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Directors Report of Sun Pharma Advanced Research Company Ltd.

Mar 31, 2017

Board s Report

The Directors take pleasure in presenting the Twelfth Annual Report and Audited Accounts for the financial year ended 31st March, 2017.

FINANCIAL RESULTS

(Rs, in Lakhs)

Particulars

Year ended 31st March, 2017

Year ended 31st March, 2016

Total Income

19,465.05

16,421.91

Profit/(Loss) before Interest, Depreciation & Tax

(11,020.78)

(6,025.65)

Interest

181.98

215.69

Depreciation

823.97

757.86

Profit/(Loss) before Tax

(12,026.73)

(6,999.20)

Tax Expense

0.00

0.00

Profit/(Loss) after Tax

(12,026.73)

(6,999.20)

Balance brought forward from Previous Year

(22,297.93)

(15,298.73)

Balance carried to Balance Sheet

(34,324.66)

(22,297.93)

DIVIDEND

In view of loss incurred during the year, your Directors do not recommend any dividend for the year under review.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as provided under sub-section (3) of section 92 of the Companies Act, 2013 in prescribed form MGT-9 is enclosed as "Annexure 1" to this report.

SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE COMPANY

The Company does not have any subsidiary, joint venture or associate company. Consequent to restructuring of promoter group holding, the Company has become a subsidiary of Shanghvi Finance Pvt. Ltd. with effect from 30th March, 20l7.

SHARE CAPITAL & RIGHTS ISSUE

During the year, your Company had issued 1,02,04,081 fully paid-up equity shares of face value of Rs, 1 each ("Rights Issue Equity Shares") for cash at a price of Rs, 245 per equity share including a share premium of Rs, 244 per equity share aggregating up to Rs, 25,000 Lakhs to the existing equity shareholders on a rights basis in the ratio of 5 fully paid-up equity shares for every 116 fully paid-up equity shares held by the existing equity shareholders on the record date, i.e. March 17, 2016 ("The Issue").

The Issue was open for subscription from 28th March, 2016 to 13th April, 2016 (the Issue Closing Date was extended from April 11, 2016 to April 13, 2016). The Rights Issue Committee, in its meeting held on 27th April, 2016, approved the allotment of 1,02,04,081 Rights Issue Equity Shares to the successful applicants, based on the Rs,basis of allotment'' approved by BSE Limited, the designated Stock Exchange for the issue. The shares were listed on BSE Limited & National Stock Exchange of India Limited (NSE) and were admitted for dealing by both the exchanges with effect from 3rd May, 2016.

The Board of Directors, in its meeting held on 29th July, 2016 and 28th October, 2016, annulled the forfeiture of 4,351 shares and 191 shares respectively, on receipt of applications along with the unpaid amount & interest for delayed payment from the concerned shareholders.

Consequent to the aforesaid allotment & annulment of forfeited shares, the paid-up share capital of the Company has increased from Rs, 23,66,87,354 to Rs, 24,68,95,977 during the previous financial year.

The Board of Directors, in their meeting held on 5th May, 2017, approved the issue and allotment of up to 1,51,51,515 warrants, each convertible into one fully paid equity share of the Company at a price of Rs, 330 each, to certain Promoter and Non-promoter entities on Preferential basis, subject to receipt of necessary approvals, including that of Shareholders.

TRANSFER OF SHARES TO UNCLAIMED SUSPENSE ACCOUNT

In compliance with the requirements of regulation 39 (4) of the Securities and Exchange Board of India Listing Obligation & Disclosure Requirements Regulations, 2015 [SEBI (LODR) Regulations], the Company had transferred 1,620 shares belonging to 14 shareholders to "SPARC Unclaimed Suspense Account", after sending three reminders to the concerned shareholders and following the procedures laid down under Schedule VI of the aforesaid Regulations.

As on 31st March, 2017, 1,584 shares belonging to 13 shareholders were lying unclaimed in the aforesaid account.

In compliance with the requirements of the SEBI (LODR) Regulations, all corporate benefits declared by the Company in future, in respect of the aforesaid shares shall be transferred to the aforesaid account until the rightful shareholders claim for the aforesaid shares. The voting rights on the aforesaid shares shall also remain frozen till the rightful owners claim the shares.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Dr. T Rajamannar (DIN: 01415412), retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment.

