Equity Analysis

Your Directors are pleased to present the Twenty Ninth Annual Report and the Audited Financial Statements of Zydus

Lifesciences Limited ("the Company") for the Financial Year ended on March 31, 2024.

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") notified under section 133 of The Companies Act, 2013 ("the Act"), read with rule 7 of The Companies (Accounts) Rules, 2014

("the Accounts Rules").

The standalone and consolidated financial performance of the Company for the Financial Year ended on March 31, 2024 is summarized below: Rs. in mio.

The Company proposes to retain an amount of Rs. 133,476 mio. (Rupees One Lakh Thirty Three Thousand Four Hundred Seventy Six Million only) in the Statement of Profit and Loss. The Company proposes not to transfer any amount to general reserve on declaration of dividend.

During the Financial Year ended on March 31, 2024, the consolidated revenue from operations and other income was Rs. 198,315 mio. (Rupees One Lakh Ninety Eight Thousand Three Hundred Fifteen Million only). The Company has achieved consolidated PBT from continuing operations of Rs. 48,089 mio. (Rupees Forty Eight Thousand Eighty Nine Million only) and consolidated PAT (from continuing and discontinued operations) of

Rs. 39,728 mio. (Rupees Thirty Nine Thousand Seven Hundred Twenty Eight Million only). The Company achieved a consolidated total Comprehensive Income of Rs. 37,727 mio. (Rupees Thirty Seven Thousand Seven Hundred Twenty Seven Million only). The consolidated EPS on continuing and discontinued operations for the Financial Year ended on March 31, 2024 was Rs. 38.14 (Rupees Thirty Eight and Paise Fourteen). During the Financial Year ended on March 31, 2024, the standalone revenue from operations and other income was

Rs. 119,035 mio. (Rupees One Lakh Nineteen Thousand Thirty Five Million only). The Company has achieved standalone PBT of Rs. 42,398 mio. (Rupees Forty Two Thousand Three Hundred Ninety Eight Million only) and standalone PAT of

Rs. 34,415 mio. (Rupees Thirty Four Thousand Four Hundred Fifteen Million only). The Company achieved a standalone total Comprehensive Income of Rs. 34,093 mio. (Rupees Thirty Four Thousand Ninety Three Million only). The standalone EPS for the Financial Year ended on March 31, 2024 was Rs. 34.01 (Rupees Thirty Four and Paisa One). The Company's principal sources of liquidity are the cash flow generated from business operations, cash and cash equivalents and liquid investments. At a consolidated level, the Company's net debt is negative (i.e. it has a surplus cash over debt) and the Company maintained sufficient cash to meet its requirements.

The Company's working capital management is robust and involves a well-organised process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.

As at March 31, 2024, Authorised Share Capital was Rs. 172.50 mio. (Rupees One Hundred Seventy Two Million Five Hundred Thousand only) divided into 172.50 mio. (One Hundred Seventy Two Million Five Hundred Thousand) equity shares of Rs. 1.00/- (Rupee One only) each.

The Board of Directors ("the Board") at its meeting held on February 9, 2024 passed a resolution to buyback 5,970,149 (five million nine hundred seventy thousand one hundred forty nine) equity shares of Rs. 1.00/- (Rupee One only) each fully paid-up, representing 0.59% of the total number of pre-buyback equity shares at a price of Rs. 1,005/- (Rupees One Thousand Five only) aggregating to Rs. 6,000 mio. (Rupees Six Thousand Million only), being 5.28% and 3.33% of the aggregate of the fully paid-up equity share capital and free reserves of the Company as per the audited standalone and consolidated financial statements of the Company as at March 31, 2023, respectively (which is within the statutory limits of 10% (ten percent) of the aggregate of the fully paid-up equity share capital and free reserves of the Company, based on both standalone and consolidated financial statements of the Company, under the Board approval route as per the provisions of the Act and The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 ("the Buyback Regulations")), excluding the transaction cost relating to the buyback, from the members of the Company (including the promoters of the Company), on a proportionate basis under the tender offer route in accordance with the provisions of the Buyback Regulations and the Act and Rules made thereunder.

