SOLARA ACTIVE PHARMA SCIENCES LIMITED — Regulatory Filings 2024

Feb 14, 2024

Communication Address: Solara Active Pharma Sciences Limited 2nd Floor, Admin Block 27, Vandaloor Kelambakkam Road, Keelakottaiyur Village, Melakottaiyur (Post) Chennai – 600 127, India

Tel: +91 44 43446700 Fax: +91 44 47406190 E-mail: investors@solara.co.in www.solara.co.in

February 14, 2024

The BSE Limited The National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, Bandra-Kurla Complex Dalal Street, Mumbai – 400 001 Bandra (E), Mumbai – 400 051

Scrip Code: 541540 Scrip Code: SOLARA

Dear Sir/Madam,

Sub: Outcome of Board Meeting

We wish to inform that meeting of Board of Directors of Solara Active Pharma Sciences Limited ("Company") held today (i.e., February 14, 2024), the Directors has inter-alia approved Unaudited financial results (standalone and consolidated) of the Company for the quarter and nine months ended December 31, 2023, pursuant to Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. A copy of the unaudited financial results (standalone and consolidated) along with the Limited Review Report by the Auditors and press release is attached.

The Board Meeting commenced at 11.30 a.m. and concluded at 1.55 p.m.

We request you to take the same on record.

Thanking you, Yours faithfully, For Solara Active Pharma Sciences Limited

SUDDAPALLI MURALIKRISHNA Digitally signed by SUDDAPALLI MURALIKRISHNA Date: 2024.02.14 13:58:55 +05'30'

S. Murali Krishna Company Secretary

Encl.: As above

Deloitte Haskins & Sells LLP

Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru - 560 001 Karnataka, India

Tel: +91 80 6188 6000 Fax: +91 80 6188 6011

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF SOLARA ACTIVE PHARMA SCIENCES LIMITED

• 1. We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of SOLARA ACTIVE PHARMA SCIENCES LIMITED ("the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group") for the quarter and nine months ended December 31, 2023 ("the Statement") being submitted by the Parent pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• 1. This Statement, which is the responsibility of the Parent's Management and approved by the Parent's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• 1. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of Parent's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable.

1. The Statement includes the results of the following entities:

Sl. No.	Name of the entities
1	Solara Active Pharma Sciences Limited the Parent
2	Sequent Penems Private Limited, wholly-owned subsidiary
3	Shasun USA Inc., wholly-owned subsidiary
4	Chemsynth Laboratories Private Limited subsidiary

1. Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

Deloitte Haskins & Sells LLP

1. The consolidated unaudited financial results Includes the lnter1m financial Information of 3 subsidiaries which have not been reviewed by their auditors, whose lnter1m ftnanclallnfonnatlon reflect total revenue of Rs. Nil and Rs. Nil for the quarter and nine months ended December 31, 2023 respectively, total net loss after tax of Rs. 0.03 crores and Rs. 3.01 crores for the quarter and nine months ended December 31, 2023 respectively and total comprehensive loss of Rs. 0.07 crores and Rs. 3.05 crores for the quarter and nine months ended December 31, 2023 respectively as considered In the Statement.

According to the Information and explanations given to us by the Management, this lnter1m financial information are not material to the Group.

Our Conclusion on the Statement Is not modified In respect of our reliance on the lnter1m financial information certified by the Management.

For DELOITTE HASKINS a. SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Sathya P Koushik (Partner) (Membership No. 206920) (U DIN: 24206920BKANXJ7636}

Place: Bengaluru Date: February 14, 2024

SO LARA ACTIVE PHARMA SCIENCES LIMITED CIN: L24230MH2017PLC291 &36

,;. SOLARA Regd. Office: No. 201 Devavrata, Sector 17, Vashi, Navi Mumbai 400 703.

Address: 2nd Floor, Admin Block 27, Vandaloor kelambakkam Road, Keelakottaiyur Village, Chennai 600 127

STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31 , 2023

							( Rs. in Crores exc ept per share data)
Sl. No.	Particulars	3 months ended	Preceding 3 months ended	Corresponding 3 months ended in the previous year	Year to date figures tor the current period ended	Year to d ate figures for the previous period ended	Previous Financ ial Year ended
		31.12.2023	30.09.2023	31.12.2022	31.1 2.2023	31.12.2022	31 .03.2023
		UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	AUDITED
	Revenue from operations	248.73	425.24	394.75	1.026.28	1,063.19	1.443.81
	Other income	0.45	1. 18	7.17	3.67	17.87	22.55
	Ill Total income (I +II)	249.18	42&.42	401.92	1,029.95	1,081.06	1,46&.36
	IV Expenses
	{a) Cost of materials consumed	157.76	24 1.83	213.24	602.27	578.80	773.90
	(b) Purchases of stock-in-trade	0.25	3.12	2.40	4.95	5. 11	7.88
	{c) Changes in inventories of finished good s. stock-in-trade and work in progress	57.51	{7.42)	{4.25)	37.82	12.48	7.05
	{d) Employee benefits expense	62.64	64.12	58.45	187.91	168.44	228.63
	{e) Finance costs	25.37	24.44	23.64	74.42	68.10	90.06
	(f) Depreciation and amortisation expense	25.96	26.21	27.98	78.08	84.74	I 11.19
	{g) Other expenses {Refer note 7)	132.26	85.96	79.91	298.27	213.24	292.47
	Total expenses (IV)	461.75	438.26	401.37	1,283.72	1,130.91	1.511.18
V	Proflt/(loss) before exceptional items and tax (Ill • IV)	(212.57)	{11.84)	0.55	(253.77)	(49.85)	(44.82)
VI	Exceptional item prolit /(loss) (Refer note 6 )	162.771	15.221		167.99)
	VII ProfH/(Ioss) before tax {V ·VI}	(275.34)	{1 7.06)	0.55	(321.76)	(49.85)	(44.82)
	Vtll Tax expense
	-Current tax			(0. 10)		0.47	10.09)
	- Deterred tax			0.22	{10.25)	124.32)	{22.48)
	Total tax expense (VIII)			0.12	{10.25)	(23.85)	(22.57)
	IX ProfH/(Ioss} for the period (VII-VIII)	(275.34)	(17.06)	0.43	(311.51)	(26.00)	(22.25)
X	other comprehensive income
A	Items that will not be reclassified subsequently to profH or loss:
	(i) Remeasurement gains/flosses) of d efined benefit plans		0.24		0.24	(1.66)	(2.70)
	(ii) Income tax relating to items that will not be reclassified subsequently to profit or loss					0.58	0.94
	Items that may be reclassified to subsequently to profH or loss:
	{i) Exchange differences o n tra nslating the financial statements of foreign operations	(0.04)	{0.01)	0.01	{0.05)	(0.24)	(0.30)
	(ii) Income tax relating to items tha t may be reclassified to statement of profit and loss
	Total other comprehensive income tor the period (X)	(0.04)	0.23	0.01	0.19	(1.32)	(2.06)
	XI Total comprehensive income/(loss} for the period (IX +X)	(275.38)	(16.83)	0.44	(311.32)	(27.32)	(24.31)
	XII ProfH for the year attributable to:
	• Equity shareholders ot the Company	(275.34)	{17.16)	0.45	{312.05)	(25.94)	(22.18)
	- Non-controlling interests		0.10	(0.02)	0.54	(0.06)	{0.07)
	XIII other Comprehensive income attributable to:
	- Equity shareholders of the Company	(0.04)	0.23	0.01	0.19	(1.32)	(2.06)
	· Non-controlling interests
	XIV Total Comprehensive income attributable to:
	· Equity shareholders of the Company	(275.38)	(16.93)	0.46	{311.86)	127.26)	{24.24)
	• Non-controlling interests		0. 10	(0.02)	0.54	{0.06)	(0.07)
	XV Paid-up equity shore capitol {lace value of Rs. 10/- each)	36.00	36.00	36.00	36.00	36.00	36.00 \,464.21
	XVI Other equity excluding Non-controlling interest
	Earnings p er equity share {fac e value of Rs. 10/- each) (not annualised for quarters)
	{o) Basic (in Rs.)	(76.49)	(4.77)	0.12	{86.69)	{7.21)	(6.16)
	(b) Diluted (in Rs.)	(76.49)	(4.77)	0.12	{86.69)	(7.21 )	(6.16)
	See accompanying no tes to the financial results

SOLARA

SO LARA ACTIVE PHARMA SCIENCES LIMITED CIN: l24230MH2017PLC291636

Regd. Office: No. 201 Oevavrala, Sector 17, Vashi, Navl Mumbai 400 703. Address: 2nd Floor, Admin Block 27, Vandaloor kelambakkam Road, Keelakottaiyur Village, Chennai 600 127 STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31 , 2023

Notes: The above consolidated financial results of Solara Active Pharmo Sciences limited ("the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group") as reviewed by the Audit Committee has been approved by the Board of Directors at its meeting held on February 14. 2024. The results for the quarter and nine months ended December 31 . 2023 has been reviewed by Deloitte Haskins & Sells LLP, the statutory auditors of the Company. The statutory auditors of the Parent have issued an unmodified conclusion in respect of the limited review for the quarter and nine months ended December 31. 2023.

These consolidated financial results of the Group have been prepared in accordance w ith the Indian Accounting Standards prescribed under Section 133 of the Companies Act. 2013 ("the Act") read with relevant rules issued thereunder ('IND AS') and other accounting principles generally accepted in India and guidelines issued by the Securities and Exchange Board of India ("SEBI").

The Group's operations relate to only one reportable segment viz Active Pharmaceutical Ingredient (API). Accordingly no separate disclosure of segment information is required.