Prof. Dr. Andrea Vasella (DIN: 01653058), Prof. Dr. Goverdhan Mehta (DIN: 00350615) and Mr. S. Mohanchand Dadha (DIN: 00087414), Independent Directors of the Company hold office upto the ensuing Annual General Meeting of the Company. The Board acknowledges and puts on record its appreciation for the valuable contributions made by the above members during their tenure as Directors of the Company.

The Board of Directors of the Company, in its meeting held on 5th May, 2017, appointed Dr. Ferzaan Engineer (DIN: 00025758) & Mr. Mark Simon (DIN: 07807378) as Additional Directors of the Company under section 161 of the Companies Act, 2013 to hold office up to the ensuing Annual General Meeting of the Company. In view of the impressive qualifications & experience of the aforesaid Directors, it is proposed to appoint Dr. Ferzaan Engineer & Mr. Mark Simon as Independent Directors of the Company for a term of 3 years, to hold office up to the conclusion of the fifteenth Annual General Meeting of the Company.

Mr. Sudhir V. Valia, resigned from his position as the Chief Financial Officer of the Company at the end of working hours on 31st January, 2017. In view of the above, the Board has appointed Mr. Chetan Rajpara as the Chief Financial Officer of the Company with effect from 1st February, 2017. Post his resignation as the Chief Financial Officer of the Company, Mr. Sudhir V. Valia continues to be associated with the Company in his position of Non-Executive Director.

Appropriate resolutions for the appointment/re-appointment of Directors as detailed above are being placed for your approval at the ensuing Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration 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.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

For the purpose of selection of any Director, the Nomination & Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and also takes into consideration recommendation, if any, received from any member of the Board. The Committee also ensures that the incumbent fulfils such other criteria with regard to age and other qualifications as laid down under the Companies Act, 2013 or other applicable laws.

The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection, appointment and remuneration of Directors and Senior Management.

The summary of Remuneration Policy is disclosed in the Corporate Governance Report, which forms a part of this Report.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI (LODR) Regulations, the Company has put in place a Familiarization Programme for the Independent Directors to familiarize them with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model etc. The detail of such programme is available on the website of the company www.sparc. life and may be accessed through the web link http://www. sunpharma.in/regulatory-compliance.htm.

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met four times during the previous financial year on 6th May, 2016, 29th July, 2016, 28th October, 2016 and 27th January, 2017. The particulars of attendance of the Directors at the said meetings are detailed in the Corporate Governance Report which forms a part of this Report. The intervening gaps between the meetings were within the period prescribed under the Companies Act, 2013 and SEBI (LoDR) Regulations.

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

In view of Securities and Exchange Board of India''s (‘SEBI'') notification no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January, 2016 on ‘Guidance Note on Board Evaluation'', the Board of Directors, on the recommendation of the Nomination & Remuneration Committee, adopted revised set of criteria, aligned with the recommendations of SEBI, for evaluation of the Board of Directors of the Company, including the individual Directors and the Committees of the Board.

The Board of Directors have also carried out an annual evaluation of its own performance, its various committees and individual directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed under regulation 17(10), 25(4) and other applicable provisions of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

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 of the Board, Meetings of the Board, Functions of the Board, Board and Management, Professional Development, 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, Contribution to decisions of the Board etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Non-Independent Directors on the basis of criteria such as qualifications, experience, knowledge & competency, fulfillment of functions, ability to function as a team, initiative, availability and attendance, commitment (as a Director), contribution & integrity.

The individual Independent Directors were reviewed, based on the additional criteria of Independence and Independent Views & Judgment. Similarly, the performance of the Chairman was evaluated based on the following additional criteria such as effectiveness of leadership and ability to steer the meetings, impartiality, commitment (as Chairperson) and ability to keep shareholders'' interests in mind.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the various Committees of the Board and the Board as a whole and performance of the Chairman was evaluated, taking into account the views of the executive directors and nonexecutive directors. The same was discussed in the board meeting that followed the meeting of independent directors, at which the performance of the Board, its committees and individual Directors was also discussed.