Pursuant to and in compliance with the provisions of section 68 of the Act read with rule 17 of The Companies (Share Capital and Debentures) Rules, 2014 and the Buyback Regulations, the amount of buyback was distributed to the members on March 14, 2024 and the corresponding equity shares were extinguished on March 15, 2024. Pre and post buyback shareholding structure is as under:

Pursuant to the buyback, the promoters' shareholding increased from 74.98% to 75.04% of the total post buyback paid-up share capital. Pursuant to and in compliance with the provisions of regulation 38 of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") and rule 19(2)(b) and 19(A) of The Securities Contract (Regulations) Rules, 1957 read with para 3(7)(ii) of the SEBI Circular No. SEBI/HO/CFD/PoD2/P/CIR/2023/18 dated February 3, 2023, to maintain minimum public shareholding, Zydus Family Trust, promoter of the Company, sold equity shares representing 0.06% of the paid-up share capital in the open market, within the statutory time frame as prescribed under The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011. Post-sale of equity shares as above, promoters' shareholding in the Company has reduced from 75.04% to 74.98%. Pursuant to and in compliance with the provisions of section 69 of the Act, the Company has transferred an amount of

Rs. 6.00 mio. (Rupees Six Million only) to Capital Redemption Reserve, which is equal to the nominal value of the equity shares bought back. The details thereof are disclosed in Note No. 17 of the Audited Standalone Financial Statements for the Financial Year ended on March 31, 2024.

Your Directors have recommended a final dividend of

Rs. 3.00/- (Rupees Three only) (i.e. 300%) per equity share of

Rs. 1.00/- (Rupee One only) each for the Financial Year ended on March 31, 2024. The final dividend, if declared by the members at the ensuing Annual General Meeting ("AGM"), will result into cash outflow of Rs. 3,018.70 mio. (Rupees Three Thousand Eighteen Million Seven Hundred Thousand only) and will be paid to those members, whose names stand registered in the Register of Members on Friday, July 26, 2024 i.e. the record date. In respect of shares held in dematerialized mode, it will be paid to the members whose names are furnished by the National Securities Depository Limited and the Central Depository Services (India) Limited, as beneficial owners. The Dividend Payout Ratio (including dividend and buyback) for the Financial Year ended on March 31, 2024 is 23.51% of profits from continuing operations. As per the provisions of the Income-Tax Act, 1961, dividends paid or distributed by the Company shall be taxable in the hands of the members. Accordingly, the Company makes the payment of the dividend from time to time after deduction of tax at source.

Pursuant to and in compliance with regulation 43A of the Listing Regulations, the Company has formulated Dividend Distribution Policy, which is approved by the Board (lastly modified on May 17, 2024) and is uploaded on Company's website and the weblink of the same is provided in a separate section of Corporate Governance Report on Page No. 144, which forms a part of this Annual Report.

The Dividend Distribution Policy sets out the parameters to be considered by the Board in determining the quantum of the dividend and / or the utilization of the retained profits earned by the Company.

The Company is in compliance with Secretarial Standards on Meetings of Board of Directors and General Meetings issued by The Institute of Company Secretaries of India.

Pursuant to and in compliance with the provisions of regulation 34(2)(e) of the Listing Regulations, MDA for the Financial Year ended on March 31, 2024 is presented in a separate section which forms a part of this Annual Report.

Pursuant to and in compliance with the provisions of Ind AS-110 on Consolidation of Financial Statements read with Ind AS-28 on Accounting for Investments in Associates and Joint Ventures and as prescribed under the provisions of the Act read with Schedule III of the Act and Rules made thereunder and the Listing Regulations, the Audited Consolidated Financial Statements are provided in the Annual Report, which show the financial resources, assets, liabilities, income, profits and other details of the Company, its associate companies and its subsidiary companies after elimination of minority interest, as a single entity.

SUBSIDIARY AND JOINT VENTURE COMPANIES: i. The Company has 16 (sixteen) Indian subsidiary companies (including 7 (seven) step down subsidiaries), 34 (thirty four) foreign subsidiary companies (including 23 (twenty three) step down subsidiaries) and 4 (four) joint venture companies as at March 31, 2024. During the Financial Year ended on March 31, 2024, there has been no material change in the nature of business of the Company, subsidiary companies and joint venture companies. There is 1 (one) partnership firm in the group, in which 2 (two) subsidiary companies of the Company are the partners. More details are provided in the Audited Standalone Financial Statements. During the Financial Year ended on March 31, 2024, the Board has reviewed the performance / affairs of the subsidiary companies. ii. Hercon Pharmaceuticals LLC, ("Hercon") a wholly owned subsidiary of Zydus Noveltech Inc., USA ("ZNI"), which in turn is a wholly owned subsidiary of the Company was dissolved w.e.f. May 24, 2023.

Hercon was not a material subsidiary of the Company and did not carry on any business activities at the time of its dissolution. The dissolution of Hercon does not affect the business operations of the Company. iii. The Company has entered into a Business Transfer Agreement ("BTA") for purchase of one of the business undertakings ("Business Undertaking") of Watson Pharma Private Limited ("Watson") on a going concern basis by way of slump sale, without values being assigned to individual assets and liabilities, on cash-free and debt-free basis at a lump-sum consideration of Rs. 467.70 mio. (Rupees Four Hundred Sixty Seven Million Seven Hundred Thousand only), subject to certain closing date adjustments as provided in the BTA, with effect from such date and in such manner and on the terms and conditions as mentioned in the BTA.

