DIRECTORS' REPORT

The Board of Directors are pleased to present the Company's Fortieth Annual Report (first Integrated Annual Report) and the Company's audited financial statements (standalone and consolidated) for the financial year ended March 31, 2024.

Financial Performance

The Company's financial performance (standalone) for the year ended March 31, 2024, is summarised below:

For the financial year ended March 31, 2024, a Total Income of H 1,57,112.48 lakhs as against H 1,20,094.61 lakhs in the previous year.

For the year ended on March 31, 2024, the Company has reported Earnings Before Interest, Finance Cost, Depreciation and Amortization and Tax (EBIDTA) of H 47,446.55 lakhs as against the EBIDTA of H 28,105.58 lakhs during the previous year.

The Net Profit of the Company for the year 2023-24 was H 29,959.62 lakhs compared to H 16,311.92 lakhs during the previous year.

Business Review

During the year under review, your Company was able to build on the business momentum created as a result of the company's actions. Despite the uncertain geopolitical situation, the situation has largely been benign to the company's interests. We continue to see the growth of the CMS business as a result of the commercialization & launch quantities. The focus for the GDS business continues to be in products where the Company's presence makes a significant difference to customers. The company is continuing to improvise both its business development approach even as it strengthens in line with the growing opportunities. The company continued to focus on developing deeper connections with customers and listening through formal customer feedback surveys.

The Company's commitment to strong governance, sustainability and the environment continues to be reinforced through the work on Enterprise Risk Management and Environmental, Social and Governance overseen by the Risk

and Sustainability Committee of the Board. The Company improved its scores as it was rated by external agencies on Sustainability. As in previous years, the company is building capabilities in line with the strategic priorities and anticipated business needs. Along with technical & infrastructural needs, the capability building is increasingly focussed on people and building a pipeline of talent for the long-term.

Dividend

Your directors are pleased to recommend a final dividend of H 14/- (140%) per equity share on face value of H 10/-each of the Company, for the financial year ended March 31, 2024. The final dividend, if approved at the 40^th Annual General Meeting, will be paid to members within the period stipulated by the Companies Act, 2013 ('the Act'), as amended from time to time. The outflow on account of final dividend is estimated to be H 1,796.18 lakhs.

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the dividend distribution policy, is available on the Company's website at - https://www.neulandlabs. com/sites/neulandlabs/files/neuland-labs/Investors/ corporate-governance/policies-and-documents/dividend-distribution-policy.pdf

Share Capital

The equity shares of your Company continue to be listed and traded on the BSE Limited and National Stock Exchange of India Limited. The paid-up equity share capital of the Company as on March 31, 2024 is H 1,290.05 lakhs. During the year under review, the Company has not issued any

shares with differential voting rights nor granted stock options nor sweat equity.

Outlook

The Company is focussed on actions to secure the longterm growth and sustainability of the Company as there is visibility on customer order flow for the short term, and processes are in place to ensure short-term execution. Project management will be critical to ensure delivery of projects and new products, as it will also be key to ensuring cost improvement programs and other strategic initiatives are on track. The Company will continue to keep quality at the top of the agenda, though it focuses on deepening current relationships and attracting new customers. The Company is continuously taking actions across the complete spectrum of the value chain to ensure it delivers value to all stakeholders and is one of the leading API partners of choice.

Consolidated Financial Statements

The Audited Consolidated Financial Statements of your Company as on March 31, 2024, which forms part of the Integrated Annual Report, have been prepared pursuant to the provisions of SEBI Listing Regulations as amended from time to time, and also as per the applicable Indian Accounting Standard (IndAS) on Consolidated Financial Statements (IndAS-110) as notified by the Ministry of Corporate Affairs.

The annual accounts of the subsidiary companies are kept for inspection by any member at the Registered Office of the Company as well as at the Registered Office of the respective subsidiary companies and also available on the website of the Company, www.neulandlabs.com. Any member interested in a copy of the accounts of the subsidiaries may write to the Company Secretary at the Registered Office of the Company.

