Your Directors are pleased to present the 78^th Annual Report along with the audited financial
statement for the year ended March 31, 2026 (“year under review”).

Summary of Financial Results

Dividend

The Company has a strong track record of dividend payments, reflecting its commitment to
shareholder value and prudent financial management. For FY 2025-26, while the Company
remained financially sound, the Board considered the ongoing proposed share sale transaction
between the promoter and the proposed acquirers, the obligations under the agreement
signed by the Company on February 19, 2026, with the Promoter and Acquirers and the
independent legal advice received by the Company on precedents and market practice for
similar transactions.

Considering the above and the Company’s Dividend Distribution Policy, the Board was of the view
that it would be appropriate for no dividend to be recommended by the Board for FY 2025-26. This
decision was taken as a prudent and balanced measure to ensure compliance with contractual
obligations, preserve flexibility during the transaction period, and support the best interests of
the Company and its stakeholders.

Upon completion of the proposed transaction, and with greater visibility on the Company’s
future strategic direction, investment plans, and financial requirements, the matter of dividend
distribution could be appropriately reviewed to ensure optimal deployment of the Company’s
resources.

The Dividend Distribution Policy of the Company is available on the website of the Company
at: https://nilpharma.co.in/corporate-polices/

Transfer to General Reserves

In accordance with the provisions of the Companies Act, 2013 (“the Act”), the Board of
Directors do not propose to transfer any amount to the General Reserves for the year under
review. The entire profit after tax shall be retained under ‘Retained Earnings’.

Management Discussion and Analysis

For the financial year under review, the Company operated solely within the pharmaceuticals
segment.

a. Economy, Industry and Development

I ndia’s macroeconomic and industry landscape from 2026 through 2030 is marked by
robust economic growth, moderate inflation, proactive healthcare policies, and significant
expansion in the pharmaceutical sector. In fiscal year 2026-2027, real gross domestic
product GDP is forecast at 7.2%, down marginally from 7.4% in 2025-2026, with
domestic demand, especially private consumption, public capital spending, and a revival
in private investment, as the primary growth engine. GDP growth is forecast to slow to
average 6.6% annually over 2027-2030.¹⁸

Consumer price inflation will accelerate to 3.5% in 2026, from 2.2% in 2025, driven
primarily by a rebound in food prices. Services inflation, especially in healthcare, education
and housing, is projected to remain elevated because of high demand and rising input
costs, and inflation will accelerate further to 4.4% annually in 2027-2030. The rupee
will remain under pressure in 2026, but strong growth prospects and modest inflation
will keep it on a trend of gradual depreciation against the US dollar over 2027-2030,
averaging ' 93.50 : US$1 in 2030.⁸

India’s macroeconomic environment in 2026 is facing increasing pressure from geopolitical
tensions, particularly in the Middle East, which are disrupting energy markets and supply
chains. India imports nearly 85% of its fuel needs and relies on the Strait of Hormuz for a
significant share of crude oil, liquefied natural gas, and liquefied petroleum gas supplies,
making it vulnerable to supply disruptions. India also remains dependent on imports
for key commodities such as crude petroleum, machinery, and electronics components,
exposing the economy to external risks.¹²

Fuel prices remain a key transmission channel of these risks. Crude oil prices have stayed
above US$ 100 per barrel amid geopolitical tensions and disruptions in global shipping
routes. This has led to rising wholesale price pressures, with fuel and metal prices
increasing sharply and contributing to higher producer-level inflation. While consumer
price inflation has so far remained relatively contained due to limited pass-through,
underlying cost pressures are building and could be passed on to consumers if elevated
oil prices persist.¹²

I n the pharmaceutical sector, rising energy prices and supply disruptions are driving
increases in raw material costs. Prices of APIs, solvents, and intermediates have risen
sharply, linked to higher oil prices, restricted vessel movement and tightening shipping
capacity, which have raised freight costs and delayed sourcing. Given that a large share
of pharmaceutical inputs are derived from petrochemicals and that India imports a
significant proportion of APIs, these trends are directly affecting manufacturing costs
and could lead to higher drug prices if sustained.⁴⁵

The Indian Rupee has weakened to near-record lows against the US dollar in 2026, driven
by higher oil import bills, a widening trade deficit, and capital outflows. Higher oil prices
increase demand for US dollars for imports, adding pressure on the rupee and raising
concerns about external balances.³⁶ While the rupee is expected to remain under pressure
with gradual depreciation, most expert views do not indicate a base-case scenario of
crossing '100 per US$, although volatility is expected to persist.⁷

Overall, the current environment reflects supply chain disruptions, rising input costs,
and currency volatility. Even though India’s economic fundamentals remain supported by
domestic demand and policy measures, external shocks from geopolitical tensions are
translating into practical risks for businesses through higher costs, supply uncertainty,
and pressure on margins.²⁴⁶

Structurally, the industry remains highly fragmented, comprising over 10,000
manufacturers, with value concentrated among approximately 300 major players. Growth
is increasingly led by chronic therapies, particularly anti-diabetics, cardiovascular, and

emerging anti-obesity treatments. New product introductions, including innovative and
differentiated therapies, are expected to be an important contributor to value growth over
the forecast period.⁸

An updated version of the Uniform Code for Pharmaceutical Marketing Practices
replaced the previous voluntary version in March 2024. The code emphasizes executive
accountability, defines limits for promotional items and samples, and sets guidelines
for engagement with medical practitioners. The updated code has begun to change the
nature of pharmaceutical company engagement with physicians, shifting focus away from
hospitality, free samples and gifts towards scientific and technical aspects of a product.
In response, leading companies have strengthened compliance systems, and promotional
activity has begun to move onto a more scientific level.⁸

References:

¹ India's inflation in April rises for sixth straight month, but undershoots estimates (2026) CNBC, [cnbc.com]

