Lupin Ltd Directors Report.

To the Members

Your Directors present their report on business and operations of your Company for the year ended March 31, 2022.

Financial Results

(Rs in million)

Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Sales 112584.8 109010.2 161927.9 149269.9
Other operating income 5131.9 1549.1 2126.9 2359.7
Other Income 1504.2 1290.9 1416.9 1362.9
Profit before business compensation expense, interest, depreciation and tax 23045.1 21731.5 23072.9 27031.7
Less: Business compensation expense 18783.8 - 18783.8 -
Less: Finance costs 734.7 406.2 1427.7 1406.4
Less: Depreciation, amortisation and impairment expenses 5141.9 5028.3 16587.1 8874.1
Profit/(Loss) before share of profit from Jointly Controlled Entity and Tax (1615.3) 16297.0 (13725.7) 16751.2
Add: Share of profit from Jointly Controlled Entity - - 3.6 13.3
Less: Provision for taxation (including deferred tax) 271.7 3710.8 1371.5 4485.2
Profit/(Loss) after tax (1887.0) 12586.2 (15093.6) 12279.3
Profit/(Loss) after tax and before non-controlling interest (1887.0) 12586.2 (15093.6) 12279.3
Share of Profit/(Loss) attributable to Non-controlling Interest - - 186.8 114.0
Net Profit/(Loss) attributable to Shareholders of the Company (1887.0) 12586.2 (15280.4) 12165.3

Performance Review

Sales for the year ended March 31, 2022, was Rs 161927.9 million, growth of 8.5%. During the year, due to a few one-offs (business compensation expense and impairment of certain IPs), the Company reported net loss of Rs 15280.4 million.

Business compensation expense relate to settlement of a dispute by the Company and its subsidiary, with respect to antitrust class in the USA, in connection with the drug Glumetza? (used for treatment of diabetes), without admitting any liability for any wrongdoing. The settlement payment is compensatory and not penal for any offense or violation of law. The total amount was USD 252.9 million (Rs 18783.8 million) [including USD 4.9 million (Rs 374.8 million) towards litigation and settlement related expenses]. The entire amount has been paid during the year. Also, impairment provisions of Rs 8402.1 million in respect of certain acquired IPs consequent to adverse market conditions were made. Earnings per share (Basic) stood at (Rs 33.65).

The year was challenging with headwinds in the U.S. on account of price erosion, and inflation in input materials and freight. Other markets continue solid growth in revenues and profitability. The Company is focused on optimising operating expenses and spend, and ensuring the evolution of the Company?s complex generic platforms along with global portfolio maximization while doubling down on markets like India. The Company expects its efforts to yield meaningful uptick in profitability in future.

COVID-19 Pandemic

Multiple Covid waves were challenging for all of us as new variants affected diverse geographies at different times, thereby significantly impacting lives and livelihoods. The last wave witnessed low hospitalisation and mortality rates. Safety protocols remained in place and the leadership team of your Company closely monitored all regions.

The measures adopted by the Company helped in maintaining smooth operations and protected team health. Enhanced controls, ensured uninterrupted flow of products throughout the pandemic.

Dividend

Your Directors recommend dividend of 200% (Rs 4/- per equity share). The total dividend amount is Rs 1818 million.

In compliance with Regulation 43A(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), Dividend Distribution Policy has been hosted on the website of the Company www.lupin.com (web link: https://www.lupin.com/ wp-content/uploads/2021/04/dividend-distribution- policy.pdf).

Share Capital

During the year, the paid-up share capital of the Company increased by Rs 1.6 million consequent to the allotment of 794881 equity shares of Rs 2/- each to employees of the Company and its subsidiaries upon exercising vested options under various stock option plans. Paid-up equity share capital as on March 31, 2022 was Rs 909 million.

Credit Rating

ICRA Limited (ICRA) has assigned the rating A1+? (pronounced ICRA A one plus) for the Companys bank facilities of Rs 26780 million, which indicates very strong degree of safety regarding timely payment of financial obligations.

Subsidiary Companies/Joint Venture

As on March 31, 2022, the Company had 28 subsidiaries and a joint venture.

Lupin Digital Health Limited, wholly owned subsidiary of the Company, was incorporated on May 21, 2021, to leverage technology and build digital platforms to support doctors in managing health of patients.

As part of business expansion, Avenue Coral Springs, LLC, USA, wholly owned subsidiary of the Company, was incorporated on November 29, 2021.