	Information on Standalone Results:						(Rs. In Crores)
51. No.	Particulars	3 months ended	Preceding 3 months ended	Corresponding 3 previous year	Year to date figures Year to date figures months ended in the for the current period ended	for the previous period ended	Previous Financial Year ended
		31.12.2023	30.09.2023	31.12.2022	31.12.2023	31 .12.2022	31.03.2023
		UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	AUDITED
	Total Income	249.17	426.47	401.52	I.Q30.Q2	1.080.21	1.465.95
II	Profitl{loss) before tax	1275.331	115.261	0.53	1320.721	153.091	{44.781
Ill	Profit//loss after lox	275.33	11 5.261	0.42	310.471	128.671	122.211

There was o lire occident at the Company's Puducherry facility on November 04, 2023 whereby 3 blocks out of the total 76 b locks were impacted by the fire. The resultant fire caused injuries to 14 workers and 12 workers were recovered and discharged while 2 hove succumbed to injuries despite maximum efforts put to recover them. The fire a lso caused damages to our existing plant and equipment and inventories. There was disruption in the production at the Puducherry facility foro brief period and we have resumed the production after receiving the statutory approvals post the fire incident. The losses arising o n account of the fire incident have been accounted under exceptional item. The Parent has submitted the initial insurance claims and pending submission of the final insurance claims. no income from insurance claims has been accounted lor in these financial results.

Exceptional item profit I loss) : (Rs. In Crores) Preceding Sl. No. Particulars 3 months ended 3 months ended Corresponding 3 months ended in the orevious ear 31.12.2022 Year to ddte figures for the current period ended 31.12.2023 Year to date figures for the previous Period ended 31 .12.2022 Previous Financial Year ended lmooirment on assets c lassified as held for sole Exceptional loss on account of fire at Puducherry tocilit Total Refer note 5 31 .12.2023 UNAUDITED 62.771 62.77 30.09.2023 UNAUDITED 15.221 5.22 UNAUDITED UNAUDITED 5.22 62.77 67.99 31 .03.2023 UNAUDITED AUDITED

During the quarter ended December 31. 2023. the Group has received claims of Rs. 43.8 crores from two of its customers. Pending linalisation of d iscussion. the Group has accrued for Rs. 43.8 c rores towards such claims which has been included in 'Other expenses·.

Place : Bengoluru Dote : February 14. 2024

Chartered Accountants Prestige Trade Tower, Level 19 46, Palace Road, High Grounds Bengaluru – 560 001 Karnataka, India

Tel: +91 80 6188 6000 Fax: +91 80 6188 6011

INDEPENDENT AUDITOR'S REVIEW REPORT ON REVIEW OF INTERIM STANDALONE FINANCIAL RESULTS

TO THE BOARD OF DIRECTORS OF SOLARA ACTIVE PHARMA SCIENCES LIMITED

• 1. We have reviewed the accompanying Statement of Unaudited Standalone Financial Results of SOLARA ACTIVE PHARMA SCIENCES LIMITED ("the Company"), for the quarter and nine months ended December 31, 2023 ("the Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
• 1. This Statement, which is the responsibility of the Company's Management and approved by the Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 "Interim Financial Reporting" ("Ind AS 34"), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
• 1. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity', issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of the Company's personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
• 1. Based on our review conducted as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Sathya P Koushik (Partner) (Membership No. 206920) (UDIN: 24206920BKANXI1215)

