Sequent Scientific Ltd Directors Report.

Dear Members,

The Board of Directors present the Companys Thirty-sixth Annual Report along with the Companys Audited Financial Statements for the Financial Year ended March 31, 2021.

1. Financial Summary

The summarised financial performance (Standalone and Consolidated) of your Company for Financial year 2020-21 and financial year 2019-20 is given below:

(Rs. in Millions)
Dnrtiri ilrire

Stundulone

Consollduted

rU 1 LIcUIUI S 2020-21 2019-20 2020-21 2019-20
Revenue from operations 2,654.57 2,273.33 13,616.15 11,792.44
Other Income 199.66 145.61 83.63 100.89
Profit before interest, depreciation and tax 552.56 367.98 2,204.33 1804.11
Less: Finance costs 26.8 50.35 243.83 357.14
Less: Depreciation and amortisation expenses 91.28 89.50 505.98 506.22
Profit before tax (before exceptional items and tax) 434.48 228.13 1,454.52 940.75
Exceptional items 25.61 - 88.23 -
Profit before tax (after exceptional items and tax) 408.87 228.13 1,366.29 940.75
Provision for - Current Tax 73.05 31.83 320.99 227.44
- Deferred tax 26.89 (17.11) (28.6) (104.83)
- Current tax of prior period reversed (12.20) - 29.38 (2.32)
Profit after tax 321.13 213.41 1,044.52 820.46
Net Profit for the year attributable to:
Owners of the Company 321.13 213.41 954.42 699.05
Non-controlling interest - - 90.10 121.41

2. COVID-19

Response

The COVID-19 pandemic has transformed the concept of Business Responsibility across industries, making the FY 2020-21 a true test in an unusual way. The situation remains challenging, having impacted many lives and continues to evolve. Conducting business operations with the utmost safety has become critical, despite the uncertain, and challenging environment we face. This becomes significant on the account of the fact that we are part of the essential services sector.

The recent turn of events has increased our responsibilities and expectations toward all stakeholders. We have demonstrated our commitment by stepping up early enough to achieve business growth in a challenging environment. Simultaneously we have provided a protected working environment for all and caring for our employees well-being.

The Companys initiatives for its employees are documented in BRR, which is included in this Annual Report.

3. Business Performance Review

Financial year 2020-21 (FY20-21) was very significant year where we saw a seamless transition to the Carlyle group as the new promoter and broad-basing of the board with the addition of global industry stalwarts. The year was full of uncertainty led by COVID-19, resulting in prolonged lockdowns around the world, which impacted the normal business activity. Despite these challenges, we improved our margins significantly and our investments have also played out. We have significantly ramped up growth during the financial year and have delivered a robust 15.5% growth in top-line.

During FY 2020-21, on consolidated basis, your Companys revenue stood at 13,616.15 million as against 11,792.44 million in FY 2019-20. The Company posted an EBITDA of 2,162.86 million in FY 2020-21 as against 1,758.10 million in FY 2019-20. EBITDA margin during the year stood at 15.88%, up by 97 bps over previous year.

On a standalone basis, your Companys revenues for FY 2020-21 stood at 2,654.57 million as against 2,273.33 million in FY 2019-20. The Company posted an EBITDA of 353.19 million in the year 2020-21 as against 222.37 million in 2019-20. The Company made a net profit of 321.13 million.

Managements Discussion and Analysis Report, which forms part of the Boards Report details the Companys operational and financial performance for the year.

Business Overview:

Formulations

• Launched 3 new products in the European market

• Submitted first filings in the US, Canada, and Australia from India R&D

• Commercialised a multi-year distribution agreement with Zoetis for their ruminant portfolio in the domestic market

• Expanded operations in India to additional states of Kerala & Karnataka

API

• Commercialised 3 new APIs, submitted 4 VMF filings, and received CEP approval for 1 product

• Concluded the first phase of Vizag expansion project

• Completed de-bottlenecking of Mahad plant for enhanced production capacities

• Signed a long-term arrangement with a major animal health company for CDMO and product supplies

4. Dividend

Based on Companys performance, the Board of Directors has recommended a dividend of 0.50/- per equity share (i.e. 25%) of face value of 2/- each for the Financial year ended March 31, 2021.

