DIRECTORS' REPORT

The Board of Directors (Board) presents the annual report of Atul Ltd together with the audited Financial Statements for
the year ended on March 31, 2026.

01. Financial results

02. Performance

Standalone revenue for the year increased by 10%
to ^ 5,564 cr from ^ 5,075 cr in the previous year;
driven by an 8% increase in sales volumes and a 2%
improvement in price realisations. Sales increased
by 12% in India and 6% outside India; lower sales in
China and the United States were offset by higher
sales in other Asian countries, Africa and Oceania.
Profit before tax (PBT) at ^ 760 cr increased by 22%
compared to that of the previous year, mainly due
to higher sales volumes, favourable exchange rate
movements and increased income from investments
and other sources.

Consolidated revenue for the year increased by 12%
to ^ 6,274 cr from ^ 5,583 cr in the previous year. The
increase was driven by a 10% rise in sales volumes
and a 2% improvement in price realisations. Sales of
the Life Science Chemicals (LSC) segment increased
by 7%, whereas those of the Performance and Other
Chemicals (POC) segment increased by 14%. Sales
increased by 12% in India and 6% outside India.
The overall performance was further supported by

higher revenues from Atul Products Ltd (APL), Amal
Ltd (Amal), and Atul Bioscience Ltd (ABL). PBT at
^ 901 cr increased by 30% compared to that of the
previous year, mainly due to higher sales volumes,
favourable exchange rate movements and improved
performance of subsidiaries, particularly APL and ABL.

03. Dividend

The Board recommended a dividend of ^ 30 per
equity share of ^ 10 each fully paid-up for the year
ended March 31, 2026, as against ^ 25 in the previous
year. The dividend will entail an outflow of H 88.33 cr
on the paid-up equity share capital of H 29.44 cr. The
payout stood at 15%.

04. Energy conservation, technology absorption,
foreign exchange earnings and outgo

Information required under Section 134 (3)(m) of the
Companies Act, 2013 (the Act), read with Rule 8(3) of
the Companies (Accounts) Rules, 2014, as amended
from time to time, forms a part of this report, which is
given on page number 80.

05. Insurance

The Company has taken adequate insurance for its
current and fixed assets, employees and products
against various relevant risks.

06. Risk management

Risk management is an integral part of the business
practice of the Company. The framework of risk
management concentrates on formalising a system to
deal with the most relevant risks, building on existing
management practices, knowledge and structures.
With the help of a reputed international consultancy
firm, the Company developed and implemented a
comprehensive risk management system to ensure that
risks to its continued existence as a going concern and
to its growth are identified and remedied on a timely
basis. The Company considered leading standards and
practices while defining and developing the formal risk
management system. The risk management system is
relevant to the business reality, is pragmatic, simple
and involves the following:

a) Risk identification and definition - Focuses on
identifying relevant risks, creating | updating clear
definitions to ensure undisputed understanding
along with details of the underlying root causes |
contributing factors.

b) Risk classification - Focuses on understanding
the various impacts of risks and the level of
influence on their root causes. This involves
identifying various processes, identifying the
root causes and a clear understanding of risk
inter-relationships.

c) Risk assessment and prioritisation - Focuses on
determining risk priority and risk ownership for
critical risks. This involves the assessment of the
various impacts taking into consideration risk
appetite and the existing mitigation controls.

d) Risk mitigation - Focuses on addressing critical
risks to restrict their impact(s) to an acceptable
level (within the defined risk appetite).
This involves a clear definition of actions,
responsibilities and milestones.

e) Risk reporting and monitoring - Focuses on
providing to the Audit Committee and Board,
periodic information on risk profile evolution and
mitigation plans.

Roles and responsibilities

Governance

The Board approved the Risk Management Policy of
the Company. The Company laid down procedures
to inform the Board on a) to d) listed above. The
Audit Committee | the Risk Management Committee
periodically reviews the risk management system and
gives its recommendations, if any, to the Board.

The Board reviews and guides the Risk
Management Policy.