Place: Bengaluru Date: February 14, 2024

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31 , 2023

							(Rs. in Crores except per share data)
Sl. No.	Particulars	3 months ended	Preceding 3 months ended	Corresponding 3 months ended in the tor the current period previous vear	Year to date figures ended	Year to date figures for the previous period ended	Previous Financial Year ended
		31.12.2023	30.09.2023	31.12.2022	31.12.2023	31.12.2022	31 .03.2023
		UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	AUDITED
I	Revenue from operations	248.73	425.24	394.75	1,026.28	1.063.1 9	1.443.8 1
II	Other income	0.44	1.23	6.77	3.74	17.02	22.14
Ill	Total income (I + II)	249.17	426.47	401.52	1,030.02	1,080.21	1,465.95
IV	Expenses
	(a) Cost of materials consumed	157.76	241 .83	213.25	602.27	578 .80	773.90
	(b) Purchases of stock-in-trade	0.25	3.12	2.40	4.95	5.1 1	7.88
	(c) Changes in inventories of finished goods, stock-in-trade and work in progress	57.51	(7.421	(4.251	37.82	12.48	7.05
	{d) Employee benefits expense	62.64	64.12	58.27	187.9 1	167.85	228.05
	(e) Finance costs	25.37	24.47	23.64	75.35	68.10	90.06
	(f) Depreciation and amortisation expenses	25.96	26. 14	27.89	77.93	84.50	110.90
	(g) Other expenses {Refer Note 6)	132.24	85.92	79.79	298.19	216.46	292.89
v	Total expenses (IV)	461.73	438.18	400.99	1,284.42	1,133.30	1,510.73
VI	Profit/(loss) before exception\ items end tax (Ill - IV) Exceptional item profit I {loss) {Refer Note 5)	(212.56)	(11.71)	0.53	(254.40)	(53.09)	(44.78)
VII	Profit/(1oss) before tax (V - VI)	162.771	(3.551		(66.32) (320.72)
	VIII Tax expense	(275.33)	(15.26)	0.53		(53.09)	(44.78)
	-Current tax					10.11)
	- Deferred tax			10.1 11 0.22	110.251	(24.3 1)	(0.111 (22.461
	Total tax expense (VIII)			0.11	(10.25)	(24.42)	(22.57)
IX	Profit/(loss) for the period (VII -VIII)	(275.33)	(15.26)	0.42	(310.47)	(28.67)	(22.21)
X	Other comprehensive income
A	Items that will not be reclassified subsequently to profit or loss:
	(i) Remeasurement gains/flosses) of defined benefit plans		0.24		0.24	(1.661	(2.70)
	(ii) Income tax relating to ite ms that will not be reclassified subsequently to profit or loss					0.58	0.94
8	Items that may be reclassified to subsequently to profit or loss:
	Income tax relating to items that may be reclassified to statement of profit and loss
	Total other comprehensive income((loss) for the period (X)		0.24		0.24	(1.08)	(1.76)
XI	Total comprehensive income/(loss) for the period (IX + X)	(275.33)	(15.02)	0.42	(310.23)	(29.75)	(23.97)
XII	Paid-up equity shore capital (face value of Rs. 10/- each)	36.00	36.00	36.00	36.00	36.00	36.00
	XIIII other equity						1,467.13
	Earnings per equity shore (face value of Rs. 10/- each) (not cnnuclised for qUarters}
	{a) Basic {in Rs.)	(76.491	(4.241	0.12	186.251	17.96)	16.171
	(b) Diluted {in Rs.)	176.491	(4.241	0.12	(86.251	17.961	16.171
	See accompanying notes to the financial results

SOLARA ACTIVE PHARMA SCIENCES LIMITED

CIN: l24230MH2017PLC291636

Regd. Office: No. 201 Devavrata, Sector 17, Vashi, Nevi Mumbai 400 703. Address: 2nd floor, Admin Block 27, Vandaloor kelambakkam Road, Keelakottaiyur Village, Chennai 600 127

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2023

Notes:

The above standalone financial results of Solora Active Pharma Sciences Limited ("the Company") as reviewed by the Audit Committee has been approved by the Boord of Direc tors at its meeting held on February 14. 2024. The results for the quarter and nine months ended December 31 . 2023 has been reviewed b y Deloitte Hoskins & Sells LLP. the statutory auditors of the Company. The sta tutory auditors of the Company have issued an unmodified conclusion in respect of the limited review for the quarter and nine months ended December 3 1. 2023.

These standalone financial results of the Company have been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act. 2013 ("the Ac t") rea d with relevant rules issued thereunder ('I NO AS') and other accounting principles genera lly accepted in Indio and guidelines issued by the Securities and Exchange Boord of Indio ("SEBI").

• The Company's operations relate to only one reportable segment viz Active Pharmaceutical Ingredient (APl) . Accordingly no separate disclosure of segment informa tion is required.
• There was a fire occident at the Company's Puducherry facility on November 04. 2023 whereby 3 blocks out of the total 76 blocks were impacted by the fire . The resultant fire caused injuries to 14 workers and 12 workers w ere recovered and discharged while 2 have suc c umbed to injuries despite maximum efforts put to recover them. The fire also c a used damages to our existing plant a nd equipment and inventories. There w as disruption in the production at the Puducherry facility for a brief period and we hove resumed the production after receiving the statutory approvals p ost the fire incident. The losses arising on ac count of the fire incident hove been accounted under exceptional item. The Parent has submitted the initial insurance claims and pendinq submission of the final insurance claims. no income from insurance c!aims has been accounted for in these financial results.

	Exceptional item orofit I {loss :						{Rs. In Crores
Sl. No.	Particulars	3 months ended	Preceding 3 months ended	Corresponding 3 months ended in the previous year	Year to date figures for the current period ended	Year to date figures for the previous period ended	Previous Financial Year ended
		31.12.2023	30.09.2023	31.12.2022	31.12.2023	31 '12.2022	31.03.2023
		UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	UNAUDITED	AUDITED
	Impairment on assets of the Parent classified as held for sale		12.531		2.53
	Impairment on investments in Subsidiary		11.021		11.02
Ill	Exceptional loss on account of fire at Puducherry focilitv /Refer note 4	(62.77			62.771
		62.77	3.55		66.32

