Sharat Industries Ltd Directors Report

The turnover of the company for the year ended 31^st March, 2025 was 38053.48 Lakhs against 30215.92 Lakhs in the previous year. The profit for the year after tax is 995.92 lakhs as against a l year. financia profitof 587.30lakhsduringtheprevious

Sharat Industries Limited is among the few companies in India with all four of its operational divisions strategically located within a 5-kilometer radius. This integrated setup enables seamless coordination across divisions, ensuring uninterrupted production throughout the year—effectively mitigating the impact of seasonality typically associated with the industry. The proximity also facilitates faster processing and minimizes logistics time, resulting in superior product quality. In recent years, the Company has made substantial capital investments in both its farming and processing divisions to enhance production capacity and operational efficiency.

During the year under review there were no change in authorised share capital of the Company. The authorised share capital of the Company as on 31^st March 2025 is 50,00,00,000/- (Rupees Fifty Crore) divided into 5,00,00,000 Equity shares having face value of 10/- each.

During the year under review, the Company has issued 1,55,43,125 equity shares having face value of 10/- each at an issue price of 31/- per share (including premium of 21/- per share) on Rights basis in the ratio of 13 equity share for every 20 equity shares held by the existing equity shareholder of the Company. Pursuant to such rights issue, the Companys paid-up capital as on 31^st March 2025 is 39,45,56,250/- divided into 3,75,78,388 equity share comprising of fully paid-up equity share of 10/- each and 18,77,237 partly paid-up equity share of 2.50/- paid up.

The Board of Directors have recommended a Dividend of 0.25 paise per equity share of the face value 10/- each. Dividend is subject to approval of members at the ensuing Annual General Meeting.

The Board of Directors of your company has decided not to transfer any amount to the reserves for the year under review.

During the year under review, Credit rating remained unchanged.

Credit Rating Information Service of India Limited (CRISL), affirmed the credit rating as BBB Stable.

The Equity shares of the Company have been listed on the BSE Limited. The Company has paid applicable listing fees to the Stock Exchange and Depositories within stipulated time.

The company continues to be an integrated Aquaculture company with Hatchery, Culture, feed and Shrimp Processing & Exports business and during the year, the company has not changed its business.

There have been no material changes and commitments, which affect the financial position of the company that have occurred between the end of the financial year to the date of this report.

10. ALTERATION OF MEMORANDUM OF ASSOCIATION

During the year under review, the Company has amended its Articles of Association by altering the clause relating to "Calls on Share" to align with operational requirements. The said amendment was approved by the shareholders through special resolution passed at the (01/2024-2025) ExtraOrdinary General Meeting held on 24^th December 2024.

11. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

In accordance with Section 134(5) of the Act, the Company has Internal Financial Control Policies by means of policies & procedures commensurate with size and nature of operations. The Companys policies, procedures & standards are developed to uphold internal controls across the organisation. These controls ensure transactions are authorised, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorised use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls. The controls were tested during the year and no material weakness exists. Audit Committee of the Board, periodically reviews the internal audit plans and observations/recommendations of Internal and Statutory Auditors. In accordance with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements.

12. ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) and Section 134(3) of the Companies Act 2013 read with rule 12 of the Companies (Management and Administration) Rules 2014 as amended from time to time, the Annual Return of the Company as on 31^st March 2025 in e-form MGT-7 is available on Companys website and can be accessed at https://sharatindustries.com/wp-content/uploads/2025/09/SIL_ MGT-7_FY-2024-2025_Draft.pdf

13. DETAILS OF SUBSIDIARIES AND ASSOCIATE COMPANIES:

United Aquatech Private Limited

United Aquatech Private Limited, an associate company based in Nellore, is a Special Purpose Vehicle (SPV) established for the development and operation of shrimp farms at designated project locations. Your Company holds 49% of its equity share capital.

During the year under review, United Aquatech Private Limited did not record any revenue, as compared to revenue of 178.68 lakhs in the previous financial year. The company incurred a loss before tax of 2.10 lakhs, as against a loss of 10.61 lakhs in the previous year.

Pursuant to section 129(3) of the Act, the statement containing the salient features of the financial statements of the Companys associate is enclosed as Annexure- III of the Board Report.

