Hemo Organic Ltd Directors Report

The financial performance of the Company for the Financial Year ended on 31^st March, 2025 and for the previous financial year ended on 31^st March, 2024 is given below:

(Rs. In Lakhs)

Total revenue from Operation for Financial Year 2024-25 is Rs. 241.43 Lakhs compared to the total revenue from Operation of Rs. 2.24 Lakhs of previous Financial Year. The Company has incurred Profit before tax for the Financial Year 2024-25 of Rs. 2.56 Lakhs as compared to Loss before tax of Rs. 26.41 Lakhs of previous Financial Year. Net Profit after Tax for the Financial Year 2024-25 is Rs. 16.39 Lakhs as against Net Loss after tax of Rs. 26.41 Lakhs of previous Financial Year. The Directors are continuously looking for the new avenues for future growth of the Company and expect more growth in the future period.

There have been on change in the nature of the business and operations of the Company during the Financial Year 2024-25.

Pursuant to Section 92(3) read with Section134(3)(a) of the Act, the Annual Return as on March 31, 2025 is available on the Companys website at www.hemoorganic.co

5. CAPITAL STRUCTURE: A. Authorised Share Capital:

The Authorised Share Capital of the Company as on 31^st March, 2025 is Rs. 10,00,00,000/- (Rupees Ten Crores Only) divided into 1,00,00,000 (One Crores) Equity Shares of Rs. 10.00/- (Rupees Ten Only).

During the year under review the Company has increased its Authorised Share Capital from Rs. 3,50,00,000/- (Rupees Three Crores and Fifty Lakhs only) divided into 35,00,000 (Thirty-Five Lakhs) equity shares of Rs. 10.00/- (Rupees Ten only) each, to Rs. 10,00,00,000/- (Rupees Ten Crores Only) divided into 1,00,00,000 (One Crore) equity shares of face value of Rs. 10.00/- (Rupees Ten Only) each and thereafter consequent alteration in the existing Clause 5 of the Memorandum of Association of the Company was made, which was approved in Annual General Meeting of the Company held on 11^th September, 2024

B. Paid up Share Capital:

The Paid-up Share Capital of the Company as on 31^st March, 2025 is Rs. 3,46,59,000/- (Rupees Three Crores Forty-Six Lakhs Fifty-Nine Thousands Only) divided into 34,65,900 (Thirty-Four Lakhs Sixty-Five Thousands Nine Hundreds) Equity Shares of Rs. 10.00/- (Rupees Ten Only).

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) Issue of equity shares with differential rights B) Issue of sweat equity shares C) Issue of employee stock options D) Provision of money by company for purchase of its own shares by employees or by trustees for the benefit Of employees.

To conserve the resources for future prospect and growth of the Company, your Directors do not recommend any dividend for the Financial Year 2024-25 (Previous year - Nil). The Company has not paid any Interim Dividend during the year under review.

The Ministry of Corporate Affairs under Section 124 and section 125 of the Companies Act, 2013, requires the amount of dividend remaining unpaid or unclaimed for a period of seven years shall be transferred to the Investor Education and Protection Fund (“IEPF”).

During the year under review, there was no unpaid or unclaimed dividend in the “Unpaid Dividend Account” lying for a period of seven years from the date of transfer of such unpaid dividend to the said account. Therefore, there were no funds which were required to be transferred to IEPF.

The profit of the Company for the Financial Year ending on 31^st March, 2025 is transferred to profit and loss account of the Company under Reserves and Surplus.

Approval of Draft Letter of offer for Right Issue.

The Board of Directors of the Company, at its meeting held on Monday, 31st March, 2025, has considered and approved the Draft Letter of Offer to be filed with BSE Limited (‘BSE) for the proposed Rights Issue of Equity Shares. The said Draft Letter of Offer has been submitted to BSE and the Company is currently awaiting their approval.

Other than the above, there have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

10. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

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

11. BOARD MEETINGS:

The Directors of the Company meets at regular intervals at least once in a quarter within the gap between two meetings not exceeding 120 days to take a view of the Companys policies and strategies apart from the Board

Matters. The notice of the meeting is given well in advance to all the Directors.

