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Dear Members,

The Board of Directors presents the Company's Thirty-Eight Annual Report along with the Company's Audited Financial Statements for the financial year ended March 31, 2023.

1. Financial Summary

2. Business Performance Review

During FY 2022-23 (FY23), on consolidated basis, your Company's revenues stood at '14,209.09 million as against '14,128.16 million in FY 2021-22 (FY22). The Company posted loss after tax of '1,219.77 million in FY23 as against profit after tax of '447.64 million in FY22.

On a standalone basis, your Company's revenues for FY23 stood at '2,226.85 million as against '2,196.26 million in FY22. The Company posted a loss after tax of '60.80 million in FY23 as against profit after tax of '147.99 million in FY22.

Business Overview:

Formulations

• In Spain, Alivira launched two new bio-active products in its Phytosolutions line. The first one, Gastro Herb Plus, is designed to combat non-specific post-weaning diarrhoea in piglets. The second product, Dystop, is aimed at controlling Swine Dysentery as a replacement for EDTA.

• Introduced Synchromate, a cloprostenol-based injectable hormone for cycle synchronization in gilts and cows in the European market. Synchromate is the second group launch in Europe, following the launch of Tulathromycin in FY21.

• After acquiring 100% stake in Nourrie Saude e Nutrigao Animal Ltda in Brazil in February 2022, Alivira Brazil integrated this new operation into its existing structure in Campinas. Sales of Transuin continued to grow as planned, and the Company started structuring a Companion Animal team to drive commercial operations.

• India formulation business performed well in FY23, achieving a revenue of '1,055 million.

API

• Filed 5 USVMF, total USVMF filings now at 29, with 18 CEP approvals.

• Process validation activities for API on exclusive basis for a large animal health company has been initiated.

• Addition of a new manufacturing block in Vizag replaced old equipment in critical operations with new ones to increase productivity and operational efficiency.

• Expansion of R&D to build a diverse product range that includes pain management and antibacterial segments.

Management's Discussion and Analysis Report, which forms part of the Board's Report details the Company's operational and financial performance for the year under review.

3. Dividend

The Board of Directors of your Company, after considering holistically the relevant circumstances and keeping in view the Company's dividend distribution policy, has decided that it would be prudent, not to recommend any Dividend for the year under review.

In accordance with Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), your Company has formulated a Dividend Distribution Policy which ensures a fair balance between rewarding its Shareholders and retaining enough capital for the Company's future growth. This Policy is available on the Company's website at http://www.sequent.in/pdf/policies/Sequent Dividend Distribution Policy.pdf

4. Transfer to Reserves

No amount has been transferred to the Reserves during the year under review.

5. Share Capital

As on March 31, 2023, the Authorized Share Capital of the Company was '80,00,00,000/- divided into 40,00,00,000 equity shares of '2/- each.

The issued, subscribed and paid-up equity share capital of the Company as on March 31, 2023, was '49,88,66,990/- divided into 24,94,33,495 equity shares of '2/- each.

During the year under review, there has been no change in the authorized share capital of your Company. Your Company had allotted 10,62,500 equity shares of '2/- each to the employees, who have exercised stock options during the year.

Your Company has not issued any equity shares with differential voting rights or sweat equity shares. Further, your Company has not allotted any equity shares after the balance sheet date i.e. March 31, 2023.

6. Consolidated Financial Statements

In accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as the "Act") read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and the provisions of the Listing Regulations, the Consolidated Audited Financial Statements forms part of the Annual Report.

7. Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2023, your Company has 21 (Twenty-0ne) Subsidiaries, out of which 14 are Wholly Owned Subsidiaries and your Company does not have any Joint Ventures/ Associate Companies.

8. Accounts of Subsidiaries

In accordance with Section 129(3) of the Companies Act, 2013 ('the Act') read with rules made thereunder, a statement providing details of performance and salient features of the Financial Statements of Subsidiaries is given in Form AOC-1 attached as an "Annexure 1" forming part of this Report.

Further, in accordance with the provisions of Section 136(1) of the Act, the Annual Report of the Company, containing therein Audited Standalone and the Consolidated Financial Statements of the Company and the Audited Financial Statements of each of the Subsidiary Companies have been placed on the website of the Company at https://sequent.in/polices-financials-subsidiaries.aspx.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Company's website and can be accessed at https://sequent.in/pdf/policies/Sequent Policy%20on%20 Determination%20of%20Material%20Subsidiaries 2019.pdf

9. Annual Return

The draft Annual Return of the Company for FY23, is available on the Company's website and can be accessed at https://www.sequent.in/.

