TARO Presentation to the Special Committee August 12, 2012 Strictly Private and Confidential citi

Confidential Material Disclaimer The following pages contain material to be provided to the Special Committee of the Board of Directors ("the Special Committee") of Taro Pharmaceutical Industries Ltd. ("Taro" or the "Company") by Citigroup Global Markets Inc. ("Citi") in connection with the proposed transaction involving the Company and Sun Pharmaceutical Industries Ltd. ("Sun Pharma"). The accompanying material was compiled or prepared on a confidential basis solely for the use of the Special Committee of the Company. The information contained in the accompanying material was obtained from the Company, Sun Pharma and other sources. Any estimates and projections contained herein have been prepared or adopted by management of the Company, obtained from public sources, or are based upon such estimates and projections, and involve numerous and significant subjective determinations, and there is no assurance that such estimates and projections will be realized. Citi does not take responsibility for such estimates and projections, or the basis on which they were prepared. No representation or warranty, express or implied, is made as to the accuracy or completeness of such information and nothing contained herein is, or shall be relied upon as, a representation, whether as to the past, the present or the future. In preparing the accompanying material, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the management of the Company, that they are not aware of any relevant information that has been omitted or that remains undisclosed to Citi. The accompanying material was not prepared for use by readers not as familiar with the Company and Sun Pharma as the Special Committee of the Company and, accordingly, neither the Company nor Citi nor their respective legal or financial advisors or accountants take any responsibility for the accompanying material if used by persons other than the Special Committee of the Company. The accompanying material is necessarily based upon information available to Citi, and financial, stock market and other conditions and circumstances existing and disclosed to Citi, as of the date of the accompanying material. Citi does not have any obligation to update or otherwise revise the accompanying material. Nothing contained herein shall be construed as legal, tax or accounting advice. 1 citi

Table of Contents 1. Company Overview 2 2. Peer Benchmarking 8 3. Taro Valuation 11 Appendix citi

1. Company Overview citi

Taro Company Overview Company Overview o Taro is a multinational, science-based pharmaceutical company, headquartered in Israel and listed on the NYSE o Develops, manufactures and markets prescription and OTC pharmaceutical products, primarily in the United States, Canada and Israel o Also develops and manufactures APIs primarily for use in our finished dosage form products o Primary areas of focus include topical creams and ointments, liquids, capsules and tablets o Since September 2010, majority owned (approximately 66%) by Sun Pharma, an Indian global pharma company Financial Snapshot CAGR (USD in mm, except per share data) CY2011A CY2012E CY2013E '11-'13 Sales $505.7 $573.6 $535.4 2.9% Growth 13.4% (6.7%) EBITDA #N/A $222.7 $267.3 $231.8 2.0% Margin 44.0% 46.6% 43.3% Net Income $183.7 $200.6 $175.8 (2.2%) Stock Price $40.97 FirmValue / 2012ERevenue 2.6x % of 52 Week High 85.1% FirmValue / 2013ERevenue 2.8 Fully Diluted Shares 44.6 FirmValue / 2012EEBITDA 5.7 Fully Diluted Market Cap $1,827.8 FirmValue / 2013EEBITDA 6.5 Plus: Debt 37.5 2012EPE 9.1 Plus: Minority Interest 4.2 2013EPE 10.4 Less: Cash (352.6) Firm Value $1,517.0 Top Products Product Use 2010 Sales ($000s) 2011 Sales ($000s) Key Competitors Desoximetasone Skin infections $48,890 $45,860 Sanofi, Fougera Carbamazepine XR Tablets Epilepsy 15,524 18,103 Nostrum, Sandoz, Apotex Nystatin & Triamcinolone Fungal infections 3,010 25,496 Fougera, Perrigo, Actavis Clotrimazole & Betamethasone Skin infections 3,879 21,797 Fougera, Actavis Nystatin Cream Fungal infections 3,568 16,543 Perrigo, Actavis, Fougera, Teva, Hi-Tech Source: Company filings, Evaluate Pharma, and FactSet. Market data as of August 10, 2012. 2 citi

