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    SUN PHARMA LABORATORIES LIMITED 24TH ANNUAL REPORT 2019-20


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    CONTENTS PAGE NO. Company Information 1 Notice of Annual General Meeting 2 Board’s Report 6 Financial Statements 37


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    COMPANY INFORMATION BOARD OF DIRECTORS Mr. Sailesh T. Desai Non-Executive Director Mr. Sudhir V. Valia Non-Executive Director Mr. Kalyanasundaram Subramanian Non-Executive Director Mr. Naresh Chand Singhal Independent Director Ms. Rekha Sethi Independent Director CHIEF EXECUTIVE OFFICER Mr. Kirti Ganorkar (w.e.f. July 4, 2019) CHIEF FINANCIALOFFICER Mr. C. S. Muralidharan COMPANY SECRETARY Ms. Rachana Kokal AUDITORS S R B C & Co LLP Chartered Accountants REGISTERED OFFICE Sun House, Plot No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai – 400063, India CIN: U25200MH1997PLC240268 Website: www.spll.co Contact no: 022-43244324 REGISTRAR & TRANSFER AGENT Link Intime (India) Private Limited, C 101, 247 Park, L B S Marg, Vikhroli West, Mumbai 400 083 Tel No: +91 22 49186000 1


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    NOTICE OF 24th ANNUAL GENERAL MEETING Notice is hereby given that the Twenty Fourth Annual General Meeting of the members of Sun Pharma Laboratories Limited will be held on Wednesday, September 30, 2020 at 11:30 a.m. IST (Indian Standard Time) through Video Conferencing (“VC”) / Other Audio-Visual Means (“OAVM”) to transact the following business at shorter notice: ORDINARY BUSINESS: 1. To receive, consider and adopt the audited standalone financial statements of the Company for the financial year ended March 31, 2020 and the reports of the Board of Directors and Auditors thereon. 2. To confirm the payment made of interim dividend* of Rs. 110/- (Rupees One Hundred and Ten Only) per equity share of Rs. 10/- (Rupees Ten Only) for the financial year ended March 31, 2020, as final dividend. 3. To appoint a Director in place of Mr. Sailesh T. Desai (DIN: 00005443), who retires by rotation and being eligible, offers himself for reappointment. SPECIAL BUSINESS: 4. To consider and, if thought fit, to pass, the following resolution as an ORDINARY RESOLUTION: “RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force) the remuneration as set out in the Explanatory Statement annexed to this Notice payable to M/s. B. M. Sharma & Associates, Cost Accountants, Firm’s Registration No. 100537, appointed as the Cost Auditors of the Company to conduct the audit of cost records maintained by the Company for the financial year 2020-21, be and is hereby ratified. RESOLVED FURTHER THAT the Board of Directors of the Company or any Committee thereof, be and is hereby authorized to do all such acts, deeds and things, to execute all such documents, instruments and writings as may be required to give effect to this resolution.” By Order of the Board of Directors, For Sun Pharma Laboratories Limited, Place: Mumbai Date: September 9, 2020 Rachana Kokal Company Secretary Registered Office: Sun House, Plot No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai - 400063. CIN: U25200MH1997PLC240268 * The Interim Dividend at Rs. 110/- per equity share of Rs.10/- on 4,00,50,000 shares amounting to Rs.4,40,55,00,000/-, has been paid in the month of February, 2020 2


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    NOTES: 1) The Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013 relating to the Special Business to be transacted at the 24th Annual General Meeting of the Company (the “Meeting” or “AGM”) under Item No. 4 is annexed to this Notice. The relevant details as required under Clause1.2.5 of Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India (SS-2), in respect of the persons seeking appointment / re-appointment as Director is given under the heading “Profile of Directors” forming part of this Notice. 2) As you are aware, in view of the situation arising due to COVID-19 global pandemic, the general meetings of the companies shall be conducted as per the guidelines issued by the Ministry of Corporate Affairs (MCA) vide General Circular No. 14/2020 dated April 8, 2020, General Circular No.17/2020 dated April 13, 2020 and General Circular No. 20/2020 dated May 05, 2020 (hereinafter referred to as “MCA Circulars”). The forthcoming 24th AGM of the Company scheduled on Wednesday, September 30, 2020 will thus be held through video conferencing (“VC”) or other audio visual means (“OAVM”). 3) Members can attend and participate in the ensuing AGM through VC/ OAVM by clicking on https://global.gotomeeting.com/join/292078381 from their computer, tablet or smartphone. 4) Pursuant to MCA General Circular No. 14/2020 dated April 08, 2020, read with MCA General Circular No. 20/2020 dated May 5, 2020, the facility to appoint proxy to attend and cast vote for the members is not available for this 24th AGM. However, in pursuance of Section 112 and Section 113 of the Companies Act, 2013, representatives of the members can attend the 24th AGM through VC/ OAVM 5) In case the poll is required to taken or a demand for poll is made by any member in accordance with Section 109 of the Act, the members are requested to convey their votes by poll on the designated email id only at rachana.kokal@sunpharma.com. 6) Corporate members intending to appoint authorized representative(s) to attend and vote on their behalf at the 28th AGM are requested to submit to the Company a certified true copy of the resolution of the Board of Directors or other governing body of the body corporate authorising their representative(s) to attend and vote along with specimen signature of authorised representative(s) by e-mail to rachana.kokal@sunphama.com before the commencement of the 24th AGM. 7) In accordance with MCA Circulars dated April 08, 2020 and April 13, 2020 and SEBI Circular dated May 12, 2020 due to COVID-19 pandemic, the Notice of 24th AGM along with the Annual Report for 2019-20 is being sent only through electronic mode. Members may note that the Notice of the 24th AGM along with the Annual Report 2019-20 is also available for download on the website of the Company at www.spll.co 8) The Statutory Registers and documents, as may be required, will be available electronically for inspection by the members during the meeting hours. Those members who wish to inspect the same, are requested send an e-mail to rachana.kokal@sunpharma.com 9) The attendance of the Members attending the AGM through VC/OAVM will be counted for the purpose of ascertaining the quorum under Section 103 of the Companies Act, 2013. 3


