The Directors are pleased to present the 38^th Annual Report with the Audited Standalone & Consolidated
Financial Statements for the financial year ended March 31, 2026.

1. Financial Results

The Company’s financial performance for the year ended March 31, 2026 is summarised below:

2. Company Performance

During FY 2025-26, the Company achieved total revenue of H 17,249 million, compared with H 18,648
million in the previous year, reflecting a decline of 8%. Within the business segments, Pharmaceutical sales
decreased by 13% to H 10,210 million, while Crop Protection sales stood at H 6,916 million.

The EBIDTA margins deteriorated by 302 bps due to product mix and lower operating profitability and stood
at around 13%, decreased from H 3,335 million in the previous year to H 2,328 million in 2025-26. Absolute
EBITDA also decreased by H 1,007 million. The Profit Before Tax (PBT) before exceptional items, decreased
by 94% from H 1,239 million in the previous year to H 69 million in 2025-26.

Exceptional items in 2025-26 include incremental effect due to change in labour code by H 380 million and
H 471 million due to impairment charge.

Profit After Tax (PAT) decreased from H 909 million in the previous year to a loss of H 487 million in 2025-26,
primarily due to lower operating profitability and exceptional items recognised during the year. Consequently,
Earnings Per Share (EPS) declined from H 7.37 in the previous year to H (3.95) in 2025-26.

The Company is incurring substantial capital expenditure for growth in the Pharmaceutical and Crop
Protection businesses to augment capacities for existing products and to create capacities for new products,
as well as investments in Research & Technology.

The Company has prudently been funding the growth Capex with a mix between internal accruals and
long-term loans. In doing so, the Company ensures that it maintains a healthy liquidity position and that its
financial gearing and debt service coverage are at comfortable levels.

The Current Ratio of the Company is at 1.30 for 2025-26, as against 1.26 in the previous year. The Net Debt
to Equity Ratio improved from 0.59 in March 2025 to 0.56 in March 2026, while the Debt Service Coverage
Ratio (DSCR) declined from 1.45 in the previous year to 0.80 in 2025-26

3. Exports

Exports for the year 2025-26 were H 11,452 million (67% of total sales) as compared to H 11,471 million (62%
of total sales) in the previous year. The increase in exports was due to diversifying our product portfolio.

4. Dividend & Reserves

The Company declared an Interim Dividend of 10% (H 0.20 per equity share of face value of H 2 each) in
February 2026, which was paid in March 2026, for the Financial Year 2025-26. Further, the Board has
recommended a Final Dividend of 20% i.e. H 0.40 per equity share of face value of H 2/- each. The Payment
of Final Dividend is subject to the approval of shareholders at the ensuing Annual General Meeting of the
Company. If the Final Dividend is approved by the shareholders, the total dividend for the Financial Year
2025-26 shall aggregate to 30% i.e. H 0.60/- per equity share of face value of H 2/- each.

As per the Income Tax Act, 2025, dividends paid or distributed by the Company shall be taxable in the hands
of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction
of tax at source.

The dividend recommended is in accordance with the Company’s Dividend Distribution Policy. The Policy
is available on the Company’s website and can be accessed athttps://www.hikal.com/uploads/documents/
HIKAL-DividendDistributionPolicy.pdf

During the year under review, the Company has not transferred any amount to any of the reserves maintained
by the Company.

5. Share Capital

There has been no change in the Company’s paid-up share capital during the current financial year. The
paid-up equity share capital as on March 31, 2026, stood at H 246.60 million. During the financial year, the
Company did not issue shares with differential voting rights nor granted any stock options or sweat equity.
As on March 31, 2026, none of the Company’s Directors held instruments convertible into equity shares of
the Company.

6. Particulars of Loans, Guarantees and Investments by the Company

The details under Section 186 of the Companies Act, 2013 are given in Note No. 55 to the notes to the
financial statements.

