SOLARA ACTIVE PHARMA SCIENCES LIMITED — Regulatory Filings 2021

Apr 11, 2021

Communication Address: No. 28. Sardar Patel Road. Post Box 2630 Guindy. Chennai - 600 032. India Tel : +91 44 43446700. 22207500 Fax : +91 44 22350278 E-mail : investors@solara.com www.solara.co.in

April 11, 2021

The BSE Limited The National Stock Exchange of India Limited Dalal Street, Mumbai – 400 001 Bandra (E), Mumbai – 400 051

Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra-Kurla Complex

Scrip Code: 541540 Scrip Code: SOLARA

Dear Sir / Madam,

Sub: Investor Presentation - Announcement under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015

Please find attached Investor presentation issued by the Company titled:

"ACCELERATING GROWTH: SOLARA AND AURORE MERGE TO BECOME INDIA'S SECOND LARGEST PURE PLAY API / CRAMS COMPANY"

Thanking you,

Yours faithfully, For Solara Active Pharma Sciences Limited

S. Murali Krishna Company Secretary

Encl:- as above

ACCELERATING GROWTH:

SOLARA AND AURORE MERGE TO BECOME INDIA'S SECOND LARGEST PURE PLAY API / CRAMS COMPANY

STRONG FOUNDATION. ACCELERATING GROWTH.

Safe Harbor

Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", seek to", "future", "objective", "goal", "likely", "project", "should", "potential", "will pursue", and similar expressions of such expressions may constitute "forward-looking statements". These forward looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, our growth and expansion plans, obtain regulatory approvals, our provisioning policies, technological changes, investment and business income, cash flow projections, our exposure to market risks as well as other risks. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

A progressive move to combine two growth engines and build a future ready platform

"As Solara continues its journey towards accelerated growth, the combination with Aurore is a significant boost. The two entities complement each other on product portfolio, geographical presence and customers while amplifying the strengths on world class quality systems, strong R&D capabilities and robust manufacturing infrastructure. The entrepreneurial growth mindset that Raj and his team bring will further strengthen Solara. The combination will provide a compelling value proposition for both our generic APIs and CRAMS customers and exciting opportunities for the talented teams to grow with the company"

Bharath Sesha

MD & CEO , Solara

Rajender Rao Juvvadi

Founder and MD, Aurore

"I am excited about the synergies the merged entity brings with the complementary product portfolio and backward integration of key molecules. As a large pure play API player, we are in a good position to leverage our combined scale enabling us to meet customer needs. We enhance our differentiation by offering credible supply assurance towards our customers. The merged entity will develop and deliver products with agility and enable further strengthening of our global customer footprint. The aggregation of strengths between the two organizations would significantly enhance shareholder value"

K E Y T R A N S A C T I O N D E T A I L S

• ► Aurore to merge with Solara in an all-stock transaction and the shareholders of Aurore will have 27% ownership in the merged entity
• ► The transaction is immediately EPS accretive to Solara's shareholders
• ► The transaction will deliver 100% of Aurore Life Sciences (ALS) which owns all the IP and 100% revenues and EBITDA of the group, 100% stake of ELS¹ and 67% stake of Aurore Pharma Private Limited (APPL)
• ► Promoter stake holding in Solara will move from 42.57% to 55.15%

Category	Pre-transaction	Post transaction
Public	57.43%	44.85%
Promoters	42.57%	55.15%
Total	100.00%	100.00%

► With this transaction, the existing promoters align all their API interests in the merged entity

D E A L M E T R I C S

Particulars	Pre-transaction	New issue	Solara post-transaction
Equity Shares	3,59,29,767	1,32,94,800	4,92,24,567
Equity Value (INR Cr.)	5,055	1,870	6,926
Relative Value per share (INR)	1,406.93	1,406.93

The valuation was conducted by a SEBI approved valuer and the fairness opinion was provided by ICICI Securities Limited

A U R O R E S N A P S H O T *

*The financial figures are as per management account of FY21

Aurore's strategic capabilities are highly complementary to Solara's growth model

Strategic Rationale: Better financial outcomes with significant asset synergies

Robust balance sheet provides opportunities for sizeable investments

• Combination is Margin and EPS accretive.
• Assets turn at Aurore is ~2x and that of the merged entity increases from 1.5x to ~1.7x
• ROCE for the merged entity increases by 200 basis points to cross 20%
• Operating leverage will drive incremental free cash generation & help Solara to attain transformative growth
• Strong Balance Sheet with Net Debt/EBITDA ratio ~ 1.0x providing significant leverage

