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Directors Report of Sun Pharmaceutical Industries Ltd.

Mar 31, 2014

Dear Members,

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

FINANCIAL RESULTS

(Rs.in Million except dividend per share and book value)

Standalone Consolidated

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

Total Income 29,882 26,683 166,326 116,880

(Loss)/Profit after tax (28,285.2) 5,166 31,415 29,831

Dividend on Equity Shares 3,107 5,178 3,107 5,178

Corporate Dividend tax 528 880 528 880

Transfer to various Reserves NIL 520 NIL 520

Amount of dividend per equity share ofRs.1/- each 1.50 2.50# 1.50 2.50#

Book value per equity share Rs. 1/- each 36 38# 89 72#

* Previous year figures for standalone are not comparable, since current year figures include the effect of merger of the Specified undertaking of Sun Pharma Global FZE, into the Company with effect from 1st May, 2013.

# Post Bonus Issue

DIVIDEND

Your Directors are pleased to recommend an equity dividend of Rs. 1.50 per equity share of face value Rs. 1/- each (previous year Rs. 2.50 per equity share) for the year ended 31st March, 2014.

MERGER OF RANBAXY

At Sun Pharma, we have taken a significant initiative to enhance shareholder value for the future. We are in the process of acquiring Ranbaxy Laboratories Limited, India''s leading Company in sales, in one of India''s largest M&A transactions. The deal, an all-stock transaction valued at US$ 4 billion, is expected to be completed by December 2014. Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each Ranbaxy''s share. Further details on the merger, are provided in the Management Discussion and Analysis report which forms part of this Report.

BONUS SHARES

The Company had on 3rd August, 2013 allotted 1,035,581,955 Equity Shares of Rs. 1/- each as Bonus Shares to the Equity Shareholders of the Company in the ratio of 1 (One) Equity Share of Rs. 1/- each for every 1(One) Equity Share of Rs. 1/- each held on the Record Date, being 30th July, 2013.

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.

HUMAN RESOURCES

Your Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company has a dedicated team of over 14,000 employees at various locations across our corporate office, various R&D Centers & 25 plant locations (including Associate Companies) spread across three Continents. Our constant endeavor is to invest in people and people processes to improve service delivery to our customers. Attracting the right talent and engaging them for high performance is our focus, whereas we strive to provide a great place to work to our human resources through challenging and learning environment.

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/ Compliance Officer at the Corporate Office or Registered Office address of the Company.

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.

CORPORATE GOVERNANCE

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 stock exchanges, are annexed.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report of the Company for the year ended 31st March, 2014, in line with Green initiative, is made available on the website of the Company (www.sunpharma.com) and forms part of the Annual Report, and is kept at the Registered Office of the Company for inspection. A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

SUBSIDIARIES

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/2011 dated 8th February, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate/ Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

FINANCE

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit Scheme.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has identified health, education, livelihood, disaster relief and civic utilities 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, grassroot level during the year. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the Plants/Research Centers. Your Company remains interested in these contributions.

DIRECTORS

Mr. Israel Makov, Director retires by rotation and being eligible offers himself for re-appointment. Ms. Rekha Sethi was appointed as Additional Independent Director of the Company with effect from 13th February, 2014 and holds office as a Director up to the ensuing Annual General Meeting.

In terms of Section 149, and other applicable provisions, if any of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors of the Company viz. Mr. S.M Dadha, Mr. Keki Mistry, Mr. Hasmukh Shah, Mr. Ashwin Dani and Ms. Rekha Sethi are proposed to be appointed as Independent Directors of the Company in accordance with the requirements of Companies Act 2013, at the ensuing Annual General Meeting of the Company.

The Company has received the requisite notice under Section 160 of the Companies Act, 2013 from members to proposing their name for being appointed as Independent Directors 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 of the Companies Act, 2013.

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

Your Directors recommend the appointment/re- appointment of the aforesaid Directors by the Members at the ensuing Annual General Meeting.

