Sun Pharma Advanced Research Company Ltd Directors Report

DIVIDEND DISTRIBUTION POLICY

ANNUAL RETURN

SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY

As on March 31, 2026, the Company has two wholly owned subsidiaries, namely Genokine Biotech Limited, incorporated under the Companies Act, 2013 on July 04, 2025, and SPARCLIFE Inc., incorporated in Delaware, USA on September 25, 2023.

Pursuant to the provisions of Section 129(3) of the Act, a separate statement containing the salient features of the financial statements of the Companys subsidiaries in prescribed Form AOC - 1 is attached as Annexure 1 and forms part of this report.

SHARE CAPITAL

During the year under review there has been no change in the capital structure of the Company. The paid-up capital of the Company as of March 31, 2026 is H 32,45,21,588/- (Thirty-Two Crores Forty-Five Lakhs Twenty-One Thousand Five Hundred and Eighty-Eight Only)

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The following changes occurred in the composition of the Board of Directors of the Company during the FY 2025-26:

Appointments:

• Ms. Rekha Warriar (DIN:08152356) and Mr. Venkateswarlu Jasti (DIN:00278028) were appointed as Additional Independent Directors with effect from May 19, 2025 and their appointment as Independent Directors of the Company was approved by members at the 20^th Annual General Meeting of the Company held on August 12, 2025.

Cessation/ Retirement:

• Ms. Bhavna Doshi (DIN:00400508) and Dr Ferzaan Engineer (DIN: 00025758) retired from the Board as Independent Directors with effect from August 12, 2025.

Retirement by rotation:

Dr. Rajamannar Thennati (DIN: 01415412), a Non-Executive, NonIndependent Director of the Company, will retire by rotation at the ensuing 21^st Annual General Meeting, to be held on August 10, 2026 and he has not offered himself for reappointment.

After the year end and up to the date of this Boards Report, the following developments have taken place in the Senior Management and Board of Directors of the Company:

1. Dr. Shravanti Bhowmik has resigned from the post of Vice President- Operations Management of the Company with effect from the close of business hours on March 31, 2026.

2. Mr. Narendra Lakkad has been appointed as Head of Corporate Development and Operations Management with effect from April 01, 2026.

3. Dr. Nitin Dharmadhikari retired from the post of Chief Operating Officer of the Company, with effect from the close of business hours on June 30, 2026.

4. Ms. Shanta Gupta retired from the post of Functional Head - Human Resources & Administration of the Company, with effect from the close of business hours on June 30, 2026.

5. Mr. Prasanna Deshmukh has been appointed as the Functional Head - Human Resources & Administration and designated as a Senior Management Personnel, with effect from July 1, 2026.

6. Mr. Anil Kumar Raghavan, Chief Executive Officer will be appointed as Managing Director and Chief Executive Officer (DIN: 03548731) of the Company effective from August 11, 2026 subject to the approval of the shareholders at the ensuing 21^st Annual General Meeting, to be held on August 10, 2026 and he shall be liable to retire by rotation.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under section 134(5) read with section 134(3)(c) of the Act, with respect to Directors Responsibility Statement, it is hereby confirmed that:

a) 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;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as of March 31, 2026 and of the profit of the Company for the year ended on that date;

c) 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;

d) The Directors have prepared the Annual Accounts on a going concern basis;

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

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has 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 Act read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.

In terms of the requirements under the SEBI Listing Regulations, the Board has identified list of key skills, expertise and core competencies of the Board, including the Independent Directors, details of which are provided in the Corporate Governance Report forming part of this Annual Report.

Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have registered themselves with the Independent Directors Databank maintained by Indian Institute of Corporate Affairs (IICA).

In the opinion of the Board, all the Independent Directors of the Company satisfy the criteria of independence as defined under the Act, rules framed thereunder and the SEBI Listing Regulations, and that they are independent of the Management of the Company.

POLICY ON DIRECTORS AND SENIOR MANAGEMENT APPOINTMENT AND REMUNERATION

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and also takes into consideration recommendation received, if any, from a board member. The Committee also ensures that the incumbent fulfils such other criteria with regard to age and other qualifications as laid down under the Act or other applicable laws.