Recent Taro Stock Price Performance Taro's share price has increased more than 250% since Sun Pharma's September 2010 acquisition of the Levitt and Moros families' shares. It is also currently trading 67% above Sun's $24.50 per share offer from October 18, 2011. (1) Sun Pharma's 9/21/10 Purchase 4/25/2012: Watson acquires Actavis for $5.9bn 5/2/2012: Novartis acquires Fougera Pharma for $1.5bn in cash 7/16/2012: TPG acquires Par Pharma for $1.9bn in cash 2/10/2012: Taro reports Q4 revenue of $148.1m (up 44.3% year over year) 07/15/2010: US District Court rules in favor of Sun Pharma and dismisses all of Taro's efforts to block tender offer by Sun 10/29/2010: Taro announces Q3 revenue of $103.2m (up 10% year over year) 07/26/2011: Taro reports Q2 revenue of $111.6m (up 17% year over year) (2) 3/19/2012: Taro lists on the NYSE 5/24/2012: Taro reports Q1 revenue of $145.1m (up 34.7% year over year) 01/18/2011: Sun increases stake to 66.3% under Warrant No. 2 and 2007 SPA 09/21/2010: Sun Pharma acquires 4.74m shares including from Levitt and Moros families 1/20/2011: Perrigo acquires Paddock for $540m 4/25/2012: Valeant acquires Dermik Labs for $425m 11/10/2011: Taro reports Q3 revenue of $138.3m (up 34% year over year) 10/04/2010: Sun Pharma acquires 5.16m shares from Templeton Asset Management 05/26/2011: Taro reports Q1 revenue of $107.7m (up 21% year over year) 10/18/2011: Sun Pharma proposes to acquire the outstanding Taro shares not already owned for $24.50 per share 8/6/2012: Taro reports Q2 revenue of $159.2m (up 42.6% year over year) Price $50 40 30 20 10 0 Volume (mm) 0.5 Current: $40.97 0.3 0.0 Jul-10 Nov-10 Mar-11 Jul-11 Nov-11 Mar-12 Jul-12 Sun / Other news Financial News Relevant Transactions Source: Company filings and FactSet. (1) Market data as of August 10, 2012. (2) $7.40 price movement in Taro's stock price between Sun Pharma's public letter, disclosing its $24.50 unsolicited offer, and Taro's Q3 earnings announcement. 3 citi

Taro Trading Perspectives o Taro is currently not covered by any equity research houses o Sun Pharma provides limited disclosure on its earnings calls about Taro but has highlighted that given historical industry dynamics, recent price increases may not be sustainable o Taro issues a quarterly press release around its operating performance but does not provide guidance around future performance o Given its approximate 66% ownership, Sun Pharma is consolidating Taro's financial results - Few analysts break out Taro financials or forecast financials for Taro separately as part of their ongoing coverage of Sun Pharma o For the most part, the few that continue to forecast Taro separately are forecasting growth post 2012 o Given Sun Pharma's ownership, only 34% of Taro's shares (~15.0mm) trade on the NYSE - Taro's average daily trading volumes for the last 3, 6 and 12 months are ~28,500, ~32,100 and ~24,700 shares, respectively 3M ADTV as 6M ADTV as 12M ADTV as Company / Exchange %Float %Float %Float Sun Pharma 0.9% 1.1% 0.8% Perrigo 0.8 0.8 1.0 Hospira 0.7 0.8 1.0 Mylan 1.2 1.3 1.5 Impax 0.8 0.8 1.0 Watson 1.4 1.5 1.5 Par Pharma 2.1 1.5 1.3 Mean 1.1 1.1 1.1 Median 0.9 1.1 1.0 NYSE ALL Mean 1.1% 1.1% 1.1% Median 0.8 0.8 0.9 $1bn Mkt Cap Mean 1.0 1.0 1.0 Median 0.6 0.7 0.7 $1bn - $3bn Mkt Cap Mean 1.3 1.3 1.3 Median 0.9 1.0 1.0 Taro Pharma 0.2 0.2 0.2 4 citi

Taro 2011 Financial Performance in Context 2011 was unlike any year previously observed in Taro's history. Due to unforeseen circumstances impeding key competitors, Taro was able to substantially increase prices on select products in the US, resulting in significant growth in net sales, profits and cash flow. Consolidated Net Sales ($m) $356 $393 $506 $574 $219 $304 +10% +29% +13% +39% 2009A 2010A 2011A 2012E H1 2011 H1 2012 Gross Profit ($m) (1) $223 $247 $344 $408 $137 $220 +11% +39% +19% +60% 2009A 2010A 2011A 2012E H1 2011 H1 2012 Margin 63% 63% 68% 71% 63% 72% EBITDA ($m) $90 $105 $223 $267 $77 $154 +17% +111% +20% +100% 2009A 2010A 2011A 2012E H1 2011 H1 2012 Margin 25% 27% 44% 47% 35% 51% Free Cash Flow ($m) (2) $82 $76 $216 $248 $58 $127 (7%) +186% +15% +119% 2009A 2010A 2011A 2012E H1 2011 H1 2012 Source: Taro public filings and management's 5-year forecast. (1) Depreciation and amortization allocated 75%:25% between COGS and SG&A per Taro management. (2) Free cash flow defined as EBITDA less change in net working capital less capex. 5 citi

...While Cost Infrastructure Remained Relatively Unaffected COGS (1) ($m) +8% CAGR +3% $133 $145 $162 $166 $82 $84 2009A 2010A 2011A 2012E H1 2011 H1 2012 % of Sales 37% 37% 32% 29% 37% 28% SG&A (1) ($m) (3%) CAGR (2%) $96 $103 $89 $88 $45 $44 2009A 2010A 2011A 2012E H1 2011 H1 2012 % of Sales 27% 26% 18% 15% 21% 15% R&D ($m) +17% CAGR +42% $33 $36 $31 $53 $15 $21 2009A 2010A 2011A 2012E H1 2011 H1 2012 % of Sales 9% 9% 6% 9% 7% 7% Commentary o COGS split 50% fixed and 50% variable o 12% increase in COGS from 2010 to 2011 relative to a 29% increase in net sales o Continued COGS as a % of sales decline driven by meaningful price increases in H2 2011 o SG&A split 70% fixed and 30% variable o SG&A decline driven in part by reduction in nonrecurring litigation fees in 2011 o Decline as a % of sales driven by meaningful price increases in H2 2011 and H1 2012 o 2011 R&D decrease driven by reduction in number of clinical studies o New R&D team brought 'on-board' during 2011 o $50m budgeted for, but not able to be spent, during the year o H1 2012 'ramp-up' driven by incremental projects being pursued Source: Taro public filings and management's 5-year forecast. (1) Depreciation and amortization allocated 75%:25% between COGS and SG&A per Taro management. 6 citi

