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Dear Members,

The Directors have pleasure in presenting the First Annual Report of Solara Active Pharma Sciences Limited (the Company) together with the audited financial statements for the period from February 23, 2017 to March 31, 2018.

1. FINANCIAL SUMMARY

Rs. in Million

Your Directors in their meeting held on March 20, 2017 approved a Scheme of Arrangement (‘Scheme’) between the Company, Strides Shasun Limited (Strides) and Sequent Scientific Limited (SeQuent). In terms of the Scheme Commodity API business of Strides Shasun Limited (Strides) and Human API business of Sequent Scientific Limited (SeQuent) were demerged to the Company. The Scheme was approved by the Shareholders on December 27, 2017 and the Hon’ble National Company Law Tribunal, Mumbai Bench approved the scheme vide their order dated March 9, 2018.

The financials of the Company were drawn up giving effect to the Scheme with an appointed date as October 1, 2017.

A detailed analysis of the operations of the company has been provided in the management discussion and analysis report, which forms a part of this annual report.

2. BUSINESS OVERVIEW

Our Company is a global, R&D focused, pure-play API company engaged in manufacturing and development of APIs and offering services, including CRAMS and contract Manufacturing for APIs. Formed pursuant to the demerger of the commodity API business of Strides and the human API business of Sequent, our company is young but backed with a significant pharma experience of over 30 years. With five globally compliant manufacturing facilities, a presence in over 40 countries, as on April 1, 2018, a basket of diversified, high-value products and established customer relationships, we are poised to create value in the B2B space of API manufacturing and development.

Our Company brings together the Demerged Undertakings of Strides and Sequent, with the aim of providing an inorganic thrust to the organic growth demonstrated by the companies in the last two decades. We intend to capitalise on the significant experience of Strides in therapeutic areas such as pain management, anti-malaria, tuberculosis and hyperphosphatemia and its niche portfolio of products in therapeutic categories such as chronic kidney disease, NSAIDS and CNS related products.

Our Company is involved in API manufacturing and contract manufacturing services for APIs, and has differentiated capabilities to create value for its varied customer base. We have extensive operations including in North America, parts of Latin America, Europe, along with deep roots in Japan, South Korea, India, the Middle East and North Africa.

Our API business comprises of manufacture and development of generic and commercial APIs including in the anthelmintic, antimalarial, anti-infective, antipsychotic, anti-infective and hyperkalemia categories. The other business of our Company comprises of CRAMS services for APIs, contract development, custom synthesis and contract manufacturing. Our Company also has the capabilities to provide analytical and regulatory support by capitalizing on its global regulatory expertise.

3. CHANGE IN NAME OF THE COMPANY

During the year under review, your Company name changed from SSL Pharma Sciences Limited to Solara Active Pharma Sciences Limited.

4. SHARE CAPITAL

The Company was incorporated with a paid up capital of Rs.1,00,000/- (Rupees one lakh only) consisting of 10,000 equity shares of Rs.10/- each.

The share entitlement ratio as per the scheme is as under:

For demerger of Commodity API business: 1 equity share of Rs.10 each of the Company for every 6 equity shares of Rs.10 each held in Strides.

For demerger of Human API business: 1 equity share of Rs.10 each of the Company for every 25 equity shares of Rs.2 each held in Sequent.

Record Date was fixed for determination of shareholders is April 9, 2018.

Pursuant to the Scheme:

a) The Board of Directors in their meeting held on April 11, 2018, allotted 2,46,74,267 equity shares of Rs.10/- each to the shareholders of Strides and SeQuent as per the share entitlement ratio defined in the Scheme.

b) The Authorised Share Capital of the Company increased from Rs.1,00,000/- to Rs.30,00,00,000/

c) The existing paid up share capital of Rs.1,00,000/stands cancelled as per the NCLT order.

Consequent to the above, the Issued, Subscribed and Paid-up Share Capital of the Company has become Rs.24,67,42,670/- divided into 2,46,74,267 equity shares of Rs.10/- each.

5. DIVIDEND

The Board of Directors of the company has not recommended any dividend for the financial year ended March 31, 2018.

6. MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments occurred, affecting the financial position of the Company, between the end of the financial year and the date of this report.

7. SUBSIDIARIES

The details of Subsidiary Companies and their financial position as required under the first proviso to Section 129(3) is given in Form AOC-1 in Annexure-1 as part of this report.