HUMAN RESOURCES

As on 31st March, 2017, your Company had a dedicated team of over 398 people, of which around 330 are highly qualified and experienced scientists. In the last year, we considerably strengthened our team by attracting top quality scientific talent, with extensive experience in drug research internationally.

In addition to increasing our participation at international conferences for continuous knowledge up-gradation, we have also put in place effective training and career progression plans for our employees.

Your Directors recognize the team''s valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 197 (12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed ("Annexure 2") to this report. Further, pursuant to section 136 (1) of the Companies Act, 2013, the Report and the accounts are being sent to the members excluding the information under rule 5(2) & 5(3) aforesaid. In terms of section 136 of the Act, the said annexure is available for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

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

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

During the year ended 31st March, 2017, no complaint pertaining to sexual harassment was received by the Company.

AUDITORS Statutory Auditors

The Company''s Auditors, Deloitte Haskins & Sells LLP Chartered Accountants, Mumbai (Regn. No. 117366W/W-100018), were appointed as the Statutory Auditors of the Company for a period of three years, up to the conclusion of the twelfth Annual General Meeting of the Company, subject to ratification by members at every Annual General Meeting of the Company. In terms of section 139 of the Companies Act,

2013, Deloitte Haskins & Sells LLP Chartered Accountants retire as the Auditors of the Company at the conclusion of the ensuing Annual General Meeting.

The Audit Committee and the Board of Directors of the Company, in its meeting held on 5th May, 2017, recommended the appointment of SRBC & Co. LLP, Chartered Accountants, (Regn. No. 324982E) as the new Statutory Auditors of the Company for a term of five years, to hold office up to the conclusion of the seventeenth Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the valuable contribution of Deloitte Haskins & Sells LLP, during their association as the Statutory Auditors of the Company.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed C. J. Goswami & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is annexed herewith as "Annexure 3".

The Financial Audit Report and the Secretarial Audit Report for the financial year 2016-17 do not contain any qualification, reservation or adverse remark by the Auditors.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

RELATED PARTY TRANSACTIONS

All contracts/arrangements entered by the Company during the previous financial year with the related parties were in the ‘Ordinary Course of Business'' and on ‘Arm''s Length Basis''.

There are no materially significant Related Party Transactions between the Company and the Directors, the management or the relatives, except for those disclosed in the financial statements and Form AOC-2 ("Annexure 4").

All Related Party Transactions were subjected to independent review by Dhruv A. & Co., Chartered Accountants to determine adherence to ‘Arm''s Length Price'' and by Bathiya & Associates LLP, Chartered Accountants, to establish compliance with ‘Ordinary Course of Business'' requirement. All Related Party Transactions, along with the aforesaid certificates, were also placed before the Audit Committee for review and approval. Prior Omnibus approval is obtained for Related Party Transactions which are of repetitive in nature and are entered in Ordinary Course of Business and at Arm''s Length Price.

The policy on Related Party Transactions as approved by the Board is available on the website of the company www.sparc. life and may be accessed through the web link http://www. sunpharma.in/regulatory-compliance.htm.

The particulars of Related Party Transactions entered into by the Company during the previous financial year, individually or taken together with similar transactions during the last financial year, which exceeded ten percent of the annual turnover of the Company during the financial year 2015-16, are enclosed in prescribed Form AOC-2 as "Annexure 4".

Your Directors also draw your attention to "Annexure A" to the Notes on the Financial Statements, which sets out Related Party Disclosures.

AUDIT COMMITTEE COMPOSITION

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

RISK MANAGEMENT

The Board of Directors has developed & implemented a robust Risk Management Policy, which lays down the procedure to identify, monitor and mitigate the key elements of risks that threaten the existence of the Company. The Audit Committee reviews the status of key risks and steps taken by the Company, to mitigate such risks at regular intervals.

INTERNAL FINANCIAL CONTROLS

The Company has in place a well-defined organizational structure and adequate internal controls for efficient operations which is cognizant of applicable laws and regulations, particularly those related to protection of intellectual properties, resources, assets, and the accurate reporting of financial transactions in the financial statements. The Company continually upgrades these systems. The internal control systems are supplemented by extensive internal audits, conducted by an independent firm of chartered accountants.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with the requirements of section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility Committee. The details of membership of the Committee & the meetings held are given in the Corporate Governance Section of the Report.