Southern Cross Pharma Pty. Limited, Australia (Southern Cross), wholly owned subsidiary of the Company, was acquired on February 3, 2022. Southern Cross, which is in the business of registration and distribution of generic pharmaceutical formulations through hospitals and pharmaceutical companies in Australia, shall reinforce the leading position of the Company in the generics market of Australia.

As part of restructuring, Lupin Latam, Inc., USA, wholly owned subsidiary of the Company, was liquidated effective August 31, 2021.

In accordance with first proviso to Section 129(3) of the Companies Act, 2013 (Act) and Rules 5 and 8(1) of the Companies (Accounts)

Rules, 2014, salient features of the financial statements, performance and financial position of each subsidiary and joint venture are given in Form No. AOC - 1 as Annexure A? to this Report. Financial statements of subsidiaries and joint venture are available for inspection by Members at the registered office of the Company during business hours as stipulated under Section 136 of the Act. The Company shall provide free of cost, a copy of the financial statements of its subsidiaries and joint venture to Members upon their request.

The said financial statements are also available on the Companys website www.lupin.com.

Pursuant to Regulation 46(2)(h) of the Listing Regulations, the Company formulated a policy for determining material subsidiaries. The said policy is available on the Companys website www.lupin. com (web link: https://www.lupin.com/wp-content/ uploads/2022/03/rpt-policy-03-02-2022.pdf).

Integrated Report

The key initiatives taken by the Company with respect to strategy, governance framework, performance and value creation are provided separately in six forms of capital viz. financial capital, human capital, manufacturing capital, social capital, intellectual capital and natural capital in the Integrated Report. The Report encompasses financial and non-financial information, to help Members take well-informed decisions and have a better understanding of the Companys long-term perspective.

Management Discussion and Analysis

As stipulated under Regulation 34(3) read with Schedule V(B) of the Listing Regulations, Management Discussion and Analysis forms part of the Integrated Report.

Corporate Governance Report

Your Directors reaffirm their commitment to adhere to the highest standards of corporate governance and ethical practices. In compliance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, a Report on Corporate Governance forms part of the Integrated Report. In terms of Schedule V(E) of the Listing Regulations, Auditors certificate confirming compliance with the conditions of corporate governance is annexed to the Corporate Governance Report.

Business Responsibility and Sustainability Report

As recommended by the second proviso to Regulation 34(2)(f) of the Listing Regulations, the Company is pleased to voluntarily provide its maiden Business Responsibility and Sustainability Report which forms part of the Integrated Report.

Corporate Social Responsibility (CSR)

CSR activities of the Company are carried out through Lupin Human Welfare & Research Foundation (LHWRF) and Lupin Foundation.

LHWRF, which has experience of over three decades in implementing social projects, undertakes rural development activities. As a leader in undertaking CSR work in rural India, LHWRF focuses on producing efficient, sustainable and replicable models. It operates within a framework of Lives and Livelihoods, where Lives denote healthcare and Livelihoods entails rural incomes. Over the years, LHWRF has lifted many families out of poverty by imparting skills and generating farm/farm-allied/ non-farm livelihoods.

• Outreach

LHWRF operates through its 20 centres in the states of Rajasthan, Maharashtra,

Madhya Pradesh, Uttarakhand, Goa, Gujarat, Jammu, Andhra Pradesh and Sikkim. During the year, LHWRF covered 2285 villages located in 71 blocks of 21 districts in the said states.

• Programmes

In the current fiscal, LHWRF implemented various programmes having high and sustainable impact which benefited over 746000 families. Adopting a holistic rural development approach, targeted measures were implemented to enhance income and living conditions in rural India. Interventions aimed at economic, social, infrastructure development and natural resource management in operational areas broadly covered: -

• Economic development - Agriculture development programmes, animal husbandry and livelihood promotion through skill development;

• Social development - Women empowerment, health and education;

• Natural resource management - Achieving sustainable development through watershed lines, increasing water availability and accessibility, increasing land productivity, community participation, capacity building of community and comprehensive end-to-end support; and

• Infrastructure development - Building civic infrastructure, motivating people to create common assets and developing tourist spots.

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company was required to be spend Rs 334.8 million during FY22, towards CSR activities. The actual spend was Rs 339.9 million.

The CSR Policy, approved by the Board of Directors, has been hosted on the Companys website www.lupin.com. Details of CSR activities undertaken by the Company are given in Annexure B? to this Report.