8. CORPORATE GOVERNANCE

The Company on April 11, 2018 has re-constituted the Board in accordance with SEBI LODR and have also adopted requisite code prescribed under SEBI LODR.

The Company is in compliance with the requirements of corporate governance under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Even though the Corporate Governance report requirement does not apply to the Company as the Company was not listed during the reporting financial year, as a good governance practice, a separate report on Corporate Governance to the extent applicable to the Company is annexed to this report.

The Managing Director and CFO certification as required under the SEBI Listing Regulations is attached as Annexure - 7 to this report.

9. MANAGEMENT DISCUSSION AND ANALYSIS

The requirement of Management Discussion & Analysis report does not apply to the Company for the reporting financial year as it was not listed during the reporting year. However, as a good governance practice, “Management Discussion and Analysis” is given separately and forms part of this Report.

10. COMPOSITION AND NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company comprises of well qualified and experienced persons having expertise in their respective areas. It has appropriate combination of Executive, Non-Executive Directors and Independent Directors, as required under the Companies Act, 2013 read with Rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and represents an optimal mix of professionalism, knowledge and experience.

During the financial year 2017-18, the Directors met six times i.e., on 24.04.2017; 02.08.2017; 16.10.2017; 01.02.2018; 26.03.2018 and 31.03.2018.

11. DIRECTORS/KEY MANAGERIAL PERSONNEL

Pursuant to Board reconstitution, as on date of this report, the Board comprised of 6 directors comprising of 2 Executive Directors, 1 Non-Executive Director and 3 Independent Directors. Chairman of the Board is Non-Executive. The details of each members of the Board as on the date of this report forms part of Corporate Governance Report.

Appointments / Inductions:

a) Mr. Deepak C Vaidya has been appointed as Non-Executive Director (Additional Director) of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend his appointment as Non-Executive Director of the Company, liable to retire by rotation.

b) Mr. Nirmal P Bhogilal has been appointed as an Independent Director (Additional Director) of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend his appointment as an Independent Director of the Company for a period of five consecutive years effective from April 11, 2018, not liable to retire by rotation.

c) Mr. R. Ramakrishnan has been appointed as an Independent Director (Additional Director) of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend his appointment as an Independent Director of the Company for a period of five consecutive years effective from April 11, 2018, not liable to retire by rotation.

d) Dr. Kausalya Santhanam has been appointed as an Independent Director (Additional Director) of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend her appointment as an Independent Director of the Company for a period of five consecutive years effective from April 11, 2018, not liable to retire by rotation.

e) Mr. Jitesh Devendra who is a Director since incorporation has been appointed as Managing Director of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend his appointment as Managing Director of the Company for a period of three years with effect from April 11, 2018, liable to retire by rotation.

f) Mr. S. Hariharan who is a Director since incorporation has been appointed as Executive Director-Finance and Chief Financial Officer of the Company effective from April 11, 2018, who shall hold office till the conclusion of the ensuing Annual General Meeting of the Company.

Your directors recommend his appointment as Executive Director-Finance and Chief Financial Officer of the Company for a period of three years with effect from April 11, 2018, liable to retire by rotation.

Detailed profile of the Directors is attached as Annexure - 6 to this report.

The Company has received requisite notices together with necessary deposits from the member proposing the election of Mr. Deepak C Vaidya, Mr. Nirmal P Bhogilal, Mr. R. Ramakrishnan and Dr. Kausalya Santhanam as Directors of the Company pursuant to Section 160 of the Companies Act, 2013.

Resignations:

Dr. P. Sathyanarayan, Director, resigned with effect from April 11, 2018. The Board places on record its appreciation for the services rendered by him during his association with the Company.

Mr. Jagdish V Dore, who was appointed as an Independent Director, resigned with effect from August 3, 2018 due to pre-occupation. The Board places on record its appreciation for the services rendered by him during his association with the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The following are the Key Managerial Personnel (KMPs) of the Company:

Mr. Jitesh Devendra, Managing Director

Mr. S. Hariharan, Executive Director-Finance & Chief Financial Officer

Mr. B. Sreenivasa Reddy, Chief Operating Officer, and

Mr. S. Murali Krishna, Company Secretary

Policy on Directors Appointment and Remuneration

The Directors of the Company are appointed by shareholders at the General Meetings.

