Your Directors are pleased to present the Thirty-Nineth (39th) Annual Report and the audited financial statements of the Company, for the financial year
ended 31.03.2026

HIGHLIGHTS OF FINANCIAL PERFORMANCE

Note: Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.

STATE OF COMPANY’S AFFAIRS:

Financial Statements: The Company has complied with the applicable
provisions of the Companies Act, 2013 (the Act) and the Securities and
Exchange Board of India (Listing Obligations & Disclosure
Requirements), Regulations, 2015 (‘the Listing Regulations'') in
preparation of Standalone and Consolidated financial statements. The
audited consolidated Balance Sheet as at 31st March, 2026, consolidated
statement of Profit and Loss for the year ended as on that date together
with the Notes and Reports of Auditors along with the Cash flow
Statement, Management Discussion and Analysis Report forms part of
the Annual Report.The financial figures have been regrouped, wherever
required, in line with disclosure requirements under Schedule III of the
Act.

a. Standalone:

During the financial year under review, the Company recorded a total
income of Rs. 31,279.99 lakhs as against Rs. 30,464.57 lakhs in the
previous financial year, reflecting a steady growth in income. Total
expenses for the year stood at Rs. 30,643.48 lakhs, compared to
Rs. 29,891.34 lakhs in the previous year.

The Company reported a net profit of Rs. 675.12 lakhs for the financial
year 2025-26 as against Rs. 779.95 lakhs in the previous financial year.
While the Company achieved growth in its total income, the marginal
decline in net profit was primarily attributable to the increase in
operating and other expenses during the year.

b. Consolidated:

On a consolidated basis, the Company recorded a total income of Rs.
31,358.91 lakhs during the financial year 2025-26 as compared to Rs.
30,528.62 lakhs in the previous financial year.Total expenses stood at Rs.
30,765.52 lakhs, as against Rs. 30,014.88 lakhs in the previous year. The
consolidated net profit for the year amounted to Rs. 632.01 lakhs,
compared to Rs. 723.67 lakhs in the previous financial year.

Brief Summary :

During the year under review, the Company''s Revenue from Operations
increased by approximately 2.6 % over the previous year, with Profit
Before Tax (PBT) amounting to Rs. 636.51 lakhs. The Profit After Tax
(PAT) stood at Rs. 675.12 lakhs, which was marginally lower than the
previous year''s level.

The Company continued to maintain a healthy revenue mix, with
exports contributing approximately 60% of the total revenue, while
domestic sales accounted for the remaining 40%, reflecting the
Company''s strong presence in both international and domestic markets.
Highlights of Company''s performance are covered in detail in the
Management Discussion and Analysis Report (MDA), included in this
Annual Report as required under ScheduleV of the Listing Regulations.

EPSa. Standalone:

The Basic Earnings per Share has decreased from Rs. 4.89 of previous
year to Rs. 4.51 in the current year 2025-26.

b. Consolidated:

The Basic Earnings per Share has decreased from Rs. 4.56 of previous
year to Rs. 3.95 in the current year 2025-26.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs, the Financial
Statements for the year ended March 31,2026 have been prepared in
accordance with the Ind AS, notified under Section 133 of the
Companies Act, 2013 read with The Companies (Accounts) Rules, 2014,
as amended from time to time. The estimates and judgments relating to
the Financial Statements are made on a prudent basis, so as to give a true
and fair view of the state of affairs and profits and cash flows of your
Company for the year ended March 31,2026.

CONSOLIDATED FINANCIAL STATEMENTS

As per Regulation 33 of the Listing Regulations and Section 129 of the
Act read with Schedule III to the Act, the Consolidated Financial
Statements of your Company for the financial year ended March 31,
2026 have been prepared in accordance with the relevant Ind AS issued
by the Institute of Chartered Accountants of India and on the basis of the
audited financial statements of your Company and the last Audited
Financial Statements of your Company''s subsidiaries as approved by
their respective Board of Directors.

NATURE OF BUSINESS

The Company continues to be engaged in development, manufacturing
and sale of specialty pharmaceutical formulations and bulk drugs with
specific emphasis on branded generics in various therapeutic segments
in India and more than 30 countries worldwide.

CHANGE INTHE NATURE OF BUSINESS, IF ANY

During the year under review, there has been no change in the nature of
business.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE
REGULATORS/ COURTS:

During the year under review, there were no significant or material
orders passed by the Regulators or Courts or Tribunals against the
Company, impacting the Company''s operations in future.

SIGNIFICANT EVENTS/ACTIONS, HAVING A MAJOR
BEARING ONTHE COMPANY’S AFFAIRS:

There are no significant events/actions during the year that may have a
major bearing on the Company''s affairs.

DIVIDEND

The Board of Directors is pleased to recommend a dividend of Rs. 1.20
per equity share of face value Rs. 10/- each (i.e., 12%), for the financial
year ended March 31,2026. The proposed dividend, if approved by the
Members at the ensuing Annual General Meeting, will involve an outflow
of approximately Rs. 1.91 crores towards dividend distribution
(excluding applicable taxes).

Dividend Distribution Policy

The provisions relating to formulation of a Dividend Distribution Policy
under Regulation 43A of the Listing Regulations are not applicable to the
Company. Accordingly, the Company has not formulated a Dividend
Distribution Policy.

TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO
THE INVESTOR EDUCATION AND PROTECTION FUND
(IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2013
read with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, as amended ("IEPF
Rules"), any dividend remaining unpaid or unclaimed for a period of
seven years is required to be transferred to the IEPF. Further, all equity
shares in respect of which dividend has remained unclaimed for seven
consecutive years are also required to be transferred to the demat
account of the IEPF Authority.

During the year under review, the Company transferred 10,915 equity
shares (having an aggregate nominal value of Rs. 1,09,150/-) to the demat
account of the IEPF Authority in respect of shareholders whose
dividends had remained unclaimed in accordance with the said
provisions. The Company also transferred an amount of Rs. 2,01,842.00
pertaining to the unpaid/unclaimed dividend for the Financial Year 2017¬
18 to the IEPF, in accordance with the applicable provisions of the Act
and the IEPF Rules.

Further, the dividend declared for the Financial Year 2024-25 at the 38th
Annual General Meeting held on September 25, 2025, in respect of
1,30,124 equity shares already held by the IEPF Authority, amounting to
''. 1,56,148.80, was remitted to the IEPF Authority during the year under
review, in accordance with the applicable provisions of the Act and the
IEPF Rules.

The details of the shareholders whose unpaid dividend and
corresponding equity shares have been transferred to the IEPF
Authority are available on the Company''s website at
www.balpharma.com

Shareholders holding shares in physical form are advised to encash their
dividend warrants promptly and claim their dividends within the
prescribed period to avoid transfer of the unpaid dividend and the
corresponding shares to the IEPF Authority in accordance with the
provisions of the Act and the IEPF Rules.

TRANSFER TO RESERVES

The Board of Directors does not propose to transfer any amounts to
the general reserves.

SHARE CAPITAL AND DEBENTURES

Pursuant to the Scheme of Amalgamation of Golden Drugs Private
Limited ("Transferor Company") with Bal Pharma Limited ("Transferee
Company"), sanctioned by the Hon''ble National Company Law Tribunal,
Bengaluru Bench, vide Order in C.P. (CAA) No. 13/BB/2024 dated 26th
March, 2025, under Sections 230 to 232 and other applicable provisions
of the Companies Act, 2013, the Authorised Share Capital of the
Company stands revised in accordance with the approved Scheme.

Prior to the amalgamation, the Authorised Share Capital of the
Company was ''.20,00,00,000 (Rupees Twenty Crores only) divided into

2,00,00,000 (Two crores only) equity shares of ''. 10/- (Rupees Ten only)
each. The Authorised Share Capital of the Transferor Company was

''.4,50,00,000 (Rupees Four Crores Fifty Lakhs only) divided into

45,00,000 (Forty-five lakhs only) equity shares of ''. 10/- (Rupees Ten
only) each.

Consequent upon the Scheme becoming effective, the Authorised Share
Capital of the Company stands revised to ''.24,50,00,000 (Rupees
Twenty-Four Crores Fifty Lakhs only) divided into 2,45,00,000 (Two
crore forty-five lakhs only) equity shares of ''. 10/- (Rupees Ten only)
each, in accordance with the terms of the Scheme sanctioned by the
Hon''ble NCLT.

During the Financial Year 2025-26, your Company did not affect any
change in Paid up Share Capital and paid up Equity Share Capital of the
Company stood at ''.. 15,92,08,720/- (Fifteen crores ninety-two lakhs
eight thousand seven hundred and twenty only) comprising of
''.1,59,20,872 (One crore fifty-nine lakhs twenty thousand eight
hundred and seventy-two only) Equity Shares of Rs.10 (Rupees Ten only)
each.

During the financial year 2025-26 the Company has not issued any
Equity Shares with differential voting rights, nor issued any sweat Equity
Shares.

During the year under review, your Company did not issue any
Debentures.

Event subsequent to financial year-end

The Board of Directors, at its meeting held on 27th May, 2026, approved
the issuance of 10,00,000 (Ten Lakh) fully convertible warrants on a
preferential basis to Mr. Shailesh Siroya, Promoter of the Company, at an
issue price determined in accordance with the applicable provisions of
the SEBI (Issue of Capital and Disclosure Requirements) Regulations,
2018. Each warrant shall be convertible into one equity share of face
value ''. 10/- each, subject to the terms and conditions governing the
issue.

The Board also approved seeking the approval of the Members of the
Company by way of a Special Resolution through Postal Ballot for the
proposed preferential issue of warrants.The issue is subject to receipt of
the requisite statutory and regulatory approvals, including the approval
of the shareholders and the Stock Exchanges, as applicable.

DEPOSITS

Your Company has not accepted any deposits from the public falling
within the purview of Section 73 of the Act read with Companies
(Acceptance of Deposit) Rules, 2014 and as such, no amount on account
of principal or interest on deposits from public was outstanding as on
the date of the balance sheet.

Disclosure as per the Companies (Acceptance of Deposits) Second
Amendment Rules, 2015 are as under:

The total amount of fixed deposits (excluding interest on Cumulative
Deposits) from public, outstanding and unclaimed as at 31st March, 2026,
was NIL.

The Company has not accepted any fresh deposits as per the provisions
of Section 73 of the Act during the current financial year.

The Company has not accepted any unsecured loan(s) from the Directors of the Company and/or relatives of the Directors,
during the year under consideration.

AMENDMENT OF MOA AND AOA

During the financial year under review, there were no amendments
made to the Memorandum of Association ("MOA") and/or the Articles
of Association ("AOA") of the Company.

However, pursuant to the Scheme of Amalgamation of Golden Drugs
Private Limited with the Company, as sanctioned by the Hon''ble
National Company Law Tribunal, Bengaluru Bench, vide Order in C.P
(CAA) No. 13/BB/2024 dated 26th March, 2025, the Authorized Share
Capital of the Company stood revised in accordance with Section
232(3)(i) of the Companies Act, 2013. Upon payment of the applicable
stamp duty, the Capital Clause (Clause V) of the Memorandum of
Association was deemed to have been amended without requiring any
separate approval of the shareholders.

Accordingly, Clause V of the Memorandum of Association now reads as
follows:

05th The Authorized Share Capital of Company of the Company is Rs.

24.50.00. 000 (Rupees Twenty-Four Crores Fifty Lakhs only) divided into

2.45.00. 000 (Two Crore Forty Five Lakhs only) equity shares of Rs. 10/-
(Rupees Ten Only) each with power to increase or decrease or reclassify
and to very, modify or abrogate any such rights , privileges or condition in
such manner as provided by resolution of the company. (Amended vide
Special Resolution passed by the members on 23.09.2019).

BOARD MEETINGS

The Board of Directors of the Company met Six (6) times during the
year under review. The details of these Board Meetings are provided in
the Report on Corporate Governance forming part of the Annual
Report. The necessary quorum was present for all the meetings. The
maximum interval between any two meetings did not exceed 120 days.

COMMITTEES OF THE BOARD

The details of composition, and meetings of the Committees of the
Board held during the year are given in the Report on Corporate
Governance forming part of the Annual Report

BOARD DIVERSITY:

Your Company believes that a diversified board will bring differences in
thought, perspective, knowledge, skill, regional and industry experience,
cultural and geographical backgrounds, age, ethnicity, race and gender
that will help us retain our competitive advantage and as a collective is
equipped to guide the business and strategy of the Company.

At present, your Company has an appropriate mix of Executive, Non¬
Executive, women and Independent Directors to maintain the
independence of the Board, and separate its functions of governance
and management. Also, one of the Independent Directors on the Board
of the Company is a woman Director.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2026, the Board of Directors of your Company
comprised of Six Directors, viz., Two Executive Directors, One Non¬
Executive director and Three Independent Directors including one-
woman Independent Director. The Composition of the Board of
Directors is in compliance with the applicable provisions of the Act and
the Listing Regulations.

Board of the Company comprises of renowned professionals from
different walks of life. They bring in diversified competencies, domain
knowledge and experience. Right combination of Executive and

Independent Directors draws fine balance of business acumen and
independent judgement on Board''s decisions. During the year under
review, none of the Non-Executive Directors had any pecuniary
relationship or transactions with the Company, other than payment of
sitting fees, commission and reimbursement of expenses, if any.

Changes in the Board of Directors and KMP:

Appointment of Whole Time Director

Mr. Ravindra Kumar Kothari (DIN: 03418320) was appointed by the
Board of Directors as an Additional Director of the Company with
effect from 05th May, 2025, based on the recommendation of the
Nomination and Remuneration Committee.

Subsequently, the Members of the Company, by way of a Special
Resolution passed through Postal Ballot July 25, 2025 approved his
appointment as a Non-Executive, Non-Independent Director of the
Company for a term of five (5) consecutive years upto 30th July 2030.

Resignation of WholeTime Director

Mr. Kotian Chittanand Damodar (DIN: 09613054), Whole-time
Director of the Company, resigned from the office of Director with
effect from 16th May, 2025, due to personal reasons.

The Board accepted his resignation and placed on record its sincere
appreciation for the valuable contributions and dedicated services
rendered by him during his tenure with the Company.

Appointment of Independent Director

Dr. Mukesh Beekamchand (DIN: 11295580) was appointed by the Board
of Directors as an Additional Director of the Company with effect from
13th November, 2025, based on the recommendation of the
Nomination and Remuneration Committee.

Subsequently, the Members of the Company, by way of a Special
Resolution passed through Postal Ballot on 07th February, 2026,
approved his appointment as a Non-Executive, Independent Director
of the Company for a term of five (5) consecutive years commencing
from 07th February, 2026 and ending on 06th February, 2031.

Re-appointment of Independent Director

Based on the recommendation of the Nomination and Remuneration
Committee and the approval of the Board of Directors, the Members of
the Company, at the 38th Annual General Meeting held on 25th
September, 2025, approved the re-appointment of Mr. Jatish Sheth (DIN:
00581963) as an Independent Director of the Company for a second
and final term of five (5) consecutive years, commencing from 28th
December, 2025 and ending on 27th December, 2030, in accordance
with the provisions of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.

Mr. Jatish Sheth was initially appointed as an Independent Director by
the Members at the 34th Annual General Meeting held on 24th
September, 2021, for a first term ending on 27th December, 2025.

Completion of tenure

Mr. H. S. Venkatesh (DIN: 01776040), Independent Director of the
Company, ceased to be a Director with effect from 30th September,
2025, upon completion of term as an Independent Director. The Board
places on record its deep appreciation and gratitude for his invaluable

guidance, leadership, and significant contributions during his tenure on
the Board.

Retirement by Rotation:

In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Articles of Association of the Company, Mr. Ravindra
Kumar Kothari (DIN: 03418320), Director of the Company, retires by
rotation at the ensuing Annual General Meeting ("AGM") and, being
eligible, has offered himself for re-appointment. Based on the
recommendation of the Nomination and Remuneration Committee,
the Board of Directors has recommended his re-appointment for the
approval of the Members at the ensuing AGM.

Mr. Himesh Virupakshya (DIN: 08554422), Director of the Company,
retired by rotation at the previous Annual General Meeting and was re¬
appointed by the Members.

Other than what is stated above, there were no changes in the
composition of the Board or Key Managerial Personnel of the Company,
during the year under review.

Event Subsequent to year-end

Mr. Abdul Basith (M.No. A70640), Company Secretary & Compliance
Officer of the Company has tendered his resignation vide his letter
dated 2nd March, 2026 and the same has been accepted w.e.f. 11th May,
2026. Mr. Abdul Basith was relieved from the services of the Company
w.e.f., close of business hours on Monday, 11th May, 2026.

Mr. Shreepada ML (M. No. A66681), was appointed as Company
Secretary and Compliance Officer of the Company pursuant to the
approval of the Board of Directors at its meeting held on 27th May 2026
to take the charge and commence his duties as the Company Secretary
and Compliance Officer (Key Managerial Personnel) of the Company
with effect from 23rd June 2026.

The Composition of the Board and the Committees along with the
meeting attendance details are provided in the Report on Corporate
Governance.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the
Board, Committees and Individual Directors. The evaluation process
among others considers attendance of Directors at the Board and
Committee Meetings, acquaintance with business, communication
within the Board members, effective participation, domain knowledge,
compliance with the internal code of conduct, vision and strategy.

This policy on the nomination and remuneration of Directors, Key
Managerial Personnel and Senior Management Personnel has been
formulated by the Nomination & Remuneration Committee and
approved by the Board of Directors of the Company. The policy is
guided by the principles and objectives as enumerated under the
provisions of the Companies Act, 2013 and the Listing Regulations, to
ensure reasonableness and sufficiency of remuneration to attract, retain
and motivate competent resources, a clear relationship of
remuneration to performance and a balance between rewarding short
and long-term performance of the Company. A copy of the policy is
uploaded on the Company''s website.

The Board carried out annual performance evaluation of itself,
Committees, individual Directors and Chairman at their Meeting held
on 11th February 2026.

Report on performance evaluation of the individual Directors, and
Committees was reviewed by the Chairman and feedback was given to
the Directors. The Board has expressed satisfaction over the overall
functioning of the Board Members and their Committees, which are in
line with the objectives and goals of the Company.

DECLARATION OF INDEPENDENT DIRECTORS:

Independent Directors of the Company have confirmed that they
continue to meet the criteria of independence as laid down under
Section 149(6) of the Act and under the Listing Regulations. They have
registered their names in the Independent Directors data-base and have
passed the proficiency test, if applicable. They have also affirmed
compliance to the Code of Conduct for Independent Directors.

Based on disclosures provided by Independent Directors, none of them
are disqualified/debarred from being appointed as Director under
Section 164 of the Act/SEBI order or any other authority and are
independent from the management.The Board is of the opinion that the
Independent Directors possess requisite qualifications, experience and
expertise in the fields of manufacturing, operations, finance, forex,
people management, strategy, sales & marketing, auditing, banking, risk
management and they hold high standards of integrity. Skill set, expertise
& competencies matrix of all the Directors is provided in the Report on
Corporate Governance forming part of this Annual Report.

Familiarization Programmes for Independent Directors
The Company imparts familiarization programmes for its Independent
Directors. Objective of these programmes is to familiarize Independent
Directors with the business of the Company, industry, operating model,
risks, opportunities, challenges etc. The various programmes in place in
this regard includes interaction with subject matter experts within the
Company, meetings with our business leaders and functional heads on a
regular basis. The details of familiarization programmes and other
disclosures as specified under the Listing Regulations is available on the
Company''s website.

AUDITORS AND AUDITORS REPORTStatutory Auditors:

Messrs. SSJNB & Co, Chartered Accountants (FRN: 0I3976S) were
appointed as Statutory Auditors of the Company from the conclusion of
35th Annual General Meeting held on 19.09.2022 up to the conclusion
of 40th Annual General Meeting i.e. for a period of 5 years.

There are no qualifications, reservations or adverse remarks or
disclaimers on the audited standalone and consolidated financial
statements of the Company by the Statutory Auditors, for the financial
year ended 31.03.2026.

Cost Auditors:

Maintenance of Cost Records as prescribed under the provisions of
Section 148 of the Act was applicable for the business activities carried
out by the Company.The Company as such maintains the Cost Records
as specified by the Central Government under Section 148(1) of the

Companies Act, 2013 as applicable.

