The Directors take pleasure in presenting the 39^th Annual Report on the business and operations of the Company together with the Audited Standalone and Consolidated Financial Statements and the Auditors' Reports thereon for the financial year ended March 31, 2023.

Financial Results

The highlights of standalone and consolidated financial results of the Company are summarized below:

Performance Highlights

During the financial year ended March 31,2023, your Company has registered revenue from operations of '2,570.67 million as against '2,355.04 million during the previous financial year, with a growth of ~9%. The revenue from operations have mainly increased due to higher sales of pentavalent vaccines, Easyfive-TT® and sales of bivalent-OPV vaccine, BI-OPV®.

The Company has registered consolidated revenue from operations of '4,599.46 million during the financial year under review as against '6,612.32 million during the previous financial year. The decline in consolidated revenue from operations is mainly on account of absence of domestic sale of pharmaceutical formulations as the brand portfolio in India and Nepal was sold by the Company's Wholly-owned Subsidiary, Panacea Biotec Pharma Limited ("PBPL") during financial year 2021-22 for a total consideration of '18,720.00 million plus GST, out of which an amount of '16,762.06 million was recognized as revenue during financial year 2021-22 and an amount of '1,026.6 million has been recognized as revenue during financial year 2022-23 and the same has been included in the exceptional items.

On standalone basis, the Company has registered EBITDA loss of '626.27 million during financial year 2022-23 as against EBITDA loss of '726.70 million during previous financial year. The EBITDA loss is mainly due to one-time provisioning of '611.69 million pertaining to inventories of Sputnik-V vaccine produced by the Company under the Licensing and Manufacture Agreement entered into by the Company with Human Vaccine LLC, Generium JSC and Dr. Reddy's Laboratories Ltd. (DRL) for supply thereof to DRL during previous financial year. However, DRL did not take these inventories and the stocks got expired during the year under review (refer note 52 of Standalone Financial Statements).

The Company's loss before exceptional items and tax has also declined to '627.52 million as against loss of '935.76 million during previous financial year, mainly due to increased revenue from sales of pentavalent and bivalent-OPV vaccine. The loss after tax for financial year 2022-23 has also reduced to '875.44 million as against loss of '935.76 million during previous financial year.

Panacea Biotec Group has incurred consolidated EBITDA loss of '979.59 million during financial year 2022-23, as against to EBITDA loss of '132.03 million during previous financial year. The loss has increased mainly due to one-time provisioning of inventories of Sputnik-V vaccine and absence of domestic pharma revenues, as explained above. Loss before exceptional items and tax has significantly been reduced to '898.56 million as compared to loss of '2,268.50 million during previous financial year, mainly due to savings on account of interest pursuant to repayment of Non-Convertible Debentures (NCDs) by PBPL.

The consolidated loss after tax and exceptional items has been '337.45 million for financial year 2022-23 as against profit of '10,783.34 million during previous financial year due to the above stated reasons.

A detailed discussion on operations of the Company for the financial year ended March 31,2023 is given in the Management Discussion and Analysis Report forming part of the Annual Report.

Credit Rating

During the year under review, the Company has not availed any bank facility and has consequently not carried out any credit rating.

Dividend and Transfer to Reserves

In view of losses incurred during the year under review, the

Board of Directors has not recommended any dividend on the Equity as well as Preference Shares of the Company. Also, owing to such losses, there has been no transfer of profit to general reserves.

In compliance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations"), the Company has adopted a Dividend Distribution Policy which endeavors for fairness, consistency and sustainability while distributing profits to the shareholders. The same may be accessed on the Company's website at the link: https://www.panaceabiotec.com/en/ section/information-repository/policy.

Share Capital

The issued, subscribed and paid-up Share Capital of the Company as on March 31,2023, remains unchanged at '222.62 million (comprising of '61.25 million equity share capital divided into 6,12,50,746 Equity Shares of '1 each and '161.37 million preference share capital divided into 1,61,37,000 Non-Convertible Cumulative Non-Participating Redeemable Preference Shares of '10 each). Similarly, the authorised share capital of the Company also remains unchanged at '1,223.37 million (comprising of 12,50,00,000 Equity Shares of '1 each and 10,98,37,000 Preference Shares of '10 each).

During the year under review, the Company has not issued any equity share with differential rights / sweat equity shares under Rule 4 & Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014.

Significant Events during the year under review / current year

The Company has from time to time during the year under review and current year informed its stakeholders about the key developments that took place by disseminating necessary information to the stock exchanges and through various other means of communication.

