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Notes to Accounts of Glenmark Pharmaceuticals Ltd.

Mar 31, 2015

1. As at 31 March 2015, 164,800 options were outstanding under Employee Stock Option Scheme 2003. On exercise of the options so granted under Employee Stock Option Scheme 2003, the paid-up equity share capital of the Company will increase by equivalent number of shares.

2. Right, preference and restriction on shares

The Company presently has only one class of ordinary equity shares. For all matters submitted to vote in the shareholders meeting, every holder of ordinary equity shares, as reflected in the records of the Company on the date of the shareholders' meeting, has one vote in respect of each share held. All shares are equally eligible to receive dividends and the repayment of capital in the event of liquidation of the Company.

3. In the period of five years immediately preceeding 31 March 2015, the Company has not allotted any shares as fully paid up pursuant to contracts without payment being received in cash. Further, the Company has neither issued bonus shares nor bought back any shares during the aforementioned period.

4. Employee Stock Option Scheme, 2003 (ESOS)

The Company has formulated an Employee Stock Option Scheme ('ESOS') scheme namely ESOS 2003 under which it has made grants on various dates from time to time. Each grant has a vesting period which varies from 1 - 2 years and up to 4 - 6 years from the date of grant depending on the terms of the grant. The grants are made at the market price of the equity shares of the Company on either the date or the closing price of the date prior to day of the grant.

(i) Income received in advance represents advance received from customers for future supply of materials. The Company has recognised an income of Rs. 344.95 (2014 - Rs. 213.45) in current year and will recognise the balance amount in the coming periods. Refer note no. 7 for amount recognisable in one year.

(ii) Glenmark Pharmaceuticals Inc., USA (Formerly known as Glenmark Generics Inc., USA) (subsidiary of the Company) has settled dispute resolution with attorney general of the State of Texas (USA) on 7 April 2015. Under the settlement agreement, Glenmark will pay the State of Texas a total of USD13.75 million (including USD 2.5 million for attorneys' fees and costs) for the State's general revenue fund and USD 11.25 million to the federal government. Total liability is USD 25 million (Rs. 1,562.37). Payment will be made in 16 equal payments of USD1.5625 million each quarter for the next 16 quarters commencement from1 April 2015. Amount due in the next 12 months is USD 6.25 million (Rs. 390.59) which is recognised as current liability. As per the agreement between the Company and Glenmark Pharmaceuticals Inc., Company will reimburse such expenses to the Glenmark Pharmaceuticals Inc.

Legal expense incurred by the subsidiary amounting to USD 2.00 million (Rs. 125.00) is recognised as payable to subsidiaries in trade payables.

31 March 2015 31 March 2014

5. CONTINGENT LIABILITIES AND COMMITMENTS NOT PROVIDED FOR

(i) Contingent Liabilities

(a) Claims against the company not acknowledged as debts

Labour dispute 9.75 0.07

Disputed taxes and duties 223.92 123.96

(b) Guarantees

Bank guarantees 73.82 60.18

Letter of comfort on behalf of subsidiaries

Glenmark Distributors SP z.o.o., 218.73 721.08 Poland

Glenmark Generics Ltd., India - 1,500.00

Glenmark Holding S. A., 34,684.73 25,237.80 Switzerland

Glenmark Impex L.L.C., Russia 2,608.59 2,297.07

Glenmark Farmaceutica Ltda., Brazil 1,374.89 1,111.67

Glenmark Pharmaceuticals S.R.L., 68.27 562.94 Romania

Glenmark Pharmaceuticals S.R.O., 249.98 480.72 Czech Republic

Glenmark Pharmaceuticals SK, s.r.o., - 135.20 Slovak Republic

Glenmark Generics Finance S. A., 12,925.98 - Switzerland

(c) Others

Open letters of credit 827.87 223.22

Indemnity bonds for Customs 2,775.23 393.71

6. In January 2014, the National Pharma Pricing Authority (NPPA) issued a demand notice of Rs. 150 towards overpricing of product "Doxovent 400 mg tab". The Company has filed a petition under Article 32 with the Hon'ble Supreme Court of India (Hon'ble Court), challenging the issue of the above mentioned demand notice on various grounds. This petition has been tagged alongwith another petition filed by another pharmaceutical company, pending before supreme court relating to the inclusion criteria of certain drugs including "Theophylline" in the schedule of the DPCO, 1995, both matters are sub-judice before the Hon'ble Court.

The Hon'ble Court passed an ad-interim order staying any coercive steps against the Company.

The Hon'ble Court has constituted a special bench to hear the petition (along with other petitions filed in this regard) and the matter is expected to be listed in due course.

The company based on legal advise, does not forsee any liability devolving in this regard.