Business Undertaking of Watson is engaged in the business of developing, manufacturing, marketing and sale of Active Pharmaceutical Ingredients ("APIs"). The said transaction will help the Company to expand its presence in the APIs space through increase in product pipeline and manufacturing capacity.

The said transaction of purchase of Business Undertaking was consummated on August 8, 2023. iv. The Company has incorporated Zydus Pharmaceuticals (Canada) Inc., as a wholly owned subsidiary in Canada on September 6, 2023. v. Zydus Animal Health and Investments Limited ("ZAHL"), a wholly owned subsidiary of the Company entered into a Share Purchase Agreement ("SPA1") with Rising Sun Holdings Private Limited ("Seller") and Mylab Discovery Solutions Private Limited ("Mylab" or "Target") to acquire 6,506,500 (six million five hundred six thousand five hundred) equity shares having face value of

Rs. 1.00/- (Rupee One only) each (which are fully paid-up) at an agreed consideration of Rs. 1,060 mio. (Rupees One Thousand Sixty Million only) representing 6.5% of the total paid-up equity share capital of Mylab from the Seller. The ultimate number of shares to be held can change, as per the terms of the Agreement, based on the financial performance of Mylab for the year ended on March 31, 2024.

The said transaction of acquisition of shares was consummated on September 18, 2023. vi. Pursuant to the Sale and Purchase Agreement ("SPA2") amongst the Sellers (as defined in the SPA2), certain individuals, the Company and Zydus Pharmaceuticals UK Limited, United Kingdom ("Zydus UK"), a wholly owned subsidiary of the Company, Zydus UK purchased the entire share capital of LiqMeds Worldwide Limited, LiqMeds Limited, Medsolutions (Europe) Limited, LiqMeds Lifecare Limited and LM Manufacturing Limited (collectively referred to as "the Target Companies" from the Sellers, on terms and conditions as mentioned in the SPA2.

Liquid orals is a large, growing market and serves unmet needs with significant new market expansion opportunities. In line with our patient-centric approach, we believe that oral liquid formulations would help geriatric and pediatric patients, bringing in greater ease of convenience and therapy compliance.

LiqMeds Group has capabilities and specialisation in development, manufacturing and supply of oral liquid products for global markets, which it currently commercializes through partners.

The current business model of LiqMeds Group is development, manufacturing and supply of oral liquid products for global markets, which it currently commercializes through partners on milestone payments and profit share basis.

The said transaction of acquisition of shares was consummated on November 6, 2023. vii. ZNI was dissolved w.e.f. December 15, 2023.

ZNI was not the material subsidiary of the Company and did not carry any business activities at the time of its dissolution. The dissolution of ZNI did not affect the business operations of the Company. viii. The Company has incorporated Zydus Lifesciences Global FZE, as a wholly owned subsidiary in Jebel Ali Free Zone, United Arab Emirates on February 20, 2024. ix. As per the terms and conditions of the Joint Venture Agreement ("JVA") entered into between the Company and Bayer (South East Asia) Pte. Limited, the Company had entered into a Share Purchase Agreement ("SPA3") with Bayer Zydus Pharma Private Limited ("JV Company") and Bayer Pharmaceuticals Private Limited ("BPPL") to sell and transfer all the equity shares (i.e. 12,499,999 of

Rs. 10.00/- (Rupees Ten only) each fully paid-up representing 24.999998% of the share capital) of the JV Company held by the Company to BPPL as per the terms and conditions of the SPA3 at a consideration of Rs. 2,822 mio. (Rupees Two Thousand Eight Hundred Twenty Two Million only) (subject to certain post-closing adjustments).

Pursuant to the above sale and transfer, the Company ceases to hold any shares of the JV Company and the JV Company ceases to be the joint venture of the Company. The Directors representing the Company have resigned from the Board of the JV Company.

The said transaction of sell and transfer of shares was approved by the Board at its meeting held on May 2, 2024 and consummated on May 6, 2024. x. Pursuant to the provisions of section 136 of the Act, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not attached with the Balance Sheet of the Company. The Company will make available free of cost the Audited Financial Statements of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same.