During the year under the review, the Board of Directors met 7 (Seven) times viz. 18^th April, 2024, 29^th May, 2024, 14^th August, 2024, 28^th October, 2024, 26^th December, 2024, 6^th February, 2025, 31^st March, 2025.

12. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 (3)(c) and Section 134(5) of the Companies Act, 2013, to the best of their knowledge and belief the Board of Directors hereby submit that:

a. In the preparation of the annual accounts, for the year ended on 31^st March, 2025 the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departure from the same;

b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit of the Company for the financial year ended on 31^st March, 2025;

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

d. The Directors had prepared the annual accounts on a going concern basis;

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

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

13. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provisions of Section 135 of the Companies Act, 2013 is not applicable to your Company as the Company does not fall under the criteria limits mentioned in the said section of the Act.

Hence, the Company has not taken voluntary initiative towards any activity mentioned for Corporate Social Responsibility.

14. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal financial controls with reference to financial statement across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the financial year, such controls were tested and no reportable material weaknesses in the design or operations were observed. The Statutory Auditors of the Company also test the effectiveness of Internal Financial Controls in accordance with the requisite standards prescribed by ICAI. Their expressed opinion forms part of the Independent Auditors report.

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous monitoring by functional experts. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

During the year, no reportable material weakness was observed.

15. PARTICULARS OF LOANS GIVEN, GUARANTEES GIVEN, INVESTMENTS MADE AND SECURITIES

PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

The details of loans, investment, guarantees and securities covered under the provisions of section 186 of the Companies Act, 2013 are provided in the financial statement.

16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

During the year under review, all the Related Party Transactions were entered at arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure requirements) Regulations, 2015. There are no materially significance related party transactions made by the Company with Promoter, Directors, Key Managerial Personnel, etc. which may have potential conflict with the interest of the Company at large or which warrants the approval of the Shareholders. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. However, the details of transactions with Related Parties are provided in the Companys financial statements in accordance with the Accounting Standards.

The Company has formulated and adopted a policy on dealing with related party transactions, in line with Regulation 23 of the Listing Regulations, which is available on the website of the Company at www.hemoorganic.co.

As a part of the mandate under the Listing Regulations and the terms of reference, the Audit Committee undertakes quarterly review of related party transactions entered into by the Company with its related parties. Pursuant to Regulation 23 of Listing Regulations and Section 177 of the Act, the Audit Committee has granted omnibus approval in respect of transactions which are repetitive in nature, which may or may not be foreseen, not exceeding the limits specified thereunder. The transactions under the purview of omnibus approval are reviewed on quarterly basis by the Audit Committee. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed the disclosures on Related Party Transactions in prescribed format with the Stock Exchanges.

17. RESERVES & SURPLUS:

(Rs. In Lakhs)

18. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF THE RISK MANAGEMENT

POLICY OF THE COMPANY:

Pursuant to section 134(3) (n) of the Companies Act, 2013, and relevant regulations of listing Regulations, 2015, the Company has framed formal Risk Management framework for risk assessment and implementation of a Risk Mitigation plan of the Company, which is periodically reviewed by the Board of Directors to ensure smooth operations and effective management control. The Audit Committee also reviews the adequacy of the risk management framework of the Company, the key risks associated with the business and measures and steps in place to minimize the same.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND

OUTGO:

The details of conservation of energy, technology absorption etc. as required to be given under section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014, is not given as the Company has not taken any major step to conserve the energy etc.

Export revenue constituted 0 % of the total revenue in FY 2024-25;

20. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Remuneration policy is directed towards rewarding performance based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice and is designed to create a high-performance culture. It enables the Company to attract, retain and motivate employees to achieve results. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time. The Companys Policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178 (3) of the Act is available on the website of the Company at www.hemoorganic.co.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report as required under Regulation 34 and Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report, and provides the Companys current working and future outlook as per Annexure - I.

22. DISCLOSURES RELATING TO HOLDING, SUBSIDIARY, ASSOCIATE COMPANY AND JOINT VENTURES:

The Company does not have any Holding / Subsidiary/Associate Company and Joint Venture.

23. COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARDS:

During the year under review, the Company has duly complied with the applicable Secretarial Standards i.e., SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings respectively, issued by the Institute of Company Secretaries of India (ICSI). The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same.

