DIRECTORS' REPORT

Your directors take pleasure to present the Board's Report in line with the Companies Act, 2013 ("Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). This report presents the Audited financial results and other developments in respect of the Company during the financial year ended on 31 March 2026 ("FY26"/ "Financial Year") and up to the date of the Board meeting held on 22 May 2026 to approve this report.

Financial Highlights

The Company's financial performance for the financial year ended 31 March 2026:

• The Company's performance has been discussed in detail in the ‘Management Discussion and Analysis Report'.

• The Company is engaged in pharmaceuticals business, and there has been no change in the nature of the business of the Company during the financial year ended 31 March 2026.

Material Changes and Commitments

There have been no material changes and commitments affecting the Company's financial position between the end of the financial year and the date of this report other than those which have already been disclosed to the Stock Exchanges.

Consolidated Accounts

The consolidated financial statements for the year ended 31 March 2026, pursuant to Section 129(3) of the Act form part of this Annual Report.

Dividend

During the year under review, the Board has declared an interim dividend of ^ 11.00 (Rupees Eleven only) per equity share of ^ 1.00 (Rupee One only) each [previous year ^ 10.50 (Rupees Ten and Paise Fifty only) per equity share of ^ 1.00 (Rupee One only) each] for the year ended 31 March 2026.

In addition to the above, the Board has recommended a final dividend of ^ 5.00 (Rupees Five only) per equity share of face value ^ 1.00 (Rupee One only) each [previous year ^ 5.50 (Rupees Five and Paise Fifty only) per equity share of face value ^ 1.00 (Rupee One only) each] for the financial year ended 31 March 2026. The final dividend, if approved by the shareholders at the ensuing 34^th Annual General Meeting ("AGM”), shall be paid after deduction of tax at source, as applicable, and would result in a cash outflow of approximately ^ 11,996.67 million. Consequently, the total dividend payout

Investor Education and Protection Fund ("IEPF”) / Unclaimed Dividends

Pursuant to Section 124 of the Act, dividends that are unpaid or unclaimed for a period of seven years shall be transferred to the IEPF, along with the underlying shares on which such dividends remain unclaimed.

Transfer to IEPF

Details of transfers to IEPF during the year under review are as follows:

In its endeavour to facilitate and safeguard shareholders' interests, the Company has taken several proactive, voluntary initiatives. These include:

Facilitation of Unclaimed Dividend Payments

The Company processed dividends remaining unclaimed for earlier years based on analysis of shareholders whose updated bank account details were available with the Company, as evidenced by the most recent electronic dividend payouts. These efforts enabled eligible shareholders to receive their rightful dues.

Outreach to Physical Shareholders

The Company leveraged its pan-India field force network to reach shareholders holding shares in physical form who were not actively connected with the Company and assisted them in updating and regularising their records, thereby enabling them to claim unclaimed dividends. This initiative ha: facilitated improved realisation of shareholder entitlements and enhanced overall investor outreach.

SEBI Special Windows for Re-lodgement and Dematerialisation

During the year, the Securities and Exchange Board of India ("SEBI") introduced special windows to facilitate transfer and dematerialisation of physical securities purchased or sold prior to 1 April 2019.

• A re-lodgement facility was available from 7 July 2025 to

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• A further special window commenced from 5 February 2026 and will remain open until 4 February 2027, covering eligible re-lodged and fresh cases where original share certificates are available.

Shares transferred pursuant to these windows are credited only in dematerialised form and are subject to a one-year lock-in period. The Company disseminated requisite information in compliance with SEBI requirements.

Support to IEPF "Saksham Niveshak” Campaign

The IEPF Authority, Ministry of Corporate Affairs, launched the 100 Days Campaign “Saksham Niveshak” from 28 July 2025 to 6 November 2025 to facilitate shareholders in claiming unclaimed dividends prior to transfer to the IEPF.

In support of the Campaign, the Company undertook proactive investor outreach through individual notices, emails, SMS and newspaper publications, encouraging shareholders to update their KYC, bank mandates and other requisite details to enable timely claims and reduce transfers to the IEPF.

Appeal to the Shareholders

The Board continues to encourage shareholders to periodically review and claim any unpaid dividends lying with the Company. Information relating to unpaid and unclaimed dividends outstanding up to the relevant financial years, the

corresponding shares liable to be transferred (or already transferred) to the IEPF Authority, along with applicable due dates, is available on the Company's website.

