About Sun Pharmaceuticals Industries Ltd

Sun Pharmaceutical Industries Limited including its subsidiaries and associates (Sun Pharma) is the fourth largest global specialty generic company that is ranked No. 1 in India and No. 8 in the US. It is the largest Indian pharmaceutical company in the US and among the leading Indian pharmaceutical companies in emerging markets. The company manufactures and markets a large basket of pharmaceutical formulations covering a broad spectrum of chronic and acute therapies. It includes generics, branded generics, complex or difficult to make technology intensive products, over-the-counter (OTC) products, anti-retrovirals (ARVs), Active Pharmaceutical Ingredients (APIs) and intermediates. The product portfolio of over 2000 high quality molecules covers multiple dosage forms, including tablets, capsules, injectables, inhalers, ointments, creams and liquids. The products cater to a vast range of therapeutic segments covering psychiatry, anti-infectives, neurology, cardiology, orthopaedic, diabetology, gastroenterology, ophthalmology, nephrology, urology, dermatology, gynaecology, respiratory, oncology, dental and nutritionals. The company has global presence with 43 manufacturing facilities across the world. India and the US are two predominant markets, accounting for nearly 70% of the company's revenue. The company has a robust product pipeline and established presence in Europe and high-growth emerging markets like Russia, Romania, South Africa, Brazil and Mexico. The company has entered into a joint-venture agreement with MSD (Merck) to develop and bring differentiated branded generics to emerging markets. Sun Pharmaceutical Industries invests around 7-8% of its global revenue each year in R&D. The R&D capabilities span the development of differentiated products such as liposomal products, inhalers, lyophilized injections and nasal sprays, besides controlled release dosage forms. Sun Pharmaceutical Industries Ltd was incorporated in the year 1983. The company began operations in Kolkata with just 5 products to treat psychiatry ailments. They set up a compact manufacturing facility for tablets/capsules at Vapi. Sales were initially limited to two states in Eastern India. In the year 1986, the company set up an administrative office in Mumbai. They extended the customer coverage to select cities in Western India. In the year 1987, they rolled out their marketing operations nation-wide. In the year 1988, the company launched Monotrate and Angizem products. In the year 1989, they introduced Products used in gastroenterology. They moved their corporate office to Baroda. Also, they began exporting their products to neighboring countries. In the year 1998, the company established their first research center, SPARC and this created the base for strong product and process development that enabled growth in the subsequent years. Also, they began office in Moscow. In the year 1994, the company was listed on the main stock exchanges in India. They started production in a dosage form plant at Silvassa. Also, they completed the major expansion at Vapi plant. In the year 1995, the company's first API plant at Panoli started production. Also, a new division, Azura, was begun for cardiology products. Inca, a new division to market critical care medication to intensive care units began operations. They strengthened the international marketing with offices in Ukraine and Belarus. In the year 1996, the company acquired an API plant at Ahmednagar from the multinational Knoll Pharmaceutical, and expanded and substantially upgraded for regulated markets, with capacity addition over the years across differentiated API lines such as anticancers and peptides. Also, the company acquired equity stake in Gujarat Lyka Organics Ltd., a manufacturer of Cephalexin Active with a USFDA approval for the intermediate, 7ADCA. In the year 1997, the company's headquarters was shifted to Mumbai, India's commercial capital. Also, they began the first of their international acquisitions with an initial $7.5 million investment in Caraco, Detroit. Also, they took equity stake in MJ Pharma, a manufacturer of several dosage form lines with UK MHRA approval for Cephalexin capsules. The company acquired TDPL with an extensive product offering and its portfolio streamlined. In the year 1998, the company acquired a basket of products, including several respiratory/asthma brands acquired from Natco Pharma. Their new formulation plant at Silvassa commenced operations. In the year 2001, the company built a new formulation plant in Dadra. Also, the erstwhile TDPL division was renamed Spectra. A new division, Arian, targeting cardiologists/physicians and diabetologists, was launched. In the year 2004, the company acquired common stock and options from 2 large shareholders of Caraco, increasing stake to over 60% from 44% at a total outlay of about $42 million. The upgraded and expanded formulation site in Halol, India (the erstwhile MJ Pharma site) received approval from USFDA, UK MHRA, South African MCC, Brazilian ANVISA and Columbian INVIMA. During the year, the company completed the construction at a formulation manufacturing site at Jammu. They commissioned their first joint venture manufacturing unit, in Dhaka, Bangladesh. Also, two of their API factories received USFDA approval, taking the total number of US FDA approved sites to three. The company acquired a Cephalosporin Active manufacturer, Phlox Pharma, with European approval for cefuroxime axetil amorphous. In December 2004, a research centre spread over 16 acres was inaugurated by the President of India, with special lab space for drug discovery and innovation. In the year 2005, the company bought a plant in Bryan, Ohio, US and the business of ICN, Hungary from Valeant Pharma. In December 2005, they acquired the intellectual property and assets of Able Labs from the US District Bankruptcy court in New Jersey. In the year 2007, the company de-merged the innovative research and business into a new company, SPARC Ltd. SPARC Ltd was listed on the stock exchanges in India, the first pure research company to be so listed. In May 2007, the company along with their subsidiaries, signed definitive agreements to acquire Taro Pharmaceutical Industries Ltd., a multinational generic manufacturer with established subsidiaries, manufacturing and products across the US, Israel, Canada for $454 million. In November 2008, the company along with their subsidiaries acquired 100% ownership of Chattem Chemicals, Inc., a narcotic raw material importer and manufacturer of controlled substances with an approved API facility in Tennessee. This offers vertical integration for its controlled substance dosage form business in the US. In September 2010, the company acquired Taro Pharmaceuticals. This acquisition doubled the size of their US business and brought them a range of generics including a strong line of dermatologicals. In April 2011, MSD in India and Sun Pharmaceutical Industries Ltd announced formation of an India-specific strategic partnership agreement under which Sun Pharma will have the right to market, promote and distribute MSD's diabetes products, sitagliptin and sitagliptin plus metformin, under different brand names in India. In June 14, 2011, Caraco Pharmaceutical Laboratories Ltd (Caroco) merged with a subsidiary of the company. Thus, Caraco became a wholly owned subsidiary of the company. In 2012, Sun Pharma bagged USFDA approval for its AND Application for generic Zyprexa. The company also acquired URL generic business from Takeda during the year under review. In 2013, the company announced US FDA approval for generic Cymbalta. The company and Intrexon formed Joint Venture to Develop New Class of Therapeutics for Ocular Diseases. The Company announces USFDA approval for generic Prevacid, generic DoxilAr and generic DepoAr-Testosterone Injection. The company also Announces 1:1 Bonus during the year. The company also announces Tentative USFDA approval for generic Januvia & Glumetza. In 2014, the company announced US FDA approval for generic Temodar. The company acquires Pharmalucence during the year. The company and Merck & Co. Inc. enter into Licensing Agreement for Tildrakizumab during the year under review. The Board of Directors of the Company at its Meeting held on April 06, 2014 has approved the scheme of arrangement between Ranbaxy Laboratories Limited and the Company under the provisions of the sections 391 to 394 and other applicable provisions of the Companies Act, 1956 and corresponding provisions of the Companies Act, 2013 subject to receipt of necessary approvals, consents and filings. In 2015, the company receives US FTC clearance for Ranbaxy acquisition. The company and AstraZeneca enter into distribution agreement for ticagrelor in India during the year. SPARC Licenses Xelpros (Latanoprost BAK-free) to Sun Pharma. During the year, Hon'ble High Court of Gujarat, at Ahmedabad has approved the Scheme of Amalgamation of Sun Pharma Global Inc. (SPGI), wholly-owned subsidiary of the Company. The company also announces US FDA Approval for Ximino TM. The company also announces another successful completion of Opiates business acquisition in Australia and also acquires InSite Vision Incorporated. The company announces Absorica patent litigation settlement during the year under review. On 10 December 2015, Sun Pharmaceutical Industries announced that it has entered into a tripartite research and option agreement with Israel-based Weizmann Institute of Science and Spain's Health