Gland Pharma Ltd

Advancing growth with

forward-thinking strategies

Dear Stakeholders,

I am pleased to present the key highlights of Gland's journey over the past financial year. Reflecting on our performance, we believe that the year has been particularly eventful, marked by the strategic acquisition of Cenexi. While our financial results demonstrated a positive momentum, they also highlight significant milestones and strategic advancements that position us for future growth.

At the base business level (excluding Cenexi), we delivered stable financial and operational performance, reflecting our strategic positioning and commitment to driving growth in the generics business through scale, scope, and capabilities.

Cenexi, our European CDMO business, is a new addition to our fold, marking a significant milestone in our expansion journey. Although Cenexi is currently undergoing business integration and reported a negative financial performance, it remains a strong strategic pillar for our future growth. This acquisition brings complementary technical and operational capabilities to our base business, positioning Cenexi as our flagship brand for CDMO services, with particular emphasis on speciality products and injectables. With four cutting-edge manufacturing sites, each with a distinct competitive advantage and a marquee clientele, Cenexi opens up a significant addressable market in Europe, further accelerating our growth trajectory.

At Gland, we take pride in our strategic presence in key markets, offering a unique portfolio of injectables and capabilities. This approach sets us apart and allows us to make a meaningful impact as a market leader while seizing opportunities across diverse geographical regions.

Over the years, our diverse portfolio of injectable products, spanning various therapeutic areas and delivery systems, has cemented our reputation as a trusted leader in injectables. With a strong global presence encompassing regulated and emerging markets, we stand firm in our commitment to meet the evolving needs of patients and healthcare providers worldwide. We persistently focus on addressing a wide spectrum of injectable needs by ensuring a steady supply of high- quality products at an unmatched manufacturing scale.

Base Business (excluding Cenexi)

Our revenue from operations (excluding Cenexi) reached '41,769 million in FY 2023-24, a significant rise from '36,246 million recorded in FY 2022-23. Our EBITDA (base business) increased by 38% year-on- year to attain '14,142 million, with an EBITDA margin (base business) of 34% in FY 2023-24 compared to 28% in FY 2022-23. A host of factors, including the successful introduction of new products, new partnerships,

relaunches, and the sustained market leadership of existing products, were responsible for driving this growth.

Our revenue from core markets, including the US, Europe, Canada, Australia, and New Zealand, witnessed a 21% year-on-year growth during FY 2023-24, contributing 78% to total revenue, with the US, our largest market, experiencing a 24% year-on-year surge. During the year, we successfully launched over 50 new molecules, including Regadenoson, Ganirelix Acetate, Doxycycline, Octreotide Acetate, Carboprost, and Ketamine, and relaunched more than 30 molecules, contributing to our continued expansion and market presence. Our key products, such as Enoxaparin Sodium, Cisplatin, Lacosamide, Rocuronium Bromide, Zoledronic Acid, and Vancomycin, exhibited robust growth without significant price fluctuations. Given this promising foundation, we are optimistic about building further momentum, leveraging compliance, cost leadership, scale, and a diverse product portfolio to sustain our competitive edge.

Excluding the US, our performance remained consistent in other markets within the core regions despite the prolonged approval process. Additionally, we focused on identifying products from our US portfolio conducive to entry into these regions, particularly in Australia and Europe.

Looking at the Rest of the World markets, it accounted for 16% of our revenue in FY 2023-24. Additionally, we witnessed favourable traction for certain products in these markets, paving the way for future growth. Moreover, we expect significant progress in the businesses we recently launched in this region over the next two to three years.

Meanwhile, the Indian market, which contributed 7% to our revenue, recorded growth in FY 2023-24.

While we continue expanding into new markets, our focus in India remains on key products, and we are actively seeking strategic options to enhance value creation.

Integration of Cenexi

Our deep dive into Cenexi during the post-merger integration process has outlined the roadmap for us to attain the desired success from Cenexi. We maintain reasonable confidence in Cenexi's current clientele and their long-term commitment. With a solid order book of new programmes signed and in various stages of tech transfer and approval, we anticipate a medium-term incremental increase in our existing annual revenue base.

A comprehensive function-byfunction integration plan is devised to address operational issues and maximise synergistic benefits.

The team primarily focuses on accelerating existing business transformation programmes while driving necessary functional tasks.

Furthermore, we are actively working to establish a shared long-term business goal for both Cenexi and Gland, identify new opportunities that capitalise on the combined capabilities of both entities, and align collaboration and governance mechanisms to ensure the seamless delivery of integration initiatives.

Cenexi is currently navigating a transitional phase marked by shortterm operational challenges that are leading to performance issues. The Company is contending with frequent breakdowns, coupled with a significant proportion of low-margin products. To address these issues, we have initiated a comprehensive transformation plan encompassing short-term, medium-term, and long-term solutions. This strategy involves proactive investments in asset upgrades, capacity rebalancing, and the implementation of future- ready capabilities.