14. STATUTORY AUDITORS:

M/s A. R Krishnan & Associates, Chartered Accountants (FRN: 009805S) were re-appointed as statutory auditors of the Company for a second term of five (5) consecutive years, to hold office from the conclusion of the 32^nd Annual General Meeting held on 29^th September 2022 till the conclusion of 37^th Annual General meeting.

15. STATUTORY AUDITORS REPORT:

The Statutory Auditors report for the Financial Year 2024-2025 does not contain any qualification, reservation or adverse remark or disclaimer.

16. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review, there were no changes in the composition of Board of Directors of the Company. However, the following changes took place in Key Managerial Personnel of the Company:

i. Resignation of Mr. N. Thyagarajan from the post of Chief Financial Officer with effect from 23^rd August 2024. ii. Based on the recommendation of the Nomination & Remuneration Committee, Audit Committee, the Board of Directors in the meeting held on 13^th September 2024 approved the appointment of Mr. Balasubramanian R as a Chief Financial Officer (Key Managerial

Personnel) of the company with effect from 13^th September 2024. iii. Board of Directors in their meeting held on 02^nd December 2024 took note the resignation of

Mr. M. Balamurugan (Membership No: A66115) as a Company Secretary & Compliance officer with effect from 30^th November 2024. iv. Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors in the meeting held on 29^th January 2025 approved the appointment of Mr. N. Ganesan

(Membership No:8407) as a Company Secretary & Compliance officer.

RE-APPOINTMENT OF DIRECTOR RETIRING BY ROTATION:

In terms of Section 152 of the Companies Act, 2013, Mr. Shanmugam P (DIN: 08877587) is liable to retire by rotation at the ensuing 34^th Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee has recommended the re-appointment of Mr. Shanmugam P (DIN: 08877587) as Director of the Company.

17. DECLARATION FROM INDEPENDENT DIRECTORS:

The Board of Directors has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of Independence as prescribed

Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) read with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The Independent Directors have also complied with the Code of Conduct prescribed in Schedule IV to the Act.

In accordance with Companies (Appointment & Qualification of Directors) Fifth Amendment Rules, 2019, Company has received declarations from Independent Directors confirming that they have registered with the Independent Directors Data Bank through Indian Institute of Corporate Affairs.

Information on familiarization program to Independent Directors is provided in the Corporate Governance Report section of this Annual Report.

18. SEPARATE MEETING OF INDEPENDENT DIRECTORS

Separate meeting of Independent Directors was held on 29^th January 2025 to review the performance of the Non-Independent Directors and the Board as a whole, to review the performance of Chairperson of the Company and assess the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. DIRECTORS RESPONSIBILITY STATEMENT

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 & 134 (5) of the Companies Act, 2013, shall state that:

a. that the financial statements for the year ended March 31, 2025 have been prepared in conformity with Indian Accounting Standards (Ind AS) and requirements of the Act, and that of guidelines issued by SEBI, to the extent applicable to the Company along with proper explanation relating to material departures; 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 as at 31^st March 2025 and of the profit of the company for the year ended on that date; c. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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 were operating effectively. 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.

20. NUMBER OF MEETINGS OF THE BOARD:

During the Financial Year 2024-2025 under review, the Board of Directors of the company met

7 (Seven) times i.e., on 28^th May 2024, 27^th June 2024, 22^nd July 2024, 13^th September 2024, 12^th November 2024, 02^nd December 2024 & 29^th January 2025.

The further details relating to the Board meetings are given in Corporate Governance Section of this Annual Report. The gap between any two Meetings was within the period prescribed in the Companies Act 2013 and SEBI LODR.

21. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

As on date of this report, the Board consists of 6 (Six) Directors, of which 2 (Two) are Executive Directors (one Managing Director and one Whole-Time Director),4 (Four) are Non-executive Directors (Three are Independent and one is Non-Independent) Director. The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, independence and other matters as provided under subsection (3) of Section 178 of the Companies Act, 2013 (the Act) is available on the Companys website at https://sharatindustries.com/wp-content/uploads/2025/06/ Nomination-and-Remuneration-Policy.pdf

22. AUDIT COMMITTEE:

Your Company has an Audit Committee pursuant to the requirements of the Act read with Rules framed there under and SEBI (LODR) Regulations, 2015.The details relating to the same are given in the report on Corporate Governance forming part of this Report. During FY 2024-2025 the recommendations of Audit Committee were duly accepted by the Board.

