Your Directors are pleased to present the 89^th Annual Report on business and operations along with the Audited
Financial Statements of the Company for the financial year ended 31^st March 2026.

ECONOMIC ENVIRONMENT

Global macroeconomic conditions in 2026 indicate a steady but moderate growth environment, reflecting stability
despite ongoing structural challenges. Global GDP growth is estimated at 2.8% in 2025 and is projected to ease slightly
to 2.7% in 2026, remaining below the pre-pandemic average of 3.2%. Economic activity continues to be supported
by stable labour markets, easing monetary conditions, and steady consumer demand, although policy uncertainty,
geopolitical tensions, and trade frictions continue to affect overall momentum. Growth across advanced economies is
expected to remain modest, with the United States, Europe, and Japan maintaining stable expansion supported by fiscal
and monetary measures. (Source: UN WESP 2026, Executive Summary pp. VII-VIII; Chapter I p.5)

Emerging and developing economies are expected to maintain relatively stronger growth, supported by domestic demand
and targeted policy measures. However, growth is projected to ease slightly, reflecting tighter fiscal conditions, high debt
levels, and uneven investment trends. While large economies such as China and India continue to support global growth,
many low-income and vulnerable countries face constraints due to limited fiscal space and external financing challenges.
Structural issues such as productivity gaps, climate-related disruptions, and uneven access to technology continue to
influence growth across regions. (Source: UN WESP 2026, Executive Summary pp. VII-IX)

Inflationary pressures have continued to ease globally, with headline inflation declining from 3.4% in 2025 to a projected
3.1% in 2026. This decline has been driven by lower energy and food prices, improved supply conditions and gradual
stabilization in global markets. However, inflation remains above target levels in several economies, mainly due to
continued price pressures in services and housing. While many central banks have moved towards monetary easing,
policy actions remain careful given ongoing risks from geopolitical developments, supply disruptions and climate-related
events that could affect price stability. (Source: UN WESP 2026, Executive Summary pp. XII-XIII)

India continues to remain one of the fastest-growing major economies globally. Growth is estimated at 7.4% in 2025
and is projected to ease to 6.6% in 2026, supported by strong domestic consumption and continued public investment.
Economic activity is further supported by policy reforms and easing monetary conditions, which are expected to help
near-term growth. While external risks such as West Asian war induced uncertainty around energy prices and global
trade uncertainty arising from sanctions and tariff measures imposed by the U.S. administration are cause of concern,
India's strong domestic fundamentals, infrastructure investment and demographic profile continue to provide a stable
base for long-term growth. (Source: UN WESP 2026, Executive Summary p. XI)

TOBACCO INDUSTRY

India's tobacco industry continues to hold an important position in the country's agricultural and consumer markets.
The India tobacco market reached 821.7 thousand tons in 2025 and is projected to grow to 988.8 thousand tons
by 2034, at a CAGR of 2.08% during 2026-2034. Growth in the market is supported by increasing tobacco
consumption, rising disposable incomes and wider product availability. India also remains the world's second-largest
producer of tobacco, with annual production of around 1,037 million kilograms across key states such as Andhra
Pradesh, Karnataka, Gujarat, Uttar Pradesh, Telangana and Bihar, producing a wide range of tobacco varieties for
domestic and export markets. (Source: IMARC India Tobacco Market Report and Tobacco Fact Sheet India 2026)

India's tobacco exports continue to support the country's trade revenues. India is the second-largest exporter of
tobacco globally after Brazil and exports tobacco and tobacco products to nearly 200 countries. In FY25, India
exported 146,954 tonnes of FCV tobacco valued at US$ 895.9 million (Rs. 7,571 crores). Exports of unmanufactured
tobacco and tobacco products during FY25 reached 364,575.84 tonnes, valued at Rs. 16,728 crores (US$ 1.97
billion). Major export destinations include the UAE, Belgium, Indonesia, Egypt, the USA, Turkey, and the Republic of
Korea. In FY26, UAE remained the largest importer of Indian tobacco products at around US$ 134 million of total
exports from India. (Source: IBEF Tobacco Industry and Exports India)

India's position in the global tobacco trade continues to be supported by low production costs and a diversified product
portfolio. Along with cigarettes, India has a strong export presence in FCV tobacco, unmanufactured non-FCV tobacco,
bidis, hookah tobacco, chewing tobacco and other tobacco products catering to different international markets. In
FY2026, India exported 19,768.09 tonnes of unmanufactured non-FCV tobacco valued at US$ 75.30 million (Rs.
642.73 crores). The exports of unmanufactured tobacco and tobacco products during FY26, were 66,984.61 tonnes
valued at US$ 374.9 million (Rs. 3,201 crore). India continues to export tobacco products to nearly 200 countries,
supported by steady global demand and expanding market reach. (Source: IBEF Tobacco Industry and Exports India)