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 relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgments 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 and of 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, Messrs. Deloitte Haskins & Sells LLP, 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 139 of the Companies Act, 2013.

COST AUDITORS

The Company has appointed Messrs. Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended 31st March, 2014.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, 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

ISRAEL MAKOV

Chairman 12th August, 2014 Mumbai


Mar 31, 2013

Dear Members,

The Directors take pleasure in presenting the Twenty-First Annual Report and Audited accounts for the year ended March 31, 2013

FINANCIAL RESULTS

(Rs. in million except dividend per share and book value)

Year ended Year ended March 31, 2013* March 31, 2012

Total Income 26,683 43,584

Profit after tax 5,166 16,975

Dividend on Equity Shares 5,178 4,401

Corporate Dividend tax 880 714

Transfer to various Reserves 520 2,000

Amount of dividend per equity share of Rs.1/- each 2.50 4.25

Book value per equity share of Rs.1/- each 75 76

*Previous year figures are not comparable since they include the figures with respect to the Domestic Formulation undertaking which got transferred to and /or vested in Sun Pharma Laboratories Limited , the Company''s wholly onwed subsidiary company as a going concern as on March 31, 2012.

DIVIDEND

Your Directors have recommended an equity dividend of Rs.2.50 per equity share of face value Rs.1/- each (equivalent to Rs.5.00 per equity share pre-bonus) (previous year Rs.4.25 per equity share) for the year ended March 31, 2013.

BONUS SHARES

The Company on August 3, 2013 allotted 1,035,581,955 Equity Shares of Rs.1/- each as Bonus Shares to the Equity Shareholders of the Company in the ratio of 1 (One) Equity Share of Rs.1/- each for every 1(One) Equity Share of Rs.1/- each held on the Record Date, July 30, 2013.

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.

HUMAN RESOURCES

Your Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. The Company has a dedicated team of over 13000 employees at various locations across our corporate office, various R&D Centers & 23 plant locations (including associate companies) spread across three continents. The Company strives to inculcate the culture where its employees are motivated and their performance is aligned with values. Your Company has achieved this present level of excellence through the commitment and dedication exhibited by its employees. The focus on improving productivity and adoption of best practices in every area are being pursued relentlessly. Efforts for active participation, nurturing creativity and innovation and ensuring a climate of synergy and enthusiasm has been at the core of Human Resource initiatives and interventions. Management Development Programmes (MDPs) are organised at regular intervals in the form of workshops to nurture, enhance and retain the top talent.

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/Compliance Officer at the Corporate Office or Registered Office address of the Company.

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

CORPORATE GOVERNANCE

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 stock exchanges, are annexed.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report of the Company for the year ended March 31, 2013, in line with Green initiative, is made available on the website of the Company www.sunpharma.com and forms part of the Annual Report, and is kept at the Registered Office of the Company for inspection. A copy of the aforesaid report shall be made available to such of those shareholders who are desirous and interested, upon receipt of a written request from them.

CONSOLIDATED ACCOUNTS

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

SUBSIDIARIES

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/2011 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

FINANCE

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit Scheme.

CORPORATE SOCIAL RESPONSIBILITY

Your company has identified health, education, disaster relief and civic utilities 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, grassroots level during the year. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

DIRECTORS

Shri, Dilip S. Shanghvi, Shri Sailesh T. Desai and Shri Hasmukh S. Shah retire by rotation and being eligible offer themselves for re-appointment. The terms of appointment of Shri Sudhir V. Valia and Shri Sailesh T. Desai as Whole-time Director will expire on March 31, 2014. Both of these Directors have made significant contribution to overall growth of the Company''s business. Your Directors recommend the re-appointment of both Directors for a further period of five years from April 1, 2014.

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 March 31, 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 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 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 March 31, 2013 on a ''going concern'' basis.

AUDITORS

Your Company''s auditors, Messrs. 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.

