Hester Biosciences Ltd Directors Report

Your Directors are pleased to present the Thirty-Ninth Annual Report together with the Audited Financial Statements of the Company for the financial year ended 31 March 2026.

FINANCIAL RESULTS

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015.

A summary of the standalone and consolidated financial performance of the Company for the financial year ended 31 March 2026 is given below:

(Amounts in INR million)

	Standalone		Consolidated
Particulars	For the year ended 31 March 2026	For the year ended 31 March 2025	For the year ended 31 March 2026	For the year ended 31 March 2025
Revenue from operations	2,921.36	2,864.66	3,325.99	3,111.02
Other income	76.35	47.64	96.84	39.24
Total Revenue	2,997.71	2,912.30	3,422.83	3,150.26
Profit before interest, depreciation, amortisation expenses and tax (PBIDT)	801.07	557.08	963.42	649.76
Less: Finance Cost	71.69	53.67	109.34	127.03
Less: Depreciation and Amortisation Expenses	102.52	85.81	188.81	168.02
Profit before Share of Profit in Joint Venture entity, exceptional items and tax	626.86	417.60	665.27	354.71
Share of Profit in Joint Venture entity	-	-	63.73	41.00
Profit before exceptional items and tax	626.86	417.60	729.00	395.71
Add: Exceptional Items	69.96	-	29.36	-
Less: Tax Expenses	175.82	99.18	183.52	107.45
Profit for the year (PAT)	521.00	318.42	574.84	288.26
Attributable to:
Owners	521.00	318.42	556.39	274.88
Non-Controlling Interest	-	-	18.45	13.38
Other Comprehensive Income /(Loss)	(0.50)	(3.63)	(23.28)	0.59
Attributable to:
Owners	(0.50)	(3.63)	(23.35)	0.78
Non-Controlling Interest	-	-	(0.07)	(0.19)
Total Comprehensive Income	520.50	314.79	551.56	288.85
Attributable to:
Owners	520.50	314.79	533.04	275.66
Non-Controlling Interest	-	-	18.52	13.19
Earnings Per Share (Basic & Diluted) (Face Value of Share INR 10 each) (INR)	61.24	37.43	67.57	33.89

There have been no significant changes or commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

RESULTS OF OPERATIONS

Sales

During the year under review, the standalone revenue from operations was INR 2,921.36 million, as compared to INR 2,864.66 million in the previous year. The consolidated revenue from operations was INR 3,325.99 million for the financial year ended 31 March 2026, as compared to INR 3,111.02 million in the previous year.

Profitability

The Company reported standalone profit before tax of INR 696.82 million, as compared to INR 417.60 million in the previous year. The consolidated profit before tax was INR 758.36 million for the financial year ended 31 March 2026, as compared to INR 395.71 million in the previous year.

Earnings per share

The Earnings Per Share (EPS) on a standalone basis was INR 61.24 for the year ended 31 March 2026, as against INR 37.43 for the year ended 31 March 2025. The EPS on a consolidated basis was INR 67.57 for the year ended 31 March 2026, as against INR 33.89 for the year ended 31 March 2025.

Transfer to Reserves

The Board of Directors has decided not to transfer any amount to the reserves for the year under review.

Share Capital

The authorised equity share capital as on 31 March 2026 is INR 112 million and the paid-up equity share capital as on 31 March 2026 stood at INR 85.07 million.

Net Worth

The Companys net worth on a standalone basis as on 31 March 2026 was INR 3,851.82 million, as compared to INR 3,390.87 million as on 31 March 2025. The Companys net worth on a consolidated basis as on 31 March 2026 was INR 3,602.35 million, as compared to INR 3,142.55 million as on 31 March 2025.

DIVIDEND

Your Directors have recommended a dividend of INR 11 per equity share (110 %) on 8,506,865 equity shares of

INR 10 each, fully paid-up, for the financial year 202526, total amounting to INR 93.58 million. This dividend is subject to the approval of the Members at the ensuing Annual General Meeting (“AGM”) and will be disbursed to those shareholders whose names appear in the Register of Members as on the cut-off date.