² The fuel price paradox: Why rising petrol rates may help the rupee but increase inflation (2026) @mathrubhumi.
[english.ma...ubhumi.com]

³ What Lies ahead for indian rupee in higher oil price environment (2026) THINK.ING. [think.ing.com]

⁴ India's pharmaceutical sector grapples with rising costs [arcweb.com]

⁵ Oil crisis may push drug prices higher, supply chain pressure hits Paracetamol & APIs (2026) [freepressjournal.in]

⁶ Indian rupee falls against US dollar in 2026 as oil prices and outflows rise - goodreturns. [goodreturns.in]

⁷ Will the Rupee Cross 100 against the US$ in 2026? CFOs, economic experts weigh in (2026) ETCFO.com.
[cfo.econom...atimes.com]

⁸ IQVIA (2026). Market Prognosis 2026-2030, India

b. Performance

Revenue from operations for the financial year ended March 31,2026 was ' 3,543.3 million
illustrating a decrease of 0.5 percent over the previous year.

The Profit before tax for the year stood at ' 1,296.6 million versus ' 1,304.2 million in the
previous year.

I ndia ranks third globally—after the United States and China—in the total number of
transplants performed annually. However, a significant demand-supply gap persists. Of
the approximately 180,000 annual cases of renal failure, only about 6,000 results in
transplants, with an organ donation rate of under 1 per million population, as against an
estimated requirement of around 65 per million.¹

The 2023 revised guidelines of the Transplantation of Human Organs and Tissues Act,
1994 (amended in 2011) removed the 65-year upper age limit for registering to receive
deceased donor organs and ended the state domicile requirement for such registrations.¹
The Union Health Ministry has directed States/Union Territories to allocate a unique
NOTTO (National Organ & Tissue Transplant Organization) -ID for all organ transplants.
It is mandatory for deceased donor’s organ allocation and must be generated within
48 hours of a living donor transplant surgery.¹

Continued rollout of digital national registry, under the National Organ Transplant
Program (NOTP), donor pledge platforms, and structured organ transport networks¹ and
push for increased awareness and better monitoring of brain stem deaths by NOTTO have
led to three times more organ transplants than in the last decade.²

The incorporation of kidney, heart, lung, and liver transplants under PM-JAY Ayushman
Bharat and Rashtriya Arogya Nidhi with financial support for BPL (Below Poverty Line)
patients demonstrates a commitment to accessibility of Organ transplants in India.

Novartis continues to engage Physicians for high brand recall and for dissemination
of key scientific messages. This is done through differentiated campaigns channelized
through RTEs (Rep Triggered Emails) and CMEs (Continuing Medical Education).

We continue to create high differentiation for Novartis brands in the Transplant
maintenance portfolio.

Throughout the financial year, the Transplant portfolio experienced a 5% growth driven by
recovery of Simulect key accounts.

This growth was achieved despite a highly cluttered genericized market, by bringing in
sharp focus on individual brands in Transplant Maintenance portfolio with high-pitch
share of voice campaigns such as ‘Myfortic - Coated with Care’ and ‘Start Early with
Certican’ campaigns.

The exclusive sales and distribution arrangement entered with Dr. Reddy’s Laboratories
(Dr. Reddy’s) for the Established Medicines Brand, which includes the Voveran range,
the Calcium range and Methergine enters the 4^th year of operations. The arrangement
aimed to broaden access of these medicines to larger geographies to benefit many more
patients, more efficiently through an expanded field force.

The calcium range outperformed with robust 12% growth vs. FY 24-25. Higher market
uptake of Calcium Sandoz and channel management lead to this achievement.

Within the pain portfolio, Voveran Emulgel has performed with a positive evolution index of
100% on MAT Mar’26 basis. The team worked towards leveraging the efficacy perception
of Voveran among HCPs and focus on urban and rural markets with a high in-clinic share
of voice drive with the ‘Jab Pain Nachaye...bas Voveran kaam aaye’ campaign.

There is an increase in the share of voice and Voveran orals are overall gaining prescription
share among doctors in India, however softness was observed in other Voveran franchises.
In-clinic activation of 5,000 HCPs on pledging to support patients with low back pain,
hospital-focused initiatives and building reasons-to-believe with the HCPs have improved
the efficacy perception of Voveran among HCPs.

Approximately 8.8 million Indians are living with dementia, with a prevalence rate of
7.4% among adults over 60^{1 2 3}. Efforts are being made to improve awareness and early
diagnosis through national health programs and partnerships with organizations like the
Alzheimer’s and Related Disorders Society of India (ARDSI)⁴. Exelon Patch, our innovative
Alzheimer’s medicine, offers convenience and safety, leading to increased patient
acceptance and growth.

The following brands hold key positions in major therapeutic areas such as:

References:

¹ https://www.drishtiias.com/daily-updates/daily-news-analysis/organ-transplantation-in-india. Accessed
on 14 April 2026

c. Key Financial Indicators

Particulars 2025-26 2024-25

Reasons for change compared to the previous financial year in key financial ratios are
as follows:

Operating profit margin

Operating profit margin is a profitability or performance ratio used to calculate the
percentage of profit a company produces from its operations. It is calculated by dividing
the operating earnings before interest and tax by turnover. Margins have improved because
of operational efficiencies.

Net profit margin

The net profit margin is equal to how much net income or profit is generated as a
percentage of revenue. It is calculated by dividing profit for the year by turnover. Net
profit margin in the financial year 2025-26 has decreased due to increase in Tax expense.
Current tax expense for the year ended March 31, 2026 and March 31, 2025 includes tax
adjustments for earlier years of ' 26 million and (' 42.5 million) respectively.

Debtors’ turnover ratio

It is calculated by dividing turnover by average trade receivables, to quantify a company’s
effectiveness in collecting its receivables. No major movement compared to previous year.

Current ratio

The current ratio is a liquidity ratio that measures a company’s ability to pay short-term
obligations or those due within one year. It is calculated by dividing the current assets by
current liabilities. No major movement compared to previous year.