7. Merck Sharp & Dohme Pharmaceuticals Private Limited ('Merck'), the Indian affiliate of Merck & Co. Inc., USA had filed a suit for infringement and was seeking permanent injunction in the Hon'ble High Court at Delhi to restrain the Company from manufacturing and sale of generic versions of Merck's product Januvia (Sitagliptin Phosphate Monohydrate). The petition was dismissed by the single bench of the Hon'ble High Court at Delhi and Merck had filed an appeal before the divisional bench of the Hon'ble High Court at Delhi. On 20 March 2015, the High Court of Delhi injuncted the Company from making and marketing the product Zita and Zita-Met.

The Hon'ble Supreme Court of India on Special Leave Petition filed by the Company directed the trial to be expedited and completed by 30 June 2015 and daily hearing before Single Judge, Delhi High Court from 6 July 2015.

The Supreme Court permitted the Company to continue selling the existing stock while restrained from further manufacturing of the said products.

8. Commitments

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2015 aggregate Rs. 485.18 (2014 - Rs. 590.05).

(b) Estimated amount of contracts remaining to be executed on other than capital commitment, net of advances, not provided for as at 31 March 2015 aggregate Rs. 2,260.74 (2014 - Rs. 203.94).

9. SEGMENT INFORMATION

Business segments

The Company is primarily engaged in a single segment business of pharmaceuticals and is managed as one entity, for its various activities and manufacturing and marketing of pharmaceuticals is governed by a similar set of risks and returns.

10. RELATED PARTY DISCLOSURES

In accordance with the requirements of Accounting Standard - 18 "Related Party Disclosures", the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as follows:

11. Parties where direct/indirect control exists

i) Subsidiary companies

Glenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Glenmark Pharmaceuticals Europe Ltd., U.K.)

Glenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Glenmark Generics (Europe) Ltd., U.K.)

Glenmark Pharmaceuticals S.R.O., Czech Republic Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S. A., Switzerland

Glenmark Holding S. A., Switzerland

Glenmark Generics Finance S. A., Switzerland

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Distributors SP z.o.o., Poland

Glenmark Pharmaceuticals SP z. o.o., Poland

Glenmark Pharmaceuticals Inc., USA (formerly known as Glenmark Generics Inc., USA)

Glenmark Therapeutics Inc., USA

Glenmark Farmaceutica Ltda., Brazil

Glenmark Generics SA., Argentina

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Colombia SAS, Colombia (formerly known as Glenmark Pharmaceuticals Colombia Ltda., Colombia)

Glenmark Uruguay S.A., Uruguay

Glenmark Pharmaceuticals Venezuela., C.A , Venezuela

Glenmark Dominicana, SRL, Dominican Republic

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Impex L.L.C., Russia

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals B.V., Netherlands (formerly known as Glenmark Generics B.V., Netherlands)

Glenmark Arzneimittel Gmbh., Germany

Glenmark Pharmaceuticals Canada Inc., Canada (formerly Known as Glenmark Generics Canada, Inc., Canada)

Glenmark Pharmaceuticals Kenya Ltd., Kenya Glenmark Therapeutics AG, Switzerland

ii) Investment in Joint Venture

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

iii) Enterprise over which key managerial personnel excercise significant influence Glenmark Foundation Glenmark Aquatic Foundation

b) Related party relationships where transactions have taken place during the year

Subsidiary Companies/Joint Venture/Enterprise over which key managerial personnel excercise significant influence

Glenmark Farmaceutica Ltda., Brazil

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals S.A., Switzerland

Glenmark Pharmaceuticals Malaysia Sdn. Bhd., Malaysia

Glenmark Impex L.L.C., Russia

Glenmark Holding S.A., Switzerland

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Venezuela., C.A, Venezuela

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Generics SA., Argentina

Glenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Glenmark Pharmaceuticals Europe Ltd., U.K.)

Glenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Glenmark Generics (Europe) Ltd., U.K.)

Glenmark Pharmaceuticals Inc., USA (Formerly known as Glenmark Generics Inc., USA)

Glenmark Pharmaceuticals s.r.o., Czech Republic

Glenmark Therapeutics Inc., USA

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

Glenmark Dominicana SA., Dominican Republic

Glenmark Pharmaceuticals SP z.o.o., Poland

Glenmark Distributor SP z.o.o., Poland

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals Kenya Ltd., Kenya

Glenmark Pharmaceuticals Colombia SAS, Colombia (Formerly known as Glenmark Pharmaceuticals Colombia Ltda.,

Colombia)

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark Generics Finance S.A., Switzerland

Glenmark Foundation

Glenmark Aquatic Foundation

c) Key Management Personnel

Mr. Glenn Saldanha (Chairman & Managing Director)

Mrs. Cherylann Pinto (Executive Director)

Mr. Rajesh Desai (Executive Director)

Mr. Sanjay Kumar Chowdhary (Company Secretary & Compliance Officer)

32. OUTSTANDING DUES TO MICRO, SMALL AND MEDIUM SCALE ENTERPRISES

Based on the information available with the Company, no creditors have been identified as "supplier" within the meaning of "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006". Accordingly, no disclosure under the MSMED Act are required to be given.