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 company www. sparc.life and may be accessed through the web link http:// www.sunpharma.in/regulatory-compliance.htm

Since the average net profits of the Company during the three immediately preceding financial years were negative, the Company was not required to spend any money on CSR activities during the previous financial year.

PUBLIC DEPOSITS

The Company has not accepted any Public Deposit during the year under review, under the provisions of the Companies Act, 2013 and the rules framed there under.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis on the operations of the Company, as prescribed under Schedule V read with regulation 34(3) of the SEBI (LODR) Regulations, is provided in a separate section and forms a part of this Report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Schedule V read with regulation 34(3), of the SEBI (LODR) Regulations, are provided in a separate section and forms a part of this Report.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report of the Company for the year ended 31st March, 2017, in line with Green Initiative as required under Clause 34 (2) (f) of the SEBI (LODR) Regulations, forms part of this Report and is available on the website of the Company www.sparc.life and may be accessed through the web link http://www.sunpharma.in/regulatory-compliance.htm. The same is also kept at the Registered Office of the Company for inspection. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

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 stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules,

2014, is annexed as "Annexure 5".

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

No significant or material orders were passed by the Regulators or Courts or Tribunals during the previous year which may impact the Going Concern Status of the Company''s future operations.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behavior in all its operations, the Company has formulated a Vigil Mechanism named as ‘SPARC Whistle Blower Policy'' in addition to the existing Code of Conduct that governs the actions of its employees. This Policy aspires to encourage all employees to report suspected or actual occurrence of illegal, unethical or inappropriate events (behaviors’ or practices) that affect Company''s interest / image.

The Policy is available on the website of the Company www.sparc.life and may be accessed through the web link http://www.sunpharma.in/regulatory-compliance.htm.

DIRECTORS’ RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the financial year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 31 st March, 2017 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of 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; and

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

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

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, business partners, Company''s bankers, medical professionals and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip S. Shanghvi

Chairman & Managing Director

Place: Mumbai

Date: May 5, 2017


Mar 31, 2014

Dear Members,

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

FINANCIAL RESULT

(Rs. in Thousands)

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

Total Income 1,770,327 888,959

Profit/(Loss) before Depreciation & Tax 378,965 (190,992)

Depreciation 35,723 33,955

Profit/(Loss) before Tax 343,242 (224,947)

Tax Expense 40,000 -

Profit/(Loss) after Tax 303,24 (224,947)

Balance brought forward from Previous Year (1,437,915) (1,212,968)

Balance carried to Balance Sheet (1,134,673) (1437,915)

DIVIDEND

In view of carried forward losses, your Directors do not recommend any dividend for the year under review.

DIRECTORS

Dr. T. Rajamannar ceased to be the Whole-time Director of the Company effective April 24, 2014 and is now a Non-Executive Director of the Company, with effect from April 24, 2014. Dr. T. Rajamannar, retires by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment.

The Independent Directors of the Company viz. Mr. S. M. Dadha, Prof Dr. Goverdhan Mehta and Prof Dr. Andrea Vasella, are being proposed to be appointed as Independent Directors of the Company in terms of Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 at the ensuing Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 ofthe Companies Act, 2013.

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

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

SPARC, which is committed to do quality research work, has a dedicated team of about 318 employees, of which 261 are highly qualified and experienced scientists comparable to those existing internationally. We are augmenting consistently enhancing our capabilities by attracting talent and nurturing these talents for better results. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees'' career development is a part of human resources mission. We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the team''s valuable contribution and place on record their appreciation forTeam SPARC.

Information as per Section 217(2A) of the Companies Act/1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, is available at the registered office of your Company. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(l)(e) of the Companies Act 1956 readwith the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure and forms part of this Report.

DIRECTORS''

RESPONSIBILITY

STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relatingto material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made

judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, and Companies Act, 2013 to the extent applicable, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a ''going concern''basis.