The Board, on the recommendation of the Nomination and Remuneration Committee, has framed a policy for selection, appointment and remuneration of Directors. The summary of Remuneration Policy is disclosed in the Corporate Governance Report, which forms a part of this Report.

BOARD DIVERSITY

Your Company recognises and embraces the importance of a diverse Board in its success. The Board has adopted the Board Diversity Policy, which sets out the approach to the diversity of the Board. The said Policy is available on the Companys website at https://sparc.life/statutory-disclosures/policies-and-codes/

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTOR

The Company believes that the process of performance evaluation at the Board level is pivotal to its Board Engagement and Effectiveness. The Policy and criteria for Board Evaluation is duly approved by Nomination and Remuneration Committee which is in line with the SEBI Guidance Note on Board Evaluation. This process is conducted through structured questionnaires which cover various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Members strengths and contribution, execution and performance of specific duties, obligations and governance.

The Board reviewed the performance of the Individual NonIndependent Directors on the basis of criteria such as qualifications, experience, knowledge & competency, fulfilment of functions, ability to function as a team, initiative, availability and attendance, commitment (as a Director) and contribution. The performance of each individual Independent Director was reviewed, based on the additional criteria of independence and independent views & judgment. Similarly, the performance of the Chairman was evaluated based on additional criteria such as effectiveness of leadership and ability to steer the meetings, impartiality, commitment (as Chairman) and ability to keep members interests in mind.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Chairman taking into account the views of other Non- Executive Directors and performance of the Board as a whole was evaluated.

Performance evaluation of the Board, its various Committees and individual Directors including Independent Directors and Chairman was found satisfactory. The Board also assessed the fulfilment of the independence criteria as specified in Listing Regulations, by the Independent Directors of the Company and their independence from the management.

Particulars of Employees and Remuneration

Information as per Section 197(12) of the Act, read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 2 to this Report.

HUMAN RESOURCE

SPARC has a workforce of 279 dedicated individuals - 89% of which are highly qualified and experienced scientists in various fields.

Last year, there was a resource optimization activity in which 20% manpower was reduced in the departments such as Drug Discovery Preclinical Development, Drug Delivery Systems, Quality Assurance and Operations Management. Two departments - Bioinformatics and Partnerships & Portfolio Strategy were closed. The entire optimization exercise was concluded by 31^st March 2026.

The manpower optimization helped to reduce redundant roles and optimize work, project efforts and operational costs. This activity also helped to consolidate more financial power and streamline the business. The Company is committed to focus on its people strategies to deliver on its key priorities and implement more engagement activities and reward mechanisms to retain talent.

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

In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, SPARC is committed to fostering a safe, respectful and a harassment-free workplace environment. SPARC strongly believes in gender neutrality and encourages hiring resources from all genders ensuring we create an environment free of any form of discrimination and harassment.

During the financial year ended March 31, 2026, there was no complaint received for sexual harassment. Also, there are no complaints pending as at the end of the financial year.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The organization conducted awareness programs aimed at promoting a culture of respect and inclusivity. We continue to remain dedicated to maintaining a zero-tolerance approach towards sexual harassment and ensuring the safety and well-being of all our employees.

AUDIT REPORTS AND AUDITORS Audit reports

The Auditors Report for financial year ended March 31, 2026, does not contain any qualification, reservation, or adverse remark. The report is enclosed with the financial statements in this Integrated Annual Report.

The Secretarial Audit Report in the Form No. MR-3 for the financial year ended March 31, 2026 is annexed as Annexure 3. The Secretarial Audit Report for the year does not contain any qualification or reservation except a remark, as follows,

BOARD MEETINGS

5 (Five) Board Meetings of the Board of Directors were held during the financial year. The dates of the Board meeting and the attendance of the Directors at the said meetings are provided in the Corporate Governance Report, which forms a part of this Annual Report.

COMMITTEES OF THE BOARD

As on March 31, 2026, the Board has 7 (seven) Committees, namely, Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Fund Management Committee and Securities Allotment Committee. The details pertaining to the meetings and composition of the Committees of the Board are included in the Corporate Governance Report, which forms a part of this Annual Report.

During the year under review, all recommendations made by the Committees (including Audit Committee) were accepted by the Board.

RISK MANAGEMENT

The Board of Directors has developed and implemented a comprehensive Risk Management Policy, which lays down the procedure to identify, monitor and mitigate the key elements of risks that threaten the existence of the Company. Further, in compliance with the requirements of Regulation 21 of the Listing Regulations as amended from time to time, the Board of Directors of the Company has constituted a Risk Management Committee to oversee risk mitigation measures in the Company.

The details of composition of Risk Management Committee are included in the Corporate Governance Report which forms a part of this Annual Report.

The Risk Management Committee reviews, at regular intervals, the status of key risks and steps taken by the Company, to mitigate such risks.

INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are an integral part of the risk management process which in turn is a part of Corporate Governance addressing financial reporting risks. The Company has in place a well- defined organizational structure and adequate internal controls for efficient operations which is cognizant of applicable laws and regulations, particularly those related to protection of intellectual properties, resources, assets, and the accurate reporting of financial transactions in the financial statements. The Company upgrades these systems on continuous basis.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility Committee. The details of membership of the Committee and the meeting(s) of the Committee held during the year are given in the Corporate Governance Report which forms a part of this Annual Report.

Since the Company has incurred losses during the three immediately preceding financial years, the Company was not required to spend on CSR activities during the financial year ended March 31, 2026. However, in compliance with the requirements of Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR Activities as per prescribed format, is annexed as Annexure 5.

CREDIT RATING

The credit rating of the securities/ instruments/ loans, credit facilities and other borrowings of the Company as on March 31, 2026 was as follows:

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report on the operations of the Company forms an integral part of this Report and gives detail of the overall developments, performance and state of affairs of the Companys businesses, during the financial year 2025-26 and the same is given in a separate part of this Annual Report.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintaining the highest standards of corporate governance and adherence to the corporate governance requirements set out by the Securities and Exchange Board of India (SEBI) and the Companies Act, 2013. The Company strives to achieve fairness for all stakeholders and to enhance long-term value to members. In compliance with Regulation 34 of the SEBI Listing Regulations, a report on Corporate Governance and the Certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance are attached to the report on Corporate Governance which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

DISCLOSURE UNDER THE MATERNITY BENEFIT ACT, 1961

Your Board affirms that it has complied with the applicable provisions of the Maternity Benefit Act, 1961, and the rules made thereunder. The Company has in place appropriate systems and policies to provide maternity benefits and related entitlements to eligible women employees, in accordance with the statutory requirements. The Company continues to endeavour to provide a supportive and inclusive work environment for women employees.

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

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

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

There are no significant or material orders passed by the Regulators or Courts or Tribunals during the year which may impact the going concern status of the Companys future operations.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company is committed to maintaining the highest standards of ethical conduct, integrity, and transparency across all its operations. The Code of Conduct provides the foundation for ethical behaviour and serves as a guide for employees, directors, and other stakeholders in conducting business responsibly.

In line with this commitment, the Company has established a robust Whistle blower Policy / Vigil Mechanism, approved by the Board and administered with appropriate independence. The mechanism enables employees and other stakeholders to report concerns

relating to unethical behaviour, fraud, violations of law or policy, and other misconduct, without fear of retaliation.

The Audit Committee provides oversight of the vigil mechanism and reviews cases, trends, and remediation actions. Management leverages insights from whistle blower cases to strengthen controls, promote ethical culture, and reinforce accountability across the organisation

OTHER DISCLOSURES

Disclosure under section 43(a)(ii) of the Companies Act, 2013

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Disclosure under section 54(1)(d) of the Companies Act, 2013

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Unpaid Dividend & Investor Education and Protection Fund (IEPF)

There was no transfer of unpaid and unclaimed amount to IEPF during the year under review.

Disclosure of proceedings pending or application made under Insolvency and Bankruptcy Code, 2016

There are no proceedings initiated/ pending against your Company under the Insolvency and Bankruptcy Code, 2016, and there is no instance of one-time settlement with any Bank or Financial Institution.

Disclosure of reason for difference between valuation done at the time of taking loan from bank and at the time of one time settlement

There was no instance of onetime settlement with any Bank or Financial Institution during the year under review

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, business partners, bankers, medical professionals and business associates for their continued support and valuable co-operation. The Directors also express their gratitude to investors for the faith that they continue to repose in the Company.