The Financial Statements of the subsidiary companies will also be kept open for inspection. Pursuant to and in compliance with the provisions of sections 129, 134 and 136 of the Act and Rules made thereunder and regulation 33 of the Listing Regulations, the Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies. xi. Pursuant to and in compliance with the provisions of section 129(3) of the Act and Rules made thereunder, a statement containing the salient features of the financial statements of its subsidiaries and the joint venture companies in the format prescribed under the rules is attached to the Audited Financial Statements. The policy relating to material subsidiaries, pursuant to the provisions of regulation 16(1)(c) of the Listing Regulations, is uploaded on Company's website and the weblink of the same is provided in a separate section of Corporate Governance Report on Page No. 145, which forms a part of this Annual Report. xii. Pursuant to and in compliance with the provisions of section 134 and rule 8(1) of the Accounts Rules, the details of the performance of subsidiaries and joint ventures of the Company are covered in the MDA and Audited Financial Statements. xiii. Your Company funds its subsidiaries, from time to time, in the ordinary course of business and as per their funding requirements, through equity, loan, providing guarantee and / or other means for their business purposes. xiv. Pursuant to the Company's policy to determine material subsidiary companies, read with the provisions of the Act and the Listing Regulations, Zydus Healthcare Limited ("ZHL"), Zydus Wellness Limited ("ZWL"), Zydus

Wellness Products Limited ("ZWPL"), Zydus Animal Health and Investments Limited ("ZAHL") and Zydus Pharmaceuticals USA Inc., USA ("ZPUI") are the material subsidiary companies of the Company, the details of which are provided in the Corporate Governance Report, which forms a part of this Annual Report.

The Company's plants, properties, equipments and stocks / inventory are adequately insured against all major risks. The Company has insurance cover for product liability and clinical trials. Pursuant to and in compliance with the provisions of regulation 25(10) of the Listing Regulations, the Company has taken the Directors' and Officers' Liability Policy to provide coverage against the liabilities arising on them.

The Company has neither accepted nor renewed any deposits from its members or public as per the provisions of sections 73 and 74 of the Act read with Rules made thereunder and as such, no amount on account of principal or interest on deposits was outstanding as on the date of the balance sheet.

The Company has made and maintained the cost accounts and records as specified under section 148(1) of the Act and Rules made thereunder.

Pursuant to and in compliance with the provisions of section 134(3)(g) of the Act, details of loans, guarantees and investments covered under section 186(4) of the Act are given in the notes to the Audited Standalone Financial Statements.

In terms of section 134(3)(ca) of the Act, during the Financial Year ended on March 31, 2024, the statutory auditors, cost auditors and the secretarial auditors have not reported to the Audit Committee, under section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's Report.

All contracts / arrangements / transactions entered into by the Company during the Financial Year ended on March 31, 2024 with related parties were in the ordinary course of business, on an arm's length basis, had no conflict with the interest of the Company and in accordance with the policy on related party transactions. All related party transactions are placed before the Audit Committee on a quarterly basis for review and approval. As provided under section 134(3)(h) of the Act and Rules made thereunder and the Listing Regulations, disclosure of particulars of material transactions (i.e. transactions exceeding Rs. 10,000 mio. (Rupees Ten Thousand Million only) or 10% (ten percent) of the annual consolidated turnover as per the last Audited Financial Statements) with related parties entered into by the Company in the prescribed Form No. AOC-2 is annexed to this report as Annexure-A. Disclosures on related party transactions as per Ind-AS 24 are set out in Note No. 41 of the Audited Standalone Financial Statements.

As a part of the Company's annual planning process, before the beginning of a financial year, details of all the transactions proposed to be executed with related parties, including the estimated amounts of transactions to be executed and other relevant details, are approved by the Audit Committee and the Board.

Further approval is sought during the year for any new transaction / modification to the previously approved limits / terms of contracts with the related parties. This is followed by a quarterly review of the related party transactions by the Audit Committee.

The weblink to view the policy on materiality of related party transactions and dealing with related party transactions is provided in a separate section of Corporate Governance Report on Page No. 145, which forms a part of this Annual Report. Pursuant to and in compliance with provisions of regulation 23(9) of the Listing Regulations, the Company has filed the related party transactions with the stock exchanges on the date of disclosing the standalone and consolidated financial results.

As at March 31, 2024, your Company's Board comprised of 10 (ten) Directors who have considerable experience in their respective fields, the details of which are provided in below table:

Other statutory details are provided in the Corporate Governance Report, which forms a part of this Annual Report. i. Appointment / cessation of Independent Directors ("IDs"):

Based on the recommendation of the Nomination and Remuneration Committee ("NRC"), the Board at its meeting held on May 17, 2024 passed the resolutions and appointed Ms. Shelina P. Parikh (DIN: 00468199) as an Additional Director as well as ID for the first term of

5 (five) consecutive years w.e.f. the date of the Board approval, subject to approval of the members at the ensuing AGM by way of special resolution. She will hold the office up to the ensuing AGM.

Mr. Nitin R. Desai (DIN: 00140239) and Ms. Dharmishtaben N. Raval (DIN: 02792246) shall cease to be the Directors as well as the IDs of the Company after the conclusion of the ensuing AGM, consequent upon completion of their respective tenures.

