RISE - emcure.com

1 1 Resilience Innovation Scale ExecutionAnnual Report 2021 RISEEMCURE AT A GLANCEE mcure s name embodies the company s purpose and core belief to make effective medicine accessible to patients, enabling them to lead healthier lives. Since its inception in 1981, Emcure has established a vertically integrated infrastructure for developing and manufacturing a wide range of medicines and marketing them in India and abroad. Emcure is, today, ranked amongst the leading pharmaceutical players in , one of Emcure s core values, is ingrained in our culture and reflected in all our operations. Our Business Strategy, driven by the entrepreneurial spirit, has led us to adopt different business models across geographies. Emcure s operations are focused towards building a robust product portfolio including differentiated platforms such as Novel Drug Delivery Systems, Biologics, Chiral chemistry, Injectables etc. Emcure aims at creating strong brand equity by promoting top class products. We are oriented towards serving our customers, consumers and community globally and thus we have the highest regard for quality.

2 In a fast changing global pharmaceutical industry, it has been our constant endeavour to equip ourselves with required resources that would aid our MEDICINE FOR CURESUCCESS THROUGH INNOVATIONI nnovationQuality &Patient FocusTeam Work& RespectValueDrivenIntegrityOUR CORE VALUESTo provide quality healthcare solutions globally by leveraging our scientific strengthsOUR VISIONCORPORATE GOVERNANCE FRAMEWORKS takeholders(Shareholders, Society, Environment,Future generations, etc)Board and BoardCommitteesChairmanMD& CEOE xecutiveManagement/CommiteeEmployees/Sta ffTrusteesExecuting strategy within the policyframework set by the BoardOwnersACCOUNTABILITYEMPOWERMENTG overning BodyBoard of DirectorsBoard CommitteesExecutive DirectorsNon-Executive/ Independent DirectorsSenior managementFirst LineManagementControlSecond LineControllingFunctionsThird LineIndependentAssuranceThe corporate governance structure at Emcure is based on the principles of delegation of authority and accountability throughout the governance structure, with appropriate checks and balances in place at each Board of Directors serve as an oversight body with supervisory role to represent interest of all stakeholders and provide strategic direction to the management.

3 As a commitment to the strong corporate governance structure, role of Board chairman at Emcure has been held by independent director since 1997. Our Key Governing Policies Vigil mechanism and Whistle-blower policy Nomination and Remuneration Policy CSR Policy POSH Policy Related Party Transactions Policy Anti Corruption Policy Risk Management PolicyThe company has a well-established three lines of defense model that governs the effective functioning of the organization. At Emcure, all three lines of defense operate in a co-ordinated manner with the common objective to support the organization in achievement of its objectives and effective risk management. First line (business functions) acts as the primary risk owner and manages the risks as per the defined policies. Second line (monitoring & oversight functions) monitors risks & controls, legal compliance and enterprise risk management.

4 Third line (Independent assurance/ internal audit) has an independent reporting to the governing body and acts independently from first and second line of defense. Risk based internal audit plan is developed and approved by the governing body / Audit company has an established internal financial control (IFC) framework with periodic monitoring of effectiveness of the is a legal compliance framework whereby compliance tasks are identified and mapped to owners and there is a mechanism to monitor changes in the compliance OF DIRECTORSMr. Berjis DesaiChairman and Independent DirectorKey attributes and skills:Legal, Finance, Corporate GovernanceMr. Shreekant BapatIndependent DirectorKey attributes and skills:Human Resource, Law Enforcement, Administration, GovernanceMr. Palamadai JayakumarIndependent DirectorKey attributes and skills:Banking, Leadership, Corporate GovernanceMr. Samonnoi BanerjeeNon-Executive DirectorKey attributes and skills:Investment banking, FinanceMr.

5 Vijay GokhaleIndependent DirectorKey attributes and skills:Diplomacy, GovernanceDr. Vidya YeravdekarIndependent DirectorKey attributes and skills:Education, Administration, LegalDr. Shailesh AyyangarNon-Executive DirectorKey attributes and skills:Pharma Industry Veteran, Leadership, StrategyMr. Satish MehtaExecutive DirectorKey attributes and skills:Leadership, Business Development, R&D, Manufacturing, Corporate governanceDr. Mukund GurjarExecutive DirectorKey attributes and skills:Research & Development, EducationMr. Sunil MehtaExecutive DirectorKey attributes and skills:Finance, AdministrationMrs. Namita ThaparExecutive DirectorKey attributes and skills:Marketing & Sales, Business Development, Leadership, Human Resources11 Board YearsAverage Tenure -Independent Directors61 YearsAverage Age5 Number of Board Meetings98%Committee Attendance100%Board Attendance11 Number of CommitteeMeetingsAudit CommitteeIndependenceIndependentDirector s 80%ExecutiveDirectors 20%IndependentDirectors 75%ExecutiveDirectors 25%Nomination & RemunerationCommittee IndependenceIndependentDirectors 46%ExecutiveDirectors 36%Non-ExecutiveDirectors 18%Board IndependenceMen - 9 Women - 2 Gender Diversity50 - 59340 - 49260 - 69470+2 Age DiversityIndependent BoardChairmanSeparate Role ofChairman and MDBOARD DEMOGRAPHICS8 SENIOR MANAGEMENTMr.