Research Institute of Santiago de Compostela (IDIS) to develop breakthrough products for the treatment of neurological diseases like brain stroke as well as glioblastoma, a lethal brain cancer. On 14 December 2015, Sun Pharmaceutical Industries announced that as a part of its manufacturing consolidation in the US, one of its wholly owned subsidiaries has entered into an agreement with Nostrum Laboratories Inc. (Nostrum) for the divestment of the Bryan (Ohio) unit in the US. As a part of the agreement, the Sun Pharma subsidiary has divested this unit as a going concern along with the employees and related products to Nostrum. On 19 December 2015, Sun Pharmaceutical Industries announced that it has received a Warning Letter from the USFDA as a result of the September 2014 inspection for its facility located at Halol, Gujarat in India. Post the September 2014 inspection, the US FDA has withheld future product approvals from the Halol facility. Sun Pharma said that the company expects to request a re-inspection by USFDA upon completion of its remediation commitments. Sun Pharma also said at that time that the Halol facility will continue to supply important drug products to meet its obligations to its customers and the patients who use the drugs in the United States and around the world. On 23 March 2016, Sun Pharma and AstraZeneca Pharma India Limited announced a partnership for the distribution of dapagliflozin, an innovative Type 2 diabetes medicine, in India. Dapagliflozin is AstraZeneca India's leading diabetes medicine. Under the agreement, Sun Pharma will promote and distribute dapagliflozin under the brand name Oxra. AstraZeneca India markets dapagliflozin under the brand name Forxiga and under the terms of the agreement, both companies will promote, market and distribute dapagliflozin in India under different brand names. AstraZeneca will retain the intellectual property rights to dapagliflozin. Sun Pharma will also gain the rights to promote and distribute the combination of dapagliflozin with metformin under the brand name Oxramet after requisite regulatory approval. On 29 March 2016, Sun Pharma announced the acquisition of 14 established prescription brands from Novartis AG and Novartis Pharma AG in Japan. According to the agreements entered into between the parties, a wholly-owned subsidiary of Sun Pharma will acquire the portfolio consisting of 14 established prescription brands from Novartis for a cash consideration of US$ 293 million. These brands have combined annualized revenues of approximately US$ 160 million and address medical conditions across several therapeutic areas. Under the terms of the agreements, Novartis will continue to distribute these brands, for a certain period, pending transfer of all marketing authorizations to Sun Pharma's subsidiary. The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands. On 4 May 2016, Sun Pharma and International Centre for Genetic Engineering and Biotechnology (ICGEB) signed an agreement to develop a novel botanical drug for treatment of dengue. Through this agreement Sun Pharma will follow up on earlier pre-clinical collaboration between ICGEB and erstwhile Ranbaxy Laboratories. Sun Pharma will develop Cipa, a botanical drug following a drug registration process similar to a new chemical entity, consisting of all required in-vitro, in-vivo, pre-clinical and clinical studies meeting all regulatory standards of India and other regulatory agencies worldwide. A botanical drug is a plant-derived medicinal product that is intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease in humans. On 4 June 2016, Sun Pharma announced that as a part of its manufacturing consolidation in the US, one of its wholly owned subsidiaries has entered into an agreement with Frontida BioPharm, Inc. (Frontida) for divestment of its two oral solid dosage manufacturing facilities located at Philadelphia, PA, and Aurora, IL, both in the US, along with 15 related pharmaceutical products. In connection with the transaction, Frontida has agreed to continue manufacturing certain products for Sun Pharma at these facilities on a contract basis for a predetermined period. The Board of Directors of Sun Pharma at its meeting held on 23 June 2016 approved buyback of fully paid up equity shares of the company through the tender offer route at Rs 900 per share. The purpose of the buyback is to return surplus funds to the equity shareholders and thereby, enhancing the overall returns to shareholders. On 18 July 2016, Sun Pharma and Sun Pharma Advanced Research Company Ltd. (SPARC) announced a licensing arrangement for SPARC's ELEPSIA XR (Levetiracetam Extended Release tablets). As per the agreement, SPARC will license ELEPSIA to a wholly-owned subsidiary of Sun Pharma for the US market. SPARC will receive an up-front payment of US$10 million from Sun Pharma. It is also eligible for certain additional milestone payments and defined royalties linked to any future sales of ELEPSIA XR. On 27 July 2016, Sun Pharma and Almirall announced a licensing agreement on the development and commercialization of tildrakizumab for psoriasis in Europe. Under terms of the license agreement, Almirall will pay Sun Pharma an initial upfront payment of US $50 million. Sun Pharma will be eligible to receive development and regulatory milestone payments and, additionally, sales milestone payments and royalties on net sales. Almirall will be able to lead European studies, and participate in larger global clinical studies for psoriasis indication subject to the terms of the Sun Pharma - Merck agreements, as well as certain cost sharing agreements. Sun Pharma will continue to lead development of tildrakizumab for other indications, where Almirall will have right of first negotiation for certain indications in Europe. On 6 September 2016, Sun Pharma announced that it has signed a strategic distribution alliance with Mitsubishi Tanabe Pharma Corporation, Japan for 14 prescription brands. Under this alliance, Mitsubishi Tanabe Pharma Corporation will market and distribute all the 14 brands as well as provide information on their proper use to healthcare professionals. On 19 October 2016, Sun Pharma and International Centre for Genetic Engineering and Biotechnology (ICGEB) announced their new collaboration for development of a dengue vaccine, targeted against all the four serotypes of Dengue virus that cause disease in humans. According to the agreement, Sun Pharma will fund and support further development of the vaccine candidate and existing ICGEB Know-How and Patents. ICGEB will grant Sun Pharma exclusive rights and licenses for development and commercialization of this vaccine globally. ICGEB will receive pre-defined royalty and milestone payments. On 26 October 2016, Sun Pharmaceutical Industries announced the execution of definitive agreements by its wholly owned subsidiary for the acquisition of 100% of Ocular Technologies, Sarl (OTS), a portfolio company of Auven Therapeutics (Auven), an international private equity company focused on accelerated development of breakthrough therapeutic drugs. OTS owns exclusive, worldwide rights to Seciera (cyclosporine A, 0.09% ophthalmic solution). Sun Pharma will pay Auven US$ 40 million upfront, plus contingent development milestones and sales milestones as well as tiered royalty on sales of Seciera as consideration for this acquisition.On 23 November 2016, Sun Pharma announced the execution of definitive agreements by its wholly owned subsidiary for the acquisition of 85.1% ofJSC Biosintez, a Russian pharmaceutical company engaged in manufacture and marketing of pharmaceutical products in Russia and CIS region. The equity consideration for the 85.1% stake is US$ 24 million. Sun Pharma would also assume a debt of approximately US$ 36 million as part of this transaction. Biosintez is a Russian pharmaceutical company focusing on the hospital segment with annual revenues of approximately US$ 52 million for 2015. It has a manufacturing facility in Penza region with capabilities to manufacture a wide variety of dosage forms including pharmaceuticals for injections, blood substitutes, blood preservatives, ampoules, tablets, ointment, creams, gels, suppositories, APIs, etc. On 28 November 2016, Sun Pharma announced the launch of a branded ophthalmic product BromSite 0.075% in the US market. It was the first branded product launched by the company in the USA following its focus on Specialty Business. On 12 December 2016, Sun Pharma and Israel-based Moebius Medical announced that they have entered into an exclusive worldwide licensing deal to further develop MM-II, a novel pharmaceutical candidate for the treatment of pain in osteoarthritis. According to the agreement, Sun Pharma will fund further development of Moebius Medical's lead product, MM-II, and undertake its global commercialization. Moebius Medical will conduct requisite pre-clinical studies, and will assume responsibility for product development and manufacturing through the end of Phase-II studies. Sun Pharma will assume responsibility for further clinical studies, regulatory submissions and product commercialization. Moebius Medical will receive an upfront payment, development-based and sales-based milestone payments, and tiered royalties on sales from Sun Pharma. On 22 December 2016, Sun Pharma announced its plans to acquire a branded oncology product Odomzo from Novartis. The agreement was signed for an upfront payment of US$ 175 million and additional milestone payments. Odomzo (Sonidegib) was approved by the USFDA in July 