Krebs Biochemicals & Industries Ltd Directors Report

To,

The Members,

The Directors submit the 34^th Annual Report of Krebs Biochemicals & Industries Limited (the Company) along with the audited financial statements for the financial year ended 31^st March 2026.

1. Financial Summary

( In Lakhs)

Particulars	Financial Year ended 31st March 2026	Financial Year ended 31st March 2025
Net Sales	2373.16	4331.19
Other Income	202.63	70.89
Total Income	2575.79	4402.08
Expenditure	2918.18	5834.14
Profit /(Loss) before Interest, Depreciation and Taxes	(342.39)	(1432.06)
Finance Cost	708.59	591.42
Depreciation & Amortisation	642.33	668.92
Profit/(Loss) Before Tax	(1693.31)	(2692.40)
Provision of Taxation	-	1.53
Net profit/(Loss) after Tax	(1693.31)	(2693.93)

2. Financial Performance and Operations

During the financial year under review, the Company has reported a total income of 2575.79 Lakhs as against total income of 4402.08 Lakhs in the previous financial year. During the year under report, operations of the Company have resulted in a loss of 1693.31 Lakhs as against loss of 2693.93 Lakhs in the previous financial year. Detailed Performance of the Company is given in the Management Discussion and Analysis Report forming part of this Annual Report.

The manufacturing operations at the Companys Vizag manufacturing unit remain closed since 9^th February 2025 pursuant to an order issued by Andhra Pradesh Pollution Control Board.

The Company is taking all the possible efforts to revoke the closure order issued by Pollution Control Board and restart the manufacturing operations at this manufacturing unit.

Closure of the manufacturing operations at this manufacturing unit materially impacted the Companys business.

3. Change in nature of business

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

4. Dividend

In view of losses incurred during the year, no dividend is proposed to be declared for the financial year 2025-26.

5. Material changes and commitments affecting the financial position of the Company

No material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year to which financial statement in this report relate and date of this report.

6. Share Capital

There is no change in the share capital of the Company during the financial year under report.

7. Investor Education and Protection Fund

No unclaimed dividend and/or shares were transferred or transferable to the Investor Education and Protection Fund during the year under review.

8. Amalgamation of the Company

The Board of Directors ofthe Company attheir meeting held on 26^thJune 2026 approvedthe Scheme ofAmalgamation of Krebs Biochemicals & Industries Limited with Ipca Laboratories Limited, a promoter company, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Scheme of Amalgamation is subject to necessary approvals under the relevant provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The appointed date for the Scheme is 1^st April, 2026 and shall be operative from the Effective Date upon receipt of all the consents and approvals, as defined in the Scheme.

9. Statutory Auditors, Audit Report and Audited Accounts

At the 33^th Annual General Meeting (AGM) of the Company held on 26^th September 2025, the Members approved and extend the term of re-appointment of M/s. Bhavani & Co, Chartered Accountants (Firm Registration No. 012139S) as the Statutory Auditors of the Company to hold office for a period of 5 years ( instead of 3 years) from the conclusion of the 32^nd AGM held on 27^th September 2024 and till the conclusion of the 37^th AGM to be held in the year 2029.

The Auditors report read with notes to the accounts referred to therein are self explanatory.

Explanation or Comments on Qualification, Reservation or Adverse Remark or Disclaimer made by the Auditors

We draw your attention to note no. 2.20.2 to the financial statements, which states that the Company has incurred loss before tax of 1,693.31 lakhs for the year ended 31st March 2026 and 2,692.40 lakhs for the year ending 31st March 2025. As of 31 March 2026, the total liabilities exceeded its total assets by 16,275.47 lakhs as compared to 14,623.88 lakhs as at 31st March 2025. These factors indicate that material uncertainty exists that may cast doubt on the Companys ability to continue as going concern.

The Company has prepared turnaround strategy and is also in the process of developing new products for manufacturing. It is essential for the Company to increase production level to optimally utilise the available capacity so as to make the Companys operations financially viable. The Company is also exploring the opportunity to manufacturing additional fermentation based products so as to optimally utilise the capacities of Companys manufacturing units.