Dividend Payout has been determined in accordance with Dividend Distribution Policy, which is available on the Companys website and can be accessed at https://sequent.in/pdf/policies/Sequent Dividend Distribution Policy.pdf

Record date for dividend is Friday, September 10, 2021. Dividend, if approved by the Shareholders will be paid within 30 days from date of approval.

5. Transfer to Reserves

During the year under review, the Company has not made any transfer to the Reserves.

6. Share Capital

As on March 31, 2021, the Authorised Share Capital of the Company is 800,000,000/- divided into 400,000,000 equity shares of 2/- each.

During the year under review, the Authorised Share Capital of the Company was increased from 500,000,000/- divided into 250,000,000 equity shares of 2/- each to 800,000,000/- divided into 400,000,000 equity shares of 2/- each vide Ordinary Resolution passed by the Members of the Company through Postal Ballot on January 17, 2021.

The issued, subscribed and paid-up equity capital of the Company as on March 31, 2021 is 496,741,990/- divided into 248,370,995 equity shares of 2/- each. The Company has not issued any equity shares during the year. Further, your Company has not allotted any equity shares after the balance sheet date i.e. March 31, 2021.

7. Corporate Actions

Acquisition of control over the Company by CA Harbor Investments (A Carlyle Group Company)

On May 08, 2020, certain promoters of the Company (together the "Sellers" or "Original Promoters") entered into a Share Purchase Agreement with CA Harbor Investments ("Carlyle") (as subsequently amended, and which agreement read with such amendments are collectively referred to as "SPA"), under which Carlyle agreed to acquire (a) control over SeQuent Scientific Limited ("Company") from the Sellers, and (b) equity shares amounting to 53.02% (fifty three point zero two percent) of the paid-up equity share capital of the Company held by the Sellers, in accordance with the terms and conditions thereof. Pursuant to the SPA, Carlyle made a public announcement for open offer ("Open Offer") under Regulations 3(1) and 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SAST Regulations"). The said open offer opened on August 25, 2020 and closed on September 07, 2020.

On August 17, 2020, Carlyle and the Sellers consummated the first tranche under the SPA pursuant to which Carlyle acquired equity shares from the Sellers amounting to 25.20% (twenty-five point two zero percent) of the paid-up equity share capital of the Company along with control over the Company and became a Promoter of the Company. On August 17, 2020, the Company notified the Stock Exchanges that Carlyle has acquired control over the Company and has become a Promoter of the Company w.e.f. August 17, 2020. Further, on September 08, 2020, Carlyle acquired equity shares amounting to 27.82% (twenty-seven-point eight two percent) from the Sellers.

Carlyle also acquired 4,467 equity shares through the Open Offer, which concluded on September 07, 2020. Carlyle currently holds 131,680,103 equity shares aggregating to 53.02% of the paid-up equity share capital in the Company.

Consequent to the change in Promoters, the Original Promoters have requested for re-classification of category from Promoter to Public. The said request was approved by the Board on November 06, 2020 and the Shareholders through Postal Ballot on March 14, 2021. The Company has filed requisite application for re-classification of Promoters with the Stock Exchanges.

8. 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (hereinafter referred to as the "Listing Regulations"), the Consolidated Audited Financial Statements forms part of the Annual Report.

9. Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2021, your Company has 22 (Twenty-two) Subsidiaries, out of which 12 are Wholly Owned Subsidiaries and your Company does not have any Joint Ventures/ Associate Companies.