COST AUDITORS

The Company has appointed Messrs.Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2013.

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, 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

Israel Makov

Chairman

August 9, 2013

Mumbai


Mar 31, 2012

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

Financial Results

(Rs. in million except dividend per share and book value)

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

Total Income 43584 33017

Profit after tax 16975 13838

Dividend on Equity Shares 4401 3625

Corporate Dividend tax 714 588

Transfer to various Reserves 2000 5000

Amount of dividend per equity share of Rs.1/- each 4.25 3.5

Book value per equity share of Rs.1/- each 76 65

Dividend

An interim equity dividend of Rs. 4.25 per equity share of face value Rs.1/- each (previous year Rs. 3.50 per equity share) for the year ended March 31, 2012 as recommended by the Board of Directors of the Company at their Meeting held on August 10, 2012 was paid on August 22, 2012 to the Equity Shareholders of the Company whose names stood on the Register of Members on August 16, 2012. Yours Directors recommend that the interim dividend paid as aforesaid be treated as final for the year ended March 31, 2012.

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.

Scheme of Arrangement in the form of spin off and transfer of Domestic Formulation Division of our Company to Sun Pharma Laboratories Ltd., a wholly owned subsidiary of our Company with effect from March 31, 2012

As all of us are aware that, your Company had undertaken the Scheme of Arrangement in the form of spin off and transfer of domestic formulation undertaking of our Company to Sun Pharma Laboratories Ltd., a wholly owned subsidiary of our Company with effect from March 31, 2012. The said spin off has been sanctioned by the Honourable High Court of Gujarat at Ahmedabad and by the Honourable High Court of Judicature at Bombay, pursuant to Sections 391 to 394 of the Companies Act, 1956 on May 3, 2013. On completion of the necessary formalities, the spin off has been effective from March 31, 2012 and the impact of the spin off has been incorporated in the Audited Accounts for the year under review.

Human Resources

Human Resource development continues to be a key focus area at Sun Pharma and your Company takes great pride in the commitment, competence and vigor shown by its workforce in all realms of business. You have a dedicated team of over 13000 employees at various locations across our corporate office, various R&D Centers & 23 plant locations (including associate companies) spread across three continents. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. Your Directors truly appreciate the efforts and contribution by Team Sun Pharma 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/Compliance Officer at the Corporate Office or Registered Office address of the Company.

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.

Corporate Governance

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 stock exchanges, are annexed.

Consolidated Accounts

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

Subsidiaries

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide general circular No.2/201 1 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

Finance

CRISIL continued to reaffirm its highest rating of "AAA/ Stable" and "A1 ", for your Company''s Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit scheme.

Corporate Social Responsibility

At the close of a relatively event-free, disaster-free year, your Company persisted with participation in activities at the local, grassroots level across health and education. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

Directors

Mr. S. Kalyanasundaram, resigned as the Director of the Company with effect from March 31, 2012 so as to relocate himself to the USA to take care of the Group''s business interests in North and South America. The Directors place on record their appreciation of the services rendered by Shri S. Kalyanasundaram during his tenure of Directorship with the Company. Mr. Israel Makov was appointed as an Additional Director and Chairman of the Company and Mr. Dilip Shanghvi stepped down from the Chairmanship of the Company at Meeting of the Board of Directors held on May 29, 2012.

At the Twentieth Annual General Meeting of the Company held on November 8, 2012 which was adjourned sine die pending approval of the respective High Courts of Gujarat and Bombay, Mr. Keki M. Mistry, Mr. Sudhir V. Valia and Mr. Ashwin Dani retired by rotation and were re-appointed, the appointment of Mr. Israel Makov as a Director of the Company was confirmed and Mr. Dilip Shanghvi was reappointed as the Managing Director of the Company for a further period of 5 years effective from 1st April, 2013.

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 March 31, 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 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 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 March 31, 2012 on a ''going concern'' basis.