Some of the key events held during the year under review / current year are mentioned below:

a) Receipt of UNICEF and PAHO awards for supply of Pentavalent Vaccine: During the year under review, the Company has received long-term supply award worth ~'1,040 Crore from United Nations Children's Fund (UNICEF) and Pan American Health Organization (PAHO) for supply of its WHO pre-qualified fully liquid Pentavalent vaccine, Easyfive-TT® (DTwP-HepB-Hib). UNICEF award is worth ~'813 Crore for supply of ~99.70 million doses during calendar years 2023-2027 and PAHO award is worth ~'235 Crore for supply of ~24.83 million doses during calendar years 2023-2025. In addition, the Company also received awards from UNICEF and Govt. of Mozambique for supply of 98.60 million doses of b-OPV vaccine worth ~'106 Crore during calendar year 2022 and 2023. The Company continues to save lives by supporting U.N. Agencies and partners for global immunization programs and to bring to market additional vaccines in coming years to meet programmatic needs of UNICEF and PAHO.

b) Collaboration with CEPI and THSTI to develop broadly protective Beta coronavirus vaccines: The Company has partnered with the Coalition for Epidemic Preparedness Innovations ("CEPI") and the Translational Health Science and Technology Institute ("THSTI"), an autonomous institute of the Department of Biotechnology, Ministry of Science and Technology, Government of India, for development of vaccine candidates that could provide broad protection against SARS-Cov-2 variants and other Beta coronaviruses. CEPI has awarded funding support of upto US$ 12.50 million (including US$ 4.00 million to subawardees) to a consortium comprised of the Company and THSTI, under its US$200 million programme launched in March, 2021 to advance the development of said vaccines.

CEPI will provide the said funding to the Company and THSTI in a phased manner to support development of multi-epitope, nanoparticle-based vaccine candidates and advance manufacturing process upto the stage of Phase I / II clinical trials to be completed by August, 2025. During the financial year 2022-23, the Company has received an amount of US$ 2.99 million under this grant for undertaking the research & development activities as per the project plan.

c) Receipt of award for Fortune India - The Next 500: Sectoral Star - Pharma Category, 2023: Fortune India Magazine, a monthly publication, has tracked the achievements of India's biggest emerging companies in 2023 across different industry sectors and has awarded PBPL with the Fortune "The Next 500" 2023, Sectoral Star - Pharma category award on July 07, 2023. The award was given by Mr. Anurag Thakur, Union Minister for Information & Broadcasting, Sports and Youth Affairs, Government of India who was the Chief Guest to commemorate Fortune India's annual special issue "The Next 500" that lists the Top 500 emerging companies in the Country.

d) Launch of pediatric nutrition products: PBPL has recently entered into a new business of nutrition products. It has developed its own product portfolio for nutrition segment at its Sampann R&D Center and has set-up a manufacturing facility to manufacture these products at Baddi, Himachal Pradesh. This manufacturing facility currently has installed capacity of ~6 tons per day. To start with, in June 2023, PBPL has launched pediatric nutrition products under the brand name, ChilRunfull^TM, ChilRun® 7 , ChilRun® No Sucrose in ~100 territories across India covering almost 4,000 doctors. It plans to add more products going forward to expand the product portfolio and markets including other specialties like gynecology and adult nutrition.

e) Site Inspection by the United States Food and Drug Administration ("USFDA"): Upon site inspection of PBPL's pharmaceutical formulations facility at Baddi, Himachal Pradesh, India, conducted by the USFDA between May 30 andJune 08, 2022, PBPL was issued a'FDA Form 483'with few observations in response thereto PBPL had immediately initiated actions to address specific observations raised in the 'FDA Form 483' and submitted its response alongwith Corrective and Preventive Actions ("CAPA") with USFDA. USFDA issued letter maintaining facility status as Official Action Indicated, which does not impact existing business of PBPL in US. However, satisfactory resolution of the observations raised by USFDA, is necessary for approval of the ANDA filed for Paclitaxel Protein-Bound Particles for Injectable Suspension (Albumin-Bound) from the above said pharmaceutical formulations facility. In this regard, PBPL has made a request with USFDA for an early inspection and is maintaining constant touch with USFDA for an update on proposed inspection, if any.

f) Under the collaboration with the Limited Liability Company "Human Vaccine", an indirect Wholly owned Subsidiary of Joint Stock Company "Management Company of Russian Direct Investment Fund" for manufacture of Covid-19 vaccine using the technology to be provided by Human Vaccine, the Company had received from Human Vaccine an advance amount of US$ 7.00 million out of which ~US$ 6.58 million was used to meet the expenses relating to Sputnik-V and Sputnik Light vaccine project. Due to the failure on the part of Human Vaccine, to demonstrate and transfer the technology and certain other reasons beyond the control of the Company, the complex process of technology transfer and manufacture of Sputnik-V vaccine could not be completed successfully and the contract stood frustrated and accordingly both the parties stood automatically discharged from their contract by operation of law. In view of the fact that the Company has already incurred huge expenses on the said project, it has been decided to adjust the advance received from Human Vaccine against expenses incurred by the Company and communication in this regard has already been sent to Human Vaccine along with relevant details / documents pertaining to the said expenses. The Company has received legal advice from its counsel and believes that it will not be liable to pay back the amount adjusted towards expenses under dispute with Human Vaccine.

