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Sun Pharmaceuticals Industries Ltd.

BSE: 524715 Sector: Health care
NSE: SUNPHARMA ISIN Code: INE044A01036
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VOLUME 182873
52-Week high 678.80
52-Week low 434.80
P/E 163.20
Mkt Cap.(Rs cr) 126,083
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 531.00
CLOSE 530.55
VOLUME 182873
52-Week high 678.80
52-Week low 434.80
P/E 163.20
Mkt Cap.(Rs cr) 126,083
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sun Pharmaceuticals Industries Ltd. (SUNPHARMA) - Director Report

Company director report

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

FINANCIAL RESULTS

Standalone

Consolidated

Particulars Year ended Year ended Year ended Year ended
March 31 2018 March 31 2017* March 31 2018 March 31 2017
Revenue from operations 79476.0 77932.0 264894.6 315784.4
Profit / (Loss) before tax but after exceptional item (5199.8) (168.0) 34789.8 90478.7
Tax Expense:
-Current Tax 20.2 57.7 6628.0 4046.4
-Deferred Tax Charge / (Credit) (274.1) 2.7 (720.6) 8069.3
-Deferred tax charge / (Credit) - exceptional - - 2544.5 -
Profit / (Loss) after tax (4945.9) (228.4) 26337.9 78363.0
Profit / (Loss) after Tax but before Share in profit / (loss) of associates / joint ventures - - 26337.9 78363.0
Share of Profit/ (loss) of associates / joint ventures (Net) - - (254.4) 99.3
Profit for the year before non-controlling interests - - 26083.5 78462.3
Non-controlling interests - - 4468.0 8818.6
Profit for the year attributable to owners of the Company - - 21615.5 69643.7
Total other Comprehensive Income 494.9 (634.5) 5232.5 (14871.9)
Total Comprehensive Income / (Loss) for the year attributable to: (4451.0) (862.9) 31316.0 63590.4
-Owners of the Company (4451.0) (862.9) 26370.3 56306.1
-Non-Controlling Interest - - 4945.7 7284.3
Opening balance in Retained Earnings 124860.0 126353.4 306456.9 251630.4
Additions:
Transfer on Merger* - 1824.8 - -
Amount available for appropriation (4511.5) (829.2) 22123.2 68933.4
Less: Appropriations
Dividend on Equity Shares 7977.4 2406.8 7977.4 2406.8
Dividend Distribution Tax 3.4 74.7 1624.0 490.0
Transfer to various Reserves:
-Capital redemption Reserve - 7.5 - 7.5
-Debenture redemption Reserve - - (833.4) 1041.7
-Capital reserve - - - 50.6
-Buy-back of equity shares by overseas subsidiary - - 2168.1 10110.3
company
-Legal reserve - - 2.5 -
-General reserve - - - -
Closing balance in Retained Earnings 112367.7 124860.0 317641.5 306456.9

DIVIDEND

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

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

CHANGES IN CAPITAL STRUCTURE

During the year under review the Company has allotted 18893 equity shares of ' 1/-each under Sun Employee Stock Option Scheme - 2015 and 13106 equity shares of ' 1/- eachunder Sun Employee Stock Option Plan - 2015 thereby the paid up share capital of theCompany increased to ' 2399323180/- (Rupees Two Billion Three Hundred Ninety-NineMillion Three Hundred Twenty- Three Thousand One Hundred Eighty only) as on March 312018.

Further on May 24 2018 the Company has allotted 1314 equity shares of ' 1/- eachunder Sun Employee Stock Option

Scheme - 2015.

SCHEME OF ARRANGEMENTS

1. During the year the Hon'ble National Company Law Tribunal of Gujarat at Ahmedabadhad vide its order dated August 11 2017 sanctioned the Scheme of Arrangement among SunPharma Medisales Private Limited Ranbaxy Drugs Limited Gufic Pharma Limited VidyutInvestments Limited (collectively “Transferor Companies”) wholly ownedsubsidiaries of the Company and the Company (“Transferee Company”) and theirrespective members and creditors (“Scheme”) whereby the Transferor Companiesstand amalgamated with the Company w.e.f. September 08 2017 with appointed date beingApril 01 2017. Pursuant to the Scheme no consideration was paid.