10. Credit Rating

As on the date of this Report, the credit rating assigned by India Ratings & Research (Fitch Group) is "IND A+" with outlook being "Stable" for long-term bank facilities of the Company. The said ratings signify an adequate degree of safety regarding the timely servicing of financial obligations.

Further, India Ratings & Research (Fitch Group) assigned the rating as "IND A1+" for the Company's shortterm bank facilities, which signifies strong safety regarding timely payment of financial obligations and carry the lowest credit risk.

11. Public Deposit

During the year under review, your Company has not accepted or renewed any public deposits in terms of Sections 73 and 74 of the Act read with rules framed thereunder.

12. Directors & Key Managerial Personnel

As on March 31, 2023, the Board comprises of 8 (Eight) Directors out of which 2 (Two) Directors are Executive, 3 (Three) Directors are Non-Executive Independent including one Woman Director and 3 (Three) Directors are Non- Executive Non-Independent. All Directors are competent and experienced personalities in their respective fields. The Board is chaired by Dr. Kamal Sharma, Independent Director of the Company.

The following changes took place in the Board of Directors of the Company during the year:

• Mr. Manish Gupta (DIN: 06805265) ceased to be the Managing Director and Chief Executive Officer of the Company on April 10, 2022.

• Mr. Rajaram Narayanan (DIN: 02977405) was appointed as a Managing Director and Chief Executive Officer of the Company by the Board of Directors on April 11, 2022. The Members of the Company have also approved the said appointment vide Special Resolution passed through Postal Ballot on April 09, 2022.

• Mr. Rahul Mukim (DIN: 06996915) ceased to be the Director of the Company w.e.f December 06, 2022. The Company has received declarations from all the Independent Directors of the Company confirming that:

• they meet the criteria of independence prescribed under the Act and the Listing Regulations; and

• they have registered their names in the Independent Directors' Databank maintained by the Indian Institute of Corporate Affairs.

Mr. Tushar Mistry ceased to be the Chief Financial Officer of the Company w.e.f May 31, 2022.

Mr. P.V. Raghavendra Rao, was appointed as the Chief Financial Officer of the Company w.e.f July 25, 2022.

As on date, the Key Managerial Persons of the Company are Mr. Rajaram Narayanan, Managing Director & Chief Executive Officer, Mr. Sharat Narasapur, Joint Managing Director, Mr. P.V. Raghavendra Rao, Chief Financial Officer and Mr. Krunal Shah, Company Secretary.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Gregory Andrews, Director of the Company, shall retire by rotation at the ensuing AGM. The Board of Directors has recommended his re-appointment.

13. Board Evaluation

Pursuant to provisions of Schedule IV of the Act and rules made thereunder and provisions of Listing Regulations, the Company had formulated a policy called 'SeQuent Board Performance Evaluation Policy' (the 'Policy') for performance evaluation of the Board, its Committees, Chairperson of the Board, and other individual Directors (including Independent Directors). Based on the criteria mentioned in the Policy, your Company has prepared a questionnaire to carry out the performance evaluation of the Board, its Committees, Chairperson of the Board, and other individual Directors (including Independent Directors) on an annual basis. The questionnaire is structured to embed various parameters based on which the performance can be evaluated. Based on these criteria's, the Nomination and Remuneration Committee

(hereinafter referred to as "NRC") and the Board carried out annual performance evaluation of the Board, its Committees, Chairperson of the Board, and Individual Directors (including Independent Directors). The Independent Directors carried out annual performance evaluation of the Chairperson of the Board, the Nonindependent Directors and the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the management of the Company and the Board of Directors that is necessary for the Board of Directors to effectively and reasonably perform their duties. The results of the performance evaluation were sent to the Chairman of the Board.

14. Meetings of The Board

During the year under review, 5 (Five) Board Meetings were held on May 25, 2022, July 15, 2022, August 08, 2022, November 07, 2022, and February 14, 2023. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report for the financial year ended March 31, 2023, forming an integral part of this Annual Report.

15. Company's Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

Pursuant to Section 178 of the Act, NRC has formulated "SeQuent's Policy on Director's Appointment and Remuneration" which deals inter-alia with appointment and remuneration of Directors, Key Managerial Personnel, Senior Management, and other employees of the Company. The said policy is uploaded on the website of the Company and can be accessed at http://www.sequent.in/pdf/policies/Nomination- Remuneration-Policy 2019.pdf

The salient features of the policy are as under:

• NRC to identify people who are qualified to become Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

• NRC to guide the Board in relation to the appointment, retention and removal of Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

• NRC to evaluate the performance of the Members of the Board including Independent Directors to provide necessary information/ report to the Board for further evaluation.

