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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Sun Pharmaceutical Industries Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2023

Your Directors take pleasure in presenting the Thirty-first Annual Report and Company''s Audited Financial Statements for the financial year ended March 31, 2023 (‘FY23'').

Financial Results

in Million)

Standalone

Consolidated

Year ended March 31, 2023

Year ended March 31, 2022

Year ended March 31, 2023

Year ended March 31, 2022

Revenue from operations

208,121.4

155,859.8

438,856.8

386,544.9

Profit before exceptional item and tax

46,788.4

21,273.9

95,798.8

90,481.4

Exceptional Item

29,377.9

18,205.3

1,714.5

45,668.2

Profit before tax but after exceptional item

17,410.5

3,068.6

94,084.3

44,813.2

Profit after tax

16,907.2

(999.9)

85,608.4

34,058.2

Opening balance in Retained Earnings

136,120.8

159,645.5

376,456.5

365,980.9

Closing balance in Retained Earnings

127,908.8

136,120.8

436,102.5

376,456.5

Material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of this report

There have been no material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of this report.

Consolidated Accounts

The consolidated financial statements for the year ended March 31, 2023 pursuant to Section 129(3) of the Companies Act, 2013, form part of this Annual Report.

Dividend

During the year under review, the Directors have declared an interim dividend of ^ 7.50/- (Rupees Seven and Paise Fifty only) per equity share of ^ 1/- (Rupee One only) each [previous year ^ 7.00/- (Rupees Seven only) per equity share of ^ 1/- (Rupee One only) each] for the year ended March 31, 2023.

In addition to above, the Directors have recommended a final dividend of ^ 4.00/- (Rupees Four only) per equity share of ^ 1/- (Rupee One only) each [previous year ^ 3.00/-(Rupees Three only) per equity share of ^ 1/- (Rupee One only) each] for the year ended March 31, 2023, subject to the approval of the shareholders at the ensuing 31st Annual General Meeting of the Company.

The total dividend payout for the FY23 is ^ 11.50/- (Rupees Eleven and paise fifty only) per equity share of ^ 1/- each [previous year ^ 10.0/- (Rupees Ten only) per equity share of ^ 1/- (Rupee One only) each].

The dividend payout is in accordance with the Company''s Dividend Distribution Policy. The policy is available on the website of the Company, https://sunpharma.com/policies.

Transfer to Reserves

The Directors do not propose any transfer to reserve.

Loans, Guarantees & Investments

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

Public Deposits

The Company has not accepted any deposit from the public during the year under review.

Changes in Capital Structure

During the year under review there was no change in the capital structure of the Company.

Credit Rating

The highest credit rating has been reaffirmed by CRISIL and ICRA and the ratings are disclosed in the Corporate Governance Report which forms part of this Annual Report.

Subsidiaries/ Joint Ventures/ Associates

The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associates is given in Form AOC - 1, provided in Notes to the Consolidated Financial Statements, forming part of this Annual Report.

During the year under review, apart from the other acquisitions, the Company has completed the acquisition of Concert Pharmaceuticals, Inc. which was a strategic investment to strengthen global specialty product portfolio of the Company.

Details pertaining to entities that became subsidiaries/ joint ventures/ associates and those that ceased to be the subsidiaries/ joint ventures/ associates of the Company during the year under review are provided in the notes to the Consolidated Financial Statements, forming part of the Annual Report.

Directors and Key Managerial Personnel

During the year, following were the changes in Director/ Key Managerial Personnel:

1. Mr. Dilip Shanghvi (DIN: 00005588) is re-appointed as Managing Director for a further period of 5 years, from April 1, 2023 to March 31, 2028 at the 30th Annual General Meeting held on August 29, 2022.

2. Mr. Gautam Doshi (DIN: 00004612) is re-appointed as an Independent Director for a second term of 5 years, from May 25, 2023 to May 24, 2028 at the 30th Annual General Meeting held on August 29, 2022.

3. Mr. Sanjay Asher (DIN: 00008221) is appointed as an Independent Director for a term commencing from November 1, 2022 till March 31, 2025, by the shareholders vide resolution passed by Postal Ballot on January 27, 2023.

4. Mr. Israel Makov (DIN: 05299764) retired and ceased to be the Chairman and Director upon the conclusion of 30th Annual General Meeting held on August 29, 2022.

5. Mr. Kalyanasundaram Subramanian (DIN: 00179072) retired and ceased to be the Director effective from February 13, 2023.

After the year end and upto the date of the Report, following were the changes:

6. The Board of Directors at its meeting held on May 26, 2023, on the recommendation by Nomination and Remuneration Committee, has approved the appointment of Mr. Rolf Hoffmann as an Independent Director for a term of five years to be effective from the date of allotment of Director Identification Number, subject to approval of the shareholders.

7. The Board of Directors at its meeting held on May 26, 2023, on the recommendation by Nomination and Remuneration Committee, has approved the appointment and remuneration of Mr. Aalok Shanghvi (DIN: 01951829) as a Whole-time Director for a term of five years effective from June 1, 2023, subject to approval of the shareholders.

Mr. Sudhir Valia Director of the Company, retires by rotation at the ensuing 31st Annual General Meeting, and being eligible has offered himself for re-appointment.

The necessary disclosures required under the Companies Act, 2013 (“Act”) and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and Secretarial Standards-2 on General Meetings issued by the Institute of Company Secretaries of India, for the above-mentioned appointments/ re-appointment are provided in the 31st Annual General Meeting Notice of the Company.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Act and the Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, the Independent Directors fulfil the conditions specified under the Act and the Listing Regulations and are independent of the management.

Familiarisation Programme for the Independent Directors

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company: https://sunpharma.com/policies.

Evaluation of performance of the Board, its Committees and Individual Directors

During the year, annual performance evaluation of the Board and Committees of the Board, individual Directors including the Chairman of the Company, was carried out as per the criteria and process approved by Nomination and Remuneration Committee, which is in line with the SEBI Guidance Note on Board Evaluation.

The Board discussed upon the outcome of performance evaluation and concluded that they were satisfied with the overall performance of the Board and Committees of the Board and Directors individually. The Board also assessed the fulfilment of the independence criteria by the Independent Directors of the Company and their independence from the management as specified in the Listing Regulations.

The performance evaluation of the Non-Independent Directors and the performance of the Board as a whole was discussed at the separate meeting of the Independent Directors as well.

Remuneration policy for Directors, Key Managerial Personnel and Other Employees and Criteria for appointment of Directors

The Company has in place a process for selection of any Director, wherein the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and the Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws and the diversity attributes as per the Board Diversity Policy of the Company.

Further, the Company has a Policy on remuneration of Directors, Key Managerial Personnel and other Employees. The salient features of the Remuneration Policy of the Company are as under:

A. Guiding Principles for remuneration: The Company shall remunerate all its personnel reasonably and sufficiently as per industry benchmarks and standards. The remuneration shall be commensurate to retain and motivate the human resources of the Company. The compensation package will, inter alia, take into account the experience of the personnel, the knowledge & skill required including complexity of his job, work duration and risks associated with the work, and attitude of the employee like positive outlook, team work, loyalty etc.

B. Components of Remuneration: The following will be the various remuneration components which may be paid to the personnel of the Company based on the designation and class of the personnel.

(a) Fixed compensation

(b) Variable compensation

(c) Share based payments

(d) Non-monetary benefits

(e) Gratuity/group insurance

(f) Commission

The Remuneration Policy as approved by the Board is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ‘Annexure - A'' to this Report. Further, the information pertaining to Rule 5(2) and 5(3) of the aforesaid Rules, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and the Annual Report is being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary and Compliance Officer either at the Registered/ Corporate Office address or by email to [email protected].

Management Discussion and Analysis

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Report which includes the state of affairs of the Company.

Corporate Governance Report

The Corporate Governance Report and the Certificate from the Auditors of the Company as stipulated in Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

Board Meetings

The Board of Directors of the Company met 6 (six) times during the year under review. The dates of the Board meeting and the attendance of the Directors at the said meetings are provided in the Corporate Governance Report, which forms a part of this Report.

Committees of the Board

As on March 31, 2023, the Board has 6 (six) Committees. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee and Corporate Governance & Ethics Committee.

The details pertaining to the meetings and composition of the Committees of the Board are included in the Corporate Governance Report, which forms part of this Report.

Related Party Transactions

The policy on Related Party Transactions as approved by the Board is available on the website of the Company, https://www.sunpharma.com/policies. All contracts/ arrangements/ transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm''s length basis.

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act are given in Form AOC-2, provided as ‘Annexure - B'' to this Report.

Internal Controls and Internal Financial Controls

The management believes that internal controls are the prerequisite of governance and that action emanating from agreed business plans should be exercised within a framework of checks and balances. The management is committed to ensuring adequate internal controls environment commensurate with the size and complexity of the business, which assures compliance with internal policies, applicable laws and regulations, ensures reliability and accuracy of records, promotes operational efficiency, protects resources and assets, helps to prevent and detect fraud, errors and irregularities and overall minimises the risks.

The Company has a well-established internal controls framework comprising a set of policies, procedures and systems, instrumental in enhancing the efficiency and effectiveness of business operations, reducing risks and costs, and improving decision-making and accountability.

Internal financial controls framework, sub-set of internal controls framework assures the reliability and accuracy of financial reporting and the preparation of financial statements for external purposes following generally accepted accounting principles.

Whistle-Blower Policy/Vigil Mechanism

As a Company of repute and global standing, Sun Pharma is committed to conducting its business by adopting the highest standards of professional integrity and ethical behaviour. The organisation has a detailed Global Code of Conduct (‘Code'') that directs the Employees to uphold the Company values and urges them to conduct business with integrity and the highest ethical standards. Management intends to prevent the occurrence of any practice not in compliance with this Code through the Global Whistle Blower Policy. This mechanism aims to provide a secure environment to Employees for responsible reporting of Code violations by Employees. The Board approved Global Whistle-blower Policy is available on the website, https://sunpharma.com/policies. Further details on the vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

Global Internal Audit

An independent and empowered Global Internal Audit Function (GIA) at the corporate level with support from highly skilled and reputed external audit firms, carries out risk-based internal audits of the Company''s operations, governance, risk management and internal controls wherever required. GIA audits all businesses & support functions on a rotation basis to ensure that business process controls are adequate and functioning effectively. These reviews include financial, operational, and compliance controls'' design and operating effectiveness and risk mitigation plans.

The GIA department comprises qualified Chartered Accountants, Certified Internal Auditors, Certified Information System Auditors, Certified Fraud Examiners, Company Secretaries, MBAs and Engineers. GIA provides assurance and advice to management on improving the effectiveness and efficiency of the Company''s processes and systems.

GIA''s functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit. The Audit Committee of the Board periodically reviews key findings, provides strategic guidance, and monitors the performance of the GIA function.

The Company''s operating management closely monitors the internal control environment and ensures that the audit recommendations are effectively implemented.

Enterprise Risk Management

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various organisational risks. The Corporate Governance Report, which forms part of this Report, contains the details of the Risk Management Committee of the Company. The Risk Management Committee assesses the adequacy of mitigation plans to address such risks.

The Board approved an overarching Risk Management Policy. The Policy synopsis is available on the website at https://sunpharma.com/policies.

The Company has developed and implemented an integrated Enterprise Risk Management (ERM) Framework through which it identifies, assesses, prioritises, mitigates, monitors, reports and manages, critical risks impacting its ability to meet its key strategic and operational objectives. ERM helps to align the risk appetite and strategy of the organisation, enhance risk response decisions, reduce operational surprises and losses, and improve stakeholder confidence and trust.

The ERM team engages with all Functional heads/designees to identify internal and external events that may harm the achievement of the Company''s objectives and periodically monitors changes in both internal and external environments leading to a new threat/risk. Risks are categorised into various categories viz. Financial, Operational, Sectorial, Sustainability, Cyber, Strategic, Compliance, Social, GeoPolitical, Third-Party etc. These risks are captured in a risk register with all the relevant information such as risk area, risk description, risk rating, root cause, mitigation plans, action items etc. The risk register is refreshed periodically.

AUDITORS Statutory Auditors

S R B C & Co. LLP, Chartered Accountants, (Firm''s Regn.

No. 324982E/ E300003), were re-appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 30th Annual General Meeting of the Company to hold office till the conclusion of the 35th Annual General Meeting of the Company.

The Auditor''s Report for the financial year ended March 31, 2023, has been issued with an unmodified opinion, by the Statutory Auditors. Further, the Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2023. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as ‘Annexure - C1'' to this Report.

The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark except a comment, as follows, which, in the opinion of the Board is self-explanatory.

“We report that the UDIN and date of issue of certificate annexed in the Annual Report for FY 2021-22, issued under Regulation 34 read with Schedule V, Para C, Clause 10(i) of SEBI LODR Regulations was incorrectly mentioned. It is clarified that there is no change in the contents of such certificate and such certificate was without any qualifications.’’

In accordance with the provision of Regulation 24A of the Listing Regulations, Secretarial Audit of two material unlisted Indian subsidiaries of the Company namely, Sun Pharma Laboratories Limited (SPLL) and Sun Pharma Distributors Limited (SPDL), was undertaken by KJB & Co. LLP, Practicing

Company Secretaries, Mumbai and the Secretarial Audit Reports issued by them are provided as ‘Annexure - C2'' and ‘Annexure - C3'' respectively to this Report. The Secretarial Audit Reports for these material unlisted Indian subsidiaries do not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board has appointed K D & Co, Cost Accountants, (Firm''s Registration No. 004076) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the FY23.

The Company has maintained the Cost Records as specified by the Central Government under Section 148(1) of the Act.

Business Responsibility & Sustainability Report

The Business Responsibility and Sustainability Report of the Company for the year ended March 31, 2023, is provided in a separate section and forms part of this Annual Report and is also made available on the website of the Company at https://sunpharma.com/investors-annual-reports-presentations.

Corporate Social Responsibility

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Policy of the Company is available on the website of the Company and can be accessed through the web link: https://sunpharma. com/policies.

The Annual Report on CSR activities containing details of expenditure incurred by the Company and brief details on the CSR activities are provided in ‘Annexure - D'' to this Report.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as ‘Annexure - E'' to this Report.

Human Resources

FY23 was an exciting year for everyone. Our 41,000 strong global workforce worked relentlessly to ensure medicines continue to reach patients who rely on us. Driven by Sunology, our employees spread across manufacturing

sites, distribution centres, R&D centres and sales offices worldwide enabled us in delivering a high performance.

The top priority for the Human Resource function is to provide a work environment which is safe, diverse, inclusive and full of growth opportunities.

Your Directors would like to take this opportunity to express their gratitude and appreciation for the passion, dedication and commitment of the employees and look forward to their continued contribution.

Disclosure under the sexual harassment of women at workplace (Prevention, Prohibition and Redressal) act, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review.

There were four complaints received during the year. All the complaints were disposed of and no complaints were pending as on the end of March 31, 2023.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Significant and material orders passed by the regulators or courts or tribunals

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status of the Company.

Annual Return

The Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 (‘the Act'') in form MGT-7 is made available on the website of the Company and can be accessed at https://sunpharma.com/annual-return


Secretarial Standards

The Company has complied with the applicable Secretarial Standards as amended from time to time.

Other Disclosures

There are no proceedings initiated/ pending against your Company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

Cyber Security Incident

In March 2023, the Company experienced an IT Security Incident that impacted some of the Company''s IT assets and operations. Based on the Company''s investigation, the Company currently believes that the incident''s effects on its IT system include a breach of certain file systems and the theft of Company data and personal data. A ransomware group has claimed responsibility for this incident. As part of the Company''s containment and remediation efforts, the Company has taken various measures, including but not limited to strengthening its cybersecurity infrastructure to safeguard against such risks in the future. The details on the IT Security Incident are also provided in Note 55(11) of the standalone financial statements.

Directors’ Responsibility Statement

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2023, the applicable accounting standards have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Directors wish to thank all stakeholders, employees and business partners, Company''s bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Mr. Dilip Shanghvi Mr. Sailesh Desai

Managing Director Whole-time Director

(DIN: 00005588) (DIN: 00005443)

Place: Mumbai Date: May 26, 2023


Mar 31, 2022

Your Directors take pleasure in presenting the Thirtieth Annual Report and Company''s Audited Financial Statements for the financial year ended March 31, 2022 (‘FY2021-22'').

FINANCIAL RESULTS

('' in Million)

Standalone

Consolidated

Year ended March 31, 2022

*Year ended March 31, 2021

Year ended March 31, 2022

Year ended March 31, 2021

Revenue from operations

155,859.8

141,160.5

386,544.9

334,981.4

Profit before exceptional item and tax

21,273.9

9,451.3

90,481.4

71,055.1

Exceptional Item

18,205.3

895.6

45,668.2

43,061.4

Profit before tax but after exceptional item

3,068.6

8,555.7

44,813.2

27,993.7

Profit/(Loss) after tax

(999.9)

8,424.0

34,058.2

22,846.8

Opening balance in Retained Earnings

159,645.5

140,052.7

365,980.9

353,200.5

Closing balance in Retained Earnings

136,120.8

159,645.5

376,456.5

365,980.9

*Refer Note 54(12) of Standalone Financial Statements

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

There have been no material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of this report.

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31, 2022, have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Companies Act, 2013 (‘Act'') with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2022, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022, and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Report.

DIVIDEND

During the year under review, your Directors at their meeting held on January 31, 2022 declared an interim dividend of '' 7/- (Rupees Seven only) per equity share of '' 1/- (Rupee One only) each [previous year '' 5.50/- (Rupees Five and Paisa Fifty only) per equity share of '' 1/- (Rupee One only) each] for the year ended March 31, 2022. The interim dividend was paid on February 18, 2022 to those shareholders who held shares as on February 10, 2022, being the record date.

In addition to above, your Directors have recommended a final dividend of '' 3/- (Rupees Three only) per equity share of '' 1/- (Rupee One only) each [previous year '' 2/- (Rupees Two only) per equity share of '' 1/- (Rupee One only) each] for the year ended March 31, 2022, subject to the approval of the equity shareholders at the ensuing 30th Annual General Meeting of the Company.

The total dividend payout for FY2021-22 would be '' 10/-(Rupees Ten only) per equity share of '' 1/- (Rupees One only) each [previous year '' 7.50/- (Rupees Seven and Paisa Fifty only) per equity share of '' 1/- (Rupee One only) each].

The dividend payout is in accordance with the Company''s Dividend Distribution Policy. The policy is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/.

TRANSFER TO RESERVES

The Directors do not propose any transfer to reserve.

CHANGES IN CAPITAL STRUCTURE

During the year under review there was no change in the Capital Structure of the Company.

CREDIT RATING

ICRA Ltd. has reaffirmed the highest credit rating of ‘[ICRA] A1 ''/ ‘[ICRA] AAA (Stable)'' for the bank facilities, short term/ long term borrowings and commercial paper programs of the Company.

Further, CRISIL Ltd. has also reaffirmed the highest credit rating of ‘CRISIL A1 and CRISIL AAA/Stable'' for short term & long term bank facilities and commercial paper programs of the Company.

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associates is given in Form AOC - 1, provided in Notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries, joint ventures and associates and their contribution to the overall performance of the Company during the financial year under review is given under Annexure ‘A'' to the Consolidated Financial Statements forming part of the Annual Report.

Details pertaining to entities that became subsidiaries/ joint ventures/ associates and those that ceased to be the subsidiaries/ joint ventures/ associates of the Company during the year under review are provided in the notes to the Consolidated Financial Statements, forming part of the Annual Report.

SCHEME OF AMALGAMATION

1. National Company Law Tribunal (NCLT) vide its Order dated August 31, 2021, sanctioned the Scheme of Amalgamation and Merger of Sun Pharma Global FZE (“Transferor Company”), an indirect wholly owned subsidiary of the Company with Sun Pharmaceutical Industries Limited (“Company”) pursuant to Section 234 read with Sections 230 to 232 of the Companies Act, 2013 and the relevant rules and regulations made

thereunder. The Scheme is effective from October 1, 2021 with appointed date as January 1, 2020 and Sun Pharma Global FZE has been merged with the Company.

2. The Board of Directors of the Company at its meeting held on May 30, 2022 has approved the Scheme of Amalgamation of Sun Pharmaceutical Medicare Limited, Green Eco Development Centre Limited, Faststone Mercantile Company Private Limited, Realstone Multitrade Private Limited, Skisen Labs Private Limited, Wholly-owned Subsidiaries of the Company with the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, following were the changes in Directors/

Key Managerial Personnel:

1. Dr. Pawan Goenka has been appointed as the Independent Director w.e.f. May 21, 2021 for a period of five years by the shareholders at the 29th Annual General Meeting.

2. Ms. Rama Bijapurkar has been appointed as the Independent Director w.e.f. May 21, 2021 for a period of five years by the shareholders at the 29th Annual General Meeting.

3. Ms. Rekha Sethi retired and ceased to be the Independent Director w.e.f. August 31, 2021 i.e. upon conclusion of the 29th Annual General Meeting.

4. Mr. Vivek Chaand Sehgal resigned as the Independent Director with effect from September 1, 2021.

5. Mr. Sunil Ajmera resigned from the position of Company Secretary and Compliance Officer w.e.f. the close of business hours of January 31, 2022.

6. Mr. Anoop Deshpande has been appointed as Company Secretary and Compliance Officer effective from closure of business hours of January 31, 2022.

After the year end and up to the date of the Report,

following were the changes:

1. The Board of Directors at its meeting held on May

30, 2022, on the recommendation by Nomination and Remuneration Committee, has approved the re-appointment and remuneration of Mr. Dilip Shanghvi as Managing Director for further period of five years with effect from i.e. April 1, 2023 to March

31, 2028, subject to approval of the shareholders at the 30th Annual General Meeting.

2. The Board of Directors at its meeting held on May 30, 2022, on the recommendation by Nomination and Remuneration Committee, has approved the re-appointment of Mr. Gautam Doshi as Independent Director for further period of five years with effect from

i.e. May 25, 2023 to May 24, 2028, subject to approval of the shareholders at the 30th Annual General Meeting.

Mr. Sailesh T. Desai and Mr. Israel Makov Directors of the Company, retire by rotation at the 30th Annual General Meeting.

The necessary disclosures required under the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Secretarial Standards-2 on General Meetings issued by the Institute of Company Secretaries of India, for the above-mentioned appointments/ re-appointment are provided in the 30th Annual General Meeting Notice of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

In the opinion of the Board, the Independent Directors fulfil the conditions specified under the Act and Listing Regulations and are independent of the management. The Board skill/ expertise/ competencies matrix of all the Directors, including the Independent Directors is provided in the Corporate Governance Report forming part of this Annual Report.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company: https://sunpharma.com/policies/.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, annual performance evaluation of the Board and Committees of the Board, individual Directors including the Chairman of the Company, was carried out as per the criteria and process approved by Nomination and Remuneration Committee, which is in line with the SEBI Guidance Note on Board Evaluation.

The Chairman and other members of the Board discussed upon the performance evaluation outcome and concluded that they were satisfied with the overall performance of the Board and Committees of the Board and Directors individually. The Board also assessed the fulfillment of the independence criteria as specified in Listing Regulations, by the Independent Directors of the Company and their independence from the management.

The performance evaluation of the Non-Independent Directors including the Chairman of the Company and performance of the Board as a whole was discussed at the separate meeting of the Independent Directors.

