MANAGEMENT DISCUSSION & ANALYSIS

GLOBAL ENVIRONMENT

The global economy growth is, currently estimated at 3.1% in 2015 and is projected at 3.4% in 2016. The pickup in global activity is projected to be more gradual especially in emerging market and developing economies. The subdued growth was due to emerging markets and developing economies—which still account for over 70% of global growth—declined for the fifth consecutive year. In advanced economies, a modest and uneven recovery is expected to continue, with a gradual further narrowing of output gaps. The picture for emerging market and developing economies remains diverse but in many cases challenging. The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016-17. The projected pickup in growth in the next two years—despite the ongoing slowdown in China— primarily reflects forecasts of a graduai improvement of growth rates in countries currently in economic distress, notably Brazil, Russia, and some countries in the Middle East, though even this projected partial recovery could be frustrated by new economic or political shocks. Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalised slowdown in emerging market economies, China's rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed.

The Indian economy continued to record good economic growth at around 7.2%. India's GDP grew 7.6% in the year under review powered by a rebound in farm output, and an improvement in electricity generation and mining production in the fourth quarter of the fiscal. The low oil prices helped the Indian economy as India is a huge importer of oil. Inflation is also well under control and the economy is on a strong platform for sustained growth over a period in time. However there needs to be an increased reform to boost industrial growth in the country which in the last six months has come down sharply due to poor demand conditions and high interest costs. Also due to the weakening of currencies across emerging markets and the Indian currency remaining relatively stable, exports from the country were also under brssure.

GLOBAL PHARMA SCENARIO

Reports suggest that the medicine use is expected to increase by over 24% from 2015 to 2020 to reach 4.5 trillion doses in 2020 and a value of USD 1.4 trillion. Increased usage by emerging countries and increase of volumes in developed markets is projected to be the reason for this. While the developed markets would continue to use branded and speciality medicines the pharmerging markets would use more non-original brands, generics and over the counter products. Furthermore, the adoption of newer medicines will remain higher in developed markets than in pharmerging markets.

The spending on medicines in the region is anticipated to reach USD 560 - 590 billion by 2020, an increase of about 34% compared to 2015. The growth is expected to be driven by innovation, price increase and the impact of loss of exclusivity.

The US is the largest pharmaceutical market of the world accounting for approximately 35% of the global share. The patent cliffs in the US market has been less than historical. The number of Indian and Chinese companies operating in the US has increased year on year which has led to significant price erosion in the generics market. The consolidation in supply chain has also led to continued brssure on margins and working capital. The GDUFA metrics has played out during the year with the number of approvals increasing signiicantly.

The growth in spending on medicines in pharmerging markets by 2020 would be about USD 125 billion primarily driven by wider use of medicines. The per capita increase in volume and spending is expected to result from the strong commitment by government to widen the access to healthcare and the expanded private insurance in these markets.

It is brdicted that, as the investment in research and development made in the last two decades emerge, an increase in the number of innovative drugs will drive transformation of disease treatments in 2020. It is expected that medicines used by 2020 would comprise of the 940 New Active Substances (NAS) introduced in the past two decades indicating that more than 200 NAS would be introduced over the period of next 5 years with cancer treatments being the largest category.

Over the years, the global regulatory environment has evolved signiicantly. Strong focus on quality and compliance would be key for long term successes of organisations. For sustained growth it would be imperative for organisations to become more sensitive and proactive towards compliance. It is observed that the reputation risk associated with non-compliance is not restricted to the country of origin but spill over effects are observed across businesses.

FINANCIAL SUMMARY

Material Consumed and Purchase of Traded Goods:

Cost of Material consumed including Finished goods purchased were at Rs. 23,009.12 Mn as against Rs. 18,771.60 Mn in the brvious year and as a percentage to sales was at 30.44% as against 28.60% of brvious year.

Employee Cost:

Employee Cost was at Rs. 13,772.34 Mn as against Rs. 12,126.06 Mn an increase of 13.58% mainly attributed to increase in heads count due to expansion of business and inflationary trends brvailing in the markets in which the Company operates.

Other Expenses:

Other Expenses includes Manufacturing Overheads, Selling and Marketing Expenses, Administrative and General Expenses and R&D Expenses.

The Expenditure increased to Rs. 24,479.95 Mn as against Rs. 22,585.62 Mn an increase of 8.38%. The increase in expenditure was mainly attributable to increase in travelling, consumables & other operating expenses to support growth, R&D expenditure to provide strong Product Portfolio.

Debrciation and Amortisation:

Debrciation and amortisation decreased to Rs. 2,517.63 Mn as against Rs. 3,004.07 Mn during the year.

Finance Costs:

Interest Expenses showed a marginal decrease of 5.92% at Rs. 1,788.85 Mn as against Rs. 1,901.50 Mn.

Profit After Tax:

Proit after tax for the year was Rs. 7,199.09 Mn as against Rs. 2,094.75 Mn in the brvious year.

Dividend:

The Board of Directors have recommended a inal dividend of 200% (Rs. 2 per equity share of Rs. 1 each) on the equity share capital as at 31 March 2016 subject to the approval of shareholders.

Equity Capital:

The equity capital has increased from Rs. 271.29 Mn in FY 15 to Rs. 282.16 Mn in FY 16 due to allotment of equity shares on conversion of stock options and allotment of equity shares under brferential allotment.

Accounts Payable:

Accounts Payable decreased marginally to Rs. 19,407.86 Mn (PY Rs. 19,480.37 Mn).

Current Tax Liabilities:

Current Tax Liabilities decreased to Rs. 708.41 Mn (PY Rs. 924.58 Mn).

Short Term Borrowings:

Short Term Borrowings increased to Rs. 7,874.18 Mn (PY Rs. 3476.00 Mn).

