Pharmaids Pharmaceuticals Ltd Management Discussions

A. Industry Structure and Developments

Contract Research Development & Manufacturing Organisations (CRDMO) have very well established their value proposition globally and more importantly in India with very large addressable market. Your Company aims to build a globally competitive CRDMO business, confirming to international quality standards and making a difference by creating brand value. These services encompass pre-clinical and clinical research, discovery services, and other related activities within biotechnology, pharmaceuticals, medical devices, agro-chemical and nutritional products. Presently the subsidiary entities, namely Adita Bio Sys Private Limited and Spring Labs, have established Pre Clinical Services and Laboratory animal breeding business with excellent infrastructure, very good science talent coupled with internationally acceptable certifications like GLP and A2LA and is currently servicing large Indian and International customers. Your Company and the subsidiaries intend to enhance the execution capabilities and the service offerings which in turn will result in higher revenues and profitability. The progress on this plan will be communicated to the members through the appropriate communication channels.

1. Enhance market presence with increased service & product offerings.

Building upon its existing market presence, Your Company plans to further expand its reach by launching its business in the Good Laboratory Practices (GLP) Developmental Services, Drug Discovery & Laboratory animals services.

2. Build or acquire Infrastructure

Your Company is actively looking to enhance the infrastructure available to provide the increased service & product offerings. The progress on the same will be communicated to the members at appropriate timelines.

C. Performance

Your Company services customers operating in Medical Devices, Pharmaceutical, Biopharma and Agro-Chem industries. Each of these industries are large in their own right and has large pool of target customers. While these industries are prone to cyclical, regulatory and market risks, your company has created a broad base of customers both in India and outside. This helps us in mitigating and balancing the impact of such risks faced by our customers. During the Financial Year, at the group level, we have built relationships with about 80 institutional customers, including 25 international customers. Our business development team endeavors to add more such customers every year. While we are incurring the cost of building, this exercise of relationship building is expected to create the required base to offer our services and products, which is expected to last for several years. Despite the positive outlook for the medical devices, pharmaceuticals, biopharma and agro-chem market, each of these industries also face challenges such as increasing regulatory scrutiny and pricing pressures, as well as the need to demonstrate the value and cost-effectiveness of their products. One of the important aspects of managing such challenges is making innovative and better products, which require investment in R&D. Your Company is well positioned to support their R&D efforts.

D. CRDMO Outlook: Positive Factors

The size and opportunities for CRDMO is well documented and available in the public domain today for everyone to understand. Increasing number of businesses are outsourcing their R&D as well as Manufacturing activities for several reasons. Several research reports available in the public domain estimates the global size of the CRDMO opportunity at around US$ 500 Billion, with share of Indian organisations at about 2%.

Indian CRDMOs have seen transformation over the last few decades, from offering routine services in the early years to highly scientific and complex services and products today. India has advantage of large talent pool of international stature and lower costs as well. This has played to the advantage of

Indian CRDMOs and each of the company has seen healthy growth year on year.

Your Company has required management expertise to leverage this opportunity and is working on the same.

E. Risks and Concerns

Your Company and its subsidiaries operate in the CRDMO industry, which is subjected to several regulatory compliance requirements. Constant monitoring and continuous adherence to those requirements requires diligent and meticulous planning and supervision. Apart from the regulatory requirements, meeting the customer compliance requirements is also very important. Your Company and its subsidiaries undergoes frequent audits by the certification/regulatory agencies like NGCMA, A2LA, ISO, CCESEA etc. as well as customer audits. Also, evaluation parameters can change with new requirements being announced by such agencies and customers. Hence, being compliant to all these requirements is very important. Accordingly, your Company and its subsidiaries invest adequate time, manpower and resources to stay adherent in all these aspects. Your company and its subsidiaries also face the uncertainties of market dynamics based on customer preferences, changing geopolitical scenarios and competition from other companies. Hence robust market facing approach is practiced by your company and its subsidiaries.

F. Internal Control Systems and their Adequacy

Your Company has established comprehensive Internal Control Systems with well-defined compliance guidelines, enabling smooth operations with a reasonable level of assurance. These internal controls serve to protect the Companys assets, monitor cost structures, ensure sound financial and accounting controls, and adhere to accounting standards. The system incorporates continuous monitoring, routine reporting, checks and balances, purchase policies, authorization and delegation procedures, and regular audits. To support these internal controls, the Company maintains an Internal Audit Team and conducts periodic reviews under the managements supervision. The Audit Committee convenes regularly to assess the adequacy and scope of the internal audit function, discuss significant findings, and address any abnormal occurrences. The system undergoes continuous improvement and modification to align with changes in business conditions, statutory requirements, and accounting standards. Your Company has adopted policies and procedures covering all financial, operating and compliance functions. These controls have been designed to provide reasonable assurance over:

1. Effectiveness and Efficiency of operations

2. Prevention and detection of fraud and errors

3. Accuracy and completeness of the accounting records

4. Timely preparation of reliable financial information

5. Safeguarding assets from unauthorized uses or losses

6. Compliance with applicable laws and regulations

This framework is sound in design and is continuously evaluated for effectiveness and adequacy. The management is committed to ensuring an effective internal controls environment, which provides assurance of compliance with internal policies, applicable laws, and regulations, ensures the accuracy of records, promotes operational efficiency, protects resources and assets and overall minimize the risks.

G. Discussion on financial performance with respect to operational performance

During F.Y. 2025-26, the revenue from operations was about Rs. 1060.25 lakhs. The Company reported a Loss (after tax) of Rs. 1043.72 lakhs during the year against loss of Rs.727.92 lakhs in the previous year. Your Directors continue to explore new business opportunities aimed at enhancing the Companys growth and profitability. Efforts are being directed towards strengthening operations and achieving improved financial performance in the coming years.

H. Material Development in Human Resources / Industrial Relations Front, including number of employees employed

The number of employees as on 31st March 2026 was 12 (Twelve) in the Company on standalone level;. The number of employees as on 31st March 2026 at the group level (including all subsidiaries) was 127 (one hundred and twenty seven). The Companys growth is predominantly attributed to the competence and quality of its human resources. Our work environment fosters a challenging and performance-oriented atmosphere, acknowledging employees potential by offering ample opportunities. We have diligently refined our hiring process to ensure discipline and effectiveness. Prioritizing the acquisition and retention of talent aligned with the Companys goals remains a key focus area.

I. Details of Significant change in the Key Financial Ratios:

J. Disclosure of Accounting Treatment

The financial statements for the year ended March 31, 2026, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015, and other relevant provisions of the Act. There has been no deviation from the prescribed accounting treatment in the preparation of these financial statements. All accounting policies have been applied consistently and are in line with applicable Ind AS requirements, ensuring a true and fair view of the companys financial performance and position.