During the quarter ended December 31, 2023, the Company has received claims of Rs. 43.8 crores from two of its customers. Pending finalisation of discussion, the Company has accrued for Rs. 43.8 c rores towards such claims which has been included in 'Other expenses'. _

Place : Bengaluru Dote : February 14. 2024	Poorvank Purohit MD & CEO	I~ ~I) ~ ~ ~*G~

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Press Release

Solara reports Q3'24 and 9m'24 results

• Q3'24 Revenues at ₹ 2,492 Mn, down by 38% YoY;
• Q3'24 Reported EBITDA at (₹ 1,616 Mn);
• Q3'24 is severally impacted by one-off items;
• a. Fire incident in Puducherry and temporary deferment of sales
• b. A complete Reset of our business model to restore to Key Regulated market player

Bengaluru, India – February 14, 2024: Solara Active Pharma Sciences Ltd (Solara) (NSE: SOLARA; BSE: 541540), a leading Active Pharmaceutical Ingredient / CRAMS company, today announced the financial results for the third quarter (Q3'24)

Updates on Q4'24 and strong FY25 guidance

Q4'24

Q4'24 Revenues are expected to be at ₹ 4,000 Mn+ and EBITDA is expected to be at ₹ 400 Mn+

FY25

• Solara announces a Strong Outlook for FY25 by Reset of its Operations
• Focus on free cash generation and margin expansion leading to strong growth in profitability and margins and customer advocacy.
• FY25 Revenues are expected to be at ₹ 15,000 Mn+
• EBITDA is expected to be at ₹ 2,300-2,600 Mn with EBITDA margins of 15%-17%

Q4'25 Exit quarter

• Q4'25 Exit quarter Revenue run-rate expected to be at ₹ 4,000 Mn+
• EBITDA run-rate expected to be at ₹ 800-900 Mn with EBITDA margins of 20%-22%
• Net Debt to EBITDA at less than 3 times by Q4'25 Exit quarter.

Update on Rights issue

• Further to the announcement made by the Company on July 5, 2023 regarding fund raising through a Rights issue, the Company has appointed a Merchant Banker for the proposed issue.
• The Company is in the process of filing the offer document with the Stock Exchanges
• The issue price and the exact size will be decided by the Rights Issue committee on receipt of inprinciple approval from the Stock Exchanges
• Promoters are committed to subscribe to the issue to the extent of their holdings and are also willing to subscribe and underwrite the unsubscribed portion of the public holdings.

Particulars (INR m)	Q3'24	Q3'23	YoY%	9M'24	9M'23	YoY%
Revenue	2,492	4,019	-38%	10,300	10,810	-5%
Reported Gross margins	324	1,902	-83%	3,827	4,801	-20%
Reported Gross margins %	13.0%	47.3%		37.2%	44.4%
Reported EBITDA	(1,616)	510	-	(1,034)	991	-
Reported EBITDA Margins %	-	12.7%		-	9.2%

Financial Performance for Q3'24

Commenting on the financial performance, Poorvank Purohit, MD & CEO of the Company, remarked, "Q3'24 is a difficult quarter for Solara majorly impacted by the fire incident and also by the one-off impact of the reset strategy. The fire incident occurred at our Puducherry facility and the resultant fire caused injuries to 14 workers and 12 workers were recovered and discharged while 2 have succumbed to injuries despite best efforts put to recover them. The fire also caused damage to our existing plant and equipment and inventories. There was disruption in the production at the Puducherry facility for a brief period and post corrective actions, permissions to commence production was accorded by end of Dec'23. We resumed supplies to Regulated markets in Jan'24. The losses arising on account of the fire incident have been accounted under exceptional item. The insurance claims have been made and no deferred income is considered in our results.

Our revenues have seen a reduction during Q3'24 majorly impacted by the fire incident. Intended shipments for the quarter were deferred to Q4'24 due to additional documentation and quality and customer approvals post the fire incident also resulted in lower Revenues and also impacted Gross margins. Our Gross margins have been impacted by the one-off impact of the reset strategy to discontinue few products and optimize inventory.

We will now aggressively focus on product profitability, cost control and cost improvement program (CIP), better cash flows and debt reduction. With significant headwinds behind us and with our reset strategy in place, we aim to turnaround and deliver 20-22% EBITDA margins by Q4FY25"

More details given in the Investor presentation

EBITDA Reconciliation

Particulars (INR m)	Q3'24	Q2'24	Q3'23	9m'24	9m'23	FY23
Profit/(loss) before exceptional items and tax	(2,126)	(118)	6	(2,538)	(499)	(448)
Add : Finance costs	254	244	236	744	681	901
Add: Depreciation and amortisation expense	260	262	280	781	847	1,112
Less: Interest income	(4)	(6)	(12)	(21)	(39)	(59)
Consolidated Reported EBITDA as per press release	(1,616)	382	510	(1,034)	991	1,506

Earnings Conference Call

The Company will conduct earnings call at 3.00 PM IST on February 14, 2024, where the Management will discuss the Company's performance and answer questions from participants. To participate in this conference call, please dial the below numbers ten minutes ahead of the scheduled start time. The dial-in numbers for this call are +91 22 6280 1346 or +91 22 7115 8247. Please note that the conference call transcript will be uploaded on the Company website in due course.

