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Since its demerger from SMS Pharmaceuticals Limited in

2017, your Company has emerged as a prominent player in Active Pharmaceutical Ingredients (API) manufacturing Ranitidine HCL, Famotidine ofvariousBulkDrugslike and its Intermediates, catering to both Indian and global markets at a large. The Company is proud of developing products, processes and systems according to industry benchmarks and achieving sustained improvements to deliver quality products.

Management Discussion & Analysis report sets out developments in the business, environment and Company?s performance since our last report. The analysis supplements the Directors? Report and audited financial statements which together form part of this

Annual Report.

Cautionary Statement:

This report describes the Company?s objectives, projections, note for estimates, and expectations may be "forward-looking statements" within applicable securitieslaws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company?s operations include economic conditionsaffecting in supply and price conditionsin the domestic and overseas markets. It operates changes in the government regulations,tax laws, and other statutes & other incidental factors.

INDUSTRY STRUCTURE AND DEVELOPMENTS Global Economy & Outlook:

As the world enters the third year of the pandemic, global economic developments have been both encouraging and troubling. Output in many countries rebounded in

2021 after a sharp decline in 2020, aided by pick-up in international trade, high commodity prices, stimulus infused by government and lower incidences of foreign debt restructurings and domestic financialcrises. Rapid advancement in vaccinationrates in advanced and middle-income countries also aided opening up of the economy and gradually getting back

However, evolving geopolitical disturbances and continued inflationary pressure present uncertainties and risks. The growth is likely to face headwinds in 2022 in the light of factors such as pandemic flare-ups, inflationary pressure and in turn, gradual unwinding of accommodative policies and persistent supply chain challenges.

Global inflation continued its upward journey during the year which has been further aggravated by the Russia-Ukraine conflict.

Indian Economy & Outlook:

Indian economy continued to display broad-based recovery during the year 2021- 22 as indicated by various health parameters of economy after an exceptional fiscal 2020-21 when the pandemic led to the contraction of the economy. difficult Theyear2021-22commencedona the country as the second wave of the pandemic, which emerged in the mid of March, 2021 spread rapidly across the country and put an unprecedented stress on the healthcare ecosystem of India. However, with gradual demand-daily cases since the second half of May, reduction 2021, the economy started showing signs of revival on the back of targeted fiscal relief, monetary policy measures and a rapid vaccination drive and the economy recovered fully from the impact of pandemic as real GDP for the year 2021- 22.

Overview of Pharmaceutical Sector

INDUSTRY OVERVIEW:

API is an important segment of the Indian pharma industry, contributing to 35% of the market. The Indian active pharmaceuticals ingredients market stood at 11.8 billion in 2020-21 and is anticipated to grow at a CAGR of 12.24% till 2026-27.

This growth is anticipated due to the growing pharmaceutical sector in in geriatric population in India is expected to steer demand over the forecasted periodof2021-27.Growing als sector. incidence of chronic diseases such as cardiovascular diseases, diabetes, cancer, respiratory disorders among others is anticipated to drive the market.

The Government of India has rolled out Performance-linked Incentive schemes (PLI schemes) with an aim to increase theefficiency competitiveness of the and Indian Pharmaceutical industry. This is aimed to reduce dependence of importation and increase self-reliance for key pharmaceutical inputs response from industry participants and would help in solidifying India?s positioning quality pharmaceutical products, including key APIs and intermediates. The ‘Archetype of Affordable Healthcare? has made significant contributions to improving public health outcomes in India and worldwide.

The API industry is on a growth trajectory. It caters to around 20% of the global market.

Key highlights:

Indian drug & pharmaceutical US$ 24.60 billion in the year 2021-22 as compared to US$ 24.44 billion in 2020-21.

In June 2021, Finance Minister Ms. Nirmala Sitharaman announced an 197,000 crore (US$ 26,578.3 million) that shall be utilized over 5 (five) years for the PLI scheme in 13 key sectors such as active pharmaceutical ingredients, and key starting materials.

The FDI inflows in the Indian Pharmaceuticals sector between April 2000- March 2022.

The domestic market is expected to grow 3X in the next decade as per the Indian Economic Survey 2021.

USDr CARE Ratings expect Indias business to develop at an annual rate of 11% over the next two years to reach more than US$ 60 billion in value. thecountry.Besides,thespurt

In November 2021, PM Mr. Narendra Modi inaugurated the first Global InnovationSummit of the March under the Strengthening of In 2022, Pharmaceutical Industry financial 500 crore (US$ 665.5 million) for the period FY 2021-22 to FY 2025-26 were announced.

The Indian Government?s initiatives to encourage the domestic manufacture of active ingredients and key raw materials are expected to increase . The scheme has seen positive backward integration and reduce the dependence in of domestic drug makers on foreign markets. These incentives could address major pricing competitiveness as a leading supplier of high and concerns and funding, aiding investment decisions of the local pharma companies.

Additionally, the world?s largest and first smart ecosystem-based "Pharma City" is planned in the outskirt of Hyderabad, which shall set a new international benchmark for sustainable industrial cities world minimize the reliance on Chinese drug ingredients.

Opportunities, Threats and Outlook

The Company is engaged in only one segment viz. Bulk Drugs / API?s

Your Company aims to foray into and establish its presence in a few more frontier and regulated markets over the current decade. The Company?s short-term goal is to capture incremental market share in the existing geographies and establish strong beachheads for sustained organic growth in the United States and European Union.

The recent successful USFDA audit is a testimony to the same.