Mr. Nitin R. Desai and Ms. Dharmishtaben N. Raval are members of certain committees of the Board. Said committees are re-constituted, details of which are provided in the Corporate Governance Report, which forms a part of this Annual Report. ii. Re-appointment of Executive Director:

Mr. Ganesh N. Nayak (DIN: 00017481) was appointed as the Whole Time Director, designated as the Executive Director, of the Company for a period of 3 (three) years w.e.f. July 12, 2021. His appointment will expire on July 11, 2024.

The Board, based on the recommendation of the NRC, at its meeting held on May 17, 2024, re-appointed Mr. Ganesh N. Nayak, as the Whole Time Director, designated as the Executive Director for one more year i.e. upto July 12, 2025, notwithstanding the fact that Mr. Ganesh N. Nayak shall attain age of 70 (seventy) years during the term of re-appointment, subject to approval of the members at the ensuing AGM by way of special resolution. iii. Retirement by rotation:

Pursuant to and in compliance with the provisions of section 152(6) of the Act and in terms of the Articles of Association of the Company, Mr. Pankaj R. Patel, Non-Executive Non-Independent Director (DIN: 00131852) and Mr. Mukesh M. Patel, Non-Executive Non-Independent Director (DIN: 00053892), will retire by rotation at the ensuing AGM and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment. iv. Declaration of independence:

Pursuant to and in compliance with the provisions of section 134(3)(d) of the Act, the Company has received declaration of independence as stipulated under sections 149(6) and 149(7) of the Act and regulations 16(1)(b) and 25 of the Listing Regulations from IDs confirming that they are not disqualified for continuing as an ID. There has been no change in the circumstances affecting their status as an ID of the Company.

All IDs have complied with the Code prescribed under Schedule IV to the Act.

As per the declarations received, all the Directors of the Company, who are required to get registered, have registered themselves with The Indian Institute of Corporate Affairs. Further, they have qualified the online proficiency self-assessment test or are exempted from passing the test as required in terms of section 150 of the Act read with rule 6 of The Companies (Appointment and Qualifications of Directors) Rules, 2014.

The Board has taken on record the declaration and confirmation submitted by the IDs after undertaking due assessment of the veracity of the same. v. Profile of Directors seeking appointment / re-appointment:

Pursuant to and in compliance with the provisions of regulation 36(3) of the Listing Regulations and standard 1.2.5 of Secretarial Standard on General Meetings, particulars of Directors seeking appointment / re-appointment at the ensuing AGM are annexed to the notice convening Twenty Ninth AGM. During the Financial Year ended on March 31, 2024, no Director of the Company has resigned.

The following persons are the Key Managerial Personnel

(" KMP") as on March 31, 2024:

1. Dr. Sharvil P. Patel, Managing Director,

2. Mr. Ganesh N. Nayak, Executive Director, *

3. Mr. Nitin D. Parekh, Chief Financial Officer and

4. Mr. Dhaval N. Soni, Company Secretary.

During the Financial Year ended on March 31, 2024, there were no changes to the KMP.

* Based on the recommendation of the NRC, the Board re-appointed Mr. Ganesh N. Nayak as an Executive Director (continued to be designated as Key Managerial Personnel), subject to approval of the members by way of special resolution at the ensuing AGM. vii. Board Evaluation:

Pursuant to and in compliance with the provisions of the Act and Rules made thereunder and as provided in Schedule IV of the Act and the Listing Regulations, the NRC and the Board have carried out an annual evaluation of its own performance, the Directors individually as well as its committees. In terms of section 134(3)(p) of the Act read with rule 8(4) of the Account Rules, the manner in which the evaluation was carried out is provided in the Corporate Governance Report, which forms a part of this Annual Report.

In a separate meeting of IDs, the performance of the non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the NRC reviewed the performance of individual directors on the basis of criteria fixed by the Board / NRC.

The functioning of the Board, the Committees and performance of individual Directors was found satisfactory.

viii. Nomination and Remuneration Policy:

The Board has, on the recommendation of the NRC, framed a policy on selection and appointment of

Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy and weblink of the same is provided in a separate section of Corporate Governance Report on Page No. 145, which forms a part of this Annual Report.

During the Financial Year ended on March 31, 2024, the NRC Policy was amended to suitably modify the definition of Senior Management.

ix. Pecuniary relationship:

During the Financial Year ended on March 31, 2024, except those disclosed in the Audited Financial Statements, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

None of the Directors are disqualified from being appointed as directors as specified under section 164(1) and 164(2) of the Act read with rule 14(1) of The Companies (Appointment and Qualifications of Directors) Rules, 2014 or are debarred or disqualified by the Securities and Exchange Board of India ("SEBI"), Ministry of Corporate Affairs ("MCA") or any other such statutory authority.

Remuneration paid to the Directors, KMP and Senior Management is in accordance with the NRC Policy. More details are provided in the Corporate Governance Report which forms a part of this Annual Report.

