Your Directors are pleased to present this Seventh Annual Report of Aarti Pharmalabs Limited ("the Company" or "APL") together
with the Audited Financial Statements for the financial year ended March 31,2026 ("year under review" or "FY 2025-26").

1. FINANCIAL HIGHLIGHTS

2. COMPANY'S PERFORMANCE

On a standalone basis, the revenue for FY 2025-26 was
' 1,79,755 Lakhs, higher by 1.48% over the previous
year’s revenue of ' 1,77,135 Lakhs for FY 2024-25. The
PAT attributable to shareholders in FY 2025-26 was
' 17,620 Lakhs compared to the PAT of ' 25,735 Lakhs
in FY 2024-25.

On a consolidated basis, the revenue for FY 2025¬
26 was ' 1,81,944 Lakhs, reduced by 13.48% over
the previous year’s revenue of ' 2,11,507 Lakhs. The
PAT attributable to shareholders for FY 2025-26 was
' 17,471 Lakhs registering the degrowth of 35.86% over
the PAT of ' 27,240 Lakhs in FY 2024-25.

3. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors are pleased to attach the Consolidated
Financial Statements pursuant to Section 129(3) of
the Companies Act, 2013 ("Act") and Regulation 34 of
the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,

2015 ("Listing Regulations"), prepared in accordance
with the provisions of the Act and the Indian Accounting
Standards ("IND AS").

4. STATE OF COMPANY'S AFFAIRS

The state of your Company’s affairs is given in the
Management Discussion and Analysis, which forms
part of this Annual Report.

5. RESERVES

The Board of Directors ("Board") of your Company has
decided not to transfer any amount to the Reserves for
the year under review.

6. DIVIDEND

During the year under review, your Board has declared
an Interim Dividend of ' 1.50 (@ 30%) per equity
share of ' 5/- each aggregating to ' 1,359.87 Lakhs.
Further, Directors are pleased to recommend the Final
Dividend of ' 2 (@ 40%) per equity share of ' 5/- each
subject to approval of the Shareholders at the ensuing

Annual General Meeting ("AGM"), aggregating to a
total Dividend of ' 3.50 for FY 2025-26, resulting in a
total payout Lakhs ' 1813.59 Lakhs (Previous Year:
' 4531.68 Lakhs). The dividend would be payable to all
Shareholders whose names appear in the Register of
Members as on Record Date.

The Dividend payout is in accordance with the Dividend
Distribution Policy, which is available on the website
of the Company. As per Regulation 43A of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations"), the top
1,000 listed companies shall formulate a Dividend
Distribution Policy. Accordingly, the Policy was adopted
to set out the parameters and circumstances that will
be taken into account by the Board in determining
the distribution of dividend to its shareholders and/or
retaining profits earned by the Company. The Policy
is available on the website of the Company and the
web link thereto ishttps://www.aartipharmalabs.com/
investors/dividend-distribution-policy-feb-2023.pdf

Pursuant to the Finance Act, 2020, dividend income
is taxable in the hands of the shareholders effective
April 01, 2020 and the Company is required to deduct
tax at source from dividend paid to the Members at
prescribed rates as per the Income Tax Act, 2025.

7. SHARE CAPITAL

Your Company’s Equity Share Capital as on March 31,
2026 was as follows:

During the year 2025-26, the Nomination and
Remuneration Committee allotted 23,127 number
of equity shares to the employees of the Company
under "Aarti Pharma Performance Stock Option Plan
2023’’ (PSOP 2023) upon exercise of the vested stock
options. Thus, Issued, Subscribed and Paid-up Capital
of the Company stands increased to ' 45,32,88,755
comprising of 9,06,57,751 equity shares of ' 5/- each.

The shares so allotted rank pari passu with the existing
share capital of the Company. Apart from the same,
there was no other change in the share capital of the
Company.

The Company has not defaulted on payment of any
dues to the financial lenders.

During FY 2025-26, the Company’s outlay towards
capital expenditure was ' 44,831 Lakhs for the
standalone Company and ' 44,831 Lakhs at the
consolidated level.

8. SUBSIDIARY/JOINT VENTURE COMPANIES

As on March 31,2026, the Company has two (2) direct
subsidiaries, namely, Aarti Pharmachem Limited and
Aarti USA Inc. and one Joint Venture Company, namely,
Ganesh Polychem Limited.

Aarti USA Inc. ceased to be a material subsidiary in
the last accounting year and continue to remain so
in the current accounting year. A policy on material
subsidiaries has been formulated and is available on
the website of the Company and the web link thereto is:
https://www.aartipharmalabs.com/investors/policy-
on-determination-of-material-subsidiary-feb-2023.pdf

During the year, the Board of Directors reviewed
the affairs of the subsidiaries and joint venture in
accordance with Section 129(3) of the Companies
Act, 2013, we have prepared consolidated financial
statements of the Company and all its subsidiaries and
joint venture, which form part of the Annual Report.

Further a statement containing salient features of the
financial statement of our Subsidiaries/Joint Venture in
the prescribed format AOC-1 is included in the Report
as Annexure-A and forms an integral part of this Report.

9. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social
Responsibility Committee ('CSRC’) in terms of the
requirements of Section 135 of the Act read with the
rules made thereunder. The composition, detailed
terms of reference of the CSR Committee, attendance
at its meetings and other details have been provided
in the Corporate Governance Report. The primary role
of this Committee is to approve the CSR activities to
be undertaken, allocate the necessary expenditure
and oversee the execution and effectiveness of these
initiatives.

The objective of the Company’s Corporate Social
Responsibility ('CSR’) initiatives is to improve the
quality of life of communities through long-term value
creation for all stakeholders.

For past years, the Company has undertaken various
CSR initiatives. The Company continues to address
societal challenges through societal development
programmes and remains focused on improving
the quality of life. The Company’s CSR initiatives
and related projects are undertaken through Aarti
Foundation, the principal implementation agency and
their implementing partners. Aarti Foundation, our

philanthropic arm, we design and implement social
initiatives that address critical societal needs and
contribute to long-term community resilience. Our CSR
approach is outcome-oriented and aligned with our
vision of building an equitable and resilient society.

During FY2025-26, the Company spent ' 565.20 Lakhs
towards its CSR activities demonstrating its unwavering
commitment to the well-being of the community and
society, the Company’s CSR initiatives are focused on
Education, Healthcare, Skill Development, Tribal Welfare
Livestock Development and Green Environment etc.
which positively impacted over 20,000 lives through
its CSR programmes and initiatives. We work to
strengthen access to quality and affordable healthcare
for communities especially around our operations.