As required by the provisions of Section 148 of the Companies Act,
2013, GNV & Associates, Cost Auditors (Firm Registration No.000I50),
was appointed as the Cost Auditor of the Company for the financial year
2025-26, to conduct cost audit of the cost records maintained by the
Company.

Cost Audit Report for the FY 2024- 2025 has been filed with the
Ministry of Corporate Affairs on 08th September 2025.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015,
the Board of Directors, based on the recommendation of the Audit
Committee, appointed Mr. Parameshwar G. Bhat, Practicing Company
Secretary (Certificate of Practice No. 11004), as the Secretarial Auditor
of the Company for a term of five (5) consecutive financial years,
commencing from Financial Year 2025-26 up to Financial Year 2029-30.
The said appointment was approved by the Members of the Company at
the 38th Annual General Meeting held on 25th September, 2025.

The Secretarial Audit Report for the FinancialYear 2025-26 in Form MR-
3, issued by the Secretarial Auditor, is annexed to this Report as
Annexure - I.

The Secretarial Audit Report for the Financial Year 2025-26 does not
contain any qualification, reservation, adverse remark or disclaimer
requiring any explanation by the Board, except the observation relating
to the composition of the Board and the Audit Committee and
Nomination and Remuneration Committee during the third quarter of
the financial year (October-December 2025).

The observation pertains to the temporary non-compliance with the
requirements of Regulation I7 and the relevant provisions relating to
the constitution of the Statutory Committees under the Listing
Regulations, arising due to vacancies in the positions of Independent
Directors.

The Board would like to clarify that the process of identifying and
appointing suitable Independent Directors with the requisite
qualifications, experience, expertise and industry knowledge relevant to
the Company''s business required additional time to ensure the
appointment of competent and effective Board members. Consequently,
the vacancies could not be filled within the prescribed timeline.

The Company has since appointed the requisite Independent Directors,
thereby restoring the composition of the Board of Directors and the
Audit Committee in full compliance with the applicable provisions of the
Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The applicable fines levied by BSE
Limited and the National Stock Exchange of India Limited in respect of
the temporary non-compliance were duly paid. As on 31st March, 2026,
the composition of the Board and its Committees was fully compliant
with all applicable statutory and regulatory requirements.

Internal Auditors:

Messrs. Murugesh & Co, Chartered Accountants (Firm Registration No:
002233S) were appointed as the Internal Auditors of the Company for
the Financial Year 2025-26 and the internal audit reports issued by them
were periodically reviewed by the Audit Committee and the
Management of the Company is appraised about the observations of the
Internal Auditors and on corrective actions, if any, that needs to be taken.

Reporting of fraud by Auditors

During the year, the statutory auditors have not reported to the Audit
Committee any fraud on the Company by its officers or employees
under Section 143(12) of the Companies Act, 2013, the details of which
needs to be provided in this report.

Further, the Cost Auditors, Internal Auditors and Secretarial Auditor
have also not reported any instance of fraud involving the Company, its
officers or employees during the financial year under review.

RECONCILIATION OF SHARE CAPITAL AUDIT

As per the directive of Securities and Exchange Board of India, Mr.
Vijayakrishna K.T, Practicing Company Secretary, undertook the
Reconciliation of Share Capital Audit on a quarterly basis and the
reconciliation documents, for the year under review, have been duly
uploaded on the website of the Stock Exchange.

A qualified practicing Company Secretary carries out reconciliation of
share capital to reconcile the total admitted equity share capital with the
National Securities Depository Limited (NSDL) and the Central
Depository Services (India) Limited (CDSL) and the total issued and
listed equity share capital.The reconciliation of share capital audit report
confirms that the total issued/paid-up capital is in agreement with the
total number of shares in physical form and the total number of
dematerialised shares held with NSDL and CDSL.

POLITICAL CONTRIBUTION

Your Company has not made any political contribution to any political
parties during the financial year under review.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the
functional heads of the Company will submit its periodical report to the
Board of Directors on the measures to be taken for mitigation of
potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is
designed to enable risks to be identified, assessed and mitigated
appropriately, is available on the website of the Company
https://www.balpharma.com

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS
ADEQUACY

Your Company has an adequate system of internal controls with clearly
defined authority limits. Internal controls ensure that the Company''s
assets are protected against loss from unauthorized use or disposition
and all transactions are authorized, recorded and reported in conformity

with generally accepted accounting principles. These systems are
designed to ensure accuracy and reliability of accounting data,
promotion of operational efficiency and adherence to the prescribed
management principles.These policies are periodically reviewed to meet
business requirements. The Company has in place adequate internal
financial controls with respect to financial statements.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT (BRSR)

In terms of the provisions of Regulation 34(2)(f) of the Listing
Regulations, submission of the Business Responsibility and Sustainability
Report (BRSR) is not applicable to the Company for the financial year
under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the Listing Regulations, the Management Discussion and
Analysis Report is presented in a separate section and forms part of the
Annual Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies
Act, 2013, your Directors wish to confirm:

a) That in preparing the annual accounts, all the applicable
accounting standards had been followed along with proper
explanation relating to material departures.

b) That the Directors had selected such accounting policies and
applied them consistently and made judgements 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) That 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 / detecting fraud and other
irregularities.

d) That the Directors had prepared the annual accounts on a going
concern basis.

e) That the Directors had laid down internal financial controls to
be followed by the Company and that such internal financial
controls are adequate and are operating effectively.

f) That the Company had devised proper systems to ensure
compliance with the provisions of all applicable laws and that
such systems are adequate and operating effectively.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE
COMPANIES

During the year under review, the following Companies continued to be
the subsidiaries of Bal Pharma Limited. A report on the financial
performance of each of the subsidiaries as per Section 129(3) of the Act
in the prescribed format AOC-1 is provided in Annexure- 2 to the
Board''s Report and hence not repeated here, for the sake of brevity:-
NIL

During the year the following changes occurred relating to subsidiaries:

M/s. Golden Drugs Private Limited, wholly owned subsidiary of the Company
has been amalgamed with the company pursuant to Hon''ble National
Company Law Tribunal, Bengaluru Bench, vide Order in C.P. (CAA) No.
I3/BB/2024 dated 26th March,2025.

RELATED PARTY TRANSACTIONS (RPTs)

All contracts /arrangements / transactions entered by the Company
during the financial year with related parties were in ordinary course of
business and at arms'' length basis and the same were undertaken after
receiving omnibus approval of the Audit Committee.

During the year, the Company has not entered into any
contract/arrangement/transaction with the related parties that could be
considered as material, as per the policy of the Company on materiality of
related party transactions.

There were no materially significant related party transactions which
could have potential conflict with the interests of the Company at large.

The Company''s policy on the related party transactions as approved by
the Board can be accessed from the website i.e. www.balpharma.com

Details of disclosures relating to the related party transactions under
Section 188 of the Companies Act, 2013, form part of the notes to the
financial statements provided in this Annual Report. For Further Details,
your attention is drawn to the Related Party disclosures set out in the
Financial Statements.

Statement of the related party transactions as approved by the Board, for
the financial year 2025-26 in Form AOC-2 is annexed to this report in
Annexure- 3.

ACCOUNTING STANDARDS

Your Company has adopted “IndAS” and the financial statements have
been prepared in accordance with Indian Accounting Standards (Ind AS),
the provisions of the Companies Act, 2013 (to the extent notified) and
guidelines issued by SEBl.The Ind AS are prescribed under Section 133 of
the Companies Act, 2013, read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016.

SECRETARIAL STANDARDS

Secretarial Standards i.e. SSI & SS2 issued by the Institute of Company
Secretaries of India (ICSI) relating to the Meetings of Board of Directors
and General Meetings, respectively have been duly followed by the
Company.

PREVENTION OF INSIDERTRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 2015,
the Company has made a Code of practices and procedures for fair
disclosure of unpublished price sensitive information and prevention of
insider trading to prohibit the insider trading, to govern the fair
disclosure of unpublished price sensitive information and to attain
equality of access to such information with a view to regulate trading in
securities by the Directors and designated employees of the Company.
All Directors and the designated employees have confirmed compliance
with the Code. The Company has also has complied with the
requirement of Structured Digital Database (SDD) pursuant to
provisions of Regulation 3(5) and 3(6) of Securities and Exchange Board
of India (Prohibition of Insider Trading) Regulations, 2015 (PIT
Regulations) the Company has purchased a software for recording of
Name, PAN and email id etc. of the person to whom Unpublished Price
Sensitive Information is shared for genuine purpose and the Board
confirms that the Company has a system driven Structured Digital
Database in place to capture all the UPSI.

DEPOSITORY SYSTEM

As the members are aware, your Company''s shares are tradable in
electronic form and the Company has established connectivity with
both the Depositories i.e., National Securities Depository Limited
(NSDL) and Central Depository Services (India) Limited (CDSL). In
view of the advantages of the Depository System, the members are
requested to avail of the facility of de-materialization of the Company''s
shares.

DETAILS OF APPLICATION MADE/PROCEEDINGS
PENDING UNDER IBC CODE, 2016 DURING THE YEAR
AND THEIR STATUS AS AT THE END OF FINANCIALYEAR
2025-2026

During the Financial Year 2025-26, no application was made against the
Company under the provisions of the Insolvency and Bankruptcy Code,
2016. Further, no proceedings under the Insolvency and Bankruptcy
Code, 2016 were pending against the Company as on 31st March, 2026.

DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF
VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE
AVAILING LOANS FROM BANKS OR FINANCIAL
INSTITUTIONS

The requirement to disclose the details of the difference between the
amount of valuation done at the time of OneTime Settlement (OTS) and
the valuation done while availing loans from banks or financial
institutions, along with the reasons therefor, is not applicable to the
Company during the Financial Year 2025-26, as no One Time Settlement
was entered into with any bank or financial institution.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle
Blower Policy as prescribed by Listing Regulations, 2015 includes
compliance task force comprising of senior executives of the Company.

The policy of whistle blower is available on the Company''s website. The
policy is reviewed by the Audit Committee from time to time and no
concerns and/or irregularities were reported by the employees till date.
Please access the Company''s website https://www.balpharma.com to
refer to the whistle blower policy of the Company.

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

As per the provisions of Section 134 of the Companies Act, 2013, details
relating to the conservation of energy, technology absorption, foreign
exchanges earnings and outflow are given as Annexure -4 to this report.

CORPORATE GOVERNANCE

The Board of Directors reaffirm their continued commitment to
transparent Corporate Governance & ethical practices.The Company is
committed to maintain highest standard of Corporate Governance and
elevating the same to the best global practices. Report on Corporate
Governance for the year under review, forms part of this report.

A certificate from Mr.Vijayakrishna K.T, Practicing Company Secretary
confirming compliance with Corporate Governance requirements as
stipulated under the Listing Regulations, forms part of the Corporate
Governance Report.

CODEOFCONDUCT

In terms of Regulation 34 read with Schedule V of the Listing
Regulations, a declaration signed by Mr. Shailesh Siroya, the Chairman &
Managing Director of the Company affirming compliance with the Code
of Conduct by the Directors and Senior Management Personnel of the
Company for the financial year 2025-26 forms part of the Report on
Corporate Governance.

CERTIFICATE PURSUANT TO CLAUSE 10 OF SCHEDULE
V OF (LODR), REG, 2015:

In terms of sub clause (i) of clause 10 of Part C of Schedule V of the
Listing Regulations, the Company has obtained certificate from Mr.
Vijayakrishna K.T, Practicing Company Secretary with respect to
disclosure/ declaration/ representation received from the directors and

taken on record by the Board of Directors, as on March 31,2026, none of
the Directors of the Company has been debarred or disqualified from
being appointed or continuing as director of Companies by the SEBI/
Ministry of Corporate Affairs or any such other statutory authority.The
above said Certificate is appended hereto and forms part of the
Corporate Governance Report.

CEO & CFO CERTIFICATION:

As per Regulation 17(8) of Listing Regulations, Managing Director and
Chief Financial Officer of the Company in their submission to the Board
have confirmed that the annual financial statements present a true and
fair view of the Company''s affairs and do not omit any material facts,
which may make the statements or figures contained therein either
misleading or false. The above said Certificate is appended hereto and
forms part of the Report on Corporate Governance.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE,
GUARANTEES GIVEN OR SECURITY PROVIDED BY THE
COMPANY.

The Company makes investments and trade advances to its subsidiaries
for their business purposes. Pursuant to the provisions of Section 134 of
the Companies Act, 2013 the particulars of the loans, guarantees and
investments made by the Company under Section 186 of the Companies
Act, 2013 is detailed in the Notes to Accounts section of the Annual
Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING
THE FINANCIAL POSITION OF THE COMPANY
BETWEEN THE END OF THE FINANCIAL YEAR AND UP
TOTHE DATE OFTHIS REPORT.

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

ANNUAL RETURN

In accordance with the provisions of Section 134 of the Companies Act,
2013 read with the Companies (Management and Administration) Rules,
2014, rule 12, sub rule (1) as amended, the extract of the Annual Return
(MGT-9) is no longer required to be attached along with Board Report.
The copy of the Annual Return for the year 2025-26 can be accessed on
the Company''s website at the link www.balpharma.com

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Company has dissolved the Corporate Social Responsibility Committee
by the Board of Directors in its meeting held on 29.05.2025 as per
section 135(9) of Companies Act, 2013 as the amount to be spend
towards CSR is below 50 lakhs for the F.Y 2025-26.

Corporate Social Responsibility policy which recommends the social
activities to be undertaken by the Company, as specified in Schedule VII
of the Companies Act, 2013. A copy of the said policy is available on the
Company website.

The Board has recommended CSR budget of Rs 17,50,000 (Rupees
Seventeen Lakhs Fifty Thousand Only) for the financial year 2025-26, as
per the provisions of Section 135 of the Companies Act, 2013.

The allocated CSR budget is spent on the social welfare activities during
the year. Details of CSR activities & the brief outline of the CSR policy of
the Company and the initiatives undertaken by the Company on CSR
activities during the year are set out in Annexure- 5 of this report in the
format prescribed in the Companies (Corporate Social Responsibility
Policy) Rules, 2014.

HUMAN RESOURCE, HEALTH AND SAFETY

Human Resources are invaluable assets and Company is committed to
provide conducive environment that values their contribution and
provides them opportunities to grow. It invests in their training and
professional development to equip them with the necessary skills,
domain expertise and latest technology in line with the business
strategy. The Company is dedicated to the protection of human health,
safety, environment and maintains highest standards of health and safety
in all its plants and facilities. This commitment forms the basis for our
EHS management systems and governance.

REMUNERATION OF DIRECTORS AND KMP

It is confirmed that the remuneration paid to Directors, Key Managerial
Personnel and Senior Management Personnel is in accordance with the
Company''s policy. Statement of Disclosure of Remuneration under
Section 197 of Companies Act, 2013 and Rule 5(1) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
is attached to this report as ‘ ‘Annexure 6”.

MANAGERIAL REMUNERATION AND PARTICULARS OF
EMPLOYEES

There were 939 permanent employees of the Company as of 31 March
2026. The information pursuant to Rule (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
is annexed to this report as “Annexure 7”. Information pursuant to Rule
5(2) & 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 also forms part of this report
pursuant to Section 136(1) of the Act. Any shareholder interested in
obtaining a copy of the same may write to the Company Secretary at the
registered office address of the Company.

EMPLOYEES STOCK OPTION PLAN (ESOP)

The Company has implemented Bal Pharma Limited Employee Stock
Option Plan -2025 (hereinafter after referred to as the ‘Scheme'') in
accordance with the Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021 and
applicable provisions of the Companies Act, 2013. The said Scheme has
been duly approved by the shareholders of the Company by way of a
special resolution at the 38th Annual General Meeting of the Company
held on 25th September, 2025. In-principal approvals for the same from
both BSE Limited and National Stock Exchange of India Limited were
received. Scheme have come into force on the 25.09.2025 and shall
continue to be in effect for a term of 10 (Ten) years.The total number of
options granted under ESOP 2025 shall not exceed 10,00,000 options
convertible into 10,00,000 equity shares of Rs. 10 each, equivalent to
6.28% of the current equity share capital (1,59,20,872 shares) of the
Company. The earlier Bal Pharma Limited Employee Stock Option
Scheme, 2014 has been successfully completed and no further options
remain available for grant under the said scheme.

Further, the Board of Directors at its meeting held on May 27, 2026,
based on recommendation of Nomination & Remuneration Committee,
approved to grant 5,00,000 Options under the Bal Pharma Limited
Employee Stock Option Plan -2025 to some of its senior executives.

Pursuant to the requirements of the SEBI (Share Based Employee
Benefit and Sweat Equity) Regulations, 2021, a certificate has been issued
by the Secretarial Auditors of the Company confirming that the Plan has
been implemented in accordance with the said Regulations and with the
resolution passed by the Company in the General Meeting.

The additional details of stock options are provided under Notes to
Financial Statements (Standalone).

As required under the SEBI (Share Based Employee Benefit and Sweat
Equity) Regulations, 2021, the applicable disclosures as on March 31,
2026, are uploaded on the website of the Company.

Disclosures as per Rule 12(9) of the Companies (Share Capital and
Debenture) Rules, 2014 and SEBI (Share Based Employee Benefit and
Sweat Equity) Regulations, 202lis attached to this report as “Annexure
08”.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE
Limited, and National Stock Exchange of India Limited, and the Company
has paid the annual listing fees for F.Y 2025-26 to the Exchanges.

INSURANCE COVERAGE

The Company has in place a comprehensive insurance programme
commensurate with the nature, scale and risks associated with its
business operations. The Management confirms that the Company''s
movable and immovable properties, plant and machinery, inventories,
current assets and other insurable assets are adequately covered under
appropriate insurance policies against various operational and business
risks.

In addition to asset insurance, the Company has obtained and timely
renewed Directors'' and Officers'' (D&O) Liability Insurance, Public
Liability Insurance and other statutory and business-specific insurance
policies, as applicable to the pharmaceutical industry. The Company also
maintains appropriate employee-related insurance covers and welfare
policies, including those mandated under applicable laws, to safeguard
the interests of its employees.

The insurance portfolio of the Company is reviewed periodically to
ensure that the nature and extent of coverage remain adequate,
appropriate and aligned with the Company''s risk profile and applicable
regulatory requirements.

CREDIT RATING

The discipline with which the Company conducts its financial
transactions is reflected in the BBB- rating given by the credit rating
agency Acute for the financial year 2025-2026. The Management of the
Company aims at further improving its credit rating during the current
financial year.

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

The Company has in place an anti-sexual harassment policy on lines with
the requirements of the sexual harassment of women at the workplace
(Prevention, Prohibition and Redressal) Act, 2013. All the employees of
the Company either they are permanent, contractual, temporary or
trainees, are covered by the policy.

The following is the summary of the Complaints regarding sexual
harassment, received and redressed during the financial year 2025-26.

Number of Complaints received during the year : Nil

Number of Complaints resolved : NA

Number of Complaints pending at the end of the year : NA

DISCLOSURE UNDER MATERNITY BENEFITS ACT, 1961

Company complies with the provisions of the Maternity Benefit Act,
1961, ensuring eligible women members receive their statutory
entitlements, including up to 182 days of fully paid maternity leave.
Company also extends additional leave support in cases of medical
complications, including leave provisions for miscarriage and medical
termination of pregnancy, in line with applicable regulations. These
benefits reflect our commitment to creating a compliant, inclusive, and
supportive workplace that prioritizes the health, well-being, and diverse
needs of expecting and new mothers.There were 91 permanent women
employees in the company as of 31st March, 2026.

HUMAN RELATIONS

During the year under review, employee relations at all sites remained
cordial. Despite the exceptional challenges faced in past years, the
motivated work force aided your Company in maintaining its Industrial
Relations at all time.

REVISION OF FINANCIAL STATEMENTS OR BOARDS
REPORT:

There was no revision of Financial Statements or Boards Report of the
Company that took place in any of the three preceding financial years,
under consideration.

GENERAL INFORMATION:

Your Directors confirm that, during the financial year under review,
there were no transactions, events or circumstances requiring

disclosure or reporting under the applicable provisions of the
Companies Act, 2013, the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 or any other applicable laws in respect
of the following matters:

♦ Provision of money by the Company for the purchase of its own
shares by employees or by trustees for the benefit of employees;

♦ Suspension of trading in the Company''s securities by any Stock
Exchange;

♦ Failure to implement any corporate action; and

♦ One-time settlement with any bank or financial institution.