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    EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 As required under Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the Special business as set out at Item No. 4 of the accompanying Notice dated September 9, 2020: Item No. 4 M/s. B. M. Sharma & Associates, Cost Accountants, (Firm’s Registration No. 100537) have been appointed as the Cost Auditors of the Company, by the Board of Directors of the Company on recommendation of the Audit Committee for conducting audit of cost records of the Company for the financial year ending March 31, 2021 at a remuneration of Rs. 8,03,000/- (Rupees Eight Lakh Three Thousand Only) excluding reimbursement of out of pocket expenses and applicable taxes. In terms of provisions of Section 148 (3) of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, members’ ratification is required for remuneration payable to the Cost Auditor. Therefore, consent of the members of the Company is sought for passing of an Ordinary Resolution as set out at Item No. 4 for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2021. The Board recommends the Resolution as set out at item no. 4 of the Notice for approval of the Members as Ordinary Resolution. None of the Directors or Key Managerial Personnel or their relatives are in anyway concerned or interested in the above resolution. Place: Mumbai By Order of the Board of Directors, Date: September 9, 2020 For Sun Pharma Laboratories Limited, Registered Office: Sun House, Plot No. 201 B/1, Western Express Highway, Goregaon (E), Mumbai Rachana Kokal – 400063 Company Secretary CIN: U25200MH1997PLC240268 4


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    PROFILE OF DIRECTORS As required under Secretarial Standard - 2, the particulars of Mr. Sailesh T. Desai who is proposed to be re- appointed at this 24th Annual General Meeting, is given below: The details of Board and Committee Meetings attended by him during the year 2019-20 are stated in the Board’s Report which forms part of the Annual Report. The details of remuneration, wherever applicable, are given in the Board’s Report which forms part of the Annual Report. Particulars Mr. Sailesh T. Desai Age 66 years Brief resume of the Director Mr. Sailesh T. Desai is a science graduate from Kolkata University and is a including nature of expertise successful entrepreneur with more than three decades of wide industrial in specific functional areas experience including more than two decades in the pharmaceutical industry. He is a Whole-time Director of Sun Pharmaceutical Industries Limited. Date of First appointment on October 30, 2012 the Board Directorship held in other Sun Pharmaceutical Industries Limited companies (excluding foreign Sun Pharmaceutical Medicare Limited companies & section 8 companies) Sun Pharma Distributors Limited Universal Enterprises Private Limited Membership / Sun Pharmaceutical Industries Limited : Audit Committee – Member Chairmanships of Sun Pharma Distributors Limited: Corporate Social Responsibility Committee - Committees of other public Member Companies Inter-se Relationship between NIL Directors No. of Shares held in the 801 shares held jointly with and for and on behalf and as nominee of Sun Company (singly or jointly as Pharmaceutical Industries Limited first holder) as on 31st March, 2020 5


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    BOARD’S REPORT To, The Members of, SUN PHARMA LABORATORIES LIMITED, Your Directors present the Twenty-Fourth Annual Report and the Company’s Audited Financial Statements for the financial year ended March 31, 2020. FINANCIAL RESULTS Rs. in Million Particulars Standalone 2019-20 2018-19 Total – Revenue 68,541 45,094 Profit Before Tax 19,013 4,172 Tax Expense: -Current Tax 3,310 911 -Deferred Tax Charge / Credit (514) (19) Profit after tax 16,217 3,281 Profit after Tax before Share in profit / (loss) of associates 0 0 Share of Profit of Associates 0 0 Total Other Comprehensive Income (85) 36 Total Comprehensive Income 16,133 3,317 Total Comprehensive Income for the period attributable to: 0 0 -Owners of the Company 0 0 Opening balance in Retained Earnings 8,354 9,784 Add: Amount available for appropriation 16,133 3,323 Less: Appropriations 0 0 Dividend on Equity Shares (4,406) (4,750) Dividend on Preference Shares 0 (15) Corporate Dividend tax (906) (979) Transfer to various Reserves: 0 0 Capital redemption reserve 0 (400) Transfer from various Reserves: Debenture redemption reserve 0 1,250 Equity component of compound financial instrument 0 141 Closing balance in Retained Earnings 19,175 8,354 6


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    STATE OF COMPANY’S AFFAIRS During the current year of operation, the Company has registered an increase in the revenue from Rs. 45,094 million to Rs. 68,541 million on account of growth in domestic market, enhanced sales and marketing efforts and due to previous year’s impact on account of transitioning its distribution from Aditya Medisales Limited to Sun Pharma Distributors Limited, the wholly owned subsidiary of Company. The profit before tax has accordingly increased from Rs.4,172 million to 19,013 Million. The Company has registered profit after tax of Rs. 16,217 million DIVIDEND During the financial year 2019-20, the Board of Directors at their meeting held on February 5, 2020 declared interim dividend of Rs. 110/- (Rupees Ten Only) per annum per equity share on 4,00,50,000 (Four Crore Fifty Thousand) equity shares of Rs. 10/- (Rupees Ten Only) each for the financial year 2019-20, aggregating to Rs. 4,40,55,00,000.00/- (Rupees Four Hundred and Forty Crore and Fifty Five Lakh Only) The Board recommends that the interim dividend paid as aforesaid on equity shares be treated as the final dividend for the financial year ended March 31, 2020. ISSUE OF BONUS SHARES During the year under review, 4,00,00,000 ( Four Crore) Equity Shares of Re.10/- (Rupees Ten only) were allotted as fully paid-up Bonus Equity Shares, to the Members of the Company holding equity shares of Rs.10/- (Rupees Ten only) each in the proportion of 800 (Eight Hundred) fully paid Equity Share of Rs.10/- (Rupees Ten only) for every 1 (One) Equity Share of Rs.10/- (Rupees Ten only) held on the Record Date. Thereafter the paid-up capital of the Company increased to Rs. 40,05,00,000.00/- (Rupees Forty Crore Five Lakh Only) divided into 4,00,50,000 (Four Crore Fifty Thousand) equity shares of Rs. 10/- (Rupees Ten Only) each. DIRECTORS & KEY MANAGIAL PERSONNEL Mr. Sailesh T. Desai, Director of the Company retires by rotation and being eligible has offered himself for re-appointment at the ensuing 24th Annual General Meeting of the Company. Appropriate resolution for the re-appointment of the Mr. Sailesh T. Desai is being placed for your approval at the ensuing 24th Annual General Meeting. Your Directors recommend the re-appointment of the aforesaid Director by the Members at the ensuing Annual General Meeting. During the year, Mr. Kalyanasundaram Subramanian ceased to be the CEO & Whole-time Director of the Company with effect from July 4, 2019, however he continues to act as a Non-Executive and Non Independent Director of the Company. Mr. Kirti Ganorkar was appointed as Chief Executive Officer of the Company with effect from July 4, 2019. Profile and other particulars of Mr. Sailesh T. Desai as required under the Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of India, are provided under heading “PROFILE OF DIRECTORS” forming part of the Notice of 24th Annual General Meeting of the Company. 7