Dr. Sharvil P. Patel, Managing Director, has not received any remuneration or commission from any of the subsidiary companies. Further, the Company does not have any holding company, hence, the circumstance of any remuneration or commission from a holding company does not arise.

Mr. Ganesh N. Nayak, Executive Director, has not received any remuneration or commission from any of the subsidiary companies. He has received sitting fees of

Rs. 1.00 mio. (Rupees One Million only) towards sitting fees for attending the Board and committee meetings of Zydus Wellness Limited, a subsidiary company.

The details of credit ratings obtained during the Financial Year ended on March 31, 2024 are provided in below table:

* No CPs / NCDs were issued during the Financial Year ended on March 31, 2024.

The Company has adopted the Code for Insider Trading as per The SEBI (Prohibition of Insider Trading) Regulations, 2015 ("Insider Trading Regulations"). Other details on Insider Trading Regulations are provided in the Corporate Governance Report, which forms a part of this Annual Report.

In terms of sections 134(3)(c) and 134(5) of the Act and to the best of their knowledge and belief, and according to the information and explanations provided to them, your Directors hereby make the following statements: i. that in preparation of the Financial Statements, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any, ii. that such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2024 and of the profit of the Company for the year ended on that date, iii. that proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventionanddetectionoffraudandotherirregularities, iv. that the annual financial statements have been prepared on a going concern basis, v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively, and vi. that the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Pursuant to and in compliance with the provisions of sections 124 and 125 of the Act and Rules made thereunder, the Company has transferred-i. 207,631 (two hundred seven thousand six hundred thirty one) equity shares held by 180 (one hundred eighty) members whose dividend has remained unclaimed / unpaid for a consecutive period of 7 (seven) years to IEPF and ii. Rs. 7.99 mio. (Rupees Seven Million Nine Hundred Ninety Thousand only) held by 3,312 (three thousand three hundred twelve) members, being the unclaimed dividend, pertaining to the interim dividend for the Financial Year ended on March 31, 2017 to IEPF after giving notice to the members to claim their unclaimed / unpaid dividend.

As at March 31, 2024, 1,500,237 (one million five hundred thousand two hundred thirty seven) equity shares are lying with IEPF.

5 (five) Board meetings were held during the Financial Year ended on March 31, 2024 and in compliance with provisions of section 173(1) of the Act, the time gap between any 2 (two) Board meetings was not more than 120 (one hundred twenty) days. The Board approved 4 (four) resolutions by circulation, vide resolutions dated July 19, 2023, July 24, 2023, September 22, 2023 and March 30, 2024. Other information with regard to the Board meetings is given in the Corporate Governance Report, which forms a part of this Annual Report.

As at March 31, 2024, the Company has 7 (seven) committees namely Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Corporate Social Responsibility and Environment Social and Governance Committee, Stakeholder's / Investor's Relationship Committee, Share Transfer Committee and Finance and Administration Committee.

The Board has accepted the recommendations of all the committees constituted by the Board.

A detailed note on the composition of the Board and its Committees, governance of committees including its terms of reference, number of committee meetings held during the Financial Year ended on March 31, 2024 and attendance of the members, is provided in the Corporate Governance Report, which forms a part of this Annual Report. The composition and terms of reference of all the Committees of the Board are in line with the provisions of the Act and the Listing Regulations.

The Company has complied with the Corporate Governance requirements under the Act and as stipulated under the Listing Regulations. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Regulations, along with a certificate from Manoj Hurkat & Associates, Practicing Company Secretaries, confirming the compliance, forms a part of this Annual Report.

Deloitte Haskins & Sells LLP, Chartered Accountants

("Deloitte"), were appointed as the Statutory Auditors of the Company for a period of 5 (five) consecutive years from the conclusion of Twenty Second AGM till the conclusion of Twenty Seventh AGM.

Based on the recommendation of the Audit Committee and the Board, members at their Twenty Seventh AGM passed the resolution to re-appoint Deloitte as the Statutory Auditors of the Company for a further period of 5 (five) consecutive years from the conclusion of Twenty Seventh AGM till the conclusion of Thirty Second AGM in the calendar year 2027, with an authority to the Audit Committee and the Board to decide the remuneration payable to them.

Deloitte have furnished a declaration confirming their independence as well as their arm's length relationship with the Company and that they have not taken up any prohibited non-audit assignments for the Company. Deloitte have issued an unmodified opinion on the financial statements for the Financial Year ended on March 31, 2024 and the same forms a part of this Annual Report.