As regards the appointment and tenure of Independent Directors, the Company has adopted the provisions of the Companies Act, 2013 read with Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The remuneration policy of the Company has been so structured in order to match the market trends of the industry. The Board in consultation with the Nomination and Remuneration Committee decides the remuneration policy for directors.

12. PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 197 of the Act read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees’ particulars, which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company has undertaken “Corporate Social Responsibility (CSR)”, initiatives in areas of Health, Education and Employability which are projects in accordance with Schedule VII of the Companies Act, 2013.

A detailed report on CSR activities undertaken during the financial year 2017-18 is enclosed as Annexure -2 to this Report.

14. WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy in place as part of its vigil mechanism. The policy provides appropriate avenues to the directors, employees and stakeholders of the Company to make protected disclosures in relation to the matters concerning the Company. Protected disclosures are appropriately dealt with by the Whistle Officer or the Chairman of the Audit Committee. The policy is also available on the Company’s website at www.solara.co.in

15. INSURANCE

The assets / properties of the Company are adequately insured against loss due to fire, riots, earthquake, terrorism, etc. and against other perils that are considered necessary by the management.

16. RISK MANAGEMENT

The Company has a risk management framework for identification and managing risks. Please refer the ‘Management Discussion and Analysis’ report forming part of the Annual Report for additional details.

17. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has designed and implemented framework for internal financial controls as required under Section 134 (5) (e) of the Companies Act, 2013.

18. LOANS, GUARANTEES OR INVESTMENTS

Particulars of investments made, loans given and guarantees covered under the provisions of Section 186 of the Companies Act, 2013 are provided in Note No. 40 to the Standalone Financial Statements in the Annual Report.

19. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties are in the ordinary course of business and at arm’s length basis. Hence disclosure under Form AOC-2 is not part of this report. However, transactions with related parties are disclosed in Note No. 40 to the Standalone Financial Statements in the Annual Report.

The Company has formulated a policy for transacting with Related Parties, which is uploaded on the website of the Company.

Further, there are no materially significant related party transactions with its promoters, the directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of the Company at large.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

21. EXTRACT OF ANNUAL RETURN

An extract of Annual Return in form MGT-9 as on March 31, 2018 is attached as Annexure - 3 forming part of this Report.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under section 134 of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure - 4 to this Report.

23. AUDIT REPORT

There are no qualifications, observations or adverse remarks in the Audit Report issued by the Statutory Auditors of the Company for the financial year ended March 31, 2018.

24. STATUTORY AUDITORS

The Board of Directors of the Company had recommended the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (Firms Registration No. (117366W/ W-100018) as Statutory Auditors of the Company for a period of 5 years from the conclusion of the 1st AGM till the conclusion of the 6th AGM of the Company to be held in the Financial Year 2022-23.

25. COST AUDITOR

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, the Board of Directors had appointed Mr. K. Suryanarayanan, Cost Accountant (Membership No.24946) as Cost Auditor of the Company for the financial year 2018-19. Proposal for ratification of remuneration of the Cost Auditor is placed before the shareholders.

26. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company engaged the services of M/s. JM & Associates, Practicing Company Secretaries, Chennai, to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2018. The Secretarial Audit Report for the financial year ended March 31, 2018 in Form MR-3 is attached as Annexure - 5 to this report. The Secretarial Audit report does not contain any qualification, reservation or adverse report.

The Board confirms the compliance of the Secretarial Standards notified by the Institute of Company Secretaries of India, New Delhi.

27. LISTING ARRANGEMENTS

Pursuant to the Scheme, the Company’s equity shares were listed in the BSE Limited and National Stock Exchange of India Limited and trading commenced in both the exchanges on June 27, 2018.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has put in place an anti-sexual harassment mechanism in line with the requirements of the Sexual Harassment ofWomen at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee have been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaint of sexual harassment during the year 2017-18.

29. PUBLIC DEPOSITS

The Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

30. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Directors of your Company confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b) t hey have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

c) they have 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) they have prepared the annual accounts on a going concern basis

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and

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

31. ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Banks during the year under review. Your Directors also place on record their deep sense of appreciation for the continued support of customers, suppliers, employees and investors of the company.

For and on behalf of Board of Directors

Jitesh Devendra S. Hariharan

Place: Bengaluru Managing Executive

Date: 03.08.2018 Director Director-Finance