About Solara

Solara Active Pharma Sciences Ltd (BSE-541540, NSE-SOLARA), headquartered in Bengaluru, India, offers a basket of diversified, high-value Commercial APIs and Contract manufacturing services in over 73 countries. It has a manufacturing base comprising six globally compliant API facilities, with approvals including the USFDA, EU GMP, and PMDA in Japan.

Investor / Analyst contact Statutory and corporate affairs

Abhishek Singhal abhishek.singhal@solara.co.in

Murali Krishna S Raghavan. V investors@solara.co.in

Disclaimer: Certain statements in this document are not historical facts and are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political, or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Solara Active Pharma Sciences Ltd will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

Q3'24 AND 9m'24 RESULTS

Staying Focused. Moving Forward.

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.

Q3'24 has been majorly impacted by the fire incident and by the one-off impact of our reset strategy

* Adjusted for fire incident impact. Refer page 4 for more details

** Adjusted for fire incident impact and reset impact. Refer page 4 for more details

• Loss of revenues of ~ ₹1,300 Mn due to production disruptions after the fire incident at Puducherry resulted in lower gross margins to the extent of ~ ₹640 Mn
• Fire Incident Impact • Post corrective actions, permissions to commence production was accorded by end of Dec'23. Resumed supplies to Regulated markets in Jan'24.
• Solara is adequately insured to cover these loss of profits. The insurance claims have been made and no deferred income on account of insurance claims is considered in our results.

Deferred Revenues

• Intended shipments for the quarter to the extent of ~₹550 Mn of revenues and ~₹360 Mn gross margins were deferred to Q4'24 due to additional documentation and quality and customer approvals post the fire incident.
• The Company has reset its strategy to revert to its pre-COVID focus on being a pre-dominantly regulated market player and to focus on customer retention and cost leadership.
• One-off impact on Q3'24 EBITDA of ₹1,004Mn on account of resetting the operations.

Reset Impact

• As part of our Reset Strategy, several long tail products have been discontinued resulting in a provisioning of discontinued products to the extent of ₹ 203 Mn and loss on liquidation of discontinued products to the extent of ₹ 134 Mn.
• One-off impact of reduction in inventory levels to the extent of ₹ 175 Mn resulting from our strategic actions taken to optimize the existing inventory levels
• The Company has been carrying long outstanding receivables related to post COVID sales which have been provided - ₹ 492 Mn

Solara announces Reset of its Operations

Focus on Profitable Growth	• Aggressive focus on products with high profitability • Categorization of products based on profitability per KL • Discontinuance of products that do not deliver minimum profitability thresholds and where we do not control cash flows.
Cost Improvement	• Focus on Cost control and Cost Improvement programs through alternate vendors to achieve improved COGS. • Reduced operating cost by austerity measures without impacting business continuity.
Network Optimization	• Manufacturing network optimization by consolidation of assets and capacities
Revenue and Margin expansion	• Expanding margins by focusing on profitable growth, cost improvement and network optimization which will lead our Revenues reverting to ₹4,000m per quarter with improved gross margins and EBITDA in the range of 20-22%
Optimization of Inventory and Working Capital	• Optimization of existing high inventory levels through robust Sales and Operational Planning (S&OP) • Reducing working capital days and improve cash cycle • Improved free cash flows by Q4'25
Debt Reduction	• Net Debt to EBITDA at less than ~3 times by Q4'25

Guidance for Q4'24 & FY25

Expected outcome of the reset strategy:

• ❖ Expanding margins by focusing on profitable growth, cost improvement and network optimization which will lead our Revenues reverting to ₹4,000m per quarter with improved gross margins and EBITDA in the range of 20-22% by Q4'25.
• ❖ Q4'25 Exit quarter Revenue run-rate remain flat at ₹4,000m because of discontinuance of some of the products and it will get replaced with products with high profitability.

• Further to the announcement made by the Company on July 5, 2023 regarding fund raising through a Rights Issue, the Company has appointed a Merchant Banker for the proposed issue.
• We are in the process of filing the offer document with the Stock Exchanges
• The issue price and the exact size will be decided by the Rights Issue committee on receipt of in-principle approval from the Stock Exchanges.
• Promoters are committed to subscribe to the issue to the extent of their holdings and are also willing to subscribe and underwrite the unsubscribed portion of the public holdings.