The tobacco sector continues to be a major contributor to employment and economic activity in India. The industry
provides direct and indirect employment to around 45.7 million people, with nearly 70% engaged in agricultural
activities. The sector contributes an estimated Rs. 18 lakh crores to the Indian economy and generates annual tax
revenues of more than Rs. 76,000 crores. Tobacco exports earn India over Rs. 17,000 crores annually, with FCV

tobacco contributing nearly 70% of leaf exports. Tobacco cultivation also remains important for semi-arid and rain-fed
regions where alternative crops may not provide similar income opportunities. (Source: Tobacco Fact Sheet India 2026)

Despite its economic contribution, the tobacco industry continues to face challenges due to high taxation, health
concerns, and increasing illicit trade. Legal cigarettes account for only about 10% of overall tobacco consumption
but contribute nearly 80% of tobacco tax revenues. India is among the world's largest illegal cigarette markets, with
illicit cigarettes accounting for about 26.1% of the total cigarette market. Illicit cigarettes are estimated to amount to
nearly one-third of legal cigarette volumes, resulting in an annual revenue loss of around Rs. 23,000 crores to the
government. High taxes and price differences between legal and illegal products continue to support the growth of
illicit trade. (Source: Tobacco Fact Sheet India 2026)

CONSUMER INDUSTRY

India's consumer sector continues to play an important role in the country's economic growth. Supported by favourable
demographics, rising incomes, increasing urbanisation and wider digital adoption, both sectors continue to expand
steadily. Changes in consumer preferences, along with policy support are shaping growth across categories. Demand
is becoming more diversified, with consumers seeking convenience, quality and value, while businesses are adapting
their strategies to align with these trends. (Source: IBEF FMCG Report, March 2026, Page 1)

The Fast-Moving Consumer Goods (FMCG) sector continues to expand, with the market valued at approximately USD
245 billion in 2024 and projected to reach nearly USD 1.1 trillion by 2033, growing at a CAGR of about 17.3%. The
sector is expected to deliver revenue growth of 6-8% in FY26, supported by rising urban demand and steady rural
consumption. Digital adoption remains a key driver, with over 270 million online shoppers in 2024 and increasing
use of digital platforms for consumption. E-commerce and direct-to-consumer channels continue to expand, while quick
commerce is growing at a CAGR of 70-80%, improving access and delivery timelines across cities. Companies are
also investing in supply chain improvements, data analytics, and product innovation to meet evolving demand patterns.
(Source: IBEF Retail Report, November 2025, Page 4; KPMG FMCG Report, Q3FY26)

At the same time, companies are adapting to evolving challenges. Managing costs and ensuring efficient supply
chains remain key priorities amid inflationary pressures and competitive intensity. Food inflation trends have remained
volatile, with marginal deflation observed in late 2025. Consumer preferences are shifting toward health, sustainability,
and premium products, with premium FMCG categories gaining traction, particularly in rural markets. Companies
are responding by investing in sustainable practices, cleaner ingredients, and technology-led product development to
remain aligned with consumer expectations. (Source: KPMG FMCG Report, Q3FY26)

As the market continues to evolve, India's consumer sector is expected to benefit from steady demand, digital growth,
and supportive policy measures. Continued focus on product innovation, efficient operations, and customer engagement
will remain important for sustaining growth and creating long-term value for stakeholders.

SEGMENTWISE PERFORMANCE IN 2025-26Cigarettes

During the year under report, the Company recorded stable performance, supported by continued consumer demand
in the first half of the year and disciplined execution across markets. The Company strengthened its presence in select
emerging markets through calibrated brand investments, filling up portfolio gaps, measured pricing actions and focused
execution across the value chain.

The performance of the cigarettes business, during the year, was led by the Company's key brands, Four Square and Stellar,
which continued to enhance their relevance across consumer segments. Four Square consolidated its position, supported by
the performance of its variants, including the Four Square Crush range. Stellar sustained its momentum, with continued focus
on higher growth segments and modern retail formats. Legacy brands such as Cavanders and North Pole also recorded
steady performance, supported by initiatives aimed at enhancing consumer relevance within permissible frameworks.

However, the change in the indirect tax structure for cigarettes brought about by the Government with effect from
1^st February 2026 which has resulted in steep increase in overall incidence of tax, has posed major challenges for the
industry in the future, particularly impacting consumer affordability across the segments and price points. The prevalence
of illicit and contraband products continued to remain a significant structural concern for the industry.