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    DECLARATION BY INDEPENDENT DIRECTORS The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 (“the Act”). In the opinion of the Board, the Independent Directors of the Company fulfil the conditions specified under the Act and are independent of the management. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 134(5) read with Section 134(3)(c) of the Act with respect to the 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. NUMBER OF MEETINGS OF THE BOARD The Board of Directors of the Company met 5 (five) times during the year under review on May 27, 2019, July 4, 2019, August 12, 2019, November 6, 2019 and February 5, 2020. The intervening gap between the Meetings was within the period prescribed under the Act. Attendance of each Director at the Board meetings is given below: Name of the Director Number of Board meetings Number of Board held during the tenure of meetings attended respective Director Mr. Kalyanasundaram Subramanian* 5 3 Mr. Sudhir Valia 5 3 Mr. Sailesh Desai 5 5 8


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    Ms. Rekha Sethi 5 5 Mr. Naresh Chand Singhal 5 5 *Mr. Kalyanasundaram Subramanian ceased to be the CEO & Whole-time Director of the Company and continues to act as a Non-Executive and Non Independent Director of the Company with effect from July 4, 2019. NOMINATION & REMUNERATION COMMITTEE The Nomination & Remuneration Committee of the Company comprises of three Directors viz., Ms. Rekha Sethi, Chairperson of the Committee, Mr. Sailesh Desai and Mr. Naresh Chand Singhal. Ms. Rachana Kokal, Company Secretary of the Company is the Secretary of the Committee. The Nomination & Remuneration Committee met five times (5) during the previous financial year on May 27, 2019, July 4, 2019, August 12, 2019, November 6, 2019 and February 5, 2020. The attendance of each Member of the Committee is given below: Name of the Director Chairman / Member Number of meetings Number of held during the Committee meetings tenure of the attended respective members Ms. Rekha Sethi Chairperson 5 5 Mr. Sailesh Desai Member 5 5 Mr. Naresh Chand Singhal Member 5 5 POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION For the purpose of selection of any Director, the Nomination & Remuneration Committee (NRC) identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfills such criteria with regard qualifications, positive attributes, independence, age and other criteria as laid down under the Act or other applicable laws. The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for remuneration of Directors & Senior Management which is available on the website of the Sun Pharmaceutical Industries Limited and may be accessed through the web link: http://www.sunpharma.com/spll/policies. The Key highlights of the Remuneration Policy of the Company are as follows: 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 worker like, positive outlook, team work, loyalty etc. B. Components of Remuneration: The following will be the various remuneration components 9


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    which may be paid to the personnel of the Company based on the designation and class of the personnel. a. Fixed compensation: The fixed salaries of the Company’s personnel shall be competitive and based on the individual personnel’s responsibilities and performance. b. Variable compensation: The personnel of the Company may be paid remuneration by way of variable salaries based on their performance evaluation. Such variable salaries should be based on the performance of the individual against his short and long term performance objectives and the performance of the Company. c. Share based payments: The Board may, on the recommendation of the NRC, issue to certain class of personnel a share and share price related incentive program. d. Non-monetary benefits: Senior management personnel of the Company may, on a case to case basis, be awarded customary non-monetary benefits such as discounted salary advance / credit facility, rent free accommodation, Company cars with or without chauffer’s, share and share price related incentive, reimbursement of electrify and telephone bills etc. e. Gratuity/group insurance: Personnel may also be awarded to group insurance and other key man insurance protection. Further as required by the law necessary gratuity shall be paid to the personnel. f. Commission: The directors may be paid commission if approved by the shareholders. The shareholders may authorise the Board to declare commission to be paid to any director of the Board. C. Entitlement: The authority to determine the entitlement to various components as aforesaid for each class and designation of personnel shall be as follows: Designation/Class To be determined by Director Members on recommendation of NRC and the Board. Key Managerial Personnel other than Human Resources Head Directors Other employees Human Resources Head EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS During the year, the evaluation of the annual performance of individual Directors and Independent Directors, Board and Committees of the Board was carried out under the provisions of the Act, relevant Rules, 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. Mr, Sailesh Desai interacted with each Director individually, for evaluation of performance of the 10


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    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. 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. 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. They were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance. Mr. Sailesh Desai, additionally interacted with each Director individually, for evaluation of performance of all Individual Directors and Mr. Sudhir Valia, along with other Directors had evaluated the performance of Mr. Sailesh Desai as an Individual Director. HUMAN RESOURCES We have more than 8000 talented employee base in various sales offices, manufacturing locations, regional offices and Corporate office. We believe our employees are pivotal to all the initiatives that drive us to realise our future plans. Human Resource agenda encourages high performance culture with focus on Employee health, safety & welfare, Employee engagement, development & productivity. Your Directors would also like to take this opportunity to express their appreciation for the dedication and commitment of the employees of the Company and look forward to their continued contribution. The information pertaining to 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the proviso to Section 136 (1) of the Act, the report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary. 11


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    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 made the Whistle Blower Policy of Sun Pharmaceutical Industries Limited (SPIL) applicable to the Company, since it is a wholly owned subsidiary of SPIL. This Whistleblower Policy aspires to encourage all employees to report suspected or actual occurrence(s) of illegal, unethical or inappropriate events (behaviours or practices) that affect Company’s interest / image. The same can be accessed through the web link: http://www.sunpharma.com/spll/policies.This policy also outlines the reporting procedure and investigation mechanism to be followed in case an employee blows the whistle for any wrong-doing in the Company. Employees are given protection in two important areas - confidentiality and against retaliation. It is ensured that employees can raise concerns regarding any violation or potential violation easily and free of any fear of retaliation, provided they have raised the concern in good faith. An Ombudsperson/s has been appointedfor Sun Pharma Group to receive the complaints through a portal or email or letters who would investigate the complaints with an investigating committee. The final decision would be taken by the Ombudsperson in consultation with the Management and the Audit Committee. The Policy is expected to help to draw the Company’s attention to unethical, inappropriate or incompetent conduct which has or may have detrimental effects either for the organisation or for those affected by its functions. No personnel have been denied access to the Audit Committee. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, & 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, no complaint pertaining to sexual harassment was received and 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 AUDIT COMMITTEE COMPOSITION The Audit Committee of the Company comprises of three Directors viz. Mr. Naresh Chand Singhal, Chairman of the Committee, Mr. Sudhir V. Valia and Ms. Rekha Sethi. The constitution of Audit Committee meets with the requirements as laid down under Section 177 of the Act. Ms. Rachana Kokal, Company Secretary of the Company is the Secretary of Audit Committee. 12