Subsidiaries

Your Company has two subsidiaries, Neuland Laboratories K.K., Japan and Neuland Laboratories Inc. USA, working on market development. Your Company does not have any joint venture or associate companies. Further there has been no material change in the nature of business of the subsidiaries.

A report on the performance and financial position of the subsidiaries, set out in the prescribed form AOC-1 in terms of proviso to sub-section (3) of Section 129 of the Act as amended from time to time, is provided as Annexure to the consolidated financial statements and hence not repeated here.

Corporate Governance Report, Management Discussion & Analysis and Other Information Required under the Companies Act, 2013 and SEBI Listing Regulations

As per SEBI Listing Regulations, as amended from time to time Corporate Governance Report with Certificate from a

Practicing Company Secretary thereon and Management Discussion and Analysis report are attached and form part of this report.

Directors and Key Managerial Personnel Appointments

During the year, the members of the Company at the Annual General Meeting held on July 27, 2023, approved the appointment of Mr. Sugata Sircar and Ms. Pallavi Bakhru, as Independent Directors of the Company, with effect from June 27, 2023. The Board opined that the above Independent Director's possessed requisite experience and expertise (including the proficiency).

Retirement and Resignation

Mr. Parampally Vaudeva Maiya (DIN: 00195847) and Ms. Bharathi Rao (DIN: 01892516) completed their terms as Independent Directors of the Company on March 31, 2024 and May 8, 2024, respectively.

Mr. Humayun Dhanrajgir (DIN: 00004006) vide his letter dated September 23, 2023, received by the Company through courier on September 25, 2023, tendered his resignation as an Independent Director of the Company with immediate effect on account of health issues.

The Board placed on record its profound gratitude for the valuable contributions made by the above Independent Directors to the Company. These directors have contributed significantly to the Company's growth, and the Company has benefited immensely from their insightful leadership, strategic guidance, and their ability to deepen discussions in meetings.

Re-appointment of Directors

During the year, the members of the Company at its AGM held on July 27, 2023, approved the re-appointment of the following directors:

1. Mr. Davuluri Sucheth Rao (DIN: 00108880), as Whole Time Director designated as Vice Chairman & Chief Executive Officer for a period of five years, with effect from August 1, 2023;

2. Mr. Homi Rustam Khusrokhan (DIN: 00005085), as an Independent Director of the Company for a further period of five years, with effect from February 12, 2024; and

3. Dr. Davuluri Rama Mohan Rao (DIN: 00107737), as Whole Time Director designated as Executive Chairman, for a period of five years, with effect from April 1, 2024.

Retirement by Rotation

Pursuant to the provisions of Section 152(6) (d) of the Act read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of Association of the Company, Dr. Davuluri Rama Mohan Rao (DIN: 00107737) and Mr. Davuluri Sucheth Rao (DIN: 00108880) will retire by rotation at the ensuing Annual General Meeting and being

eligible has offered themselves for re-appointment. The Board recommends their re-appointment in the ensuing AGM of the Company.

Key Managerial Personnel (KMP)

During the year under review, there were no changes in the Key Managerial Personnel of the Company. As on the date of this report, the Company has the following Key Managerial Personnel as per Sections 2(51) and 203 of the Act:

Listing at Stock Exchanges

The equity shares of your Company continue to be listed and traded on the BSE Limited and National Stock Exchange of India Limited. The Annual Listing fee for the year 2024-25 has been paid to both the stock exchanges.

Directors' Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, as amended from time to time, your directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them:

a. in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for the year ended on that date;

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

d. the annual financial statements have been prepared on a going concern basis;

e. proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Board Meetings

During the year under review, eight Board Meetings were convened and held, the details of which are given in the Corporate Governance Report, which forms part of this report. The intervening gap between the meetings was within the period prescribed under the Act, and SEBI Listing Regulations, as amended from time to time.

Composition of various Committees

Details of various committees constituted by the Board as per the provisions of the Act and SEBI Listing Regulations as amended from time to time, and their meetings are given in the Corporate Governance Report which forms part of this report.