The Companys management has carried out an assessment of the Companys financial performance and has obtained a confirmation providing comfort of financial support from the Principal Promoter Share Holder, if required to meet its obligations. Principal Promoter Share Holder has given assurance to put their best efforts and help the Company in achieving break even in its business through addition of products being manufactured and as well as giving marketing support and shall also financially support the Companys financial needs in continuing with its operations till such time the Company turnaround its operations. And with continued efforts, the Company expects to address the material uncertainty in future.

The Company is also making all efforts to revoke the closure order issued by Andhra Pradesh Pollution Control Board for its manufacturing unit situated at Vishakhapatnam.

10. Internal Auditors

The Board of Directors based on the recommendation of Audit Committee have re-appointed M/s. Suryanarayana & Suresh, Chartered Accountants, Hyderabad, as Internal Auditors of the Company for the Financial Year 2026-27 at their meeting held on 21^st May 2026.

The internal auditors have submitted their reports at quarterly intervals to the Audit Committee and the Board during the financial year ended 31^st March 2026.

11. Directors and Key Managerial Personnel

During the year, the Non-Executive Directors including Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board and Committees.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company as on the date of this report are: Mr. Manish Kumar Jain - Managing Director & CEO

Mr. Ritesh Jain - Chief Financial Officer

Mr. Rakesh R Kalbate - Company Secretary & Compliance Officer

Appointment/ Resignation of KMPs a) Mr. Jitendra Shah resigned as the Managing Director & CEO of the Company w.e.f. close of business hours on 7^th August 2025. b) Mr. Manish Kumar Jain was appointed as the Managing Director & CEO of the Company w.e.f. 7^th August 2025.

Retirement by Rotation

Dr. R T Ravi and Mr. Manish Kumar Jain, retires by rotation as Directors at the ensuing Annual General Meeting and they have offered themselves for re-appointment.

12. Declaration of Independence

The Company has received the declarations under Section 149(6) of the Companies Act, 2013, from the Independent Directors that each of them meets the criteria of independence and there has been no change in the circumstances which may affect their status as Independent Directors during the year. They have also declared that they are not debarred from the holding office of director by virtue of any SEBI order or order by any other competent authority.

All the Independent Directors have registered themselves under Independent Directors data bank maintained by the Indian Institute of Corporate Affairs (IICA).

13. Board Meetings

During the financial year 2025-26, Four (4) meetings of the Board were held. Details of the meetings of the Board and attendance of the Directors have been provided in the corporate governance report which forms part of this report.

14. Corporate Social Responsibility

The provisions of Section 135 of the Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) is not applicable to the Company.

15. Quality Initiatives

The Company is committed to meet the customers quality requirements and satisfaction by maintaining high degree of assurance in quality, safety, efficacy of the products manufactured. The Company maintains mutual and beneficial relationship with the suppliers, vendors and customers.

The Company provides continual training to all the employees working in the plants for upgrading their knowledge of CGMP practices. Your Company continuously focus on developing new products with innovative knowledge and robust practices meeting the Regulatory requirements.

Several customers have audited the Companys Nellore plant and have approved the plant as a qualified Vendor. Company is totally focusing to be as an integrated Company emerging in the Pharma market by improving and implementing best in class methodologies to meet the customer requirements with zero complaints and by implementing the ALCOA practices in its manufacturing operations.

16. Policy on directors appointment and remuneration and other details

The Nomination and Remuneration Committee has laid down the criteria for Directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of Directors. The following attributes/criteria for selection have been laid down by the Board on the recommendation of the Committee: ? The candidate should posses the positive attributes such as leadership, entrepreneurship, industrialist, business advisor or such other attributes which in the opinion of the Committee the candidate possess and are in the interest of the Company; ? The candidate should be free from any disqualifications as provided under Sections 164 and 167 of the Companies Act, 2013; ? The candidate should meet the conditions of being independent as stipulated under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 in case of appointment as an independent director; and ? The candidate should possess appropriate educational qualification, skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations, infrastructure, medical, social service, professional teaching or such other areas or disciplines which are relevant for the Companys business.

