DRAFT RED HERRING PROSPECTUS

Dated: August 19, 2016

(The Draft Red Herring Prospectus will be updated upon filing with the RoC)

(Please read Section 32 of the Companies Act, 2013)

100% Book Built Offer

LAURUS LABS LIMITED

Our Company was originally incorporated as Laurus Labs Private Limited on September 19, 2005 at Hyderabad, Andhra Pradesh, India as a private limited company under the Companies Act, 1956. Our Company was

subsequently converted into a public limited company and its name was changed to Laurus Labs Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a public limited

company was issued by the Registrar of Companies, Andhra Pradesh and Telangana, located at Hyderabad (“RoC”) on February 12, 2007. Subsequently the name of our Company was changed to Aptuit Laurus

Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on July 19, 2007. Thereafter our Company was converted into a private limited company and its name was

changed to Aptuit Laurus Private Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a private limited company was issued by the RoC on July 24, 2007. Subsequently the

name of our Company was changed to Laurus Labs Private Limited and a fresh certificate of incorporation consequent upon change of name was issued by the RoC on February 21, 2012. Our Company was converted

into a public limited company and the name of our Company was changed to Laurus Labs Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a public limited company

was issued by the RoC on August 16, 2016. For details of change in the name and registered office of our Company, see “History and Certain Corporate Matters” on page 186.

Registered Office: Plot No.21, Jawaharlal Nehru Pharma City, Parawada, Visakhapatnam 531 021, Andhra Pradesh, India

Corporate Office: 2nd Floor, Serene Chambers, Road No. 7, Banjara Hills, Hyderabad 500 034, Telangana, India

Contact Person: G. Venkateswar Reddy, Company Secretary and Compliance Officer; Tel: +91 40 3980 4333; Fax: +91 40 3980 4320

E-mail: secretarial@lauruslabs.com; Website: www.lauruslabs.com

Corporate Identity Number: U24239AP2005PLC047518

OUR PROMOTERS: DR. SATYANARAYANA CHAVA, NAGA RANI CHAVA, DR. RAJU SRIHARI KALIDINDI, RAVI KUMAR V V AND DR. LAKSHMANA RAO C V

INITIAL PUBLIC OFFERING OF UP TO [●] EQUITY SHARES OF FACE VALUE OF `10 EACH (“EQUITY SHARES”) OF LAURUS LABS LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT

A PRICE OF `[●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `[●] PER EQUITY SHARE) (THE “OFFER PRICE”)AGGREGATING UP TO `[●] MILLION (“OFFER”)

COMPRISING A FRESH ISSUE OF UP TO [●] EQUITY SHARES AGGREGATING UP TO `3,000 MILLION (“FRESH ISSUE”) AND AN OFFER FOR SALE OF 24,844,240 EQUITY SHARES BY THE

SELLING SHAREHOLDERS (AS DEFINED HEREUNDER), AGGREGATING TO `[●] MILLION (“OFFER FOR SALE”). THE OFFER INCLUDES A RESERVATION OF UP TO [●] EQUITY

SHARES, AGGREGATING UP TO `60 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) NOT EXCEEDING 5% OF OUR POST-OFFER PAID UP EQUITY

SHARE CAPITAL (THE “EMPLOYEE RESERVATION PORTION”). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS THE “NET OFFER”.

THE OFFER AND THE NET OFFER SHALL CONSTITUTE [●]% AND [●]%, RESPECTIVELY OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.

THE FACE VALUE OF EQUITY SHARES IS `10 EACH. THE PRICE BAND WILL BE DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDERS IN CONSULTATION WITH THE

BRLMS AND THE AMOUNT OF DISCOUNT, IF ANY TO RETAIL INDIVIDUAL BIDDERS AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION (THE

“RETAIL DISCOUNT”) AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BRLMS AND WILL BE ADVERTISED IN ALL EDITIONS OF

THE ENGLISH NATIONAL NEWSPAPER [●], ALL EDITIONS OF THE HINDI NATIONAL NEWSPAPER [●] AND THE [●] EDITION OF THE TELUGU NEWSPAPER, [●] (TELUGU BEING THE

REGIONAL LANGUAGE OF ANDHRA PRADESH, WHERE OUR REGISTERED OFFICE IS LOCATED), EACH WITH WIDE CIRCULATION, AT LEAST FIVE WORKING DAYS PRIOR TO THE

BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO THE BSE LIMITED (“BSE”) AND THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”) FOR THE

PURPOSE OF UPLOADING ON THEIR WEBSITES.* * Retail Discount of `[●] to the Offer Price may be offered to the Retail Individual Bidders and the Eligible Employees bidding in the Employee Reservation Portion.

In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days after such revision in the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. Any

revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the website of the BRLMs and at the terminals of the Syndicate Members.

In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), and in accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009, as amended (the “SEBI ICDR Regulations”) the Offer is being made through the Book Building Process wherein 50% of the Net Offer shall be allocated on a proportionate basis to Qualified

Institutional Buyers (“QIBs”), provided that our Company may allocate upto 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third shall be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Offer Price, in accordance with the SEBI ICDR Regulations. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for

allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject

to valid Bids being received at or above the Offer Price. Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be

available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, [●] Equity Shares will be available for allocation on a proportionate basis to Eligible Employees, subject to valid Bids being received from them at or above the Offer Price after the Retail Discount, if any. All potential investors, other than Anchor Investors, are required to mandatorily

utilise the Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”) to participate in the Offer. Anchor

Investors are not permitted to participate in the Anchor Investor Portion through the ASBA process. For details, see “Offer Procedure” on page 397.

RISK IN RELATION TO THE FIRST OFFER

This being the first public issue of our Company, there has been no formal market for the Equity Shares. The face value of the Equity Shares is `10 and the Floor Price is [●] times the face value and the Cap Price is [●] times the face

value. The Offer Price (determined and justified by our Company in consultation with the BRLMs as stated under “Basis for Offer Price” on page 98) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS

Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Offer unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Offer. For taking an investment decision, investors must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in

the Offer have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific attention of

the investors is invited to “Risk Factors” on page 17.

ISSUER’S AND SELLING SHAREHOLDERS’ ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Offer, which is material in the context of

the Offer, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held

and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Further,

each Selling Shareholder, severally and not jointly, accepts responsibility for and confirms only statements specifically confirmed or undertaken by such Selling Shareholder in this Draft Red Herring Prospectus to the extent that the statements specifically pertain to such Selling Shareholder and its portion of the Equity Shares offered under the Offer for Sale and confirms that such statements are true and correct in all material respects and are not misleading in any

material respect.

LISTING

The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Our Company has received an ‘in-principle’ approval from the BSE and the NSE for the listing of the Equity

Shares pursuant to letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [●].

BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Kotak Mahindra Capital Company

Limited

1st Floor, 27 BKC, Plot No. 27

“G” Block, Bandra Kurla Complex

Bandra (East), Mumbai 400 051

Maharashtra, India

Tel: +91 22 4336 0000

Fax: +91 22 6713 2447

E-mail: lauruslabs.ipo@kotak.com

Investor grievance email:

kmccredressal@kotak.com

Website:

www.investmentbank.kotak.com

Contact Person: Ganesh Rane SEBI Registration No.:

INM000008704

Citigroup Global Markets India

Private Limited

1202, 12th Floor, First International

Financial Center, G-Block, Bandra

Kurla Complex, Bandra (East),

Mumbai 400 051

Maharashtra, India

Tel: +91 22 6175 9999

Fax: +91 22 6175 9961

E-mail: lauruslabs.ipo@citi.com

Investor grievance e-mail:

investors.cgmib@citi.com

Website:

http://www.online.citibank.co.in/rht

m/citigroupglobalscreen1.htm

Contact Person: Rahul Roy

SEBI Registration No.:

INM000010718

Jefferies India Private Limited

42/43, 2 North Avenue

Maker Maxity, Bandra-Kurla Complex

Bandra (East)

Mumbai 400 051

Maharashtra, India

Tel: +91 22 4356 6000

Fax: +91 22 6765 5595

E-mail: Laurus.IPO@jefferies.com

Investor grievance email:

india.investor.grievance@jefferies.com

Website: www. jefferies.com

Contact Person: Ashish Parasrampuria

SEBI Registration No.:

INM000011443

SBI Capital Markets Limited

202, Maker Tower “E”

Cuffe Parade

Mumbai 400 005

Maharashtra, India

Tel: +9122 2217 8300

Fax: +9122 2218 8332

E-mail: laurus.ipo@sbicaps.com

Investor grievance e-mail:

Investor.relations@sbicaps.com

Website: www.sbicaps.com

Contact Person: Kavita Tanwani/

Sambit Rath

SEBI Registration No.:

INM000003531

Karvy Computershare Private

Limited

Selenium Tower B

Plot No. 31-32, Gachibowli

Financial District, Nanakramguda

Hyderabad 500 032

Tel: +91 40 6716 2222

Fax: +91 40 2343 1551

E-mail: einward.ris@karvy.com

Investor grievance email:

lauruslabs.ipo@karvy.com

Website: www.karisma.karvy.com

Contact Person: M Muralikrishna

SEBI Registration No.: INR000000221

BID/OFFER PROGRAMME

BID/OFFER OPENS ON [](1)

BID/OFFER CLOSES ON [](2) (1) Our Company may, in consultation with the BRLMs, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Offer Period shall be one Working

Day prior to the Bid/Offer Opening Date. (2) Our Company and the Selling Shareholders may, in consultation with the BRLMs, consider closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/ Offer Closing Date in accordance with the

SEBI ICDR Regulations.

TABLE OF CONTENTS

SECTION I: GENERAL .......................................................................................................................................... 2

DEFINITIONS AND ABBREVIATIONS ......................................................................................................... 2

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA .................................................... 13

FORWARD-LOOKING STATEMENTS ........................................................................................................ 15

SECTION II: RISK FACTORS ............................................................................................................................. 17

SECTION III: INTRODUCTION .......................................................................................................................... 41

SUMMARY OF INDUSTRY ........................................................................................................................... 41

SUMMARY OF OUR BUSINESS ................................................................................................................... 44

SUMMARY OF FINANCIAL INFORMATION ............................................................................................. 49

THE OFFER ..................................................................................................................................................... 57

GENERAL INFORMATION ........................................................................................................................... 59

CAPITAL STRUCTURE ................................................................................................................................. 67

OBJECTS OF THE OFFER .............................................................................................................................. 90

BASIS FOR OFFER PRICE ............................................................................................................................. 98

STATEMENT OF TAX BENEFITS .............................................................................................................. 102

SECTION IV: ABOUT OUR COMPANY ............................................................................................................ 107

INDUSTRY OVERVIEW .............................................................................................................................. 107

OUR BUSINESS ............................................................................................................................................ 161

REGULATIONS AND POLICIES ................................................................................................................. 178

HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................ 186

OUR MANAGEMENT .................................................................................................................................. 196

OUR PROMOTERS AND PROMOTER GROUP ......................................................................................... 214

OUR GROUP ENTITY .................................................................................................................................. 219

RELATED PARTY TRANSACTIONS ......................................................................................................... 221

DIVIDEND POLICY ..................................................................................................................................... 222

SECTION V: FINANCIAL INFORMATION ....................................................................................................... 224

FINANCIAL STATEMENTS ........................................................................................................................ 224

FINANCIAL INDEBTEDNESS .................................................................................................................... 338

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS ............................................................................................................................................... 341

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS .................... 360

SECTION VI: LEGAL AND OTHER INFORMATION....................................................................................... 367

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................... 367

GOVERNMENT AND OTHER APPROVALS ............................................................................................. 370

OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 373

SECTION VII: OFFER INFORMATION ............................................................................................................ 389

TERMS OF THE OFFER ............................................................................................................................... 389

OFFER STRUCTURE .................................................................................................................................... 394

OFFER PROCEDURE ................................................................................................................................... 397

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ............................................... 441

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ........................................................ 442

SECTION IX: OTHER INFORMATION............................................................................................................. 544

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................................. 544

DECLARATION ............................................................................................................................................ 548

2

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise

indicates or implies, shall have the meaning as provided below. References to any legislation, act, regulation, rules,

guidelines or policies shall be to such legislation, act or regulation, as amended from time to time.

General Terms

Term Description

“our Company”, “the Company”,

“the Issuer” or “Laurus Labs”

Laurus Labs Limited, a company incorporated under the Companies Act, 1956 and

having its Registered Office at Plot No.21, Jawaharlal Nehru Pharma City, Parawada,

Visakhapatnam 531 021, Andhra Pradesh, India

“we”, “us” or “our” Unless the context otherwise indicates or implies, refers to our Company together with its

Subsidiary

Company Related Terms

Term Description

Aptuit Aptuit (Asia) Private Limited

Aptuit Informatics Aptuit Informatics India Private Limited

Aptuit Singapore Aptuit (Singapore) Private Limited

Articles of Association/AoA Articles of association of our Company, as amended

Associate Company Sriam Labs

Auditors/Statutory Auditors Statutory auditors of our Company, namely, S. R. Batliboi & Associates LLP, Chartered

Accountants

Board/Board of Directors Board of directors of our Company or a duly constituted committee thereof

Bluewater Bluewater Investment Ltd

CCPS Series A Preference Shares, Series B Preference Shares and Series C Preference Shares

Corporate Office Corporate office of our Company located at 2nd Floor, Serene Chambers, Road No.7,

Banjara Hills, Hyderabad 500 034, Telangana, India

Director(s) Director(s) of our Company

Equity Shares Equity shares of our Company of face value of `10 each

ESOP 2011 Laurus Employee Stock Option Scheme 2011

ESOP 2016 Laurus Employee Stock Option Scheme 2016

Erstwhile Subsidiary Our erstwhile subsidiary company, namely Viziphar Biosciences Private Limited which

we divested, with effect from April 1, 2016

FIP Fidelity India Principals

FIL Capital Advisors FIL Capital Advisors Trustee Company Private Limited

FIL Capital Management FIL Capital Management (Mauritius) Limited

Frost and Sullivan Frost and Sullivan (India) Private Limited

Group Entity The company as covered under the applicable accounting standards and also other

companies as considered material by our Board, as identified in“Our Group Entity” on

page 219

Key Management Personnel Key management personnel of our Company in terms of Regulation 2(1)(s) of the SEBI

ICDR Regulations, Section 2(51) of the Companies Act, 2013 and as disclosed in “Our

Management” on page 196

Laurus Inc. Laurus Synthesis Inc.

Laurus Investment Agreement Investment agreement dated May 2, 2014 executed between our Company, Dr.

Satyanarayana Chava, Naga Rani Chava, Ravi Kumar V V, Dr. Raju Srihari Kalidindi,

FIL Capital Management, FIP, Aptuit, Bluewater and other shareholders of our

Company, as amended

Memorandum of

Association/MOA

Memorandum of Association of our Company, as amended

Promoters Promoters of our Company, namely, Dr. Satyanarayana Chava, Naga Rani Chava, Dr.