Following are the changes in subsidiaries during the financial year ended March 31, 2021:

Name of the Subsidiary Changes during the year
Alivira Animal Health UK Limited Incorporated on April 29, 2020
Alivira Animal Health Australia Pty Limited Struck-off w.e.f. May 13, 2020

10. Consolidation of Subsidiaries

During the year under review, the Company has consolidated its shareholding in the following subsidiaries by making them wholly owned subsidiaries of the Company:

a) In October 2020, Alivira Animal Health Limited, Ireland, Wholly Owned Subsidiary of the Company acquired 15% stake in Fendigo BV, Netherlands (Fendigo Netherlands), for a consideration of Euro 191,947.50 to make Fendigo Netherlands a wholly owned subsidiary of the Company.

b) In November 2020, Alivira Animal Health Limited, Ireland, Wholly Owned Subsidiary of the Company acquired 40% stake in Provet Veteriner Urunleri San. Ve Tic. A. S., Turkey (Provet) for a consideration of USD 18.04 Million to make Provet a wholly owned subsidiary of the Company.

c) In March 2021, Alivira Animal Health Limited, Ireland, Wholly Owned Subsidiary of the Company acquired 7.5% stake in Fendigo SA, Belgium (Fendigo Belgium), for a consideration of Euro 551,075 to make Fendigo Belgium a wholly owned subsidiary of the Company.

11. 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 www.sequent.in.

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

12. Annual Return

The Annual Return of the Company as on March 31, 2021 is available on the Companys website and can be accessed at https://sequent.in/pdf/annual-report/MGT-7%202020-2021.pdf.

13. Credit Rating

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

Further, India Ratings & Research (Fitch Group) assigned the rating as "IND A1+" (upgraded from "IND A1") for the Companys short-term bank facilities, which signifies strong safety regarding timely payment of financial obligations and carry the lowest credit risk.

14. 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.

15. Directors & Key Managerial Personnel

As on March 31, 2021, the Board comprises of 9 (Nine) Directors out of which 2 (Two) Directors are Executive, 3 (Three) Directors are Non-Executive Independent including one Woman Director and 4 (Four) 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.

During the year under review, CA Harbor Investments, a Carlyle Group Company became Promoter of the Company by acquiring 53.02% from the Original Promoters led by Mr. Arun Kumar as detailed under head Corporate Actions in Point No. 7 of this Report.

Consequently, the Board underwent the following changes:

Cessation of Directorships

• Mr. Narendra Mairpady (DIN: 00536905) ceased to be a Director of the Company w.e.f. July 31, 2020 upon completion of his term as an Independent Director of the Company.

• Mr. KEC Rajakumar (DIN: 00044539) and Dr. S. Devendra (DIN: 00050440) resigned from the Directorship of the Company w.e.f. August 17, 2020 and Dr. Gopakumar Nair (DIN: 00092637) resigned from the Directorship of the Company w.e.f. August 25, 2020.

We place on record our appreciation for the immense contribution and valuable guidance given by Mr. Narendra Mairpady, Mr. KEC Rajakumar, Dr. S. Devendra and Dr. Gopakumar Nair during their association as Board Members of the Company.

Appointment of Directors

• Mr. Neeraj Bharadwaj (DIN: 01314963) and Mr. Rahul Mukim (DIN: 06996915) who were appointed as Additional Directors (Non-Executive Non-Independent) of the Company w.e.f. August 17, 2020, automatically ceased to be Directors on conclusion of the 35th AGM held on August 25, 2020. They were re-appointed as Additional Directors (Non-Executive Non-Independent) by the Board of Directors w.e.f. August 25, 2020.

• Dr. Kamal Sharma (DIN: 00209430) and Mr. Milind Sarwate (DIN: 00109854) were appointed as Additional Directors (Non-Executive Independent) by the Board of Directors w.e.f. August 25, 2020.

• Mr. Gregory Andrews (DIN: 08904518) was appointed as an Additional Director (Non-Executive Non-Independent) by the Board of Directors w.e.f. November 06, 2020.

• Dr. Fabian Kausche (DIN: 08976500) was appointed as an Additional Director (Non-Executive Non-Independent) by the Board of Directors w.e.f. December 14, 2020.

All the aforesaid appointments of Directors were duly approved by the Members of the Company vide Ordinary Resolutions passed through Postal Ballot on January 17, 2021.

The Company has received declarations from all the Independent Directors of the Company confirming that:

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

b) they have registered their names in the Independent Directors Databank.