6 Satish MehtaManaging Director, Chief Executive OfficerKey attributes and skills:Leadership, Business Development, R&D, Manufacturing Corporate GovernanceMrs. Namita ThaparExecutive Director,India BusinessKey attributes and skills:Marketing & Sales, Business Development,Leadership, Human ResourcesMr. Samit MehtaPresident, OperationsKey attributes and skills:Manufacturing, Strategy, R&D, FinanceMr. Vikas ThaparPresident, Corporate Development, Strategy & FinanceKey attributes and skills:Strategy, Business Development, FinanceMr. Sanjay MehtaPresident, CommercialKey attributes and skills:Business Development, Operations, FinanceMr. Sunil MehtaExecutive Director,ProjectsKey attributes and skills:Finance, AdministrationDr. Mukund GurjarChief Scientific Officer and Executive DirectorKey attributes and skills:Research & Development, EducationDr. Sanjay SinghChief Executive Officer,Gennova Biopharmaceuticals attributes and skills:R&D, LeadershipMr. Prakash GuhaManaging Director, Zuventus Healthcare attributes and skills:Sales & Marketing, LeadershipMr.

7 Tajuddin ShaikhChief Financial OfficerKey attributes and skills:Finance, AccountingDr. Deepak GondaliyaPresident, International ManufacturingKey attributes and skills:R&D, Manufacturing9 Note 1: Figures mentioned above for FY17, FY 18, FY19, FY20 & FY21 are as per Ind 2: International markets represent Emcure s presence in Regulated Markets of US, Canada and Europe & Rest of the World markets of Africa, Latin America, the Middle East, and South East Asia and in 3: PAT represents PAT before Other Comprehensive Income and excludes the impact of exceptional items legal settlement fees, USFDA remediation consultancy fees and legal fees on account of DOJ investigation in FY17, FY18, FY19, FY20 & FY21and sale of property in UK, sale of investment in Konsina in FY18, reversal of SAR provision in FY19 and write-o of insurance claim receivable in FINANCIAL HIGHLIGHTS010000200003000040000500006000 0700000200040006000800010000120001400005 00010000150002000025000FY21FY20FY19FY18F Y170%5%10%15%20%25%050010001500200025003 000350040004500500050720%5%10%15%20%25%2 2%010000200003000040000500006000070000FY 21FY20FY19FY18FY1727568357982476618351 BOARD OF DIRECTORSMr.

8 Humayun DhanrajgirChairman, Independent Director(Resigned April 16, 2021) Mr. Berjis Desai Independent Director - ChairmanMr. Satish Mehta Managing Director & CEOMr. Sunil Mehta Whole-time DirectorDr. Mukund Gurjar Whole-time DirectorMrs. Namita Thapar Whole-time Director Mr. Shreekant Bapat Independent DirectorMr. P. S. JayakumarIndependent DirectorMr. Vijay GokhaleIndependent DirectorDr. Vidya YeravdekarIndependent DirectorMr. Samonnoi Banerjee Non-Executive, Non-Independent Director (Nominee of BC Investment IV Ltd)Dr. Shailesh AyyangarNon-Executive, Non-Independent Director CHIEF FINANCIAL OFFICERMr. Tajuddin ShaikhCOMPANY SECRETARYMr. Jayant PrakashAUDITORSM/s BSR & Co. LLP, Chartered AccountantsCOMPANY INFORMATIONBANKERSAxis Bank LimitedBank of BarodaBank of MaharashtraState Bank of IndiaShinhan BankIndia Exim BankREGISTERED OFFICEE mcure House, T-184, ,Bhosari, Pune - 411 : 020-35010000 Fax: 020-30610111 Mail us at: Website : OFFICEPlot P-2, I T - B T Park, ,Hinjawadi, Pune - 411 : 020-39821300 Fax.

9 020-3982140011 company OVERVIEWFINANCIAL STATEMENTSM essage from Chairman 01 CEO Speaks 03 Management Discussion and Analysis 05 Research and Development 13 Manufacturing 17 Covid Response 20 Human Resources 22 Corporate Social Responsibility 25 Risks 27 Board's Report 29 Corporate Governance Report 47 Independent Auditor's Report 51 Standalone Financial Statements 56 Independent Auditor's Report-Consolidated 117 Consolidated Financial Statements 121 CONTENTS1 MESSAGE FROM CHAIRMANDear Stakeholders,As Chairman of the Board, it is my pleasure to update you on key priorities and activities of the Board during the year carried out as part of our fiduciary responsibilities towards you, our Board met 5 times during the last year with 100% attendance. All Board members actively participated in the Board agenda and insights from Board driven activities during the year : Strengthening Board size and diversity: Appointment of additional Independent Directors Appointment of Non-Executive Non-Independent Director having 35 years of pharmaceutical experience Demerger of USA business to enhance shareholder value through better capital allocation and focus on high return businesses Formal earmarking of key strategic responsibilities to executives Support communities through our ongoing CSR activitiesCorporate GovernanceAs global economies continue to grapple with challenges and uncertainties of the Covid-19 pandemic, the rules of good corporate governance hold even more importance than ever before.

10 Effectiveness of corporate governance systems and policies will define how businesses survive the impact of the pandemic and pave the way to ensure financial viability and seamless continuity of Board continues to take various measures from time to time to endure and further enhance governance practices. Recently, your company s Board has laid the foundation to accelerate integration of environmental, social and governance (ESG) factors into decision making in order to address wider societal issues and the need for strong corporate governance. The leadership at Emcure has been proactive in adapting to improved ways of working through limited 2physical interactions and minimal loss of productivity by embracing technology and digital take this opportunity to highlight to you some of our key governance indicators symbolizing our continued commitment towards better governance: a. Separation in role of Board Chairman and Managing Director b. Independent Director as Board Chairman c.