Board Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations the annual evaluation of the performance of the Board, its Committees and of individual directors has been carried out by the Board. The process was carried out by circulating questionnaires on the Board and Committees functioning on certain parameters. The performance evaluation of the Independent Directors was carried out by the entire Board, except the director being evaluated. The performance evaluation of the non-Independent Directors including Executive Directors was carried out by the Independent Directors.

Independent Directors

The Independent Directors met on February 9, 2024, without the presence of non-Independent Directors and members of the management. The Independent Directors, inter alia, discussed matters pertaining to the Company's affairs and reviewed the performance of non-Independent Directors, the Chairman and the Board as a whole, and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the Act and SEBI Listing Regulations, as amended. Further, they have affirmed compliance to the code of conduct for Independent Directors as prescribed in Schedule IV of the Act. The terms and conditions of appointment of Independent Directors is available on the website of the Company.

Disclosures by Directors

None of the directors of your Company is disqualified as per provisions of Section 164(2) of the Act. Your directors have made necessary disclosures to this effect as required under Act.

Audit Committee

During the year under review, four Audit Committee Meetings were convened and held. The details of the committee meeting and composition of the Audit Committee and its terms of reference are included in the Report on Corporate Governance annexed. All the recommendations made by the Audit Committee were accepted by the Board of Directors.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company includes Board Diversity as part of the policy and is available on the website of the Company at https://www. neulandlabs.com/sites/neulandlabs/files/neuland-labs/ Investors/corporate-governance/policies-and-documents/ nomination-and-remueration-policy.pdf. The policy covers selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act and SEBI Listing Regulations.

Corporate Social Responsibility

The Company has in place a Corporate Social Responsibility Policy which is available on the website of the Company at https:// www.neulandlabs.com/en/investors/corporate-qovernance/ policies-and-documents. Further, your Company has met its CSR obligations for the financial year ended March 31, 2024 under the provisions of the Act and rules made thereunder.

Annual report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 read with Section 134(3) and 135(2) of the Act, has been appended as Annexure-1 and forms an integral part of this Report.

Business Responsibility and Sustainability Report

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR), is forming part of this report as Annexure-2.

Code of Conduct for Board of Directors and Senior Management Personnel

The directors and members of senior management have affirmed compliance with the Code of Conduct for Board of Directors and Senior Management Personnel of the Company. A declaration to this effect by the Vice Chairman & Chief Executive Officer, forms part of this Report.

Vigil Mechanism/ Whistle Blower Policy

Your Company has a Vigil Mechanism/Whistle Blower Policy which serves as a mechanism for its directors, employees and stakeholders to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct without fear of reprisal. Audit Committee of the Company oversees the implementation of the Whistle Blower Policy. During the year, Company has not received any protected disclosure. The Whistle Blower Policy is available on the website of the Company, at https:// www.neulandlabs.com/en/investors/corporate-govemance/ policies-and-documents. A brief note on the Whistle Blower Policy is also provided in the Report on Corporate Governance, which forms part of this Report.

Prohibition of Insider Trading

Pursuant to Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted the Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Designated Persons and their Immediate Relatives along with Code of Fair Disclosures. Periodically, insider trading awareness sessions are conducted for the benefit of designated persons. Trading window closures, when the designated persons are not permitted to trade in the securities of the Company, are intimated in advance to all concerned.

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to ensure that there is no scope for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has not received any complaints on sexual harassment during the year under review and as on the date of this report.

Employee Stock Option Scheme

As on March 31, 2024, there are no employee stock options available in the Company and hence no disclosures are required to be made under Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Statutory Auditors

M/s. M S K A & Associates (Firm Registration No: 105047W), Chartered Accountants, were appointed as the Statutory Auditor of the Company for a period of five (5) consecutive years to hold the office from the conclusion of the thirty fifth Annual General Meeting until the conclusion of the fortieth Annual General Meeting. The Board of Directors of

the Company on recommendation of the Audit Committee at its meeting held on May 10, 2024, has approved the proposal to reappoint M/s. M S K A & Associates as the Statutory Auditors of the Company for a second term of five consecutive years, subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. M/s. M S K A & Associates have consented to the said reappointment and confirmed that their re-appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be re-appointed as statutory auditors in terms of the provisions of Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

Auditors' Report

There are no qualifications, reservations or adverse remarks made by M/s. M S K A & Associates, Statutory Auditors, in their report for the financial year ended March 31, 2024.