Details of the procedure for claiming amounts or shares from the IEPF Authority can be accessed at www.sunpharma. com under Investors > Shareholders' Information >

Investor Services.

Shareholder Satisfaction Survey

With a view to further strengthening shareholder services, the Company undertook a Shareholder Satisfaction Survey to obtain feedback on the services rendered by its Registrar and Transfer Agent, MUFG Intime India Private Limited (formerly known as Link Intime India Private Limited).

The Survey was conducted from 17 March 2026 to 31 March 2026 and was open to shareholders who had availed RTA services during the period from 1 April 2025 to 31 December 2025. The Survey facilitated the collection of constructive feedback from shareholders, which has been duly shared with the RTA and is expected to contribute towards continuous improvement in service delivery and overall shareholder experience.

Memorandum of Association

During the year, the Board approved an alteration to the Objects Clause of the Company's Memorandum of Association to include an additional object for undertaking captive and renewable energy activities. The said alteration was approved by the shareholders through a special resolution passed by Postal Ballot on 17 April 2026.

Public Deposits

The Company has not accepted any deposits from the public during the financial year under review within the meaning of Chapter V of the Act and the rules made thereunder.

Credit Rating

There has been no change to the credit rating during the year, as disclosed in the Corporate Governance Report, which forms part of this Annual Report.

Board Policies

The various policies that the Board has approved and adopted in accordance with the requirements set forth by the Act and the Listing Regulations can be accessed at our website at https://www.sunpharma.com/policies.

Transfer to Reserves

The Board has not proposed any transfer of profits to reserves during the year. The Composite Scheme of Arrangement implemented during the year involved reclassification of general reserve to retained earnings and amalgamation of wholly-owned subsidiaries and did not result in any transfer to reserves. The Board considers it appropriate to retain resources to support the Company's operational and strategic requirements.

Loans, Guarantees and Investments

The Company continues to maintain a prudent approach in respect of loans, guarantees and investments, undertaken as part of its overall financial and strategic management. All such transactions during the year under review were carried out in compliance with the provisions of Section 186 of the Act. The details of loans given, guarantees provided, and investments made have been duly disclosed in the Financial Statements forming part of this Annual Report.

Changes in Capital Structure

During the financial year under review, there was no change in the issued, subscribed or paid-up share capital of the Company. Pursuant to the Composite Scheme of Arrangement implemented during the year, the authorised share capital of the Company increased to ^ 6,179,700,000 on account of the amalgamation of the authorised share capital of the transferor wholly-owned subsidiaries with that of the Company.

The paid-up equity share capital of the Company as on 31 March 2026 remained at ^ 2,399,334,970. The Company did not issue any shares or other convertible securities, including sweat equity shares or securities under stock option schemes, during the year.

Subsidiaries/ Joint Ventures/ Associates

The statement containing the salient features of the Financial Statements of the Company's subsidiaries/ joint ventures/ associates is given in Form AOC - 1, provided in Notes to the consolidated financial statements, forming part of this Annual Report.

Details pertaining to entities that became subsidiaries/ joint ventures/ associates and those that ceased to be the subsidiaries/ joint ventures/ associates of the Company during the year under review are provided in the notes to the consolidated financial statements, forming part of this Annual Report.

As on 31 March 2026, the Board of the Company comprised eight members. This included four Executive Directors, of whom three are associated with the Promoter, including one woman director; and four Non-Executive Independent Directors, one of whom is a Woman Independent Director. Details relating to the composition of the Board and its Committees, and other related information are provided in the Corporate Governance Report forming part of this Annual Report.

During the financial year under review and up to the date of this Report, the following were the changes in the composition of the Board and Key Managerial Personnel of the Company:

Change in Managing Director

1. Mr. Dilip Shanghvi (DIN: 00005588) stepped down as Managing Director effective from 01 September 2025 and continues to be the Chairman. His appointment as the Executive Chairman of the Company is for a term of five years commencing from 1 September 2025 to 31 August 2030, as approved by the shareholders at the 33^rd AGM.

2. Mr. Kirti Ganorkar (DIN: 10620142) was appointed as the Managing Director of the Company for a term of five years commencing from 1 September 2025 to 31 August 2030, as approved by the shareholders at the 33^rd AGM.

