#1R Ⓡ Kwality Pharma QUALITY YOU CAN TRUST Investor Presentation Financial Year March 2022 2 1½ 1/2#2Executive Summary A 5m#3Kwality - A Niche Injectable Player for Emerging Markets D India's Leading injectable player with a strong presence in emerging markets Strong focus on complex injectables like Liposomal, peptide-based, protein- based, and lyophilized injectables Strong portfolio of 600 products and a pipeline of 300 products under registration. KII 010101 An experienced team led by visionary management State of art manufacturing for Critical care, Oncology, General & Cephalosporin injectables Superior financials - FY22 Revenues: 74% EBTIDA: 38.4%, ROE: 66% 3#4Kwality at a Glance: Overview Company overview • 1 About Financial overview 456 ■Sales (Crs) 500 450 ✓ Established in 1983, Kwality Pharmaceuticals is a leading exporter of 400 complex generics formulations with Injectables forming over 70% of its FY 22 sales. 350 300 ✓ Listed on the Bombay Stock Exchange (SME Segment) in 2015 and is migrating to (Main Board) in the coming months. 250 200 150 ✓ Presence in 60+ countries, with 120+ overseas channel partners 100 166 139 ✓ Team size: ~1500 members 50 0 اس 262 Portfolio: 3000+ formulations in >25 therapeutic areas FY 19 FY 20 FY 21 FY 22 ✓ Generic Liquid injectables: Small volume parenteral in vials and ampoules, dental cartridge, ophthalmic, and prefilled syringes. Generic Lyophilized injectables in vials ✓ Others- Oral Liquids, tablets, capsules, dry syrups, and sachets ✓ Oncology liquid and lyophilized Injectables, Oral tablets & capsules ✓ Cephalosporins: Tablets, capsules, dry syrups and sachets, Dry powder injectables Key financial ratios (FY22) ROE 66% RevenueCAGR (FY19-22)-40% Beta-lactam - Oral tablets, capsules, dry syrups, and sachets, Dry powder injectables Gross Margin EBITDA 56% 38.4% Manufacturing: Facilities located in Amritsar (Punjab) and Jassur (Himachal Pradesh) 4#52000 1983 Kwality at a Glance: Evolution of the Company 2004 2010 • Started marketing office in Africa and new manufacturing in Jammu (HP) New manufacturing with OSD and injectable capabilities for general therapies and beta lactam 1983-2000 2000-2010 Kwality was founded with generic liquid orals and injectables facility Started exporting to Africa and ASEAN countries 2015 • 2012 2010-2015 WHO approval for Amritsar facility New facility for Anti-cancer products • Started exporting to gulf countries Listing on BSE SME exchange Libya, Ivory Coast, Nigeria approval for Amritsar facility 5 2018 PICS/GMP from Iran, Iraq and Tanzania • New Cephalosporin facility in HP 2022 2015-20 2021 2020-2022 • 11 molecules registered in emerging markets. • WHO approval for cephalosporin unit • Enhanced injectables capabilities at Amritsar facility Developed over 10 complex products including microspheres, Liposomes, Ophthalmic susp. etc.#6Key Highlights B A 5m#7E Kwality: Key Highlights B Development capabilities in complex products: Specialist capabilities, expertise, and know-how in Long-chain acting injectables, Liposomal injectables, Lipid nano particles/Lipid complexes, Lyophilized injectables, Protein-based injectables, and complex ophthalmic Highly experienced leadership team: The management team at Kwality has extensive experience in the development, marketing, and manufacturing of complex pharmaceutical products. Under their leadership, the company has successfully registered over 600 products globally. Emerging market-approved manufacturing facilities: Business at Kwality is supported by state-of-art manufacturing facilities approved by many emerging markets. These facilities are fully capable of manufacturing complex injectables on a commercial scale Presence in over 60 