Implementation

Implementation of the Risk Management Policy is
the responsibility of the Management. It ensures
the functioning of the risk management system as
per the guidance of the Audit Committee and the
Risk Management Committee. The Company has a
risk management oversight structure in which each
sub-segment has a Chief Risk and Compliance Officer.

The Management at various levels takes accountability
for risk identification, appropriateness of risk analysis
and timeliness, as well as the adequacy of risk mitigation
decisions at both individual and aggregate levels. It
is also responsible for the implementation, tracking
and reporting of defined mitigation plans, including
periodic reporting to the Audit Committee and Board.

07. Internal financial controls

The internal financial controls over financial reporting
are designed to provide reasonable assurance
regarding the reliability of financial reporting and
the preparation of the Financial Statements. These
include policies and procedures that:

a) pertain to the maintenance of records, which in
reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets
of the Company,

b) provide reasonable assurance that transactions
are recorded as necessary to permit the preparation
of the Financial Statements in accordance with
Generally Accepted Accounting Principles and
that receipts and expenditures are being made
only in accordance with the authorisations of the
Management and Directors of the Company,

c) provide reasonable assurance regarding the
prevention or timely detection of unauthorised
acquisition, use or disposition of the assets that can
have a material effect on the Financial Statements.
A reputed international consultancy firm has
reviewed the adequacy of the internal financial
controls concerning the Financial Statements.

The Management assessed the effectiveness of the
internal financial controls over financial reporting as
at March 31, 2026 and the Board believes that the
controls are adequate.

08. Fixed deposits

The Company did not accept any deposits from the
public and as such, no amount on account of principal
or interest on deposits from public was outstanding
as at March 31, 2026.

09. Loans, guarantees, investments and security

Particulars of loans, guarantees, investments
and security provided are given on page
numbers 200 and 201.

During 2025-26, the Company has received all stipulated
amounts of principal and interest as per schedule
in respect of loans granted, except that, in respect of
the secured loan given to Anaven LLP, the amount of
H 12.20 cr (aggregate of H 25.93 cr) as principal
and an amount of H 3.01 cr (aggregate of H 7.25
cr) as interest are overdue as at March 31, 2026.
The principal amount is secured, and hence the
Company has not made any provision. As a matter
of abundant precaution, the Company has made
provision for the interest of H 2.71 cr (aggregate of
H 6.53 cr) in the books as at March 31, 2026, though the
Company is expecting to recover the same.

During 2025-26, the Company extended the repayment
period of the unsecured loan of ^ 1.74 cr given to Anaven
LLP by 12 months.

The Company is evaluating various options to mitigate
the unprecedented adverse business conditions that
Anaven LLP is facing.

10. Subsidiary, joint venture and associate
companies | entities and joint operation

During 2025-26, Atul-Buckman Specialities Pvt Ltd
was incorporated as a joint venture company of
the Company. There were no other changes in the
subsidiary, joint venture and associate companies |
entities and joint operation. Details of subsidiary, joint
venture and associate companies | entities and joint
operation are given on page number 82.

11. Related party transactions

All the transactions entered into with related parties
were in the ordinary course of business and on an
arm’s length basis. Details of such transactions
are given on page number 214. No transactions
were entered into by the Company that required
disclosure in Form AOC-2.

12. Corporate social responsibility

The Corporate Social Responsibility (CSR) Policy,
the CSR report and the composition of the CSR
Committee are given on page number 84.

13. Annual return

Annual return is available on the website of
the Company at:

www.atul.co.in/investors/annual-general-meetings/

14. Auditors

Statutory Auditors

Deloitte Haskins & Sells LLP, Chartered Accountants,
were reappointed as the Statutory Auditors of
the Company at the 45^th Annual General Meeting
(AGM) held on July 29, 2022, until the conclusion
of the 50^th AGM.

The Auditor’s Report for the financial year ended on
March 31, 2026, does not contain any qualification,
reservation or adverse remark. The report is enclosed
with the Financial Statements in this annual report.