Raju Srihari Kalidindi, Ravi Kumar V V and Dr. Lakshmana Rao C V

For details, see “Our Promoters and Promoter Group” on page 214

Promoter Group Persons and entities constituting the promoter group of our Company in terms of

Regulation 2(1)(zb) of the SEBI ICDR Regulations

For details, see “Our Promoters and Promoter Group” on page 214

Registered Office Registered office of our Company located at Plot No.21, Jawaharlal Nehru Pharma City,

3

Term Description

Parawada, Visakhapatnam 531 021, Andhra Pradesh, India

Registrar of Companies/RoC Registrar of Companies, Andhra Pradesh & Telangana, located at Hyderabad

Restated Consolidated Financial

Statements

The restated consolidated financial information of our Company, our Erstwhile

Subsidiary, our Subsidiary and our Associate Company which comprises of the restated

consolidated balance sheet, the restated consolidated profit and loss information and the

restated consolidated cash flow information as at and for the financial years ended March

31, 2016, March 31, 2015 and March 31, 2014, together with the annexures and notes

thereto, which have been prepared in accordance with the Companies Act, the Indian

GAAP and restated in accordance with the SEBI ICDR Regulations

Restated Financial Statements Collectively, the Restated Consolidated Financial Statements and the Restated

Unconsolidated Financial Statements

Restated Unconsolidated Financial

Statements

The restated unconsolidated financial information of our Company which comprises of

the restated unconsolidated balance sheet, the restated unconsolidated profit and loss and

the restated unconsolidated cash flow information as at and for the financial years ended

March 31, 2016, March 31, 2015, March 31, 2014, March 31, 2013 and March 31, 2012,

which have been prepared in accordance with the Companies Act, the Indian GAAP and

restated in accordance with the SEBI ICDR Regulations

R&D Center Research and Development Center located at Plot No. DS1 and DS2, IKP Knowledge

Park, Turkapally, Shameerpet, Ranga Reddy District, Hyderabad 500 078, Telangana,

India

Selling Shareholders Aptuit, Bluewater, FIL Capital Management and FIP (acting through its trustee FIL

Capital Advisors)

Series A Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series A preference shares of face value of `10 each

Series B Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series B preference shares of face value of `243 each

Series C Preference Shares 0.001% fully and compulsorily convertible, cumulative, participating and non-

redeemable Series C preference shares of face value of `10 each

Shareholders Shareholders of our Company from time to time

Sriam Labs Sriam Labs Private Limited

Subsidiary Subsidiary of our Company namely Laurus Synthesis Inc.

Unit 1 Manufacturing facility located at Plot No. 21, Jawaharlal Nehru Pharma City, Parawada,

Visakhapatnam 531 021, Andhra Pradesh, India

Unit 2 Manufacturing facility located at Plot No. 19, 20, 21, APSEZ, Achutapuram,

Visakhapatnam 531 011, Andhra Pradesh, India

Unit 3 Manufacturing facility located at Plot No. 18, Jawaharlal Nehru Pharma City, Parawada,

Visakhapatnam 531 021, Andhra Pradesh, India

Unit 4 Manufacturing facility located at Plot No 25, 25A to 25K, APSEZ – Denotified Area,

Alalamkoduru Village, Rambilli (M), Visakhapatnam, Andhra Pradesh

Unit 5 Manufacturing facility located at Plot No 102 and 103, Lemarthi Village, Parawada (M),

Visakhapatnam 531 021, Andhra Pradesh

Viziphar Viziphar Biosciences Private Limited

Offer Related Terms

Term Description

Acknowledgement Slip The slip or document issued by the Designated Intermediary to a Bidder as proof of

registration of the Bid cum Application Form

Allot/Allotment/Allotted Unless the context otherwise requires, allotment of the Equity Shares pursuant to the

Fresh Issue and transfer of the Equity Shares offered by the Selling Shareholders

pursuant to the Offer for Sale to the successful Bidders

Allotment Advice Note or advice or intimation of Allotment sent to the Bidders who have been or are to be

Allotted the Equity Shares after the Basis of Allotment has been approved by the

Designated Stock Exchange

Allottee A successful Bidder to whom the Equity Shares are Allotted

Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in

accordance with the requirements specified in the SEBI ICDR Regulations and the Red

Herring Prospectus

Anchor Investor Allocation Price The price at which Equity Shares will be allocated to Anchor Investors at the end of the

Anchor Investor Bid/Offer Period in terms of the Red Herring Prospectus and the

Prospectus which will be decided by our Company, in consultation with the BRLMs

Anchor Investor Application Form The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion and

which will be considered as an application for Allotment in terms of the Red Herring

Prospectus and Prospectus

4

Term Description

Anchor Investor Bid/Offer Period The day, one Working Day prior to the Bid/Offer Opening Date, on which Bids by

Anchor Investors shall be submitted and allocation to Anchor Investors shall be

completed

Anchor Investor Offer Price Final price at which the Equity Shares will be Allotted to Anchor Investors in terms of

the Red Herring Prospectus and the Prospectus, which price will be equal to or higher

than the Offer Price but not higher than the Cap Price

The Anchor Investor Offer Price will be decided by our Company in consultation with

the BRLMs

Anchor Investor Portion Up to 60% of the QIB Portion which may be allocated by our Company in consultation

with the BRLMs, to Anchor Investors on a discretionary basis, in accordance with the

SEBI ICDR Regulations

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,

subject to valid Bids being received from domestic Mutual Funds at or above the Anchor

Investor Allocation Price

Application Supported by Blocked

Amount or ASBA

An application, whether physical or electronic, used by ASBA Bidders to make a Bid and

authorize an SCSB to block the Bid Amount in the ASBA Account

ASBA Account A bank account maintained with an SCSB and specified in the ASBA Form submitted by

ASBA Bidders for blocking the Bid Amount mentioned in the ASBA Form

ASBA Bidders Any Bidder except Anchor Investor

ASBA Form An application form, whether physical or electronic, used by ASBA Bidders which will

be considered as the application for Allotment in terms of the Red Herring Prospectus

and the Prospectus

Banker to the Offer/Escrow

Collection Bank

Banks which are clearing members and registered with SEBI as bankers to an issue and

with whom the Escrow Account will be opened, in this case being [●]

Basis of Allotment Basis on which Equity Shares will be Allotted to successful Bidders under the Offer and

which is described in “Offer Procedure” on page 397

Bid An indication to make an offer during the Bid/Offer Period by ASBA Bidders pursuant to

submission of the ASBA Form, or during the Anchor Investor Bid/Offer Period by an

Anchor Investor pursuant to submission of the Anchor Investor Application Form, to

subscribe to or purchase the Equity Shares at a price within the Price Band, including all

revisions and modifications thereto as permitted under the SEBI ICDR Regulations

The term “Bidding” shall be construed accordingly

Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form and

payable by the Bidder or blocked in the ASBA Account of the ASBA Bidder, as the case

may be, upon submission of the Bid in the Offer, less Retail Discount

Bid cum Application Form The Anchor Investor Application Form or the ASBA Form, as applicable

Bid Lot [●]

Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which

the Designated Intermediaries will not accept any Bids, which shall be notified in all

editions of the English national newspaper [●], all editions of the Hindi national

newspaper [●] and the [●] edition of the Telugu newspaper [●] (Telugu being the

regional language of Andhra Pradesh, where the registered office of the Company is

situated), each with wide circulation

Our Company and the Selling Shareholders may, in consultation with the BRLMs,

consider closing the Bid/ Offer Period for QIBs one Working Day prior to the Bid/ Offer

Closing Date in accordance with the SEBI ICDR Regulations

Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which the

Designated Intermediaries shall start accepting Bids, which shall be notified in all

editions of the English national newspaper [●], all editions of the Hindi national

newspaper [●] and the [●] edition of the Telugu newspaper, [●], (Telugu being the

regional language of Andhra Pradesh, where the registered office of the Company is

situated) each with wide circulation

Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date

and the Bid/Offer Closing Date, inclusive of both days, during which prospective Bidders

can submit their Bids, including any revisions thereof

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring

Prospectus and the Bid cum Application Form and unless otherwise stated or implied,

includes an Anchor Investor

Bidding Centers Centers at which at the Designated Intermediaries shall accept the ASBA Forms, i.e,