g) In August 2021, the Company had entered into a Licensing and Manufacture Agreement with Human Vaccine LLC, Generium JSC and Dr. Reddy's Laboratories Limited ("DRL"). As per the terms of the Agreement, the Company was to undertake fill-and-finish activities of Sputnik-V vaccine using the ready-to-fill drug substance supplied by Generium and supply the Sputnik-V vaccine so produced to DRL. Pursuant to the said Agreement, the Company received drug substance from Generium and produced ~ 1.96 million doses of Sputnik-V vaccine out of which DRL purchased ~0.86 million doses only and refused to purchase and pay for the remaining ~1.10 million doses. Because of breach of their respective obligations by DRL and Generium, the pending payment of ~US$ 7.41 million for the drug substance received from Generium could not be made. After several rounds of discussion among the parties to settle the dispute amicably, Generium has filed notice of arbitration with Singapore International Arbitration Centre (SIAC) for arbitration of dispute with respect to the said pending payment and interest thereon aggregating to ~US$ 8.90 million. The Company has also initiated a parallel arbitration proceeding regarding its claims against DRL, Generium and Human Vaccine and filed notice of arbitration with SIAC during the current financial year. Both the arbitration proceedings have been clubbed together and the sole arbitrator has been appointed by SIAC. Further arbitration proceedings, including filing of pleadings, shall commence in due course. The Company has obtained legal opinion from its legal counsel who, considering the nascent stage of the proceedings, have opined that (a) the Company has a reasonable defence against the claim brought by

Generium and (b) the possibility of the claim falling to the Company may be classified as low at this stage.

h) Alteration in the Articles of Association: The existing Articles of Association ("AOA") of the Company have been replaced in its entirety by new set of AOA with a view to delete the provisions relating to the terms of warrant and debentures, which are no more required; and to incorporate other relevant modifications / additions.

Apart from the updates mentioned above, there were no significant events during and after the end of the financial year ended March 31,2023.

Employee Stock Options

The Company has an approved Employee Stock Option Plan 2020 ("ESOP 2020"/ "Plan") for the employees of the Company and its subsidiaries. However, no options have been granted under ESOP 2020 till date.

Significant and material orders impacting the going concern status and Company's operations in future

During the year under review, no significant and material order was passed by any regulator or court or tribunal which may impact the going concern status and your Company's operations in future.

During the financial year 2011-12, a search operation was conducted by Income Tax Department in the premises of the Company and hence the Company re-filed the income tax returns for the Assessment Years ("AY") 2006-07 to 2012-13. During the financial year 2014-15, the Income Tax Department completed the assessment of the said years, disallowed certain expenses, and issued demand of '3,294.9 million (including interest) on various grounds. The Company preferred appeals before CIT (Appeals) against the orders of the Income Tax Department and after several hearings in the matter and based on the facts of the matter, the appeals were decided in favour of the Company and the entire demand of '3,294.9 million was cancelled. However, CIT (Appeals) made certain disallowances of '60.2 million with respect to AY 2010-11 & AY 2011-12 against which the Company has filed appeals before the Income Tax Appellate Tribunal ("ITAT"). The Income Tax Department has also filed appeals before ITAT against the orders of CIT (Appeals). The appeals before ITAT are pending at present. Based on the expert opinion, the Company believes that it has merit in these cases.

Report on Corporate Governance

Your Company has always placed thrust on managing its affairs with diligence, transparency, responsibility and accountability. The Board supports the broad principles of Corporate Governance and lays emphasis on its role to align and direct the actions of the Company in achieving its objectives. Your directors reaffirm their commitment to adhere to the highest corporate governance and ethical practices. In compliance with Regulation 34(3) of the SEBI LODR Regulations, a report on corporate governance for the financial year under review is presented in a separate section and forms an integral part of the Annual Report. The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached thereto and forms part of the Annual Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34(3) of the SEBI LODR Regulations, Management Discussion and Analysis Report for the year under review, is presented in a separate section and forms an integral part of the Annual Report.

Business Responsibility and Sustainability Report

The Business Responsibility & Sustainability Report for the year under review, as required pursuant to Regulation 34(2)(f) of the SEBI LODR Regulations, is presented in a separate section and forms an integral part of the Annual Report. The Report provides a detailed overview of initiatives taken by the Company from environmental, social and governance perspectives.

Subsidiaries, Associates and Joint Ventures

A. Subsidiaries

As on March 31, 2023, your Company had 3 Wholly Owned Subsidiary ("WOS") companies, viz. Panacea Biotec Pharma Limited ("PBPL"), Meyten Realtech Private Limited ("Meyten") and Panacea Biotec (International) S.A. ("PBS") and 1 indirect WOS company, viz. Panacea Biotec Germany GmbH ("PBGG"), the WOS of PBS.