Also, the operating environment for the cigarettes business remains subject to regulatory and taxation considerations. The
Company continues to closely monitor developments in the regulatory landscape and remains focused on prudent cost
management, disciplined execution and compliance. The Company's strategy will continue to emphasise strengthening
its core brand portfolio, pursuing selective innovation aligned with consumer preferences which already exist and to
those which are emerging, and optimising its sales and distribution capabilities. These efforts are expected to support the
Company's ability to operate effectively in a dynamic market environment and create long term value for stakeholders.

Confectionary Products

During the financial year 2025-26, the Company's Confectionery Products division, though relatively small in size, achieved
robust growth, recording a 31% increase in operating profit, a 26% rise in volume, and a 15% uplift in gross sales value

compared to the previous year. This impressive performance was primarily driven by the hard-boiled segment, notably
with the successful launch of our new brand, "Lemon Chaskaa" The brand has gained significant traction, now available
in approximately 450,000 outlets across Pan India.

Looking ahead, the Company is poised to strengthen its digital marketing presence and introduce new product
variants in the coming year.

Exports

The following table shows the status of exports for different products during the year under report:

During the year under review, the Company strengthened its emphasis on Burley tobacco production to cater to a
broader range of customers. This strategy facilitated additional business opportunities, expanded market reach, and
supported continued revenue growth. Moreover, the successful implementation of the Integrated Production System
(IPS) in the HDBRG 2025 crop enabled the Company to secure new business while reinforcing its commitment
to quality and regulatory compliance. The Company has also identified new crop varieties-Sun-Cured Virginia,
Kurnool Rustica, Lanka, and Lalchoupadia-to further diversify its existing portfolio.

A strategic and methodical approach, incorporating ongoing procurement monitoring, optimal tobacco utilization,
expedited processing and improved yield performance, has resulted in marked advances in supply chain efficiency.
Collectively, these initiatives have contributed significant value by enabling enhanced cost management and elevating
overall operational effectiveness.

HUMAN RESOURCE DEVELOPMENT

Your Company's Human Resource strategy continues to be guided by its "People First" philosophy, with a sustained
focus on strengthening organizational capability, enhancing employee experience, and fostering a safe, inclusive
and future ready workplace aligned with business priorities. During the year, your Company advanced its people
transformation journey through the implementation of the latest Oracle Cloud HCM platform, enabling stronger
digital integration, workforce transparency and data driven people decisions. Curated learning interventions were
conducted to upskill the workforce on emerging technologies, strengthening digital awareness and readiness
for evolving roles. The Company maintained its emphasis on leadership development, succession planning and
internal talent mobility, supporting career progression and leadership depth. Focused initiatives on diversity, equity
and inclusion, alongside enhanced health, safety and wellness interventions, reinforced employee well-being and
organizational resilience. Your Company was certified as a Great Place to Work® for the 8^th consecutive year,
instilling a strong sense of pride and reaffirming its high trust culture. Leadership remained closely connected with
employees through increased dialogue, engagement and accessibility, fostering trust and pride while strengthening
the organization's ability to respond with agility to change and growth.

INFORMATION TECHNOLOGY (IT)

Your Company continued to leverage technology as a strategic enabler to strengthen enterprise governance, enhance
workforce productivity and support compliant business growth. During the year, focused investments were made in
introducing AI productivity platforms, improving information security posture and enhancing efficiency across critical
operational and compliance processes.

The enterprise application landscape has been further enhanced through select process improvements in ERP, enabling
alignment with evolving tax and regulatory frameworks. There has been a continued emphasis on digitization and
governance-led visibility across the organization. IT infrastructure capabilities have been further strengthened to
support growing digital adoption and user experience expectations. Network capacity across locations has been
enhanced, improving reliability and performance for enterprise applications.

Your Company has also made steady progress in strengthening its information security framework. Security controls
across core data platforms have been enhanced, alongside the rollout of centralized security governance dashboards
to improve monitoring and oversight. Advanced password-less identity-based authentication mechanisms have been
implemented across key enterprise applications to further strengthen access security. These initiatives, coupled with
enhanced email security measures, have significantly improved the overall cyber resilience of the organization.

Your Company continues to focus on responsible and secure adoption of emerging technologies. Progress has been
made towards enterprise-wide AI enablement to enhance productivity using secure enterprise grade AI platform.
Strong IT governance remains a cornerstone of the technology strategy, as reflected in the successful re-certification

of the Information Security Management System to upgraded version ISO 27001:2022, reaffirming the Company's
continued commitment towards data security, risk management, and compliance.