7. Deposits

The Company did not accept any deposits and as such there were no overdue deposits outstanding as on
March 31, 2026.

8. Material Changes and Commitments

In terms of Section 134(3)(l) of the Companies Act, 2013, except as disclosed in this Annual Report, no
material changes and commitments which could affect the Company’s financial position have occurred
between the end of the financial year of the Company and the date of this Annual Report.

9. Significant and Material Orders Passed by the Regulators or Courts

The United States Food and Drug Administration (US FDA) conducted an inspection of the Company’s
manufacturing facility at Jigani, Bengaluru, Karnataka in February 2025. Subsequently, in May 2025, the
Company received communication from the US FDA classifying the inspection outcome as "Official Action
Indicated” (OAI). Further, in August 2025, the Company received a warning letter from the US FDA in respect
of the said facility.

The Company has taken cognisance of the observations and is in the process of implementing remediation
measures. Corrective and preventive actions (CAPA) have been implemented in alignment with applicable
international regulatory standards.

Operations remain supported by other regulatory approvals catering to markets such as Latin America,
Mexico, Japan, among others. As part of its risk mitigation strategy, the Company has transitioned certain
operations from the Jigani facility to the Panoli facility, which is US FDA compliant.

Except as above the Company has not received any significant or material orders from any regulators or
courts or tribunals impacting the going concern status of the Company and its future operations.

10. Annual Return

The Annual Return of the Company, as required under Section 92 of the Companies Act, 2013, read with
the Rules framed thereunder, in the prescribed Form MGT-7, is available on the website of the Company at
www.hikal.com/documents/aam.

11. Subsidiaries

The Company has two subsidiaries viz. Acoris Research Limited and Hikal LLC, USA. A statement containing
the salient features of the Financial Statements of Subsidiaries in the prescribed Form AOC-1, is attached
as "Annexure A” to this Report. The Company will provide the Financial Statements of the subsidiaries and
the related information to any member of the Company who may be interested in obtaining the same. The
Financial Statements of the subsidiaries will also be available for inspection in electronic mode. Members
who wish to inspect the same are requested to write to the Company by sending an email to secretarial
aam@hikal.com. The Consolidated Financial Statements of the Company, forming part of this Annual Report,
include the Financial Statements of Subsidiaries. The Financial Statements of Subsidiaries are also hosted
on the website of the Company at www.hikal.com/documents/annual-reports

12. Directors and Key Managerial Personnel

Board of Directors

As on March 31, 2026, the Board of Directors comprised of ten Directors, five of which are Independent
Directors (including two woman Independent Directors), two Non-Executive Directors (including a women
Non-Executive Director), three Executive Directors comprised of Executive Chairman, Vice-Chairman and
Managing Director and Whole-Time Director.

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Company’s Articles
of Association, Mr. Sarangan Suresh (DIN - 10562713), Director, retires by rotation at the ensuing Annual
General Meeting (AGM). The Board of Directors of the Company, based on the recommendation of the
Nomination and Remuneration Committee, have recommended his re-appointment.

Mr. Berjis Desai (DIN: 00153675), Non-Executive Independent Director of the Company, resigned from the
Board with effect from October 01, 2025 and, consequent to his resignation, ceased to be a member of the
Audit Committee and Nomination and Remuneration Committee.

Nomination and Remuneration Committee and the Board of Directors approved the appointment of
Mr. Sandip Parikh (DIN: 00030990) with effect from May 27, 2026 as an Independent Director of the
Company for a period of 5 (Five) consecutive years, which has been approved by the Members through
Postal Ballot on July 04, 2026. Mr. Sandip Parikh is a Fellow Chartered Accountant and a Law Graduate
with extensive experience in taxation, audit & assurance, transaction advisory, corporate restructuring and
corporate governance.