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws and the diversity attributes as per the Board Diversity Policy of the Company. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a Policy on remuneration of Directors, Key Managerial Personnel and other Employees.

The salient features of the Remuneration Policy of the Company are as under:

A. Guiding Principles for remuneration: The Company shall remunerate all its personnel reasonably and sufficiently as per industry benchmarks and standards. The remuneration shall be commensurate to retain and motivate the human resources of the Company. The compensation package will, inter alia, take into account the experience of the personnel, the knowledge & skill required including complexity of his job, work duration and risks associated with the work, and attitude of the employee like positive outlook, team work, loyalty etc.

B. Components of Remuneration: The following will be the various remuneration components which may be paid to the personnel of the Company based on the designation and class of the personnel.

a) Fixed compensation: The fixed salaries of the Company''s personnel shall be competitive and based on the individual personnel''s responsibilities and performance.

b) Variable compensation: The personnel of the Company may be paid remuneration by way of variable salaries based on their performance evaluation. Such variable salaries should be based on the performance of the individual against his short and long term performance objectives and the performance of the Company.

c) Share based payments: The Board may, on the recommendation of the Nomination and Remuneration Committee, issue to certain class of personnel a share and share price related incentive program.

d) Non-monetary benefits: Senior management personnel of the Company may, on a case to case basis, be awarded customary non-monetary benefits such as discounted salary advance/ credit facility, rent free accommodation, Company cars with or without chauffer, share and share price related incentive, reimbursement of electricity and telephone bills etc.

e) Gratuity/group insurance: Personnel may also be awarded to group insurance and other key man insurance protection. Further as required by the law necessary gratuity shall be paid to the personnel.

f) Commission: The directors may be paid commission if approved by the shareholders.

The shareholders may authorise the Board to declare commission to be paid to any director of the Board.

The complete Policy as approved by the Board is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ‘Annexure - A'' to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary & Compliance Officer either at the Registered/ Corporate Office address or by email to [email protected].

BOARD MEETINGS

The Board of Directors of the Company met 5 (Five) times during the year under review. The dates of the Board meeting and the attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report.

COMMITTEES OF THE BOARD

As on March 31, 2022, the Board has 6 (six) Committees. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee and Corporate Governance & Ethics Committee.

The details pertaining to the meetings and composition of the Committees of the Board are included in the Corporate Governance Report, which forms part of this Report.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link: https://www. sunpharma.com/policies. All contracts/ arrangements/ transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm''s length basis.

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as ‘Annexure - B'' to this Report.

INTERNAL CONTROLS

The Company believes that internal controls are the prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The Company has a well-established internal controls framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of internal controls. The management is committed to ensuring an effective internal controls environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations, ensures accuracy of records, promotes operational efficiency, protects resources and assets and overall minimize the risks.

INTERNAL FINANCIAL CONTROLS

The Company has a well-established internal financial controls framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of internal financial controls. The management is committed to ensuring an effective internal financial controls environment, commensurate with the size and complexity of the business, which provides an assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

GLOBAL INTERNAL AUDIT

An independent and empowered Global Internal Audit Function (GIA) at the corporate level with support from a Big 4/ equally reputed audit firms, wherever required, carries out risk-based audits. GIA audits all businesses to ensure that business process controls are adequate and are functioning effectively. These reviews include financial, operational and compliance controls and risk mitigation plans. The Company''s operating management closely monitors the internal control environment and ensures that the audit recommendations are effectively implemented.

The Audit Committee of the Board monitors performance of the Internal Audit Function, periodically reviews key findings and provides strategic guidance.

GIA''s functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit.

RISK MANAGEMENT

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various organizational risks. The Risk Management Committee also assesses the adequacy of mitigation plans to address such risks. The Corporate Governance Report, which forms part of this report, contains the details of Risk Management Committee of the Company. An overarching Risk Management Policy which was approved by the Board is in place.

The Company has developed and implemented an integrated Enterprise Risk Management (ERM) Framework through which it identifies, monitors, mitigates and reports, key risks that impact the Company''s ability to meet its strategic objectives.

The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company''s objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in a risk register with all the relevant information such as risk area, risk description, risk rating, root cause and mitigation plans, action items etc. The risk register is refreshed semi-annually. Risks are categorised into various categories viz. Strategic, Financial, Operational, Compliance, Cyber, Geo-Political etc. During FY 21-22, the focus was on reviewing effectiveness of actions taken to mitigate the identified risks as well as to identify the new risks and associated risk-mitigation plans, emerging out of constantly changing geo-political situation across the globe.

Outcome of Enterprise Risk Assessments covering Company''s various businesses and functions, are one of the key input for the annual internal audit plan.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behaviour in all its operations, the Company has adopted a ‘Global Whistle Blower Policy'' for Sun Pharmaceutical Industries Limited and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

AUDITORS Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firm''s Regn.

No. 324982E/ E300003), were appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 25th Annual General Meeting of the Company to hold office till the conclusion of the 30th Annual General Meeting of the Company.

In terms of provisions of sections 139 read with the Companies (Audit and Auditors) Rules, 2014.S R B C & Co LLP, Chartered Accountants are eligible to be re-appointed for a further term of 5 (five) years.

The Company has received the consent, certificate of eligibility and a certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) in accordance with Sections 139, 141 and other applicable provisions of the Act and Rules issued thereunder and as required under the Listing Regulations, from S R B C & Co LLP, chartered Accountants.

Accordingly, the Board of Directors at its meeting held on May 30, 2022, based on the recommendation of the Audit Committee have approved and recommended the reappointment of S R B C & Co LLP, Chartered Accountants, (Firm''s Regn. No. 324982E/ E300003), as the Statutory Auditors, for a further period of 5 (five) years i.e. from the conclusion of the 30th Annual General Meeting till the conclusion of the 35th Annual General Meeting of the Company, for approval of the Shareholders of the Company at the ensuing 30th Annual General Meeting.

The Auditor''s Report for the financial year ended March 31, 2022, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2022. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as ‘Annexure - C1'' to this Report.

The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark.

In accordance with the provision of Regulation 24A of the Listing Regulations, Secretarial Audit of two material unlisted Indian subsidiaries of the Company namely, Sun Pharma Laboratories Limited (SPLL) and Sun Pharma Distributors Limited (SPDL), was undertaken by KJB &

Co. LLP, Practicing Company Secretaries, Mumbai and the Secretarial Audit Reports issued by them are provided as ‘Annexure - C2'' and ‘Annexure - C3'' respectively to this Report. The Secretarial Audit Reports for these material unlisted Indian subsidiaries do not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board has appointed K D & Co, Cost Accountants, (Firm''s Registration No. 004076) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2022-23.

The Company is required to maintain Cost Records as specified by the Central Government under Section 148(1) of the Act and accordingly, such accounts and records are made and maintained by the Company.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The details of membership of the Committee and the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The CSR Policy of the Company is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/.

The annual report on CSR activities containing details of expenditure incurred by the Company and brief details on the CSR activities are provided in ‘Annexure - D'' to this Report.

The Board has accorded its consent to set off the excess amount spent by the Company on its CSR Activities against the requirement to spend in terms of Section 135 of the Companies Act, 2013 in any subsequent year(s).

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report of the Company for the year ended March 31, 2022, is provided in a separate section and forms part of this Annual Report and is also made available on the website of the Company at https://sunpharma.com/investors-annual-reports-presentations/.

HUMAN RESOURCES

FY2021-22 was a very challenging year for everyone. Our 38,000 strong global workforce worked relentlessly to ensure medicines continue to reach patients who rely on us. As lockdowns continued across the world, our teams being part of essential services, ensured our 43 manufacturing sites, distribution centres, R&D centres and sales offices worldwide continue to operate. We are grateful to our employees who made this happen with a safety-first mind set. The top priority for the Human Resource function was providing a safe work environment to employees globally.

Your Directors would like to take this opportunity to express their gratitude and appreciation for the passion, dedication and commitment of the employees and look forward to their continued contribution.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder.

The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review. The Company has submitted the Annual Returns to the local authorities, as required under the above-mentioned Act.

During the financial year ended March 31, 2022, two complaints pertaining to sexual harassment were received. The complaints were resolved and there are no complaints pending as at the end of the financial year.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards as amended from time to time.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as ‘Annexure - E'' to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status.

ANNUAL RETURN

The Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 (‘the Act'') in form MGT-7 is made available on the website of the Company and can be accessed at https://sunpharma.com/investors-annual-reports-presentations.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Company''s bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip Shanghvi Sailesh T. Desai

Place: Mumbai Managing Director Whole-time Director

Date: May 30, 2022 (DIN: 00005588) (DIN: 00005443)


Mar 31, 2021

Your Directors take pleasure in presenting the Twenty-Ninth Annual Report and Company''s Audited Financial Statements for the financial year ended March 31, 2021.

FINANCIAL RESULTS

('' in Million)

Standalone

Consolidated

Year ended March 31, 2021

Year ended March 31, 2020

Year ended March 31, 2021

Year ended March 31, 2020

Revenue from operations

128,032.1

125,319.3

334,981.4

328,375.0

Profit before exceptional item and tax

22,424.3

32,530.0

71,055.1

52,702.3

Exceptional Item

895.6

-

43,061.4

2,606.4

Profit before tax but after exceptional item

21,528.7

32,530.0

27,993.7

50,095.9

Tax expense:

- Current Tax

2,449.1

3,864.6

9,573.0

13,201.4

- Deferred Tax Charge / (Credit)

(2,317.4)

(3,446.0)

(331.0)

(4,973.4)

- Deferred Tax - Exceptional

-

-

(4,095.1)

-

Profit after tax

21,397.0

32,111.4

22,846.8

41,867.9

Profit after Tax but before Share in profit / (loss) of associates and joint venture

-

-

22,846.8

41,867.9

Share of profit/(loss) of associates and joint venture [Net]

-

-

(123.3)

(148.3)

Profit for the year before non-controlling interests

-

-

22,723.5

41,719.6

Non-controlling interests

-

-

(6,314.7)

4,070.3

Profit for the year attributable to owners of the Company

-

-

29,038.2

37,649.3

Total other Comprehensive Income

633.0

(808.0)

(1,460.3)

21,208.3

Total Comprehensive Income for the year attributable to:

22,030.0

31,303.4

21,263.2

62,927.9

- Owners of the Company

22,030.0

31,303.4

28,133.4

56,068.4

- Non-Controlling Interest

-

-

(6,870.2)

6,859.5

Opening balance in Retained Earnings

140,052.7

123,846.1

353,200.5

333,301.9

Additions:

Amount available for appropriation

21,324.4

31,925.1

28,985.5

37,377.3

Less:

Dividend on Equity Shares

15,590.6

13,789.6

15,590.6

13,789.6

Dividend Distribution Tax

-

1,928.9

-

2,834.5

Buy-back of equity shares by overseas subsidiaries

-

-

559.5

831.6

Transfer to/from various Reserves:

- Legal reserve

-

-

55.0

23.0

- General reserve

-

-

-

-

Closing balance in Retained Earnings

145,786.5

140,052.7

365,980.9

353,200.5

DIVIDEND

During the year under review, your Directors at their meeting held on January 29, 2021 had declared an interim dividend of ''5.50 (Rupees Five and paise fifty only) per equity share of ''1/- each [previous year ''3.00 per equity share of ''1/- each] for the year ended March 31, 2021. The interim dividend was paid on February 17, 2021 to those shareholders who held shares as on February 10, 2021, being the record date for payment.

In addition to above, your Directors have recommended a final dividend of ''2/- (Rupees Two only) per equity share

of ''1/- each [previous year ''1/- per equity share of ''1/-each] for the year ended March 31, 2021, subject to the approval of the equity shareholders at the ensuing 29th Annual General Meeting of the Company. Pursuant to the provisions of the Finance Act, 2020, the said final dividend will be liable for deduction of income tax at source.

Therefore, the total dividend payout for the FY21 is ''7.50/-(Rupees Seven and paise fifty only) per equity share of ''1/-each [previous year ''4.00/- per equity share of ''1/- each].

The dividend payout is in accordance with the Company''s Dividend Distribution Policy. The policy is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/.

BUY-BACK OF SHARES

The Board of Directors of the Company at its meeting held on March 17, 2020, had approved the buy-back of Company''s equity shares of face value of ''1/- each (“Equity Shares”) from the Open Market through stock exchange mechanism as prescribed under the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, at a maximum price of ''425/- (Rupees Four Hundred Twenty Five Only), per Equity Share payable in cash, for an aggregate maximum amount of up to ''1700,00,00,000/-(Rupees One Thousand Seven Hundred Crores Only) (“Maximum Buy-back Size”).

The Buy-back period had opened on and from March 26, 2020 and had closed, during the year under review, effective from closure of trading hours on September 25,

2020 i.e., within 6 months from the date of the opening of Buy-back.

No Equity Shares have been bought back under the Buyback as the volume weighted average market price of Equity Shares of the Company during the Buy-Back period was higher than the Maximum Buy-back Price.

CHANGES IN CAPITAL STRUCTURE

During the year under review there was no change in the paid-up share capital of the Company.

SCHEME OF ARRANGEMENT

During the year, the Board of Directors of the Company at its meeting held on July 31, 2020 had approved the Scheme of Amalgamation and Merger of Sun Pharma Global FZE (“Transferor Company”), an indirect wholly owned subsidiary of the Company with Sun Pharmaceutical Industries Limited (“Company”) and their respective members and creditors (“Scheme”) pursuant to Section 234 read with Sections 230 to 232 of the Companies Act, 2013 and the relevant rules and regulations made thereunder for amalgamation of Transferor Company into the Company.

The Hon''ble National Company Law Tribunal of Gujarat, at Ahmedabad (“NCLT”) vide its Order dated January 07,

2021 had dispensed with convening of meeting of secured creditor(s) of the Company and had ordered to convene the meeting of equity shareholders and unsecured creditors

of the Company and accordingly separate meetings of the equity shareholders and unsecured creditors were convened on March 16, 2021 by way of Video Conferencing / Other Audio Visual Means to approve the Scheme with appointed date as January 01, 2020 or such subsequent date as may be decided by the Board of Directors as applicable, of the Transferor Company and the Board of

Directors of the Company or such date as may be approved by the Hon''ble NCLT or such other appropriate date as the Appropriate Authority may decide.

At both the meetings namely the meeting of equity shareholders and the meeting of unsecured creditors, the resolution for approval of proposed merger was passed with requisite majority. The approval of NCLT is awaited.

The merger will result synergies of operations, reduction in overheads including administrative, managerial and other expenditure, operational rationalisation, organisational efficiency, competitive advantage and optimal utilisation of resources eventually enhancing the growth and reputation of the group. Pursuant to the Scheme, no consideration shall be paid nor any shares of the Company shall be issued and allotted to the shareholders of the Transferor Company.

ANNUAL RETURN

The Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 (‘the Act'') in form MGT-7 is made available on the website of the Company and can be accessed at https://sunpharma.com/investors-annual-reports-presentations/

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associates is given in Form AOC - 1, provided in Notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries, joint ventures and associates and their contribution to the overall performance of the Company during the financial year under review is given under Annexure ‘A'' to the Consolidated Financial Statements forming part of the Annual Report.

Details pertaining to entities that became subsidiaries/ joint ventures/associates and those that ceased to be the subsidiaries / joint ventures/associates of the Company during the year under review are provided in Note: 38 of the notes to the Consolidated Financial Statements, forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Dilip S. Shanghvi, Managing Director and Mr. Kalyanasundaram Subramanian, Whole-time Director of the Company retire by rotation at the ensuing 29th Annual General Meeting of the Company and being eligible offer themselves for reappointment.

Further, Mr. Kalyanasundaram Subramanian''s term as Whole-time Director as approved by the members at the 26th Annual General Meeting of the Company held on September 26, 2018, was upto February 13, 2021.

The Board of Directors of the Company at its meeting held on January 29, 2021, on the recommendation of the Nomination and Remuneration Committee, had approved re-appointment and remuneration of Mr. Kalyanasundaram Subramanian as Whole-time Director for a further period of two years with effect from February 14, 2021 till February

13, 2023, subject to the approval of the shareholders of the Company at the 29th Annual General Meeting. The Board of Directors recommend his re-appointment and remuneration for further period of two years with effect from February

14, 2021, for approval of the members at the ensuing 29th Annual General Meeting of the Company.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors by passing a resolution by circulation have appointed Dr. Pawan Goenka (DIN: 00254502) and Ms. Rama Bijapurkar (DIN: 00001835) as Additional Independent Directors of the Company effective from May 21, 2021 in accordance with the provisions of Section 149 of the Act and in terms of Section 161(1) of the Act, they both hold office upto the date of ensuing 29th Annual General Meeting. In the opinion of the Board, Dr. Pawan Goenka and Ms. Rama Bijapurkar hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors and further they are exempted from the requirement to undertake online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The Board recommends appointment of Dr. Pawan Goenka and Ms. Rama Bijapurkar as Independent Directors of the Company for a term of 5 (Five) years effective from May 21,

2021 upto May 20, 2026 for approval of the members at the ensuing 29th Annual General Meeting of the Company.

Mr. Sailesh T. Desai was re-appointed as the Wholetime Director at the 26th Annual General Meeting of the Company held on September 26, 2018 for a period of 5 (five) years effective from April 1, 2019 upto March 31, 2024. However, due to inadequacy of profits at that time, the approval for maximum remuneration to be paid to Mr. Sailesh T. Desai was sought from the members for a period of 3 years with effect from April 1, 2019 to March 31, 2022, including the minimum remuneration to be paid to him in event of loss or inadequacy of profits in any financial year during the aforesaid period of 3 years. The Board of Directors, at its meeting held on May 27, 2021, have considered, approved and recommends to the members, the maximum remuneration to be paid to Mr. Sailesh T. Desai, as recommended by the Nomination and Remuneration Committee, for further period of two years i.e. for the remaining term of his present appointment, from April 1,

2022 till March 31, 2024.

Appropriate resolutions for the appointment, reappointment and remuneration of the Directors are being

placed for your approval at the ensuing 29th Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Act and under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

In the opinion of the Board, the Independent Directors of the Company fulfil the conditions specified under the Act and Listing Regulations and are independent of the management.

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a Policy on remuneration of Directors, Key Managerial Personnel and other Employees.

The salient features of the Remuneration Policy of the Company are as under:

A. Guiding Principles for remuneration: The Company shall remunerate all its personnel reasonably and sufficiently as per industry benchmarks and standards. The remuneration shall be commensurate to retain and motivate the human resources of the Company. The compensation package will, inter alia, take into account the experience of the personnel, the knowledge & skill required including complexity of his job, work duration and risks associated with the work, and attitude of the employee like positive outlook, team work, loyalty etc.

B. Components of Remuneration: The following will be the various remuneration components which may be paid to the personnel of the Company based on the designation and class of the personnel.

a) Fixed compensation: The fixed salaries of the Company''s personnel shall be competitive and based on the individual personnel''s responsibilities and performance.

b) Variable compensation: The personnel of the Company may be paid remuneration by way of

variable salaries based on their performance evaluation. Such variable salaries should be based on the performance of the individual against his short and long term performance objectives and the performance of the Company.

c) Share based payments: The Board may, on the recommendation of the Nomination and Remuneration Committee, issue to certain class of personnel a share and share price related incentive program.

d) Non-monetary benefits: Senior management personnel of the Company may, on a case to case basis, be awarded customary non-monetary benefits such as discounted salary advance / credit facility, rent free accommodation, Company cars with or without chauffer, share and share price related incentive, reimbursement of electricity and telephone bills etc.

e) Gratuity/group insurance: Personnel may also be awarded to group insurance and other key man insurance protection. Further as required by the law necessary gratuity shall be paid to the personnel.

f) Commission: The directors may be paid commission if approved by the shareholders. The shareholders may authorise the Board to declare commission to be paid to any director of the Board.

C) Entitlement: The authority to determine the

entitlement to various components as aforesaid for each class and designation of personnel shall be as follows:

Designation / Class

To be determined by

Director

Board of Directors on the recommendation of the Nomination and Remuneration Committee within the limits approved by the shareholders

Key Managerial Personnel and Senior Management

Board of Directors on recommendation of the Nomination and Remuneration Committee

Other employees

Human Resources Head

Note: For the purpose of this Policy, the term Senior Management'' shall have the same meaning as defined under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

The complete Policy as approved by the Board is available on the website of the Company and can be accessed through the web link: https://sunpharma. com/policies/.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company: www.sunpharma. com and can be accessed through the web link: https:// sunpharma.com/policies/

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 4 (Four) times during the year under review on May 27, 2020;

July 31, 2020; November 03, 2020; and January 29,

2021. The particulars of attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report.

The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, the evaluation of the annual performance of individual Directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act, relevant Rules, and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations and based on the circular issued by SEBI dated January 5, 2017 with respect to Guidance Note on Board Evaluation. The Nomination and Remuneration Committee had approved the criteria for the performance evaluation of the Board, its Committees and individual Directors as per the SEBI Guidance Note on Board Evaluation.

The Chairman of the Company interacted with each Director individually, for evaluation of performance of the individual Directors. The evaluation for the performance of the Board as a whole and of the Committees were conducted by way of questionnaires.

In a separate meeting of Independent Directors, performance of Non Independent Directors and performance of the Board as a whole was evaluated.

Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-executive Directors.

The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfilment of functions, availability and attendance, initiative, integrity, contribution and commitment etc., and the Independent Directors were additionally evaluated on the basis of independence,

independent views and judgement etc. Further the evaluation of Chairman of the Board, in addition to the above criteria for individual Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

The Chairman and other members of the Board discussed upon the performance evaluation of every Director of the Company and concluded that they were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The summary of the feedback from the members were thereafter discussed in detail by the members. The respective Director, who was being evaluated, did not participate in the discussion on his/her performance evaluation.

The Chairman additionally interacted with each Director individually, for evaluation of performance of all Individual Directors and Mr. Dilip Shanghvi, along with other Directors had evaluated the performance of Mr. Israel Makov as the Chairman and as an Individual Director. They were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The Board also assessed the fulfillment of the independence criteria as specified in Listing Regulations, by the Independent Directors of the Company and their independence from the management.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as diversity in the Board, competency of Directors, strategy and performance evaluation, evaluation of performance of the management and feedback, independence of the management from the Board etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as mandate and composition, effectiveness of the committee, independence of the committee from the Board, contribution to decisions of the Board, etc.

HUMAN RESOURCES

2020 was a very challenging year for everyone. Our 37000 strong global workforce worked relentlessly to ensure medicines continue to reach patients who rely on us. As lockdowns hit across the world, our teams being part of essential services, ensured our 44 manufacturing sites, distribution centres, R&D centres and sales offices worldwide continue to operate. We are grateful to our employees who made this happen with a safety-first mind set. The top priority for the Human Resource function was providing a safe work environment to employees globally.

Your Directors would like to take this opportunity to express their gratitude and appreciation for the passion,

dedication and commitment of the employees and look forward to their continued contribution.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ‘Annexure - A'' to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/ Compliance Officer either at the Registered/Corporate Office address or by email to [email protected].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review. The Company has submitted the Annual Returns to the local authorities, as required under the above mentioned Act.

During the financial year ended March 31, 2021, no complaint pertaining to sexual harassment was received by the Company. There are no complaints pending as at the end of the financial year.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

AUDITORS Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firm''s Regn.

No. 324982E/ E300003), were appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 25th Annual General Meeting of the Company to hold office till the conclusion of the 30th Annual General Meeting of the Company.