PBPL is engaged in the research, development, manufacturing and marketing of pharmaceutical formulations and nutrition products in India and international markets. As on March 31, 2023, the Company holds 10,00,000 equity shares of '1 each with an investment of '1.00 million in PBPL.

Meyten: During financial year 2022-23, the Hon'ble NCLT has vide its order dated January 18, 2023, approved the Composite Scheme of Arrangement ("Scheme") amongst Meyten, Radhika Heights Limited, an erstwhile WOS of the Company ("RHL") and Cabana Structures Limited (WOS of RHL), and their respective shareholders and creditors for, inter-alia, demerger of specified Leasing Business of RHL into Meyten. The appointed date for the Scheme was April 01, 2020 and the Scheme became effective from March 18, 2023. Consequently, Meyten has now recorded the assets and liabilities in its books as per the said Scheme and now owns the immovable property which is being used by the Company as its corporate office at New Delhi.

As on March 31, 2023, the Company was holding 1,00,000 equity shares of '1 each with an investment of '0.10 million in Meyten. Pursuant to the terms of the said Scheme, the Board of Directors of Meyten in its Meeting held on April 20, 2023 issued and allotted 47,76,319 equity shares of '1 each to the Company. Accordingly, as on date of this report, the Company holds 48,76,319 equity shares of '1 each in Meyten.

PBS was earlier engaged in the business of trading of pharmaceutical products and is currently not pursuing any business. Since no further activity is envisaged to be undertaken by PBS, it has been decided to liquidate PBS. The Company holds 6,000 equity shares of CHF 100 each with an investment of '34.36 million in PBS as on March 31,2023.

PBGG is engaged in marketing of pharmaceutical products including the Company's products in Germany. PBGG is proposed to be converted into indirect WOS of the Company through PBPL by way of acquisition of 100% shares of PBGG by PBPL from PBS.

B. Joint Ventures and Associates

Your Company has 2 joint ventures, viz. Adveta Power Private Limited ("Adveta") and Chiron Panacea Vaccines Private Limited (Under Liquidation) ("CPV") and 1 associate company, viz. PanEra Biotec Private Limited ("PanEra"). Adveta and PanEra have been considered as subsidiaries for the purpose of consolidation of accounts pursuant to the provisions of Indian Accounting Standards ("Ind AS").

Adveta: The Company's 50:50 joint venture with PanEra, was granted in-principle approval by Government of Arunachal Pradesh for allotment of two Power Projects of 80 MW and 75 MW in the financial year 2012-13. Adveta has in the past initiated taking preliminary steps in connection with the implementation of projects. However, in view of the difficulties faced by Adveta in implementing the projects within the stipulated period, the Government of Arunachal Pradesh has cancelled the said allotment of power projects and accordingly, Adveta has written-off the investments in hydropower projects. As part of business restructuring, Adveta was proposed to be merged into PBPL, however, considering the cancellation of projects, alternate options are being explored.

CPV: The Liquidators have completed the voluntary winding-up of CPV and the Company has received surplus amount of '55.88 million (including initial share capital of '22.96 million and TDS of '2.47 million deducted on surplus) from CPV during financial year 2020-21. Thereafter, during the previous financial year, the Liquidators of CPV have submitted the final Liquidator's Statement of Account with the Official Liquidator, Mumbai. Final order of liquidation by the Hon'ble High Court is awaited.

PanEra: PanEra was granted in-principle approval by Government of Himachal Pradesh for allotment of a hydropower project of 4 MW, in earlier years. However, no major investment has been made in this regard. As part of business restructuring, PanEra is proposed to be merged into PBPL so that PBPL can move towards net zero carbon emission and use energies which are sustainable and good for environment and at the same time economical to PBPL. Also, post this merger, PBPL will largely become self-reliant in its own energy requirements.

Pursuant to Regulation 46(2)(h) of the SEBI LODR Regulations, the Company has formulated a Policy for determining material subsidiaries which may be accessed on the Company's website at the link: https://www.panaceabiotec.com/en/section/ information-repository/policy.

As on March 31, 2023 as well as on the date of this report, Panacea Biotec Pharma Limited is the only material subsidiary of the Company pursuant to SEBI LODR Regulations.

Financial Details of Subsidiaries, Associates and Joint Ventures

In accordance with the first proviso to Section 129(3) of the Companies Act, 2013 ("the Act") and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of financial statements, performance and financial position of each of the Company's Subsidiaries, Associates and Joint Ventures, in the prescribed Form AOC-1, forms part of the Annual Report and hence not repeated here for the sake of brevity.