23. VIGIL MECHANISM/ WHISTLE – BLOWER POLICY:

Pursuant to Section 177(9) of the Companies Act 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a whistle blower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected frauds or violation of the Companys code of conduct and ethics. The Audit Committee of the Board oversees the functioning of Whistle Blower Policy. The Whistle Blower Policy covering all the employees and directors is available in the Companys website. The Vigil Mechanism Policy has been uploaded on the website of the Company at https://sharatindustries.com/wp-content/ uploads/2025/05/sharat_industries_vigil_mechanism_and_whistle-blower_policy.pdf

24. RISK MANAGEMENT:

The risk management is based on the clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation reserves.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

a. Conservation of energy

b. Technology absorption:

S.No Particulars FY 2024-2025

(i) The efforts made towards technology Installed evaporative condenser no. 3 for absorption replacement of old and commissioned to carry to production full load (ii) Benefits derived like product improvement,Installed all VFD drives to system motors/ cost reduction, product development or compressor units import substitution

S.No Particulars FY 2024-2025

(iii) In case of imported technology (imported Screw compressor low side to be replace at during the last three years reckoned from machine room the beginning of the financial year)

(a) details of technology imported System upgraded with drives an operation (b) the year of import; 2024-2025 (c) whether the technology been fully Yes 90% of technology absorbed absorbed (d) if not fully absorbed, areas where One old screw compressor is replaced with absorption has not taken place, and the new motor and another one will be planned reasons thereof soon (iv) The expenditure incurred on Research and 24-25 Lakhs Development

26. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, the details of Foreign Exchange Earnings and outgo are as under:

27. CORPORATE SOCIAL RESPONSIBILITY(CSR):

In terms of Section 135 of the Companies Act 2013 read with CSR rules, your company during the year 2023-2024 spent 14.61 Lakhs being the two percent of the average net profit of your Company during the three preceding financial year in accordance with CSR policy of the Company.

Annual Report on CSR initiatives as required under the Companies (Corporate Social Responsibility Policy) Rules 2014, as amended (CSR Rules) is annexed as Annexure –I and forms part of this report.

28. CORPORATE GOVERNANCE:

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Compliance report on Corporate Governance as per Schedule V of the

Listing Regulations, along with a Certificate of Compliance from the Practicing Company Secretary forms part of this report. Annexure – VI

29. DEPOSITS

During the year under review, your Company has not invited or accepted any deposits from the public under Section 76 of the Companies Act, 2013 and Rules made there under.

30. PARTICULARS OF EMPLOYEES REMUNERATION:

The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014, are set out in ANNEXURE - V attached herewith which forms part of this report.

The statement containing such particulars of employees as required in terms of the provisions of Section 197(12) of the Act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of the Annual Report. Pursuant to the provisions of the Section 136(1) of the Companies Act, 2013, the reports and accounts, as set out therein, are being sent to all members of the Company, excluding the aforesaid information and the same is open for inspection at the registered office of the Company during working hours up to the date of Annual General Meeting and if any member is interested in obtaining such information, may write to the Company Secretary at the registered office of the Company in this regard.

31. MANAGERIAL REMUNERATION RECEIVED FROM THE COMPANY, HOLDING OR SUBSIDIARY COMPANY:

During the year, the Company does not have holding or subsidiary Company.

32. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 DETAILS OF LOANS:

During the year under review, the Company has not given any loan, guarantee or made Investment as per the provisions of Section 186 of the Companies Act 2013.

33. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All the related party transactions entered during the year were in ordinary course of business and on arms length basis.

There are no materially significant related party transactions that may have potential conflict with interest of the company at large.

The details of the related party transactions as per Indian Accounting Standards (Ind AS) – 24 are set out in the notes to the Financial Statements of the Company.

Form AOC-2 pursuant to Section 134 (2) (h) of the Companies Act, 2013 read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is set out the Annexure – IV to the report.