TREASURY OPERATIONS

Your Company continues to enjoy the highest rating of 'CRISIL A1 ' for short term debt program, 'CRISIL AA /
Stable' for long term loan. With these ratings in place, your Company can raise funds (if needed) at most competitive
terms. Following the principles of liquidity, safety and tax efficient returns, your Company has been deploying its
long term surplus funds primarily in debt-oriented schemes of reputed mutual funds. Also, the Company continued
to park its temporary surpluses in liquid/short-term schemes of various mutual funds.

FINANCIAL RESULTS (Rs. in Lakhs)

During the year, the gross sales value registered a growth of 32.80 % by reaching the level of Rs.9119.02 crores from
Rs.6866.64 crores last year. Similarly, the profit after tax is Rs.1507.48 crores as compared to Rs.1043.20 crores last year.
(The figures of revenue for the year ended 31^st March 2026 are not comparable with the previous year due to revision
of indirect tax structure on cigarettes effective from 1^st February 2026.)

DIVIDEND

Your Directors are pleased to recommend the final dividend of 1650% i.e. Rs.33/- per equity share of face value
of Rs.2/- each over and above the interim dividend of Rs.17 per share paid in November 2025. The proposed
dividend will absorb Rs.514.74 crores. No amount proposed to be transferred to the general reserves.

DEPOSITS

Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 and hence, no
details pursuant to Rules 8(v) and 8(vi) of the Companies (Accounts) Rules, 2014 are required to be reported.

BONUS SHARES AND INCREASE IN SHARE CAPITAL

During the year under review, the Authorised Share Capital of the Company has been increased from Rs. 25,00,00,000/-
(Rupees Twenty-Five Crore) divided into 12,20,00,000 (Twelve Crore Twenty Lakh) Equity Shares of Rs. 2/- (Rupees Two)
each and 60,000 (Sixty Thousand) Preference Shares of Rs. 100/- (Rupees One Hundred) each to Rs. 50,00,00,000/-
(Rupees Fifty Crore) divided into 24,70,00,000 (Twenty-Four Crore Seventy Lakh) Equity Shares of Rs. 2/- (Rupees
Two) each and 60,000 (Sixty Thousand) Preference Shares of Rs. 100/- (Rupees One Hundred) each, by creation of
additional 12,50,00,000 (Twelve Crore Fifty Lakh) Equity Shares of Rs. 2/- (Rupees Two) each, ranking pari-passu with
the existing Equity Shares.

The Board of Directors of the Company, at its meeting held on 4^th August 2025, had approved issuance of Bonus
Equity Shares in the proportion of 2:1, i.e. 2 (Two) new fully paid-up Equity Shares of Rs. 2/- each for every 1 (One)
existing fully paid-up Equity Share of Rs. 2/- each, by capitalizing a sum of Rs. 20,79,75,680/- (Rupees Twenty
Crore Seventy-Nine Lakh Seventy-Five Thousand Six Hundred and Eighty only) out of the amounts standing to the
credit of the General reserves and/or Retained earnings of the Company as per the Audited Financial Statement of
the Company for the financial year ended 31^st March 2025, which was subsequently approved by the Shareholders
at the 88^th Annual General Meeting of the Company held on 4^th September 2025.

Accordingly, the Board of Directors of the Company, at its meeting held on 17^th September 2025, approved the allotment
of 10,39,87,840 (Ten Crore Thirty-Nine Lakh Eighty-Seven Thousand Eight Hundred Forty) Equity Shares of Rs. 2/- (Rupees
Two) each as fully paid-up Bonus Equity Shares to all the eligible members of the Company as on the Record Date and the
Bonus Equity Shares so allotted rank pari-passu, in all respects, with the existing Equity Shares of the Company.

Consequent to the aforesaid allotment, the paid-up share capital of the Company has increased to Rs. 31,19,63,520/-
(Rupees Thirty-One Crore Nineteen Lakh Sixty-Three Thousand Five Hundred Twenty), divided into 15,59,81,760 (Fifteen
Crore Fifty-Nine Lakh Eighty-One Thousand Seven Hundred Sixty) fully paid-up Equity Shares of Rs. 2/- (Rupees Two) each.
The aforesaid Bonus Equity Shares were credited to the respective demat account of the eligible members as on the
Record Date. In the case of the eligible members holding Equity Shares in physical form, the Bonus Equity shares have
been credited to a separate demat suspense account namely "Godfrey Phillips India Limited-Bonus Suspense Account" in
accordance with the requirements of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and only
upon submission of the requisite documents, such Bonus Equity Shares will be credited to their respective demat account.