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as ‘Annexure - C'' to this Report.

AUDIT COMMITTEE COMPOSITION

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

RISK MANAGEMENT

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various organisational risks (strategic, operational and financial). The Risk Management Committee also assesses the adequacy of mitigation plans to address such risks. The Corporate Governance Report, which forms part of this report, contains the details of Risk Management Committee of the Company. An overarching Risk Management Policy which was approved by the Board is in place.

The Company has developed and implemented an integrated Enterprise Risk Management (ERM) Framework through which it identifies monitors, mitigates & reports key risks that impact the Company''s ability to meet its strategic objectives. The Company''s ERM framework is based on the recommendations by the Committee of Sponsoring Organisations (COSO) to further the organisation''s endeavour to strengthen ERM framework and processes using best practices. The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company''s objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in a risk register with all the relevant information such as risk description, root cause and any existing mitigation plans. The risk register is refreshed semi-annually. Risks are categorised into Strategic, Financial, Operational, Compliance & Reputational. ERM risk assessments covering Company''s various businesses and functions are a key input for the annual internal audit program. During FY21, the focus was on reviewing effectiveness of actions taken to mitigate business, cyber security and other operational & Compliance risks.

INTERNAL FINANCIAL CONTROLS

The Company believes that internal control is a prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance

The Auditor''s Report for the financial year ended March 31, 2021, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2021. The Secretarial Audit Report in the Form No.

MR - 3 for the year is provided as ‘Annexure - B1'' to this Report.

The remarks stated in the Secretarial Audit Report are self explanatory and do not require any further explanation. The Secretarial Audit Report for the year does not contain any other qualification, reservation or adverse remark.

In accordance with the provisions of Regulation 24A of the Listing Regulations, Secretarial Audit of two material unlisted Indian subsidiaries of the Company namely, Sun Pharma Laboratories Limited (SPLL) and Sun Pharma Distributors Limited (SPDL), was undertaken by KJB & Co. LLP, Practicing Company Secretaries, Mumbai and the Secretarial Audit Reports issued by them to the respective Boards of SPLL and SPDL are provided as ‘Annexure - B2'' and ‘Annexure - B3'' respectively to this Report. The Secretarial Audit Reports for these material unlisted Indian subsidiaries do not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board has appointed Messrs B. M. Sharma & Associates, Cost Accountants, Pune (Firm''s Registration No. 100537) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2021-22.

The Company is required to maintain Cost Records as specified by the Central Government under Section 148(1) of the Act and accordingly, such accounts and records are made and maintained by the Company.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards as amended from time to time.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link: http://www. sunpharma.com/policies. All contracts/ arrangements/ transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm''s length basis.

on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

Global Internal Audit

An independent and empowered Global Internal Audit Function (GIA) at the corporate level with support from a Big 4 / equally reputed audit firm, wherever required, carries out risk-focused audits. GIA audits all businesses (both in India and overseas) to ensure that business process controls are adequate and are functioning effectively.

These reviews include financial, operational and compliance controls and risk mitigation plans. The Company''s operating management closely monitors the internal control environment and ensures that the recommendations are effectively implemented. The Audit Committee of the Board monitors performance of the Internal Audit Function periodically reviews key findings and provides strategic guidance.

GIA''s functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit. The audit processes are fully automated on ‘SunScience'' tool which integrates Internal Audits, Automated follow-ups for closure of observations, Internal Financial Controls (IFC) and Enterprise Risk Management (ERM) modules. ERM Risk assessments are a key input for the annual audit program.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee. The details of membership of the Committee and the meetings held are detailed in the Corporate Governance Report, forming part of this Report. On the recommendation of the Corporate Social Responsibility Committee, the Board of Directors at its meeting held on May 27, 2021 has approved and adopted the revised CSR Policy in line with the requirements of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. The CSR Policy of the Company is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/

During the year, the Company has spent ''269.504 Million which exceeds 2% of the average net profits of the Company in the three preceding financial years. The annual report on CSR activities containing details of expenditure incurred by the Company and brief details on the CSR activities are provided in ‘Annexure - D'' to this Report.

The Board has accorded its consent to set off the excess amount spent by the Company on its CSR Activities against the requirement to spend in any subsequent year(s) in term: of Section 135 of the Act.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Act and the rules framed thereunder.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as ‘Annexure - E'' to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company''s operations in future.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behaviour in all its operations, the Company has adopted a ‘Global Whistle Blower Policy'' for Sun Pharmaceutical Industries Limited and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments

and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended

March 31, 2021 have been prepared in accordance with

Indian Accounting Standards (Ind AS) notified under the

Companies (Indian Accounting Standards) Rules, 2015.

CREDIT RATING

ICRA Ltd. has reaffirmed the highest credit rating of ‘[ICRA]

A1 ''/‘[ICRA] AAA(Stable)'' for the bank facilities, long term/

short term borrowings and commercial paper programs of the Company.

Further, CRISIL Ltd. has also reaffirmed the highest credit rating of ‘CRISIL A1 and CRISIL AAA/Stable'' for short term & long term bank facilities and commercial paper programs of the Company.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31, 2021, forms part of the Annual Report and is also made available on the website of the Company at https://sunpharma.com/investors-annual-reports-presentations/

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Company''s bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Israel Makov

Place: Israel Chairman

Date: May 27, 2021 (DIN: 05299764)


Mar 31, 2019

Board's Report

The Directors take pleasure in presenting the Twenty-Seventh Annual Report and Company's Audited Financial Statements for the financial year ended March 31, 2019.

Financial Results

 

 

 

 

(Rs in Million)

 

Standalone

Consolidated

 

Year ended March 31,2019

Year ended March 31, 2018*

Year ended March 31, 2019

Year ended March 31, 2018*

Revenue from operations

103,032.1

90,062.5

290,659.1

264,894.6

Profit before exceptional item and tax

19,338.3

12,307.5

50,245.8

44,294.8

Exceptional Item

12,143.8

9,505.0

12,143.8

9,505.0

Profit before tax but after exceptional item

7,194.5

2,802.5

38,102.0

34,789.8

Tax expense:

 

 

 

 

- Current Tax

15.5

20.2

8,039.6

6,628.0

- Deferred Tax Charge / (Credit)

(987.0)

(274.1)

(2,030.8)

(62.1)

- Deferred tax charge / (Credit) - exceptional

-

-

-

2,544.5

Profit after tax

8,166.0

3,056.4

32,093.2

25,679.4

Profit after Tax but before Share in profit / (loss) of associates /joint ventures

-

-

32,093.2

25,679.4

Share of (loss) of associates / joint ventures [Net]

-

-

(14.6)

(254.4)

Profit for the year before non-controlling interests

 

 

32,078.6

25,425.0

Non-controlling interests

 

 

5,424.4

4,468.0

Profit for the year attributable to owners of the Company

-

 

26,654.2

20,957.0

Total other Comprehensive Income

1,837.4

566.9

16,799.9

5,232.5

Total Comprehensive Income for the year attributable to:

10,003.4

3,623.3

48,878.5

30,657.5

- Owners of the Company

10,003.4

3,623.3

42,054.1

25,711.8

- Non-Controlling Interest

-

-

6,824.4

4,945.7

Opening balance in Retained Earnings

120,370.0

124,860.0

319,777.0

309,250.9

Additions:

 

 

 

 

Amount available for appropriation

8,273.3

3,490.8

26,804.4

21,464.7

Less: Appropriations

 

 

 

 

Dividend on Equity Shares

4,791.6

7,977.4

4,791.6

7,977.4

Dividend Distribution Tax

5.6

3.4

984.9

1,624.0

Transfer to various Reserves:

- Capital redemption Reserve -

- Debenture redemption Reserve

-

 

(1,250.0)

(833.4)

- Capital reserve

-

 

 

 

- Buy-back of equity shares by overseas subsidiaries

-

 

2,013.1

2,168.1

- Adjustment on account of Ind AS 115

-

-

6,493.0

-

- Legal reserve

-

-

203.9

2.5

- General reserve

-

-

43.0

-

Closing balance in Retained Earnings

123,846.1

120,370.0

333,301.9

319,777.0

*Refer Note 56(11) of Standalone Financial Statements #Refer Note 66 of Consolidated Financial Statements

Dividend

Your Directors have recommended a dividend of Rs.2.75 (Rupees two and paise seventy five only) per equity share of Rs.1/- each [previous year Rs.2.00/- per equity share of Rs.1/- each] for the year ended March 31, 2019, subject to the approval of the equity shareholders at the ensuing 27th Annual General Meeting of the Company.

The dividend payout is in accordance with the Company's Dividend Distribution Policy. The Dividend Distribution Policy of the Company is provided as 'Annexure - A to this Report. The policy is also available on the website of the Company and can be accessed through the web link: http:// www.sunpharma.com/policies.

Changes in Capital Structure

During the year under review, the Company has allotted 11790 equity shares of Rs.1/- each under Sun Employee Stock Option Scheme - 2015 thereby the paid up share capital of the Company increased to Rs.2,399,334,970/- (Rupees Two Billion Three Hundred Ninety Nine Million Three Hundred Thirty Four Thousand Nine Hundred Seventy only) as on March 31, 2019.

Scheme of Arrangements

1. During the year, the Hon'ble National Company Law Tribunal of Gujarat at Ahmedabad had vide its Order dated October 31, 2018 sanctioned the Scheme of Arrangement among the Company and Sun Pharma Global FZE ("Transferor Company"), a wholly owned subsidiary of the Company and their respective members and creditors ("Scheme") whereby the Specified Undertaking (as defined in the Scheme) of Transferor Company stands demerged into the Company w.e.f. December 01, 2018 with appointed date being April 01, 2017. No consideration was paid pursuant to the Scheme.

2. During the year, the Board of Directors at its meeting held on May 25, 2018 had approved a Composite Scheme of Arrangement among the Company and Sun Pharma (Netherlands) B.V. (Transferee Company-1) and Sun Pharmaceutical Holdings USA Inc. (Transferee Company-2), wholly owned subsidiaries of the Company and their respective members and creditors ("Composite Scheme"), for demerger of Specified Investment Undertaking -1 (as defined in the Composite Scheme) of the Company into Sun Pharma (Netherlands) B.V. and Specified Investment Undertaking -2 (as defined in the Composite Scheme) of the Company into Sun Pharmaceutical Holdings USA Inc. The Hon'ble National Company Law Tribunal of Gujarat, at Ahmedabad ("NCLT") has vide its Order dated April 11, 2019 dispensed with convening of meeting of secured creditors of the Company and ordered to convene the meeting of equity shareholders and unsecured creditors of the Company on June 04, 2019 to approve the Composite Scheme with appointed date as April 01, 2017 or such other date as may be agreed between  the Transferee Company-1, Transferee Company-2 and the Company and approved by the NCLT. Pursuant to said Composite Scheme, no consideration shall be paid. This demerger shall enable the Company to address the risks and policies, ability to strategies the remaining business for long term growth, consolidation and creation of shareholder value, etc.

Extract of Annual Return

The extract of Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 ('the Act') in form MGT-9 is provided as 'Annexure - B' to this Report and is also made available on the website of the Company at https://www.sunpharma.com/investors/annualreports.

Subsidiaries/ Joint Ventures/ Associate Companies

The statement containing the salient features of the Financial Statements of the Company's subsidiaries/ joint ventures/ associate companies is given in Form AOC - 1, provided in Notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries, joint ventures and associate companies and their contribution to the overall performance of the Company during the financial year is given under 'Annexure A to the Consolidated Financial Statements forming part of the Annual Report.

Details pertaining to companies that became subsidiaries/ joint ventures/associates and those that ceased to be the subsidiaries / joint ventures/associates of the Company during the year are provided in Note no. 39 of the Notes to the Consolidated Financial Statements, forming part of the Annual Report.

Directors and Key Managerial Personnel

Mr. Sailesh T. Desai and Mr. Kalyanasundaram Subramanian, Whole-time Directors of the Company retire by rotation at the ensuing 27th Annual General Meeting of the Company and being eligible offer themselves for reappointment.

During the year, Mr. Gautam Doshi was appointed as an Additional Independent Director of the Company with effect from May 25, 2018. Mr. Vivek Chaand Sehgal and Mr. Gautam Doshi have been appointed as Independent Directors of the Company for a term of 5 (five) years each effective from November 14, 2017 and May 25, 2018 upto November 13, 2022 and May 24, 2023 respectively by the members at the 26th Annual General Meeting of the Company held on September 26, 2018.

Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") the consent of the members by way of Special Resolution, was obtained at the 26th Annual General Meeting of the Company for continuation as Director beyond the age of seventy five years, of Mr. Israel Makov, Non-Executive Director and the Chairman of the Company, as he had attained an age of 79 years.

Mr. S. Mohanchand Dadha, Mr. Keki Mistry and Mr. Ashwin Dani, Independent Directors having completed second term of 2 (two) years of their respective appointments on the conclusion of the 26th Annual General Meeting of the Company, all the three aforementioned Independent Directors retired and ceased to be Directors of the Company w.e.f. the conclusion of the 26th Annual General Meeting of the Company held on September 26, 2018. The Board of Directors places on record their appreciation for contribution made by Mr. S. Mohanchand Dadha, Mr. Keki Mistry and Mr. Ashwin Dani during their tenure as Independent Directors of the Company.

Mr. Sudhir V. Valia has stepped down from the position of Whole-time Director of the Company w.e.f. May 29, 2019. However, he shall continue as a Non-Executive and Non-independent Director of the Company.

Appropriate resolutions for the re-appointment of the Directors are being placed for your approval at the ensuing 27th Annual General Meeting. Your Directors recommend the same for approval by the members at the ensuing 27th Annual General Meeting of the Company.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Act and under Listing Regulations.

In the opinion of the Board, the Independent Directors of the Company fulfil the conditions specified in the Act and Listing Regulations and are independent of the management.

Remuneration Policy for Directors, Key Managerial Personnel and Other Employees and Criteria for Appointment of Directors

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on remuneration of Directors, Key Managerial Personnel and other Employees.

The salient features of the Remuneration Policy of the Company are as under:

(A) Guiding Principles for remuneration: The Company shall remunerate all its personnel reasonably and sufficiently as per industry benchmarks and standards. The remuneration shall be commensurate to retain and motivate the human resources of the Company. The compensation package will, inter alia, take into account the experience of the personnel, the knowledge & skill required including complexity of his job, work duration and risks associated with the work, and attitude of the employee like positive outlook, team work, loyalty etc.

(B) Components of Remuneration: The following will be the various remuneration components which may be paid to the personnel of the Company based on the designation and class of the personnel.

a) Fixed compensation: The fixed salaries of the Company's personnel shall be competitive and based on the individual personnel's responsibilities and performance.

b) Variable compensation: The personnel of the Company may be paid remuneration by way of variable salaries based on their performance evaluation. Such variable salaries should be based on the performance of the individual against his short and long term performance objectives and the performance of the Company.

c) Share based payments: The Board may, on the recommendation of the Nomination and Remuneration Committee, issue to certain class of personnel a share and share price related incentive program.

d) Non-monetary benefits: Senior management personnel of the Company may, on a case to case basis, be awarded customary non-monetary benefits such as discounted salary advance / credit facility, rent free accommodation, Company cars with or without chauffer, share and share price related incentive, reimbursement of electricity and telephone bills etc.

e) Gratuity/group insurance: Personnel may also be awarded to group insurance and other key man insurance protection. Further as required by the law necessary gratuity shall be paid to the personnel.

f) Commission: The directors may be paid commission if approved by the shareholders. The shareholders may authorise the Board to declare commission to be paid to any director of the Board.

C) Entitlement: The authority to determine the entitlement to various components as aforesaid for each class and designation of personnel shall be as follows

Designation / Class

To be determined by

Director

Board of Directors on the recommendation of the Nomination and Remuneration Committee within the limits approved by the shareholders

Key Managerial Personnel and Senior Management

Board of Directors on recommendation of the Nomination and Remuneration Committee

Other employees

Human Resources Head

Note: For the purpose of this Policy, the term 'Senior Management' shall have the same meaning as defined under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

The complete Policy as approved by the Board is available on the website of the Company and can be accessed through the web link: http://www.sunpharma.com/policies.

Familiarisation programme for the Independent Directors

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company www.sunpharma. com and can be accessed through the web link: http:// www.sunpharma.com/policies.

Number of meetings of the Board

The Board of Directors of the Company met 5 (Five) times during the year under review on May 25, 2018; August 14, 2018; September 26, 2018; November 13, 2018 and February 12, 2019. The particulars of attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

Evaluation of performance of the Board, its Committees and Individual Directors

During the year, the evaluation of the annual performance of individual Directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act, relevant Rules, and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations and based on the circular issued by SEBI dated January 5, 2017 with respect to Guidance Note on Board Evaluation. The Nomination and Remuneration Committee had approved the criteria for the performance evaluation of the Board, its Committees and individual Directors as per the SEBI Guidance Note on Board Evaluation.

The Chairman of the Company interacted with each Director individually, for evaluation of performance of the individual Directors. The evaluation for the performance of the Board as a whole and of the Committees were conducted by way of questionnaires.

In a separate meeting of Independent Directors, performance of Non Independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-executive Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as structure and diversity of the Board, competency of Directors, experience of Director, strategy and performance evaluation, secretarial support, evaluation of risk, evaluation of performance of the management and feedback, independence of the management from the Board etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as mandate and composition, effectiveness of the committee, structure of the committee and meetings, independence of the committee from the Board and contribution to decisions of the Board. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfilment of functions, availability and attendance, initiative, integrity, contribution and commitment etc., and the Independent Directors were additionally evaluated on the basis of independence, independent views and judgement etc. Further the evaluation of Chairman of the Board, in addition to the above criteria for individual

Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

The Chairman and other members of the Board discussed upon the performance evaluation of every Director of the Company and concluded that they were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The summary of the feedback from the members were thereafter discussed in detail by the members. The respective Director, who was being evaluated, did not participate in the discussion on his/her performance evaluation and had exited the meeting for the said discussion. During the discussion in respect of performance of Mr. Dilip Shanghvi and Mr. Sudhir Valia, both Mr. Dilip Shanghvi and Mr. Sudhir Valia had exited the meeting.

The Chairman additionally interacted with each Director individually, for evaluation of performance of all Individual Directors and Mr. Dilip Shanghvi, along with other Directors had evaluated the performance of Mr. Israel Makov as the Chairman and as an Individual Director. They were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

Human Resources

We have more than 32,000 talented employee base spread across multiple geographies in various sales offices, R&D centers, 40 + manufacturing locations, Regional offices and Corporate office. We believe our employees are pivotal to all the initiatives that drive us to realise our future plans. Human Resource agenda encourages high performance culture with focus on Employee safety & welfare, Employee development & Productivity. Your Directors would also like to take this opportunity to express their appreciation for the dedication and commitment of the employees of the Company and look forward to their continued contribution.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in 'Annexure - C to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at Corporate office or Registered office address of the Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review. The Company has submitted the Annual Returns to the local authorities, as required under the above mentioned Act.

During the financial year ended March 31, 2019, three complaints pertaining to sexual harassment were received and the same were resolved by the Company. There are no complaints pending as at the end of the financial year.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Auditors

Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firm's Regn. No. 324982E/ E300003), were appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 25th Annual General Meeting of the Company to hold office till the conclusion of the 30th Annual General Meeting of the Company.

The Auditor's Report for the financial year ended March 31, 2019, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2019. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as 'Annexure - D' to this Report. The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board has appointed Messrs B M Sharma & Associates, Cost Accountants, Pune (Firm's Registration No. 100537) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2019-20.

The Company is required to maintain Cost Records as specified by the Central Government under Section 148(1) of the Act and accordingly, such accounts and records are made and maintained by the Company.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards as amended from time to time.

Loans, Guarantees & Investments

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

Related Party Transactions

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link http://www.sunpharma.com/ policies. All contracts/arrangements/transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm's length basis.

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as 'Annexure - E' to this Report.

Audit Committee Composition

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

Risk Management

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various strategic, operational and financial risks that the organisation faces, along with the adequacy of mitigation plans to address such risks. The Corporate Governance Report, which forms part of this report, contains the details of Risk Management Committee of the Company. There is an overarching Risk Management Policy in place has been reviewed and approved by the Board.

The Company has developed & implemented an integrated Enterprise Risk Management Framework through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives. The Company's ERM framework is based on the recommendations by the Committee of Sponsoring Organisations (COSO) to further the organisation's endeavor to strengthen ERM framework and processes using best practices. The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company's objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in the form of a risk register with all the relevant information such as risk description, root cause and any existing mitigation plans. The risk register is refreshed annually. Risks are categorised into Strategic, Financial, Operational, Compliance& Reputational. ERM risk assessments covering Company's various businesses and functions are a key input for the annual internal audit program. During FY 2018-19, the ERM team focused on reviewing effectiveness of actions taken to mitigate certain business, cyber security and other operational risks.

Internal Financial Controls

The Company believes that internal control is a necessary prerequisite of Governance and that freedom should be exercised within a framework of checks and balances. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensure an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

Global Internal Audit

An independent and empowered Global Internal Audit Function (GIA) at the corporate level carries out risk-focused audits across all businesses (both in India and overseas), to ensure that business process controls are adequate and are functioning effectively. These audits include reviewing finance, operations, safeguarding of assets and compliance related controls. Areas requiring specialised knowledge are reviewed in partnership with external subject matter experts.

GIA's functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of audit. The audit processes are fully automated on a 'SunScience' tool which integrates audit, Internal Financial Controls (IFC) and Enterprise Risk Management (ERM) modules.

The Company's operating management closely monitors the internal control environment and ensures that the recommendations of GIA are effectively implemented. The Audit Committee of the Board monitors performance of GIA, periodically reviews key findings and provides strategic guidance.

Corporate Social Responsibility

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee. The details of membership of the Committee and the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee are available on the website of the Company and can be accessed through the web link: http://www.sunpharma.com/policies. The average net profit of the Company in the three immediately preceding financial years is negative, therefore the Company was not required to spend on CSR activities during the year, however, the Company has voluntarily spent on CSR activities. The annual report on CSR activities containing details of voluntary expenditure incurred by the Company and brief details on the CSR activities are provided in 'Annexure - F' to this Report.

Public Deposits

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Act and the rules framed thereunder.

Management Discussion and Analysis

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Report.

Corporate Governance Report

Report on Corporate Governance and Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as 'Annexure - G' to this Report.

Employees' Stock Option Schemes

The Company presently has only one Employees' Stock Option Scheme, which is inherited from erstwhile Ranbaxy Laboratories Limited ("Ranbaxy"). The scheme is through Direct Route and has been named as Sun Pharma Employee Stock Option Scheme - 2015. The scheme was adopted by the Company with certain amendments consequent upon merger of erstwhile Ranbaxy into the Company. The Scheme is in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure with respect to the Employees' Stock Option Scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is available on the Company's website and can be accessed at: http://www.sunpharma.com/pdflist/all-documents.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company's operations in future.

Whistle Blower Policy / Vigil Mechanism

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behaviour in all its operations, the Company has adopted a 'Global Whistle Blower Policy' for Sun Pharmaceutical Industries Limited and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

Directors' Responsibility Statement

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Consolidated Accounts

The consolidated financial statements for the year ended March 31, 2019 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

Credit Rating

ICRA Ltd. has reaffirmed the highest credit rating of '[ICRA] A1+'/'[ICRA] AAA(Stable)' for the bank facilities, long term/ short term borrowings and commercial paper programs of the Company.