The Board of Directors, at its meeting held on August 26, 2026, proposed the appointment of Mr. Sameer
Hiremath (DIN: 00062129) as the Chairman and Managing Director of the Company, effective October 01,
2026, along with the remuneration payable to him, subject to the approval of the Members at the ensuing
Annual General Meeting.

In the opinion of the Board, all Independent Directors possess the integrity, requisite qualifications expertise
and experience (including proficiency) required to contribute to the quality and better governance of the
Board processes.

All Independent Directors have given declarations that they meet the criteria of independence as laid
down under Section 149(6) of the Companies Act, 2013, and Regulation 16(1)(b) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing
Regulations”) as amended.

Details of the number of board meetings, held during the financial year 2025-26, are mentioned in the
Corporate Governance Report, which forms an integral part of this Annual Report.

Key Managerial Personnel

Mr. Jai Hiremath, Executive Chairman and Whole-Time Director, Mr. Sameer Hiremath, Vice-Chairman &
Managing Director, Mr. Sarangan Suresh, Whole Time Director, Mr. Kuldeep Jain, Chief Financial Officer and
Mr. Rajasekhar Reddy, Company Secretary, are the Key Managerial Personnel (“KMP”) of the Company in
accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013.

During the year, there were no changes in the KMP.

13. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, as amended, a structured
questionnaire was prepared after taking into consideration various aspects of the Board’s functioning,
like composition of the Board and its Committees, culture, execution and performance of specific duties,
obligations and governance.

The performance evaluation of the Independent Directors was carried out in accordance with the applicable
provisions of the Companies Act, 2013 and SEBI Listing Regulations. In a separate meeting of Independent
Directors held on March 17, 2026, performance of Non-Independent Directors, the Board as a whole and
the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non¬
Executive Directors. The Nomination and Remuneration Committee has reviewed the implementation and
compliance of effective evaluation of performance of the Board, its committees and individual directors. The
Board of Directors expressed their satisfaction with the evaluation process.

14. Whistle-Blower Policy

The Company has a Whistle Blower policy to report genuine concerns or grievances. The Whistle
Blower Policy is posted on the Company’s websitehttps://www.hikal.com/uploads/documents/
HikalWhistleBlowerPolicyRev2024.pdf

15. Nomination & Remuneration Policy

The Company has a policy which lays down a framework in relation to remuneration of Directors, Key Managerial
Personnel and Senior Management of the Company. The Nomination and Remuneration Policy of the Company
is attached as "Annexure B” to this Report. This policy also lays down criteria for selection and appointment of
Board members. The details of this policy are explained in the Corporate Governance Report and uploaded on
the Company’s we bsi tehttps://www.hikal.com/uploads/documents/RemunerationPolicy.pdf

16. Related Party Transactions

All related party transactions entered during the financial year, were at an arm’s length basis and in the ordinary
course of business. There were no materially significant related party transactions made by the Company with
Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential
conflict with the Company’s interest at large. The disclosure of Related Party Transactions as required under
Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is attached as "Annexure C”.

All related party transactions were placed before the Audit Committee for approval.

The policy on Related Party Transactions, as approved by the Board, is uploaded on the Company’s website
https://www.hikal.com/uploads/documents/RelatedPartvTransactionPolicv.pdf

17. Risk Management

The Company has a robust business risk management framework in place to identify and evaluate all
business risks. The Company recognises risk management as a crucial aspect of the Company’s management
and is aware that identification and management of risk effectively is instrumental in achieving its
corporate objectives.

The Company has identified the business risks, and the business heads, who are termed as risk owners,
assess, monitor and manage these risks on an ongoing basis. The risk owners assess the identified risks
and continually identify any new risks that can affect the business. Different risks such as technological,
operational, maintenance of quality, reputational, competition, geopolitical, environmental, foreign exchange,
financial, human resource and legal compliances, among others, are assessed on a continuous basis.