Cost Auditors

The Company has maintained cost records as required
under the Act and the Companies (Cost Records
and Audit) Rules, 2014. The members ratified the
appointment of R Nanabhoy & Co as the Cost Auditors
for 2025-26, on July 25, 2025.

Secretarial Auditors

SPANJ & Associates, Company Secretaries, were
appointed as the Secretarial Auditors of the Company
at the 48^th AGM held on July 25, 2025, to hold office
until the conclusion of the 53^rd AGM.

The Secretarial Audit Report for the financial year
ended on March 31, 2026 is given on page number 87.

15. Directors’ responsibility statement

a) In the preparation of the annual accounts for the
financial year that ended on March 31, 2026,
the applicable accounting standards have been
followed and there are no material departures.

b) The accounting policies were selected and applied
consistently and judgements and estimates thus
made were reasonable and prudent 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) Proper and sufficient care was taken for the
maintenance of adequate accounting records
in accordance with the provisions of the Act, for
safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities.

d) The attached annual accounts for the year
ended on March 31, 2026, were prepared on a
going concern basis.

e) Adequate internal financial controls to be
followed by the Company were laid down and
they were adequate and operating effectively.

f) Proper systems were devised to ensure
compliance with the provisions of all applicable
laws and the same were adequate and
operating effectively.

16. Directors

16.1 Retirement | Reappointment | Appointment

a) Retirement:

Mr Bharathy Mohanan, Whole-time Director,
ceased to be a Director during the year.

The Board places on record its deep appreciation
for his valuable contribution, dedicated service
and enduring commitment.

b) Reappointment:

i) According to Article 86 of the Articles of
Association of the Company, Mr Vivek
Gadre retires by rotation and being
eligible, offers himself for reappointment at
the ensuing AGM.

ii) Subject to the approval of the members
at the ensuing AGM, Mr Samveg Lalbhai
is reappointed as a Managing Director
effective December 15, 2026.

c) Appointment:

Mr Shantanu Khosla was appointed as an
Independent Director for a period of five
consecutive years effective October 17, 2025.

In the opinion of the Board, Mr Shantanu Khosla,
Independent Director, fulfils the requisite conditions
as per applicable laws and is independent of the
Management of the Company.

16.2 Policy on appointment and remuneration

The policy is displayed on the website of the
Company at www.atul.co.in/investors/policies

The salient features of the Policy are as under:

16.2.1 Appointment

While recommending the appointment of Directors,
the Nomination and Remuneration Committee
considers the following factors:

a) Qualification: well-educated and experienced in
senior leadership positions within the industry

b) Trait: positive attributes and qualities

c) Independence: criteria prescribed in the Act
and the Securities and Exchange Board of India
(Listing Obligations and Disclosure
Requirements) Regulations, 2015 (the

Regulations), for the Independent Directors,
including no pecuniary interest and
conflict of interest

16.2.2 Remuneration of the Non-executive Directors

a) Sitting fees: up to H 50,000 for attending a
Board, Committee and any other meeting

b) Commission: up to 1% of net profit, as may be
decided by the Board, based on:

i) Membership of committee(s)

ii) Profit

iii) Attendance

iv) Category (Independent or Non-executive)

16.2.3 Remuneration of the Executive Directors
This is given under paragraph number 17.2.

16.3 Criteria and method of the annual evaluation

16.3.1 The criteria for evaluation of the performance of

a) the Executive Directors, b) the Non-executive
Directors (other than Independent Directors), c)
the Independent Directors, d) the Chairman, e) the
Committees of the Board and f) the Board as a
whole are summarised in the table at the end of the
Directors’ Report on page number 79.

16.3.2 The Independent Directors have carried out annual:

a) review of the performance of the Executive Directors

b) review of the performance of the Chairman and
assessment of quality, quantity and timelines
of the flow of information to the Board

c) review of the performance of the Board as
a whole

16.3.3 The Board has carried out an annual evaluation of
the performance of:

a) its committees, namely, Audit, Corporate
Social Responsibility, Investment, Nomination
and Remuneration, Risk Management and
Stakeholders Relationship

b) the Independent Directors

The templates for the above purpose were circulated
in advance for feedback from the Directors.