The policy on Related Party Transaction as approved and can be accessed at the website of the Company https://sharatindustries.com/wp-content/uploads/2025/06/Related-Party-Transaction-Policy.pdf

34. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:

During the Financial Year 2024-2025, your company has complied with applicable Secretarial Standards, namely SS-1, SS-2 & SS-3 issued by Company Secretaries of India.

35. ANNUAL SECRETARIAL COMPLIANCE REPORT

Annual Secretarial Compliance report for the Financial Year ended 31^st March 2025 on the compliance of all applicable SEBI regulation and circulars/guidelines, issued by M/s. BP & Associates, Practicing Company Secretaries, Chennai was submitted to BSE Limited.

36. SECRETARIAL AUDITOR

In terms of Section 204(1) of the companies Act 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of Directors has appointed M/s. BP & Associates, Practicing Company Secretaries, Chennai as Secretarial Auditors of the Company for conducting the Secretarial Audit for the financial year 2024-2025. The report of the Secretarial

Auditor is Annexure –II to this report.

The Secretarial Audit report for the financial year ended 31st March 2025 contains qualification and clarification by the Board is as follows:

Further, pursuant to the amended provisions of Regulation 24A of the Listing Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have approved and recommended the appointment of M/s. BP & Associates, (Peer Review No:7014/2025) (Firm Registration number P2015TN040200) as Secretarial Auditors of the Company for a term of up to 5(Five) consecutive years to hold office from the conclusion of ensuing 35^th AGM till the conclusion of 39^th AGM of the Company to be held in the Year 2030, for approval of the Members at ensuing AGM of the

Company. Brief profile and other details of M/s. BP & Associates Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

37. INTERNAL AUDIT:

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereto) if any of the Companies Act, 2013, M/s. P S S & CO Chartered Accountants, Chennai were re-appointed as the Internal Auditors of the Company for the Financial Year 2024-2025.

38. COST AUDIT:

The provisions of the Cost Audit are not applicable to the Company.

39. MANAGEMENT DISCUSSION AND ANALYSIS REPORT.

Management Discussion and Analysis Report of the company for the year under review as required under Regulation 17 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 is included in this report.

40. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNAL

There are no significant and material the going concern status and the Companys operations in furture.

41. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

(PREVENTION, PROHIBITION & REDRESSAL) ACT , 2013

The Company has in place an Internal Complaints Committee (ICC) in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and

Redressal) Act, 2013. During the financial year 2024-2025

The Company is committed to providing a safe and respectful work environment for all its employees, and necessary awareness programs are conducted from time to time.

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961. All eligible women employees have been extended the benefits as prescribed under the Act. The Company remains committed to supporting working mothers and promoting a gender-inclusive workplace.

43. MECHANISM FOR BOARD EVALUATION:

Regulation 17(10) of SEBI (LODR) Regulations, 2015 states that the Board shall monitor and review the Board evaluation framework. The Companies Act,2013 states that a formal Annual Evaluation needs to be made 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 the Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding of the Companys vision and objective, skills, knowledge and experience, participation and attendance in Board/Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various spects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

44. PREVENTION OF INSIDER TRADING:

TheCompanyhasapolicyviz.,CodeofConducttoregulate,monitorandreporttradingbydesignated person and same has been posted on the website of the company https://sharatindustries.com/ wp-content/uploads/2025/06/Code-of-Conduct-for-Regulating-Monitoring-and-Reporting-of-Trading-by-Insiders.pdf

45. PERSONNEL:

The relations between the management and the staff were very cordial throughout the year. Your Directors take this opportunity to record their appreciation for the co-operation and loyal services rendered by the employees.

46. GENERAL

Your directors state that no disclosure or reporting is required of the following matter as there were no transaction on these matters during the year under review:

47. ACKNOWLEDGEMENTS:

Your Directors gratefully acknowledge with thanks the constructive guidance and co-operation extended by MPEDA, Axis Bank Limited and Government of Andhra Pradesh, Tamil Nadu and also to employees at all levels, suppliers, dealers and customers for their strong support.

Your Directors also thank the shareholders for their continued confidence and trust placed by them with the Company.

By Order of the Board of Directors