During the year under review, our CSR initiatives were
executed in accordance with the annual action plan
previously approved by the Board.

The detailed Policy on Corporate Social Responsibility
is available on the website of the Company and the web
link

https://www.aartipharmalabs.com/investors/csr-

policy-feb-2023.pdf.

The CSR Annual Report which contains a brief note on
various CSR initiatives undertaken during the year is
annexed as Annexure-B and forms an integral part of
this Report.

10. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

Pursuant to the provisions of section 134(3)(g) of the Act,
details of loans, guarantees and investments covered
under section 186(4) of the Act are disclosed in the
notes to the Audited Standalone Financial Statements,
which forms part of the Annual Report.

11. MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 read with Schedule V to
the Listing Regulations, Management Discussion and
Analysis for the year under review is presented in a
separate section forming part of this Annual Report.

12. BOARD OF DIRECTORS & KEY MANAGERIAL
PERSONNELI. Board of Directors

Your Company actively seeks to adopt global best
practices for an effective functioning of the Board
and believes in having a truly diverse Board whose
wisdom and strength can be leveraged for creating
greater stakeholder value, protection of their
interests and better corporate governance. The
Company’s Board comprises eminent persons
with proven competence and integrity, who

bring in vast experience and expertise, strategic
guidance and leadership qualities. The Board
fulfills its fiduciary responsibilities with a steadfast
commitment to safeguarding the interests of the
Company and its stakeholders.

The Board of the Company is carefully structured
to achieve an optimal balance, consisting of
Executive and Non-Executive Directors, including
two (2) Women Independent Directors. This
composition adheres strictly to the current
provisions of the Act and the Listing Regulations
ensuring compliance with governance standards.
The details of the Board of Directors and
Committees along with their composition, number
of meetings held and attendance at the meetings
during FY 2025-26 are provided in the Corporate
Governance Report which forms part of this
Report. During the Financial Year under review
Five (5) Board Meetings were held.

Additionally, all directors of the Company have
confirmed that they are not disqualified from
being appointed as Directors, in accordance with
Section 164 of the Act.

CHANGES IN THE BOARD COMPOSITION:

With a view to strengthening executive leadership
and driving long-term strategic growth and
realignment of roles and responsibilities amongst
the promoters and based on recommendation of
the Nomination and Remuneration Committee,
the Board of Directors at their meeting held
on August 07, 2026 have re-designated

Shri Rashesh C. Gogri (DIN: 00066291) as the
Managing Director for a period of five years with
effect from October 01, 2026, subject to the
approval of the shareholders at the ensuing Annual
General Meeting (AGM) and other regulatory
approvals, if any. The Board at the same meeting
based on the recommendation of the Nomination
and Remuneration Committee have re-designated
Smt. Hetal Gogri Gala (DIN:00005499) as the
Wholetime Director, liable to retire by rotation, for
a period of five years with effect from October 01,
2026, subject to the approval of the shareholders
at the ensuing Annual General Meeting (AGM) and
other regulatory approvals, if any. The resolutions
seeking approval of the Members in this regard
have been incorporated in the Notice convening
the AGM of the Company along with brief details
about them.

I n accordance with the regulatory requirements,
Shri Rajendra V. Gogri (DIN: 00061003), Non¬
Executive and Non Independent Director of the
Company shall retire by rotation at the ensuing
Annual General meeting and is eligible for

re-appointment. However, Shri Rajendra V. Gogri
expressed his desire to not offer himself for
re-appointment at the ensuing AGM. Accordingly,
he will cease to be a Director of the Company
upon retirement by rotation at the ensuing AGM.
The Board of Directors have decided to not fill up
this vacancy.

Pursuant to Regulation 36 of the Listing
Regulations read with Secretarial Standard-2 on
General Meetings, a brief profile of the Directors
proposed to be appointed/re-appointed/re-
designated is made available, as a part of the
Notice convening this AGM.

Pursuant to the provisions of Regulation 34(3)
read with Schedule V to the Listing Regulations,
the Company has obtained a Certificate from M/s
Mehta & Mehta, Practising Company Secretaries
(Firm Registration No P1996MH007500), the
Secretarial Auditor of the Company, certifying that
none of the Directors of the Company have been
debarred or disqualified from being appointed
or continuing as Directors of companies by the
Securities and Exchange Board of India (SEBI)
or by the Ministry of Corporate Affairs or by any
such statutory authority. The said Certificate is
annexed to the Corporate Governance Report of
the Company for the FY 2025-26.

Commission to Non-Executive Directors:

Your Directors at their meeting held on May 13,
2024, on the recommendation of the Nomination
and Remuneration Committee, approved the
proposal for payment of commission to Non¬
Executive Directors as a percentage of profit.
The said proposal was approved by the
Shareholders’ at the Annual General Meeting held
on August 07, 2024. The Non-Executive Directors
of the Company are entitled to sitting fee and
commission as per the statutory provisions and
within the limits approved by the Shareholders
which was approved by the Board of Directors as
per the recommendation of the Nomination and
Remuneration Committee.

II. Key Managerial Personnel

As on the date of this Report, the Key Managerial
Personnel of the Company, in accordance with the
provisions of Section 2(51) and Section 203 of the
Act include:

1. Managing Directors;

a. Smt. Hetal Gogri Gala (additionally she
has also been designated as the Vice
Chairperson)

b. Shri Narendra J. Salvi

2. Shri Piyush Lakhani, Chief Financial Officer.

3. Shri Jeevan Mondkar, Company Secretary
and Compliance Officer

Other than above, during the year under review,
there was no change in the Key Managerial
Personnel of the Company.

13. INDEPENDENT DIRECTORS

The Company has received requisite declarations
from all the Independent Directors of the Company
confirming that they meet the criteria of independence
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 also confirmed that they are not aware
of any circumstance or situation that exists or may
be reasonably anticipated that could impair or impact
their ability to discharge their duties with an objective
independent judgment and without any external
influence. These declarations include confirmations
that they are not barred from holding the office of
director by any SEBI order or any other authoritative
body. In the opinion of the Board, all the Independent
Directors satisfy the criteria of independence as
defined under the Act, rules framed thereunder and the
Listing Regulations, and that they are independent of
the Management of the Company. Furthermore, they
have affirmed their adherence to the Code of Conduct
outlined in Schedule IV of the Act.

I n the opinion of the Board, all Independent Directors
possess requisite qualifications, experience, expertise,
proficiency and hold high standards of integrity for the
purpose of Rule 8(5)(iii a) of the Companies (Accounts)
Rules, 2014. In terms of the requirements under the
Listing Regulations, the Board has identified a list of key
skills, expertise and core competencies of the Board,
including the Independent Directors, details of which
are provided as part of the Corporate Governance
Report.

As required under Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules,

2014, all the Independent Directors (including those
appointed during the year) have registered themselves
with the Independent Directors Databank and also
completed the online proficiency test conducted by the
Indian Institute of Corporate Affairs.

Familiarisation Programme for Independent Directors

All the Independent Directors of the Company are
made aware of their roles and responsibilities through
a formal letter of appointment, which also stipulates
various terms and conditions of their engagement.

The Senior Management makes presentations giving
an overview of the Company’s strategy, operations,
products, markets in each Board Meeting.

Pursuant to Regulation 25(7) of the Listing Regulations,
the Independent Directors of the Company were
familiarised and the details of familiarisation
programmes imparted to them during the year, are
placed on the website of the Company and the web
link athttps://www.aartipharmalabs.com/regarding-
independent-directors

14. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) and 134(5) of the
Act, the Directors of your Company, to the best of
their knowledge and based on the information and
explanations received from the Company, confirm that:

a) in the preparation of the Annual Financial
Statements for the year ended March 31, 2026,
the applicable accounting standards have been
followed along with proper explanation relating to
material departures, if any;

b) 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 a true and fair view of the
state of affairs of the Company at the end of the
Financial Year and of the profit of the Company for
that period;

c) the Directors had 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 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

f) 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.

15. ANNUAL PERFORMANCE EVALUATION

The Board of Directors has carried out an evaluation of
its own performance, board committees, and individual
Directors pursuant to the provisions of the Act and the
SEBI Listing Regulations. A structured questionnaire
was prepared after taking into consideration various
aspects of the Board’s functioning, composition of
the Board and its Committees, culture, execution
and performance of specific duties, obligations and
governance. The evaluation was undertaken by way
of internal assessments, based on a combination of
detailed questionnaires and verbal discussions.

The performance of the Committees and Independent
Directors were evaluated by the entire Board of
Directors except for the Director being evaluated.
The performance evaluation of the Chairman, Non¬
Independent Directors and Board as a whole was
carried out by the Independent Directors was carried
out in a separate meeting of Independent Directors.
The NRC and Board reviewed the performance of
individual Directors on the basis of criteria such as the
contribution of the individual Director to the Board and
Committee meetings including preparedness on the
issues to be discussed, meaningful and constructive
contribution and inputs in meetings, etc.

As per the evaluation results, the directors were
satisfied with board effectiveness, experience, diversity,
expertise, quality of board discussions and board
meeting processes, etc. The Committees were also
found to be effective in terms of their composition,
functioning, competence of the members, compliance
with statutory obligations, role and responsibilities and
quality of discussions at the meetings.

The Board was satisfied that each director has diligently
discharged their responsibilities as board member of
the Company and had contributed meaningfully.

The Board of Directors expressed their satisfaction with
the outcome of evaluation and the process followed
thereof.

16. AUDIT COMMITTEE

The details of the composition of the Audit Committee,
terms of reference, meetings held, etc. are provided in
the Corporate Governance Report, which forms part of
the Annual Report. During the year under review, there
were no instances where the Board had not accepted
any recommendation of the Audit Committee.

17. AUDITORS

a) Statutory Auditor and their Report

In accordance with the provisions of Section 139 of
the Act, Gokhale & Sathe, Chartered Accountants
(Firm Registration. No. 103264W) were appointed
as the Statutory Auditors of the Company at the
4^th AGM for a term of 5 (five) years to hold office
till the conclusion of 9^th AGM to be held in the year
2028.

The Statutory Auditors’ Report forms part of the
Annual Report. The said report does not contain
any qualification, reservation or adverse remark
for the year under review. During FY 2025-26,
there were no instances of fraud which required
the Statutory Auditors to report the same to the
Central Government under Section 143(12) of Act
and Rules framed thereunder.

b) Cost Auditor and their records

I n terms of Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules,
2014, the Company is required to maintain cost
accounting records and have them audited every
year.

The Board of Directors had appointed Smt. Ketki
D. Visariya, Cost Accountants (Membership No.
16028), as the Cost Auditor of the Company for
the financial year 2026-27. The remuneration
payable to the Cost Auditor is required to be
ratified by the Shareholders. Accordingly, a
resolution seeking Shareholder’s ratification for
the remuneration payable to Smt. Ketki D. Visariya,
Cost Accountants, is included at Item No. 4 of the
Notice convening the AGM.

The Company has maintained cost records as
specified under section 148(1) of the Act.

c) Secretarial Auditor and their Report

On the recommendation of the Audit Committee
and the Board, the shareholders at the 6^th Annual
General Meeting approved the appointment and
remuneration of M/s Mehta & Mehta, Practising
Company Secretaries (FRN: P1996MH007500)
as the Secretarial Auditor for a term of Five years
commencing from Financial year 2025-26.

Pursuant to provisions of Section 204(1) of the
Act and Regulation 24A of the Listing Regulations,
the Secretarial Audit Report for the Financial
Year ended March 31, 2026 issued by CS Monali
Bhandari (COP No. 10272), of M/s Mehta &
Mehta, Practising Company Secretaries and the
Secretarial Auditor of the Company in Form MR-3
is annexed as Annexure-C and forms an integral

part of this Report. During the year under review,
the Secretarial Auditor had not reported any fraud
under Section 143(12) of the Act and therefore
disclosure of details under Section 134(3)(ca) of
the Act is not applicable.

There is no qualification, reservation or adverse
remark or disclaimer made by the Auditor in their
report.

18. RISK MANAGEMENT

The Board of Directors of the Company has already
formed a Risk Management Committee to frame,
implement, and monitor the risk management plan
for the Company.The Committee is responsible for
monitoring and reviewing the risk management plan
and ensuring its effectiveness.

The Board takes responsibility for the overall process
of risk management throughout the organisation.
Through an Enterprise Risk Management programme,
our business units and corporate functions address
risks through an institutionalised approach aligned to
our objectives.

A systematic review of risks identified is subject
to a series of focused meetings of the. The Risk
Management Committee meets periodically to review
all the key risks and assess the status of mitigation
measures.

Considering the volatility, uncertainties and
unprecedented challenges involved in the businesses,
the risk management function has gained more
importance and it is imperative to manage and address
such challenges effectively.

This is facilitated by an internal audit. The Business
risk is managed through cross functional involvement
and communication across businesses. The results
of the risk assessment are presented to the senior
management.

There have been no changes in our internal control
over financial reporting that occurred during the period
covered by this annual report that have materially
affected, or are reasonably likely to materially affect our
internal control over financial reporting. The Company
continuously strives to improve its Internal control
system.

We continue to closely monitor, assess and implement
mitigation plans in consideration of the turbulent
geopolitical and economic landscape. This work is
underpinned by foresight intelligence and scenario
planning to look further ahead and build resilience to
alternative futures. Our diverse global customer base
gives us the flexibility to react to regional changes in
demand by adjusting our sales mix into other markets,

while we may adjust product features or content should
we face supply challenges informed through our
enhanced supply chain risk management framework.

We continue to monitor and assess the global tariff
environments to manage their ramifications as
effectively as possible, and take mitigating actions
such as implementing cost discipline, pricing actions,
evaluate our offerings and improving geographical mix.

Risk Management is an integral and important aspect
of Corporate Governance. Your Company believes
that a robust Risk Management Framework ensures
adequate controls and monitoring mechanisms for
smooth and efficient running of the business. A risk-
aware Company is better equipped to maximise
shareholder value.

Your Company has always worked to be contemporary
in the application of technology for its business
processes and its interface, both within and outside
the Company. Towards this end, review of business
process, applications available and the digitisation of
process with adequate controls is an ongoing work
in progress. This calls for seamless integration with
our consumers, customers and stakeholder operating
ecosystems that can lead to a superior experience
by improving agility and responsiveness across the
business.

Cybersecurity is essential for any organisation to
protect its digital assets from cyber-attacks, data
breaches, and other security threats. Technology
plays a critical role in cybersecurity and your Company
has implemented several measures to enhance its
Cybersecurity measures on the principles of Identify,
Protect, Detect, Respond and Recover.

Your Board has adopted a Risk Management Policy,
which is available on the Company’s website athttps://
www.aartipharmalabs.com/investors/APL Risk%20
Management%20Policy.pdf

The details of the composition of the RMC, terms
of reference, meetings held, etc. are provided in the
Corporate Governance Report, which forms part of this
Report.

19. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

Your Company has robust internal financial controls
(IFC) systems, in line with the requirements of
the Companies Act 2013. This system enhances
transparency and accountability in the organisation’s
process of designing and implementing internal
controls.

Internal financial control systems of the Company
are commensurate with its size and the nature of its
operations. These have been designed to provide
reasonable assurance with regard to recording and
providing reliable financial and operational information,
complying with applicable accounting standards
and relevant statutes, safeguarding assets from
unauthorised use, executing transactions with proper
authorisation and ensuring compliance of corporate
policies.The Company continuously strives to improve
its Internal control system.

The Company has a well-defined delegation of authority
with specified limits for approval of expenditure, both
capital and revenue.

The Company has appointed Manish Modi and
Associates, Chartered Accountants as the Internal
Auditor, who periodically audits the adequacy and
effectiveness of the internal controls laid down by
the Management and suggests improvements. This
ensures that all Assets are safeguarded and protected
against loss from unauthorised use or disposition and
that the transactions are authorised, recorded and
reported diligently. Your Company’s internal control
systems are commensurate with the nature and size of
its business operations. Internal Financial Controls are
evaluated and Internal Auditors’ Reports are regularly
reviewed by the Audit Committee of the Board.

The Audit Committee also deliberates with the
management and is satisfied with the adequacy and
effectiveness of the internal financial control systems
as laid down and kept the Board of Directors informed

The Statutory Auditors Report on Internal Financial
Controls as required under Clause (i) of sub-section 3 of
Section 143 of the Act is annexed with the Independent
Auditors’ Report.

20. RELATED PARTY TRANSACTIONS

I n line with the requirements of the Companies Act,
2013 and the Listing Regulations, the Company has
a Policy on Materiality of Related Party Transactions
and dealing with Related Party Transactions which
is uploaded on the Company’s website athttps://
www.aartipharmalabs.com/investors/apl-amended-
rpt-policy-march-2026-final.pdf. During the year
under review, this Policy was amended to incorporate
the regulatory amendments. The Policy captures
framework for Related Party Transactions and intends
to ensure due and timely identification, approval,
disclosure and reporting of transactions between the
Company or its subsidiaries on one side and Related
Parties on the other, in compliance with the applicable
laws and regulations as may be amended from time to
time.

All transactions with related parties and subsequent
material modifications, if any, are placed before
the Audit Committee for its review and approval.
An omnibus approval from the Audit Committee is
obtained for the related party transactions which are
repetitive in nature, based on the criteria approved by
the Audit Committee. The Company has obtained prior
approval from the Audit Committee for all related party
transactions, except for transactions amounting to
' 5.16 Lakhs with one of the related parties, for which
ratification was obtained subsequently. A statement
of related party transactions is presented before the
Audit Committee on a quarterly basis, specifying the
nature, value and terms and conditions of transactions.
A report of factual findings arising out of the accepted
procedures carried out in regard to transactions with
Related Parties is given by the Statutory Auditors on
quarterly basis and the same is placed before the Audit
Committee.

There are no materially significant related party
transactions made by the Company with Promoters,
Key Managerial Personnel or other Designated Persons
which may have potential conflict with interest of the
Company at large.

Since all related party transactions entered into by the
Company were in ordinary course of business and
were on an arm’s length’s basis, Form AOC-2 is not
applicable to Company. Further, there were no material
related party transactions in terms of the Listing
Regulations requiring approval of the Shareholders
during the year under review.

Pursuant to Regulation 23(9) of the SEBI Listing
Regulations, your Company has filed the reports on
related party transactions with the Stock Exchanges
within statutory timelines. Besides, the details of related
party transactions are provided in the accompanying
financial statements.

21. NOMINATION AND REMUNERATION COMMITTEE
("NRC") AND NRC POLICY

Pursuant to Section 178(3) of the Act and Regulation
19 of Listing Regulations your Company has framed
a policy on Directors’ appointment and remuneration
and other matters which is available on the website of
your Company and link for the same ishttps://www.
aartipharmalabs.com/investors/nomination-and-
remuneration-policy-feb-2023.pdf

The Remuneration Policy for selection of Directors
and determining Directors’ independence sets out
the guiding principles for the NRC for identifying the
persons who are qualified to become the Directors.
Your Company’s Remuneration Policy is directed
towards rewarding performance based on review
of achievements. The Remuneration Policy is in
consonance with existing industry practice.

The composition of the Committee, attendance at its
meetings and other details have been provided as part
of the Corporate Governance Report.

Your Company has adopted a Nomination and
Remuneration Policy ("Policy") which lays down a
framework in relation to remuneration of Directors,
Key Managerial Personnel and Senior Management
of the Company. The Policy also lays down criteria for
selection and appointment of Board Members.

The Committee also plays an important role and
is responsible for administering the Stock Options
Scheme as applicable to the eligible employees of the
Company.

22. PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12)
of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is annexed as
Annexure-D and forms an integral part of this Report. As
per first proviso to Section 136(1) of the Act and second
proviso of Rule 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, the report and financial statements are being
sent to the members of the Company excluding the
statement of particulars of employees under Rule
5(2). However, these are available for inspection during
business hours up to the date of the forthcoming AGM
at the registered office of the Company. Any Member
interested in obtaining a copy of the said statement
may write to the Company Secretary at the Registered
Office address of the Company.

23. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/
INDUSTRIAL RELATIONS FRONT, INCLUDING
NUMBER OF PEOPLE EMPLOYED

At Aarti Pharmalabs Limited (APL), our focus is "Right
person for right job at right time", keeping this in
mind we recruit people with the relevant experience
and academic background and ensure long term
engagement brings results in win-win situations
for both employees as well as the organisation. We
believe our people are assets in the organisation and
invest quality time in nurturing their talent, improving
productivity consistently and providing growth paths
for them. People at APL are proud of their association
with the Company.

We firmly believe that our people are our greatest
strength and the key to our continued success. Guided

by this belief, our HR Department remains dedicated
to attracting, developing, engaging, and retaining talent
through people-centric policies and industry-leading
practices. Our consistent focus on nurturing human
capital enables us to deliver on our business goals while
fostering a culture of trust, growth, and mutual success.

Empowering Our People Through Digital
Transformation

Building directly upon the insights gathered from last
year’s comprehensive Employee Satisfaction Survey
(ESS)-which revealed a strong 75% employee
satisfaction rate-we transitioned from validation to
targeted action this year. To sustain this momentum
and honour our commitment to fostering a progressive,
agile, and high-performance work culture, the
organisation embarked on a milestone HR digitalisation
journey.

We successfully rolled out a unified digital HR
ecosystem, anchored by the implementation of PMS
(Performance Management System), a revamped
Reimbursement Module, a dedicated Mobile App, and
an advanced Learning & Development (L&D) platform.

• Performance & Execution: The automated Spine
PMS has brought unprecedented transparency,
alignment, and real-time tracking to our appraisal
and goal-setting processes.

• Efficiency & Accessibility: The introduction of the
new Reimbursement Module and the integrated
Mobile App has eliminated administrative friction,
offering our workforce seamless, on-the-go
access to essential HR services.

• Skill & Growth Culture: The modern L&D platform
ensures that continuous learning is democratised,
empowering employees across all functions and
locations to upskill at their own pace.

By converting our employees’ aspirations into digital
reality, we have not only simplified daily workflows but
also deeply enhanced employee engagement, future¬
proofing our talent architecture for the growth ahead.

Performance Appraisals & Rewarding System

Recognising and rewarding performance in a fair and
timely manner remains a cornerstone of our HR strategy.
During the year, we ensured that all employees up to the
manager level received timely performance evaluations
and corresponding rewards in April 2026. For senior
managers and above, appraisals were completed by
May 2026. Notably, the average rewards provided were
significantly higher than the previous year and exceeded
the pharmaceutical industry benchmarks published in
Deloitte's 2025-26 Pharma Report. This commitment
to market-competitive recognition strengthens our

employee value proposition and supports our efforts to
attract and retain top talent. Additionally, the appraisal
process identified key training needs, which are being
addressed through targeted development programmes.

Attrition Management

The Company recognises that optimal workforce
discipline and productivity are critical to sustaining
operational excellence. Through an appropriate
recruitment methodology, robust retention policies, and
an enriching work environment, we have consistently
strived to manage our talent architecture effectively
during a period of market-wide talent mobility, with
our attrition rate standing at 19.22% for 2025-2026. In
response to this trend, we have proactively intensified
our employee growth plans and modernised our people
practices to raise retention standards. This transition
reflects our focus on cultivating a high-performance
culture, and the heightened sense of responsibility
among our core teams continues to drive the
organisation forward.

In addition, we are committed to promoting gender
equality by increasing recruitment opportunities for
women, both at our offices and factory locations. While
the industry average for female representation stands
at 27%, over the next two years we aim to significantly
increase the number of female employees across all
levels.

Proactive Leadership & Talent Management

The Company has customised its organisational
structure to align with evolving business requirements
and to provide clarity on roles and responsibilities within
each function. We have placed strong emphasis on
strengthening second-line leadership across all critical
areas. During the year, we identified high-potential
employees at various levels and invested in preparing
them for larger roles and greater responsibilities. This
structured approach to succession planning ensures
organisational stability and enhances our readiness to
meet future challenges effectively. Clear role definitions
and functional targets further support accountability
and performance.

Developing a sustainable talent pool remains a key
priority for us. To this end, we successfully expanded
our talent pipeline by recruiting 8% of our workforce
as Graduate Engineer Trainees (GETs) in FY 2025¬
26. These young graduates undergo a structured
onboarding programme, followed by continuous
functional training modules to build the required
competencies before they assume key roles within the
Company. This initiative not only nurtures local talent
near our manufacturing facilities but also contributes
to reducing attrition by creating a steady pipeline of
skilled professionals ready to step in as needed.

Employee Engagement Initiatives

At APL, we believe that an engaged workforce is more
productive, innovative, and committed. To nurture
this engagement systematically, we introduced a
comprehensive annual event engagement calendar this
year and drove all activities accordingly. This structured
approach allowed us to successfully organise a variety
of initiatives, including inter-unit sports tournaments,
regional picnics, festival celebrations, Women’s
Day special events, and health & wellness camps.
Additionally, we continue to honour local cultural
traditions through site-specific poojas and gatherings,
which strengthen team bonding and promote a deep
sense of belonging. These efforts have played a vital
role in enhancing employee morale and remain central
to our long-term workforce retention strategies.

Way Forward

We believe that continuous learning and operational
efficiency are key to staying ahead of the competition.
To support this, we have systematically modernised our
workplace tools by implementing a series of advanced
modules within our integrated HRMS system, each
delivering distinct strategic benefits:

• Performance Management System (PMS): Drives
a high-performance culture by bringing absolute
transparency, objective goal alignment, and real¬
time tracking to our appraisal processes.

• Expenses & Reimbursement Module: Maximises
financial accuracy and slashes administrative
turnaround times through automated, paperless
claims processing.

• Learning & Development (L&D) Module:

Centralises capability building, empowering our
workforce across all locations with democratised
access to continuous upskilling.

• Dedicated Mobile App Service: Promotes
seamless, frictionless usage of HR services by
giving employees instant, on-the-go access to
their profiles, requests, and essential tools right
from their smartphones.

Feedback on evolving learning and development needs
is regularly captured through our self-appraisal system,
ensuring that our ongoing training initiatives remain
deeply relevant and impactful.

24. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo
stipulated under Section 134(3)(m) of the Act read with
Rule 8(3) of the Companies (Accounts) Rules, 2014
is given in Annexure-E and forms an integral part of this
Report.

25. AARTI PHARMA PERFORMANCE STOCK OPTION
PLAN 2023

Aarti Pharma Performance Stock Option Plan 2023
("PSOP 2023") was approved by the shareholders at the
4^th AGM of the Company held on September 14, 2023,
under which stock options would be granted to the
eligible employees in compliance with the provisions of
the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021.

During the year under review, the Company granted
42,000 options to eligible employees under PSOP
2023 as per the recommendation of the Nomination
and Remuneration Committee, at its meeting held
on May 10, 2025. Subsequent to March 31, 2026, the
Company granted 57,600 options to eligible employees
under PSOP 2023 as per the recommendation of the
Nomination and Remuneration Committee, at its
meeting held on May 25, 2026.

Your Company has received a certificate for FY 2025-26
from CS Monali Bhandari (COP No. 10272), M/s Mehta
& Mehta, Practising Company Secretaries and the
Secretarial Auditor of the Company that PSOP 2023 has
been implemented in accordance with the provisions of
the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 and the resolution passed by
the shareholders. Any request for inspection of the said
Certificate may please be sent to investorrelations@
aartipharmalabs.com

The details of the stock options granted under the
PSOP Scheme and the disclosures in compliance with
Regulation 14 of the Securities and Exchange Board
of India (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 is available on the website
of the Company athttps://www.aartipharmalabs.
com/investors/disclosure-under-reg-14-of-sebi-
regulations-fy-2025-26.pdf

26. CORPORATE GOVERNANCE

Your Company upholds a strong corporate governance
framework, built on the foundation of effective
leadership, well-defined policies, streamlined
processes, and a deeply ingrained legacy of values.
The Board, in collaboration with the management
team, establishes and drives the Company’s principles,
ensuring that business operations align with these core
values. These ethics and standards are seamlessly
woven into the Company’s culture, business practices,
disclosure policies, and stakeholder relationships,
maintaining alignment with international best practices
and exemplary corporate conduct.

Your Company has fully adhered to the mandatory
Corporate Governance requirements outlined in the
Listing Regulations. In compliance with Regulation

34 of the Listing Regulations, a dedicated Corporate
Governance Report is annexed hereto, forming
an integral part of this Report. Additionally, the
requisite certification from M/s Mehta & Mehta,
Practising Company Secretaries (Firm Registration
No P1996MH007500) is attached to the Corporate
Governance Report.

27. HEALTH AND SAFETY

At Aarti Pharmalabs Limited (APL), the health and safety
of all stakeholders—including employees, contractors,
customers, and visitors—stands as a fundamental
organisational priority. By integrating safety into every
facet of its operations, from research and development
and manufacturing to supply chain management, the
Company utilises advanced infrastructure, robust
systems, continuous training programmes, and a deep-
rooted safety culture. APL is committed to a proactive
approach in identifying and mitigating risks to maintain
a secure and compliant working environment across all
sites throughout FY 2025-26.

Governance Mechanism

Aarti Pharmalabs Limited has implemented robust
governance structures to manage its health and safety
protocols. To facilitate employee involvement and
equitable representation in safety-related decisions,
EHS Committees have been established across all
organisational levels. These groups are tasked with
assessing risks, monitoring the completion of corrective
measures, analysing incident data, and managing
escalations. The Company adopts a methodical
hierarchy for risk mitigation, focusing on elimination,
substitution, and both engineering and administrative
controls. Furthermore, a rigorous Permit to Work
protocol is maintained for high-risk operations—
including hot work, work at heights, and confined space
entry-supported by definitive safety procedures and
communication standards.

Occupational Health and Safety

Committed to high standards of occupational health
and safety, Aarti Pharmalabs Limited (APL) aligns
its operations with the ISO 45001:2018 framework.
Through the Aarti Pharma Management System
(APMS), the Company maintains an extensive
Occupational Health and Safety Management System
that applies to all employees, contractors, and visitors.

The system enforces critical protocols, including:

• Comprehensive training in chemical handling
and the correct application of personal protective
equipment (PPE).

• Strict adherence to established emergency
response procedures.

• Proactive risk identification through regular safety
drills, inspections, toolbox talks, and monthly
campaigns.

• Mandatory medical screenings during onboarding
and at periodic intervals to meet regulatory
requirements.

To enhance timely risk mitigation, APL has further
integrated a specialised software platform across
its sites to efficiently identify and resolve potential
workplace hazards.

Process Safety

To evaluate and control the risks associated with
hazardous chemical handling, APL maintains a
centralised Process Safety Laboratory utilising
sophisticated technologies like Thermal Screening
Units (TSu) and Reaction Calorimeter (RC1mx). This
internal facility produces vital information regarding
powder safety and reaction characteristics, guiding
decisions for secure processing and plant engineering.
The laboratory completed 468 TSu analyses, 132
RC1mx trials, and 133 evaluations of powder safety
throughout FY 2025-26. APL employs a systematic
four-tier framework for process safety risk assessment:
Step 1 involves Process Safety Information; Step 2
covers Hazard Checklist & HIRA; Step 3 utilises HAZOP;
and Step 4 encompasses PSSR. These stages are
further supported by occupational exposure banding
and methodologies such as FMEA, What-if analysis,
and Fault Tree Analysis. Ongoing process safety
expertise is developed across the workforce through a
combination of internal and external training initiatives.

Safety Training

To cultivate a proactive safety culture, APL facilitates
targeted and regular safety training initiatives for
its workforce. These comprehensive programmes
focus on safe work procedures, hazard identification,
the application of safety signage, and emergency
preparedness. During the 2025-26 fiscal year, the
Company successfully executed 4,339 Occupational
Health and Safety (OHS) training sessions.

Instructional delivery is managed by a combination
of external consultants and internal specialists
through various channels, including on-site safety
displays, online meetings, and traditional classroom
settings. Beyond formal training, APL reinforces safety
awareness through practical emergency drills and
dedicated safety campaigns. A key component of this
culture is the empowerment of employees, who are
encouraged to identify and report unsafe conditions
and are authorised to halt operations if they encounter
hazardous situations.