The dividend pay-out ratio for the year stands at 18% of standalone profits, in line with the Companys Dividend Distribution Policy. Further details of the policy, formulated in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, are available on the Companys website at https://www.hester.in/corporate-governance

BORROWINGS

The Companys outstanding long-term borrowings on a standalone basis stood at INR 504.99 million as on 31 March 2026, as compared to INR 756.26 million as on 31 March 2025.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DIVESTMENT OF SUBSIDIARY

During the year under review, the Company sold/ transferred 43.81% of its shareholding in Texas Lifesciences Private Limited, reducing its holding from 54.81% to 11%, pursuant to approval of the Board of Directors at its meeting held on 11 March 2026. The transaction was carried out in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the necessary disclosures were made to the stock exchanges. Consequently, Texas Lifesciences Private Limited ceased to be a subsidiary of the Company with effect from 27 March 2026. The Company continues to hold 11% in the said entity as an investment.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated total income from operations is INR 3,325.99 million and the total comprehensive income attributable to owners equity after non-controlling interest is INR 533.04 million for the financial year 2025-26, as compared to consolidated total income from operations of INR 3,111.02 million and total comprehensive income attributable to owners equity after non-controlling interest of INR 275.66 million for the previous financial year 2024-25. The consolidated financial statements include the financial statements of the following entities:

1. Hester Biosciences Nepal Private Limited	Foreign Subsidiary
2. Hester Biosciences Africa Limited	Foreign Wholly-owned Subsidiary
3. Hester Biosciences Kenya Limited	Foreign Wholly-owned Subsidiary
4. Hester Biosciences Tanzania Limited	Foreign Step-down Subsidiary (Wholly-owned Subsidiary of Hester Biosciences Kenya Limited)
5. Thrishool Exim Limited	Foreign Joint Venture Entity

In compliance with Ind AS 110, the Companies Act, 2013, Schedule III and the related Rules and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Annual Report includes the Audited Consolidated Financial Statements. These statements present the combined financial position, including resources, assets, liabilities, income, profits and other details, of the Company, its subsidiaries, after elimination of non-controlling interest and joint venture entities as a single entity.

SUBSIDIARY COMPANIES

As of 31 March 2026, your Company has two wholly-owned subsidiary companies, namely Hester Biosciences Africa Limited and Hester Biosciences Kenya Limited. In addition, the Company has one subsidiary, Hester Biosciences Nepal Private Limited. Furthermore, there is one step-down subsidiary company, Hester Biosciences Tanzania Limited, which is wholly-owned by Hester Biosciences Kenya Limited.

During the year under review, Texas Lifesciences Private Limited ceased to be a subsidiary of the Company by way of sale/ transfer of shares.

The business details of the subsidiary companies are as follows:

Hester Biosciences Nepal Private Limited (HBNPL)

HBNPL is a subsidiary of Hester Biosciences Limited, with a 65% stake in HBNPL. HBNPL is in the business of manufacturing veterinary vaccines in Nepal.

Hester Biosciences Africa Limited (HBAL)

HBAL is a wholly owned subsidiary of Hester Biosciences Limited in Tanzania. HBAL manufactures and markets veterinary vaccines in Tanzania and other African countries.

Hester Biosciences Kenya Limited (HBKL)

HBKL is a wholly owned subsidiary of Hester Biosciences Limited in Kenya. HBKL is in the business of trading of veterinary vaccines and animal health products in Kenya.

Hester Biosciences Tanzania Limited (HBTL)

HBTL is a wholly owned subsidiary of HBKL in Tanzania and step-down subsidiary of Hester Biosciences Limited. HBTL is in the business of trading veterinary vaccines and animal health products in Tanzania and other African countries.

There have been no material changes in the nature of the subsidiaries business operations, as detailed in the financial statements. During the year under review, the Board diligently assessed the performance and operations of these subsidiary companies.