Change in Executive Director

3. Ms. Vidhi Shanghvi (DIN: 06497350) was appointed as a Whole-time Director of the Company for a term of five years with effect from 22 May 2025 to 21 May 2030, as approved by the shareholders at the 33^rd AGM.

Change in Non-Executive Directors

4. Mr. Sudhir Valia (DIN: 00005561), Non-Executive Non-Independent Director, retired from the Board at the conclusion of the 33^rd AGM on 31 July 2025.

5. Dr. Pawan Goenka (DIN: 00254502) was re-appointed as a Non-Executive Independent Director of the Company for a second term of five years commencing from 21 May 2026 to 20 May 2031, pursuant to the approval of the shareholders through Postal Ballot. He shall continue to hold office after attaining the age of seventy-five (75) years during the said term and shall not be liable to retire by rotation.

6. Ms. Rama Bijapurkar (DIN: 00001835), Non-Executive Independent Director, completed her first term of appointment and ceased to be a Director of the Company with effect from closure of business hours on 20 May 2026.

7. Ms. Satyavati Berera (DIN: 05002709) was appointed as a Non-Executive Independent Director of the Company for a term of five years commencing from 8 May 2026 to 07 May 2031, pursuant to the approval of the shareholders through Postal Ballot. She shall not be liable to retire by rotation.

8. Dr. Andreas Busch (DIN: 11699735) has been appointed as a Non-Executive Independent Director of the Company for a term of five years with effect from 12 May 2026 upto 11 May 2031, subject to the approval of the shareholders at the ensuing 34^th AGM. He shall not be liable to retire by rotation.

Change in Chief Financial Officer

9. Ms. Jayashree Satagopan was appointed as the Chief Financial Officer and Key Managerial Personnel of the Company with effect from 01 July 2025.

10. Mr. C. S. Muralidharan, Chief Financial Officer, retired from the services of the Company and ceased to be the Chief Financial Officer with effect from 01 July 2025.

The requisite disclosures as required under the Act, the Listing Regulations and Secretarial Standard-2 on General Meetings issued by the Institute of Company Secretaries of India (“ICSI”) are provided in the Notice convening the 34^th AGM.

Declaration by Independent Directors

The Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as outlined in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. Additionally, the Independent Directors have declared their compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, regarding their inclusion in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

There have been no changes in the circumstances affecting their status as Independent Directors of the Company. In the opinion of the Board, the Independent Directors meet the conditions specified under the Act and the Listing Regulations, and they remain independent of management.

This requirement underscores the importance of Independent Directors in providing unbiased oversight. They help make sure that the Board's decisions are not swayed by management or major shareholders.

Familiarisation Programme for the Independent Directors

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme are available on the website of the Company at https://sunpharma.com/policies/

Board Performance Evaluation

The Board Performance Evaluation is conducted annually under a comprehensive Performance Evaluation Programme (“PEP"), which is an integral part of the Nomination and Remuneration Committee's (“NRC") roles and responsibilities. Each year, the NRC reviews the performance evaluation criteria for the Board as a whole, its Committees, and individual Directors, taking into account applicable SEBI Regulations and the Guidance Note on Board Evaluation issued by ICSI.

For the financial year 2025-26, the PEP was implemented through a structured, multi-pronged approach to ensure a robust, objective, and effective evaluation process. The approach comprised the following:

• Questionnaire Approach:

Structured questionnaires covering the performance of the Board as a whole, Board Committees, and individual Directors were circulated to all Board members. The questionnaires sought inputs on various aspects of governance, strategy, oversight, Board dynamics, and individual contribution.

• Interaction Approach:

In addition, the Lead Independent Director held one-on-one interactions with each Board member to solicit qualitative feedback, views, and suggestions on the effectiveness of the Board's functioning, decisionmaking processes, Committee operations, and overall governance framework.

• Meeting of Independent Directors

The Independent Directors held their separate meeting, as required, to review the performance of the Board as a whole, the Chairperson, Non-Independent Directors and the Board Committees. The views and suggestions expressed at the said meeting were noted and have been appropriately considered in the performance evaluation process. Action points arising therefrom are being taken forward for implementation.

Remuneration Policy and Criteria for Appointment of Directors

The Company has in place a process for selection of any Director, wherein the NRC identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and the Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws and the diversity attributes as per thi Board Diversity Policy of the Company. The Remuneration Policy, inter alia, covers guiding principles and components such as fixed or variable remuneration, retirement benefits, and commissions.