2015. Odomzo is a hedgehog pathway inhibitor indicated for the treatment of adult patients with locally advanced basal cell carcinoma (laBCC) that has recurred following surgery or radiation therapy, or those who are not candidates for surgery or radiation therapy. On 4 January 2017, Sun Pharma announced successful Phase 3 confirmatory clinical trial results for Seciera for the treatment of dry eye disease. Seciera is being developed by Ocular Technologies, a company acquired by Sun Pharma. Following this acquisition, Sun Pharma owns exclusive, worldwide rights to Seciera and is developing it to commercialize for global markets including US, Europe, and Japan, as well as several emerging markets. On 14 March 2017, Sun Pharmaceutical Industries announced that USFDA will lift the Import Alert imposed on the company's Mohali, Punjab manufacturing facility and remove the facility from the Official Action Initiated (OAI) status. This proposed action will clear the path for Sun Pharma to supply approved products from the Mohali facility to the US market, subject to normal USFDA regulatory requirements. The Mohali facility was inherited by Sun Pharma as part of its acquisition of Ranbaxy Laboratories in 2015. The USFDA had taken action against the Mohali facility in 2013 when it ordered the facility to be fully subject to Ranbaxy's Consent Decree of Permanent Injunction. Certain conditions of the consent decree will continue to be applicable to the Mohali facility. On 27 June 2017, Sun Pharmaceutical Industries and National Institute of Virology (NIV), Pune, an institution of the Indian Council of Medical Research, Department of Health Research, Ministry of Health and Family Welfare, New Delhi announced that they have signed an agreement for testing phytopharmaceutical, biologic and chemical entities developed by Sun Pharma against Zika, Chikungunya and Dengue viruses. Sun Pharma will provide drug molecules to NIV for testing against Zika, Chikungunya and Dengue in model systems. Candidate molecules with encouraging data will then be taken forward for commercial development. On 4 July 2017, Sun Pharmaceutical Industries and Samsung BioLogics announced a strategic long-term manufacturing agreement for Tildrakizumab, an investigational IL-23p19 inhibitor being evaluated for the treatment of moderate to severe plaque psoriasis. According to the agreement, Sun Pharma has appointed Samsung BioLogics to manufacture Tildrakizumab. The approximate value of the contract will be US$ 55.5 million. The regulatory filings associated with tildrakizumab have been accepted for review by the U.S. Food and Drug Administration and the European Medicines Agency (EMA). On 16 January 2018, Sun Pharmaceutical Industries announced that its wholly owned subsidiaries have reached an agreement with Ironwood Pharmaceuticals, Inc. and Allergan plc to resolve the patent litigation regarding submission of an Abbreviated New Drug Application (ANDA) for a generic version of Linzess (Linaclotide capsules) in the US. Pursuant to the terms of the settlement, Ironwood Pharmaceuticals and Allergan will grant, the wholly owned subsidiaries of Sun Pharma, a license to market a generic version of Linzess in the United States beginning 01 February 2031 (subject to USFDA approval) or earlier under certain circumstances. During the FY2019, Sun Pharma has received USFDA approval for its New Drug Application (NDA) of XELPROSTM (latanoprost ophthalmic emulsion 0.005%) used for the reduction of elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension. XELPROSTM is the first and only form of latanoprost that is not formulated with benzalkonium chloride (BAK), a commonly used preservative in topical ocular preparations. XELPROSTM was launched in the US in January 2019. The company has launched ILUMYATM (tildrakizumab-asmn) 100 mg/mL in the US for treating moderate-to-severe psoriasis in October 2018. The company has received a good initial response for the product and we expect ramp-up in ILUMYATM sales in the US over the next few years. The company also commenced a direct-to-consumer advertising initiative for ILUMYATM in the US. Sun Pharma also received approval from the Australian Therapeutic Goods Administration (TGA) for ILUMYATM during the year. The product has already been commercialised in Australia. During the year 2018-19 the company received USFDA approvals for CEQUATM (cyclosporine ophthalmic solution 0.09%). CEQUATM increases tear production in patients with dry eyes. It is the first and only approved dry eye treatment to combine cyclosporine A with nanomicellar technology. CEQUATM will be commercialised in the US in FY20. In July 2018, Sun Pharma announced the USFDA approval for INFUGEMT (gemcitabine in 0.9% sodium chloride injection), for intravenous use in a ready-to-administer (RTA) bag. INFUGEMT uses a proprietary technology, which allows cytotoxic oncology products to be pre-mixed in a sterile environment and supplied to the prescribers in RTA infusion bags. These RTA bags will provide greater safety, by preventing problems of over-dosing or under-dosing and eliminating contamination risk. INFUGEMT was commercialised in the US in April 2019. During the fiscal 2020, Sun Pharma announced licensing agreements with a subsidiary of China Medical System Holdings Ltd. (CMS) for the development and commercialisation of two of its specialty products - Tildrakizumab (for psoriasis and psoriatic arthritis) and Cyclosporine A 0.09% (CsA) eye drops (for dry eye disease) in Greater China. In July 2019, Sun Pharma announced the US launch of EZALLOR SPRINKLET (Rosuvastatin) capsules for the treatment of three types of elevated lipid disorders in people who have difficulty swallowing, a problem that is estimated to affect approximately 30-35% of long-term care residents. With the introduction of EZALLOR SPRINKLE, Sun Pharma continued its commitment of providing a portfolio of innovative formulation products to address the needs of a specific patient segment. In August 2019, Sun Pharma announced the filing of an application in Japan for manufacturing and marketing authorisation of ILUMYA (Tildrakizumab) for moderate-to-severe psoriasis with the Pharmaceuticals and Medical Devices Agency (PMDA), Japan. Sun Pharma is committed to growing its global dermatology franchise, with ILUMYATM as its lead product. Further in August 2019, Sun Pharma entered into a global licensing agreement with the CSIR - Indian Institute of Chemical Technology, Hyderabad (CSIR-IICT), for patents related to certain compounds with potential therapeutic activity across multiple indications in Sun Pharma's specialty focus areas. Under the terms of the license agreement, Sun Pharma gets exclusive global license for the said patents and any other future patents covered in the agreement. Sun Pharma paid CSIR-IICT an upfront payment and will also pay for potential development, regulatory and sales milestone payments totalling up to Rs 2.40 Billion, plus royalties on net sales from commercialisation of the products developed using these patents. In August 2019, Sun Pharma granted an exclusive license to a subsidiary of China Medical System Holdings Ltd. (CMS) to develop and commercialise seven generic products in Mainland China. Till date, Sun Pharma and the CMS collaboration covers a total of eight generic products, with an addressable market size of about USD 1 Billion (as per IQVIA data) in Mainland China. This collaboration gives Sun Pharma an entry into the Chinese generic pharmaceutical market. In November 2019, Sun Pharma entered into a licensing agreement with AstraZeneca UK Ltd. (AstraZeneca) to introduce certain novel ready to use (RTU) infusion oncology products in China. In January 2020, Sun Pharma entered into exclusive licensing and supply agreements with Rockwell Medical Inc. (Rockwell), to commercialise Rockwell's Triferic, a proprietary iron replacement and haemoglobin maintenance drug, for treating anaemia in hemodialysis patients in India. In February 2020, Sun Pharma launched ABSORICA LDT (isotretinoin) capsules in the US for the management of severe recalcitrant nodular acne in patients 12 years of age and older. ABSORICA LD is the only isotretinoin formulation to feature Sun Pharma's micronisation technology, which utilises micronised particles to optimise absorption at a 20% lower dose. In March 2020, Sun Pharma committed to donate Hydroxychloroquine (HCQS), Azithromycin, and other related drugs and hand sanitisers to support India's COVID-19 response. It also donated HCQS in the US market. In March 2020, Sun Pharma launched a buyback offer in India to buy back 40 Million shares at a price up to Rs 425 per equity share, totalling to about Rs 17 billion. The Board of Directors of the Company at its meeting held on 31 July 2020, approved the Scheme of Amalgamation and Merger of Sun Pharma Global FZE (wholly owned subsidiary of the Company) with Sun Pharmaceutical Industries Limited, and their respective members and creditors which inter-alia, envisages merger of Sun Pharma Global FZE into the Company. The approval of the only secured creditor has been received during the quarter under review. The Company is convening separate meetings of shareholders and unsecured creditors of the Company on 16 March 2021 to seek the approval of the Scheme as directed by National Company Law Tribunal. The Scheme shall be effective post completion of all necessary formalities and procedures and accordingly, the above unaudited standalone financial results do not reflect the impact on account of the Scheme.