Return on Equity

Return on equity is a measure of profitability of a company expressed in percentage. It is
calculated by dividing profit for the year by average shareholder’s equity. Return on equity
in the financial year 2025-26 has decreased due to increase in Tax expense to previous
financial year 2024-25.

Inventory turnover ratio

I nventory turnover is the number of times a company sells and replaces its inventory
during a period. It is calculated by dividing turnover by average inventory. The movement
in the inventory turnover ratio is mainly on account of increase in inventory.

Debt service coverage ratio

The debt service coverage ratio measures how many times a company can cover its current
interest payment with its available earnings. It is calculated by dividing earning available
for debt service by lease payments. No major movement compared to previous year.

Debt equity ratio

The ratio is used to evaluate a company’s financial leverage. It is a measure of the degree
to which a company is financing its operations through debt versus wholly owned funds.
It is calculated by dividing lease liabilities by shareholders equity. No major movement
compared to previous year.

Return on Capital employed

Return on Capital employed is a measure of profitability of a company expressed in
percentage. It is calculated by dividing profit before interest and tax for the year by capital
employed. No major movement compared to previous year.

Return on Investment

Return on investment is defined as return earned on the investment done. It is calculated
by dividing weighted average interest income on bank deposit by weighted average bank
deposits. The decrease is mainly due to lower interest rates.

d. Risks, Threats, and Concerns

While branded generics account for the vast majority of India’s pharmaceutical market
by value, trade generics have grown rapidly in recent years. With maximum retail prices
similar to branded generics, but free from costs associated with promotion to doctors,
trade generics manufacturers have room to offer higher margins and discounts to
stockists and retailers. Most leading Indian pharmaceutical companies, as well as some
multinationals such as Abbott, have set up trade generic divisions.

The size of the trade generics market is difficult to assess as trade generics do not flow
through the regular distribution system. However, IQVIA India estimates that it accounted
for around 12% of the total market in value terms in 2025. Initially involving mainly acute
therapies, trade generics of chronic therapies have also begun to appear, and further
growth is expected, taking market share from branded generics and slowing overall
market growth.⁴

The sector also faces risks from supply chain disruptions, rising energy and freight costs,
currency volatility and dependence on imported inputs. Sustained increases in crude oil
prices and continued rupee depreciation could increase manufacturing costs, pressure
margins and, where pass-through is possible, result in higher drug prices.¹²³

References:

¹ India’s inflation in April rises for sixth straight month but undershoots estimates (2026) CNBC. [cnbc.com]

² The fuel price paradox: Why rising petrol rates may help the rupee but increase inflation (2026) mathrubhumi.
[english.ma...ubhumi.com]

³ What Lies ahead for indian rupee in higher oil price environment (2026) THINK.ING. [think.ing.com]

⁴ IQVIA (2026). Market Prognosis 2026-2030, India.

e. Outlook

India’s population is forecast to expand at an average annual rate of 0.8% over 2025-2030,
adding 61.27 million to reach 1.53 billion in 2030. While the 0-14 years age group is
forecast to contract at an average annual rate of (0.7%), the 15-64 years age group will
grow at an average rate of 1.0%, adding 51.49 million over 2025. Growth in the 65
cohort will be fastest, averaging 3.9% annually and adding 22.51 million over the forecast
period. This cohort will account for 8.6% of the total population by 2030.¹

Initiatives such as the Ayushman Bharat Health Infrastructure Mission, new regional
medical hubs, and public-private partnerships in hospital development are projected to
enhance service capacity, especially outside major cities. Digital health and telemedicine
expansions, including eSanjeevani, the Ayushman Bharat Digital Mission and a formalized
e-pharmacy regulatory framework once in place, are expected to integrate health services,
improve telehealth access and make healthcare delivery more efficient nationwide.¹

The forecast period will be marked by new high-impact drug launches anticipated to
drive market value. The introduction of novel anti-obesity and diabetes treatments, such
as Eli Lilly’s Mounjaro and Novo Nordisk’s Wegovy, in 2025 and beyond is expected to
bolster sales, particularly in metabolic and cardiovascular therapy areas. These therapies
address India’s large and growing diabetic and overweight populations and are projected
to achieve substantial uptake. The patent expiry of semaglutide in 2026 will likely lead to
multiple Indian companies launching affordable generic or biosimilar versions, expanding
patient access while sustaining market growth.¹

Healthcare providers and pharmaceutical companies are expected to expand further
into Tier 2 and Tier 3 cities, where demand is rising as awareness and access improve.
The continuing rise of chronic diseases from lifestyle changes and aging will increase
long-term demand for medications in areas such as diabetes, cardiovascular diseases and
oncology. Companies are responding by enlarging sales forces and pursuing co-marketing
alliances to penetrate these regions.¹

The expansion of pharmacy retail chains and online pharmacies, with hybrid online-offline
models, will modernize drug distribution and improve last-mile availability of medicines
across India. In the hospital sector, private hospitals and clinics will continue attracting
investment and expanding capacity, supported by insurance coverage and rising medical
tourism interest in India’s high-quality, cost-effective care offerings.¹

References:

¹ IQVIA (2026). Market Prognosis 2026-2030, India.

f. Details in respect of adequacy of internal financial controls with reference to the Financial
Statements

The Company maintains appropriate systems of internal control, including monitoring
procedures, to ensure that all assets are safeguarded against loss from unauthorised use
or disposal. Company policies, guidelines and procedures provide for adequate checks
and balances and are intended to ensure that all transactions are authorised, recorded
and reported correctly.

The Internal Auditor reviews the effectiveness and efficiency of these systems and
procedures to ensure that all assets are protected against loss and that the financial and
operational information is accurate and complete in all respects. The Audit Committee
approves and reviews audit plans for the year based on internal risk assessment. Audits
are conducted on an ongoing basis, and significant deviations are brought to the notice
of the Audit Committee of the Board of Directors, following which corrective action is
recommended for implementation. All these measures facilitate timely detection of any
irregularities and early remedial steps.