Performance (₹ In Million)

Poorvank Purohit,
MD & CEO

Particulars	Q3'24	Q3'23	YoY%	9M'24	9M'23	YoY%
Revenue	2,492	4,019	-38%	10,300	10,810	-5%
Reported Gross margins	324	1,902	-83%	3,827	4,801	-20%
Reported Gross margins %	13.0%	47.3%		37.2%	44.4%
Reported EBITDA	(1,616)	510	-	(1,034)	991	-
Reported EBITDA Margins %	-	12.7%		-	9.2%

Q3'24 is a difficult quarter for Solara majorly impacted by the fire incident and also by the oneoff impact of the reset strategy. The fire incident occurred at our Puducherry facility and the resultant fire caused injuries to 14 workers and 12 workers were recovered and discharged while 2 have succumbed to injuries despite best efforts put to recover them. The fire also caused damage to our existing plant and equipment and inventories. There was disruption in the production at the Puducherry facility for a brief period and post corrective actions, permissions to commence production was accorded by end of Dec'23. We resumed supplies to Regulated markets in Jan'24. The losses arising on account of the fire incident have been accounted under exceptional item. The insurance claims have been made and no deferred income is considered in our results.

Our revenues have seen a reduction during Q3'24 majorly impacted by production disruptions post the fire incident. Intended shipments for the quarter were deferred to Q4'24 due to additional documentation and quality and customer approvals post the fire incident also resulted in lower Revenues and also impacted Gross margins.

Our Gross margins have been impacted by the one-off impact of the reset strategy to discontinue few products and optimize inventory.

We will now aggressively focus on product profitability, cost control and cost improvement program (CIP), better cash flows and debt reduction.

With significant headwinds behind us and with our reset strategy in place, we aim to turnaround and deliver 20-22% EBITDA margins by Q4FY25.

YoY Performance (₹ In Million)

Particulars	Q3'24	Q3'23	Change
Revenue	2,492	4,019	-38%
Reported Gross Margins	324	1,902	-83%
Reported Gross margins %	13.0%	47.3%
Operating EBITDA	(1,508)	605
Operating EBITDA Margins %	-	15.0%
R&D Cost	(108)	(95)
Reported EBITDA	(1,616)	510
Reported EBITDA Margins %	-	12.7%

QoQ Performance (₹ In Million)

Particulars	Q3'24	Q2'24	Change
Revenue	2,492	4,264	-42%
Reported Gross Margins	324	1,931	-83%
Reported Gross margins %	13.0%	45.3%
Operating EBITDA	(1,508)	587
Operating EBITDA Margins %	-	13.8%
R&D Cost	(108)	(100)
Reported EBITDA	(1,616)	382
Reported EBITDA Margins %	-	9.0%

▸ Impact of fire incident at Puducherry facility:

• Financial Performance ▸ Loss of revenues of ~ ₹1,300 Mn due to production disruptions after the fire incident at Puducherry resulted in lower gross margins to the extent of ~ ₹640 Mn
• ▸ Shipment delays to Regulated market customers after the fire incident.
• Key Updates ▸ Losses of Rs. 628 Mn arising on account of the fire incident have been accounted under exceptional item.
• ▸ Insurance claim submitted and under progress. No deferred income on account of insurance claims is considered in our results.

▸ Strategic actions on optimizing high inventory levels:

• ▸ Strategic actions to reduce the overall inventory and working capital levels.
• ▸ One-off impact of provision for discontinued products held in inventory for Rs. 203 Mn and loss on liquidation of discontinued products held in inventory of Rs. 134 Mn.
• ▸ One-off impact of reduction in inventory levels to the extent of ₹ 175 Mn resulting from our strategic actions taken to optimize the existing inventory levels

▸ Deferred Revenue:

▸ Intended shipments for the quarter to the extent of ~₹550 Mn of revenues and ~₹360 Mn gross margins was deferred to Q4'24 due to additional documentation and quality and customer approvals post the fire incident.

▸ Business highlights:

• ▸ Resumed production at Puducherry facility after Post corrective actions and permissions to commence production was accorded.
• ▸ Regulated markets revenues at 61% of Q3'24 revenues (vs. 68% in Q3'23 and 71% in Q2'24)
• ▸ Change in geography mix with lower Regulated markets sales impacted Gross margins for Q3.
• ▸ Strategic initiatives in progress to deliver 20-22% EBITDA margins by Q4FY25 exit quarter.

YoY Performance (₹ In Million)

Particulars	9M'24	9M'23	Change
Revenue	10,300	10,810	-5%
Reported Gross Margins	3,827	4,801	-20%
Reported Gross margins %	37.2%	44.4%
Operating EBITDA	(716)	1,260
Operating EBITDA Margins %	-	11.7%
R&D Cost	(318)	(270)
Reported EBITDA	(1,034)	991
Reported EBITDA Margins %	-	9.2%

▸ Impact of fire incident at Puducherry facility:

• Financial Performance ▸ Loss of revenues of ~ ₹1,300 Mn due to production disruptions after the fire incident at Puducherry resulted in lower gross margins to the extent of ~ ₹640 Mn
• Key Updates ▸ Shipment delays to Regulated market customers after the fire incident.
• ▸ Losses of Rs. 628 Mn arising on account of the fire incident have been accounted under exceptional item.
• ▸ Insurance claim submitted and under progress. No deferred income on account of insurance claims is considered in our results.