Sun Pharmaceuticals Industries Ltd Chairman Speech

Managing Directors Message

Dear Shareholders,

Health first - that is the underlying message that the COVID-19 pandemic has reasserted. The pandemic is a health as well as an economic crisis and hence the role of the pharmaceutical industry has become very critical. The pandemic has shaken the global economy, but has given the world an opportunity to correct decades of under investment in healthcare.

While the pharmaceutical industry has taken significant strides in developing cutting-edge products in immunology, biologics, gene and cell therapy, etc., it has, barring certain exceptions, neglected developing new innovative products in the anti-infective segments.

A growing incidence of chronic ailments like diabetes, cardiovascular, cancer etc., coupled with better pricing for products in these segments has resulted in very few new products being developed for infectious diseases. Over the past few decades, anti-infectives have become less attractive as potential areas for R&D due to relatively inferior pricing for such products compared to chronic products. Global innovator companies have reorganised their R&D pipelines to focus more on developing high-end chronic products. The global manufacturing infrastructure for anti-infectives has followed this trend, resulting in very few new capacities being set up for such products. The COVID-19 global pandemic may force both, the industry and governments, to revisit the importance of focusing on infectious disease research.

Over the past many years, governments across the world have given more importance to controlling healthcare costs to balance their overall budgets. The COVID-19 pandemic and the economic costs that it has extracted, may force governments to revisit this presumption and try to strike a balance between providing adequate healthcare and the ability to fund it.

While the pandemic obviously highlighted the importance of having an optimum healthcare infrastructure, it has also ignited a fresh debate on globalisation versus localisation. Supply chain network strategy is evolving as the pandemic has also highlighted the risks associated with vendor and/or location concentration. There is a higher sense of urgency now to achieve a pragmatic balance between outsourcing and self-sufficiency. Achieving higher resilience for supply chain is likely to prompt companies to evaluate diversification of their vendor base. However, in case of the pharmaceutical industry, new vendor identification and qualification will be a time-consuming process.

There is also a gradual realisation that the COVID-19 virus is here to stay and that all of us will have to learn to coexist with the virus till an effective treatment or vaccine becomes available. The industry is trying to develop a potential vaccine at a frantic pace while simultaneously putting in efforts to test existing drugs which can potentially aid COVID-19 treatment.

There will be far-reaching changes in the way in which organisations are likely to operate going forward.

Consumer behaviour and consumption patterns are also likely to change due to the global pandemic. Social distancing and maintaining individual hygiene (like using masks and hand sanitisers) have become imperative. Work-from-home (WFH) option has been exercised by most organisations for certain functions and there is a likelihood that it will continue for some more time till the viral infection comes under control. There is a possibility that WFH may become the new-normal for certain categories of corporate work force even after COVID-19 comes under control.

COVID-19 risk response

In these critical and uncertain times, Sun Pharma has responded quickly and efficiently to meet the challenges at hand. We promptly evolved a COVID-19 Risk Management Plan and formed multiple COVID-19 Risk Response Teams under the guidance of the senior management to tackle the challenges resulting from the global pandemic.

Sun Pharma ensured adequate supplies of medicines to its customers across the world despite the supply chain disruptions and the lockdown restrictions in various countries. In a situation where there were multiple disruptions in manufacturing because of various challenges in terms of availability of intermediates, availability of packaging material, etc., we have ensured uninterrupted supply of our products across markets. Sun Pharma has also supplied some of the medicines used for treating COVID-19 symptoms.

There is now a higher focus on automation, digitalisation as well as increased dependence on analytical tools for decision making. We are leveraging IT technology tools to ensure business continuity as well as to facilitate WFH for many functions in the organisation. Changes at manufacturing facilities have been made to ensure productivity as well adherence to all safety and hygiene protocols.

We are also evaluating the potential of some existing products which can be useful in COVID-19 treatment. These include Nafamostat Mesilate and the phytopharmaceutical, AQCH. Both these products are currently undergoing Phase-2 trials in India.

As part of our corporate social responsibility, we donated certain medicines useful in managing COVID-19 symptoms and hand sanitisers worth about 250 Million to support the Indian governments COVID-19 pandemic response.

Sun Pharma has also arranged personal protective equipment (PPE) kits, disinfectants, gloves etc. to help fight the pandemic.

FY20 highlights

We continued our growth trajectory in FY20 with our overall revenues growing by about 13% to 323 Billion.

Key growth drivers include India, our global specialty business, coupled with growth in the rest of the world and API business.

Operational performance

For FY20, India formulation sales were at 97 Billion, accounting for about 30% of overall revenues. Adjusted for one-offs of last year, the India business has recorded a Y-o-Y growth of 15%. Our India business has done well, and we have started witnessing an increase in our market share. Our leading presence in chronic segments coupled with our strong brand equity with doctors is helping us increase our market share in an intensely competitive market. We have also initiated an expansion of sales force for the India business in order to expand our geographical footprint in India and to ensure that all our brands get the attention they deserve.

Revenues in the US remained almost flat at 105 Billion and accounted for approximately 33% of our consolidated revenues for FY20. While we witnessed a ramp-up in sales of our specialty products, the generics business continued to face price erosion, driven by competitive intensity amongst manufacturers, buying consortium pressures and a higher pace of generic approvals from the USFDA. Our subsidiary, Taro, recorded a 4% decline in overall revenues to US$645 Million for the year.

We grew by 3% in emerging markets for the year. We are witnessing a reduction in tender revenues in our South Africa business. Excluding the impact of the tender sales, we have recorded a low double-digit growth year-on-year for our emerging market portfolio. The depreciation of some emerging market currencies has also reduced our reported growth despite good underlying growth in local currency.

Our sales in the rest of world (RoW) markets grew by 31% for the year, driven by increased sales in some key Western European markets and the full year consolidation of the Pola Pharma acquisition in Japan.

Research & Development (R&D)

R&D is imperative for any pharmaceutical Company's future. Our focus is to continue investing in R&D to develop differentiated generics and innovative specialty products. Our global generic business requires a constant flow of new products and hence R&D capabilities to develop such products and meet the individual requirements of each market are very important. At Sun Pharma, we have multiple R&D centres and a strong R&D team to cater to these requirements.

R&D is also absolutely vital for strengthening our global specialty pipeline. It is a key determinant of the future growth and profitability of the specialty initiative. We expect to continue to invest in specialty R&D in the coming years as we progress further in building the specialty business.

Our R&D investments for the year were approximately ^20 Billion. We continue to be disciplined in identifying future R&D projects for the US generics market and the focus is on developing differentiated generics. Investments for developing the long-term specialty pipeline are expected to continue.

Progress on specialty initiatives

As we gain traction in the specialty business, it is becoming an additional growth engine for us. Our global specialty revenues for FY20 were about US$430 Million and accounted for approximately 9% of our consolidated revenues.