ANNUAL RETURN

As required under Section 134(3)(a) and section 92(3) of the Companies Act, 2013, the Annual Return
as on 31^st March 2026 has been uploaded on the Company's website and the same can be accessed at
https://godfreyphillips.co.in/sustainabililty/annual-return.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on 31^st March 2026, your Company had six operating subsidiaries, two associate companies and a
controlled entity. The basic details of these companies form part of the Annual Return as on 31^st March 2026,
which can be accessed through the link given above.

Form AOC-1 containing the salient features of financial statements of the Company's subsidiaries and associates
is attached as 'An note 47 of the consolidated financial statements shows the share of

each subsidiary, associate, and controlled entity in the consolidated net assets and profits of the Company.
The audited financial statements of these entities will be available for inspection during business hours at the
Registered Office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Indian Accounting Standard (IndAS-110)-Consolidated Financial Statements, Group Accounts
form part of this Annual Report. The Group Accounts have been prepared based on financial statements received
from the subsidiary, associate and controlled entities, as approved by their respective Boards.

INTERNAL CONTROL SYSTEMS

Your Company has established a robust system of internal controls including financial controls, commensurate with
its size and nature of its operations. These controls ensure that transactions are properly recorded, authorised and
reported, while also safeguarding assets against loss arising from wastage, unauthorized use or disposal.

The internal control systems are supplemented by well documented policies, guidelines and procedures which are in
line with the internal financial control framework requirements. There is an extensive programme of internal audit by
a firm of chartered accountants followed by periodic management reviews.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen the same.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review, the Company continued to strengthen its commitment to Corporate Social Responsibility
(CSR) with a focused approach towards environmental sustainability, conservation of natural resources, water
management, access to safe drinking water, preventive healthcare and support for good agricultural practices.

In water-stressed and rain shadow regions of Andhra Pradesh, the Company further scaled its water conservation
initiatives. During the year, 13 new check-dams were constructed, taking the total number to nearly 60. These structures
continue to serve as a reliable source of irrigation, enabling marginalised tobacco farmers to cultivate a secondary
crop while also supporting groundwater recharge. In addition, volumetric analysis of 43 existing check-dams built
by us was undertaken to assess actual water storage capacity, which indicated that over 2,72,000 kilolitres of water
were conserved during the year, directly benefiting farming communities and contributing to ecological balance. To
further enhance water conservation capacity, desiltation activities were carried out at 16 sites in the tobacco growing
region, improving storage potential of water bodies while also providing farmers with nutrient-rich soil for agricultural
use. The Company also undertook rejuvenation and improvement of 2 large natural water tanks, benefiting thousands
of community members and supporting local ecosystems. Further expanding its water conservation efforts to new
geographies, the Company undertook the construction of 3 rainwater harvesting structures in the water-stressed region
of Guldhar, Ghaziabad. These structures are aimed at enhancing groundwater recharge, improving water availability
and supporting long-term ecological sustainability in areas surrounding the Company's manufacturing operations. The

Company also conducted multiple community awareness drives and facilitated the formation of water user groups to
ensure effective utilisation, ownership, and long-term maintenance of created assets.

In line with its ESG commitment to ensure access to safe drinking water, the Company installed 20 new RO water plants
equipped with borewell recharge systems and wastewater management provisions, taking the total number of such
installations to over 80 across its areas of operation. These initiatives continue to address challenges related to drinking
water quality and availability in rural communities.

To support farmer livelihoods, the Company constructed 122 community agri-sheds during the year. These structures
provide safe storage for multiple agricultural produce and shelter for livestock, particularly during adverse weather
conditions, thereby reducing post-harvest losses and improving income stability.

The Company continued its efforts towards environmental sustainability through the maintenance of 2 biodiversity
parks, with 2 parks already handed over to local communities after achieving self-sustenance. These parks contribute
to ecological restoration, support native biodiversity, and create green spaces for community use.

Recognising the importance of preventive healthcare, the Company expanded its health screening initiative for people
in the low-income segment, Swasth Pehal 2.0, through deployment of mobile medical units across multiple locations.
The programme covered over 100 health parameters, including blood-based diagnostics, non-invasive screening using
specialised equipment, and eye testing. During the year, over 6,000 beneficiaries across nearly 200 locations were
covered under this initiative, enabling early detection of health issues and promoting awareness on preventive care.
The CSR efforts of the Company are overseen by the CSR Committee of the Board which is constituted in accordance
with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014
and is led by Dr. Bina Modi, Chairperson and Managing Director. The composition, terms of reference, and details of
the Committee's meetings are provided in the Corporate Governance Report. A brief outline of the CSR Policy, overview
of activities undertaken, the amount spent/unspent, reasons for any unspent amount, executive summary of Impact
Assessment reports and the Committee's composition are disclosed in 'Annexure - 2' to this Report.