Taro YTD Financial Performance o $304mm of H1 2012 sales represents 53% of Taro 2012 budget o 160 bps improvement in gross margin from 68.5% to 70.1% o Sales, marketing, general and admin expense in line with 2012 budget o ~$21mm R&D spend well below ~$26.5mm R&D projection (based on full year estimates of $53mm spend) - Taro still committed to $53mm full year spend - Adjusting R&D spend to reflect H1 budget estimate would lower H1 2012 EBITDA to be at 56.5% of full year budget $000's Q1 2012 Q2 2012 H1 2012 2012E %of Budget Net sales 145,141 159,152 304,293 573,578 53.1% Net sales growth 9.7% Cost of sales (1) (42,523) (41,650) (84,172) (165,805) 50.8% Gross profit 102,619 117,503 220,121 407,773 54.0% Gross profit margin 70.7% 73.8% 72.3% 71.1% Research and development, net (9,847) (11,525) (21,372) (52,970) 40.3% Selling, marketing, general and administrative(1) (21,952) (22,449) (44,400) (87,547) 50.7% EBITDA 70,820 83,529 154,349 267,256 57.8% EBITDA margin 48.8% 52.5% 50.7% 46.6% Depreciation and amortization (4,598) (4,542) (9,140) (20,000) Operating Income 66,222 78,987 145,209 247,256 Operating Profit Margin 45.6% 49.6% 47.7% 43.1% Interest and other financial expense 107 (390) (283) (65) Foreign exchange (expense) income (1,107) 708 (399) (240) Other (expense) income, net (94) 365 271 922 Income before income taxes 65,128 79,670 144,798 247,873 58.4% Tax expense (17,791) (16,510) (34,301) (47,279) Income from continuing operations 47,337 63,160 110,497 200,593 55.1% Net income (loss) from discontinued operations 66 10 76 -- Net income 47,403 63,170 110,573 200,593 55.1% Source: Taro public filings and management's 5-year forecast. (1) Depreciation and amortization allocated 75%:25% between COGS and SG&A per Taro management. 7

2. Peer Benchmarking citi

Generic Pharma Peer Benchmarking Taro is expected to grow more quickly than most of its US generic peers in 2012, however, as competitors re-enter select Taro product markets, pricing and volume are projected to be pressured, leading to declining growth. 2011A - 2012E Revenue Growth 20% 15 10 5 0 (5) Median: 6.5% (1) 16.8% 11.6% 6.5% 6.5% 2.4% (0.4%) 13.4% Watson (2) Mylan Perrigo (3) Par (4) Impax (5) Hospira Taro Mgmt 5-Yr Forecast 2012E - 2013E Revenue Growth 12% 8 4 0 (4) (8) Median: 4.2% (1) 9.1% 4.7% 4.4% 3.9% 2.9% (2.5%) (6.7%) Perrigo Mylan Hospira Par (4) Impax (5) Watson (2) Taro Mgmt 5-Yr Forecast Sources: Taro financial projections as per management's 5-year forecast. FactSet, Wall Street Research. (1) Median excludes Taro. (2) Not pro forma for Actavis acquisition. (3) Perrigo 2011A revenue adjusted for full year of Paddock revenue based on 12/31/2011 10Q. (4) Par revenue adjusted to exclude revenue associated with acquisition of marketing rights to generic Provigil. (5) Impax revenue adjusted to exclude revenue associated with acquisition of Zomig. 8

Generic Pharma Peer Benchmarking (cont'd) Taro's highly attractive COGS margin is driven by (1) the benefit from price increases over the past year as well as (2) historically more attractive COGS margins within the derm segment. This outsized differential leads to EBITDA margins on the high side of generic peers. 2012E COGS % of net Sales 64.1% 62.5% 56.1% 55.7% 50.7% 37.4% 28.9% Median: 55.9% (1) 65% 55 45 35 25 15 Hospira Perrigo Watson Par Mylan Impax Taro Mgmt 5-Yr Forecast 2012E SG&A% of net Sales 19.2% 17.4% 17.4% 16.3% 15.5% 11.2% 15.3% Median: 16.8% (1) 22% 19 16 13 10 Mylan Impax Hospira Par Watson Perrigo Taro Mgmt 5-Yr Forecast 2012E R&D % of net Sales 13.3% 7.5% 6.5% 6.2% 5.6% 3.3% 9.2% Median: 6.4% (1) 14% 12 10 8 6 4 2 Impax Hospira Par Watson Mylan Perrigo Taro Mgmt 5-Yr Forecast 2012E EBITDA Margin 36.9% 27.0% 25.0% 24.6% 24.3% 15.7% 46.6% Median: 24.8% (1) 50% 40 30 20 10 Impax Mylan Par Perrigo Watson Hospira Taro Mgmt 5-Yr Forecast Sources: Taro financial projections as per management's 5-year forecast. FactSet, Wall Street Research. (1) Median excludes Taro. 9