Further, CRISIL Ltd. has also reaffirmed the highest credit rating of 'CRISIL A1+ and CRISIL AAA/Stable' for short term & long term bank facilities and commercial paper programs of the Company.

Business Responsibility Reporting

The Business Responsibility Report of the Company for the year ended March 31, 2019, forms part of the Annual Report and is also made available on the website of the Company at http://www.sunpharma.com/pdflist/all-documents.

Acknowledgements

Your Directors wish to thank all stakeholders, employees and business partners, Company's bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Place: Mumbai

Israel Makov

Date: May 28, 2019

Chairman

DIVIDEND DISTRIBUTION POLICY

Annexure - A

1. Objectives and Scope:

The Board of Directors (the "Board") of the Sun Pharmaceutical Industries Limited (the "Company") recognises the need to lay down a broad framework for considering decisions by the Board of the Company, with regard to distribution of dividend (including any interim dividend) to its equity shareholders and/ or retaining or plough back of its profits.

The Policy sets out the circumstances and different factors for consideration by the Board at the time of taking such decisions of distribution or of retention of profits, in the interest of providing transparency to the equity shareholders. The Policy is not an 'alternative' but a 'Guide' to the decision of the Board for recommending dividend, which may be made after taking into consideration all the relevant circumstances enumerated hereunder and such other factors as may be decided as relevant by the Board.

While recommendation of Dividend shall be guided by this Policy, in extraordinary circumstances, the Board shall have complete liberty to recommend dividend in deviation to this policy, if so deemed necessary in the best interests of the Company and its stakeholders.

The Policy reflects the intent of the Company to reward its equity shareholders by sharing a portion of its profits after adjusting for accumulated losses, if any, and also retaining sufficient funds for future growth of the Company. The Company intends to pay, subject to the circumstances and factors enlisted hereon, dividend, which shall be consistent with the performance of the Company over the years.

Subject to the considerations as provided in the Policy, the Board shall determine the dividend payout in a particular year after taking into consideration the operating and financial performance of the Company, the advice of executive management including the CFO, and other relevant factors.

The Policy shall not apply to:

• Determination and declaring dividend on preference shares, if any.

2. Relevant Regulations

The Securities and Exchange Board of India ("SEBI") vide its Notification dated July 08, 2016 has amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations") by inserting Regulation 43A in order to make it mandatory to have a Dividend Distribution Policy in place by the top five hundred listed companies based on their market capitalisation calculated as on the 31st day of March of every year.

The Company, being one of the top five hundred listed Companies in India on the basis of market capitalisation, requires to comply with the requirements of Regulation 43A.

3. Effective Date

The Policy shall become effective from the date of its adoption by the Board i.e. November 10, 2016.

4. Category of Dividends

The Board of Directors shall have the power to recommend final dividend to the equity shareholders for their approval in the Annual General Meeting of the Company. Subject to compliance with the provisions of Companies Act, 2013 including the Rules made thereunder and other relevant regulations, if any, the Board of Directors shall also have the absolute power to declare interim dividend during any financial year out of the surplus in the profit and loss account and out of profits of the financial year in which such interim dividend is sought to be declared, as and when they consider it fit in compliance with Companies Act, 2013 and other relevant regulations. Interim Dividend may be paid in order to supplement the annual dividend or in exceptional circumstances.

5. Payment of Dividend from Reserves

Dividend shall normally be declared from the profit earned by the Company during the relevant financial year after adjusting for accumulated losses & unabsorbed depreciation, if any and out of the carried forward profits not transferred to any reserves. However, under special circumstances, Dividend may be declared out of the accumulated profits earned by it in previous years and transferred by it to the free reserves, subject to compliance with the requirements of the relevant provisions of the Companies Act, 2013 including the Rules made thereunder.

6. Circumstances to be Considered While Determining Dividend Pay-Out

The Board shall consider the circumstances provided below before determination of any dividend payout after analysing the prospective opportunities and threats, viability of the options of dividend payout or retention etc. The decision of dividend payout shall, majorly be based on the aforesaid factors considering the balanced interest of the stakeholders and the business requirements of the Company.

• Accumulated Losses, if any

The profits earned by the Company during any financial year shall be first utilised to set off the accumulated losses/ unabsorbed depreciation, if any of the Company from the previous financial years.

• Operating cash flow of the Company

The Board will consider the impact of proposed dividend on the operating cash flow of the Company and shall satisfy itself of its adequacy before taking a decision on whether to declare dividend or retain its profits.

• Transfer to Reserves and other Statutory Requirements

The Board shall examine the implication of relevant statutory requirements including payment of Dividend Distribution Tax, transfer of a certain portion of profits to Reserves etc., if applicable, on the financials of the Company at the time of taking decision with regard to dividend declaration or retention of profit.

• Covenants with lenders/ Debenture Trustees, if any

The decision of dividend pay-out shall also be subject to compliance with covenants contained in any agreement entered into by the Company with the Lenders/ Debenture Trustee's, from time to time, if any.

• Prudential & Strategic requirements

The Board shall analyse the ongoing and prospective projects and strategic decisions including need for replacement of capital assets, expansion and modernisation etc., before recommending Dividend Pay-out for any financial year with an object to build a healthy reserve of retained earnings to augment long term strength and to build a pool of internally generated funds to provide long-term resources as well as resource-raising potential for the Company.

• Expectations of major stakeholders, including small shareholders

The Board, while considering the decision of dividend pay-out or retention of a certain amount or entire profits and/or out of the accumulated profits of the Company, shall, as far as possible, consider the expectations of the major stakeholders including the small shareholders of the Company who generally expect a regular dividend payout.

7. The Financial Parameters that shall be considered while declaring/ recommending Dividend

In addition to the circumstances covered under point 6 above, the Board shall, inter alia, consider the following financial parameters, while taking decisions of a dividend payout during a particular year-

• Return on invested capital

The efficiency with which the Company uses its capital will impact the decision of dividend declaration.

• Magnitude of earnings of the Company

Since dividend is directly linked with the availability of earning over the long haul, the magnitude of earnings will significantly impact the dividend declaration decisions of the Company.

• Cost of borrowings

The Board will analyse the requirement of necessary funds considering the long term or short term projects proposed to be undertaken by the Company and the viability of the options in terms of cost of raising necessary funds from outsiders such as bankers, lending institutions or by issuance of debt securities or plough back its own funds.

• Obligations to creditors

The Company should be able to repay its debt obligations without much difficulty over a reasonable period of time. The decision of dividend declaration shall be taken after considering the volume of such obligations and time period of repayment.

• Adequacy of profits

If during any financial year, the Board determines that the profits of the Company are inadequate on standalone basis and/or consolidated basis, the Board may decide not to declare dividends for that financial year.

• Post dividend Earning Per Share (EPS)

The post dividend EPS can have strong impact on the funds of the Company, thus, impacting the overall operations on day-today basis and therefore, affects the profits and can impact the decision for dividend declaration during a particular year.

8. Factors that may affect Dividend Payout

• Internal Factors

Product/ Project expansion plan

The Company's growth oriented decision to conserve cash in the Company for future expansion plan impacts shareholders expectation for the long run which shall have to considered by the Board before taking dividend decision.

General Working capital requirement

In addition to the above, the general working capital requirements within the Company will also impact the decision of dividend declaration.

Past performance/ reputation of the Company

The trend of the performance/ reputation of the Company that has been during the past years determine the expectation of the shareholders.

• External Factors Macroeconomic conditions

Considering the state of economy in the Country, the policy decisions that may be formulated by the Government and other similar conditions prevailing in the international market which may have a bearing on or affect the business of the Company, during uncertain or recessionary economic and business conditions, the Board may consider retaining a larger part of the profits to have sufficient reserves to absorb unforeseen circumstances.

Capital Market

When the markets are favourable, dividend pay-out can be liberal. However, in case of unfavorable Capital market conditions, Board may resort to a conservative dividend pay-out in order to conserve cash outflows.

Statutory Restrictions

The Board will keep in mind any restrictions on payment of dividends by virtue of any regulation or loan covenant, as may be applicable to the Company at the time of declaration of dividend.

Tax implications

Dividend distribution tax or any tax deduction at source as required by applicable tax regulations in India, as may be applicable at the time of declaration of dividend shall have bearing on the quantum of Dividend declared by the Company.

9. Range of Dividend Pay-Out

The Company is committed to deliver sustainable value to all its stakeholders. The Company strives to distribute an optimal and appropriate level of the profits earned by it in its business and investing activity, with the equity shareholders, in the form of dividend. As explained in the earlier part of this Policy, determining the dividend pay-out is dependent upon several factors, both internal to a business and external to it. Taking into consideration the aforementioned factors, the Board shall have absolute discretion to determine & recommend appropriate Dividend pay-out for the relevant financial year.

10. Manner of Utilisation of Retained Earnings

The Board may retain its earnings in order to make better utilisation of the available funds and increase the value of the stakeholders in the long run. The retained earnings of the Company may, inter alia, be utilised for the following purposes:

• To meet the working capital/ business needs of the Company

• To fund the project expansion plans of the Company

• To fund the research expenditures of ongoing research projects specifically those in the advanced development stages

• Towards replacement/ up-gradation /modernisation of equipment's & plants

• Towards investment in long term/ short term strategic joint ventures & / or partnerships and/or subsidiary companies

• To fund new acquisitions & investments

• Towards diversification of business

• Such other manner as the Board may deem fit from time to time

11. Review and Amendment

The Board may review and amend or modify this policy in whole or in part, at any time.

Annexure - B

Form No. MGT-9

EXTRACT OF ANNUAL RETURN  as on the financial year ended on March 31, 2019

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. Registration and Other Details:

i)

CIN

L24230GJ1993PLC019050

ii)

Registration Date

March 01, 1993

iii)

Name of the Company

Sun Pharmaceutical Industries Limited

iv)

Category / Sub-Category of the Company

Company Limited by Shares

v)

Address of the Registered Office and Contact details

SPARC, Tandalja, Vadodara 390012, Gujarat Tel No: +91 0265 6615500

vi)

Whether listed company

Yes

vii)

Name, Address and Contact details of Registrar and Transfer Agent, if any

Link Intime India Private Limited C 101, 247 Park, L.B.S. Marg, Vikhroli West, Mumbai 400 083 Tel No: +91 22 49186270

II. Principal Business Activities of the Company

All the business activities contributing 10% or more of the total turnover of the Company:

Sr. No.

Name and Description of main products/ services

NIC Code of the Product/ Service

% to Total turnover of the company

1

Pharmaceuticals

210

100

III. Particulars of Holding, Subsidiary and Associate Companies as on March 31, 2019

Sr. No.

Name of the Company

Address of the Company

CIN/GLN

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1.

2 Independence Way LLC

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

2.

3 Skyline LLC

USA

Not Applicable

Subsidiary

76.54

2(87)(ii)

3.

Aditya Acquisition Company Ltd.

Israel

Not Applicable

Subsidiary

100.00

2(87)(ii)

4.

Alkaloida Chemical Company Zrt.

Hungary

Not Applicable

Subsidiary

99.99

2(87)(ii)

5.

AO Ranbaxy

Russia

Not Applicable

Subsidiary

100.00

2(87)(ii)

6.

Basics GmbH

Germany

Not Applicable

Subsidiary

100.00

2(87)(ii)

7.

Caraco Pharmaceuticals Private Limited

India

U24100MH2012FTC225970

Subsidiary

100.00

2(87)(ii)

8.

Chattem Chemicals Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

9.

Dungan Mutual Associates, LLC

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

10.

Dusa Pharmaceuticals, Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

11.

Faststone Mercantile Company Private Limited

India

U51900MH2006PTC159266

Subsidiary

100.00

2(87)(ii)

12.

Foundation for Disease Elimination and Control of India

India

U85190MH2016NPL286097

Subsidiary

100.00

2(87)(ii)

13.

Green Eco Development Centre Limited

India

U90009GJ2010PLC062892

Subsidiary

100.00

2(87)(ii)

14.

Insite Vision Incorporated

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

15.

JSC Biosintez

Russia

Not Applicable

Subsidiary

96.96

2(87)(ii)

16.

Kakayu Co., Ltd.

Japan

Not Applicable

Subsidiary

100.00

2(87)(ii)

17.

Laboratorios Ranbaxy S.L.U.

Spain

Not Applicable

Subsidiary

100.00

2(87)(ii)

18.

Morley & Company, Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

19.

Mutual Pharmaceutical Company Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

20.

Neetnav Real Estate Private Limited

India

U45200MH2010PTC201611

Subsidiary

100.00

2(87)(ii)

21.

Office Pharmaceutique Industries Et Hospitalier

France

Not Applicable

Subsidiary

100.00

2(87)(ii)

22.

Ohm Laboratories Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

23.

One Commerce Drive LLC

USA

Not Applicable

Subsidiary

76.54

2(87)(ii)

24.

OOO "Sun Pharmaceutical Industries" Limited

Russia

Not Applicable

Subsidiary

100.00

2(87)(ii)

25.

Pharmalucence, Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

26.

PI Real Estate Ventures, LLC

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

27.

Pola Pharma Inc.

Japan

Not Applicable

Subsidiary

100.00

2(87)(ii)

28.

Ranbaxy South Africa (Pty) Ltd.

South Africa

Not Applicable

Subsidiary

100.00

2(87)(ii)

29.

Ranbaxy (Malaysia) SDN. BHD.

Malaysia

Not Applicable

Subsidiary

95.67

2(87)(ii)

30.

Ranbaxy (Poland) SP. Z.O.O.

Poland

Not Applicable

Subsidiary

100.00

2(87)(ii)

31.

Ranbaxy (Thailand) Co., Ltd.

Thailand

Not Applicable

Subsidiary

100.00

2(87)(ii)

32.

Ranbaxy (U.K.) Limited

UK

Not Applicable

Subsidiary

100.00

2(87)(ii)

33.

Ranbaxy Farmaceutica Ltda.

Brazil

Not Applicable

Subsidiary

100.00

2(87)(ii)

34.

Ranbaxy Holdings (U.K.) Limited

UK

Not Applicable

Subsidiary

100.00

2(87)(ii)

35.

Ranbaxy Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

36.

Ranbaxy Ireland Limited

Ireland

Not Applicable

Subsidiary

100.00

2(87)(ii)

37.

Ranbaxy Italia S.P.A.

Italy

Not Applicable

Subsidiary

100.00

2(87)(ii)

38.

Ranbaxy Nigeria Limited

Nigeria

Not Applicable

Subsidiary

86.16

2(87)(ii)

39.

Ranbaxy Pharmaceuticals (Pty) Ltd.

South Africa

Not Applicable

Subsidiary

100.00

2(87)(ii)

40.

"Ranbaxy Pharmaceuticals Ukraine" LLC

Ukraine

Not Applicable

Subsidiary

100.00

2(87)(ii)

41.

Ranbaxy Pharmacie Generiques

France

Not Applicable

Subsidiary

100.00

2(87)(ii)

42.

Ranbaxy Signature LLC

USA

Not Applicable

Subsidiary

67.50

2(87)(ii)

43.

Realstone Multitrade Private Limited

India

U51900MH2006PTC158889

Subsidiary

100.00

2(87)(ii)

44.

Rexcel Egypt LLC

Egypt

Not Applicable

Subsidiary

100.00

2(87)(ii)

45.

Terapia SA

Romania

Not Applicable

Subsidiary

96.81

2(87)(ii)

46.

Skisen Labs Private Limited

India

U73100MH2005PTC150606

Subsidiary

100.00

2(87)(ii)

47.

Softdeal Trading Company Private Limited

India

U51900MH2006PTC159237

Subsidiary

100.00

2(87)(ii)

48.

Sonke Pharmaceuticals Proprietary Limited

South Africa

Not Applicable

Subsidiary

70.00

2(87)(ii)

49.

SPIL De Mexico S.A. DE C.V.

Mexico

Not Applicable

Subsidiary

100.00

2(87)(ii)

50.

Sun Farmaceutica do Brasil Ltda.

Brazil

Not Applicable

Subsidiary

100.00

2(87)(ii)

51.

Sun Global Canada Pty. Ltd.

Canada

Not Applicable

Subsidiary

100.00

2(87)(ii)

52.

Sun Global Development FZE

UAE

Not Applicable

Subsidiary

100.00

2(87)(ii)

53.

Sun Laboratories FZE

UAE

Not Applicable

Subsidiary

100.00

2(87)(ii)

54.

Sun Pharma Laboratories Limited

India

U25200MH1997PLC240268

Subsidiary

100.00

2(87)(ii)

55.

Sun Pharma (Netherlands) B.V. [Formerly known as Ranbaxy (Netherlands) B.V.]

Netherlands

Not Applicable

Subsidiary

100.00

2(87)(ii)

56.

Sun Pharma ANZ Pty Ltd

Australia

Not Applicable

Subsidiary

100.00

2(87)(ii)

57.

Sun Pharma Canada Inc. (Formerly known as Ranbaxy Pharmaceuticals Canada Inc.)

Canada

Not Applicable

Subsidiary

100.00

2(87)(ii)

58.

Sun Pharma DE Mexico S.A. DE C.V.

Mexico

Not Applicable

Subsidiary

75.00

2(87)(ii)

59.

Sun Pharma DE Venezuela, C.A.

Venezuela

Not Applicable

Subsidiary

100.00

2(87)(ii)

60.

Sun Pharma Distributors Limited

India

U51909MH2019PLC322778

Subsidiary

100.00

2(87)(ii)

61.

Sun Pharma East Africa Limited

Kenya

Not Applicable

Subsidiary

100.00

2(87)(ii)

62.

Sun Pharma Egypt Limited LLC (Formerly known as Ranbaxy Egypt Ltd)

Egypt

Not Applicable

Subsidiary

100.00

2(87)(ii)

63.

Sun Pharma Global FZE

UAE

Not Applicable

Subsidiary

100.00

2(87)(ii)

64.

Sun Pharma Healthcare FZE

UAE

Not Applicable

Subsidiary

100.00

2(87)(ii)

65.

Sun Pharma Holdings

Mauritius

Not Applicable

Subsidiary

100.00

2(87)(ii)

66.

Sun Pharma Japan Ltd.

Japan

Not Applicable

Subsidiary

100.00

2(87)(ii)

67.

Sun Pharma Philippines, Inc.

Philippines

Not Applicable

Subsidiary

100.00

2(87)(ii)

68.

Sun Pharma Switzerland Ltd.

Switzerland

Not Applicable

Subsidiary

100.00

2(87)(ii)

69.

Sun Pharmaceutical Industries, Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

70.

Sun Pharmaceutical (Bangladesh) Limited

Bangladesh

Not Applicable

Subsidiary

72.50

2(87)(ii)

71.

Sun Pharmaceutical Industries (Australia) Pty Limited

Australia

Not Applicable

Subsidiary

100.00

2(87)(ii)

72.

Sun Pharmaceutical Industries (Europe) B.V.

Netherlands

Not Applicable

Subsidiary

100.00

2(87)(ii)

73.

Sun Pharmaceutical Industries S.A.C.

Peru

Not Applicable

Subsidiary

100.00

2(87)(ii)

74.

Sun Pharmaceutical Medicare Limited

India

U36900GJ2017PLC095132

Subsidiary

100.00

2(87)(ii)

75.

Sun Pharmaceutical Peru S.A.C.

Peru

Not Applicable

Subsidiary

99.33

2(87)(ii)

76.

Sun Pharmaceuticals Holdings USA, Inc.

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

77.

Sun Pharmaceuticals SA(Pty) Ltd.

South Africa

Not Applicable

Subsidiary

100.00

2(87)(ii)

78.

Sun Pharmaceuticals France

France

Not Applicable

Subsidiary

100.00

2(87)(ii)

79.

Sun Pharmaceuticals Germany GmbH

Germany

Not Applicable

Subsidiary

100.00

2(87)(ii)

80.

Sun Pharmaceuticals Korea Ltd.

South Korea

Not Applicable

Subsidiary

100.00

2(87)(ii)

81.

Sun Pharmaceuticals Morocco LLC

Morocco

Not Applicable

Subsidiary

100.00

2(87)(ii)

82.

Taro International Ltd.

Israel

Not Applicable

Subsidiary

76.54

2(87)(ii)

83.

Taro Pharmaceutical Industries Ltd.

Israel

Not Applicable

Subsidiary

76.54

2(87)(ii)

84.

Taro Pharmaceutical Laboratories Inc.

USA

Not Applicable

Subsidiary

76.54

2(87)(ii)

85.

Taro Pharmaceuticals Europe B.V.

Netherlands

Not Applicable

Subsidiary

76.54

2(87)(ii)

86.

Taro Pharmaceuticals Inc.

Canada

Not Applicable

Subsidiary

76.54

2(87)(ii)

87.

Taro Pharmaceuticals North America, Inc.

Cayman Islands, British West Indies

Not Applicable

Subsidiary

76.54

2(87)(ii)

88.

Taro Pharmaceuticals U.S.A., Inc.

USA

Not Applicable

Subsidiary

76.54

2(87)(ii)

89.

The Taro Development Corporation

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

90.

Universal Enterprises Private Limited

India

Not Applicable

Subsidiary

100.00

2{87)(ii)

91.

URL PharmPro,LLC

USA

Not Applicable

Subsidiary

100.00

2(87)(ii)

92.

Zenotech Farmaceutica Do Brasil Ltda

Brazil

Not Applicable

Subsidiary

38.21

2(87)(ii)

93.

Zenotech Inc

USA

Not Applicable

Subsidiary

57.56

2(87)(ii)

94.

Zenotech Laboratories Limited

India

L27100AP1989PLC010122

Subsidiary

57.56

2(87)(ii)

95.

Zenotech Laboratories Nigeria Limited

Nigeria

Not Applicable

Subsidiary

57.50

2(87)(ii)

96.

ALPS LLC

USA

Not Applicable

Associate

19.99

2(6)

97.

Artes Biotechnology GmbH

Germany

Not Applicable

Associate

45.00

2(6)

98.

Composite Power Generation LLP

India

Not Applicable

Associate

36.90

2(6)

99.

Dr. Py Institute LLC

USA

Not Applicable

Associate

19.99

2(6)

100.

Generic Solar Power LLP

India

Not Applicable

Associate

28.76

2(6)

101.

HRE II LLC

USA

Not Applicable

Associate

19.99

2(6)

102.

HRE III LLC

USA

Not Applicable

Associate

19.99

2(6)

103.

HRE LLC

USA

Not Applicable

Associate

19.99

2(6)

104.

Intact Pharmaceuticals LLC

USA

Not Applicable

Associate

19.99

2(6)

105.

Intact Media LLC (Formerly Intact Skin Care LLC)

USA

Not Applicable

Associate

19.99

2(6)

106.

Medinstill Development LLC

USA

Not Applicable

Associate

19.99

2(6)

107.

Medinstill LLC

USA

Not Applicable

Associate

19.99

2(6)

108.

Trumpcard Advisors and Finvest LLP

India

Not Applicable

Associate

40.61

2(6)

109.

Vento Power Generation LLP

India

Not Applicable

Associate

40.55

2(6)

110.

Vintage Power Generation LLP

India

Not Applicable

Associate

39.41

2(6)

111.

Tarsius Pharma Ltd.