Accordingly, no disclosure or reporting on the above matters is required
in this Annual Report.

GREEN INITIATIVE

We request all the Members to support the ‘Green Initiative'' of the
Ministry of Corporate Affairs and Bal Pharma continuance towards a
greener environment by enabling the service of the Integrated Annual
Report,AGM Notice, and other documents electronically to your email
address registered with your Depository Participant/ the Registrar and
ShareTransfer Agent of the Company.

In support of the ‘Green Initiative'', the Company encourages Members
to register their email addresses with their Depository Participant or
the Registrar and Share Transfer Agent of the Company to receive soft
copies of the Integrated Annual Report, Notices and other information
disseminated by the Company, on a real-time basis without any delay.

APPRECIATION:

Your directors place on record earnest appreciation for the
contribution made by each and every employee of the Company during
the year under review. Company''s consistent growth was made possible
by their hard work, solidarity, cooperation and dedication.The Directors
also wish to express their gratitude to the Investors for the confidence
and faith that they continued to repose in the Company. Board takes this
opportunity to thank all shareholders, analysts, business partners,
government and regulatory authorities, financial institutions, banks,
distributors, suppliers, business associates, medical professionals and
customers for their continued guidance, encouragement and support.

for and on behalf of the board of directors of

Bal Pharma LimitedShailesh Siroya V Himesh

^{Place: Bengaluru} M anagi ng D i recto r Whole Time Director

^Date : ^27th IMay ²⁰²⁶ DIN: 00048109 DIN: 08554422

Your Directors are pleased to present the Thirty Eighth (38th) Annual
Report and the audited financial statements of the Company, for the
financial year ended 31.03.2025

FINANCIAL SUMMARY/ REVIEW OF OPERATIONS/ STATE
OF COMPANY’S AFFAIRS

Following is the analysis of the standalone financial statements of the
Company during the year under review:

Company continues to be engaged in development, manufacturing and
sale of specialty pharmaceutical formulations and bulk drugs with
specific emphasis on branded generics in various therapeutic segments
in India and more than 30 countries worldwide.

During the year under review, Revenue from Operations augmented at
Rs.302.50 cr, Profit before tax stood at Rs.5.73 Cr a 38.49% lower than
the previous year. PAT for the year under review stood at Rs.7.79 Cr.
Exports contributed 60 % of the revenue and 40 % revenue is generated
by domestic sales.

Highlights of Company''s performance are covered in detail in the
Management Discussion and Analysis Report (MDA), included in this
Annual Report as required under Schedule V of the SEBI (LODR)
Regulations, 2015.

DIVIDEND

The Board of Directors is pleased to recommend a Dividend of Rs. 1.20
per Equity Share of Rs.10/- each, i.e 12% of the Equity Share Capital of
the Company thereby appropriating an amount of Rs 1.91 Crores
towards Dividend distribution, for the F.Y 2024-25.

UNCLAIMED DIVIDEND

Section 124 of the Companies Act, 2013 read with Investor Education
and Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016 (the Rules) provides that the dividend that has remained
unclaimed or unpaid for a period of seven years is to be transferred to
Investor Education and Protection Fund (IEPF). Further, the Rules
mandate that the shares on which dividend has not been paid or claimed
for seven consecutive years or more shall also be transferred to the IEPF.
During the year under review, the Company has transferred 7,334 Equity
Shares of the shareholders, whose dividend is outstanding for 7

consecutive years and an amount of Rs 2,40,542/- pertaining to the
outstanding/unclaimed dividend amount for the F.Y 2016-17, to the IEPF
account as per the Investor Education and Protection Fund Authority
(Accounting,Audit,Transfer and Refund) Rules, 2016.

Details of the shareholders whose shares and unpaid dividend that was
transferred to the IEPF a/c is updated on Company''s website
www.balpharma.com.

Shareholders holding shares in physical form are advised to en-cash their
Dividend on time to avoid transfer of their shares to IEPF account.

TRANSFERTO RESERVE

The Company does not propose to transfer any amount to general
reserves.

SHARE CAPITAL

Rs.15,92,08,720/- comprising of 1,59,20,872 Equity Shares of Rs.10 each
is the Issued and Paid-up Capital of the Company as on 31.03.2025.
During the financial year 2024-25, the Company has the vested 1,16,500
(one Lakh Sixteen Thousand Five Hundred) stock options to the
permanent and eligible employees of the Company under Bal Pharma
Ltd - Employees Stock Option Scheme - 2014, with each option
converted into l(one) Equity Share of Rs.10 (Rupees Ten only) each of
the Company.

During the financial year 2024-25 the Company has not issued any
Equity Shares with differential voting rights, nor issued any sweat Equity
Shares.

FINANCIAL STATEMENTS

The Annual consolidated and standalone financial statements together
with the Auditors Reports'' is annexed to this report, for the financial
year ended 31.03.2025.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Board of the Company comprise of renowned professionals from
different walks of life. They bring in diversified competencies, domain
knowledge and experience. Right combination of Executive and
Independent Directors draws fine balance of business acumen and
independent judgement on Board''s decisions. During the year under
review, none of the Non-Executive Directors had any pecuniary
relationship or transactions with the Company, other than payment of
sitting fees, commission and reimbursement of expenses, if any.

Changes in the Board of Directors:

Board of Director of the Company through a resolution passed by
circulation on 05.05.2025 has appointed Mr. Ravindra Kumar Kothari
(DIN # 03418320) as additional Director of the Company. His
appointment is Regularized by the shareholders Via postal ballot as Non
Executive - Non Independent Director on 01.08.2025.

Mr. Kotian Chittanand Damodar (DIN # 09613054), Whole Time
Director of the Company has resigned from his post on 16.05.2025
citing personal reasons. Board of Directors of the Company has
accepted his resignation with a note of appreciation for the services
rendered by him during his tenure.

Retirement by Rotation:

Mr. Himesh Virupakshya (DIN # 08554422) retires by rotation at the
ensuing AGM and being eligible, has offered himself for reappointment.
The Board recommends for his re-appointment.

Independent Directors:

Independent Directors of the Company have confirmed that they
continue to meet the criteria of independence as laid down under
Section 149(6) of the Act and under the Listing Regulations. They have
registered their names in the Independent Directors data-base and have
passed the proficiency test, if applicable. They have also affirmed
compliance to the Code of Conduct for Independent Directors.

Based on disclosures provided by Independent Directors, none of them
are disqualified/debarred from being appointed as Director under
Section 164 of the Act/SEBI order or any other authority and are
independent from the management.The Board is of the opinion that the
Independent Directors possess requisite qualifications, experience and
expertise in the fields of manufacturing, operations, finance, forex,
people management, strategy, sales & marketing, auditing, banking, risk
management and they hold high standards of integrity. Skill set, expertise
& competencies matrix of all the Directors is provided in the Report on
Corporate Governance forming part of this Annual Report.

Other than what is stated above, there are no changes in the
Composition of the Board or Key Managerial Personnel of the
Company, during the year under review.

AUDITORS AND AUDITORS REPORT

Statutory Auditors:

M/s SSJNB & Co, Chartered Accountants (FRN # 0I3976S) were
appointed as Statutory Auditors of the Company from the conclusion of
35th Annual General Meeting held on 19.09.2022 up to the conclusion
of 40th Annual General Meeting i.e. for a period of 5 years.

There are no observations or remarks on the audited accounts of the
Company by the statutory auditors, for the financial year ended
31.03.2025.

CostAuditors:

As required by the provisions of Section I48 of the Companies Act,
2013, Mr. M. R. Krishnamoorthy, Cost Accountant, Bangalore
(Membership No: 7568) was appointed as the Cost Auditor of the
Company for the financial year 2024-25, to conduct cost audit of the
cost records maintained by the Company.

Cost Audit Report for the FY 2023- 2024 has been filed with the
Ministry of Corporate Affairs on 05.09.2024.

Secretarial Auditor:

Pursuant to Section 204 of the Companies Act,20I3 and rules made
thereunder and in compliance with Regulation 24 A of SEBI (LODR)
Regulations, Mr. Parameshwar G Bhat, Practicing Company Secretary
(CP # 11004) was appointed by the Board of Directors as the Secretarial
Auditor of the Company for the period of five consecutive years i.e.
from F.Y 2025-26 up to 2030-2031.

Secretarial Audit Report for the F.Y 2024-25 in Form MR-3 is annexed to
this report as Annexure -2.

Internal Auditors:

M/s Murugesh & Co, Chartered Accountants (M # 002233S) were
appointed as the Internal Auditors of the Company for the F.Y 2024-25
and the internal audit reports issued by them were periodically reviewed
by the Audit Committee and the Management of the Company is
appraised about the observations of the internal auditor and on
corrective actions, if any, that needs to be taken.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the
functional heads of the Company will submit its periodical report to the
Board of Directors on the measures to be taken for mitigation of
potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is
designed to enable risks to be identified, assessed and mitigated
appropriately, is available on the website of the Company
https://www.balpharma.com/fin.

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS
ADEQUACY

Your Company has an adequate system of internal controls with clearly
defined authority limits. Internal controls ensure that the Company''s
assets are protected against loss from unauthorized use or disposition
and all transactions are authorized, recorded and reported in
conformity with generally accepted accounting principles. These
systems are designed to ensure accuracy and reliability of accounting
data, promotion of operational efficiency and adherence to the
prescribed management principles. These policies are periodically
reviewed to meet business requirements. The Company has in place
adequate internal financial controls with respect to financial statements.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies
Act, 2013, your Directors wish to confirm:

That in preparing the annual accounts, all the applicable accounting
standards had been followed along with proper explanation relating to
material departures.

That the Directors had selected such accounting policies and applied
them consistently and made judgements 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.

That 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 / detecting fraud and other irregularities.

That the Directors had prepared the annual accounts on a going
concern basis.

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

That the Company had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.

RELATED PARTYTRANSACTIONS (RPTs)

All contracts /arrangements / transactions entered by the Company
during the financial year with related parties were in ordinary course of
business and at arms'' length basis and the same were undertaken after
prior omnibus approval of the Audit Committee.

During the year, the Company has not entered into any
contract/arrangement/transaction with the related parties that could be
considered as material, as per the policy of the Company on materiality
of related party transactions.

There were no materially significant related party transactions which
could have potential conflict with the interests of the Company at large.

The Company''s policy on the related party transactions as approved
by the Board can be accessed from the website i.e.
https://www.balpharma.com/balpharmacom.fin.

Details of disclosure relating to the related party transactions under
Section 188 of the Companies Act, 2013, form part of the notes to the
financial statements provided in this annual report.

Statement of the related party transactions as approved by the Board,
for the financial year 2024.25 in Form AOC-2 is annexed to this report in
Annexure- 3.

All the RPTs undertaken during the financial year are disclosed in the
notes to the financial statements. For Further Details, your attention is
drawn to the Related Party disclosures set out in the Standalone
Financial Statements.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE
COMPANIES

During the year under review, the following Companies continued to be
the subsidiaries of Bal Pharma Ltd.A report on the financial performance
of each of the subsidiaries as per Section 129(3) of the Companies Act,
2013 in the prescribed format AOC-1 is provided in Annexure- 4 to the
Board''s Rep¹

SECRETARIAL STANDARDS

Secretarial Standards i.e. SS1 & SS2 issued by the Institute of Company
Secretaries of India (ICSI) relating to the Meetings of Board of Directors
and General Meetings, respectively have been duly followed by the
Company.

DECLARATION’S FROM INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent
Directors confirming that they meet the criteria of independence, as
prescribed under Section 149(6) of the Companies Act, 2013.

The Independent Directors have also confirmed under Regulation 16(b)
of SEBI (LODR) Regulations, 2015 that they are not Non-Independent
Director of another Company on the Board of which any non¬
independent Director of the listed entity is an independent Director.

The Company has devised a policy for familiarization of Independent
Directors on their roles, rights, responsibilities with the Company and
the said policy is available on the Company''s website
www.balpharma.com.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the
Board, Committees and Individual Directors. The evaluation process
among others considers attendance of Directors at the Board and
Committee Meetings, acquaintance with business, communication
within the Board members, effective participation, domain knowledge,
compliance with the internal code of conduct, vision and strategy.

The Company has also in place a Policy for Nomination and
Remuneration of KMPs, Senior Management personnel and Directors of
the Company, which is in compliance with Section 178 of the Companies
Act, 2013. Policy guiding the nomination and remuneration of the
Directors and KMP''s can be accessed from the Company''s website
https://www.balpharma.com/balpharmacom/pdf/investors/irl/Nominati
on%20and%20Remuneration%20Policy.pdf

The Board carried out annual performance evaluation of itself,
Committees, Individual Directors and Chairman at their Meeting held
on 13/02/2025.

Report on performance evaluation of the individual Directors, and
Committees was reviewed by the Chairman and feedback was given to
the Directors. The Board has expressed satisfaction over the overall
functioning of the Board Members and their Committees, which are in
line with the objectives and goals of the Company.

MEETINGS OF THE BOARD

The intervening gap between two Board Meetings was within the
maximum period prescribed under the Act. The detailed information
regarding Board and Committee meetings held during the year under
review is furnished in the Corporate Governance Report, which is
forming part of this Report as Annexure - 5.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle
Blower Policy as prescribed by SEBI(LODR) Regulations, 2015 includes
compliance task force comprising of senior executives of the Company.

The policy of whistle blower is available on the Company''s website. The
policy is reviewed by the Audit Committee from time to time and no
concerns and/or irregularities were reported by the employees till date.
Please access the Company''s website https://www.balpharma.com/wbp
to refer to the whistle blower policy of the Company.

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

As per the provisions of Section 134 of the Companies Act, 2013, details
relating to the conservation of energy, technology absorption, foreign
exchanges earnings and outflow are given as Annexure -6 to this report.

CORPORATE GOVERNANCE

The Board of Directors reaffirm their continued commitment to
transparent Corporate Governance & ethical practices.The Company is
committed to maintain highest standard of Corporate Governance and
elevating the same to the best global practices. Report on Corporate
Governance for the year under review, forms part of this report.
A certificate from Mr. Vijaykrishna K.T, Practicing Company Secretary
confirming compliance with Corporate Governance requirements as
stipulated under the Listing Regulations, is annexed and forms part of
this report.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE,
GUARANTEE’S GIVEN OR SECURITY PROVIDED BY THE
COMPANY

The Company makes investments and trade advances to its subsidiaries
for their business purposes. Details of loans, investments and advances
covered under Section 186 of the Companies Act, 2013, form part of the
notes to the financial statements annexed to this report.

DEPOSITS

Your Company has not accepted any deposits from the public falling
within the purview of Section 73 of the Companies Act, 2013 read with
Companies (Acceptance of Deposit) Rules, 2014 and as such, no amount
on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.

Disclosure as per the Companies (Acceptance of Deposits) Second
Amendment Rules, 2015.

The Company has not accepted any unsecured loan from the Directors
of the Company and/or relatives of the Directors, during the year under
consideration.ort and hence not repeated here, for the sake of brevity:

MATERIAL CHANGES AND COMMITMENTS AFFECTING
THE FINANCIAL POSITION OF THE COMPANY
BETWEEN THE END OF THE FINANCIAL YEAR AND UP
TOTHE DATE OFTHIS REPORT.

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

ANNUAL RETURN

Pursuant to Section 92(3) read with Section I34(3)(a) of the Act, Copy
of the Annual Return as on March 31st, 2025 is available on the
Company''s website www.balpharma.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR) *

As per the provisions of Section 135 of the Companies Act, 2013, the
Company has constituted a CSR Committee. As on the date of report,
following is the composition:

1. Mr. H SVenkatesh - Chairman

2. Mr. Shailesh Siroya - Member

3. Mr. Jatish Sheth - Member

The Committee has formulated a Corporate Social Responsibility policy
which recommends the social activities to be undertaken by the
Company, as specified in ScheduleVII of the Companies Act, 20I3.A copy
of the said policy is available on the website i.e
https://www.balpharma.com/balpharmacom/pdf/finance/irl/CSR%20Pol
icy%202022.pdf.

The Committee has recommended CSR budget of Rs I9,00,000
(Rupees Nineteen Lakhs Only) for the financial year 2024-25, as per the
provisions of Section 135 of the Companies Act, 2013.

The allocated CSR budget is spent on the following social welfare
activities during the year.-

The allocated CSR budget is spent on the following social welfare activities during the year.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in
Annexure- 7 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

* Note: The Corporate Social Responsibility Committee has been dissolved by the Board of Directors in its meeting held on 29.05.2025 as per section
135(9) of Companies Act, 2013 as the amount to be spend is below 50 lakhs for the F.Y 2025-26.

HUMAN RESOURCE, HEALTH AND SAFETY

Human Resources are invaluable assets and Company is committed to provide conducive environment that values their contribution and provides them
opportunities to grow. It invests in their training and professional development to equip them with the necessary skills, domain expertise and latest
technology in line with the business strategy. The Company is dedicated to the protection of human health, safety, environment and maintains highest
standards of health and safety in all its plants and facilities.This commitment forms the basis for our EHS management systems and governance.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

There were 986 permanent employees of the Company as of 31 March 2025. The information pursuant to Rule (1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as “Annexure-8”. Information pursuant to Rule 5(2) & 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to Section 136(1) of the Act.
Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE
Limited, and National Stock Exchange of India Limited, and the Company
has paid the annual listing fees for F.Y 2024-25 to the Exchanges.

CEO & CFO CERTIFICATION:

The CEO and CFO of the Company in their submission to the Board
have confirmed that the annual financial statements present a true and
fair view of the Company''s affairs and do not omit any material facts,
which may make the statements or figures contained therein either
misleading or false.

INSURANCE COVERAGE

The Management of the Company wishes to confirm that all the
movable, immovable and current assets of the Company are covered
with comprehensive and adequate insurance cover.

CREDIT RATING

The discipline with which the Company conducts its financial
transactions is reflected in the BBB- rating given by the credit rating
agency Acute for the financial year 2024-2025. The Management of the
Company aims at further improving its credit rating during the current
financial year.

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

The Company has in place an anti-sexual harassment policy on lines with
the requirements of the sexual harassment of women at the workplace
(Prevention, Prohibition and Redressal) Act, 2013. All the employees of
the Company either they are permanent, contractual, temporary or
trainees, are covered by the policy.

The following is the summary of the Complaints regarding sexual
harassment, received and redressed during the financial year 2024-25.

Number of Complaints received during the year : Nil

Number of Complaints resolved : NA

Number of Complaints pending at the end of the year : NA

REVISION OF FINANCIAL STATEMENT ORTHE REPORT:

As per the Secretarial Standards-4 in case the Company has revised its
financial statement or the Report in respect of any of the three
preceding financial years either voluntarily or pursuant to the order of a
judicial authority, the detailed reasons for such revision shall be disclosed
in the Report of the year as well as in the Report of the relevant financial
year in which such revision is made.

There is no revision of Financial Statement of the Company that took
place in any of the three preceding financial years, under consideration.

GENERAL INFORMATION:

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

• Transfer to Reserves; • Deposits accepted by the Company; • Issue of
equity shares with differential rights as to dividend, voting or otherwise; •
Provision of money for the purchase of its own shares by employees or
by trustee for the benefit of employees * Revision in the financial
statements; • Change in the nature of company''s business; • Transfer of
any amount to reserves; • Suspension of Company''s securities; • Failure
to implement Corporate Action * One-time settlement; • Material
changes and commitments affecting financial position of the Company
between the end of the financial year and the date of this report; •
Significant or material orders passed by the Regulators or Courts or
Tribunals which could impact the going concern status of the Company
and its future operations; • Application or proceedings made under the
Indian Bankruptcy Code, 2016.

APPRECIATION:

Your directors place on record earnest appreciation for the
contribution made by each and every employee of the Company during
the year under review. Company''s consistent growth was made possible
by their hard work, solidarity, cooperation and dedication.The Directors
also wish to express their gratitude to the Investors for the confidence
and faith that they continued to repose in the Company. Board takes this
opportunity to thank all shareholders, analysts, business partners,
government and regulatory authorities, financial institutions, banks,
distributors, suppliers, business associates, medical professionals and
customers for their continued guidance, encouragement and support.

