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

Sun Pharmaceutical Industries Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2017

1. General information

Sun Pharmaceutical Industries Limited (“the Company”) is a public limited company incorporated and domiciled in India and has its listing on the BSE Limited and National Stock Exchange of India Limited. The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report. The Company is in the business of manufacturing, producing, developing and marketing a wide range of branded and generic formulations and Active Pharmaceutical Ingredients (APIs). The Company has various manufacturing locations spread across the country with trading and other incidental and related activities extending to the global markets.

2 SHARE CAPITAL

(i) 1,035,581,955 (upto March 31, 2016: 1,035,581,955; upto April 01, 2015: 1,035,581,955) equity shares of Rs.1 each have been allotted as fully paid up bonus shares during the period of five years immediately preceding the date at which the Balance Sheet is prepared.

(ii) 334,956,764 (upto March 31, 2016: 334,956,764; upto April 01, 2015: Nil) equity shares of Rs.1 each have been allotted, pursuant to scheme of amalgamation, without payment being received in cash during the period of five years immediately preceding the date at which the Balance Sheet is prepared. [Refer Note 59(4)]

(iii) 7,500,000 (upto March 31, 2016: Nil, upto April 01, 2015: Nil) equity shares of Rs.1 each have been bought back during the period of five years immediately preceding the date at which the Balance Sheet is prepared. The shares bought back in the current year were cancelled immediately. [Refer Note 59 (13)]

(iv) Rights, Preference and Restrictions attached to equity shares: The Equity Shares of the Company, having par value of Rs.1 per share, rank pari passu in all respects including voting rights and entitlement to dividend.

(v) Refer Note 50 for number of employee stock options against which equity shares are to be issued by the Company / ESOP Trust upon vesting and exercise of those stock options.

Nature and purpose of each reserve

Capital reserve - During amalgamation / merger / acquisition, the excess of net assets taken, over the consideration paid, if any, is treated as capital reserve.

Securities premium reserve - The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve.

In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium reserve. This reserve is utilised in accordance with the provisions of the Companies Act 2013.

Debenture redemption reserve - The Company is required to create a debenture redemption reserve out of the profits which is available for payment of dividend. This reserve was transferred to general reserve on redemption of debentures.

Share options outstanding account - The fair value of the equity settled share based payment transactions is recognised to share options outstanding account.

Amaglamation reserve - The reserve was created pursuant to scheme of amalgamation in earlier years.

Capital redemption reserve - The Company has recognised Capital Redemption Reserve on buy-back of equity shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.

General reserve - The reserve arises on transfer portion of the net profit pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

Equity instrument through OCI - The Company has elected to recognise changes in the fair value of certain investment in equity instrument in other comprehensive income. This amount will be reclassified to retained earnings on derecognition of equity instrument.

Effective portion of cash flow hedges - The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on the changes of the fair value of the designated portion of the hedging instruments that are recognised and accumulated under the cash flow hedge reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximates the fair value because there is wide range of possible fair value measurements and the costs represents estimate of fair value within that range.

# These investments in equity instruments are not held for trading. Instead, they are held for medium or long-term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments as at fair value through other comprehensive income as the management believes that this provides a more meaningful presentation for medium or long-term strategic investments, than reflecting changes in fair value immediately in profit or loss.

There were no transfers between Level 1 and 2 in the periods.

The management considers that the carrying amount of financial assets and financial liabilities carried as amortised cost approximates their fair value.

Reconciliation of Level 3 fair value measurements

3 CAPITAL MANAGEMENT

The Company’s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern; and

- to provide an adequate return to shareholders through optimisation of debts and equity balance.

The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company’s objective for capital management is to maintain an optimum overall financial structure.

4 CIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course of business.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties, and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Trade receivables

The Company has used expected credit loss (ECL) model for assessing the impairment loss. For the purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data of credit losses from various customers.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The Company has unutilised working capital lines from banks of Rs.32,128.0 Million as on March 31, 2017, Rs.27,718.7 Million as on March 31, 2016, Rs.30,177.9 Million as on April 01, 2015

Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

Foreign exchange risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses, (primarily in US Dollars, Euros, South African Rand and Russian Rouble) and foreign currency borrowings (primarily in US Dollars). As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, the Company’s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and these foreign currencies have changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses both derivative and non-derivative financial instruments, such as foreign exchange forward contracts, option contracts, currency swap contracts and foreign currency financial liabilities, to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.

a) Significant foreign currency risk exposure relating to trade receivables, cash and cash equivalents, borrowings and trade payables

b) Sensitivity

For the years ended March 31, 2017, March 31, 2016 and April 01, 2015, every 5% strengthening in the exchange rate between the Indian rupee and the respective currencies for the above mentioned financial assets/liabilities would decrease the Company’s loss and increase the Company’s equity by approximately Rs.1,760.6 Million, Rs.2,720.8 Million and Rs.2,360.9 Million respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal but opposite effect.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

c) Derivative contracts

The Company is exposed to exchange rate risk that arises from its foreign exchange revenues and expenses, primarily in US Dollars, Euros, South African Rand and Russian Rouble, and foreign currency debt in primarily in US Dollars. The Company uses foreign currency forward contracts, foreign currency option contracts and currency swap contracts (collectively, “derivatives”) to mitigate its risk of changes in foreign currency exchange rates. The counterparty for these contracts is generally a bank or a financial institution.

Hedges of highly probable forecasted transactions

The Company designates its derivative contracts that hedge foreign exchange risk associated with its highly probable forecasted transactions as cash flow hedges and measures them at fair value. The effective portion of such cash flow hedges is recorded as in other comprehensive income, and re-classified in the income statement as revenue in the period corresponding to the occurrence of the forecasted transactions. The ineffective portion of such cash flow hedges is immediately recorded in the statement of profit and loss.

In respect of the aforesaid hedges of highly probable forecasted transactions, the Company has recorded a loss of Rs.26.6 Million for the year ended March 31, 2017 and Rs.Nil for the year ended March 31, 2016 in other comprehensive income. The Company also recorded hedges as a component of revenue, loss of Rs.521.5 Million for the year ended March 31, 2017 and Rs.Nil for the year ended March 31, 2016 on occurrence of forecasted sale transaction.

Changes in the fair value of forward contracts and option contracts that economically hedge monetary assets and liabilities in foreign currencies, and for which no hedge accounting is applied, are recognised in the statement of profit and loss. The changes in fair value of the forward contracts and option contracts, as well as the foreign exchange gains and losses relating to the monetary items, are recognised in the statement of profit and loss.

Interest rate risk

The Company has loan facilities on floating interest rate, which exposes the Company to risk of changes in interest rates. The Company’s Treasury Department monitors the interest rate movement and manages the interest rate risk by evaluating interest rate swaps etc. based on the market / risk perception.

For the years ended March 31, 2017 and March 31, 2016, every 50 basis point decrease in the floating interest rate component applicable to its loans and borrowings would decrease the Company’s loss by approximately Rs.160.5 Million and Rs.221.5 Million respectively. A 50 basis point increase in floating interest rate would have led to an equal but opposite effect.

Commodity rate risk

Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices may fluctuate significantly over short periods of time. The prices of the Company’s raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Company’s cost of revenues. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. As of March 31, 2017, the Company had not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.

5 SURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

The information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6 YEE BENEFIT PLANS

Defined contribution plan

Contributions are made to Regional Provident Fund (RPF), Family Pension Fund, Employees State Insurance Scheme (ESIC) and other Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund and other Statutory Funds are made only by the Company. The contributions are normally based on a certain percentage of the employee’s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs.608.1 Million (Previous year Rs.587.9 Million).

The Company has an obligation towards provident fund with respect to certain employees upto March 31, 2015 which was recognised as defined benefit plan. From the previous year the contribution for the same is made to RPF and the Company does not have any obligation apart from such contribution. Accordingly, from previous year, the provident fund is recognised as defined contribution plan.

Defined benefit plan

a) Gratuity

In respect of Gratuity, a defined benefit plan, contributions are made to LIC’s Recognised Group Gratuity Fund Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled to specific benefit at the time of retirement or termination of the employment on completion of five years or death while in employment. The level of benefit provided depends on the member’s length of service and salary at the time of retirement/termination age. Provision for Gratuity is based on actuarial valuation done by an independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The Company decides its contribution based on the results of its annual review. The Company aims to keep annual contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments in short to medium term.

b) Pension fund

The Company has an obligation towards pension, a defined benefit retirement plan, with respect to certain employees, who had already retired before March 01, 2013, will continue to receive the pension as per the pension plan.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

i) Investment risk - The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the market yields on government bonds denominated in Indian Rupees. If the actual return on plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by investment in LIC managed fund.

ii) Interest rate risk - A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the return on the plan’s debt investments.

iii) Longevity risk - The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

iv) Salary risk - The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

Other long term benefit plan

Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the Statement of Profit and Loss amounting to Rs.331.0 Million (Previous Year Rs.313.8 Million) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation.

Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially determined as at the year end using the ‘Projected Unit Credit’ method. Gains and losses on changes in actuarial assumptions relating to defined benefit obligation are recognised in other comprehensive income whereas gains and losses in respect of other long term employee benefit plans are recognised in the Statement of Profit and Loss.

7 LEASES

(a) The Company has given certain premises and plant and equipment under operating lease or leave and license agreements. These are generally not non-cancellable and periods range between 11 months to 10 years under leave and licence / lease and are renewable by mutual consent on mutually agreeable terms. The Company has received refundable interest free security deposits where applicable in accordance with the agreed terms. (b) The Company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and periods range between 11 months to 10 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. These refundable security deposits have been valued at amortised cost under relevant Ind AS (c) Lease receipts / payments are recognised in the statement of profit and loss under “Lease rental and hire charges” & ”Rent” in Note 32 and 37 respectively. (d) The future minimum lease payments in respect of assets taken on non-cancellable operating leases are as under -

8 EMPLOYEE SHARE-BASED PAYMENT PLANS

Erstwhile Ranbaxy Laboratories Limited (RLL) had Employee Stock Option Schemes (“ESOSs”) namely, Employees Stock Option Scheme -II (ESOS-II), Employees Stock Option Scheme 2005 (ESOS 2005) and Employees Stock Option Plan 2011 (ESOP 2011) for the grant of stock options to the eligible employees and Directors of the Erstwhile RLL and its subsidiaries. ESOS-II had been discontinued from 17th January, 2015. The ESOSs are administered by the Compensation Committee (“Committee”). Options are granted at the discretion of the Committee to selected employees depending upon certain criterion. Each option comprises one underlying equity share.