▸ Strategic actions on optimizing high inventory levels:

• ▸ Strategic actions to reduce the overall inventory and working capital levels.
• ▸ One-off impact of provision for discontinued products held in inventory for Rs. 203 Mn and loss on liquidation of discontinued products held in inventory of Rs. 134 Mn.
• ▸ One-off impact of reduction in inventory levels to the extent of ₹ 188 Mn resulting from our strategic actions taken to optimize the existing inventory levels

▸ Deferred Revenue:

▸ Intended shipments for the quarter to the extent of ~₹550 Mn of revenues and ~₹360 Mn gross margins was deferred to Q4'24 due to additional documentation and quality and customer approvals post the fire incident.

▸ Business highlights:

• ▸ Resumed production at Puducherry facility after Post corrective actions and permissions to commence production was accorded.
• ▸ Regulated markets revenues at 68% of 9m'24 revenues (vs. 70% in 9m'23)
• ▸ Change in geography mix with lower Regulated markets sales impacted Gross margins for Q3.
• ▸ Strategic initiatives in progress to deliver 20-22% EBITDA margins by Q4FY25 exit quarter.

Sources of funds (₹ In Million)

Particulars	Mar'23	Dec'23
Shareholders' funds	15,002	11,891
Less: Goodwill	-3,651	-3,651
Net worth	11,351	8,240
Term Loan	3,524	2,680
Working capital Loan	6,488	6,584
Gross Debt	10,012	9,264
Total	21,363	17,504

Use of funds (₹ In Million)
Particulars	Mar'23	Dec'23
Net Tangible Fixed Assets	11,830	11,312
Net Non-current Assets	1,010	947
Net Current Assets	8,523	5,245
Total	21,363	17,504

Gross Debt movement (₹ In Million)

Particulars	Term Loan	Working Capital	Gross Debt
Opening as on 1.4.2023	3,524	6,488	10,012
Add: Fresh Term loan	49	-	49
Less: Term loan repaid	(893)	-	(893)
Change in Working capital	-	96	96
Closing as on 31.12.2023	2,680	6,584	9,264

• ▸ Term loan reduced by ₹893 million during 9M'24 from ₹ 3,524 million to ₹ 2,680 million
• ▸ Gross debt has reduced by ₹ 748 million during 9M'24 from ₹ 10,012 million to ₹ 9,264 million.

IMPACT OF FIRE INCIDENT AT OUR PUDUCHERRY FACIITY

• ➢ Injuries to 14 operators/contract workers
• ➢ Unfortunately, 2 of them succumbed to injuries
• ➢ Damage to two blocks - Recovery, Special product packing – Buildings & Machineries
• ➢ Damage to few Inventories under production

• ➢ Loss of production during the intermittent period

• Consequently, we had taken an exceptional loss of ₹628 Mn due to this fire incident in this quarter. Solara is adequately insured to cover this loss. No deferred income on account of Insurance claimsis considered in our results.

• Focus on Profitable Business portfolio • The fire incident occurred at our Puducherry facility in C Shift on 4th November 2023 around 9.30 pm. Out of the 76 blocks, recovery block no-40 and Special Product Packing were impacted.
• The resultant fire caused injuries to 14 operators/ contract workers. Out of 14 Operators & Contract Workmen who were affected due to the fire incident, 12 were discharged from the hospital while the remaining 2 succumbed to injuries despite best efforts put to recover them. The 12 persons discharged have recovered well.
• The company immediately swung into action and with the help of the Fire department and the support of the Puducherry government officials, the fire was brought under control and the injured were shifted to hospitals in Chennai and Puducherry.
• Out of the 76 Blocks, Two blocks (Block no 40 & 12), were prohibited from use till the plant is rebuilt and all corrective and preventive measures are taken. The affected 2 blocks are getting dismantled and new blocks are getting rebuilt. The construction work is getting executed on a fast-track basis.
• Alternate arrangements have been made to execute the recovery and special grade Ibuprofen within the same site. Production has resumed for Ibuprofen.
• In terms of Business continuity, the facility manufactures Ibuprofen and with the recent approvals from regulators and certain key customers, we expect to be back to full steam in this Plant.
• Safety continues to remain a top priority for Solara, and we have implemented the learnings from the incident in other units.
• Solara is committed to Safety and have taken various measures like Implementation of enhanced safety measures to prevent fire and strengthening of Fire Fighting Systems.

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CORPORATE OFFICE

Second Floor, Admin Block, 27, Vandaloor Kelambakkam Road, Keelakottaiyur Village, Melakottaiyur (PO), Chennai – 600 127 Tel.: +91 44 4740 6200; Fax: +91 44 4740 6190

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: L24230MH2017PLC291636