Sequent Scientific Ltd Directors Report

Dear Members,

The Board of Directors presents the Companys Thirty-Ninth Annual Report along with the Companys Audited Financial Statements for the financial year ended March 31, 2024.

1. Financial Summary

The summarized financial performance (Standalone and Consolidated) of your Company for Financial year 2023-24 and Financial year 2022-23 is given below:

( in millions)

* Figures are restated as per IND AS 103

2. Business Performance Review

During FY 2023-24 (FY24), on consolidated basis, your Companys revenues stood at 13,697.31 Million as against 14,209.09 Million in FY 2022-23 (FY 23). The Company posted loss after tax of (296.13) Million in FY24 as against loss after tax of (1,219.77) Million in FY23.

On a standalone basis, your Companys revenues for FY24 stood at 1,685.18 Million as against 2,226.85 Million in FY23. The Company posted a profit after tax of 6.22 Million in FY24 as against loss after tax of

(60.80) Million in FY23.

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

Business Overview:

Formulations

• Expanding Our Global Footprint: We have extended our reach in Latin America by initiating sales with a new distributor in Peru and continuing registration efforts in Colombia, Chile, Ecuador, Panama, Paraguay, and Bolivia. This expands our reach and positions us for future growth in the region.

• Strengthening Our Product Pipeline: We are also committed to developing innovative new products. Our pipeline is getting more structured with new project on Companion Animal being added to our products, further enriching our product pipeline. Additionally, our strong portfolio of Business Development projects maturing in 2024, combined with our in-house product development capabilities, fuels our optimism for growth across Europe and all our Global Formulation regions.

• Phytosolutions Line: Our Phytosolution range, nutritional bio-actives based on essential oils for industrial markets in swine and poultry, has maintained its growing trend especially in markets where ALIVIRA has direct market access (Italy, Spain, Mexico and Brazil) though slightly below our expectations due to geo-political issues in Middle East. We are now entering FY25 with a reinforced team to structure better this activity especially on technical support for our customers.

API

• New Product development: Our newly launched products in the companion animal segment have garnered a favourable response from customers worldwide, indicating strong potential for future growth.

• Market Expansion: Strategic efforts to broaden our presence in key markets, such as Japan, have yielded successful outcomes, strengthening our global footprint.

• Expanding portfolio with existing partner/customers: We have signed master supply agreement (MSA) with key Animal Health global players and commercialization has started. The revenues are expected to grow on account of volume scale up and continued Business development efforts to expand portfolio with existing players and commercialization with new products.

• WHO Approval: Our Mahad site received WHO approval, paving the way for new business opportunities

• Increased Cost Competitiveness: We are enhancing our cost competitiveness in the price-sensitive emerging markets; to tackle the increasing cost competitiveness, we have implemented a systematic cost reduction programme for our top products. Our efforts have led to significant cost reductions in few of our overall products, along with a significant simplification of our supply chain.

• Business with top Global Animal Health companies: Our customers are among the Top Animal Health companies globally – we are leveraging this network to expand our offering to leading Animal health companies

3. Dividend

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

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

4. Transfer to Reserves

The Board of Directors of your Company has decided not to transfer any amount to the Reserves for the year under review.

5. Share Capital

As on March 31, 2024, the Authorized Share Capital of the Company was 80,00,00,000/- divided into 40,00,00,000 equity shares of 2/- each.

The issued, subscribed and paid-up equity share capital of the Company as on March 31, 2024, was

49,88,66,990/- divided into 24,94,33,495 equity shares of 2/- each.

6. Consolidated Financial Statements

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

7. Subsidiaries, Joint Ventures and Associate Companies

As on March 31, 2024, your Company has 20 (Twenty) Subsidiaries, out of which 14 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, 2024:

Name of the Subsidiary	Country	Changes during the year
Comercial Vila Vetrinaria De Lleida	Spain	Merged/amalgamated with Vila Vi?a Participacion, S.L w.e.f. (June 16, 2023)
Alivira France S.A.S	France	Struck off w.e.f. (March 24, 2024)

8. Accounts of Subsidiaries

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

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

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Companys website and can be accessed at https://sequent.in/pdf/policies/Sequent_Policy%20on%20 Determination%20of%20Material%20Subsidiaries_2019.pdf

9. Annual Return

The draft Annual Return of the Company for FY24, is available on the Companys website and can be accessed at https://sequent.in/investor-relations.aspx

10. Credit Rating

As on the date of this Report, the credit rating assigned by India Ratings & Research (Fitch Group) is "IND A" with outlook being "Negative" " (revised from "IND A+" with outlook being "Stable") 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" (revised 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.

11. Public Deposit

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

12. Directors & Key Managerial Personnel

As on March 31, 2024, 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.

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

• Dr. Hari Babu Bodepudi (DIN: 01119678) was appointed as Additional Director (Non-Executive Non- Independent) of the Company in the Annual General Meeting. The members of the Company approved the said appointment vide an Ordinary Resolution w.e.f. 7th August, 2023.

• Mr. Gregory Andrews (DIN: 08904518) was appointed as a Director (retiring by rotation) of the Company in the Annual General Meeting. The members of the Company approved the said appointment vide an Ordinary Resolution w.e.f. 30th August, 2023.