ESOS 2005 provided that the grant price of options would be the latest available closing price on the stock exchange on which the shares of the erstwhile RLL were listed, prior to the date of the meeting of the Committee in which the options were granted. If the shares are listed on more than one stock exchange, then the stock exchange where there was highest trading volume on the said date were considered. The options vested evenly over a period of five years from the date of grant. Options lapse, if they are not exercised prior to the expiry date, which was ten years from the date of grant.

ESOP 2011 provided that the grant price of options would be the face value of the equity share i.e. Rs.5 per share. The options vested evenly over a period of three years from the date of grant. Options lapse, if they were not exercised prior to the expiry date, which was three months from the date of the vesting. An ESOP Trust had been formed to administer ESOP 2011. Shares issued to the ESOP Trust were allocated to the eligible employees upon exercise of stock options from time to time.

In accordance with the above approval of issuance of options, stock options have been granted from time to time.

The stock options outstanding as on June 30, 2005 are proportionately adjusted in view of the sub-division of equity shares of the Erstwhile RLL from the face value of Rs.10 each into 2 equity shares of Rs.5 each

Pursuant to the Scheme of Amalgamation, Sun Pharmaceutical Industries Limited (‘transferee company’) formulated two Employee Stock Option Schemes, namely, (i) SUN Employee Stock Option Scheme-2015 (SUN-ESOS 2015) to administer ESOS 2005 (ii) SUN Employee Stock Option Plan-2015 (SUN-ESOP 2015) to administer ESOP 2011. These scheme provide that the number of transferee options issued shall equal to the product of number of transferor options outstanding on effectiveness of Scheme multiplied by the Share exchange ratio (0.80) and each transferee option shall have an exercise price per equity share equal to transferor option exercise price per equity share divided by the share exchange ratio (0.80) and fractions rounded off to the next higher whole number. The terms and conditions of ESOS, of transferee company are not less favourable than those of ESOSs of erstwhile RLL. No new grants shall be made under these schemes and these schemes shall operate only for the purpose of administering the exercise of options already granted / vested on an employee pursuant to SUN-ESOS 2015 and SUN-ESOP 2015.

During the current year, the Company has recorded a Stock-based employee compensation expense of Rs.30.8 Million (March 31, 2016: Rs.90.6 Million). The amount has been determined under a fair value method wherein the grant date fair value of the options was calculated by using Black Scholes pricing model.

@@ Assumptions used are as applicable at the date of grant in the context of erstwhile RLL

The Black -Scholes option-pricing model was developed for estimating fair value of trade options that have no vesting restrictions and are fully transferable. Since options pricing models require use of subjective assumptions, changes therein can materially affect fair value of the options. The options pricing models do not necessary provide a reliable measurable of fair value of options. The volatility in the share price is based on volatility of historical stock price of the erstwhile RLL for last 60 months.

9 WINGS

(A) Details of long term borrowings and current maturities of long term debt (included under other current financial liabilities)

(I) Unsecured External Commercial Borrowings (ECBs) has 6 loans aggregating of USD 256 Million (March 31, 2016 : USD 266 Million, April 01, 2015 : USD 288 Million) equivalent to Rs.16,602.9 Million (March 31, 2016 : Rs.17,625.2 Million, April 01, 2015 : Rs.18,001.4 Million) [(included in long term borrowings Rs.7,523.2 Million (March 31, 2016 : Rs.15,902.4 Million, April 01, 2015 : Rs.11,625.9 Million) and in current maturity of long term debt Rs.9,079.7 Million (March 31, 2016 : Rs.1,722.8 Million, April 01, 2015 : Rs.6,375.5 Million))]. For the ECB loans outstanding as at March 31, 2017, the terms of repayment for borrowings are as follows:

(a) USD Nil (March 31, 2016 : USD Nil, April 01, 2015 : USD 50 Million) equivalent to Rs.Nil (March 31, 2016 : Rs.Nil,

April 01, 2015 : Rs.3,125.2 Million). The loan was taken on August 12, 2010. The outstanding amount has been repaid in previous year.

(b) USD Nil (March 31, 2016 : USD Nil, April 01, 2015 : USD 30 Million) equivalent to Rs.Nil (March 31, 2016 : Rs.Nil, April 01, 2015 : Rs.1,875.2 Million). The loan was taken on September 9, 2010. The outstanding amount has been repaid in previous year.

(c) USD 10 Million (March 31, 2016 : USD 20 Million, April 01, 2015 : USD 30 Million) equivalent to Rs.648.6 Million (March 31, 2016 : Rs.1,325.2 Million, April 01, 2015 : Rs.1,875.2 Million). The loan was taken on June 30, 2011 and is repayable in 3 equal installments of USD 10 Million each at the end of 4th year, 5th year and 6th year. Second installment of USD 10 Million has been repaid in current year and first installment of USD 10 Million was repaid in previous year. The last installment is due on June 30, 2017.

(d) USD 50 Million (March 31, 2016 : USD 50 Million, April 01, 2015 : USD 50 Million) equivalent to Rs.3,242.8 Million (March 31, 2016 : Rs.3,313.0 Million, April 01, 2015 : Rs.3,125.2 Million). The loan was taken on September 20, 2012 and is repayable on September 19, 2017.

(e) USD 100 Million (March 31, 2016 : USD 100 Million, April 01, 2015 : USD 100 Million) equivalent to Rs.6,485.5 Million (March 31, 2016 : Rs.6,626.0 Million, April 01, 2015: Rs.6,250.5 Million). The loan was taken on June 4, 2013 and is repayable on June 3, 2018.

(f) USD Nil (March 31, 2016 : USD 16 Million, April 01, 2015 : USD 28 Million) equivalent to Rs.Nil (March 31, 2016 : Rs.1,060.2 Million, April 01, 2015 : Rs.1,750.1 Million).

Loan of USD 40 Million was taken on March 25, 2011 and was repayable in 3 installments viz., 30% each of the drawn amount at the end of 4th year and 5th year and 40% of the drawn amount at the end of the 6th year.

The last installment of USD 16 Million has been repaid in current year. First and Second installment of USD 12 Million each has been repaid in previous years.

(g) USD 50 Million (March 31, 2016 : USD 50 Million, April 01, 2015 : USD Nil) equivalent to Rs.3,242.8 Million (March 31, 2016 : Rs.3,313.0 Million, April 01, 2015 : Rs.Nil). The loan was taken on August 11, 2015 and is repayable on August 11, 2017.

(h) USD 30 Million (March 31, 2016 : USD 30 Million, April 01, 2015 : USD Nil) equivalent to Rs.1,945.7 Million (March 31, 2016 : Rs.1,987.8 Million, April 01, 2015 : Rs.Nil). The loan was taken on September 09, 2015 and is repayable on September 08, 2017.

(i) USD 16 Million (March 31, 2016 : USD Nil, April 01, 2015 : USD Nil) equivalent to Rs.1,037.7 Million (March 31, 2016 : Rs.Nil, April 01, 2015 : Rs.Nil). The loan was taken on March 24, 2017 and is repayable on March 22, 2019.

(II) Unsecured Loan under Foreign Currency Non Resident (FCNR B) Scheme of USD 50 Million (March 31, 2016 : USD 50 Million, April 01, 2015 : USD Nil) equivalent to Rs.3,242.8 Million (March 31, 2016 : Rs.3,313.0 Million, April 01, 2015 : Rs.Nil). The loan was taken on August 19, 2015 and is repayable on August 18, 2017.

(III) Redeemable non-convertible debentures of Rs.Nil (March 31, 2016 : Rs.Nil, April 01, 2015 : Rs.5,000.0 Million) issued on November 23, 2012 for a period of 36 months at a coupon rate of 9.20% p.a. Such debentures were secured by a pari-passu first ranking charge on the Company’s specified fixed assets so as to provide a fixed asset cover of 1.25x and were listed on the National Stock Exchange. The loan was taken on November 23, 2012 and has been repaid in previous year.

(IV) Unsecured term loan of Rs.Nil (March 31, 2016 : Rs.Nil, April 01, 2015 : Rs.2,500.0 Million) has been repaid in previous year.

(V) Secured term loan from department of biotechnology of Rs.108.2 Million (March 31, 2016 : Rs.77.3 Million, April 01, 2015 : Rs.77.3 Million) has been secured by hypothecation of assets and goods of the Company. The loan is repayable in 10 equal half yearly installments commencing from December 26, 2018, last installment is due on June 26, 2023.

The Company has not defaulted on repayment of loan and interest payment thereon during the year.

(B) Details of securities for Short term Borrowings are as follows:

First charge has been created on a pari-passu basis, by hypothecation of inventories and receivables, both present and future.

10 IME IND AS ADOPTION RECONCILIATION

Explanation to transition to Ind AS

Ind AS 101 -”First-time Adoption of Indian Accounting Standards” requires that all Ind AS and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended March 31, 2017 for the Company, be applied retrospectively and consistently for all financial years presented, except for the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as described below. The Company has recognised all assets and liabilities whose recognition is required by Ind AS and has not recognised items of assets or liabilities which are not permitted by Ind AS, reclassified items from previous GAAP to Ind AS as required under Ind AS and applied Ind AS in measurement of recognised assets and liabilities.

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

Hedge accounting

At the date of transition to Ind AS, the Company has measured all derivatives at fair value through profit or loss and eliminated all deferred losses and gains arising on derivatives that were reported in accordance with previous GAAP assets or liabilities.

Classification and measurement of financial assets

The Company has assessed conditions for classification of the financial assets on the basis of the facts and circumstances that were exist on the date of transition to Ind AS.

Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 “Determining whether an Arrangement contains a Lease” to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date

Deemed cost of property, plant and equipment and intangible assets

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as at April 01, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment and intangible assets.

Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances as at the date of transition to Ind AS. The Company has elected to apply this exemption for its investments in certain equity instruments.

Compound financial instruments

Under Ind AS 32, the Company should split compound financial instruments into separate equity and liability components. Ind AS 101 provides that if the liability component is no longer outstanding at the date of transition, a first-time adopter does not have to separate it from the component instrument. The Company has elected to apply this exemption for its compound financial instruments.

Fair value measurement of financial assets and financial liabilities at initial recognition

The Company has applied the requirements in paragraph B5.1.2A (b) of Ind AS 109 prospectively to transactions entered into on or after the date of transition to Ind AS. This exemption has been availed by the Company.

Non - current assets held for sale and discontinued operations

Ind As 105 requires that asset classified as non - current as per Ind AS 1 are not reclassified as current assets until they meet criteria to be classified as held for sale. The adopter can opt to either value those assets at carrying amount or fair value less cost of sale at the transition date and record any difference between such amount and carrying value directly to retained earnings. The Company has applied for this exemption.

Business Combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

Share-based payment transactions

As per previous GAAP, the Company had applied the fair value recognition and measurement principles similar to those prescribed under Ind AS 102 for all options granted before the Transition Date. Consequently, this exemption was not required to be applied.

Excise duty

Under the previous GAAP, excise duty was netted off against sale of products. However, under Ind AS, excise duty is included in sale of products and is separately presented as expense in the statement of profit and loss.

a) Derivative instruments at fair value through profit or loss

Under previous GAAP, derivative instruments entered into for hedging the foreign currency fluctuation risk were accounted for on the principles of prudence. Pursuant to this, losses, if any, on Mark to Market basis, were recognised and gains were not recognised. Under Ind AS, gains on derivative instruments have been measured at fair value through profit or loss and gains or losses are recognised in the statement of profit and loss.

b) Discounting / (unwinding of discount) of provisions

Under Ind AS, long term provisions are to be measured at present value at the date of transition.

c) Separately acquired intangible assets

Under Ind AS, separately acquired intangible assets shall be capitalised which were not eligible for capitalisation under previous GAAP.

d) Proposed dividend (including dividend distribution tax)

Under Ind AS, dividend to holders of equity instruments is recognised as a liability in the period in which the obligation to pay is established. Under previous GAAP, dividend proposed was recorded as a provision in the period to which it relates.

e) Expected credit loss

Under previous GAAP, the Group had created provision for doubtful debts based on specific amount for incurred losses. Under Ind AS, the allowance for doubtful debts has been determined based on expected credit loss model.

f) Employee benefits

Under previous GAAP, actuarial gains and losses were recognised in statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of net defined benefit liability / asset which is recognised in other comprehensive income in the respective periods.

g) Effect of transition to Ind AS on Standalone Cash Flow Statement for the year ended March 31, 2016

Net increase in cash and cash equivalents represents movement in cash credit facilities considered as a component of cash and cash equivalents under Ind AS which as per previous GAAP, was considered as financing activity. Other Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities and has no impact on the net cash flow for the year ended 31st March, 2016 as compared with the previous GAAP.

In respect of any present obligation as a result of past event that could lead to a probable outflow of resources, provisions has been made, which would be required to settle the obligation. The said provisions are made as per the best estimate of the management and disclosure as per Ind AS 37 - “Provisions, Contingent Liabilities and Contingent Assets” has been given below :

Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs.24.1 Million (Previous Year Rs.116.5 Million).

11 ESTIMATES AND JUDGEMENTS

The preparation of the Company’s financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

1 Fair value measurement of Financial Instruments

When the fair values of financials assets and financial liabilities recorded in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques which involve various judgements and assumptions.

2 Useful lives of property, plant and equipment and intangible assets

Property, plant and equipment and intangible assets represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation and amortisation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company’s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

3 Assets and obligations relating to employee benefits

The employment benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ (income) include the discount rate, inflation and mortality assumptions. Any changes in these assumptions will impact upon the carrying amount of employment benefit obligations.

4 Tax expense [Refer Note 2(q)]

The Company’s tax jurisdiction is India. Significant judgements are involved in determining the provision for income taxes, if any, including amount expected to be paid/recovered for uncertain tax positions. Further, significant judgement is exercised to ascertain amount of deferred tax asset (DTA) that could be recognised based on the probability that future taxable profits will be available against which DTA can be utilized and amount of temporary difference in which DTA can not be recognised on want of probable taxable profits.

5 Provisions [Refer Note 2(m)]

6 Write down in value of inventories (Refer Note 13)

7 Contingencies (Refer Note 40)

1 Consequent to the amalgamation of erstwhile Ranbaxy Laboratories Limited (RLL) into the Company as referred in Note 59(4), Zenotech Laboratories Limited (‘Zenotech’) had become an associate of the Company. The erstwhile RLL had granted certain loans to Zenotech which were outstanding and inherited by the Company. The Company has not granted any further loans to Zenotech post effective date of amalgamation i.e. March 24, 2015. The balance of this inherited outstanding loan is Rs.512.0 Million. The Company is in process of evaluating various options in relation to recovery of the outstanding loans and interest thereon of Rs.214.9 Million (March 31, 2016 : Rs.151.5 Million, April 01, 2015 : Rs.88.8 Million).

2 Intangible assets consisting of trademarks, designs, technical knowhow, non-compete fees and other intangible assets are available to the Company in perpetuity. The amortisable amount of intangible assets is arrived at based on the management’s best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

3 Exceptional item for previous year represents charge on account of impairment of certain Property, Plant and Equipment and Intangible assets. This charge had arisen on account of the integration and optimization exercise being carried out for certain manufacturing facilities. The recoverable amount of the said assets is its value in use which is determined for a period of less than one year.

4 Pursuant to the Scheme of Arrangement u/s 391 to 394 of the Companies Act 1956 for amalgamation of erstwhile RLL with the Company as sanctioned by the Hon’ble High Court of Gujarat and Hon’ble High Court of Punjab and Haryana on March 24, 2015 (effective date) all the assets, liabilities and reserves of erstwhile RLL were transferred to and vested in the Company with effect from April 1, 2014, the appointed date. Erstwhile RLL along with its subsidiaries and associates was operating as an integrated international pharmaceutical organisation with business encompassing the entire value chain in the production, marketing and distribution of pharmaceutical products. The scheme was accordingly been given effect to in the financial statements for the year ended March 31, 2015.

On April 10, 2015, in terms of the Scheme of Arrangement 0.80 equity share of Rs.1 each (Number of Shares 334,956,764 including 186,516 Shares held by ESOP trust) of the Company has been allotted to the shareholders of erstwhile RLL for every 1 share of Rs.5 each (Number of Shares 418,695,955 including 233,146 shares held by ESOP trust) held by them in the share capital of erstwhile RLL, after cancellation of 6,967,542 shares of erstwhile RLL. An amount of Rs.1,792.4 Million being the excess of share capital of erstwhile RLL over the amount recorded as the share capital (which was outstanding to be issued by the Company as on April 1, 2015 and disclosed as Share Suspense Account) was credited to Capital Reserve.

5 Out of a MAT credit entitlement of Rs.8,222.7 Million which was written down by the erstwhile RLL during the quarter ended December 31, 2014, an amount of Rs.7,517.0 Million was recognised by the Company in the year ended March 31, 2015, on a reassessment by the Management, based on convincing evidence that the combined amalgamated entity would pay normal income tax during the specified period and would therefore be able to utilize the MAT credit entitlement so recognised.

6 Since the US-FDA import alert at Karkhadi facility in March 2014, the Company remained fully committed to implement all corrective measures to address the observations made by the US-FDA with the help of third party consultant. Substantial progress has been made at the Karkhadi facility in terms of completing the action items to address the observations made by the US-FDA in its warning letter issued in May 2014. The Company is continuing to work closely and co-operatively with the US-FDA to resolve the matter. The contribution of this facility to Company’s revenues is not significant.

7 The US-FDA, on January 23, 2014, had prohibited using API manufactured at Toansa facility for manufacture of finished drug products intended for distribution in the U.S. market. Consequentially, the Toansa manufacturing facility was subject to certain provisions of the consent decree of permanent injunction entered in January 2012 by erstwhile Ranbaxy Laboratories Ltd (which was merged with Sun Pharmaceutical Industries Ltd in March 2015). In addition, the Department of Justice of the USA (‘US DOJ’), United States Attorney’s Office for the District of New Jersey had also issued an administrative subpoena dated March 13, 2014 seeking information primarily related to Toansa manufacturing facility for which a Form 483 containing findings of the US-FDA was issued in January 2014. The Company is continuing to fully cooperate and is in dialogue with the US DOJ, and continuing to provide requisite information.

8 In December 2015, the US-FDA issued a warning letter to the manufacturing facility at Halol. Subsequently, a re-inspection was carried out by the US-FDA in November 2016. At the conclusion of the inspection, FDA issued a Form 483 with nine observations. The Company has submitted its response documenting the corrective measures to resolve the 483 observations. The Company is providing regular updates to USFDA on the progress of the corrective actions. The Company is continuing to manufacture and distribute products to the U.S from Halol facility and at the same time working closely and co-operatively with the US-FDA to resolve the matter.

9 In September 2013, the US-FDA had put the Mohali facility under import alert and was also subjected to certain provisions of the consent decree of permanent injunction entered in January 2012 by erstwhile Ranbaxy Laboratories Ltd (which was merged with Sun Pharmaceutical Industries Ltd in March 2015). In November 2016, the US-FDA conducted a re-inspection of the Mohali facility post the completion of remediation work at the facility. As a result of this reinspection, in March 2017, the US-FDA lifted the import alert and indicated that the facility was in compliance with the requirements of cGMP provisions mentioned in the consent decree. The Mohali facility will continue to remain under consent decree under certain other provisions of the decree for a fixed period of time to demonstrate sustainable cGMP compliance.

10 In accordance with Ind AS 108 “Operating Segments”, segment information has been given in the consolidated Ind AS financial statements, and therefore, no separate disclosure on segment information is given in these financial statements.

