Kwality Pharmaceuticals Ltd Directors Report

To

The Members

KWALITY PHARMACEUTICALS LIMITED.

Your Directors have pleasure in presenting the 43^rd Annual Report of KWALITY PHARMACEUTICALS LIMITED along with the Audited Financial Statements for the year ended 31^st March 2026

1) FINANCIAL HIGHLIGHTS

The Companys financial performance for the year under review has been encouraging and is summarized below

(Rupees in Lacs except Earnings Per Share)

	STANDALONE		CONSOLIDATED
Particulars	2025-26	2024-25	2025-26	2024-25
Revenue from operations	50305.89	37019.70	50308.34	37019.70
Other Income	285.86	192.01	285.86	192.01
Total Income	50591.75	37211.71	50594.19	37211.71
Less:- Depreciation and amortization expenses	1979.43	1825.84	1981.04	1828.96
Less:- Finance cost	1097.04	987.79	1097.04	987.79
Less:- Other Expenses	38483.07	28975.38	38483.96	28980.97
Profit before exceptional items and tax	9032.21	5422.70	9032.16	5413.99
Exceptional items	82.94	0.00	82.94	0.00
Profit before tax	8949.27	5422.70	8949.21	5413.99
Less: Provision for Taxation
Current Tax	2280.03	1469.47	2280.03	1469.47
Deferred Tax	-88.70	-158.94	-88.70	-158.94
Tax for earlier Years	23.29	123.19	23.29	123.19
Profit / (Loss) After Tax For The Year	6734.66	3988.97	6734.60	3980.27
Other Comprehensive Income /(expense) for the year (net of tax)	13.67	-0.97	13.44	-1.78
Total Comprehensive Income for the year	6748.33	3988.01	6748.04	3978.49
Earnings per equity share [Nominal value of share Rs.10.00 each]
Basic	64.90	38.44	64.90	38.36
Diluted	64.90	38.44	64.90	38.36

2) STATE OF AFFAIRS AND FINANCIAL PERFORMANCE

Your Company has prepared the Financial Statements for the financial year ended March 31, 2026, in terms of Sections 129, 133 and other applicable provisions, if any, of the Companies Act, 2013 (as amended) (the "Act") and Schedule III thereto read with the Rules framed thereunder.

The financial performance of the Company during the Financial Year 2025-26 reflects its continued operational resilience, strategic execution and prudent financial stewardship amidst a dynamic business environment. The Company achieved a notable improvement across all key financial parameters, underpinned by enhanced operational efficiencies, disciplined cost optimisation and sustained revenue growth.

On a standalone basis, the Revenue from Operations increased to Rs. 50,305.89 lakhs from Rs. 37,019.70 lakhs in the previous financial year, representing a growth of approximately 35.89%. Consequently, the Total Income rose to Rs. 50,591.75 lakhs as against Rs. 37,211.71 lakhs during the preceding financial year. The Companys Profit Before Exceptional Items and Tax increased substantially to Rs. 9,032.21 lakhs from Rs. 5,422.70 lakhs in the previous year. After accounting for exceptional items, the Profit Before Tax stood at Rs. 8,949.27 lakhs, while the Profit After Tax increased significantly to Rs. 6,734.66 lakhs from Rs. 3,988.97 lakhs, registering an impressive growth of approximately 68.83% over the previous financial year. The Total Comprehensive Income for the year amounted to Rs. 6,748.33 lakhs, compared with Rs. 3,988.01 lakhs in the previous year. Correspondingly, the Basic and Diluted Earnings Per Equity Share improved to Rs. 64.90 from Rs. 38.44.

On a consolidated basis, the Company recorded Revenue from Operations of Rs. 50,308.34 lakhs as compared to Rs. 37,019.70 lakhs in the previous financial year. The Profit Before Tax stood at Rs. 8,949.21 lakhs as against Rs. 5,413.99 lakhs, while the Profit After Tax increased to Rs. 6,734.60 lakhs from Rs. 3,980.27 lakhs in the preceding year. The Total Comprehensive Income on a consolidated basis aggregated to Rs. 6,748.04 lakhs, signifying the sustained financial robustness of the Group.