Israel

Not Applicable

Associate

18.33

2(6)

 

 

IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity as on March 31, 2019)

 (i) Category-wise Share Holding

 

No. of shares held at the beginning of the year

No. of shares held at the end of the year

% Change during the year

Category of shareholders

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A. PROMOTERS*

 

 

 

 

 

 

 

 

 

1) Indian

 

 

 

 

 

 

 

 

 

a) Individual / HUF

293200513

0

293200513

12.22

293200513

0

293200513

12.22

0.00

b) Central Government / State Government

0

0

0

0.00

0

0

0

0.00

0.00

c) Bodies Corporate

1010366094

12000

1010378094

42.11

1010366094

12000

1010378094

42.11

0.00

d) Financial Institutions/ Bank

0

0

0

0.00

0

0

0

0.00

0.00

e) Any Other (Trusts)

1276774

0

1276774

0.05

1276774

0

1276774

0.05

0.00

Sub-total (A) (1):-

1304843381

12000

1304855381

54.38

1304843381

12000

1304855381

54.38

0.00

2) Foreign

 

 

 

 

 

 

 

 

 

a) Individuals (NRIs)

0

0

0

0.00

0

0

0

0.00

0.00

b) Other- Individuals

0

0

0

0.00

0

0

0

0.00

0.00

c) Bodies Corporate

0

0

0

0.00

0

0

0

0.00

0.00

d) Financial Institutions/ Bank

0

0

0

0.00

0

0

0

0.00

0.00

e) Any Other

0

0

0

0.00

0

0

0

0.00

0.00

Sub-total (A)(2):-

0

0

0

0.00

0

0

0

0.00

0.00

Total shareholding of Promoter' (A)=(A)(1)+(A)(2)

1304843381

12000

1304855381

54.38

1304843381

12000

1304855381

54.38

0.00

B. PUBLIC SHAREHOLDING

 

 

 

 

 

 

 

 

 

1. Institutions

 

 

 

 

 

 

 

 

 

a) Mutual Funds

192509489

2500782

195010271

8.13

223325669

9342

223335011

9.31

1.18

b) Financial Institutions /Bank

22412015

3798

22415813

0.93

21068879

2293

21071172

0.88

-0.06

c) Central Government / State Government

0

0

0

0.00

2820

0

2820

0.00

0.00

d) Venture Capital Funds

0

0

0

0.00

0

0

0

0.00

0.00

e) Insurance Companies

168094940

0

168094940

7.01

166138398

0

166138398

6.92

-0.08

f)Flls

3788557

17943

3806500

0.16

677802

15248

693050

0.03

-0.13

g) Foreign Venture Capital

0

0

0

0.00

0

0

0

0.00

0.00

h) Qualified Foreign Investors

0

0

0

0.00

0

0

0

0.00

0.00

(i) Any Other (specify) Foreign Portfolio Investor (Corporate)

387782873

0

387782873

16.16

372261678

0.00

372261678

15.52

-0.65

Foreign Bank

1504

23918

25422

0.00

8928

23789

32717

0.00

0.00

UTI

2235590

1380

2236970

0.09

3626731

1380

3628111

0.15

0.06

Alternate Investment Funds

1546565

0

1546565

0.06

1212911

0

1212911

0.05

-0.01

Sub-total (B)(1):-

778371533

2547821

780919354

32.55

788323816

52052

788375868

32.86

0.31

2. Non-Institutions

 

 

 

 

 

 

 

 

 

a) Bodies Corporate

 

 

 

 

 

 

 

 

 

i) Indian

102919063

153917

103072980

4.30

89415662

151840

89567502

3.73

-0.57

ii) Overseas

46000

0

46000

0.00

46000

0

46000

0.00

0.00

b) Individuals

 

 

 

 

 

 

 

 

 

i) Individual Shareholders holding nominal share capital upto Rs.1 Lakh

138287020

9952424

148239444

6.18

139147990

8528636

147676626

6.15

-0.02

ii) Individual Shareholders holding nominal share capital in excess of Rs.1 Lakh

27181865

125000

27306865

1.14

28686116

288000

28974116

1.21

0.07

c) Qualified Foreign Investors

0

0

0

0.00

0

0

0

0.00

0.00

d) Others (specify)

 

 

 

 

 

 

 

 

 

i) Non Resident Indians(Repat)

4545204

331885

4877089

0.20

5427442

279740

5707182

0.24

0.03

ii) Non Resident lndians(Non Repat)

2565549

0

2565549

0.11

3161429

0

3161429

0.13

0.02

iii ) Foreign Companies

671865

0

671865

0.03

276965

0

276965

0.01

-0.02

iv) Clearing Member

2695586

0

2695586

0.11

2938110

0

2938110

0.12

0.01

v) Other Directors

3783394

0

3783394

0.16

3746747

0

3746747

0.16

0.00

vi) Trusts

15374984

0

15374984

0.64

17502708

0

17502708

0.73

0.09

vii) Foreign Nationals

21040

0

21040

0.00

24636

0

24636

0.00

0.00

viii) Hindu Undivided Family

4424397

0

4424397

0.18

5263150

0

5263150

0.22

0.03

ix) IEPF

469252

0

469252

0.02

1218550

0

1218550

0.05

0.03

Sub-total (B)(2):-

302985219

10563226

313548445

13.07

296855505

9248216

306103721

12.76

-0.31

Total Public Shareholding (B)=(B)(1)+(B)(2)

1081356752

13111047

1094467799

45.62

1085179321

9300268

1094479589

45.62

0.00

C. SHARES HELD BY CUSTODIAN FOR GDRs & ADRs

 

 

 

 

 

 

 

 

 

Employee Benefit Trust under SEBI (Share based employee benefit) Regulations, 2014

0

0

0

0.00

0

0

0

0.00

0.00

GRAND TOTAL (A+B+C)

2386200133

13123047

2399323180

100.00

2390022702

9312268

2399334970

100.00

0.00

 

*includes Promoter Group

(ii) Shareholding of Promoters

 

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in share-holding during the year

Sr. No.

Shareholder's Name

No. of shares

% of total Shares of the company

% of shares Pledged/ encumbered to total Shares

No. of shares

% of total Shares of the company

% of shares Pledged/ encumbered to total Shares

1

Dilip S. Shanghvi

230285690

9.60

0

230285690

9.60

0

0.00

(iii) Change in Promoters' Shareholding (please specify, if there is no change)

 

 

Shareholding at the beginning of the year

Cumulative shareholding during the year

Sr. No.

 

No. of shares

% of total Shares of the company

No. of shares

% of total Shares of the company

1. Dilip S. Shanghvi

At the beginning of the year Increase / Decrease in Shareholding during the year At the end of the year

230285690

9.60

230285690

9.60

No Change during the year

230285690

9.60

 

230285690

9.60

230285690

9.60

(iv) Shareholding Pattern of top ten shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

 

 

 

Shareholding at the beginning of the year

Cumulative shareholding during the year

Sr. No.

For Each of the top 10 shareholders

 

No. of shares

% of total Shares of the company

No. of shares

% of total Shares of the company

1.

Shanghvi Finance Private Limited

At the beginning of the year

282603

0.01

282603

0.01

 

Increase / Decrease in Share holding*

October 23, 2018* (Pursuant to merger)

959489975

39.99

959772578

40.00

 

 

At the end of the year

959772578

40.00

959772578

40.00

2.

Life Insurance Corporation of India

At the beginning of the year

145302877

6.06

145302877

6.06

 

Increase / Decrease in Share holding

Various dates during the year*

(4085319)

(0.17)

141217558

5.89

 

 

At the end of the year

141217558

5.89

141217558

5.89

3.

ICICI Prudential Value Discovery Fund and various Fund Accounts

At the beginning of the year

72006776

3.00

72006776

3.00

 

Increase / Decrease in Share holding

Various dates during the year*

10086458

0.42

82093234

3.42

 

 

At the end of the year

82093234

3.42

82093234

3.42

4.

Aditya Medisales Limited

At the beginning of the year

40153960

1.67

40153960

1.67

 

 

At the end of the year

40153960

1.67

40153960

1.67

5.

Raksha S. Valia

At the beginning of the year

33830352

1.41

33830352

1.41

 

 

At the end of the year

33830352

1.41

33830352

1.41

6.

Government of Singapore

At the beginning of the year

31322421

1.31

31322421

1.31

 

Increase / Decrease in Share holding

Various dates during the year*

1702560

0.07

33024981

1.38

 

 

At the end of the year

33024981

1.38

33024981

1.38

7.

Lakshdeep Investments & Finance (P) Ltd.

At the beginning of the year

35124907

1.46

35124907

1.46

 

Increase / Decrease in Share holding

Various dates during the year*

(3740000)

(0.15)

31384907

1.31

 

 

At the end of the year

31384907

1.31

31384907

1.31

8.

Reliance Capital Trustee Co Ltd.A/C Reliance Large Cap Fund and various Fund Accounts

At the beginning of the year

16376928

0.68

16376928

0.68

 

Increase / Decrease in Share holding

Various dates during the year*

14448920

0.60

30825848

1.28

 

 

At the end of the year

30825848

1.28

30825848

1.28

9.

Matthews Pacific Tiger Fund

At the beginning of the year

19254758

0.80

19254758

0.80

 

Increase / Decrease in Share holding

Various dates during the year*

5032051

0.21

24286809

1.01

 

 

At the end of the year

24286809

1.01

24286809

1.01

10.

UTI - Nifty Exchange Traded Fund

At the beginning of the year

16627671

0.69

16627671

0.69

 

Increase / Decrease in Share holding

Various dates during the year*

3720108

0.16

20347779

0.85

 

 

At the end of the year

20347779

0.85

20347779

0.85

 

Note: Shareholding has been consolidated on PAN basis.

* Pursuant to Scheme of Amalgamation, Shanghvi Finance Private Limited ("SFPL"), which is a part of the Promoter Group of the Company, has w.e.f. 23.10.2018 acquired 95,94,89,975 Equity Shares of the Company representing 39.99% of the total paid-up equity share capital of the Company from 11 Transferor Companies namely 1) erstwhile Viditi Investment Private Limited; 2) erstwhile Tejaskiran Pharmachem Industries Private Limited; 3) erstwhile Quality Investment Private Limited; 4) erstwhile Family Investment Private Limited; 5) erstwhile Virtuous Share Investments Private Limited; 6) erstwhile Virtuous Finance Private Limited; 7) erstwhile Sholapur Organics Private Limited; 8) erstwhile Jeevanrekha Investrade Private Limited; 9) erstwhile Package Investrade Private Limited; 10) erstwhile Asawari Investment and Finance Private Limited; and 11) erstwhile Nirmit Exports Private Limited, which were forming part of the promoter group of the Company and were collectively holding the aforementioned equity shares of the Company.

The trading has taken place on various dates, therefore the change has been shown on consolidated basis.

(v) Shareholding of Directors and Key Managerial Personnel: (Held singly or jointly as first holder)

Sr. No.

 

 

Shareholding at the beginning of the year

Cumulative shareholding during the year

Name of Director / KMP

 

No. of shares

% of total shares of the company

No. of shares

% of total Shares of the company

1.

Israel Makov

At the beginning of the year

0

0

0

0

 

 

At the end of the year

0

0

0

0

2.

Dilip S. Shanghvi

At the beginning of the year

230285690

9.60

230285690

9.60

 

 

At the end of the year

230285690

9.60

230285690

9.60

3.

Sudhir V. Valia

At the beginning of the year

14345019

0.60

14345019

0.60

 

 

At the end of the year

14345019

0.60

14345019

0.60

4.

Sailesh T. Desai

At the beginning of the year®

3740747

0.16

3740747

0.16

 

Increase / Decrease in Share holding

October 05, 2018

(2000)

(0.00)

3738747

0.16

 

 

At the end of the year®

3738747

0.16

3738747

0.16

5.

Kalyanasundaram Subramanian

At the beginning of the year

0

0

0

0

 

Increase / Decrease in Share holding

Various dates during the year*

201

0.00

201

0.00

 

 

At the end of the year

201

0.00

201

0.00

6.

S. Mohanchand Dadha*

At the beginning of the year

0

0

0

0

 

 

As on September 26, 2018

0

0

0

0

7.

Keki M. Mistry*

At the beginning of the year

43270

0.00

43270

0.00

 

 

As on September 26, 2018

43270

0.00

43270

0.00

8.

Ashwin S. Dani*

At the beginning of the year

0

0

0

0

 

 

As on September 26, 2018

0

0

0

0

9.

Rekha Sethi

At the beginning of the year

0

0

0

0

 

 

At the end of the year

0

0

0

0

10.

Vivek Chaand Sehgal

At the beginning of the year

0

0

0

0

 

 

At the end of the year

0

0

0

0

11.

Gautam Doshi*

As on May 25, 2018

8000

0.00

8000

0.00

 

 

At the end of the year

8000

0.00

8000

0.00

12.

CS Muralidharan

At the beginning of the year

0

0

0

0

 

 

At the end of the year

0

0

0

0

13.

Sunil Ajmera

At the beginning of the year

0

0

0

0

 

 

At the end of the year

0

0

0

0

 

*Was Director upto September 26, 2018,

#appointed as Director w.e.f. May 25, 2018,

@ includes shares transferred as margin, if any

$The trading has taken place on various dates, therefore the change has been shown on consolidated basis.

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment

 

 

 

 

(Rs. in Million)

 

Secured Loans excluding deposits

Unsecured Loans

Deposits(1)

Total Indebtedness

Indebtedness at the beginning of the financial year

 

 

 

 

i) Principal Amount

108.2

68,731.9

118.3

68,958.4

ii) Interest due but not paid

-

-

-

-

iii) Interest accrued but not due(2)

9.1

40.0

-

49.1

Total (i+ii+iii)

117.3

68,771.9

118.3

69,007.5

Change in Indebtedness during the financial year

 

 

 

 

Addition: Principal Amount (3)

 

173,501.5

-

173,501.5

Reduction: Principal Amount(3)/(4)

-

177,975.2

20.9

177,996.1

Change: Addition / (Reduction) in Interest accrued but not Due

1.1

44.2

-

45.3

Net Change

1.1

(4,429.5)

(20.9)

(4,449.3)

Indebtedness at the end of the financial year

 

 

 

 

i) Principal Amount

108.2

64,258.2

97.4

64,463.8

ii) Interest due but not paid

-

 

-

-

iii) Interest accrued but not due (2)

10.2

84.2

-

94.4

Total (i+ii+iii)

118.4

64,342.4

97.40

64,558.2

Notes:

(1) Deposits are Security Deposits Received. The change during the year has been shown on net basis.

(2) Interest accrued but not due on borrowings.

(3) Change in the OD & WCDL limit underworking Capital Facility forming part of Unsecured loans, have been shown on net basis.

(4) Ind AS adjustment in the outstanding as on March 31, 2019 of External Commercial Paper & Commercial papers are shown as reduction in principal amount.

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

 

 

 

 

 

(Amount in Rs.)

Sr. No.

Particulars of Remuneration

Mr. Dilip S. Shanghvi

Mr. Sudhir V. Valia

Mr. Sailesh T. Desai

Total

1.

Gross salary

 

 

 

 

 

(a) Salary as per provisions contained in section 17(1) of the Income- tax Act, 1961

1*

1*

11855400

11855402

 

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

262800

79200

371181

713181

 

(c) Profits in lieu of salary under section 17(3) Income tax Act, 1961

-

-

-

-

2.

Stock Option

-

-

-

-

3.

Sweat Equity

-

-

-

-

4.

Commission - as % of profit

 

-

-

 

5.

Others, please specify

 

-

-

 

 

Total (A)

262801

79201

12226581

12568583

Ceiling as per the Act: Rs. 499.9 Million (10% of Net Profits of the Company calculated as per Section 198 of the Companies Act, 2013) 'Remuneration of Mr. Dilip Shanghvi and Mr. Sudhir V. Valia is Rs. 1/- each for the financial year 2018-19 and the remaining amount of Rs. 262800 and Rs. 79200 respectively pertain to notional value of perquisite as per Income Tax Act.

B. Remuneration to other directors for the year ended March 31, 2019:

(The remuneration to Non-Executive Directors consist only of sitting fees)

 

 

(Amount in Rs)

 

 

Name of Directors

 

 

Sr. No.

Particulars of Remuneration

Mr. S Mohanchand Dadha*

Mr. Keki Mistry*

Mr. Ashwin Dani*

Ms. Rekha Sethi

Mr. Vivek Chaand Sehgal

Mr. Gautam Doshi

Mr. Israel Makov

Total Amount

 

 

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(1) to (7)

1.

Independent

 

 

 

 

 

 

 

 

 

Fee for attending

1000000

600000

200000

1500000

600000

1300000

-

5200000

 

board / committee meetings

 

 

 

 

 

 

 

 

 

Commission

 

-

 

-

-

 

-

 

 

Others, please specify

 

-

 

-

-

 

-

 

 

Total (1)

1000000

600000

200000

1500000

600000

1300000

0

5200000

2.

Other Non-Executive Directors

 

 

 

 

 

 

 

 

 

Fee for attending board / committee meetings

 

-

 

-

-

 

900000

900000

 

Commission

-

-

-

-

-

-

-

-

 

Others, please specify

-

-

-

-

-

-

-

-

 

Total (2)

0

0

0

0

0

0

900000

900000

 

Total (B) = (1+2)

1000000

600000

200000

1500000

600000

1300000

900000

6100000

 

Ceiling as per the Act:

Not applicable since no commission was paid during the year. Sitting Fee is Rs.1,00,000 for each meeting of the Board /Committee attended by the Director.

 

Total Managerial Remuneration

(A+B):

 

 

 

 

 

 

18668583

*For part of the year upto September 26, 2018

C Remuneration to Key Managerial Personnel other than MD / Manager / WTD

(As per Form 16, on actual payment basis)

 

 

Key Managerial Personnel

 

(Rs. in Million)

Sr. No.

Particulars of Remuneration

Mr. Sunil Ajmera (Company Secretary)

Mr. C S Muralidharan (Chief Financial Officer)

Total

1.

Gross salary

 

 

 

 

(a) Salary as per provisions contained in section 17(1) of the Income- tax Act, 1961

13.39

32.02

45.41

 

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

0.32

0.79

1.11

 

(c) Profits in lieu of salary under section 17(3) Income tax Act, 1961

-

-

-

2.

Stock Option

-

-

-

3.

Sweat Equity

-

-

-

4.

Commission - as % of profit

 

 

-

5.

Others, please specify

 

 

-

 

Total

13.71

32.81

46.52

VII. Penalties / Punishment / Compounding of Offences Against Company, Directors and Other Officers in Default: NIL

 

For and on behalf of the Board of Directors

Place: Mumbai

Israel Makov

Date: May 28, 2019

Chairman

Annexure - C

Information required under Section 197 of the Act Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(i) Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2018-19 and the percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2018-19:

Name of Director and Key Managerial Personnel

Designation

Ratio of remuneration(1) of each Director to median remuneration of employees

increase/ (decrease) in Remuneration(1) in the Financial Year 2018-19

Directors:

 

 

 

Mr. Israel Makov

Non-executive Chairman

1.87

0.0%

Mr. Dilip S. Shanghvi(2)

Managing Director

0.55

-99.13%

Mr. Sudhir V. Valia(2)

Whole-time Director

0.16

-99.74%

Mr. Sailesh T. Desai

Whole-time Director

25.44

-0.46%

Mr. Kalyanasundaram Subramanian(3)

Whole-time Director

N.A

N.A

Mr. S. Mohanchand Dadha*

Non-executive Independent Director

2.08

-37.50%

Mr. Keki M. Mistry*

Non-executive Independent Director

1.25

-25.00%

Mr. Ashwin S. Dani*

Non-executive Independent Director

0.42

-71.43%

Ms. Rekha Sethi

Non-executive Independent Director

3.12

15.38%

Mr. Vivek Chaand Sehgal

Non-executive Independent Director

1.25

100.00%

Mr. Gautam Doshi**

Non-executive Independent Director

2.70

N.A

Key Managerial Personnel:

 

 

 

Mr. C.S. Muralidharan

Chief Financial Officer

Not Applicable

Refer Note 1

Mr. Sunil Ajmera

Company Secretary

Not Applicable

2.25%

*Retired and ceased to be Directors w.e.f. September 26, 2018

"Appointed w.e.f. May 25, 2018

(1) Remuneration to Non-Executive Directors consists only of sitting fees and is based on the number of meetings attended during the year. No commission was paid to Non-Executive Directors for the year 2018-19.

(2) Remuneration of Mr. Dilip Shanghvi and Mr. Sudhir V. Valia is Rs. 1/- each for the financial year 2018-19 and the remaining amount of Rs. 262800 and Rs. 79200 respectively pertain to notional value of perquisite as per Income Tax Act.

(3) Mr. Kalyanasundaram Subramanian, Whole-time Director of the Company, does not receive any remuneration from the Company, however he is receiving remuneration from Sun Pharma Laboratories Limited (SPLL), the wholly owned subsidiary of the Company, where he is also Whole-time Director and Chief Executive Officer.

Note 1 - There was no increase in the overall remuneration as approved by the Board of Directors for the FY 2018-19. However, based on calculation of amounts as per Form 16 for the year 2017-18 (annualised, as he was for the part of the year in 2017-18) and for the year 2018-19, the increase amounts to 12.64%

(ii) The percentage increase in the median remuneration of employees in the financial year 2018-19 (Median -2019/ Median 2018): 5.12%

(iii) The number of permanent employees on the rolls of the Company as on March 31, 2019:17501

(iv) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase made in the salaries of employees other than the managerial personnel in the financial year ending March 31, 2019 was approximately 9.77% and the average increase/(decrease) in the managerial personnel remuneration was (66.44)%.

(v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

(All the details of remuneration given above are as per Form 16 as per Income Tax Act, and the ratios are calculated on that basis)

For and on behalf of the Board of Directors

Place: Mumbai

Israel Makov

Date: May 28, 2019

Chairman

Annexure - D

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2019

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

Sun Pharmaceutical Industries Limited,

Vadodara, Gujarat.

We have conducted the Secretarial Audit of the compliances of applicable statutory provisions and the adherence to good corporate governance practice by Sun Pharmaceutical Industries Limited ("the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minutes books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minutes books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2019, according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;

ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India ("SEBI") Act, 1992:

a. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

b. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

c. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;

e. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable to the Company for the year under review;

f. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not applicable to the Company for the year under review;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not applicable to the Company for the year under review;

h. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client -Not applicable to the Company;

i. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable to the Company for the year under review;

We have also examined compliance with the applicable clauses of Secretarial Standards with respect to meeting of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India under the provisions of Companies Act, 2013;

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines etc. mentioned above

We further report that:

1. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and Woman Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

2. Adequate notice of at least seven days was given to all directors to schedule the Board Meetings and Meetings of Committees. Agenda and detailed notes on agenda were sent in advance in adequate time before the meetings and a system exists for Directors for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

3. On verification of minutes, we have not found any dissent/disagreement on any of the agenda items discussed in the Board and Committee meetings from any of the Directors and all the decisions are carried through.

Based on the information received and records maintained, we further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on the basis of the representations made by the respective plant heads of R&D centers, the Company has identified and complied with the following laws applicable to the Company:

• Drugs and Cosmetics Act, 1940 and rules made thereunder;

• Factories Act, 1948.