11 Remuneration to the Managing Director and the Whole-time Director(s) of the Company for the years ended March 31, 2015, March 31, 2016 and March 31, 2017 are higher by Rs.49.6 Million, Rs.29.6 Million and Rs.44.7 Million respectively than the amounts approved by the Central Government of India (Ministry of Corporate Affairs) on applications made by the Company to approve the maximum remuneration as approved by the members of the Company for the three years ended March 31, 2017, in excess of the limits specified under Schedule V to the Companies Act, 2013, in case of inadequacy of profits. The Company has re-represented to the office of the Ministry of Corporate Affairs (MCA) for approval of remuneration within the overall limits approved by the members of the Company for the years ended March 31, 2015 and March 31, 2016, and that for the year ended March 31, 2017, applications for revision in the remuneration, as approved by the members of the Company, has been made to the MCA. The responses in respect of the foregoing rerepresentation / applications for revision are awaited from the MCA. On receipt of the requisite approvals, the balance amount of remuneration for the aforesaid years, if any, as per their entitlement, shall be paid to the Managing Director and the Whole-time Director(s), as applicable, and the same shall be given effect to in the year in which the approval is received.

Excess remuneration, if any, after final approval in respect of the re-representation/applications for revision is received, shall be refunded by the respective Managing Director and the Whole-time Director(s).

12 As at March 31, 2017, the Company has received an amount of Rs.0.0 Million (Rs.7,177) towards share application money for 1,148 equity shares of the Company. The Company will allot these equity shares during the next financial year.

The Company has sufficient authorised capital to cover the allotment of these shares. Pending allotment of shares, the amounts are maintained in a designated bank account and are not available for use by the Company.

13 The Company completed buy-back of 7,500,000 equity shares of Rs.1 each (representing 0.31% of total pre buy-back paid up equity capital) on October 18, 2016, from the shareholders on a proportionate basis by way of a tender offer at a price of Rs.900 per equity share for an aggregate amount of Rs.67,500 Lakhs in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998. This buy-back of equity shares was approved by the Board of Directors of the Company at its meeting held on June 23, 2016.

Footnote

1 Incorporated / Acquired during the year.

2 Merged with Sun Pharmaceutical Industries, Inc.

3 Dissolved / Liquidated during the year.

4 Merged with Sun Pharma Global FZE.

5 Investment sold during the previous year.

6 Taro Pharmaceutical India Private Limited is under liquidation.

7 Merged into Mutual Pharmaceutical Company, Inc. during the previous year .

8 Merged into URL Pharma Inc. during the previous year.

9 Thallion Pharmaceutical Inc., was acquired and merged with Taro Pharmaceuticals Inc. during the year.

10 Incorporated / Acquired during the year ended March 31, 2015.

11 Dissolved / Liquidated during the previous year.

12 Incorporated / Acquired during the previous year.

13 Thea Acquisition Corporation has been merged with Insite Vision Incorporated during the previous year.

14 Acquired and subsequently amalgamated in Taro Pharmaceuticals Inc. in the previous year.

15 Daiichi Sankyo (Thailand) Ltd.’s shares were sold during the year.

16 During the year Solrex Pharmaceuticals Company, a partnership firm has been converted into company which is known as Sun Pharma Medisales Private Limited.

17 Holds voting power of 81.87% (beneficial ownership 72.81%) [March 31, 2016 79.32% (beneficial ownership 68.98%)] [April 01, 2015 79.24% (beneficial ownership 68.87%)].


Mar 31, 2015

1 DISCLOSURES RELATING TO SHARE CAPITAL

i Rights, Preferences and Restrictions attached to Equity Shares

The Equity Shares of the Company, having par value of Rs. 1 per share, rank pari passu in all respects including voting rights and entitlement to dividend.

ii Reconciliation of the number of shares and amount outstanding at the beginning and at the end of reporting period

iii 1,035,581,955 (upto the end of previous year 1,035,581,955) Equity Shares of Rs. 1 each have been allotted as fully paid up bonus shares during the period of five years immediately preceding the date at which the Balance Sheet is prepared.

iv Number of stock options against which equity shares to be issued by the Company upon vesting and exercise of those stock options by the option holders as per the relevant scheme (Refer Note 56)

v Equity shares held by each shareholder holding more than 5 percent Equity Shares (excluding share suspense account) in the Company are as follows:

2 The net Exchange Loss of Rs. 3,861.1 Million (Previous Year Loss of Rs. 1,740.0 Million) is included in Revenue from Operations, Cost of Materials Consumed, Finance Cost and Other Expenses in the Statement of Profit and Loss, as applicable.

3 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:

(a) An amount of Rs. 94.0 Million (Previous Year Rs. 69.7 Million) and Rs. NIL (Previous Year Rs. NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Note 8 "Trade Payables" regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS

Contributions are made to Recognised Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 377.8 Million (Previous year Rs. 118.5 Million)

5 ACCOUNTING STANDARD (AS-19) ON LEASES

(a) The Company has given certain premises and Plant and Machinery under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 10 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has received refundable interest free security deposits where applicable in accordance with the agreed terms. (b) The Company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 10 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. (c) Lease receipts / payments are recognised in the Statement of Profit and Loss under "Lease Rental and Hire Charges" & "Rent" in Note 22A and 26 respectively. (d) The future minimum lease payments in respect of non cancellable operating leases as at March 31, 2015 are as under

6 Miscellaneous Expenses includes Nil (Previous year Rs. 433.9 Million) towards Product Settlement Expense.

7 Consequent to the amalgamation of erstwhile RLL into the Company as referred in Note 48, Zenotech Laboratories Limited ('Zenotech') became an associate of the Company. The erstwhile RLL had granted certain loans to Zenotech which were outstanding and inherited by the Company. The Company has not granted any further loans to Zenotech post effective date i.e. March 24, 2015. The balance of this inherited outstanding loan is Rs. 512.0 Million. The Company is in process of evaluating various options in relation to recovery of the outstanding loans and interest thereon of Rs. 88.8 million.

8 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the Company in perpetuity. The amortisable amount of intangible assets is arrived at based on the management's best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

9 On 11th June, 2013, Sun Pharma Global FZE (SPG), a wholly owned subsidiary has entered into settlement agreement for USD 550.0 Million [including USD 44.0 Million borne by Sun Pharmaceutical Industries Inc (formerly known as Caraco Pharmaceutical Laboratories Ltd.)] with Pfizer Inc., USA; Wyeth LLC USA and Nycomed GmbH, Germany in settlement of the claim of patent infringement litigation related to generic version of "Protonix". SPG has entered into an agreement with a third party in terms of which the said party has agreed to bear damages on account of patent infringement to the extent of USD 400.0 Million (equivalent to Rs. 24,002.0 Million) in consideration of SPG agreeing to sell them pharmaceutical products at a negotiated discounted price for a specified period. Accordingly, a provision of USD 16.5 Million (Previous year USD 438.5 Million) equivalent to Rs. 1,031.7 Million (Previous Year Rs. 26,312.2 Million) [including other related expected discount and incidental expenses of USD 16.5 Million (Previous Year USD 38.5 Million) equivalent to Rs. 1,031.7 Million (Previous Year Rs. 2,310.2 Million)] towards estimated expected liability on this account, has been accounted for and given effect in these financial statements. The above charge of USD Nil (Previous year USD 506.0 Million) equivalent to Nil (Previous Year Rs. 28,756.0 Million) has been considered as exceptional item and Rs. 1,031.7 Million (Previous Year Rs. 2,381.2 Million) has been included in miscellaneous expenses.

10 Pursuant to the Scheme of Arrangement u/s 391 to 394 of the Companies Act 1956 for amalgamation of erstwhile Ranbaxy Laboratories Ltd (RLL) with the Company as sanctioned by the Hon'ble High Court of Gujarat and Hon'ble High Court of Punjab and Haryana on March 24, 2015 (effective date) all the assets, liabilities and reserves of RLL were transferred to and vested in the Company with effect from 1st April 2014, the appointed date. RLL along with its subsidiaries and associates was operating as an integrated international pharmaceutical organisation with business encompassing the entire value chain in the production, marketing and distribution of pharmaceutical products. The scheme has accordingly been given effect to in these financial statements.

The amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed under Accounting Standard 14- "Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies Accounts Rules 2014. Accordingly and giving effect in compliance of the Scheme of Arrangement all the assets, liabilities and reserves of RLL, now considered a division of the Company, were recorded in the books of the Company at their carrying amounts and the form as at the appointed date in the books of RLL.

On April 10, 2015, In terms of the Scheme of Arrangement 0.80 equity share of Rs. 1 each (Number of Shares 334,956,764 including 187,583 Shares held by ESOP trust) of the Company has been allotted to the shareholders of RLL for every 1 share of Rs. 5 each (Number of Shares 418,461,476 including 234,479 shares held by ESOP trust) held by them in the share capital of RLL, after cancellation of 6,967,542 shares of RLL. These shares have been considered for the purpose of calculation of earnings per share appropriately. An amount of Rs. 1,792.4 Million being the excess of the amount recorded as share capital to be issued by the Company over the amount of the share capital of erstwhile RLL has been credited to Capital Reserve.

11 RLL had early adopted Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" and AS 31 "Financial Instruments: Presentation" for accounting of derivative instruments which are outside the scope of Accounting Standard 11 'The Effects of Changes in Foreign Exchange Rates' such as forward contracts to hedge highly probable forecast transactions, option contracts, currency swaps, interest rate swaps etc. In order to align with the Company's policy, derivative instruments are now accounted for in accordance with the announcement issued by the Institute of Chartered Accountants of India dated March 28, 2008. On the principles of prudence as enunciated in Accounting Standard 1 "Disclosure of Accounting Policies" which requires to provide losses in respect of all outstanding derivative instruments at the balance sheet date by marking them to market. Accordingly, the unrealized MTM gain of Rs. 905.4 Million as at April 1, 2014 has been reversed and MTM gain as at March 31, 2015 amounting to Rs. 1,121.0 Million has not been recognized in these financial statements

12 Out of a MAT credit of Rs. 8,222.7 Million which was written down by the erstwhile RLL during the quarter ended December 31, 2014, an amount of Rs. 7,517.0 Million has been recognized by the Company, on a reassessment by the Management at the year-end, based on convincing evidence that the combined amalgamated entity would pay normal income tax during the specified period and would therefore be able to utilize the MAT credit so recognised. Current tax for the year also includes Rs. 284.7 Million pertaining to earlier years.