During the year, the Company conducted a detailed review of its internal control systems,
evaluated the internal financial control systems with the Audit Committee and discussed
relevant issues with internal and statutory auditors. Based on the recommendations of the
Audit Committee, the Board has stated in its responsibility statement that the Company
followed proper internal financial controls and that such internal financial controls are
adequate and were operating effectively.

Particulars of Employees

The Company regards its employees as a valuable asset and accords high priority to training
and development of employees.

The number of employees in the Company as at March 31, 2026, was 57.

Disclosures pertaining to remuneration and other details, as required under Section 197(12)
of the Companies Act, 2013 (‘the Act’), read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as
Annexure A.

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, a statement
showing the names and other particulars of employees drawing remuneration in excess of the
limits set out in the said Rules forms part of this Report. However, in terms of first provision
of Section 136(1) of the Act, the Annual Report and Accounts are being sent to the members
and others entitled thereto, excluding the aforesaid information. If any member is interested in
obtaining a copy thereof, such members may write to the Company Secretary and Compliance
Officer, whereupon a copy would be sent.

Share Capital

The equity shares issued by the Company during the year under review are listed at BSE Limited
(BSE) as on the date of this report and the securities of the Company are not suspended from
trading during the reporting period.

During the year under review, there was no change in the authorized, issued and paid-up
share capital of the Company than that of the previous year ended March 31, 2025.

Share Purchase Agreement

The promoter of the Company i.e. Novartis AG has entered into the Agreement for the sale and
purchase of the Sale Shares in Novartis India Limited (“SPA”) with WaveRise Investments Limited
(“Acquirer 1”), ChrysCapital Fund X (“Acquirer 2”) and Two Infinity Partners (“Acquirer 3”)
(Acquirer 1, Acquirer 2, and Acquirer 3, collectively referred to as the “Acquirers”) dated February
19, 2026 pursuant to which Novartis AG has agreed to sell to the Acquirers and the Acquirers
have agreed to acquire from Novartis AG 1,74,50,680 (One Crore Seventy Four Lakhs Fifty
Thousand Six Hundred and Eighty) fully paid-up equity shares of the Company representing
70.68% (seventy point six eight percent) of the equity share capital of the Company.

As a result of the above, the acquirers along with ChrysCapital X, LLC (“PAC 1”) and OceanEdge
Investments Limited (“PAC 2”) (PAC 1 and PAC 2, collectively referred to as the “PACs”), in
their capacity as persons acting in concert with the Acquirers for the purposes of the Open
Offer, have announced an open offer for acquisition of up to 64,19,608 (sixty four lakhs
nineteen thousand six hundred and eight) fully paid-up equity shares of face value of ' 5 each
(“Equity Shares”) from the Public Shareholders of Novartis India Limited, representing 26%
of the ‘total Voting Share Capital’ (as defined in the Public Announcement), at a price of
' 860.64 (Indian Rupees Eight Hundred Sixty Point Six Four) per Equity Share.

A Committee of Independent Directors (“IDC”) was formed in relation to the above and
under Regulation 26(6) of the SEBI (Substantial Acquisition of Shares and Takeover)
Regulations, 2011 (“SEBI SAST Regulations”) and a meeting of the IDC was convened
on Thursday, June 04, 2026, wherein the IDC after careful review of the Detailed Public
Statement, Letter of Offer, the Valuation Report/ Pricing data and other relevant documents
placed before it, provided its reasoned recommendations in connection with the Open Offer.
The recommendations in relation to the said Open Offer were published in Financial Express,
Navshakti and Jansatta newspapers on June 06, 2026.

The tendering period in relation to the Open Offer was open from June 11, 2026, to June 24, 2026.

During the tendring period 182 shares were tendered by the public shareholders, out of which 40
shares were acquired.

Corporate Social Responsibility

The Company continues to support various initiatives in the areas of health. The
CSR Policy adopted by the Board of Directors is available on the Company’s website at:
https://nilpharma.co.in/pdfs/investors/cp/NIL_Corporate%20Social%20Responsibility%20
Policy.pdf

Health: The Government of India announced its commitment to eradicate leprosy from the
country by year 2030. Aligned with this vision, the Company reinforced its commitment to
leprosy as part of its CSR work in India. The Company continued its support to a non-profit
organization with projects based in Andhra Pradesh and Maharashtra. The project gives
students and community members affected by leprosy (either directly or through their families)
the ability to get jobs through vocational training and build a community of empowered young
people who can further empower their families and communities.

The Annual Report on Corporate Social Responsibility Activities in terms of Section 135
of the Act and Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules,
2014 as amended by Companies (Corporate Social Responsibility Policy) Amendment Rules,
2021, effective January 22, 2021 read with Companies (Corporate Social Responsibility
Policy) Amendment Rules, 2022, effective September 20, 2022 (hereinafter referred to as
‘CSR Rules’) is annexed herewith as an Annexure B.

Contracts or Arrangements with Related Parties

All contracts, arrangements and transactions entered by the Company during the year under
review with Related Parties were in ordinary course of business and on arm’s length basis, in
accordance with the provisions of the Act.

Your Company has formulated a policy on Related Party Transactions which has been
uploaded on the website of the Company at https://nilpharma.co.in/pdfs/investors/cp/NIL_
Related%20Party%20Transaction%20(RPT)%20Policy.pdf

All transactions with related parties during the year were in accordance with the Policy on
Related Party Transactions, formulated and adopted by the Company, and were reviewed and
approved by the Independent Directors who are members of the Audit Committee, in accordance
with the SEBI Listing Regulations. Prior omnibus approval of the Independent Directors who are
members of the Audit Committee is obtained on a yearly basis for the transactions that are
foreseen and of a repetitive nature. A statement giving details of all Related Party Transactions
is placed before the Audit Committee for their review on a quarterly basis.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24
are set out in Note No. 30 to the Financial Statements of the Company. The Company, in terms
of Regulation 23 of the SEBI Listing Regulations, submits disclosures of all related party
transactions to the stock exchanges within the time stipulated and in the format stipulated
under the said SEBI Listing Regulations.