The substantial enhancement in the financial performance during the year is attributable to improved operational leverage, effective deployment of resources, judicious management of finance and operating costs, and the Companys unwavering emphasis on operational excellence and value creation. The Board of Directors remains encouraged by the Companys resilient financial position and believes that the strategic initiatives undertaken during the year will continue to strengthen its competitive advantage, reinforce stakeholder confidence and facilitate sustainable long-term growth.

3) CHANGES IN NATURE OF BUSINESS

The Company is engaged in the business of manufacturing & trading in Pharmaceuticals & allied products and there was no change in the nature of the business of the Company during the year under review.

4) DIVIDEND

In order to conserve the resources, the Board of Directors does not recommend any dividend for the financial year 2025-26.

5) RESERVES

During the financial year under review, there are no transfers to any specific reserves.

6) ANNUAL RETURN

The Annual Return of the Company as on March 31, 2026 is available on the Companys website and can be accessed at https://www.kwalitypharma.com/annual returns.php

7) ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 8, sub-rule (3) of Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo is given in Annexure A.

8) PARTICULARS OF EMPLOYEES REMUNERATION

The information pertaining to Section 197(12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure B. There is no employee drawing a salary exceeding the limit prescribed under Section 197(12) read with Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

9) ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

The Audited Financial Statements for the financial year ended March 31, 2026 have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS) prescribed under Section 133 of the Companies Act, 2013 and other recognized accounting practices and policies to the extent applicable.

10) DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board received a declaration from all the directors under section 164 and other applicable provisions, if any, of the Companies Act, 2013 that none of the directors of the company is disqualified under the provisions of the Companies Act, 2013 (Act) or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Change in Directors

i) Appointment/Re-appointment

Based on the recommendation of the Nomination and Remuneration Committee, Mr. Swanith Kapoor (DIN: 11662482) was appointed as an Additional Director (under Independent Director category) of the Company by the Board at its meeting held on June 02, 2026, under the provisions of section 161(1) and other applicable provisions, if any, of the Companies Act, 2013 and is entitled to hold office upto the date of 43^rd Annual General Meeting of the Company.

The Company has also received requisite disclosures/ declarations from Mr. Swanith Kapoor under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 and its amendments thereunder. Mr. Swanith Kapoor is not disqualified from being appointed as Director in terms of Section 164 of the Companies Act, 2013. In opinion of the Board, he fulfills the conditions specified in the Companies Act, 2013 & Listing Regulations and is independent of the management. The Board recommends the Special Resolution for his appointment as Independent director of the company for approval by the Members at the ensuing AGM.

The aforesaid appointment with brief profile and other related information of Mr. Swanith Kapoor forms part of the Notice convening the ensuing AGM.

The Board recommends the above appointment for the consideration of Members of the Company at the ensuing Annual General Meeting.

At the previous Annual General Meeting of the Company held on September 09, 2025, the members approved the following:

• Appointment of Mr. Vinod Kumar Sharma (DIN: 08502519) as an Independent Director of the

Company for a term of five (5) consecutive years with effect from July 26, 2025 to July 25, 2030.

• Re-appointment of Mr. Ramesh Kumar (DIN: 00462656) as the Managing Director of the Company for a period of five (5) years with effect from January 16, 2026 to January 15, 2031, and approval of the payment of remuneration to him for a period of three (3) years from January 16, 2026 to January 15, 2029.

• Re-appointment of Mr. Ajay Kumar Arora (DIN: 00462664) as the Whole Time Director of the Company for a period of five (5) years with effect from January 16, 2026 to January 15, 2031, and approval of the payment of remuneration to him for a period of three (3) years from January 16, 2026 to January 15, 2029.

• Re-appointment of Mrs. Anju Arora (DIN: 03155641) as the Whole Time Director of the Company for a period of five (5) years with effect from January 16, 2026 to January 15, 2031, and approval of the payment of remuneration to her for a period of three (3) years from January 16, 2026 to January 15, 2029.

• Re-appointment of Mrs. Geeta Arora (DIN: 03155615) as Whole-time Director of the Company for a period of five (5) years with effect from January 16, 2026 to January 15, 2031, and approval of the payment of remuneration to her for a period of three (3) years from January 16, 2026 to January 15, 2029.

• Re-appointment of Mr. Kartik Kapur (DIN: 08966816) as an Independent Director of the

Company for a second term of five (5) consecutive years effective from January 16, 2026 to January 15, 2031.