12. LEASES

The Company has taken on lease/leave and licence godowns/residential & office premises at various locations in the country.

i) The Company's significant leasing arrangements are in respect of the above godowns & premises (including furniture and fittings therein, as applicable). The aggregate lease rentals payable are charged to Statement of Profit and Loss as Rent.

ii) The Leasing arrangements which are cancellable range between 11 months to 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. An amount of Rs. 105.42 (2014 - Rs. 100.43) towards deposit and unadjusted advance rent is recoverable from the lessors.

13. TAXATION

Provision for current taxation for the Company of Rs. 2,801.69 represents Minimum alternate tax pursuant to the provisions of Section 115JB of the Income Tax Act, 1961 of India.

The Finance Act, 2005 inserted sub-section (1A) to section 115JAA to grant tax credit in respect of MAT paid under Section 115JB of the Act with effect from Assessment Year 2006-07 and carry forward the credit for a period of 10 years. In accordance with the Guidance Note issued on "Accounting for credit available in respect of Minimum Alternative Tax (MAT) under the Income Tax Act 1961" by the Institute of the Chartered Accountants of India, the Company has recognised MAT Credit which is expected to be set-off against the tax liability, other than MAT in future years. Accordingly, an amount of Rs.526.92 for the current year has been recognised as MAT Credit Entitlement.

14. RESEARCH AND DEVELOPMENT EXPENDITURE

During the year, the Company expensed Rs. 2,773.14 (2014 - Rs. 1,213.55) towards research and development costs.

15. SUBSEQUENT EVENTS

The Company in its meeting of Preferential Issue Committee of the Board of Directors held on May 19, 2015, has allotted 10,800,000 Equity Shares of the face value of Rs. 1/- each at a price of Rs. 875 per equity share to Aranda Investments (Mauritius) Pte. Ltd., on preferential basis in terms of Chapter VII of SEBI (ICDR) Regulations and the applicable sections of the Companies Act, 2013.

16. In terms of proviso to Clause 3(i) of Part A of Schedule II to the Companies Act, 2013 (the Act), the Company has based on a technical evaluation decided to adopt useful life for various fixed assets, which are in certain cases, different from those prescribed in Schedule II to the Act. The useful life of an asset is not ordinarily different from the useful life specified in Part C and the residual value of an asset is not more than five per cent of the original cost of the asset. The impact of Such change will decrease profit byRs. 69.13 for FY 2014-15.

17. PRIOR YEAR COMPARATIVES

The current year figures are not comparable with that of the corresponding previous year due to Merger of Glenmark Generics Ltd. and Glenmark Access Ltd. with the Company during the year. (Refer Note 1A) Prior year's figures have been regrouped or reclassified wherever necessary to confirm to current year's classification.


Mar 31, 2014

1. CONTINGENT LIABILITIES AND COMMITMENTS NOT PROVIDED FOR

31 March 2014 31 March 2013

(i) Contingent Liabilties

(a) Claims against the Company not acknowledged as debts

- Labour dispute 0.07 0.06

- Disputed taxes and duties 123.96 105.78

(b) Guarantees

Bank guarantees 60.18 41.39

Letter of comfort on behalf of subsidiaries, to the extent of limits 32,046.48 24,286.73

(c) Others

Open letters of credit 223.22 18.64

Indemnity bonds 393.71 374.57

(d) In January 2014, the National Pharma Pricing Authority (NPPA) issued a demand notice ofRs. 150 towards overpricing of product "Doxovent 400 mg tab". The Company has filed a petition under Article 32 with the Hon''ble Supreme Court of India (Hon''ble Court), challenging the issue of the above mentioned demand notice on various grounds, primarily, that inclusion of "Theophylline" in the schedules of DPCO, 1995 is sub-judice before the Hon''ble Court.

The Hon''ble Court passed an ad-interim order staying any coercive steps against the Company and directed the matter be tagged along with the petition on the inclusion of "Theophylline" in the Schedule of DPCO, 1995. The Hon''ble Court has constituted a special bench to hear the petition (along with other petitions filed in this regard) and the matter is expected to be listed in due course.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2014 aggregate X 590.05 (2013 - X 264.03).

(b) Estimated amount of contracts remaining to be executed on other than capital commitment, net of advances, not provided for as at 31 March 2014 aggregate X 203.94 (2013 - X 209.26).

2. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares from the exercise of options on unissued share capital.

3. SEGMENT INFORMATION

Business segments

The Company is primarily engaged in a single segment business of formulations and is managed as one entity, for its various activities and manufacturing and marketing of pharmaceuticals is governed by a similar set of risks and returns.