AUDITORS

Your Company''s auditors, M/s. Deloitte Haskins & Sells LLP (Firm''s Registration No. 117366W/W-100018), retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re- appointment.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners-your Company''s bankers, medical profession and business associatesfortheir continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Dilip S. Shanghvi

Place: Mumbai Chairman & Managing

Date: May 3,2014 Director


Mar 31, 2013

The Directors take pleasure in presenting the Eighth Annual Report and Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULT (Rs. in Thousand)

Year ended Year ended Particulars 31st March, 2013 31st March, 2012

Total Income 888,959 301,222

Profit/(Loss) before Depreciation & Tax (190,992) (690,698)

Depreciation 33,955 31,623

Profit/(Loss) before Tax (224,947) (722,321)

Tax Expense - -

Profit/(Loss) after Tax (224,947) (722,321)

Balance brought forward from Previous Year (1,212,968) (490,647)

Balance carried to Balance Sheet (1,437,915) (1,212,968)

DIVIDEND

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year under review.

RIGHTS ISSUE

During the year under review, the Company had filed Letter of Offer ("LOF") dated 10th August, 2012, with SEBI for issue of 29,588,056 Equity shares of Rs. 1.00 each to existing shareholders on Rights Basis in the ratio of 1 Rights Share for every 7 equity shares held, at issue price of Rs. 67.00 each (including share premium). Pursuant to Rights Issue the Company had on 3rd October, 2012, allotted to the eligible shareholders, 29,588,056 Equity Shares partly paid up to the extent of Rs. 40 per share (comprising of Rs. 0.60 towards face value and Rs. 39.40 per share towards share premium) and the balance Rs. 27.00 per share (comprising of Rs. 0.40 towards face value and Rs. 26.60 per share towards share premium) was payable on Final Call.

Further the Company had announced Final Call on these shares vide Final Call Notice dated February 19, 2013, and the Final Call money was payable from March 1, 2013 up to March 21, 2013. Pursuant to receipt of Final Call Money, till the date of this report, 29,351,987 out of 29,588,056 partly paid Equity shares have been converted to fully paid shares. The remaining shares will be converted as and when the Final call money is received from the respective shareholders.

Consequent to allotment of the aforesaid shares, the Issued and Subscribed Equity Capital of the Company increased from Rs. 207,116,391 as on 31st March, 2012 to Rs. 236,704,447 as on 31st March, 2013 and the Paid-Up Equity Share Capital of the Company increased from Rs. 207,116,391 as on 31st March, 2012 to Rs. 236,599,845 as on 31st March, 2013.

Out of the proceeds of the Rights Issue, as on 31st March, 2013, the Company has utilised amount aggregating to Rs. 1027.5 million towards the Objects of the Issue, as stated in the Letter of Offer. The balance unutilised funds have been temporarily invested in liquid mutual funds / bank.

Due to inherent unpredictability in clinical trial enrolments and results, deployment of funds in clinical trials on R&D projects stated in the LOF may be staggered. The Board of Directors, therefore, at their meeting held on 24th January, 2013 decided to seek the approval of the members, by way of postal ballot, for altering the utilisation of unutilised funds out of the proceeds of the Rights Issue.

The members on 11th May, 2013, by way of resolution by postal ballot approved alteration of the Objects stated in the LOF to utilize the unutilized funds for Pharmaceutical research and development activities - Funding clinical trials in India or USA, on any existing and/ or future product/technology including S-597 nasal, Latanoprost plus Timolol combination eye drops, dry powder inhaler, Baclofen GRS Capsule and PICN.

Further, as you are aware, the Company undertakes various Research and Development activities in addition to clinical trials. Numerous allied and supporting activities need to be carried out prior to and after conducting such clinical trials. To reach the stage of clinical trials, the project has to go through various preliminary stages. The Board of Directors therefore now deem fit that the unutilzed funds of the Rights Issue would be better utilized for funding the other operational demands of this technology-intensive field, in addition to utilising the funds for Clinical Trials. Consequently, it is now intended to further alter the utilization of unutilized funds out of the proceeds of the Rights Issue to any research and development activities/expenses, including incidental, ancillary and/or support activities/ expenses incurred by the Company, directly or indirectly. The alteration of the objects of the Letter of Offer issued pursuant to the Rights Issue requires the approval of the members of the Company by way of Special Resolution, which is proposed at the ensuing Annual General Meeting for approval of members.