For and on behalf of Board of Directors
Bal Pharma Limited

Place: Bengaluru H i mes h V i r u p a ks hya Shailesh Siroya

D_at_e: 29th M_ay, 2025 Whole-Time Director Managing Director

DIN: 08554422 DIN: 00048109

1

Golden Drugs Private Limited was amalgamated with Bal Pharma
Limited Vide Hon''ble NCLT Bengaluru bench order # CP.(CAA)
No.13/BB/2024 Dated 26.03.2025.

Your Directors are pleased to present the Thirty Seventh (37th) Annual Report and the audited financial statements of the Company, for the financial year ended 31.03.2024

FINANCIAL SUMMARY/ REVIEW OF OPERATIONS/ STATE OF COMPANY’S AFFAIRS

Following is the analysis of the standalone financial statements of the Company during the year under review:

The Company continues to be engaged in development, manufacturing and sale of specialty pharmaceutical formulations and bulk drugs with specific emphasis on branded generics in various therapeutic segments in India and more than 30 countries worldwide.

During the year under review, Revenue from Operations stood at Rs.338.53 cr., a 10.46% higher than the previous year. Profit before tax stood at Rs.12.10 cr. a 29.4% higher then the previous year. PAT for the year under review stood at Rs.10.27 Cr which is 40 % higher then that of the previous year''s PAT Exports contributed 61% of the total revenue and 39% revenue is generated by domestic sales.

Highlights of Company''s performance are covered in detail in the Management Discussion and Analysis Report (MDA), included in this Annual Report as required under Schedule V of the SEBI (LODR) Regulations, 2015.

DIVIDEND

The Board of Directors is pleased to recommend a Dividend of Rs.1.20/-per Equity Share of Rs.10/- each, i.e 12% of the Equity Share Capital of the Company thereby appropriating an amount of Rs 1,89,65,246 Crores towards Dividend distribution , for the F.Y 2023-24.

UNCLAIMED DIVIDEND

Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) provides that the dividend that has remained unclaimed or unpaid for a period of seven years is to be transferred to Investor Education and Protection Fund (IEPF). Further, the Rules mandate that the shares on which dividend has not been paid or claimed for seven consecutive years or more shall also be transferred to the IEPF. During the year under review, the Company has transferred 10,012

Equity Shares of the shareholders, whose dividend is outstanding for 7 consecutive years and an amount of Rs 2,62,812/- pertaining to the outstanding/unclaimed dividend amount for the F.Y 2015-16, to the IEPF account as per the Investor Education and Protection Fund Authority (Accounting,Audit,Transfer and Refund) Rules, 2016.

Details of the shareholders whose shares and unpaid dividend that was transferred to the IEPF a/c is updated on Company''s website www.balpharma.com.

Shareholders holding shares in physical form are advised to encash their Dividend on time to avoid transfer of their shares to IEPF account.

TRANSFERTO RESERVE

The Company does not propose to transfer any amount to general reserves.

SHARE CAPITAL

Rs.15,80,43,720/- comprising of 1,58,04,372 Equity Shares of Rs.10 each is the Issued and Paid Up Capital of the Company as on 31.03.2024.

During the financial year 2023-24 the Company has vested 1,14,500 (One Lakh Fourteen Thousand Five Hundred) stock options to the permanent and eligible employees of the Company under Bal Pharma Ltd - Employees Stock Option Scheme - 2014, with each option convertible into l(one ) Equity Share of Rs.10 (Rupees Ten only) each of the Company.

During the financial year 2023-24 the Company has not issued any Equity Shares with differential voting rights, nor issued sweat Equity Shares.

FINANCIAL STATEMENTS

The Annual consolidated and standalone financial statements together with the Auditors Reports'' is annexed to this report, for the financial year ended 31.03.2024.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors the Company comprise of renowned professionals from different walks of life. They bring in diversified competencies, domain knowledge and experience. Right combination of Executive and Independent Directors draws fine balance of business acumen and independent judgement on Board''s decisions. During the year under review, none of the Non-Executive Directors had any pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses, if any

Reappointment of Managing Director : Mr. Shailesh Siroya''s ( DIN # 00048109) tenure of Managing Director of the Company ends on

31.07.2024 and based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on

28.05.2024 appointed Mr. Shailesh Siroya as Managing Director of the Company for a further period of 5 years. This reappointment is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Reappointment of Whole Time Director:

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Director of the Company at its meeting held on 28.05.2024 reappointed Mr.HimeshVirupakshya (DIN # 08554422 ) as Whole Time Director of the Company for a further period of 5 years starting from 01.08.2024.

Retirement by Rotation:

Mr. Kotian Chittanand Damodar ( DIN # 09613054) retires by rotation at the ensuing AGM and is eligible for reappointment. The Board recommends his re-appointment.

Independent Directors:

All the Independent Directors have confirmed that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and under the Listing Regulations. They have registered their names in the Independent Directors data-base and have passed the proficiency test, if applicable. They have also affirmed compliance to the Code of Conduct for Independent Directors.

Based on disclosures provided by them, none of them is disqualified/debarred from being appointed as Director under Section 164 of the Act/SEBI order or any other authority and are independent from the management.The Board is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in the fields of manufacturing, operations, finance, forex, people management, strategy, sales & marketing, auditing, banking, risk management and they hold high standards of integrity. Skill set, expertise & competencies matrix of all the Directors is provided in the Report on Corporate Governance forming part of this Annual Report.

There are no changes in the composition of the Board or Key Managerial Personnel of the Company during the year under review.

AUDITORS AND AUDITORS REPORTStatutory Auditors:

Messrs SSJNB & Co, Chartered Accountants (FRN # 013976S) were appointed as Statutory Auditors of the Company from the conclusion of 35th Annual General Meeting held on 19.09.2022 up to the conclusion of 40th Annual General Meeting i.e for a period of 5 years.

There are no observations or remarks on the audited accounts of the Company by the statutory auditors, for the financial year ended

31.03.2024 except as stated in point # (ix) a in CARO report. The management would like to clarify that the delay in repayment of term loan and vehicle loans as stated by the auditors is due to the banks not honoring the debit mandated provided by the company, in timely manner. Public holidays and banks internal procedural issues has resulted in marginal delays in repayment of loans.

Cost Auditors:

As required by the provisions of Section 148 of the Companies Act,20i3, Mr. M.R Krishna Murthy, Cost Accountant, (FCMA # 7568) was reappointed as the Cost Auditor of the Company for the financial

year 2023-24, to conduct cost audit of the cost records maintained by the Company.

Cost Audit Report for the FY 2022- 2023 has been filed with the Ministry of Corporate Affairs on 20.10.2023.

Secretarial Auditor:

Pursuant to Section 204 of the Companies Act,2013 and rules made thereunder and in compliance with Regulation 24 A of SEBI (LODR) Regulations, Mr. Parameshwar G Bhat, Practising Company Secretary (CP # 11004) was appointed by the Board of Directors as the Secretarial Auditor of the Company for the financial year 2023-2024.

Secretarial Audit Report for the F.Y 2023-24 in Form MR-3 is annexed to this report as Annexure -2. No comments or remarks were made by the Auditor in his report for the FY 2023-24.

Internal Auditors:

Messrs Murugesh & Co, Chartered Accountants (M # 002233S) were appointed as the Internal Auditors of the Company for the FY 2023-24 and the internal audit reports issued by them were periodically reviewed by the Audit Committee and the Management of the Company is appraised about the observations of the internal auditor and on corrective actions, if any, that needs to be taken.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the functional heads of the Company submits its periodical report to the Board of Directors on the measures to be taken for mitigation of potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is designed to enable risks to be identified, assessed and mitigated appropriately, is available on the website of the Company https://www.balpharma.com/fin

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Company''s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management principles. These policies are periodically reviewed to meet business requirements. The Company has in place adequate internal financial controls with respect to financial statements.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors wish to confirm:

i.That in preparing the annual accounts, all the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. That the Directors had selected such accounting policies and applied them consistently and made judgements 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.

3. That 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 / detecting fraud and other irregularities.

4. That the Directors had prepared the annual accounts on a going concern basis.

5. That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

6. That the Company had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTYTRANSACTIONS (RPTs)

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and at arms'' length basis and the same were undertaken after prior omnibus approval of the Audit Committee.

During the year, the Company has not entered into any contract/arrangement/transaction with the related parties that could be considered as material, as per the policy of the Company on materiality of related party transactions.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large.

The Company''s policy on the related party transactions as approved by the Board can be accessed from the website i.e https://www.balpharma.com/balpharmacom.fin.

Details of disclosure relating to the related party transactions under Section 188 of the Companies Act, 2013, forms part of the notes to the financial statements provided in this annual report.

Statement of the related party transactions as approved by the Board, for the financial year 2023.24 in Form AOC-2 is annexed to this report in Annexure- 3.

All the RPTs undertaken during the financial year are disclosed in the notes to the financial statements. For Further Details, your attention is drawn to the Related Party disclosures set out in the Standalone Financial Statements.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, the following Companies continued to be the subsidiaries of Bal Pharma Ltd.A report on the financial performance of each of the subsidiaries as per Section 129(3) of the Companies Act, 2013 in the prescribed format AOC-1 is provided in Annexure- 4 to the Board''s Report and hence not repeated here, for the sake of brevity:-

SECRETARIAL STANDARDS

Secretarial Standards i.e SS1 & SS2 issued by the Institute of Company Secretaries of India (ICSI) relating to the Meetings of Board of Directors and General Meetings, respectively have been duly followed by the Company.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013.

The Independent Directors have also confirmed under Regulation 16(b) of SEBI (LODR) Regulations, 2015 that they are not Non-Independent Director of another Company on the Board of which any nonindependent Director of the listed entity is an independent Director.

The Company has devised a policy for familiarization of Independent Directors on their roles, rights, responsibilities with the Company and the said policy is available on the Company''s website www.balpharma.com.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the Board, Committees and Individual Directors. The evaluation process among others considers attendance of Directors at the Board and Committee Meetings, acquaintance with business, communication within the Board members, effective participation, domain knowledge, compliance with the internal code of conduct, vision and strategy.

The Company has also in place a Policy for Nomination and Remuneration of KMPs, Senior Management personnel and Directors of the Company, which is in compliance with Section 178 of the Companies Act, 2013. Policy guiding the nomination and remuneration of the Directors and KMP''s can be accessed from the Company''s website https://www.balpharma.com/balpharmacom/pdf/investors/irl/Nominati on%20and%20Remuneration%20Policy.pdf

The Board carried out annual performance evaluation of itself, Committees, Individual Directors and Chairman at their Meeting held on 12/02/2024.

Report on performance evaluation of the individual Directors, and Committees was reviewed by the Chairman and feedback was given to the Directors. The Board has expressed satisfaction over the overall functioning of the Board Members and their Committees, which are in line with the objectives and goals of the Company.

MEETINGS OF THE BOARD

The intervening gap between two Board Meetings was within the maximum period prescribed under the Act. The detailed information regarding Board and Committee meetings held during the year under review is furnished in the Corporate Governance Report which is forming part of this Report.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle Blower Policy as prescribed by SEBI(LODR) Regulations, 2015 includes compliance task force comprising of senior executives of the Company.

The policy of whistle blower is available on the Company''s website. The policy is reviewed by the Audit Committee from time to time and no concerns and/or irregularities were reported by the employees till date. Please access the Company''s website https://www.balpharma.com/wbp to refer to the whistle blower policy of the Company.

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

As per the provisions of Section 134 of the Companies Act, 2013, details relating to the conservation of energy, technology absorption, foreign exchanges earnings and outflow are given as Annexure -5 to this report.

CORPORATE GOVERNANCE

The Board of Directors reaffirm is continued commitment to good Corporate Governance & ethical practices. The Company is committed to maintain highest standard of Corporate Governance and elevating the same to the best global practices. Report on Corporate Governance for the year under review, forms part of this report. A certificate from Mr.Vijayakrishna K.T , Practising Company Secretary confirming compliance with Corporate Governance requirements as stipulated under the Listing Regulations, is annexed and forms part of this report as Annexure-6.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE’S GIVEN OR SECURITY PROVIDED BY THE COMPANY

The Company makes investments and trade advances to its subsidiaries for their business purpose. Details of loans, investments and advances covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements annexed to this report.

DEPOSITS

Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Disclosure as per the Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

The Company has not accepted any unsecured loan from the Directors

--of the Company and/or relatives of the Directors during the year under

consideration.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND UP TOTHE DATE OFTHIS REPORT

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

ANNUAL RETURN

Pursuant to Section 92(3) read with Section I34(3)(a) of the Act, Copy of the Annual Return as on March 31st, 2024 is available on the Company''s website www.balpharma.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. As on the date of report following is the composition:

1. Dr. C.V Srinivas - Chairman

2. Mr. H SVenkatesh - Member

3. Mr. Shailesh Siroya - Member

4. Mr.Jatish Sheth - Member

The Committee has formulated a Corporate Social Responsibility policy which recommends the social activities to be undertaken by the Company, as specified in ScheduleVII of the Companies Act, 20I3.A copy of the said policy is available on the website i.e https://www.balpharma.com/balpharmacom/pdf/finance/irl/CSR%20Pol icy%202022.pdf.

The Committee has approved CSR budget of Rs 20,35,642 (Rupees Twenty Lakhs Thirty Five Thousand Six Hundred and Forty Two only ) for the financial year 2023-24 as per the provisions of Section 135 of the Companies Act, 2013.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure- 7 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

HUMAN RESOURCE, HEALTH AND SAFETY

Human Resources are invaluable assets and Company is committed to provide conducive environment that values their contribution and provides them opportunities to grow. It invests in their training and professional development to equip them with the necessary skills, domain expertise and latest technology in line with the business strategy. The Company is dedicated to the protection of human health, safety, environment and maintains highest standards of health and safety in all its plants and facilitiesThis commitment forms the basis for our EHS management systems and governance.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

There were 865 permanent employees of the Company as of 31 March 2024. The information pursuant to Rule (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as "Annexure 8”. Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE Limited, and National Stock Exchange of India Limited, and the Company has paid the annual listing fees for F.Y 2023-24 to the Exchanges.

CEO & CFO CERTIFICATION:

The CEO and CFO of the Company in their submission to the Board have confirmed that the annual financial statements present a true and fair view of the Company''s affairs and do not omit any material facts, which may make the statements or figures contained therein either misleading or false.

INSURANCE COVERAGE

The Management of the Company wishes to confirm that all the movable, immovable and current assets of the Company are covered with comprehensive and adequate insurance cover.

CREDIT RATING

The discipline with which the Company conducts its financial transactions is reflected in the BBB- rating given by the credit rating agency Acute for the financial year 2023-2024. The Management of the Company aims at further improving its credit rating during the current financial year.

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

The Company has in place an anti-sexual harassment policy on lines with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. All the employees of the Company either they are permanent, contractual, temporary or trainees, are covered by the policy.

The following is the summery of the Complaints regarding sexual harassment, received and redressed during the financial year 2023-24.

Number of Complaints received during the year : Nil

Number of Complaints resolved : NA

Number of Complaints pending at the end of the year : NA

REVISION OF FINANCIAL STATEMENT ORTHE REPORT:

As per the Secretarial Standards-4 in case the Company has revised its financial statement or the Report in respect of any of the three preceding financial years either voluntarily or pursuant to the order of a judicial authority, the detailed reasons for such revision shall be disclosed in the Report of the year as well as in the Report of the relevant financial year in which such revision is made.

There is no revision of Financial Statement of the Company that took place in any of the three preceding financial years, under consideration.

GENERAL INFORMATION:

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

1) Transfer to Reserves

2) Deposits accepted by the Company

3) Issue of equity shares with differential rights as to dividend, voting or otherwise

4) Provision of money for the purchase of its own shares by employees or by trustee for the benefit of employees

5) Revision in the financial statements

6) ''Change in the nature of company''s business

7) Suspension of Company''s securities

8) Failure to implement Corporate Action, One-time settlement

9) Material changes and commitments affecting financial position of --- the Company between the end of the financial year and the date of

this report

10) No significant or material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations

11) Application or proceedings made under the Indian Bankruptcy Code, 2016.

APPRECIATION:

Your Directors place on record earnest appreciation for the contribution made by each and every employee of the Company during the year under review. Company''s consistent growth was made possible by their hard work, solidarity, cooperation and dedication.The Directors also wish to express their gratitude to the Investors for the confidence and faith that they continued to repose in the Company. Board takes this opportunity to thank all shareholders, analysts, business partners, government and regulatory authorities, financial institutions, banks, distributors, suppliers, business associates, medical professionals and customers for their continued guidance, encouragement and support.

The Directors are pleased to present the Thirty Sixth (36th) Annual Report and the audited financial statements of the Company, for the financial year ended 31.03.2023

FINANCIAL SUMMARY/ REVIEW OF OPERATIONS/ STATE OF COMPANY’S AFFAIRS

Following is the analysis of the standalone financial statements of the Company during the year under review:

The financial year 2022-23 was a year of satisfactory performance by the Company. During the year, the revenue from operations recorded a growth of 6.41% in comparison to the revenue from previous financial year. However Profit after Tax (PAT) recorded a decrease of 28.6 % due to inflationary trends in the industry

Highlights of Company''s performance are covered in detail in the Management Discussion and Analysis Report (MDA), included in this Annual Report as required under Schedule V of the SEBI (LODR) Regulations, 2015.

DIVIDEND

The Board of Directors is pleased to recommend a Dividend of Re.1 /-per Equity Share of Rs.10/- each, i.e 10% of the Equity Share Capital of the Company thereby appropriating an amount of Rs 1.57 Crores towards Dividend for the F.Y 2022-23.

UNCLAIMED DIVIDEND

Section 124 of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules) provides that the dividend that has remained unclaimed or unpaid for a period of seven years is to be transferred to Investor Education and Protection Fund (IEPF). Further, the Rules mandate that the shares on which dividend has not been paid or claimed for seven consecutive years or more shall also be transferred to the IEPF.

During the year under review, the Company has transferred 8,363 Equity Shares of the shareholders, whose dividend is outstanding for 7 consecutive years and an amount of Rs 3,79,577/- to the IEPF account as per the Investor Education and Protection Fund Authority (Accounting, Audit,Transfer and Refund) Rules, 2016.

Details of the shareholders whose shares and unpaid dividend that was transferred to the IEPF a/c is updated on Company''s website www.balpharma.com.

Shareholders holding shares in physical form are advised to encash their Dividend on time to avoid transfer of their shares to IEPF account.

TRANSFERTO RESERVE

The Company does not propose to transfer any amount to general reserves.

SHARE CAPITAL

Rs.15,68,98,720/- comprising of 1,56,89,872 Equity Shares of Rs.10 each continued to be the Issued and Paid Up Capital of the Company.

During the financial year 2022-23 the Company has not issued any Equity Shares with differential voting rights, nor issued sweat Equity Shares.

During the financial year 2022-23 the Company has allotted 1,17,500 (one Lakh seventeen Thousand Five Hundred) equity shares of Rs.10 each to the permanent employees of the Company under Bal Pharma Ltd - Employees Stock Option Scheme - 2014, And also allotted 7,50,000 equity shares of Rs.10 (Rupees Ten only) each to Shailesh Siroya, Managing Director by way of conversion of warrants issued under preferential issue.

CONSOLIDATED FINANCIAL STATEMENTS

The Annual consolidated financial statements together with the Auditors Reports'' is annexed along with standalone financial statements for the financial year ended 31.03.2023.

NEW PROJECTS/ EXPANSION

--The Company has earmarked Rs.36.00 Cr for setting up of an bulk drug''s

manufacturing unit at Kadechur KIADB industrial area, Yadgir district , Karnataka. The Company has already obtained single window clearance for the said project and the same is expected to be completed in the next 4 years. Once fully commissioned, the API manufacturing unit will cater to the domestic and internal markets and ease the pressure on the existing API unit in Bommasandra , Bangalore.

Apart from this, API unit at Udaipur is getting upgraded to meet the requirements of the regulated international markets. The Company is also aiming at increasing its foot print in African markets in the near future.While the Company continues to launch a slew of new products in India, developed through its in-house R&D efforts, it also leveraging its strengths in India to position itself as a partner of choice for launch of latest generation innovative products in India. The Company offers a comprehensive product portfolio across various therapeutic segments, including neuropsychiatry, cardiology, diabetes, gastrointestinal, pain/analgesics, gynaecology, ophthalmology, , dermatology, anti-infectives and other segments. Bal Pharma has one of the largest sales force , coupled with a strong distribution and geographical reach. It also enjoys strong brand equity among the medical fraternity.