During the year under review, the members of the Company have approved (through Postal Ballot):

• Based on the recommendation of Nomination and Remuneration Committee, the board had appointed Mr. PreetMohinder Singh Bedi (DIN: 11452004) as an Additional Director (Non-

Executive and Independent) with effect from January 01, 2026. In terms of Regulation 17(1C) of Listing Regulations, the said appointment was duly approved by the shareholders of the Company by way of special resolution passed through postal ballot on March 28, 2026. Further, the Board is of the opinion that Mr. PreetMohinder Singh Bedi possesses the requisite qualifications, knowledge, experience and proficiency and has the necessary expertise in the relevant fields. The Board is also satisfied that he possesses the highest standards of integrity.

• Based on the recommendation of Nomination and Remuneration Committee, the board had appointed Mr. Bhavesh Mahajan (DIN: 09614108) as an Additional Director (Non-Executive and Independent) with effect from January 28, 2026. In terms of Regulation 17(1C) of Listing Regulations, the said appointment was duly approved by the shareholders of the Company by way of special resolution passed through postal ballot on March 28, 2026. Further, the Board is of the opinion that Mr. Bhavesh Mahajan possesses the requisite qualifications, knowledge, experience and proficiency and has the necessary expertise in the relevant fields. The Board is also satisfied that he possesses the highest standards of integrity.

Cessation

• Mr. Kiran Kumar Verma (DIN: 07415375) ceased to be an Independent Director of the Company and also ceased to be the Chairperson of Nomination & Remuneration Committee and a Member of the Audit Committee of the Company with effect from the close of business hours on July 26, 2025, pursuant to his resignation due to other professional commitments.

• Mr. Pankaj Takkar (DIN: 07414345) ceased to be an Independent Director of the Company and also ceased to be the Chairperson of Audit Committee, a Member of Nomination and Remuneration Committee and a Member of Corporate Social Responsibility Committee with effect from January 31, 2026, upon completion of his second consecutive term as an Independent Director.

• Mr. Ravi Shanker Singh (DIN: 02303588) ceased to be an Independent Director of the Company and also ceased to be the Chairperson of Stakeholders Relationship Committee and a Member of Nomination and Remuneration Committee with effect from January 31, 2026, upon completion of his second consecutive term as an Independent Director.

• Mr. Kartik Kapur (DIN: 08966816) ceased to be an Independent Director of the Company with effect from the close of business hours on June 02, 2026 pursuant to his resignation due to other professional commitments.

The Board of Directors places on record its sincere appreciation for the valuable guidance and contributions made by Outgoing Directors during their association with the Company.

ii.) RETIREMENT BY ROTATION

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Aditya Arora and Mrs. Anju Arora, directors retire by rotation at the ensuing Annual General Meeting and offer themselves for reappointment.

iii.) Key Managerial Personnel: The following are the Key Managerial Personnel of the Company for the year:

Sr. No.	Name of Person	Designation
1.	Mr. Ramesh Kumar	Managing Director
2.	Mr. Ajay Kumar Arora	Whole Time Director
3.	Mr. Aditya Arora	Whole Time Director
4.	Mrs. Anju Arora	Whole Time Director
5.	Mrs. Geeta Arora	Whole Time Director
6.	Ms. Gurpreet Kaur	Company Secretary

11) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the Financial Year 2025-26, 12 meetings of the Board of Directors of the company were held and the details of which are given in the Corporate Governance Report which is enclosed with directors report as "Annexure E". The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

12) COMMITTEES OF THE BOARD

The Board has constituted various committees to support the Board in discharging its responsibilities. The following four committees are constituted by the Board:

AUDIT COMMITTEE

The Audit Committee presently comprises Mr. Bhavesh Mahajan as the Chairperson and Mr. Vinod Kumar Sharma and Mr. Aditya Arora as Members. During the year under review, Mr. Kiran Kumar Verma ceased to be a Member of the Audit Committee with effect from July 26, 2025, consequent to his resignation from the Board. Accordingly, Mr. Vinod Kumar Sharma, who was appointed as an Independent Director of the Company with effect from July 26, 2025, was appointed as a Member of the Audit Committee w.e.f. July, 26, 2025. Further, Mr. Pankaj Takkar ceased to be the Chairperson and a Member of the Audit Committee with effect from January 31, 2026, upon completion of his second term as an Independent Director. Consequently, Mr. Bhavesh Mahajan, who was appointed as an Independent Director of the Company w.e.f. January 28, 2026, was appointed as the Chairperson of the Audit Committee w.e.f. February 1, 2026. The details of the terms of reference of the Audit Committee, the meetings held during the year and the attendance of the Members thereat are provided separately in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee presently comprises Mr. Vinod Kumar Sharma as the Chairperson and Mr. Bhavesh Mahajan and Mr. Preetmohinder Singh Bedi as Members. During the year under review, Mr. Kiran Kumar Verma ceased to be the Chairperson and a Member of the Nomination and Remuneration Committee with effect from July 26, 2025, consequent to his resignation from the

Board. Accordingly, Mr. Vinod Kumar Sharma, who was appointed as an Independent Director of the Company w.e.f. July 26, 2025, was appointed as the Chairperson of the Nomination and Remuneration Committee w.e.f. July 26, 2025. Further, Mr. Pankaj Takkar and Mr. Ravi Shanker Singh ceased to be the Members of the Nomination and Remuneration Committee w.e.f. January 31, 2026, upon completion of their second term as Independent Directors. Consequently, Mr. Preetmohinder Singh Bedi, who was appointed as an Independent Director of the Company w.e.f. January 1, 2026, and Mr. Bhavesh Mahajan, who was appointed as an Independent Director of the Company w.e.f. January 28, 2026, were appointed as Members of the Nomination and Remuneration Committee w.e.f. February 01, 2026. The details of the terms of reference of the Nomination and Remuneration Committee, the meetings held during the year and the attendance of the Members thereat are provided separately in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee presently comprises Mr. Preetmohinder Singh Bedi as Chairperson and Mrs. Geeta Arora and Mrs. Anju Arora as members. During the year under review, Mr. Ravi Shanker Singh ceased to be the Chairperson and a Member of Stakeholders Relationship Committee w.e.f. January 31, 2026, upon completion of his second term as an Independent Director. Consequently, Mr. Preetmohinder Singh Bedi, who was appointed as an Independent Director of the Company w.e.f. January 01, 2026 was appointed as the Chairperson of the Committee with effect from February 01, 2026. The details of the terms of reference of the Stakeholders Relationship Committee, the meetings held during the year and the attendance of the Members thereat are provided separately in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee ("CSR Committee") is duly constituted in terms of the requirements of the Companies Act, 2013. During the year under review, Mr. Pankaj Takkar ceased to be a member of the Corporate Social Responsibility Committee w.e.f. January 31, 2026, upon completion of his second term as an Independent Director of the Company. Consequently, Mr. Bhavesh Mahajan, who was appointed as an Independent Director of the Company w.e.f. January 28, 2026 was appointed as a Member of the CSR Committee w.e.f. February 01, 2026. During the financial year 2025-26, one meeting of CSR committee was held on March 30, 2026. The composition of CSR Committee and attendance of members at the meeting are as follows:

Name	Category	Meetings held during 2025-26	No. of Meetings Attended
Geeta Arora	Chairperson	1	1
Aditya Arora	Member	1	1
Bhavesh Mahajan	Member	1	1

13) MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met on 31^st March 2026 inter alia, to

a) review the performance of the Non-Independent Directors and the Board of Directors as a whole;

b) review the performance of the Managing Director of the Company, taking into account the views of Executive Directors and Non-Executive Directors;

c) assess the quality, content and timeliness of the flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

14) DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company has one subsidiary company Kwality Pharmaceuticals Africa, Limitada at Maputo Province, Mozambique which is mainly engaged in the Pharmaceuticals business. The Board reviewed the affairs of the Companys subsidiary during the year at regular intervals. In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and its subsidiary, which forms part of this Annual Report. Further, a statement containing the salient features of the financial statements of the Companys subsidiary, in Form AOC-1, as required under the Companies Act, 2013, forms part of the Financial Statements and is included in the Annual Report. During the year under review, no company became or ceased to be a Subsidiary, Joint Venture or Associate Company of the Company.