Geographical segments

In the view of the management, the Indian and export markets represent geographical segments.

Revenue by market - The following is the distribution of the Company''s sale (of products and services) by geographical markets (gross of excise duty and sales tax):

4. RELATED PARTY DISCLOSURES

In accordance with the requirements of Accounting Standard - 18 "Related Party Disclosures", the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as follows:

a) Parties where direct/indirect control exists

i) Subsidiary companies

Clenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Clenmark Pharmaceuticals Europe Ltd., U.K.)

Clenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Clenmark Generics (Europe) Ltd., U.K.)

Clenmark Pharmaceuticals S.R.O., Czech Republic

Clenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Clenmark Pharmaceuticals S. A., Switzerland

Clenmark Holding S. A., Switzerland

Clenmark Generics Finance S. A., Switzerland

Clenmark Pharmaceuticals S.R.L., Romania

Clenmark Pharmaceuticals Eood., Bulgaria

Clenmark Distributors SP z.o.o., Poland

Clenmark Pharmaceuticals SP z.o.o., Poland

Clenmark Generics Inc., USA

Clenmark Therapeutics Inc., USA

Glenmark Farmaceutica Ltda., Brazil

Clenmark Generics SA., Argentina

Clenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals Peru SAC, Peru

Clenmark Pharmaceuticals Colombia SAS, Colombia (formerly known as Clenmark Pharmaceuticals Colombia Ltda., Colombia)

Clenmark Uruguay S.A., Uruguay

Glenmark Pharmaceuticals Venezuela C.A., Venezuela

Clenmark Dominicana, SRL, Dominican Republic

Clenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Pharmaceuticals FZE., United Arab Emirates

Clenmark Impex L.L.C., Russia

Clenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Clenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Clenmark South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Clenmark Access Ltd (formerly known as Glenmark Exports Ltd.)., India

Clenmark Generics Ltd., India

Clenmark Pharmaceuticals B.V., Netherlands (formerly known as Glenmark Generics B.V.), Netherlands

Glenmark Arzneimittel Gmbh., Germany

Glenmark Generics Canada, Inc., Canada

Clenmark Pharmaceuticals Kenya Ltd., Kenya

Glenmark Therapeutics AC, Switzerland ii) Investment in Joint Venture

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand iii) Enterprise over which key managerial personnel exercise significant influence

Clenmark Foundation, India

b) Related party relationships where transactions have taken place during the year Subsidiary Companies/Joint Venture

Glenmark Farmaceutica Ltda., Brazil

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals S.A., Switzerland

Glenmark Pharmaceuticals Malaysia Sdn. Bhd., Malaysia

Glenmark Impex L.L.C., Russia

Glenmark Holding S.A., Switzerland

Glenmark Generics Ltd., India

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Venezuela C.A., Venezuela

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Generics S.A., Argentina

Glenmark Pharmaceuticals (Europe) R&D Ltd., U.K. (formerly known as Glenmark Pharmaceuticals Europe Ltd., U.K.)

Glenmark Pharmaceuticals Europe Ltd., U.K. (formerly known as Glenmark Generics (Europe) Ltd., U.K.)

Glenmark Generics Inc., USA

Glenmark Pharmaceuticals s.r.o., Czech Republic

Glenmark Therapeutics Inc., USA

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

Glenmark Dominicana SRL., Dominican Republic

Glenmark Pharmaceuticals SP z.o.o., Poland

Glenmark Distributors SP z.o.o., Poland

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals Kenya Ltd., Kenya

Glenmark Pharmaceuticals Colombia SAS, Colombia (formerly known as Glenmark Pharmaceuticals Colombia Ltda., Colombia)

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark Therapeutics AG., Switzerland

Glenmark Access Ltd (formerly known as Glenmark Exports Ltd.)., India

Enterprise over which key managerial personnel exercise significant influence

Glenmark Foundation, India

c) Key Management Personnel

Mrs. B.E. Saldanha (Non-Executive Director)

Mr. Glenn Saldanha (Chairman & Managing Director)

Mrs. Cherylann Pinto (Executive Director)

Mr. Rajesh Desai (Executive Director)

5. OUTSTANDING DUES TO MICRO, SMALL AND MEDIUM SCALE BUSINESS ENTERPRISES

Based on the information available with the Company, no creditors have been identified as "supplier" within the meaning of "Micro, Small and Medium Enterprises Development (MSMED) Act, 2006". Accordingly, no disclosure under the MSMED Act are required to be given.

6. LEASES

The Company has taken on lease/leave and licence godowns/residential & office premises at various locations in the country.

i) The Company''s significant leasing arrangements are in respect of the above godowns & premises (including furniture and fittings therein, as applicable). The aggregate lease rentals payable are charged to Statement of Profit and Loss as rent.

ii) The Leasing arrangements which are cancellable range between 11 months to 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. An amount of Rs. 100.43 (2013 - Rs. 98.62) towards deposit and unadjusted advance rent is recoverable from the lessors.