The Board has duly reviewed the Statutory Auditors' Report and the observations and comments, appearing in the report, are self-explanatory and do not call for any further explanation / clarification by the Board as provided under section 134(3)(f) of the Act. ii. Cost Auditors and Audit Report:

Pursuant to the provisions of section 148(3) of the Act and rules 3 and 4 of The Companies (Cost Records and Audit) Rules, 2014, ("the Cost Rules") the cost audit records maintained by the Company in respect of Drugs and Pharmaceuticals are required to be audited. The Board had, on the recommendation of the Audit Committee, appointed Dalwadi & Associates, Cost Accountants to audit the cost records of the Company for the Financial Year ending on March 31, 2025 on a remuneration of

Rs. 0.80 mio. (Rupees Eight Hundred Thousand only) plus applicable Goods and Services Tax and out of pocket expenses at actuals. Pursuant to the provisions of section 148 of the Act and rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is required to be placed before the members in a general meeting for ratification. Accordingly, a resolution seeking ratification by members for the remuneration payable to Dalwadi & Associates is included at Item No. 6 of the Notice convening Twenty Ninth AGM.

The Cost Audit Report for the Financial Year ended on March 31, 2023, which was filed on September 2, 2023 did not contain any qualification, reservation, or adverse remark. The Cost Audit Report for the Financial Year ended on March 31, 2024 will be submitted within the prescribed timelines.

iii. Secretarial Auditors and Audit Report:

Pursuant to and in compliance with the provisions of section 204 of the Act, rule 9 of The Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Managerial Personnel Rules") and regulation 24A(1) of the Listing Regulations, the Board has appointed Manoj Hurkat & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the Financial Year ended on March 31, 2024. The Secretarial Audit Report is annexed herewith as Annexure-B. The Board has duly reviewed the Secretarial Audit Report and the observations and comments, appearing in the report are self-explanatory and do not call for any further explanation / clarification by the Board as provided under section 134(3)(f) of the Act.

Further, pursuant to and in compliance with the provisions of regulation 24A(1) of the Listing Regulations, the secretarial audit reports of ZHL and ZAHL, unlisted material subsidiary companies incorporated in India are annexed herewith as Annexure-B1 and Annexure-B2 respectively.

ZWL and ZWPL are also material subsidiaries of the Company. ZWPL is a wholly owned subsidiary of ZWL, a listed entity and a subsidiary of the Company. In view of the same, secretarial audit reports of ZWL and ZWPL are not required to be annexed with the Boards' Report of the Company.

Pursuant to and in compliance with the provisions of regulation 24A(2) of the Listing Regulations, Manoj Hurkat & Associates, Practicing Company Secretaries have issued Annual Secretarial Compliance Report for the Financial Year ended March 31, 2024. Said report was presented at the Board meeting held on May 17, 2024. The Company will submit the said report to the stock exchanges within the prescribed time frame.

Details of awards and recognitions are provided separately in this Annual Report.

Pursuant to and in compliance with the provisions of regulation 34(2)(f) of the Listing Regulations, a separate section on BRSR forms a part of this Annual Report.

During the Financial Year ended on March 31, 2024, the Company contributed an amount of Rs. 133.07 mio. (Rupees One Hundred Thirty Three Million Seventy Thousand only) towards various CSR activities. The CSR and ESG Committee confirmed that the implementation and monitoring of the

CSR Policy was done in compliance with the CSR objectives and policy of the Company.

Pursuant to and in compliance with section 135 of the Act read with section 134(3)(o) and rule 5 of The Companies (Corporate Social Responsibility Policy) Rules, 2014 ("the CSR Rules"), the Board has constituted a CSR and ESG Committee. CSR Policy is placed on the Company's website. During the year, no revision was made to the CSR Policy. The details of the CSR and ESG Committee constitution, CSR activities and other details, as required under section 135 of the Act and the CSR Rules, are given in the CSR Report at Annexure-C. A synopsis of the report of the Independent Agency for the CSR Project, to which Impact Assessment is applicable in terms of the provisions of section 135 of the Act read with rules made thereunder, is provided in the CSR Report.

Pursuant to and in compliance with the provisions of section 134(3)(n)oftheActandregulation21oftheListingRegulations, the Company has constituted a Risk Management Committee

("RMC"). The details of the RMC and its terms of reference are set out in the Corporate Governance Report, which forms a part of this Annual Report.

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and take advance actions to prevent or mitigate them. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks. The Company has framed a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure.

During the Financial Year ended on March 31, 2024, the Company has reviewed its Risk Management Policy and no revision was made in the said Policy.

Discussion on risks and concerns is covered in the MDA, which forms a part of this Annual Report.

Pursuant to and in compliance with the provisions of section 134(5)(e) of the Act read with rule 8(5) of the Account Rules, the Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC"). For the Financial Year ended on March 31, 2024, the Board is of the opinion that the Company has sound IFC commensurate with the size, scale and complexity of its business operations. The IFC operates effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved internal controls whenever the effect of such gaps would have a material effect on the Company's operations.

