Smruthi Organics Ltd Directors Report

Directors Report

Dear Members,

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

2025.

1. Financial Highlights

A summary of the Companys financial results for the year ended 31^st March, 2025 compared to the financial results for the previous year ended 31^st 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 Companys 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 Companys 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 31^st March, 2025 as against Rs. 1.5/- per equity share (15 %) for the year ended 31^st 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 31^st 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 Companys 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 Companys 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 31^st 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 04^th 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 01^st 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 04^th 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 01^st 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 31^st 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 33^rd 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 31^st 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 arms 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 Companys philosophy towards Companys CSR program implementation. The CSR policy is available on the Companys 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 Companys 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