Operations for the year:

Standalone

The Company has earned revenue from operations of '9,198
crores for the current financial year against '7,665 crores for
the previous financial year. The Company's initiatives have
effectively resulted in earning revenue higher by 20% over the
previous financial year.

The total income for the current financial year is '9,550
crores against '8,002 crores for the previous financial year.
Profit before tax for the current financial year is '2,929 crores
against '2,132 crores for the previous financial year.

Tax expense for the current financial year is '720 crores
against '556 crores for the previous financial year. The
Company has chosen to exercise the option permitted
in the Section 115BAA of Income Tax Act, 1961 from the
current financialyear. The Deferred Tax Liability as on

March 31, 2025 and the Current Tax for the year then ended
have been provided accordingly.

Profit after tax for the current financial year is '2,209 crores
against '1,576 crores for the previous financial year.

Consolidated

The Group's consolidated total income for the current year
is '9,712 crores as against '8,184 crore for the previous
financial year.

Profit before tax for the current financial year is '2,916 crores
as against '2,163 crores for the previous financial year.
The Company earned a Profit after Tax of '2,191 crores for
the current financial year as against '1,600 crores for the
previous financial year. The consolidated operations are
reflective of standalone operations, as standalone operations
are substantial part of our Group's business.

In accordance with the provisions of the Companies Act, 2013
(the Act) and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (SEBI Listing Regulations),
the consolidated financial statements have been prepared
by the Company in accordance with the relevant Indian
Accounting Standards (Ind AS). The audited consolidated
financial statements together with Auditor's Report thereon
form part of this Annual Report.

Dividend

The Board of Directors have recommended a dividend of
'30/- per equity share of face value '2/- each, i.e. 1,500%,
for the financial year ended March 31, 2025. The dividend
recommended is in accordance with the Company's Dividend
Distribution Policy. The total dividend payout for the current
year amounts to '796 crores resulting in a payout of 36% of
the standalone profit after tax for the financial year ended
March 31,2025.

Dividend is subject to approval of Members at the ensuing
Annual General Meeting (AGM) and shall be subject to
deduction of income tax at source. The record date fixed
is July 25, 2025 for determining the names of the members
eligible for dividend on equity shares, if approved by the
members in the AGM.

In terms of Regulation 43A of the SEBI Listing Regulations, the
Dividend Distribution Policy, is available on the Company's
website and can be accessed at https://www.divislabs.com/
DividendDistributionPolicy.pdf.

Transfer to reserves

The Company has not proposed to transfer any amount to
the General Reserve on declaration of dividend.

Capital expenditure
Kakinada project

The Unit III greenfield project at Ontimamidi Village, Thondangi
Mandal, Kakinada District, Andhra Pradesh has commenced
commercialoperations during the year. The totalcapital
expenditure incurred on this project upto March 31, 2025 is
'1,497 crores, of which property, plant and equipment and
intangible assets valuing '885 crores have been capitalized
upto March 31, 2025.

Others

Besides Kakinada project, property, plant and equipment and
intangible assets valuing '363 crores have been capitalized
during the current financial year.

Capital works in progress of all locations as at March 31,2025
is amounting to '1,022 crores.

Material changes and commitments affecting
the financial position between the end of the
financial year and the date of the report

There have been no material changes and commitments,
affecting the financial position of the Company, which have
occurred between the end of the financial year to which the
financial statements relate and the date of this report.

Changes in the nature of business

During the year, Company did not undergo any change in the
nature of its business. Further there was no significant change
in the nature of business carried on by its subsidiaries.

Business Responsibility and Sustainability
Report

The Business Responsibility and Sustainability Report for the
FY 2024-25, in terms of provisions of Regulation 34 of SEBI
Listing Regulations is presented in a separate section, which
forms part of this Annual Report.

Management Discussion and Analysis

Management Discussion and Analysis report for the year
under review, in terms of provisions of Regulation 34(2) of
SEBI Listing Regulations is presented in a separate section,
which forms part of this Annual Report.

Corporate Governance Report

The Corporate Governance Report as per Regulation 34(3)
read with Schedule V of the SEBI Listing Regulations forms
part of this Annual Report. The certificate issued by the
practicing company secretary confirming the compliance with
the conditions of corporate governance is attached to the
Corporate Governance Report.