• Mr. P.V. Raghvendra Rao, Chief Financial Officer of the Company resigned w.e.f. October 25, 2024 and Mr. Saurav Bhala was appointed as the Chief Financial Officer of the Company w.e.f. November 6, 2024.

• Mr. Krunal Shah, Company Secretary of the Company resigned w.e.f. February 15, 2024 and Mr. Phillip Trott who was with the Company as AVP-Legal, Secretarial & Compliance was designated as Company Secretary of the Company w.e.f. February 16, 2024.

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

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

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

13. Board Evaluation-

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

14. Meetings of The Board

During the year under review, 6 (Six) Board Meetings were held on May 23, 2023, August 10, 2023, September 14, 2023, November 06, 2023, February 05, 2024, and February 13, 2024. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report for the financial year ended March 31, 2024, forming an integral part of this Annual Report.

15. 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, and Senior Management of the Company. The said policy is uploaded on the website of the Company and can be accessed at http://www.sequent.in/pdf/policies/Nomination-Remuneration- Policy_2019.pdf

The salient features of the policy are as under:

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

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

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

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

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

• To devise a policy on Board diversity.

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

16. Committees of The Board

The Board of Directors have the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

6. Ethics and Governance Committee

The details of the Committees along with their composition, number and dates of the Meetings and attendance at the Meetings are provided in the Corporate Governance Report for the financial year ended March 31, 2024, forming integral part of this Annual Report.

17. Auditors and Auditors Report

Statutory Auditors

In accordance with the provisions of Section 139 of the Act, at the Annual General Meeting held on August 29, 2019, M/s. SRBC & CO LLP, Chartered Accountants (Firm Registration No. 324982E/ E300003) were appointed as Statutory Auditors of the Company for a period of 5 years commencing from the conclusion of 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, 2024, forms integral part of the Annual report and does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter.

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

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, read with rules thereunder, the Board has appointed M/s. Nilesh Shah & Associates, Practicing Company Secretary (Certificate of Practice No: 2631) to conduct Secretarial Audit of the Company for the year ended March 31, 2024, and its unlisted material subsidiary, Alivira Animal Health Limited (Alivira).

The Secretarial Audit Report issued in Form No. MR-3 as an "Annexure 2A" and Alivira is attached "Annexure

2B" respectively to this Boards Report.

The Secretarial Audit Report of the Company and Alivira does not contain any qualification, Reservation or adverse remark except for the Companys non-filing of 3 e-forms and Aliviras non filing of 2 e-forms with the Registrar of Companies during the FY 2023-24. The Company and Alivira on the date of this Report, has complied and filed the said e-forms with the Registrar of Companies.

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 2023-24 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, 2024, would be filed within the due date prescribed by law.

18. Segment

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

19. Particulars of Employees and Related Disclosures

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

20. Vigil Mechanism / Whistle Blower Policy

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

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

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

22. Related Party Transactions

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

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

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

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

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

23. Corporate Social Responsibility

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

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

24. Internal Financial Controls

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

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

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

25. Directors Responsibility Statement

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

• In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

• Such accounting policies as mentioned in the notes to the Financial Statements for the year ended March 31, 2024 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, 2024 and of the loss of the Company for the year ended on that date;

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

• The annual financial statements for the year ended March 31, 2024, have been prepared on a going concern basis;

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

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

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as ‘Annexure 5 forming part of this report.

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

During the quarter ended December 31, 2023, one complaint pertaining to sexual harassment was received and as on date of this Report the same has been closed.

28. Corporate Governance Report

As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of Corporate Governance. The report on Corporate Governance along with a certificate issued by M/s. Nilesh Shah & Associates, Practicing Company Secretaries and Secretarial Auditors of the Company, confirming compliance of Corporate Governance for the year ended March 31, 2024, forms integral part of this Annual Report.

29. Business Responsibility and Sustainability Reporting (BRSR)

As stipulated under the Listing Regulations, the Business Responsibility and Sustainability Reporting (BRSR) describing the initiatives taken by the Company from an Environmental, Social and Governance perspective

forms an integral part of this Annual Report. BRSR is also available on the Companys website and can be accessed at www.sequent.in.

30. Management Discussion and Analysis

Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis containing Information inter-alia on industry trends, your Companys performance, outlook, opportunities, and threats for the year ended March 31, 2024, forms integral part of this Annual Report.

31. Risk Management

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

The constitution of the Committee and details of the meeting held are disclosed in the Corporate Governance Report for the financial year ended March 31, 2024, forming an integral part of this Annual Report.

32. Secretarial Standards

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

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

There are no material changes or commitments affecting the financial position of your Company during the financial year 2023-24. Between the end of the financial year 2023-24 and the date of this report, Sequent Scientific Limited has pledged the entire shares of its wholly owned subsidiaries Alivira Animal Health Limited, India and Alivira Animal Health Limited, Ireland in favour of Barclays Bank PLC as security towards the financial facilities availed by Alivira Animal Health Limited, India and Alivira Animal Health Limited, Ireland for the debt restructuring process.

34. 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.

35. Employee Stock Option Scheme

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

• SeQuent Scientific Employee Stock Option Plan 2010 and

• SeQuent Scientific Limited Employees Stock Option Plan 2020

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

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

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

Account

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

37. Acknowledgement

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

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

For and on Behalf of the Board of Directors

Sequent Scientific Limited

Place: Thane Dr. Kamal Sharma

Date: May 15,2024 Chairman