DIRECTORS

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Sumant Bharadwaj was re-appointed
as an Independent Director of the Company for the second term of five consecutive years w.e.f. 13^th February 2026, by
the Board of Directors at its meeting held on 15^th May 2025, which appointment was subsequently approved by the
shareholders at the 88^th Annual General Meeting held on 4^th September 2025.

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Paul Norman Janelle was appointed
as a Non-Executive Non-Independent Director of the Company with effect from 16^th May 2025, by the Board of Directors
in its meeting held on 15^th May 2025, which appointment was subsequently approved by the Shareholders by way of
Postal Ballot on 28^th June 2025.

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Marco Mariotti was appointed as
a Non-Executive Non-Independent Director of the Company with effect from 1^st February 2026, by the Board of Directors
in its meeting held on 30^th January 2026, which appointment was subsequently approved by the Shareholders by way of
Postal Ballot on 12^th March 2026.

Mr. Atul Kumar Gupta ceased to be the Director of the Company on completion of his term as an Independent Director
w.e.f. closure of business hours on 19^th June 2025.

The Independent Directors of your Company have confirmed that:

(a) they meet the criteria of Independence as prescribed under Section 149 of the Companies Act, 2013 and Regulation
16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations'); and

(b) they are not aware of any circumstance or situation which could impair or impact their ability to discharge duties with
an objective independent judgement and without any external influence.

Further, in the opinion of the Board, the Independent Directors fulfill the conditions prescribed under the SEBI Listing
Regulations and are competent, experienced, proficient and possess necessary expertise and integrity to discharge their
duties and functions as Independent Directors and are independent of the management of the Company.

PERFORMANCE EVALUATION OF THE BOARD, ETC.

Details pertaining to the manner of evaluation of the Board, its committees and individual Directors including
Chairperson have been carried out, form part of Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

Dr. Bina Modi, Chairperson and Managing Director, Ms. Charu Modi, Executive Director, Mr. Sharad Aggarwal,
Whole-time Director, Mr. Vishal Dhariwal, Chief Financial Officer and Mr. Pumit Kumar Chellaramani, Company
Secretary of the Company are considered to be Key Managerial Personnel of the Company as on 31^st March 2026
as per the provisions of the Companies Act, 2013 and the rules made thereunder.

BOARD MEETINGS

During the financial year 2025-26, the Board of Directors met 5 (five) times. Details of the meetings of the Board held
during the year form part of the Corporate Governance Report.

AUDIT COMMITTEE

The composition, functions and details of the meetings of the Audit Committee held during the year, form part of the
Corporate Governance Report.

RISK MANAGEMENT

Your Company considers that risk is an integral part of its business and therefore, it takes proper steps to manage
all risks in a proactive and efficient manner. The Company management periodically assesses risks in the internal
and external environment and incorporates suitable risk treatment processes in its strategy and business and
operating plans. The details of practices being followed by the Company in this regard, form part of the Corporate
Governance Report.

There are no risks which, in the opinion of the Board, threaten the very existence of your Company. However, some
of the challenges faced by it have been dealt with under Management Discussion and Analysis which forms part
of this Report. Your Company has a Risk Management Policy in place and is available on the Company's website
at https://godfrevphillips.co.in/sustainabililtv/policies. The Risk Management Committee reviews the Policy, its
effectiveness and adequacy in periodic manner.

Details regarding constitution of Risk Management Committee and its role and responsibilities, form part of the
Corporate Governance Report.

ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) COMMITTEE

The Company has integrated sustainability into its operational practices. The Board has established a dedicated
committee to oversee progress in this area, and a separate Business Responsibility and Sustainability Report offers
detailed information on these initiatives.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 (the 'Act'), the Directors, to the best
of their knowledge, confirm that:

(i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along
with proper explanation relating to material departures, if any;

(ii) Appropriate accounting policies have been applied consistently and judgements and estimates that are
reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company for the period;

(iii) Proper and sufficient care has been taken for 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 Annual Accounts have been prepared on a going concern basis;

(v) The internal financial controls to be followed by the Company have been laid down and such internal
financial controls are adequate and are operating effectively; and

(vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that
such systems are adequate and are operating effectively.