Cash and Bank Balance:

Cash and Bank balance increased to 8,692.44 Mn (PY Rs. 7,758.80 Mn).

Account Receivables (Net):

Accounts Receivables decreased to Rs. 24,926.46 Mn (PY Rs. 25,117.65 Mn).

Inventory:

Inventory increased to Rs. 15,677.60 Mn (PY Rs. 12,690.39 Mn) mainly to support the increase in sale of formulation and API business.

Other Current Assets:

Other Current Assets increased to Rs. 1,144.15 Mn against Rs. 210.34 Mn in the brvious year.

Tangible Assets (Excluding CWIP):

The gross block increased to Rs. 23,007.26 Mn (PY Rs. 18,666.22 Mn).

Intangible Assets (Excluding CWIP):

The value of Intangible Assets increased to Rs. 19,423.32 Mn (PY Rs. 15,708.77 Mn).

BUSINESS REVIEW

India Formulations

During the year under review, the India Formulations business performed well registering revenue of Rs. 21,092.74 Mn (USD 322.91 Mn) as against Rs. 17,489.53 Mn (USD 285.92 Mn) recording growth of 20.6%. As per IMS MAT Mar 2016, Glenmark's India business maintained its rank at 17, compared to MAT Mar 2015. During the year under review, Glenmark increased its market share by 0.12% exhibiting value growth of 20% vis a vis IPM growth of 14%. The IF business continued its focus on the four therapy areas viz. Dermatology, Respiratory, Cardiology and Diabetes. The business records majority of its revenue from these four therapy areas and has increased market share in all these four therapy areas.

Growth across therapeutic categories

Glenmark continued to strengthen its brsence across therapeutic segments with considerable increase in market share from IMS MAT 2015 to IMS MAT 2016 respectively:

• Dermatology segment market share rose from 7.92% to 8.59% for the year under review

• Cardiology segment market share improved from 3.72% to 3.97%

• Diabetes segment market share increased 2.03% to 2.19%

• Respiratory segment market share went up from 3.80% to 4.12%

Brands in IPM Top 300

• Glenmark's brand Telma (Telmisartan) secured its position among the Top 40 brands in IPM with currently being ranked at 36 and recording a value growth of 28%

• Telma-H (Telmisartan Hydrochloride) was ranked at 77th in IPM clocking a value growth of 17%

• Glenmark's brands Ascoril+ (IPM rank 126), Candid B (IPM rank 134), CANDID (IPM rank 146), Telma-AM (IPM rank 211), Alex Plus Cough (IPM rank 244) and Ascoril-LS (IPM rank 259) are some of the other brands among the Top 300 brands in IPM 300 brands league

NEW PRODUCT LAUNCHES

• Glenmark launched Episoft OC for Oily to Acne Prone Skin

•In the derma segment, Glenmark launched IFIN 250 cream

•In the hair care segment, Glenmark launched Hair4U Shampoo and Hair4U Conditioner

•Glenmark launched Diziron D in a mouth dissolving form

•In the cardiology segment the company launched Eptus-T razel- A telma- ACT

•In the diabetics segment, Glenmark launched Teneligliptin under the brand name Zita plus and Ziten. It also launched the Teneligliptin + Metformin combination

DOCTOR/PATIENT EDUCATION PROGRAMS

•Glenmark launched its new initiative called ‘Fungal Free Nation’. This is an innovative concept which focuses on conducting in-clinic education on diagnosis of various skin conditions for family physicians. During the year over 5000 in-clinic education program was conducted

•The GEEX (Glenmark Enabled Expert Exchange) continued to gain a good response. This is a unique platform for the fraternity of Dermatologists in India to share their clinical acumen, expertise and experience while managing patients of acne in day to day clinical practice

• Another new initiative was introduced to understand the science behind cough called ‘Ascoril Coughology’.The division completed seven case studies including various types of cough. The case studies provide interesting insights for the doctors as the issue of cough is not taken as seriously as other medical conditions

• Once again on World Heart Day (September 29), a huge initiative all across the country was launched to sbrad awareness about a healthy heart. A number of screening camps was conducted all over the country and over 10,000 people benefited from this initiative

• On the issue of hypertension during the Hypertension Control Month (HCM), a number of educational initiatives were launched with multiple touch points, including a series of clinical activities and patient awareness

• Glenmark actively conducts patient education and detection camps for disorders and diseases impacting large population. To increase awareness about bone movement and health, more than 2.1 lac patients were screened for determining their Bone Mineral Density (BMD). In addition to this, Glenmark also conducted Diabetes Detection Camps with a view to raise awareness on diabetes management in India

• The company conducted the Hope-Action-Change initiative which aimed at educating patients and also introduced a free starter therapy for psoriatic patients by conducting free camps across 100 major medical institutes across the country

US FORMULATIONS

During the year, Glenmark Pharmaceuticals Inc., US registered revenue from the sale of fnished dosage formulations was at Rs. 24,203.2 Mn (USD 370.53 Mn) for FY 2016 as against Rs. 20,397.66 Mn (USD 333.46 Mn) for the brvious year, recording 18.66% growth.

It has been a milestone year for the US business as it received the highest number of approvals in any given year. The US business was granted a total of 24 ANDA approvals - 19 final approvals and 5 tentative approvals; consisting of a mix of injectables, semi-solid brparations, oral contraceptives, delayed release and immediate release tablets. Of the 19 approvals we received, nine were hormones/ oral contraceptives and two derma approvals. Even though we received a number of approvals during the year under review, a majority of the approvals were very small opportunities and thus the expected traction was much limited than anticipated. Also one major setback was the loss of the Azaelic acid litigation which would be a sole FTF for the US business had we won the litigation. The loss of this litigation impacted our US numbers overall. During the year, the Company was granted final approval for Bendamustine Hydrochloride for injection, 25 mg/vial and 100 mg/ vial, the therapeutic equivalent to the reference listed drug product; Treanda® for Injection, 25 mg/vial and 100 mg/vial, of Cephalon, Inc. This marks Glenmark's first injectable granted approval by the US FDA.