The Company has entered into operating lease agreements for the rental of its office premises for a period of 3 to 5 years.

7. TAXATION

Provision for current taxation for the Company of Rs. 1,080.21 represents Minimum Alternate Tax pursuant to the provisions of Section 115JB of the Income Tax Act, 1961 of India.

The Finance Act, 2005 inserted sub section (1A) to Section 115JAA to grant tax credit in respect of MAT paid under Section 115JB of the Act with effect from Assessment Year 2006-07 and carryforward the credit for a period of 10 years. In accordance with the Guidance Note issued on "Accounting for credit available in respect of Minimum Alternative Tax (MAT) under the Income Tax Act, 1961" by the Institute of the Chartered Accountants of India, the Company has recognised MAT Credit which is expected to be set-off against the tax liability, other than MAT in future years. Accordingly, an amount of Rs. 477.56 for the current year has been recognised as MAT Credit Entitlement in note 11.

8. EMPLOYEE BENEFITS

The disclosures as required as per the revised AS 15 are as under:

1. Brief description of the Plans

The Company has various schemes for long-term benefits such as Provident Fund, Superannuation, Gratuity and Compensated absences. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities. The Company''s defined contribution plans are Superannuation and Employees'' Provident Fund and Pension Scheme (under the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans include Gratuity benefit.

9. RESEARCH AND DEVELOPMENT EXPENDITURE

During the year, the Company expensed Rs. 1,213.55 (2013 - Rs. 929.44) as research and development costs.

10. Disclosure of Assets and Liabilities as on 31 March 2014 and Income and Expenses for the year ended 31 March 2014 related to the interest of the Company in the joint venture Clenmark Pharmaceuticals (Thailand) Co. Ltd, Thailand. These extracts have been drawn up from the audited financial statements of the joint venture, without giving effect to the elimination of transactions between the Company and the joint venture.

11. OTHER EVENTS

(i) The Board of Directors of Clenmark Pharmaceuticals Limited ("GPL"), in their meeting held on 31 January 2014, have approved a proposal to merge its subsidiaries i.e. Clenmark Generics Limited ("CCL") and Clenmark Access Limited ("GAL"), with GPL.

The merger will be effected through a court approved Scheme of Amalgamation under Sections 391 to 394 and other applicable provisions of Companies Act, 1956 ("Scheme"). As on date, 99.33% of the share capital of CGLis being held by GPL (including 1.19% being held by GAL, a wholly owned subsidiary of GPL). As per the Scheme, the remaining shareholders holding 0.67% (1,016,741 equity shares) of the share capital of GCL will be issued shares of GPL at a swap ratio which has been determined as 4 shares of GPL of Rs. 1 each for every 5 shares of Rs. 10 each held by shareholders of GCL. The Company has initiated necessary legal process to conclude the merger. The accounting effect of the merger shall be given only upon receipt of all regulatory approvals and necessary submissions to relevant authorities.

(ii) Merck Sharp & Dohme Pharmaceuticals Private Limited (''Merck''), the Indian affiliate of Merck & Co. Inc., USA had filed a suit for infringment and was seeking permanent injunction in the Hon''ble High Court at Delhi to restrain Clenmark from manufacturing and sale of generic versions of Merck''s product Januvia (Sitagliptin Phosphate Monohydrate). The petition was dismissed by the single bench of the Hon''ble High Court at Delhi and Merck has now filed an appeal before the divisional bench of the Hon''ble High Court at Delhi, which is pending orders. Based on legal advice, the management is of the opinion that no liability is likely to devolve on the Company.

12. PRIOR YEAR COMPARATIVES

Prior year''s figures have been regrouped or reclassified wherever necessary to confirm to current year''s classification.


Mar 31, 2013

1. Earnings per share

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares from the exercise of options on unissued share capital.

The calculations of earnings per share (basic and diluted) are based on the earnings and number of shares as computed below.

2. Segment Information Business segments

The Company is primarily engaged in a single segment business of formulations and is managed as one entity, for its various activities and manufacturing and marketing of pharmaceuticals is governed by a similar set of risks and returns.

3. Related Party Disclosures

In accordance with the requirements ofAccounting Standard -18 "Related Party Disclosures", the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as follows:

a) Parties where direct/indirect control exists

i) Subsidiary companies

Glenmark Pharmaceuticals Europe Ltd., U.K.

Glenmark Generics (Europe) Ltd., U.K.

Glenmark Pharmaceuticals S.R.O., Czech Republic

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S. A., Switzerland

Glenmark Holding S. A., Switzerland

Glenmark Generics Holding S.A., Switzerland (merged with Glenmark Generics Finance SAw.e.f. 1 April 2012.)