countries through successful registrations: Kwality has successfully filed 600 products in different therapies and across dosages with strong presence in injectables. Injectable sales contributes ~70% to the overall company sales. Superior financials: Kwality revenues for FY22 increased by 74% to Rs 456.2 cr from Rs 262 cr while EBITDA grew to Rs 175.2 cr from Rs 30.4 cr compared with the year ago period. EBITDA margin stood at 38.4%. Net profit too increased to Rs 120 cr from Rs 15 cr compared with the same period a year ago. 7#8Development capabilities in complex injectables Complex injectable drug products Long-acting Injectables using micro- sphere technology Key technologies involved • Sustained drug release • Reducing injection frequency • Polymeric microspheres • In-situ forming depots . • Advanced in-vitro efficacy read-outs Advanced polymer characterization Kwality experience Developed complex long-acting injectables: Leuprolide depot injectable, Octreotide Acetate injectable Suspension, Risperidone Long-Acting injectable, Goserelin Acetate Depot injectable • Tissue targeting • Intracellular targeting Liposomal Injectables . Increase exposure time • Drug solubilization and stabilization Developed complex oncology injectables: Daunorubicin Liposomal Injection and Doxorubicin Liposomal Injection with stability data of 24 months • Protein-based Injectables • Selectivity for specific protein targets • Higher potency and reduced toxicity than many small molecules Improved stability & control release Developed complex protein based injectables: Erythropoietin Injectable, Alteplase for Injection, Darbepoetin injectable for intravenous and subcutaneous • Solubility using freeze-drying Lyophilized Injectables • Improved stability, solubility and stability Developed complex Lyophilized products: Paclitaxel injection suspension, Amphotericin B inj., Caspofungin Acetate inj., Isoniazid inj., Micafungin inj., Rifampin inj., Tenoxicam inj., Suxamethonium inj. 8#9Highly experienced leadership team Mr. Ramesh Arora Managing Director O O Founder of the company Overall head of business with a focus on strategy and R&D Education: B.COM(H) Mr. Ajay Arora Director Has been with the company for the past 28 years Heads sourcing and projects Education: Graduate in pharmacy Mr. Aditya Arora Director Has been with the company for the past 7 years Heads finance and operations Education: B.COM(H) 9#10Manufacturing facilities are approved by emerging markets... Locations Jassur, HP Amritsar, PB Locations Units Unit-1 Therapy General Therapies Amritsar Beta-lactum Unit-4* Regulatory approvals Dosage forms Tablets, Capsules, Oral liquid, Sachets, Dry powder for suspension, Lyophilized injections Vials and ampoules Eye/Ear/Nasal drops and cream/ointment/lotion/gel Tablets/Capsules, Dry powder for suspension, Injections *under completion 10 10 THE REPUBLIC OF YEMEN Ministry of Public Health & Population BOY TE WHO-GMP DOML Direction de la Pharmacie, du Médicament et des Laboratoires de Côte d'Ivoire Ministry of Health MINISTRY OF HEALTH MINISTERE DE LA santé NATIONAL AGENCY FOR FOOD AND D NAFDAC ADMINISTRATION AND CONTROL Oncology Unit-2 Jassur Cephalosporins Pharmacy and Poisons Board Unit-3 Tablets/Capsules, Lyophilized injections Tablets/Capsules, Dry powder for suspension, Lyophilized injections#11..and expected to get approved by high-end markets like Europe, Brazil and Mexico Regulatory agency ANVISA Region/countries . Expected timeline of approvals Country: Brazil Brazil is among the top 15 pharmaceuticals market by country in the world in value terms By Oct 2022 (General therapy section) and by Nov. 2022 (Oncology injection) EUROPEAN UNION GMP Region: Europe Europe region