During the year under review, we iled 13 ANDAs with the US FDA. Of the 13 products filed with the FDA, 5 were dermatology products reinforcing our strength in this segment. We now have a total of 15 dermatology products pending for approval with the US FDA and clearly have one of the best pipeline in terms of generic dermatology products for the US market. Our dermatalogy range of products will continue to drive growth for the US generics business.

Glenmark's marketing portfolio through March 31, 2016 consists of 112 generic products authorised for distribution in the US market. Currently, the Company has 59 applications pending in various stages of the approval process with the US FDA, of which 23 are Paragraph IV applications.

FIRST-TO-FILE OPPORTUNITY ON EZETIMIBE

Glenmark has continued to explore and leverage first-to-file opportunity for the US market. One such upcoming opportunity is Ezetimibe the generic version of Merck-Schering Plough's cholesterol-lowering drug with the product name Zetia. The product has achieved blockbuster status (sales >USD 1.0 billion) for multiple years. Zetia is formulated as a 10mg tablet that is taken once daily with or without food and inhibits the absorption of dietary cholesterol in the intestine. It is brscribed as a mono-therapy for patients who do not tolerate other cholesterol-lowering medications, or together in combination with statins in patients whose cholesterol is not well controlled by statins. The current market size of Zetia is approximately USD 2.4 billion.

Glenmark has a irst-to-ile opportunity for Zetia. In 2010, the company settled its litigation with the innovator company (Merck) which provides for a 6-month exclusivity starting December 12, 2016. Glenmark has a distribution partnership with Par Pharmaceuticals, Inc. ("Par Pharma") on Generic Ezetimibe. This is clearly one of the biggest launches for the Company in the upcoming inancial year

REST OF THE WORLD

Glenmark's revenue from the ROW (Russia/CIS, Africa & Asia) region for the year under review was Rs. 9032.54 Mn (USD 138.28 Mn) as against Rs. 8123.29 Mn (USD 132.80 Mn) in the brvious year, recording a 11.19% increase.

RUSSIA/CIS REGION

The economic environment in Russia signiicantly dampened the overall demand conditions for the pharma industry. Moreover the oil crisis impacted the Russian currency signiicantly. Thus during the year even though the Russia business grew in constant currency, our business was severely hampered during the year under review.

As per IMS MAT March 2016 data, Glenmark Russia ranked 51 in the retail segment of the market. In the dermatology segment, the company grew by 14.1% in value as per IMS whereas the overall dermatology market recorded a growth of 7.2% in value as per MAT March 2016. Glenmark now ranks 14 among all dermatology companies in Russia.

During the year, Glenmark received approvals for Glenbecar MDI, Glenspray with Azelastine NS, Caponko tabs (Capecitabine tabs), Momat Rino Advance, Deriva CMS Gel, Carbohope for injection, Erupnil Tab and Erupnil Plus Tab in Russia. In the CIS region, Glenmark received approval for Flusort F DPI for the Ukraine market. Glenmark received approvals for Deriva-C MS gel,

Glemont CT, Ascoril tabs, Momate A NS, Momat Rino NS for the Kazakhstan market and Momat Rino NS, Kerawort cream and Momat A NS 150 MD in the Ukraine market. Glenmark also received approvals for Ascoril tabs N 20 and Glencet Advance N in the Uzbekistan market.

AFRICA REGION

During the year under review, the Africa business performed well. The units of South Africa and Kenya recorded secondary sales growth of 15% and 35% respectively. During the year, Glenmark launched Linotar, Evarmiles and Ulceloocin in South Africa; Ibicar/s and Budesma in Kenya, Flusort and Budesma in Nigeria and Ibicar in Uganda and Tanzania.

ASIA REGION

The Asian region rebounded strongly during the year under review. The region recorded secondary sales growth of over 25%. The units of Malaysia, Philippines and Vietnam recorded secondary sales growth of 31%, 35% and 52% respectively. Malaysia, the largest subsidiary of the company in the Asian region launched products like Ibicar and Combiwave FB. The Philippines subsidiary launched a series of products viz. Flusort Nasal Spray, Vwash, Flusort, Glemont and Onabet while the Myanmar subsidiary introduced Halovate and Glenlipid. The Sri Lankan subsidiary launched Combiwave SF and Flusort NS and our subsidiary in Vietnam launched Combiwave SF and Flusort. Each of the main operating subsidiaries in the region grew faster than the overall market growth.

EUROPE FORMULATIONS

The revenue from Glenmark's Europe operations for FY 2016 was at Rs. 7170.66 Mn (USD 109.78 Mn), compared to Rs. 6445.33 Mn (USD 105.37 Mn) in the brvious year, recording 11.25% growth.

During the year, Glenmark concluded licensing agreement with Celon Pharma S.A. to develop and market a generic version of GlaxoSmithKline's Seretide Accuhaler, a Fluticasone/Salmeterol dry powder inhaler, in Europe. The Company has obtained semi-exclusive marketing and distribution rights for the product in 15 European countries, including the UK, Germany, the Netherlands, Italy, Sweden, Norway and Romania, among others. It has already filed the product in seven countries, including markets in the Nordic region as well as Germany, and the Company is in the process of iling in several other countries. Glenmark expects to launch the product in the next one to two years, subject to regulatory approval.