AUDITORS AND AUDITORS REPORTa. Statutory Auditors:

M/s SSJNB & Co, Chartered Accountants (FRN # 0I3976S) were appointed as Statutory Auditors of the Company from the conclusion of 35th Annual General Meeting held on 19.09.2022 up to the conclusion of 40th Annual General Meeting i.e for a period of 5 years.

Management Responses to Auditor’s observations if any:

There are no observations or remarks on the audited accounts of the company by the statutory auditors, for the financial year ended 31.03.2023

b. Cost Auditors:

As required by the provisions of Section 148 of the Companies Act,2013, Mr. M.R Krishna Murthy, Cost Accountant, (FCMA # 7568) was reappointed as the Cost Auditor of the Company for the financial year 2023-24, to conduct cost audit of the cost records maintained by the Company.

Cost Audit Report for the FY 2021- 2022 has been filed with the Ministry of Corporate Affairs on 07/10/2022.

c. Secretarial Auditor:

Pursuant to Section 204 of the Companies Act,2013 and rules made thereunder and in compliance with Regulation 24 A of SEBI (LODR) Regulations, Mr. Parameshwar G Bhat, Practising Company Secretary (CP # 11004) was appointed by the Board of Directors as the Secretarial Auditor of the Company for the financial year 2022-2023.

Secretarial Audit Report for the F.Y 2022-23 in Form MR-3 is annexed to this report as Annexure -1. No comments or remarks were made by the Auditor in his report for the F.Y 2022-23.

d. Internal Auditors:

M/s Murugesh & Co, Chartered Accountants (M # 002233S) were appointed as the Internal Auditors of the Company for the F.Y 202223 and the internal audit reports issued by them were periodically reviewed by the Audit Committee and the Management of the Company is appraised about the observations of the internal auditor and on corrective actions, if any, that needs to be taken.

RISK MANAGEMENT

The Risk Management Committee of the Company comprising of the functional heads of the Company will submit its periodical report to the Board of Directors on the measures to be taken for mitigation of potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is designed to enable risks to be identified, assessed and mitigated appropriately, is available on the website of the Company https://www.balpharma.com/fin

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Company''s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management principles. These policies are periodically reviewed to meet business requirements. The Company has in place --adequate internal financial controls with respect to financial statements.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies ---Act, 2013, your Directors wish to confirm:

1. That in preparing the annual accounts, all the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. That the Directors had selected such accounting policies and applied them consistently and made judgements 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.

3. That 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 / detecting fraud and other irregularities.

4. That the Directors had prepared the annual accounts on a going concern basis.

5. That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls

_____are adequate and are operating effectively.

6. That the Company had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RELATED PARTY TRANSACTIONS (RPTs)

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and at arms'' length basis and the same were undertaken after prior omnibus approval of the Audit Committee.

During the year, the Company has not entered into any contract/arrangement/transaction with the related parties that could be considered as material, as per the policy of the Company on materiality of related party transactions.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large. The Company''s policy on the related party transactions as approved by

the Board can be accessed from the website i.e https://www.balpharma.com/balpharmacom.fin

Details of disclosure relating to the related party transactions under Section 188 of the Companies Act, 2013, form part of the notes to the financial statements provided in this annual report.

The statement relating to related party transactions are provided as note 57 to the audited accounts. Form AOC-2, which is annexed to this report in Annexure- 2.

All the RPTs undertaken during the financial year are disclosed in the notes to the financial statements. For Further Details, your attention is drawn to the Related Party disclosures set out in the Standalone Financial Statements.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, the following Companies continued to be the subsidiaries of Bal Pharma Ltd.A report on the financial performance of each of the subsidiaries as per Section 129(3) of the Companies Act, 2013 in the prescribed format AOC-1 is provided in Annexure- 3 to the Board''s Report and hence not repeated here, for the sake of brevity:-

SECRETARIAL STANDARDS

Secretarial Standards i.e SS1 & SS2 issued by the Institute of Company Secretaries of India (ICSI) relating to the Meetings of Board of Directors and General Meetings, respectively have been duly followed by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP’S)

Mr. H S Venkatesh''s appointment as Director - Independent Non Executive was approved by the Shareholders in the 35th Annual General Meeting held on 19.09.2022 and he was appointed as an Independent Director.

Mr. Kotian Chittananda Damodar (DIN: #09613054) appointment as Whole- time Director was approved by the Shareholders in the 35th Annual General Meeting held on 19.09.2022 and he was appointed as an Whole- time Director.

Mr. Shailesh Siroya (DIN 00048109) is the Managing Director and Mr.

Virupakshaya Himesh (DIN 08554422) is the Whole Time Director of the Company,

Mrs. Preeti Singh, Company Secretary has tendered her resignation with effect from 15/05/2023 and Mr. Rengarajan Gopalakrishnan, Chief Financial Officer (CFO) has tendered his resignation with effect from 24/11/2022 . The company has appointed Mr. Daddanala Venkat Bharath Bhushan as the Chief Financial Officer (CFO) of the company with effect from 06/02/2023 and Mr.Abdul Basith as the Company Secretary with effect from 17/07/2023, are the Key Managerial Personnel of the Company as on the date of this report.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013.

The Independent Directors have also confirmed under Regulation 16(b) of SEBI (LODR) Regulations, 2015 that they are not Non-Independent Director of another Company on the Board of which any nonindependent Director of the listed entity is an independent Director.

The Company has devised a policy for familiarization of Independent Directors on their roles, rights, responsibilities with the Company and the said policy is available on the Company''s website www.balpharma.com.

BOARD EVALUATION

The Company has devised a policy for performance evaluation of the Board, Committees and Individual Directors. The evaluation process among others considers attendance of Directors at the Board and Committee Meetings, acquaintance with business, communication within the Board members, effective participation, domain knowledge, compliance with the internal code of conduct, vision and strategy.

The Company has also in place a Policy for Nomination and Remuneration of KMPs, Senior Management personnel and Directors of the Company, which is in compliance with Section 178 of the Companies Act, 2013. Policy guiding the nomination and remuneration of the Directors and KMP''s can be accessed from the Company''s website https://www.balpharma.com/balpharmacom/pdf/investors/irl/Nominati on%20and%20Remuneration%20Policy.pdf

The Board carried out annual performance evaluation of itself, Committees, Individual Directors and Chairman at their Meeting held on 27/02/2023.

Report on performance evaluation of the individual Directors, and Committees was reviewed by the Chairman and feedback was given to the Directors. The Board has expressed satisfaction over the overall functioning of the Board Members and their Committees, which are in line with the objectives and goals of the Company.

MEETINGS OF THE BOARD

The intervening gap between two Board Meetings was within the maximum period prescribed under the Act. The detailed information regarding Board and Committee meeting is furnished in the Corporate Governance Report, forming part of the Annual Report were held during the year under review.

VIGIL MECHANISM

The vigil mechanism of the Company which also incorporates Whistle Blower Policy as prescribed by SEBI(LODR) Regulations, 2015 includes compliance task force comprising of senior executives of the Company. ._

The policy of whistle blower is available on the Company''s website. The policy is reviewed by the Audit Committee from time to time and no concerns and/or irregularities were reported by the employees till date. Please access the Company''s website https://www.balpharma.com/wbp to refer to the whistle blower policy of the Company.

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

As per the provisions of Section 134 of the Companies Act, 2013, details relating to the conservation of energy, technology absorption, foreign exchanges earnings and outflow are given as Annexure -4 to this report.

CORPORATE GOVERNANCE

Your Company is committed to maintaining highest standards of Corporate Governance requirements set out by the Securities and Exchange Board of India.A detailed report on the corporate governance system and practises of the Company along with a certificate from the practising Company secretary confirming the compliance with the corporate governance requirements, are given in a separate section of this report as Annexure-5.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE’S GIVEN OR SECURITY PROVIDED BY THE COMPANY

The Company makes investments and trade advances to its subsidiaries for their business purpose. Details of loans, investments and advances covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements provided in this annual report.

DEPOSITS

Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Disclosure as per the Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

The Company has not accepted any unsecured loan from the Directors of the Company and/or relatives of the Directors during the year under consideration.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND UP TOTHE DATE OFTHIS REPORT

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

ANNUAL RETURN

Pursuant to Section 92(3) read with Section I34(3)(a) of the Act, Copy of the Annual Return as on March 31st, 2023 is available on the Company''s website www.balpharma.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. As on the date of report following is the composition:

The Committee has formulated a Corporate Social Responsibility policy which recommends the social activities to be undertaken by the Company, as specified in ScheduleVII of the Companies Act, 20I3.A copy of the said policy is available on the website i.e https://www.balpharma.com/balpharmacom/pdf/finance/irl/CSR%20Pol icy%202022.pdf.

The Committee has recommended CSR budget of Rs 9,75,000 (Rupees Nine Lakhs Seventy Five Thousand only) for the financial year 2022-23 as per the provisions of Section 135 of the Companies Act, 2013.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure- 6 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

HUMAN RESOURCES

Human resources of the Company have major share in the growth and development of the Company. The Company continues to hire new talent in order to keep pace with the new projects and initiatives undertaken. The Management of the Company aims to strengthen its employee relations through progressive people management.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company continued to be listed on BSE Limited, and National Stock Exchange of India Limited, and the Company has paid the annual listing fees for F.Y 2022-23 to the Exchanges.

PARTICULARS OF EMPLOYEES

There are no employees who are in receipt of remuneration in excess of the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as "Annexure -7” to this report.

CEO & CFO CERTIFICATION

The CEO and CFO of the Company in their submission to the Board have confirmed that the annual financial statements presents a true and fair view of the Company''s affairs and do not omit any material facts, which may make the statements or figures contained therein either misleading or false.

INSURANCE COVERAGE

The Management of the Company wishes to confirm that all the movable, immovable and current assets of the Company are covered with comprehensive and adequate insurance cover.

CREDIT RATING

The discipline with which the Company conducts its financial transactions is reflected in the BBB- rating given by the credit rating agency Acute for the financial year 2022-2023. The Management of the Company aims at further improving its credit rating during the current financial year.

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

The Company has in place an anti-sexual harassment policy in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. All the employees of the Company either they are permanent, contractual, temporary or trainees, are covered by the policy.

The following is the summary of the Complaints regarding sexual harassment, received and redressed during the financial year 2022-23.

Number of Complaints received during the year : Nil

Number of Complaints resolved : NA

Number of Complaints pending at the end of the year : NA

GENERAL INFORMATION:

Your Directors Report that no disclosure or reporting is required in respect of the following items except for issue of shares to permanent employees during the year under review:

1. Details relating to the deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential voting rights with respect to dividend, voting etc.

3. Issue of shares (including sweat equity shares) to the employees of the Company under any scheme is given in a separate section of this report as Annexure-8.

4. Neither the Managing Director nor the whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the regulators or courts or tribunals which impacts the going concern status of the Company and its operations in future.

6. No fraud has been reported by the Auditors to Audit Committee or the Board during the year.

REVISION OF FINANCIAL STATEMENT OR THE REPORT:

As per the Secretarial Standards-4 in case the Company has revised its financial statement or the Report in respect of any of the three preceding financial years either voluntarily or pursuant to the order of a judicial authority, the detailed reasons for such revision shall be disclosed in the Report of the year as well as in the Report of the relevant financial year in which such revision is made.

There is no revision of Financial Statement of the Company that took place in any of the three preceding financial years, under consideration.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

There is no such process initiated during the year, therefore said clause is not applicable to the Company.

FAILURE TO IMPLEMENTANY CORPORATE ACTION:

There were no such events took place during the year under consideration.

APPRECIATION:

Your Directors express their gratitude to the Company''s customers, Shareholders, employees, business partners'' viz. distributors, suppliers, medical professionals, Company''s bankers, financial institutions including investors for their valuable, sustainable support and co-operation.

The Directors are pleased to present the thirty first (31^th) Annual report and the audited financial statements of the Company for the financial year ended 31.03.2018.

FINANCIAL ANALYSIS

The following is the analysis of the standalone financial statements of the Company during the year under review.

(in Rs. Crores)

Appropriations:

Your Directors are pleased to recommend a dividend of Rs.I /- per equity share of Rs.10 each i.e 10% of the Equity Share Capital of the Company thereby appropriating an amount of Rs.1.41 Crores towards Dividend for the FY 2017.18, which is exclusive of the dividend distribution tax of Rs.28.85 Lakhs. The Company has not transferred any amount to General Reserves.

The register of members and share transfer books of the Company shall remain closed from 18^th September 2018 to 22^nd September 2018 (both days inclusive) for the purpose of payment of dividend for the FY 2017-18 and for the 31^st Annual General Meeting scheduled to be held on 22.09.2018.

Share capital:

During the financial year under review, Rs.14,17,23,720/- comprising of 1,41,72,372 equity shares of Rs.10 each continues to be the issued and paid up capital of the Company.

During the financial year 2017.18, the Company has not issued any Equity Shares with differential voting rights, granted stock options nor issued sweat Equity Shares.

MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS.

India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. Presently over 80 per cent of the antiretroviral drugs used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical firms. India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50 per cent of global demand for various vaccines, 40 per cent of generic demand in the US and 25 per cent of all medicine in UK.

Market Size

The Indian pharmaceutical sector was valued at US$ 33 billion in 2017. The country''s pharmaceutical industry is expected to expand at a CAGR of 22.4 per cent over 2015-2020 to reach US$ 55 billion. India''s pharmaceutical exports stood at US$ 17.27 billion in 2017-18 and are expected to reach US$ 20 billion by 2020.

Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from the US Food and Drug Administration (USFDA) in 2017. The country accounts for around 30 per cent (by volume) and about I0 per cent (value) in the US$ 70-80 billion US generics market.

India''s biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry and bioinformatics is expected grow at an average growth rate of around 30 per cent a year and reach US$ 100 billion by 2025. Biopharma, comprising vaccines, therapeutics and diagnostics, is the largest sub-sector contributing nearly 62 per cent of the total revenues at Rs.12,600 crore (US$ 1.89 billion).

Investments

The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 per cent under the automatic route for manufacturing of medical devices, subject to certain conditions.

The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 15.59 billion between April 2000 and December 2017, according to data released by the Department of Industrial Policy and Promotion (DIPP).

Some of the recent developments/investments in the Indian pharmaceutical sector are as follows:

- During 2017-18, Indian pharmaceutical sector witnessed 46 merger & acquisition (M&A) deals worth US$ 1.47 billion.

- The exports of Indian pharmaceutical industry to the US will get a boost, as branded drugs worth US$ 55 billion will become off-patent during 2017-2019.

Government Initiatives

Some of the important initiatives taken by the government to promote the pharmaceutical sector in India are as follows:

- The National Health Protection Scheme is largest government funded healthcare programme in the world, which is expected to benefit 100 million poor families in the country by providing a cover of up to Rs.5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation. The programme was announced in Union Budget 2018-19.

- In March 2018, the Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.

- The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy, in order to stop any misuse due to easy availability.

- The Government of India unveiled ‘Pharma Vision 2020'' aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.

- The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.

Road Ahead

Healthcare spending in India is expected to increase at 9-12 per cent CAGR between 2018-22 to US$ 50-55 billion, driven by increasing consumer spending, rapid urbanisation, and raising healthcare insurance among others.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as cardiovascular, anti-diabetes, antidepressants and anti-cancers, which are on the rise.

The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the Indian pharmaceutical companies.

BUSINESS OPERATIONS:

Turnover and Net profit:

Yjur company has registered a total revenue of Rs.211.48 Crores for the financial year ended 31.03.2018 as against Rs. 235.40 Crores during the previous year. The drop in the turnover is due to the effect of implementation of GST during the financial year and also due to changes in the presentation of Profit & Loss Account as per IND AS.

Rs.8.15 Cr was the Profit before tax (PBT) of the Company for the financial year ended 31.3.2018.

The Company has registered a net profit of Rs.5.93 Crores for the year ended 31.03.2018 as against the net profit of Rs.5.31 Crores during the previous year.

The company has recorded an EPS of Rs.3.98 per equity share of Rs.10 each as against Rs.3.50 during the previous year.

Formulations Business:

The formulations business of the Company has contributed a revenue of Rs.103.10 Crores during FY 2017.18 as against the revenue of Rs.106.31 Crores during FY 2016.17.

Turnover from the export of formulations during FY 2017.18 is at Rs.52.97 Crores as against Rs.61.43 crores during FY16.17.

Domestic sales of formulations mainly constituting branded formulations has contributed a revenue of Rs.50.12 Crores during FY 2017.18 as against a revenue of Rs.44.88 Crores during FY 2016.17.

Bulk Drugs Business:

As against the total revenue of '' 120.49 Crores from the bulk drugs business during FY 2016.17, the company has recorded a sales revenue of Rs.103.17 Crores from bulk drugs for the financial year 2017.18. Revenue from export of API products has resulted in a turnover of Rs.60.33 Crores and domestic sales of the said products has yield a revenue of Rs.42.85 Crores.

Diabetic and cardiac drugs of the Company continues to be the major revenue earners of the Company, from both domestic and export markets during the financial year.

Export Business:

The Company has recorded export sales of Rs.113.29 Crores as against Rs.121.67 Crores recorded during the previous financial year.

Domestic Business:

The Company has recorded a revenue of Rs.92.97 Crores from its domestic business for the financial year 2017.18 as against the domestic revenue of Rs.105.13 crores during 2016.17.

NEW PROJECTS:

During the year under review, Bal Pharma Ltd has acquired 100% stake and management control of Golden Drugs Private Ltd, an Udaipur, Rajasthan based private limited Company involved in the manufacture of bulk drugs and intermediates. The total cost of acquisition is Rs.14 Crores which involves purchase of 100% shareholding of the Company with a purchase consideration of '' 20.66/- per shares and also towards repayment of all the past liabilities of the Company. With this acquisition, Bal Pharma Ltd aims to increase its production capacity by at least 20% and also enter into unexplored API markets, both domestic and international.

In addition to this, the Company assesses the future infrastructure requirements and continuously invests in the same on need basis.

AUDIT COMMITTEE:

Audit Committee, a subcommittee of the Board consists of Mr.Pramod Kumar.S, Dr.G.S.R Subba Rao, Mrs. Sarika Bhandari, Independent Directors of the Company.

Audit Committee of the Company continues to discharge its duties as per the provisions of Section 177 of the Companies Act, 2013 and also SEBI (LODR) Regulations, 2015.

AUDITORS AND AUDITORS REPORT:

a) Statutory Auditors:

Messers NSVM & Associates, Chartered Accountants (FRN # 0I0072S) were appointed as Statutory Auditors of the Company from the conclusion of 30^th Annual General Meeting held on 22.09.2017 up to the conclusion of 35^th Annual General Meeting i.e for a period of 5 years.

There are no qualifications or adverse remarks or observations by the Statutory Auditors in their report issued for the financial year 2017.18.

b) Cost Auditors:

Mr.M.R Krishna Murthy , Cost accountant,(FCMA # 7568) was reappointed as the Cost Auditor of the Company for the financial year 2018-19, to conduct cost audit of the cost records maintained by the Company.

c) Secretarial Auditors:

Mr.Parameshwar G Bhat, Practising Company Secretary ( CP # 11004) were appointed as the Secretarial Auditor of the Company for the financial year 2017.18. No adverse comments or remarks were made by the auditor in his report for the F.Y 2017.18, which is annexed to this report.

d) Internal Auditors:

Messers Bharath & Co, Chartered Accountants, (MRN # 240163) were appointed as the Internal Auditors of the Company for the FY 2017.18 and the internal audit reports issued by them were periodically reviewed by the Audit Committee and the management of the Company is appraised about the observations of the internal auditor and on corrective actions, if any, that needs to be taken.

Risk Management:

The Risk Management Committee of the Company comprising of the functional heads of the Company will submit its periodical report to the Board of Directors on the measures to be taken for mitigation of potential risk factors that may affect the business of the Company.

The Risk Management Policy implemented by the Company which is designed to enable risks to be identified, assessed and mitigated appropriately, is available on the website of the Company i.e www. balpharma.com.