The Company has a well-placed, proper and adequate IFC system, which ensures:

? Orderly and efficient conduct of its business,

? Safeguarding of its assets,

? Prevention and detection of frauds and errors,

? Accuracy and completeness of the accounting records and

? Timely preparation of reliable financial information.

The Board reviews the effectiveness of controls documented as a part of IFC framework and takes necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and the Information Technology environment.

Based on this evaluation, no significant events had come to notice during the Financial Year ended on March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the Financial Year ended on March 31, 2024 and is adequate considering the business operations of the Company. The Statutory Auditors of the Company have audited the IFC with reference to Financial Reporting and their Audit Report is annexed as an Annexure to the Independent Auditors' Report under Standalone Financial Statements and Consolidated Financial Statements.

The Company has built a reputation for doing business with honesty and integrity and it has zero tolerance for any type of unethical behavior or wrongdoing. The Company has in place a stringent vigil system to report unethical behavior in order to promote professionalism, fairness, dignity and ethical behavior in its employees. Pursuant to and in compliance with the provisions of section 177(9) of the Act, rule 7 of The Companies (Meetings of Board and its Powers) Rules, 2014 and regulation 22 of the Listing Regulations, the Company has established vigil mechanism and framed Whistle Blower Policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy and Insider Trading Regulations. The Board at its meeting held on May 17, 2024 amended the Whistle Blower Policy to widen the coverage of the policy to cover all the stakeholders. The Whistle Blower Policy is uploaded on Company's website and the weblink of the same is provided in a separate section of Corporate Governance Report on Page No. 145, which forms a part of this Annual Report. ii. Zydus Business Conduct Policy:

The Company has framed "Zydus Business Conduct Policy" ("Business Conduct Policy") and is monitored by the President-Group Human Resources. Every employee is required to review and sign the policy at the time of joining and an undertaking shall be given for adherence to the Business Conduct Policy. The objective of the Business Conduct Policy is to conduct the business in an honest, transparent and ethical manner. The Business Conduct Policy provides for anti-bribery and avoidance of other corrupt practices by the employees of the Company.

The Company has zero tolerance towards sexual harassment at the workplace and 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 constituted an Internal Complaints Committee as required under the said Act.

The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment.

The Company periodically conducts sessions for employees across the Company to build awareness about the Policy and the provisions of the said Act.

Complaints of sexual harassment received by the Company are investigated in accordance with the procedures prescribed and adequate steps are taken to resolve them. During the Financial Year ended on March 31, 2024, 1 (one) complaint was received and the same was resolved. No complaint was pending to be resolved as at March 31, 2024.

Pursuant to and in compliance with the provisions of section 92(3) read with section 134(3)(a) of the Act, Annual Return for the Financial Year ended on March 31, 2024, in prescribed Form No. MGT-7 is available on the website of the Company at https://www.zyduslife.com/investor/admin/ uploads/14/1/2023---2024.pdf. The Annual Return will be filed with the Registrar of Companies within prescribed time frame.

The information required under section 197(12) of the Act and rule 5(1) of Managerial Personnel Rules is provided in

Annexure-D.

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3)(m) of the Act read with rule 8(3) of the Accounts Rules, is provided in Annexure-E.

Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134(3) of the Act and rule 8 of the Accounts Rules to the extent the transactions took place on those items during the Financial Year ended on March 31, 2024.

During the Financial Year ended on March 31, 2024, the Company has not- (i) issued any shares, warrants, debentures, bonds or any other convertible or non-convertible securities, (ii) issued any shares with differential voting rights, (iii) issued any sweat equity shares and (iv) made any changes in voting rights.

There are no proceedings initiated / pending against your Company under the Insolvency and Bankruptcy Code, 2016 which can materially impact the business of the Company. There were no instances where your Company required the valuation for a one-time settlement or while taking the loan from the Banks or Financial institutions.

The equity shares of the Company were not suspended for trading during the Financial Year ended on March 31, 2024. Disclosure pertaining to explanation for any deviation or variation in connection with certain terms of public issue, right issue, preferential issue, etc. is not applicable to the Company.

There were no revisions of the financial statements and the Board's Report during the Financial Year ended on March 31, 2024.

No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations in the future during the Financial Year ended on March 31, 2024. In terms of section 134(3)(l) of the Act, apart from what is mentioned in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of this report.

Your Directors place on record their sincere appreciation for the continued co-operation and support extended to the Company by various Banks. Your Directors also thank the medical fraternity and patients for their patronage to the Company's products. Your Directors also place on record sincere appreciation of the continued hard work put in by the employees at all levels. Your Directors also thank the

Company's vendors, investors, business associates, Stock Exchanges, banks, financial institutions, Government of India, State Governments and various departments and agencies for their support and co-operation.

Your Directors appreciate and value the contribution made by every member of the Zydus group.