Equity Analysis

Dear Shareholders,

Your directors have pleasure in presenting Forty-Fourth Annual Report and Audited Financial Statements of the Company for the Year ended 31 March 2023.

The Consolidated and Standalone Financial Statements for the year ended 31 March 2023 have been prepared in accordance with the Indian Accounting Standards (Ind AS), Section 133 and other applicable provisions of the Companies Act, 2013 ("Act") and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Company discloses consolidated and standalone financial results on a quarterly basis, which are subjected to limited review and publishes consolidated & standalone audited financial results annually.

Company continues to be engaged in development, manufacturing and sale of specialty pharmaceutical formulations with specific emphasis on branded generics in various therapeutic segments in India and more than 30 countries worldwide.

During the year under review, Consolidated Revenue from Operations augmented at 1 3.7A3 cr., 12% higher than the previous year. Consolidated Profit After Tax stood at Rs. 588 cr. lower by 17.5% then the previous year due to abnormal increase in raw material and freight costs. Exports contributed 68% of the revenue.

During the year under review, the Board had declared an interim dividend of Rs. 7/- per eguity share at its meeting held on 3 November 2022. Total dividend payout was Rs. 89.60 cr. The Board recommends interim dividend to be considered as final dividend for FY 2023.

The Company has Four overseas subsidiaries and it does not have any Associate company or Joint Venture.

Salient features of the Financial Statements of subsidiaries are provided in the AOC-1 statement annexed herewith as "Annexure A".

Audited Financial Statements of subsidiaries are available on Company's website at www.aiantapharma.com and the same are also available for inspection at the Registered Office of the Company during business hours as stipulated under Section 136 of the Act. The same will be made available to interested members upon getting reguest.

Ajanta Pharma USA Inc. is a material subsidiary in accordance with the provisions of the Listing Regulations read with the Company's "Policy on Material Subsidiaries". The policy can be accessed at https://ajantapharma. com//imaqes/PolicyonMaterialSubsidiaries.pdf

There was no change in authorised share capital of the Company during the year under review.

Company has formulated and implemented Ajantci Pharma Share-Based Incentive Plan 2019 ("SBIP 2019") which is administered by the Nomination and Remuneration Committee ("NRC"). There was no change in the scheme during the year.

During the year under review, 1,000 shares were issued and allotted against the options exercised. Disclosures with regard to SBIP 2019 are put up on the Company's website and can be accessed at https:// www.aiantapharma.com/aianta/lnvestors/annual_ results/ Rs.year=2022-23.

M/s. Alwyn D'Souza & Co., Secretarial Auditors have issued certificate confirming that SBIP 2019 has been implemented in accordance with the SEBI Regulations and the resolution passed by members in general meeting. The certificate will be available for inspection by members at the ensuing Annual General Meeting ("AGM").

Board of Directors had at their meeting held on 10 May 2022 approved issue of bonus shares to the members in the ratio of 1:2 i.e. one new fully paid- up equity share of Rs. 2/- each to be issued for every two equity shares held. Post bonus issue, paid-up equity shares of the Company stood increased from 8,5A,16,770 equity shares to 12,81,25,155 equity shares of Rs. 2/- each.

At the meeting held on 10 March 2023, Board had approved buy-back of 22,10,500 (Twenty-two lakhs ten thousand five hundred) fully paid-up equity shares of the face value of Rs. 2/- each, from the existing shareholders / beneficial owners of equity shares of the Company on a proportionate basis, through "Tender Offer" route, at a price of Rs. 1,425/- (Rupees One Thousand Four Hundred and Twenty-Five only) per equity share, for an aggregate amount of Rs. 315.00 or.

Share buy-back amounting to Rs.315 cr. during the year

Buy-back represented 2.59?₀ (not adjusted for bonus undertaken by the Company) of the subscribed and paid- up equity share capital of the Company. Post Buyback, the paid-up share capital stood reduced from 12,81,25,155 equity shares to 12,59,14,655 equity shares of Rs. 2/- each.

Company's bank facilities are rated by Credit Analysis and Research Limited ("CARE"). They have assigned rating CARE AA/CARE A1+ for long-term/short-term bank facilities, which connotes stability. This reaffirms the reputation and trust the Company has earned for its sound financial management and its ability to meet its financial obligations.

Board of the Company comprise of renowned professionals from different walks of life. They bring in diversified competencies, domain knowledge and experience. Right combination of Executive and Independent Directors draws fine balance of business acumen and independent judgement on Board's decisions.

During the year under review, none of the Non-Executive Directors had any pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses, if any.

At the meeting held on 1 February 2023, the Board had approved re-appointment of Mr. Yogesh M. Agrawal as Managing Director of the Company and Mr. Rajesh M. Agrawal as Joint Managing Director of the Company for an another term of 5 years. Both the appointments were approved by Shareholders on 9 March 2023 through postal ballot.

Mr. Madhusudan B. Agrawal retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment.

All the Independent Directors have confirmed that they continue to meet the criteria of independence as laid down under Section 149(6) of the Act and under the Listing Regulations. They have registered their names in the Independent Directors data-base and have passed the proficiency test, if applicable. They have also affirmed compliance to the Code of Conduct for Independent Directors.

Based on disclosures provided by them, none of them are disqualified/debarred from being appointed as Director under Section 164 of the Act/SEBI order or any other authority and are independent from the management.

The Board is of the opinion that the Independent Directors possess requisite qualifications, experience and expertise in the fields of manufacturing, operations, finance, forex, people management, strategy, sales & marketing, auditing, banking, risk management and they hold high standards of integrity. Skill set, expertise & competencies matrix of all the Directors is provided in the Report on Corporate Governance forming part of this Annual Report.

Policy for Determining Qualifications of Directors sets out guiding principles for selection of persons who are qualified to become Directors/Independent Directors.

The objective of Policy for Remuneration of Directors and Employees is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, Key Managerial Personnel ("KMP") and Senior Management employees.

The same are briefly mentioned in the Report on Corporate Governance.

The policies are available at:

Mr. Yogesh M. Agrawal, Managing Director; Mr. Rajesh M. Agrawal, Joint Managing Director; Mr. Arvind K. Agrawal, Chief Financial Officer and Mr. Gaurang C. Shah, Company Secretary, are the KMPs of the Company as on the date of this report.

As per provisions of the Act and Regulation 17(10) of the Listing Regulations, the performance evaluation of the Board, Board committees and individual Directors was carried out by the Board, in accordance with the Policy on Board Evaluation, criteria laid down which are in alignment with the best corporate governance practices.

Further, at a separate meeting, the Independent Directors evaluated performance of NonIndependent Directors, Board as a whole and of the Chairman of the Board.

A consolidated report on performance evaluation was shared with the Chairman of the Board for his review and discussion with Board and each Director.

The manner of evaluation of Board of Directors performance and matters incidental thereto, are detailed in the Report on Corporate Governance.

Board of Directors of the Company met 5 times during the year under review. Details of meetings are given in the Report on Corporate Governance.

The Board has constituted six committees, viz., Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders' Relationship Committee, Risk Management Committee and Executive Committee. All the recommendations made by these Committees to the Board were accepted by the Board.

Details of committees, its composition, committee meetings held etc. are provided in the Report on Corporate Governance.

All RPTs entered into by the Company during the financial year were in accordance with the Company's Policy on RPTs and in pursuance of approval granted by the Audit Committee. Pursuant to Regulation 23(3) of the Listing Regulations and Rule 6A of the Companies (Meetings of Board and its Powers) Rules, 2014, the Audit Committee granted omnibus approval to the transactions likely to be entered into by the Company with related parties during the year which are of repetitive nature. Members may refer to Note No. 53 to the Financial Statement which sets out RPT disclosures pursuant to IND AS-24.

All the RPTs effected in accordance with the approval are placed before the Audit Committee on a quarterly basis for review and noting. Material related party transactions were entered into by the Company only with its US subsidiary.

Apart from remuneration and sitting fees, there is no pecuniary transaction with any director, which had potential conflict of interest with the Company.

Detail of RPTs effected during the year are given in Form AOC-2 annexed as "Annexure B" to this report in accordance with Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

Company believes that it can grow sustainably only through an ecosystem of interdependence with society. The Company considers its economic, environmental and social responsibility to foster sustainable local development as well as extend necessary support to the underprivileged and poor sections of the society.

Company has spent more than 2% of the average net profits during three preceding financial years. The Board had at its meeting held on 10 May 2022, approved the Annual Action Plan of CSR activities to be undertaken during the year in accordance with the CSR policy of the Company. CSR activities were carried out through various charitable trusts and NGOs who meet the criteria. CSR Committee reviewed and monitored the CSR projects and expenditure undertaken by the Company as per the plan and apprised the Board of the same.

Thrust areas for CSR spent were healthcare, education, rural development & promoting sports. On the healthcare front, contributions were made for healthcare camps, medical treatment for cancer and other diseases, setting up hospitals for affordable medical treatment, cataract surgeries, eradication of malnutrition etc. On the education front contributions were made for setting up colleges and educational infrastructure in underdeveloped regions, subsidised education for the underprivileged etc. As regards rural development & community welfare, contributions were made to old age homes, subsidised food for the needy, providing necessities to the physically challenged community etc.

Chief Financial Officer has certified that the funds disbursed for CSR during the financial year 2023, have been used for the purpose and in the manner approved by the Board.

CSR policy and CSR activities undertaken during the year are annexed as "Annexure C" to this report, in accordance with Sections 134 & 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Rule 9 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 34 read with Part B of Schedule V of the Listing Regulations, a detailed review of the business operations, performance, future outlook, major events occurred during the year as well as state of company's affairs is given in the Management Discussion and Analysis, which forms part of this report.

The Board of Directors reaffirm their continued commitment to good Corporate Governance & ethical practices. The Company is committed to maintain highest standard of Corporate Governance and elevating the same to the best global practices.

Report on Corporate Governance for the year under review, forms part of this report. A certificate from M/s. Alwyn D'Souza & Co., Practicing Company Secretaries confirming compliance with Corporate Governance norms as stipulated under the Listing Regulations, is annexed and forms part of this report.

Company has been conducting business in a sustainable manner and to create maximum value for all its stakeholders.

Business Responsibility and Sustainability Report ("BRSR") for FY 2023 in accordance with Regulation 34(2)(f) of the Listing Regulations, forms part of this report.

It describes various initiatives taken by the Company from environment, social and governance perspective.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return in Form MGT-7 as on 31 March 2023 is placed on the Company's website at https://www.aiantapharma.com/aianta/lnvestors/annual_ results/year=2022-23.

In pursuance of Regulation 39 read with Schedule VI of the Listing Regulations, the details of shares lying in unclaimed suspense account and unclaimed shares/dividend transferred to Investor Education and Protection Fund, are provided in the Report on Corporate Governance.

M/s. B S R and Co. LLP, Chartered Accountants (ICAI Registration No.: 1012A8W/W-100022) ("BSR") are the Statutory Auditors of the Company. At the 43^rd AGM held on 4 August 2022, Members re-appointed BSR for a further period of five years, i.e. from the conclusion of the 43"¹ AGM till the conclusion of the 48"¹ AGM of the Company to be held in the year 2027.

Auditors' Report on the financial statements of the Company for the financial year ended 31 March 2023 is enclosed with the financial statements, which forms part of this Annual Report. The report is unmodified i.e. it does not contain any qualification, reservation, adverse remark or disclaimer. Notes on financial statement referred to in the Auditor's Report are self- ex plcincitory and do not call for any further comments.

M/s. Ernst & Young LLP conducted internal audit of important centralised functions. For other locations, viz. factories, C&F agents and warehouses, local Chartered Accountant Firms having requisite expertise and resources are appointed as Internal Auditors. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board in each meeting. No instances of fraud, suspected fraud, irregularity or failure of internal control systems of material nature were reported by the internal auditors during the year.

Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 & Regulation 24A of the Listing Regulations, Board had appointed M/s. Alwyn D'Souza & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for year ended 31 March 2023.

Secretarial Audit Report is annexed to this report as "Annexure D". There are no qualifications or reservations or adverse remarks in the Secretarial Audit Report. The report is self-explanatory and does not call for any further comments.

M/s. Alwyn D'Souza & Co., Practicing Company Secretaries, have also issued Secretarial Compliance Report for the year ended 31 March 2023 confirming that the Company has maintained proper records as stipulated under various Rules and Regulations applicable to the Company and that no action has been taken against the Company or its material subsidiaries or promoters/directors by SEBI/Stock Exchanges. The Company disseminates the Report on the websites of BSE and NSE within the prescribed time.

On the recommendations of the Audit Committee, Board of Directors have re-appointed M/s. Alwyn D'Souza & Co., Practicing Company Secretaries, to conduct the secretarial audit of the Company for FY 2024. They have consented and confirmed their eligibility for the said re-appointment.

The Company maintains cost accounts and records as per the provisions of Section 148(1) of the Act and the same are audited by the Cost Auditors. In accordance with Section 148(6) of the Act read with Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014, cost audit report, in Form No. CRA-4 (in XBRL mode), for the year ended 31 March 2022, was filed with the Ministry of Corporate Affairs, within the prescribed time.

Based on the recommendation of the Audit Committee, Board has appointed M/s. Sevekari, Khare & Associates, practicing Cost Accountants, to audit the cost records of the Company for FY 2024. They have confirmed that their appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and that they are not disqualified to be appointed as the Cost Auditors of the Company for the year ending 31 March 2024.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration to be paid to the Cost Auditor for FY 2024 is required to be ratified by the members. Accordingly, the Board of Directors recommends the same for approval by members at the ensuing AGM. The proposal forms a part of the notice of the AGM.

During the year under review, the Statutory, Internal, Secretarial and Cost Auditors have not reported to the Audit Committee, any instances of fraud committed against the Company by its officers or employees, the details of which need to be mentioned in the Directors' report.

During FY 2023, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India as amended.

The Company believes that internal controls are the prerequisite of governance and all the actions should be exercised within the framework of checks and balances.

It has laid down an adequate system of internal controls, policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, timely preparation of reliable financial disclosures and to ensure compliance with regulatory requirements. The Company has adopted Committee of Sponsoring Organisations ("COSO") 2017 of the Treadway Commission framework for its Enterprise Risk Management processes.

The internal financial controls are adequate and operating effectively. Effectiveness of internal financial controls is ensured through management reviews, controlled self-assessment and independent testing by the interna audit team.

The Company also has Risk Management Policy and framework in place which defines roles and responsibilities at various levels of the risk management process.

Risk Management Committee ("RMC") oversees the implementation of Risk Management Policy as well as risk management and mitigation framework.

Risks are categorised into Regulatory, Competition,

Supply Chain Disruption, Cyber Security including Data Security, Economic & Political Environment, Environmental, Social & Governance Risks and other critical risks. The in- house Internal audit team acts as Risk co-ordinator and engages with all functional all heads to identify interna and external events that may have an adverse impact on the achievement of Company's objectives and periodically

Relying on Strength. Building on Strategy.

monitor changes in both internal and external environment leading to emergence of a new threat/risk.

Risk Management system followed by the Company is detailed in the Management Discussion and Analysis report and in the Notes to Accounts.

The Company has a comprehensive framework for monitoring compliances with applicable laws and internal policies. Business and corporate functions ensure implementation of laws at the primary level through checks and controls in their operational processes. Compliances are further mapped into the compliance monitoring tool and affirmed at regular frequency by the compliance owners and compliance reports are submitted to the Board on a quarterly basis.

A sustainable and seamless supply chain is critical for the timely availability of our medicines to our patients across the globe. Your Company has developed a resilient and agile supply chain framework that sources its direct and indirect materials from its suppliers. Company continuously supports supply chain and distribution partners to maintain an uninterrupted supply and distribution of medicines.