DIRECTORS

Prof. Dr. Goverdhan Mehta and Prof. Dr. Andrea Vasella, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

SPARC, which is committed to do quality research work, has a dedicated team of about 248 employees, of which 206 are highly qualified and experienced scientists comparable to those existing internationally. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees'' career development is a part of human resources mission. We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the team''s valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the loss of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

AUDITORS

Your Company''s auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners- your Company''s bankers, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Place : Vadodara Dilip S. Shanghvi

Date : 14th May, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors take pleasure in presenting the Seventh Annual Report and Audited Accounts for the year ended 31st March, 2012.

(Rs IN THOUSAND)

Particulars Year ended 31st March, 2012 Year ended 31st March, 2011

Total Revenue 3,01,222 5,95,872

Loss before Depreciation and Tax 6,90,698 55,217

Depreciation 31,623 29,859

Loss before Tax 7,22,321 85,076

Prior Year Fringe Benefit Tax Provision written back - (69)

Loss after Tax 7,22,321 85,007

Balance brought forward from Previous Year 4,90,647 4,05,640

Balance carried to Next Year 12,12,968 4,90,647

DIVIDEND

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year.

RIGHTS ISSUE

The Members of the Company at the Sixth Annual General Meeting had passed the special resolution to offer, issue and allot equity shares not exceeding Rs 200 crores by way of the Rights Issue or by way of a qualified institutions placement or offer or otherwise. The Fund Mobilising Committee of the Company had approved offering equity shares of the Company on Rights basis for amount not exceeding Rs 200 crores. The Company had fled the Draft Letter of Offer with Securities and Exchange Board of India (SEBI) on January 31, 2012, and with the Stock Exchanges where it is listed.

Subsequently, the Company received the in-principle approval approval from The National Stock Exchange of India Ltd., and BSE Limited in respect of the Rights Issue of the Company.

The Company has further received the observation letter from SEBI. The Company has made necessary applications to the Foreign Investment Promotion Board (FIPB) and to the Reserve Bank of India (RBI) for issue of partly paid shares to the non resident shareholders and to allow renunciation of partly paid shares. The Company is awaiting the approval from FIPB and RBI, upon receipt of which the Company shall finalise and file the Letter of Offer with SEBI. Thereafter the Funds Mobilising Committee of the Company would finalise the Rights Issue price, ratio of the Rights Issue shares and the record date and file the final Letter of Offer with Stock Exchanges and open the Rights Issue.

DIRECTORS

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

The terms of appointment of Dr. T. Rajamannar as Whole-time Director will expire on 3rd June, 2013, Your Directors recommend the re-appointment of Dr. T. Rajamannar as Whole-time Director for a further period of 3 years.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

Sun Pharma Advanced Research Company Ltd., (SPARC), which is committed to do quality research work, has a dedicated team of around 250 employees. This team consists of 214 scientists who are highly knowledgeable and veterans in their field of work. We understand and value the contribution of our employees and take great pride in the commitment, competence and vigor shown by them which has helped SPARC to outshine its competitors. We strive to give our employees an environment which is conducive for their professional and personal growth and empowers them to inculcate discretionary behavior in the day-to-day functioning which leads to collective organizational success.

Your Directors truly appreciate the efforts and contribution by Team SPARC for maintaining and further accelerating the growth pace.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

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

The additional information relating to energy conservation, technology absorption, foreign exchange earnings and outgo, pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the loss of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

AUDITORS

Your Company's auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners- your Company's bankers, the medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.



For and on behalf of the Board of Directors

Place : Mumbai Dilip S. Shanghvi

Date : 2nd May, 2012 Chairman & Managing Director


Mar 31, 2011

The Directors take pleasure in presenting the Sixth Annual Report and Audited Accounts for the year ended 31st March, 2011

Rs in thousands

Particulars Year ended 31st March, 2011 Year ended 31st March, 2010

Total Income 595,872 346,309

profit/(Loss) before Depreciation & Tax (55138) (189,447)

Depreciation 29,859 25,991

profit/(Loss) before Tax (84,997) (215,438)

Provision for Tax (includes Deferred tax, Wealth tax & Fringe Benefit Tax) 10 96

profit/(Loss) after Tax (85,007) (215,534)

Balance brought forward from Previous Year (405,640) (190,106)

Balance carried to Balance Sheet (490,647) (405,640)

DIVIDEND

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year under review.