We undertook multiple initiatives during the year as part of our efforts to build the specialty business. These include:

1. New specialty product launches in the US

2. Targeting new markets like Japan and China for our specialty products

3. Evaluating new indications for ILUMYA

4. Reiteration of ILUMYAS potential through longterm clinical data

5. Enhancing the specialty R&D pipeline by adding preclinical candidates

New specialty launches

During the year, we launched four specialty products in the US market viz., CEQUA, ABSORICA LD, EZALLOR SPRINKLE and DRIZALMA SPRINKLE.

a) CEQUA: In October 2019, Sun Pharma commercialised CEQUA (cyclosporine ophthalmic solution) 0.09% in the US. It is indicated for increasing tear production

in patients with keratoconjunctivitis sicca (dry eye), an inflammatory disease that affects more than 16 Million people in the US. CEQUA is the first and only USFDA-approved cyclosporine treatment delivered with nanomicellar (NCELL™) technology, which helps to improve the bioavailability and physicochemical stability of cyclosporine, resulting in improved ocular tissue penetration. CEQUAs launch significantly enhances Sun Pharmas specialty ophthalmology portfolio in the US.

b) ABSORICA LD: In February 2020, Sun Pharma launched ABSORICA LD™ (isotretinoin) capsules in the US for the management of severe recalcitrant nodular acne in patients 12 years of age and older. ABSORICA LD is the only isotretinoin formulation to feature Sun Pharmas micronisation technology, which utilises micronised particles to optimise absorption at a 20% lower dose and can be taken with or without food.

c) EZALLOR SPRINKLE: In July 2019, Sun Pharma launched EZALLOR SPRINKLE™ (rosuvastatin) capsules in the US for the treatment of three types of elevated lipid disorders in people who have difficulty swallowing, a problem that is estimated to affect approximately 30-35% of long-term care patients.

d) DRIZALMA SPRINKLE: In October 2019, Sun Pharma launched DRIZALMA SPRINKLE™ (duloxetine delayed-release capsules) in the US for oral use. It is

a serotonin and norepinephrine reuptake inhibitor (SNRI) designed for the treatment of various neuro-psychiatric and pain disorders in patients who have difficulty swallowing. The availability of DRIZALMA SPRINKLE expands Sun Pharmas portfolio of innovative formulation products designed for individuals with swallowing difficulties, the risk of which increases with age and exposure to age-related diseases and conditions, including depression, anxiety, and pain disorders.

Targeting new markets for specialty products

During FY20, we took steps to target two important markets for our specialty products viz., Japan and Greater China. In June 2019, we announced licensing agreements with a subsidiary of China Medical System Holdings Ltd. (CMS) for the development and commercialisation of two of our specialty products - Tildrakizumab (for psoriasis and psoriatic arthritis) and Cyclosporine A 0.09% (CsA) eye drops (for dry eye disease) for Greater China market. These licensing agreements will facilitate Sun Pharmas entry into the Greater China market, which is the second largest pharmaceutical market globally.

In August 2019, Sun Pharma announced the filing of an application in Japan for manufacturing and marketing authorisation of ILUMYA for moderate-to-severe psoriasis with the Pharmaceuticals and Medical Devices Agency (PMDA), Japan. The PMDA has recently approved this application and launch preparations have been initiated. This launch in Japan will be a step forward for Sun Pharma in expanding the global franchise for ILUMYA.

We have also recently entered into an exclusive licensing and distribution agreement with Hikma Pharmaceuticals PLC for commercialisation of ILUMYA™ in the Middle East and North Africa (MENA) region.

Evaluating new indications for ILUMYA

In June 2019, we announced interim results from a Phase-2 study of ILUMYA in patients with active psoriatic arthritis (PsA). The interim analysis revealed that over 71% of patients treated with ILUMYA experienced a 20% improvement in joint and skin symptoms (ACR20 response), meeting the primary endpoint of the study.

The interim results showed that ILUMYA was well tolerated with a low rate of serious treatment-emergent adverse events. The Phase-2 study interim results also showed that across all patients receiving ILUMYA, 75.3% experienced a 20% improvement in symptoms of PsA (ACR20 response) at week 24 compared to 50.6% of patients on placebo.

The findings were similar in patients receiving 100 mg or 200 mg of ILUMYA on a quarterly dosing schedule. For some patients on 100 mg ILUMYA, results were seen as early as 8 weeks. Furthermore, an average of 47.1% of all patients receiving ILUMYA achieved an ACR50 response, with some results seen as early as 12 weeks, compared to 24.1% of patients on placebo.

Given the encouraging Phase-2 study interim results, Sun Pharma is in the process of initiating the Phase-3 trials for PsA. ILUMYA is already approved in the US for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy, and is being investigated for PsA, which affects up to 42% of people with plaque psoriasis.

Reiteration of ILUMYAS potential through long-term clinical data

In October 2019, Sun Pharma presented long-term follow-up data from ILUMYA Phase-3 reSURFACE 1 and resurface 2 trials. The data showed that the significant response rates seen in the initial 52 and 64 weeks, respectively, were maintained over four years for people with moderate-to-severe plaque psoriasis, with more than half the participants achieving at least 90% skin clearance [Psoriasis Area Sensitivity Index (PASI) 90] with no new safety concerns recorded.

Additional study analyses showed that the 75-100% skin clearance achieved with ILUMYA treatment over three years was sustained equally in people with and without metabolic syndrome, a common condition in people with psoriasis. This positive data reiterates the potential of ILUMYA and also indicates that the product provides a sustained response against moderate-to-severe plaque psoriasis, thus giving long-term benefit to the patient.

Enhancing the specialty R&D pipeline

Developing/adding new innovative specialty products is imperative to ensure a strong R&D pipeline. We have taken multiple steps to strengthen the specialty pipeline.

In August 2019, Sun Pharma entered into a global licensing agreement with the CSIR Indian Institute of Chemical Technology, Hyderabad (CSIR-IICT), for patents related to certain compounds with potential therapeutic activity across multiple indications in Sun Pharmas specialty focus areas. Under the terms of the license agreement, Sun Pharma gets exclusive global license for the said patents and any other future patents covered in the agreement.

This collaboration for developing new drugs is part of Sun Pharmas broader strategy for enhancing its global specialty pipeline. This agreement will facilitate the addition of pre-clinical candidates to Sun Pharmas global specialty pipeline. A successful clinical development of these potential compounds may enable Sun Pharma to commercialise pharmaceutical products for various therapeutic indications over the long term.

We recently presented pre-clinical data for GL0034, a long-acting GLP-1R (Glucagon-Like Peptide-1 Receptor) agonist at the American Diabetes Association Virtual 80th Scientific Sessions. GLP-1R agonists are used to treat patients with type 2 diabetes.

The data demonstrated significant outcomes on various diabetic parameters evaluated, viz. glucose reduction, decrease in HbA1c (an important marker for clinical efficacy), augmented insulin secretion, lowering of glucagon level and a marked and meaningful reduction in triglyceride levels. All these outcomes with GL0034 were found to be higher or significant to the currently marketed once a week GLP-1R agonists compared in the study. GL0034 also induced a larger body weight reduction, 1.9x and 3.8x times higher than the two different standard once a week GLP-1R agonist drugs compared in the study, with similar food consumption. We look forward to validating this data in human clinical trials with the Phase-1 trials likely to commence by Q3FY21.

In May 2020, Sun Pharma in-licensed SCD-044, a new chemical entity targeted as a potential oral treatment for atopic dermatitis, psoriasis and other auto-immune disorders. SCD-044 is entering Phase-2 clinical trials.

CGMP compliance

With global CGMP standards undergoing constant upgradation over the past many years, the pharmaceutical industry needs to be constantly on its toes with an unwavering focus on 24x7 compliance, which, in turn, raises compliance costs. Adherence to these quality standards and ensuring that each manufacturing facility remains compliant has become a key priority for pharmaceutical companies worldwide.