The Remuneration Policy, as approved by the Board, is available on the Company's website at https://sunpharma. com/policies.

Scan the QR code to view the Remuneration Policy

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ‘Annexure -A' to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the aforesaid Rules, pertaining to the names and other particulars of employees, is available for inspection at the registered office of the Company during business hours, and the Annual Report is being sent to the members, excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary and Compliance Officer either at the Registered/Corporate Office address or by email to secretarial@sunpharma.com.

Board Diversity

Your Company recognises and embraces the importance of a diverse Board in its success. The Board has adopted the Board Diversity Policy, which sets out the approach to the diversity of the Board. The said Policy is available on the Company's website at https://sunpharma.com/policies.

Succession Plan

The Company has an effective succession planning mechanism focusing on the orderly succession of Directors, Key Management Personnel, and Senior Management.

The NRC implements this mechanism in conjunction with the Board.

Corporate Governance Report

The Corporate Governance Report and the certificate from the Company's Auditors, as stipulated in Schedule V of the Listing Regulations, are provided in a separate section which forms part of this Annual Report.

Management Discussion and Analysis

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Annual Report which includes the state of affairs of the Company, and there has been no change in the nature of business of the Company during the financial year ended 31 March 2026.

Board Meetings

The Board of the Company met 7 (seven) times during the year under review. The dates of the Board meetings and the attendance of the Directors at the meetings are provided in the Corporate Governance Report, which forms a part of thi Annual Report.

Committees of the Board

As on 31 March 2026, the Board has established six Committees: the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Risk Management Committee, the Corporat Social Responsibility Committee, and the Corporate Governance and ESG Committee.

The Corporate Governance Report, which is included in this Annual Report, provides details about the meetings and composition of the Board Committees.

Related Party Transactions

Given the Company's global reach, size, and operations, related party transactions are essential to its core business. As part of various measures for better corporate governance the Company has constituted a special Committee, the Corporate Governance and ESG Committee (“CGESGC”), which, inter alia, monitors and reviews all related party transactions before recommending them to the Audit Committee for approval. Furthermore, the Company verifies the nature of these transactions by obtaining a certificate from an Independent consultant confirming whether they were conducted at arm's length and in the ordinary course o business. This certificate is then presented to the CGESGC and Audit Committee for thorough evaluation, ensuring a robust governance process.

The Policy on Materiality of and Dealing with Related Party Transactions, as approved by the Board, is available on the website of the Company at https://www.sunpharma.com/ policies.

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act are given in Form AOC-2, provided as Annexure - B' to this Report.

Internal Controls and Internal Financial Controls

Internal Controls

The Company recognises that a strong internal control environment is fundamental to effective governance, sustainable value creation, and stakeholder confidence. Management is responsible for establishing, maintaining, and continuously strengthening internal controls that are commensurate with the scale, complexity, and geographic footprint of the Company's operations.

The internal control framework is designed to provide reasonable assurance regarding the achievement of business objectives across operations, reporting, and compliance. It encompasses clearly defined policies, standard operating procedures, segregation of duties, preventive and detective controls, and monitoring mechanisms. These controls suppor operational effectiveness, safeguard assets, enhance proces discipline, and facilitate timely and reliable decision making.

The framework is dynamic and risk responsive, with periodic reassessment to address evolving business models, regulator expectations, digital transformation initiatives, emerging risks, and changing external conditions. Control owners across business units are accountable for operating controls effectively, while independent assurance is provided through structured internal audit and monitoring activities.

Insights arising from audits, risk assessments, investigations, and data analytics are leveraged to drive continuous improvement, remediation of control gaps, and strengthenin of governance practices across the organisation.

Internal Financial Controls

The Company has established an adequate and effective system of internal financial controls (“IFC”) over financial reporting, forming an integral part of the overall internal control framework. These controls are designed to ensure the orderly and efficient conduct of business, reliability of financial reporting, and compliance with applicable laws and regulations.

The IFC framework is aligned with globally recognised standards and supports the preparation of Financial Statements that present a true and fair view in accordance with applicable accounting principles. It covers entity level controls, process level controls, and technology enabled controls across significant business processes and legal entities.