2. During the year the Board of Directors at its meeting held on November 14 2017 hasapproved another Scheme of Arrangement among Sun Pharma Global FZE (“TransferorCompany”) a wholly owned subsidiary of the Company and the Company and theirrespective members and creditors (“Scheme”) for demerger of the SpecifiedUndertaking (as defined in the Scheme) of Transferor Company into the Company. The Hon'bleNational Company Law Tribunal of Gujarat at Ahmedabad (“NCLT”) had dispensedwith convening of meeting of secured creditors of the Company and ordered to convene themeeting of equity shareholders and unsecured creditors of the Company on June 01 2018 toapprove the Scheme with appointed date as April 01 2017 or such other date as may beagreed between the Transferor Company and the Company and approved by the NCLT. Pursuantto said Scheme no consideration shall be paid and no shares of the Company shall beissued and allotted to the Transferor Company. The Scheme will result in strengthening ofthe business synergestic benefits economies of scale faster decision makingintegration of supply chain reduction in operating costs strengthening the focusincreased ability to face the competitive regulatory environment increasingprofitability higher market share etc.

3. Further the Board of Directors at its meeting held on May 25 2018 has also approveda Composite Scheme of Arrangement among the Company and Sun Pharma (Netherlands) B.V. andSun Pharmaceutical Holdings USA Inc wholly owned subsidiaries of the Company and theirrespective members and creditors (“Scheme”) for demerger of SpecifiedInvestment Undertaking -1 (as defined in the Scheme) of the Company into Sun Pharma(Netherlands) B.V. and Specified Investment Undertaking -2 (as defined in the Scheme) ofthe Company into Sun Pharmaceutical Holdings USA Inc. This demerger shall enable theCompany to address the risks and policies ability to strategize the remaining businessfor long term growth strengthening of the investment portfolio consolidation andcreation of shareholder value. The Company shall be making the necessary application tothe Hon'ble National Company Law Tribunal of Gujarat at Ahmedabad and such otherauthorities as may be required for obtaining necessary approvals for the aforesaid Scheme.

EXTRACT OF ANNUAL RETURN

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

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATE COMPANIES

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

The highlights of performance of subsidiaries joint ventures and associate companiesand their contribution to the overall performance of the Company during the financial yearis given under 'Annexure A of the Consolidated Financial Statements' forming part of theAnnual Report.

Details pertaining to companies that became subsidiaries/ joint ventures/associates andthose that ceased to be the subsidiaries/ joint ventures/associates of the Company duringthe year are provided in Note no. 39 of the notes to the Consolidated FinancialStatements forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

The present term of appointment of Mr. Sudhir V. Valia and Mr. Sailesh T. Desai asWhole-time Directors will expire on March 31 2019. They have made significantcontributions to the overall growth of the Company's business. Your Directors recommendthe re-appointment of Mr. Sudhir V. Valia and Mr. Sailesh T. Desai for a further period of5 (Five) years from April 01 2019 to March 31 2024 and remuneration for a period of 3(Three) years from April 01 2019 to March 31 2022 due to inadequacy of profits forapproval of the members at the ensuing 26th Annual General Meeting of the Company.

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

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

Pursuant to Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (“Listing Regulations”) to be effective from April 01 2019the consent of the members by way of Special Resolution is required for continuation of aNon-Executive Director of a company beyond the age of seventy five years. Mr. IsraelMakov Non-Executive Director and the Chairman of the Company having attained an age of79 years the Board has recommended his continuation as a Director of the Company forapproval of the members at the ensuing 26th Annual General Meeting of the Company.

Mr. Hasmukh Shah had resigned as an Independent Director of the Company effective fromNovember 15 2017. The Board of Directors places on record their appreciation forcontributions made by Mr. Hasmukh Shah during his tenure as an Independent Director of theCompany.