During the year, many of our facilities underwent successful audits by multiple regulatory agencies, including the USFDA. Our Halol facility was inspected by the USFDA in December 2019, which resulted in 8 deviations. The facility was subsequently classified as "Official Action Indicated (OAI)", which implies that all new approvals for the US market from this facility will be put on hold till it is cleared by the USFDA. We have already initiated the corrective actions required to get the facility back into compliance.

Focus on improving productivity

We are continuing with our efforts to reduce expenses to achieve an optimum cost structure relevant to todays business and market realities. These efforts are being implemented in multiple areas of the business with greater involvement of people in order to make the Company more efficient. Further enhancement of manufacturing efficiencies, optimising manufacturing footprint, rationalising generics R&D investments, reducing fixed costs and interest cost are some of the areas targeted for efficiency improvement.

Overall outlook

We will continue to focus on growing each of our businesses faster than the market in which we operate. R&D investments in developing a differentiated generic pipeline as well as in building our specialty pipeline will continue in the coming years.

Our strategy of developing the specialty business as an additional growth engine has started delivering, with a gradual ramp up in specialty revenues. We expect this momentum to continue over the next few years although the COVID-19 pandemic and lockdowns may throw up some uncertainties in the near-term. The specialty business is also helping us to move up the pharmaceutical value chain and bring in more innovation to our business. We have invested significant resources over the past few years in building this business and are now focusing on commercial execution to ensure that future cash flows justify these significant investments.

Generics will continue to be an important part of the overall healthcare management globally. Focus on healthcare may increase in the post-COVID period and hence generics are likely to retain their importance as an effective and economical health solution. Sun Pharmas strong positioning in the global generics industry and continued investments for the future will ensure that it remains a prominent player in this space.

Despite our proactive COVID risk response initiative, we do estimate some softening of sales in the near term due to the lockdowns and economic slowdown across various countries, although it is difficult to quantify the impact as of now. Our endeavour will be to ensure that we are the least impacted.

Key focus areas for us will be:

1. Employee protection and keeping workplace COVID-19 free

2. Digital engagement with doctors and patients

3. Supply chain protection, ensuring optimum utilisation of our factories and working closely with vendors to ensure continuity of supply

4. Enabling work from home for employees wherever and whenever it is necessary

5. Focus on cash collection and cash conservation in the business to ensure adequate liquidity

6. Continuing our focus on improving R&D productivity and throughput

7. Focus on cost optimisation and target higher efficiencies

8. Continue to invest in developing new technologies and innovative products

Our talented employees have done a remarkable job of ensuring business continuity despite the multiple disruptions resulting from the COVID-19 pandemic and lockdowns. All our teams, including Supply Chain, HR, IT, Finance, Manufacturing have worked tirelessly to:

1. Maintain adequate supply of our products in various markets

2. Enabling WFH for a large number of employees in a very short time

3. Ensuring overall productivity without compromising on safety protocols

We are also grateful to our Board of Directors for their guidance and support in these uncertain times.

We are thankful for your support as a shareholder and we hope that you will continue to repose your confidence in us in future as well.

Warm regards,

Dilip Shanghvi

Managing Director

Sun Pharmaceutical Industries Ltd.

Your Directors take pleasure in presenting the Twenty-Ninth Annual Report and Company's Audited Financial Statements for the financial year ended March 31, 2021.

FINANCIAL RESULTS

DIVIDEND

During the year under review, your Directors at their meeting held on January 29, 2021 had declared an interim dividend of '5.50 (Rupees Five and paise fifty only) per equity share of '1/- each [previous year '3.00 per equity share of '1/- each] for the year ended March 31, 2021. The interim dividend was paid on February 17, 2021 to those shareholders who held shares as on February 10, 2021, being the record date for payment.

In addition to above, your Directors have recommended a final dividend of '2/- (Rupees Two only) per equity share of '1/- each [previous year '1/- per equity share of '1/- each] for the year ended March 31, 2021, subject to the approval of the equity shareholders at the ensuing 29^th Annual General Meeting of the Company. Pursuant to the provisions of the Finance Act, 2020, the said final dividend will be liable for deduction of income tax at source.

Therefore, the total dividend payout for the FY21 is '7.50/- (Rupees Seven and paise fifty only) per equity share of '1/- each [previous year '4.00/- per equity share of '1/- each].

The dividend payout is in accordance with the Company's Dividend Distribution Policy. The policy is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/.

BUY-BACK OF SHARES

The Board of Directors of the Company at its meeting held on March 17, 2020, had approved the buy-back of Company's equity shares of face value of '1/- each ("Equity Shares") from the Open Market through stock exchange mechanism as prescribed under the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018, at a maximum price of '425/- (Rupees Four Hundred Twenty Five Only), per Equity Share payable in cash, for an aggregate maximum amount of up to '1700,00,00,000/- (Rupees One Thousand Seven Hundred Crores Only) ("Maximum Buy-back Size").

The Buy-back period had opened on and from March 26, 2020 and had closed, during the year under review, effective from closure of trading hours on September 25, 2020 i.e., within 6 months from the date of the opening of Buy-back.

No Equity Shares have been bought back under the Buyback as the volume weighted average market price of Equity Shares of the Company during the Buy-Back period was higher than the Maximum Buy-back Price.

CHANGES IN CAPITAL STRUCTURE

During the year under review there was no change in the paid-up share capital of the Company.

SCHEME OF ARRANGEMENT

During the year, the Board of Directors of the Company at its meeting held on July 31, 2020 had approved the Scheme of Amalgamation and Merger of Sun Pharma Global FZE ("Transferor Company"), an indirect wholly owned subsidiary of the Company with Sun Pharmaceutical Industries Limited ("Company") and their respective members and creditors ("Scheme") pursuant to Section 234 read with Sections 230 to 232 of the Companies Act, 2013 and the relevant rules and regulations made thereunder for amalgamation of Transferor Company into the Company.

The Hon'ble National Company Law Tribunal of Gujarat, at Ahmedabad ("NCLT") vide its Order dated January 07, 2021 had dispensed with convening of meeting of secured creditor(s) of the Company and had ordered to convene the meeting of equity shareholders and unsecured creditors of the Company and accordingly separate meetings of the equity shareholders and unsecured creditors were convened on March 16, 2021 by way of Video Conferencing / Other Audio Visual Means to approve the Scheme with appointed date as January 01, 2020 or such subsequent date as may be decided by the Board of Directors as applicable, of the Transferor Company and the Board of Directors of the Company or such date as may be approved by the Hon'ble NCLT or such other appropriate date as the Appropriate Authority may decide.

At both the meetings namely the meeting of equity shareholders and the meeting of unsecured creditors, the resolution for approval of proposed merger was passed with requisite majority. The approval of NCLT is awaited.

The merger will result synergies of operations, reduction in overheads including administrative, managerial and other expenditure, operational rationalisation, organisational efficiency, competitive advantage and optimal utilisation of resources eventually enhancing the growth and reputation of the group. Pursuant to the Scheme, no consideration shall be paid nor any shares of the Company shall be issued and allotted to the shareholders of the Transferor Company.

ANNUAL RETURN

The Annual Return as required under sub-section (3) of Section 92 of the Companies Act, 2013 (‘the Act') in form MGT-7 is made available on the website of the Company and can be accessed at https://sunpharma.com/investors- annual-reports-presentations/

SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

The statement containing the salient features of the Financial Statements of the Company's subsidiaries/ joint ventures/ associates is given in Form AOC - 1, provided in Notes to the Consolidated Financial Statements, forming part of the Annual Report.

The highlights of performance of subsidiaries, joint ventures and associates and their contribution to the overall performance of the Company during the financial year under review is given under Annexure ‘A' to the Consolidated Financial Statements forming part of the Annual Report.

Details pertaining to entities that became subsidiaries/ joint ventures/associates and those that ceased to be the subsidiaries / joint ventures/associates of the Company during the year under review are provided in Note: 38 of the notes to the Consolidated Financial Statements, forming part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Dilip S. Shanghvi, Managing Director and Mr. Kalyanasundaram Subramanian, Whole-time Director of the Company retire by rotation at the ensuing 29^th Annual General Meeting of the Company and being eligible offer themselves for reappointment.