We further report that during the year under review:

• The Company had allotted 11,790 Equity Shares of Rs. 1/- each to eligible employees who have exercised their options under Sun Employees Stock Options Scheme - 2015;

• Undertaking of Sun Pharma Global FZE was demerged under Sections 230 to 232 and Section 234 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other applicable provisions of  the Companies Act, 2013 on 1st December 2018 (Effective date), the appointed date for the said demerger being 1st April 2017.

For KJB & CO LLP,
Practicing Company Secretaries
Alpeshkumar J. Panchal
Partner
Mem No. - 49008 C. P. No. – 20120
Date: May 28, 2019
Place: Mumbai.

This report is to be read with our letter of even date which is annexed as Annexure 1 and forms an integral part of this report

ANNEXURE 1 TO SECRETARIAL AUDIT REPORT

To,

The Members,

Sun Pharmaceutical Industries Limited,

Vadodara, Gujarat.

Our report of even date is to be read along with this letter.

1. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion.

2. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

3. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

4. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For KJB & CO LLP,
Practicing Company Secretaries
Alpeshkumar J. Panchal
Partner
Mem No. - 49008 C. P. No. – 20120
Date: May 28, 2019
Place: Mumbai.

Annexure - E

AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 ("the Act") and Rule 8(2) of the  Companies (Accounts) Rules, 2014)

Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's length basis - NIL

2. Details of material contracts or arrangement or transactions (i.e. exceeding ten percent of the annual consolidated turnover as per the last audited financial statements) at arm's length basis

Sr. No.

Name(s) of the related party and nature of relationship

Nature of contracts/ arrangements/ transactions

Duration of the contracts / arrangements/ transactions

Salient terms of the contracts or arrangements or transactions including the value, if any

Date(s) of approval by the Board, if any:

Amount paid as advances, as on March 31, 2019 if any:

1.

Sun Pharma Laboratories Limited

(Wholly owned subsidiary)

Purchase of goods, property, plant & equipment, Revenue from contracts with customers, Sale of property, plant & equipment and investments, Dividend Income, Receiving and Rendering of Service, Reimbursement of expenses paid and expenses received, Loan taken and repaid, Interest on Loans repaid, Interest expense and Rent income

On-going

The related party transactions entered during the year were in ordinary course of business and on an arm's length basis. The aggregate amount of transactions for the financial year 2018-19 was Rs. 46,141.8 Million

Since these transactions are in the ordinary course of business and are at arm's length basis, approval of the Board is not applicable.

Nil

2.

Aditya Medisales Limited

(Direct Subsidiary of Shanghvi Finance Private Limited w.e.f. October 23, 2018 where Mr. Dilip S. Shanghvi, Promoter and Managing Director of the Company alongwith his spouse holds 100% shares)

Revenue from contracts with customers, Rent Income and Interest Income

On-going

The related party transactions entered during the year were in ordinary course of business and on an arm's length basis. The aggregate amount of transactions for the financial year 2018-19 was Rs. 31,418.1 Million

Since these transactions are in the ordinary course of business and are at arm's length basis, approval of the Board is not applicable. However the shareholders' approval has been obtained at the 25th Annual General Meeting of the Company held on September 26, 2017

Nil 1

 

 

For and on behalf of the Board of Directors

Place: Mumbai

Israel Makov

Date: May 28, 2019

Chairman

Annexure - F Annual Report on Corporate Social Responsibility (CSR) Activities for the Financial Year 2018-19

 

Details

Particulars

1.

A brief outline of the Company's CSR policy, including overview of projects or programmes proposed to be undertaken

The CSR policy of the Company encompasses its philosophy towards Corporate Social Responsibility and lays down the guidelines and mechanism for undertaking socially useful programs for welfare & sustainable development of the community at large.

The Company has identified health, education & livelihood, environment protection, water management and disaster relief as the areas where assistance is provided on a need-based and case-to-case basis. Your Company persisted with participation in such activities at the local, grass root level during the year.

2.

Reference to the web-link to the CSR policy and projects or programmes

The contents of CSR policy can be accessed through the web link http://www.sunpharma.com/policies and details on projects and programmes are forming part of this Annual Report

3.

Composition of the CSR Committee

Mr. Dilip S. Shanghvi, Chairman, Mr. Sudhir V. Valia, Member and Ms. Rekha Sethi, Member

4.

Average net profit of the Company for last three financial years

The average net profits of the Company for the last three financial years was negative.

5.

Prescribed CSR Expenditure (two percent of the amount as in item 4 above)

Since, the average net profit of the Company for the last three financial years was negative, the Company was not required to spend on CSR activities during the previous year. However, the Company has voluntarily spent on CSR activities.

6.

Details of CSR spend for the financial year:

 

 

a) Total amount spent for the financial year

Rs.39.36 Million

 

b) Amount unspent, if any

Nil

 

c) Manner in which the amount spent during the Financial year

Details given below

 

 

 

 

 

 

 

 

 

(Rs. in Million)

Sr. No.

CSR Project or Activity Identified

Sector in which the project is covered

Projects or Programs 1. Local Area or other 2. Specify the State and District where projects or programs were undertaken

Amount Outlay (Budget) Project or Program wise

Amount spent on the projects or programs (Direct Expenditure)

Overhead Expenditure

Cumulative expenditure upto to the reporting period

Amount spent Directly or through implementing agency

1

Mobile Medical Unit Programme

Healthcare under Item No.(i)

Ahmednagar (Ahmednagar, Maharashtra), Halol (Panchmahal, Gujarat), Mohali (SAS Nagar, Punjab), Toansa(SBS Nagar, Punjab), Paonta Sahib (Sirmour, Himachal Pradesh), Dewas (Dewas, Madhya Pradesh), Panoli(Bharuch, Gujarat), Ankleshwar(Bharuch, Gujarat), Karkhadi(Vadodara, Gujarat), Malanpur (Bhind, Madhya Pradesh) and Madurantakam (Kanchipuram, Tamilnadu)

31.60

20.84

0.77

91.02

Implementing Agency: 1. Help Age India 2. Sun Pharma Community Healthcare Society

2.

Education Programme

Education under Item No.(ii)

Karkhadi (Vadodara, Gujarat), Malanpur(Bhind, Madhya Pradesh), Ahmednagar (Ahmednagar.Maharashtra), Panoli(Bharuch, Gujarat), Madurantakam (Kanchipuram, Tamilnadu), Dewas (Dewas, Madhya Pradesh), Halol (Panchmahal, Gujarat), Silvassa (UT of Dadra & Nagar Haveli) and Toansa(SBS Nagar, Punjab)

6.76

5.41

0.04

10.76

Directly and Implementing Agency: SVADES

3.

Sanitation Programme

Healthcare under Item No.(i)

Ahmednagar (Ahmednagar, Maharashtra), Silvassa, (UT of Dadra & Nagar Haveli), Halol (Panchmahal, Gujarat), Panoli (Bharuch, Gujarat), Toansa (SBS Nagar, Punjab) and Madurantakam (Kanchipuram, Tamilnadu)

5.29

5.17

0.25

13.82

Directly and Implementing Agency: GVT-Dahod

4.

Environment Conservation Programme

Environment under Item No.(iv)

Panoli (Bharuch, Gujarat), Ahmednagar (Ahmednagar, Maharashtra), Paonta (Sirmour, Himachal Pradesh), Madurantakam (Kanchipuram, Tamilnadu) and Toansa (SBS Nagar, Punjab)

2.18

1.86

0.00

2.95

Directly

5.

Water Conservation -Pond Deepening Project

Rural Development Project under Item No. (x)

Halol (Panchmahal, Gujarat), Panoli (Bharuch, Gujarat), Ankleshwar (Bharuch, Gujarat) and Karkhadi (Vadodara, Gujarat)

2.10

1.62

0.00

1.62

Directly

6.

Rural Development Project

Rural Development under Item No. (x)

Dahej (Bharuch, Gujarat), Halol (Panchmahal, Gujarat), Panoli (Bharuch, Gujarat), Ahmednagar (Ahmednagar, Maharashtra), and Madurantakam (Kanchipuram, Tamilnadu)

1.70

1.53

0.00

4.51

Directly and implementing Agency: GVT-Dahod

7.

Disaster Relief Programme

Disaster Relief under Item No. (i)

Paonta (Sirmour, Himachal Pradesh) and Madurantakam (Kanchipuram, Tamilnadu)

1.01

1.01

0.00

1.22

Directly

8.

Drinking Water Project

Drinking Water under Item No. (i)

Toansa (SBS Nagar, Punjab) and Panoli (Bharuch, Gujarat)

0.45

0.45

0.02

0.62

Directly

9.

Healthcare Programme

Healthcare under Item No.(i)

Halol (Panchmahal, Gujarat) and Toansa (SBS Nagar, Punjab)

0.47

0.37

0.00

1.05

Directly

 

 

 

Grand Total

 

38.27

1.10

127.57

 

 

The CSR Committee confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

 

 

For and on behalf of the Board of Directors

 

Dilip S. Shanghvi

Sudhir V.Valia

Place: Mumbai

Chairman - CSR Committee and

Member - CSR Committee and

Date: May 28, 2019

Managing Director

Whole-Time Director

CSR ACTIVITIES

Sun Pharmaceutical Industries Limited ("Sun Pharma") has taken-up diversified need-based CSR Projects in rural areas lying in the vicinity of its plant locations and also in remote, unprivileged areas for sustainable development of people as a part of its Social Responsibilities.

Our main objective is to emphasise on social process, quality and ensuring the sustainability, hence our implementation approach is strategic in nature, is more inclined towards the sustainability of the projects, addressing community needs, focussing poorest of the poor, disadvantaged, BPL and weaker sections of society.

All our CSR endeavours originate from our all-around enunciated Corporate Social Responsibility (CSR) Policy and our CSR program aims to address the immediate and long term needs of the community and focus on where we can have the biggest impact. We regularly listen to subject matter experts and gather feedback from all stakeholders.

At Sun Pharma, our CSR programmes mainly focussed upon Health, Education, Sanitation, Drinking water, Environment Conservation, Rural Development and Disaster Relief, which are designed to improve the quality of life of the people.

Mobile Medical Unit Programme

Mobile Medical Unit (MMU) Programme has been designed to meet the primary health needs of the communities residing in rural areas. The main objective of this programme is to provide a range of health care services focused upon maternal and child healthcare for populations living in remote, inaccessible, un-served and underserved areas at the doorsteps of these communities. This programme also emphasises on reduction in Maternal and Infant Mortality rate, improving health of adolescent girls, Prevention and Control of Communicable and Non-communicable diseases, Awareness regarding HIV/AIDS within the community.

The Company has invested Rs. 21.61 Million in this programme during the FY 2018-19. There were 11 locations covered under this project and has served around 147,611 patients with Clinical Treatment, whereas 78,255 beneficiaries were also benefitted under Preventive and Promotive healthcare services.

Education Programme

Education programme includes various different activities such as Infrastructure Upgradation in Schools, Computer literacy programme for students, Model School development Project, Provision of potable drinking water for the students, distribution of stationary/books, etc. These projects were implemented by Sun Pharma in various different locations with an objective to provide quality education to the underserved and under- privileged children of the rural remote areas. The project has covered different schools from Gujarat, Maharashtra, M.P., Punjab, UT of Dadra & Nagar

Haveli and Tamilnadu and the same has benefitted more than 11,821 students with an investment of Rs.5.45 Million during FY 2018-19.

Sanitation Programme

Household toilets are one of the most important aspects of sanitation. Company has constructed 216 individual household toilets for unprivileged communities based at Halol, Silvassa, Ahmednagar and Madurantakam locations with an objective to encourage better health for communities and improved quality of life amongst people living in rural areas. Apart from construction of Individual Household Toilets, Sun Pharma has also emphasised upon IEC (Information, Education and Communication) activities in various locations considering that construction of toilets is not sufficient if there is no proper awareness within the community regarding the use of toilets. Therefore, Company has carried out a Sanitation and Cleanliness drive across all project locations, which has benefitted the communities at large. The project was undertaken with an investment of Rs. 5.42 Million during the FY 2018-19 for the construction of individual household's toilets and its Sanitation and Cleanliness drive programme.

Environment Conservation Programme

The Company has continued this programme implemented towards environment protection and to create awareness within the community regarding the importance of environment conservation.

Some of the activities that were undertaken by the company are:

1. Roadside tree plantation

2. Distribution of saplings

3. Awareness generation programme within the community for the importance of tree plantation

4. Celebration of Environment Day in Schools

The Company has made an investment of Rs.1.86 Million during the FY 2018-19 in various locations like Ahmednagar, Panoli, Toansa, Maduranthakam and Paonta which has benefitted communities at large.

Water Conservation - Pond Deepening Project

Water Conservation - Pond Deepening Project is an initiative undertaken by Sun Pharma as an alignment with flagship Scheme of Gujarat Government, titled as "Sujalam Sufalam Yojana" which focuses on water conservation during rainy season to increase the availability of water in rural areas where local villagers & communities are directly dependent upon local water bodies like ponds and ground water for their survival. This project was implemented in Ankleshwar, Halol, Karkhadi and Panoli with an investment of Rs.1.62 Million during the FY 2018-19.

Rural Development Project

Rural Development projects were implemented to improve the lives of rural population in terms of access to facilities such as healthcare and education. The Company has undertaken various activities such as Installation of Solar lights in Abhetwa Village, Halol Taluka, Gujarat, Installation of Traffic Signal lights in Ahmednagar Taluka, Maharashtra. Construction of Community Kitchen Area in Dahej, Gujarat, Provision of LPG connection and Utensils in Anganbari Centers of rural areas of Madurantakam Taluka, Tamilnadu and Playground development at Panoli, Gujarat.

The company has fulfilled its social responsibility after addressing the needs of rural neighbouring communities in the vicinity of its operational manufacturing sites with an investment of Rs.1.53 Million during the FY 2018-19 and has benefitted 4,132 villagers and other communities through this project.

Disaster Relief Programme

Sun Pharma supported the cause of immediate disaster relief for communities during the flood affected disaster that took place in Himachal Pradesh and Tamilnadu. The programme was taken-up with an investment of Rs 1.01 Million during the FY 2018-19.

Drinking Water Project

Drinking Water Project was implemented in Toansa and Panoli with an aim to provide safe drinking water for neighbouring communities residing in vicinity of our plant areas.

This project was implemented with an investment of Rs.0.47 Million for Community water Project at Bhadi Village, District Bharuch, Gujarat and for running deep bore well at village Toansa in Punjab. 125 Households were provided with clean and potable drinking water in upper and lower Toansa village, whereas in Panoli, this project aimed at benefitting around 2,831 villagers of Bhadi village with the help of WASMO.

Healthcare Programme

Under Healthcare programme, basic health services such as distribution of medicines, mega medical camp and maintenance of Subsidiary health center were undertaken at Toansa, Punjab, whereas the Company has installed medical equipment for Blood Bank development which is benefitting the community of Halol area at large. The project has benefitted more than 2,240 patients in Toansa and under this programme the company has invested Rs. 0.37 Million during the FY 2018-19.

Annexure - G

Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the Companies (Accounts) Rules, 2014

A. Conservation of Energy

1. Steps taken or impact on Conservation of Energy

• Hot water generation system for process is changed to plate heat exchangers from direct live steam heating.

• Conventional light fittings are replaced with LED lighting.

• Old natural cooling towers are replaced with forced draft cooling tower to improve the performance of utilities.

• Cooling tower centrifugal pumps are replaced with inline energy efficient pumps thereby the motor energy reduced by more than 50%.

• Usage of steam with long distribution piping for HVAC hot water demand is replaced by Heat pump.

• Steam condensate recovery is improved.

• Replaced reciprocating air compressor by energy efficient screw compressor.

• New motor procurement higher than 30 kW is done with energy efficient motor.

• Power factor is improved at various sites.

• Designed pump head is reviewed to meet the actual demand there by substantial saving on Power.

• Water Ring Vacuum pumps are replaced with Dry Vacuum Pumps.

2. Steps taken by the Company for utilising alternate sources of energy

In following factories biomass briquettes are used instead of conventional fuel (FO/HSD) - Ahmednagar, Panoli, Mohali, Silvassa, Dadra, Karkhadi, Dewas, MKM Chennai, Paonta Sahib. In MKM Chennai - Partially power is used from the wind mills. In Gurgaon Location - Partially power is used from rooftop solar.

3. Capital investment on energy conservation equipments

Capital investment of Rs.91.1 Million is done on energy conservation equipments.

B. Technology Absorption

(A) Research and Development

Expenditure on R&D

 

 

(Rs. in Million)

 

Year ended March 2019

Year ended March 31, 2018

Capital

590.9

1,591.0

Revenue

9,029.9

8,011.5

Total

9,620.8

9,602.5

Total R&D expenditure as % of Total Turnover

9.8%

10.9%

(B) Technology Absorption, Adaptation and Innovation 1. Efforts in brief, made towards technology absorption, adaptation and innovation

The Company continues to invest on R&D, both as revenue expenses as well as capital investments. Part of this spending is for developing complex products, specialty products, generic products, and API technologies that are complex and may require dedicated manufacturing blocks. Investments have been made in creating research sites, employing scientifically skilled and experienced manpower, adding equipment, sponsored research and in accessing world class consultants to continuously upgrade the research understanding of the scientific team in the technologies and therapy areas of our interest.

There has been thrust on the development of novel technologies like use of green reagents for chemical transformations in API synthesis and ultrasonic crystallisation for achieving required particle size, capillary flow reactors for continuous process and safety related studies using reaction calorimetry. Product Life Cycle management has been undertaken for key products. Backward integration is a key strategic objective and many of our products enjoy the benefit of this backward integration.

Process robustness has been implemented for wide range of products with the objective to reduce cost and increase in-process capability.

Novel compact dosage forms having differentiation with regards to improved stability and/or reduced pharmacokinetic variability have been developed for the Indian market. Stable liquid oral formulations of labile products are also being developed.

2. Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development, import substitution

(a) Offers complete basket of products under chronic therapeutic classes. Many products are in the pipeline for future introduction in India, emerging markets, as well as US and European generic market. The company has developed an ability to challenge patents in the US market, and earn exclusivity.

(b) Not dependent on imported technology, can make high-end products available at competitive prices by using indigenously developed manufacturing processes and formulation technologies.

(c) Offers technologically advanced differentiated products which are convenient and safe for administration to patients.

(d) We are among the few selected companies that have set up completely integrated manufacturing capability for the production of anticancer, hormones, peptide, immunosuppressant and steroidal drugs.

(e) The Company has benefited from reduction in cost due to import substitution and increased revenue through higher exports.

(f) Clinical studies of some products (complex and difficult to formulate) have been carried out at our in-house clinical pharmacology units. This has helped to maintain R&D quality and regulatory compliance with significantly reduced cost.

3. Your company has not imported technology during the last 5 years reckoned from the beginning of the financial year.

C) Foreign Exchange Earnings and Outgo -

 

(Rs. in Million)

 

Year ended March 31, 2019

Year ended March 31, 2018

Earnings

66,025.4

51,402.9

Outgo

38,610.2

32,233.0

 

For and on behalf of the Board of Directors

Place: Mumbai

Israel Makov

Date: May 28, 2019

Chairman

 


Mar 31, 2018

DIVIDEND

Board''s Report

Your Directors take pleasure in presenting the Twenty-Sixth Annual Report and Company''s Audited Financial Statements for the financial year ended March 31, 2018.

FINANCIAL RESULTS

(Rs, in Million)

Standalone

Consolidated

Particulars

Year ended 1

Year ended

Year ended

Year ended

March 31, 2018 1

March 31, 2017*

March 31, 2018 1

March 31, 2017

Revenue from operations

79,476.0

77,932.0

264,894.6

315,784.4

Profit / (Loss) before tax but after exceptional item

(5199.8)

(168.0)

34,789.8

90,478.7

Tax Expense:

-Current Tax

20.2

57.7

6,628.0

4,046.4

-Deferred Tax Charge / (Credit)

(274.1)

2.7

(720.6)

8,069.3

-Deferred tax charge / (Credit) - exceptional

-

-

2,544.5

-

Profit / (Loss) after tax

(4,945.9)

(228.4)

26,337.9

78,363.0

Profit / (Loss) after Tax but before Share in profit / (loss) of

-

-

26,337.9

78,363.0

associates / joint ventures

Share of Profit/ (loss) of associates / joint ventures (Net)

-

-

(254.4)

99.3

Profit for the year before non-controlling interests

-

-

26,083.5

78,462.3

Non-controlling interests

-

-

4,468.0

8,818.6

Profit for the year attributable to owners of the Company

-

-

21,615.5

69,643.7

Total other Comprehensive Income

494.9

(634.5)

5,232.5

(14,871.9)

Total Comprehensive Income / (Loss) for the year attributable to:

(4,451.0)

(862.9)

31,316.0

63,590.4

-Owners of the Company

(4,451.0)

(862.9)

26,370.3

56,306.1

-Non-Controlling Interest

-

-

4,945.7

7,284.3

Opening balance in Retained Earnings

124,860.0

126,353.4

306,456.9

2,51,630.4

Additions:

Transfer on Merger*

-

1,824.8

-

-

Amount available for appropriation

(4,511.5)

(829.2)

22,123.2

68,933.4

Less: Appropriations

Dividend on Equity Shares

7,977.4

2,406.8

7,977.4

2,406.8

Dividend Distribution Tax

3.4

74.7

1,624.0

490.0

Transfer to various Reserves:

-Capital redemption Reserve

-

7.5

-

7.5

-Debenture redemption Reserve

-

-

(833.4)

1,041.7

-Capital reserve

-

-

-

50.6

-Buy-back of equity shares by overseas subsidiary

-

-

2,168.1

10,110.3

company

-Legal reserve

-

-

2.5

-

-General reserve

-

-

-

-

Closing balance in Retained Earnings

112,367.7

124,860.0

317,641.5

306,456.9

*Refer Note 56(13) of Standalone Financial Statements (Note 18 of Abridged Standalone Financial Statements)

Your Directors have recommended a dividend of Rs, 2.00 (Rupees Two only) per equity share of Rs, 1/- each [previous year Rs, 3.50/- per equity share of Rs, 1/- each] for the year ended March 31, 2018, subject to the approval of the equity shareholders at the ensuing 26th Annual General Meeting of the Company.

The dividend payout is in accordance with the Company''s Dividend Distribution Policy. The Dividend Distribution Policy of the Company is provided as ''Annexure - A'' to this Report. The policy is also available on the website of the Company and can be accessed through the web link: http://www.sunpharma.com/policies.

CHANGES IN CAPITAL STRUCTURE

During the year under review, the Company has allotted 18893 equity shares of Rs, 1/- each under Sun Employee Stock Option Scheme - 2015 and 13106 equity shares of Rs, 1/- each under Sun Employee Stock Option Plan - 2015 thereby the paid up share capital of the Company increased to Rs, 2,399,323,180/- (Rupees Two Billion Three Hundred Ninety-Nine Million Three Hundred Twenty-Three Thousand One Hundred Eighty only) as on March 31, 2018.

Further, on May 24, 2018, the Company has allotted 1314 equity shares of Rs, 1/- each under Sun Employee Stock Option Scheme - 2015.

SCHEME OF ARRANGEMENTS

1. During the year, the Hon''ble National Company Law Tribunal of Gujarat at Ahmedabad had vide its order dated August 11, 2017 sanctioned the Scheme of Arrangement among Sun Pharma Medisales Private Limited, Ranbaxy Drugs Limited, Gufic Pharma Limited, Vidyut Investments Limited (collectively “Transferor Companies”) wholly owned subsidiaries of the Company and the Company (“Transferee Company”) and their respective members and creditors (“Scheme”) whereby the Transferor Companies stand amalgamated with the Company w.e.f. September 08, 2017 with appointed date being April 01, 2017. Pursuant to the Scheme no consideration was paid.