Glenmark's Central Eastern Europe region performed well during the year mainly driven by launch of in-licensed products.

During the year Glenmark launched 24 products in the European region including 16 in-licensed products from several companies.

Glenmark's Western Europe Formulations business continued to perform strongly.

The Company continued to remain among the Top 50 fastest growing generic companies in Germany, outpacing the market signiicantly as per IMS. Glenmark ranked 14th among generic companies in the market (Rx sales value February 2016). In the Netherlands, the Company recorded good growth over the brvious corresponding quarter.

LATIN AMERICA

During the year under review, the Latin America business registered revenue of Rs. 7495.06 Mn (USD 114.74 Mn ) as compared to Rs. 7640.00 Mn (USD 124.90 Mn), recording a decline of -1.90%.

This has been an extremely tough year for the Latin American business. Majority of our sales in this region is generated by the Brazil and Venezuela subsidiary and the economic environment in these countries was impacted severely. The demand conditions in Brazil deteriorated due to the tough economic environment on account of weak commodity prices. During the year under review, the Brazilian Real debrciated signiicantly which put further brssure on the overall Latam business. Even the Venezuela business was hit due to the low oil prices throwing the country in deep economic turmoil. In the last few years, your company was doing well in the region and the Brazilian subsidiary was close to breakeven. However in this year losses from the unit increased signiicantly. However in constant currency the Brazilian subsidiary still recorded double digit growth. In Venezuela we faced a completely different situation. There was good demand for medicines and we were also receiving our payment from the distribution channel but because of the foreign currency issue faced by the country we were unable to repatriate any money out of the country. Thus large amounts of money is locked up in the subsidiary in the form of cash in local currency. Because of this, we were forced to stop shipments to the country during the year under review and we are watching the situation on a constant basis.

Some product launches during the year was as follows - The Brazil subsidiary launched Levolukast in the country. This is the first time a combination of montelulakst and levocitrizine was launched the country. In the Mexico region, Glenmark launched Lasderma Airless, JAGODI (Budesonide MDI 200 mcg), MISDAbr RAC (Montelukast 10 mg + Levocetirizine 5 mg), DIRNELID (Mometasone NS 50 mcg). The company launched Celamina Zinco, Celamina Ultra, Glemont CT 4, Acnipop and Glemont IR 10 in Peru. In Equador, Glenmark launched Celamina Zinco, Celamina Ultra, Combiwave; Glemont IR 10, Glemont L; Momate AZ; Momate NS, Candid Powder, Acnipop, Glemont CT 4 and Glemont CT 5.

ACTIVE PHARMACEUTICAL INGREDIENTS (API)

Revenue from sale of API to regulated and semi-regulated markets globally was Rs. 6682.88 Mn (USD 102.31 Mn) during the year as against Rs. 6052.82 Mn (USD 98.95 Mn) for the brvious year, recording 10.41% increase in terms. Glenmark successfully received acceptable status for all its API manufacturing facilities.

During the year, Glenmark successfully completed inspection of the Ankleshwar facility by the Mexican Health agency (COFEPRIS). The business continued to record strong sales for products like Lercanidipine, Amiodarone and Olmesartan.

APIs are the principal ingredients for inished dosages and are also known as bulk actives or bulk drugs. APIs become formulations when the dosage is administered by using additional inactive ingredients either in oral forms such as tablets, capsules, dry syrups or liquid orals or in sterile forms like injectable dry powder vials or liquid injectables. In addition to fulilling captive API requirements, the Company also markets and supplies its API products to leading generic manufacturers in the US, Europe and Japan. Glenmark's API product portfolio comprises Lercanidipine, Amiodarone, Rosuvastatin, Linezolid, Perindopril, Adapalene and Atovaquone, among others. As at March 31, 2016, the Company has filed over 190 DMFs in various markets, including 87 DMFs for the US market. As at March 31, 2016, the Company had iled over 65 DMFs for the US market.

OUTLOOK

Despite the challenging economic situation in most emerging markets including the volatile currencies, Glenmark continues to remain positive on the long term growth prospects in key emerging markets. The focus in emerging markets will be to continuously invest in product pipeline namely the areas of dermatology, respiratory and the oncology segment. While Glenmark will contain its new investments in emerging markets it will continuously focus on building the product pipeline in these therapy areas. The US remains the most important market for Glenmark and the organisation continues to invest signiicantly in this market. All the incremental R&D resources are being invested in the US market and this region will be a key driver for growth in the future. On the generics front, Glenmark will continuously ile products in the area of dermatology and injectables including complex injectables. On the discovery front, the pipeline is progressing well with 7 molecules in clinical or br-clinical development. The company will also continue with its approach of out-licensing its molecules. Your organisation has done a good job in balancing the pipeline with novel biologics molecules and small molecules as compared to a few years when the pipeline was made up of only small molecules. Going ahead, the organisation will continue to lay equal emphasis on small molecules as well as biologics and will continue to focus on discovering primarily irst-in-class molecules globally for unmet medical needs.

RISK MANAGEMENT

PRINCIPAL RISK FAOTÛRS AND UNOERTAINTIES

Company's business, financial condition and results of opérations are subject to certain risks and liabilities that may affect the Company's performance and ability to achieve its objectives. The factors that the Company believes could cause its actual results to differ materially from expected and historical results have been discussed hereunder. However, there are other risks and uncertainties that may affect the Company's performance and ability to achieve its objectives that are not currently known to the Company, or which are deemed immaterial.

The Company has implemented an ERM programme through which it reviews and assesses significant risks on a regular basis to help ensure that there is a system of internal controls in place. This system includes policies and procedures, communication and training programmes, supervision and monitoring and processes for escalating issues to the appropriate level of senior management. Such a system helps facilitate the Company's ability to respond appropriately to risks and to achieve the Company's objectives and helps ensure compliance with applicable laws, regulations and internal policies.

