FINANCIAL RESULTS (? in Lakhs) Year ended 31st March, Tax Expense

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1 Sun Pharma Advanced esearch C o m p a n y Ltd. Annual eport BAD'S EPT Your Directors take pleasure in presenting Eleventh Annual eport and Audited 31st March, Accounts for year ended FINANCIAL ESULTS (? in Lakhs) Particulars Year ended 31st March, 2016 Year ended 31st March, , , , , Total Income Loss before Interest, Depreciation & Tax Interest Depreciation , , , , Loss brought forward from Previous Year 15, , Loss carried to Balance Sheet 22, , Loss before Tax Tax Expense Loss after Tax DIVIDEND The Issue was open for subscription from 28th March, 2016 In view of loss incurred during year, your Directors do not to 13th April, 2016 ( Issue Closing date was extended from recommend any dividend for year under review. 11th April, 2016 to 13th April, 2016). The ights Issue Committee, in its meeting held on 27th April, 2016 approved EXTACT F A N N U A L ETUN: allotment of 1,02,04,081 rights equity shares to The extract of Annual eturn as provided under sub-section successful applicants, based on 'basis of allotment' (3) of section 92 of Companies Act, 2013 in prescribed approved by BSE Limited, designated Stock Exchange for form MGT-9 is enclosed as Annexure "1" to this report. issue. The shares were listed on BSE Limited & National Stock Exchanged of India Limited and was admitted for S U B S I D I A Y / J I N T V E N T U E / ASSCIATE CMPANY dealing by both exchanges with effect from 3rd May, The Company does not have any subsidiary, joint venture or Consequent to allotment made by Company on associate company. SHAE CAPITAL & IGHTS ISSUE The Board of Directors of Company vide ir resolution passed on 24th July, 2015, forfeited 17,093 partly paid up equity shares of Company due to non-payment of call money. Consequent to forfeiture, paid-up capital of Company was reduced to? 236,687,354/- during year Your Company had issued 1,02,04,081 fully paid-up equity shares of face value of? 1 each ("rights issue equity shares") ights basis, paid-up share capital of Company have increased from? 236,687,354 to? 24,68,91,435/-. DIECTS & KEY MANAGEIAL PESNNEL Mr. Dilip Shanghvi (DIN: ), retires by rotation at ensuing Annual General Meeting, and being eligible offers himself for re-appointment. Pursuant to resolution passed by members in ir 6th Annual General Meeting held on 8th August 2011, Mr. Dilip Shanghvi (DIN: ), who is also Managing Director for cash at a price of? 245 per equity share including a of Sun Pharmaceutical Industries Limited, holds office as share premium of? 244 per equity share aggregating upto Managing Director of Company upto 28th February, 2017.? 25,000 lakhs to our existing equity shareholders on a rights The Board of Directors of Company, in ir meeting held basis in ratio of 5 fully paid-up equity share(s) for every on 6th May, 2016 approved proposal for re-appointment 116 fully paid-up equity share(s) held by existing equity Mr. Shanghvi as Managing Director of Company, shareholders on record date, i.e. 17th March, 2016 (" without any remuneration, for a furr period of five years issue"). w.e.f. 1st March, 2017.

