Hikal Ltd Directors Report

To,

The Members,

The Directors are pleased to present the 37^th Annual Report with the Audited Standalone & Consolidated Financial Statements for the financial year ended 31 March 2025.

1. Financial Results

H in million
Particulars	2024-25 ^	2023-24
Total Revenue	18,648	17,871
Profit before interest & depreciation	3,335	2,694
Interest	752	564
Profit before depreciation	2,583	2,130
Depreciation	1,344	1,176
Profit before taxation	1,239	954
Provision for taxation
- Current tax	300	284
- Deferred tax	30	(25)
Profit after tax	909	695
Reserves and surplus	12,375	11,629
Dividend on equity share	148	148

2. COMPANY PERFORMANCE

The Company achieved revenue of R 18,648 million in 2024-25, against R 17,871 million in the previous year, recording a growth of 4%. The sales of the pharmaceutical business recorded an increase of 6% to R 11,681 million, while the sales of the Crop Protection saw a growth of 1% to R 6,917 million.

The EBIDTA margins improved by 281 bps on the back of stable raw material prices, improved product mix and ongoing business excellence initiatives and stood at around 18%, increased from R2,694 million in the previous year to R 3,335 million in 2024-25. Absolute EBITDA also increased by R 641 million. The Profit before Tax (PBT) increased by 30% from R 954 million in the previous year to R 1,239 million in 2024-25. Profit After Tax (PAT) witnessed a growth of 31% from R 695 million in the previous year to R 909 million in 2024-25. The Earning per Share (EPS) also increased from R 5.64 in the previous year to R 737 in 2024-25.

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

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

The Current Ratio of the Company is at 1.26 for 2024-25, as against 1.28 in the previous year. The net Debt to Equity Ratio improved from 0.67 in March 2024 to 0.59 in March 2025, while the Debt Service Coverage Ratio (DSCR) declined from 1.52 in the previous year to 1.45 in 2024-25.

3. EXPORTS

Exports for the year 2024-25 were R 11,471 million (62% of total sales) as compared to R11,082 million (63% of total sales) in the previous year. The increase in exports was due to diversifying our product portfolio.

4. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis on the Companys operations is provided in a separate section and forms part of this Annual Report.

5. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Companys Business Responsibility and Sustainability Report, in terms of Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (SEBI Listing Regulations), is provided in a separate section and forms part of this Annual Report.

6. DIVIDEND & RESERVES

The Company had in the financial year 2024-2025 declared and paid in the month of February 2025 an interim dividend of 30% i.e. R 0.60 per share of face value of R 2/- each. Further, the Board has recommended a Final Dividend of 40% i.e. R 0.80 per share of R 2/- each. The Payment of Final Dividend is subject to the approval of shareholders at the ensuing Annual General Meeting of the Company. If the final dividend is approved by the shareholders, the total dividend for the Financial Year 2024-25 shall aggregate to 70% i.e. R 1.40/- per share of face value R 2/- each.

As per the Income Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

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

The Dividend Distribution policy of the Company which provides the Companys philosophy on Dividend is available on the website of the Company at https://www.hikal.com/uploads/documents/ HIKAL-DividendDistributionPolicy.pdf

7. MATERIAL CHANGES AND COMMITMENTS

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

8. SHARE CAPITAL

There has been no change in the Companys paid-up share capital during the current financial year. The paid-up equity share capital as on 31 March 2025, stood at R 246.60 million. During the financial year, the Company did not issue shares with differential voting rights nor granted any stock options or sweat equity. As on 31 March 2025, none of the Companys Directors held instruments convertible into equity shares of the Company.

9. ANNUAL RETURN

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

10. SUBSIDIARIES

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

11. DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Companys Articles of Association, Mr. Amit Kalyani (DIN - 00089430), Director, retires by rotation at the forthcoming Annual General Meeting (AGM), and being eligible, offers himself for re-appointment.