During the year, the Company continued its focus on:

• Strengthening control design and operating effectiveness,

• Transitioning from manual to automated controls, particularly in finance and IT-dependent processes, and

• Enhancing coordination with statutory auditors to ensure alignment on risk assessment, testing methodology, and remediation outcomes.

The effectiveness of internal financial controls is assessed through a combination of management self-assessments, independent testing, and audit committee oversight.

Identified deficiencies, if any, are addressed through time-bound corrective actions, with progress monitored to ensure sustainable remediation.

Whistle-blower Policy / Vigil Mechanism

The Company is committed to maintaining the highest standards of ethical conduct, integrity, and transparency across all its operations. The Global Code of Conduct provides the foundation for ethical behaviour and serves as a guide for employees, directors, and other stakeholders in conducting business responsibly.

In line with this commitment, the Company has established a robust Global Whistle blower Policy / Vigil Mechanism, approved by the Board and administered with appropriate independence. The mechanism enables employees and other stakeholders to report concerns relating to unethical behaviour, fraud, violations of law or policy, and other misconduct, without fear of retaliation.

Key features of the vigil mechanism include:

• Multiple confidential reporting channels, including web based and direct reporting mechanisms,

• Protection of whistle blowers against retaliation,

• Independent investigation of reported concerns with appropriate oversight, and

• Time bound tracking, reporting, and closure of cases.

The Global Whistle-Blower Policy has been periodically enhanced to reflect evolving regulatory expectations, data privacy considerations, and best practices, and is accessible on the Company's website at https://sunpharma.com/policies.

The Audit Committee provides oversight of the vigil mechanism and reviews significant cases, trends, and remediation actions. Management leverages insights from whistle blower cases to strengthen controls, promote ethical culture, and reinforce accountability across the organisation.

For more in-depth information regarding the Company's vigil mechanism, please refer to the Corporate Governance Report included within this Annual Report.

Global Internal Audit

The Global Internal Audit ("GIA") function operates independently and reports functionally to the Audit Committee of the Board and administratively to senior management. The function is governed by an Audit Charter approved by the Audit Committee and operates in accordanc with recognised professional standards.

GIA adopts a risk based and forward looking audit approach, providing independent assurance on the adequacy and effectiveness of governance, risk management, and internal controls. Audits cover financial, operational, compliance, information technology, and strategic risk areas and are conducted across business units and geographies on a rotational basis.

In addition to assurance, GIA plays an advisory and value enabling role, supporting management through:

• Thematic and cross functional reviews,

• Early identification of emerging risks and control gaps,

• Data driven insights and analytics,

• Investigations and integrity reviews, and

• Recommendations focused on process simplification, standardisation, automation, and sustainable remediation

The GIA team comprises professionals with diverse qualifications, including Chartered Accountants, Certified Internal Auditors, Certified Information Systems Auditors, Certified Fraud Examiners, MBAs, and Engineers.

During the year, the Company further strengthened audit governance and execution through enhanced use of technology. The Laser Audit Reporting System (LARS®), implemented effective 1 April 2024, enables end to end management of the audit lifecycle, real time tracking of audit progress, standardised documentation, and structured monitoring of action plan closure.

Audit findings, key themes, and status of corrective actions are regularly reviewed by the Audit Committee. Management is responsible for timely implementation of agreed actions, with closure monitored through structured follow up mechanisms.

Enterprise Risk Management

The Board of Directors, through the Risk Management Committee ("RMC"), oversees the Company's Enterprise Risk Management ("ERM") framework. The Committee reviews the Company's risk profile, risk appetite, and the effectiveness of risk mitigation strategies. Details of the Committee's composition and functioning are set out in the Corporate Governance Report forming part of this Annual Report.

The Company has implemented a comprehensive and integrated ERM framework that supports identification, assessment, prioritisation, and management of risks that may affect the achievement of strategic and operational objectives. The framework aligns risk considerations with strategy, capital allocation, and performance management.

Key elements of the ERM framework include:

• Identification of strategic, financial, operational, regulatory, sustainability, cyber, geopolitical, third party, and emerging risks,

• Clear ownership of risks and mitigation actions by designated risk owners,

• Assessment of risk likelihood, impact, and control effectiveness, and

• Periodic review and escalation of key risks to senior management and the Board.

Risks and mitigations are documented in a comprehensive enterprise risk register, which is updated at least semi annually in consultation with business, regional, and functional leaders. The register captures evolving risk trends, mitigation status, and emerging risk insights to support informed decision making.