The principal risks and uncertainties that might affect the Company's business are identified below. The listing agreement with the stock exchanges mandates the identification, minimization and periodical review of these risks and uncertainties. However, it is not possible for the Company to implement controls to adequately respond to all the risks that it may face and there can be no complete assurance provided that the steps that the company undertakes to address certain risks, including those listed below under "Mitigating activities include," will manage these risks effectively or at all. The principal risk factors and uncertainties mentioned herein have not been listed in order of their importance.

DELIVERING CÛMMERCIALLY SUCCESSFUL NEW PRODUCTS

Risk description: Risk that R&D will not deliver commercially successful new products

The Company operates in highly competitive markets globally and faces competition from local manufacturers. Significant product innovations, technological advancements or the intensification of price competition by competitors may materially and adversely affect the Company's revenues. The Company cannot always brdict the timing or impact of competitive products or their potential impact on sales of the Company's products.

Continuous development of commercially viable new products as well as the development of additional uses for existing products is critical to the Company's ability to increase overall sales.

Developing new pharmaceutical products is investment intensive, having a longer gestation period with uncertain outcome. A new product candidate can fail at any stage of the development process and one or more late stage product candidates could fail to receive regulatory approval. New product candidates may appear promising in development but after significant investment of Company's economic and human resources, may fail to reach the market or may have only limited commercial success. This could be, for example, as a result of efficacy or safety concerns, an inability to obtain necessary regulatory approvals, difficulty in manufacturing or excessive manufacturing costs, erosion of patent coverage as a result of a lengthy development period, infringement of patents or other intellectual property rights of others or an inability to differentiate the product adequately from those with which it competes.

Furthermore, health authorities have increased their focus on safety and product differentiation when assessing the benefit/ risk balance of drugs, which has made it more difficult for pharmaceutical products to gain regulatory approval. There is also increasing brssure on healthcare budgets as a result of the increase in the average age and absolute population in developed and developing markets. A failure to develop commercially successful products or to develop additional uses for existing products for any of these reasons could materially and adversely affect the Company's revenues.

Mitigating activities include

The Company instead of following the traditional hierarchial R & D business model has its R&D business model based on smaller units in an attempt to encourage greater entrebrneurialism and accountability for our scientists,which the Company believes creates an environment that is more conducive to the development of commercially viable new products and the development of additional uses for existing products.

In addition, the Company plans to continue collaborating with other pharmaceutical companies, which the Company believes enables sharing the risk, availability of technical expertise and decrease the amount of time it takes to develop products.

The Company reviews both product development and external collaborations and targets are selected after exhaustive screening and research across various parameters. The Company progressively evaluates both the scientific and financial considerations for a product as well as the potential benefits/risks associated with the continued development of the assets.

ENSURING PRODUCT QUALITY

Risk description: Risk to the patient or consumer as a result of the failure by the Company, its contractors or suppliers to comply with good manufacturing practice regulations in commercial manufacturing or through inadequate governance of quality through product development

Patients, consumers and healthcare professionals trust the quality of our products at the point of use. A failure to ensure product quality is an enterprise risk which is applicable across all of the Company's global operations.

A failure to ensure product quality could have far reaching implications in terms of the health of our patients and customers, reputation, regulatory, legal, and financial consequences for the Company.

The quality of the product may be influenced by many factors including product and process understanding, consistency of manufacturing components, compliance with current Good Manufacturing Practice (cGMP), accuracy of labelling, reliability and security of the supply chain, and the embodiment of an overarching quality culture.

The internal and external environment continues to evolve as new products, new markets and new legislation are introduced. Particular attention is currently being focused on security of supply, product standards and sound distribution practices.

New cGMP legislation is being introduced in many emerging markets including China and Brazil. On the inspection front, pharmaceutical inspectors are increasingly looking for global application of corrective actions beyond the original site of inspection.

Mitigating activities include

The Company has adopted a single Quality Management System (QMS) that defines Corporate quality standards and systems for the business units associated with Pharmaceuticals products & R&D investigational materials. The QMS has a broad scope, covering the end to end supply chain from starting materials to distributed product, and is applicable throughout the complete life cycle of products from R&D to mature commercial supply.

The QMS is periodically updated based on experience, new regulation and improved scientific understanding to seek to ensure operations comply with cGMP requirements globally, and supports the delivery of consistent and reliable products.

A team of Quality and Compliance professionals are aligned with each business unit to provide oversight and assist the delivery of quality performance and operational compliance. Management oversight of those activities is accomplished through a hierarchy of Quality Council Meetings. Staff are trained to seek to assure that standards, as well as expected behaviours based on the Company's values, are followed.

The Company's Head - Corporate Quality Assurance oversees the activities of the Company Quality Council which serves as a forum to escalate emerging risks, share experiences of handling quality issues from all business units and ensure that the learnings are assessed and deployed across the Company.

The Company has implemented a risk-based approach to assessing and managing its third-party suppliers that provide materials used in finished products. Contract manufacturers making Company products are audited to help assure expected standards are met.

SUPPLY CHAIN CONTINUITY

Risk description: Risk of interruption of product supply

Supply chain operations are subject to review and approval of various regulatory agencies that effectively provide our license to operate. The manufacture of pharmaceutical products and their constituent materials requires compliance with good manufacturing practice regulations. The Company's manufacturing sites are subject to review and approval by the FDA and other regulatory agencies.