24. REPORTING OF FRAUDS BY THE AUDITORS:

During the year under review, neither the Statutory nor the Secretarial Auditors has reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards Report.

25. STATE OF COMPANYS AFFAIRS:

Management Discussion and Analysis Report for the year under review, as stipulated in Regulation 34(2)(e) of SEBI Listing Regulations is given as a separate part of the Annual Report. It contains a detailed write up and explanation about the performance of the Company.

26. STATEMENT ON ANNUAL EVALUATION OF BOARDS PERFORMANCE:

The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors, pursuant to the provisions of the Act and SEBI Listing Regulations. The Board sought the feedback of Directors on various parameters including:

Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); Structure, composition, and role clarity of the Board and Committees; Extent of co-ordination and cohesiveness between the Board and its Committees; Effectiveness of the deliberations and process management; Board / Committee culture and dynamics; and Quality of relationship between Board Members and the Management.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

The Chairman of the Board had one-on-one meetings with each Independent Director and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with each Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors inputs on effectiveness of the Board/ Committee processes.

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

The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.

In the Board meeting that followed the meeting of the independent directors and the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was discussed.

The evaluation process endorsed the Board Members confidence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management, and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties.

The Board carried out an annual performance evaluation of its own performance and that of its committees and individual directors as per the formal mechanism for such evaluation adopted by the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee.

The performance evaluation of the Chairman, the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The exercise of performance evaluation was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board by way of individual feedback from directors.

The evaluation frameworks were the following key areas:

a) For Non-Executive & Independent Directors:

Knowledge; Professional Conduct;

Comply Secretarial Standard issued by ICSI Duties; Role and functions.

b) For Executive Directors:

Performance as leader;

Evaluating Business Opportunity and analysis of Risk Reward Scenarios; Key set investment goal; Professional conduct and integrity; Sharing of information with Board; Adherence applicable government law.

The Directors expressed their satisfaction with the evaluation process.

27. MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS PRACTICES:

A. VIGIL MECHANISM / WHISTLE BLOWER POLICY: -

The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Companys Code of Conduct or Ethics Policy. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company at www.hemoorganic.co.

B. BUSINESS CONDUCT POLICY: -

The Company has framed “Business Conduct Policy”. Every employee is required to review and sign the policy at the time of joining and an undertaking shall be given for adherence to the policy. The objective of the policy is to conduct the business in an honest, transparent and in an ethical manner. The policy provides for anti-bribery and avoidance of other corruption practices by the employees of the Company.

28. PARTICULARS OF EMPLOYEES:

The Company has not employed any employee except the Managing Director, Chief Financial Officer and Company Secretary. Hence, the information required under section 197(12) of the Companies Act, 2013 and Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is not given separately and are not applicable to the Company as none of the Employees of the Company has received remuneration above the limits specified in the Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 during the financial year 2024-25.

29. LOAN FROM DIRECTOR / RELATIVE OF DIRECTOR:

During the year under review, the Company has not entered into any materially significant related party transactions which may have potential conflict with the interest of the Company at large. Suitable disclosures as required are provided in AS-18 which is forming the part of the notes to financial statement.

30. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Directors and Key Managerial Personnel of the Company are summarized below:

Apart from the above changes, there were no other changes in the composition of the Board of Directors of the Company during the Financial Year 2024-25 and till the date of Boards Report.

As per Companies Act, 2013, the Independent Directors are not liable to retire by rotation.

31. INDEPENDENT DIRECTORS:

In terms of Section 149 of the Companies Act, 2013 and rules made there under, the Company had two Non-Promoter Non-Executive Independent Directors in line with the Companies Act, 2013. In the opinion of the Board of Directors, all two Independent Directors of the Company meet all the criteria mandated by Section 149 of the Companies Act, 2013 and rules made there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are Independent of Management

A separate meeting of Independent Directors was held on August 14, 2024 to review the performance of Non-Independent Directors, Board as whole and performance of Chairperson of the Company including assessment of quality, quantity and timeliness of flow of information between Company management and Board.

The terms and conditions of appointment of Independent Directors and Code for Independent Director are incorporated on the website of the Company at www.hemoorganic.co.

Your Company has received annual declarations from all the Independent Directors of the Company under sub - section (7) of section 149 confirming that they meet with the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Director during the year.

