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Director's Report
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Sun Pharmaceuticals Industries LtdIndustry : Pharmaceuticals - Indian - Bulk Drugs & Formln
BSE Code:524715
ISIN Demat:INE044A01036
Book Value(Rs):101.68
NSE Symbol:SUNPHARMA
Div & Yield %:0.76
Market Cap (Rs Cr.):125545.2
P/E(TTM):42.13
EPS(TTM):12.42
Face Value(Rs):1
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Your Directors take pleasure in presenting the Twenty-Eighth Annual Report and Company's Audited Financial Statements for the financial year ended March 31, 2020.

FINANCIAL RESULTS

( in Million)

Standalone Consolidated
1 Year ended March 31, 2020 Year ended 1 March 31, 2019 Year ended March 31, 2020
Year ended March 31, 2019
Revenue from operations 125,319.3 103,032.1 328,375.0 290,659.1
Profit before exceptional item and tax 32,530.0 19,338.3 52,702.3 50,245.8
Exceptional Item - 12,143.8 2,606.4 12,143.8
Profit before tax but after exceptional item 32,530.0 7,194.5 50,095.9 38,102.0
Tax expense:
-Current Tax 3,864.6 15.5 13,201.4 8,039.6
-Deferred Tax Charge / (Credit) (3,446.0) (987.0) (4,973.4) (2,030.8)
Profit after tax 32,111.4 8,166.0 41,867.9 32,093.2
Profit after Tax but before Share in profit / (loss) of associates and joint venture - - 41,867.9 32,093.2
Share of profit/(loss) of associates and joint venture [Net] - - (148.3) (14.6)
Profit for the year before non-controlling interests - - 41,719.6 32,078.6
Non-controlling interests - - 4,070.3 5,424.4
Profit for the year attributable to owners of the Company - - 37,649.3 26,654.2
Total other Comprehensive Income (808.0) 1,837.4 21,208.3 16,799.9
Total Comprehensive Income for the year attributable to: 31,303.4 10,003.4 62,927.9 48,878.5
-Owners of the Company 31,303.4 10,003.4 56,068.4 42,054.1
-Non-Controlling Interest - - 6,859.5 6,824.4
Opening balance in Retained Earnings 123,846.1 120,370.0 333,301.9 319,777.0
Additions:
Amount available for appropriation 31,925.1 8,273.3 37,377.3 26,804.4
Less:
Dividend on Equity Shares 13,789.6 4,791.6 13,789.6 4,791.6
Dividend Distribution Tax 1,928.9 5.6 2,834.5 984.9
Buy-back of equity shares by overseas subsidiaries - - 831.6 2,013.1
Adjustment on account of Ind AS 115 - - - 6,493.0
Transfer to/from various Reserves:
-Debenture redemption Reserve - - - (1,250.0)
-Legal reserve - - 23.0 203.9
-General reserve - - - 43.0
Closing balance in Retained Earnings 140,052.7 123,846.1 353,200.5 333,301.9

DIVIDEND

During the year under review, your Directors at their meeting held on February 06, 2020 had declared an interim dividend of 3.00 (Rupees Three only) per equity share of 1/- each for the year ended March 31, 2020. The interim dividend was paid on February 24, 2020 to those shareholders who held shares as on February 18, 2020, being the record date for payment.

In addition to above, your Directors have recommended a final dividend of 1/-(Rupee One only) per equity share of 1/- each [previous year 2.75/- per equity share of 1/- each] for the year ended March 31, 2020, subject to the approval of the equity shareholders at the ensuing 28th Annual General Meeting of the Company. Pursuant to the recent amendments introduced by the Finance Act, 2020, the said final dividend will be liable for deduction of income tax at source.

Therefore, the total dividend payout for the FY20 is 4/- (Rupees Four only) per equity share of 1/- each.

The dividend payout is in accordance with the Company's Dividend Distribution Policy. The Dividend Distribution Policy of the Company is provided as Annexure - A to this Report. The policy is also available on the website of the

Company and can be accessed through the web link: http://www.sunpharma.com/policies .

BUY-BACK OF SHARES

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

The Buy-back period opened on and from March 26, 2020 and last date for the completion of the Buy-back shall be earlier of: a) Friday, September 25, 2020 i.e., within 6 months from the date of the opening of Buy-back; or b) When the Company completes the Buy-back by deploying the amount equivalent to the Maximum Buy-back Size; or

c) At such earlier date as may be determined by the Board or the persons authorised by the Board, subject to the Company having deployed an amount equivalent to the Minimum Buy-back Size i.e. 850,00,00,000/- (Rupees Eighi Hundred Fifty Crores Only) (even if the Maximum Buy-back Size has not been reached).