Credit ratings

Details of credit rating ascribed by rating agencies are
disclosed in the Corporate Governance Report forming part
of this Annual Report. The strong credit rating reaffirmed is
a reflection of the Company's strong financial position and
discipline.

Subsidiaries

The Company has two wholly owned subsidiaries which are
Divis Laboratories (USA) Inc in USA and Divi's Laboratories
Europe AG in Switzerland; engaged in marketing/distribution
of nutraceutical ingredients used in the food, beverage,
dietary supplement, feed and pet food industries providing a
greater reach to customers within these regions.

There has been no material change in the nature of the
business of the subsidiaries. Further, the Company does not
have any material subsidiaries. There are no associates or

joint venture companies within the meaning of Section 2(6)
of the Act.

During the year, the Board of Directors reviewed the affairs
of the subsidiaries. Pursuant to the provisions of Section
129(3) of the Act, a statement containing the salient features
of financial statements of the Company's subsidiaries in Form
No. AOC-1 is annexed as Annexure-I to this Report.

Further, pursuant to the provisions of Section 136 of the
Act, the standalone financial statements of the Company,
consolidated financial statements of the Group and separate
audited financial statements of the Company's subsidiaries,
are made available on the Company's website at https://www.
divislabs.com/investor-relations/.

Policy for determining material subsidiaries, is available on
the Company's website and can be accessed at: https://www.
divislabs.com/MaterialSubsidiaryPolicy.pdf.

Directors and Key Managerial Personnel
Appointment

Dr. Rajendra Kumar Premchand was appointed as an
Additional Director (Independent Director) of the Company
with effect from May 25, 2024. The Members of the Company
at its 34^th Annual General Meeting held on August 12, 2024,
approved his appointment as an Independent Director of the
Company, for a period of 5 years with effect from May 25,

2024.

Re-appointments:

The shareholders, at the 34^th AGM held on August 12, 2024,
approved the following:

• Re-appointment of Dr. Murali K. Divi as Managing
Director of the Company for a period of 5 years with
effect from October 10, 2024.

• Re-appointment of Mr. N.V. Ramana as Executive
Director of the Company for a period of 5 years with
effect from December 26, 2024.

• Re-appointment of Mr. K.V. Chowdary as Independent
Director of the Company for a second term of 5 years
effective from January 04, 2025.

The shareholders, vide postal ballot concluded on March 06,

2025, approved the following:

• Re-appointment of Dr. Kiran S. Divi as Whole-time
Director and Chief Executive Officer of the Company for
a period of 5 years with effect from April 01,2025.

In the opinion of the Board, the Independent Directors
appointed during the year possess requisite integrity,
expertise, experience and proficiency.

Retirement:

• Mr. K.V.K Seshavataram retired as an independent
director of the Company with effect from close of
business hours on June 22, 2024, on completion of his
second term as Independent Director of the Company.

The Board placed on record its sense of deep appreciation

and gratitude for the invaluable contributions rendered by

him during his period as Director of the Company.

Retirement by rotation:

• Ms. Nilima Prasad Divi and Dr. S. Devendra Rao retire by
rotation at the forthcoming 35^th AGM and being eligible,
offer themselves for re-appointment.

Key Managerial Personnel:

The details of Key Managerial Personnel as on March 31,

2025 are as under:

Declaration by Independent Directors

The Company has received declaration from each
Independent Director under Section 149(7) of the Act and
Regulation 25 of the SEBI Listing Regulations, confirming that
he or she meets the criteria of independence laid down in
Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI
Listing Regulations. Further, each Independent Director has
affirmed compliance to the Code of Conduct for Independent
Directors as prescribed in Schedule IV of the Act. In the opinion
of the Board, the independent directors of the Company
possess the necessary expertise, integrity and experience.

Policy on Directors' appointment and
remuneration

As of March 31,2025, the Board had ten members, consisting
of five executive directors and five independent directors.
There are two women directors on the Board, one being
executive and other being an independent director. For
appointment of an independent director, the independence
criteria defined in Section 149(6) of the Act, and Regulation
16(1)(b) of the SEBI Listing Regulations are considered.

Pursuant to Section 178(3) of the Act, Regulation 19(4) read
with Schedule II Part D of the SEBI Listing Regulations and

on recommendation of the Company's Nomination and
Remuneration Committee, the Board adopted Nomination
and Remuneration Policy on appointment and remuneration
of directors, key managerial personnel (KMP) and senior
management including criteria for determining qualifications,
positive attributes and director's independence and which
includes:

• To identify persons who are qualified to become directors
and who may be appointed in senior management
positions in accordance with the criteria laid down.