Particulars of contracts or arrangements with related parties pursuant to
Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014,
are provided in Annexure C in Form AOC-2 and forms part of this report. The transactions
disclosed in the said Annexure relate to material RPTs with Novartis Pharma AG for purchase
and import of Pharmaceutical finished products on such terms and conditions as may be
mutually agreed between the company and Novartis Pharma AG as approved by members by
the way of Postal Ballot Resolution dated June 15, 2025.

Risk Management

Pursuant to Regulation 21 of the SEBI Listing Regulations, your Company has constituted
a Risk Management Committee (‘RMC’) to identify elements of risk in different areas of
operations and to develop a policy for actions associated to mitigate the risks.

The RMC is supported by the Internal Risk Steering Committee, risk champions, and on some
occasions, by an external risk advisory firm. The teams undertake assessments of internal
and external risks, adopt the risk mitigation plan, and regularly monitor them in a structured
and controlled environment. The Committee provides updates on risk management to the
Risk Committee of the Board of Directors of the Company on a regular basis. There are no
risks which, in the opinion of the Board, threaten the existence of your Company.

Details of the composition of the RMC and the Risk Management Policy, adopted by the
Board, are provided in the Report on Corporate Governance, which forms part of this Report.

Deposits

During the year under review, your Company neither accepted nor renewed any deposits from
the public, in terms of the provisions of Section 73 of the Companies Act, 2013, read with
Chapter V of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

Insurance

The Company does not own any buildings and/ or plant and machinery, stores etc. hence there
is no requirement of insurance. However, the stocks of the Company have been adequately
insured against major risks.

Directors and Officers Insurance (D&O)

As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company
has obtained Directors and Officers (D&O) Insurance for all its directors and members of
senior management.

Particulars of Loans, Guarantees or Investments

As on March 31, 2026, there were no outstanding loans or guarantees covered under the
provisions of Section 186 of the Act.

Loans from Directors

During the financial year under review, the Company has not borrowed any amount(s)
from Directors.

Transfer to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 124 of the Act read with the Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
(‘IEPF Rules’), (including any statutory modification(s)/re-enactment(s)/ amendments(s)
thereof for the time being in force), the dividend which remains unclaimed or unpaid for a
period of seven (7) consecutive years from the date of transfer to the unpaid dividend account
of the Company, is required to be transferred to the Investor Education and Protection Fund
(‘IEPF’) established by the Central Government. As per the IEPF Rules, the corresponding
shares in respect of which dividend has not been paid or claimed by the members for seven (7)
consecutive years or more shall also be transferred to the dematerialised account created
by the IEPF authority within a period of thirty days of such shares becoming due to be so
transferred. Upon transfer of such shares, all benefits (such as bonus, etc.), if any, accruing on
such shares shall also be credited to such demat account and the voting rights on such shares
shall remain frozen until the rightful owner claims the shares. Shares which are transferred
to the Demat Account of IEPF Authority can be claimed back by the shareholder from IEPF
authority by following the procedure prescribed under the aforesaid rules. Therefore, it is in
the interest of shareholders to regularly claim the dividends declared by the Company.

The said requirement does not apply to shares in respect of which there is a specific order of
a court, tribunal or statutory authority, restraining any transfer of the shares.

During the year under review, the Company had transferred a sum of ' 16,78,730.00/-
(Rupees Sixteen Lakh Seventy-Eight Thousand Seven Hundred Thirty Only) lying in the unpaid/
unclaimed dividend for the financial year 2017-18, to the Investor Education and Protection Fund
(IEPF) established by the Central Government. Further, in compliance with the provisions laid down
in IEPF Rules, the Company sent individual notices and also advertised in the newspapers seeking
action from the members who had not claimed their dividends for seven (7) consecutive years or
more and transferred all corresponding shares and dividend amounts remaining unclaimed for a
period of seven (7) consecutive years till 2017-18 to the Demat Account of the IEPF

It may please be noted that no claim shall lie against the Company in respect of share(s)
transferred to IEPF pursuant to the said Rules. Members or claimants whose shares, unclaimed
dividends, have been transferred to the IEPF demat account of the fund, as the case may be,
may claim the shares or apply for a refund by making an application to IEPF Authority in form
IEPF-5 (available on www.iepf.gov.in). The statement containing details of name, address, folio
number, demat account No. and number of shares transferred to IEPF demat account is made
available on our website https://nilpharma.co.in/transfer-of-shares-to-iepf-demat-account/

The shareholders are encouraged to verify their records and claim their dividends for the
preceding seven (7) years, if not claimed.

Board of Directors and Key Managerial Personnel
Appointment of Director

The Board of Directors of the Company at its meeting held on March 27, 2026, based
on the recommendation of the Nomination and Remuneration Committee, approved the
appointment of Ms. Gowree Gokhale (DIN: 09351661) as an Additional Director designated
as Non-executive and Independent Director of the Company for a period of five (5) years, with
effect from April 01, 2026 up to March 31, 2031 and shall be not liable to retire by rotation.
The said appointment was subject to the approval of the members of the Company.

The members approved the appointment of Ms. Gowree Gokhale (DIN: 09351661) as
Non-executive and Independent Director for a period of five (5) years, with effect from April 01,
2026 up to March 31, 2031 vide a Special Resolution passed by the way of Postal Ballot on
May 16, 2026.

Re-appointment of Director

Mr. Sanker Parameswaran (DIN:00008187) was appointed as Director designated as
Non-Executive and Independent Director with effect from June 22, 2020 for a term
of five (5) years i.e. up to June 21, 2025. The first tenure of Mr. Sanker Parameswaran
(DIN:00008187) as the Independent Director of the Company ended on closing hours of
business on June 21, 2025.