Designated SCSB Branch for SCSBs, Specified Locations for Syndicate, Broker Centres

for Registered Brokers, Designated RTA Locations for RTAs and Designated CDP

5

Term Description

Locations for CDPs

Book Building Process Book building process, as provided in Schedule XI of the SEBI ICDR Regulations, in

terms of which the Offer is being made

Book Running Lead Managers or

BRLMs

The book running lead managers to the Offer namely, Kotak, Citi, Jefferies and SBICAP

Broker Centres Broker centres notified by the Stock Exchanges where ASBA Bidders can submit the

ASBA Forms to a Registered Broker

The details of such Broker Centres, along with the names and contact details of the

Registered Broker are available on the respective websites of the Stock Exchanges

(www.bseindia.com and www.nseindia.com)

CAN/Confirmation of Allocation

Note

Notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who

have been allocated the Equity Shares, after the Anchor Investor Bid/Offer Period

Cap Price The higher end of the Price Band, above which the Offer Price and the Anchor Investor

Offer Price will not be finalised and above which no Bids will be accepted

Cash Escrow Agreement Agreement dated [●] entered into by our Company, the Selling Shareholders, the

Registrar to the Offer, the BRLMs, the Escrow Collection Bank, the Public Offer Account Banks and the Refund Bank, inter alia, for collection of the Bid Amounts from

Anchor Investors, transfer of funds to the Public Offer Account and where applicable,

refunds of the amounts collected from Anchor Investors, on the terms and conditions

thereof

Citi Citigroup Global Markets India Private Limited

Client ID Client identification number maintained with one of the Depositories in relation to demat

account

Collecting Depository Participant

or CDP

A depository participant as defined under the Depositories Act, registered with SEBI and

who is eligible to procure Bids at the Designated CDP Locations in terms of circular no.

CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI

Cut-off Price Offer Price, finalised by our Company in consultation with the BRLMs

Only Retail Individual Bidders and Eligible Employees bidding in the Employee

Reservation Portion are entitled to Bid at the Cut-off Price. QIBs (including Anchor

Investors) and Non-Institutional Investors are not entitled to Bid at the Cut-off Price

Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s

father/husband, investor status, occupation and bank account details

Designated Date The date on which funds are transferred by the Escrow Collection Banks from the Escrow

Account and the amounts blocked by the SCSBs are transferred from the ASBA

Accounts, as the case may be, to the Public Issue Account or the Refund Account, as

appropriate, after filing of the Prospectus with the RoC Designated CDP Locations Such locations of the CDPs where Bidders can submit the ASBA Forms.

The details of such Designated CDP Locations, along with names and contact details of

the Collecting Depository Participants eligible to accept ASBA Forms are available on

the respective websites of the Stock Exchanges (www.bseindia.com and

www.nseindia.com)

Designated Intermediaries Syndicate, sub-Syndicate/agents, SCSBs, Registered Brokers, CDPs and RTAs, who are

authorized to collect ASBA Forms from the ASBA Bidders, in relation to the Offer

Designated RTA Locations Such locations of the RTAs where Bidders can submit the ASBA Forms to RTAs.

The details of such Designated RTA Locations, along with names and contact details of

the RTAs eligible to accept ASBA Forms are available on the respective websites of the

Stock Exchanges (www.bseindia.com and www.nseindia.com)

Designated SCSB Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of which is

available on the website of SEBI at http://www.sebi.gov.in/sebiweb/home/list/5/3

3/0/0/Recognised-Intermediaries or at such other website as may be prescribed by SEBI

from time to time

Designated Stock Exchange [●]

Draft Red Herring Prospectus or

DRHP

This Draft Red Herring Prospectus dated August 19, 2016, issued in accordance with the

SEBI ICDR Regulations, which does not contain complete particulars of the price at

which the Equity Shares will be Allotted and the size of the Offer

Eligible Employees All or any of the following:

(a) a permanent and full time employee of our Company (excluding such employees not eligible to invest in the Offer under applicable laws, rules, regulations and

guidelines) as of the date of filing of the Red Herring Prospectus with the RoC and

who continues to be an employee of our Company until the submission of the Bid

http://www.bseindia/http://www.nseindia/http://www.bseindia/http://www.nseindia/http://www.bseindia/http://www.nseindia/http://www/

6

Term Description

cum Application Form, and is based, working and present in India as on the date of

submission of the Bid cum Application Form; and

(b) a Director of our Company, whether a whole time Director, part time Director or otherwise, (excluding such Directors not eligible to invest in the Offer under

applicable laws, rules, regulations and guidelines and any Promoter) as of the date of

filing the Red Herring Prospectus with the RoC and who continues to be a Director

of our Company until the submission of the Bid cum Application Form and is based

and present in India as on the date of submission of the Bid cum Application Form.

An employee of our Company, who is recruited against a regular vacancy but is on

probation as on the date of submission of the Bid cum Application Form will also be

deemed a ‘permanent and a full time employee’.

The maximum Bid Amount under the Employee Reservation Portion by an Eligible

Employee shall not exceed `200,000 on a net basis.

Eligible NRI(s) NRI(s) from jurisdictions outside India where it is not unlawful to make an offer or

invitation under the Offer and in relation to whom the Bid cum Application Form and the

Red Herring Prospectus will constitute an invitation to subscribe to or to purchase the

Equity Shares

Employee Reservation Portion The portion of the Offer, being [●] Equity Shares aggregating to `60 million, available

for allocation to Eligible Employees, on a proportionate basis

Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Anchor

Investors will transfer money through direct credit/NEFT/RTGS in respect of the Bid

Amount when submitting a Bid

First Bidder Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision

Form and in case of joint Bids, whose name shall also appear as the first holder of the

beneficiary account held in joint names

Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which the

Offer Price and the Anchor Investor Offer Price will be finalised and below which no

Bids will be accepted

Fresh Issue The fresh issue of up to [] Equity Shares aggregating up to `3,000 million by our

Company

General Information

Document/GID

The General Information Document prepared and issued in accordance with the circular

(CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI, suitably modified and

included in “Offer Procedure” on page 397

Jefferies Jefferies India Private Limited

Kotak Kotak Mahindra Capital Company Limited

Maximum RIB Allottees Maximum number of RIBs who can be allotted the minimum Bid Lot. This is computed

by dividing the total number of Equity Shares available for Allotment to RIBs by the

minimum Bid Lot

Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or [] Equity Shares

which shall be available for allocation to Mutual Funds only, subject to valid Bids being

received at or above the Offer Price

Net Offer The Offer minus the Employee Reservation Portion

Net Proceeds Proceeds of the Fresh Issue less our Company’s share of the Offer expenses

For further information about use of the Net Proceeds and the Offer expenses, see

“Objects of the Offer” on page 90

Non-Institutional Bidder(s) All Bidders that are not QIBs or Retail Individual Bidders or Eligible Employees bidding

in the Employee Reservation Portion, who have Bid for Equity Shares for an amount

more than `200,000 (but not including NRIs other than Eligible NRIs)

Non-Institutional Portion The portion of the Net Offer being not less than 15% of the Offer consisting of [] Equity

Shares which shall be available for allocation on a proportionate basis to Non-

Institutional Bidders, subject to valid Bids being received at or above the Offer Price

Non-Resident A person resident outside India, as defined under FEMA and includes a non resident

Indian, FIIs, FPIs and FVCIs

Offer The initial public offering of up to [] Equity Shares of face value of `10 each for cash at

a price of `[●] each, aggregating up to `[●] million comprising the Fresh Issue and the

Offer for Sale

The Offer comprises of Net Offer to the public aggregating up to `[●] million and