Glenmark Generics Finance S. A., Switzerland

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals Eood., Bulgaria

Glenmark Distributors SP z.o.o., Poland

Glenmark Pharmaceuticals SP z.o.o., Poland

Glenmark Generics Inc., USA

Glenmark Therapeutics Inc., USA

Glenmark Farmaceutica Ltda., Brazil

Glenmark Generics S.A., Argentina

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Colombia Ltda., Colombia

Glenmark Uruguay S.A., Uruguay

Glenmark Pharmaceuticals Venezuela., C.A, Venezuela

Glenmark Dominicana, SRL, Dominican Republic

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Pharmaceuticals FZE., U.A.E.

Glenmark Impex L.L.C., Russia

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Access Ltd. (formerly known as Glenmark Exports Ltd.)

Glenmark Generics Ltd., India

Glenmark Generics B.V., Netherlands

Glenmark Arzneimittel Gmbh., Germany

Glenmark Generics Canada, Inc.

Glenmark Pharmaceuticals Kenya Ltd.; Kenya

Glenmark Therapeutics AG; Switzerland

ii) Investment in Joint Venture

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

iii) Enterprise over which key managerial personnel exercise significant influence Glenmark Foundation, India

b) Related party relationships where transactions have taken place during the year Subsidiary Companies/Joint Venture

Glenmark Farmaceutica Ltda., Brazil

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals S.A., Switzerland

Glenmark Pharmaceuticals Malaysia Sdn. Bhd., Malaysia

Glenmark Impex L.L.C., Russia

Glenmark Holding S.A., Switzerland

Glenmark Generics Ltd., India

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Venezuela., C.A, Venezuela

Glenmark Pharmaceuticals FZE., U.A.E.

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Generics SA., Argentina

Glenmark Generics (Europe) Ltd., U.K.

Glenmark Pharmaceuticals Europe Ltd., U.K.

Glenmark Generics Inc., USA

Glenmark Pharmaceuticals s.r.o., Czech Republic

GlenmarkTherapeutics Inc., USA

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

Glenmark Dominicana SA., Dominican Republic

Glenmark Distributor SP z.o.o., Poland

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals Kenya Ltd; Kenya

Glenmark Pharmaceuticals Colombia Ltda., Colombia

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark Therapeutics AG; Switzerland

Glenmark Uruguay S.A., Uruguay

Enterprise over which key managerial personnel exercise significant influence

Glenmark Foundation, India

c) Key management personnel

Mr. Gracias Saldanha (Upto 20 July 2012)

Mrs. B. E. Saldanha

Mr. Glenn Saldanha

Mrs. Cherylann Pinto

Mr. R. V. Desai (Appointed w.e.f 9 November 2011)

Mr. A. S. Mohanty (Upto 10 May 2011)

4. Outstanding Dues to Micro, Small and Medium Scale Business Enterprises

The Company has not received any information from the "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to the amounts as at year-end together with interest paid/payable as required under the said Act have not been given.

5. Leases

The Company has taken on lease/ leave and licence godowns/ residential & office premises at various locations in the country.

i) The Company''s significant leasing arrangements are in respect of the above godowns & premises (including furniture and fittings therein, as applicable). The aggregate lease rentals payable are charged to Statement of Profit and Loss as Rent.

ii) The Leasing arrangements which are cancellable range between 11 months to 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. An amount ofRs. 98.62 (2012 -Rs. 99.32) towards deposit and unadjusted advance rent is recoverable from the lessor.

6. Taxation

Provision for current taxation for the Company of Rs. 656.97 represents Minimum Alternate Tax pursuant to the provisions of Section 115JB of the Income Tax Act, 1961 of India. The Finance Act, 2005 inserted sub-section (1A) to Section 115JAA to grant tax credit in respect of MAT paid under Section 115JB of the Act with effect from Assessment Year 2006-07 and carry forward the credit for a period of 10 years. In accordance with the Guidance Note issued on "Accounting for credit available in respect of Minimum Alternative Tax (MAT) under the Income Tax Act, 1961" by the Institute of the Chartered Accountants of India, the Company has recognised MAT Credit which is expected to be set-off against the tax liability, other than MAT in future years. Accordingly, an amount of Rs. 656.97 for the current year and has been recognised as MAT Credit Entitlement in Note 13.

7. Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

1. BriefdescriptionofthePlans

The Company has various schemes for long-term benefits such as Provident Fund, Superannuation, Gratuity and Compensated absences. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities. The Company''s defined contribution plans are Superannuation and Employees'' Provident Fund and Pension Scheme (under the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans include Gratuity benefit.

8. Research and development expenditure

During the year, the Company expensed Rs. 929.44 (2012 -Rs. 759.57) as research and development costs.