The risks mentioned in the risk register are reviewed by the Risk Management Committee at regular intervals
to assess and mitigate the risk from time to time. The findings of the Risk Management Committee along
with the actions taken to mitigate the risks are sent to the Board for its reference.

The strategies are reviewed, discussed and allocation of appropriate resources is done as and when necessary.
The risk management programme, internal control systems and processes are monitored and updated on
an ongoing basis. A built-up mechanism has been established to identify, measure, control, monitor and
report the risks. Business heads are responsible for rolling out the risk assessment and management plan
within the organisation.

18. Internal Control Systems and their Adequacy

The Company has an internal control system, commensurate with the size, scale and complexity of its
operations. To maintain its objectivity and independence, the Internal Audit Function reports to the Vice
Chairman and Managing Director of the company.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of the internal control
system in the Company, its compliance with operating systems, accounting procedures and policies at all
locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners
undertake corrective action in their respective areas and thereby, strengthen the controls. Significant audit
observations and corrective actions thereon are presented to the Audit Committee.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and
suggests improvements to strengthen them. The Company has a robust management information system,
which is an integral part of the control mechanism.

Your Company implemented proper Internal Financial Controls, and these financial controls were adequate
and effectively operated during FY 2025-26.

19. Director’s Responsibility Statement

Your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards read with requirements
set out under Schedule III to the Companies Act, 2013, were followed and there are no material
departures from the same;

(ii) The Directors have selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year 2025-26, and of the loss for the year;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis;

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

(vi) The Directors have devised a proper system to ensure compliance with the provision of all applicable
laws and that such systems are adequate and are operating effectively.

20. Statutory Auditor

M/s S R B C & CO. LLP has been re-appointed as the Statutory Auditors at the 36^th Annual General Meeting of
the Company held on September 17, 2024 for a second term of 5 consecutive years to hold the office from
the conclusion of 36^th Annual General Meeting till the conclusion of 41^st Annual General Meeting to be held
in the year 2029. The Auditors have confirmed that they are not disqualified from continuing as the Auditors
of the Company.

The Auditor’s report does not contain any qualification, reservation, adverse remark or disclaimer, however,
has an emphasis of matter paragraph. The observations made by the Auditors in their Report are self¬
explanatory and, therefore, do not call for any further comments. The notes to the financial statements
referred in the Auditors’ Report are self-explanatory and do not call for any further comments.

21. Cost Auditor

The Company has maintained cost accounts and records as specified by the Central Government under
Section 148(1) of the Companies Act, 2013. For FY 2025-26, M/s. V. J. Talati & Co., (FRN: R00213), Cost
Accountants conducted the audit of the cost records of the Company.

The Company has re-appointed M/s. V. J. Talati & Co., (FRN: R00213) as the Cost Auditor to carry out the
audit of cost accounts for the financial year 2026-27. The requisite resolution for ratification of remuneration
payable to Cost Auditors for the financial year 2026-27, by the shareholders has been set out in the Notice
of AGM. The cost audit report for the financial year 2024-25 was filed with the Ministry of Corporate Affairs,
Government of India, on September 04, 2025.

22. Secretarial Auditor

M/s Dhrumil M. Shah & Co. LLP, Practicing Company Secretaries, were appointed as the Secretarial Auditors
of the Company, for a period of 5 (Five) consecutive financial years, commencing from the financial year
2025-26 to 2029-30, at the 37^th AGM held on September 23, 2025.

The Secretarial Audit Report in Form MR 3 for the financial year ended March 31, 2026, is annexed to this
report as “Annexure D” and forms an integral part of this Report. The Secretarial Audit Report does not
contain any qualifications, reservations or adverse remarks.

The Secretarial Compliance Report issued by the Secretarial Auditor in terms of Regulation 24A of the SEBI
Listing Regulations has been submitted to the Stock Exchanges and is available on the website of the
Companyhttps://www.hikal.com/documents/corporate-governance.