13 Pursuant to the Scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956 and u/s 52 of the Companies Act, 2013 for amalgamation of erstwhile Sun Pharma Global Inc.(Transferor Company) with the Company, with effect from January 1, 2015 (appointed date), as sanctioned by the Hon'ble High Court of Gujarat, filed with the Registrar of Companies on August 6, 2015 (effective date), all the assets, liabilities, reserves and surplus of Transferor Company were transferred to and vested in the Company without any consideration, on going concern basis. Transferor Company is a wholly owned subsidiary of the company and was engaged in the business activities of strategic and non-strategic investments and financing mainly to its group subsidiary or associate companies worldwide. The amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed under Accounting Standard 14- "Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies Accounts Rules 2014. The scheme has been given effect to in these financial statements and accordingly; (i) The Financial Statements for the year ended March 31, 2015 which were earlier approved by Board of Directors on May 29, 2015 and audited by the statutory auditors of the Company have been revised. (ii) All the assets, liabilities, reserves and surplus of Transferor Company were recorded in the books of the Company at their carrying amounts and in the same form as at the appointed date. Transferor Company being a wholly owned subsidiary of the Company neither any shares are required to be issued nor any consideration is paid. The Equity Share Capital, Preference Share Capital, Share application money pending allotment and securities premium account of the Transferor Company and the carrying value of investment in Equity Shares, Preference Shares and Share application money of the Transferor Company in the books of the Transferee Company stands cancelled. Accordingly the difference of Rs. 6,498.8 Million between the amount of share capital of the Transferor Company and the consideration being Nil, after adjusting for the carrying value of Investments in the books of the Company is credited to Capital Reserve.

14 With regard to tangible assets, the Company has adopted the useful life of fixed assets as indicated in Part C of Schedule II of the Companies Act, 2013 and amendment thereto vide notification dated August 29, 2014 issued by the Ministry of Corporate Affairs. Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, have been fully depreciated and an amount of Rs. 491.8 Million has been charged to the Statement of Profit and Loss. The depreciation expense in the Statement of Profit and Loss for the year is higher by Rs. 3,069.9 Million consequent to the change in the useful life of the assets.

15 In March 2014, the US FDA issued an import alert to the Company for its cephalosporin facility located at Karkhadi, Gujarat in India. The warning letter pertaining to this import alert was issued by the US FDA in May 2014. The letter identifies practices at the facility which are non-compliant with current Good Manufacturing Practice (CGMP) regulations. The Company remains fully committed to compliance and corrective steps are on-going to address the observations made by the US FDA. The Company is committed to working co-operatively and expeditiously with the US FDA to resolve the matters indicated in its letter. Until these matters are resolved to the satisfaction of the US FDA, the US FDA may, in the near term, withhold approval of pending new drug applications from this facility. The contribution of this facility to Company's revenues is not significant.

16 The US FDA had, on January 23, 2014, prohibited from manufacturing and distributing APIs from its Toansa manufacturing facility and finished drug products containing APIs manufactured at this facility into the USA regulated market. Consequentially, the Toansa manufacturing facility is subject to certain terms of the Consent decree of permanent injunction entered into by the Company in January 2012.

In addition, the Department of Justice of the USA ('US DOJ'), United States Attorney's Office for the District of New Jersey had also issued an administrative subpoena dated March 13, 2014 seeking information primarily related to Toansa manufacturing facility for which a Form 483 containing findings of the US FDA was issued in January 2014. The Company is fully cooperating with this information request and is in dialogue with the US DOJ for submission of the requisite information.

17 In the absence of net profits in the Company for the year ended March 31, 2015 remuneration to the Managing Director and a Whole-time Director of the Company for the year ended March 31, 2015 is in excess of the limits specified under Schedule V of the Companies Act, 2013 by Rs. 20.7 Million. In this regard the Company has made necessary applications to the Central Government for approving of the amounts of maximum remuneration payable, which includes the excess amounts already paid / provided. Consequent to giving effect to the scheme of arrangement for the merger of Specified Undertaking of Sun Pharma Global FZE into the Company effective from May 1, 2013, resulting in the absence of net profits in the Company for the previous year ended March 31, 2014 (i) remuneration to the Managing Director and the Whole-time Directors of the Company has exceeded the limits specified under Schedule XIII to the Companies Act, 1956 by Rs. 44.7 Million; and (ii) commission of Rs. 6.4 Million for the previous year ended March 31, 2014, to the Non-Executive Directors of the Company is in excess, since there is absence of net profits for the previous year under section 309(4) read with section 309(5) of the Companies Act, 1956. The Company has made necessary applications to the Central Government for the waiver of the excess remuneration and commission for the previous year ended March 31, 2014. The Company has obtained approval from the shareholders of the Company in respect of the aforesaid remuneration and commission, as applicable for the years March 31, 2014 and 2015. The approval from the Central Government of India is awaited in respect of the said applications.

18 EMPLOYEE SHARE-BASED PAYMENT PLANS

Erstwhile Ranbaxy Laboratories Limited had the Employee Stock Option Schemes ("ESOSs") for the grant of stock options to its eligible employees and Directors of the Company and of its subsidiaries. The ESOSs are used to be administered by the Compensation Committee ("Committee"). Options are used to be granted at the discretion of the Committee to the selected employees depending upon certain criterion. As at 31 March 2015, there were two ESOSs, namely, "ESOS 2005" and "ESOP 2011". ESOS II discontinued on January 17, 2015.

ESOS II provided that the grant price of options would be determined at the average of the daily closing price of the erstwhile RLL's equity shares on the NSE during a period of 26 weeks preceding the date of the grant. ESOS 2005 provided that the grant price of options would be the latest available closing price on the stock exchange on which the shares of the erstwhile RLL were listed, prior to the date of the meeting of the Committee in which the options were granted. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date shall be considered. The options vested evenly over a period of five years from the date of grant. Options lapse, if they were not exercised prior to the expiry date, which was ten years from the date of grant.

During the year ended December 31, 2011, a new ESOS scheme was introduced by erstwhile RLL viz "ESOP 2011" with effect from July 01, 2011. ESOP - 2011 provides that the grant price will be the face value of the equity share i.e. Rs. 5 per share. The options vested evenly over a period of three years from the date of grant. Options lapsed, if they were not exercised prior to the expiry date, which was three months from the date of the vesting. An ESOP Trust had been formed to administer ESOP-2011 scheme. Shares issued to the ESOP Trust were allocated to the eligible employees upon exercise of stock options from time to time. As per the opinion of the Expert Advisory Committee (EAC) of The Institute of Chartered Accountants of India, as on the reporting date, the shares issued to an ESOP Trust but yet to be allocated to the employees be shown as a deduction from the Share Capital with a corresponding adjustment to the loan receivable from ESOP Trust. Accordingly, the Company has adjusted shares held by the ESOP Trust on the reporting date as a deduction from the Share Suspense Account.

Pursuant to the Scheme of Amalgamation, Sun Pharmaceutical Industries Limited ('transferee company') formulated two Employee Stock Option Schemes namely (i) SUN Employee Stock Option Scheme-2015 (ii) SUN Employee Stock Option Plan-2015 (ESOS Schemes) among other things to grant to the eligible employees of erstwhile RLL ('transferor company') stock options. Further, the number of transferee options issued shall equal to the product of number of transferor options outstanding on effectiveness of Scheme multiplied by the Share exchange ratio (0.80) and each transferee option shall have an exercise price per equity share equal to transferor option exercise price per equity shares divided by the share exchange ratio (0.80) and fractions rounded of to the next higher whole number. The terms and conditions of ESOS Schemes of Sun Pharma are not less favourable than those of ESOS Schemes of erstwhile RLL. Under the ESOS Schemes of Sun Pharma, stock options have been issued to the eligible employees of erstwhile RLL.

19 DETAILS OF LONG TERM BORROWINGS AND CURRENT MATURITIES OF LONG TERM DEBT (included under Other Current Liabilities)

(I) External Commercial Borrowings (ECBs) has 6 loans of USD 288.0 Million equivalent to Rs. 18,001.4 Million (Previous Year Nil)

[(included in long term borrowings Rs. 11,625.9 Million (Previous Year Nil) and Rs. 6,375.5 Million (Previous Year Nil) in current maturity of long term debt.)] For the loans outstanding as at March 31, 2015, the terms of repayment for borrowings are as follows:

(a) USD 100 Million equivalent to Rs. 6,250.5 Million (Previous Year Nil). The loan was taken on June 4, 2013 and is repayable on June 3, 2018.

(b) USD 50 Million equivalent to Rs. 3,125.3 Million (Previous Year Nil). The loan was taken on September 20, 2012 and is repayable on September 19, 2017.

(c) USD 30 Million equivalent to Rs. 1,875.2 Million (Previous Year Nil). The loan was taken on June 30, 2011 and is repayable in 3 equal instalments at the end of 4th year, 5th year and 6th year.

(d) USD 30 Million equivalent to Rs. 1,875.2 Million (Previous Year Nil). The loan was taken on September 9, 2010 and is repayable on September 8, 2015.

(e) USD 50 Million equivalent to Rs. 3,125.3 Million (Previous Year Nil). The loan was taken on August 12, 2010 and is repayable on August 11, 2015.

(f) USD 28 Million equivalent to Rs. 1,750.1 Million (Previous Year Nil). Loan amounting to USD 40 Million equivalent to Rs. 2,500. 2 Million (Previous Year Nil) was taken on March 25, 2011 and is repayable fully by March 24, 2017 in 3 instalments viz., 30% each of the drawn amount at the end of 4th year and 5th year each and 40% of the drawn amount at the end of the 6th year. First instalment of USD 12 Million equivalent to Rs. 747.91 Million (Previous Year Nil) has been repaid in current year. The Company has not defaulted on repayment of loan and interest during the year.

(II) Rs. 5,000 Million (Previous Year Nil) redeemable non-convertible debentures issued by erstwhile RLL on November 23, 2012 for a period of 36 months at a coupon rate of 9.20% p.a. Such debentures are secured by a pari-passu first ranking charge on the Company's specified fixed assets so as to provide a fixed asset cover of 1.25x and are listed on the National Stock Exchange.

(III) Loan of Rs. 2,500 Million (Previous Year Nil). The loan is repayable on October 2, 2015. The Company has not defaulted on repayment of loan and interest during the year.

20 In respect of any present obligation as a result of past event that could lead to a probable outflow of resources, provisions has been made, which would be required to settle the obligation. The said provisions are made as per the best estimate of the management and disclosure as per Accounting Standard (AS) 29 - Provisions, Contingent Liabilities & Contingent Assets has been given below :

21 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs. 11.0 Million.

22 Previous year figures are regrouped wherever necessary. In view of the amalgamation as referred in Note 48 and Note 51 the figures for the current year are not comparable with the corresponding figures of the previous year.


Mar 31, 2014

Rs. in Million As at As at 31st March 2014 31st March, 2013

1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

i Contingent Liabilities

A Claims against the Company not acknowledged as debts 24.0 34.6

B Guarantees:

Guarantees given by the bankers on behalf of the Company 374.2 227.4

Corporate Guarantees 86.0 149.2

C Others:

Letters of Credit for Imports 2,103.2 463.2

Liabilities Disputed-Appeals filed with respect to :

Income Tax on account of Disallowances /Additions 4,927.8 2771.2

Sales Tax on account of Rebate/ Classification 48.5 48.4

Excise Duty on account of Valuation /Cenvat Credit 93.6 322.2

ESIC Contribution on account of applicability 0.2 0.2

Drug Price Equalisation Account [DPEA] on account of demand towards 14.0 14.0 unintended benefit, including interest thereon, enjoyed by the Company

Demand by (DGFT import duty with respect to import alleged to be in 14.6 13.9 excess of entitlement as per the Advanced Licence Scheme

ii Commitments

a Estimated amount of contracts remaining to be executed on capital 6,279.2 2,647.0 account [net of advances].

b Uncalled liability on partly paid investments 0.5 0.4

c Derivative related Commitments - Forward Foreign Exchange Contracts 4,200.0 4,342.4

2 DISCLOSURES RELATING TO SHARE CAPITAL

i Rights, Preferences and Restrictions attached to Equity Shares

The Equity Shares of the Company, having par value ofRs. 1 per share, rank pari passu in all respects including voting rights and entitlement to dividend.

iii 1,035,581,955 (Previous Year Nil) Equity Shares of Rs. 1 each have been allotted as fully paid up bonus shares during the period of five years immediately preceding the date at which the Balance Sheet is prepared.

3 The net Exchange Loss of Rs. 1,740.0 Million (Previous Year Loss of Rs. 39.9 Million) is included in Revenue from Operations, Cost of Materials Consumed and Other Expenses in the Statement of Profit and Loss, as applicable.

4 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:

(a ) An amount of Rs. 69.7 Million (Previous YearRs. 66.2 Million) andRs. NIL (Previous YearRs. NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d ) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Note 8 "Trade Payables" regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS

Contributions are made to Recognised Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 118.5 Million (Previous year Rs. 94.8 Million)

In respect of Gratuity, Contributions are made to LIC''s Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the Statement of Profit and Loss amounting toRs. 41.9 Million (Previous YearRs. 75.5 Million) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Commitments are actuarially determined using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

Category of Plan Assets : The Company''s Plan Assets in respect of Gratuity are funded through the Group Scheme of the LIC of India.

6 ACCOUNTING STANDARD (AS-19) ON LEASES

(a) The Company has given certain premises for its operations and Plant and Machinery under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and license, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has received refundable interest free security deposits where applicable in accordance with the agreed terms, (b) The Company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and license, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms, (c) Lease receipts / payments are recognised in the Statement of Profit and Loss under "Rent" in Note 22 and 26 respectively.

7 Miscellaneous Expenses includes Rs. 433.9 Million (Previous year Nil) towards Product Settlement Expense.

8 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the Company in perpetuity. The depreciable amount of intangible assets is arrived at based on the management''s best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

9 LEGAL PROCEEDINGS

The Company and / or its subsidiaries are involved in various legal proceedings including product liability, contracts, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance / is contractually indemnified by the manufacturer, in an amount it believes is sufficient for its needs. In respect of other claims, the Company believes, these claims do not constitute material litigation matters and with its meritorious defences the ultimate disposition of these matters will not have material adverse effect on its Financial Statements.

10 Current Tax is net of write back of Provision for Fringe Benefit Tax (net) of Nil (Previous Year Rs. 0.2 Million) pertaining to earlier year.

11 Pursuant to the scheme of arrangement in the nature of demerger and transfer of specified undertaking of Sun Pharma Global FZE, a wholly owned subsidiary, into the Company w.e.f 1st May, 2013, without any consideration, For the year ended 31st March, 2014 on a going concern basis consisting of all the assets and liabilities pertaining to the said undertakings, being approved by shareholders of both the companies and subsequently approved by the Hon''ble High Court of Gujarat and completion of other regulatory compliances, the scheme has been given effect to in these financial statements and accordingly:

i. The Financial Statements for the year ended 31st March 2014 which were earlier approved by Board of Directors on 29th May, 2014 and audited by the statutory auditors of the Company have been revised.

ii. All the assets and liabilities pertaining to the said undertaking of Sun Pharma Global FZE stand transferred to and vested in the Company as a going concern, as at 1st May, 2013 at carrying values as disclosed in the notes to the revised Financial Statements of Sun Pharma Global FZE on which their auditors have issued a revised audit report dated 10th August, 2014 and the resultant difference amounting to Rs. 28,109.9 Million being the excess of assets over liabilities has been credited to Capital Reserve Account.

iii. On 11th June, 2013, Sun Pharma Global FZE (SPG), a wholly owned subsidiary has entered into settlement agreement for USD 550.0 Million (including USD 44.0 Million borne by Caraco Pharmaceutical Laboratories Ltd) with Pfizer Inc., USA;Wyeth LLC USA and Nycomed GmbH, Germany in settlement of the claim of patent infringement litigation related to generic version of "Protonix". SPG has entered into an agreement with a third party in terms of which the said party has agreed to bear damages on account of patent infringement to the extent of USD 400.0 Million (equivalent toRs. 24,002.0 Million) in consideration of SPG agreeing to sell them pharmaceutical products at a negotiated discounted price for a specified period. Accordingly, a provision of USD 438.5 Million (equivalent to Rs. 26,312.2 Million) [(including other related expected discount and incidental expenses of USD 38.5 Million (equivalent to Rs. 2,310.2 Million)] towards estimated expected liability on this account, has been accounted for and given effect in these financial statements. The above charge of USD 506.0 Million (equivalent to Rs. 28,756.0 Million) has been considered as exceptional item and Rs. 2,381.2 Million has been included in miscellaneous expenses.

12 In March 2014, the US FDA issued an import alert to the Company for its cephalosporin facility located at Karkhadi, Gujarat in India. The warning letter pertaining to this import alert was issued by the US FDA in May 2014. The letter identifies practices at the facility which are non-compliant with current Good Manufacturing Practice (cGMP) regulations. The Company remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the US FDA. It is committed to working co-operatively and expeditiously with the US FDA to resolve the matters indicated in its letter. Until these matters are resolved to the satisfaction of the US FDA, the US FDA may, in the near term, withhold approval of pending new drug applications from this facility.

The contribution of this facility to Company''s revenues is not significant.

13 Consequent to giving effect to the Scheme of Arrangement as referred in Note 48 above, resulting in the absence of net profits in the company for the year; (i) remuneration to the Managing Director and the Whole-time Directors of the Company for the year ended 31st March, 2014 has exceeded the limits specified under Schedule XIII to the Companies Act, 1956 byRs. 44.7 Million; and (ii) commission of Rs. 6.4 Million for the year ended 31st March, 2014 to the Non-Executive Directors of the Company has exceeded in terms of section 309(4) read with section 309(5) of the Companies Act.1956. The Company is in the process of seeking approval from the shareholders of the Company and the Central Government of India in respect of the aforesaid amounts.

14 The Company enters into Forward Exchange Contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date.

15 Previous years'' figures are regrouped wherever necessary.


Mar 31, 2013

1 The net Exchange Loss of Rs. 39.9 Million (Previous Year Rs. 618.5 Million) is included under Revenue from Operations, Other Income, Cost of Materials Consumed and Other Expenses in the Statement of Profit and Loss.

2 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:

(a) An amount of Rs. 66.2 Million (Previous Year Rs. 39.4 Million) and Rs. NIL (Previous Year Rs. NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Note 8 "Trade Payables" regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

3 RELATED PARTY DISCLOSURE (AS-18) - AS PER ANNEXURE ''A''

4 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS

Contributions are made to Recognised Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 94.8 Million (Previous year Rs. 132.1 Million)

In respect of Gratuity, Contributions are made to LIC''s Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the Statement of Profit and Loss amounting to Rs. 75.5 Million (Previous Year Rs. 52.0 Million) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Commitments are actuarially determined using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

Category of Plan Assets : The Company''s Plan Assets in respect of Gratuity are funded through the Group Scheme of the LIC of India.

5 ACCOUNTING STANDARD (AS-19) ON LEASES

(a) The Company has given certain premises for its operations and Plant and Machinery under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has received refundable interest free security deposits where applicable in accordance with the agreed terms. (b) The Company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. (c) Lease receipts / payments are recognised in the Statement of Profit and Loss under "Rent" in Note 22 and 26 respectively.

6 As per the best estimate of the management, provision has been made towards breakages and expiry of products return, as per Accounting Standard (AS) 29 notified under the Companies (Accounting Standards) Rules, 2006.