Internal Control System and its Adequacy:

Your Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Company''s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. The Company has in place adequate internal financial controls with respect to Financial Statements. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management principles. These policies are periodically reviewed to meeting business requirements.

Directors responsibility statement.

In compliance with the provisions of Section 134(5) of the Companies Act,20l3, your Directors wish to confirm,

a) That in preparing the annual accounts, all the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) That the Directors had selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period.

c) That 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 / detecting fraud and other irregularities.

d) That the Directors had prepared the annual accounts on a going concern basis.

e) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f) That the Company had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Related party Transactions:

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and at arms length basis. During the year, the Company has not entered into any contract/arrangement/transaction with the related parties that could be considered material, as per the policy of the Company on materiality of related party transactions.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large.

The Company''s policy on the related party transactions as approved by the Board can be assessed from the website i.e www.balpharma.com.

For disclosure relating to the related party transactions, please refer to note # 34 of the financial statements.

Subsidiary, Joint Venture and Associate Companies:

During the year under review, the following Companies listed below continues to be the subsidiaries, joint ventures or associates of Bal Pharma Ltd. A report on the financial performance of each of the subsidiaries, joint ventures or associate companies as per section 129(3) of the Companies Act, 2013 is provided in Annexure 1 to the Board''s report and hence not repeated here for the sake of brevity.

Secretarial Standards:

Secretarial Standards i.e SSI & SS2 relating to the meetings of Board of Directors and General meetings, respectively have been duly followed by the Company.

Directors and Key Managerial Personnel (KMP’s):

The Nomination and Remuneration Committee has recommended for reappointing Dr.Subba Rao Prasanna as whole time Director of the Company for a further period of 2 years. His reappointment is being considered at the ensuing Annual General Meeting by a special resolution.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence, as prescribed under Section 149(6) of the Companies Act, 2013.

The Company has devised a policy for familiarization of Independent Directors on their roles, rights, responsibilities with the Company and the said policy is available on our website.

The Company has also in place a Policy for nomination and remuneration of KMP''s, Senior Management personnel and Directors of the Company, which is in compliance with Section 178 of the Companies Act, 2013.

The Company has devised a policy for performance evaluation of the Board, committees and Individual directors. The evaluation process inter alia considers attendance of Directors at Board and Committee meetings, acquaintance with business, communication within Board members, effective participation, domain knowledge, compliance with the internal code of conduct, vision and strategy.

The Board carried out annual performance evaluation of itself, Committees, Individual Directors and Chairman. The performance of each committee is evaluated based on the reports of evaluation received from the respective committees.

Report on performance evaluation of the individual Directors was reviewed by the Chairman and feedback was given to the Directors. Details of Board and Committee Meetings held during the year is disclosed in the Corporate Governance Report.

Vigil Mechanism:

The vigil mechanism of the Company which also incorporates Whistle Blower Policy as prescribed by SEBI(LODR) Regulations, 2015 includes compliance task force comprising of senior executives of the Company. The policy of whistle blower is available on our website.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outflow:

As per the provisions of Section 134 of the Companies Act, 2013, details relating to the conservation of energy, technology absorption, foreign exchanges earnings and outflow are given as Annexure -3 to this report.

Corporate Governance:

The Company is committed to maintaining highest standards of Corporate Governance requirements set out by the Securities and Exchange Board of India. A detailed report on the corporate governance system and practises of the Company along with a certificate from the practising Company secretary confirming to the compliance with the corporate governance requirements, are given in a separate section of this report.

Particulars of Loans given, investments made, Guarantee’s given or security provided by the Company.

The Company makes investments and trade advances to its subsidiaries for their business purpose. Details of loans, investments and advances covered under Section 186 of the Companies Act, 2013, form part of the notes to the financial statements provided in this annual report.

Material Changes and Commitments affecting the financial position of the Company between the end of the financial year and up to the date of this report.

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

Extract of the Annual Return:

In accordance with Section 134 (3) (a) of the Companies Act, 2013, an extract of the Annual return of the Company for the financial year 2017-18 in Form MGT-9 is annexed to this report as Annexure-5.

Corporate Social Responsibility:

As per the provisions of Section 135 of the Companies Act,20I3, the Company has constituted a CSR committee with the following Composition.

1.Dr.G.S.R Subba Rao - Chairman

2.Mr.Pramod Kumar.S - Member

3.Dr.S.Prasanna - Member

4.Mr.Shailesh Siroya - Member

The Committee has formulated an Corporate Responsibility policy which recommends the activities to be undertaken by the Company, as specified in Schedule VII of Companies Act,20I3. A copy of the said policy is available on the website i.e www.balpharma.com. The Committee has not recommended any CSR budget for the financial year 20I8.I9, due to inadequate profits

Human Resources:

Human resources of the Company has major share in the growth and development of the Company. The Company continues to hire new talent in order to keep pace with the new projects and initiatives undertaken. The Management of the Company aims to strengthen its employee relations through progressive people management.

Board Evaluation:

The Board of Directors of the Company has carried out annual performance evaluation of its own performance, its Committees and individual Directors at their meeting held on I4.02.20I8. The Board has expressed satisfaction over the overall functioning of the Board members and their committees which are in line with the objectives and goals of the Company.

Listing with Stock Exchanges:

The Equity Shares of the Company continued to be listed on BSE Limited, Mumbai and National Stock Exchange of India Ltd, Mumbai and the Company has paid the annual listing fees for F.Y 2018-19 to the exchanges.

CEO & CFO certification:

The CEO and CFO of the Company in their submission to the Board have confirmed that the annual financial statements presents a true and fair view of the Company''s affairs and do not omit any material facts, which may make the statements or figures contained therein either misleading or false.

Insurance Coverage:

The Management of the Company wishes to confirm that all the movable, immovable and current assets of the Company are covered with comprehensive and adequate insurance cover.

Credit Rating:

The discipline with which the Company conducts its financial transactions is reflected in the BBB(stable) rating given by the credit rating agency ICRA for the financial year 2017-18. The Management of the Company aims at further improving its credit rating during the current financial year.

Disclosure under the sexual harassment of Women at work place (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an anti-sexual harassment policy on lines with the requirements of the sexual harassment of women at the work place (Prevention, Prohibition and Redressal) Act,20I3. All the employees of the Company either they are permanent, contractual, temporary or trainees, are covered by the policy.

The following is the summery of the Complaints regarding sexual harassment, received and redressed during the financial year 2017-18.

Number of Complaints received during the year : Nil

Number of Complaints resolved : NA

Number of Complaints pending at the end of the year : NA

Particulars of Employees:

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(1), 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as ‘Annexure 4” to this report.

General Information:

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

1 Details relating to the deposits covered under Chapter V of the Companies Act, 2013.

2 Issue of equity shares with differential voting rights with respect to dividend, voting etc.

3. Issue of shares (including sweat equity shares) to the employees of the Company under any scheme.

4. Neither the Managing Director nor the whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the regulators or courts or tribunals which impacts the going concern status of the Company and its operations in future.

6. No fraud has been reported by the Auditors to Audit Committee or the Board during the year.

Appreciation:

Your Directors express their gratitude to the Company''s customers, shareholders, employees, business partners'' viz. distributors, suppliers, medical professionals, Company''s bankers, financial institutions including investors for their valuable, sustainable support and co-operation.

To the Members,

The Directors are pleased to present the Twenty Ninth (29^th) Annual Report and the Company''s Audited Financial Statements for the Financial Year ended 31.03.2016.

FINANCIAL RESULTS

The following is the summary of the Company''s Consolidated financial performance during the year under review.

(Rs, in Crores)

Note : Previous year''s expenses have been regrouped wherever necessary to confirm to this year''s classification.

2. DIVIDEND & APPROPRIATIONS

Your Directors are pleased to recommend dividend of Rs, 1.00/- (i.e 10%) on each Equity Share of Rs, 10/- , thereby absorbing an amount of Rs, 1.41 crores excluding Dividend Distribution Tax of Rs, 28.85 Lakhs.

3. SHARE CAPITAL:

The Company has made the allotment of 13,00,000 Equity Shares of Rs, 10/- each on preferential basis with each share carrying a premium of Rs, 52/-. With this allotment, the Paid-up Equity Share Capital of the Company has increased to Rs, 14,17,23,720/- divided into 1,41,72,372 Equity Shares of Rs, 10/- each.

During the period under review, the Company has not issued shares with differential voting rights nor granted stock options nor Sweat Equity Shares.

4. MANAGEMENT DISCUSSION AND BUSINESS ANALYSIS: Indian Pharmaceutical Industry scenario and opportunities:

India continues to be the global manufacturing hub for the pharmaceuticals during the financial year 2015.16. Presently there are 10,500 manufacturing units and over 3,000 Pharmaceutical Companies in India, and still growing at an exceptional rate. India has about 1,400 WHO GMP approved manufacturing units.1,105 CEP accredit ions , more than 950 TGA approvals and 584 sites approved by the USFDA. Globally more than 90 per cent of formulations approvals for Anti-retroviral (ARVs), Anti-tubercular & Anti-malarial (WHO pre-qualified) have been granted to companies present in India. Manufacturing costs in India are approximately 35-40 percent less than those in the US due to low installation and manufacturing costs. Qualified manpower , availability of raw materials and a huge domestic market for growth are some of the contributing factors for this scenario. India ranks amongst the top global generic formulation exporters in volume terms.

India''s exports of pharma and drugs stood at US$ 16.8 bn. India exports all forms of pharmaceuticals from APIs to formulations, both in modern medicine and traditional Indian medicines. The country''s pharmaceutical industry accounts for about 1.4 per cent of the global pharmaceutical industry in value terms and 10 per cent in volume terms.

Bal Pharma Limited during the year under review has aimed at consolidating its position in Indian market by advancing its project on modernizing and expansion of its manufacturing capabilities, which is expected to be completed by December 2017. Once the enhanced production capability is made available to the Company, it is expected to meet the demand of its signature products in Cardiology, Diabetology, Analgesics, Antipyretics, Antibiotic, Anti histamine, IV fluids, Nutrition supplements etc both in domestic and international markets.

Lifezen healthcare Private Limited, an Over The Counter (OTC) products marketing Company floated by Bal Pharma Limited as its Subsidiary has launched 2 new products in Indian OTC market and the said products has received encouraging response from the market. Even through the Subsidiary is yet to break even in its business; it has made its presence felt in OTC market and aiming at an profitable business model in near future.

5. BUSINESS OPERATIONS

(i) Turnover and Net profit:

During the Financial Year 2015-16, your Company has achieved a gross standalone turnover of Rs, 201.82 Crores as against Rs, 190.67 Crores achieved during the previous Financial Year, thus registering a top line growth of 5%. .

The Net Profit After Tax of the Company during the financial year 2015-16 stands at Rs, 2.81 Crores as against the Net Profit of Rs, 4.02 Crores achieved in the previous financial year 2014-15.

(ii) Formulations Business:

The Formulations Business of the Company has contributed a total revenue of Rs, 111.03 Crores, during the FY 2015-16 as compared to Rs, 115.40 Crores, during F Y 2014-15.

The turnover from export of formulations during the year under review stands at Rs, 61.51 Crores as against Rs, 73.51 Crores achieved during the previous financial year. This drop in revenues is due to sluggish economy in overseas markets.

In the domestic market, Branded formulations of the Company, consisting of mainly Diabetic, Gynaecology and Cardiac drugs have contributed to revenue of Rs, 36.00 Crores during the year under review as against Rs, 22.49 crores achieved during the previous year.

(iii) Bulk Drug Business:

Bulk Drug Business continue to show its momentum in sales with a revenue of Rs, 87.31 Crores during the year under review as compared to Rs, 75.13 Crores achieved during the previous financial year, thereby registering a growth of 10.7%.

Exports sales of bulk drugs during the year under review stands at Rs, 53.60 Crores as against Rs, 48.01 crores registered during the previous financial year.

Domestic sales of the bulk drugs have registered an revenue of Rs, 33.70 Crores as against the revenue of Rs, 27.24 Crores registered during the previous financial year.

(iv) Export Performance:

The overall export sales of the Company during the year under review has recorded a turnover of Rs, 115.11 Crores as against revenue of Rs, 121.53 Crores achieved during the previous financial year.

Revenues from the export sales continue to consistently dominate the Companies overall turnover.

(v) Domestic Performance:

Revenue from domestic sales has registered a turnover of Rs, 82.76 Crores as compared to Rs, 64.46 Crores achieved during 2014-15, there by registering an growth of 22% .

Diabetic and Cardiac drugs of the Company continue to prove their dominance in revenue earnings in Indian markets.

7. AUDIT COMMITTEE:

The Audit Committee, a sub-Committee of Board consists of Dr. G.S.R Subba Rao, Independent Director, Mr. Shrenik Siroya, Non-Executive Director, Mr. Pramod Kumar S, Independent Director and Mrs. Sarika Bhandari, Independent Director.

Mr. Pramod Kumar S was appointed as Chairman of the Committee on 10.02.2016 in place of Dr. G.S.R Subba Rao, who resigned from the Chairmanship of the Committee citing personal reasons. The Audit Committee has been discharging its duties as per the provisions of SEBI (LODR) Regulations, 2015 and as per Section 177 of the Companies Act, 2013.

8. AUDITORS AND AUDITORS REPORT :

a. Statutory Auditors:

Messrs T.D Jain and D I Sakaria , Chartered Accountants were appointed as Statutory Auditors of the Company from Financial Year 2015-16 to 2017-18 i.e., for the period of 3 years, to hold office from the conclusion of 28th Annual General Meeting held on 22nd September, 2015 until the conclusion of 31st Annual General Meeting, subject to ratification of their appointment at every subsequent Annual General Meeting..

There are no qualifications or reservations or adverse remarks by the Statutory Auditors in their report.

b. Cost Auditors:

Pursuant to the provisions of Section 148 of the Companies Act, 2013, the Company has appointed Mr. M.R Krishna Murthy, Cost Accountant as Cost Auditor for conducting audit of cost records of the Company, for the Financial Year 2015-16.

c. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Parameshwar G. Bhat, Practising Company Secretary to conduct Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial Audit report for the Financial Year 2015-16 is annexed to this report as Annexure 2. Certain non material observations made by Secretarial Auditor in his report have been suitably addressed by the Management with corrective actions, wherever necessary.

d. Internal Auditors:

Messrs Abhishek Jain and Dheeraj Bafna, Chartered Accountants were appointed as Internal Auditors of the Company for the financial year 2015-16 and their Reports on Internal Audit were periodically reviewed by the Audit Committee and recommends to the Board for its noting. The Internal Audit Reports do not contain any qualifications, reservations or adverse remarks.

9. RISK MANAGEMENT:

The Risk Management Committee of the Company consisting of the Functional heads and Company Secretary of the Company will submit its periodical report to the Board of Directors of the Company on the measures taken for mitigation of potential risk factors.

The Risk Management Policy devised and implemented by the Company is available on the website i.e www.balpharma.com.

10. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company has an adequate system of internal controls with clearly defined authority limits. Internal controls ensure that the Company''s assets are protected against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported in conformity with Generally Accepted Accounting Principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically reviewed to meet current business requirements.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors wish to confirm:

a) that in preparing the Annual Accounts, all the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) that 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 and Loss of the Company for that period.

c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

d) that the Directors have prepared the annual accounts on a going concern basis.

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

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

12. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES :

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm''s length basis. During the year, the Company had not entered into any contract/arrangement/ transaction with related parties that could be considered material

i.e., exceeding 10% of the annual consolidated turnover of the Company, as defined in SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

The Company''s Policy on the Related Party Transactions as approved by the Board can be accessed from our website

i.e www.balpharma.com.

Please refer to the note #34 to the financial statements, which sets out related party disclosures.

13. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES:

During the year under review, the following Companies listed below are Company''s Subsidiaries, Joint Ventures or Associate Companies. A report on the performance and financial position of each of the Subsidiaries, Associates, Joint Venture companies as per Companies Act, 2013 is provided as Annexure 1 to the Board''s Report and hence not repeated here for the sake of brevity.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shrenik D Siroya, Non Executive Director of the Company retires by rotation at the Annual General Meeting and being eligible offers himself for reappointment.

As per Section 196,197 and Schedule V of the Companies Act,2013, Dr.S.Prasanna is being reappointed as the Whole time Director of the Company for a period of 2 years w.e.f 1.10.2016 to 30.9.2018.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.

The Company has devised a Policy for familiarization of independent Directors with the Company, their roles, rights, responsibilities in the Company etc and the same is uploaded on the website of the Company i. e www.balpharma.com.

The Company also has in place a Policy for Nomination and remuneration of KMP''s, Senior Managerial personnel and Directors of the Company, which is in compliance with Section 178 of the Companies Act, 2013. The said Policy is available on the website of our Company.

15. VIGIL MECHANISAM:

The vigil mechanism of the Company, which also incorporates Whistle Blower Policy as per the SEBI (LODR) Regulations, 2015, includes compliance task force comprising of Senior Executives of the Company. The complete text on the vigil mechanism and Whistle Blower Policy can be accessed from our website i.e., www.balpharma.com.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND FOREIGN EXCHANGE OUTGO:

As per provisions of Section 134(m) of the Companies Act, 2013, read with the rule 8 of the Companies (Accounts) Rules, 2014, details relating to the Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outflow are given in Annexure-3, which forms part of the Board''s Report.

17. PARTICULARS OF EMPLOYEES:

Information as per Rule 5(1) of Chapter XIII of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as an Annexure - 5 to this report.

18. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHARE HOLDERS:

A detailed report on the Corporate Governance System and practices of the Company are given in a separate section of this Annual Report. Detailed information for the shareholders is given in Additional Shareholders information section.

19. PARTICULARS OF LOAN GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY:

The Company has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

20. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:

There were no material changes and commitments between the end of the financial year and the date of the Report, which affect the financial position of the Company.

21. EXTRACT OF ANNUAL RETURN:

Extract of the Annual Return of the Company for the Financial Year 2015-16, in Form MGT-9 is annexed to this report as Annexure - 4.

22. CORPORATE SOCIAL RESPONSIBILITY:

The Board has constituted a Corporate Social Responsibility Committee consisting of Dr. G.S.R Subba Rao, Mr. Pramod Kumar

S, Dr. S. Prasanna and Mr. Shailesh Siroya as its members.

The Committee has formulated a Corporate Social Responsibility (CSR) Policy and the Board has approved the Policy for its implementation. The CSR Policy may be accessed from our website i.e., www.balpharma.com .

Due to delay in suitable planning of the CSR activities, the Company could not spend any amount towards Corporate Social responsibility for the year ended 31.03.2016.

23. HUMAN RESOURCES:

The human resources of the Company continue to contribute its share in the growth of the Company. Human Resource agenda of the Company for the year continued to focus on building a talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement, and strengthening employee relations through progressive people management.

There was no complaint lodged by any woman employee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, with the Company during the period under report.

24. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, its Committee''s and the Directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report

25. LISTING WITH STOCK EXCHANGES:

The Securities and Exchange Board of India (SEBI), on September

2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company entered into revised Listing Agreement with BSE Limited and the National Stock Exchange of India Limited, during November 2015.

The Company has paid the Annual Listing Fees for the year 201617 to National Stock exchange of India Limited (NSE) and BSE Limited (BSE) where the Company''s Shares are listed.

26. CEO & CFO CERTIFICATION:

The Board has acknowledged that Managing Director as the CEO of the Company and DGM Finance and Accounts as the CFO for the purpose of compliance under the Listing Regulations. The CEO and CFO have certified to the Board, in terms of Regulation 33(2) of SEBI (LODR) Regulations, 2015, that the financial statements present a true and fair view of the Company''s affairs and do not omit any material facts which may make the statements or figures contained therein misleading.

27. INSURANCE COVERAGE:

The Board of Directors reports that your Company has adequate and comprehensive insurance cover on all the movable and immovable assets of the Company.

28. CREDIT RATING:

The Company''s financial discipline is reflected in the BBB (stable) rating given by ICRA for the Companies borrowings, both for term loan and working capital for the financial year 2015-16 which is a notch above the previous year''s credit rating of BBB - . The Company looks forward to further improve its credit rating during the Financial Year 2016-17.

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

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16:

No. of complaints received : NIL No. of complaints disposed off : NIL

30. GENERAL:

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

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

2. Issue of equity shares with differential rights as to dividend, voting etc.

3. Issue of shares (including sweat equity shares) to the employees of the Company under any scheme.

4. Neither the Managing Director nor the whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company''s operations in the future.