Notwithstanding these hurdles, Cenexi maintains a robust order book, a loyal customer base, ongoing tech transfer projects, and promising growth prospects. Although the realisation of the full potential of the acquisition has faced delays, we remain confident in Cenexi's medium- to long-term outlook.

Our immediate priority is to boost Cenexi's profitability and achieve high-teen margins in the medium to long term.

Operational achievements

Our manufacturing facilities continue to run efficiently, reaffirming our commitment to delivering high- quality products at scale while maintaining competitive costs and adhering to stringent compliance standards. Additionally, we are investing in the construction of new high-speed lines to replace existing ones, implementing automation to boost efficiency, and ensuring continuous compliance with regulations.

This year has been marked by significant advancement, with over 40 successful audits conducted, including assessments by the regulators and our partners.

Our unshakable commitment to compliance requirements continues to be central to our strategy, deeply embedded in our organisational culture, and integral to every business decision we make.

In sync with our objective to focus on innovation, we incurred an R&D expense of ' 1,774 million in FY 202324. Furthermore, we filed 19 ANDAs and obtained approval for 24 ANDAs. As of March 31, 2024, our collective efforts with partners resulted in the submission of 349 ANDAs in the US, with 286 approved and 63 pending approvals. At present, we hold 1,667 product registrations worldwide.

In our drive to excel in complex injectables, we set our sights on developing 19 molecules targeting a market valued at approximately USD 9 billion, as per IQVIA. To date, we have secured six approvals, with four products already making their market debut. The recent launch

of Eribulin (May 2024) marks a significant milestone as our premier complex product in this domain.

The next two years are set to be pivotal in our journey, as our complex product portfolio is poised to yield substantial outcomes. Additionally, we are actively exploring potential acquisitions, co-development opportunities, and in-licensing agreements to expedite our growth trajectory and fortify our position in this sector.

While biologics remain a cornerstone for driving our future growth, it represents a more long-term endeavour. Our immediate focus is on securing regulatory approvals for our facility through existing business channels and potential nearterm achievements.

Financial performance

Amidst an evolving operational landscape, our teams remained steadfast, productive, and dedicated to our customers, ensuring the sustained progression of our upward trajectory. In FY 2023-24, our revenue surged by 56% to reach ' 56,647 million, compared to ' 36,246 million in the previous fiscal year. The growth enablers included consistent performance across markets, increased shipment volumes at stable prices, and the introduction of new products. Concurrently, our EBITDA soared to ' 13,331 million, up from ' 10,248 million in FY 202223, propelled by robust operational efficiencies. Our EBITDA margin stood at 24% in FY 2023-24 compared to 28% in FY 2022-23. Our PAT stood at ' 7,725 million with a PAT margin of 14% in FY 2023-24. Moving forward, we are committed to enhancing profitability and margins, anchored on a strategic growth blueprint.

The Board of Gland Pharma is delighted to propose its inaugural dividend to shareholders following our listing. The Board recommends a final dividend of ' 20 per equity share for the fiscal year ending March 31, 2024.

Strategic roadmap

We have identified a number of growth strategies that will help us maintain our momentum. These include the following:

•Expanding our presence globally, with a strategic focus on the US, Europe, and the rest of the world (RoW)

•Advancing our portfolio through strategic initiatives such as InLicensing, Complex Development, and Co-Development

•Recognising the growing demand for biologics and staying committed to fortifying our CDMO in biologics

•Integrating Environmental,

Social, and Governance (ESG) considerations into our core business strategy

ESG approach

We prioritise our focus on ESG principles, ingraining sustainability into every facet of our operations.

We set a precedent in environmental stewardship by minimising our ecological footprint, conserving resources, and adopting ecofriendly practices across our manufacturing processes.

Our employees are the driving force behind our steady pursuit of innovation and growth.

Their collective dedication and passion are the mainstay of our organisational agility and accomplishments. Recognising

that employee satisfaction and well-being are essential drivers of productivity, we prioritise employee welfare while striving to fulfil their professional aspirations.

Active engagement with the communities in which we operate is integral to our ethos.

To drive collective prosperity, we support impactful CSR initiatives encompassing education, health, community development, environmental protection, and wildlife conservation, thereby benefitting those in need.

Our governance framework is rooted in transparency, accountability, and ethical conduct, ensuring adherence to regulatory standards and fostering fair and ethical business practices.

By upholding these ESG principles, we are committed to creating enduring value for all our stakeholders.

Embracing the future

Looking ahead, we are optimistic and firmly convinced that our prime moments are still ahead of us. Harnessing our core strengths, including our differentiated business model, continued focus on operational efficiencies and innovation, and commitment to stringent quality and compliance, we are confident that we can navigate the challenges of both domestic and global markets. This agile approach positions us for sustained growth and accretive value creation.

I am deeply grateful for the exceptional leadership of our Board and management, whose expertise has been instrumental in Gland Pharma's continued success. Their guidance, combined with the support of our shareholders, communities, customers, vendors, and stakeholders, has fuelled our growth and achievements. I am particularly proud of our dedicated employees, whose spirit and tireless work have been the cornerstone of our Company's progress and sustainability.

Thank you all for the remarkable year.