Granules India Ltd

TO THE MEMBERS OF GRANULES INDIA LIMITED,

The Board of Directors presents the Company's thirty-fourth Annual Report and the Company's audited financial statements (standalone and consolidated) for the financial year ended March 31, 2025.

The Company's financial performance for the year ended March 31, 2025 is summarised below:

H ( in million)

Note: The above figures are extracted from the standalone and consolidated financial statements of the Company.

Standalone Financial Summary: On a standalone basis, the revenue from operations was H 30,301.63 million in FY 2024-25 as against H 37,550.91 million for FY 2023-24 and the net profit after tax was H 3,193.36 million in FY 2024-25 as against H 4,359.18 million for FY 2023-24.

Consolidated Financial Summary: On a consolidated basis, the revenue from operations was H 44,816.08 million in FY 2024-25 as against H 45,063.67 million for FY 2023-24 and the net profit after tax was H 5,015.16 million in FY 2024-25 as against H 4,053.10 million for FY 2023-24.

For more details, please refer to the Management Discussion and Analysis report.

On a standalone basis, the Finished Dosages (FD) business contributed the largest share of revenue of the Company at 65.20% while Pharmaceutical Finished Intermediates (PFI) and Active Pharmaceutical Ingredients (API) contributed 14.68% and 20.12% respectively while it was 56.71%, 17.12% and 26.17% for FD, PFI and API respectively for the FY 2023-24.

In FY 2024-25, the Company on a standalone basis filed seven ANDAs with the USFDA, nine MAA's in the European region and one OTC application in Canada. The Company also filed six US DMFs, which will be used to build future revenue from the API business. The Company received six USFDA approvals and one approval in Canada. The management believes that it will continue to strengthen its position through dedicated research and the launch of new products. The Company launched nine products in the US market.

Vertical integration has always been the strength and focus area of the Company. It will continue its focus on its core business and strengthen it by enhancing its market presence through backward integration strategies, improving operational efficiencies and continuous supply chain management. The non-core business will also be given equal focus and the Company shall endeavour towards adding new products, cost leadership and most importantly offering reliable and consistent services to all the customers. The Company's goal of transforming more of its business into the finished dosage business will continue and with this objective, the Company will continue to grow as an integrated Pharmaceutical Company sustainably and responsibly.

The Board of Directors has recommended a final dividend of H1.50 /- per equity share (Face value H 1/- per equity share) for the financial year 2024-25, same as the dividend paid in the previous financial year.

The dividend payout is in accordance with the Company's Dividend Distribution Policy. The Dividend Distribution Policy of the Company may be accessed on the Company's website at https://granulesindia.com/wp-content/uploads/pdf/Dividend-Distribution-policy.pdf.

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. There has been no change in the business of the Company.

The authorized share capital of the Company is 50,50,00,000 equity shares of H 1/- each. The paid-up share capital is 24,25,43,716 equity shares of H 1/- each.

The Company had allotted 1,75,000 equity shares of H 1/- each during the year upon the exercise of an equal number of stock options by the employees pursuant to the Employees Stock Option Scheme(s) of the Company.

In terms of Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, unclaimed dividends amounting to H 10,16,484/- (Ten Lakhs Sixteen Thousand four hundred and eighty four rupees only) pertaining to the final dividend for the financial year 2016-17 and up to the third interim dividend for the financial year 2017-18 was transferred during the year under review to the Investor Education and Protection Fund established by the Central Government. Further, during the year under review, the Company transferred 14,897 equity shares to the Investor Education and Protection Fund relating to the investors who have not claimed any dividend for the last seven consecutive years.

Thedetailsoftheinvestorswhosedividendamountandsharesare transferred are available on the website of the Company athttps:// granulesindia.com/investors/investor-resources/unclaimed- dividend-shares-transferred-to-iepf/.

Mrs. Chaitanya Tummala, Company Secretary & Compliance Officer is designated as the Nodal Officer under the provisions of IEPF. The contact details can be accessed on the website of the Company at https://granulesindia.com/.

Management's Discussion and Analysis Report for the year under review, as stipulated under regulation 34(2) of the Listing Regulations, is presented in a separate section, forming part of the annual report.

Granules USA, Inc., a wholly-owned foreign subsidiary of the Company, caters to the_business-to-business segment of the

US market. During the FY_ 2023-24, the Company achieved a turnover of H_ 8,119.36_ million for FY_ 2024-25 against the turnover of H_7,187.96_million for FY 2023-24_and the profit after tax is H (179.25) million against H_(188.37)_million for FY 2023-24.

Granules Consumer Health, Inc. (GCH) is a wholly-owned subsidiary of Granules USA, Inc. GCH primarily focuses on marketing over-the-counter (OTC) medications to retailers. GCH also operates an USFDA-approved packaging facility in Manassas, Virginia, USA to support its business.

Granules USA, Inc., together with GCH has been merged with Granules Pharmaceuticals, Inc. with effect from April 01, 2025. After the merger, the legal entity of GCH has been converted to an LLC.

Granules Pharmaceuticals, Inc. (GPI), a wholly-owned foreign subsidiary of the Company located in Virginia, USA focuses on formulation R&D. During the FY 2024-25, the Company achieved a turnover of H20,740.81 million against the turnover of H_16,203.76_million for FY 2023-24_and the profit after tax is H 1,877.40 million against H_589.89_million for FY 2023-24.

During the year FY_2024-25, GPI filed_two_ANDAs with USFDA, approvals for which are awaited. During the year under review, GPI launched six products under its label.

Granules Europe Limited, a wholly-owned foreign subsidiary of the Company was dissolved voluntarily with effect from March 18, 2025 due to a strategic change in the business model of the Company.

Granules Life Sciences Private Limited is a wholly-owned Indian subsidiary of the Company located in Hyderabad, India. This facility has a_finished dosage capacity of 10 billion per annum.

Granules CZRO Private Limited is a wholly-owned Indian subsidiary of the Company established for manufacturing green chemicals. It has successfully commissioned the pilot plant for Dicyandiamide (DCDA) at Visakhapatnam and is developing a first-of-its-kind continuous process for DCDA production.

In addition, the Company is developing alternate technologies for para-aminophenol (PAP) production under continuous process mode to enable decarbonisation of Paracetamol production. Efforts are also underway to adopt green energy and green molecule manufacturing technologies aimed at reducing the overall carbon footprint and achieving net-zero emissions by 2050.

Granules Peptides Private Limited was incorporated as a wholly-owned Indian subsidiary of the Company in the month of March, 2025 for the acquisition of 100% equity stake in M/s. Senn Chemicals AG, a Switzerland-based Company that specialises in custom peptide development & manufacturing, supporting global clients across the Pharmaceuticals, Cosmetics and Theragnostic industries from early development to commercial production. The acquisition was completed in April 2025.

The Company is in the process of changing its name to M/s. Ascelis Peptides Private Limited.

The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at https://granulesindia.com/wp-content/uploads/2024/03/ Policy-on-Material-Subsidiaries.pdf.

The Company has no joint venture or associate Company during the period under review.

No other Company except M/s. Granules Peptides Private Limited has become or ceased to be a Company's subsidiary, joint venture or associate Company during the period under review.

As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies is prepared in Form AOC-1 and it forms part of the consolidated financial statements.

The consolidated financial statements of the Company and its subsidiaries for FY 2024-25 are prepared in compliance with section 129(3) of the Companies Act, 2013 and regulation 34 of the Listing Regulations and in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statements together with the auditor's report thereon form a part of this annual report. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company and its subsidiaries as approved by their respective Boards. As per the provisions of section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries on its website at https://granulesindia.com/investors/financial-reports/annual-accounts-of-subsidiaries-jvs/ and a copy of separate audited accounts of its subsidiaries will be provided to the members at their request till the date of the Annual General Meeting of the Company.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India.

Pursuant to the requirement of section 134(5) of the Companies Act, 2013, with respect to the Director's Responsibility Statement, the Board of Directors of the Company to the best of their knowledge and ability hereby confirm that: a) in the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards have been followed and there are no material departures from the same;

b) accounting policies have been selected 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 at March 31, 2025 and of the profit and loss of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis for the financial year ended March 31, 2025;

e) adequate internal financial controls for the Company to follow have been laid down and these are operating effectively; and

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

The Company is committed to maintaining the highest standards of corporate governance and adhering to the corporate governance requirements set out by the Securities and Exchange Board of India (SEBI). The report on corporate governance as stipulated under the Listing Regulations forms an integral part of this report. The requisite certificate from the secretarial auditor of the Company confirming compliance with the conditions of corporate governance is attached to the report on corporate governance.

The Business Responsibility & Sustainability Report for the year under review, as stipulated under regulation 34(2) (f) of the Listing Regulations, is presented in a separate section, forming part of the annual report.

All related party transactions entered by the Company during the financial year 2024-25 with related parties were in the ordinary course of business and are on an arm's length basis. During the year, except for the wholly-owned subsidiaries, the Company had not entered into any transaction with related parties which could be considered material in accordance with the policy of the Company on the materiality of related party transactions.

The Policy on the materiality of related party transactions and dealing with related party transactions as approved by the

Board may be accessed on the Company's website at https:// granulesindia.com/wp-content/uploads/2025/02/Granules-Related-Party-Transactions-Policy-Updated-24.01.2025.pdf

The particulars of transactions with related parties referred to in section 188(1) are prepared in Form No. AOC-2 pursuant to clause (h) of sub-Section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is annexed herewith as Annexure IV to the Board's report.

The details of the transactions with related parties were also provided in the notes to the financial statements.

The Sustainability & Corporate Social Responsibility Committee is comprised of four members out of which two are Independent Directors. The details of the constitution of the Committee and its meetings are provided in the corporate governance report. The CSR activities of the Company are governed through the Corporate Social Responsibility Policy (CSR Policy) approved by the Board and in compliance with Schedule VII of the Act. The CSR Policy may be accessed on the Company's website at https://granulesindia.com/wp-content/uploads/pdf/other-information/8328CSR%20Policy.pdf

During the year under review, the Company has spent H 118.90 million on CSR activities. The annual report on CSR activities is annexed herewith as Annexure I to the Board's report.

During the year under review, the Committee comprised three members and the details of the constitution of the Committee and its meetings are provided in the corporate governance report. The Chairman of the Committee and all other members are Independent Directors, thereby resulting in independent and unbiased decisions.

The Performance Evaluation and Remuneration Policy framed by the Committee and approved by the Board is directed towards rewarding the performance of Executive and Non-Executive Directors, Key Managerial Personnel and Senior Management Personnel of the Company based on a review of achievements periodically. The Performance Evaluation and Remuneration Policy may be accessed on the Company's website at https:// granulesindia.com/wp-content/uploads/2023/06/performance-evaluation-and-remuneration-policy-2023.pdf

The Company has a Risk Management Committee of the Board and the details of the Committee and its terms of reference are set out in the corporate governance report.

The Risk Management Committee has been entrusted with the responsibility to:

(a) oversee and approve the Company's enterprise risk management framework;

(b) oversee all the risks that the organization faces such as financial, operational, sectoral, sustainability (particularly,

ESG-related risks), information, cyber security risks or any other risk as may be determined by the Committee;

(c) ensure that appropriate methodology, processes, and systems are in place to monitor, evaluate and mitigate risks associated with the business of the Company.

The Company has a proper process for risk management.

Internal financial controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes. An assurance of the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by external consultants on behalf of the management at least once a year. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

The Company continues to engage M/s. Dhanunjaya & Haranath, Chartered Accountants as its internal auditors. During the year, the Company continued to implement its suggestions and recommendations to improve internal controls. Their scope of work includes a review of the operational efficiency, the effectiveness of systems & processes, compliance and assessing the robustness of the internal control systems in all areas of operations and the financial closure process. Internal auditor's findings are discussed and suitable corrective actions are taken as per the directions of the Audit Committee on an ongoing basis to improve the performance of the Company.

The Company's internal control systems are well established and are commensurate with the nature of its business, the size and complexity of its operations. The Audit Committee reviews the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations. The recommendations/suggestions of the internal auditors are discussed in the Audit Committee meetings.

Assessment and appointment of members to the Board are based on a combination of the criteria that include ethics, personal and professional stature, domain expertise, gender diversity and specific qualifications required for the position. While appointing the Independent Directors, the potential Board member is also assessed on the basis of the independence criteria defined in Section 149(6) of the Act, and regulation 16(1)(b) of the Listing Regulations.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. K.B. Sankar Rao, (DIN: 05167550) Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment.

The Board recommends the above re-appointment to the shareholders. The notice convening the 34^th Annual General Meeting to be held on August 07, 2025 sets out the details.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act and the Listing Regulations.

The Board of Directors has complete access to the information within the Company. Independent Directors have the freedom to interact with the Company's management. Interactions happen during the Board / Committee meetings when executives of the Company are asked to make presentations about the performance of the Company. Apart from this, they also have independent interactions with the statutory auditors, the internal auditors and external advisors appointed from time to time. Further, they meet without the presence of any management personnel and their meetings are conducted to enable the Independent Directors to discuss matters about the Company's affairs and put forth their combined views to the Board of Directors of the Company.

The following have been designated as the key managerial personnel of the Company pursuant to section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Dr.KrishnaPrasadChigurupati-ChairmanandManagingDirector Dr.KandirajuVenkataSitaramRao-JointManagingDirector&CEO Mrs. Uma Devi Chigurupati - Executive Director Mr. Harsha Chigurupati - Executive Director Mrs. Priyanka Chigurupati - Executive Director Mr. Mukesh Surana - Chief Financial Officer Ms. Chaitanya Tummala - Company Secretary

The Company has devised a policy for the performance evaluation of the Independent Directors, Board, Committees and other individual Directors and also includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for annual evaluation of the performance of the Board, its Committees and individual Directors was carried out.

The performance of the Board and individual Directors was evaluated by the Board after seeking input from all the Directors. The criteria for performance evaluation of the Board included aspects such as Board composition and structure, the effectiveness of Board processes, contribution to long-term strategic planning, etc. The performance of the Committees was evaluated by the Board after seeking input from the Committee Members.

In a separate meeting, the Independent Directors evaluated the performance of Non-Independent Directors and the performance of the Board as a whole including the Chairman of the Board.

The Company's Employees Stock Option Schemes viz. ESOS-2009 & ESOS-2017 have been in place and the Company has made grants under ESOS-2009 & ESOS-2017 to the eligible employees of the Company and its subsidiaries. The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Schemes. The Company did not make any grant under ESOS- 2017 during the FY 2024-25. There has not been any material change in the Employee Stock Option Schemes during the financial year under review. The Schemes and their implementation are in line with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations") as amended thereof.

The applicable disclosures as stipulated under the SEBI guidelines as of March 31, 2025 (cumulative position) about the Employee's Stock Option Schemes are herein under-provided. The issue of equity shares pursuant to the exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Scheme. There has not been any material change in the Employee Stock Option Schemes during the period under review. The Schemes and their implementation are in line with the SBEB Regulations as amended thereof.

Under regulation 13 of the SBEB Regulations, a certificate from M/s. Saurabh Poddar & Associates, Practicing Company Secretaries is annexed herewith as Annexure-II to the Board's report.

The details of the stock options granted/vested/exercised under the Granules India Limited – ESOS 2009 approved by the members in the 18^th Annual General Meeting and Granules India Limited –ESOS 2017 approved by the members in the 26^th Annual General Meeting, are given below:

M/s. S.R. Batliboi & Associates LLP, a Firm of Chartered Accountants, Hyderabad was appointed as the statutory auditors of the Company for a term of 5 (five) consecutive years, at the 31^st Annual General Meeting held on July 27, 2022. They have confirmed that they are not disqualified from continuing as auditors of the Company.

The notes on the financial statement referred to in the auditors' report are self-explanatory and do not call for any further comments. The auditors' report does not contain any qualification, reservation, adverse remark or disclaimer.

The Board has appointed M/s. Saurabh Poddar & Associates, Company Secretaries, to conduct a secretarial audit for the financial year 2024-25. The secretarial audit report of the Company and its material unlisted Indian subsidiary for the financial year ended March 31, 2025 is annexed herewith as Annexure III to the Board's report. The secretarial audit report does not contain any qualification, reservation or adverse remark.

Subject to the approval of the members, the Board on the recommendations of the Audit Committee, approved the appointment of M/s. Saurabh Poddar & Associates, Company Secretaries (Registration No. S2012AP177700) as the secretarial auditor of the Company for a period of 5 (five) consecutive years from the conclusion of 34^th AGM till the conclusion of the 39^th AGM. Further, Mr. Saurabh Poddar, Proprietor of M/s. Saurabh Poddar & Associates, Company Secretaries had confirmed that he meets the criteria for appointment specified in regulation 24 (A) of listing regulations, section 203 and all other applicable provisions of the Act. Further, the Company has also received a copy of the Peer Review Certificate issued by the Institute of Company Secretaries of India to the said auditor and a declaration that the firm is not disqualified for the appointment under the Act & listing regulations.

Six meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance report, which forms part of this report.

The Audit Committee is comprised of four (4) Members out of which three (3) are Independent Directors and one (1) is an Executive Director. During the year under review, five Committee meetings were held, details of which are provided in the Corporate Governance report. During the year under review, there were no instances when the recommendations of the Audit Committee were not accepted by the Board.

The Company has established a mechanism for Directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud, or violation of the Code. It also provides adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. During the year, no person was denied access to the Audit Committee.

The Vigil Mechanism & Whistleblower policy may be accessed on the Company's website at https://granulesindia. com/wp-content/uploads/2025/02/GIL-Whistle-blower-policy-Jan-2025.pdf

A declaration regarding compliance with the code of conduct signed by the Company's Joint Managing Director & CEO is published in the Corporate Governance report, which forms part of the annual report.

Particulars of loans given, investments made, guarantees given and securities provided are provided in the standalone financial statement (Please refer to Note No.4A, 4B, 7C and 26(b) to the standalone financial statement).

The particulars relating to the conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are annexed herewith as Annexure V to the Board's report.

Pursuant to section 92(3) read with section 134(3)(a) of the Act, the Annual Return as of March 31, 2025 is placed on the website of the Company and may be accessed on the Company's website at https://granulesindia.com/investors/ notice-disclosures/annual-returns/.

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed herewith as Annexure VI to the Board's report.

In terms of the provisions of section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, as amended thereof, a statement showing the names and other particulars of the employees drawing remuneration over the limits set out in the said rules forms part of this report.

Considering the first proviso to section 136 (1) of the Act, the annual report, excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection by the members at the registered office of the Company or through electronic mode during business hours on working days up to the date of the forthcoming 34^th AGM of the Company. Any member interested in obtaining a copy thereof may write to the Company Secretary in this regard.

The Directors further state that the remuneration paid to the Key Managerial Personnel and Senior Management Personnel is as per the Company's Performance Evaluation and Remuneration Policy.

Mrs. Priyanka Chigurupati has received a consideration for settlement of employee stock option of H 57.04 million from Granules Pharmaceuticals, Inc., a wholly-owned foreign subsidiary of the Company in the Financial year ended on March 31, 2025.

The Company has complied with the provisions relating to the maintenance of Cost Records as specified by the Central Government under section 148 of the Companies Act, 2013 during the year under review.

The Company has a Policy on "Prevention of Sexual Harassment of Women at Workplace" for the matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" and constituted an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaints were pending at the beginning of the year. During the year under review, one concern/complaint was reported and resolved. No complaint was pending for more than ninety days and as of the end of the financial year.

The Company regularly conducts awareness programs for the employees.

No disclosure or reporting is required in respect of the following matters, as there were no transactions on these items during the year under review:

Details relating to deposits covered under Chapter V of the Act.