Your Company has also received confirmation that Independent Directors are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact his/ her ability to discharge his/her duties with an objective independent judgment and without any external influence and that he/she is independent of the management. They have also complied with the Code for Independent Directors prescribed in Schedule IV to the Act and Code of Conduct for directors and senior management personnel formulated by the company.

32. CORPORATE GOVERNANCE:

Since the paid-up Capital of Company is less than Rs. 10 Crores and Turnover is less than Rs. 25 Crores therefore by virtue of Regulation 15 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 the compliance with the corporate governance provisions as specified in regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V are not applicable to the Company. Hence Corporate Governance does not form part of this Boards Report.

33. PUBLIC DEPOSITS:

As per Section 73 of the Companies Act, 2013, the Company has neither accepted nor renewed any deposits from Shareholders and Public during the financial year under review. Hence the Company has not defaulted in repayment of deposits or payment of interest during the financial year.

34. FORMAL ANNUAL EVALUATION PROCESS BY BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, the Board has carried the evaluation of its own performance, performance of Individual Directors, Board Committees, including the Chairman of the Board on the basis of attendance, contribution towards development of the Business and various other criteria as recommended by the Nomination and Remuneration Committee of the Company. The evaluation of the working of the Board, its committees, experience and expertise, performance of specific duties and obligations etc. were carried out. The Directors expressed their satisfaction with the evaluation process and outcome.

In a separate meeting of Independent Directors i.e. held on Wednesday, 14^th August, 2024, the performances of Executive and Non-Executive Directors were evaluated in terms of their contribution towards the growth and development of the Company. The achievements of the targeted goals and the achievements of the expansion plans were too observed and evaluated, the outcome of which was satisfactory for all the Directors of the Company.

35. AUDITORS AND THEIR REPORT:

A. Statutory Auditor:

M/s. M A A K & Associates, Chartered Accountants (FRN: 135024W) were appointed as Statutory Auditors of your Company at the Thirtieth Annual General Meeting of the Company held on September 24, 2022, for a term of four consecutive years. The present term is expiring at the Thirty Fourth Annual General Meeting of the Company to be held in the year 2026.

The report of the Statutory Auditor has not made any adverse remark in their Audit Report except:

Reply:

The process of obtaining balance confirmations from trade receivables and trade payables has been initiated and the requests have already been circulated. The receipt of responses from the respective parties is currently awaited. Nevertheless, the management affirms that the balances as reflected in the books of account for both trade payables and trade receivables are consistent with the underlying transactions and records. There are no material discrepancies noted, and to the best of our knowledge, all transactions have been appropriately recorded in the books.

B. Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Jay Pandya, Proprietor of M/s. Jay Pandya & Associates , Practicing Company Secretary, Ahmedabad, to undertake the Secretarial Audit of the Company for the financial year 2024-25.

The Secretarial Audit Report for the Financial Year 2024-25 is annexed herewith as Annexure II in Form MR-3.

The report of the Secretarial auditor has not made any adverse remark in their Audit Report except:

Reply: The Company has duly provided records demonstrating its compliance with the SDD requirements. Furthermore, the Company is in communication with the Exchange to resolve the said technical matter, and necessary steps are being taken to rectify the status at the earliest

Reply: The newspaper advertisement for the financial results for the quarter ended 31 March 2024, was inadvertently not published due to an administrative oversight. The financial results, however, were duly approved by the Board of Directors and submitted to the Stock Exchange within the prescribed timelines, and were also made available on the Companys website.

The Company acknowledges the lapse and is taking necessary steps to strengthen its internal compliance processes to ensure that such omissions do not recur in the future.

C. Internal Auditor:

The Board of directors of the Company has appointed M/s. Akshay Mohnot & Co., Chartered Accountants, (FRN: 123209W), as an Internal Auditor of the Company for the Financial Year 2024-25. The Internal Auditor conducts the internal audit of the functions and operations of the Company and reports to the Audit Committee and Board from time to time.

36. DISCLOSURES:

A. Composition of Audit Committee:

During the year under review, meetings of members of the Audit committee as tabulated below, was held on -, 29^th May 2024, 14^th August 2024, 28^th October 2024, 26^th December 2024, 6^th February 2025, 31^st March 2025 the attendance records of the members of the Committee are as follows: