Alkem Laboratories Ltd Directors Report

Dear Members,

Alkem Laboratories Limited

Your Directors are pleased to present their 50^th Annual Report on the business and operations together with the Audited Financial Statements of the Company for financial year ended 31^st March, 2024. Consolidated performance of the Company and its subsidiaries has been referred to, wherever required.

FINANCIAL PERFORMANCE

				(Rs. in million)
	Standalone		Consolidated
Particulars	Year ended 31st March, 2024	Year ended 31st March, 2023	Year ended 31st March, 2024	Year ended 31st March, 2023
Revenue from Operations	97,477.2	90,545.5	126,675.8	115,992.6
Other Income	3,059.9	2,662.9	3,108.4	2,160.8
Total Income	100,537.1	93,208.4	129,784.2	118,153.4
Profit before Interest, Depreciation and Tax	22,072.9	16,432.4	24,348.4	17,225.5
Less: Interest	819.1	864.0	1,124.1	1,073.6
Less: Depreciation	2,443.5	2,298.5	2,993.0	3,104.2
Profit before Tax	18,810.3	13,269.9	20,231.3	13,047.7
Less: Provision for Taxation (net)	1,338.8	1,925.2	2,116.7	2,979.6
Profit after Tax and before Non-Controlling Interest	17,471.5	11,344.7	18,114.6	10,068.1
Less: Non-Controlling Interest	-	-	156.9	226.4
Profit for the year	17,471.5	11,344.7	17,957.7	9,841.7
Other Comprehensive Income	(43.5)	(21.9)	200.4	1,149.0
Other Comprehensive Income attributable to NonControlling Interest	-	-	6.1	4.1
Total Comprehensive Income attributable to owners of the Company	17,428.0	11,322.8	18,164.2	10,994.8
Balance of other Equity as of 01.04.2023	93,259.4	87,197.5	90,213.8	86,139.9
Dividend on Equity Shares	(5,380.4)	(5,260.9)	(5,380.4)	(5,260.9)
Employee Stock Option exercised Put Option Liability recognized	-	-	(305.5)	(1,660.1)
Employee compensation expense for the year	-	-	189.4	-
Balance of other Equity as of 31.03.2024	105,307.0	93,259.4	102,881.5	90,213.8

OVERVIEW OF FINANCIAL PERFORMANCE

During financial year ended 31^st March, 2024, the Companys total revenue including other income was Rs.100,537.1 million on Standalone basis as against Rs.93,208.4 million achieved in the previous year, registering a growth of 7.9%.

The export turnover of the Company during financial year 202324 was Rs.19,301.8 million as against Rs.16,444.5 million achieved in the previous year, registering a growth of 17.4%.

During financial year ended 31^st March, 2024, the Company and its subsidiaries achieved a total revenue including other income of Rs.129,784.2 million on Consolidated basis, as against a turnover of Rs.118,153.4 million achieved in the previous year, registering a growth of 9.8%.

During financial year ended 31^st March, 2024, Standalone Profit before interest, depreciation and tax increased by 34.3% at Rs.22,072.9 million as against Rs.16,432.4 million in the previous year, whereas Consolidated Profit before interest, depreciation and tax increased by 41.4% at Rs.24,348.4 million as against Rs.17,225.4 million in the previous year. As a result, Standalone Profit before tax increased by 41.8% over the previous year to Rs.18,810.3 million and Consolidated Profit before tax was Rs.20,231.3 million, which grew by 55.1% over the previous year.

The Standalone Net Profit after tax for financial year ended 31^st March, 2024 increased by 54% to Rs.17,471.5 million over the previous year while the Consolidated Net Profit after tax increased by 82.5% over the previous year to Rs.17,957.7 million.

DIVIDEND

During financial year 2023-24, the Board of Directors on 09^th February, 2024 declared and paid an interim dividend of Rs.35/- (Rupees Thirty Five only) per equity share of Rs.2/- (Rupees Two only) each, being 1750% of paid up share capital of the Company. In addition, your Directors are pleased to recommend payment of Rs.5/- (Rupees Five only) per equity share of Rs.2/- (Rupees Two only) each as final dividend for financial year 2023-24, for the approval of the Members at the ensuing Annual General Meeting (AGM) of the Company. If approved, the total dividend (interim and final) for financial year 2023-24 will be Rs.40/- (Rupees Forty only) per equity share of Rs.2/- (Rupees Two only) each as against the total dividend of Rs.50/- (Rupees Fifty only) per equity share 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 Companys website at https://admin. alkemlabs.com/uploads/977928327_Dividend_distribution_ policy_6b026313dc.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 financial year 2023-24.

SHARE CAPITAL

The paid up equity share capital of the Company as on 31^st March, 2024 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 during the year under review and accordingly no amount on account of principal or interest on public deposits was outstanding as on 31^st March, 2024.

SUBSIDIARIES

As on 31^st March, 2024, the Company has 26 subsidiaries. The Company does not have any joint venture / associate company(ies) within the meaning of Section 2(6) of the Companies Act, 2013 (hereinafter referred to as "the Act").

During the year under review:

• M/s. S & B Holdings, B.V., a wholly owned subsidiary of the Company in Netherlands was re-domiciled to Luxembourg under the name and style of M/s. S & B Holdings S.a.r.l. w.e.f. 16^th October, 2023;

• M/s. Alkem Medtech Private Limited was incorporated as a wholly owned subsidiary of the Company on 27^th March, 2024; and none of the companies ceased to be a subsidiary of the Company.

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 Companys website at https://www.alkemlabs.com/ investors/subsidiary-accounts 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

In compliance with Regulation 34 read with Schedule V of the SEBI LODR Regulations, a Report on Corporate Governance for the year under review is provided as a separate section along with a certificate from the Statutory Auditors conforming the Companys compliance with the conditions of Corporate Governance, forming part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of SEBI LODR Regulations, the Business Responsibility and Sustainability 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 Companys CSR initiatives are as per the Companys CSR Policy. The CSR program aims to address the immediate and long term needs of the community and focus on where the major impact on marginalized sections of the society can be made. The Companys CSR strategy involves a multi-sectoral inclusive approach to focus on community needs. It strives to improve the well-being of communities by focusing on key thematic areas of healthcare, education, rural development, environment and sports. The Company implements these activities directly or through reliable partnerships with various NGOs. During financial year 2023-24, the Company has addressed the requirements of local communities in the vicinity of its head office, manufacturing facilities and R&D centers through focused projects in the said thematic areas.

Details about the Companys CSR Policy and initiatives undertaken by the Company during financial year 2023-24 are outlined in the Report on CSR activities annexed to this Report as Annexure C.

The CSR Policy is posted on Companys website: https://admin. alkemlabs.com /uploads/csr_policy_e0e5ec8d61.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments:

The details of the appointments during the year under review are as follows:

Appointment of Dr. Vikas Gupta as the Chief Executive Officer of the Company.

The Board of Directors of the Company based on recommendation of the Nomination and Remuneration Committee, approved the appointment of Dr. Vikas Gupta as the Chief Executive Officer designated as the Key Managerial Personnel of the Company effective from 22^nd September, 2023.

Appointment of Mr. Nitin Agrawal as the Chief Financial Officer of the Company.

The Board of Directors of the Company based on recommendation of the Nomination and Remuneration Committee & Audit Committee, approved the appointment of Mr. Nitin Agrawal as the President & Chief Financial Officer designated as the Key Managerial Personnel of the Company effective from 01^st February, 2024.

Re-appointments:

The following Directors are proposed to be re-appointed at the ensuing AGM, the brief details of which are mentioned in the Notice of Annual General Meeting forming part of this Annual Report:

Re-appointment of Mr. Basudeo N. Singh as an Executive Chairman of the Company.

The Board of Directors of the Company based on the recommendation of Nomination & Remuneration Committee and Audit Committee and pursuant to the relevant provisions of SEBI LODR Regulations, Sections 196, 197 and 198 read with Schedule V and other applicable provisions of the Act, the Articles of Association of the Company and considering his contribution towards the growth of the Company, approved the re-appointment of Mr. Basudeo N. Singh as an Executive Chairman of the Company for a term of 03 (three) consecutive years w.e.f 01^st April, 2025 upto 31^st March, 2028 subject to approval of the Members of the Company.

Re-appointment of Mr. Sarvesh Singh as an Executive Director of the Company.

The Board of Directors of the Company based on the recommendation of the Nomination & Remuneration Committee and Audit Committee and pursuant to the relevant provisions of SEBI LODR Regulations, Sections 196, 197 and 198 read with Schedule V and other applicable provisions of the Act, the Articles of Association of the Company and considering his contribution towards the growth of the Company, approved the re-appointment of Mr. Sarvesh Singh as an Executive Director of the Company for a term of 5 (five) consecutive years w.e.f. 11^th November, 2024 upto 10^th November, 2029 subject to the approval of the Members of the Company.

Re-appointment of Mr. Narendra Kumar Aneja as an Independent Director of the Company.

The Board of Directors of the Company based on the recommendation of the Nomination and Remuneration Committee and pursuant to the provisions of Sections 149 and 152 of the Act, the Articles of Association of the Company and considering the integrity, expertise and experience of Mr. Narendra Kumar Aneja, approved his re-appointment as an Independent Director of the Company for a second term of 5 (five) consecutive years w.e.f. 16^th March, 2025 upto 15^th March, 2030, subject to approval of the Members of the Company.

Retirements

Mr. Rajesh Dubey, retired from the position of President & Chief Financial Officer of the Company w.e.f. 31^st January, 2024. The Directors placed on record appreciation for the valuable contribution made by Mr. Rajesh Dubey during his tenure as the President & Chief Financial Officer of the Company.

Directors liable to retire by rotation

Mrs. Madhurima Singh (DIN: 09137323) and Mr. Sarvesh Singh (DIN: 01278229) are liable to retire by rotation at the ensuing AGM of the Company 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 re-appointment, on the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company.

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

Key Managerial Personnel

In accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the following are the Key Managerial Personnel of the Company as on 31^st March, 2024:

• Mr. Sandeep Singh - Managing Director;

• Dr. Vikas Gupta - Chief Executive Officer;

• Mr. Nitin Agrawal - President and Chief Financial Officer; and

• Mr. Manish Narang, President - Legal, Company Secretary and Compliance Officer

Independent Directors

The Independent Directors hold office for a term of 5 (five) years and are not liable to retire by rotation. The Independent Directors of the Company fulfill the conditions specified in the Act and SEBI LODR Regulations and are independent of the management.

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 Regulation 16(1)(b) 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 Companys website: https://admin. alkemlabs.com/uploads/Terms_of_appointment_Independent_ Directors_2a82f9dd72.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 financial year under review are explained in the Corporate Governance Report. The same is also available on the Companys website at https://www.alkemlabs.com/investors/ details-familiarization-program

Annual Evaluation of Boards Performance

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

The Independent Directors, at a separate meeting held on 29^th March, 2024 evaluated performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairperson of the Company.

The evaluation of the Independent Directors was carried out by the entire Board of Directors without the participation of the respective Independent Director.

The Company follows a policy for selection and appointment of Directors, Senior Management and their remuneration, which is available on the Companys website at https://admin.alkemlabs. com/uploads/1378936118_Nomination_and_Remuneration_ Policy_modified_27052016_307d64b304.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 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 shall be provided electronically to any Member on a written request to the Company Secretary to obtain a copy of the same.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 10 (ten) times during financial year 2023-24. 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

As on 01^st April, 2023, the Audit Committee comprised of Mr. Arun Kumar Purwar as Chairperson and Mr. Sandeep Singh, Mr. Mritunjay Kumar Singh, Ms. Sangeeta Singh, Mr. Narendra Kumar Aneja and Dr. Dheeraj Sharma as Members.

The Board of Directors of the Company at its meeting held on 09^th February, 2024, reconstituted the Audit Committee with effect from the said date to comprise of Mr. Arun Kumar Purwar as Chairperson and Mr. Sandeep Singh, Mr. Mritunjay Kumar Singh, Ms. Sangeeta Singh, Mr. Narendra Kumar Aneja and Ms. Sudha Ravi as Members.

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

As on 01^st April, 2023, the Nomination and Remuneration Committee comprised of Dr. Dheeraj Sharma as Chairperson and Mr. Basudeo N. Singh, Mr. Arun Kumar Purwar and Ms. Sudha Ravi as Members.

The Board of Directors of the Company at its meeting held on 09^th February, 2024, reconstituted the Nomination and Remuneration Committee with effect from the said date to comprise of Mr. Arun Kumar Purwar as Chairperson and Mr. Basudeo N. Singh, Ms. Sudha Ravi and Mr. Narendra Kumar Aneja as Members.

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

As on 01^st April, 2023, the Corporate Social Responsibility Committee comprised of Mr. Arun Kumar Purwar as Chairperson and Mr. Basudeo N. Singh, Mr. Sandeep Singh, Mrs. Madhurima Singh, Ms. Sangeeta Singh and Ms. Sudha Ravi as Members.

The Board of Directors of the Company at its meeting held on 09^th February, 2024, reconstituted the Corporate Social Responsibility Committee with effect from the said date to comprise of Mrs. Madhurima Singh as Chairperson and Mr. Sandeep Singh, Mr. Srinivas Singh, Ms. Sangeeta Singh and Ms. Sudha Ravi 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. Sujjain Talwar as Chairperson and Mr. Mritunjay Kumar Singh, Mrs. Madhurima Singh and Mr. Srinivas Singh as Members.

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

As on 01^st April, 2023, the Risk Management Committee comprised of Mr. Mritunjay Kumar Singh as Chairperson and Mr. Sandeep Singh, Mr. Srinivas Singh, Ms. Sudha Ravi, Dr. Dheeraj Sharma and Mr. Narendra Kumar Aneja as Members.

The Board of Directors of the Company at its meeting held on 09^th February, 2024, reconstituted the Risk Management Committee with effect from the said date to comprise of Mr. Mritunjay Kumar Singh as Chairperson and Mr. Sandeep Singh, Mr. Srinivas Singh, Ms. Sudha Ravi, Mr. Narendra Kumar Aneja and Mr. Sujjain Talwar 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 Companys Board of Directors has overall responsibility for the establishment and oversight of the Companys 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 Report forming part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

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

(a) in the preparation of the annual accounts for financial year ended 31^st March, 2024, 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 them 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, 2024 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 are adequate and operating effectively.

SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

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 45^th AGM of the Company held on 27^th August, 2019, for another term of 5 (five) years from the conclusion of 45^th AGM of the Company until the conclusion of the 50^th AGM, on such fees, 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.

The second term of M/s. B S R & Co. LLP, Chartered Accountants, the Statutory Auditors of the Company shall expire at the conclusion of ensuing AGM of the Company. Hence, the Board of Directors of the Company, based on the recommendation of the Audit Committee and subject to approval of the shareholders, has recommended the appointment of M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018), Chartered Accountants as the Statutory Auditors of the Company for a term of 5 (five) consecutive years to hold office from the conclusion of the 50^th AGM untill the conclusion of the 55^th AGM of the Company to be held in the year 2029.

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, have informed the Company that their appointment, if made, shall be in compliance with Sections 139 and 141 of the Act and Companies (Audit and Auditors) Rules, 2014 and also confirmed that the Auditors hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Auditors Report for financial year ended 31^st March, 2024, is an unmodified one. However, following are the unfavorable remarks in the auditors report:

• Delay in depositing Provident Fund for certain employees during the year which was mainly due to their Aadhar number not being linked to the Universal Account Number (UAN). The Company is however in the process of resolving the said issue so that dues can be deposited.

• Occurrence of Cyber Security incident in the month of November, 2023 which compromised business email IDs of certain employees at one of the Companys subsidiaries which resulted in a fraudulent transfer of INR 513 million. The Company had employed independent external agencies to investigate the incident and based on their report, the Company concluded that the impact of the incident did not extend beyond the above-mentioned amounts nor did it occur due to any fraudulent act on part of any of the promoters, directors, key managerial personnel or any member of the senior management or any other employee of the Company.

The Company has since strengthened its cybersecurity infrastructure and is in the process of implementing improvements to its cyber and data security systems to safeguard against such risks in the future. The Company is also implementing certain long term measures to augment its security controls systems across the organization. The Company believes that no legal violations have occurred because of this incident, and all known impacts on its standalone financial statements for the year ended 31^st March, 2024 on account of this incident have been considered. Further, subsequent to this event, the Company has been able to recover an amount of INR 290.4 million out of the above mentioned. The net amount of INR 222.7 million has been shown as Exception item in the Statement of Profit and Loss.

Additionally, the below observation (not considered as an unfavorable remark) was reported by the Auditors in their report for financial year ended 31^st March, 2024:

• Audit trail was not enabled at the database level to log any direct data changes and at the application level for changes made by privileged users for the period from 22^nd July 2023 to 11^th January 2024 as the table logs were inadvertently disabled for the said intermittent period due to a planned system migration and continuous upgrade and advancement of Companys ERP systems. The Company has ensured that adequate compensatory controls such as controlled access rights, transaction logs, etc. were available during the said period and working effectively.

Cost Auditor

The Company is required to maintain cost records for certain products as specified by the Central Government under Section 148(1) 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 19^th May, 2023, had re-appointed Mr. Suresh

D. Shenoy, Cost Accountant (Membership No. 8318), as the Cost Auditor of the Company for financial year 2023-24 to conduct the audit of the cost records of the Company. A resolution for ratification of the fees 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 financial year 2023-24. The Secretarial Audit Report is annexed to this Report as Annexure F. The said Report does not contain any qualification, reservation or adverse remark.

ANNUAL RETURN

The Annual Return of the Company in prescribed Form MGT-7 is available on the website of the Company at https://www. alkemlabs.com/investors/annual-returns

RELATED PARTY TRANSACTIONS

All the Related Party Transactions entered into during financial year 2023-24 by the Company, were at arms length basis and in compliance with the applicable provisions of the Act and the SEBI LODR Regulations and are in conformity with the Companys Policy on Related Party Transactions.

The disclosure of material related party transactions entered into by the Company during financial year 2023-24, as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed to this Report as Annexure G. The Policy on Related Party Transactions as approved by the Board of Directors is posted on the Companys website at https://admin.alkemlabs.com/uploads/Policy_on_Related_Party_ Transactions_99b0363aec.pdf

PARTICULARS OF LOANS/ GUARANTEES GIVEN/ 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 have framed the Vigil Mechanism / Whistle Blower Policy for employees and/ or volunteers of the Company. The said Policy encourages to report any action or suspected action taken within the Company that is illegal, fraudulent or in violation of any adopted policy of the Company including reporting of instances of leak or suspected leak of unpublished price sensitive information. The Policy also provides access to the Chairperson of the Audit Committee under certain circumstances. The Whistle Blower Policy is posted on the website of the Company at https://admin.alkemlabs.com/uploads/ Whistle_Blower_Policy_new_5d094b8491.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 Companys plants, depots and R&D centers to redress complaints received on sexual harassment. During financial year 2023-24, the Company had received 1 complaint of sexual harassment and the same was disposed off during the year.

DISCLOSURES UNDER THE ACT

Change in Nature of Business, if any:

During financial year 2023-24, there has been 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 financial year and the date of the Report which have affected the financial position of the Company.

Significant and Material Orders:

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which may impact the going concern status and Companys operations in future.

Reporting of Frauds by Auditors:

During the year under review, there were no frauds reported by Auditors under Section 143(12) of the Act.

Details on Insolvency and Bankruptcy Code:

During the year under review, no application has been made by the Company under the Insolvency and Bankruptcy Code and accordingly the requirement of disclosing the following details are not applicable to the Company:

(i) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year; and

(ii) the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

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 Companys 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 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.

For and on behalf of the Board

Alkem Laboratories Limited

Basudeo N. Singh

Executive Chairman

DIN: 00760310

Mumbai, 29 May, 2024