No shares have been bought back by the Company, till the date of this report i.e. May 27, 2020, mainly due to the market price per Equity Share remaining higher, on most of the days, than the maximum price per Equity Share approved for the Buy-back.

CHANGES IN CAPITAL STRUCTURE

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

SCHEME OF ARRANGEMENT

During the year, the Honble National Company Law Tribunal, Ahmedabad Bench ("NCLT"), vide its Order dated December 19, 2019, on interpretation ground that an outbound Demerger is not envisaged under Section 234 of Companies Act, 2013, did not allow the Company's petition for the proposed Composite Scheme of Arrangement amongst Sun Pharmaceutical Industries Limited and Sun Pharma (Netherlands) B.V. ("Transferee Company-1") and Sun Pharmaceutical Holdings USA Inc. ("Transferee Company-2") and their respective members and creditors ("Composite Scheme of Arrangement") for transfer of the Specified Investment Undertaking-1 (as defined in the Composite Scheme of Arrangement) and Specified Investment Undertaking-2 (as defined in Composite Scheme of Arrangement) of the Company into Transferee Company-1 and Transferee Company-2 respectively.

The Composite Scheme of Arrangement being an internal restructuring exercise, the above referred Order of Honble

NCLT does not impact the consolidated financial statements of the Company.

The aforesaid Composite Scheme of Arrangement was approved by the Board of Directors at its meeting held on May 25, 2018 and was approved by the shareholders of the Company and unsecured creditors at their respective NCLT convened meetings held on June 04, 2019.

EXTRACT OF ANNUAL RETURN

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

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

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

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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, Mr. Sudhir V. Valia had stepped down from the position of Whole-time Director of the Company w.e.f. May 29, 2019. However, he continues to be a NonExecutive and Non-Independent Director of the Company.

Mr. Israel Makov, Chairman and Mr. Sudhir V. Valia, Director of the Company retire by rotation at the ensuing 28th Annual General Meeting of the Company and being eligible offer themselves for reappointment.

Mr. Kalyanasundaram Subramanian was re-appointed as Whole-time Director for a period of two years with effect from February 14, 2019, without any remuneration from the Company, since he was receiving remuneration from wholly owned subsidiary company as the CEO & Wholetime Director of the subsidiary. During the year, due to change in his role and responsibilities, the Board, on the recommendation of the Nomination and Remuneration Committee, had approved the payment of remuneration to Mr. Kalyanasundaram Subramanian with effect from July 04, 2019 till the remaining term of his appointment upto February 13, 2021. The maximum remuneration which can be paid to Mr. Kalyandasundaram Subramanian was also approved by the members at 27th Annual General Meeting of the Company held on August 28, 2019. He no longer receives remuneration from the wholly owned subsidiary company with effect from July 04, 2019.

Mr. Dilip S. Shanghvi was re-appointed as the Managing Director at the 25th Annual General Meeting of the Company held on September 26, 2017 for a period of 5(five) years effective from April 1, 2018 upto March 31, 2023. However, due to inadequacy of profits, the approval for remuneration to be paid to Mr. Dilip S. Shanghvi was sought from the members for a period of 3 years with effect from April 1, 2018 to March 31, 2021, including the minimum remuneration to be paid to him in event of loss or inadequacy of profits in any financial year during the aforesaid period of 3 years.

On the recommendation by the Nomination and Remuneration Committee, the Board of Directors at its meeting held on May 27, 2020, have considered, approved and recommended to the members, the maximum remuneration to be paid to Mr. Dilip S. Shanghvi for further period of two years i.e. for the remaining term of his present appointment, from April 01, 2021 till March 31, 2023.

Appropriate resolutions for the re-appointment and remuneration of the Directors are being placed for your approval at the ensuing 28th Annual General Meeting.

Your Directors recommend the same for approval by the members at the ensuing 28th Annual General Meeting of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Designation / Class To be determined by
Director Board of Directors on the recommendation of the Nomination and Remuneration Committee within the limits approved by the shareholders
Key Managerial Personnel and Senior Management Board of Directors on recommendation of the Nomination and Remuneration Committee
Other employees Human Resources Head

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

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

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of Regulation 25(7) of the Listing Regulations, the Company has put in place a Familiarisation Programme for the Independent Directors to familiarise them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc.