Further, Mr. Kalyanasundaram Subramanian's term as Whole-time Director as approved by the members at the 26^th Annual General Meeting of the Company held on September 26, 2018, was upto February 13, 2021.

The Board of Directors of the Company at its meeting held on January 29, 2021, on the recommendation of the Nomination and Remuneration Committee, had approved re-appointment and remuneration of Mr. Kalyanasundaram Subramanian as Whole-time Director for a further period of two years with effect from February 14, 2021 till February 13, 2023, subject to the approval of the shareholders of the Company at the 29^th Annual General Meeting. The Board of Directors recommend his re-appointment and remuneration for further period of two years with effect from February 14, 2021, for approval of the members at the ensuing 29^th Annual General Meeting of the Company.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors by passing a resolution by circulation have appointed Dr. Pawan Goenka (DIN: 00254502) and Ms. Rama Bijapurkar (DIN: 00001835) as Additional Independent Directors of the Company effective from May 21, 2021 in accordance with the provisions of Section 149 of the Act and in terms of Section 161(1) of the Act, they both hold office upto the date of ensuing 29^th Annual General Meeting. In the opinion of the Board, Dr. Pawan Goenka and Ms. Rama Bijapurkar hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors and further they are exempted from the requirement to undertake online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The Board recommends appointment of Dr. Pawan Goenka and Ms. Rama Bijapurkar as Independent Directors of the Company for a term of 5 (Five) years effective from May 21,2021 upto May 20, 2026 for approval of the members at the ensuing 29^th Annual General Meeting of the Company.

Mr. Sailesh T. Desai was re-appointed as the Wholetime Director at the 26^th Annual General Meeting of the Company held on September 26, 2018 for a period of 5 (five) years effective from April 1, 2019 upto March 31, 2024. However, due to inadequacy of profits at that time, the approval for maximum remuneration to be paid to Mr. Sailesh T. Desai was sought from the members for a period of 3 years with effect from April 1, 2019 to March 31, 2022, including the minimum remuneration to be paid to him in event of loss or inadequacy of profits in any financial year during the aforesaid period of 3 years. The Board of Directors, at its meeting held on May 27, 2021, have considered, approved and recommends to the members, the maximum remuneration to be paid to Mr. Sailesh T. Desai, as recommended by the Nomination and Remuneration Committee, for further period of two years i.e. for the remaining term of his present appointment, from April 1,2022 till March 31, 2024.

Appropriate resolutions for the appointment, reappointment and remuneration of the Directors are being placed for your approval at the ensuing 29^th Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Act and under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

In the opinion of the Board, the Independent Directors of the Company fulfil the conditions specified under the Act and Listing Regulations and are independent of the management.

REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES AND CRITERIA FOR APPOINTMENT OF DIRECTORS

For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. The Committee also ensures that the incumbent fulfils such criteria with regard to qualifications, positive attributes, independence, age and other criteria as laid down under the Act, Listing Regulations or other applicable laws. The Board has, on the recommendation of the Nomination and Remuneration Committee framed a Policy on remuneration of Directors, Key Managerial Personnel and other Employees.

The salient features of the Remuneration Policy of the Company are as under:

A. Guiding Principles for remuneration: The Company shall remunerate all its personnel reasonably and sufficiently as per industry benchmarks and standards. The remuneration shall be commensurate to retain and motivate the human resources of the Company. The compensation package will, inter alia, take into account the experience of the personnel, the knowledge & skill required including complexity of his job, work duration and risks associated with the work, and attitude of the employee like positive outlook, team work, loyalty etc.

B. Components of Remuneration: The following will be the various remuneration components which may be paid to the personnel of the Company based on the designation and class of the personnel.

a) Fixed compensation: The fixed salaries of the Company's personnel shall be competitive and based on the individual personnel's responsibilities and performance.

b) Variable compensation: The personnel of the Company may be paid remuneration by way of variable salaries based on their performance evaluation. Such variable salaries should be based on the performance of the individual against his short and long term performance objectives and the performance of the Company.

c) Share based payments: The Board may, on the recommendation of the Nomination and Remuneration Committee, issue to certain class of personnel a share and share price related incentive program.

d) Non-monetary benefits: Senior management personnel of the Company may, on a case to case basis, be awarded customary non-monetary benefits such as discounted salary advance / credit facility, rent free accommodation, Company cars with or without chauffer, share and share price related incentive, reimbursement of electricity and telephone bills etc.

e) Gratuity/group insurance: Personnel may also be awarded to group insurance and other key man insurance protection. Further as required by the law necessary gratuity shall be paid to the personnel.

f) Commission: The directors may be paid commission if approved by the shareholders. The shareholders may authorise the Board to declare commission to be paid to any director of the Board.

C) Entitlement: The authority to determine the entitlement to various components as aforesaid for each class and designation of personnel shall be as follows:

Note: For the purpose of this Policy, the term ‘Senior Management' shall have the same meaning as defined under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

The complete Policy as approved by the Board is available on the website of the Company and can be accessed through the web link: https://sunpharma. com/policies/.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

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

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors of the Company met 4 (Four) times during the year under review on May 27, 2020; July 31, 2020; November 03, 2020; and January 29, 2021. The particulars of attendance of the Directors at the said meetings are provided in detail in the Corporate Governance Report, which forms a part of this Report.

The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.

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

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

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

In a separate meeting of Independent Directors, performance of Non Independent Directors and performance of the Board as a whole was evaluated.

Further, they also evaluated the performance of the Chairman of the Company, taking into account the views of the Executive Directors and Non-executive Directors.

The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as qualification, experience, knowledge and competency, fulfilment of functions, availability and attendance, initiative, integrity, contribution and commitment etc., and the Independent Directors were additionally evaluated on the basis of independence, independent views and judgement etc. Further the evaluation of Chairman of the Board, in addition to the above criteria for individual Directors, also included evaluation based on effectiveness of leadership and ability to steer the meetings, impartiality, etc.

The Chairman and other members of the Board discussed upon the performance evaluation of every Director of the Company and concluded that they were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The summary of the feedback from the members were thereafter discussed in detail by the members. The respective Director, who was being evaluated, did not participate in the discussion on his/her performance evaluation.

The Chairman additionally interacted with each Director individually, for evaluation of performance of all Individual Directors and Mr. Dilip Shanghvi, along with other Directors had evaluated the performance of Mr. Israel Makov as the Chairman and as an Individual Director. They were satisfied with the overall performance of the Directors individually and that the Directors generally met their expectations of performance.

The Board also assessed the fulfillment of the independence criteria as specified in Listing Regulations, by the Independent Directors of the Company and their independence from the management.

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 diversity in the Board, competency of Directors, strategy and performance evaluation, evaluation of performance of the management and feedback, independence of the management from the Board etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as mandate and composition, effectiveness of the committee, independence of the committee from the Board, contribution to decisions of the Board, etc.

HUMAN RESOURCES

2020 was a very challenging year for everyone. Our 37000+ strong global workforce worked relentlessly to ensure medicines continue to reach patients who rely on us. As lockdowns hit across the world, our teams being part of essential services, ensured our 44 manufacturing sites, distribution centres, R&D centres and sales offices worldwide continue to operate. We are grateful to our employees who made this happen with a safety-first mind set. The top priority for the Human Resource function was providing a safe work environment to employees globally.

Your Directors would like to take this opportunity to express their gratitude and appreciation for the passion, dedication and commitment of the employees and look forward to their continued contribution.

Information as per Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in ‘Annexure - A' to this Report. Further, the information pertaining to Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the names and other particulars of employees is available for inspection at the Registered office of the Company during business hours and pursuant to the second proviso to Section 136(1) of the Act, the Report and the accounts are being sent to the members excluding this. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary/ Compliance Officer either at the Registered/Corporate Office address or by email to secretarial@sunpharma.com.