As on March 31, 2021, Mr. Manish Gupta, Managing Director, Mr. Sharat Narasapur, Joint Managing Director,

Mr. Tushar Mistry, Chief Financial Officer and Mr. Krunal Shah, Company Secretary are the Key Managerial Personnel of the Company in terms of Section 203 of the Act.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Manish Gupta, Managing Director and Mr. Sharat Narasapur, Joint Managing Director, retires by rotation at the ensuing AGM.

The Board of Directors has recommended their re-appointment.

16. Board Evaluation

Pursuant to provisions of Schedule IV of the Act and rules made thereunder and provisions of Listing Regulations, the Company has 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 of the Board can be evaluated. Based on these criterias, 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 Non-independent 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.

17. Meetings of the Board

During the year under review, 9 (Nine) Board Meetings were held on May 08, 2020, May 12, 2020, July 30, 2020, August 12, 2020, August 17, 2020, August 25, 2020, November 06, 2020, December 14, 2020 and February 03, 2021.

The maximum interval between any two consecutive Board Meetings did not exceed 120 days. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report.

I n case of special and urgent business needs, the Boards approval was taken by passing resolutions through circulation, as permitted by law, which is confirmed in the subsequent Board Meeting.

18. Companys Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

Pursuant to Section 178 of the Act, NRC has formulated "SeQuents Policy on Directors 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 persons who are qualified to become Directors, Key Managerial Personnel and Senior Management Personnel of the Company;

• NRC to guide Board in relation to 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 on remuneration payable to the Directors, Key Managerial Personnel and Senior Management Personnel;

• 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 and to regularly review the plan.

19. Committees of the Board

The Board of Directors have the following Committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Corporate Social Responsibility Committee

e. Risk Management Committee

f. Ethics and Governance Committee

g. Board and General Committee

The Risk Management Committee was constituted by the Company on July 30, 2020 in terms of Regulation 21 of the Listing Regulations and was re-constituted by the Company on August 25, 2020.

The Ethics and Governance Committee was voluntarily constituted by the Company on February 03, 2021.

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.

20. 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. S R B C & 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 34th Annual General Meeting (AGM) till the conclusion of 39th AGM.

The Independent Auditors Report on Standalone and Consolidated Financial Statements for the year ended March 31, 2021 forms integral part of this Annual Report. Except as set forth below, there are no qualifications/ reservations/adverse remarks/disclaimer/emphasis of matter in their reports referred above:

(i) Emphasis of matter in the Independent Auditors Report on Consolidated Financial Statements with respect to restated goodwill and foreign currency translation reserve as of April 01, 2020 and March 31, 2021 and Other Comprehensive Income for the year ended March 31, 2021, in Consolidated Financial Statements, as elaborated in Note No. 52 to the Consolidated Financial Statements;

(ii) Qualifications in the Auditors Report on Internal Financial Controls on Financial Reporting forming part of their report on Standalone Financial Statements and in the Independent Auditors Report on Internal Financial Controls on Financial Reporting forming part of their report on Consolidated Financial Statements with respect to above-referred matters concerning revenue recognition.

(iii) The Statutory Auditors have included remarks in their report under the Companies (Auditors report) Order, 2016 with respect to the above-referred matter concerning revenue recognition, which was detected by the management. The Statutory Auditors of the Company have not reported any fraud under Section 143(12) of the Act.

The managements response on the above-mentioned Emphasis of Matter and Qualifications concerning revenue recognition is given below:

Revenue Recognition: The matters in question were detected by the management and subjected to a detailed review including examination by an external independent agency. The impact of acceleration of revenue recognition is detailed in the notes to accounts referred above. The Companys management considers this issue to have arisen on account of lack of training for personnel and control gaps and has corrected the processes leading to such non-adherence related to revenue recognition and will continue to strengthen them further and hence does not expect any continuing impact.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Act, read with rules therunder and Regulation 24A of the Listing Regulations, the Board has appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries (Certificate No. 2631) to conduct secretarial audit for the Company and its unlisted material subsidiary, Alivira Animal Health Limited (Alivira).