Directors? Responsibility Statement

In compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Act, to the best of their knowledge and belief your directors confirm that: -

i) in the preparation of the annual financial statements for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year March 31, 2022 and of the loss of your Company for that year;

iii) 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;

iv) the annual financial statements have been prepared on a going concern basis;

v) they had laid down proper internal financial controls and that the same are adequate and were operating effectively; and

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

Directors

In accordance with the provisions of Section 152 of the Act, Ms. Vinita Gupta (DIN: 00058631), Chief Executive Officer of the Company, retires by rotation at the ensuing Annual General Meeting (AGM) and is eligible for re-appointment.

Ms. Vinita Gupta is a pharmacy graduate from the University of Mumbai and an MBA from the Kellogg School of Management at Northwestern University. She has been instrumental in formulating and executing the strategy that helped the Company to emerge as a global pharmaceutical powerhouse. Ms. Gupta has led the Companys global expansion through a combination of organic growth and strategic acquisitions. She is also a member of the Global Advisory Board at the Kellogg School of Management. Ms. Gupta has been conferred with various coveted global awards in recognition of her contribution to pharma business and was named amongst 20 most Influential women in healthcare by BW Healthcare World in India for 2022.

Mr. Robert Funsten (DIN: 08950420), Independent Director, retired on May 9, 2021, on completion of his term as Independent Director of the Company. The Board sincerely appreciates and places on record its gratitude for the valuable contributions of Mr. Funsten during his association with the Company

In compliance with the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, all Independent Directors have furnished declarations that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and that there has been no change in the circumstances affecting their status as Independent Directors of the Company.

During the year, ten Board meetings were held on April 9, 2021, May 12, 2021, June 1, 2021, July 8, 2021, August 10, 2021, September 15, 2021, October 27, 2021, January 17, 2022, February 3, 2022 and March 17, 2022, details of which, are given in the Corporate Governance Report which forms part of the Integrated Report.

Board Evaluation

An annual performance evaluation of the Board, its Committees and of individual directors was carried out by the Board in terms of provisions of Section 134(3)(p) of the Act and Rule 8(4) of the Companies (Accounts) Rules, 2014. In compliance with Regulation 17(10) of the Listing Regulations, the Board carried out performance evaluation of independent directors without the participation of the director being evaluated. In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated. Governance, control and guidance are the key roles directors play. Performance of directors was evaluated based on monitoring corporate governance practices and introducing internationally accepted best practices to address business challenges and risks. Weightage was given to active involvement in long-term strategic planning including participation in Board and Committee meetings. Among other matters, the evaluation process focused on board dynamics, softer aspects, effectiveness of Board Committees and flow of information to the Board and its Committees. Board performance was evaluated after seeking inputs from all directors on criteria such as board composition and structure and effectiveness of board processes. Performance of Committees was evaluated after seeking inputs from Committee members as regards composition of Committees and effectiveness of Committee meetings. Performance of individual directors was reviewed on the basis of criteria viz. contribution at Board/Committee meetings, leadership qualities, qualifications, responsibilities shouldered, analytical skills, knowledge, preparedness on the issues discussed and meaningful and constructive contributions. Parameters such as, initiative, independent judgement and understanding the business environment were also taken into account.

Audit Committee

The Audit Committee comprises three non-executive directors, i.e. Dr. Punita Kumar-Sinha, Independent Director, Chairperson, Dr. Kamal K. Sharma, Vice Chairman and Ms. Christine Mundkur, Independent Director. Mr. R. V Satam, Company Secretary, acts as the Secretary of the Committee. The functions performed by the Committee, particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report, which forms part of the Integrated Report. All recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Policy

As recommended by the Nomination and Remuneration Committee and as stipulated by Section 178(3) of the Act and Regulation 19(4) of the Listing Regulations, the Board formulated a Nomination and Remuneration Policy. The policy covers remuneration of directors, key managerial personnel and senior management and also lays down guiding principles, philosophy and basis for recommending payment of their remuneration.

The policy includes criteria for determining qualifications, positive attributes and independence of directors. In terms of the policy, the Committee evaluates balance of skills, knowledge and experience of Independent Directors, whom it recommends to the Board for appointment. The functions of the Committee are mentioned in the Corporate Governance Report, which forms part of the ; Integrated Report. In terms of proviso to Section 178(4) of the Act, the policy has been hosted on the Companys website www.lupin.com (web link: https:// www.lupin.com/wp-content/uploads/2022/05/ nomination-and-remuneration-committee-terms-of- reference.pdf).