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

As informed in the previous year's Board's Report Mr. C.S. Muralidharan has beenappointed as Chief Financial Officer of the Company w.e.f June 19 2017 and Mr. UdayBaldota had resigned as Chief Financial Officer w.e.f. June 19 2017 to assume office asthe Director and Chief Executive Officer of Taro Pharmaceutical Industries Limited asubsidiary of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

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

REMUNERATION POLICY FOR DIRECTORS

KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director the Nomination and Remuneration Committeeidentifies persons of integrity who possess relevant expertise experience and leadershipqualities required for the position. The Committee also ensures that the incumbentfulfills such criteria with regard to qualifications positive attributes independenceage and other criteria as laid down under the Act Listing Regulations or other applicablelaws. The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy on remuneration of Directors Key Managerial Personnel and otherEmployees. The Remuneration Policy of the Company is enclosed as 'Annexure B to CorporateGovernance Report' which forms part of this Report

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

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

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 5 (Five) times during the year under reviewon May 26 2017; August 11 2017; September 26 2017; November 14 2017; and February 142018. The particulars of attendance of the Directors at the said meetings are detailed inthe Corporate Governance Report which forms a part of this Report. The intervening gapbetween the meetings was within the period prescribed under the Act and ListingRegulations.

EVALUATION OF PERFORMANCE OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

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

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

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

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of various criteria such as structure and diversity of theBoard competency of Directors experience of Director strategy and performanceevaluation secretarial support evaluation of risk evaluation of performance of themanagement and feedback independence of the management from the Board etc. Theperformance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of criteria such as mandate and composition effectivenessof the committee structure of the committee and meetings independence of the committeefrom the Board and contribution to decisions of the Board. The Nomination and RemunerationCommittee reviewed the performance of the individual Directors on the basis of thecriteria such as qualification experience knowledge and competency fulfillment offunctions availability and attendance initiative integrity contribution and commitmentetc and the Independent Directors were additionally evaluated on the basis ofindependence independent views and judgement etc. Further the evaluation of Chairman ofthe Board in addition to the above criteria for individual Directors also includedevaluation based on effectiveness of leadership and ability to steer the meetingsimpartiality etc.

HUMAN RESOURCES

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

We believe nurturing a high performance culture is imperative.

Your company is proud to have talent which is varied and deep in its experiences andexpertise across manufacturing R & D sales and other functions. Globally theCompany (including subsidiary and associate companies) has a dedicated human capital ofover 30000 employees at various locations across our various offices

R & D Centers & more than 40+ active manufacturing locations and dedicatedsales professionals across various geographies. Your Directors would also like to takethis opportunity to express their appreciation for the hard work and commitment of theemployees 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 2014pertaining to the names and other particulars of employees is available for inspection atthe Registered office of the Company during business hours and pursuant to the secondproviso to Section 136(1) of the Act the Report and the accounts are being sent to themembers excluding this. Any shareholder interested in obtaining a copy of the same maywrite to the Company Secretary/Compliance Officer at Corporate office or Registered officeaddress of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

Your Company strongly believes in providing a safe and harassment free workplace foreach and every individual working for the Company through various interventions andpractices. It is the continuous endeavor of the Management of the Company to create andprovide an environment to all its employees that is free from discrimination andharassment including sexual harassment.

The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunder.The Company has arranged various interactive awareness workshops in this regard for theemployees at the manufacturing sites R & D set ups & corporate office during theyear under review. The Company has submitted the Annual Returns to the local authoritiesunder the above mentioned Act. During the financial year ended March 31 2018 1 complaintpertaining to sexual harassment was received and the same was resolved by the Company.There are no complaints pending as at the end of the financial year.

AUDITORS Statutory Auditors

S R B C & Co LLP Chartered Accountants (Firm's Regn. No. 324982E/ E300003) wereappointed as the Statutory Auditors of the Company for a period of 5 (five) years at the25th Annual General Meeting of the Company to hold office till 30th Annual General Meetingof the Company.