In compliance with Section 136 of the Act, the Balance Sheets, Profit and Loss Statements and other relevant documents of the subsidiary companies are not attached with the Companys Balance Sheet. These statements are available to Members on the Companys website. The consolidated financial statements include the financial statements of the subsidiaries and joint venture entity. The highlights are given in this Board Report as Annexure 1, in the format prescribed under Form AOC-1.

In accordance with Section 129(3) of the Companies Act, 2013 and the related Rules, the Company has provided a statement outlining the significant aspects of the financial statements of its subsidiaries. The policy on material subsidiaries, as approved by the Board, is available on the Companys website at https://www.hester.in/corporate-governance

JOINT VENTURE ENTITY

Thrishool Exim Limited (TEL) is a joint venture entity operating in Tanzania, with Hester Biosciences Limited holding a 50% stake. TEL is a reputable supplier and distributor of a wide range of animal health and nutrition products sourced from various esteemed companies. Its diverse product range includes veterinary feed additives, feed raw materials, nutritional supplements, therapeutics and equipment sourced from internationally renowned producers.

TEL has a large sourcing network, collaborating with prominent partners throughout Europe, Asia and Southern Africa.

INSURANCE

The Company has taken appropriate insurance coverage for its plants, properties, equipment, stocks and vehicles to safeguard against major risks. In addition, the Company has obtained a Directors and Officers Liability Policy to cover potential liabilities of the Companys directors and officers.

PUBLIC DEPOSITS

During the year under review, the Company did not accept any deposits from shareholders or the public within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditor, Cost Auditor nor the Secretarial Auditor reported any instance of fraud committed against the Company by its officers or employees, as specified under Section 143(12) of the Companies Act, 2013, which would require disclosure in this Report.

RELATED PARTY TRANSACTIONS

All related party transactions during the financial year were carried out in compliance with the applicable provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and the Companys Policy on Related Party Transactions.

These transactions were reviewed and approved by the Audit Committee and the Board of Directors and where required, by the shareholders.

Details of material contracts and arrangements with related parties, in accordance with the Companys Related Party Transactions Policy and Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, are annexed to this Report as Annexure 2. The disclosures relating to related party transactions for the financial year 202526 are also provided in the Notes to the Financial Statements.

The Policy on Related Party Transactions, including the policy for determining material transactions, is available on the Companys website at https://www.hester.in/corporate-governance

In compliance with Regulation 23(9) of the Listing Regulations, the Company filed the required related party transaction disclosures with the stock exchanges along with the financial results.

COST ACCOUNTS AND RECORDS

The Company has maintained its cost accounts and records in accordance with the regulations prescribed by the Central Government under Section 148(1) of the Act and the rules made thereunder.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31 March 2026, the Companys Board comprised ten Directors, excluding the Alternate Director, each bringing significant experience and expertise in their respective fields. Other statutory disclosures relating to the Board and its functioning are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

Appointment and Cessation of Directors

There were no changes in the composition of the Board of Directors during the financial year under review. Subsequently, Mr. Ravin Gandhi, Director of the Company has resigned with effect from 12 May 2026 and Ms. Nina Gandhi, Alternate Director to Mr. Ravin Gandhi ceased to be the alternate director with effect from 12 May 2026.

Retirement by Rotation

In accordance with Section 152(6) of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Articles of Association of the Company, Mr. Sanjiv Gandhi (DIN: 00024548), Non-Executive Director, is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment. The Board recommends his reappointment for approval of the shareholders.

Declaration of Independence

Pursuant to Sections 149(6) and 149(7) of the Companies Act, 2013 and Regulations 16(1)(b) and 25 of the Listing Regulations, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence and are eligible to continue as Independent Directors of the Company. The Board has taken the declarations on record after assessing their veracity and has noted that there has been no change in the circumstances affecting their status.

Profile of Directors seeking Appointment/ Reappointment

Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the applicable provisions of Secretarial Standard on General Meetings (SS-2), the brief profile and other relevant details of the Director seeking appointment or re-appointment at the ensuing Thirty- Ninth Annual General Meeting are provided in the Notice convening the said meeting.