7 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the Company in perpetuity. The depreciable amount of intangible assets is arrived at based on the management''s best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

8 LEGAL PROCEEDINGS

The Company and / or its subsidiaries are involved in various legal proceedings including product liability, contracts, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance / is contractually indemnified by the manufacturer, in an amount it believes is sufficient for its needs. In respect of other claims, the Company believes, these claims do not constitute material litigation matters and with its meritorious defences the ultimate disposition of these matters will not have material adverse effect on its Financial Statements.

9 Current Tax is net of write back of Provision for Fringe Benefit Tax (net) of Rs. 0.2 Million (Previous Year Rs. 0.6 Million) pertaining to earlier year.

10 During the year, the Company has received Government Grant of Nil (Previous Year Rs. 2.0 Million) and Nil (Previous Year Rs. 3.0 Million) in respect of Building and Plant and Equipment respectively.

11 Pursuant to the scheme of arrangement in the nature of spin off and transfer of Domestic Formulation undertaking of the Company to its wholly owned subsidiary, Sun Pharma Laboratories Ltd (SPLL - formerly known as Sun Resins & Polymers Private Ltd.) as approved by the Hon''ble High Court of Gujarat and the Hon''ble High Court of Bombay vide their Orders dated 3rd May, 2013, on and with effect from the close of the business hours on 31st March 2012, the appointed date, all the specified assets, movable, tangible and intangible assets, without any liabilities, pertaining to the Domestic Formulation undertaking stands transferred to and /or vested in the SPLL as a going concern without consideration. The scheme has been given effect to in the financial statements for the previous year ended 31st March, 2012 and accordingly, specified intangible assets, tangible and other assets of the Domestic Formulation undertaking having book value of Rs. 2,999.2 Million have been transferred to SPLL with corresponding debit to the Statement of Profit and Loss as an Exceptional Item.

12 The Company enters into Forward Exchange Contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date.

13 Previous years'' figures are regrouped wherever necessary. Further, current years'' figures are not comparable with those of the previous year in view of the spin off as stated in Note 49.


Mar 31, 2012

1 DISCLOSURES RELATING TO SHARE CAPITAL

i Rights, Preferences and Restrictions attached to Equity Shares

The Equity Shares of the Company, having par value of Rs. 1 per share, rank pari passu in all respects including voting rights and entitlement to dividend.

ii Equity Shares held by each shareholder holding more than 5 percent Equity Shares in the Company are as follows:

2 The net Exchange Loss of Rs. 618.5 Million (Previous Year Gain of Rs. 307.3 Million) is included under Revenue from Operations, Other Income, Cost of Materials Consumed and Other Expenses in the Statement of Profit and Loss.

3 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:

(a) An amount of Rs. 39.4 Million (Previous Year Rs. 33.0 Million) and Rs. NIL (Previous Year Rs. NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Note 7 "Trade Payables" regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4 RELATED PARTY DISCLOSURE (AS-18) - AS PER ANNEXURE ''A''

5 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS

Contributions are made to Recognised Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 132.1 Million (Previous year Rs. 108.1 Million)

In respect of Gratuity, Contributions are made to LIC''s Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules with corresponding charge to the Statement of Profit and Loss amounting to Rs. 52.0 Million (Previous Year Rs. 43.2 Million) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. Commitments are actuarially determined using the ''Projected Unit Credit'' method. Gains and losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss.

Category of Plan Assets : The Company''s Plan Assets in respect of Gratuity are funded through the Group Scheme of the LIC of India.

6 ACCOUNTING STANDARD (AS-19) ON LEASES

(a) The company has given certain premises for its operations and Plant and Machinery under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has received refundable interest free security deposits where applicable in accordance with the agreed terms. (b) The company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. (c) Lease receipts / payments are recognised in the Statement of Profit and Loss under "Rent" in Note 21 and 25 respectively.

7 As per the best estimate of the management, provision has been made towards breakages and expiry of products return, as per Accounting Standard (AS) 29 notified under the Companies (Accounting Standards) Rules, 2006.

8 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the Company in perpetuity. The depreciable amount of intangible assets is arrived at based on the management''s best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

9 The financial statements of the Company for the year ended 31st March, 2012 were earlier approved by the Board of Directors at their meeting held on 29th May, 2012 on which the Statutory Auditors of the Company had issued their report dated 29th May, 2012. Subsequently, the Board of Directors approved the Scheme of Arrangement in the nature of spin off, of Domestic Formulation Undertaking of the Company, comprising specified assets, without any liabilities, pertaining to the said undertaking, on a going concern basis without consideration into Sun Pharma Laboratories Limited (SPLL - formerly known as Sun Resins & Polymers Private Ltd), a wholly owned subsidiary of the Company, effective from the close of the business hours on 31st March 2012, the appointed date. The aforesaid financial statements were not laid for adoption at the annual general meeting held on 8th November, 2012 and it was resolved to approve such financial statements only after the same are revised for giving effect to the aforesaid Scheme of Arrangement. Consequent to the Orders dated 3rd May, 2013 of the Hon''ble High Court of Gujarat and the Hon''ble High Court of Bombay sanctioning the said Scheme of Arrangement, the aforesaid financial statements are revised only to give effect to the said spin off, effective from 31st March, 2012 and assets having book value of Rs. 2,999.2 Million have been transferred to SPLL with corresponding debit to the Statement of Profit and Loss as an Exceptional Item.

10 LEGAL PROCEEDINGS

The Company and / or its subsidiaries are involved in various legal proceedings including product liability, contracts, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance / is contractually indemnified by the manufacturer, in an amount it believes is sufficient for its needs. In respect of other claims, the Company believes, these claims do not constitute material litigation matters and with its meritorious defences the ultimate disposition of these matters will not have material adverse effect on its Financial Statements.

11 Current Tax is net of write back of Provision for Fringe Benefit Tax (net) of Rs. 0.6 Million (Previous year Rs. Nil) pertaining to earlier year.

12 During the year, the Company has received Government Grant of Rs. 2.0 Million (Previous year Rs. Nil) and Rs. 3.0 Million (Previous year Rs. Nil) in respect of Building and Plant and Equipment respectively.

13 The Company enters into Forward Exchange Contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date.

A) The following are the outstanding Forward Exchange Contracts entered into by the Company as on 31st March, 2012

B) The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: a) Amounts receivable in foreign currency on account of the following :

14 The Revised Schedule VI has been effective from 1st April, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous years'' figures are restated / regrouped / rearranged wherever necessary in order to conform to current years'' groupings and classifications.


Mar 31, 2011

As at 31 st March, 2011 As at 31st March, 2010

Rs. in Million Rs. in Million

1 CONTINGENT LIABILITIES NOT PROVIDED FOR

Guarantees Given by the bankers on behalf of the Company 160.1 106.4

Corporate Guarantees 46.0 51.5

Letters of Credit for Imports 166.7 505.5

Liabilities Disputed - Appeals filed with respect to :

Income Tax on account of Disallowances / Additions 290.2 446.6

Sales Tax on account of Rebate / Classification 25.6 11.4

Excise Duty on account of Valuation / Cenvat Credit 318.4 314.0

ESIC Contribution on account of applicability 0.2 0.2

Drug Price Equalisation Account [DPEA] on account of 14.0 14.0 demand towards unintended benefit, including interest there on, enjoyed by the Company

Demand by JDGFT import duty with respect to import 11.5 11.1 alleged to be in excess of entitlement as per the Advanced Licence Scheme

Other Claims against the Company not 15.3 6.7 acknowledged as debts

10 The net exchange gain of Rs. 307.3 Million (Previous Year gain of Rs. 36.4 Million) is included under various heads in the Profit and Loss account.

11 Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:

(a) An amount of Rs. 33.0 Million (Previous Year Rs.14.8 Million) and Rs. NIL (Previous Year Rs. NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Schedule 12 - “Current Liabilities and Provisions” regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.This has been relied upon by the auditors.

12 Disclosure with respect to Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 :

(i) Related Party Disclosure - as per Annexure ‘A' Consequent to the approval of the members of the Company and upon requisite regulatory compliance, during the year, one equity share of Rs. 5 each of the Company is sub-divided into five equity shares of Rs.1 each fully paid-up. The Earnings Per Share of Rs.1 each has been restated for all the corresponding periods in accordance with Accounting Standard (AS-20) on “Earnings Per Share” as notified under The Companies (Accounting Standards) Rules, 2006.

(iv) Accounting Standard (AS-15) on Employee benefits

Contributions are made to Recognised Provident Fund/ Government Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to Rs. 108.1 Million (Previous year Rs. 90.8 Million)

In respect of Gratuity, Contributions are made to LIC's Recognised Group Gratuity Fund Scheme based on amount demanded by LIC of India. Provision for Gratuity is based on actuarial valuation done by independent actuary as at the year end. Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made as per Company rules amounting to Rs. 43.2 Million (Previous Year Rs. 38.8 Million) and it covers all regular employees. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. After the issuance of the Accounting Standard 15 on ‘Employee Benefits', commitments are actuarially determined using the ‘Projected Unit Credit' method. Gains and losses on changes in actuarial assumptions are accounted for in the Profit and Loss account.

(v) Accounting Standard (AS-19) on Operating Leases

(a) The company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms.

(b) Lease payments are recognised in the Profit and Loss Account under “Rent” in Schedule 17.

17 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the Company in perpetuity. The depreciable amount of intangible assets is arrived at based on the management's best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the Company.

18 Legal Proceedings

The Company and / or its subsidiaries are involved in various legal proceedings including product liability, contracts, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance / is contractually indemnified by the manufacturer, in an amount it believes is sufficient for its needs. In respect of other claims, the Company believes, these claims do not constitute material litigation matters and with its meritorious defences the ultimate disposition of these matters will not have material adverse effect on its Financial Statements.

19 Taro Pharmaceutical Industries Ltd (Taro), a pharmaceutical company, incorporated in Israel became a subsidiary of the Company on September 20, 2010.

20 As per the best estimate of the management, no provision is required to be made as per Accounting Standard (AS) 29 as notified by Companies (Accounting Standards) Rules, 2006, in respect of any present obligation as a result of a past event that could lead to a probable outflow of resources, which would be required to settle the obligation.

22 The Company enters into Forward Exchange Contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date.

23 Previous years' figures are restated / regrouped / rearranged wherever necessary in order to conform to current years' groupings and classifications.