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    The Audit Committee met four (4) times during the previous financial year on May 27, 2019, August 12, 2019, November 6, 2019 and February 5, 2020. The attendance of each Member of the Committee is given below: Name of the Director Chairman / Number of meetings Number of Member held during the tenure Committee of the respective meetings attended members Mr. Naresh Chand Singhal Chairman 4 4 Mr. Sudhir V. Valia Member 4 3 Ms. Rekha Sethi Member 4 4 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 – A” to this Report and is also made available at the weblink: www.spll.co. AUDITORS STATUTORY AUDITORS S R B C & Co LLP, Chartered Accountants, (Firm Registration No. 324982E/E300003), were appointed as the Statutory Auditors of the Company for a period of 5(Five) years at the 21st Annual General Meeting of the Company to hold office till 26th Annual General Meeting of the Company. The Auditor’s Report for the financial year ended March 31, 2020, has been issued with an unmodified opinion, by the Statutory Auditors. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs 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 annexed herewith as “Annexure B” to this report. The Secretarial Audit Report for the year does not contain any qualification, reservation or adverse remark. COST AUDITORS The Company has appointed Messers. B. M. Sharma & Associates, Cost Accountants, Firm’s Registration No. 100537, as Cost Auditors of the Company for conducting Cost Audit in respect of Pharmaceutical Formulations business of your Company for the 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. 13


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    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 All contracts/arrangements/transactions entered by the Company during the year under review with the related parties were in the ordinary course of business and on an arm’s length basis. As required under Section 134(3)(h) of the Act, details of transactions entered with Related Parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as “Annexure C” to this report. INTERNAL FINANCIAL CONTROLS The Company believes that internal control is a prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The Company has a well established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance 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) of Sun Pharmaceutical Industries Limited, the Holding Company, 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 Holding Company’s operating management closely monitors the internal control environment and ensures that the recommendations are effectively implemented. The Audit Committee of the Board monitors performance of the Internal Audit Function, periodically reviews key findings and provides strategic guidance. GIA’s functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board of the Holding Company, 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 provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors have constituted the Corporate Social Responsibility (CSR) Committee of the Company. The Corporate Social Responsibility Committee comprises of three Directors viz. Mr. Sudhir V. Valia, Mr. Kalyanasundaram Subramanian and Ms. Rekha Sethi. Ms. Rachana Kokal, Company Secretary of the Company is the Secretary of the said Committee. 14


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    The Corporate Social Responsibility Committee met two (2) times during the previous financial year on May 27, 2019 and November 6, 2019. The attendance of each Member of the Committee is given below: Name of the Director Chairman / Number of meetings held Number of Committee Member during the tenure of the meetings attended respective members Mr. Sudhir V. Valia Chairman 2 2 Ms. Rekha Sethi Member 2 2 Mr. Kalyanasundaram Member 2 1 Subramanian The contents of the CSR Policy of the Company as approved by the Board on the recommendation of the Corporate Social Responsibility Committee is available on the website of the Parent Company, Sun Pharmaceutical Industries Limited and can be accessed through the weblink: http://www.sunpharma.com/spll/policies. The Company has increased their spending on CSR as compared to last year and has exceeded the amount required to be spent on CSR for the financial year 2019-20. During the year, the Company has spent Rs. 170.48 Million as against Rs. 168.28 Million which the Company was required to spend as per the prescribed CSR expenditure of 2% of the average net profit for the last three financial years as per the Act. The annual report on Corporate Social Responsibility activities containing details of activities undertaken and expenditure incurred thereon by the Company and brief details on the CSR activities are provided in “Annexure D” to this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS There are no significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status of the Company’s operations in future. 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. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure E” to this report. SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY The statement containing the salient features of the Financial Statements of the Company’s subsidiaries/ joint ventures/ associate companies of the Company is given in Form AOC – 1, is annexed herewith as “Annexure F” to this report 15


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    During the year under review, the Company incorporated a wholly-owned subsidiary Company “Realstone Infra Limited”. CREDIT RATING ICRA Ltd. has reaffirmed the highest credit rating of ‘[ICRA] A1+’ for the bank facilities and commercial paper programs of the Company. Further, CRISIL Ltd. has also reaffirmed the highest credit rating of ‘CRISIL A1+’ for commercial paper programs of the Company RISK MANAGEMENT The Holding Company has developed & implemented an integrated Enterprise Risk Management Framework for itself and Subsidiaries through which it identifies monitors, mitigates & reports key risks that impacts its ability to meet the strategic objectives. The Holding Company’s ERM framework is based on the recommendations by the Committee of Sponsoring Organisations (COSO) to further the organisation’s endeavor to strengthen ERM framework and processes using best practices. The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company’s objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in the form of a risk register with all the relevant information such as risk description, root cause and any existing mitigation plans. The risk register is refreshed annually. Risks are categorised into Strategic, Financial, Operational, Compliance & Repuational. 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. ACKNOWLEDGMENTS 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. For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place: Mumbai Date: May 26, 2020 16


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    ANNEXURE A FORM MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended 31.03.2020 Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration Rules), 2014 I REGISTRATION AND OTHER DETAILS: i CIN: U25200MH1997PLC240268 ii Registration January 17, 1997 date: iii Name of the Sun Pharma Laboratories Limited Company: iv Category/ Sub- Company Limited By Shares category of the Company v Address of the Registered Office Sun House, Plot No. 201 B/1, Western Express Highway, and Contact details: Goregaon (East), Mumbai - 400063 Contact no: 022-43244324 vi Whether listed company: No vii Name , Address , and Contact Link Intime (India) Private Limited, C 101, 247 Park, L B S details of Registrar and Transfer Marg, Vikhroli West, Mumbai 400 083 Agent: Tel No: +91 22 49186000 II PRINCIPAL BUSINESS ACTIVITY OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company: Sr.no Name and Description of main products/services NIC code of the % to total Product/ Service turnover of the Company 1 Pharmaceuticals 210 99.57 17