2. During the year, the Board of Directors at its meeting held on November 14, 2017 has approved another Scheme of Arrangement among Sun Pharma Global FZE (“Transferor Company”), a wholly owned subsidiary of the Company and the Company and their respective members and creditors (“Scheme”) for demerger of the Specified Undertaking (as defined in the Scheme) of Transferor Company into the Company. The Hon''ble National Company Law Tribunal of Gujarat, at Ahmadabad (“NCLT”) had dispensed with convening of meeting of secured creditors of the Company and ordered to convene the meeting of equity shareholders and unsecured creditors of the Company on June 01, 2018 to approve the Scheme with appointed date as April 01, 2017 or such other date as may be agreed between the Transferor Company and the Company and approved by the NCLT. Pursuant to said Scheme, no consideration shall be paid and no shares of the Company shall be issued and allotted to the Transferor Company. The Scheme will result in strengthening of the business, synergestic benefits, economies of scale, faster decision making, integration of supply chain, reduction in operating costs, strengthening the focus, increased ability to face the competitive regulatory environment, increasing profitability, higher market share etc.

3. Further the Board of Directors at its meeting held on May 25, 2018 has also approved a Composite Scheme of Arrangement among the Company and Sun Pharma (Netherlands) B.V.

and Sun Pharmaceutical Holdings USA Inc, wholly owned subsidiaries of the Company and their respective members and creditors (“Scheme”), for demerger of Specified Investment Undertaking -1 (as defined in the Scheme) of the Company into Sun Pharma (Netherlands) B.V. and Specified Investment Undertaking -2 (as defined in the Scheme) of the Company into Sun Pharmaceutical Holdings USA Inc. This demerger shall enable the Company to address the risks and policies, ability to strategize the remaining business for long term growth, strengthening of the investment portfolio, consolidation and creation of shareholder value. The Company shall be making the necessary application to the Hon''ble National Company Law Tribunal of Gujarat, at Ahmedabad and such other authorities as may be required for obtaining necessary approvals for the aforesaid Scheme.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 (''the Act'') in form MGT-9 is provided as ''Annexure - B'' to this Report.

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATE COMPANIES

The statement containing the salient features of the Financial Statements of the Company''s subsidiaries/ joint ventures/ associate companies is given in Form AOC - 1, provided in notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries, joint ventures and associate companies and their contribution to the overall performance of the Company during the financial year is given under ''Annexure A of the Consolidated Financial Statements'' forming part of the Annual Report.

Details pertaining to companies that became subsidiaries/ joint ventures/associates and those that ceased to be the subsidiaries/ joint ventures/associates of the Company during the year are provided in Note no. 39 of the notes to the Consolidated Financial Statements, forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Dilip S. Shanghvi, Managing Director and Mr. Sudhir V. Valia, Wholetime Director of the Company retire by rotation and being eligible offer themselves for reappointment at the ensuing 26th Annual General Meeting of the Company.

The present term of appointment of Mr. Sudhir V. Valia and Mr. Sailesh T. Desai as Whole-time Directors will expire on March 31, 2019. They have made significant contributions to the overall growth of the Company''s business. Your Directors recommend the re-appointment of Mr. Sudhir V. Valia and Mr. Sailesh T. Desai for a further period of 5 (Five) years from April 01, 2019 to March 31, 2024, and remuneration for a period of 3 (Three) years from April 01, 2019 to March 31, 2022 due to inadequacy of profits, for approval of the members at the ensuing 26th Annual General Meeting of the Company.

Further the present term of appointment of Mr. Kalyanasundaram Subramanian as Whole-time Director will expire on February 13, 2019. He has made significant contribution to the overall growth of the Company''s business. Your Directors recommend the re-appointment of Mr. Kalyanasundaram Subramanian for a further period of 2 (Two) years from February 14, 2019 to February 13, 2021, without any remuneration, for approval of the members at the ensuing 26th Annual General Meeting of the Company.

Mr. Vivek Chaand Sehgal and Mr. Gautam Doshi were appointed as Additional Independent Directors of the Company w.e.f. November 14, 2017 and May 25, 2018 respectively in accordance with the provisions of Section 149 and 161(1) of the Act and they both hold office upto the date of ensuing 26th Annual General Meeting. The Board recommends appointment of Mr. Vivek Chaand Sehgal and Mr. Gautam Doshi as Independent Directors of the Company for a term of 5(Five) years effective from November 14, 2017 and May 25, 2018 respectively for approval of the members at the ensuing 26th Annual General Meeting of the Company.

Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) to be effective from April 01, 2019, the consent of the members by way of Special Resolution is required for continuation of a Non-Executive Director of a company beyond the age of seventy five years. Mr. Israel Makov, Non-Executive Director and the Chairman of the Company, having attained an age of 79 years, the Board has recommended his continuation as a Director of the Company for approval of the members at the ensuing 26th Annual General Meeting of the Company.

Mr. Hasmukh Shah had resigned as an Independent Director of the Company effective from November 15, 2017. The Board of Directors places on record their appreciation for contributions made by Mr. Hasmukh Shah during his tenure as an Independent Director of the Company.

Appropriate resolutions for the appointment / re-appointment of the Directors are being placed for your approval at the ensuing 26th Annual General Meeting. Your Directors recommend the appointment/reappointment of the aforesaid Directors by the members at the ensuing 26th Annual General Meeting of the Company.

As informed in the previous year''s Board''s Report, Mr. C.S. Muralidharan has been appointed as Chief Financial Officer of the Company w.e.f June 19, 2017 and Mr. Uday Baldota had resigned as Chief Financial Officer w.e.f. June 19, 2017 to assume office as the Director and Chief Executive Officer of Taro Pharmaceutical Industries Limited, a subsidiary of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and under Listing Regulations.

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfills such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy on remuneration of Directors, Key Managerial Personnel and other Employees. The Remuneration Policy of the Company is enclosed as ''Annexure B to Corporate Governance Report'', which forms part of this Report

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarization Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarization Programme conducted are available on the website of the Company www.sunpharma.com and may be accessed through the web link: http://www.sunpharma. com/policies.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 5 (Five) times during the year under review on May 26, 2017; August 11, 2017; September 26, 2017; November 14, 2017; and February 14, 2018. The particulars of attendance of the Directors at the said meetings are detailed in the Corporate Governance Report, which forms a part of this Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, the evaluation of the annual performance of individual Directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act, relevant Rules, and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations and based on the circular issued by SEBI dated January 5, 2017 with respect to Guidance Note on Board Evaluation. The Nomination and Remuneration Committee had approved the criteria for the performance evaluation of the Board, its Committees and individual Directors as per the SEBI Guidance Note on Board Evaluation.

The Chairman of the Company interacted with each Director individually, for evaluation of performance of the individual Directors. The evaluation for the performance of the Board as a whole and of the Committees were conducted by way of questionnaires.

In a separate meeting of Independent Directors, performance of Non Independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-executive Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as structure and diversity of the Board, competency of Directors, experience of Director, strategy and performance evaluation, secretarial support, evaluation of risk, evaluation of performance of the management and feedback, independence of the management from the Board etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as mandate and composition, effectiveness of the committee, structure of the committee and meetings, independence of the committee from the Board and contribution to decisions of the Board. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfillment of functions, availability and attendance, initiative, integrity, contribution and commitment etc, and the Independent Directors were additionally evaluated on the basis of independence, independent views and judgment etc. Further the evaluation of Chairman of the Board, in addition to the above criteria for individual Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

HUMAN RESOURCES

We continue to believe that our organizational plans are fuelled by our employees and in an ever-changing business environment, it is critical to have credible and transparent people management practices and policies. The Human Resources agenda focuses on employee welfare, productivity and performance as a priority.

We believe nurturing a high performance culture is imperative.

Your company is proud to have talent which is varied and deep in its experiences and expertise across manufacturing, R & D, sales and other functions. Globally, the Company (including subsidiary and associate companies) has a dedicated human capital of over 30,000 employees at various locations across our various offices, R & D Centers & more than 40 active manufacturing locations and dedicated sales professionals across various geographies. Your Directors would also like to take this opportunity to express their appreciation for the hard work and commitment of the employees of the Company and look forward to their continued contribution.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ''Annexure - C'' to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at Corporate office or Registered office address of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavor of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review. The Company has submitted the Annual Returns to the local authorities under the above mentioned Act. During the financial year ended March 31, 2018, 1 complaint pertaining to sexual harassment was received and the same was resolved by the Company. There are no complaints pending as at the end of the financial year.

AUDITORS Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firm''s Regn. No. 324982E/ E300003), were appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 25th Annual General Meeting of the Company to hold office till 30th Annual General Meeting of the Company.

The Auditor''s Report for the financial year ended March 31, 2018, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Company had appointed Messrs C. J. Goswami & Associates, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2018. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as ''Annexure - D'' to this Report. The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Company has appointed Messrs Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2018-19.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards as amended from time to time.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link http://www.sunpharma.com/policies. All contracts/arrangements/transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm''s length basis.

As required under Section 134(3)(h) of the Act, details of transactions entered with Related Parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as ''Annexure - E'' to this Report.

AUDIT COMMITTEE COMPOSITION

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this Report.

RISK MANAGEMENT

The Company has developed & implemented an integrated Enterprise Risk Management Framework through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives. The Board of Directors have constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various strategic, operational and financial risks that the organization faces, along with the adequacy of mitigation plans to address such risks. There is an overarching Risk Management Policy in place that was reviewed and approved by the Board. The Corporate Governance Report, which forms part of this Report, contains the details of Risk Management Committee of the Company.

INTERNAL FINANCIAL CONTROLS

The Company has in place well defined and adequate internal financial control framework. During the year under review, such controls were tested and no material weaknesses were observed both in their design or operations.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee of the Company. The details of membership of the Committee and the meetings held are detailed in the Corporate Governance Report, forming part of this Report. During the year under review, the Board of Directors have approved certain amendments in CSR policy pertaining to the projects and CSR activities to be undertaken by the Company. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee are available on the website of the Company and can be accessed through the web link: http://www.sunpharma.com/policies. The average net profit of the Company for last three financial years is negative, therefore the Company was not required to spend on CSR activities during the year, however, the Company has voluntarily spent on CSR activities. The annual report on CSR activities containing details of voluntary expenditure incurred by the Company and brief details on the CSR activities are provided in ''Annexure - F'' to this Report.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Act and the rules framed there under.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations is provided in a separate section and forms part of this Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided as ''Annexure - G'' to this Report.

EMPLOYEES’ STOCK OPTION SCHEMES

The Company has two Employees'' Stock Option Schemes, one through Trust Route and the other by Direct Route, both inherited from erstwhile Ranbaxy Laboratories Limited (“Ranbaxy”). The scheme through Direct Route has been named as Sun Pharma

Employee Stock Option Scheme - 2015, and the one through Trust Route as Sun Pharma Employee Stock Option Plan - 2015. Both the schemes were adopted by the Company with certain amendments consequent upon merger of erstwhile Ranbaxy into the Company. Both the Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Scheme through Trust Route i.e. Sun Pharma Employee Stock Option Plan - 2015 has been completed in August 2017.

Disclosures with respect to the Employees'' Stock Option Schemes in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are available on the Company''s website and can be accessed at: http://www.sunpharma. com/pdflist/all-documents.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company''s operations in future.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behavior in all its operations, the Company has adopted a ''Global Whistle Blower Policy'' for Sun Pharmaceutical Industries Limited and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

CREDIT RATING

ICRA Ltd. has reaffirmed the highest credit rating of ''[ICRA] A1 ''/''[ICRA] AAA(Stable)'' for the bank facilities, long term/short term borrowings and commercial paper programs of the Company.

Further, CRISIL Ltd. has also reaffirmed the highest credit rating of ''CRISIL A1 and CRISIL AAA/Stable'' for short term & long term bank facilities and commercial paper programs of the Company.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31, 2018, is made available on the website of the Company at http://www.sunpharma.com/pdflist/all-documents and forms part of the Annual Report, and is also available at the Registered office / Corporate office of the Company for inspection.

A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

ABRIDGED ANNUAL REPORT

In terms of the provision of Section 136(1) of the Act, Rule 10 of Companies (Accounts) Rules, 2014 and Regulation 36 of the Listing

Regulations and to support Green Initiative, the Board of Directors has decided to circulate the physical copy of Abridged Annual Report containing salient features of Financial Statements and other documents for financial year 2017-18 to the members, who have not registered their e-mail ids. All the annexure to the Board''s Report referred herein viz., Annexure - A to Annexure - G and the Corporate Governance Report (including its annexure) have been excluded from the Abridged Annual Report which is being circulated to the members who have not registered their e-mail id.

The members who are desirous of receiving the full version of the Annual Report may write to the Company''s Registrar and Share Transfer Agent for a copy of the same. Full version of the Annual Report can also be accessed from the Company''s website: www.sunpharma.com

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Company''s bankers, medical professionals and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Place: Mumbai Israel Makov

Date: May 25, 2018 Chairman


Mar 31, 2017

The Directors take pleasure in presenting the Twenty-Fifth Annual Report and Company’s Audited Financial Statements for the financial year ended March 31, 2017.

FINANCIAL RESULTS

(Rs. in Million)

Particulars

Standalone

Consolidated

Year ended March 31, 2017

Year ended March 31, 2016

Year ended March 31, 2017

Year ended March 31, 2016

Total - Revenue

78,067.0

78,636.9

315,784.4

284,870.3

Profit Before Tax

(324.4)

(10,820.6)

90,478.7

65,706.3

Tax Expense:

-Current Tax

25.1

54.5

4,046.4

11,954.1

-Deferred Tax Charge / Credit

-

-

8,069.3

(2,816.4)

(Loss) / Profit after tax

(349.5)

(10,875.1)

78,363.0

56,568.6

Profit after Tax before Share in profit / (loss) of associates and non controlling interests

-

-

78,363.0

56,568.6

Share of Profit of Associates / Joint ventures (Net) Net Profit after taxes and share of profit / (loss) of associates and joint ventures but before non-controlling interests

99.3

14.5

Total Other Comprehensive Income

(633.8)

(247.9)

(14,871.9)

14,353.4

Total Comprehensive Income

(983.3)

(11,123.0)

63,590.4

70,936.5

Total Comprehensive Income for the period attributable to:

-Owners of the Company

(983.3)

(11,123.0)

56,306.1

58,251.6

-Non-Controlling Interest

7,284.3

12,684.9

Opening balance in Retained Earnings

126,353.4

146,184.5

251,630.4

216,743.1

Amount available for appropriation

(949.6)

(11,141.9)

68,933.4

45,109.6

Dividend on Equity Shares

(2,406.8)

(7,219.5)

(2,406.8)

(7,219.5)

Corporate Dividend tax

(74.7)

(1,469.7)

(490.0 )

(1,469.7)

Transfer to various Reserves:

-Capital redemption Reserve

(7.5)

-

(7.5)

-

-Debenture redemption Reserve

-

-

(1,041.7)

(1,041.7)

-Capital reserve

-

-

(50.6)

(188.9)

-Buy-back of equity shares by overseas subsidiary company

-

-

(10,110.3)

(302.3)

-Legal reserve

-

-

-

(0.2)

-General reserve

-

-

-

-

Closing balance in Retained Earnings

122,914.8

126,353.4

306,456.9

251,630.4

Figures for Financial Year 2015-16 have been restated as per Ind AS and therefore may not be comparable with financials for Financial Year 2015-16 approved by the Directors and disclosed in the Financial Statement of previous year.

DIVIDEND

Your Directors are pleased to recommend an equity dividend of Rs.3.50/-(Rupees Three and Fifty Paise only) per equity share of Rs.1/- each [previous year Rs.1/- per equity share of Rs.1/- each] for the year ended March 31, 2017, subject to the approval of the equity shareholders at the ensuing Annual General Meeting.

CHANGES IN CAPITAL STRUCTURE

The changes in the capital structure of the Company during the year under review, are as follows:

i. The Company allotted 62682 equity shares of Rs.1/- each under Sun Employee Stock Option Scheme-2015.

ii. On October 18, 2016, the Company completed Buyback of 7,500,000 (Seventy Five Lakhs) fully paid-up equity shares of Rs.1/- each (representing about 0.31% of the total outstanding pre Buyback equity shares of our Company) at a price of Rs.900/- (Rupees Nine Hundred only) per equity share for an aggregate amount of Rs.6,750,000,000/- (Rupees Six Billion Seven Fifty Million only) from the equity shareholders/ beneficial owners holding equity shares as on Record Date i.e. July 15, 2016 on proportionate basis through the tender offer route using mechanism for acquisition of shares through Stock Exchange.

Consequent to above changes, the paid up share capital of the Company decreased to Rs.2,399,291,181/- (Rupees Two Billion Three Hundred Ninety-Nine Million Two Hundred Ninety One Thousand One Hundred Eighty-One only) as on March 31, 2017 from Rs.2,406,728,499/- (Rupees Two Billion Four Hundred Six Million Seven Hundred Twenty-Eight Thousand Four Hundred Ninety-Nine only).

Further, on May 26, 2017, the Company alloted 3000 equity shares of Rs.1/- each under Sun Employee Stock Option Scheme - 2015 and 12,000 equity shares of Rs.1/- each under Sun Employee Stock Option Plan - 2015.

SCHEME OF ARRANGEMENT FOR AMALGAMATION

During the year, the Board of Directors at its meeting held on November 10, 2016 approved the Scheme of Arrangement among Sun Pharma Medisales Private Limited, Ranbaxy Drugs Limited, Gufic Pharma Limited, Vidyut Investments Limited (collectively known as “Transferor Companies”, which are the wholly owned subsidiaries of the Company) and the Company and their respective members and creditors (“Scheme of Arrangement”). The Hon’ble National Company Law Tribunal, at Ahmedabad vide its order dated April 18, 2017, dispensed with convening of meeting of secured creditors of the Company and ordered to convene the meeting of equity shareholders and unsecured creditors of the Company on June 20, 2017 to approve the Scheme of Arrangement. The appointed date for the said amalgamation is April 1, 2017 or such other date as may be agreed between the Transferor Companies and the Company and approved by the National Company Law Tribunal. Pursuant to Scheme of Arrangement, no consideration shall be paid and no shares of the Company shall be issued and allotted on amalgamation. The Scheme of Arrangement will enable the Company to consolidate and effectively manage the Transferor Companies and the Company in a single entity, which will provide several benefits including synergy, economies of scale, attain efficiencies and cost competitiveness.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013 (‘the Act’) as prescribed in form MGT-9 is enclosed as “Annexure A” to this Report.

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATE COMPANIES

The statement containing the salient features of the Financial Statements of the Company’s subsidiaries/ joint ventures/ associate companies of the Company is given in Form AOC - 1, which forms a part of this Annual Report.

The highlights of performance of subsidiaries, joint ventures and associate companies and their contribution to the overall performance of the Company during the financial year is given under Annexure A of the Consolidated Financial Statements forming part of this Annual Report.

Details pertaining to companies that became subsidiaries/ joint ventures /associates and those that ceased to be the subsidiaries/ joint ventures/ associates of the Company during the year are provided in Note 39 of the notes to the Consolidated Financial Statements, forming part of this Annual Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Israel Makov and Mr. Sailesh T. Desai, Directors of the Company retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

Mr. Kalyanasundaram Subramanian was appointed as an Additional and Whole-time Director of the Company, without remuneration, w.e.f. February 14, 2017 as per the provisions of Section 161(1) of the Act and he shall hold the office upto the date of ensuing Annual General Meeting. The Board recommends appointment of Mr. Kalyanasundaram Subramanian as a Whole-time Director of the Company for a period of 2 (Two) years upto February 13, 2019 without any remuneration, for approval of the members at the ensuing Annual General Meeting.

The term of appointment of Mr. Dilip S. Shanghvi as Managing Director will expire on March 31, 2018. He has made significant contribution to overall growth of the Company’s business. Your Directors recommend the re-appointment of Mr. Dilip S. Shanghvi for a further period of five years from April 1, 2018 to March 31, 2023, at remuneration as proposed in the resolution.

Appropriate resolutions for the appointment of the Directors are being placed for your approval at the ensuing Annual General Meeting. Your Directors recommend the appointment of the aforesaid Directors by the Members at the ensuing Annual General Meeting.

Mr. Uday Baldota, Chief Financial Officer of the Company, has resigned as Chief Financial Officer w.e.f. June 19, 2017 to assume office as Chief Executive Officer of Taro Pharmaceutical Industries Limited, a subsidiary of the Company and Mr. C.S. Muralidharan has been appointed as Chief Financial Officer w.e.f June 19, 2017 at the Board Meeting held on May 26, 2017.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations, 2015”).

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director, the Nomination & Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfills such criteria with regard to qualifications, positive attributes, Independence, age and other criteria as laid down under the Act, Listing Regulations, 2015 or other applicable laws. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy on remuneration of Directors & Key Managerial Personnel. The Remuneration Policy of the Company is enclosed as Annexure B to Corporate Governance Report, which forms part to this Report.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, 2015, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The details of the Familiarisation Programme conducted are available on the website of the Company www.sunpharma.com and may be accessed through the web link: http://www.sunpharma.com/policies.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 6 (Six) times during the previous financial year on May 30, 2016; June 23, 2016; August 12, 2016; September 17, 2016; November 10, 2016 and February 14, 2017. The particulars of attendance of the Directors at the said meetings are detailed in the Corporate Governance Report of the Company, which forms a part of this Report. The intervening gap between the Meetings was within the period prescribed under the Act and Listing Regulations, 2015.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

During the year, the evaluation of the annual performance of individual directors including the Chairman of the Company and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act and relevant Rules and the Corporate Governance requirements as prescribed under Regulation 17 of Listing Regulations, 2015 and the circular issued by SEBI dated January 5, 2017 with respect to Guidance Note on Board Evaluation. The Nomination and Remuneration Committee had approved the indicative criteria for the evaluation based on the SEBI Guidance Note on Board Evaluation.

The Chairman of the Company interacted with each Director individually, for evaluation of performance of the individual directors. The evaluation for the performance of the Board as a whole and of the Committees were conducted by questionnaires.

In a separate meeting of Independent Directors, performance of Non Independent Directors and performance of the Board as a whole was evaluated. Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-executive Directors.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as structure and diversity of the Board, experience of Director, strategy and performance evaluation, secretarial support, evaluation of risk, evaluation of performance of the management and feedback, independence of the management from the Board etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as mandate and composition, effectiveness of the committee, structure of the committee and meetings, independence of the committee from the Board and contribution to decisions of the Board. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as knowledge and competency, fulfillment of functions, availability and attendance, initiative integrity contribution and commitment, independence, independent views and judgement etc.