Employee Reservation Portion. The Offer includes a reservation of [●] Equity Shares

aggregating up to `60 million for subscription by Eligible Employees

7

Term Description

Offer Agreement The agreement dated August 19, 2016, between our Company, the Selling Shareholders

and the BRLMs, pursuant to which certain arrangements are agreed to in relation to the

Offer

Offer for Sale The offer for sale of 24,844,240 Equity Shares by Selling Shareholders at the Offer Price

aggregating to `[●] million in terms of the Red Herring Prospectus

Offer Price The final price at which Equity Shares will be Allotted to Bidders other than Anchor

Investors. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor

Offer Price in terms of the Red Herring Prospectus

A discount of up to [●]% (equivalent of `[●]) per Equity Share on the Offer Price may be

offered to Eligible Employees bidding in the Employee Reservation Portion and to the

Retail Individual Bidders. The Rupee amount of such discount, if any, will be decided by

our Company in consultation with the BRLMs, and advertised in [●] editions of [●], [●]

editions of [●]and [●] editions of [●] (which are widely circulated English, Hindi and

Telugu newspapers, Telugu being the regional language of Andhra Pradesh where our

Registered Office is located), at least five Working Days prior to the Bid/ Offer Opening

Date, and shall be made available to the Stock Exchanges for the purpose of uploading on

their website.

The Offer Price will be decided by our Company in consultation with the BRLMs on the

Pricing Date

Offer Proceeds The proceeds of the Offer that are available to our Company and the Selling Shareholders

Price Band Price band of a minimum price of `[●] per Equity Share (Floor Price) and the maximum

price of `[●] per Equity Share (Cap Price) including any revisions thereof

The Price Band will be decided by our Company and the Selling Shareholders in

consultation with the BRLMs and the minimum Bid Lot size for the Offer will be decided

by our Company in consultation with the BRLMs and will be advertised, at least five

Working Days prior to the Bid/Offer Opening Date, in all editions of the English national

newspaper [●], all editions of the Hindi national newspaper [●] and the [●] edition of the

Telugu newspaper [●] (Telugu being the regional language of Andhra Pradesh, where the

Registered Office of the Company is situated), each with wide circulation

Pricing Date The date on which our Company in consultation with the BRLMs, will finalise the Offer

Price

Prospectus The prospectus to be filed with the RoC after the Pricing Date in accordance with Section 26 of the Companies Act, 2013, and the SEBI ICDR Regulations containing, inter alia,

the Offer Price that is determined at the end of the Book Building Process, the size of the

Offer and certain other information including any addenda or corrigenda thereto

Public Issue Account Bank account opened under Section 40(3) of the Companies Act, 2013 to receive monies

from the Escrow Account and ASBA Accounts on the Designated Date

Public Issue Account Bank The bank(s) with which the Public Issue Account(s) shall be maintained, in this case

being [●]

QIB Portion The portion of the Offer (including the Anchor Investor Portion) being 50% of the Net

Offer consisting of [●] Equity Shares which shall be Allotted to QIBs (including Anchor

Investors), subject to valid Bids being received at or above the Offer Price

Qualified Institutional Buyers or

QIBs or QIB Bidders

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR

Regulations

Red Herring Prospectus or RHP The red herring prospectus to be issued in accordance with Section 32 of the Companies

Act, 2013 and the provisions of the SEBI ICDR Regulations, which does not have

complete particulars of the price at which the Equity Shares will be offered and the size

of the Offer including any addenda or corrigenda thereto

The red herring prospectus will be registered with the RoC at least three days before the

Bid/Offer Opening Date and will become the Prospectus upon filing with the RoC after

the Pricing Date

Refund Account The account opened with the Refund Bank, from which refunds, if any, of the whole or

part of the Bid Amount to the Anchor Investors shall be made

Refund Bank [●]

Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other

than the BRLMs and the Syndicate Members and eligible to procure Bids in terms of

Circular No. CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

Registrar Agreement The agreement dated August 18, 2016, entered into among our Company, the Selling

Shareholders and the Registrar to the Offer in relation to the responsibilities and

obligations of the Registrar to the Offer pertaining to the Offer

Registrar and Share Transfer Registrar and share transfer agents registered with SEBI and eligible to procure Bids at

8

Term Description

Agents or RTAs the Designated RTA Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015

dated November 10, 2015 issued by SEBI

Registrar to the Offer/Registrar Karvy Computershare Private Limited

Retail Individual Bidder(s)/RIB(s) Individual Bidders, other than Eligible Employees bidding in the Employee Reservation

Portion, who have Bid for the Equity Shares for an amount not more than `200,000 in

any of the bidding options in the Net Offer (including HUFs applying through their Karta

and Eligible NRIs and does not include NRIs other than Eligible NRIs)

Retail Discount A discount of `[●] that may be offered to Retail Individual Bidders and the Eligible

Employees bidding in the Employee Reservation Portion, by our Company in

consultation with the BRLMs, at the time of making a Bid

Retail Portion The portion of the Offer being not less than 35% of the Net Offer consisting of [●] Equity

Shares which shall be available for allocation to Retail Individual Bidders in accordance

with the SEBI ICDR Regulations subject to valid Bids being received at or above the

Offer Price

Revision Form Form used by the Bidders to modify the quantity of the Equity Shares or the Bid Amount

in any of their ASBA Form(s) or any previous Revision Form(s)

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their

Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage. Retail

Individual Bidders and Eligible Employees can revise their Bids during the Bid/Offer

Period and withdraw their Bids until Bid/Offer Closing Date.

SBICAP SBI Capital Markets Limited

Self Certified Syndicate Bank(s) or

SCSB(s)

The banks registered with SEBI, offering services in relation to ASBA, a list of which is

available on the website of SEBI at

http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and

updated from time to time

Share Escrow Agent Escrow agent appointed pursuant to the Share Escrow Agreement, namely, [●]

Share Escrow Agreement Agreement dated [●] entered into by the Selling Shareholders, our Company and the

Share Escrow Agent in connection with the transfer of Equity Shares under the Offer for

Sale by such Selling Shareholders and credit of such Equity Shares to the demat account

of the Allottees

Specified Locations Bidding centers where the Syndicate shall accept ASBA Forms from Bidders

Syndicate Agreement Agreement dated [●] entered into among the BRLMs, the Syndicate Members, our

Company and the Selling Shareholders in relation to collection of Bid cum Application

Forms by the Syndicate

Syndicate Members Intermediaries registered with SEBI who are permitted to carry out activities as an

underwriter, namely, [●]

Syndicate The BRLMs and the Syndicate Members

Underwriters [●]

Underwriting Agreement The agreement among the Underwriters, our Company and the Selling Shareholders to be

entered into on or after the Pricing Date

Working Day “Working Day” means all days, other than second and fourth Saturday of the month,

Sunday or a public holiday, on which commercial banks in Mumbai are open for

business; provided however, with reference to (a) announcement of Price Band; and (b)

Bid/Offer Period, “Working Day” shall mean all days, excluding all Saturdays, Sundays

or a public holiday, on which commercial banks in Mumbai are open for business; and

with reference to the time period between the Bid/Offer Closing Date and the listing of

the Equity Shares on the Stock Exchanges, “Working Day” shall mean all trading days of

Stock Exchanges, excluding Sundays and bank holidays, as per the SEBI Circular

SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016

Technical/Industry Related Terms/Abbreviations

Conventional and General Terms or Abbreviations

Term Description

`/Rs./Rupees/INR Indian Rupees

3TC Lamivudine and Zidovudine

ABC Abacavir

AIDS Acquired immunodeficiency syndrome

AIF Alternative Investment Fund as defined in and registered with SEBI under the Securities

and Exchange Board of India (Alternative Investments Funds) Regulations, 2012

Air Act Air (Prevention and Control of Pollution) Act, 1981

9

Term Description

AML Acute Myeloid Leukemia

ANDA Abbreviated New Drug Applications

APIs Active Pharmaceutical Ingredients

ART Antiretroviral therapy

ARV Anti-retro Viral

AS/Accounting Standards Accounting Standards issued by the Institute of Chartered Accountants of India