M/s Dhrumil M. Shah & Co. LLP has confirmed that they are not disqualified from continuing as the Secretarial
Auditor of the Company.

23. Corporate Social Responsibility (CSR)

Based on the recommendation of the Corporate Social Responsibility Committee (CSR Committee) the Board
has adopted a CSR Policy that provides guiding principles for selection, implementation and monitoring of
CSR activities and formulation of Annual Action Plan. The CSR Policy may be accessed on the Company’s
websitehttps://www.hikal.com/uploads/documents/corporate-social-responsibilitv-polic-sriian.pdf

The Annual Report on CSR activities is annexed herewith marked as “Annexure E” and forms an integral
part of this Report.

24. Prevention of Sexual Harassment of Women at Workplace

Pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013, ("POSH Act”), the Company adopted a ‘Policy on Appropriate Social Conduct at
Workplace’. The policy is applicable for all employees of the organisation, which includes corporate office
and manufacturing units. The policy is applicable to non-employees as well, i.e. business associates, vendors
and trainees, among others.

An Internal Complaints Committee, as required under the provisions of the POSH Act has also been set up
to redress complaints received on sexual harassment as well as other forms of verbal, physical, written or
visual harassment.

During the financial year 2025-26, the Company did not receive any complaints of sexual harassment and
no cases were filed under the POSH Act.

a. Number of complaints filed during the financial year 2025-26: NIL

b. Number of complaints disposed off during the financial year 2025-26: NIL

c. Number of cases pending for more than 90 days: NIL

25. Particulars of Employees and Related Disclosures

The Company considers its human capital an invaluable asset. The Company continued to have cordial
relationships with all its employees. Management and employee development programmes and exercises
were conducted at all sites. The Company has conducted various in-house skill developmental programmes
and also has sponsored for various external seminars for other developmental programmes to enhance the
skill set of the employees at various levels. The total workforce of the Company stood at 3133 as on March
31, 2026, including 2152 permanent employees.

The statement containing particulars of employees 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, forms part of this Report and is annexed as "Annexure F”.

A statement providing details of the employees in terms of Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 has been provided in a separate annexure which
forms part of the Directors’ Report. In terms of Section 136 of the Companies Act, 2013, the Reports
and Accounts are being sent to the shareholders, excluding the information required under Rule 5(2)
and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any
shareholder interested in obtaining the same may write to the Company Secretary & Compliance Officer
at secretarial@hikal.com.

26. Transfer to Investor Education and Protection Fund (“IEPF”)

• Transfer of Unclaimed Dividend to IEPF

During the financial year, final dividend relating to the year ended March 31, 2018, sales proceed of
fractional bonus shares issued on June 22, 2018 and the interim dividend for the year ended March 31,
2019, amounting to H 2,39,728/- that had not been claimed by the shareholders were transferred to the
Account of IEPF as required under Sections 124 and 125 of the Companies Act, 2013.

• Unclaimed dividend as on March 31, 2026

The Shareholders are requested to lodge their claims with the Registrar and Share Transfer Agent of
the Company i.e. MUFG Intime India Pvt. Ltd., for unclaimed dividend.

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016, the Company has uploaded the details of unpaid and unclaimed
amounts lying with the Company as on March 31, 2026, on the website of the Companyhttps://www.
hikal.com/documents/dividend-shares. The same are also available on the website of the IEPF Authority
www.iepf.gov.in.

• Transfer of Equity Shares

As required under Section 124 of the Companies Act, 2013, during the financial year, 28,327 Equity
Shares, in respect of which dividend has not been claimed by the members for seven consecutive years
or more, were transferred by the Company to the IEPF Authority. Details of such shares transferred have
been uploaded on the website of the Companyhttps://www.hikal.com/documents/dividend-shares.
The same are also available on the website of the IEPF Authority www.iepf.gov.in.