17. Board Evaluation

The Nomination and Remuneration Committee lays down the criteria for performance evaluation of Independent Directors, Board of Directors and Committees of the Board. The criteria for performance evaluation is based on the parameters like attendance and participation at the meetings of the Board and Committees thereof, contribution to strategic decision-making, review of financial statements and business performance.

The Board has carried out evaluation of its own performance as well as that of the Committees of the Board and all the Directors.

18. Remuneration Policy

The objective and broad framework of the Companys Remuneration Policy is to consider and determine the remuneration, based on the fundamental principles of payment for performance, potential and growth. The Remuneration Policy reflects on certain guiding principles of the Company such as aligning remuneration with the longer term interests of the Company and its shareholders, promoting a culture of meritocracy and creating a linkage to corporate and individual performance and emphasising on line expertise and market competitiveness so as to attract the talent. The Nomination and Remuneration Committee recommends the remuneration of Directors and Key and Senior Managerial Personnel, which is approved by the Board of Directors, subject to the approval of shareholders, where necessary. The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate the directors, key managerial personnel and other employees of the quality required to run the Company successfully. The relationship of remuneration to performance should be clear and meet appropriate performance benchmarks. The remuneration to directors, key managerial personnel and senior management personnel should also involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals. The Remuneration Policy is placed on the Companys website at http://www.krebsbiochem.com/ documents/54405dae0fa8dbfdd493d897deab01b3.pdf.

Information about elements of remuneration package of individual directors is provided in the Annual Return as provided under Section 92(3) of the Companies Act, 2013 which is placed on the website of the Company.

19. Familiarisation program for Independent Directors

The Company has conducted familiarisation programs for the Independent Directors as required under the provisions of Companies Act, 2013, the same is uploaded on the Companys website at www.krebsbiochem.com.

20. Internal Financial Control Systems and their adequacy

The details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report which forms part of this report.

21. Audit Committee

Your Company has a duly constituted an Audit Committee and the Board has accepted all the recommendations of Audit Committee during the year under review. The composition of Audit Committee as on date of signing this report are:

a) Mr. P M Kathariya	Chairman
b) Ms. Dipti Shah	Member
c) Mr. Satya Prakash Chigurupati	Member
d) Mr. Sumanth Karlapudi	Member
e) Mr. Manish Kumar Jain	Member

The details pertaining to meeting, role and responsibilities of Audit Committee are provided in the Corporate Governance Report, which forms part of this report.

22. Nomination and Remuneration Committee

Your Company has in place a duly constituted Nomination and Remuneration Committee which has following members as on date of signing of this report:

a) Mr. Satya Prakash Chigurupati	Chairman
b) Ms. Dipti Shah	Member
c) Mr. P M Kathariya	Member
d) Mr. Sumanth Karlapudi	Member

Details pertaining to meetings, role and responsibilities of Nomination and Remuneration Committee are provided in the Corporate Governance Report which forms part of this report.

23. Stakeholders Relationship Committee

Your Company has constituted a Stakeholders Relationship Committee as required under the provisions of SEBI Listing Regulations and the Companies Act, 2013. Members of the committee as on signing date of this report are:

a) Mr. Sumanth Karlapudi	Chairman
b) Ms. Dipti Shah	Member
c) Mr. Satya Prakash Chigurupati	Member
d) Mr. P M Kathariya	Member
e) Mr. Manish Kumar Jain	Member

Details pertaining to meetings, role and responsibilities of Stakeholders Relationship Committee are provided in the Corporate Governance Report which forms a part of this report.

24. Corporate Governance

As per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements of Corporate Governance in all material aspects.

A report on Corporate Governance together with a certificate of its compliance from the Statutory Auditors, forms a part of this report.

25. Loans and Investments

During the year under review, the Company has not given any loans and not made any investments under the provisions of Section 186 of the Companies Act, 2013.

26. Particulars of Employees

Pursuant to the provisions of Section 197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employee of the Company is drawing salary of more than 1.02 Crores (Rupees One Crore Two Lakhs) per annum or 8.5 lakhs (Rupees Eight Lakhs Fifty Thousand) per month, as the case may be, for the financial year ended 31^st March 2026.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure-I forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

27. Cost Audit

Pursuant to the provisions of Section 148 of the Companies Act, 2013, the cost audit of cost records are applicable to the Company for financial year 2025-26. M/s. Bojanapalli & Associates, Cost Accountant (Firm Registration No. 100849) were appointed as Cost Auditors to conduct audit of cost records of the Company for the financial year 2025-26.