FINANCE

NCE and NDDS projects are typically long gestation period projects, with revenue/ royalty streams closer to market. Your Companys NCE and NDDS projects which are at various stages of development, and the signifi cant growth plans of your Company are likely to require signifi cant investment. Your Company is therefore evaluating various options to raise additional funds for which approval of the shareholders is being sought at the ensuing Annual General Meeting of the Company.

DIRECTORS

Dr. T. Rajamannar and Mr. S. M. Dadha, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for reappointment.

Mr. Dilip Shanghvi had been appointed as the Chairman & Managing Director of the Company for a period of fi ve years from 1st March, 2007 upto February 29, 2012. He has been re-appointed by the Board of Directors as the Chairman & Managing Director of the Company with effect from 1st March, 2012 without any remuneration, for a further period of fi ve years, and the approval of members is sought for his re-appointment, at the ensuing Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

Report on Corporate Governance and Certifi cate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

HUMAN RESOURCES

SPARC is committed to do quality research work, and has a dedicated team of about 237 employees, of which 210 are highly qualifi ed and experienced scientists comparable to those existing internationally. We understand and value that all employees are career conscious and growth of employees is intrinsically linked with the growth of the organization and vice versa. Therefore, employees career development is a part of human resources mission. We practice a culture of performance and excellence, reward talent, and provide comprehensive development and learning opportunities, on job training, challenging work content and respect human dignity.

Your Directors recognize the teams valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered offi ce of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai offi ce or Registered offi ce address of the Company.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confi rmed:

(i) that in the preparation of the annual accounts for the fi nancial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fi nancial year and on the loss of the Company for the year under review;

(iii) that the Directors have taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the fi nancial year ended 31st March, 2011 on a ‘going concern basis.

AUDITORS

Your Companys auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners-your Companys bankers, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Place : Mumbai Dilip S. Shanghvi

Date : 7th May, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors take pleasure in presenting the Fifth Annual Report and Audited Accounts for the year ended 31st March, 2010.

Financial Result (Rs. in Thousands)

Year ended Year ended 31st March, 2010 31st March, 2009

Total Income 347,404 352,705

Profit/(Loss) before Depreciation & Tax (189,447) (106,549)

Depreciation 25,991 18,364

Profit/(Loss) before Tax (215,438) (124,913)

Provision for Tax (includes Deferred Tax, Wealth Tax & Fringe Benefit Tax) 96 (33,508)

Profit/(Loss) after Tax (215,534) (91,405)

Balance brought forward from Previous Year (190,106) (98,701)

Balance carried to Balance Sheet (405,640) (190,106)

Dividend

In view of loss incurred during the year under review, your Directors do not recommend any dividend for the year under review.

Directors

Prof. Dr. Goverdhan Mehta and Prof. Dr. Andrea Vasella, Directors of the Company, retire by rotation at the ensuing Annual General Meeting, and being eligible offer themselves for reappointment.

Management discussion and analysis

The management discussion and analysis on the operations of the Company is provided in a separate section and forms a part of this report.

Corporate governance report

Report on Corporate Governance and Certificate of the Auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, are enclosed.

Human resources

SPARC, which is committed to do quality research work, has a dedicated team of about 220 employees, of which 208 are highly qualified and experienced scientists comparable to those existing internationally. We understand and value that all employees are career conscious. The growth of employees is intrinsically linked with the growth of any organization and vice versa. No organization can develop without taking its employees on the growth path and therefore, employees career development is a part of human resources mission.

We provide performance driven reward, comprehensive development and learning opportunities, challenging work content and quality of work life.

Your Directors recognize the teams valuable contribution and place on record their appreciation for Team SPARC.

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company.

However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information.

Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at Mumbai office or Registered office address of the Company.

Public deposits

The Company has not accepted any deposit from the Public during the year under review, under the provisions of the Companies Act, 1956 and the rules framed thereunder.

Information on conservation of energy, technology absorption, foreign exchange earning and outgo

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Directors responsibility statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

i that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the loss of the Company for the year under review;

iii that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

iv that the Directors have prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

Auditors

Your Companys auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners-your Companys bankers, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors

Mumbai Dilip S. Shanghvi

22nd May, 2010 Chairman & Managing Director

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