27. Conservation of Energy, Research & Development, Technology Absorption and Foreign
Exchange Earnings and Outgo

In accordance with the requirements of Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3)
of the Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, forming a part of the Board's
Report, is given in the enclosed "Annexure G” which forms a part of this Report.

28. Compliance with Secretarial Standards

The Company has followed the applicable Secretarial Standards with respect to Meetings of the Board of
Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

29. Maternity Benefit

During the year under review the Company has complied with the applicable provisions relating to Maternity
Benefits Act, 1961.

30. Safety and Environment

The Company continues to strengthen its commitment to operational excellence through a robust culture
of safety and environmental stewardship. During FY 2025-26, focused initiatives such as the “Safety Culture
Transformation” programme were implemented in collaboration with SWASYA Solutions, leveraging global
expertise from organisations like Shell and DuPont. Senior leadership underwent intensive training on
safety leadership principles to drive visible commitment and influence workforce behaviour. Safety has
now been formally elevated as a Core Value, reaffirming the Company’s belief that protection of its people
is fundamental and deeply embedded in its way of working.

On the environmental front, the Company made notable progress by achieving an approximate reduction
of 18% in Scope 1 emissions and 3% in Scope 2 emissions. Continued efforts were directed towards waste
minimisation, circularity, and water conservation. The Company maintained transparency in disclosures
by submitting its Climate Change and Water reports to CDP, securing ratings of B and B- respectively,
with a clear target for improvement. Progress towards science-based targets (SBTi) is underway, with
approval expected by September 2027. The Company has also commenced Product Carbon Footprint (PCF)
assessments, achieving a 38% reduction in PCF for its flagship product Thiabendazole over the past three
years. A structured roadmap for further emission reduction and expansion of PCF assessment to additional
products has been established to support long-term climate objectives.

31. Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review, as per the SEBI Listing Regulations,
is presented in a separate section, which forms part of this Annual Report.

32. Business Responsibility and Sustainability Report

The Company’s Business Responsibility and Sustainability Report, in terms of Regulation 34 of the SEBI
Listing Regulations, is provided in a separate section and forms part of this Annual Report.

33. Corporate Governance

The Company is committed to maintain the highest standards of governance and has also implemented
several best governance practices. A report on Corporate Governance, along with a certificate from M/s
Dhrumil M. Shah & Co. LLP, Practicing Company Secretaries, regarding the compliance of the requirements
of Corporate Governance, as stipulated under the provisions of Regulation 34 of the SEBI Listing Regulations,
is provided in a separate section and forms part of this Annual Report.

34. Awards & Recognitions

The details of the Awards and Recognitions earned by the Company during the financial year 2025-26 have
been provided as part of this Annual Report.

35. General

Your Directors state that no disclosure or reporting is required in respect of the following matters as there
were no instances of these matters during FY 2026:

i. There has been no change in the nature of business of the Company.

ii. There were no applications made or proceeding pending under the Insolvency and Bankruptcy
Code, 2016.

iii. There was no instance of one-time settlement with any bank or financial institution.

36. Acknowledgments

The Board of Directors place on record their appreciation of the contribution and sincere support extended
to the Company by our bankers, financial institutions and valued customers and suppliers.

The Board also places on record its appreciation for the impeccable service and generous efforts rendered
by its employees at all levels, across the Board, towards the overall growth and success of the Company.

37. Cautionary Statement

Statements in the Board’s Report and the Management Discussion and Analysis describing the Company’s
objectives, expectations or forecasts may be forward looking within the meaning of applicable securities
laws and regulations. Actual results may differ materially from those expressed in the statement. Important
factors that could influence the Company’s operations include global and domestic demand and supply
conditions affecting selling prices of finished goods, input availability and prices, changes in Government
regulations, tax laws, economic developments within the country and other factors such as litigation and
industrial relations.

For and on behalf of the Board of Directors

Jai Hiremath

Date: August 26, 2026 Executive Chairman

Place: Mumbai DIN: 00062203