The details of the Familiarisation Programme conducted are available on the website of the Company: www.sunpharma.com and can be accessed through the web link: http://www.sunpharma.com/policies .

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 6 (Six) times during the year under review on May 28, 2019; August 13, 2019; August 28, 2019; November 07, 2019; February 06, 2020 and March 17, 2020. The particulars of attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

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

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

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

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

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

The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfilment of functions, availability and attendance, initiative, integrity, contribution and commitment etc., and the Independent Directors were additionally evaluated on the basis of independence, independent views and judgement etc. Further the evaluation of Chairman of the Board, in addition to the above criteria for individual Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

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

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

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

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

HUMAN RESOURCES

Sun Pharmas skilled, talented and multicultural workforce is pivotal to all the initiatives that drive us to realise our future plans. We have 36000+ employees globally spread across multiple geographies in various sales offices, R&D centers, 43 manufacturing locations, regional offices and Corporate office. Human Resource agenda encourages high performance culture with focus on Employee health, safety & welfare, Employee engagement, development & Productivity. Your Directors would like to take this opportunity to express their appreciation for the passion, dedication and commitment of the employees of the Company and look forward to their continued contribution.

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

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

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

During the financial year ended March 31, 2020, one complaint pertaining to sexual harassment was received and the same was resolved by the Company. There are no complaints pending as at the end of the financial year.

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

AUDITORS

Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firms Regn.

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

The Auditors Report for the financial year ended March 31, 2020, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2020. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as Annexure - D to this Report.

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

Cost Auditor

The Board has appointed Messrs B. M. Sharma & Associates, Cost Accountants, Pune (Firms Registration No. 100537) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2020-21.

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

SECRETARIAL STANDARDS

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

LOANS, GUARANTEES & INVESTMENTS

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

RELATED PARTY TRANSACTIONS

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

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

AUDIT COMMITTEE COMPOSITION

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

RISK MANAGEMENT

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

The Company has developed & implemented an integrated Enterprise Risk Management Framework through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives. The Company's ERM framework is based on the recommendations by the Committee of Sponsoring Organisations (COSO) to further the organisations endeavor to strengthen ERM framework and processes using best practices. The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company's objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in the form of a risk register with all the relevant information such as risk description, root cause and any existing mitigation plans. The risk register is refreshed annually. Risks are categorised into Strategic, Financial, Operational, Compliance & Reputational. ERM risk assessments covering Company's various businesses and functions are a key input for the annual internal audit program. During FY20, the ERM team focused on reviewing effectiveness of actions taken to mitigate certain business, cyber security and other operational risks.

INTERNAL FINANCIAL CONTROLS

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

Global Internal Audit

An independent and empowered Global Internal Audit Function (GIA) at the corporate level with support from a Big 4 / equally reputed audit firm, wherever required, carries out risk-focused audits and reviews across all businesses (both in India and overseas), to ensure that business process controls are adequate and are functioning effectively. These reviews include financial, operational and compliance controls and risk mitigation plans. The Company's operating management closely monitors the internal control environment and ensures that the recommendations are effectively implemented. The Audit Committee of the Board monitors performance of the Internal Audit Function, periodically reviews key findings and provides strategic guidance.

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

CORPORATE SOCIAL RESPONSIBILITY

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

During the year, the Company has spent 43.71 Million which amounts to about 3.24% of the average net profits of the Company in the three preceding financial years.

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

PUBLIC DEPOSITS

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

MANAGEMENT DISCUSSION AND ANALYSIS

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

CORPORATE GOVERNANCE REPORT

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

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

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

EMPLOYEES STOCK OPTION SCHEMES

The Company had an Employees Stock Option Scheme, which was inherited from erstwhile Ranbaxy Laboratories Limited ("Ranbaxy"). The scheme was through Direct Route and had been named as Sun Pharma Employee Stock Option

Scheme - 2015. The said scheme has been completed in February 2020.

The Scheme was in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Disclosure with respect to the Employees Stock Option Scheme in compliance with Securities and Exchange Board of India (Share Based Employee Benefits)

Regulations, 2014 is available on the Company's website and can be accessed through the web link: http://www.sunpharma.com/pdfiist/all-documents .

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

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM

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

DIRECTORS RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the financial year ended March 31, 2020, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2020 and of the profit of the Company for the year ended on that date;

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

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

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

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

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31, 2020 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

CREDIT RATING

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

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

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31, 2020, forms part of the Annual Report and is also made available on the website of the Company at: http://www.sunpharma.com/pdfiist/all-documents .