Bn/bn Billion

Boilers Act Indian Boilers Act, 1923

BSE BSE Limited

BMW Rules Bio-Medical Waste (Management and Handling) Rules, 1998

BMS Bristol-Myers Squibb Company

CAGR CAGR = [Ending Value / Beginning Value](1/# of years) -1

Category I foreign portfolio

investors

FPIs who are registered as “Category I foreign portfolio investors” under the SEBI FPI

Regulations

Category II foreign portfolio

investors

FPIs who are registered as “Category II foreign portfolio investors” under the SEBI FPI

Regulations

Category III foreign portfolio

investors

FPIs who are registered as “Category III foreign portfolio investors” under the SEBI FPI

Regulations

CCI Competition Commission of India

CCR5 antagonists Chemokine receptor antagonists

CD4 cells CD4 T-lymphocytes

CDSL Central Depository Services (India) Limited

CDSCO Central Drugs Standard Control Organisation

CHAI Clinton Health Access Initiative, Inc.

CIN Corporate Identity Number

COBI Cobicistat

Companies Act Companies Act, 1956 and Companies Act, 2013, as applicable

Companies Act, 1956 Companies Act, 1956 (without reference to the provisions thereof that have ceased to

have effect upon notification of the sections of the Companies Act, 2013) along with the

relevant rules made thereunder

Companies Act, 2013 Companies Act, 2013, to the extent in force pursuant to the notification of the Notified

Sections, along with the relevant rules, regulations, clarifications, circulars and

notifications issued thereunder

CRO Clinical research organization

CST Act Central Sales Tax Act, 1956

Competition Act The Competition Act, 2002

Customs Act The Customs Act, 1962

d4T Stavudine

DAA Acting anti-viral drugs

DCA Drugs and Cosmetics Act, 1940

DCA Rules Drugs and Cosmetics Rules, 1945

DCGI Drug Controller General of India

Depositories NSDL and CDSL

Depositories Act The Depositories Act, 1996

DFID Department for International Development

DIN Director Identification Number

DP ID Depository Participant’s Identification

DP/Depository Participant A depository participant as defined under the Depositories Act

Drugs Act Drugs (Control) Act, 1950

DRV Darunavir

DSIR Department of Scientific and Industrial Reserch

DTG Dolutegravir

EFV Efavirenz

EGM Extraordinary General Meeting

EOIs Expressions of Interest

EOU Scheme Export Oriented Unit Scheme

EPA Environment Protection Act, 1986

EPF Act The Employees Provident Fund and Miscellaneous Provisions Act, 1952

EPS Earnings Per Share

ESI Act The Employees State Insurance Act, 1948

ETV Etravirine

EVG Elvitegravir

Explosives Act The Explosives Act, 1884

10

Term Description

FCNR Foreign Currency Non-Resident

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999, read with rules and regulations thereunder

FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations,

2000 and amendments thereto

FIs Fusion inhibitors

FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations

Financial Year/Fiscal/ Fiscal

Year/FY Unless stated otherwise, the period of 12 months ending March 31 of that particular year

FIPB Foreign Investment Promotion Board

Food Authority Food Safety and Standards Authority of India

FPI(s) Foreign Portfolio Investors as defined under the SEBI FPI Regulations

FPP Finished pharmaceutical product

FSSA The Food Safety and Standards Act, 2006

FSSR Food Safety and Standards Rules, 2011

FTC Emtricitabine

FVCI Foreign Venture Capital Investors as defined and registered under the SEBI FVCI

Regulations

GA Generic-accessible

GDP Gross domestic product

GFATM Global Fund to Fight AIDS, Tuberculosis and Malaria

GIR General Index Register

GoI/Government Government of India

GST Goods and Services Tax

HAART Highly active antriretroviral therapy

Hazardous Waste Rules / HMW

Rules

Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008

HCV Hepatitis C Virus

HIV Human immunodeficiency virus

ICAI The Institute of Chartered Accountants of India

ICDS Income Computation and Disclosure Standards notified by the Ministry of Finance on

March 31, 2015

IDV Indinavir

IFRS International Financial Reporting Standards

Income Tax Act / IT Act The Income Tax Act, 1961

Ind AS Indian Accounting Standards (Ind AS)

India Republic of India

Indian Accounting Standard

Rules

The Companies (Indian Accounting Standards) Rules of 2015

Indian GAAP Generally Accepted Accounting Principles in India

INSTIs Integrase inhibitors

IPO Initial public offering

IRDA Insurance Regulatory and Development Authority of India

IST Indian Standard Time

IT Information Technology

Legal Metrology Act Legal Metrology Act, 2009

LMICs Low and middle income countries

LPV Lopinavir

MCA Ministry of Corporate Affairs, Government of India

Mn/mn Million

MPP Medicines Patent Pool

MSIHC Rules The Manufacturing, Storage & Import of Hazardous Chemicals Rules, 1989

Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India

(Mutual Funds) Regulations, 1996

N.A./NA Not Applicable

NACO National AIDS Control Organisation

Narcotic Act Narcotic Drugs and Psychotropic Substances Act, 1985

NAV Net Asset Value

NBFC Non-banking financial company registered with the RBI

NECS National Electronic Clearing Services

NEFT National Electronic Fund Transfer

NNRTIs Non-nucleoside reverse transcriptase inhibitors

Notified Sections The sections of the Companies Act, 2013 that were notified by the Ministry of Corporate

11

Term Description

Affairs, Government of India

NR Non-resident

NRE Account Non Resident External Account

NRI A person resident outside India, who is a citizen of India as defined under the Foreign

Exchange Management (Deposit) Regulations, 2000 or an ‘Overseas Citizen of India’

cardholder within the meaning of section 7(A) of the Citizenship Act, 1955

NRO Account Non Resident Ordinary Account

NRTIs Nucleoside reverse transcriptase inhibitors

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

NVP Nevirapine

OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or indirectly to

the extent of at least 60% by NRIs including overseas trusts, in which not less than 60%

of beneficial interest is irrevocably held by NRIs directly or indirectly and which was in

existence on October 3, 2003 and immediately before such date had taken benefits under

the general permission granted to OCBs under FEMA. OCBs are not allowed to invest in

the Offer

p.a. Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

Patents Act The Patents Act, 1970

PAT Profit After Tax

PCBs Pollution Control Boards

PEPFAR President’s Emergency Plan for AIDS Relief

PIC/s Pharmaceutical Inspection Convention and Pharmacheutical Inspection Co-operation

Scheme

PIs Protease inhibitors

PLHIV People living with HIV

PrEP Pre-exposure prophylaxis

Public Liability Act Public Liability Insurance Act, 1991

RAL Raltegravir

RBI Reserve Bank of India

RoW Rest of the world

RTGS Real Time Gross Settlement

RTV Ritonavir

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act 1992

SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investments Funds) Regulations,

2012

SEBI FII Regulations Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,

1995

SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014

SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations,

2000

SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2009

SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015

SEBI VCF Regulations Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996

Securities Act U.S. Securities Act of 1933

SEZ Act The Special Economic Zones Act, 2005

SEZ Rules Special Economic Zones Rules, 2006

SICA Sick Industrial Companies (Special Provisions) Act, 1985

Sq. ft./sq.ft. Square feet

Stamp Act The Indian Stamp Act, 1899

State Government The government of a state in India

State PCB State Pollution Control Board

Stock Exchanges The BSE and the NSE

STT Securities Transaction Tax

TAF Tenofovir Alafenamide

TDF Tenofovir Disoproxil Fumarate

12

Term Description

TDF + 3TC Tenofovir and Lamivudine

Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011

TAN Tax deduction account number

Trade Marks Act Trade Marks Act, 1999

TRIPS Trade Related Agreement on Intellectual Property Rights

U.S./USA/United States United States of America

US GAAP Generally Accepted Accounting Principles in the United States of America

USD/US$ United States Dollars

VAT Value Added Tax

VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF

Regulations

Water Cess Act Water (Prevention & Control of Pollution) Cess Act, 1977

Water Cess Rules Water (Prevention & Control of Pollution) Cess Rules, 1978

Water Act Water (Prevention and Control of Pollution) Act, 1974

Wilful Defaulter(s) Wilful defaulter as defined under Regulation 2(zn) of SEBI ICDR Regulations

WHO World Health Organisation

ZDV or AZT Zidovudine

The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms

under the SEBI Act, SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules

and regulations made thereunder.