The above statements were also noted by the Audit Committee at its meeting held on 15^th May 2026.

RELATED PARTY TRANSACTIONS

Form AOC-2 containing particulars of contracts or arrangements entered into by the Company with related parties
referred in Section 188(1) of the Companies Act, 2013 is attached as 'Annexure - 3'.

Details of related party transactions and related disclosures are given in the notes to the financial statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The aforesaid details are provided in the financial statements of the Company forming part of the Annual Report.
Please refer to Note 52 of the standalone financial statements.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Details of Whistle Blower Policy/Vigil Mechanism form part of the Corporate Governance Report.

NOMINATION AND REMUNERATION POLICY

The appointment and remuneration of the Directors is recommended by the Nomination and Remuneration Committee
and approved by the Board, subject to approval of the shareholders.

The remuneration payable to the Directors is decided keeping into consideration long term goals of the Company
apart from the individual performance expected from them in pursuit of the overall objectives of the Company.

The remuneration of the Executive Directors including Managing Director and Whole-time Director, may consist of
both fixed compensation (which may be subject to annual increments) & variable compensation and shall be paid
as salary, commission, performance bonus, perquisites and fringe benefits, as may be approved by the Board and
within the overall limits as may be approved by the shareholders.

In accordance with the provisions of the Articles of Association of the Company and the Companies Act, 2013,
Non-executive Directors including Independent Directors, of the Company who are not drawing any remuneration
are entitled for the sitting fee (presently fixed at Rs. 1,00,000 per meeting) for attending any meeting of the Board
or of any Committee thereof.

The remuneration payable to the Directors shall be governed by the ceiling limits specified under section 197 of the
Companies Act, 2013 and shareholders' approval taken from time to time.

The remuneration policy for other senior management employees including key managerial personnel aims at
attracting, retaining and motivating high calibre talent and ensures equity, fairness and consistency in rewarding the
employees. The remuneration to management grade employees involves a blend of fixed and variable component
with performance forming the core. The components of total remuneration vary for different employee grades and are
governed by industry practices, qualifications and experience of the employees, responsibilities handled by them,
their potentials, etc. Remuneration of senior management employees is also being looked at by the Nomination and
Remuneration Committee.

The Nomination and Remuneration Policy of the Company is available on the Company's website at
https://godfreyphillips.co.in/sustainabililty/policies. There is no change in the Nomination and Remuneration
policy of the Company during the year.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As mandated by the SEBI Listing Regulations, the Business Responsibility and Sustainability Report ("BRSR") has
been included separately, as part of the Annual Report. An independent Assurance Report on the BRSR Core for the
financial year 2025-26 from S.R. Batliboi & Co LLP is also included separately and forms part of the Annual Report.

UNCLAIMED SHARES

Status of the unclaimed shares as on 31^st March 2026 has been mentioned in the Corporate Governance Report.

CORPORATE GOVERNANCE

The Company is committed to maximise the value for its stakeholders by adopting the principles of good Corporate
Governance in line with the provisions of law and particularly those stipulated in the SEBI Listing Regulations. The
Company's objective and that of its management and employees is to manufacture and market its products in a way
so as to create value that can be sustained over the long term for consumers, shareholders, employees, business
partners and the national economy in general.

Certificate from the statutory auditors of the Company regarding compliance of the conditions of Corporate
Governance as stipulated in the SEBI Listing Regulations, is enclosed.

Certificate from Dr. Bina Modi, Chairperson and Managing Director as the Chief Executive Officer (CEO) and Mr.
Vishal Dhariwal, Chief Financial Officer (CFO) in relation to the financial statements for the year along with declaration
by the CEO regarding compliance with the code of business conduct of the Company by the Directors and the members
of the senior management team of the Company during the year, were submitted to and taken note of by the Board.

STATUTORY AUDITORS

In compliance with the provisions of Section 139 and other applicable provisions of the Companies Act, 2013
and the Companies (Audit and Auditors) Rules, S. R. Batliboi & Co. LLP, Chartered Accountants, (FRN 301003E/
E300005) were re-appointed as the Statutory Auditors for another term of five (5) consecutive years until the date
of conclusion of the 90^th Annual General Meeting, by the Shareholders in the 85^th Annual General Meeting of the
Company held on 26^th August 2022.

Auditors' Report on the financial statements (both standalone as well as consolidated) of the Company forms part of
the Annual Report and does not contain any qualification, reservation, adverse remark or disclaimer.