Compliance failure by the Company's manufacturing facilities or by suppliers of key services and materials could lead to product recalls and seizures, interruption of production, delays in the approval of new products, and revoking of license to operate pending resolution of manufacturing issues. For example, non-compliance with cGMPrequirements for US supply could ultimately result, in the most severe circumstances, in fines and disgorgement of profits. Any interruption of supply or the incurring of fines or disgorgement impacting significant products or markets could materially and adversely affect the Company's revenues.

Materials and services provided by third-party suppliers are necessary for the commercial production of our products, including specialty chemicals, commodities and components necessary for the manufacture and packaging of many of the Company's pharmaceutical products. Some of the third-party services procured, for example, services provided by clinical research organisations to support development of key products, are very important to the operation of the Company's businesses. The clinical trial processes should strictly adhere to GCP standards in terms of quality, safety, procedures and other standards. Clinical trial service provider may lack in adhering to GCP standards.

Although the Company undertakes business continuity planning, single sourcing for certain components, bulk active materials, finished products, and services creates a risk of failure of supply in the event of regulatory non-compliance or physical disruption at the manufacturing sites.

The failure of a small number of single-source, third-party suppliers or service providers to fulfill their contractual obligations in a timely manner or as a result of regulatory non-compliance or physical disruption at the manufacturing sites may result in delays or service interruptions, which may materially and adversely affect the Company's revenues.

Mitigating activities include

The Supply Chain model of the Company is designed to help ensure the supply, quality and security of the Company's products and the Company closely monitors the delivery of our products with the intent of ensuring that our customers have the medicines and products they need.

Safety stocks and backup supply arrangements for high revenue and critical products are in place to help mitigate this risk. in addition, the standing of manufacturing external suppliers is also routinely monitored in order to identify and manage supply base risks.

The Company selects Clinical Trial agencies which are of repute and follows a process of regular monitoring and auditing of the clinical trial sites.

Where practical, dependencies on single sources of critical items are removed by developing alternative sources. in cases where dual sourcing is not possible, an inventory strategy has been developed to protect the supply chain from unanticipated disruptions. The Company has set up new manufacturing facilities/ upgraded the existing facilities which can continue the manufacturing operations in case of interruption of operations of a certain facility. The Company while filing for product approvals with various regulatory authorities registers multiple manufacturing sites.

PRODUCT PRICING

Risk description: Risk that the Company may fail to secure adequate pricing for its products or existing regimes of pricing laws and regulations become more unfavourable Pharmaceutical products are subject to price controls or brssures and other restrictions in many markets, around the world. Some governments intervene directly in setting prices. For example,in india, the government enforces price control through bringing the products under DPCO. in addition, in some markets, major purchasers of pharmaceutical products have the economic power to exert substantial brssure on prices or the terms of access to formularies. Difficult economic conditions, particularly in the major markets in Europe, could increase the pricing brssures on the Company's pharmaceutical products. Some markets follow the reference pricing for fixation of the price of the products. The price depends on the home market price or the price where the product was launched. The Company cannot accurately brdict whether existing controls, brssures or restrictions will increase or whether new controls, brssures or restrictions will be introduced. Such measures may materially and adversely affect the Company's ability to introduce new products profitably and its financial results.

Mitigating activities include

The Company plans to initiate measures to reduce costs, improve efficiencies and reallocate resources to support identified growth opportunities in these markets. The Company is also continuously evaluating further strategic options to ensure the development of new capabilities and the ability to maximise the value of the Company's current and future portfolio.

The Company makes conscious efforts to launch new value added products with some differentiation i.e improvised products which can fetch better pricing.

COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS

Risk description: Risks arising from non-compliance with laws and regulations affecting the Company

The Company's global operations subjects it to compliance with a broad range of laws and regulatory controls on the development,manufacturing, testing, approval, distribution and marketing of its pharmaceutical products that affect not only the cost of product development but also the time required to reach the market and the uncertainty of successfully doing so. The Company operates globally in complex legal and regulatory environments that often vary among jurisdictions.

As those rules and regulations change or as governmental interbrtation of those rules and regulations evolve, the potential exists for conduct of the Company to be called into question.

Historically, there have been more stringent regulatory requirements in developed markets. However, in recent years, emerging markets have been increasing their regulatory expectations based on their own national interbrtations of US and EU standards. Stricter regulatory controls heighten the risk of changes in product profile or withdrawal by regulators on the basis of post-approval concerns over product safety, which could reduce revenues and result in product recalls and product liability lawsuits. There is also greater regulatory scrutiny, on advertising and promotion and in particular on direct-to-consumer advertising.

Mitigating activities include

The Company's internal control framework is designed to help ensure we adhere to legal and regulatory requirements through continuous evaluation. We are in the process of further strengthening the framework in order to meet the evolving regulations.

The Company has implemented numerous mechanisms to monitor and support our compliance with legal and regulatory requirements. The following rebrsent some examples of these mechanisms.

The Company's head of Regulatory oversees the activities of the Regulatory Team which includes promoting compliance with regulatory requirements and companywide standards, making regulatory services more efficient and agile, and further aligning regulatory capabilities with business needs at global and local levels.

The Company's senior management oversees the system of principles, policies and accountabilities to help ensure the Company applies the generally recognized principles of good medical science, integrity and ethics to the discovery, development and marketing of products. This includes reinforcing the Company's commitment to respecting a clear distinction between scientific engagement on the one hand, and product promotion on the other.

CHANGING GLOBAL POLITICAL AND ECONOMIC CONDITIONS

Risk description: Risk of exposure to various external political and economic conditions, as well as natural disaster that may impact the Company's performance and ability to achieve its objectives

Many of the world's largest economies, including the major markets in which the Company operates and financial institutions have recently faced extreme financial difficulty, including a decline in asset prices, liquidity problems and limited availability of credit.Due to the economic uncertainty in emerging markets there has been a huge devaluation of the currency in certain geographies in which the Company operates. Certain geographies have imposed restrictions on the imports as well as the remittances outside the country.in addition, the Company operates across a wide range of markets and these markets have the potential to encounter natural disasters that could impact business operations.