HUMAN RESOURCES

Your Company recognises that employees are the most valuable resource and endeavors to enable its employees to meet business requirements while meeting their career aspirations. The Human Resource agenda continues to support the business in achieving sustainable and responsible growth by building the right capabilities in the organisation. It continues to focus on progressive employee relations policies and building a high-performance culture with a growth mind-set where employees are engaged, productive and efficient. Globally the Company (including subsidiary and associate companies) has a dedicated human capital of over 30,000 employees at various locations across our Corporate Office, R & D Centers & more than 42 active Manufacturing locations, dedicated Sales Professionals across various geographies. Your Directors would also like to take this opportunity to express their appreciation for the hard work and commitment of the employees of the Company and look forward to their continued contribution. Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in “Annexure B” to this report. Further, the information pertaining to 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the proviso to Section 136 (1) of the Act, the report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/Compliance Officer at Corporate office or Registered office address of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavor of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Company arranged various interactive awareness workshops in this regard for the employees in the manufacturing sites, R & D set ups & Corporate Office during the financial year. The Company submitted the Annual returns to the local authorities under the above mentioned act . During the financial year ended March 31, 2017, no complaint pertaining to sexual harassment was received by the Company.

AUDITORS

Statutory Auditors

The Company’s Auditor, Messrs. Deloitte Haskins & Sells LLP, Chartered Accountants, (Firm’s Regn No. 117366W/W-100018), were appointed as the Statutory Auditors of the Company for a period of three years at the 22nd Annual General Meeting of the Company, and they shall retire at the conclusion of the ensuring 25th Annual General Meeting of the Company. The Auditors’ Report for the financial year ended March 31, 2017, has been issued with an unmodified opinion, by the Statutory Auditors. The Board of Directors placed on record their appreciation for the retiring auditors.

The Board of Directors of the Company had proposed and recommended the appointment of M/s. S R B C & Co LLP, Chartered Accountants, (Firm Registration No. 324982E/E300003) as the statutory auditors of the Company for a period of 5(Five) years from the conclusion of 25th Annual General Meeting of the Company, upto the conclusion of the 30th Annual General Meeting of the Company, subject to approval of members at the ensuing 25th Annual General Meeting and ratification by members at every Annual General Meeting of the Company. M/s. S R B C & Co LLP, Chartered Accountants, have confirmed their eligibility under Section 141 of the Act and the Rules framed thereunder for the appointment as Auditors of the Company and as required under Regulation 33 of the Listing Regulations, 2015.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs C. J. Goswami & Associates, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure C”.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Company has appointed Messrs. Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditor of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year 2017-18.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

RELATED PARTY TRANSACTIONS

The policy on Related Party Transactions as approved by the Board is available on the website of the Company and can be accessed through the web link http://www.sunpharma.com/policies. All contracts/arrangements/transactions entered by the Company during the previous financial year with the related parties were in the ordinary course of business and on arm’s length basis.

The Company has entered into material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, during the year with Sun Pharma Laboratories Limited, a wholly owned subsidiary.

The transactions entered into between a holding company and its wholly owned subsidiary do not require approval of the shareholders.

The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in Form AOC 2 is not applicable for the current year.

AUDIT COMMITTEE COMPOSITION

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms a part of this Report.

RISK MANAGEMENT

The Company has developed & implemented an integrated Enterprise Risk Management Framework through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives. The Board of Directors have constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various strategic, operational and financial risks that the organisation faces, along with the adequacy of mitigation plans to address such risks. There is an overarching Risk Management Policy in place that was reviewed and approved by the Board. The Corporate Governance Report, which forms a part of this Report, contains the details of Risk Management Committee.

INTERNAL FINANCIAL CONTROLS

The Company has in place well defined and adequate internal financial control framework. During the year under review, such controls were tested and no material weaknesses in their design or operations were observed.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee. The details of membership of the Committee & the meetings held are detailed in the Corporate Governance Report, forming part of this Report. The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the CSR Committee is available on the website of the Company and can be accessed through the web link: http:// www.sunpharma.com/policies. The average net profits of the Company for last three financial years is negative, therefore the

Company was not required to spend on CSR activities during the previous year. However, the Company has voluntarily spent on CSR activities and the annual report on CSR activities containing details of voluntary expenditure incurred by the Company and brief details on the CSR activities are given in “Annexure D”.

DIVIDEND DISTRIBUTION POLICY

In accordance with the Regulation 43A of Listing Regulations, 2015, the Company has formulated Dividend Distribution Policy and the same is annexed herewith as “Annexure E”. The policy is also available on the website of the Company and can be accessed through the web link: http://www.sunpharma.com/policies.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Act and the rules framed thereunder.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34 (3) of the Listing Regulations, 2015 is provided in a separate section and forms a part of this Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, 2015, are enclosed as a separate section and forms a part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure F”.

EMPLOYEES’ STOCK OPTION SCHEMES

The Company has two Employees’ Stock Option Schemes, one through Trust Route and the other by Direct Route, both inherited from erstwhile Ranbaxy Laboratories Limited (“Ranbaxy”). The scheme through Direct Route has been named as Sun Pharma Employee Stock Option Scheme - 2015, and the one through Trust Route as Sun Pharma Employee Stock Option Plan - 2015. Both the schemes were adopted by the Company with certain amendments consequent upon merger of erstwhile Ranbaxy into the Company. The both the Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosures with respect to the Employees’ Stock Option Schemes in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are available on the Company’s website and can be accessed at: http://www.sunpharma. com/pdflist/all-documents.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company’s operations in future.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behaviour in all its operations, the Company has adopted a ‘Global Whistle Blower Policy’ for Sun Pharmaceutical Industries Limited (SPIL) and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31, 2017 has been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 together with the comparative period data as at and for the previous year ended March 31, 2016. Further, the Company has prepared the opening consolidated balance sheet as at April 1, 2015 (the transition date) in accordance with Ind AS.

CREDIT RATING

ICRA Ltd. has reaffirmed the highest credit rating of ‘[ICRA] A1 ’/’[ICRA] AAA(Stable)’ for the bank facilities, long term/short term borrowings and commercial paper programs of the Company. Further, CRISIL Ltd. has also reaffirmed the highest credit rating of ‘CRISIL A1 and CRISIL AAA/Stable’ for short term and long term bank facilities of the Company.

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31, 2017, in line with Green initiative, is made available on the website of the Company (http://www.sunpharma. com/pdflist/all-documents) and forms part of the Annual Report, and is available at the Registered office / Corporate office of the Company for inspection. A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Company’s bankers, medical profession and business associates for their continued support and valuable cooperation.

The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Israel Makov

Chairman

May 26, 2017

Mumbai


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the Twenty-Second Annual Report and Audited Accounts for the year ended 31st March, 2014

FINANCIAL RESULTS

(Rs.in Million except dividend per share and book value)

Standalone Consolidated

Particulars Year ended Year ended Year ended Year ended 31st March, 31st March, 31st March, 31st March, 2014 2013* 2014 2013

Total Income 29,882 26,683 166,326 116,880

(Loss)/Profit after tax (28,285.2) 5,166 31,415 29,831

Dividend on Equity Shares 3,107 5,178 3,107 5,178

Corporate Dividend tax 528 880 528 880

Transfer to various Reserves NIL 520 NIL 520

Amount of dividend per equity share ofRs.1/- each 1.50 2.50# 1.50 2.50#

Book value per equity share Rs. 1/- each 36 38# 89 72#

* Previous year figures for standalone are not comparable, since current year figures include the effect of merger of the Specified undertaking of Sun Pharma Global FZE, into the Company with effect from 1st May, 2013.

# Post Bonus Issue

DIVIDEND

Your Directors are pleased to recommend an equity dividend of Rs. 1.50 per equity share of face value Rs. 1/- each (previous year Rs. 2.50 per equity share) for the year ended 31st March, 2014.

MERGER OF RANBAXY

At Sun Pharma, we have taken a significant initiative to enhance shareholder value for the future. We are in the process of acquiring Ranbaxy Laboratories Limited, India''s leading Company in sales, in one of India''s largest M&A transactions. The deal, an all-stock transaction valued at US$ 4 billion, is expected to be completed by December 2014. Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each Ranbaxy''s share. Further details on the merger, are provided in the Management Discussion and Analysis report which forms part of this Report.

BONUS SHARES

The Company had on 3rd August, 2013 allotted 1,035,581,955 Equity Shares of Rs. 1/- each as Bonus Shares to the Equity Shareholders of the Company in the ratio of 1 (One) Equity Share of Rs. 1/- each for every 1(One) Equity Share of Rs. 1/- each held on the Record Date, being 30th July, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis on the operations of the Company is provided in a separate section and forms part of this report.

HUMAN RESOURCES

Your Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company has a dedicated team of over 14,000 employees at various locations across our corporate office, various R&D Centers & 25 plant locations (including Associate Companies) spread across three Continents. Our constant endeavor is to invest in people and people processes to improve service delivery to our customers. Attracting the right talent and engaging them for high performance is our focus, whereas we strive to provide a great place to work to our human resources through challenging and learning environment.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/ Compliance Officer at the Corporate Office or Registered Office address of the Company.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The additional information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

CORPORATE GOVERNANCE

Report on Corporate Governance and Certificate of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are annexed.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report of the Company for the year ended 31st March, 2014, in line with Green initiative, is made available on the website of the Company (www.sunpharma.com) and forms part of the Annual Report, and is kept at the Registered Office of the Company for inspection. A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

SUBSIDIARIES

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/2011 dated 8th February, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate/ Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

FINANCE

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit Scheme.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has identified health, education, livelihood, disaster relief and civic utilities as the areas where assistance is provided on a need-based and case-to-case basis. Your Company persisted with participation in such activities at the local, grassroot level during the year. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the Plants/Research Centers. Your Company remains interested in these contributions.

DIRECTORS

Mr. Israel Makov, Director retires by rotation and being eligible offers himself for re-appointment. Ms. Rekha Sethi was appointed as Additional Independent Director of the Company with effect from 13th February, 2014 and holds office as a Director up to the ensuing Annual General Meeting.

In terms of Section 149, and other applicable provisions, if any of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors of the Company viz. Mr. S.M Dadha, Mr. Keki Mistry, Mr. Hasmukh Shah, Mr. Ashwin Dani and Ms. Rekha Sethi are proposed to be appointed as Independent Directors of the Company in accordance with the requirements of Companies Act 2013, at the ensuing Annual General Meeting of the Company.

The Company has received the requisite notice under Section 160 of the Companies Act, 2013 from members to proposing their name for being appointed as Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

Appropriate resolutions for the appointment/re- appointment of Directors are being placed for your approval at the ensuing Annual General Meeting.

Your Directors recommend the appointment/re- appointment of the aforesaid Directors by the Members at the ensuing Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i)that in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the loss of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and of Companies Act, 2013 to the extent applicable, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

AUDITORS

Your Company''s auditors, Messrs. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 139 of the Companies Act, 2013.

COST AUDITORS

The Company has appointed Messrs. Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended 31st March, 2014.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

ISRAEL MAKOV

Chairman 12th August, 2014 Mumbai


Mar 31, 2013

Dear Members,

The Directors take pleasure in presenting the Twenty-First Annual Report and Audited accounts for the year ended March 31, 2013

FINANCIAL RESULTS

(Rs. in million except dividend per share and book value)

Year ended Year ended March 31, 2013* March 31, 2012

Total Income 26,683 43,584

Profit after tax 5,166 16,975

Dividend on Equity Shares 5,178 4,401

Corporate Dividend tax 880 714

Transfer to various Reserves 520 2,000

Amount of dividend per equity share of Rs.1/- each 2.50 4.25

Book value per equity share of Rs.1/- each 75 76

*Previous year figures are not comparable since they include the figures with respect to the Domestic Formulation undertaking which got transferred to and /or vested in Sun Pharma Laboratories Limited , the Company''s wholly onwed subsidiary company as a going concern as on March 31, 2012.

DIVIDEND

Your Directors have recommended an equity dividend of Rs.2.50 per equity share of face value Rs.1/- each (equivalent to Rs.5.00 per equity share pre-bonus) (previous year Rs.4.25 per equity share) for the year ended March 31, 2013.

BONUS SHARES

The Company on August 3, 2013 allotted 1,035,581,955 Equity Shares of Rs.1/- each as Bonus Shares to the Equity Shareholders of the Company in the ratio of 1 (One) Equity Share of Rs.1/- each for every 1(One) Equity Share of Rs.1/- each held on the Record Date, July 30, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis on the operations of the Company is provided in a separate section and forms part of this report.

HUMAN RESOURCES

Your Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company has a dedicated team of over 13000 employees at various locations across our corporate office, various R&D Centers & 23 plant locations (including associate companies) spread across three continents. The Company strives to inculcate the culture where its employees are motivated and their performance is aligned with values. Your Company has achieved this present level of excellence through the commitment and dedication exhibited by its employees. The focus on improving productivity and adoption of best practices in every area are being pursued relentlessly. Efforts for active participation, nurturing creativity and innovation and ensuring a climate of synergy and enthusiasm has been at the core of Human Resource initiatives and interventions. Management Development Programmes (MDPs) are organised at regular intervals in the form of workshops to nurture, enhance and retain the top talent.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1) (b) (iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

CORPORATE GOVERNANCE

Report on Corporate Governance and Certificate of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are annexed.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report of the Company for the year ended March 31, 2013, in line with Green initiative, is made available on the website of the Company www.sunpharma.com and forms part of the Annual Report, and is kept at the Registered Office of the Company for inspection. A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

SUBSIDIARIES

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/2011 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

FINANCE

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit Scheme.

CORPORATE SOCIAL RESPONSIBILITY

Your company has identified health, education, disaster relief and civic utilities as the areas where assistance is provided on a need-based and case-to-case basis. Your company persisted with participation in such activities at the local, grassroots level during the year. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

DIRECTORS

Shri, Dilip S. Shanghvi, Shri Sailesh T. Desai and Shri Hasmukh S. Shah retire by rotation and being eligible offer themselves for re-appointment. The terms of appointment of Shri Sudhir V. Valia and Shri Sailesh T. Desai as Whole-time Director will expire on March 31, 2014. Both of these Directors have made significant contribution to overall growth of the Company''s business. Your Directors recommend the re-appointment of both Directors for a further period of five years from April 1, 2014.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures,

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review,

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, and,

(iv) that the Directors have prepared the annual accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

AUDITORS

Your Company''s auditors, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

COST AUDITORS

The Company has appointed Messrs.Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2013.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Israel Makov

Chairman

August 9, 2013

Mumbai


Mar 31, 2012

The Directors take pleasure in presenting the Twentieth Annual Report and Audited Accounts for the year ended March 31, 2012.

Financial Results

(Rs. in million except dividend per share and book value)

Particulars Year ended Year ended March 31, March 31, 2012 2011

Total Income 43584 33017

Profit after tax 16975 13838

Dividend on Equity Shares 4401 3625

Corporate Dividend tax 714 588

Transfer to various Reserves 2000 5000

Amount of dividend per equity share of Rs.1/- each 4.25 3.5

Book value per equity share of Rs.1/- each 76 65

Dividend

An interim equity dividend of Rs. 4.25 per equity share of face value Rs.1/- each (previous year Rs. 3.50 per equity share) for the year ended March 31, 2012 as recommended by the Board of Directors of the Company at their Meeting held on August 10, 2012 was paid on August 22, 2012 to the Equity Shareholders of the Company whose names stood on the Register of Members on August 16, 2012. Yours Directors recommend that the interim dividend paid as aforesaid be treated as final for the year ended March 31, 2012.

Management Discussion and Analysis

The Management Discussion and Analysis on the operations of the Company is provided in a separate section and forms part of this report.

Scheme of Arrangement in the form of spin off and transfer of Domestic Formulation Division of our Company to Sun Pharma Laboratories Ltd., a wholly owned subsidiary of our Company with effect from March 31, 2012

As all of us are aware that, your Company had undertaken the Scheme of Arrangement in the form of spin off and transfer of domestic formulation undertaking of our Company to Sun Pharma Laboratories Ltd., a wholly owned subsidiary of our Company with effect from March 31, 2012. The said spin off has been sanctioned by the Honourable High Court of Gujarat at Ahmedabad and by the Honourable High Court of Judicature at Bombay, pursuant to Sections 391 to 394 of the Companies Act, 1956 on May 3, 2013. On completion of the necessary formalities, the spin off has been effective from March 31, 2012 and the impact of the spin off has been incorporated in the Audited Accounts for the year under review.

Human Resources

Human Resource development continues to be a key focus area at Sun Pharma and your Company takes great pride in the commitment, competence and vigor shown by its workforce in all realms of business. You have a dedicated team of over 13000 employees at various locations across our corporate office, various R&D Centers & 23 plant locations (including associate companies) spread across three continents. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. Your Directors truly appreciate the efforts and contribution by Team Sun Pharma for maintaining and further accelerating the growth pace.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Corporate Governance

Report on Corporate Governance and Certificate of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are annexed.

Consolidated Accounts

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

Subsidiaries

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/201 1 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

Finance

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit scheme.

Corporate Social Responsibility

At the close of a relatively event-free, disaster-free year, your Company persisted with participation in activities at the local, grassroots level across health and education. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

Directors

Mr. S. Kalyanasundaram, resigned as the Director of the Company with effect from March 31, 2012 so as to relocate himself to the USA to take care of the Group''s business interests in North and South America. The Directors place on record their appreciation of the services rendered by Shri S. Kalyanasundaram during his tenure of Directorship with the Company. Mr. Israel Makov was appointed as an Additional Director and Chairman of the Company and Mr. Dilip Shanghvi stepped down from the Chairmanship of the Company at Meeting of the Board of Directors held on May 29, 2012.

At the Twentieth Annual General Meeting of the Company held on November 8, 2012 which was adjourned sine die pending approval of the respective High Courts of Gujarat and Bombay, Mr. Keki M. Mistry, Mr. Sudhir V. Valia and Mr. Ashwin Dani retired by rotation and were re-appointed, the appointment of Mr. Israel Makov as a Director of the Company was confirmed and Mr. Dilip Shanghvi was reappointed as the Managing Director of the Company for a further period of 5 years effective from 1st April, 2013.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended March 31, 2012 on a ''going concern'' basis.

Auditors

Your Company''s auditors, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, have already been re-appointed at the Twentieth Annual General Meeting of the Company held on November 8, 2012.

Cost Auditors

The Company has appointed Messrs Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2012.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip S. Shanghvi Sudhir V. Valia

Managing Director Whole-time Director

May 28, 2013

Mumbai


Mar 31, 2011

Dear Members,

The Directors take pleasure in presenting the Nineteenth Annual Report and Audited Accounts for the year ended March 31,2011.

FINANCIAL RESULTS

(Rs. in million except dividend per share and book value)

Year ended Year ended March 31, 2011 March 31, 2010

Total Income 32989 26084

Profit aftertax 13838 8987

Dividend on Equity Shares 3625 2848

Corporate Dividend tax 588 473

Transferto General Reserve 5000 3000

Amount of dividend per equity share ofRs.1/- each (Previous year per equity 3.5 1375 share ofRs. 5/-each)

Book value per equity share ofRs.1/- each(Previous year per equity share 65 276 ofRs. 57-each)

Dividend

Your Directors are pleased to recommend an equity dividend of Rs. 3.50 per equity share of face value Rs. 1/-each (previous year Rs. 13.75 per equity share of face value Rs. 5/-each) for the year ended March 31,2011.

Split of Equity Shares

As approved by the Shareholders of the Company by way of postal ballot conducted during November, 2010, the results of which were announced on November 12,2010, the Equity Shares of Rs. 5/- each of the Company were sub- divided into 5 Equity Shares ofRs. 1/-each during the year under review.

Management Discussion and Analysis

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

Human Resources

Human Resource development continues to be a key focus area at Sun Pharma and your Company takes great pride in the commitment, competence and vigor shown by its workforce in all realms of business. You have a dedicated team of over 11200 employees at various locations across our corporate office, various R&D Centers & 19 plant locations (including associate companies) spread across three continents.The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. A transparent work culture, quality of work and supportive environment induces discretionary behavior among employees which gives them the opportunity to personally succeed in a way that leads to collective organizational success. Your Directors truly appreciate the efforts and contribution by Team Sun Pharma for maintaining and further accelerating the growth pace.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1 )(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1) (e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Corporate Governance

Report on Corporate Governance and Certificate of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are annexed.

Consolidated Accounts

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

Subsidiaries

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide genera circular No.2/2011 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company.The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same.The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

Finance

CRISIL continued to reaffirm its highest rating of "AAA/Stable" and "P1 ", for your Company's Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit scheme.

Corporate Social Responsibility

At the close of a relatively event-free, disaster-free year, your Company persisted with participation in activities at the local, grassroots level across health and education. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

Directors

Shri Dilip S. Shanghvi, Shri Sailesh T. Desai and Shri S.Mohanchand Dadha retire by rotation and being eligible offer themselves for re-appointment.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financia year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended March 31,2011 on a 'going concern' basis.

Auditors

Your Company's auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual Genera Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

Cost Auditors

The Company has appointed Messrs. Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2011.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners, your Company's bankers, financia institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the

Board of Directors

Dilip S. Shanghvi

Chairman & Managing Director

May 28, 2011

Mumbai


Mar 31, 2010

The Directors take pleasure in presenting the Eighteenth Annual Report and Audited Accounts for the year ended March 31, 2010.

Financial Results

(Rs. in million except dividend per share and book value)

Year ended Year ended March 31, 2010 March 31, 2009

Total Income 26467 40437

Profit after tax 8987 12653

Dividend on Equity Shares 2848 2848

Corporate Dividend tax 473 484

Transfer to various Reserves 3000 4500

Amount of dividend per equity share of Rs. 5/- each 13.75 13.75

Book value per equity share of Rs. 5/- each 276 249

Dividend

Your Directors are pleased to recommend an equity dividend of Rs. 13.75 per equity share of face value Rs. 5/- each (previous year Rs. 13.75 per equity share of face value Rs. 5/- each) for the year ended March 31, 2010.

Management Discussion and Analysis

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

Human Resources

A dedicated team of over 8000 multi- cultural employees have been pushing boundaries of your organisation to maximize opportunities across our corporate office, Companys various R&D Centres & 19 plants (including associate companies) spread across three continents. The potential and ability to deliver consistently is established by our remarkable team, evident from our consistent growth. The Company recognises the importance and contribution of our people. Performance orientation and ethics are high priority areas. The supportive work environment and opportunities for career advancement within the Company itself, helps retain talent. Your Directors recognise the teams valuable contribution and places on record their appreciation for Team Sun Pharma.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the

Corporate Office or Registered Office address of the Company.

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Corporate Governance

Report on Corporate Governance and Certificate of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are enclosed.

Consolidated Accounts

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

Subsidiaries

The Ministry of Corporate Affairs, Government of India, has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in sub-section (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said order, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

Finance

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and “P1+”, for your Companys Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit scheme.

Corporate Social Responsibility

Your organization continued to support activities in two areas-- health and education. Other areas of support were disaster relief and civic utilities around the plants and research centers, where assistance was provided on a need basis.

Directors

Shri Sudhir V. Valia, Shri Hasmukh S. Shah and Shri Ashwin S.Dani retire by rotation and being eligible offer themselves for re-appointment.

Shri Subramanian Kalyanasundaram was appointed as an Additional Director, and Chief Executive Officer & Whole-time Director of the Company for a period of five years from April 1, 2010 to March 31, 2015, by the Board of Directors by way of circular resolution passed on March 31, 2010, and holds the office as a director up to the ensuing Annual General Meeting. The Company has received requisite notice under Section 257 of the Companies Act, 1956, from a member to propose his name for being appointed as a Director of the Company.

Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended March 31, 2010 on a ‘going concern basis.

Auditors

Your Companys auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners, your Companys bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip S. Shanghvi

Chairman & Managing Director

June 14, 2010 Mumbai

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