^• To ensure a transparent Board nomination process
keeping in view the diversity of thought, experience,
knowledge, perspective and gender in the Board.

^• To determine remuneration based on the Company's
size and financial position, limits prescribed in
the Companies Act, and trends and practices on
remuneration prevailing in peer companies, in the
Pharma industry besides qualifications, experience,
skills, capabilities, contributions made by the individual,
etc.

• To carry out evaluation of the performance of Directors,
as well as Key Managerial and Senior Management
Personnel.

• To provide them rewards linked directly to their effort,
performance, dedication and achievement relating to
the Company's operations.

^• To retain, motivate and promote talent and to ensure
long term sustainability of talented managerial persons
and create competitive advantage.

Policy on Nomination and Remuneration of Directors, Key
/ Senior Managerial Personnel may be accessed on the
Company's website at:

https://www.divislabs.com/NominationRemunerationPolicy.

pdf.

We affirm that the remuneration paid to the Directors is as
per the terms laid out in the Nomination and Remuneration
Policy of the Company.

Remuneration details of directors & KMP and
particulars of employees

Pursuant to Section 197(12) of the Act, read with Rule 5(1)
of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (Rules), the prescribed
particulars pertaining to remuneration and other details are
given in Annexure - II to this Report.

The non-executive directors of the Company had no pecuniary
relationship or transactions with the Company, other than
sitting fees, annual remuneration and reimbursement of
expenses for attending meetings, if any.

In terms of the provisions of Section 197(12) of the Act read
with Rules 5(2) and 5(3) of the Rules, a statement showing
the names and other particulars of employees drawing
remuneration in excess of the limits set out in the said
Rules forms part of this report. Further, the report and the
annual accounts are being sent to the Members excluding
the aforesaid statement. In terms of Section 136 of the Act,
the said statement will be open for inspection upon request
by the Members. Any Member interested in obtaining
such particulars may write to the Company Secretary at
cs@divislabs.com.

Number of meetings of the Board

The Board met four times during the financial year. The
meeting details are provided in the Corporate Governance
Report that forms part of this Report. The intervening gap
between the meetings was within the period prescribed
under the Act and the SEBI Listing Regulations.

Performance evaluation

The Board of Directors carried out an annual evaluation of its
own performance, of the Committees of the Board and of the
individual directors including independent directors, pursuant
to the provisions of the Act and SEBI Listing Regulations.

Performance evaluation was carried out based on criteria
evolved, as provided by the guidance note on board evaluation
issued by Securities and Exchange Board of India, seeking
inputs from the Directors individually and the Committees
through a structured questionnaire which provides valuable
feedback for contribution to the Board, improving Board
effectiveness, maximizing strengths and highlighting areas for
further improvement, etc.

In a separate meeting of the Independent Directors,
performance of the Chairman, non-independent directors
and the Board was evaluated taking into account the views of
the non-independent directors and the same was discussed
in the Board meeting. Performance evaluation of independent
directors is done by the entire Board of Directors (excluding
the Directors being evaluated).

The meeting details of the independent directors are provided
in the Corporate Governance Report that forms part of this
Report

Committees of the Board

As on March 31,2025, the Board has five Committees - Audit
Committee, Nomination and Remuneration Committee,

Stakeholders Relationship Committee, Corporate Social
Responsibility Committee and Risk Management and
Sustainability Committee.

On May 25, 2024, the Board delegated sustainability related
references to the Risk Management Committee and renamed
the Committee as Risk Management and Sustainability
Committee.

During the year, all recommendations made by the
Committees were approved by the Board. A detailed note on
the composition of the Board and its Committees is provided
in the Corporate Governance Report, which forms part of this
Report.

Public deposit

The Company has not accepted any deposits from the public
covered by provisions of Section 73 of the Act, no amount on
account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.

Loans, guarantees or investments

The Company has not given any loans or guarantees to
persons covered under the provisions of Section 186 of the
Act. The details of investments made by the Company are
given in the notes to the financial statements forming part of
this Annual Report.

Related party transactions

In line with the requirements of the Act and the SEBI Listing
Regulations, the Policy on Materiality of Related Party
Transactions and dealing with Related Party Transactions, as
approved by the Board is available on the Company's website
at https://www.divislabs.com/wp-content/uploads/7075/04/
RPT Policy V4.pdf.