The contribution of the Subsidiaries, Associates and Joint Ventures to the overall performance of your Company is outlined in Note No. 50 of the Consolidated Financial Statements for the year ended March 31,2023.

The separate Audited Financial Statements of the Subsidiaries are available on the website of the Company at https://www. panaceabiotec.com/en/section/information-repository/ subsidiaries-financial-information. The same will also be made available upon request of any member of the Company who is interested in obtaining the same.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its Subsidiaries, Associates and Joint Ventures, prepared in terms of Section 129 of the Act, Regulation 33 of the SEBI LODR Regulations and in accordance with Ind AS 110 read with Ind AS 28 and 31 as specified in the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS Rules") and provisions of Schedule III to the Act, together with Auditors' Report thereon, forms part of the Annual Report.

Indian Accounting Standards, 2015

The annexed financial statements comply in all material aspects with Indian Accounting Standards notified under Section 133 of the Act, the Ind AS Rules and other relevant provisions of the Act.

Listing of Equity Shares

The Equity Shares of the Company continue to be listed on National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE"). The requisite annual listing fees for the financial year 2023-24 have been paid to these Exchanges well within the due dates.

Public Deposits

During the year under review, your Company has neither invited nor accepted any deposits from the public / members pursuant to the provisions of Sections 73 and 76 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as on the balance sheet date.

The details of loans received from directors of the Company have been disclosed in Note No. 42 to the Standalone Financial Statements forming part of the Annual Report.

Directors and Key Managerial Personnel

i) Cessation of Director: Shri Soshil Kumar Jain (DIN: 00012812), Whole-time Director designated as Chairman and the founder promoter of the Company, departed for his heavenly abode on October 07, 2022 and accordingly ceased to be the director and Chairman of the Company with immediate effect. With the sad demise of Shri Soshil Kumar Jain, the Company has lost a visionary, creative, genius and a dynamic leader. He has left behind a very strong company with a Purpose, Values and Mission that each one at the Company needs to continue to work on, along with a solid and huge infrastructure, latest technology, state of the art manufacturing facilities, excellent research and development centers, strong brands, global network of partners and above all highly committed, talented, smart

and hardworking people with a culture of performance. His spirit will forever be the foundation of the Company.

Your directors place their sincere appreciation towards the invaluable contributions, guidance and support received from him during his tenure as director, towards the progress of the Company. Further, your directors pray to the Almighty that the departed soul of Shri Soshil Kumar Jain rest in peace.

ii) Appointment of Non-Executive and Non-Independent Director: Mr. Narotam Kumar Juneja (DIN: 01204817) has been appointed as Non-Executive Non-Independent Director of the Company w.e.f. April 01, 2022. The said appointment was also approved by the shareholders on June 26, 2022, by way of passing resolution through Postal Ballot.

iii) Elevation of Director: The Board of Directors has, on the recommendation of Nomination and Remuneration Committee ("NRC"), elevated Dr. Rajesh Jain (DIN: 00013053), the then Managing Director of the Company to the position of Chairman and Managing Director w.e.f. November 14, 2022, on the existing terms and conditions for the remaining tenure upto March 31,2025 and he shall continue to be liable to retire by rotation.

iv) Directors Retiring by Rotation: In accordance with the provisions of Section 152 of the Act and Article 119 of the Articles of Association of the Company, Mr. Sandeep Jain (DIN: 00012973), Joint Managing Director and Mr. Ankesh Jain (DIN: 03556647), Whole-time Director designated as Director Sales & Marketing of the Company are liable to retire by rotation. Being eligible they have offered themselves for their re-appointment as directors at the ensuing Annual General Meeting ("AGM") of the Company.

v) Profile of Directors seeking re-appointment: The brief resume of the Directors seeking re-appointment along with other details as stipulated under Regulation 36(3) of the SEBI LODR Regulations and Secretarial Standards issued by The Institute of Company Secretaries of India, are provided in the Notice convening the ensuing AGM of the Company and the Corporate Governance Report forming part of the Annual Report.

vi) Declaration of independence: Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence provided in Section 149(6) of the Act and Regulation 16 of the SEBI LODR Regulations, and that there has been no change in the circumstances which may affect their status as Independent director during the year under review.

viii) Registration in Independent Directors' Data Bank: The Company has received confirmation from all its Independent Directors that they are registered in the Independent Directors' Data Bank of the Indian Institute of Corporate Affairs at Manesar, for a period of 5 years, in compliance with the provisions of sub-rule (1) of rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

All the above re-appointments by the Board of Directors are

based on the performance evaluation and recommendation

of the Nomination and Remuneration Committee of the Board

of Directors. Your directors recommend re-appointment of the above said directors in the ensuing AGM of the Company.

Apart from the above, there is no other change in the Directors and Key Managerial Personnel ("KMP") during the year under review and thereafter.