The Company leverages digital enablement through the Laser Risk Management System (LERMS®), implemented effective 1 September 2024, which provides a centralised platform for risk identification, assessment, mitigation tracking, and reporting. The system facilitates consistency, transparency, and enterprise wide risk awareness.

ERM discussions are integrated into Board and management reviews, enabling proactive risk responses, minimisation of unexpected losses, and strengthening of organisational resilience.

In order to comply with the above requirements, the Board of Directors has established RMC to oversee the spectrum of organisational risks diligently. The Corporate Governance Report, an integral part of this Annual Report, provides detailed insights into the Committee's operations. The Committee evaluates the effectiveness of risk mitigation strategies, ensuring they are robust and responsive. In line with this, the Board has endorsed a comprehensive Risk Management Policy, a synopsis of which can be accessed on our website at https://sunpharma.com/policies.

Auditors

Statutory Auditors

Disclosing the details of the Statutory Auditors in the Board's Report helps ensure transparency and gives shareholders and other stakeholders confidence in the Company's financial health and adherence to Regulations.

S R B C & CO LLP, Chartered Accountants, (Firm's Registration. No. 324982E/ E300003), have been reappointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 30^th AGM of the Company to hold office till the conclusion of the 35^th AGM of the Company.

The Auditor's Report for the financial year 2025-26 has been issued with an unmodified opinion.

Secretarial Auditors

The Secretarial Audit verifies whether the Company complies with various laws and regulations, thereby strengthening its compliance efforts. The Board is responsible for responding to any issues raised in the audit report, demonstrating its commitment to making the necessary changes and maintaining high compliance standards.

Based on the recommendation of the Board, the shareholders of the Company had appointed KJB & CO LLP, Practising Company Secretaries, to undertake the Secretarial Audit of the Company for a term of five (5) consecutive years, to hold such office from the conclusion of 33^rd AGM up to the conclusion of 38^th AGM, at such remuneration as may be fixed by the Board, from time to time. The Secretarial Audit Report in the Form No. MR-3 for the year is provided as Annexure - C1' to this Report.

The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark.

In accordance with the provision of Regulation 24A of the Listing Regulations, Secretarial Audit of two material unlisted Indian subsidiaries of the Company namely, Sun Pharma Laboratories Limited (SPLL) and Sun Pharma Distributors Limited (SPDL), was undertaken by KJB & CO LLP, Practicing Company Secretaries, Mumbai and the Secretarial Audit Reports issued by them are provided as ‘Annexure - C2' and ‘Annexure - C3' respectively to this Report. The Secretarial Audit Reports for these material unlisted Indian subsidiaries do not contain any qualification, reservation or adverse remark.

Cost Auditors

The Cost Auditors play a crucial role in examining the Company's cost accounting practices and verifying the accuracy of its cost records. Through detailed assessments, they ensure that the Company adheres to legal standards and effectively manages its costs.

The Board has appointed M/s. Narasimha Murthy & Co.,

Cost Accountants (Firm's Registration No. 000042), as Cost Auditor of the Company, to conduct the audit of cost records maintained by the Company for the financial year 2025-26.

The Company has maintained the Cost Records as specified by the Central Government under Section 148(1) of the Act.

Business Responsibility & Sustainability Report

The Business Responsibility and Sustainability Report of the Company for the year ended 31 March 2026 is provided in a separate section and forms part of this Annual Report and is also made available on the website of the Company at https:// sunpharma.com/investors-annual-reports-presentations.

Further, the Company publishes a separate Sustainability Report, which inter alia includes details of CSR expenditure, initiatives, and broader Environmental, Social, and Governance (ESG) performance. The Sustainability Report is duly submitted to the stock exchanges and is also available on the website of the Company at www.sunpharma.com.

Corporate Social Responsibility ("CSR”)

In compliance with the requirements of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Policy of the Company is available on the website of the Company at https:// sunpharma.com/policies.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as ‘Annexure - E' to this Report.

Human Resources

FY26 continued to be a year of meaningful progress for us. Our people remained at the core of our success, demonstrating unwavering commitment to ensuring uninterrupted access to medicines for patients across markets. Guided by the philosophy of Sunology and aligned to our Employee Value Proposition-Better Everyday, Take Charge, Thrive Together-the focus remained on building a safe, inclusive, and performance-driven workplace.