The Cost Audit Report for financial year 2025-26 will be filed on or before the due date.

28. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the Company has appointed M/s DSMR & Associates, Practicing Company Secretaries, as Secretarial Auditors to undertake the secretarial audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure- II to the Boards Report.

Qualifications in Secretarial Audit Report:

Sr. No. Observations in Secretarial Audit Report	Boards explanation/comments
1 Non-maintenance of 100% promoter shareholding in dematerialized form	1000 shares of Mrs. Hemalata Ravi and 19400 shares of Dr. R T Ravi, promoter shareholders are under legal dispute in the court of law and hence the same could not be dematerialized.

29. Annual Secretarial Compliance Report

The Company has undertaken an audit for the financial year 2025-26 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by M/s. DSMR & Associates, Practicing Company Secretaries, Hyderabad has been submitted to the Stock Exchanges within the specified time.

30. Transactions with related parties

Information on transactions with related parties are given in Annexure-III in Form AOC-2 and the same forms the part of this report.

31. Fixed Deposits

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance Sheet.

32. Annual Return

In accordance with the requirements of Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, a copy of Annual Return in Form MGT-7 is placed on the website of the Company at www.krebsbiochem.com.

33. Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a fair and true view of the state of affairs of the Company at the end of the financial year; iii) They 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) They have prepared the annual accounts on a going concern basis; v) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. Disclosures relating to Subsidiaries, Associates and Joint Ventures

The Company does not have any Subsidiary Company, Associate Company or Joint Ventures Company.

35. Disclosure Requirements

As per SEBI Listing Regulations, Corporate Governance Report with Auditors Certificate thereon and Management Discussion and Analysis are attached, which form a part of this report.

36. Code of Conduct

The Board has laid down a code of conduct for Board members and senior management personnel of the Company. The Company has also adopted code of conduct for independent directors incorporating the role and functions, duties as laid down in the Companies Act, 2013. The said code of conduct is available on the website of the Company www.krebsbiochem.com. The Board members and senior management personnel have affirmed compliance with the said code of conduct. A declaration signed by the Managing Director in this regard is given at the end of this report.

37. Prevention of Insider Trading

The Company has adopted a code of conduct for prevention of insider trading. All directors, senior management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by the Code. During the year under report, there has been due compliance with the code of conduct for prevention of insider trading.

The said code is available on the Companys website www.krebsbiochem.com.

38. Vigil Mechanism/Whistle Blower Policy

The Company has in place a whistle blower policy and no personnel have been denied access to the Chairman of the Audit Committee. The policy also provides for the safeguarding of whistle blowers. The whistle blower policy is available on website of the Company www.krebsbiochem.com.

39. Energy conservation, technology absorption and foreign exchange earnings outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure-IV" to this report.

40. Safety, Environment and Health

The Company considers safety, environment and health as the management responsibility. The employees are provided training programs at regular intervals on manufacturing facilities on safety and environment.

41. Significant or material orders passed against the Company

The Company had received closure order dated 7^th February 2025 issued by A. P. Pollution Control Board for its Manufacturing Facility situated at Vizag on 9^th February 2025. Accordingly, the manufacturing operations of this manufacturing facility is closed since 9^th February 2025. The Management of the Company is taking necessary steps to get this closure order revocated from the Pollution Control Board at the earliest.

Except above, there were no significant or material orders passed during the year against the Company by regulators/ Courts/Tribunals impacting the going concern status and operations of the Company in future.

42. Disclosures pertaining to the Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with the provision relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. There are no complaints registered in this matter during the year under review.

43. Secretarial Standards

The Company is in due compliance with the applicable secretarial standards issued by the Institute of the Company Secretaries of India (ICSI).

44. Acknowledgments

Your Directors take this opportunity to express their sincere appreciation to the shareholders, customers, bankers, employees, suppliers and other business associates for the excellent support and co-operation extended by them.