Notwithstanding the foregoing, terms in “Statement of Tax Benefits”, “Financial Statements” and “Main Provisions

of Articles of Association” on pages 102, 224 and 442, respectively, shall have the meaning given to such terms in

such sections.

13

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to “India” in this Draft Red Herring Prospectus are to the Republic of India and all references to

“USA”, “US” and “United States” are to the United States of America.

Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page

numbers of this Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise or the context requires otherwise, the financial data in this Draft Red Herring Prospectus is

derived from the Restated Financial Statements prepared in accordance with the Companies Act and Indian GAAP,

and restated in accordance with the SEBI ICDR Regulations.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sum of the amounts

listed are due to rounding off. All figures in decimals have been rounded off to the second decimal and all

percentage figures have been rounded off to two decimal places except percentage figures in “Risk Factors”,

“Industry Overview” and “Our Business”, which are rounded off to one decimal place and accordingly there may be

consequential changes in this Draft Red Herring Prospectus.

Our Company’s Financial Year commences on April 1 and ends on March 31 of the next year; accordingly, all

references to a particular Financial Year, unless stated otherwise, are to the 12 month period ended on March 31 of

that year. The restated unconsolidated financial statements as of and for the Financial Years ended March 31, 2016,

2015, 2014, 2013 and 2012 and the restated consolidated financial statements as of and for the Financial Years

ended March 31, 2016, 2015, and 2014 are included in this DRHP. The Company did not have any subsidiary

during Financial Years 2012 and 2013.

There are significant differences between Indian GAAP, Ind AS, US GAAP and IFRS. The reconciliation of the

financial information to Ind AS, IFRS or US GAAP has not been provided. Our Company has not attempted to

explain those differences or quantify their impact on the financial data included in this Draft Red Herring

Prospectus and investors should consult their own advisors regarding such differences and their impact on our

Company’s financial data. See “Risk Factors” on page 17 for risks involving differences between Indian GAAP and

IFRS or US GAAP and risks in relation to Ind AS. Further, for details of significant differences between Indian

GAAP and Ind AS, see “Summary of Significant Differences Between Indian GAAP and Ind AS” on page 360. The

degree to which the financial information included in this Draft Red Herring Prospectus will provide meaningful

information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and practices,

Indian GAAP, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with

Indian accounting policies, Indian GAAP, the Companies Act, the SEBI ICDR Regulations and practices on the

financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.

Unless the context otherwise indicates, any percentage amounts, as set forth in “Risk Factors”, “Our Business” and

“Management’s Discussion and Analysis of Financial Conditions and Results of Operations” on pages 17, 161 and

341 respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis of the

Restated Financial Statements of our Company.

Currency and Units of Presentation

All references to:

“Rupees” or “`” or “INR” or “Rs.” are to the Indian Rupee, the official currency of India; and

“USD” or “US$” are to the United States Dollar, the official currency of the United States.

Our Company has presented certain numerical information in this Draft Red Herring Prospectus in “million” units.

One million represents 1,000,000 and one billion represents 1,000,000,000.

Exchange Rates

This Draft Red Herring Prospectus contains conversions of certain other currency amounts into Indian Rupees that

have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed

14

as a representation that these currency amounts could have been, or can be converted into Indian Rupees, at any

particular rate or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the

Rupee and the USD (in Rupees per USD):

Currency As on March 31,

2012(1)

(`)

As on March 31,

2013(1)

(`)

As on March 31,

2014(1)

(`)

As on March 31,

2015

(`)

As on March 31,

2016

(`)

1 USD 51.16 54.39 60.10 62.59 66.33 (Source: https://rbi.org.in)

(1) In the event that March 31 of any of the respective years is a public holiday, the previous calendar day not being a public holiday has been considered

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or

derived from publicly available information as well as industry publications and sources.

Industry publications generally state that the information contained in such publications has been obtained from

publicly available documents from various sources believed to be reliable but their accuracy and completeness are

not guaranteed and their reliability cannot be assured. Although we believe the industry and market data used in this

Draft Red Herring Prospectus is reliable, it has not been independently verified by us or the BRLMs or any of their

affiliates or advisors. The data used in these sources may have been reclassified by us for the purposes of

presentation. Data from these sources may also not be comparable. Such data involves risks, uncertainties and

numerous assumptions and is subject to change based on various factors, including those discussed in “Risk

Factors” on page 17. Accordingly, investment decisions should not be based solely on such information.

Information has been included in this Draft Red Herring Prospectus from the reports titled “Independent Market

Research Report for IPO covering Anti-Retro Virals (ARV) in Selected Geographies, June 2016”, “Independent

Market Research Report for IPO covering Hepatitis C in India, May 2016”, “Independent Market Research Report

for IPO covering Oncology in G7 Countries”, “Independent Market Research Report for IPO covering Contract

Research and Manufacturing Services (CRAMS) in India, June 2016” and “Independent Market Research Report

for IPO covering Nutraceuticals in Selected Geographies, June 2016” prepared by Frost & Sullivan, which reports

have been commissioned by the Company for the purposes of confirming its understanding of the industry in

connection with the Offer.

For details of risks in relation to the industry report, see “Risk Factors – We have commissioned industry reports

from Frost and Sullivan which have been used for industry related data in this Draft Red Herring Prospectus and

such data has not been independently verified by us” on page 33.

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” on page 98 includes information relating to

our peer group companies. Such information has been derived from publicly available sources, and neither we, nor

the BRLMs have independently verified such information.

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends

on the reader’s familiarity with and understanding of the methodologies used in compiling such data. There are no

standard data gathering methodologies in the industry in which the business of our Company is conducted, and

methodologies and assumptions may vary widely among different industry sources.

15

FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking

statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,

“estimate”, “intend”, “objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other words or phrases

of similar import. Similarly, statements that describe our Company’s strategies, objectives, plans or goals are also

forward-looking statements.

All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual

results to differ materially from those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by the forward-looking statements due to risks or

uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to

the industry in which our Company operates and our ability to respond to them, our ability to successfully

implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general

economic and political conditions in India and globally which have an impact on our business activities or

investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates,

foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and

globally, changes in laws, regulations and taxes and changes in competition in our industry. Important factors that

could cause actual results to differ materially from our Company’s expectations include, but are not limited to, the

following:

any manufacturing or quality control problems;

any reduction in demand for products in the therapeutic areas from which we derive a significant portion of our revenue;

if our products become obsolete due to a breakthrough in the development of alternate drugs;

loss of one or more of our significant customers, the deterioration of their financial condition or prospects, or a reduction in their demand for our products;

our inability to effectively manage our growth or to successfully implement our business plan and growth strategy;

a slowdown or shutdown in our manufacturing operations;

any adverse developments affecting the region where our manufacturing facilities are concentrated;

our inability to accurately forecast demand for our products and manage our inventory; and

our inability to develop and commercialize new products in a timely manner or failure of our R&D efforts hindering the introduction of new products.