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    III PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Sr.No Name of the Address CIN/GLN Holding/ % of Applicable Company Subsidiar equity Section y/ shares Associate held 1 Sun Pharmaceutical India L24230GJ1993PLC019050 Holding 100 2(46) Industries Limited 2 Universal Enterprises India N.A. Subsidiary 100 2(87)(ii) Private Limited 3 Sun Pharmaceutical India U36900GJ2017PLC095132 Subsidiary 100 2(87)(ii) Medicare Limited 4 Sun Pharma India U51909MH2019PLC322778 Subsidiary 100 2(87)(ii) Distributors Limited 5 Realstone Infra India U70109MH2020PLC337007 Subsidiary 100 2(87)(ii) Limited 6 Trumpcard Advisors India AAH-6275 Associate 40.61 2(6) and Finvest LLP 7 Generic Solar Power India AAE-7937 Associate 28.76 2(6) LLP 8 Sun Pharma Holdings* Mauritius N.A. Associate 0.01* 2(6) * Proportion of Ownership Interest does not include ownership interest held by the Company through Optionally Convertible Preference Shares issued by Sun Pharma Holdings IV SHARE HOLDING PATTERN (Equity Share Breakup as percentage of Total Equity) i) Category-wise shareholding Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Shareholders Change during the Demat Physical Total % of Demat Physical Total % of year Total Total Shares Shar es A Promoter* 1) Indian 0 0 0 0 0 0 0 0 a) Individual/ HUF 0 0 0 0 0 0 0 0 b) Central Government/ 0 0 0 0 0 0 0 0 State Government c) Bodies Corporate 0 50000* 50000* 100% 49994 40000006* 40050000* 100 % d) Financial Institutions/ 0 0 0 0 0 0 0 0 Bank e) Any other 0 0 0 0 0 0 0 0 Sub total (A ) (1) 0 50000* 50000* 100% 49994 40000006* 40050000* 100 2) 0 0 0 0 0 0 0 % 0 Foreign NIL a) Individuals (NRIs) 0 0 0 0 0 0 0 0 b) Other Individuals 0 0 0 0 0 0 0 0 c) Bodies Corporate 0 0 0 0 0 0 0 0 18


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    d) Financial Institutions/ 0 0 0 0 0 0 0 0 Bank e) Any other 0 0 0 0 0 0 0 0 Sub total (A)(2) 0 0 0 0 0 0 0 0 Total shareholding of 0 50000* 50000* 100% 49994 40000006* 40050000* 100 Promoter & Promoter group % (A)=(A)(1)+(A)(2) (B) Public Shareholding 0 0 0 0 0 0 0 0 1) Institutions 0 0 0 0 0 0 0 0 a) Mutual Funds 0 0 0 0 0 0 0 0 b) Financial Institutions/ 0 0 0 0 0 0 0 0 Bank c) Central Government/ 0 0 0 0 0 0 0 0 State Government d) Venture Capital 0 0 0 0 0 0 0 0 Funds e) Insurance Companies 0 0 0 0 0 0 0 0 f) FIIs 0 0 0 0 0 0 0 0 g) Foreign Venture 0 0 0 0 0 0 0 0 Capital h) Qualified Foreign 0 0 0 0 0 0 0 0 Investors i) Any other (specify) 0 0 0 0 0 0 0 0 Sub total (B)(1) 0 0 0 0 0 0 0 0 2) Non- Institutions 0 0 0 0 0 0 0 0 a) Bodies Corporate 0 0 0 0 0 0 0 0 i) Indian 0 0 0 0 0 0 0 0 ii) Overseas 0 0 0 0 0 0 0 0 b) Individuals 0 0 0 0 0 0 0 0 i) Individual 0 0 0 0 0 0 0 0 shareholders holding nominal share capital upto Rs. 1 lakh ii) Individual 0 0 0 0 0 0 0 0 shareholders holding nominal share capital in excess of Rs. 1 lakh c) Others (specify) 0 0 0 0 0 0 0 0 19


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    i) Non Resident Indians 0 0 0 0 0 0 0 0 (Repat) ii) Non Resident Indians 0 0 0 0 0 0 0 0 (Non-Repat) iii) Qualified Foreign 0 0 0 0 0 0 0 0 Investors iv) Clearing Member 0 0 0 0 0 0 0 0 v) Directors/ Relatives 0 0 0 0 0 0 0 0 vi) Trusts 0 0 0 0 0 0 0 0 vii) Foreign Portfolio 0 0 0 0 0 0 0 0 Investor (Corporate) viii) Overseas Corporate 0 0 0 0 0 0 0 0 Bodies ix) Foreign Nationals 0 0 0 0 0 0 0 0 Sub total (B) (2) 0 0 0 0 0 0 0 0 Total Public shareholding 0 0 0 0 0 0 0 0 Public Group (B)= (B)(1)+(B)(2) (C) 0 0 0 0 0 0 0 0 Shares held by Custodian for GDRs & ADRs GRAND TOTAL 0 50000* 50000* 100% 49994 40000006* 40050000* 100 (A)+(B)+(C ) % * Including 4806 shares held by nominees for and on behalf of Sun Pharmaceutical Industries Limited (SPIL) jointly with SPIL ii) Shareholding of Promoters Sr Shareholder's Shareholding at the beginning of Shareholding at the end of the year % change N Name the year in share No. of % of %of No. of % of total %of Shares holding Share total Shares Shares Shares of Pledged / during the s Shares Pledged / the encumbered year of the encumbe company to total company red to shares total shares 1 Sun Pharmaceutical 50000* 100% NIL 40050000* 100% NIL NIL Industries Limited * Including 4806 shares held by nominees for and on behalf of SPIL, jointly with SPIL 20


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    iii) Change in Promoters’ Shareholding Sr. Name of the Promoter Shareholding at the beginning of the Cumulative Shareholding during the No Sun Pharmaceutical year No. of % of total yearof shares No. % of total Shares of Industries Limited* shares Shares of the the Company 1 At the beginning of the 50000 Company 100% N.A N.A year Date wise Increase / 40000000 100% 40050000 100% Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus Shares on August 12, 2019 At the end of the year N.A N.A 40050000 100% * Including 4806 shares held by nominees for and on behalf of SPIL, jointly with SPIL iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Sr. For each of the Top 10 Shareholding at the beginning of the Cumulative Shareholding No shareholders year during the year 1 No. of shares % of total Shares No. of shares % of total Shares of the Company of the Company Ashok Bhuta* At the beginning of the 1 0.002% N.A N.A year Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus Shares on August 12, 800 0.002% 801 0.002% 2019 At the end of the year N.A N.A 801 0.002% 2 Sunil Ajmera* At the beginning of the 1 0.002% N.A N.A year 21


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    Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus 800 0.002% 801 0.002% Shares on August 12, 2019 At the end of the year N.A N.A 801 0.002% 3 Dinesh Desai* At the beginning of the 1 0.002% N.A N.A year Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus 800 0.002% 801 0.002% Shares on August 12, 2019 At the end of the year N.A N.A 801 0.002% 4 Dilip Shanghvi* At the beginning of the 1 0.002% N.A N.A year Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus 800 0.002% 801 0.002% Shares on August 12, 2019 At the end of the year N.A N.A 801 0.002% * Four Individual shareholders other than Directors are holding 801 equity shares each, jointly with SPIL, and for and on behalf of SPIL as a nominee of SPIL. 22