The Board of Directors of the Company in their meeting held on May 09, 2025
approved the re-appointment of Mr. Sanker Parameswaran (DIN:00008187) as a Non-Executive
and Independent Director for a second term of five (5) years w.e.f. June 22, 2025, till June 21,
2030, subject to the approval of the members of the Company.

The members approved the re-appointment of Mr. Sanker Parameswaran (DIN:00008187)
as Non-Executive and Independent Director for a second term of five (5) years w.e.f. June 22,
2025, till June 21, 2030 vide a Special Resolution passed by the way of Postal Ballot on
June 15, 2025.

Cessation/ Resignation of Director

Ms. Sandra Martyres (DIN: 00798406), Independent Director of the Company, completed
her second consecutive term of five (5) years on the Board and consequently ceased to be
an Independent Director of the Company with effect from the close of business hours on
April 18, 2026.

During her tenure, Ms. Martyres made significant contributions to the Board and its Committees
through her rich experience, objective judgment, and valuable guidance. She consistently
upheld the highest standards of corporate governance and provided strategic oversight that
contributed meaningfully to the Company’s performance and governance framework.

The Board of Directors places on record its sincere appreciation for the dedicated services
rendered by Ms. Martyres during her association with the Company and conveys its best
wishes for her continued success in her future endeavors.

Declarations by Independent Directors

The Company has received the necessary declarations from all the Independent Directors
of the Company confirming that they continue to meet the criteria of independence, as
prescribed under Section 149(6) of the Act, read with Regulations 25(8) and 16(1)(b) of the
SEBI Listing Regulations. There has been no change in the circumstances affecting their status
as Independent Directors of the Company. The Independent Directors have also confirmed
that they have complied with Schedule IV of the Act and the Company’s Code of Conduct.

They have further confirmed that they are not aware of any circumstance or situation which
exists, or may reasonably be anticipated, that could impair or impact their ability to discharge
their duties. Furthermore, the Independent Directors have submitted their declaration in
compliance with the provisions of Rule 6(3) of the Companies (Appointment and Qualification
of Directors) Rules, 2014, which mandate the inclusion of an Independent Director’s name in
the data bank of Indian Institute of Corporate Affairs (‘IICA’) for a period of one year, or five
years or lifetime till they continue to hold the office of an Independent Director.

Committees of Board; Meetings of the Board of Directors and Committees

The Board currently has five (5) Committees, namely: the Audit Committee, the Nomination and
Remuneration Committee, the Corporate Social Responsibility Committee, the Stakeholders
Relationship Committee, and the Risk Management Committee.

Further, in terms of Regulation 26(6) of the SEBI (Substantial Acquisition of Shares and
Takeover Regulations) Regulations, 2011, a committee of Independent Directors has
been formed called as Independent Directors Committee (“IDC”) to provide reasoned
recommendations on the Open Offer. All the Independent Directors of the Company form a
part of the IDC.

During the year under review, the Board of Directors met Six (6) times to transact various
affairs of the Company. A detailed update on the Board, its composition, including a synopsis
of terms of reference of various Board Committees, number of Board and Committee
meetings held during the financial year 2025-26, and attendance of the Directors at each
meeting is provided in the Report on Corporate Governance, which forms part of this Report.

Key Managerial Personnel (KMP)

In terms of the provisions of Section 203 of the Act, the following are the KMP of the Company
as at the date hereof: -

Ms. Shilpa Joshi - Whole-Time Director and Chief Financial Officer

Mr. Falin Majmudar - Whole-Time Director

Ms. Chandni Maru - Company Secretary and Compliance Officer

The Company has in place a Nomination and Remuneration Policy (‘Policy’), which provides
guidance on selection and nomination of Directors to the Board of the Company; appointment
of the Senior Management Personnel of the Company; and remuneration of Directors, KMP
and other employees. The said Policy is also provided in the Report on Corporate Governance,
which forms part of this Report, and is available on the website of the Company and can
be accessed at: https://nilpharma.co.in/pdfs/investors/cp/NIL_Nomination%20&%20
Remuneration%20Policy.pdf

Disclosure with respect to Remuneration drawn by Managing Director/ Whole-Time Director
from Holding/ Subsidiary Company

The Whole-Time Directors of the Company do not draw any remuneration from its holding
Company.

Further, the Company does not have a Subsidiary Company.

Performance Evaluation of Board

Pursuant to the provisions of Section 178 read with Schedule IV of the Act and Regulation 17,
read with Part D of Schedule II to the SEBI Listing Regulations, the Board of Directors has
carried out the annual performance evaluation of its own performance, that of the Directors
individually as well as working of its Audit, Nomination and Remuneration, Stakeholders
Relationship, Risk Management and Corporate Social Responsibility Committees.

A structured questionnaire was prepared for the Board evaluation process for the financial
year 2025-26, covering various aspects of the Board’s functioning, such as proper mix
of competencies, sufficient diversity and review of the Company’s business, financial
performance, governance and compliance etc.

A separate exercise was carried out to evaluate the performance of individual Directors, who
were assessed on parameters such as level of engagement and contribution, independence of
judgement, safeguarding the interest of the stakeholders of the Company etc.

The Independent Directors of the Company met on April 09, 2026, without the presence
of Non-Independent Directors and members of the management to review the performance of
Non-Independent Directors and the Board of Directors as a whole; to review the performance
of the Chairperson, and Whole-time Directors of the Company; and to assess the quality,
quantity and timeliness of flow of information between the management and the Board of
Directors for the financial year 2025-26. The performance evaluation of the Independent
Directors was carried out by the entire Board.

The final outcome of the Board evaluation process for the financial year 2025-26 was placed
before the Board of Directors at its meeting held on May 12, 2026, and the Directors expressed
their satisfaction with the evaluation process carried out.