Key Managerial Personnel

During the year under review, Mr. Divyesh Maru resigned from the position of Chief Financial Officer with effect from 13 November 2025. Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, Mr. Ashish Desai was appointed as Chief Financial Officer with effect from 20 November 2025.

Additionally, Mr. Rajiv Gandhi was re-appointed as CEO and Managing Director of the Company with effect from 1 April 2026 for a further period of 3 years, as approved by members of the Company through the Postal Ballot Process.

The following persons are designated as Key Managerial Personnel (KMP) as on 31 March 2026:

1. Mr. Rajiv Gandhi, CEO & Managing Director

2. Ms. Priya Gandhi, Executive Director

3. Mr. Ashish Desai, Chief Financial Officer

4. Mr. Vinod Mali, Company Secretary & Compliance Officer

Board Evaluation

In accordance with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carried out an annual performance evaluation of its own performance, its Committees and individual Directors, including the Chairman and Independent Directors. The process was conducted through structured questionnaires and in line with the Guidance Note on Board Evaluation issued by SEBI.

A separate meeting of the Independent Directors was held to review the performance of the NonIndependent Directors, the Board as a whole and the

Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors.

Based on the feedback received and the assessments carried out, the overall performance of the Board, its Committees and individual Directors was rated between Very Good and Good on different parameters. Further details of the evaluation process are provided in the Corporate Governance Report forming part of this Annual Report.

Nomination and Remuneration Policy

The Company has in place a Nomination and Remuneration Policy formulated by the Nomination and Remuneration Committee and approved by the Board. The Policy sets out the framework for selection, appointment and remuneration of Directors and Senior Management Personnel. During the year, the Policy was amended to align with recent changes in the Listing Regulations. The detailed Remuneration Policy is available in the Corporate Governance Report, which forms part of this Annual Report.

Pecuniary Relationship

During the year under review, except as disclosed in the audited financial statements, the Non-Executive Directors did not have any pecuniary relationship or transaction with the Company.

Board of Directors Meetings

During the financial year 2025-26, the Board of Directors met five times. The Company complied with the statutory requirement that the interval between two consecutive meetings shall not exceed 120 days. The details of the meetings held are provided in the Corporate Governance Report, which forms part of this Annual Report.

Non-disqualification

None of the Directors of the Company is disqualified from being appointed or continuing as a Director under Section 164(1) and 164(2) of the Companies Act, 2013 read with Rule 14(1) of the Companies (Appointment and Qualification of Directors)

Rules, 2014. Further, none of the Directors has been debarred or disqualified by the Securities and Exchange Board of India (SEBI), the Ministry of Corporate Affairs (MCA) or any other statutory authority.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors state that:

a) That in preparation of Financial Statements for the year ended 31 March 2026, the applicable accounting standards have been followed and no material departures have been made from the same;

b) The Directors had selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit or loss of the Company for that year;

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the Financial Statements for the year ended 31 March 2026 on going concern basis;

e) The Directors had laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

COMMITTEES OF BOARD OF DIRECTORS

The Company has constituted several Committees as part of its commitment to sound corporate governance and in compliance with applicable statutory requirements. These Committees play an important role in supporting the Board in its oversight responsibilities and in enabling effective decisionmaking.

The Company has the following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Grievances and Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Management Committee

A detailed overview of each Committee, including its composition, terms of reference, powers and the number of meetings held during the year, is provided in the Corporate Governance Report forming part of this Annual Report.

RECOMMENDATION OF COMMITTEES

The Board of Directors confirms that it has accepted all recommendations made by the Committees during the year under review.

CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

Pursuant to Section 135 of the Act read with the relevant rules, the Board has constituted a Corporate Social Responsibility (“CSR”) Committee under the chairmanship of Mr. Rajiv Gandhi. The details of the composition of the Committee and the meetings held are provided in the Corporate Governance Report, forming part of this Report. The CSR Policy, as approved by the Board on the recommendation of the CSR Committee, is available on the Companys website at

https://www.hester.in/corporate-governance

During the year, the Company spent INR 8.21 million on CSR activities. The disclosures relating to CSR activities, as required under the Companies (CSR Policy) Rules, 2014, are annexed to this Boards Report as Annexure 3.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has instituted a robust vigil mechanism to uphold ethical conduct, professionalism and integrity across all levels.

