of Directors, from time to time and the same are
disclosed in the Financial Statements of the Company for the year under review. Further,
pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board of
Directors has, on recommendation of its Audit Committee, adopted a Policy on Related Party
Transactions and the said policy is available on the website of the Company
i.e.www.smruthiorganics.com.

In terms of the provisions of Section 188(1) of the Act read with the Companies
(Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing
Regulations, all contracts/ arrangements/ transactions entered into by the Company with
its related parties, during the year under review, were in the ordinary course of business
of the Company and on an arm's length basis.

There were no material Related Party transactions during the year.


25. Corporate Governance

The Company is in full compliance with the requirements and disclosures that have to be
made in terms of the requirements of Corporate Governance specified in SEBI Listing
Regulations.

Corporate Governance Report is enclosed as a part of the Annual Report along with the
certificate from the Secretarial Auditor Mr. H.R. Thakur, Practicing Company Secretary
confirming compliance of the code of Corporate Governance as stipulated Para E of Schedule
V of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.


26. Audit Committee

The Company has an Audit Committee in place in terms of the provisions of Regulation 18
of SEBI Listing Regulations read with Section 177 of the Companies Act, 2013.

The Composition of the Audit Committee is in compliance with the requirements as
prescribed under the Act and Listing Regulations and forms part of Report on Corporate
Governance. The recommendations made by the Audit Committee to the Board, from time to
time during the year under review, have accepted by the Board. The details with respect to
the Audit Committee such as its terms of reference, the meetings of the Audit Committee
and attendance thereat of the members of the Committee, are separately provided in this
Annual Report, as a part of the Report on Corporate Governance.


27. Remuneration Policy

The policy on remuneration and other matters provided in Section 178(3) of the Act
along with reconstituted committee details has been disclosed in the Corporate Governance
Report, which is a part of this report and is also available on website of the company
www.smruthiorganics.com.


28. Risk Management Policy

The Company is aware of the risks associated with the business. It regularly analyses
and takes corrective actions for managing/ mitigating the same. The requirements of
Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
with regard to the constitution of a Risk Management Committee are not applicable to our
Company.


29. Corporate Social Responsibility (CSR)

Pursuant to Section 135(1) of the Act, the Company has constituted Corporate Social
Responsibility (CSR) Committee. The Composition of the CSR Committee is disclosed
separately in the Corporate Governance report forming part of this Annual Report. The
Company has in place, the CSR policy which outlines Company's philosophy towards Company's
CSR program implementation. The CSR policy is available on the Company's website
www.smruthiorganics.com. However, for FY 2024-25 , the Company had no CSR liability to
spend therefore CSR annexure is not applicable for FY 2024-2025.


30. Vigil Mechanism - Whistle Blower Policy

The Company has a Whistle Blower Policy to report genuine concerns and grievances. The
policy provides adequate safeguards against victimisation of persons who use the Whistle
Blower mechanism. Details with respect to implementation of the Whistle Blower Policy are
separately disclosed in this Annual Report, as a part of the Report on Corporate
Governance. The same is also available on the website of the Company at
www.smruthiorganics.com.


31. Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as
on March 31, 2025 is available on the Company's website on https://smruthiorganics.com/
investor-relation/.


32. Investor Education and Protection Fund (IEPF)

The Company was not required to transfer any amount to the Investor Education and
Protection Fund established by the Central Government (IEPF) during the financial year
2024-25 except the dividend declared for the financial year 2023-24 on the shares already
transferred to IEPF.


33. Compliance with Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.


34. Acknowledgements

Your Directors wish to express their grateful appreciation for the co-operation and
continued support received from customers, collaborators, vendors, investors,
shareholders, banks, regulatory authorities and the society at large during the year. We
also place on record our appreciation for the contribution made by our employees at all
levels and for their commitment, hard work and support in driving the growth of the
Company.


  

    

    
For & on behalf of the Board
  
  

    

    
E. Purushotham
  
  

    

    
Chairman & Managing Director
  
  

    

    
DIN:00033583
  
  

    
Place: Solapur
    

  
  

    
Date: 05th May, 2025