Auditors

Your Company''s auditors, Messrs. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, have already been re-appointed at the Twentieth Annual General Meeting of the Company held on November 8, 2012.

Cost Auditors

The Company has appointed Messrs Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2012.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners, your Company''s bankers, financial institutions, 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

Dilip S. Shanghvi Sudhir V. Valia

Managing Director Whole-time Director

May 28, 2013

Mumbai


Mar 31, 2011

Dear Members,

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

FINANCIAL RESULTS

(Rs. in million except dividend per share and book value)

Year ended Year ended March 31, 2011 March 31, 2010

Total Income 32989 26084

Profit aftertax 13838 8987

Dividend on Equity Shares 3625 2848

Corporate Dividend tax 588 473

Transferto General Reserve 5000 3000

Amount of dividend per equity share ofRs.1/- each (Previous year per equity 3.5 1375 share ofRs. 5/-each)

Book value per equity share ofRs.1/- each(Previous year per equity share 65 276 ofRs. 57-each)

Dividend

Your Directors are pleased to recommend an equity dividend of Rs. 3.50 per equity share of face value Rs. 1/-each (previous year Rs. 13.75 per equity share of face value Rs. 5/-each) for the year ended March 31,2011.

Split of Equity Shares

As approved by the Shareholders of the Company by way of postal ballot conducted during November, 2010, the results of which were announced on November 12,2010, the Equity Shares of Rs. 5/- each of the Company were sub- divided into 5 Equity Shares ofRs. 1/-each during the year under review.

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.

Human Resources

Human Resource development continues to be a key focus area at Sun Pharma and your Company takes great pride in the commitment, competence and vigor shown by its workforce in all realms of business. You have a dedicated team of over 11200 employees at various locations across our corporate office, various R&D Centers & 19 plant locations (including associate companies) spread across three continents.The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. A transparent work culture, quality of work and supportive environment induces discretionary behavior among employees which gives them the opportunity to personally succeed in a way that leads to collective organizational success. Your Directors truly appreciate the efforts and contribution by Team Sun Pharma 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/Compliance Officer at the Corporate Office or Registered Office address of the Company.

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.

Corporate Governance

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 stock exchanges, are annexed.

Consolidated Accounts

In accordance with the requirements of Accounting Standard AS-21 prescribed by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.

Subsidiaries

The Ministry of Corporate Affairs, Government of India, New Delhi has issued direction under Section 212(8) of the Companies Act, 1956 vide genera circular No.2/2011 dated February 8, 2011 and in accordance with the same, the Balance Sheet, the Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company.The information relating to each subsidiary including subsidiaries of subsidiaries, as required by the aforesaid circular, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same.The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies also.

Finance

CRISIL continued to reaffirm its highest rating of "AAA/Stable" and "P1 ", for your Company's Banking Facilities throughout the year enabling your Company to avail facilities from banks at attractive rates. The Company does not offer any Fixed Deposit scheme.

Corporate Social Responsibility

At the close of a relatively event-free, disaster-free year, your Company persisted with participation in activities at the local, grassroots level across health and education. In the past, support has been offered towards disaster relief as well as participation in the facilitation of civic utilities around the plants/research centers. Your Company remains interested in these contributions.

Directors

Shri Dilip S. Shanghvi, Shri Sailesh T. Desai and Shri S.Mohanchand Dadha retire by rotation and being eligible offer themselves for re-appointment.

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 financia year ended March 31, 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 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 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 March 31,2011 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 Genera 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.

Cost Auditors

The Company has appointed Messrs. Kailash Sankhlecha & Associates, Cost Accountants, Vadodara as Cost Auditors of our Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the year ended March 31, 2011.

Acknowledgements

Your Directors wish to thank all stakeholders and business partners, your Company's bankers, financia institutions, 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

Dilip S. Shanghvi

Chairman & Managing Director

May 28, 2011

Mumbai



 
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