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

Secretarial Auditor

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

Cost Auditor

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

SECRETARIAL STANDARDS

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

LOANS GUARANTEES & INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in theFinancial Statements.

RELATED PARTY TRANSACTIONS

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

As required under Section 134(3)(h) of the Act details of transactions entered withRelated Parties under the Act exceeding ten percent of the annual consolidated turnover asper 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 CorporateGovernance Report which forms part of this Report.

RISK MANAGEMENT

The Company has developed & implemented an integrated Enterprise Risk ManagementFramework through which it identifies monitors mitigates & reports key risks thatimpacts its ability to meet the strategic objectives. The Board of Directors haveconstituted a Risk Management Committee which is entrusted with the responsibility ofoverseeing various strategic operational and financial risks that the organisation facesalong with the adequacy of mitigation plans to address such risks. There is an overarchingRisk Management Policy in place that was reviewed and approved by the

Board. The Corporate Governance Report which forms part of this Report contains thedetails of Risk Management Committee of the Company.

INTERNAL FINANCIAL CONTROLS

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

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies(Corporate Social Responsibility) Rules 2014 the Board of Directors have constituted aCorporate Social Responsibility (CSR) Committee of the Company. The details of membershipof the Committee and the meetings held are detailed in the Corporate Governance Reportforming part of this Report. During the year under review the Board of Directors haveapproved certain amendments in CSR policy pertaining to the projects and CSR activities tobe undertaken by the Company. The contents of the CSR Policy of the Company as approved bythe Board on the recommendation of the CSR Committee are available on the website of theCompany and can be accessed through the web link: http://www.sunpharma.com/policies. Theaverage net profit of the Company for last three financial years is negative thereforethe Company was not required to spend on CSR activities during the year however theCompany has voluntarily spent on CSR activities. The annual report on CSR activitiescontaining details of voluntary expenditure incurred by the Company and brief details onthe 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 reviewunder 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 readwith Regulation 34(3) of the Listing Regulations is provided in a separate section andforms part of this Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of the Company regardingcompliance of the conditions of Corporate Governance as stipulated in Part C of Schedule Vof the Listing Regulations are provided in a separate section and forms part of thisReport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

EMPLOYEES' STOCK OPTION SCHEMES

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

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

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

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

There are no significant and material orders passed by the regulators or courts ortribunals 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 honestyintegrity and ethical behaviour in all its operations the Company has adopted a 'GlobalWhistle Blower Policy' for Sun Pharmaceutical Industries Limited and all its subsidiariesin addition to the existing Global Code of Conduct that governs the actions of itsemployees. Further details on vigil mechanism of the Company are provided in the CorporateGovernance Report forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of theAct 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 312018 the applicable accounting standards have been followed and there are no materialdepartures from the same;

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

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively; and

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

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31 2018 have beenprepared in accordance with Indian Accounting Standards (Ind AS) notified under theCompanies (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 ofthe Company.

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

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31 2018 ismade available on the website of the Company athttp://www.sunpharma.com/pdfiist/all-documents and forms part of the Annual Report and isalso available at the Registered office / Corporate office of the Company for inspection.

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

ABRIDGED ANNUAL REPORT

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

Regulations and to support Green Initiative the Board of Directors has decided tocirculate the physical copy of Abridged Annual Report containing salient features ofFinancial Statements and other documents for financial year 2017-18 to the members whohave not registered their e-mail ids. All the annexures to the Board's Report referredherein viz. Annexure - A to Annexure - G and the Corporate Governance Report (includingits annexures) have been excluded from the Abridged Annual Report which is beingcirculated to the members who have not registered their e-mail id.

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

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders employees and business partnersCompany's bankers medical professionals and business associates for their continuedsupport and valuable cooperation.

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

For and on behalf of the Board of Directors
Place: Mumbai Israel Makov
Date: May 25 2018 Chairman