The Secretarial Audit Report in Form No. MR-3 of the Company and Alivira are attached as "Annexure 2A" and "Annexure 2B" respectively to this Boards 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 the financial year 2020-21 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, 2021 would be filed within the due date prescribed by law.

The remuneration proposed to be paid to the Cost Auditors for the financial year 2021-22, forms part of the Notice of the ensuing AGM for approval of the Shareholders.

21. Segment

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

22. 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.

23. 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 Companys Code of Conduct. It also provides adequate safeguards against the victimisation of employees who avail this mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. The Whistle-blower Policy is hosted on the Companys website and can be accessed at http://www.sequent.in/pdf/policies/Sequent Whistle%20Blower%20Policy 2019.pdf.

24. 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 utilised by the recipient are provided in Note No. 5,

6, 12, 16 and 45 to the Standalone Financial Statements in the Annual Report.

25. 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 arms length basis.

The particulars of 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 is attached as an ‘Annexure 4 forming part of this report.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Companys website and can be accessed at https://www.sequent. in/pdf/policies/Sequent Policy%20on%20RPT%20&%20Material%20Subsidiary 2019.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.

26. Corporate Social Responsibility

The Corporate Social Responsibility Committee of the Company was re-constituted by the Board of Directors on August 25, 2020 comprising of Dr. Kamal Sharma, Independent Director, Mr. Rahul Mukim, Non-Executive Director and Mr. Sharat Narasapur, Joint Managing Director as its Members. Your Company in the Meeting of Corporate Social Responsibility (CSR) Committee held on March 12, 2021 has formulated a revised policy on CSR and the same can be accessed at https://www.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 5 forming part of this report.

27. Internal Financial Controls

Reference is drawn to Qualification in the Independent Auditors Report on Internal Financial Controls on Financial Reporting forming part of their report on Standalone Financial Statements and in the Independent Auditors Report on Internal Financial Controls on Financial Reporting forming part of their report on Consolidated Financial Statements with respect to matters concerning revenue recognition as set forth under "Auditors and Auditors report" above.

Subject to these observations: (i) your Company believes that it has in place adequate internal financial controls with reference to financial statements; (ii) During the year under review, such controls were tested and no reportable material weakness in the design or operations were observed; and (iii) 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.

Your Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.

28. Directors Responsibility Statement

Reference is drawn to matters concerning non-adherence with the Companys policy and practices leading to accelerated revenue recognition during the financial year, as elaborated in Note No. 54 to the Standalone Financial Statements and Note No. 53 to the Consolidated Financial Statements, and the consequent:

(i) qualifications (in the auditors reports on internal financial controls on financial reporting; and

(ii) remarks in the auditors report under the Companies (Auditors report) Order, 2016; as detailed under the head "Auditors and Auditors report" in this Boards Report. Subject to the matters stated above, 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:

a) in the preparation of the annual accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) such accounting policies as mentioned in the notes to the Financial Statements for the year ended March 31, 2021 have been selected and applied consistently and judgments 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, 2021 and of the profit of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual financial statements for the year ended March 31, 2021 have been prepared on a going concern basis;

e) i nternal financial controls to be followed by the Company have been laid down and that the said financial controls were adequate and were operating effectively;

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

29. 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 6 forming part of this report.

30. 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 Complaints Committee(s) (ICCs) to redress and resolve any complaints arising under the POSH Act. Training/awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace.

During the year under review, no complaints pertaining to sexual harassment were received and no complaints were pending as on March 31, 2021.

31. 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, 2021 is provided separately and forms integral part of this Annual Report.

32. Business Responsibility Report

As stipulated under the Listing Regulations, the Business Responsibility Report (BRR) describing the initiatives taken by the Company from an environmental, social and governance perspective is provided separately and forms integral part of this Annual Report. BRR is also available on the Companys website and can be accessed at www.sequent.in.

33. Management Discussion and Analysis

Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis containing Information inter-alia on industry trends, your Companys performance, future outlook, opportunities and threats for the year ended March 31, 2021, is provided separately and forms integral part of this Annual Report.

34. 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 integral part of this Annual Report.