Generic Pharma Peer Benchmarking (cont'd) Despite forecasted increases in competition through 2016, Taro's ETBIDA margins remain at the high side of its generic peers. In addition, its longer-term more steady state growth is only modestly below the median of its peers. 2010A - 2015E Revenue CAGR 7.9% 7.1% 6.8% 4.0% 1.9% 0.4% 4.6% Median: 5.4% (1) 10% 5 0 Watson (2) Mylan Perrigo (3) Hospira Par (4) Impax (5) Taro Mgmt 5-Yr Forecast 2015E EBITDA Margin 35.3% 29.8% 25.9% 25.5% 23.6% 19.3% 39.6% Median: 25.7% (1) 42% 32 22 12 Impax Par Perrigo Mylan Watson Hospira Taro Mgmt 5-Yr Forecast 2015E Gross Margin 70.3% 49.3% 48.3% 47.8% 40.3% 39.2% 67.8% Median: 48.1% (1) 80% 70 60 50 40 30 Impax Mylan Par Watson Perrigo Hospira Taro Mgmt 5-Yr Forecast Sources: Taro financial projections as per management's 5-year forecast. FactSet, Wall Street Research. (1) Median excludes Taro. (2) Not pro forma for Actavis acquisition. (3) Perrigo 2010A revenue adjusted to include implied full year of Paddock results from 10Q 12/31/2011. (4) Par revenue adjusted to exclude revenue associated with acquisition of marketing rights to generic Provigil. (5) High 2010 sales are the result of temporary increase from exclusivity of Flomax in Q1 2010. Not pro forma for Zomig product acquisition. 10

3. Taro Valuation citi

Taro Valuation Summary Valuation Methodology Valuation Range Implied 2013E P/E Commentary Sun Pharma's offer price ($39.50) Taro's current share price ($40.97) Low High For Informational Purposes Only Unaffected Price Trading Range $18.30 $48.20 4.6x 12.2x o Low to high trading range for the last 12 months $24.30 $25.30 6.1x 6.4x o 25% - 30% minority squeeze-out premium applied to Taro's 'undisturbed' closing share price of $19.45 on October 17, 2011, the day prior to the announcement of Sun's offer DCF Valuation Public Trading Valuation Management Case Comparable Companies $35.60 $43.50 9.0x 11.0x o 9.0x - 11.0x 2013E P/E range based on peer group trading multiples $35.50 $43.70 9.0x 11.1x o Based on management's 5-year forecast o Standalone DCF valuation based on a 7.0% - 9.0% WACC and a 5.0x - 7.0x terminal LTM 2016E EBITDA multiple Note: Market data as of August 10, 2012. Net cash of $315m and Minority Interests of $4m as at June 30, 2012. 11 citi

Precedent Minority Squeeze-out Transactions o 53 completed minority squeeze-out transactions since 2000 o ~94% of those transactions experienced at least one 'price-bump' o On average, there have been ~2.3 price-bumps per transaction o Average increase from initial offer price to final offer price of ~17.2% o Average duration from initial offer to final offer of ~69 days Sun Pharma Proposed Transaction o $39.50 per share offer price o 3 price-bumps o 61.2% increase from initial to final offer o 295 days from initial to final offer Initial Offer Premia to Undisturbed (1) 1-Day 1-Month Average 14% 26% 16% 24% Min. Squeezeouts Sun Pharma Offer Premium Min. Squeezeouts Sun Pharma (2) Offer Premium Final Offer Premia to Undisturbed (1) 1-Day 1-Month Average 29% 103% 29% 99% Min. Squeezeouts Sun Pharma Offer Premium Min. Squeezeouts Sun Pharma Offer (2) Premium Increase from Initial to Final Offer (3) 12% 61% Min. Squeezeouts Sun Pharma Offer Premium Note: For informational purposes only. Source: SDC and public filings. (1) Represents median premium based upon undisturbed prices. (2) Represents premium to average share price for respective period. (3) Represents median increase from initial to final offer. 12 citi