is 2nd largest pharma market after North America in value terms Cofepris Comisión Federal para la Protección contra Riesgos Sanitarios • Cephalosporin and Oncology section by Dec 22 • Country: Mexico • Mexico is among the top 15 pharmaceuticals market by country in the world in value terms General therapy and Oncology section by Dec 2022 11#12Manufacturing facility: Few snapshots AMALTY CALLY *under completion 12 ITY KWALITY#13Established presence in over 60 emerging markets through successful product registrations South and Central America Africa Middle East Asia Colombia Costa Rica Botswana Uganda Iran Egypt India Uzbekistan Guatemala El Salvador Kenya South Africa Iraq Algeria Sri Lanka Indonesia Namibia Tanzania Chile Ecuador Oman Morocco Philippines Malaysia Nigeria Sudan Peru Honduras Lebanon Jordan Nepal Vietnam Ethiopia Zambia Nicaragua Panama KSA Bhutan French W Africa Guinea Dom. Republic Jamaica - 16 Countries UAE Pakistan Mexico Brazil Zimbabwe Kuwait Kyrgyzstan Kwality has an experienced marketing team with strong reach in emerging markets Kwality will continue to strengthen its position in emerging market through more registrations and by adding new markets#14Product registrations South and Latin America* Product registrations #'s Registered 72 South-East Asia Under registrations 77 Africa Product registrations #'s Product registrations #'s Registered 86 Registered 102 Under registrations 42 42 Under registrations 17 *Including Mexico and Brazil#15Kwality of the Future: Focus on HIGH MARGIN PORTFOLIO & Commercial Partnerships % Focus on Niche high margin portfolio of difficult to manufacture molecules Building long term commercial partnerships both locally & globally Injectables would be the growth driver Continuing investments in R&D with focus on complexity Manufacturing continues to be core competency 15#16Superior Financials A 5m#17Profit & Loss Account For the year ending 31st March (In Crores) Revenue from operations Cost of Goods Sold Gross profit Gross profit% EBITDA EBITDA% PAT PAT% FY19 FY20 FY21 FY22 166.29 139.30 262.01 456.19 119.45 87.08 165.59 200.60 46.84 52.22 96.42 255.59 28.17 37.49 36.80 56.02 16.31 17.85 30.44 175.17 9.81 12.81 11.62 38.40 7.56 8.21 14.89 119.94 4.55 5.89 5.68 26.29 11 17#18Balance Sheet Shareholders' funds (a) Share capital (b) Reserves and surplus Minority Interest in Subsidiary Non-current liabilities (a) Long-term borrowings (b) Deferred tax liabilities (net) (c) Other long-term liabilities (d) Long-term provisions Current liabilities (a) Short-term borrowings (b) Trade payables (c) Other current liabilities (d) Short-term provisions EQUITY AND LIABILITIES FY 19 FY20 FY 21 FY22 10.38 10.38 10.38 10.38 26.92 35.63 50.78 170.77 37.30 46.01 61.15 181.14 -0.98 -1.04 -1.30 -1.35 7.59 10.18 18.26 20.29 0.12 0.00 0.00 0.27 0.00 9.18 9.18 9.18 0.52 0.62 0.68 0.75 8.23 19.98 28.12 20.84 18.73 16.45 23.00 17.07 22.97 26.21 34.51 21.73 20.55 29.82 31.79 3.30 3.00 5.80 41.00 60.83 67.75 78.29 139.96 TOTAL 105.38 132.69 166.26 340.59 ASSETS Non-current assets (a) Property Plant & Equipment (i) Tangible 29.08 42.69 59.42 103.88 (b) Non-current investments 0.79 0.65 0.73 0.78 (c) Deferred Tax Assets(Net) 0.00 0.20 0.04 0.00 (c) Long-term loans and advances 0.12 0.12 0.17 8.11 (d) Other non-current assets 0.03 0.00 0.00 0.00 30.03 43.66 60.36 112.77 Current assets (a) Current investments (b) Inventories (c) Trade receivables (d) Cash and cash equivalents (e) Short-term loans and advances 4.04 3.34 4.44 0.00 11.25 22.42 17.36 53.36 38.43 30.33 35.71 69.13 1.40 1.54 5.81 12.95 20.21 31.37 42.58 92.38 (f) Other current assets TOTAL 0.03 0.03 0.00 0.00 75.35 89.03 105.90 227.82 105.38 132.69 166.26 340.59 18#19THANK YOU