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    v) Shareholding of Directors and Key Managerial Personnel: Sr. Name of Directors and Shareholding at the Cumulative Shareholding No Key Managerial beginning of the year during the year Personnel 1 Sudhir V. Valia* No. of shares % of total No. of shares % of total Shares Shares of the of the Company Company At the beginning of the 1 0.002% N.A N.A year Date wise Increase / 800 0.002% 801 0.002% Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus Shares on August 12, 2019 At the end of the year N.A N.A 801 0.002% 2 Sailesh T. Desai* No. of shares % of total No. of shares % of total Shares Shares of the of the Company Company At the beginning of the 1 0.002% N.A N.A year Date wise Increase / 800 0.002% 801 0.002% Decrease in Share holding during the year specifying the reasons for increase /decrease (e.g. allotment / transfer / bonus / sweat equity etc): Add: Issue of Bonus Shares on August 12, 2019 At the end of the year N.A N. 801 0.002% A *The aforementioned persons hold equity shares in the Company jointly with SPIL for and on behalf of SPIL as a nominee of SPIL. 23


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    v) INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amount in Millions) Secured Loans Unsecured Total Deposits (1) excluding Loans Indebtedness deposits Indebtedness at the beginning of the financial year i) Principal Amount - 2,989.9 16.4 3,006.3 ii) Interest due but not paid - - - - iii) Interest accrued but not due (2) - - - - Total (i+ii+iii) - 2,989.9 16.4 3,006.3 Change in Indebtedness during the financial year Addition: Principal Amount (3) / (4)/ (5) - 17,341.9 - 17,341.9 Reduction: Principal Amount - 13,000.0 10.6 13,010.6 Change: Addition / (Reduction) in Interest accrued but not Due - - - - Net Change - 4,341.9 (10.6) 4,331.3 Indebtedness at the end of the financial year i) Principal Amount - 7,331.8 5.8 7,337.6 ii) Interest due but not paid - - - - iii) Interest accrued but not due (2) - - - - Total (i+ii+iii) - 7,331.8 5.8 7,337.6 Notes: (1) Deposits are Security Deposits Received. The change during the year has been shown on net basis. (2) Interest accrued but not due on borrowings. 24


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    (3) Includes effect of exchange rate changes during the year. (4) Ind As adjustment during the year of External commercial borrowing & Commercial paper are shown as addition in principal amount. (5) Change in the OD limit under Working Capital Facility forming part of Unsecured loans, have been shown on net basis. (6) Above schedule does not include lease liability as per IND AS 116. VI) REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A) Remuneration to Managing Director, Whole-time Directors and/or Manager (As per Form 16, on actual payment basis) (Amount in Rs.) *Mr. Kalyanasundaram Subramanian Sr. No. Particulars of Remuneration Total Amount Whole-time Director and CEO (until July 3, 2019) 1 Gross salary (a) Salary as per provisions contained in 16350140 16350140 section 17(1) of the Income- tax Act,1961 (b) Value of perquisites u/s 17(2) of the 0 0 Income tax Act, 1961 (c) Profits in lieu of salary under section 0 0 17(3) Income- tax Act, 1961 2 Stock Option 0 0 3 Sweat Equity 0 0 4 Commission as a % of profit 0 0 5 Others, please specify 0 0 Total (A) 16350140 16350140 Rs. 1915.93 Million (10% of Net Profits of the Company Ceiling limit as per the Act calculated as per Section 198 of the Companies Act, 2013) *Mr. Kalyanasundaram Subramanian ceased to be the CEO & Whole-time Director of the Company and continues to act as a Non-Executive and Non Independent Director of the Company with effect from July 4, 2019. B) Remuneration to other directors: (The remuneration to Non-Executive Directors consists only of sitting fees) (Amount in Rs.) Sr. Particulars of Name of Directors Total no. Remuneration Amount Mr. Ms. Rekha Mr. Naresh Mr. Sudhir Mr. Sailesh Kalyanasundara Sethi Chand Singhal Valia Desai m Subramanian Independent Directors 1 Fee for attending board 0 425000 375000 0 0 800000 committee meetings Commission 0 0 0 0 0 0 Others, please specify 0 0 0 0 0 0 Total (1) 0 425000 375000 0 0 800000 2 Other Non-Executive Directors 25


  • Page 28

    Fee for attending board 25000 0 0 200000 250000 475000 committee meetings Commission 0 0 0 0 0 0 Others, please specify 0 0 0 0 0 0 Total (2) 0 0 0 200000 250000 475000 Total (B)=(1+2) 25000 425000 375000 200000 2500000 12,75,000 Overall Ceiling as per the Act Not applicable since no commission was payable to Director during the year and Rs. 25000 per Director per Meeting of Board or Committee thereof for Sitting fees. Total Managerial Remuneration (A+B) 1,76,25,140 C) REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (Amount in Rs.) Sr. Particulars of Remuneration Key Managerial Personnel no. Mr. Kirti Total Wardhaman *Mr. C. Ms. Rachana Ganorkar S.Muralidharan Kokal (CEO from (CFO) (CS) July 4, 2019) 1 Gross salary (a) Salary as per provisions contained in section 37898348.00 NIL 1305899.00 39204247.00 17(1) of the Income-tax Act, 1961 (b) Value of perquisites under section 17(2) of the 52991.00 0 52991.00 Income Tax Act, 1961 (c) Profits in lieu of salary under section 17(3) of 0 0 the Income Tax Act, 1961 2 Stock Option 0 0 0 3 Sweat Equity 0 0 0 4 Commission as % of profit 0 0 0 5 Others, please specify 0 0 0 Total 37951338 1305899.00 39257238.00 *CFO draws salary from Sun Pharmaceutical Industries Limited, the parent Company. VII PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type Section of Brief Details of Penalty Authority [RD Appeal made, the Description / Punishment/ / NCLT/ if any (give Companies Compounding COURT] Details) Act fees imposed A. COMPANY Penalty Punishment Compounding B. DIRECTORS NIL Penalty Punishment Compounding 26


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    C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place: Mumbai Date: May 26, 2020 27


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    ANNEXURE B Form No. MR-3 SECRETARIAL AUDIT REPORT For the Financial Year Ended 31st March 2020. [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Sun Pharma Laboratories Limited, Mumbai. We have conducted the Secretarial Audit of the compliances of applicable statutory provisions and the adherence to good corporate governance practice by Sun Pharma Laboratories Limited (“the Company”). The Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March 2020, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2020, according to the provisions of: i. The Companies Act, 2013 (the Act) and the rules made thereunder; ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; Not applicable to the Company for the year under review; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; Not applicable to the Company for the year under review; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent applicable during the period under review of Overseas Direct Investment; External Commercial Borrowings (Regulations relating to Foreign Direct Investment not attracted to the Company for the year under review); v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’): a. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 - Not applicable to the Company for the year under review; b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 - Not applicable to the Company for the year under review; c. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Not applicable to the Company for the year under review; d. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011- Not applicable to the Company for the year under review; e. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 – Not applicable to the Company for the year under review; f. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 – Not applicable to the Company for the year under review; g. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 – Not applicable to the Company for the year under review; h. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, regarding the Companies Act and dealing with client – Not applicable to the Company for the year under review; i. The Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2014 – Not applicable to the Company for the year under review; 28


