About Alkem Laboratories Ltd

Headquartered in Mumbai, India, Alkem Laboratories Limited is a leading Indian pharmaceutical company with global operations. The company is engaged in the development, manufacture and sale of pharmaceutical and nutraceutical products. The company produces branded generics, generic drugs, active pharmaceutical ingredients (APIs) and nutraceuticals, which it markets in India and international markets. With a portfolio of more than 700 brands in India, Alkem is ranked the fifth largest pharmaceutical company in India in terms of domestic sales. The company also has presence in more than 50 international markets, with the United States being its key focus market. Alkem Laboratories Ltd was incorporated as a private limited company on August 8, 1973 at Patna under the Companies Act, 1956 and subsequently became a deemed public limited company under section 43A(2) of Companies Act, 1956 on October 26, 1988. Pursuant to our Company passing a resolution under section 21 of Companies Act, 1956 and upon issuance of a fresh certificate of incorporation consequent on change of name dated August 21, 2001, the name of our Company was changed to Alkem Laboratories Limited' with effect from October 26, 1988. In 1978, the company established its first plant at Taloja Maharashtra. In 1992, the company established its manufacturing facility in Mandwa, Maharashtra, which was later converted into an API facility in 2005. In 2003, the company set up a research and development facility for ANDA development at Taloja, Maharashtra. During the year 2006, the company's anti-infective drug Taxim became the first anti-infective drug in the Indian pharmaceutical industry to cross Rs 100 crore in terms of domestic sales in India. In 2007, the company filed its first ANDA in the US for the drug Amlodipine. In 2009, the company received first ANDA approval in US for Amlodipine. Also during the year, the company acquired Pharmacor Pty Ltd., a generic pharma company in Australia. In 2010, Alkem Laboratories acquired Ascend Laboratories, a generic marketing company in the US. In 2011, the company acquired Enzene, a company engaged in the development of biosimilars in India. In 2012, the company acquired an API manufacturing facility in the US. In 2014, the company acquired the 'Clindac-A' brand in India from Galderma S.A. Also during the year, Clavam crossed Rs 200 crore mark in terms of domestic sales in India. In 2015, the company acquired a formulation manufacturing facility in the US. On 23 December 2015, Alkem Laboratories successfully completed an Initial Public Offering (IPO) with its equity shares listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. On 10 May 2016, Alkem Laboratories announced that the Competition Appellate Tribunal (COMPAT) has passed an order dated 10 May2016 setting aside the penalty of Rs 74.63 crore imposed on the company by the Competition Commission of India (CCI) in its order dated 1 December 2015. On 7 June 2016, Alkem Laboratories announced the closure of the inspection by the United Kingdom - The Medicines and Healthcare Products Regulatory Agency (UK-MHRA) for its Bioequivalence facility at Taloja, Maharashtra, India. The facility stands UK-MHRA compliant. On 11 August 2016, Alkem Laboratories announced that the USFDA inspected the company's Bioequivalence facility at Taloja, Maharashtra, India from 1 August to 10 August 2016. At the end of the inspection, there were no 483s issued by the USFDA. On 28 October 2016, Alkem Laboratories announced that the USFDA conducted a Bio-analytical inspection at the company's manufacturing facility located at Daman, India from 24 October to 28 October 2016. The inspection has been cleared successfully without any 483 observations. This inspection was based on an ANDA filed by the company. On 7 February 2017, Alkem Laboratories announced that it has entered into an alliance with Haw Par India Pvt Ltd., a wholly owned subsidiary of Haw Par Healthcare Ltd., Singapore to exclusively market, sell and distribute Tiger Balm range of products in India. Tiger Balm products will be promoted by Alkem Healthcare, an Over the Counter (OTC) division of Alkem. Tiger Balm range of products is an internationally known remedy for headaches, upper respiratory congestions, rheumatic or arthritic pains and muscular sprains. Its unique blend of herbal ingredients, derived from an ancient Chinese source, has been proven effective for nearly 100 years and is trusted by millions of people in more than 100 countries. On 29 March 2017, Alkem Laboratories announced that the USFDA has issued an Establishment Inspection Report (EIR) for its Ankaleshwar API facility which was inspected in December 2016. The inspection has now been closed by the USFDA. The USFDA had inspected the Ankaleshwar API manufacturing facility from 5 to 9 December 2016 and had issued Form 483 with three observations. Post this, the company had submitted a detailed corrective and preventive action plan (CAPA) to the regulator within the stipulated timelines. The USFDA has reviewed the CAPA and has found them acceptable. On 10 January 2018, Alkem Laboratories announced the closure of USFDA inspection at its Baddi facility in Himachal Pradesh. On 28 March 2018, Alkem Laboratories informed the stock exchanges that the USFDA conducted an inspection at the company's manufacturing facility located at Amaliya, Daman, India from 19 March 2018 to 27 March 2018. Post the inspection, the company has received a Form 483 with thirteen observations. The company said it will put together a detailed response with adequate corrective and preventive measures to address the USFDA observations within the timeline stipulated by the USFDA. The USFDA also conducted an inspection at the company's manufacturing facility located at St. Louis, USA from 12 March 2018 to 16 March 2018. In response to the one Form 483 observation issued by the USFDA, the company has submitted a detailed corrective and preventive action plan (CAPA) plan to the regulator within the stipulated timelines.

Alkem Laboratories Ltd Chairman Speech

Our unflinching focus on regulatory compliance and ensuring adherence to the best global practices in quality and safety further strengthen our value proposition.

Dear Shareholders,

As we prepare this year's annual letter, the world is facing an unprecedented situation with the COVID-19 crisis having a far-reaching socioeconomic impact. At Alkem, our thoughts have been with the frontline health and essential services workers who are most at risk as they battle it out to control the outbreak. In this unusually changed landscape, we renew our commitment to serve healthcare needs and collaborate for the benefit of all our stakeholders and for our great nation. Together, we will emerge stronger from this crisis. Meanwhile, we urge you to follow the proactive and preemptive guidelines to stay safe and stem the spread of COVID-19.

Every organisation's journey is defined by milestones, and leadership that makes those milestones possible. Our Late Founder and Chairman, Mr. Samprada Singh, was a true visionary, who through his foresight and brilliance pioneered several landmark achievements to enable Alkem's evolution into a globally reputed Indian pharmaceutical company. Leading by example and exemplifying the values of commitment, determination and integrity, our Late Founder will continue to be an inspiration as we live his dream and work hard together to take Alkem to greater heights.

As we review the year gone by, I take great satisfaction in reporting that the Company has delivered robust performance. More importantly, this performance has been broad-based with all our key markets recording healthy revenue growth. We also delivered significant improvement in our profitability. These results indicate that the efforts towards cost optimisation, better business mix and productivity improvements are yielding the desired outcomes. Lower effective tax rates on account of investments made in manufacturing facilities that are entitled to fiscal benefits have also worked to the Company's advantage. We continue to drive strong cash flows and healthy balance sheet with our leaner operating model and enhanced commercial excellence.

Our diversified market presence is key to our ability to deliver sustained value. In India, we feature amongst the top pharmaceutical players, with market leadership in the acute therapeutic segments. We are also taking impressive strides in the fast-expanding chronic segment through focussed investments in select therapy areas. In the US, which is the world's largest pharmaceutical market, we have been making strong inroads despite a relatively late entry compared to other Indian players. While the competition is intense in this market, resulting in pricing pressure, we are confident of maintaining our growth momentum led by our robust ANDA filings and timely launches. We are also tending towards complex generics in the US, where the competition is relatively lower and market opportunity is higher.

Alkem was founded over four decades ago, on the principle to develop, manufacture and deliver affordable and effective drugs to make a difference in the lives of patients. Throughout our history, led by our dedicated and experienced R&D team, which has enabled us to strengthen our product portfolio and pipeline, we have maintained that patient-centric approach. During the year, we made R&D investments amounting to Rs 4,726 million, which is about 5.7% of our total revenues. Our unflinching focus on regulatory compliance and ensuring adherence to the best global practices in quality and safety further strengthen our value proposition.

It gives me great pleasure to acknowledge the continued hard work, expertise and dedication of our employees. Without their efforts we would not have achieved so much. We remain committed to invest in our people for their ongoing learning and growth. We are also investing significantly in latest technologies to empower our people and enhance our operational excellence.

At Alkem, we understand the importance of giving back to our communities. During the year, we continued carrying out structured interventions in areas of health, education and rural infrastructure in the communities in which we live and work. Through our corporate social responsibility endeavours we aim to promote social and economic benefits for the financially vulnerable sections of the society and bring about a transformative change. In the tough times following the coronavirus crisis, we reached out to medical teams and patients at hospitals to provide protective equipment for their wellbeing. We also extended support to local communities by providing food essentials.

In closing, I would like to warmly thank our employees, customers, partners, the medical fraternity, government agencies and shareholders for their support throughout the year. I would also like to extend my sincere appreciation to my fellow Board members and to the senior management for their leadership and guidance. We look forward to continuing working together and driving greater momentum to build a stronger company and a more robust industry for the many people who depend on our solutions.

Warm Regards,

Basudeo N. Singh

to the Members

Dear Members,

Alkem Laboratories Limited

Your Directors are pleased to present their 46^th Annual Report on the business and operations together with the Audited Financial Statements of the Company for the financial year ended 31^st March, 2020. Consolidated performance of the Company and its subsidiaries has been referred to, wherever required.

FINANCIAL PERFORMANCE

OVERVIEW OF FINANCIAL PERFORMANCE

During the financial year ended 31^st March, 2020, the Company's total revenue including other income was ' 67,730.6 Million on standalone basis as against Rs 57,816.7 Million achieved in the previous year, registering a growth of 17 %.

The export turnover of the Company during the financial year 2019-20 was Rs 15,917.1 Million as against Rs 12,159.5 Million achieved in the previous year registering a growth of 31%.

During the financial year ended 31^st March, 2020, the Company and its subsidiaries achieved total revenue including other income of Rs 84,485.8 Million on consolidated basis, as against a turnover of Rs 74,448.9 Million achieved in the previous year, registering a growth of 13%.

During the financial year ended 31^st March, 2020, Standalone Profit before interest, depreciation and tax increased by 40% at Rs 15,636.3 Million as against Rs 11,132.9 Million in the previous year, whereas Consolidated Profit before interest, depreciation and tax increased by 31% at Rs 15,776.2 Million as against Rs 12,024.7 Million in the previous year. As a result, Standalone Profit before tax grew by 42% over the previous year to Rs 13,380.8 Million and Consolidated Profit before tax was Rs 12,597.9 Million, which grew by 32% over the previous year.

The Standalone net profit after tax for the financial year ended 31^st March, 2020 increased by 58% to Rs 12,644.2 Million over the previous year while the Consolidated net profit after tax increased by 48 % over the previous year to Rs 11,270.7 Million.

DIVIDEND

During the financial year 2019-20, Board of Directors on 7^th February, 2020 declared and paid an interim dividend at Rs 22/- (Rupees Twenty Two only) per equity share of Rs 2/- (Rupees Two only) each, being 1100% of paid up share capital. In addition, your Directors are pleased to recommend payment of Rs 3/- (Rupees Three only) per equity share of the face value of Rs 2/- (Rupees Two only) each as final dividend for the financial year 2019-20, for the approval of the Members at the ensuing Annual General Meeting (AGM). If approved, the total dividend (interim and final dividend) for the financial year 2019-20 will be Rs 25/- (Rupees Twenty five only) per equity share of the face value of Rs 2/- (Rupees Two only) each as against the total dividend of Rs 16/- (Rupees Sixteen only) per equity share of the face value of Rs 2/- (Rupees Two only) each paid for the previous financial year.

In compliance with the requirement of Regulation 43A of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI LODR Regulations"), the Company has formulated its Dividend Distribution Policy, which is available on the Company's website at https://www. alkemlabs.com/pdf/policies/977928327Dividend_distribution_ policy.pdf

The said Policy is also annexed to this Report as Annexure A.

TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve for the financial year 2019-20.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31^st March, 2020 was Rs 239.1 Million. The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares to the Employees or Directors of the Company, under any Scheme (including sweat equity shares).

DEPOSITS

The Company has not accepted any deposits from the public/ members under Section 73 of the Companies Act, 2013 (hereinafter referred to as "the Act"), read with Companies (Acceptance of Deposits) Rules, 2014 during the year under review. There are no deposits which are outstanding as on 31st March, 2020.

SUBSIDIARIES

As on 31^st March, 2020, the Company had 21 subsidiaries. The Company does not have any joint venture / associate company(ies) within the meaning of Section 2(6) of the Act.

During the year under review, none of the companies ceased to be a subsidiary of the Company, however, a new company named Ascend Laboratories SAS was incorporated on 04^th June, 2019 as a wholly owned subsidiary of the Company in Colombia.

In addition to the above, on 08^th April, 2020, a new company named S&B Pharma LLC had been incorporated as a Step down subsidiary of the Company in USA.

Pursuant to the first proviso to Section 129(3) of the Act and Rule 5 and Rule 8(1) of the Companies (Accounts) Rules, 2014, the salient features of financial statements, performance and financial position of each subsidiary is given in Form AOC-1 as Annexure B to this Report.

The Audited Financial Statements of the subsidiaries are available on the Company's website at www.alkemlabs.com pursuant to Section 136 of the Act.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided as a separate section forming part of this Report.

CORPORATE GOVERNANCE

A detailed report on the Corporate Governance systems and practices of the Company is provided as a separate section along with a certificate from the Statutory Auditors conforming the Company's compliance with the conditions of Corporate Governance, forming part of this Report.

BUSINESS RESPONSIBILITY REPORT

As stipulated under Regulation 34 of SEBI LODR Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from an environmental, social and governance perspective, is provided as a separate section forming part of this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's CSR initiatives are as per the Company's CSR Policy. Our CSR program aims to address the immediate and long term needs of the community and focus on where we can make the major impact on marginalized sections of the society. The Company's CSR strategy involves a multi-sectoral inclusive approach to focus on community needs. It strives to improve the well-being of our communities by focusing on education, vocational training, healthcare and sanitation, environmental concerns and rural development. The Company implements these activities directly or through strategic trust- based partnerships with various NGOs. During the financial year 2019-20, the Company has addressed the requirements of local communities in the vicinity of its manufacturing facilities and R&D centers through focused projects in the areas of education, health and hygiene, environment and community development.

As a part of CSR initiatives, during the Covid-19 pandemic, the Company arranged distribution of essential items to cater the needs of the society at large and has also contributed towards the Prime Minister's Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund.

Details about the Company's CSR Policy and initiatives undertaken by the Company during financial year 2019-20 are outlined in the Report on CSR Activities annexed to this Report as Annexure C.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments

The Board of Directors of the Company on the recommendation of the Nomination and Remuneration Committee approved the re-appointment of Mr. Basudeo N. Singh (DIN: 00760310) as an Executive Chairman of the Company for a period of 5 (five) consecutive years w.e.f 01^st April, 2020 upto 31^st March, 2025 subject to the approval of the shareholders. The Shareholders of the Company through Postal Ballot on 04^th April, 2020, approved the said appointment of Mr. Basudeo N. Singh as an Executive Chairman of the Company, not liable to retire by rotation, for a period of 5 (five) consecutive years w.e.f. 01^st April, 2020 upto 31^st March, 2025.

The Board of Directors of the Company on recommendation of the Nomination and Remuneration Committee appointed Mr. Sarvesh Singh (DIN: 01278229) as an Additional Director designated as an Executive Director of the Company for a period of 5 (five) consecutive years w.e.f. 11^th November, 2019 upto 10^th November, 2024. The Shareholders of the Company through Postal Ballot on 04^th April, 2020 approved the appointment of Mr. Sarvesh Singh as a Whole Time Director designated as an Executive Director of the Company for a period of 5 (five) consecutive years w.e.f. 11^th November, 2019 upto 10^th November, 2024.

As per the provisions of Section 161 read with Section 149 of the Act, the Articles of Association of the Company and considering the expertise and experience of Mr. Narendra Kumar Aneja in the field of GRC (Governance, Risk and Compliance) assignment, management consultancy and high standards of integrity possessed by him, the Board of Directors of the Company approved the appointment of Mr. Narendra Kumar Aneja (DIN: 00124302) as an Additional Director designated as an Independent Director of the Company for a period of 5 (five) consecutive years w.e.f. 16^th March, 2020 upto 15^th March, 2025 subject to the approval of the shareholders. The Shareholders of the Company through Postal Ballot on 04^th April, 2020, approved the said appointment of Mr. Narendra Kumar Aneja as an Independent Director of the Company for a period of 5 (five) consecutive years, w.e.f. 16^th March, 2020 upto 15^th March, 2025.

Resignations/ Retirements/ Demise/ Completion of Tenure

Late Mr. Samprada Singh, Chairman Emeritus and Founder Promoter of the Company expired on 27^th July, 2019. He had served on the Board of the Company since its incorporation. He had rich and varied experience of over 45 years in the Indian pharmaceutical industry and had received various prestigious awards for his contribution. He had spearheaded the Company since its incorporation and under his guidance the Company has grown to its current stature. The Directors placed on record their sincere appreciation for the valuable strategic guidance and leadership provided by him to the Company since its inception.

Mr. Akhouri Maheshwar Prasad (DIN: 07066439) completed his tenure as an Independent Director on the Board of Directors of the Company on 15^th March, 2020. The Board placed on record its appreciation for his valuable contribution during his tenure as a Director of the Company.

Directors liable to Retirement by Rotation

Mr. Dhananjay Kumar Singh (DIN: 00739153) and Mr. Balmiki Prasad Singh (DIN: 00739856) are liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible they have offered themselves for reappointment. Appropriate resolutions for their re-appointment are included in the Notice of AGM for seeking approval of Members. The Directors recommend their re-appointment for your approval.

Particulars in pursuance of Regulation 36 of the SEBI LODR Regulations read with Secretarial Standard - 2 on General Meetings relating to Mr. Dhananjay Kumar Singh and Mr. Balmiki Prasad Singh are given in the Notice of AGM.

Key Managerial Personnel

Mr. Sandeep Singh, Managing Director, Mr. Rajesh Dubey, President Finance and Chief Financial Officer and Mr. Manish Narang, President - Legal, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company as on 31^st March, 2020, in accordance with the provisions of Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Independent Directors

The Independent Directors hold office for a fixed term of 5 (five) years and are not liable to retire by rotation.

Declaration of independence from Independent Directors

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder, as well as clause (b) of sub-regulation (1) of Regulation 16 of the SEBI LODR Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). In terms of Regulation 25(8) of the SEBI LODR Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

The terms and conditions of appointment of the Independent Directors are posted on Company's website https://www. alkemlabs.com/pdf/policies/996508366Terms_of_appointment- Independent_directors.pdf.

Familiarization Program

In compliance with the requirements of SEBI LODR Regulations, the Company has put in place a framework for Directors'

Familiarization Programme to familiarize them with their roles, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarization Programme conducted during the financial year under review are explained in the Corporate Governance Report. The same is also available on the Company's website at https://www.alkemlabs.com/ corporate-governance.

Annual Evaluation of Board's Performance

The details of the Evaluation of the individual Directors, Board as a whole and all the Committees of the Board etc. have been provided in the Corporate Governance Report, which forms part this Report.

As per the provisions of Schedule IV of the Act and Regulation 25(3) of the SEBI Listing Regulations, atleast one separate meeting of the Independent Directors of the Company shall be held in a year. However, in order to address the COVID-19 pandemic, Ministry of Corporate Affairs vide General Circular No. 11/ 2020 dated 24^th March, 2020, stated that if the Independent Directors of a company have not been able to hold the said meeting for the financial year 2019-20, the same shall not be viewed as a violation. The said circular further mentions that the Independent Directors however, may share their views amongst themselves through telephone or e-mail or any other mode of communication, if they deem it to be necessary. The Company was unable to hold a separate Independent Directors meeting for FY 2019-20 but the Independent Directors in line with the said circular shared their views amongst themselves telephonically.

Remuneration Policy

The Company follows a policy for selection and appointment of Directors, Senior Management and their remuneration, which is available on the Company's website at https://www.alkemlabs. com/pdf/policies/1378936118Nomination-and-Remuneration- Policy_modified%2027052016.pdf. The said policy is annexed to this Report as Annexure D.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure E.

Further a statement showing the names and other particulars of top ten employees in terms of remuneration drawn and of employees drawing remuneration in excess of the limits required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Annual Financial Statements are being sent by email to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the Members at the Registered Office of the Company during the business hours on all working days up to the date of AGM and also shall be provided electronically to any Member on a written request to obtain a copy of the same to the Company Secretary.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 7 (Seven) times during the financial year 2019-20. The details of the Board Meetings and the attendance of Directors thereat are provided in the Corporate Governance Report, which forms part of this Report.

COMMITTEES OF THE BOARD Audit Committee

The Audit Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Sandeep Singh, Mr. Mritunjay Kumar Singh, Ms. Sudha Ravi, Ms. Sangeeta Singh and Mr. Narendra Kumar Aneja (inducted as Member w.e.f. 16^th March, 2020) as Members. Mr. Akhouri Maheshwar Prasad was a Member of this Committee upto 15^th March, 2020. The brief terms of reference of the Audit Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report which forms part of this Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of Mr. Arun Kumar Purwar, Chairman and Mr. Basudeo N. Singh, Ms. Sangeeta Singh and Mr. Ranjal Laxmana Shenoy (inducted as Member w.e.f. 16^th March, 2020) as Members. Mr. Akhouri Maheshwar Prasad was a Member of this Committee upto 15^th March, 2020. The brief terms of reference of the Nomination and Remuneration Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report which forms part of this Report.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Dhananjay Kumar Singh, Mr. Balmiki Prasad Singh, Mr. Mritunjay Kumar Singh and Mr. Arun Kumar Purwar as Members. The brief terms of reference of the Corporate Social Responsibility Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report which forms part of this Report.

Stakeholders' Relationship Committee

The Stakeholders' Relationship Committee comprises of Mr. Ranjal Laxmana Shenoy, Chairman and Mr. Dhananjay Kumar Singh and Mr. Mritunjay Kumar Singh as Members. Mr. Akhouri Maheshwar Prasad was a Member of this Committee upto 15^th March, 2020. The brief terms of reference of the Stakeholders' Relationship Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report which forms part of this Report.

Risk Management Committee

The Risk Management Committee comprises of Mr. Dhananjay Kumar Singh, Chairman and Mr. Mritunjay Kumar Singh, Mr. Sandeep Singh, Ms. Sudha Ravi, Dr. Dheeraj Sharma and Mr. Narendra Kumar Aneja (inducted as Member w.e.f. 16^th March, 2020) as Members. The brief terms of reference of the Risk Management Committee and the particulars of meeting held and attendance thereat are mentioned in the Corporate Governance Report which forms part of this Report.

RISK MANAGEMENT

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company has a Board approved Risk Management Policy. The Board of Directors has constituted a Risk Management Committee which is delegated with the responsibility of overseeing various strategic, operational and financial risks that the organization faces, along with assessment of risks, their management and mitigation procedures. A detailed analysis of the business risks and opportunities is given under Management Discussion and Analysis.

To the best of their knowledge and belief, your Directors confirm that:

(a) in the preparation of the annual accounts for the financial year ended 31^st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2020 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care 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) they have prepared the annual financial statements on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

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

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 relating to 'Meetings of the Board of Directors' and SS-2 relating to 'General Meetings' have been duly followed by the Company.

AUDITORS AND AUDITORS' REPORT Statutory Auditor

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), M/s. B S R & Co. LLP (Firm Registration No: 101248W/W-100022), Chartered Accountants, the Statutory

Auditors of the Company, were re-appointed by the Shareholders at the Forty-Fifth AGM of the Company held on 27^th August, 2019, for another term of 5 (five) years from the conclusion of Forty-Fifth AGM of the Company until the conclusion of the Fiftieth AGM, on such remuneration, inclusive of applicable taxes and reimbursement of travelling and out of pocket expenses incurred in connection with the audit, as recommended by the Audit Committee and as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors from time to time. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company for the current year and are not disqualified from being so appointed.

The Auditors' Report for financial year ended 31^st March, 2020, does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Company is required to maintain cost records for certain products as specified by the Central Government under subsection (1) of Section 148 of the Act, and accordingly such accounts and records are made and maintained in the prescribed manner.

Pursuant to the provisions of Section 148 of the Act and the Rules made thereunder read with notifications/ circulars issued by the Ministry of Corporate Affairs from time-to-time and as per the recommendation of the Audit Committee, the Board of Directors at its meeting held on 30^th May, 2019, had appointed Mr. Suresh D. Shenoy, Cost Accountant (Membership No. 8318), as the Cost Auditor of the Company for the financial year 2019- 20 to conduct the audit of the cost records of the Company. A resolution for ratification of the remuneration payable to the Cost Auditor is included in the Notice of AGM for seeking approval of Members. The Cost Audit Report will be filed within the period stipulated under the Act.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Manish Ghia & Associates, Practicing Company Secretaries, (Membership No. F6252, COP No. 3531) to conduct the Secretarial Audit of the Company for the financial year 2019-20. The Secretarial Audit Report is annexed to this Report as Annexure F. The said Report does not contain any qualification, reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

As required under Section 92(3) of the Act and the Rules made thereunder, extract of the Annual Return in Form MGT- 9 is annexed to this Report as Annexure G. Further, the Annual Return of the Company in prescribed Form MGT-7 is available on the website of the Company at https://www.alkemlabs.com/ annual-returns.php

RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered into during financial year 2019-20 by the Company, were at arm's length basis, in the ordinary course of business and in compliance with the

applicable provisions of the Act and the SEBI LODR Regulations and are in conformity with the Company's Policy on Related Party Transactions.

During the financial year 2019-20, the Company did not enter into any material related party transactions, i.e. transactions exceeding ten percent of the consolidated turnover as per the last audited financial statements. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act in Form AOC-2 is not applicable. The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website at https://www.alkemlabs.com/ pdf/policies/84051713915915Policy_on_Related_Party_ Transactions.pdf

PARTICULARS OF LOANS/GUARANTEES GIVEN AND INVESTMENTS MADE AND SECURITIES PROVIDED

The particulars of loans, guarantees, investments and securities provided covered under the provisions of Section 186 of the Act have been disclosed in the notes to the financial statements forming part of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to the provisions of Section 177(9) of the Act, the Board of Directors of the Company has framed the Vigil Mechanism / Whistle Blower Policy for Directors and Employees of the Company. Under the said policy, provisions have been made to safeguard persons who use this mechanism from victimization. The policy also provides access to the Chairperson of the Audit Committee under certain circumstances. The Whistle Blower Policy is uploaded on the website of the Company at https:// www.alkemlabs.com/pdf/policies/961507913Whistle_Blower_ Policy.pdf

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

Internal Complaints Committees have been set up at the head office of the Company as well as at all the Company's plants and R&D Centers to redress complaints received on sexual harassment. During the financial year 2019-20, the Company had not received any complaints of sexual harassment.

DISCLOSURES UNDER THE ACT Change in Nature of Business, if any:

During the financial year 2019-20, there was no change in the nature of business of the Company.

Material Changes and Commitments affecting the financial position of the Company:

There are no material changes and commitments which have occurred between the end of the financial year and the date of the Report which have affected the financial position of the Company.

Significant and Material Orders:

There are no significant and material orders passed by the regulators or courts or tribunals during the year impacting the going concern status and the Company's operations in future.

Reporting of Frauds by Auditors:

During the year under review, an employee of the Company was found to have perpetrated misappropriation of the Company's funds aggregating to an amount of Rs 116.5 Million. As at 31^st March, 2020, Company was able to recover an amount of Rs 83.8 Million and has also secured recovery of balance amount so misappropriated. The details of the same have been explained in the notes to financial statements forming part of the Annual Report.

DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has designed and implemented a process driven framework for Internal Financial Controls (IFC) as mandated under the Act. The Company's policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

During the financial year under review, Internal Auditors of the Company with the external audit consultants have reviewed the effectiveness and efficiency of these systems and procedures. As per the said assessment, Board is of the view that IFC were adequate and effective during the financial year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act and the Rules framed thereunder is annexed herewith as Annexure H to this Report.

ACKNOWLEDGEMENT

Your Directors would like to express sincere gratitude to all valuable stakeholders of the Company viz., the Central and State Government Departments, Organizations, Agencies, our customers, shareholders, dealers, vendors, banks, medical fraternity, patients and other business associates for their excellent support and co-operation extended by them during the financial year under review.

The Board of Directors also places on record its appreciation for the significant contribution made by the employees of the Company through their dedication, hard work and unstinted commitment.

Alkem Laboratories Ltd Company Background

Alkem Laboratories Ltd Company Management

Alkem Laboratories Ltd Listing Information

Alkem Laboratories Ltd Finished Product