Pursuant to provisions of Section 143(12) of the Act, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, the Company has appointed M/s. P.S. Rao & Associates, a firm of Company Secretaries in Practice, to conduct the Secretarial Audit of the Company. The report of the Secretarial Audit for the financial year ended March 31, 2024, is annexed to the Corporate Governance Report and forms part of this report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in their report.

Cost Auditors

Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, as amended from time to time, subject to the approval of the Central Government, if any required, the Audit Committee has recommended and the Board of Directors had appointed M/s. Nageswara Rao & Co. (Registration No. 000332), Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2024-25.

Reporting of Fraud

During the year, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its officers and employees under Section 143(12) of the Act details of which needs to be mentioned in this Report.

Insurance

Your Company has taken necessary steps to mitigate risks and obtained appropriate insurances and the Board is kept appraised of the risk assessment and minimization procedures. The assets of the Company have been adequately covered under insurance. The policy values have been determined taking into consideration the value of the assets of the Company.

Material Changes

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate and the date of the report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

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

Annual Return

Pursuant to Section 92 and Section 134 of the Act, the Annual Return as on March 31, 2024 in form MGT-7 is available on the website of the Company at www.neulandlabs.com.

Particulars of Employees and related disclosures

The information relating to remuneration and other details as required pursuant to Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is provided as Annexure-4 to this report.

In terms of the provisions of Section 197 of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Pursuant to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report is being sent to the members and other persons entitled thereto, excluding the information in respect of employees of the Company containing the particulars as specified in Rule 5 (2) of the said Rules. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such information, may write to the Company Secretary and the same will be furnished on request.

Related Party Transactions

All contracts/arrangements/transactions with the related parties during the financial year were in the ordinary course of business and at an arm's length basis.

During the year, the Company has not entered into any contract or arrangement with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Further, there were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board may be accessed on the Company's website at https://www.neulandlabs.com/en/investors/corporate-governance/policies-and-documents.

The particulars of transactions with related parties in the prescribed format is annexed to this report, as Annexure-5. Members may refer to Note No. 38 to the standalone financial statement which sets out related party disclosures pursuant to Ind AS.

Particulars of Loans, Guarantees and Investments

The Company has not given any loans and guarantees or made any investments under Section 186 of the Act during the year under review.

Deposits from Public

The Company has not accepted any deposits from the public and as such no amount of principal or interest on deposits from the public was outstanding as on the date of the Balance Sheet.

Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

Transfer to Reserves

No amount was proposed to be transferred to the general reserve during the financial year 2023-24.

Risk Management

The Risk & Sustainability Committee of the Board oversees Company's processes for determining risk tolerance and review management's action and comparison of overall risk tolerance to established levels. The framework is designed to enable risks to be identified, assessed and mitigated appropriately. Major risks identified by the businesses and functions are systematically addressed through appropriate

actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which forms part of this Report.

Internal Financial Controls

Internal Financial Controls are an integral part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been embedded and documented in the business processes. The controls in place include essential components of internal financial controls required under the Act and also the internal financial controls over financial reporting as per the Guidance Note on Audit of Internal Controls over Financial Reporting as issued by Institute of Chartered Accountants of India.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, continuous monitoring by functional owners as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

The Company has in place adequate internal financial controls with reference to financial statements. During the year under review such controls were tested and no reportable material weakness in the design or operation were observed.

Human Resources & Industrial Relations

Your Company's relations with its employees continue to be cordial. Dedicated work by the workmen, supervisors and executives of your Company made it possible to achieve success under trying and difficult circumstances.

Acknowledgement

Your Board of Directors take this opportunity to thank all its stakeholders, including banks, financial institutions, business partners, government and other statutory bodies, regulatory authorities, analysts and members for their continued support and valuable cooperation. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Company's employees at all levels.