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    We have also examined compliance with the applicable clauses of the Secretarial Standards with respect to meeting of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India under the provisions of Companies Act, 2013. During the year under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines etc. mentioned above. We further report that: 1. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and Woman Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. 2. Adequate notice of at least seven days was given to all directors to schedule the Board Meetings and Meetings of Committees except in some cases where the meeting was held on a shorter notice. Agenda and detailed notes on agenda were sent in advance in adequate time before the meetings and a system exists for Directors for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. 3. On verification of minutes, we have not found any dissent/disagreement on any of the agenda items discussed in the Board and Committee meetings from any of the Directors and all the decisions are carried through. Based on the information received and records maintained, we further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that, having regard to the compliance system prevailing in the Company and on examination of the relevant documents and records in pursuance thereof, on the basis of the representations made by the respective plant heads of R&D centers, the Company has identified and complied with the following laws applicable to the Company:  Drugs and Cosmetics Act, 1940;  Factories Act, 1948. We further report that, during the period under review, 1. The Company has allotted 4,00,00,000 (Four Crore) Equity Shares of Rs. 10/- (Rupees Ten Only) each allotted as a fully paid-up Bonus Equity shares in proportion of 800 (Eight Hundred) fully paid equity shares of Rs. 10/- (Rupees Ten Only) each for every 1(one) Equity Share. 2. The Company has purchased 100 miliion 5% Optionally Convertibel Preference Shares of face value USD 1 each of Sun Pharma Holdings, Mauritius from Sun Pharmaceutical Industries Limited (the Holding Company). Note: We relied on the representation made to us by the management wherever required due to several restrictions imposed by the Central and State government on the travel, movement and transportation considering public health and safety measures due to Covid -19, which had impact on the audit assessment due to limited access to information / documents / data as required for audit assessment. For KJB & Co LLP, Practicing Company Secretaries Alpeshkumar Panchal Partner Mem No. - 49008 C. P. No. – 20120 UDIN: A049008B000283605 Date: May 26, 2020. Place: Mumbai. This report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. 29


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    ANNEXURE A To, The Members, Sun Pharma Laboratories Limited, Mumbai. Our report of even date is to be read along with this letter. 1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For KJB & Co LLP, Practicing Company Secretaries Alpeshkumar Panchal Partner Mem No. - 49008 C. P. No. – 20120 UDIN: A049008B000283605 Date: May 26, 2020. Place: Mumbai. 30


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    ANNEXURE C FORM NO. AOC-2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 (“the Act”) and Rule 8(2) of the Companies (Accounts) Rules, 2014) Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm's length basis – NIL 2. Details of material contracts or arrangement or transactions (i.e. exceeding ten percent of the annual consolidated turnover as per the last audited financial statements) at arm's length basis Sr. Name(s) of the Nature of contracts/ Duration of the Salient terms of the Date(s) of Amount paid No. related party arrangements/ contracts/ contracts/ approval by the as advances, and nature of transactions arrangements/ arrangements/ Board, if any: as on March relationship transactions transactions including 31, 2020, if the value, if any any: 1. Sun Purchase of property and On-going The related party Since these Nil Pharmaceutical plant & equipment and transactions (RPT’s) transactions are in Industries investments, Revenue entered during the year the ordinary Limited from contracts with were in ordinary course course of (“SPIL”, customers Sale of goods, of business and on an business and are Holding property, plant & arm’s length basis. The at arm’s length Company) equipment, Dividend aggregate amount of basis, approval of paid, Receiving and transactions for the the Board is not Rendering of Service, financial year 2019-20 applicable. Reimbursement of was Rs. 75351.4 Million expenses paid and expenses received, Loan given and received back, Interest income and Receipts towards lease liabilities and Rent paid 2. Sun Pharma Revenue from On-going The related party Since these Nil Distributors contracts with transactions (RPT’s) transactions are in Limited customers entered during the year the ordinary (Wholly owned Reimbursement of were in ordinary course course of Subsidiary) Expenses paid and of business and on an business and are received, Loans given and arm’s length basis. The at arm’s length received back aggregate amount of basis, approval of transactions for the the Board is not financial year 2019-20 applicable. was Rs. 56816.3 Million *the threshold limit for related party transactions (all types of transactions combined together) with related parties for the purpose of this disclosure is treated at 10% of the annual consolidated turnover of the Company, in line with the materiality policy of SPIL, Holding Company For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place: Mumbai Date: May 26, 2020 31


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    ANNEXURE D Annual Report on CSR activities for the financial year 2019-20 Details Particulars A brief outline of the Company’s The CSR policy of the Company encompasses its philosophy towards CSR policy, including overview of Corporate Social Responsibility and lays down the guidelines and projects or programmes proposed mechanism for undertaking socially useful programs for welfare & to be undertaken sustainable development of the community at large. Your Company has identified health, education & livelihood, sanitation, rural development, environment protection, water management and disaster relief as the areas where assistance is provided on a need-based and case-to- case basis. Your Company persisted with participation in such activities at the local, grass-root level during the year. Reference to the web-link to the http://www.sunpharma.com/spll/policies CSR policy and projects or programmes: Composition of the CSR Mr. Sudhir V. Valia (Chairman of the committee), Mr. Kalyanasundaram Committee: Subramanian and Ms. Rekha Sethi Average net profit of the Company 8414.03 for last three financial years: Prescribed CSR Expenditure (two 168.28 percent of the amount as in item above): Details of CSR spend for the financial year: spent for the a)Total amount 170.48 Million financial year: b)Amount unspent, if any: Nil 32