Annexure ‘A' to Notes on Account

Names of related parties and description of relationship

1. Subsidaries

Alkaloida Chemical Company Zrt

Caraco Pharmaceutical Laboratories Ltd.

Chattem Chemical Inc.

Green Eco Development Centre Ltd.

OOO “Sun Pharmaceutical Industries” Ltd.

Sun Farmaceutica Ltda (upto 30th September, 2010)

TKS Farmaceutica Ltda.

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

Sun Pharma De Venezuela, CA

Sun Pharma Global Inc.

Sun Pharmaceutical (Bangladesh) Ltd.

Sun Pharmaceutical Industries (Europe) B.V.

Sun Pharmaceutical Industries Inc.

Sun Pharmaceutical Spain, S.L.

Sun Pharmaceuticals France

Sun Pharmaceuticals Germany GmbH

Sun Pharma Global (FZE)

Sun Pharmaceuticals Italia S.R.L.

Sun Pharmaceuticals UK Ltd.

Taro Pharmaeutical Industries Ltd.

Sun Pharmaceutical Industries (Australia) Pty. Ltd.

Aditya Acquisition Company Ltd.

Sun Pharmaceuticals (SA) (Pty) Ltd.

Sun Global Canada Pty Ltd.

Sun Pharmaceutical Peru S.A.C.

Taro Development Corporation

Sun Development Corporation I (upto 20th September, 2010)

ZAO Sun Pharma Industries Ltd.

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

Caraco Pharma Inc.

3 Sky Line LLC

One Commerce Drive LLC

Taro Healthcare Ltd.

Taro Hungary Intellectual Property Licensing LLC

Taro Industries Ltd.

Taro International Ltd - Isaral

Taro Laboratories Ltd.

Taro Manufacturing Ltd.

Taro Pharmaceutical INC.

Taro Pharmaceutical India Pvt. Ltd.

Taro Pharmaceutical Laboratories INC.

Taro Pharmaceutical U.S.A., INC.

Taro Pharmaceuticals Europe B.V.

Taro Pharmaceuticals Ireland Ltd.

Taro Pharmaceuticals North America INC

Taro Pharmaceuticals UK Ltd.

Taro Research Institute Ltd.

Tarochem Ltd.

Morley and Company Inc.

Sun Laboratories FZE

Taro Pharmaceuticals Canada Ltd.

Sun Laboratories Inc.

Taro International Ltd - UK

2. Controlled Entity

Sun Pharma Exports

Sun Pharmaceutical Industries

Sun Pharma Sikkim

Sun Pharma Drugs

Universal Enterprise Pvt. Ltd.

3. Key Management Personnel

Mr. Dilip S. Shanghvi Chairman & Managing Director

Mr. Sudhir V. Valia Wholetime Director

Mr. Sailesh T. Desai Wholetime Director

Mr. S. Kalyanasundaram Chief Executive Officer and Wholetime Director

4. Relatives of Key Management Personnel

Mr. Aalok Shanghvi Son of Chairman and Managing Director

Ms. Khyati Valia Daughter of Wholetime Director

5. Enterprise under significant Influence of Key Management Personnel or their relatives

Sun Petrochemicals Pvt. Ltd.

Navjivan Rasayan (Gujarat) Pvt. Ltd.

Sun Pharma Advanced Research Company Ltd.


Mar 31, 2010

As at 31st March, 2010 As at 31st March, 2009 Rs in Million Rs in Million

1 CONTINGENT LIABILITIES NOT PROVIDED FOR

Guarantees Given by the bankers on behalf 106.4 89.6 of the Company

Corporate Guarantees 51.5 91.2

Letters of Credit for Imports 505.5 399.6

Liabilities Disputed - Appeals filed with respect to:

Income Tax on account of Disallowances / Additions 446.6 154.1

Sales Tax on account of Rebate / Classification 11.4 11.6

Excise Duty on account of Valuation / Cenvat Credit 314.0 242.8

Service Tax on account of Import of Services -- 1.9

ESIC Contribution on account of applicability 0.2 0.2

Drug Price Equalisation Account [DPEA] 14.0 14.0 on account of demand towards unintended benefit, including interest there on, enjoyed by the Company

Demand by JDGFT import duty with respect to 11.1 10.7 import alleged to be in excess of entitlement as per the Advanced Licence Scheme

Other Claims against the Company 6.7 6.5 not acknowledged as debts

2 The net exchange gain of Rs.36.4 Million (Previous Year gain of Rs.759.6 Million) is included under various heads in the Profit & Loss account.

3 Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:

(a) An amount of Rs.14.8 Million (Previous Year Rs.2.1 Million) and Rs. NIL (Previous Year NIL) was due and outstanding to suppliers as at the end of the accounting year on account of Principal and Interest respectively.

(b) No interest was paid during the year.

(c) No interest is payable at the end of the year under Micro, Small and Medium Enterprises Development Act, 2006.

(d) No amount of interest was accrued and unpaid at the end of the accounting year.

The above information and that given in Schedule 12 - "Current Liabilities and Provisions" regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(v) Accounting Standard (AS-19) on Operating Leases

(a) The company has obtained certain premises for its business operations (including furniture and fittings, therein as applicable) under operating lease or leave and license agreements. These are generally not non-cancellable and range between 11 months to 5 years under leave and licence, or longer for other lease and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms.

(b) Lease payments are recognised in the Profit and Loss Account under "Rent" in Schedule 18.

4 Intangible assets consisting of trademarks, designs, technical knowhow, non compete fees and other intangible assets are stated at cost of acquisition based on their agreements and are available to the company in perpetuity. The depreciable amount of intangible assets is arrived at based on the management’s best estimates of useful lives of such assets after due consideration as regards their expected usage, the product life cycles, technical and technological obsolescence, market demand for products, competition and their expected future benefits to the company.

5 Legal Proceedings

The Company and / or its subsidiaries are involved in various legal proceedings including product liability, contracts, employment claims and other regulatory matters relating to conduct of its business. The Company carries product liability insurance / is contractually indemnified by the manufacturer, in an amount it believes is sufficient for its needs. In respect of other claims, the Company believes, these claims do not constitute material litigation matters and with its meritorious defences the ultimate disposition of these matters will not have material adverse effect on its Financial Statements.

6 Alkaloida Chemical Company Zrt. (formerly known as Alkaloida Chemical Company Exclusive Group Limited) (Alkaloida), a subsidiary of the company has made a strategic investment in Taro Pharmaceutical Industries Limited (Taro) a pharmaceutical company based in Israel and holds 36.4% in the capital of Taro. On May 28, 2008 Alkaloida received a notice from Taro regarding purported termination of the merger agreement between Taro and Aditya Acquisition Company Ltd, an Israeli incorporated subsidiary of Alkaloida. On the same date, Taro and some of its directors had filed for a declaratory judgment in an Israeli court seeking Alkaloida/Sun Pharma to conduct a special tender offer which has been rejected by the Tel-Aviv District Court. The plaintiffs have appealed this decision in the Supreme Court of Israel which has temporarily prohibited closing of the Tender offer until it issues a decision on the appeal. Alkaloida does not foresee any adverse impact on its investment.

7 As per the best estimate of the management, no provision is required to be made as per Accounting Standard (AS) 29 as notified by Companies (Accounting Standards) Rules, 2006, in respect of any present obligation as a result of a past event that could lead to a probable outflow of resources, which would be required to settle the obligation.

8 The company enters into Forward Exchange Contracts being derivative instruments, which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date.

9 Previous years’ figures are restated / regrouped / rearranged wherever necessary in order to conform to current years’ groupings and classifications.

ACCOUNTING STANDARD (AS-18) " RELATED PARTY DISCLOSURE " Names of related parties and description of relationship

1. Subsidaries

Sun Pharma Global Inc. BVI.

Sun Pharma Global - FZE

Sun Pharmaceutical (Bangladesh) Ltd.

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

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

Sun Pharmaceutical Peru S.A.C.

Sun Farmaceutica Ltda - Brazil

Sun Pharmaceutical Industries Inc, USA

Sun Pharmaceuticals UK Ltd.

ALKALOIDA Chemical Company Zrt

(formerly known as Alkaloida Chemical Company Exclusive Group Limited)

Chattem Chemical Inc.

Zao Sun Pharma Industries Ltd. Russia

Sun Pharmaceutical Ind (Australia) PTY Ltd.

Aditya Acquisition Company Ltd. - Israel

Sun Development Corporation I

Sun Pharmaceutical Ind. Europe BV

OOO "Sun Pharmaceutical Industries" Ltd.

Sun Pharmaceuticals France

Sun Pharmaceuticals Germany GmbH

Sun Pharmaceuticals Italia S.R.L.

Sun Pharmaceutical Spain, SL.

Sun Pharmaceuticals (SA) (Pty) Ltd-South Africa

Caraco Pharmaceutical Laboratories Ltd - U.S.A

TKS Farmaceutica Ltda.

Sun Global Canada Pty. Ltd.

Caraco Pharma Inc.

2. Controlled Entity

Sun Pharma Exports Sun Pharmaceutical Industries Sun Pharma Sikkim Universal Enterprise Pvt Ltd.

3. Key Management Personnel

Mr. Dilip S. Shanghvi Mr. Sudhir V. Valia Mr. Sailesh T. Desai

4. Relatives of Key Management Personnel

Mrs Vibha Shanghvi Wife of Chairman and Managing Director

Mrs Kumud Shanghvi Mother of Chairman and Managing Director

Mrs Meera Desai Wife of Wholetime Director

Mr Alok Shanghvi Son of Chairman and Managing Director

Ms Khyati Valia Daughter of Wholetime Director

5. Enterprise under significant Influence of Key Management Personnel or their relatives

Sun Petrochemical Pvt. Ltd.

Sun Speciality Chemicals Pvt. Ltd. (upto 31-03-2009)

Navjivan Rasayan (Gujarat) Pvt. Ltd.

Sun Pharma Advanced Research Company Ltd.

Aditya Thermal Energy Pvt. Ltd.

Alfa Infraprop Pvt. Ltd.

Shantilal Shanghvi Foundation

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