Taro DCF Valuation Year Ending December 31 $m 2012E (1) 2013E 2014E 2015E 2016E Net Sales 506 $287 $535 $514 $492 $498 % Growth 13.4% (6.7%) (3.9%) (4.4%) 1.3% EBITDA $134 $232 $215 $194 $194 % Margin 46.6% 43.3% 41.8% 39.6% 39.0% EBIT $124 $212 $193 $172 $172 % Margin 43.1% 39.6% 37.5% 35.1% 34.6% Taxes @ 17.5% (24) (38) (33) (27) (27) NOPAT $100 $174 $160 $145 $145 Plus: Depreciation & Amortization 10 20 22 22 22 Plus: Change in NWC (3) (5) (5) (5) (5) Less: Capex (7) (14) (14) (14) (14) Unlevered Free Cash Flow -- $100 $175 $163 $148 $148 Terminal Adj. Free Cash Flow (2) $140 Terminal EBITDA Multiple 5.0x 5.5x 6.0x 6.5x 7.0x WACC Firm Value ($m) 7.0% $1,354 $1,426 $1,498 $1,569 $1,641 7.5% 1,333 1,404 1,474 1,544 1,614 8.0% 1,313 1,382 1,451 1,519 1,588 8.5% 1,293 1,360 1,428 1,495 1,562 9.0% 1,274 1,340 1,406 1,472 1,537 WACC Implied Perpetuity Growth Rate 7.0% (6.5%) (5.4%) (4.5%) (3.7%) (3.0%) 7.5% (6.0) (5.0) (4.0) (3.2) (2.5) 8.0% (5.6) (4.5) (3.6) (2.8) (2.1) 8.5% (5.2) (4.1) (3.1) (2.3) (1.6) 9.0% (4.7) (3.6) (2.7) (1.9) (1.2) Terminal EBITDA Multiple 5.0x 5.5x 6.0x 6.5x 7.0x WACC Equity Value Per Share 7.0% $37.34 $38.94 $40.54 $42.14 $43.74 7.5% 36.87 38.44 40.01 41.58 43.14 8.0% 36.41 37.95 39.49 41.02 42.56 8.5% 35.97 37.47 38.98 40.48 41.99 9.0% 35.53 37.01 38.48 39.96 41.43 WACC Terminal Value as a %of Enterprise Value 7.0% 52.9% 55.3% 57.4% 59.4% 61.2% 7.5% 52.6 55.0 57.2 59.1 60.9 8.0% 52.4 54.7 56.9 58.8 60.6 8.5% 52.1 54.4 56.6 58.5 60.3 9.0% 51.8 54.2 56.3 58.3 60.1 Note: Net cash of $315m and minority interests of $4m as at June 30, 2012. (1) For the 6 months ending December 31, 2012. (2) Normalizes for the difference in capex and depreciation and amortization. 13 citi

Historical Taro LTM EBITDA Multiples LTM EV / EBITDA Multiples between 9/21/2010 and 10/17/2011 (1) LTM EBITDA Multiple Statistics Min 5.3x Median 6.0 Mean 6.1 Max 7.6 8.0x 6.0 4.0 Multiple uplift driven by stock price appreciation ahead of Taro product pricing increases being reflected in LTM EBITDA Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Source: FactSet. Note: Taro market value calculated using average diluted shares throughout the respective quarter. (1) Date range based upon period from Sun Pharma's acquisition of its majority stake in Taro through to the day prior to Sun Pharma's offer of $24.50 per share for the shares it does not already hold. 14

Comparable Company Valuation Benchmarking 2013E EV / EBITDA Median: 7.2x (1) Median (sub-$5bn market cap peers): 5.9x (1) 13.3x 8.9x 8.3x 6.5x 6.2x 6.2x 5.7x 15.0x 10.0 5.0 0.0 Perrigo Hospira Mylan Taro Mgmt 5-Yr Forecast Impax Watson Par (2) 2013E P / E Median: 10.9x (1) Median (sub-$5bn market cap peers): 10.5x (1) 20.1x 13.7x 11.7x 10.4x 10.0x 9.3x 8.6x 24.0x 16.0 8.0 0.0 Perrigo Hospira Impax Taro Mgmt 5-Yr Forecast Watson Par (2) Mylan Sources: FactSet, Wall Street Research. Market data as of August 10, 2012. (1) Median calculation does not include Taro. (2) Represents multiple prior to transaction announcement with TPG on July 16, 2012. 15 citi