• NRC to recommend to the Board remuneration payable to the Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

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

• To devise a policy on Board diversity.

• To develop a succession plan for the Directors, Key Managerial Personnel and Senior Management Personnel of the Company and to regularly review the plan.

16. Committees of The Board

The Board of Directors have the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Ethics and Governance Committee

The details of the Committees along with their composition, number and dates of the Meetings and attendance at the Meetings are provided in the Corporate Governance Report for the financial year ended March 31, 2023, forming integral part of this Annual Report.

17. Auditors and Auditors Report Statutory Auditors

In accordance with the provisions of Section 139 of the Act, at the Annual General Meeting held on August 29, 2019, M/s. SRBC & CO LLP, Chartered Accountants (Firm Registration No. 324982E/ E300003) were appointed as Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of 34^th Annual General Meeting (AGM) till the conclusion of 39^th AGM.

The Independent Auditors' Report on Standalone and Consolidated Financial Statements for the year ended March 31, 2023, forms integral part of the Annual report and does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter.

The Statutory Auditors of the Company have not reported any fraud under Section 143(12) of the Act. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, read with rules thereunder, the Board has appointed M/s. Nilesh Shah & Associates, Practicing Company Secretary (Certificate of Practice No: 2631) to conduct Secretarial Audit of the Company for the year ended March 31, 2023, and its unlisted material subsidiary, Alivira Animal Health Limited (Alivira).

The Secretarial Audit Report issued in Form No. MR-3 as an "Annexure 2A" and Alivira is attached "Annexure 2B" respectively to this Board's Report.

The Secretarial Audit Report of the Company and Alivira does not contain any qualification, reservation, or adverse remark.

Cost Auditors

In accordance with the provisions of Section 148(1) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Company has maintained cost records.

Pursuant to Section 148(3) of the Act read with Companies (Cost Records and Audit) Rules, 2014, M/s. Kirit Mehta & Co, Practicing Cost Accountants, were appointed as the Cost Auditors of the Company for FY23 for conducting the audit of cost records of products and services of the Company. The Cost Audit Report for the financial year ended March 31, 2023, would be filed within the due date prescribed by law.

The remuneration proposed to be paid to the Cost Auditors for the financial year 2023-24, forms part of the Notice of the ensuing AGM for ratification by the Shareholders.

18. Segment

The Company operates only in a single segment, i.e. the Pharmaceuticals Segment.

19. Particulars of Employees and Related Disclosures

The statement containing particulars of employees as required to be disclosed under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as an 'Annexure 3' forming part of this report except the report as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In terms of Section 136 of the Act, the said report is open for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining a copy of the same may write to the Company Secretary at investorrelations@sequent.in.

20. Vigil Mechanism / Whistle Blower Policy

Pursuant to provisions of Section 177(9) of the Act and the Listing Regulations, the Company has established Vigil Mechanism and a Whistle Blower Policy, for the directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct. It also provides adequate safeguards against the victimization of employees who avail this mechanism and none of the employees or directors have been denied access to the Audit Committee.

The Whistle blower policy can be accessed at https://sequent.in/pdf/policies/Whistle%20Blower%20Policy.pdf

21. Particulars of Loans Given, Investments Made, Guarantees Given and Securities Provided

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in Note No.5, 6, 30 and 45 to the Standalone Financial Statements in the Annual Report.

22. Related Party Transactions

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arm's length basis.

There were no material contracts/arrangements/transactions entered with related parties as required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of Companies (Accounts) Rules, 2014.

The Company has the Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions in the line with the Listing Regulations and the same can be accessed at https://www.sequent. in/pdf/policies/Amended%20Policy%20on%20Related%20Party%20Transactions.pdf

Further, there were no materially significant related party transactions which could have potential conflict with the interests of the Company at large.

Members may refer to Note No. 45 to the Standalone Financial Statements which sets out related party disclosures pursuant to Ind AS.

23. Corporate Social Responsibility

The Corporate Social Responsibility Committee comprises of Dr. Kamal Sharma, Independent Director, Mr. Rajaram Narayanan, Managing Director and Chief Executive Officer and Mr. Sharat Narasapur, Joint Managing Director as its Members. Your Company has a policy on CSR and the same can be accessed at https://sequent.in/pdf/policies/CSR%20Policy.pdf

The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as an 'Annexure 4' forming part of this report.

24. Internal Financial Controls

Your Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested by PricewaterhouseCoopers Services LLP, Internal Auditors of the Company, and Grant Thornton Bharat LLP independently and no reportable material weakness in the design or operations was observed.

Internal Financial Controls have been designed to provide reasonable assurance with regards to the recording and providing reliable financial and operational information complying with applicable Accounting Standards.