Contractor Health & Safety

To ensure all onsite activities are performed
under authorised and regulated conditions, APL
enforces rigorous safety standards for its contract
workforce. These protocols encompass mandatory
work permit systems for job authorisation and site
access, comprehensive safety induction training,
and pre-employment medical evaluations. The
Company maintains close oversight of contractors
to verify continuous adherence to established safety
benchmarks.

Customer Health & Safety

Ensuring the well-being of its clients remains a primary
objective for APL. The organisation maintains strict
alignment with international product safety benchmarks,
incorporating Globally Harmonised System (GHS)
labels and comprehensive Material Safety Data Sheets
(MSDS) into its operations. Furthermore, APL ensures
its methodologies are consistent with the European
Union’s REACH standards. The success of these safety
communication strategies and risk management
procedures is demonstrated by the fact that no
significant health or safety grievances were recorded
from customers during the 2025-26 fiscal year.

Occupational Health Centres (OHC)

In accordance with regulatory requirements, Aarti
Pharmalabs Limited (APL) delivers comprehensive
on-site occupational health services across all its
manufacturing and R&D facilities through dedicated
Occupational Health Centres (OHCs). These centres
are operated by qualified factory medical officers and
nurses, providing continuous 24x7 medical support.
A key focus of these OHCs is the management
of health risks associated with noise-intensive
machinery and exposures to corrosive chemicals,
solvents, and powders. To support rapid emergency
medical response, the facilities are equipped with
first aid resources and onsite ambulances. Under the
supervision of the Factory Medical Officer, employees
undergo regular medical surveillance via annual or
semi-annual health assessments, with follow-up care
provided to support full rehabilitation. Furthermore, all
OHCs have established mutual aid agreements with
adjacent industries and local hospitals to enhance their
emergency preparedness.

Incident Learning and Safety Culture

Through its monthly "Learning from Incidents"
forum, APL cultivates a robust safety learning culture
by reviewing and sharing incident details across
all locations to avoid recurrence. The organisation
institutionalises these lessons company-wide by
assigning Global Corrective and Preventive Actions
(CAPA). As an industry leader, APL also actively tracks

potential incidents within peer sectors and proactively
applies relevant CAPA to its own operations. Staff
members are encouraged to provide safety input via
internal software systems and anonymous suggestion
boxes. Furthermore, transparent communication and
individual accountability are promoted at every level
through open forums such as Toolbox Talks.

ENVIRONMENT

Energy Conservation & Consumption

During the current fiscal year, our aggregate energy
usage amounted to 68,166,861 gigajoules (GJ). Of
this total consumption, renewable energy sources
contributed 84,393.32 GJ. As a component of our
enduring sustainability strategy, we have launched
impactful programmes aimed at decreasing our
reliance on traditional fossil fuels. A significant number
of our facilities have moved away from furnace oil in
favour of cleaner alternatives, successfully lowering
our overall emissions. Furthermore, to advance our
renewable energy objectives, we have begun sourcing
solar-generated electricity for our Tarapur cluster from
a dedicated plant in the Akola district of Maharashtra.
This initiative is designed to utilise solar power to
balance traditional energy consumption and foster
a low-carbon operational framework throughout our
entire value chain.

Hazardous Waste Management

Aarti Pharmalabs Limited employs a systematic and
comprehensive waste management framework. We
ensure that every type of waste-whether hazardous
or non-hazardous-is meticulously segregated,
recovered, or recycled in alignment with its specific
chemical and physical characteristics. All disposal
processes strictly adhere to prevailing environmental
mandates. To minimise our ecological footprint and
maximise resource recovery, we consistently evaluate
and modernise our waste management protocols.

Water & Wastewater Management

During FY 2025-26, our aggregate water usage
totaled 461885 kiloliters (KL). This volume was
composed of both freshwater, primarily obtained
from industrial providers, and recycled or recovered
sources. Demonstrating our dedication to circular
water management, recycled water accounted for
an impressive 82.11% of our total consumption.
We persist in refining our water stewardship by
adopting sophisticated treatment methods. To ensure
responsible wastewater management, we utilise high-
efficiency systems such as Reverse Osmosis (RO) units,
Multiple Effect Evaporators (MEEs), Mechanical Vapour
Recompression (MVR), and Agitated Thin Film Dryers
(ATFD). These technologies facilitate substantial water
reclamation and minimise waste output. Furthermore,

a strict Zero Liquid Discharge (ZLD) mandate is applied
across all production facilities, guaranteeing that no
untreated effluent enters the environment and that our
operational influence on water resources is kept to a
minimum.

Product End-of-Life Management

A formal system is in place to manage the end-of-life
phase for all items produced at our sites, with each
product receiving a thorough shelf-life analysis driven
by R&D research. We provide technical expertise and
assistance for the secure, compliant treatment or
disposal of expired goods when requested by clients.
Additionally, our Extended Producer Responsibility
(EPR) initiative facilitates the systematic collection and
disposal of plastic packaging waste at the conclusion
of its lifecycle.

Our robust lifecycle management and commitment to
reducing environmental liabilities were evidenced in
FY 2025-26, during which no instances of product
end-of-life treatment were reported. This resulted
in a zero environmental footprint within this specific
category for the period.

28. BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORTING (BRSR)

The Listing Regulations mandate the inclusion of the
Business Responsibility & Sustainability Reporting as
part of the Annual Report for top 1,000 listed entities
based on market capitalisation. BRSR for the year
under review, as stipulated under Regulation 34(2) (f)
of Listing Regulations is in a separate section forming
part of the Annual Report.

29. VIGIL MECHANISM

The Vigil Mechanism as envisaged in the Act and
the Rules prescribed thereunder and the Listing
Regulations is implemented through the Company’s
Vigil Mechanism Policy. The said Policy of your
Company is available on the Company’s website at
https://www.aartipharmalabs.com/investors/vigil-
mechanism-policy-feb-2023.pdf

It enables the Directors, employees and all stakeholders
of the Company to report genuine concerns (about
unethical behaviour, actual or suspected fraud, or
violation of the Code) and provides for adequate
safeguards against victimisation of persons who
use such mechanism and makes provision for direct
access to the Chairman of the Audit Committee.

No whistle-blower complaints have been received
during the year under review.

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

The Company believes that every woman employee
should have the opportunity to work in an environment
free from any conduct which can be considered as
Sexual Harassment. The Company has Zero Tolerance
towards sexual harassment at the workplace.

The Company is committed to treating every employee
with dignity and respect. The Policy framed by the
Company in this regard provides for protection against
sexual harassment of women at workplace and for
prevention and redressal of such complaints. The
POSH Policy is gender inclusive and the framework
ensures complete anonymity and confidentiality.
The said Policy of your Company is available on the
Company’s website athttps://www.aartipharmalabs.
com/investors/prevention-of-sexual-harrasment-
policy.pdf.