16.4 Familiarisation programs for the Independent
Directors

The Company has familiarisation programs for
its Independent Directors. It comprises, amongst
others, presentations by and discussions with
the Senior Management on the nature of the
industries in which it operates, its vision and
strategy, its organisational structure and relevant
regulatory changes. A visit is organised to one

or more of its manufacturing sites. Details of the
familiarisation programmes are also available at
www.atul.co.in/about/directors/

17. Key Managerial Personnel and other
employees

17.1 Appointments and cessations of the Key
Managerial Personnel

Mr Bharathy Mohanan retired as a Whole-time
Director effective May 25, 2025. There were no
other changes in the Key Managerial Personnel
during 2025-26.

17.2 Remuneration

The Remuneration Policy related to the Key
Managerial Personnel and other employees
consists of the following:

17.2.1 Components:

a) Fixed pay

i) Basic salary

ii) Allowances

iii) Perquisites

iv) Retirals

b) Variable pay

17.2.2 Factors for determining and changing fixed pay:

a) Existing compensation

b) Education

c) Experience

d) Salary bands

e) Performance

f) Market benchmark

17.2.3 Factors for determining and changing variable pay:

a) Company performance

b) Business performance

c) Individual performance

d) Work level

18. Analysis of remuneration

The information required pursuant to Sections 134
(3)(q) and 197(12) of the Act, read with Rule 5 of
the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, in respect
of employees of the Company, forms a part of
this Report. However, as per the provisions of
Sections 134 and 136 of the Act, the Report and
the Accounts are being sent to the members and
others entitled thereto, excluding the information
on particulars of employees, which are available for
inspection by the members.

Any member who is interested in obtaining a copy
of such statement may write to the Company
Secretary at the registered office of the Company.

19. Management Discussion and Analysis

The Management Discussion and Analysis covering
the performance of the two reporting segments,
namely, LSC and POC, is given on page number 91.

20. Corporate Governance Report

20.1 Declaration by the Independent Directors

The Independent Directors have given declarations
under Section 149(6) of the Act.

20.2 Report

The Corporate Governance Report, along with the
certificate from the Practicing Company Secretary
regarding the compliance of the conditions of
corporate governance pursuant to Regulation
34(3), read with Schedule V of the Regulations, is
given on page number 98. Details about the number
of meetings of the Board held during 2025-26, are
given on page number 102. The composition of the
Audit Committee is given on page number 105.

All the recommendations given by the Audit
Committee were accepted by the Board.

20.3 Whistleblower Policy

The Board, on the recommendation of the Audit
Committee, had approved a vigil mechanism
(Whistleblower Policy). The Policy provides
an independent mechanism for reporting and
resolving complaints about unethical behaviour,
actual or suspected fraud and violation of
the Code of Conduct of the Company and is
displayed on the website of the Company at
www.atul.co.in/investors/policies

No person has been denied access to the
Audit Committee.

20.4 Secretarial standards

Secretarial standards as applicable to the Company
were followed and complied with during 2025-26.

20.5 Prevention, prohibition and redressal of
sexual harassment

Details required under the Sexual Harassment
of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 and rules thereunder are
given on page number 109.

20.6 Maternity benefit

The Company has complied with the provisions
relating to maternity benefits.

21. Business Responsibility and Sustainability
Report

As per Regulation 34 of the Regulations, the
Business Responsibility and Sustainability Report
is given on page number 118.

22. Dividend Distribution Policy

As per Regulation 43A of the Regulations, the
Dividend Distribution Policy is displayed on the
website of the Company at www.atul.co.in/
investors/policies

23. Acknowledgements

The Board expresses its sincere thanks to all the
employees, customers, suppliers, lenders, regulatory
and government authorities, stock exchanges and
investors for their support.

For and on behalf of the Board of Directors

(Sunil Lalbhai)

Mumbai Chairman and Managing Director

April 24, 2026 DIN: 00045590