Board Evaluation

An annual performance evaluation of the Board, its Committees and of individual directors was carried out by the Board in terms of the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rule, 2014. In compliance with Regulation 17(10) of the SEBI LODR Regulations, the Board carried out performance evaluation of independent directors without the participation of director being evaluated. In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman was evaluated. The exercise was carried out through a structured evaluation process covering various aspects such as Board composition & quality, strategic & risk management, board functioning, etc. which are briefly stated in the Corporate Governance Report, forming part of the Annual Report. Performance evaluation of independent directors was conducted based on criteria such as ethics and values, knowledge and proficiency, behavioral traits, etc. The Board of Directors has expressed its satisfaction with the evaluation process.

Board Meetings

During the year under review, four (4) Board Meetings were held on May 18, 2022, August 09, 2022, November 14, 2022, and February 14, 2023, in physical mode with the facility for attending the meeting through video conferencing. The intervening gap between two Board Meetings was within the maximum period prescribed under the Act. The detailed information is furnished in the Corporate Governance Report, forming part of the Annual Report.

Audit Committee

The Audit Committee of the Board of Directors comprises entirely of Independent Directors.The details of the composition and number of meetings of the Audit Committee held during the financial year under review including attendance thereat, are furnished in the Corporate Governance Report, forming part of the Annual Report. During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

Policy on Directors' appointment & remuneration

The management of the Company is immensely benefitted from the guidance, support and mature advice from the members of the Board who are also members of various committees. The Board consists of directors possessing diverse skills and rich experience to enhance quality of its performance. Pursuant to the provisions of Section 178(3) of the Act, Regulation 19(4) of the SEBI LODR Regulations and as per the recommendations by the Nomination and Remuneration Committee ("NRC") of the Board, the Board has adopted a policy for appointment and remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company. The policy includes criteria for determining qualifications, positive attributes and independence of directors. In terms of the policy, the NRC evaluates balance of skills, knowledge and

experience of directors, Key Managerial Personnel or Senior Management Personnel whom it recommends to the Board for appointment. The components of remuneration policy are briefly stated in the Corporate Governance Report, forming part of the Annual Report.

This policy may be accessed on the Company's website at the link: https://www.panaceabiotec.com/en/section/information-repository/policy.

Energy Conservation, Technology Absorption & Foreign Exchange Earnings & Outgo

As required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars regarding conservation of energy, technology absorption and foreign exchange earnings & outgo, are given in Annexure A hereto and forms part of this Report.

Annual Return

As required pursuant to Section 92(3) and 134(3)(a) of the Act, the Annual Return of the Company as on March 31, 2023, is available on the Company's website at: https://www. panaceabiotec.com/en/section/information-repository/ annual-return.

Related Party Transactions

During the year under review, all the related party transactions entered into were in the ordinary course of business and on an arm's length basis. The Company has not entered into any material related party transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in the prescribed Form AOC-2 is not applicable. Suitable disclosures as required under Ind AS 24 have been made in the notes to the Financial Statements forming part of the Annual Report. Apart from remuneration and sitting fees, there is no pecuniary transaction with any director, which had potential conflict of interest with the Company.

All related party transactions are placed before the Audit Committee for its review and further recommendation to the Board for its approval. Wherever applicable, approval is obtained for related party transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arm's length basis.

As per the provisions of the Act and Regulation 46(2)(g) of the SEBI LODR Regulations, your Company has formulated a policy on Related Party Transactions which is available on Company's website at the link: https://www.panaceabiotec.com/en/ section/information-repository/policy.

The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the Related Parties. This policy specifically deals with the review and approval of material related party transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions.

Particulars of Employees and Related disclosures

Disclosures pertaining to remuneration and other details

as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Managerial Personnel Rules") are provided in Annexure B hereto and the same forms part of this Report.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Managerial Personnel Rules, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules is provided in Annexure C hereto and the same forms part of this Report.

Auditors and Audit Reports

i) Statutory Auditors and Audit Report: Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Regn. No. 001076N/N500013) were re-appointed as Statutory Auditors of the Company for a second term of five (5) consecutive years to hold office from the conclusion of the 35^th AGM of the Company held on September 30, 2019 till the conclusion of the 40^th AGM of the Company. Pursuant to Section 141 of the Act, the Statutory Auditors have confirmed they are not disqualified from continuing as Auditors of the Company.

M/s. Walker Chandiok & Co. LLP have also confirmed that they are free from the disqualifications specified in Section 141 read with Sections 139 to 147 and their appointment meets the requirements prescribed in Section 141(3) (g) and 147 of the Act. They also confirmed that they are independent, maintained an arm's length relationship with the Company and that no orders or proceedings were pending against them before the Institute of Chartered Accountants of India or any competent court / authority relating to matters of professional conduct.