Your Company has also set its eyes on entering various additional markets and also aims to develop 6 to 8 products each year, few in collaboration with ChemWerth Inc, a full-service generic API company based in the United States. Given the growing importance of health and disease management by the world?s population, the Company plans to leverage and grow in challenging frontier markets where affordability and health consciousness within the population is steadily increasing by using its existing business model, solid management expertise and market knowledge. Your Company is continuously adding / upgrading capacity in its facilities in Hyderabad and Vizag to ensure robust offerings to its customers along with necessary resources for new product and growth possibilities.

In a way, the Company is not only charting out its short-term potential for growth but also its longer term ambitions forbecomingareliable, equally prominent in both semi and highly regulated markets. Your Company is focusing on regularly adding clientele globally in generics, contract manufacturing and custom synthesis.

Ranitidineupdate: the Ranitidineissue has gradually settled and sales of ranitidine along with its intermediaries have considerably increased by 62% as compared to previous year.

Financial performance with respect to Operational Performance

Particulars	FY 2021-22	FY 2020-21	Growth %
Revenue from operations	345.62	260.25	32.80%td>
Other Income	1.53	1.33	15.04%
Total Income	347.16	261.58	32.72%
EBITDA	32.90	31.06	5.92%
Depreciation	7.99	7.21	10.82%
PBIT	24.90	23.85	4.40%
Profit Before Tax	20.28	19.35	4.81%
Exceptional income**	12.69	-	-
Tax Expense	7.59	6.18	22.82%
Profit after Tax	25.38	13.16	92.86%

**profit on sale of Investments and non-revenue generating Land & Buildings

During the year, your Company?s turnover improved to 345.62 crore compared to 260.25 crore, resultingin a sustainable growth rate of 32.80%. However, the bottom line has grown meagerly by approx. 5% during the period. Moving forward, your Company has executed the "Product Development Agreement" with ChemWerth Inc., a

Strategic partner, which will assist your Company in tabbing the unexplored regulatory market in the ensuing years.

Human Resources

Your Company believes that its dedicated and motivated employees are its greatest asset and has offered competitive compensation, a healthy work environment and the employee performances are recognized through a planned reward and recognition program, in order to develop a workplace where every employee can recognize and attain his or her true power.

During the year under review, the Industrial relationswith Employees/ workers at all the Company?s locations continued to be harmonious and positive.

The total employee strength of the Company as on 31^st March, 2022 stood at 565.

Details of significant changes in key Financial Ratios and Net-worth

Particular	3103.2022	3103.2021	%Change	Reason
Debtors Turnover Ratio	11.12	9.21	-	-
Days	32.80	39.61	20.77%	-
InventoryTurnover	4.89	4.34	-	-
(Days)	74.67	87.45	(14.61%)	-
Interest Coverage Ratio	5.39	5.30	(1.58%)	-
Current Ratio	1.36	1.30	6.00%	-
Debt Equity Ratio	0.40	0.35	12.00%	-
Operating Profit Margin	9.48%	11.88%	20.21%	-
Net Profit Margin	7.30%	5.03%	45.00%	Variance is due
				to Exceptional
Return on Net worth	16.79%	10.42%	61.03%	Income

Company? robust business model enables us to deliver effective products to our chosen Marketplaces, attractive returns for our stakeholders and build a sustainable business.

Internal Control Systems & their adequacy

The internal control system is organized and employed accordingly with the principles and criteria set up in the corporate governance code of the Company. It is an inherent part of the general structure of the Company and involves a various persons to work and coordinate amongst each other to complete their respective duties. The internal controls of the Company are being reviewed by an independent chartered accountants? firm i.e. M/s Adusumilli and Associates, Internal Auditors and the Audit Committee of the Company on periodical results in an unbiased and independent examination of the adequacy and effectiveness of the internal control systems to achieve the objective of the optimal functioning activities includes safeguarding and of theCompany.Thescopeof protecting the Company?s assets against unauthorised use or disposition, maintenance of proper and verification of the authenticity transactions . ofall

Research & Development

Department of Scientific and Industrial Research (DSIR) of Government of India, Ministry of Science and Technology, New Delhi has accorded prestigious recognition to in-house Research and Development (R&D) Unit of the Company situated at Sanath Nagar, Hyderabad vide letter dated 25th January, 2021. The Lab is well equipped with the latest and sophisticated equipment and machineries and is focused on technology transfer activities collaborations customers globally.with

Risks & Concerns

Company faces risks and uncertainties that are typical to that faced by players within the other industry. These along with few other issues as mentioned below are some of the major risks / potential pitfalls the immediate future:

Disruption of operations on account implementationof various measures to contain the pandemic.

Frequent political changes in different geographies resulting in uncertainty,

Unavailability of raw materials and adverse currency fluctuations

Non-receipt/ significant delay in receipt of approvals for new products from the regulatory authorities can business.

These are determined via robust assessment considering our risk context by the Board of Directors with inputs from the that these risks are being managed appropriately and consistently.

Note: Risk Management Committee is not applicable to the Company pursuant to SEBI (Listing Disclosure Requirements) Regulations, 2015

Moving ahead

With the sharp recovery in the Indian economy and more focus on healthcare after the pandemic, the domestic pharmaceutical market is and your Company through its subsidiary is aggressively looking at entering into collaboration with national international of distributionand manufacturing facilities. Your Company is confident to continueto outperform the current achievements and provide sustainable growth to all the stakeholders.

By Order of the Board
For SMS Lifesciences India Limited
.
TV Praveen	TVVSN Murthy
Date: 09.08.2022 DIN: 08772030	DIN: 00465198
Place: Hyderabad Executive Director	Managing Director
affect the growth of the