2 Sun Pharma Advanced esearch C o m p a n y Ltd. Annual eport The members of company had in ir 9th Annual General The Board has, on recommendation of Nomination Meeting held on 31st July, 2014 appointed Prof. Dr. Andrea & emuneration Committee framed a policy for selection Vasella (DIN: ), Prof. Dr. Goverdhan Mehta (DIN: and appointment of Directors, Senior Management and ir ) and Mr. S. Mohanchand Dadha (DIN: ) remuneration. as Independent Directors of Company for a term of two years to hold office upto conclusion of ensuing 11th Annual General Meeting of Company. In view of commendable performance by Prof. Dr. Vasella, Prof. Dr. Mehta and Mr. Dadha during ir tenure as Independent Directors of Company and based on ir Performance Evaluation, it is proposed to re-appoint all three of m as The summary of emuneration Policy is disclosed in Corporate Governance eport, which forms a part of this eport. FAMILIAISATIN P G A M M E F THE INDEPENDENT DIECTS Independent Directors of Company at ensuing Annual In compliance with requirements of erstwhile Listing General Meeting of Company for a furr term of one year Agreement with stock exchanges ("Listing Agreement") upto conclusion of 12th Annual General Meeting of and SEBI (Listing bligation and Disclosure equirements) Company. egulations, 2015 ("SEBI (LD) egulations") Company During year, Mr. Sudhir V Valia (DIN: ), who is also a whole-time Director of Sun Pharmaceutical Industries Limited, was re-appointed as Chief Financial fficer (CF) under section 203 of Companies Act, 2013 and consequentially a Whole-time Director of Company, without any remuneration, for a furr period of two years, has put in place a Familiarisation Programme for Independent & non - executive directors to familiarize m with Company, ir roles, rights, responsibilities in Company, nature of industry in which Company operates, business model etc. The details of such programme is available on website of company to hold office from 1st January, 2016 to 31st December, 2017 in and may be accessed through web link without any remuneration. sunpharma.in/regulatory-compliance.htm. With effect from 6th May, 2015, Ms. Meetal S Sampat ceased to be Company Secretary & Compliance fficer of Company and Mr. Debashis Dey has been appointed in her place. N U M B E F MEETINGS F THE BAD The Board of Directors of Company met six times during previous financial year on 05th May, 2015, 12th May, 2015, 1st August, 2015, 4th November, 2015, 3rd February, 2016 Appropriate resolutions for appointment/re-appointment and 5th March, The particulars of attendance of of Directors as detailed above are being placed for your Directors at said meetings are detailed in Corporate approval at ensuing Annual General Meeting. Governance eport of Company, which forms a part of this eport. The intervening gap between Meetings were DECLAATIN BY INDEPENDENT DIECTS The Company has received declaration from within period prescribed under Companies Act, 2013, all erstwhile Listing Agreement and SEBI (LD) egulations. Independent Directors of Company confirming that y meet with criteria of independence as prescribed under EVALUATIN F PEFMANCE F THE BAD, ITS sub-section (6) of Section 149 of Companies Act, C M M I T T E E S A N D INDIVIDUAL DIECTS PLICY N DIECTS' APPINTMENT AND EMUNEATIN For purpose of selection of any Director, Nomination & emuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for position and also takes into The Board of Directors have carried out an annual evaluation of its own performance, its various committees and individual directors pursuant to provisions of Act and Corporate Governance requirements as prescribed under regulation 17(10), 25(4) and or applicable provisions of SEBI (LD) egulations. consideration recommendation, if any, received from any The performance of Board was evaluated by Board member of Board. The Committee also ensures that after seeking inputs from all directors on basis incumbent fulfills such or criteria with regard to age and of various criteria such as Board Composition, Process, or qualifications as laid down under Companies Act, dynamics, quality of deliberations, strategic 2013 or or applicable laws. effective reviews, reviews etc. committee participation, discussions, governance