Directors’ Responsibility Statement

The audited financial statements of your Company for the year under review (‘financial
statement’) are in conformity with the requirements of the Act, read with the Rules made
thereunder (‘Act’), and the applicable Accounting Standards. The financial statement fairly
reflects the form and substance of transactions carried out during the year under review and
reasonably present your Company’s financial condition and results of operations.

Pursuant to Section 134(3)(c) of the Act, the Board of Directors, to the best of its knowledge
and ability, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been
followed, along with proper explanation relating to material departures, if any;

(b) appropriate accounting policies have been selected and applied consistently, and have
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 March 31, 2026, and of the profit of
the Company for the year ended March 31, 2026;

(c) proper and sufficient care has been taken 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;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls were laid down and followed by the Company and such
internal financial controls are adequate and were operating effectively;

(f) proper systems are devised to ensure compliance with the provisions of all applicable
laws and that such systems are adequate and operating effectively.

Familiarization Programme for Independent Directors

The Company keeps its directors informed of the activities of the Company, its management
and operations and provides an overall industry perspective on issues being faced by industry,
including changes in regulatory landscape, in a proactive manner. Details of familiarization
programme provided to the Directors of the Company are available on the website of the
Company at: https://nilpharma.co.in/pdfs/investors/cp/NIL_Board%20Familiarization%20
Programme.pdf

Auditors and Auditors Report

(i) Statutory Auditors, Auditors Report and Statutory Audit Fees:

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and
Auditors) Rules, 2014, M/s. B S R & Co. LLP Chartered Accountants (Firm Registration
No. 101248W/ W100022), were appointed as Statutory Auditors of the Company at the
AGM held on July 29, 2022, for a term of five (5) years to hold office from the conclusion
of the 74^th AGM till the conclusion of the 79^th AGM of the Company.

The Auditors’ Report issued by M/s. B S R & Co. LLP to the shareholders on the Financial
Statement of the Company for the year ended March 31, 2026, does not contain any
qualification, reservation or adverse remark. The said Report for the financial year
ended March 31, 2026, read with the explanatory notes therein are self-explanatory and
therefore, do not call for any further explanation or comments from the Board under
Section 134(3) of the Act. The Auditors’ Report is enclosed with the Financial Statement
in this Annual Report.

During the financial year 2025-26, the total fees for the statutory audit rendered by the
Statutory Auditors are given below:

* Fees paid to the Statutory Auditors for issuing a certificate for the Unhedged Foreign Currency
Exposure (UFCE) for the financial year ending March 31, 2025.

(ii) Secretarial Auditor and Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M K Saraf
& Associates LLP Company Secretaries, (Firm Registration No. L2025MH018600 and
Peer Review Certificate No. 6694/2025) to conduct Secretarial Audit of the Company
for the financial year 2025-26. The Secretarial Audit Report is annexed herewith as an
Annexure D. The Secretarial Audit Report does not contain any qualification, reservation
or adverse remark.

Further, as per the recent amendments in SEBI LODR Regulations, 2015, it is prescribed
that the term for the appointment of Secretarial Auditor shall not exceed one term of

five (5) consecutive years in case of an individual practicing Company Secretary, and for not
more than two terms of five (5) consecutive years in case of a firm of Secretarial Auditors.

In this regard, M K Saraf & Associates LLP Company Secretaries (Firm Registration No.
L2025MH018600 and Peer Review Certificate No. 6694/2025) were appointed as the
Secretarial Auditors of the Company for a period of five (5) consecutive years commencing
from April 01, 2025, till March 31, 2030, at the Board Meeting held on May 09, 2025,
and the same was approved by the shareholders at the 77^th Annual General Meeting of
the Company.

(iii) Cost records and Cost Audit:

The maintenance of cost records and the requirement of cost audit, as prescribed under
Section 148(1) of the Companies Act, 2013, are applicable to the business activities
carried out by the Company for the financial year 2025-26.

Accordingly, M/s. D. C. Dave & Co., Cost Accountants (Firm Registration No. 000611),
Cost Accountants, were appointed as the Cost Auditors of the Company to conduct the
cost audit for the said financial year.

The Cost Audit Report along with its annexures for the year ended March 31, 2026, issued
by the Cost Auditors, was duly reviewed and approved by the Board of Directors at its
meeting held on May 12, 2026.

(iv) Reporting of fraud by Statutory Auditors under Section 143(12):

There were no incidences of reporting of frauds by Statutory Auditors of the Company
under Section 143(12) of the Act read with Companies (Accounts) Rules, 2014

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor
has reported to the Audit Committee or the Board, under Section 143(12) of the Act, any
instances of fraud committed against the Company by its officers or employees.

Compliance with Secretarial Standards

During the financial year 2025-26, the Company has complied with the applicable Secretarial
Standards issued by the Institute of Company Secretaries of India.

Annual Secretarial Compliance Report

The Company has conducted an examination of all applicable compliances as per SEBI
Listing Regulations and the Circulars/Guidelines issued thereunder, for the financial
year 2025-26.

The Annual Secretarial Compliance Report dated May 21, 2026, issued by M K Saraf &
Associates LLP Company Secretaries, has been submitted to Stock Exchanges within 60 days
of the end of the financial year. The Report does not contain any qualification, reservation or
adverse remark. The said report has been duly submitted to BSE Limited.

Energy, Technology Absorption and Foreign Exchange

Information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies
(Accounts) Rules, 2014, with respect to conservation of energy, technology absorption, and
foreign exchange earnings/outgo, is included in Annexure E, annexed herewith.

Corporate Governance

Your Company has consistently adhered to the corporate governance guidelines and best
practices to boost long-term shareholder value and to uphold minority rights. The Company
considers it an inherent responsibility to disclose in a timely and accurate manner all

information regarding its operations and performance, as well as regarding leadership and
governance within the Company.

Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations, the Report on
Corporate Governance for the year under review is presented in a separate section and forms a
part of this Annual Report. A certificate from M K Saraf & Associates LLP Company Secretary,
confirming compliance with the conditions of Corporate Governance as stipulated under the
SEBI Listing Regulations, also forms part of the Report on Corporate Governance.

Prohibition of Insider Trading

Pursuant to provisions of the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015, as amended (“PIT Regulations”), the Company has adopted
Insider Trading Code to regulate, monitor and report trading by insiders. This Code applies
to Promoters, all Directors, Designated Persons and Connected Persons and their immediate
relatives, who are likely to have access to Unpublished Price Sensitive Information (“UPSI”)
relating to the Company.

The Company has also formulated a ‘Code of Practices and Procedures for Fair Disclosure
of UPSI’ in compliance with the PIT Regulations. The aforesaid Codes are available on the
website of the Company at https://nilpharma.co.in/pdfs/investors/cp/NIL_Code%20of%20
Practices%20%20Procedures%20for%20Fair%20Disclosure%20of%20UPSI.pdf

Business Responsibility and Sustainability Reporting (‘BRSR’)

In terms of amendment to regulation 34(2)(f) of the SEBI Listing Regulations vide Gazette
notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021, the Business Responsibility
and Sustainability Report (“BRSR”) based on nine (9) ESG principles for the financial year
2025-26 is included as part of this Annual Report as Annexure F.

The members are informed that several sustainability initiatives undertaken by the Company
are guided by the ESG principles and policies of its promoter, Novartis AG. Accordingly, the
BRSR for the period ended March 31, 2026 has been prepared based on such principles and
policies and therefore contains certain cross-references to the promoter.

Whistle Blower Policy: Vigil Mechanism

Pursuant to Section 177 of the Act, read with Regulation 22 of the SEBI Listing Regulations,
it is mandatory for every listed entity to formulate Vigil Mechanism (‘Whistle Blower Policy’)
to enable the Directors and employees to report genuine concerns. The Company has
implemented a Vigil Mechanism and Whistleblower Policy that provides for (a) adequate
safeguards against victimization of people who avail the Vigil Mechanism; and (b) direct access
to the Chairperson of the Audit Committee of the Board of the Company in appropriate or
exceptional cases. Details of the Vigil Mechanism and Whistleblower Policy are made available
on the website of the Company at: https://nilpharma.co.in/pdfs/investors/cp/NIL_Vigil%20
Mechanism_Whistleblower%20Policy.pdf

Prevention of Sexual Harassment Policy

The Company has in place a Prevention of Sexual Harassment Policy in line with the
requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition
and Redressal) Act, 2013, and Rules framed thereunder. An Internal Complaints Committee
has been set up to redress complaints received regarding sexual harassment. All persons
whether employed as permanent, contractual, temporary or trainees are covered under
this Policy.

During the financial year 2025-26, no complaint was received by the Company related to
sexual harassment. As on March 31, 2026 there are no complaints to be resolved.

Annual Return

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act, read with Rule 12 of
the Companies (Management and Administration) Rules, 2014, the draft Annual Return of
the Company for the financial year ended March 31, 2026, is available on the website of the
Company at: https://nilpharma.co.in/annual-reports/

Significant and Material Orders passed by the Regulators or Court

There are no significant material orders passed by the regulators or courts or tribunals
impacting the going concern status and Company’s operations in future.

Compliance regarding Maternity Benefit Act, 1961

The Company has complied with the Maternity Benefit Act, 1961, to the extent applicable.
Other Disclosures

• There were 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.

• The Company has not issued any shares with differential voting rights/sweat equity
shares/under Employees Stock Option Scheme during the year under review.

• There was no revision in the Financial Statements.

• There has been no change in the nature of business of the Company as on the date of
this Report.

• No instances of non-exercising of voting rights in respect of shares purchased directly by
employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of
Companies (Share Capital and Debentures) Rules, 2014 is furnished.

• No application has been made under the Insolvency and Bankruptcy Code; hence, the
requirement to disclose the details of any application made or any proceeding pending
under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with
their status as at the end of the financial year is not applicable.

• The requirement to disclose the details of difference between the amount of the valuation
done at the time of one-time settlement and the valuation done while taking loans from
the Banks or Financial Institutions, along with the reasons thereof, is not applicable; and

• The Company does not have any subsidiaries, associate companies and joint ventures for
the year ended March 31, 2026.

• In accordance with the provisions of NFRA Circular dated January 07, 2026 -
“Effective Communication Between Statutory Auditors and Those Charged with
Governance”, the Board has adopted a Policy that sets out the principles, governance
structure, processes and documentation standards for effective, structured and timely two
way communication between the Statutory Auditors and Those Charged with Governance
(TCWG) of the Company. The Policy is intended to strengthen audit quality, financial
reporting integrity, internal control oversight and investor confidence. The Policy has been
adopted w.e.f. April 08, 2026.

Green Initiative

We request all the shareholders to support the ‘Green Initiative’ of the Ministry of Corporate
Affairs and Company’s ongoing commitment to a greener environment by consenting to
receiving the Annual Report, AGM Notice and other documents electronically to your email
address registered with your Depository Participant/ RTA.

Cautionary Note

The statements forming part of the Board’s Report may contain certain forward-looking
remarks within the meaning of applicable securities laws and regulations. Various factors
could cause the actual results, performances, or achievements of the Company to materially
differ from any future results, performances, or achievements expressed or implied by such
forward-looking statements.

Acknowledgement

The Board expresses its appreciation and places on record the contributions made by all
stakeholders, particularly employees, shareholders, customers, the medical fraternity, and all
business partners, during the year under review. It also acknowledges the support received
from the parent Company, Novartis AG.

On behalf of the Board of Directors

Christopher Snook
Chairman

Date: June 29, 2026 DIN: 00369790

Place: Mumbai

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