Company has zero tolerance for any form of unethical conduct or behaviour and it adheres to uncompromising integrity in conduct of its business. It has put in place vigil mechanism viz., Whistle-Blower Policy to encourage the employees who have knowledge of actual or suspected violation, malpractices, corruption, fraud or unethica conduct, leak of unpublished price sensitive information, genuine concerns, etc. The employees can come forward, seek resolution and express their legitimate concerns to the Audit Committee Chairman without any fear of reprimand, retaliation, victimisation or unfair treatment.

It is posted on the intranet and website of the Company and the same is available at https://ajantapharma.eom// images/Whistle-Blower-Policy-Feb-2023.pdf.

The same is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported by employees/directors till date. It is affirmed that no person has been denied access to the Audit Committee.

Company is dedicated in providing a safe, conducive and healthy working environment that enables its employees to work without fear of prejudice and gender bias. It is the continuous endeavour of the management to create and provide an environment that is free from discrimination and sexual harassment.

The Company has adopted Policy on prevention, prohibition and redressal of sexual harassment of women at workplaces in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 20T3. Company conducts awareness sessions to sensitise employees about the policy.

It has a vigorous mechanism in place to redress complaints reported under it and has constituted an Internal Complaints Committee ("ICC") at all the locations where there are more than 10 women employees, to address the complaints regarding sexual harassment.

During the year under review, no complaint of sexual harassment has been received.

The Company has laid down a robust Code of Conduct for Directors & Senior Management, which is based on the principles of ethics, integrity and transparency. Details of the Code are given in the Corporate Governance Report.

Human Resources are invaluable assets and Company is committed to provide conducive environment that values their contribution and provides them opportunities to grow. It invests in their training and professional development to eguip them with the necessary skills, domain expertise and latest technology in line with the business strategy.

The Company is dedicated to the protection of human health, safety, environment and maintains highest standards of health and safety in all its plants and facilities. This commitment forms the basis for our EHS management systems and governance.

There were 7,713 permanent employees of the Company cis of 31 March 2023. The information pursuant to Rule (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201A is annexed to this report cis "Annexure E".

Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this report pursuant to Section 136(1) of the Act. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the registered office address of the Company.

Pursuant to Section 134 of the Act read with Companies (Accounts) Rules, 2014, particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are disclosed in "Annexure F".

Pursuant to Section 134(3)(g) of the Act, details of loans, guarantees and investments are disclosed in Notes to Financial Statements.

No disclosure or reporting is made with respect to the following as there were no such transactions during the year under review:

Transfer to Reserves;

Deposits accepted by the Company;

Issue of equity shares with differential rights as to dividend, voting or otherwise;

Provision of money for the purchase of its own shares by employees or by trustee for the benefit of employees;

Remuneration or commission received by Managing Director & CEO/Whole-Time Director from subsidiaries;

Revision in the financial statements;

Change in the nature of company's business;

Transfer of any amount to reserves;

Suspension of Company's securities;

Failure to implement Corporate Action;

• One-time settlement;

• Material changes and commitments affecting financial position of the Company between the end of the financial year and the date of this report;

• Significant or material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations;

• Application or proceedings made under the Indian Bankruptcy Code, 2016.

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEB1.

To the best of their knowledge and belief and according to the information and explanations obtained by them and pursuant to Section 13A of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), your Directors confirm:

a) that in the preparation of the annual accounts for the year ended 31 March 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) that they had selected accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as

to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31 March 2023 and of the profit of the Company for the period;

c) that 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) that the annual accounts/financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adeguate and were operating effectively;

f) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adeguate and operating effectively.

Your Directors place on record earnest appreciation for the contribution made by each and every Ajantaite during the year under review. Company's consistent growth was made possible by their hard work, solidarity, cooperation and dedication. The Directors also wish to express their gratitude to the Investors for the confidence and faith that they continued to repose in the Company. Board takes this opportunity to thank all shareholders, analysts, business partners, government and regulatory authorities, financial institutions, banks, distributors, suppliers, business associates, medical professionals and customers for their continued guidance, encouragement and splendid support.