3 r CD > S m The performance of committees was evaluated by DISCLSUE UNDE THE SEXUAL H A A S S M E N T F board after seeking inputs from committee members on W M E N AT WKPLACE (PEVENTIN, PHIBITIN basis of criteria such as Committee composition, process, A N D EDESSAL) ACT, dynamics, Your Company strongly believes in providing a safe and deliberation, strategic discussions, effective reviews etc. harassment free workplace for each and every individual The Board and Nomination and emuneration Committee reviewed performance of individual directors on basis of criteria such as Transparency, Analytical Capabilities, Performance, Leadership, Ethics and ability to take balanced decisions regarding stakeholders. working for Company through various interventions and practices. It is continuous endeavor of Management of Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. During year ended 31st March, 2016, no complaint In a separate meeting of independent directors, performance pertaining of non-independent directors, performance of board as a Company. to sexual harassment was received by whole and performance of Chairman was evaluated, taking into account views of executive directors and non- AUDITS executive directors. The same was discussed in board Statutory Auditors meeting that followed meeting of independent directors, The at which performance of Board, its committee and Sells LLP, Chartered Accountants, Mumbai (Firm's egn individual Directors was also discussed. Company's Auditors, Messrs. Deloittee Haskins & No W/W ), were appointed as Statutory Auditors of Company for a period of three years, upto H U M A N ESUCES conclusion of 12th Annual General Meeting of As on 31st March, 2016 our Company had a dedicated team Company, subject to ratification by members at every of over 350 people, of which almost 300 are highly qualified Annual General Meeting of Company. The Auditors have and experienced scientists. During previous year, we confirmed ir eligibility under Section 141 of Companies considerably strengned our team by attracting top quality Act, 2013 and ules framed reunder for reappointment scientific talent, with years of experience in drug research as Statutory Auditors of Company. As required under regulation (1) (d) of SEBI (LD) egulations, internationally. auditors have also confirmed that y hold a valid certificate In addition to increasing our participation at international issued by Peer eview Board of Institute of Chartered conferences for continuous knowledge upgradation, we have Accountants of India. also put in place effective training and career progression plans for our team. Secretarial Auditors Your Directors recognize team's valuable contribution and Act, 2013 and rule 9 of place on record ir appreciation for Team SPAC. and emuneration of Managerial Personnel) ules, 2014, Pursuant to provisions of Section 204 of Companies Companies (Appointment Company has appointed Messrs C J Goswami & Associates, Information as per Section 197 (12) of Companies Act, Company Secretaries, Mumbai to undertake Secretarial 2013, read with rule 5 of Companies (Appointment and Audit of Company. emuneration of Managerial Personnel) ules 2014 is provided in a separate annexure forming part of this report. Furr, pursuant to proviso to section 136 (1) of The eport of Secretarial Audit eport is annexed herewith as "Annexure 4". Companies Act, 2013, report and accounts are being The Audit eport and Secretarial Audit eport for sent to members excluding information under rule 5(2) financial & 5(3) aforesaid. In terms of section 136 of Act, said reservation or adverse remarks by Auditors. annexure is open for inspection at egistered ffice of year does not contain any qualification, Company. Any shareholder interested in obtaining a copy LANS, GUAANTEES & I N V E S T M E N T S of same may write to Company Secretary at Mumbai The particulars of loans, guarantees and investments have office or egistered office address of Company. been disclosed in financial statements. H

4 Sun Pharma Advanced esearch C o m p a n y Ltd. Annual eport Social esponsibility) ules, 2014, Board of Directors have ELATED PATY TANSACTINS The policy on elated Party Transactions as approved by constituted a Corporate Social esponsibility Committee. Board is available on website of company www. The details of membership of Committee & meetings sunpharma.in and may be accessed through web link All contracts/arrangements entered by Company during held are detailed in Corporate Governance Section of Annual eport. The contents of CS Policy of Company as approved previous financial year with related parties were in by Board on recommendation of Corporate rdinary Course of business and on arm's length basis. Social esponsibility Committee is available on website During previous financial year Company did not enter of company and may be accessed into any new contract/ arrangement with related parties through web link which could be considered material in accordance with compliance.htm policy of Company or Listing Agreement or SEBI (LD) Since average net profits of Company made during egulations. Appropriate resolutions for approval for certain contracts entered into/proposed to be entered into with related parties, transactions pursuant to which may become material during future years, are being placed for your approval at ensuing Annual General Meeting. three immediately preceding financial years was negative, Company was not required to spend any money on CS activities during previous year. PUBLIC DEPSITS The Company has not accepted