The economic conditions may also adversely affect the ability of our distributors, customers, suppliers and service providers to pay for our products, or otherwise to buy necessary inventory or raw materials, and to perform their obligations under agreements with the Company, which could disrupt our operations and negatively impact our business and cash flow. Some of our distributors, customers, suppliers and service providers may be unable to pay their bills in a timely manner, or may even become insolvent, which could also negatively impact our business and results of operations. These risks may be elevated with respect to our interactions with third parties with substantial operations in countries where current economic conditions are the most severe, particularly where such third parties are themselves exposed to risk from business interactions directly with fiscally-challenged government payers.

Such continued economic weakness and uncertainty could materially and adversely affect the Company's revenues, results of operations and financial condition. The Company's businesses may be particularly sensitive to declines in consumer or government spending. in addition, further or renewed declines in asset prices may result in a lower return on the Company's financial investments.

The Company has no control over changes in inflation and interest rates, foreign currency exchange rates and controls or other economic factors affecting its businesses or the possibility of political unrest, legal and regulatory changes or nationalisation in jurisdictions in which the Company operates.

Mitigating activities include

The extent of the Company's portfolio and geographic footprint assist in mitigating our exposure to any specific localised risk to a certain degree. External uncertainties are carefully considered when developing strategy and reviewing performance.The Company effectively manages its currency risk exposure.

COMPLIANCE WITH FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS

Risk description: Risk associated with financial reporting and disclosure and changes to accounting standards

New or revised accounting standards, rules and interbrtations issued from time to time under the indian Accounting Standards and iFRS could result in changes to the recognition of income and expense that may materially and adversely affect the Company's financial results.

Stock exchanges review the financial statements of listed companies for compliance with accounting and regulatory requirements. The Company believes that it complies with the appropriate regulatory requirements concerning its financial statements and disclosures.

Mitigating activities include

The Company keeps up to date with the latest developments for financial reporting requirements by working with the external auditor and other advisors to ensure adherence to relevant reporting requirements.

COMPLIANCE WITH TAX LAW

Risk description: Risk that as the Company's business models and tax law and practice change over time, the Company's existing tax policies and operating models are no longer appropriate

The Company's effective tax rate is driven by rates of tax in jurisdictions that are both higher and lower than that applied in india. in india, weighted deduction is applicable for R & D and tax concessions are available for setting up manufacturing units in specified zones.

Furthermore, given the scale and international nature of the Company's operations, intra-Company transfer pricing is an inherent tax risk as it is for other international businesses. Changes in tax laws or in their application with respect to matters such as transfer pricing, foreign dividends, controlled companies, R&D tax credits, taxation of intellectual property or a restriction in tax relief allowed on the interest on intra-Company debt, could impact the Company's effective tax rate and materially and adversely affect its financial results.

The tax charge included in the financial statements is the Company's best estimate of its tax liability, but until such time as audits by tax authorities are concluded, there is a degree of uncertainty regarding the final tax liability for the period. The Company's policy is to submit tax returns within the statutory time limits and engage with tax authorities to ensure that the Company's tax affairs are as current as possible, and that any differences in the interbrtation of tax legislation and regulation are resolved as quickly as possible. in exceptional cases where matters cannot be settled by agreement with tax authorities, the Company may have to resolve disputes through formal appeals or other proceedings.

Mitigating activities include

The Company continuously monitors the changes in the tax policies in the key jurisdictions to deal proactively with any potential future changes in tax law.

Tax risk is managed by a set of policies and procedures to ensure consistency and compliance with tax legislation. The Company engages advisors and legal counsel to review tax legislation and applicability to the Company. The Company has attempted to mitigate the risk of more aggressive audits by being as up to date as possible with our tax affairs and working in real time with tax authorities where possible.

COMPLIANCE WITH ANTI-BRIBERY AND CORRUPTION LEGISLATION

Risk description: Risk of failing to create a corporate environment opposed to corruption or failing to instill business practices that brvent corruption and comply with anti-corruption legislation

The Company's international operations may give rise to possible claims of bribery and corruption. The Company operates in a number of markets where the corruption risk has been identified as high. Failure to comply with applicable legislation such as the US Foreign Corrupt Practices Act and the UK Bribery Act, or similar legislation in other countries, could lead to action against the Company.

This could potentially include fines, prosecution, debarment from public procurement and reputational damage, all of which could materially and adversely affect the Company's revenues.

Mitigating activities include

The Company has taken steps to develop a policy on Anti-Bribery/Anti-Corruption (ABAC) . The policy would brscribe ongoing training, and detailed requirements in respect to third-party due diligence, contracting and oversight.

POTENTIAL LITIGATION

Risk description: Risk of substantial adverse outcome of litigation and government investigations The Company operates globally in complex legal and regulatory environments that often vary among jurisdictions. The failure to comply with applicable laws, rules and regulations in these jurisdictions may result in legal proceedings. As those rules and regulations change or as governmental interbrtation of those rules and regulations evolve, prior conduct may be called into question. Also, notwithstanding the efforts the Company makes to determine the safety of its products through regulated clinical trials, unanticipated side effects may become evident only when the drugs are introduced into the marketplace.