25. Directors' Responsibility Statement

Pursuant to the provisions of Section 134 (3)(c) and 134(5) of the Act, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state and confirm that:

• in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

• such accounting policies as mentioned in the notes to the Financial Statements for the year ended March 31, 2023 have been selected and applied consistently and judgements and estimates have been 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, 2023 and of the loss of the Company for the year ended on that date;

• 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;

• the annual financial statements for the year ended March 31, 2023, have been prepared on a going concern basis;

• internal financial controls to be followed by the Company have been laid down and that the said financial controls were adequate and were operating effectively;

• proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

26. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings/ Outgo and Expenditure on Research & Development

The particulars relating to 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 Companies (Accounts) Rules, 2014 is attached as an 'Annexure 5' forming part of this report.

27. Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has in place a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. The Company has constituted Internal Committee(s) (ICs) at various locations to redress and resolve any complaints arising under the POSH Act. Training/awareness programmes were conducted throughout the year to create sensitivity towards ensuring a respectable workplace.

During the year under review, no complaints pertaining to sexual harassment were received and no complaints were pending as on March 31, 2023.

28. Corporate Governance Report

As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of Corporate Governance. The report on Corporate Governance along with a certificate issued by M/s. Nilesh Shah & Associates, Practicing Company Secretaries and Secretarial Auditors of the Company, confirming compliance of Corporate Governance for the year ended March 31, 2023, forms integral part of this Annual Report.

29. Business Responsibility and Sustainability Reporting (BRSR)

As stipulated under the Listing Regulations, the Business Responsibility and Sustainability Reporting (BRSR) describing the initiatives taken by the Company from an Environmental, Social and Governance perspective forms an integral part of this Annual Report. BRSR is also available on the Company's website and can be accessed at www.sequent.in.

30. Management Discussion and Analysis

Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis containing Information inter-alia on industry trends, your Company's performance, outlook, opportunities, and threats for the year ended March 31, 2023, forms integral part of this Annual Report.

31. Risk Management

Your Company has a risk management framework for identifying and managing risks. Additional details are provided in the 'Management Discussion and Analysis' Report provided in a separate section forming an integral part of this Annual Report.

The constitution of the Committee and details of the meeting held are disclosed in the Corporate Governance Report for the financial year ended March 31, 2023, forming an integral part of this Annual Report.

32. Secretarial Standards

During the year under review, your Company has followed the applicable Secretarial Standards i.e. SS-1 and SS-2 issued by the Institute of Company Secretaries of India, relating to 'Meetings of Board of Directors' and 'General Meetings' respectively.

33. Material Changes and Commitments Affecting the Financial Position of the Company

There were no material changes or commitments affecting the financial position of your Company between the end of FY23 and the date of this report.

34. Significant and Material Orders Passed by the Regulators or Courts or Tribunals

There were no significant and material orders passed by the Regulators, Courts or Tribunals during the year under review which would impact the going concern status of your Company and its future operations.

The Company has not made any application under the Insolvency and Bankruptcy Code, 2016 ('IBC ) nor any proceeding is pending under IBC and there was no instance of onetime settlement with any Bank or Financial Institution.

35. Employee Stock Option Scheme

Your Company currently has 2 (Two) ESOP Schemes as under:

• SeQuent Scientific Employee Stock Option Plan 2010 and

• SeQuent Scientific Limited Employees Stock Option Plan 2020

The details as required to be disclosed under Section 62 of the Act read with Rule 1 of Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEBS Regulations) are given in 'Annexure 6' forming part of this report.

Both the above schemes are in compliance with applicable regulations and a certificate from M/s. Nilesh Shah & Associates., Practicing Company Secretaries and Secretarial Auditor of the Company, with respect to the implementation of the Company's Employee Stock Option Scheme(s), would be placed at the ensuing AGM for inspection by the Members and confirming that the scheme(s) has been implemented in accordance with the SEBI SBEBS Regulations.

36. Transfer of Equity Shares of the Company to the Investor Education and Protection Fund (IEPF) Account

During the year under review, there were no amounts which were required to be transferred to the IEPF account by the Company pursuant to the provisions of Section 124(6) of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund), Rules, 2016.

37. Acknowledgement

Your directors place on records their sincere gratitude and appreciation for the employees at all levels for their staunch dedication and highly motivated performance across the globe, which contributed greatly to the performance of the Company.

Your directors would like to sincerely thank all the stakeholders, medical professionals, business partners, customers, vendors, stock exchanges, Government & Regulatory Authorities, banks, financial institutions, analysts and shareholders for their continued assistance, co-operation, and support.