15) MECHANISM FOR EVALUATING BOARD MEMBERS:

Pursuant to the provisions of Section 134(3)(p) of the Companies Act, 2013 ("the Act"), read with Rule 8(4) of the Companies (Accounts) Rules, 2014, and the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board has carried out an annual evaluation of its own performance, the performance of individual Directors and the performance of its Committees.

A structured questionnaire was prepared after taking into consideration the inputs received from the Directors. The evaluation covered various aspects of the functioning of the Board and its Committees, including, inter alia, the adequacy of the composition of the Board and its Committees, the effectiveness of the Boards processes and functioning, Board culture, quality and timeliness of information provided to the Board, execution and performance of the Boards duties and responsibilities, effectiveness of governance practices and the overall contribution of the Board towards the growth and governance of the Company.

The performance of the Committees was evaluated by the Board after seeking inputs from the respective Committee Members. The evaluation was based on various criteria, including the composition of the Committees, adequacy and frequency of Committee meetings, effectiveness of the Committees functioning, discharge of their respective roles and responsibilities and the quality of recommendations made by the Committees to the Board.

The performance of individual Directors was evaluated on the basis of various criteria, including their attendance and participation in the meetings of the Board and its Committees, contribution to the deliberations and decision-making process, adherence to the applicable provisions of law and the Companys policies, exercise of duties with due and reasonable care, skill and diligence, acting in good faith and in the best interests of the Company and its stakeholders, and such other parameters as considered appropriate by the Board.

In addition, the performance of the Managing Director was evaluated by the Board on the key aspects of his role, including leadership, strategic direction, achievement of business objectives, operational and

financial performance and overall contribution towards the growth and sustainable development of the Company.

Further, in accordance with the applicable provisions of the Act and the Listing Regulations, the Independent Directors, at their separate meeting held without the presence of the Non-Independent Directors and members of the management, evaluated the performance of the Non-Independent Directors and the Board as a whole, taking into account the views of the Executive Directors and NonExecutive Directors.

16) FAMILIARISATION PROGRAMME FOR BOARD MEMBERS

The Company has in place a structured Familiarization Programme for its Independent Directors, which aims to familiarize them with the Company, its business, operations, industry, business model, organizational structure and the environment in which the Company operates. The Programme also provides the Independent Directors with periodic updates on the Companys strategy, business performance, financial position, key developments, risk management framework, internal control systems and such other matters as may be relevant for enabling them to effectively discharge their roles and responsibilities.

The Independent Directors are also apprised of their roles, rights, responsibilities and duties under the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable laws and regulations. The Familiarization Programme is conducted through presentations, meetings, periodic updates and interactions with the Managing Director, Senior Management and other functional heads of the Company.

The details of the Familiarization Programme imparted to the Independent Directors, including the disclosures required under the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are available on the website of the Company at https://www.kwalitvpharma.com/assets/Disclosure%20under%20Regulation%2046/Familiarization%20 Programmes%20imparted%20to%20Independent%20Directors.pdf

17) STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS

The Company had received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under Regulation 16 (1)(b) of Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company and in the opinion of the Board, the Independent Directors fulfil the conditions specified under the Act and the Listing Regulations and are Independent of the management of the company.

18) POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of the Directors, the senior management and their remuneration. The remuneration policy is stated in the Corporate Governance Report.

19) WHISTLE BLOWER POLICY

Pursuant to the Section 177(9) and (10) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated

Whistle Blower Policy for vigil mechanism for Directors and Employees to report the management about the unethical behavior, fraud, improper practice or violation of the Companys Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. It gives a platform to the whistle blower to report any unethical or improper practice (not necessarily violation of law) and to define processes for receiving and investigating complaints. The mechanism provides adequate safeguards against victimization of employees and directors who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in exceptional cases. The Whistle Blower Policy is available on the website of the Company at https://www.kwalitypharma.com/assets/CORPORATE%20POLICIES /Whistle-Blower-Policy.pdf

20) VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) and (10) of the Companies Act, 2013, the Company has established a Vigil Mechanism to provide a mechanism for Directors and Employees to report genuine concerns relating to unethical behaviour, actual or suspected fraud, violation of the Companys Code of Conduct or any other improper or unethical practices.

The Vigil Mechanism provides adequate safeguards against victimization of persons who avail of the mechanism and also provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The Company affirms that no person has been denied access to the Audit Committee during the financial year under review.