PRODUCT LIABILITY LITIGATION

Pre-clinical and clinical trials are conducted during the development of potential pharmaceutical to determine the safety and efficacy of the products for use by humans following approval by regulatory authorities. Notwithstanding the efforts the Company makes to determine the safety of its products through regulated clinical trials, unanticipated side effects may become evident only when drugs are widely introduced into the marketplace.

in other instances, third-parties may perform analyses of published clinical trial results which, although not necessarily accurate or meaningful, may raise questions regarding the safety of pharmaceutical products which may be publicised by the media and may result in product liability claims. Claims for pain and suffering and punitive damages are frequently asserted in product liability actions and, if allowed, can rebrsent potentially open ended exposure and thus could materially and adversely affect the Company's financial results.

In some cases, the Company may voluntarily cease marketing a product or face declining sales based on concerns about efficacy or safety, even in the absence of regulatory action.

SALES AND MARKETING LITIGATION

The Company operates globally in complex legal and regulatory environments that often vary among jurisdictions. The failure to comply with applicable laws, rules and regulations in these jurisdictions may result in civil and criminal legal proceedings brought against the Company.

Mitigating activities include

The Company attempts to mitigate the risks inherent in drug development through conscientious approaches to product development and distribution that focus on patient safety as an overriding priority, and that includes accurate documentation of the exercise of careful medical governance.

The Company has constructed a system of medical governance to help ensure the safety and efficacy of the drugs it produces. The Company's Chief Medical Officer (CMO) is responsible for medical governance for the Company. Safeguarding human subjects in Company clinical trials and patients who take Company products is of paramount importance, and the CMO has the authoritative role for evaluating and addressing matters of human safety. Senior physicians and rebrsentatives of supportive functions, as well as the lawyer who leads legal support for Pharmaceuticals R&D, is an integral component of the system.

In addition to the medical governance framework within the Company as described above, the Company uses several mechanisms to foster the early resolution of new disputes as they arise and reduce the number of such disputes that actually proceed to litigation.

The Company formalised processes for proactive risk/ dispute management. The programme aims to drive a more standardised practice to the early resolution of disputes and consistent use across the organisation, and establishes a specific vocabulary and identity for the concept of early analysis and resolution, thereby accelerating the desired culture shift. The Legal team also routinely trains the Company's employees on strategies to attempt to minimize the Company's litigation exposure.

MANAGING ENVIRONMENTAL, HEALTH, SAFETY AND SUSTAINABILITY COMPLIANCE

Risk description: Risk of ineffectively managing environment, health, safety, and sustainability ('EHSS') objectives and requirements

The environmental laws of various jurisdictions impose actual and potential obligations on the Company to remediate contaminated sites.

Failure to manage properly the environmental risks could result in additional remedial costs that may materially and adversely affect the Company's financial results.

The impact of this risk, should the risk occur, could lead to significant harm to people, the environment and communities in which the Company operates and the failure to meet stakeholder expectations and regulatory requirements.

Mitigating activities include

Management of EHSS risk is fundamental to the Company's performance and reputation. The Company is committed to appropriately managing EHSS risk and has embedded its importance into its operations.

The Company operates rigorous procedures to seek to eliminate hazards where practicable and protect employees' health and well-being,but the right culture is our essential starting point. Our employment practices are designed to create a work place culture in which all Company employees feel valued, respected, empowered and inspired to achieve our goals.

The Company's continuing efforts to improve environmental sustainability have reduced the Company's water consumption, hazardous waste, and energy consumption. The Company actively manages our environmental remediation obligations to ensure practices are environmentally sustainable and compliant.

INFORMATION TECHNOLOGY

Risk Description: Risk that the data is lost due to breakdown of systems or they are subject to intrusions

The size and complexity of our computer systems make them potentially vulnerable to breakdown, malicious intrusion and random attack. While we have invested adequately in the protection of data and information technology, there can be no assurance that our efforts will brvent breakdown or breaches in our systems that could adversely affect our business.

Mitigating Activities include

The Company takes steps to have proper back ups and security systems in place so as to avoid loss or intrusion of data.

REVENUE CONCENTRATION

Risk Description: Risk of Product/ Revenue concentration

A few products may account for nearly 2/3rd of the revenue of particular regions. This may lead to decline in the revenue on account of declining phase in the product life cycle. in some geographical regions, the substantial revenue may be generated from a particular region. Failure to have adequate market penetration or early movers advantage may affect long term growth and market share. The regional needs for products of a particular therapeutic segment/ category varies across geographies. The product development strategy may not be in synergy with the regional needs or may not be able to deliver the desired product in timely manner so as to replace the products at the end of the life cycle or enable the company to penetrate new markets. The risk of not having a long term product pipeline will lead to not being able to replace/ introduce new products to counter the risk of fall in the market share of ageing products as a result of the introduction of generic versions after the expiry of patents.

Mitigating activities include

The Company has a project management team which continuously monitors the short term and long terms needs of various geographies. Based on the research and interactions with the regional markets, the product development strategy is formulated. The product pipeline is built up based on a long term vision of 3-5 years. The business plans are drawn up with an in- built mechanism to de-risk the concentration of revenues from a few customers and regions.

Safe Harbour Statement

This report has been brpared by Glenmark Pharmaceuticals Ltd. The information, statements and analysis made in this report describing the Company's objectives, projections and estimates are forward looking statements and progressive within the meaning of applicable security laws and Regulations. Forward-looking statements may include words or phrases such as "believes", "expects", "anticipates", "intends", "plans", "foresees" or other words or phrases of similar import. Similarly, statements that describe objectives, plans or goals both for itself and for any of its business components also are forward-looking statements.

All such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated. The analysis contained herein is based on numerous assumptions. Actual result may vary from those exbrssed or implied depending upon economic conditions, government policies and other incidental factors. No rebrsentation or warranty, either exbrssed or implied, is provided in relation to this report. This report should not be regarded by recipients as a substitute for the exercise of their own judgment.