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

Your Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company through various interventions and practices. It is the continuous endeavour of the Management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company has arranged various interactive awareness workshops in this regard for the employees at the manufacturing sites, R & D set ups & corporate office during the year under review. The Company has submitted the Annual Returns to the local authorities, as required under the above mentioned Act.

During the financial year ended March 31, 2021, no complaint pertaining to sexual harassment was received by the Company. There are no complaints pending as at the end of the financial year.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

AUDITORS Statutory Auditors

S R B C & Co LLP, Chartered Accountants, (Firm's Regn. No. 324982E/ E300003), were appointed as the Statutory Auditors of the Company for a period of 5 (five) years at the 25^th Annual General Meeting of the Company to hold office till the conclusion of the 30^th Annual General Meeting of the Company.

The Auditor's Report for the financial year ended March 31, 2021, has been issued with an unmodified opinion, by the Statutory Auditors.

Secretarial Auditor

The Board had appointed KJB & Co. LLP, Practicing Company Secretaries, Mumbai to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2021. The Secretarial Audit Report in the Form No. MR - 3 for the year is provided as ‘Annexure - B1' to this Report.

The remarks stated in the Secretarial Audit Report are self explanatory and do not require any further explanation. The Secretarial Audit Report for the year does not contain any other qualification, reservation or adverse remark.

In accordance with the provisions of Regulation 24A of the Listing Regulations, Secretarial Audit of two material unlisted Indian subsidiaries of the Company namely, Sun Pharma Laboratories Limited (SPLL) and Sun Pharma Distributors Limited (SPDL), was undertaken by KJB & Co. LLP, Practicing Company Secretaries, Mumbai and the Secretarial Audit Reports issued by them to the respective Boards of SPLL and SPDL are provided as ‘Annexure - B2' and ‘Annexure - B3' respectively to this Report. The Secretarial Audit Reports for these material unlisted Indian subsidiaries do not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board has appointed Messrs B. M. Sharma & Associates, Cost Accountants, Pune (Firm's Registration No. 100537) as Cost Auditor of the Company for conducting Cost Audit in respect of Bulk Drugs & Formulations of your Company for the financial year 2021-22.

The Company is required to maintain Cost Records as specified by the Central Government under Section 148(1) of the Act and accordingly, such accounts and records are made and maintained by the Company.

SECRETARIAL STANDARDS

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

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements.

RELATED PARTY TRANSACTIONS

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

As required under Section 134(3)(h) of the Act, details of transactions entered with related parties under the Act exceeding ten percent of the annual consolidated turnover as per the last audited financial statements are given in Form AOC-2 provided as ‘Annexure - C' to this Report.

AUDIT COMMITTEE COMPOSITION

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

RISK MANAGEMENT

The Board of Directors has constituted a Risk Management Committee which is entrusted with the responsibility of overseeing various organisational risks (strategic, operational and financial). The Risk Management Committee also assesses the adequacy of mitigation plans to address such risks. The Corporate Governance Report, which forms part of this report, contains the details of Risk Management Committee of the Company. An overarching Risk Management Policy which was approved by the Board is in place.

The Company has developed and implemented an integrated Enterprise Risk Management (ERM) Framework through which it identifies monitors, mitigates & reports key risks that impact the Company's ability to meet its strategic objectives. The Company's ERM framework is based on the recommendations by the Committee of Sponsoring Organisations (COSO) to further the organisation's endeavour to strengthen ERM framework and processes using best practices. The ERM team engages with all Function heads to identify internal and external events that may have an adverse impact on the achievement of Company's objectives and periodically monitors changes in both internal and external environment leading to emergence of a new threat/risk. These risks are captured in a risk register with all the relevant information such as risk description, root cause and any existing mitigation plans. The risk register is refreshed semi-annually. Risks are categorised into Strategic, Financial, Operational, Compliance & Reputational. ERM risk assessments covering Company's various businesses and functions are a key input for the annual internal audit program. During FY21, the focus was on reviewing effectiveness of actions taken to mitigate business, cyber security and other operational & Compliance risks.

INTERNAL FINANCIAL CONTROLS

The Company believes that internal control is a prerequisite of governance and that action emanating out of agreed business plans should be exercised within a framework of checks and balances. The Company has a well- established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

Global Internal Audit

An independent and empowered Global Internal Audit Function (GIA) at the corporate level with support from a Big 4 / equally reputed audit firm, wherever required, carries out risk-focused audits. GIA audits all businesses (both in India and overseas) to ensure that business process controls are adequate and are functioning effectively.

These reviews include financial, operational and compliance controls and risk mitigation plans. The Company's operating management closely monitors the internal control environment and ensures that the recommendations are effectively implemented. The Audit Committee of the Board monitors performance of the Internal Audit Function, periodically reviews key findings and provides strategic guidance.

GIA's functioning is governed by the Audit Charter, duly approved by the Audit Committee of the Board, which stipulates matters contributing to the proper and effective conduct of the audit. The audit processes are fully automated on ‘SunScience' tool which integrates Internal Audits, Automated follow-ups for closure of observations, Internal Financial Controls (IFC) and Enterprise Risk Management (ERM) modules. ERM Risk assessments are a key input for the annual audit program.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the requirements of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee. The details of membership of the Committee and the meetings held are detailed in the Corporate Governance Report, forming part of this Report. On the recommendation of the Corporate Social Responsibility Committee, the Board of Directors at its meeting held on May 27, 2021 has approved and adopted the revised CSR Policy in line with the requirements of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. The CSR Policy of the Company is available on the website of the Company and can be accessed through the web link: https://sunpharma.com/policies/

During the year, the Company has spent '269.504 Million which exceeds 2% of the average net profits of the Company in the three preceding financial years. The annual report on CSR activities containing details of expenditure incurred by the Company and brief details on the CSR activities are provided in ‘Annexure - D' to this Report.

The Board has accorded its consent to set off the excess amount spent by the Company on its CSR Activities against the requirement to spend in any subsequent year(s) in terms of Section 135 of the Act.

PUBLIC DEPOSITS

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

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as prescribed under Part B of Schedule V read with Regulation 34(3) of the Listing Regulations 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 the Company regarding compliance of the conditions of Corporate Governance as stipulated in Part C of Schedule V of the Listing Regulations, are provided in a separate section and forms part of this Report.

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

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

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

There are no significant and material orders passed by the regulators or courts or tribunals which impact the going concern status and Company's operations in future.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

To create enduring value for all stakeholders and ensure the highest level of honesty, integrity and ethical behaviour in all its operations, the Company has adopted a ‘Global Whistle Blower Policy' for Sun Pharmaceutical Industries Limited and all its subsidiaries, in addition to the existing Global Code of Conduct that governs the actions of its employees. Further details on vigil mechanism of the Company are provided in the Corporate Governance Report, forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

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

a) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for the year ended on that date;

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

d) the Directors have prepared the annual accounts on a going concern basis;

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

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

CONSOLIDATED ACCOUNTS

The consolidated financial statements for the year ended March 31, 2021 have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

CREDIT RATING

ICRA Ltd. has reaffirmed the highest credit rating of ‘[ICRA] A1+'/‘[ICRA] AAA(Stable)' for the bank facilities, long term/ short term borrowings and commercial paper programs of the Company.

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

BUSINESS RESPONSIBILITY REPORTING

The Business Responsibility Report of the Company for the year ended March 31, 2021, forms part of the Annual Report and is also made available on the website of the Company at https://sunpharma.com/investors-annual- reports-presentations/

ACKNOWLEDGEMENTS

Your Directors wish to thank all stakeholders, employees and business partners, Company's bankers, medical professionals and business associates for their continued support and valuable cooperation.

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

Sun Pharmaceuticals Industries Ltd Company Background

Sun Pharmaceuticals Industries Ltd Company Management

Sun Pharmaceuticals Industries Ltd Listing Information

Sun Pharmaceuticals Industries Ltd Finished Product