35. Secretarial Standards

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

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

There are no material changes and commitments affecting the financial position of your Company between the end of the financial year 2020-21 and the date of this report.

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

There are 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.

There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016 and there was no instance of onetime settlement with any Bank or Financial Institution.

38. Employee Stock Option Scheme

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

a) SeQuent Scientific Employee Stock Option Plan 2010

An Employee Stock Option Plan titled "SeQuent Scientific Employee Stock Option Plan 2010" (the "SeQuent ESOP 2010") in accordance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (the "SEBI ESOP Regulations") as amended from time to time, pursuant to a Special Resolution passed by the Shareholders of the Company on March 25, 2008 and further modified by the Members on May 24, 2010, August 02, 2014 and September 24, 2015. The total number of options available under the Scheme is 7% of the total paid up capital of the Company. This ESOP Scheme is managed through a Trust.

During the year under review, NRC in its meeting held on August 17, 2020 has approved grant of 1,11,600 options under the ESOP Scheme at an exercise price of 40 per option to certain eligible employees of the Company. The options allotted under this plan is convertible into equal number of equity shares after a vesting period of 1 year from the date of grant of options.

Further, in terms of the ESOP Scheme, 23,13,750 outstanding unvested options got vested on September 12, 2020 consequent to change in control triggered by the acquisition of majority stake by the Carlyle Group in the Company on August 17, 2020.

The Company does not propose to grant further stock options under this Scheme.

b) SeQuent Scientific Limited Employees Stock Option Plan 2020

During the year, the Board of Directors ("the Board") of the Company at its meeting held on December 14, 2020, based on the recommendation of the NRC, approved introduction of Sequent Scientific Limited Employees Stock Option Plan 2020 ("SeQuent ESOP 2020") under which the maximum number of equity shares of the

Company that could be created, offered, issued and allotted should not exceed 1,85,00,000 (One Crore Eighty-Five lakhs) options exercisable into equivalent number of Equity Shares of 2/- each fully paid up of the Company.

The synopsis of the Scheme is as under:

i) Overall limit of 1,85,00,000 Options to be split into 3 types of options:

a) 1,00,00,000 (One Crore) Class A Options

b) 60,00,000 (Sixty Lakhs) Class B Options

c) 25,00,000 (Twenty-Five Lakhs) Class C Options

ii) The Scheme is extended to Permanent employees of the Company, whether working in India or outside India, and/or to the directors of the Company, whether whole-time or not but excluding independent director(s) and to such other persons as may be decided by the Board and/or permitted under SEBI ESOP Regulations (hereinafter referred to as Eligible Employees) but does not include an employee who is a promoter or a person belonging to the promoter group and the director(s) who either himself or through his relative or through any body corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the Company.

iii) Permanent employee(s) and Directors of any existing and future subsidiary company(ies) of the Company whether in or outside India, as may be permissible under the SEBI ESOP Regulations from time to time,

iv) The first lot of Grants was proposed to be issued at an Exercise Price of 86/- per option by NRC. It will decide on the exercise price for future grants.

v) The Company sought and received Shareholders approval for the said Scheme through Postal Ballot on January 17, 2021.

vi) Under the Scheme, 73,50,000 Class A Options were granted to eligible employees on March 01, 2021 by the Company at an exercise price of 86/- per option. None of the options granted are vested or exercised as on date.

The above ESOP schemes are in compliance with the SEBI ESOP Guidelines. A certificate from M/s. S R B C & CO LLP, Chartered Accountants, the Statutory Auditors of the Company, with respect to the implementation of the Companys Employee Stock Option Scheme(s), would be placed at the ensuing AGM for inspection by the Members. The said certificate is available for inspection by the Members in electronic mode.

The details as required to be disclosed under Section 62 of the Act read with Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee Benefits) Regulations, 2014 is attached as an ‘Annexure 7 forming part of this report.

39. 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.

40. Acknowledgment

Your directors place on record 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 for persistent 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.

For and on Behalf of the Board of Directors of
SeQuent Scientific Limited
Place: Thane Dr. Kamal Sharma
Date: June 30, 2021 Chairman