Panacea Biotec Ltd

This is my first communication with you as Chairman of your Company. I took over the chairmanship of your company after the sad demise of our beloved founder Chairman, Shri Soshil Kumar Jain, who left for his heavenly abode on October 7, 2022.

I would like to take this opportunity to place our sincere appreciation towards the invaluable contributions, guidance and support received from him during his tenure as Chairman, towards the progress of your Company. 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 state of the art infrastructure and technologies, excellent teams, 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 remain the foundation of the Company.

I strongly believe that each business organization must look inwards, reinvent itself from time to time for sustainable growth over the long haul. It is in the interest of the organization to jump from the attening end of one business performance to the rising slope of another.

It is also my privilege to present the Annual Report for the onancial year 2022-23 and invite the shareholders to participate in the ensuing Annual General Meeting of your Company.

The Indian pharmaceutical business is an exceptionally competitive landscape with consistent regulatory overhang. As we have seen in the last few months, there has been multiple exits in the industry and further consolidation is on the horizon. Our exit from the pharmaceutical formulations business in India and Nepal was very well timed as it enabled us to exit an area with low returns and reallocate resources to high potential opportunities.

We have helped prevent diseases through our leading rst-in-class portfolio of paediatric vaccines and we have enabled people to live healthier even with disease through our therapeutic products. Our successful and market leading brands have laid the foundation for Panacea Biotec to be known as a leading science-driven innovative company among all stakeholders.

Even though India has made substantial progress with improvements in quality of life, education, etc., the under 5 year morbidity and mortality situation still remains far from satisfactory. In fact, over 67% under the age of 5 are anaemic, 35% are stunted, 19% are wasted, and over 7.7% are severely

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wasted . On the other hand, 3.4% of children are overweight.

Nutrition, thus assumes more importance than ever before with constant distractions from modern-day necessities, pressures of life, stress, pollution, adulterated foods, etc. that compromise our habits and the quality of our food. It is now commonly known that every rupee spent on vaccination gives a return of 54 rupees the highest impact that can be generated through social development programs! Nutrition ranks second with an impact score of 38 rupees per rupee spent.

We strongly believe that each and every child is entitled for the right nutrition at right time, and that each child should grow and develop to their full potential. We are excited to support their needs by providing high-quality research-driven nutrition products so they can focus on all the things that they love.

Panacea Biotec's entry in nutrition business through its wholly-owned subsidiary, Panacea Biotec Pharma Limited ("PBPL"), will further expand and strengthen its position in the paediatric market with "Healthy Kids Foundation Vaccination & Nutrition".

Nutrition Business: The market category for these products is estimated to be approx. 530 Crore with East India at highest saliency of 42%, followed by South at 27%, North at 18% and West at 13%. PBPL has developed its product portfolio at its Sampann R&D Center and has set-up a new Ultra-Modern manufacturing facility to manufacture these products with highest Global quality standards within its existing premises at Baddi, Himachal Pradesh.

PBPL has launched the products under the brand name TM ChilRunfull , ChilRunR 7+, ChilRunR No Sucrose across India. It plans to add more products going forward to expand the portfolio in India and International markets.

Vaccines Business: Your company is supplying Pentavalent vaccine Easyove-TTR and bivalent Oral Polio Vaccine (BI-OPVR) to UN Agencies. In recent times there has been increasing focus on immunization programs. The focus on immunization has increased considerably with rising healthcare awareness, and a number of government organizations are undertaking initiatives to meet this goal. Global Alliance for Vaccine Initiatives (GAVI) and other donor agencies are routinely providing support including technical expertise and funds to national Governments to adopt new vaccines.

Panacea Biotec's commitment to indulge in development of a ordable and innovative vaccines to meet unmet needs will

1. NFHS-5. 2021. Government of India. Department of Health and Family Welfare. remain steadfast. Agencies like GAVI will continue to benet from Panacea Biotec's pipeline candidates. As part of the Alliance's Vaccine Investment Strategy (VIS 2018), the wP-hexavalent vaccine (rst launched by Panacea Biotec in TM March 2017 under the brand name, EasySix ) was prioritized. In June 2023, GAVI conormed the adoption of the wP-hexavalent vaccine creating a market for over 250 million doses annually by 2030 in GAVI countries.

Your Company has received long-term supply awards worth Rs 1,040 Crore from United Nations Children's Fund (UNICEF) and Pan American Health Organization (PAHO) for supply of its WHO prequalioed fully liquid Pentavalent vaccine, Easyve-TTR. UNICEF award is worth Rs 813 Crore for supply of Rs99.70 million doses during calendar years 2023-2027 and PAHO award is worth Rs 235 Crore for supply of Rs24.83 million doses during calendar years 2023-2025. In addition, the Company has also received awards from UNICEF and Govt. of Mozambique for supply of 98.60 million doses of b-OPV vaccine worth Rs 106 Crore during calendar year 2022 and 2023.