31. APPRECIATION:

Your Directors wish to express their sincere appreciation on significant contributions made by the employees through their dedication, hard work and commitment. Your Directors also place on record their sincere thanks on the trust reposed on the Company by the medical fraternity and the patients. We also acknowledge the support extended by Canara Bank, Punjab National Bank, EXIM Bank, Corporation Bank and other financial institutions, government agencies, shareholders and investors at large. We look forward to the continued support from all the quarters in our endeavor to help people lead healthier lives.

For and on behalf of the Board of Directors

Bengaluru Dr. S. Prasanna Shailesh D Siroya

10^th August 2016 Whole Time Director Managing Director

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report together with the Audited Accounts of the Company, for the financial year ended on 31st March, 2014. As notified by MCA vide Circular No. 1/19/2013-CL-V dated 04.04.2014, we have followed the provisions of Companies Act, 1956, in the preparation of this report.

1. FINANCIAL RESULTS

(Rs. in Crores)

Particulars FY 2013-14 FY 2012-13

1) Total Income from operations 182.01 150.25

2) Earnings before Interest , Tax , 18.53 17.88

Depreciation & Amortisation

Less :

Depreciation & Amortisation 4.74 4.81

Finance cost 7.16 7.98

Profit before taxation and prior

period adjustments. 6.63 5.09

Less :

3) Current Tax (Net) 1.55 -

4) Deferred Tax 0.01 0.82

5) Extra Ordinary / Non Recurring items - -

6) Prior year Adjustments (0.01)

7) Net Profit 5.07 4.28

Add :

8) Profit & loss account balance at the 15.16 11.80

beginning of the year

9) Profit /(Loss) made available for 20.23 16.08

appropriation

Less :

10) Proposed Dividend on Equity Shares 1.11 0.79

11) Tax on Dividend 0.19 0.13

12) Balance Carried to Balance sheet 18.93 15.16

Note : Previous year''s figures have been regrouped wherever necessary to confirm to this year''s classification.

2. DIVIDEND & APPROPRIATIONS

Your Directors are pleased to recommend a payment of Dividend of Re. 1.00/- (i.e 10%) on each Equity Share of Rs. 10/- each, thereby absorbing an amount of Rs. 1.11 crores excluding Dividend Distribution Tax of Rs. 0.19 crores. The balance amount of profit is retained as surplus in the Statement of Profit and Loss, forming part of Reserves and Surplus.

3. BUSINESS OPERATIONS

(i) Turnover and Net profit:

During the financial year 2013-14, your Company has achieved highest ever gross turnover of Rs. 182.01crores as against Rs. 150.25 crores achieved during the previous financial year, thus registering a good growth of 21.14%.

The net profit after tax of the Company during the financial year 2013-14 stands at Rs. 5.07 Crores as against the net profit of Rs. 4.28 crores achieved in the previous financial year, 2012-13.

(ii) Formulations'' Business:

The turnover from export of formulations during the year under review stands at Rs. 72.24 crores as against Rs. 48.47 crores achieved during the previous financial year, thus registering an excellent growth of 49%. The growth in export sales of formulations was due to high value orders received from overseas markets, especially markets like Latin America, Africa, etc.

In the domestic market, Branded formulations of the Company, consisting of mainly Diabetic, Gynaecology and Cardiac drugs have contributed to a revenue of Rs. 24.93 crores during the year under review as against Rs. 24.63 crores achieved during the previous year.

During the year revenue from the sale of Export formulation comprising of Branded Items surpassed the revenue from the sale of Bulk Drugs.

(iii) Bulk Drug Business:

Bulk drug business continue to grow, with a revenue of Rs. 62.25 crores during the year under review as compared to Rs. 54.86 crores achieved during the previous financial year, thereby registering a double digit growth of 13.47%. Exports of bulk drug during the year under review stands at Rs. 35.42 crores as against Rs. 37.57 crores during the previous financial year. Thus, during the year under review, while export sales remained stagnant but domestic sales showed a healthy growth of 55% by achieving a turnover of Rs. 26.83 Crores as against Rs. 17.29 Crores achieved during the previous financial year. In order to exploit the Low Volume and High margin products in Bulk Drug segment, your Company has commissioned a Kilo Lab facility at Bangalore, during the Financial Year 2013-14, which will contribute to growth in the years to come.

(iv) Overall Export Performance:

The over all exports of your Company during the year under review increased to Rs. 107.66 crores from Rs. 86.04 crores achieved during the previous financial year, thus registering a growth of 25%. Your Company for the first time crossed a milestone of Rs. 100 crore in revenues from Export sales.

Your Company continues to be a consistent net foreign exchange earner to the country''s economy.

(v) Others:

Revenue from sales to Govt. Institutional business registered a turnover of Rs. 2.88 crores during the year under review as against Rs. 5.11 crores achieved during the previous financial year. This negative growth in turnover is mainly due to Company''s focus shift towards export markets. The Ayurvedic products Division has contributed to a turnover of Rs. 3.19 crores, during the year under review as against Rs. 1.92 crores registered during the previous year. Your Company is planning to give more focus to this division to improve its share in the overall revenue contribution, in the years to come.

4. HEALTH CARE BUSINESS

As part of its forward integration plans, Your Company has ventured into the Health Care Segment by starting its maiden health care clinic in Bangalore which is aimed at providing holistic diabetes care to the patients. Your Company plans to expand its network based on the success of this pilot project.

5. RESEARCH & DEVELOPMENT

The Research and Development division of our Company has continued its activity in the field of development and standardization of pathways for the manufacture of novel and high value active pharmaceutical ingredients. The efficient pathways thus devised have resulted in reaching commercial production levels of these drugs to meet the needs of the international markets.

The products developed by the R&D division, when they enter the manufacturing stream, are backed by extensive documentation of data pertaining to the control of the quality of the drug. The quality and purity of these products are established by recourse to extensive and sophisticated analytical methodology. The R&D division works in tandem with the Quality Control Department in the development of stringent analytical procedures and protocols.

The quality of the drugs that are offered to our customers being of such high order that there is ready acceptance of our products in the international markets. There is continuing and growing demand for products of your Company. New products in the therapeutic segments of anti allergic, psychiatrics and for the treatment of inflammatory disorders are being introduced in the near future in the commercial market. These products are of direct result of R&D efforts in this direction.

The Board of Directors of the Company has in principle approved setting up of a research foundation called as ''Bal Research Foundation'' with an objective of doing research and study in allopathic, ayurvedic and herbal formulations. This foundation is being formed exclusively as non profit organisation with an intention for promoting the wellbeing of the society at large.

6. AUDIT COMMITTEE

The Audit Committee, a sub-committee of Board consists of Dr. G.S.R Subba Rao, Independent Director, Mr. Shrenik Siroya, Non-executive Director, Mr. Pramod Kumar S. Independent Director and Mr. S. Pranesh, Director who is nominee of EXIM Bank, the term loan lender to the Company.

This Committee is chaired by Dr. G.S.R Subba Rao. Audit Committee has been discharging its duties under SEBI Guidelines read with the Listing Agreement. The said Committee is also functioning as Audit committee under Section 292A of the Companies Act, 1956.

7. AUDITORS'' REPORT

There are no qualifications or adverse remarks by the auditors in their report.

8. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authority limits. They ensure that the Company''s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically reviewed to meet current business requirements.

Internal Audit is carried out by Messrs., Manjunath & Co. a firm of independent Chartered Accountants. They interact with the Audit Committee and have reported to the Directors that there is adequate internal control systems in place in respect of the areas of audit carried out by them.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance to the provisions of Section 2I7(2AA) of the Companies Act, 1956, your Directors wish to confirm with reference to statement of Accounts for the financial year ended on 31.03.2014:

(i) that in preparing the Annual Accounts, all the applicable Accounting Standards have been followed;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements 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 P&L of the Company for that period.

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

(iv) That the Directors have prepared the annual accounts on ''going concern'' basis.

(v) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

(vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. SUBSIDIARY COMPANIES

As on 31.03.2014, your Company has no subsidiaries, either wholly owned or otherwise, Indian or overseas.

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

As per provisions of Section 2I7(I)(e) of the Companies Act, I956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, details relating to the Conservation of Energy and Technology Absorption & Foreign Exchange Earnings and Outflow are given in Annexure I which forms part of the Directors'' Report.

12. PARTICULARS OF EMPLOYEES

A statement of particulars of employees as required under Section 2I7(2A) of the Companies Act, 1956, is given as Annexure II and forms part of this report.

13. PUBLIC DEPOSITS

As on date of the Report, the Company has not accepted any deposits from public.

14. DIRECTORS

Dr. G.S.R Subba Rao and Mr. Pramod Kumar S, Directors, retire by rotation and being eligible, offer themselves for re-appointment. In terms of the requirements of the new Companies Act, 2013, their appointments as Independent Directors are proposed under Special Business.

Mr. Shrenik Siroya, Non Independent Director, retires by rotation as per the new Companies Act, 2013 and being eligible, offers himself for re-appointment.

Mr. Shailesh Siroya was reappointed as Managing Director by the Board for a period of next 5 (five) years i.e. from 01.08.2014 to 31.07.2019, subject to the approval by the Shareholders.

15. AUDITORS

Messrs T D. Jain & DI Sakaria Chartered Accountants, Statutory Auditors of the Company retire at the Annual General Meeting and being eligible, offer themselves for re-appointment.

16. COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company''s Formulations as well as Bulk Drug Business.

The Board has appointed Mr. M.R. Krishna Murthy as Cost Auditor of the Company for the financial year 2013-14 for cost audit of both Formulations and Bulk Drug units of the Company. The cost audit report will be submitted to authorities within the time limit prescribed for the purpose.

17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHARE HOLDERS

A detailed report on the Corporate Governance System and practices of the Company are given in a separate section in this Annual Report. Detailed information for the shareholders is given in Additional Shareholders information section.

Outstanding Un-paid dividend amount for the financial year 2005-06 that is due for transfer to the Investor Education and Protection Fund has been duly transferred, during the year.

18. HUMAN RESOURCES

The human resources of the Company continue to contribute its share in the growth of the Company. Human Resource agenda of the company for the year continued to focus on building a robust talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement, and strengthening employee relations though progressive people management.

There was no complaint lodged by any woman employee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, with the Company during the period under report.

19. CEO & CFO CERTIFICATION

The Board has acknowledged the Managing Director as the CEO of the Company and AVP Finance & Accounts as the CFO for the purpose of compliance under the Listing Agreement. The CEO and CFO have certified to the Board, in terms of Clause 49 of the Listing Agreement that the financial statements present a true and fair view of the company''s affairs and are in compliance with accounting standards.

20. INSURANCE COVERAGE

The Board of Directors reports that your Company has adequate and comprehensive insurance cover on all the movable and immovable assets of the Company.

21. APPRECIATION

Your Directors place on record their sincere appreciation of significant contributions made by the employees through their dedication, hard work and commitment. Your directors also place on record their sincere thanks to the trust reposed on the Company by the medical fraternity and the patients. Your board also acknowledge the support extended to your Company by Canara Bank, Punjab National Bank, EXIM Bank, other Banks & financial institutions, government agencies, shareholders and investors at large. Your Company look forward to the continued support from all the quarters in its endeavour to help people lead healthier lives.

For and on behalf of the Board of Directors

Bangalore Dr. S. Prasanna Shailesh D Siroya 28th May, 2014 Whole Time Director Managing Director

The Directors have pleasure in presenting the 26th Annual Report together with the Audited Accounts of the Company for the financial year ended on 31st March, 2013.

1. FINANCIAL RESULTS

(Rs.in Crores) Particulars 2012-13 2011-12

1) Total Income from operations 150.25 142.25

2) Earnings before Interest, Tax, 17.88 15.89 Depreciations Amortisation

Less:

Depreciations Amortisation 4.81 4.13

Finance cost 7.98 7.39

Profit/(Loss)before taxation and prior period adjustment 5.09 4.37

Less:

3) Current Tax

4) Deferred Tax 0.82 0.61

5) Extra Ordinary/Non Recurring items

6) Prior year Adjustments (0.01) -

7) Profit after tax for the year 4.28 3.76

Add:

8) Profits loss account balance at the 11.80 8.04 beginning of the year

9) Profit/(Loss) made available for 16.08 11.80 appropriation

Less:

10) Proposed Dividend on Equity Shares 0.79 0.00

11) Tax on Dividend 0.13 0.00

12) Balance Carried to Balance sheet 15.16 11.80

Note : Previous year''s expenses have been regrouped to confirm this year''s classification.

2. DIVIDEND & APPROPRIATIONS

Your directors are pleased to recommend payment of dividend of Re. 0.75/- (i.e 7.5%) on each equity share of Rs. 10 each, thereby absorbing an amount of Rs. 0.92 crores including dividend distribution tax of Rs. 0.13 crores. The balance amount of profit is retained as surplus in the statement of profit and loss, forming part of reserves and surplus.

3. BUSINESS OPERATIONS

(i) Turnover and Net profit

Duringthe financial year 2012-13, your Company has achieved an gross turnover of Rs. 150.25 cores as against Rs. 142.25 crores achieved during the previous financial year, thus registering a moderate growth of 5.62%.

The net profit after tax of the Company during the financial year 2012-13 stands at Rs. 4.28 Crores as against the net profit of Rs. 3.75 crores achieved in the previous financial year, 201 l-l2.Theprofitofthefinancialyear20l l-l2includeaone time gain of Rs. 0.88 crores on sale of fixed assets (building). If the same is excluded for comparison purpose, the net profit growth during the current financial year stands at 49% over the previous year.

(ii) Formulations

The turnover from export formulations during the year under review stands at Rs. 48.47 crores as against Rs. 39.42 crores achieved during the previous financial year thus registering a good growth of 22.96%. The growth in export was due to penetration in new virgin markets like Lain America, African and South East Asian Countries with both the plants at Bangalore and Uttaranchal contributing with higher volume of production to meet the demand.

In the domestic market, Branded formulations of the company, consisting of mainly Diabetic and Cardiac drugs have contributed to a revenue of Rs. 24.63 crores during the year under review as against Rs. 24.09 crores achieved during the previous year, Considering the overall sluggishness in the domestic market, the performance may be considered satisfactory.

(iii) Bulk Drugs

Bulk drug business continues to be the major contributor of revenue, with a revenue of Rs. 54.86 crores during the year under review as compared to Rs. 53.01 crores achieved during the previous financial year, thereby registering the moderate growth of 3.48%. Exports of bulk drug during the year under review stands at Rs. 37.57 crores as against Rs. 36.44 crores during the previous financial year.

(iv) Overall export performance

The over all exports of your Company during the year under review increased to Rs. 86.04 crores from Rs. 75.85 crores achieved during the previous financial year, thus registering a growth of 13.43%

Your company continues to be a consistent net foreign exchange earner to the country''s economy.

(v) Others

Revenue from sales to Govt. Institutional business registered a turnover of Rs. 5.1 I crores during the year under review as against Rs. 8.14 crores achieved during the financial year 201 1-12. This negative growth in turnover is mainly due to company''s focus shift towards export markets. The Ayurvedic products Division has contributed to a turnover of Rs. 1.92 crores, during the year under review as against Rs. 1.73 crores registered during the previous year. Your company is planning to give more focus to this division to improve its share in the overall revenue contribution in the years to come.

5. RESEARCH & DEVELOPMENT

The Research and Development division of our Company has continued its activity in the field of development and standardization of pathways for the manufacture of novel and high value active pharmaceutical ingredients. The efficient pathways thus devised have resulted in reaching commercial production levels of these drugs to meet the needs of the international market.

The products developed by the R&D division, when they enter the manufacturing stream, are backed by extensive documentation of data pertaining to the control of the quality of the drug. The quality and purity of these products are established by recourse to extensive and sophisticated analytical methodology. The R&D division works in tandem with the Quality Control Department in the development of stringent analytical procedures and protocols.

The quality of the drugs that are offered to our customers being of such high order that there is ready acceptance of our products in the international markets. There is continuing and growing demand for products of your Company. Very new products in the therapeutic segments of anti allergic, psychiatrics and for the treatment of inflammatory disorders are being introduced in the near future in the commercial market. These products are of direct result of R&D efforts in this direction.

6. AUDIT COMMITTEE

The Audit Committee, a sub-committee of Board consists of Dr. G.S.R Subba Rao, Independent Director, Mr. Shrenik Siroya, Non- executive Director, Mr.Pramod Kumar S Independent Director and Mr. Ajit Kumar, Director who is nominee of EXIM Bank, the lender to the company.

This Committee is Chaired by Dr.G.S.R Subba Rao. Audit Committee has been discharging its duties under SEBI Guidelines read with the listing agreement. The said Committee is also functioning as Audit committee under section 292A of the Companies Act, 1956.

7. AUDITORS''REPORT

There are no adverse qualifications or remarks by the Auditors'' in the Auditors''Report.

8. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an adequate system of internal controls with clearly defined authority limits. They ensure that the Company''s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with general accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically reviewed to meet current business requirements.

Internal Audit is carried out by Messrs., Manjunath & Co. a firm of independent Chartered Accountants. They interact with the Audit Committee and have reported to the Directors that there is adequate internal control systems in place in respect of areas of audit carried out by them.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance to the provisions of Section 2I7(2AA) of the Companies Act, 1956, your Directors wish to confirm with reference to statement of Accounts for the financial year ended on 31.03.2013:

(i) that in preparing the Annual Accounts, all applicable Accounting Standards have been followed;

(ii) that the accounting policies adopted are consistently followed and the judgements or estimates made 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 and Loss Account of the Company for the financial year;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

(iv) That the Directors have prepared the annual accounts on ''going concern''basis.

10. SUBSIDIARY COMPANIES

As on 3 1.03.2013, your company has no subsidiaries, either wholly owned or otherwise, Indian or overseas.

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

As per provisions of Section 217( I )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, details relating to the Conservation of Energy and Technology Absorption and Foreign

Exchange Earnings and Outflow are given in Annexure I which forms part of the Directors''Report.

12. PARTICULARS OF EMPLOYEES

A statement of particulars of employees as required under Section 217(2A) of the Companies Act, 1956, is given as Annexure II and forms part of this report.

13. PUBLIC DEPOSITS

As on date of the Report, the Company has not accepted any deposits from public.

14. DIRECTORS

Dr. S Prasanna and Mr. Pramod Kumar. S, Independent Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. Your Directors recommend their reappointment.

15. AUDITORS

Messrs TD.jain & Dl Sakaria (eststwhile) M/s Ostawal & Jain, Chartered Accountants, Statutory Auditors of the Company retire at the Annual General Meeting and being eligible offer them selves for re-appointment.

16. COST AUDIT

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company''s Formulations as well as Bulk Drug Units.

The Board has appointed Mr. M.R Krishna Murthy as Cost Auditor of the Company for the financial year 2012-13 for cost audit of both Formulation and Bulk Drug units of the Company and the Company has also obtained the central government approval for the same. The Cost Audit is under progress and the Company will submit the Cost Auditor''s report for FY 2012-13, to the Central Government soon.

17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHARE HOLDERS

A detailed report on the Corporate Governance System and practices of the Company are given in a separate section in this Annual Report. Detailed information for the shareholders is given in Additional Shareholders information section.

Outstanding Un-paid dividend amount for the year 2004-05 that is due for transfer to the Investor Education and Protection Fund has been duly transferred, during the year.

18. HUMAN RESOURCES

The human resources of the Company continue to contribute its share in the growth of the Company. Human Resource agenda of the company for the year continued to focus on building a robust talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement, and strengthening employee relations though progressive people management.

19. CEO &CFO CERTIFICATION

The Board has acknowledged the Managing Director as the CEO of the Company and G.M Finance as the CFO for the purpose of compliance under the Listing Agreement. The CEO & CFO have certified to the Board, in terms of Clause 49 of the Listing Agreement that the financial statements present a true and fair view of the company''s affairs and are in compliance with accounting standards.

20. INSURANCE COVERAGE

The Board of Directors reports that your Company has adequate and comprehensive insurance cover on all the movable and immovable assets of the Company.