The Key HR priorities included enhancing the employer brand, strengthening our talent management practices, along with focus on high performance and effectiveness. Going forward, we will continue investments in leadership development, organizational effectiveness, and digital enablement helping us strengthen our people foundation for the future.

Your Board would like to take this opportunity to express their gratitude and appreciation for the dedication and contribution of all employees and looks forward to their continued partnership in Sun Pharma's growth journey.

Considering the strategic importance of CSR to the Company, a comprehensive CSR Report is published in addition to the disclosures mandated under the Act. It provides detailed information on the Company's CSR initiatives, including areas of expenditure, key programs and interventions, and implementation mechanisms. It also encompasses impact assessment studies, stakeholder engagement, and survey-based evaluations undertaken to assess the effectiveness, reach, and sustainability of the CSR initiatives at a group level.

The Report underscores the Company's commitment to responsible corporate citizenship and transparent disclosure of its social impact. The same is available on the Company's website and can be accessed at: https://sunpharma.com/csr/

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

Your Board strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive

awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Regulations, thereby reinforcing awareness and adherence to the Code. The Code under the Insider Trading Regulations is available on the Company's website at https://sunpharma. com/policies.

Disclosure under the Maternity Benefit Act, 1961

Your Board affirms that it has complied with the applicable provisions of the Maternity Benefit Act, 1961, and the rules made thereunder. The Company has in place appropriate systems and policies to provide maternity benefits and relatet entitlements to eligible women employees, in accordance with the statutory requirements. The Company continues to endeavour to provide a supportive and inclusive work environment for women employees.

Prohibition of Insider Trading

The Company has established a Code of Conduct for Prohibition of Insider Trading (“Code”) to govern, monitor, and report trading in the Company's shares by designated persons and their immediate relatives, in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The Code outlines the procedures that designated persons must follow when trading or dealing in the Company's shares and sharing Unpublished Price Sensitive Information (UPSI).

The Compliance Team of the Company circulates fortnightly communications to employees to apprise them of the governance do's and don'ts under the Insider Trading

Cyber Security

In response to increasing cyber threats, we continuously review and strengthen our cybersecurity framework. The Company has real-time security monitoring and layered controls across user devices, networks, servers, applications, and data to safeguard systems and information. The company has a written down, defined Information Security Management System and has been recently certified as ISO 27001:2022 compliant.

Regulatory Orders

There are currently no material orders from regulatory authorities, courts, or tribunals that could impact the Company's ability to operate as a going concern. The Company remains committed to transparent and timely disclosures in accordance with Listing Regulations, should any significant regulatory developments arise.

Annual Return

The Annual Return as required under sub-section (3) of Section 92 of the Act in form MGT-7 is made available on the website of the Company and can be accessed at https:// sunpharma.com/annual-return.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards as amended from time to time.

Other Disclosures

1. During the year under review, the Statutory Auditor, Cost Auditor and Secretarial Auditor have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee and/or Board under section 143(12) of the Act.

2. There are no proceedings initiated/ pending against your Company under the Insolvency and Bankruptcy Code, 2016, and there is no instance of one-time settlement with any Bank or Financial Institution.

3. Pursuant to the approval of the shareholders of the Company obtained on 21 January 2025, a petition was filed with the Hon'ble National Company Law Tribunal (“NCLT”) in respect of the Composite Scheme of Arrangement. The NCLT admitted the petition and passed its approval order for the Scheme, which provided for (a) the amalgamation of the Company's wholly-owned subsidiary companies, namely Sun Pharmaceutical Medicare Limited, Green Eco Development Centre Limited, Faststone Mercantile

Company Private Limited, Realstone Multitrade Private Limited and Skisen Labs Private Limited, with the Company, and (b) the reclassification of the General Reserve of the Company to Retained Earnings. The Composite Scheme of Arrangement became effective upon filing of the NCLT order dated 7 October 2025 with the Registrar of Companies on 22 November 2025.

4. The Company has not issued any equity shares with differential rights regarding dividends, voting, or other rights.

Acknowledgements

Your Board wishes to thank all stakeholders, employees, business partners, the Company's bankers, medical professionals and business associates for their continued support and valuable cooperation.

Your Board also wishes to express its gratitude to investors for the faith that they continue to repose in the Company.