9. Extracts of Assets and Liabilities as on 31 March 2013 and Income and Expenses for the year ended 31 March 2013 related to the interest of the Company (without elimination of the effect of transactions between the Company and Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand) have been extracted from the audited financial statements:

10. Other Events

Merck Sharp & Dohme Pharmaceuticals Private Limited (''Merck''), the Indian affiliate of Merck & Co. Inc., USA had filed a decree for permanent injunction in the Hon''ble High Court at Delhi to restrain Glenmark Pharmaceuticals Limited from manufacture and sale of generic versions of Merck''s product Januvia (Sitagliptin Phosphate) alleging patent right infringement. The petition was dismissed by the single bench of the Hon''ble High Court at Delhi and Merck has now filed an appeal before the divisional bench of the Hon''ble High Court at Delhi, which is pending hearing. Based on a legal advice, the management is confident that no liability is likely to devolve on the Company.

11. Prior Year Comparatives

Prior year''s figures have been regrouped or reclassified wherever necessary to confirm to current year''s classification.


Mar 31, 2012

31 March 2012 31 March 2011

1. Contingent Liabilities and Commitments not provided for

(i) Contingent Liabilties

(a) Claims against the Company not acknowledge as debts

- Labour Dispute 0.09 0.15

- Disputed Taxes and Duties 154.47 27.37

(b) Guarantees

Bank guarantees 19.63 20.28

Letter of comfort on behalf of subsidiaries, to the extent of limits 15,925.54 5,687.13

Corporate Guarantee (Refer Note) - 1,206.36

(c) Others

Open letters of credit 460.38 6.39

Indemnity Bond 287.73 260.25

Call money payable to Glenmark Pharmaceuticals (Thailand) Co. Ltd. - 1.23 (16,415 shares @ 50 THB per Equity Share)

Note:

The Company's subsidiary, Glenmark Generics Inc., U.S.A (GGI) (formerly known as Glenmark Pharmaceuticals Inc., U.S.A.) (GPI) on 02 June 2006 has entered into an Agreement with Paul Royalty Fund Holdings II (PRF) pursuant to which, PRF will pay up to USD 27 millions to GGI for the development and commercialisation of certain products for the US market. Further, the Company has entered into a Master Services, License, Manufacturing and Supply Agreement with GGI to develop and manufacture the aforesaid products, and also issued a financial guarantee in favour of PRF for an amount not exceeding USD 27 millions for the benefits under the said agreement. During the year, Glenmark Generics Inc., U.S.A (GGI) has paid Paul Royalty Fund Holdings II (PRF) an amount of Rs 1,316.80 (USD 28.8 millions) pursuant to its contractual obligation and the same has been charged to the statement of profit and loss.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for as at 31 March 2012 aggregate Rs 736.42 (2011 - Rs 233.78)

(b) Estimated amount of contracts remaining to be executed on other than capital commitment, net of advances, not provided for as at 31 March 2012 aggregate Rs 615.06 (2011 - Rs 184.39)

2. Earnings Per Share

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the weighted average number of shares outstanding are adjusted for the effects of all dilutive potential equity shares from the exercise of options on unissued share capital. The calculations of earnings per share (basic and diluted) are based on the earnings and number of shares as computed below.

3. Segment Information Business segments

The Company is primarily engaged in a single segment business of formulations and is managed as one entity, for its various activities and manufacturing and marketing of pharmaceuticals is governed by a similar set of risks and returns.

Geographical segments

In the view of the management, the Indian and export markets represent geographical segments.

Revenue by market - The following is the distribution of the Company's sale by geographical market:

4. Related Party Disclosures

In accordance with the requirements of Accounting Standard - 18 "Related Party Disclosures", the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as follows:

a) Parties where direct/indirect control exists

i) Subsidiary companies

Glenmark Pharmaceuticals Europe Ltd., U.K.

Glenmark Generics (Europe) Ltd., U.K.

Glenmark Pharmaceuticals S.R.O., Czech Republic

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S. A., Switzerland

Glenmark Holding S. A., Switzerland

Glenmark Generics Holding S. A., Switzerland

Glenmark Generics Finance S. A., Switzerland

Glenmark Pharmaceuticals S.R.L., Romania

Glenmark Pharmaceuticals Eood., Bulgaria

Glenmark Distributors SP z.o.o., Poland

Glenmark Pharmaceuticals SP z.o.o., Poland

Glenmark Generics Inc., USA

Glenmark Therapeutics Inc., USA

Glenmark Farmaceutica Ltda., Brazil

Glenmark Generics SA., Argentina

Glenmark Pharmaceuticals Mexico, S.A. DE C.V., Mexico

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Colombia Ltda., Colombia

Glenmark Uruguay S.A., Uruguay

Glenmark Pharmaceuticals Venezuela., C.A., Venezuela

Glenmark Dominicana, SRL, Dominican Republic

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Impex L.L.C., Russia

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals Malaysia Sdn Bhd., Malaysia

Glenmark Pharmaceuticals (Australia) Pty Ltd., Australia

Glenmark South Africa (Pty) Ltd., South Africa

Glenmark Pharmaceuticals South Africa (Pty) Ltd., South Africa

Glenmark Access Ltd (formerly known as Glenmark Exports Ltd.)