Aurore's capacity demands meets Solara's recent capex investments

• Aurore has created 800KL capacity and will need more capacity as it expands its market footprint and product basket
• Solara's significant capex outlay to build capacity in Vizag will meet Aurore's need for capacities and enable faster ramp up
• Aurore's intermediates presence will help in supply chain de-risking by backward integration for key KSMs
• Scale provides opportunities for supply chain efficiencies

Strategic Rationale: Bolstered CRAMS presence with increased product mix and R&D velocity

3

CRAMS business triples in revenue from the addition of Aurore's CRAMS portfolio

• The nascent CRAMS business of Solara is ~INR 75 Cr. and benefits from significant addition of Aurore's CRAMS revenue of ~INR 150 Cr. to reach a meaningful size
• Customer profile of CRAMS business is now significantly diversified providing runway for future growth
• Existing Aurore partnerships with innovators for high value molecules can be leveraged

40+ new products from Aurore and 3X R&D velocity

• Well balanced product pipeline / portfolio with a good mix of high volume (Amlodipine, Valacyclovir) and niche products (Nafamostat Camostat, Levothyroxine) complements Solara's similar strategy at a different scale
• Aurore's strong track record of filings (15+ products a year) will accelerate Solara's offerings up to 25+ new products a year
• Aurore has completed sizeable investments in developing portfolio of ARV products which allows Solara to enter a new space

Strategic Rationale: A wider push to customers with a strengthened APAC presence

Larger customer base and higher share of wallet

5

Improved product portfolio will enable Solara to grow further with its marquee customers

• Solara and Aurore's customers will benefit from the combination which offers sizeable cross selling opportunities
• Increased product portfolio will provide more opportunities for partnering with customers
• Solara's strategic customer focused approach will leverage Aurore's product portfolio and strengthen long term relationships with customers

Solara's focus market of APAC, benefits from Aurore's strong presence in the region

• Solara's stated position is to significantly increase its APAC region sales with particular emphasis on Japan & Korea
• ~29% of Aurore's sales is from this focus region. Transaction will make the combination one of the largest API suppliers in the region¹ with revenues in excess of INR 300 Cr.
• Aurore complements Solara's China focus by addition of 7 DMF submissions taking total submissions to 14

Strategic Rationale: Enhanced product footprint in the US market

Solara's leadership position in the US gets further augmented by strong filings of Aurore

• Aurore has filed 20 DMFs for US market. These products are complementary to Solara's existing filings
• 4 DMFs have been triggered for source variation / ANDA filings resulting in near term upsides for Solara in US

Solara is well positioned to benefit immensely by leveraging the individual strengths

• 8 manufacturing sites with a combined reactor capacity of 3,000+ KL and regulatory approvals from global agencies
• 3 R&D centers in India with capabilities to develop over 25 products every year
• Strong product portfolio – more than 100+ commercial products and more than 50+ in the pipeline resulting in higher "share of wallet" for customers. Key products are backward integrated

Transaction Summary:

• Accounting of the merger as per IND AS 103 – Business Combinations

TIMELINE

• Subject to statutory, regulatory, creditors and shareholder approvals
• Deal Effective Date: 1 st April 2021
• Estimated deal closure date is March 2022

POST TRANSACTION LANDSCAPE

• Post the deal, the company shall operate as Solara
• Consequent to the proposed transaction, Solara promoter group shall also include identified shareholders of Aurore
• After the transaction, existing and incoming promoters together shall hold 55.15% in the merged entity

TRANSACTION ADVISORS

Solara's advisors: Project Manager - Transaction Square LLP; SEBI valuer - Niranjan Kumar; Legal Advisor - DSK Legal and Anagram Partners; Fairness Opinion - ICICI Securities Limited; Due Diligence - Ernst and Young & J Sagar Associates

Aurore's advisors: Transaction Advisor - Intellecap Advisory Services Pvt Ltd; Legal Advisor - IC Universal

CORPORATE OFFICE

3 rd & 4th Floor, Batra Centre, No.28, Sardar Patel Road, Guindy, Chennai - 600 032 Tel.: +91 44 4344 6700 / 2220 7500 Fax No.: +91 44 2235 0278

REGISTERED OFFICE

201, Devavrata, Sector 17, Vashi, Navi Mumbai - 400 703. Tel.: +91 22 2789 2924 Fax No. +91 22 2789 2942 Email: investors@solara.co.in Website: www.solara.co.in CIN: U24230MH2017PLC291636