21. APPRECIATION

Your Directors place on record their sincere appreciation of significant contributions made by the employees through their dedication, hard work and commitment. Your directors also places on record its thanks on the trust reposed on the Company by the medical fraternity and the patients. We also acknowledge the support extended to us by Canara Bank, Punjab National Bank, EXIM Bank, and other Banks & financial institutions, government agencies, shareholders and investors at large. We look forward to having the same support in our endeavor to help people lead healthier lives.

For and on behalf of the Board of Directors

Bangalore Dr. S Prasanna Shailesh Siroya

27th May, 2013 Non-Executive Director Managing Director

The Directors have pleasure in presenting the 25th Annual Report together with the Audited Accounts of the Company for the financial year ended on 31st March, 2012.

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2011-12 2010-11

1) Total Income 14,224.60 11,664.84

2) Earnings before Interest , Tax, 1588.51 1131.76

Depreciation & Amortisation

Less :

Depreciation & Amortisation 413.08 342.36

Finance cost 729.91 679.13

Profit /(Loss)before taxation and prior period adjustment 445.52 110.27

Less :

3) Provision for taxation 8.95 4.53

4) Deferred Tax 60.75 58.67

5) Extra Ordinary / Non Recurring items - -

6) Prior year adjustments 0.12 (0.16)

7) Profit after Tax 375.70 47.23

Add:

8) Profit & loss account balance at the 804.53 809.56 beginning of the year

9) Profit /(Loss) made available for 1,180.23 856.79 appropriation

Less:

10) Proposed Dividend on Equity Shares - -

11) Tax on Dividend - -

12) Balance Carried to Balance sheet 1,180.23 856.79

Note: Previous year's income has been regrouped in line with that of the year under review for comparison. The opening balance of P & L has been reduced during the year consequent upon merger of Basava Chem Ltd., with the Company.

2. DIVIDEND:

In view of the capex plans and to facilitate expansion programs under consideration, your Directors have decided not to recommend payment of dividend for the financial year 2011-12.

4. BUSINESS OPERATIONS:

During the financial year 2011-12, your Company has achieved a total turnover of Rs 142.25 crores as against Rs. 116.65 crores achieved during the previous year 2010-11, thus registering a growth of 21.95%.

With this increase in turnover, the net profit after tax of the Company during 2011-12 has increased substantially to Rs. 3.76 crores as against the net profit of Rs. 0.47 crore achieved in the previous year, 2010-11.

The bulk drug business continues to dominate, as the total sales on this segment has increased from Rs. 46.20 crores in 2010-11 to Rs. 53.01 crores during the year 2011-12. The products mix during the year 2011-12 improved with higher sale of high value items in addition to our regular API.

Exports of Bulk Drugs has registered a growth of 16.05% during the year under review with a turnover of Rs. 36.44 crores as against Rs. 31.40 crores achieved during the previous financial year.

The export formulations division registered a growth of 6.71% by increasing its turnover from Rs. 36.94 crores in the previous year to Rs. 39.42 crores during the year under review. Your Company expanded its presence in many new global markets such as Latin America, many African countries, South East Asia etc.

Your Company's branded formulations Divisions mainly consisting of "Diabetic" and "Cardiac" Products made a net sale of Rs. 24.09 crores during 2011.12 as against Rs. 19.58 crores during the previous year, thereby strengthening the Company's presence in the domestic market.

The over all exports of your Company during the year under review has increased to Rs. 75.85 crores from Rs. 66.48 crores achieved during the previous year.

Supplies to Govt. Institutional business registered a turnover of Rs. 8.14 crores during the year, as against Rs. 6.44 crores during the previous year and the Ayurvedic products Division has achieved a turn over of Rs 1.73 crores, during the year under review as against Rs. 1.94 crores achieved during the previous financial year.

Your Company has also won the Best Exporter award from the Sri Lankan Government for the Year 2011-12 for supply of drugs and medical equipments to Sri Lanka Pharmaceutical Corporation, a Government of Sri Lanka enterprise.

5. RESEARCH & DEVELOPMENT:

The Research and Development division of your Company continued its activities in the field of development and standardization of pathways for the manufacture of novel and high value active pharmaceutical ingredients. The clear pathways thus established have resulted in the scale up of production levels of these drugs to meet the needs of the international market.

The products developed by the R&D division, when they enter the manufacturing stream, are backed by extensive documentation of data pertaining to the control of the quality of the drug. The quality and purity of these products are established by recourse to extensive and sophisticated analytical methodology. The R&D division works in tandem with the Quality Control Department in the development of stringent analytical procedures and protocols.

The quality of the drugs your Company offers to its customers being of such high order, there is ready acceptance of these products in the international markets. There is continuing and growing demand for products of your Company. New products in the therapeutic segments of antihistamines, anxiolytics and for the treatment of neurological disorders are being introduced in the near future in the commercial market. These products are of direct result of R&D efforts in this direction.

6. AUDIT COMMITTEE:

The Audit Committee consisted of Dr. G.S.R. Subba Rao, Independent Director as Chairman, Mr. Ajit Kumar, nominee Director of EXIM Bank and Mr. Shrenik Siroya, Non-executive Director; Mr. Pramod Kumar. S who is Independent Director was inducted into the Committee as member, with effect from 10.08.2012. The Audit Committee has been discharging its duties under SEBI Guidelines read with the Listing Agreement. The said Committee is also functioning as Audit Committee under Section 292A of the Companies Act, 1956.

7. AUDITORS' REPORT

There are no adverse qualifications or remarks in the Auditors' Report. However, regarding the outstanding un-paid dividend amount for the year 2003.04 of Rs. 1,84,828 which was due for transfer to the Investor Education and Protection Fund, as mentioned in the Auditors' Report, it is hereby confirmed that the amount has since been transferred to the said Fund.

8. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company has an adequate system of internal controls with clearly defined authority limits. They ensure that the Company's assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically reviewed to meet current business requirements.

Internal Audit is carried out by Messrs. Manjunath & Co. Bangalore, an independent firm of Chartered Accountants. They interact with the Audit Committee and have reported to the Directors that there is adequate internal control systems in respect of areas carried out by them.

9. DIRECTORS' RESPONSIBILITY STATEMENT:

In compliance to the provisions of Section 2I7(2AA) of the Companies Act, 1956, your Directors wish to confirm with reference to statement of Accounts for the financial year ended on 31.03.2012:

(i) that in preparing the Annual Accounts, all applicable Accounting Standards have been followed;

(ii) that the accounting policies adopted are consistently followed and the judgements or estimates made 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 and Loss Account of the Company for the financial year ;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

(iv) That the Directors have prepared the annual accounts on 'going concern' basis.

10. SUBSIDIARY COMPANIES:

The Amalgamation proceedings of Basav Chem limited, with Bal Pharma Limited was approved by Honourable High Court of Karnataka vide COP No 90/2010 and 89/2010. As on 31.03.2012 the Company has no subsidiaries, either wholly owned or otherwise. Hence, the financial results of the Company for the year under review and the results pertaining to the previous year, are not entirely comparable.

11. PARTICULARS OF EMPLOYEES:

There was no employee drawing remuneration falling within the limits prescribed under Section 2I7(2A) of the Companies Act, 1956.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND FOREIGN EXCHANGE OUTGO:

As per provisions of Section 217(I)(e) of the Companies Act, I956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, I988, details relating to the Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outflow are given in Annexure I, which is forming part of the Directors Report.

13. PUBLIC DEPOSITS:

As on date of the Report, the Company has not accepted any public deposits.

14. DIRECTORS:

Dr. G. S. R Subba Rao and Mr. Shrenik Siroya, Directors retire by rotation at the 25th Annual General Meeting of the Company and being eligible, offer themselves for reappointment. Your Directors recommend their reappointments.

15. AUDITORS:

Messrs T. D. Jain & DI Sakaria (erstwhile Messrs Ostawal & Jain), Chartered Accountants, Statutory Auditors of the Company retire at the Annual General Meeting and are eligible them for appointment.

16. COST AUDIT:

Pursuant to Section 233B of the Companies Act, I956, the Central Government has prescribed Cost Audit of the Company's Formulations Division as well as Bulk Drug Division.

Subject to the approval of the Central Government, the Board has appointed Mr. M.R. Krishna Murthy as Cost Auditor of the Company for the financial year, 2011-12 for cost audit of both Formulation and Bulk Drug divisions of the Company separately. The Cost Audit is under progress and the Company will submit the Cost Auditor's report to the Central Government soon.

17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHAREHOLDERS:

A detailed report on the Corporate Governance System and practices of the Company are given in a separate section in this Annual Report. Detailed information for the shareholders is given in Additional Shareholders information section.

18. HUMAN RESOURCES:

The Company's Human Resource agenda for the year focused on strengthening four key areas: Building a robust talent pipeline, enhancing individual and organizational capabilities for future readiness, driving greater employee engagement, and strengthening employee relations through progressive people management.

19. INSURANCE COVERAGE:

The Board reports that your Company has adequate insurance cover on all the assets of the Company.

20. APPRECIATION:

Your Directors place on record their sincere appreciation of significant contributions made by the employees through their dedication, hard work and commitment and the trust reposed on us by the medical fraternity and the patients. The Directors also acknowledge the support and wise counsel extended to the Company by Canara Bank, Punjab National Bank, EXIM Bank, State Bank of India and other Banks and financial institutions, government agencies, shareholders and investors at large. Your Directors look forward to having the same support in their endeavour to help people lead healthier lives.

For and on behalf of the Board of Directors

Bangalore

Dr. S. Prasanna Shailesh Siroya

10th August, 2012 Executive Director Managing Director

The Directors have pleasure in presenting the 23rd Annual Report together with the Audited Accounts of the Company for the financial year ended on 31st March, 2010.

1. FINANCIAL RESULTS:

(Rs. in Lakhs)

Particulars 2009-10 2008-09

1) Total Income 108,15.16 10667.67

2) Profits before 195.47 598.59 Depreciation and

provision for Taxation

Less : Depreciation 285.90 188.58

Profits before (90.43) 410.01

Taxation and prior year adjustments

Less :

3) Provision for Taxation 7.33 3.52

4) Fringe Benefit Tax - 23.47

5) Deferred Tax 44.94 79.30

6) Extraordinary/ Non Recurring items - -

7) Prior year adjustment (0.18) 52.08 4.44 110.73

Add:

8) Profit & Loss Account 142.89 299.28 balance at the

beginning of the year

9) Profit made available 906.62 699.32 for appropriation

763.74 998.60

Less:

10) Proposed Dividend on - 78.62 Equity Shares

11) Tax on dividends - - 13.36 (-) 91.98

12) Balance Carried to 763.74 906.62 Balance Sheet

2. DIVIDEND:

In view of the results, your Directors have decided not to recommend payment of dividend for the year, 2009-10.

3. MANAGEMENT DISCUSSION AND ANALYSIS:

Global Pharmaceutical Industry Challenges

The global pharmaceutical business is becoming more complicated than ever before. Older business models are being challenged by competition; new verticals are coming into play. There will be new developments and alliances, as well as new opportunities and challenges. In such an environment only the rapid, clever and nimble will win.

If present industry overview is taken in to consideration, the global pharmaceutical market in 2010 is projected to grow 4% to 6% exceeding US$ 825 billion. This growth will be largely driven by strong overall growth in the emerging countries, as well as the rising influence of healthcare access and funding on market demand. Moreover, the global market is expected to grow at 4-7% Compound Annual Growth Rate (CAGR) through 2013. Global pharmaceutical market value is expected to expand to $975 plus billions by 2013.

EMERGING TRENDS:

Emerging markets are set to play a pivotal role in future pharmaceutical success. Emerging pharmaceutical markets are typically small. However, their rapid growth vis-à-vis the more regulated markets make them attractive prospects for the pharmaceutical industry. Rapidly growing economies, increasing population and greater health awareness combined with larger incomes to spend on healthcare will drive the growth of pharmaceuticals in emerging markets. By 2017, IMS forecasts revenues from emerging markets at US$ 290 billion to US$ 320 billion, with a CAGR of 12% to 15%.

INDIAN PHARMACEUTICAL INDUSTRY:

The Indian Pharmaceutical Industry ranks as a frontrunner among the Country’s science based industries with wide ranging capabilities in the complex field of drug manufacture and technology. The industry has been growing at an impressive CAGR in excess of 8-9%, and will touch $10 billions by 2010.

Indian pharmaceutical industry is the world’s 13th largest in terms of value and 14th in terms of volume with over all 60,000 brands in over 60 therapeutic categories. India has world class facilities and expertise in manufacturing with the largest number of US FDA approved manufacturing units in the world out side US. Ancillary industries are also well developed with support available locally. Quality bulk drugs at competitive prices are assured.

- Global pharma looks to India: Prospects for growth:

The huge potential of the Indian pharmaceuticals market is impossible for foreign companies to ignore, given that it will be one of the top 10 sales markets by 2020. India’s population is growing rapidly, as is its economy - creating a large middle-class able to afford western medicines. India’s epidemiological profile is also changing and the population is ageing, so demand is likely to increase for drugs for cardiovascular problems, disorders of the central nervous system and other chronic diseases such as diabetes which is increasing at an alarming rate. The total market is expected to rise to a value of approximately US $50 billions by 2020.

4. BUSINESS OPERATIONS:

During the year, 2009-10 your Company has achieved an over all turnover of X 108.15 crores as against X 106.67 crores of the previous year. Thus registering a marginal growth of 1.39% on the top line. Despite a marginal increase in sales, the net results after tax decreased from X 2.99 crores of the previous year to a net loss of X 1.42 crores during the current year. The main reason for the fall in net profit is commissioning of our Uttarakhand plant, difference in product mix, and cut-throat competition from large pharma players in Indian and international markets.

The exports formulations division registered a growth of 42.34% by increasing its turnover from X 22.39 crores in the previous year to X 31.87 crores in the current year. Your Company expanded its presence in many new global markets such as Latin America and many African countries.

The bulk drug business both domestic and exports have been very encouraging with the growth of 44.36% as the turn over of the division reached X 42.24 crores as against X 29.26 crores in the previous year. Utilization of facility at Basav Chem Limited (wholly owned subsidiary Company) has also been to its full capacity. Regular supplies of the products are made to developed markets such as Europe, Japan, Australia and Canada where the products are already registered. Various DMF have been filed across the globe to increase our presence in other markets.

The over all exports of your Company increased (by 54.7%) to X 57.35 crores as against 37.07 crores during the year 2008-09.

The govt. Institutional business made a turnover of Rs 4.44 crores and the Ayurvedic Division has made a turn over of Rs 2.04 crores during the year 2009-10.

Your Company’s branded formulations divisions mainly consisting of Diabetic and Cardiac Products made a net sale of Rs 23.36 crores as against Rs 35.21 crores during the last year. This reduction in sales in branded formulation has affected the profit margins of the Company (34% shortfall during the year). This short fall in sale is due to mass attrition of a number of employees from major divisions of the Company.

Appropriate measures are being taken by your management to overcome the reduction in branded formulation sales and to retain the existing market.

5. RESEARCH & DEVELOPMENT:

The Research and Development division is actively engaged in the development, scale-up and commercialization of processes for the manufacture of high value API’s in niche areas. Production of these products has enabled the Company to market them, both nationally and internationally.

All the products manufactured through the processes developed by the R&D division are backed by complete, internationally accepted, documentation and controls. The quality and purity of these products are established and maintained by sophisticated analytical methods and protocols developed in-house by the R&D and QC divisions.

The ready acceptance of our products in the international market is a clear indicator of their high quality. This is further reinforced by tight quality controls at every stage of the manufacturing process, leading to excellent quality characteristics in our APIs.

All this developmental work has resulted in the generation of valuable intellectual property (IP) which the Company is now in the process of patenting. Simultaneously, Bal Pharma has made a beginning in the development of new chemical entities and some promising leads have been obtained in this direction.

6. AUDIT COMMITTEE:

The Audit Committee, a sub-committee of the Board consists of Mr. David Rasquinha (nominee Director of EXIM Bank), Dr. G. S. R. Subba Rao, Independent Director and Mr. Shrenik Siroya, Non-Executive Director.

This Committee headed by Dr.G.S.R Subba Rao, has been discharging its duties under SEBI Guidelines read with the Listing Agreement. The said Committee is also functioning as Audit Committee under Section 292A of the Companies Act, 1956.

7. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company has an adequate system of internal controls with clearly defined authority limits. They ensure that the Company’s assets are protected against loss from unauthorised use or disposition and all transactions are authorised, recorded and reported in conformity with generally accepted accounting principles. These systems are designed to ensure accuracy and reliability of accounting data, promotion of operational efficiency and adherence to the prescribed management policies. These policies are periodically reviewed to meet current business requirements.

Internal Audit is carried out by Messrs. Ishwar & Gopal an independent firm of Chartered Accountants. They interact with the Audit Committee and have reported to the Directors that there is adequate internal control systems in respect of areas carried out by them.

8. DIRECTORS’ RESPONSIBILITY STATEMENT:

In compliance to the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors wish to confirm with reference to statement of Accounts for the financial year ended 31.03.2010:

(i) that in preparing the Annual Accounts, all applicable Accounting Standards have been followed;

(ii) that the accounting policies adopted are consistently followed and the judgements or estimates made 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 and Loss Account of the Company for the financial year ;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing/detecting fraud and other irregularities;

(iv) That the Directors have prepared the annual accounts on going concern’ basis.

9. SUBSIDIARY COMPANIES:

The Company had two wholly owned Subsidiary Companies during the financial year, 2009-10. One of the subsidiary companies, Novosynth Research Labs Private Limited applied for striking off its name from the register under Section 560 of the Companies Act,1956 and the Amalgamation proceedings of Basav Chem Limited with Bal Pharma Limited is before the Honourable High Court of Karnataka.

Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company’s interest in subsidiary company, Basav Chem Limited is as given in Annexure I forming part of the Director’ Report.

10. PARTICULARS OF EMPLOYEES:

A statement of particulars of employees as required under Section 217(2A) of the Companies Act, 1956, is given as Annexure II and forms part of this report.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

As per provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, details relating to the Conservation of Energy and Technology Absorption and Foreign Exchange Earnings and Outgoings are given in Annexure forming part of the Directors Report.

12. PUBLIC DEPOSITS:

As on date of the Report, the Company has not accepted any public deposits.

13. DIRECTORS:

As on date, your Board consists of 6 (six) Directors, 3 (three) of whom are Non-Executive Directors and of which 2 (two) are Independent Directors. 1 (one) of who is Nominee Director of Export Import Bank of India. 2 (two) of whom are Executive Directors. Mr. Shrenik Siroya, Non-Executive Director and Dr. G.S.R. Subba Rao, Independent Director of the Company who retire by rotation at the 23rd Annual General Meeting of the Company and being eligible, offer themselves for reappointment. Your Directors have pleasure in recommending their reappointments.

14. AUDITORS:

Messrs Ostawal & Jain, Chartered Accountants, Auditors of the Company, retire at the Annual General Meeting and are eligible for re-appointment.

15. COST AUDIT:

Pursuant to Section 233B of the Companies Act, 1956, the Central Government has prescribed Cost Audit of the Company’s Formulations Division.

Subject to the approval of the Central Government, the Board has appointed Mr. G.I. Srinivasamurthy as Cost Auditor of the Company for the financial year, 2010-11. The Cost Audit is under process and the Company will submit the Cost Auditors’ Report to the Central Government in time.

16. EMPLOYEE STOCK OPTION SCHEME:

Pursuant to the provisions of Guideline 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999, as amended, the details of stock options as on 31st March, 2010 under the “Bal Pharma Limited Employees Stock Option Scheme, 2006” is set out in the Annexure – III to the Directors Report.

17. CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHARE HOLDERS:

A detailed report on the Corporate Governance System and practices of the Company are given in a separate section in this Annual Report. Detailed information for the shareholders is given in Additional Shareholders information section.

18. INSURANCE COVERAGE:

The Board reports that your Company has adequately insured all the assets of the Company.

19. APPRECIATION:

Your Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work and commitment and the trust reposed on us by the medical fraternity and the patients. Your Board also acknowledges the support and wise counsel extended by Canara Bank, Punjab National Bank, Exim Bank, State Bank of Indore and other Banks and financial institutions, government agencies, shareholders and investors at large. The Directors look forward to having the same support in the our endeavor to help people lead healthier lives.

For and on behalf of the Board of Directors

Bangalore Dr. S. Prasanna Shailesh Siroya

9th August, 2010 Executive Director Managing Director