For further discussion of factors that could cause the actual results to differ from our estimates and expectations, see

“Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” on pages 17, 161 and 341, respectively. By their nature, certain market risk disclosures are only

estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses

could materially differ from those that have been estimated.

We cannot assure investors that the expectations reflected in these forward-looking statements will prove to be

correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking

statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as of the date of this Draft Red Herring

Prospectus and are not a guarantee of future performance. These statements are based on the management’s beliefs

and assumptions, which in turn are based on currently available information. Although we believe the assumptions

upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be

inaccurate, and the forward-looking statements based on these assumptions could be incorrect. Neither our

Company, our Directors, our Promoters, the Selling Shareholders, the BRLMs nor any of their respective affiliates

16

have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date

hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

In accordance with SEBI requirements, our Company will ensure that investors in India are informed of material

developments from the date of the Red Herring Prospectus until the time of the grant of listing and trading

permission by the Stock Exchanges. In accordance with SEBI requirements and as prescribed under applicable law,

the Selling Shareholders severally and not jointly will ensure that investors are informed of material developments

in relation to statements and undertakings made by the respective Selling Shareholders from the date of the Red

Herring Prospectus until the time of the grant of listing and trading permission by the Stock Exchanges. Further, in

accordance with Regulation 51A of the SEBI ICDR Regulations, our Company may be required to undertake an

annual updation of the disclosures made in the Draft Red Herring Prospectus and make it publicly available in the

manner specified by SEBI.

17

SECTION II: RISK FACTORS

RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in

this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an

investment in our Equity Shares. The risks described below are not the only ones relevant to us or our Equity

Shares, the industry in which we operate in or to India and other regions we operate in. Additional risks and

uncertainties, not presently known to us or that we currently deem immaterial may also impair our business, results

of operations, cash flows and financial condition. If any of the following risks, or other risks that are not currently

known or are now deemed immaterial, actually occur, our business, results of operations, cash flows and financial

condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment.

In making an investment decision, prospective investors must rely on their own examination of us and the terms of

the Offer including the merits and risks involved.

Prospective investors should pay particular attention to the fact that our Company is incorporated under the laws of

India and is subject to a legal and regulatory environment which may differ in certain respects from that of other

countries. This Draft Red Herring Prospectus also contains forward-looking statements that involve risks,

assumptions, estimates and uncertainties. Our actual results could differ from those anticipated in these forward-

looking statements as a result of certain factors, including the considerations described below and elsewhere in this

Draft Red Herring Prospectus. See “Forward-Looking Statements” on page 15.

Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or

other implications of any of the risks described in this section. Unless otherwise stated, the financial information of

our Company used in this section has been derived from our Restated Consolidated Financial Statements.

The Company did not have any subsidiary during financial years 2012 and 2013 and therefore, the financial data

for such years reflects the financial position of the Company on a standalone basis.

Internal Risk Factors

1. Any manufacturing or quality control problems may subject us to regulatory action, damage our reputation and have an adverse effect on our business, results of operations, financial condition and cash flows.

We currently operate three manufacturing facilities and a kilo lab facility at our R&D center in Hyderabad,

which have received one or more approvals from WHO, US FDA, PMDA, KFDA or BfArM. We have also set

up an R&D center in Greater Boston, United States in 2015. We are currently in the process of setting up two

additional manufacturing facilities and another R&D center in India. Consequently, in addition to Indian

regulations, we are required to comply with regulations and quality standards stipulated by such international

regulators. Our manufacturing facilities and products are subject to audit by regulatory agencies and if we are

not in compliance with any of their requirements, our facilities and products may be the subject of a warning

letter or sanctions, which could result in the withholding of product approval and the shut-down of our

facilities. As part of its auditing process, a US FDA field investigator may issue a Form 483 letter (Notice of

Inspectional Observations) after an on-site inspection. If we receive a Form 483 letter, we must respond in a

prompt manner to avoid receiving a subsequent US FDA warning letter. In the past, the US FDA has issued an

FDA-483 letter for our Unit 1 facility at Vishakhapatnam and our kilo lab facility at Hyderabad, during their

inspections. In the past, we have successfully responded to the US FDA and received approval but we cannot

assure you that we will not receive any warning letters at any of our facilities in the future. We are also required

to meet quality standards and other specifications set out in our license agreements and other contractual

arrangements.

Certain developments could adversely affect demand for our products, including the regulatory review of

products that are already marketed, new scientific information or the recall or loss of approval of products that

we supply, manufacture, market or sell. We face the risk of loss resulting from, and the adverse publicity

associated with, manufacturing or quality control problems, including at the stage of manufacturing of final

dosage form. Such adverse publicity harms the brand image of our products. Further, our customers to whom

we supply our APIs and other products must comply with the regulations and standards of the US FDA and

other regulatory authorities. Failure to comply with these regulatory requirements, or the receipt by these

customers of warning or deficiency letters from regulators could adversely affect the demand for our products.

18

We may also be subject to claims resulting from manufacturing defects or negligence in storage and handling of

our pharmaceutical products. In certain foreign jurisdictions, the quantum of damages, especially punitive,

awarded in cases of product liability can be high. The existence, or threat of a major product liability claim

could damage our reputation and affect customers’ views of our products. Product liability claims, regardless of

their merits or the ultimate success of the defense against them, are costly. Any loss of our reputation or brand

image may lead to a loss of existing business contracts and affect our ability to enter into additional business

contracts in the future, which may have an adverse effect on our business, results of operations, financial

condition and cash flows.

2. We derive a significant portion of our revenue from the sale of products in certain therapeutic areas and any reduction in demand for these products could have an adverse effect on our business, results of operations,

financial condition and cash flows.

We derive a significant portion of our revenue from our Generics – API business, which primarily comprises

the sale of products in the therapeutic areas of ARVs, Hepatitis C and Oncology. For the financial years 2016,

2015 and 2014, our revenue from our Generics – API business was `16,516.84 million, `12,533.54 million and

`10,907.17 million, or 92.2%, 92.1% and 93.3% of our total revenues, respectively. For the financial year 2016,

our revenue from the sale of APIs in the therapeutic areas of ARVs, Hepatitis C and Oncology accounted for

`12,619.09 million, `1,970.98 million and `1,413.38 million, or 70.4%, 11.0% and 7.9% of our total revenues,

respectively. Further, within our product portfolio in the ARV therapeutic area, we depend significantly on the

sale of Efavirenz, Tenofovir Disoproxil Fumarate and Emtricitabine, the preferred first line treatment option for

adults, pregnant and breast feeding women and adolescents. Consequently, any reduction in demand or a

temporary or permanent discontinuation of manufacturing of products in these therapeutic areas could have an

adverse effect on our business, results of operations, financial condition and cash flows.

3. If our products become obsolete due to a breakthrough in the development of alternate drugs, our business, results of operations, financial condition and cash flows may be adversely affected.

For the financial year 2016, we derived `12,619.09 million, or 70.4% of our total revenues, from the sale of products in the ARV therapeutic area, which primarily comprised the sale of Efavirenz, Tenofovir Disoproxil

Fumarate and Emtricitabine. These three products are currently used as one of the preferred first line treatment

in the ARV therapeutic area, recommended by the WHO for our target markets. In the event of a breakthrough

in the development or invention of alternate drugs or formulations, we may be exposed to the risk of our

products becoming obsolete or being substituted, to a greater extent, by these alternatives. Any failure on our

part to effectively address such situations, or to successfully introduce new products in these therapeutic areas,

could