COST AUDIT & COST RECORDS

In terms of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014,
Cost Audit & maintenance of Cost Records were not applicable on the Company during Financial Year 2025-26.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204(1) and other applicable provisions of the Companies Act, 2013, read with
Regulation 24A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the shareholders at the 88^th Annual General Meeting of the Company held on 4^th September
2025 have approved the appointment of M/s Chandrasekaran Associates, Practicing Company Secretaries (Firm
Registration No. P1988DE002500) as the Secretarial Auditors, to conduct the Secretarial Audit of the Company for
a period of five consecutive years i.e. from FY 2025-26 to FY 2029-30.

The Secretarial Audit Report from M/s Chandrasekaran Associates, Practicing Company Secretaries, for the year under
review is attached as 'Annexure - 4' and does not contain any qualification, reservation, adverse remark or disclaimer.

REPORTING OF FRAUDS BY AUDITORS

During the year under report, the Statutory Auditors and Secretarial Auditors have not reported any instance of fraud
committed against your Company by its officers or employees, to the Audit Committee or the Board, under section
143(12) of the Companies Act, 2013.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING

Pursuant to Clause 9 of Revised Secretarial Standard -1 (SS -1 ), your Company has complied with applicable
Secretarial Standards issued by the Institute of Company Secretaries of India, during the financial year under report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under report, no significant and material order was passed by the Regulators/Courts that could
impact the going concern status of the Company and its future operations.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act,
2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
are attached as 'Annexure - 5'.

Pursuant to the provisions of Section 136(1) of the Companies Act, 2013 and as advised, the statement containing
particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection
at the Registered Office of the Company during working hours and Members interested in obtaining a copy of the
same may write to the Company Secretary and the same will be furnished on request. Hence, the Annual Report is
being sent to the Members excluding the aforesaid information.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars prescribed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 are attached as 'Annexure - 6'.

DIVIDEND DISTRIBUTION POLICY

As mandated by the SEBI Listing Regulations, the Board has formulated a dividend distribution policy
and the same is attached as 'Annexure - 7' and is also available on the Company's website at:
https://godfreyphillips.co.in/sustainabililty/policies

KEY FINANCIAL RATIOS

Key Financial Ratios for the financial year 2025-26 with comparatives for the year 2024-25, are disclosed in
'Annexure - 8' attached herewith.

EMPLOYEES SHARE PURCHASE SCHEME

As at 31^st March 2026, the Company has two Employees Share Purchase Schemes viz: Godfrey Phillips Employees
Share Purchase Scheme, 2024 ("ESPS 2024") and Godfrey Phillips Employees Share Purchase Scheme, 2023 ("ESPS
2023") in place. No change has been made in both these schemes during the year under report. The Company has
received a certificate from the Secretarial Auditors that the ESPS 2024 and ESPS 2023 have been implemented in
accordance with the applicable SEBI Guidelines and the resolutions passed by the shareholders. The Certificate will
be placed at the Annual General Meeting for inspection by the Members.

Details of the share based payments made during the year are provided in Note 48 to the financial
statements of the Company. Further, the disclosures pursuant to the SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 and Companies Act, 2013 are available on the website of the Company at
https://www.godfrevphillips.co.in/emplovee-benefit-scheme-documents.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy on prevention, prohibition and redressal of sexual harassment of women at
workplace in line with the requirements of the above Act.

Under the said policy, an Internal Complaints Committee (ICC) has been set up to redress complaints received relating
to sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.

During the year under report, no complaint was filed with the Company.

COMPLIANCE OF MATERNITY BENEFIT ACT, 1961

During the year under report, the Company has complied with the provisions of the Maternity Benefit Act, 1961.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF YOUR
COMPANY, WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE
OF THIS REPORT

No material changes and commitments have occurred between the end of the financial year and the date of this
report, affecting the financial position of the Company.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no change in the nature of business of the Company.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016

During the year under report, no application was made against the Company, nor any proceeding is pending
against the Company under the Insolvency and Bankruptcy Code, 2016.

THE FUTURE

Availability of best in the class manufacturing facilities with right blend of technology, vast distribution network,
adequate financial resources and motivated manpower backed by 'people first' policy, will continue to facilitate
your Company to drive growth across its various product categories both in domestic and international markets. Your
Directors are confident that the Company will continue to create value for its shareholders and other stakeholders.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to the Government authorities, Company's bankers,
customers, vendors, investors and all other stakeholders for their continued support during the year. Your Directors are also
pleased to record their appreciation for the dedicated services of employees at all levels of operations in the Company.

For and on behalf of the Board

Place: New Delhi DR. BINA MODI

Dated: 15^th May 2026 CHAIRPERSON