In compliance with Section 177(9) of the Act and the rules made thereunder, and Regulation 22 of the Listing Regulations, the Company has established a vigil mechanism and framed a Whistle Blower Policy for Directors and employees to report concerns relating to unethical behaviour, actual or suspected fraud, or violation of the Companys Code of Conduct and the SEBI (Prohibition of Insider Trading) Regulations, 2015. The Whistle Blower Policy is hosted on the Companys website and the relevant link is provided in the Corporate Governance Report. No employee or Director was denied access to the Audit Committee during the year under review.

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

The Company has zero tolerance towards any form of sexual harassment and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the applicable rules.

The Company continues to strive to provide an environment for its employees and external persons engaged with the Company that is free from discrimination and harassment, including sexual harassment. The Companys policy sets out the guidelines for prevention, reporting and redressal of sexual harassment. During the financial year 2025-26, the Company received no complaints related to sexual harassment at any of its locations.

INSIDER TRADING REGULATIONS

The Company has adopted the Code for Insider Trading as per the SEBI (Prohibition of Insider Trading) Regulations, 2015. All other details on insider trading regulations are mentioned into the Corporate Governance Report, which forms a part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance requirements under the Companies Act, 2013 and Regulations 17 to 27 and 46 of the SEBI (LODR) Regulations, 2015, as amended from time to time. A separate section containing the detailed Corporate Governance Report, along with a certificate from a Practicing Company Secretary confirming compliance, forms part of this Annual Report. The Board supports the basic principles of corporate governance and places strong emphasis on transparency, accountability and integrity.

SECRETARIAL STANDARDS

Secretarial Standards for Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) are applicable to the Company. The Company has complied with the provisions of all applicable Secretarial Standards.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (‘BRSR)

Pursuant to Regulation 34 and Schedule V of the Listing Regulations, as well as the frequently asked questions issued by the stock exchanges (BSE and NSE), the Business Responsibility and Sustainability Report (“BRSR”) of the Company for the financial year ended 31 March 2026 has been uploaded on the Companys website and can be accessed at https:// www.hester.in/shareholders/reports-certificates

The report covers the Companys initiatives from an environmental, social and governance perspective.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report is set out in a separate section of this Annual Report and forms part of this Report. The Audit Committee has reviewed the Management Discussion and Analysis relating to financial conditions and results of operations during the year under review.

AUDITORS

Statutory Auditor and Audit Report

Chandulal M. Shah & Co. (Firm Registration No. 101698W), Chartered Accountants, Ahmedabad, was appointed as the Statutory Auditors of the Company till the conclusion of the Forty First Annual General Meeting. Chandulal M. Shah & Co. has furnished a declaration confirming its independence, arms length relationship with the Company and that it has not undertaken any prohibited non-audit assignments for the Company.

The Board has reviewed the Statutory Auditors Report of Chandulal M. Shah & Co. for the year ended 31 March 2026. The notes to the financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

Internal Auditor and Audit Report

Ernst & Young LLP, Ahmedabad, has been the Internal Auditor of the Company for FY 2025-26. The Internal Auditor is appointed by the Board on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports its findings to the Audit Committee on a quarterly basis. The scope of internal audit is approved by the Audit Committee and the Management from time to time.

The Board has re-appointed Ernst & Young LLP, Ahmedabad for FY 2026-27 as Internal Auditor of the Company, after obtaining its willingness and eligibility letter.

Cost Auditor

Pursuant to the provisions of Section 148 read with the Companies (Audit & Auditors) Rules, 2014 and other applicable provisions of the Companies Act, 2013, the Board of Directors, on the recommendation of the Audit Committee, re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, as the Cost Auditor of the Company for the financial year 2025-26, on the remuneration terms approved by the Members at the previous AGM. The Cost Audit Report for FY 2024-25 was filed within the prescribed time. The due date for submission of the Cost Audit Report for FY 2025-26 is within 180 days from 31 March 2026.