ACKNOWLEDGEMENTS

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

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

For and on behalf of the Board of Directors
Israel Makov
Place: Israel Chairman
Date: May 27, 2020 (DIN: 05299764)

   

Adani Ports & Special Economic Zone Ltd     357.85   Up   11.75 (3.39%)   Asian Paints Ltd     2,028.40   Up   20.45 (1.02%)   Axis Bank Ltd     443.35   Up   0.45 (0.10%)   Bajaj Auto Ltd     3,050.95   Up   31.75 (1.05%)   Bajaj Finance Ltd     3,474.80   Up   2.85 (0.08%)   Bajaj Finserv Ltd     5,888.45   Down   -118.55 (-1.97%)   Bharat Petroleum Corporation Ltd     412.05   Down   -3.55 (-0.85%)   Bharti Airtel Ltd     494.55   Up   15.55 (3.25%)   Bharti Infratel Ltd     199.35   Up   2.95 (1.50%)   Britannia Industries Ltd     3,797.50   Down   -18.15 (-0.48%)   Cipla Ltd     806.25   Up   54.75 (7.29%)   Coal India Ltd     123.65   Down   -0.65 (-0.52%)   Dr Reddys Laboratories Ltd     5,333.35   Up   506.10 (10.48%)   Eicher Motors Ltd     2,152.95   Up   7.50 (0.35%)   GAIL (India) Ltd     92.10   Up   1.35 (1.49%)   Grasim Industries Ltd     745.00   Up   20.30 (2.80%)   HCL Technologies Ltd     810.60   Up   2.30 (0.28%)   HDFC Bank Ltd     1,057.30   Down   -26.30 (-2.43%)   HDFC Life Insurance Company Ltd     585.10   Down   -6.75 (-1.14%)   Hero Honda Motors Ltd     3,112.65   Up   51.65 (1.69%)   Hindalco Industries Ltd     179.50   Up   3.65 (2.08%)   Hindustan Unilever Ltd     2,098.70   Down   -29.50 (-1.39%)   Housing Development Finance Corporation Ltd     1,724.00   Down   -20.35 (-1.17%)   ICICI Bank Ltd     369.55   Up   0.55 (0.15%)   Indian Oil Corporation Ltd     80.70   Down   -1.10 (-1.34%)   IndusInd Bank Ltd     613.20   Down   -4.15 (-0.67%)   Infosys Technologies Ltd     1,002.15   Down   -8.85 (-0.88%)   ITC Ltd     179.10   Up   0.50 (0.28%)   JSW Steel Ltd     287.70   Up   0.85 (0.30%)   Kotak Mahindra Bank Ltd     1,277.10   Down   -28.00 (-2.15%)   Larsen & Toubro Ltd     900.70   Down   -5.60 (-0.62%)   Mahindra & Mahindra Ltd     654.15   Up   17.35 (2.72%)   Maruti Suzuki India Ltd     6,964.75   Down   -121.10 (-1.71%)   Nestle India Ltd     16,087.05   Down   -34.30 (-0.21%)   NIFTY (S&P CNX)     11,504.95   Down   -11.15 (-0.10%)   NTPC Ltd     90.55   Up   1.90 (2.14%)   Oil & Natural Gas Corpn Ltd     74.30   Up   1.15 (1.57%)   Power Grid Corporation of India Ltd     171.90   Up   3.60 (2.14%)   Reliance Industries Ltd     2,305.70   Up   6.95 (0.30%)   Shree Cement Ltd     19,520.95   Down   -367.45 (-1.85%)   State Bank of India     192.60   Down   -2.85 (-1.46%)   Sun Pharmaceuticals Industries Ltd     523.35   Up   11.35 (2.22%)   Tata Consultancy Services Ltd     2,449.90   Down   -11.05 (-0.45%)   Tata Motors Ltd     147.90   Up   0.25 (0.17%)   Tata Steel Ltd     395.50   Down   -3.20 (-0.80%)   Tech Mahindra Ltd     804.65   Up   17.70 (2.25%)   Titan Company Ltd     1,163.60   Down   -18.80 (-1.59%)   UltraTech Cement Ltd     4,002.60   Up   33.65 (0.85%)   UPL Ltd     537.30   Up   6.75 (1.27%)   Wipro Ltd     316.50   Up   4.80 (1.54%)   Zee Entertainment Enterprises Ltd     220.30   Down   -0.80 (-0.36%)      NSE Data  -  www.nseindia.com (5 minutes delayed) syndicated by www.cmots.com

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