Related Party Transactions

No related party transaction entered into by the Company conflicted with the interests of the Company. All transactions entered into by the Company with related parties during the year, were in accordance with the Act and Rules made thereunder and the Listing Regulations. All such contracts and arrangements entered into by the Company were in the ordinary course of business and on an arms length basis. As mandated by the Act and Listing Regulations, the Audit Committee periodically reviews and approves related party transactions. Material related party transactions were entered into by the Company only with its subsidiaries. As stipulated by Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, disclosure of particulars of contracts/arrangements entered into by the Company with related parties are given in Form No. AOC - 2, as Annexure C? to this Report. Apart from remuneration and sitting fees, there is no pecuniary transaction with any director, which had potential conflict of interest with the Company. As stipulated by Regulation 46(2)(g) of the Listing Regulations, the policy on Related party transactions and materiality of related party transactions, as approved by the Board is available on the Companys website www.lupin.com and web link for the same is https:// www.lupin.com/wp-content/uploads/2022/03/ rpt-policy-03-02-2022.pdf.

Risk Management

The Risk Management Committee constituted by the Board is compliant with Regulation 21 of the Listing Regulations as regards composition, frequency and quorum of meetings. The Board has defined the roles, responsibilities and functions of the Committee.

The Company has a structured process of reviewing overall risk canvas with a focus on critical risks that matter. As a part of the risk management framework, critical risks that matter are identified and assessed for probability, impact and volatility of occurrence to set-up mitigation plans for addressing and avoiding them. The risk management framework also defines the roles and responsibilities at various levels in the Company. The Committee has a monitoring mechanism process in place wherein the overall risks are evaluated and effectiveness of mitigation plans reviewed.

Terms of reference of the Committee, details of meetings held and attendance thereat are mentioned in the Corporate Governance Report, which forms part of the Integrated Report.

Particulars of loans/guarantees/ investments/securities

Pursuant to provisions of Section 134(3)(g) of the Act, particulars of loans, guarantees, investments and securities given under Section 186 of the Act are disclosed in the notes to the financial statements forming part of the Integrated Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, information as regards conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure D? to this Report.

Human Resources

Your Company firmly believes that human resources are invaluable assets. The Company has been consistently recognised as a Great Place to Work in the Biotechnology & Pharmaceuticals sector. People-first approach, best-in-class work environment and advanced learning initiatives of the Company were the key drivers behind these achievements.

As mandated by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints Committee. Employees are regularly sensitized about matters pertaining to prevention of sexual harassment.

Employees Stock Options

In compliance with Regulation 14(B) of the SEBI (Share Based Employee Benefits) Regulations, 2014, details of stock options as on March 31, 2022, are given in Annexure E? to this Report.

Vigil Mechanism/Whistleblower Policy

Your Company adheres to uncompromising integrity in conduct of its business and strictly abides by well-accepted norms of ethical, lawful and moral conduct. It has zero tolerance for any form of unethical conduct or behaviour. Directors and employees are at liberty to report unethical practices and raise their concerns to the office of the Ombudsperson without any fear of retaliation or retribution. The office of the Ombudsperson has official authority to receive, respond and investigate all offences within the scope of this policy. Teams of strategic business units heads/officers appointed by the Ombudsperson investigated/examined complaints and the same were satisfactorily resolved. No personnel has been denied access to the Chairman of the audit committee.

In compliance with the provisions of Section 177(9) and (10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Company has established a Vigil mechanism/Whistleblower Policy for directors and employees to report genuine concerns. As mandated by Regulation 18(3) read with Schedule II Part C(18) of the Listing Regulations, the Audit Committee reviews the functioning of the Vigil mechanism/ Whistleblower Policy.

During the year, the Ombudsperson received 24 complaints, mostly of minor nature. The Vigil mechanism/Whistleblower Policy is placed on the Companys website https://www.lupin.com/ wp-content/uploads/2022/02/Whistleblower-Policy- Website.pdf.

Particulars of Employees Remuneration

Particulars of remuneration of employees to be disclosed as stipulated by Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure F? to this Report. Statement containing the said particulars, to be furnished in terms of Rules 5(2) and 5(3) of the said Rules, for the year ended March 31, 2022, forms part of this Report. The same shall be provided to Members upon written request pursuant to second proviso of Rule 5. In terms of provisions of Section 136(2) of the Act, particulars of remuneration of employees are available for inspection by Members at the Registered office of the Company during business hours on all working days up to the date of the ensuing AGM.