The Auditors' Report on the standalone as well as consolidated financial statements for the year ended March 31,2023 does not contain any qualification, reservation or adverse remark. The Key Audit Matters as contained in the Auditors' Report on the Standalone Financial Statements are also mentioned as Key Audit Matters in the Auditors' Report on the Consolidated Financial Statements in similar manner.

The management response to the observations / comments / key audit matters contained in the Auditors' Report and Annexure thereto has been suitably given in the respective Notes to the Financial Statements referred to therein.

The notes to accounts and other observations, if any, in the Auditors' Report are self-explanatory and therefore, do not call for any further comments.

ii) Cost Accounts and Auditors: The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Act and accordingly, such accounts and records have been duly made and maintained by the Company in compliance with the provisions of the Act.

Pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, M/s. GT & Co., Cost Accountants (Firm's

Registration Number: 000253) were acting as the Cost Auditors to conduct the audit of the Company's Cost Records for the financial year ended March 31, 2023 and their remuneration has been ratified by the shareholders in the 38^th AGM of the Company held on September 28, 2022.

The cost audit for the financial year 2022-23 has been completed and the Cost Auditors Report will be submitted with the Central Government within the prescribed time. The Cost Audit Report for the financial year 2021-22 was filed on September 07, 2022.

During the current year, the Board of Directors has, pursuant to the provisions of Section 148 of the Act and based on the recommendations of the Audit Committee, appointed M/s. Jain Sharma & Associates, Cost Accountants, as cost auditors of the Company to conduct the audit of the Company's Cost Records for the financial year 2023-24. M/s. Jain Sharma & Associates have confirmed their independence and arm's length relationship with the Company and that they are free from the disqualifications specified in Section 139, 141 of the Act and their appointment meets the requirements prescribed in Section 141(3)(g) and 148 of the Act. They have also confirmed that they are independent, maintained an arm's length relationship with the Company and that no orders or proceedings were pending against them 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, an item for ratification of remuneration of cost auditor for conducting the audit for the financial year 2023-24 has been included in the Notice of the ensuing AGM for shareholders' approval.

iii) Secretarial Auditors and Secretarial Audit Report: Pursuant to the provisions of 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 SEBI LODR Regulations, the Board of Directors had appointed M/s. R&D Company Secretaries, Practicing Company Secretaries as Secretarial Auditors to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2023. The Secretarial Audit Report issued by them is annexed as Annexure D to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.

In compliance with the requirements of the SEBI LODR Regulations, the material unlisted subsidiary of the Company, viz. PBPL had also appointed M/s R&D Company Secretaries, Practicing Company Secretaries as Secretarial Auditors to conduct the Secretarial Audit for the financial year ended March 31,2023. The Secretarial Audit Report issued by them to PBPL is annexed as Annexure E to this Report. The said Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.

In addition to the above and in compliance with Regulation 24A(2) of the SEBI LODR Regulations, Annual Secretarial Compliance Report issued by M/s. R&D Company Secretaries, Secretarial Auditors, for the year

ended March 31,2023, has been submitted with the stock exchanges within prescribed time.

In terms of the applicable provisions of the Act, SEBI LODR Regulations and based on the recommendation of the Audit Committee, the Board of Directors has re-appointed M/s R&D Company Secretaries, Practicing Company Secretaries, as Secretarial Auditors to conduct the secretarial audit of the Company for the financial year 2023-24. They have also confirmed their eligibility for the said re-appointment.

Material changes and commitments affecting the financial position

As required under Section 134(3) of the Act, the Board of Directors inform the members that during the financial year under review, there have been no material changes, except as disclosed elsewhere in the Annual Report:

• in the nature of Company's business;

• in the Company's subsidiaries or in the nature of business carried out by them; and

• in the classes of business in which the Company has an interest.

Further, except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments which can affect the financial position of the Company between the end of the financial year and the date of this Report.

Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, issued by the Institute of Company Secretaries of India, have been duly followed by the Company.

Transfer to Investor Education and Protection Fund

During the year under review, no amount was required to be transferred by the Company to the Investor Education and Protection Fund established by the Ministry of Corporate Affairs, Government of India.

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, the Directors hereby confirm that:

a) in the preparation of the annual financial statements for the financial year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) 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 the Company as at March 31, 2023, and of the profit/ (loss) of the Company for the year ended March 31,2023;

c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of

the Company and for preventing and detecting fraud and other irregularities;

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

e) they had laid down proper internal financial controls to be followed by the Company and that the same are adequate and were operating effectively; and

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

Details in respect of frauds reported by auditors

During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Act.

Particulars of loans, guarantees or investments

The Company has made investments or extended loans / guarantees to its wholly-owned subsidiaries for their business purposes. Pursuant to the provisions of Section 134(3)(g) of the Act, the particulars of loans / guarantees and investments covered under the provisions of Section 186 of the Act along with the purpose for which such loans, guarantees or security were proposed to be utilised by the recipient, have been disclosed in the notes to the Financial Statements forming part of the Annual Report and hence not repeated here for the sake of brevity.