21) RISK MANAGEMENT

The Company has in place a robust and comprehensive Risk Management Framework for identification, assessment, evaluation, monitoring and mitigation of various risks associated with its business and operations. The framework is designed to identify and assess risks on a continuous basis and to ensure that appropriate mitigation measures and internal controls are implemented to manage such risks effectively.

Considering the nature of the pharmaceutical industry, the Company is exposed to various risks, including regulatory and compliance risks, product quality and safety risks, manufacturing and operational risks, supply chain and procurement risks, risks relating to availability and pricing of raw materials, market and competition risks, research and development risks, intellectual property risks, information technology and cybersecurity risks, financial and liquidity risks and environmental, health and safety risks. The Company has established appropriate policies, procedures and internal control systems to identify, evaluate, monitor and mitigate these risks.

The Board of Directors periodically reviews the risk assessment and mitigation measures and monitors the implementation and effectiveness of the Risk Management Framework. The Audit Committee also reviews the adequacy and effectiveness of the Companys risk management and internal control systems, wherever applicable.

The Companys Risk Management Framework is reviewed periodically and is aligned with its business objectives, regulatory requirements and overall growth strategy. The Board is of the opinion that there are no risks which, in its assessment, may threaten the existence of the Company.

22) STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the rules framed thereunder, the Members of the Company, at the 41^st Annual General Meeting held on September 24, 2024 had appointed M/s Vijay Mehra & Co., Chartered Accountants, Amritsar (FRN: 001051N) as the Statutory Auditors of the Company for a period of five consecutive years commencing from the conclusion of the 41^st Annual General Meeting until the conclusion of the 46^th Annual General Meeting of the Company.

23) AUDITORS REPORT

M/s VIJAY MEHRA & CO., Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the F.Y 2025-26, which forms part of the Annual Report. The Statutory Auditors Report on the Financial Statements of the Company for FY 2025-26 does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Statutory Auditors of the Company have not reported any fraud as specified under section 143(12) of the Act, in the year under review.

24) COST AUDITORS

Pursuant to Section 148(3) of the Companies Act, 2013, M/s Verma Khushwinder & Co., Cost Accountants, Jalandhar, were appointed as the Cost Auditors of the Company for the financial year 202526 by the Board of Directors and their remuneration was ratified by members at the 42^nd Annual General Meeting of the Company.

Further, the Board of Directors has appointed M/s Verma Khushwinder & Co. as the Cost Auditors of the Company for the financial year 2026-27 and has also fixed their remuneration. The Board has recommended the remuneration approved in its meeting, for ratification by the shareholders in the ensuing AGM of the Company.

The Company has maintained the Cost Records as specified by the Central Government under Section 148(1) of the Act.

25) SECRETARIAL AUDITORS

Pursuant to the amended provisions of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, based on the recommendation of the Audit Committee, appointed M/s Rishi Mittal & Associates, Practicing Company Secretaries (Membership No. 12613 and Peer Review Certificate No. 2486/2022), as the Secretarial Auditors of the Company for a term of five (5) consecutive financial years, i.e., from FY 2025-26 to FY 2029-30, commencing from the conclusion of the 42^nd Annual General Meeting ("AGM") until the conclusion of the 47^th AGM of the Company. The said appointment was subsequently approved by the Members of the Company at the 42^nd AGM.

The Secretarial Audit Report for Financial Year 2025-26 forms part of the Annual report as "Annexure C" to the Boards report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

26) DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In view of the profits and turnover of the Company, your Company was required to undertake CSR projects during the year 2025-26 under the provisions of section 135 of the Companies Act, 2013 and the rules made thereunder. As part of its initiatives under Corporate Social Responsibility (CSR)", the Company has undertaken various activities, which are in accordance with CSR Policy of the Company and Schedule VII of the Companies Act, 2013.The Board has approved a CSR policy on the recommendations of the CSR Committee. The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility) Rules, 2014 is set out at Annexure-D forming part of this Board Report.

27) REPORT ON CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of the Corporate Governance aligned with the best practices. In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate governance along with a certificate from practicing company secretary on its compliance forms an integral part of this Boards Report.

A report on Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations is provided in a separate section and is annexed to this Report and marked as "Annexure E".

28) MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of the operations and performance of the Company is set out in the Management Discussion and Analysis Report pursuant to Regulation 34 Part-B of Schedule V of the (Listing Obligations and Disclosure Requirements)Regulations, 2015 which forms part of the Annual Report for the year under review as "Annexure F".

29) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

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.

30) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All Related Party Transactions that were entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no related party transactions made by the Company with the Promoters, Directors and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

The Board of Directors of the Company has approved the criteria for giving the omnibus approval by the Audit Committee within the overall framework of the Policy on Related Party Transactions. Omnibus

approval was obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at arms length basis.

The transactions with the related parties have been disclosed in the financial statements. During the year the company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with policy of the Company on material related party transactions or under section 188 (1) of the Act. Thus disclosure in Form AOC-2 is not required.

31) COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

Your Directors state that they have devised proper systems to ensure compliance with the Secretarial Standards and that such system are adequate and operating effectively. During the year under review, the Company has complied with the provisions of all the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under section 118 of the Companies Act, 2013.

32) MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

33) DEPOSITS

Your Company has not accepted any deposits from the public during the year under review, within the meaning of Section 73 of the Companies Act, 2013 (the Act) read with the Companies (Acceptance of Deposits) Rules, 2014, and no amount of principle or interest on deposits from the public is outstanding as on the date of Balance Sheet.

34) SHARE CAPITAL

During the year under review, there was no change in the paid-up equity share capital of the Company. The paid-up equity share capital of the Company as on March 31, 2026, stood at Rs 1,037.62 Lakhs.

35) PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BY TRUSTEES FOR THE BENEFIT OF EMPLOYEES

The company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees as per Rule 16(4) of Companies (share capital and debentures) Rules, 2014.

36) ISSUE OF SWEAT EQUITY SHARES

The Company has not issued any sweat equity share during the financial year in accordance with the provisions of Section 54 of Companies Act, 2013 read with Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014.

37) ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any equity shares with differential voting rights during the financial year as per Rule 4(4) of Companies (Share capital and debentures) Rules, 2014.

38) ISSUE OF EMPLOYEE STOCK OPTION

The company has not issued any employee stock option during the financial year as per Rule 12 of Companies (share capital and debentures) Rules, 2014.

39) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has comprehensive and adequate internal financial controls system for all major processes including financial statements to ensure reliability of reporting. The system also helps management to have timely data/feedback on various operational parameters for effective review. It also ensures proper safeguarding of assets across the Company and its economical use. The internal financial controls system of the Company is commensurate with the size, scale and complexity of its operations. The systems and controls are periodically reviewed and modified based on the requirement.

The Company has an internal audit function which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It is also responsible for assessing and improving the effectiveness of risk management, control and governance process. The scope of Internal Audit is well defined and documented and the audit committee reviews the observations of the Internal Audit critically. The composition and working of the audit committee forms part of the Corporate Governance Report.

Internal audits are conducted on a quarterly basis by the Internal Auditors, covering the Companys major units, business operations and key processes, with a view to independently assess the adequacy and effectiveness of the existing internal controls. The reports and observations of the Internal Auditors are periodically reviewed by the Management, and appropriate corrective and preventive actions are initiated, wherever required, to strengthen the internal control framework and enhance the effectiveness of the existing systems and processes. During the year under review, no material weakness or significant deficiency in the Companys internal control systems was observed or reported by the Internal Auditors.

40) COMPANY SECRETARY AND COMPLIANCE OFFICER

Ms. Gurpreet Kaur (Membership No. 52091) is the Company Secretary, Key Managerial Personnel and Compliance Officer of the Company.

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

The Company has in place a policy on Prevention, Prohibition and Redressal of Sexual Harassment at

workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. An Internal Complaints Committee has been set up to redress the complaints received regarding sexual harassment. Your Company did not receive any complaints during the period under review.

42) PROHIBITION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities. The Insider Trading Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on the Companys website at https://www.kwalitypharma.com/assets/CORPORATE%20POLICIES /Code%20of%20Practice%20and%2 0Procedure%20for%20fair%20disclosure%20of%20UPSI.pdf

43) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review, no significant or material orders were passed by any regulator, court or tribunal which could impact the going concern status of the Company or its future operations.

44) TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

(IEPF)

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

45) DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors confirm that:

i. in the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. 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 true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2026 and of the profit of the Company for that period;

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

iv. The Directors had prepared the annual accounts on a going concern basis;

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

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

46) POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Based on the recommendation of Nomination & Remuneration Committee, the Board of Directors approved and adopted a Policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and other employees of the Company as required under Section 178(3) of the Act. The Remuneration Policy on the appointment and remuneration of Directors and Key Managerial Personnel provides a framework based on which our human resources management aligns their recruitment plans for the strategic growth of the Company. The policy may be accessed under the Investor Relations section on the website of the Company at the web link

https://www.kwalitypharma.com/assets/CORPORATE%20POLICIES /Nomination%20 %20Remuneratio n%20Policy.pdf

47) POSTAL BALLOT

During the year under review, the Members of the Company passed Special Resolutions through Postal Ballot approving the appointment of Mr. PreetMohinder Singh Bedi and Mr. Bhavesh Mahajan as Independent Directors of the Company.

48) CASH FLOW STATEMENT

In due compliance of the listing agreement and in accordance with the requirements prescribed by SEBI, the cash flow statement is prepared and is appended to this Annual Report.

49) HUMAN RESOURCES

The Company recognizes that its employees are its most valuable asset and a key driver of its sustained growth and success. The Company is committed to fostering a professional, inclusive, safe and collaborative work environment that encourages employee engagement, continuous learning, innovation and overall development.

The Company focuses on attracting, developing and retaining competent talent and provides its employees with opportunities for skill enhancement, professional growth and career development. Regular training and development programmes are conducted to enhance technical, functional and behavioural competencies and to promote awareness of quality standards, regulatory requirements, good manufacturing practices, safety and other relevant areas.

The Company continues to maintain cordial and harmonious industrial relations across its operations. The Companys human resource policies and practices are designed to promote employee welfare, equal opportunity, performance-based development and a culture of integrity, accountability and teamwork. The Company places due emphasis on employee health, safety and well-being and strives to provide a safe, healthy and supportive workplace. The Company acknowledges and appreciates the commitment, dedication and valuable contribution of its employees at all levels towards the growth and continued success of the Company.

50) STATEMENT ON COMPLIANCE WITH MATERNITY BENEFITS:

The Company complies with the applicable provisions of the Maternity Benefit Act, 1961, extending all statutory benefits to eligible women employees, including paid maternity leave, continuity of salary and service during the maternity leave period, and post maternity support such as nursing breaks and flexible return-to-work options, as applicable. Your company remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

51) OTHER DISCLOSURES

The Company does not have any Employees Stock Option Scheme in force and hence particulars are not furnished, as the same are not applicable. No proceedings against the Company is initiated or pending under the Insolvency and Bankruptcy Code, 2016. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof - Not Applicable. During the year under review, the Statutory Auditor, Cost Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee and / or Board under section 143(12) of the Act.

52) INDUSTRIAL RELATIONS

The Company continued to maintain cordial and harmonious industrial relations throughout the year under review. The Company recognizes that its employees are a key contributor to its growth and success and remains committed to fostering a positive, safe, inclusive and collaborative work environment.

53) ENVIRONMENT, HEALTH AND SAFETY

The Company remains committed to conducting its operations in an environmentally sustainable and socially responsible manner. During the year under review, all applicable environmental and safety regulations were complied with. Regular safety audits, training sessions, and medical check-ups were conducted to ensure workplace safety and employee well-being. Waste disposal, emissions, and effluent treatment were managed as per statutory norms, and energy conservation measures were implemented across operations.

54) ACKNOWLEDGEMENTS:

The Board of Directors places on record its sincere appreciation and gratitude for the continued support, trust and cooperation extended by the Companys Members, customers, suppliers, business associates, bankers, financial institutions, regulatory authorities and other stakeholders. The Board also acknowledges and appreciates the commitment, dedication and valuable contributions of the employees and workers at all levels towards the growth and sustained performance of the Company. The Board looks forward to their continued support and cooperation in the years ahead.

	For and on Behalf of the Board
	Sd/-	Sd/-
	(RAMESH KUMAR)	(AJAY KUMAR ARORA)
Place: Amritsar	Managing Director	Whole Time Director
Date: 08th August, 2026	DIN: 00462656	DIN: 00462664