Dear Members,

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

( in million )

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

India'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. 1,8 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$1 in 2030. 8 India's macroeconomic environment in 2026 is facing increasing pressure from geopolitical tensions, particularly in the Middle East, which are disrupting energy markets and supply chains. India imports nearly 85% of its fuel needs and relies on the Strait of Hormuz for a significant share of crude oil, liquefied natural gas, and liquefied petroleum gas supplies, making it vulnerable to supply disruptions. India also remains dependent on imports for key commodities such as crude petroleum, machinery, and electronics components, exposing the economy to external risks. 1,2 Fuel prices remain a key transmission channel of these risks. Crude oil prices have stayed above US$ 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. 1,2 In 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. 4,5 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. 3,6 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. 2,4,6 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 – good returns. [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.

India 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 networks 2 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. 3 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 4 . 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) 5 . 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 2. https://notto.mohfw.gov.in/writereaddata/portal/news/791_1_guidelines_04_oct_2021__approved_.pdf. Accessed on 14 April 2026 3. https://www.theweek.in/wire–updates/national/2024/08/03/des43–organ–transplants–notto.html. Accessed on 14 April 2026

4. Lee J, et al. Prevalence of dementia in India: National and state estimates from a nationwide study. Alzheimers Dement. 2023 Jul;19(7):2898–2912. doi: 10.1002/alz.12928. Epub 2023 Jan 13. PMID: 36637034; PMCID: PMC10338640.

5. https://www.alz.org/in/dementia–alzheimers–en.asp. Accessed on 14 April 2026 c. Key Financial Indicators

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

Inventory 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. 1,2,3

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 Chrys Capital 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.

NOVARTIS INDIA LIMITED

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:

Auditors' Remuneration

( in million)

(Excluding GST, where applicable)

* 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.