Risk Management

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various organizational risks. Risk Management Committee is compliant with the Regulation 21 of the SEBI LODR Regulations as regards composition, frequency and quorum of the meetings. The Board has defined the roles, responsibilities and functions of the Committee. The details of the composition, number of meetings held and attendance thereat during the financial year under review and terms of reference are furnished in the Corporate Governance Report, forming part of the Annual Report.

The Company has formulated a Risk Management Policy and monitors the risk management plan on a periodic basis. The Company has defined a structured approach to manage uncertainty and to make use of these in the decision making in business decisions and corporate functions.

Insurance

The Company has regularly invested in insuring itself against unforeseen risks. The Company's stocks and insurable assets like building, plant & machinery, computer equipment, office equipment, furniture & fixtures, leasehold improvements and upcoming projects have been adequately insured against major risks. The Company has also taken appropriate product liability insurance policies for conducting clinical trials and for insuring its products (manufactured and sold) with an extension of unnamed vendor liability and add on cover of public liability inclusive of pollution liability to cover the risk on account of claims, if any, filed against the Company.

Internal Control System

Your Company has established adequate system of internal

controls, policies and procedures to ensure orderly and efficient conduct of business and also that assets are safeguarded and transactions are appropriately authorized, recorded and reported.

The detailed explanation is provided in the Management Discussion and Analysis Report, forming part of the Annual Report.

Internal Financial Controls

The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5)(e) of the Act. For the year ended on March 31,2023, the Board is of the opinion that the Company has sound IFC commensurate with the size, scale and complexity of its business operations.

The IFC operates effectively, and no material weakness exists. The effectiveness of IFC is ensured through management reviews, controlled self-assessment and independent testing by the internal audit team.

Vigil Mechanism / Whistle Blower Policy

Your Company adheres to uncompromising integrity in conduct of its business and strictly abides by a well-accepted norm of ethical, lawful and moral conduct. It has zero tolerance for any form of unethical conduct or behavior. With the above said view and pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, Regulation 22 of the SEBI LODR Regulations and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, your Company has adopted a Vigil Mechanism / Whistle Blower Policy to provide its directors and employees an avenue to raise any sensitive and genuine concerns regarding any unethical behavior or wrongful conduct and to enable them to report instances of leak of unpublished price sensitive information and to provide adequate safeguards for protection from any victimization. This Policy is available on the website of the Company and can be accessed at: https://www.panaceabiotec.com/en/section/ information-repository/policy. This Policy, inter-alia, provides a direct access to the Chairman of the Audit Committee. Further, as mandated by Regulation 18(3) read with Schedule II Part C (18) of the SEBI LODR Regulations, the Audit Committee reviews the functioning of Vigil Mechanism / Whistle Blower Policy.

Your Company hereby affirms that no director / employee has been denied access to the Chairman of the Audit Committee and that no complaint has been received during the year under review.

Corporate Social Responsibility

The provisions of Section 135 of the Act and the Rules made thereunder regarding Corporate Social Responsibility are not attracted to the Company as the Company does not fall under the threshold limit of net worth of '5,000 million or more, or turnover of '10,000 million or more, or a net profit (as defined under Section 198 of the Act) of '50 million or more during the immediately preceding financial year. However, the Company has been, over the years, pursuing Corporate Social Responsibility by putting continuous efforts in the areas of health, education and patient awareness / assistance programs towards the development of happier and healthier society.

Prevention of Sexual Harassment at Workplace

The Company is committed to provide safe and conducive work environment to all its employees and associates. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Company has complied with the provisions relating to constitution of Internal Complaints Committee under the POSH Act for dealing with the complaint, if any, relating to sexual harassment of women at workplace. No case has been reported during the year under review.

Proceeding under Insolvency and Bankruptcy Code, 2016

During the year under review, neither any application is made nor any proceeding is pending against the Company, under the Insolvency and Bankruptcy Code, 2016.

Cyber Security Incident

The Company has installed fire walls and other softwares to protect against the cyber-crime. The back-ups are also being kept on Cloud to prevent any kind of data loss. No incident relating to cyber security, breaches or loss of data or documents has been reported during the year under review.

Acknowledgements

Your directors acknowledge with gratitude the co-operation and assistance received from the WHO, UNICEF, PAHO and other UN Agencies, Central Government, State Governments and all other Government agencies and the encouragement they have extended to the Company. Your directors also thank the shareholders, banks, funding agencies, customers, vendors and other business associates for their confidence in the Company & its management and look forward for their continuous support in future. The Board wishes to place on record its appreciation for the dedication and commitment of the employees at all levels which has continued to be our major strength.