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    Amount spent on the Amount projects or programs Projects or Programs Outlay Cumulative Amount spent Sector in 1. Local Area or other CSR Project or (Budget) expenditure Directly or Sl. which the 2. Specify the State and Activity Project Direct upto to the through Beneficiaries No. project is District where projects or Identified or Expenditure reporting implementing covered programs were Overhead Program on projects period agency undertaken Expenditure wise or programs Patients found and tested for Malaria Malaria Healthcare Mandla (District- Implementing fever :141,461 Eradication 1 under Item Mandala, State- Madhya 500.00 54.30 0 145.85 agency : patients Demonstration No. (i) Pradesh) FDEC - India Number of malaria Project cases diagnosed and treated :140 New Orchards: 29159 beneficiaries Dairy: 146 beneficiaries Holistic School Transformation: 7 schools, 4542 students Sanitation Rural Swades Model Mahad, Mangaon,Mhasla, Implementing blocks:441 IHHTs Development Village Tala,Poladpur,Shrivardhan agency : Mass scholarships: 2 Projects 250.00 50.00 0 150.97 Development (District - Raigadh, State - Swades 254 students under Item Project Maharashtra) Foundation Excellence No. (x) Scholarship: 35 students Skilling & placement: 131 individuals Drinking Water: 117 households Water for Irrigation : 49.5 Acres Initiative for Implementing Healthcare Hyderabad (District- Dry Eye agency : 3 under Item Hyderabad, State- 60.00 24.64 0 24.64 1429 Patients Amelioration Hyderabad No. (i) Telangana) (IDEA) Eye Institute Support in Implementing Setting-up of agency : Healthcare Radiation Ankleshwar (District- Ankleshwar 4 under Item 20.00* 20.00 0 20.00 Community Centre with Bharuch, State- Gujarat) Industrial No. (i) Chemotherapy Development Facility Project Society 1) Preventive Implementing Measures for Preventive agency : Outbreak of Healthcare Shantilal 5 PAN India 8.09* 8.09 0 8.09 Community Novel under Item Shanghvi Coronavirus No. (i) Foundation Covid-19 2) CSR Department Implementing Clinical treatment: Ranipool (District - East Mobile Healthcare agency : 24,298 Patients Sikkim, State - Sikkim) 6 Healthcare Unit under Item 6.31* 3.64 1.34 17.71 Sun Pharma Preventive & and Guwahati (District - Programme No. (i) Community Promotive Kamrup, State - Assam) Healthcare healthcare: 4,423 33


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    Society patients Total : 28,721 Treatment of Implementing neo-natal, agency : 207 Infants & Healthcare infants and Ahwa, (District- Dang, Shrimad General 7 under Item 3.66* 3.66 0 10.67 general State- Gujarat) Rajchandra Disadvantegd No. (i) disadvantaged Sarvamangal Patients patients Trust Ranipool (District- East Sikkim, State- Sikkim), Education Educational Jammu (District-Jammu, CSR 8 under Item 3.56* 3.56 0.02 19.50 2485 Students Programme State- Jammu & Kashmir) Department No. (ii) and Guwahati (District - Kamrup, State - Assam) Support Animal Implementing towards Welfare agency : 9 Infrastructure New Delhi (Delhi) 0.50* 0.50 0 3.00 Community under Item People for Development No. (iv) Animals for Animal Care Implementing Education Ellapuram (District - Single Teacher agency : 10 under Item Thiruvallur, State - 0.50* 0.50 0 1.50 282 Students School Project Single Teacher No. (ii) Tamilnadu) Schools Environment Environment Jammu (District-Jammu, CSR 11 Conservation under Item 0.20* 0.16 0 1.16 Community State- Jammu & Kashmir) Department Programme No.(iv) Guwahati (District - Disaster Disaster Relief Kamrup, State - Assam) CSR 12 Support under Item 0.07* 0.07 0 2.61 Community and Ranipool (District- Department Programme No. (xii) East Sikkim, State- Sikkim) Total : 169.11 1.36 Grand Total: 170.48 * project outlay which are budgeted on per annum basis The CSR Committee confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company. For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place: Mumbai Date: May 26, 2020 34


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    ANNEXURE E PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO REQUIRED UNDER THE COMPANIES (ACCOUNTS) RULES, 2014 I. CONSERVATION OF ENERGY 1. Steps taken or impact on Conservation of Energy  Installed electrical heater in place of steam load in AHUs  Reduction in fixed energy charges by contract demand reduction  Energy savings in chilled water system by confined control on chilled water operation.  Improve steam to fuel ratio by condensate recovery ,flash recovery, boiler blow down heat recovery & steam trap uptime  Hot water generation system for process is changed to plate heat exchangers from direct live steam heating  Installed energy efficient pumps to reduce electricity consumption 2. Steps taken by the Company for utilising alternate sources of energy  Biomass briquettes (Carbon Neutral) fuel used instead of Conventional fuel like furnace oil /high speed diesel for Steam generation Guwahati. 3. Capital investment on energy conservation equipments Capital investment of 37.0 lac is done on energy conservation equipments. II TECHNOLOGY ABSORPTION- 1. Efforts in brief, made towards technology absorption, adaptation and innovation Process robustness has been implemented for wide range of products with the objective to reduce cost and increase in-process capability. Novel compact dosage forms having differentiation with regards to improved stability and/or reduced pharmacokinetic variability have been developed for the Indian market. Stable liquid oral formulations of labile products are also being developed. 2. Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, product development, import substitution Not dependent on imported technology, can make high-end products available at competitive prices by using indigenously developed manufacturing processes and formulation technologies. Offers technologically advanced differentiated products which are convenient and safe for administration to patients. III FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs. in Million) Particulars Year ended 31st March, 2020 Year ended 31st March, 2019 Earnings 0 0 Outgo 3940 1665.9 IV The expenditure incurred on Research and Development: Nil For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place: Mumbai Date: May 26, 2020 35


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    ANNEXURE F FORM AOC - 1 PURSUANT TO FIRST PROVISO TO SUB-SECTION (3) OF SECTION 129 OF COMPANIES ACT, 2013 WITH THE RULE 5 OF COMPANIES (ACCOUNTS) RULES, 2014 STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES / ASSOCIATE COMPANIES PART "A": SUBSIDIARIES ` In Million Sr Name of the Subsidiary Company Date since when Reporting Rate Capital Reserve Total Total Investment Other than Turnover Profit / (Loss) Provision for Profit / (Loss) Proposed % of No subsidiary was Currency Assets Liabilities Investment in before Taxation Taxation after Taxation Dividend Shareholding acquired Subsidiary 1 Universal Enterprises Private Limited 31.08.2012 INR 1.00 4.5 0.7 8.3 3.1 - - (0.1) - (0.1) - 100.00% 2 Sun Pharmaceutical Medicare Limited 16.01.2017 INR 1.00 2.5 (1,883.9) 3,834.1 5,715.5 - 799.2 (1,396.2) 0.1 (1,396.3) - 100.00% 3 Sun Pharma Distributors Limited 19.03.2018 INR 1.00 1.5 673.3 22,930.4 22,255.6 - 81,369.9 903.6 229.2 674.4 - 100.00% 4 Realstone Infra Limited 31.01.2020 INR 1.00 2.5 (0.3) 2.5 0.3 - - (0.3) - (0.3) - 100.00% Note: 1 0.0' represents amount less than 0.05 million and rounded off. For and on behalf of the Board of Directors Sailesh Desai Sudhir V. Valia Director (00005443) Director (00005561) Place:Mumbai Date: May 26, 2020


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