The Policy intends to ensure that proper reporting, approval
and disclosure processes are in place for all transactions
between the Company and related parties. All related party
transactions and subsequent modifications are placed before
the Audit Committee for review and approval. Prior omnibus
approval is obtained for related party transactions on a
quarterly basis for transactions which are of repetitive nature
and/ or entered in the ordinary course of business and are
at arm's length. All contracts and arrangements with related
parties were at arm's length and in the ordinary course of
business of the Company. There are no materially significant
related party transactions entered into by the Company with
related parties which may have potential conflict of interest
with the Company at large. Statement of transactions with
related parties during the year is given at Note No. 31 of the
Notes to standalone financial statements.

In accordance with Section 134(3)(h) of the Act, and Rule 8(2)
of the Companies (Accounts) Rules, 2014, the particulars of
the contracts or arrangements with related parties referred
to in Section 188(1) of the Act, in Form AOC-2 is attached as
Annexure - III to this Report.

Internal financial controls

The Company has in place adequate internal financial controls
with reference to its financial statements. These controls
ensure the accuracy and completeness of the accounting
records and the preparation of reliable financial statements.
Details in respect of internal financial controls and their
adequacy is included in the Management Discussion and
Analysis Report, which forms part of this Annual report.

Risk management

The Board of Directors ofthe Company has a Risk Management
and Sustainability Committee to frame, implement and
monitor the risk management plan for the Company. The
Committee is responsible for monitoring and reviewing the
risk management plan and ensuring its effectiveness. The
Audit Committee has an additional oversight in the area of
financial risks and controls. The brief of terms of reference,
composition and names of members and chairperson are set
out in the Corporate Governance Report forming part of this
Annual Report.

The Company has an enterprise-wide approach to risk
management, which lays emphasis on identifying and
managing key operational and strategic risks. The Risk
Management and Sustainability Committee constantly
evaluates various risks related to business, customer
concentration, supplier concentration, regulatory
compliances, confidentiality of processes, consistency of
cGMP practices, environment, employee health and safety,
cyber security and data protection, business continuity,
various ESG risks etc. The major risks identified are
systematically addressed through mitigating actions on a
continuing basis.

Further details on the risk management activities including
key risks identified, and their mitigations are covered in
Management Discussion and Analysis Report, forming part of
this Annual Report.

Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Act, the Board of Directors,
to the best of its knowledge and ability, confirm that:

a) the applicable accounting standards read with
requirements of Schedule III to the Act have been
followed in the preparation of the annual accounts
for the year ended March 31, 2025 and there are no
material departures from the same;

b) accounting policies selected were applied consistently
and the judgements and estimates made are reasonable
and prudent so as to give a true and fair view of the state
of affairs of the Company as at the end of the financial
year and of the profit of the Company for the period;

c) proper and sufficient care has been 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 annual accounts have been prepared on a going
concern basis.

e) i nternal financial controls have been laid down and such
controls are adequate and operating effectively;

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

Corporate Social Responsibility (CSR)

Divi's has been carrying out CSR activities for over the past
3 decades. The CSR initiatives of the Company during the
year include promoting education, safe drinking water,
preventive healthcare, village development, environmental
sustainability, support to differently abled, Swatch Bharat,
livelihood enhancement, promotion of rural sports, woman
empowerment, etc.

Company's CSR Policy is available on our website at https://
www.divislabs.com/wp-content/uploads/2022/12/Divis-CSR-
Policy-1.pdf.

The report on our CSR activities as well as summary of the
impact assessment report are enclosed as Annexure - IV to
this Report.

Conservation of energy, technology absorption
and foreign exchange earnings & outgo

Particulars as prescribed under Section 134(3)(m) of the Act
read with Rule 8(3) of the Companies (Accounts) Rules, 2014
are enclosed as Annexure - V to this Report.

Vigil mechanism

The Company has a Whistle Blower Policy and has established
the necessary vigil mechanism for directors and employees in
conformation with Section 177(9) of the Act and Regulation
22 of SEBI Listing Regulations, to report concerns about
unethical behaviour, actual or suspected fraud or violation of
the Company's code of conduct or ethics policy.