Auditors

The Company continues to have unqualified audit reports.

At the 39th AGM held on Tuesday, August 10, 2021, Members appointed B S R & Co. LLP, Chartered Accountants (Firm Reg. No. 101248W/W-100022), as auditors of the Company, for a period of five years from the conclusion of the 39th AGM till the conclusion of the 44th AGM.

Pursuant to the provisions of Section 141 of the Act, the Company has received a certificate from B S R & Co. LLP, certifying that their appointment is in compliance with the conditions prescribed by the said Section.

Internal Audit

Internal audit of the Companys operations is conducted by the in-house corporate internal audit team, the strength of which is adequate to undertake audits. Audits of Carrying & Forwarding Agents and Central Warehouses of the Company in India are regularly conducted by local chartered accountant firms. Services of external auditors/specialist firms are engaged for undertaking special audit assignments. Internal audit findings are presented to the Audit Committee.

Cost Audit

Pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014 and as recommended by the Audit Committee, the Board of Directors, at its meeting held on May 12, 2021, appointed Mr. S. D. Shenoy, practising cost accountant (FCMA No. 8318), as Cost Auditor, to conduct cost audit for the year ended March 31, 2022. Mr. Shenoy is a Cost Accountant as defined under Section 2(1)(b) of the Cost and Works Accountant Act, 1959 and holds a valid certificate of practice. Mr. Shenoy has confirmed that he is free from the disqualifications specified in Section 141 read with Sections 139 and 148 of the Act and that his appointment meets the requirements prescribed in Sections 141(3)(g) and 148 of the Act. Mr. Shenoy also confirmed that he was independent, maintained an arms length relationship with the Company and that no orders or proceedings were pending against him relating to matters of professional conduct before the Institute of Cost Accountants of India or any competent court/authority.

In compliance with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the Members, at the 39th AGM held on August 11, 2021, ratified (vide an ordinary resolution), the remuneration payable to Mr. Shenoy, for conducting cost audit for the year ended March 31, 2022.

The Company has maintained cost records as specified by the Central Government under Section 148(1) of the Act.

In accordance with Section 148(6) of the Act read with Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014, cost audit report, in Form No. CRA-4 (in XBRL mode), for the year ended March 31, 2021, was filed with the Ministry of Corporate Affairs, within the prescribed time.

Secretarial Audit

In compliance with Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, the Board of Directors, at its meeting held on May 12, 2021, appointed Ms. Neena Bhatia, practising company secretary (FCS No. 9492 CP. No. 2661), to undertake Secretarial Audit of the Company for the year ended March 31, 2022. Secretarial Audit Report in the prescribed Form No. MR-3 is enclosed as Annexures G? and G-1? to this Report. The Company continues to have an unqualified Report.

Annual Secretarial Compliance Report

In compliance with Regulation 24A(2) of the Listing Regulations, the Board of Directors, at its meeting held on May 12, 2021, appointed Ms. Neena Bhatia, practising company secretary (FCS No. 9492 CP. No. 2661), for issuing Annual Secretarial Compliance Report for the year ended March 31, 2022.

The Report, presented at the Board Meeting held on May 18, 2022, confirmed that the Company has maintained proper records as stipulated under various Rules and Regulations and that, no action has been taken against the Company or its material subsidiaries or promoters/directors by SEBI/BSE/ NSE. The Company disseminated the Report on the websites of BSE and NSE within the prescribed time.

Compliance with Secretarial Standards

The Company complies with Secretarial Standards on Board Meetings (SS-1) and General Meetings (SS-2) (including amendments thereto) issued by the Institute of Company Secretaries of India.

Annual Return

Pursuant to provisions of Sections 92(3) and 134(3)(a) of the Act, the Annual Return of the Company for the year ended March 31, 2022, has been hosted on the Companys website www.lupin.com and web link for the same is https^www.lupin.com/investors/ reports-filings/.

Acknowledgements

Your directors sincerely appreciate all employees of the Company for their contribution, commitment, dedication and hard work. The Board also expresses its deep gratitude and looks forward to the continued support of the Central/State governments, local bodies/associations, banks, financial institutions, stakeholders, business associates, medical professionals and analysts.

For and on behalf of the Board of Directors
Manju D. Gupta
Chairman
(DIN: 00209461)
Mumbai, May 18, 2022