Appendix citi

Taro Management 5-Year Forecast $mm 2011A 2012E 2013E 2014E 2015E 2016E 2011-16 CAGR Income Statement Net sales 505.7 573.6 535.4 514.3 491.6 498.2 (0.3%) Growth % 13.4% (6.7%) (3.9%) (4.4%) 1.3% COGS (162.1) (165.8) (162.1) (159.6) (158.4) (161.8) (0.0%) Gross margin 343.6 407.8 373.3 354.8 333.2 336.3 (0.4%) Gross margin % 67.9% 71.1% 69.7% 69.0% 67.8% 67.5% SG&A (89.2) (87.5) (88.0) (88.6) (89.6) (92.0) 0.6% R&D (30.9) (53.0) (53.5) (51.4) (49.2) (49.8) 10.0% Total operating costs (120.9) (140.5) (141.5) (140.0) (138.8) (141.8) 3.2% EBITDA 222.7 267.3 231.8 214.7 194.4 194.5 (2.7%) EBITDA margin % 44.0% 46.6% 43.3% 41.8% 39.6% 39.0% Depreciation & amortization (18.7) (20.0) (20.0) (22.0) (22.0) (22.0) 3.3% Operating income 204.0 247.3 211.8 192.7 172.4 172.5 (3.3%) Operating income margin % 40.3% 43.1% 39.6% 37.5% 35.1% 34.6% Foreign exchange 6.9 (0.2) -- -- -- -- Interest expense (3.2) (0.1) (1.8) (1.1) (0.4) (0.3) Interest income 0.6 0.9 3.9 3.8 3.6 3.6 Profit before tax 208.3 247.9 213.9 195.5 175.7 175.8 (3.3%) Tax expense (24.6) (47.3) (38.1) (33.1) (27.8) (27.8) Net income 183.7 200.6 175.8 162.3 147.9 148.0 (4.2%) Net income margin % 36.3% 35.0% 32.8% 31.6% 30.1% 29.7% Cash Flow Statement Change in net working capital (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) Capital expenditure (5.7) (14.3) (14.3) (14.3) (14.3) (14.3) 20.2% Source: Taro financial projections as per management's 5-year forecast Note: Depreciation and amortization allocated 75%:25% between COGS and SG&A per Taro management. 16 citi

Comparable Company Trading Levels Company Price 8/10/2012 %of 52-Week High Fully Diluted Market Value Firm Value '12-'15 Revenue CAGR Firm Value Revenue 2012E 2013E EBITDA 2012E 2013E P/E 2012E 2013E Perrigo $115.50 97.3% $10,937 $12,317 6.8% 3.7x 3.4x 14.9x 13.3x 22.3x 20.1x Mylan 23.46 99.0 11,220 16,393 3.9 2.4 2.3 8.9 8.3 9.4 8.6 Watson 79.86 100.0 10,456 11,627 16.5 2.1 1.4 8.7 6.2 13.8 10.0 Hospira 34.15 73.8 5,674 6,798 5.6 1.7 1.6 10.7 8.9 17.1 13.7 Impax 24.03 94.9 1,712 1,369 4.8 2.2 2.1 5.9 6.2 11.6 11.7 Par (1) 36.58 85.9 1,365 1,520 0.6 1.4 1.5 5.5 5.7 9.5 9.3 Mean -- -- -- -- 6.4% 2.2x 2.0x 9.1x 8.1x 13.9x 12.2x Median -- -- -- -- 5.2 2.1 1.9 8.8 7.2 12.7 10.9 Mean (sub-$5bn market cap peers) -- -- -- -- 2.7% 1.8x 1.8x 5.7x 5.9x 10.6x 10.5x Median (sub-$5bn market cap peers) -- -- -- -- 2.7 1.8 1.8 5.7 5.9 10.6 10.5 Taro Mgmt 5-Yr Forecast $40.97 85.1% $1,828 $1,517 (5.0%) 2.6x 2.8x 5.7x 6.5x 9.1x 10.4x Source: Company filings and consensus Wall Street Research. Note: Market data as of August 10, 2012. (1) Represents financials prior to transaction announcement with TPG on July 16, 2012. 17

