Alkem Laboratories Ltd

Dear Shareholders,

At Alkem, our credo, "Inspiring Healthier Lives" is at the core of our research-driven innovation culture, enabling us to impact millions of lives worldwide positively. Reflecting on FY 2023-24, we made considerable progress in strengthening our operations, expanding our portfolio and pipeline, integrating new capabilities, and fostering the development of our people while attracting fresh talent across the organization. These focused efforts have shaped us into a stronger and more relevant company for the many individuals who rely on our innovative and affordable healthcare solutions.

Organizational Milestones and Achievements

Consistent evolution and growth have been the hallmarks of our organization. Founded in 1973, Alkem championed change when international companies dominated the Indian pharmaceutical industry. Our transformation from a family-held organization to a public listed entity in 2015 was driven by our commitment to greater transparency, enhanced governance, and unlocking new avenues for growth. Today, we stand as a formidable global pharmaceutical company with a robust presence across multiple therapeutic areas and geographies. We have demonstrated our adaptability and dynamism in the past, and remain resolute in doing so in the future to respond to unmet patient needs and deliver long-term value effectively.

Throughout our illustrious journey, among our most significant milestones has been our entry into the international market, which today accounts for more than 30% of our revenues. In India, our strategic entry into the chronic segment and our foray into trade generics marked significant strides forward. I am pleased to share that our chronic segment now contributes approximately 18% to our total prescription portfolio in India. We are also among the largest trade generic players in the country. Additionally, we have 18 brands featured in the list of the Top 300 brands in the Indian Pharmaceutical Market (IPM). Our growth over the past 15 years has been impressive and awe-inspiring, with our revenue expanding by 10.5 times.

Corporate Governance and Leadership

Our achievements are a testament to the strategic direction provided by the leadership team, the professionalism we have cultivated, and the dedicated efforts of our people. Alkem has a strong workforce of over 20,000 worldwide and about 2,700 employees of the total have been with the organization for more than a decade. Empowering people and nurturing their career growth have been central to attaining our shared objectives.

For the fourth time now, Alkem has been certified as a "Great Place to Work" for the year FY 2023-24. We were featured in India's Top 100 best companies to work for across industries, a recognition that underscores our commitment to be a world-class employer. We continue to foster a positive work environment that attracts, develops and retains a diverse and talented pool of employees, united by our core values.

Our unflinching focus on upholding the highest levels of governance, professionalism, and transparency provides a solid basis for sustainably enhancing stakeholder value. In line with our commitment to being a professionally- run organization, the Board announced the creation of the Chief Executive Officer position and appointed Dr. Vikas Gupta to this pivotal role. With over two decades of industry experience, Dr. Gupta has a proven track record of leading business transformations and driving growth across various geographies. Additionally, Mr. Nitin Agrawal has been appointed as the new Chief Financial Officer, bringing nearly 19 years of senior global leadership experience in Healthcare and FMCG. Our core management team has also been bolstered with the appointment of new heads across various functions. This strengthened leadership team, with its specialized expertise and diverse skill sets, positions Alkem strongly for its next phase of the journey.

Corporate Social Responsibility Initiatives (CSR) and Sustainability Initiatives

At Alkem, we firmly believe achieving success goes beyond financial performance - it embodies an unwavering commitment to the well-being of our planet, communities, and stakeholders. Building on our longstanding ethos of sustainability, we have advanced our ESG initiatives with the development of a comprehensive ESG framework and roadmap. Key targets include enhancing Board of Directors' gender diversity from 25% to 33% by FY 2024-25, reducing Scope 1 & 2 GHG emissions by 42% by FY 2032-33 from the FY 2022-23 baseline, achieving water neutrality by FY 2029-30, and reaching zero waste to landfill at our operating sites by FY 2025-26.

Our governance structures at the Board and management levels ensure that sustainability is anchored at the highest strategic planning level. This year, we achieved 10.2% reduction in total volume of water consumption (in kiloliters) and 11.5% reduction of total electricity consumption (GJ) - (From non-renewable source - Grid). Our training center at the Daman site is empowering our workforce with relevant skills, while our focused social initiatives in healthcare, education, sports, and rural development are building stronger communities and paving the way for a more inclusive future.

Impact of Government Policies and Industry Outlook

In recent years, the Indian Pharmaceutical Industry has shown remarkable resilience and agility amidst the challenges posed by the global health landscape. Government policies such as the Production Linked Incentive (PLI) scheme, are encouraging domestic manufacturing and enhancing India's global competitiveness. As India evolves into a hub for pharmaceutical research, manufacturing, and innovation, it stands poised to shape the future of healthcare worldwide. At Alkem, we remain steadfast in our commitment to innovation, quality, and patient-centricity, contributing to the industry's ongoing success.

Acknowledgement of Stakeholders

I want to close by recognizing our management and employees for their outstanding work throughout FY 2023-24. Our business thrives on the talent of our people, and our success is a testament to their tireless efforts. I also extend my heartfelt thanks to our customers, partners, medical fraternity, government agencies, and shareholders for their constant engagement and support. Shared value creation is embedded in Alkem's DNA; by judiciously executing our strategy, we remain dedicated to enhancing lives and delivering enduring value.

Warm regards,

B. N. Singh

Executive Chairman.