The Board has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad for FY 2026-27 as Cost Auditor to audit the cost records of the Company on a remuneration up to INR 0.25 million plus applicable Goods and Services Tax and out-of-pocket expenses at actuals. As required under the Act and the Rules made thereunder, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for ratification.

Accordingly, a resolution seeking ratification of the remuneration payable to Kiran J. Mehta & Co. has been included in the Notice convening the 39^th Annual General Meeting of the Company.

Secretarial Auditor and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, Shah and Shah Associates, a Peer Reviewed Practicing Company Secretaries Firm, has been appointed as the Secretarial Auditor of the Company for a term of five consecutive years, from FY 2025-26 to FY 2029-30, at the 38^th Annual General Meeting of the Company.

The Secretarial Audit Report for the financial year 2025-26 is attached to this Boards Report as Annexure 4. The Board has reviewed the Secretarial Auditors Report for the year ended 31 March 2026 and confirms that the report does not contain any qualification, reservation, adverse remark or disclaimer.

Annual Secretarial Compliance Report

In compliance with Regulation 24A(2) of the Listing Regulations, Mr. Tapan Shah, Practicing Company Secretary, issued the Annual Secretarial Compliance Report for the financial year 2025-26. The report, placed before the Board at its meeting held on 15 May 2026, confirmed that the Company had maintained proper records as required under the applicable rules and regulations and that no action had been taken against the Company or its material subsidiaries or promoters/directors by SEBI, BSE or NSE. The Company submitted the report to the stock exchanges within the prescribed time.

CREDIT RATINGS

During the year under review, CARE Ratings Limited reviewed the credit ratings of the Company. The rating for the Companys long-term bank facilities stands at “CARE BBB/Stable” revised from “CARE BBB+/Stable”, and the rating for its short-term bank facilities stands at “CARE A3+” revised from “CARE A2”. The ratings indicate an adequate degree of safety with respect to timely servicing of financial obligations.

CERTIFICATIONS/ RECOGNITION/ ACCREDITATIONS

The Company has the following Certifications/ Recognition/ Accreditations:

1. WHO - GMP

2. GLP (Good Laboratory Practices)

3. ISO 9001:2015

4. ISO 14001:2015

5. ISO 45001:2018

6. DSIR approved R&D Centre

BUSINESS RISK MANAGEMENT

The Company has a comprehensive risk management framework addressing business, operational, financial, sectoral, market, regulatory and compliance, sustainability, human resources, information and cyber security and strategic risks. These risks are systematically assessed, measured and mitigated through ongoing actions within the risk appetite approved by the Board of Directors. The risk management framework is periodically reviewed by the Board and the Audit Committee. An overview of the key risks and concerns is provided in the Management Discussion and Analysis Report, which forms part of this Annual Report.

In accordance with Section 134(3)(n) of the Companies Act, 2013 and Regulation 21 of the Listing Regulations, the Company has constituted a Risk Management Committee. The details of the Committee, along with its terms of reference, are set out in the Corporate Governance Report, which also forms part of this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of this Boards Report, except as disclosed elsewhere in this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, no regulator, court or tribunal passed any significant or material order affecting the going concern status of the Company or its future operations.

COMPLIANCE WITH MATERNITY BENEFIT ACT, 1961

During the year under review, the Company complied with the Maternity Benefit Act, 1961 and extended all statutory benefits to eligible women employees. The Company remains committed to fostering an inclusive and supportive workplace that safeguards the rights and well-being of women employees in accordance with applicable law.

DISCLOSURE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, no application or proceeding has been initiated against the Company under the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal.

DISCLOSURE RELATING TO VALUATION AND ONE-TIME SETTLEMENT

In accordance with Rule 8(5)(x) of the Companies (Accounts) Rules, 2014, there was no instance of a one-time settlement with any bank or financial institution during the year under review. Accordingly, disclosure of any difference between the valuation done at the time of taking a loan and at the time of one-time settlement does not arise.

PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988

During the year under review, no proceedings were initiated or remained pending against the Company under the Prohibition of Benami Property Transactions Act, 1988, as amended, and the rules made thereunder.

TRANSACTIONS WITH COMPANIES STRUCK OFF

During the year under review, the Company did not enter into any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.

FILING OF ANNUAL RETURN AND FINANCIAL STATEMENTS

The Company has duly filed its Annual Return and Financial Statements (Balance Sheet and related documents) for the financial year ended 31 March 2025 with the Registrar of Companies, Gujarat, in compliance with the provisions of the Companies Act, 2013 and the rules made thereunder.

APPOINTMENT OF DESIGNATED PERSON

Pursuant to Rule 9 of the Appointment of Designated Person (Management and Administration) Rules, 2014, the Company has appointed Mr. Rajiv Gandhi, CEO & Managing Director, as the designated person to oversee compliance with statutory obligations.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has established a formal framework for Internal Financial Control (“IFC”) in compliance with the requirements of the Companies Act, 2013. Specific responsibilities relating to IFC have been defined for the Board, Audit Committee, Independent Directors and Statutory Auditors.

Accordingly, the Company has a well-established, proper and adequate IFC system, which ensures:

1. the orderly and efficient conduct of business;

2. safeguarding of assets;

3. prevention and detection of frauds and errors;

4. accuracy and completeness of accounting records; and

5. timely preparation of reliable financial information.

The Audit Committee and the Board regularly review the effectiveness of the controls documented within the IFC framework and take corrective and preventive actions as required when weaknesses are identified. This review covers entity-level controls, process- level controls, fraud-risk controls and the information technology environment.

Based on this evaluation, no significant events were identified during the year that materially affected, or are reasonably likely to materially affect, the Companys IFC. Management concludes that IFC and financial reporting were effective and adequate in line with the Companys operations. The Statutory Auditors have audited the adequacy and operating effectiveness of the internal financial controls over financial reporting and their Audit Report is annexed as Annexure B and Annexure A to the Independent Auditors Report in the Standalone and Consolidated Financial Statements, respectively.

TRANSFER OF SHARES AND DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) ACCOUNT

During the year under review, in compliance with Sections 124 and 125 of the Act and the rules made thereunder, the Company transferred 5,449 equity shares of 31 members whose dividend had remained unclaimed or unpaid for a consecutive period of seven years to the IEPF.

Further, INR 0.90 million being unclaimed dividend pertaining to the final dividend for financial year 2017-18 and the first and second interim dividends for financial year 2018-19 was transferred to the IEPF after giving notice to the concerned Members to claim their unpaid/unclaimed dividend.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return of the Company for the financial year ended 31 March 2026 in Form MGT- 7 has been uploaded on the Companys website and can be accessed at www.hester.in

PARTICULARS OF EMPLOYEES

In terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the required disclosures relating to remuneration and other details are provided in Annexure 5 to this Report.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided in Annexure 6 and forms part of this Report.

GENERAL DISCLOSURES

Your Directors confirm that the Company has made the required disclosures in this Report for the items prescribed under Section 134(3) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014, to the extent applicable during the year.

Apart from the matters mentioned in this Report, there are no material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

ACKNOWLEDGEMENT

The Directors express their sincere appreciation for the continued support and cooperation extended to the Company by the Bank. They also thank the medical professionals, traders and consumers for their continued patronage of the Companys products.

The Directors place on record their appreciation for the dedicated efforts and hard work of employees at all levels, which have played an important role in the Companys success.

The Directors also thank the Companys vendors, investors, business associates, stock exchanges, the Government of India, State Governments and various departments and agencies for their continued support and cooperation.

Your Directors deeply appreciate the commitment, dedication and contribution of every member of the Hester Biosciences family. Their collective efforts continue to support the Companys growth and success.

For and on behalf of Board of Directors
Rajiv Gandhi	Priya Gandhi	Date 15 May 2026
CEO & Managing Director	Executive Director	Place Kadi, Mehsana
DIN: 00438037	DIN: 06998979