New Vaccines: Your company is supporting global cause of providing a ordable vaccines to the children across the globe and works closely with global organizations like WHO, The Coalition for Epidemic Preparedness Innovations (CEPI), and Clinton Health Access Initiative (CHAI), etc. 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. Your Company has a robust pipeline of vaccines under development including:

Dengue Vaccine: With GAVI 5.0 (2021-2025), there is renewed interest in the public market adoption of Dengue vaccine. At Panacea Biotec recently we have successfully moved to initiate Phase III trial of DengiAllR, a live attenuated tetravalent vaccine against Dengue fever developed in close collaboration with NIH/NIAID, US. The GMP batches are ready and upon receipt of regulatory approvals, we expect to initiate Phase III clinical trial soon. The clinical trial will be conducted in collaboration with Indian Council of Medical Research at various sites across India.

NucoVacR11: This vaccine is an upcoming product from R&D pipeline which is a new generation conjugate vaccine against pneumococcal disease, which is also entering into Phase-III clinical trial by the Q4 of CY 2023.

Td Vaccine: Phase III Clinical trial for Tetanus and Diphtheria reduced (Td) Vaccine in Adolescents is already in process and is expected to be completed in due course.

Pharma Business: Your Company through Panacea Biotec Pharma Limited has an established business of pharmaceutical formulations and exports its products to Rs36 countries worldwide including the United States, Germany, Russian Federation, Turkey, Bosnia, Tanzania, Kenya, Serbia, Vietnam, Philippines, Sri Lanka, etc. During the current year, Panacea Biotec Pharma has started supply of nano-particle based Paclitaxel generic for launch thereof in Canada.

Panacea Biotec Pharma continues to focus on building a robust pipeline of several products for ling in several other emerging markets for which it is ling registration dossiers to further strengthen its export portfolio and sales.

People Development and Quality Culture: As on March 31, 2023, your Company (including its subsidiaries) has a total manpower of Rs2,113 employees. Your company initiated "Jaan Pehchan Ho, Kaam Aasan Ho - Face to Face Meeting" with employees at manufacturing facilities across all functional areas and across different levels starting December 16, 2022 with the objective of understanding employees, their challenges in executing current job and solutions, their own independent reection and analysis, etc.

Continuing with it, "Quality is Present" campaign was conducted across our plants wherein all Plant Employees signed the Pledge by understanding "Iss Pal Mein, Har Pal Mein Sahi Se Karna, Likhna, Bolna hi Quality Hai".

Arising out of this initiative, autonomous team were formed at manufacturing facilities at Baddi and Lalru wherein BOSS is missing with self-nomination amongst the functional and cross-functional team members by one of the members to work as a CAPTAIN (someone who is Caring, Approachable, Playful, Tactful, Attentive, Inclusive, Nearest) and undertake Topics with tasks and sub-tasks to build sustainable product quality with clear objectives of "Patient Safety First". There are around 76 Captains working in different areas with a team of around 501 people. These 577 team members are now shaping the new behaviour needed to succeed in all aspects of life including Quality at Panacea Biotec.

Our future leadership will be born from these talented, aware, attentive, committed & courageous teams. We are proud of the progress they are making, changes we are bringing in our day-to-day work failures are discussed openly & encouraged like success, hiding & inaction, is viewed rmly.

We have established Manufacturing Sciences Group (MSG) in all 3 business segments, Vaccines, Pharmaceuticals and Nutrition to look into all aspects of operational challenges to be discussed and resolved with proper due diligence, regulatory science, data and proper analysis.

Digital Initiatives: Your Company has taken several initiatives to digitize various areas including implementation of Human Resource Management System (HRMS) Darwin Box, which has now gone live. This system will engage and empower employees across the HR modules with a smarter, simpler & mobile-orst HR Tech powered by Artiocial Intelligence (AI) and Machine Learning (ML). Your Company has also developed and implemented new Sales Force Automation software NIKHAAR to provide real-time support to eld sta about their customer coverage, sales trend, achievements and incentives earned and inventory monitoring.

Financial performance: During financial year 2022-23, your Company's consolidated revenue from operations was 4,599.46 million as against 6,612.32 million during previous financial year. The decline in revenues was primarily due to absence of revenue from sale of pharmaceutical brands in India and Nepal as the said brand portfolio was sold in March 2022 as part of the Company's strategy to raise funds and become debt free.

Your Company's loss before exceptional items and tax has signicantly been reduced to 898.56 million as compared to loss of 2,268.50 million during previous onancial year, mainly due to savings on account of interest pursuant to repayment of debts. Your Company has registered consolidated prot before tax of 128.05 million for scal year 2023 as against 14,493.56 million for scal year 2022, after considering exceptional item. Total loss after tax was 337.45 million for scal 2023 as compared to prot of 10,783.34 million for oscal 2021, as a result of factors explained in the Directors' Report.

While some of the efforts explained above will start showing results immediately, some efforts will take some more time to show results on the ground. I am extremely excited about the steps your Company has taken for the sustainable future growth of the organization we all have built so patiently over the last four decades. We are sure these efforts will catapult your Company and its subsidiaries into a new growth orbit.

Let's all gear up and prepare for the better days ahead which

are not very far away.

With these words, I express my sincere thanks to all our stakeholders, bankers, employees, partners, and associates for their unbroken support, participation and guidance which we continue to count on as we forge ahead towards our destination.

Best wishes

Chairman and Managing Director