Glenmark Generics Ltd., India

Glenmark Generics B.V., Netherlands

Glenmark Arzneimittel Gmbh., Germany

Glenmark Generics Canada, Inc.

ii) Investment in Joint Venture

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

iii) Enterprise over which key managerial personnel exercise significant influence

Glenmark Foundation, India

b) Related party relationships where transactions have taken place during the year

Subsidiary Companies / Joint Venture

Glenmark Farmaceutica Ltda., Brazil

Glenmark Philippines Inc., Philippines

Glenmark Pharmaceuticals (Nigeria) Ltd., Nigeria

Glenmark Pharmaceuticals S.A., Switzerland

Glenmark Pharmaceuticals Malaysia Sdn.Bhd., Malaysia

Glenmark Impex L.L.C., Russia

Glenmark Holding S.A., Switzerland

Glenmark Generics Ltd., India

Glenmark Pharmaceuticals Peru SAC., Peru

Glenmark Pharmaceuticals Venezuela., C.A., Venezuela

Glenmark Pharmaceuticals FZE., United Arab Emirates

Glenmark Pharmaceuticals Egypt S.A.E., Egypt

Glenmark Generics SA., Argentina

Glenmark Generics (Europe) Ltd., U.K.

Glenmark Pharmaceuticals Europe Ltd., U.K.

Glenmark Generics Inc., USA

Glenmark Pharmaceuticals s.r.o., Czech Republic

Glenmark Therapeutics Inc., USA

Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand

Glenmark Dominicana SA., Dominican Republic

Glenmark Distributor SP z.o.o., Poland

Glenmark Pharmaceuticals SK, s.r.o., Slovak Republic

Glenmark Pharmaceuticals S.R.L., Romania

Enterprise over which key managerial personnel exercise significant influence

Glenmark Foundation, India

c) Key management personnel

Mr. Gracias Saldanha

Mrs. B. E. Saldanha

Mr. Glenn Saldanha

Mrs. Cherylann Pinto

Mr. R. V. Desai (Appointed w.e.f. 09 November 2011)

Mr. A. S. Mohanty (Upto 10 May 2011)

5. Leases

The Company has taken on lease/leave and licence godowns/residential and office premises at various locations in the country.

i) The Company's significant leasing arrangements are in respect of the above godowns and premises (including furniture and fittings therein, as applicable). The aggregate lease rentals payable are charged to Statement of Profit and Loss as Rent.

ii) The Leasing arrangements which are cancellable range between 11 months to 5 years. They are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. An amount of Rs 99.32 (2011 - Rs 83.35) towards deposit and unadjusted advance rent is recoverable from the lessor.

The Company has entered into operating lease agreements for the rental of its office premises for a period of 3 to 5 years.

6. Taxation

Provision for current taxation for the Company of Rs 554.00 represents Minimum Alternate Tax pursuant to the provisions of Section 115JB of the Income Tax Act, 1961 of India. The Finance Act, 2005 inserted sub-section (1A) to section 115JAA to grant tax credit in respect of MAT paid under Section 115JB of the Act with effect from Assessment Year 2006-07 and carry forward the credit for a period of 10 years. In accordance with the Guidance Note issued on "Accounting for credit available in respect of Minimum Alternative Tax (MAT) under the Income Tax Act 1961" by the Institute of the Chartered Accountants of India, the Company has recognised MAT Credit which is expected to be set-off against the tax liability, other than MAT in future years. Accordingly, an amount of Rs 374.73 for the current year has been recognised as MAT Credit Entitlement in Note 13.

7. Employee Benefits

The disclosures as required as per the revised AS 15 are as under:

1. Brief description of the Plans

The Company has various schemes for long-term benefits such as Provident Fund, Superannuation, Gratuity and Compensated absences. In case of funded schemes, the funds are recognised by the Income tax authorities and administered through appropriate authorities. The Company's defined contribution plans are Superannuation and Employees' Provident Fund and Pension Scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company's defined benefit plans include Gratuity and Compensated absences.

8. Prior Year Comparatives

During the year ended 31 March 2012 the revised schedule VI notified under the Companies Act,1956, has become applicable to the Company. The company has reclassified previous year figures to confirm to this year's classification. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosure made in the financial statements.

9. Extracts of Assets and Liabilities as on 31 March 2012 and Income and Expenses for the year ended 31 March 2012 related to the interest of the Company (without elimination of the effect of transactions between the Company and Glenmark Pharmaceuticals (Thailand) Co. Ltd., Thailand) have been extracted from the audited financial statements:

 
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