Historical Minority Squeeze-out Transactions o 2000 - Present o Across industries o Controlling shareholder acquired 50% equity stake o Only completed deals Date Acquirer Target %Purchase 1-Day Premium (2) 1-Month Premium (2) 1-Day Premium to Ann. Date (1) 1-Month Premium to Ann. Date (1) Final Offer/ Initial Offer Number of Bumps Structure Consideration Days from SC Formation to Announcement 1/19/2000 Elyo SA Trigen Energy Corp. 47.0% 22.1% 26.2% 38.2% 35.5% 6.8% 3 Tender Offer All Cash 120 4/6/2000 Citigroup Inc. Travelers Property Casualty 15.0% 24.5 35.1% 1.9% 13.1 11.9 2 Tender Offer All Cash 34 5/2/2000 Security Capital Group Homestead Village Inc. 13.0 49.1 98.8 9.3 25.3 20.6 1 Tender Offer All Cash 40 5/18/2000 Hartford Financial Services Hartford Life Inc. 18.5 12.1 47.4 2.1 3.3 14.8 1 Tender Offer All Cash 52 6/5/2000 Peter Cherry Cherry Corp. 48.9 51.4 65.6 29.6 38.6 40.8 2 Tender Offer All Cash 45 9/11/2000 Phoenix Home Life Mutual Phoenix Investment Partners 41.0 44.0 62.6 8.6 7.6 26.0 4 Shareholder Vote All Cash 287 10/18/2000 AXA SA AXA Financial Inc. 39.7 4.6 34.3 7.9 7.1 10.5 2 Tender Offer Cash & Stock 112 10/31/2000 ViacomInc. Infinity Broadcasting Corp. 35.7 (6.7) (7.0) 7.8 10.7 5.0 1 Shareholder Vote All Stock 77 12/15/2000 Enron Corp. Azurix Corp. 33.1 106.2 100.0 36.7 34.8 19.6 2 Shareholder Vote All Cash 36 1/16/2001 Ford Motor Co. Hertz Corp. 18.5 46.4 12.0 1.8 3.5 18.3 3 Tender Offer All Cash 116 2/6/2001 Citicorp Venture Capital Delco Remy International Inc. 47.1 74.7 34.5 17.7 15.5 18.8 1 Tender Offer All Cash 42 2/15/2001 Westfield America Trust Westfield America Inc. 22.5 12.5 14.5 12.5 12.1 2.4 2 Tender Offer All Cash 70 5/16/2001 Benesse Corp. Berlitz International Inc. 22.8 106.3 112.9 12.6 12.3 37.5 2 Tender Offer All Cash 161 7/11/2001 CSFB CSFBdirect 18.0 140.0 73.9 28.2 25.0 50.0 1 Tender Offer All Cash 107 8/3/2001 Electronic Data Systems Unigraphics Solutions Inc. 14.0 52.9 80.8 3.2 3.7 20.4 3 Tender Offer All Cash 79 10/30/2001 Toronto-Dominion Bank TDWaterhouse Group 11.2 53.2 32.9 0.6 15.7 5.6 1 Tender Offer All Cash 21 12/24/2001 Irvin Levy & Family NCH Corp. 43.0 34.0 18.8 9.4 11.4 10.5 3 Shareholder Vote All Cash 87 3/7/2002 Limited Inc. Intimate Brands Inc. 16.3 10.2 24.8 3.2 3.8 5.2 1 Tender Offer All Stock 30 3/18/2002 Sabre Holdings Corp. Travelocity.comInc. 30.0 45.8 22.5 4.1 10.6 21.7 1 Tender Offer All Cash 28 4/4/2002 Xcel Energy Inc. NRG Energy Inc. 25.7 42.9 (16.8) 5.3 2.4 3.2 1 Tender Offer All Stock 31 8/13/2002 Network Associates Inc. McAfee.comCorp. 25.0 (0.7) (5.0) 20.2 23.2 107.6 6 Tender Offer Cash & Stock 148 10/9/2002 Union Oil Co of California Pure Resources Inc. 35.0 20.7 22.4 1.4 (4.0) 13.4 2 Tender Offer All Stock 48 11/5/2002 Valhi Inc. Tremont Corp. 20.0 8.6 20.9 3.4 10.6 51.1 1 Shareholder Vote All Stock 98 11/7/2002 Samuel J Heyman International Specialty Products 20.0 35.5 55.8 13.3 11.2 3.0 2 Shareholder Vote All Cash 92 3/19/2003 USA Interactive Expedia Inc. 38.8 (28.2) (37.7) 32.0 47.4 2.7 1 Shareholder Vote All Stock 6 4/10/2003 USA Interactive Hotels.com 32.0 13.0 28.0 13.0 9.9 0.0 0 Shareholder Vote All Stock 6 7/11/2003 Fidelity National Financial Fidelity National Info Solutions 34.0 37.6 52.3 (2.0) (1.4) 28.9 2 Shareholder Vote All Stock 79 8/4/2003 ICN Pharmaceuticals Ribapharm Inc. 19.9 23.0 50.2 22.1 4.5 11.6 1 Tender Offer All Cash N/A 1/8/2004 Barnes & Noble Barnesandnoble.com 25.4 35.6 27.1 5.2 5.8 22.0 3 Shareholder Vote All Cash 76 3/1/2004 IMC Global Phosphate Resource Partners 48.0 32.9 83.7 2.3 1.8 0.0 0 Shareholder Vote All Stock 89 10/19/2004 Cox Enterprises Cox Communications 38.0 26.0 25.2 3.9 4.4 8.6 3 Tender Offer All Cash 79 Completed at a discount to one day prior to announcement share price Healthcare deals Source: SDC and public filings. Note: Excludes deals that were not recommended by the Special Committee. (1) Date when the companies announced the final agreed terms of the transaction. (2) Premiums are based on the initial public offer date unless the target confirmed a sale process/merger talks within 6 months or rumors surfaced within 1 month. 18 citi