any deposit from Public during year under review, under provisions of AUDIT C M M I T T E E C M P S I T I N The details pertaining to composition of audit committee are included in Corporate Governance eport which forms a part of this eport. Companies Act, 2013 and rules framed reunder. M A N A G E M E N T DISCUSSIN A N D ANALYSIS The Management Discussion and Analysis on operations ISK M A N A G E M E N T of Company as prescribed under Schedule V read with The Board of Directors have developed & implemented a robust regulation 34(3) of SEBI (LD) egulations, is provided risk management policy which identifies key elements of in a separate section and forms a part of this report. risks that threatens existence of Company. The Audit Committee reviews status of key risks and steps taken by CPATE GVENANCE EPT eport on Corporate Governance and Certificate of Company to mitigate such risks at regular intervals. Auditors of your Company regarding compliance of INTENAL FINANCIAL CNTLS conditions of Corporate Governance as stipulated in Schedule The Company has in place a well-defined organizational V read with regulation 34(3), is provided in a separate section structure and forms a part of this report. and operations adequate which regulations, internal is cognizant particularly those controls for of applicable related to efficient laws protection and of BUSINESS ESPNSIBILITY EPT intellectual property, resources and assets, and accurate The Business esponsibility eport of Company for reporting of financial transactions in financial statements. year ended 31st March, 2016, as required under Clause 34 (2) The Company continually upgrades se systems. The (f) of SEBI (LD) egulations, forms part of Annual internal control system is supplemented by extensive eport and is made available on website of Company internal audits, conducted by independent firms of chartered and may be accessed through web accountants. CPATE SCIAL ESPNSIBILITY (CS) link The same is also kept at egistered office of Company for inspection. Any shareholder interested in obtaining a copy In compliance with requirements of section 135 of of same may write to Company Secretary at Mumbai Companies Act, 2013 read with Companies (Corporate office or egistered office address of Company.

5 20 253r CNSEVATIN F ENEGY TECHNLGY ABSPTIN AND FEIGN EXCHANGE EANINGS AND UTG The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of Companies Act, 2013 read with ule, 8 of The Companies (Accounts) ules, 2014, is annexed herewith as "Annexure 3". SIGNIFICANT AND MATEIAL DES PASSED BY THE EGULATS CUTS TIBUNALS No significant or material rders were passed by egulators or Courts or Tribunals during previous year which may impact Going Concern Status of Company's operations in future. WHISTLE BLWE PLICY/ VIGIL MECHANISM To create enduring value for all stakeholders and ensure highest level of honesty, integrity and ethical behaviour in all its operations, Company has formulated a Vigil Mechanism named as 'SPAC Whistle Blower Policy' in addition to existing code of conduct that governs actions of its employees. This Whistle-blower Policy aspires to encourage all employees to report suspected or actual occurrence(s) of illegal, unethical or inappropriate events (behaviours or practices) that affect Company's interest / image. A copy of Policy is available on website of Company and may be accessed through web link DIECTS' ESPNSIBILITY STATEMENT Pursuant to requirements under section 134(5) read with section 134(3) (c) of Companies Act, 2013, with respect to Directors esponsibility Statement, it is hereby confirmed that: a) in preparation of annual accounts for financial year ended 31st March, 2016, applicable accounting standards have been followed along with proper explanation relating to material departures; > ' G m b) Directors have selected such accounting policies o and applied m consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of state of affairs of Company as at 31st March, 2016 and of loss of Company for year ended on that date; c) Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding assets of Company and for preventing and detecting fraud and or irregularities; d) Directors have prepared annual accounts on a going concern basis; and e) Directors have laid down internal financial controls to be followed by Company and that such internal financial controls are adequate and were operating effectively. f) directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNWLEDGEMENTS Your Directors wish to thank all stakeholders and business partners-your Company's bankers, medical profession and business associates for ir continued support and valuable co-operation. The Directors also wish to express ir gratitude to investors for faith that y continue to repose in Company. Place: Mumbai Date: May 6, 2016 For and on behalf of Board of Directors Dilip S. Shanghvi Chairman & Managing Director CD H