Employees and other stakeholders are required to report
actual or suspected violations of applicable laws and
regulations and the Code of Conduct. Such genuine concerns
can be raised by a Whistle-blower through an e-mail or
dedicated telephone line or a letter to the Chairman of the
Audit Committee or to the Vigilance Officer. The Company
investigates such incidents, when reported, in an impartial
manner and takes appropriate action to ensure that
requisite standards of professional and ethical conduct are
always upheld. This mechanism also provides for adequate
safeguards against victimization of director(s)/ employee(s)
who avail the mechanism and also provide for direct access
to the Chairman of the Audit Committee in exceptional
cases. The Whistle Blower Policy may be accessed on the
Company's website at: https://www.divislabs.com/wp-
content/uploads/2020/06/Wh istleBlowerPolicy.pdf

Statutory auditors

M/s. Price Waterhouse Chartered Accountants LLP (Firm
Registration No. 012754N/ N500016), Chartered Accountants,
were re-appointed as Statutory Auditors of the Company at
the 32^nd Annual General Meeting held on August 22, 2022, for
a period of five years till the conclusion of the 37^th AGM to be
held in the year 2027.

Secretarial audit and appointment of
secretarial auditors

The Board has appointed M/s. V. Bhaskara Rao & Co., Company
Secretaries, (CP No. 4182) as the secretarial auditors of the
Company to conduct the secretarial audit for the FY 2024-25.
The Secretarial Audit Report for the FY 2024-25 is annexed
herewith as Annexure - VI.

Based on the recommendation of the Audit Committee, the
Board at its meeting held on May 17, 2025 has recommended
for appointment of M/s. V. Bhaskara Rao & Co., Practicing
Company Secretaries, Hyderabad (Unique code number of
firm: P2025TS104600 and having Peer Review No.6351 /2025),
as Secretarial Auditors of the Company to hold office
for a term of five consecutive years commencing from
FY 2025-26 till FY 2029-30, subject to the approval of
shareholders as per the SEBI Listing Regulations read with
Section 204 of the Act and Rules thereunder.

Cost audit

Pursuant to Section 148 of the Act and Rule 3 of the
Companies (Cost Records and Audit) Rules, 2014 as amended,
the Company maintains cost records in its books of account.
As per Rule 4 of the said rules, the requirement for cost audit
is not applicable to a company which is covered under Rule
3, and whose revenue from exports, in foreign exchange,
exceeds seventy-five per cent of its total revenue or which
is operating from a special economic zone. Being satisfied
with all these criteria, cost audit is not mandatory for the

Company. However, the Company is opting voluntarily for an
audit of cost records and appointed M/s. E.V.S & Associates,
Cost Accountants as Cost Auditors.

Auditor's report and Secretarial Audit report

The Statutory Auditor's Report and the Secretarial Auditor's
Report do not contain any qualifications, reservations, or
adverse remarks or disclaimer. During the FY 2024-25,
the statutory auditor and the secretarial auditor have not
reported any instance of fraud committed as prescribed
under Section 143(12) of the Act in the Company by its
officers or employees.

Annual return

The Annual return of the Company as on March 31,2025, in
terms of Section 92(3) read with Section 134(3)(a) of the Act, is
available on the Company's website at https://www.divislabs.
com/investor-relations/reports-and-filings/annual-return/.

Other disclosures

• Information on unclaimed dividend and transfer to IEPF
is provided in the Corporate Governance Report.

• No Company has become or ceased to be its subsidiary,
joint venture or associate company during the year.

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

• 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 and
rules made thereunder and during the year under
review, there were no complaints received or pending.

^• The Company has followed the applicable Secretarial
Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the
Board of Directors' and 'General Meetings' respectively.

• There was no application made or proceeding pending
against the Company under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year
under review.

• There was no instance of one-time settlement with any
Bank or Financial Institution.

Acknowledgements

Your Directors take this opportunity to thank the customers,
shareholders, suppliers, bankers, business associates,
financial institutions and Central and State Governments for
their consistent support and encouragement to the Company.

We are sure you will join our Directors in conveying our sincere
appreciation to employees at all levels of the Company and its
subsidiaries, for their hard work, dedication and commitment
and for their participation in the growth of the Company.

For and on behalf of the Board

Dr. Ramesh B.V. Nimmagadda Dr. Murali K. Divi

Date: May 17, 2025 Chairman Managing Director

Place: Hyderabad DIN: 07854042 DIN: 00005040