Internal Complaints Committees (ICC) has been set
up to redress complaints received regarding sexual
harassment.

During the year under review, your Company has
not received any complaint pertaining to sexual
harassment. Following is the details of complaints
received, disposed and pending more than 90 days:

Additionally the Company has complied with the
provisions of Maternity Benefit Act, 1961.

Pursuant to the requirements of Rule 8(2)(ii)(b) of the
Companies (Accounts) Rules, 2014 (as amended), the
Company confirms that it has duly complied with the
provisions of the Maternity Benefit Act, 1961 during the
financial year under review.

The Company remains committed to providing a
supportive and inclusive workplace for all employees
and has ensured that all benefits and safeguards under
the said Act have been extended to eligible women
employees.

Further, awareness sessions have been conducted
to apprise employees of their rights, and appropriate
internal systems have been maintained to facilitate
timely disbursement of maternity benefits.

31. SECRETARIAL STANDARDS

The Company has generally complied with all the
applicable provisions of Secretarial Standard on
Meetings of Board of Directors (SS-1) and Secretarial
Standard on General Meetings (SS-2), issued by
Institute of Company Secretaries of India

32. DETAILS OF DEPOSITS

During the year under review, your Company has neither
invited nor accepted any deposits from the public falling
within the ambit of Section 73 of the Act and the rules
framed thereunder. The requisite return for FY 2025-26
with respect to amount(s) not considered as deposits
has been filed.

BANK LOAN FACILITIES

Your Company continues to manage its treasury
operations efficiently and has been able to borrow
funds for its operations at competitive rates. Below are
the details of Credit Ratings as on March 31,2026:

33. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return of the Company in Form
MGT-7 for financial year 2025-26, is available on the
Company’s website athttps://www.aartipharmalabs.
com/investors/annual-return-fy-?0?5-?6.pdf

34. INVESTOR EDUCATION AND PROTECTION FUND
("IEPF")

Pursuant to the demerger of pharma undertaking of Aarti
Industries Limited during FY 2022-23, proportionate
number of shares (i.e.3,13,656 shares) held by the
shareholders of Aarti Industries Limited, which were
then lying in the IEPF account, were credited to the IEPF
demat account of the Company. As at March 31, 2026,
3,06,173 (Three Lakhs Six Thousand One Hundred and
Seventy Three) equity shares are lying with IEPF. The
Final Dividend for FY 2024-25 and Interim Dividend for
FY 2025-26 accrued on such shares was credited to the
designated bank account of the IEPF authority. Further,
the final dividend for FY 2025-26, if approved by the
shareholders at the ensuing AGM, shall be credited to
the designated bank account of the IEPF authority.

Except for the above, no amount is due to be transferred
to the IEPF Account.

35. COMPLIANCE MANAGEMENT SYSTEM

Your Company has deployed a Statutory Compliance
Mechanism providing guidance on broad categories
of applicable laws and processes for monitoring
compliance.

In furtherance to this, your Company has instituted
an online compliance management system within
the organisation to monitor compliances and provide
updates to the senior management on a periodic basis.

The Audit Committee and the Board periodically monitor
the status of compliances with applicable laws.

36. SWAYAM INVESTOR SELF-SERVICE PORTAL

'SWAYAM’ is a secure, user-friendly web-based
application, developed by "MUFG Intime India Private
Limited" (Formally known as "Link Intime India Pvt
Ltd."), our Registrar and Share Transfer Agents, that
empowers shareholders to effortlessly access various
services. This application can be accessed athttps://
swayam.in.mpms.mufg.com/

37. SIGNIFICANT AND MATERIAL ORDERS PASSED BY
THE REGULATORS

During the year under review, no significant material
orders were passed by the Regulators or Courts or
Tribunals impacting the going concern status and the
Company’s operations.

38. MATERIAL CHANGES AND COMMITMENTS, IF
ANY, AFFECTING THE FINANCIAL POSITION OF
THE COMPANY OCCURRED BETWEEN THE END OF
THE FINANCIAL YEAR TO WHICH THIS FINANCIAL
STATEMENTS RELATE AND THE DATE OF THE
REPORT

There were no other material changes and commitments
affecting the financial position of the Company, which
had occurred between the end of the Financial Year to
which these financial statements relate and the date of
the Report.

39. DETAILS OF APPLICATION MADE OR ANY
PROCEEDING PENDING UNDER THE INSOLVENCY
AND BANKRUPTCY CODE, 2016 DURING THE
FINANCIAL YEAR ALONG WITH THEIR STATUS AS AT
THE END OF THE FINANCIAL YEAR

During the FY 2025-26, there was no application made
and proceeding initiated / pending by any Financial
and/or Operational Creditors against your Company
under the Insolvency and Bankruptcy Code, 2016 ("the
Code").

Further, there is no application or proceeding pending
against your Company under the Code.

40. DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF
VALUATION AT THE TIME OF ONE TIME SETTLEMENT
AND THE VALUATION DONE AT THE TIME OF
TAKING A LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the FY 2025-26, the Company has not made any
settlement with its bankers for any loan/ facility availed
or/and still in existence.

41. GENERAL DISCLOSURES

The Managing Director(s) have not received any
remuneration or commission from the subsidiary of
your Company.

Your Directors state that no disclosure or reporting is
required in respect of the following items as there were
no transactions / events on these items during the year
under review:

1. Issue of equity shares with differential rights as to
dividend, voting or otherwise.

2. I ssue of Shares (including Sweat Equity Shares)
to employees of the Company under any Scheme
save and except Employees Stock Option
Schemes (ESOP) referred to in this Report.

3. Voting rights which are not directly exercised
by the employees in respect of shares for the
subscription / purchase of which loan was given
by the Company (as there is no scheme pursuant
to which such persons can beneficially hold
shares as envisaged under section 67(3)(c) of the
Act).

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

5. There was no revision of financial statements and
Board’s Report of your Company during the year
under review.

42. ACKNOWLEDGEMENT

The Board of Directors place on record its sincere
appreciation for the dedicated services rendered
by the employees of the Company at all levels and
the constructive cooperation extended by them.
Your Directors would like to express their grateful
appreciation for the assistance and support by all
Shareholders, Government Authorities, Auditors,
Financial Institutions, Customers, Employees,
Suppliers, other business associates and various other
stakeholders.

For and on behalf of the Board
Aarti Pharmalabs LimitedNarendra J. Salvi Hetal Gogri Gala

Place: Mumbai Managing Director Vice Chairperson and Managing Director

Date: August 07, 2026 DIN: 00299202 DIN: 00005499