Historical Minority Squeeze-out Transactions (Cont'd) o 2000 - Present o Across industries o Controlling shareholder acquired 50% equity stake o Only completed deals Date Acquirer Target %Purchase 1-Day Premium (2) 1-Month Premium (2) 1-Day Premium to Ann. Date (1) 1-Month Premium to Ann. Date (1) Final Offer/Initial Offer Number of Bumps Structure Consideration Days from SC Formation to Announcement 1/18/2005 Liberty Media UnitedGlobalComInc. 47.0 (2.0) (1.2) (2.0) (0.0) 1.1 3 Shareholder Vote Cash or Stock 36 1/27/2005 Danisco A/S Genencor International 16.0 23.9 15.8 23.9 18.4 13.2 4 Tender Offer All Cash 51 2/21/2005 Novarits AG Eon Labs Inc. 35.5 11.0 23.5 11.0 18.5 17.0 5 Tender Offer All Cash 21 3/3/2005 News Corp. Fox Entertainment Group 17.9 9.8 14.0 1.9 1.5 7.4 2 Tender Offer All Stock 52 7/1/2005 Santos Ltd. Tipperary Corp. 46.0 18.9 36.3 18.9 22.2 0.3 1 Shareholder Vote All Cash 171 10/21/2005 IYG Holding 7-Eleven Inc. 27.3 32.3 14.1 4.6 5.6 15.4 5 Tender Offer All Cash 50 11/14/2005 ev3 Inc. Micro Therapeutics 29.8 8.3 7.2 5.1 (0.5) 17.7 3 Tender Offer All Stock N/A 11/16/2005 Vector Group New Valley Corp. 42.3 44.7 42.8 16.0 18.2 17.1 3 Tender Offer All Stock 47 11/20/2006 Toronto-Dominion Bank TDBanknorth Inc. 43.0 6.5 7.1 6.5 8.4 5.6 1 Tender Offer All Cash 21 2/5/2007 VNU/ Nielsen NetRatings Inc. 39.5 44.1 46.1 16.3 15.5 31.3 3 Shareholder Vote All Cash 119 5/15/2007 American Int'l Group Inc. 21st Century Insurance 38.1 34.6 22.6 4.8 4.4 11.4 4 Shareholder Vote All Cash 223 5/18/2007 American Financial Group Great American Fin'l Resources 19.0 13.2 12.5 2.0 (0.3) 4.3 1 Shareholder Vote All Cash 85 11/5/2007 Alfa Mutual Alfa Corp. 45.0 44.7 31.5 25.6 19.6 25.0 4 Shareholder Vote All Cash 112 12/18/2007 Mgmt, Macquarie, GS Waste Industries USA Inc. 49.0 33.5 31.5 28.0 15.1 3.4 2 Shareholder Vote All Cash N/A 8/6/2008 National Mutual Insurance Nationwide Financial Services 33.7 37.8 28.7 9.5 13.6 10.7 3 Shareholder Vote All Cash 175 8/18/2008 Bank of Tokyo-Mitsubishi UFJ UnionBanCal Corp 34.6 26.3 103.0 12.2 31.8 26.7 2 Tender Offer All Cash 111 3/3/2009 Magellan MidstreamPartners LP Magellan MidstreamHldg LP 45.4 25.0 20.2 25.0 19.9 7.2 2 Shareholder Vote All Stock N/A 3/11/2009 Roche Holding AG Genentech Inc 44.1 16.1 28.1 3.8 11.5 6.7 3 Shareholder Vote All Cash 230 9/18/2009 Fairfax Financial Holdings Ltd. Odyssey Re Holdings Corp. 27.4 29.4 39.7 4.0 19.0 12.1 3 Tender Offer All Cash 28 10/8/2009 First American Corp First Advantage Corp 20.0 47.9 35.8 1.0 1.8 7.9 4 Tender Offer All Stock 615 1/21/2011 CBaySystems Holdings Ltd. MedQuist Inc. 30.5 6.0 66.5 38.0 37.7 0.0 0 Tender Offer All Stock 94 4/21/2011 CNA Financial Corporation CNA Surety Corporation 38.0 37.9 51.6 2.7 3.8 20.7 5 Tender Offer All Cash 172 Mean 31.7% 35.4% 11.6% 13.0% 17.2% Median 29.4 28.7 7.9 11.2 11.9 Completed at a discount to one day prior to announcement share price Healthcare deals Source: SDC and public filings. Note: Excludes deals that were not recommended by the Special Committee. (1) Date when the companies announced the final agreed terms of the transaction. (2) Premiums are based on the initial public offer date unless the target confirmed a sale process/merger talks within 6 months or rumors surfaced within 1 month. 19 citi

Taro WACC Analysis WACC Analysis Cost of Equity Low High U.S. Risk Free Rate (30 Year U.S. Treasury) 2.7% 2.7% Equity Market Risk Premium 5.0% 7.0% Asset Beta 0.78 0.78 Relevered Equity Beta 0.90 0.90 Market Debt / Capitalization 16.5% 16.5% Effective Marginal Tax Rate 17.5% 17.5% Adjusted Equity Market Risk Premium 4.5% 6.3% Cost of Equity 7.3% 9.1% Cost of Debt U.S. Risk Free Rate (10 Year U.S. Treasury) 1.7% 1.7% Credit Spread 6.0% 6.5% Cost of Debt (Pre-tax) (1) 7.7% 8.2% Cost of Debt (Post-tax) 6.3% 6.8% WACC 7.1% 8.7% Asset Beta Analysis Adjusted Equity Beta Market Leverage Asset Beta Mylan Inc. 1.08 36.2% 0.87 Watson Pharmaceuticals Inc. 0.75 11.3% 0.69 Perrigo Co. 0.73 12.2% 0.67 Hospira Inc. 0.80 24.0% 0.67 Impax Laboratories Inc. 0.78 0.0% 0.78 Par Pharmaceutical Cos. Inc. 1.11 15.5% 0.99 Median 0.79 13.8% 0.74 Mean 0.87 16.5% 0.78 Note: Market data as of August 10, 2012. (1) Citi estimated cost of debt for implied single B rated company based upon current B rated high yield index. 20 citi

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