Mr. Shrikrishna Adivarekar (DIN: 06928271) was reappointed as an Independent Director of the Company for the second consecutive term of 5 years with effect from 22 December 2024 by the Members by passing a special resolution at the 36^th Annual General Meeting of the Company held on 17 September 2024.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 14 May 2025 re-designated Mr. Sameer Hiremath as Vice Chairman and Managing Director of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013, and Regulation 16(1) (b) of SEBI Listing Regulations as amended. In the opinion of the Board, the Independent Directors possess the integrity, requisite qualifications expertise and experience (including proficiency) required to contribute to the quality and better governance of the Board processes.

Details of the number of Board meetings, held during the financial year 2024-25, are mentioned in the Corporate Governance Report, which forms an integral part of this Annual Report.

12. BOARD EVALUATION

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

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

13. WHISTLE-BLOWER POLICY

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

14. NOMINATION & REMUNERATION POLICY

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

15. RELATED PARTY TRANSACTIONS

All related party transactions entered during the financial year, were at an arms length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the Companys interest at large. The disclosure of Related Party Transactions as required under

Section 134(3)(h) of the Act in Form AOC-2 is attached as "Annexure C".

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

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

16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material order has been passed by the regulators or courts or tribunals impacting the going concern status of the Company and its future operations.

17. RISK MANAGEMENT

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

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

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

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

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

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

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

Your Company implemented proper Internal Financial Controls, and these financial controls were adequate and effectively operated during FY 2024-25.

19. KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Act, following were the Key Managerial Personnel of the Company as on 31 March 2025:

Mr. Jai Hiremath, Executive Chairman (WTD)

Mr. Sameer Hiremath, Vice-Chairman & Managing Director

Mr. Sarangan Suresh, Whole Time Director Mr. Kuldeep Jain, Chief Financial Officer Mr. Rajasekhar Reddy, Company Secretary.

20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY

The details under Section 186 of the Companies Act, 2013, are given in Note No. 54 to the notes to the financial statements.

21. DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards read

with requirements set out under Schedule III to the Companies Act, 2013, were followed and there are no material departures from the same;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2024-25, and of the profits of the Company for that year;

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

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

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

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

22. STATUTORY AUDITOR

M/s S R B C & CO. LLP has been re-appointed as the Statutory Auditors at the 36^th Annual General Meeting of the Company held on 17 September 2024 for the second term of 5 consecutive years to hold the office from the conclusion of 36^th Annual General Meeting till the conclusion of 41^st Annual General Meeting to be held in the year 2029.

The Auditors report prepared by S R B C & CO. LLP, to the members on the financial statements of the Company for the year ended 31 March 2025, does not contain any qualifications, adverse or disclaimer remarks. No fraud has been reported by the Auditors to the Audit Committee or the Board.

23. COST AUDITOR

The Company has maintained cost accounts and records as specified in the Central Government under Section 148(1) of the Companies Act, 2013. For FY 2024-25, M/s. V. J. Talati & Co., (FRN: R00213), Cost Accountants conducted the audit of the cost records of the Company.

The Company has re-appointed M/s. V. J. Talati & Co., (FRN: R00213) as the Cost Auditor to carry out

the audit of cost accounts for the financial year 2025-26. The requisite resolution for ratification of remuneration payable to Cost Auditors for the financial year 2025-26, by the shareholders has been set out in the Notice of AGM. The cost audit report for the financial year 2023-24 was filed with the Ministry of Corporate Affairs, Government of India on 13 August 2024.

24. SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 read with Rules made thereunder, the Board had appointed M/s Dhrumil M. Shah & Co. LLP (ICSI Unique Code L2023MH013400), Practicing Company Secretaries to conduct the Secretarial Audit of the Company.

The Secretarial Audit Report in Form MR 3 for the financial year ended 31 March 2025, is annexed to this report as "Annexure D" and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

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

Pursuant to the amendments to the SEBI Listing Regulations, the Board, on the recommendation of the Audit Committee, has approved and recommended to the Members, the appointment of M/s Dhrumil M. Shah & Co. LLP (ICSI Unique Code L2023MH013400), as the Secretarial Auditor of the Company, for a period of five consecutive years inclusive of FY 2026.

Brief details as required under the SEBI Listing Regulations, are provided in the Notice of 37^th AGM. The Directors recommend the appointment of M/s Dhrumil M. Shah & Co. LLP (ICSI Unique Code L2023MH013400), as the Secretarial Auditor for approval by the Members.

25. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Based on the recommendation of the Corporate Social Responsibility Committee (CSR Committee) the Board has adopted a CSR Policy that provides guiding principles for selection, implementation and monitoring of CSR activities and formulation of Annual Action Plan. The CSR Policy may be accessed on the Companys website www. hikal.com/uploads/documents/corporate- socialresponsibility-polic-srijan.pdf.

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

26. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

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

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

During the financial year 2024-25, the Company did not receive any complaints of sexual harassment and no cases were filed under the POSH Act.

a. Number of complaints filed during the financial year 2024-25: NIL

b. Number of complaints disposed off during the financial year 2024-25: NIL

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

27. MATERNITY BENEFIT

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

28. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")

• Transfer of Unclaimed Dividend to IEPF

During the financial year, final dividend relating to the year ended 31 March 2017 and the interim dividend for the year ended 31 March 2018, amounting to A 381219/- that had not been claimed by the shareholders were transferred to the Account of IEPF as required under Sections 124 and 125 of the Act.

• Unclaimed dividend as on 31 March 2025

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

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 31 March 2025, on the website of the Company https://www.hikal.com/ documents/dividend-shares. The same are also available on the website of the IEPF Authority www.iepf.gov.in.

• Transfer of Equity Shares

As required under Section 124 of the Act, during the financial year, 7305 Equity Shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more, were transferred by the Company to the I EPF Authority. Details of such shares transferred have been uploaded on the website of the Company https://www. hikal.com/documents/dividend-shares. The same are also available on the website of the IEPF Authority www.iepf.gov.in.

29. SAFETY AND ENVIRONMENT

The companys safety principles are fundamental rules and guidelines designed to prevent accidents, injuries, and illnesses in the workplace. These principles are crucial for maintaining a safe and healthy work environment, fostering a positive safety culture, and ensuring compliance with relevant regulations. We strongly believe in "Our Safety My Responsibility" and it was chosen as theme during safety month celebration during March - 25. The core guiding principle for EHS in "Our Safety My Responsibility" is prioritising safety and health as fundamental rights for all workers, with the goal of preventing all injuries and illnesses. This involves a commitment to a proactive, risk- based approach, clear communication, care for others and a culture of shared responsibility where every employee actively participates in maintaining a safe and healthy work environment.

30. DEPOSITS

The Company did not accept any deposits and as such there were no overdue deposits outstanding as on 31 March 2025.

31. EMPLOYEES

The Company considers its human capital an invaluable asset. The Company continued to have cordial relationships with all its employees. Management and employee development programmes and exercises were conducted at all sites. The Company has conducted various inhouse skill developmental programmes and also

has sponsored for various external seminars for other developmental programmes to enhance the skill set of the employees at various levels. The total workforce of the Company stood at 3112 as on 31 March 2025, including 2062 permanent employees.

The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms a part of this Report. However, the Report and the financial statements are being sent to the members, excluding the aforesaid statement. In terms of Section 136 of the Companies Act, 2013, the said statement is open for inspection. Any member interested in obtaining such particulars may write to the Company Secretary at secretarial agm@ hikal.com.

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

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

33. CORPORATE GOVERNANCE

A report on Corporate Governance, along with a certificate from M/s Dhrumil M. Shah & Co. LLP, Practicing Company Secretaries regarding the compliance of the requirements of Corporate Governance, as stipulated under the provisions of Regulation 34 of the SEBI Listing Regulations, is annexed to this Annual Report.

34. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, during the Financial Year 2024-25.

35. AWARDS & RECOGNITIONS

The details of the Awards and Recognitions earned by the Company during the financial year 2024-25 have been provided as part of this Integrated Annual Report at page no. 25.

36. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no instances of these matters during FY 2025:

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

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

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

37. ACKNOWLEDGEMENTS

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

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

38. CAUTIONARY STATEMENT

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

For and on behalf of the Board ofDirector Jai Hiremath
Date: 7 August 2025	Executive Chairman
Place: Mumbai	DIN: 00062203