Sun Pharma Advanced Research Company Ltd.

Annual Report 2021-22

Innovations
inspired by
life
Contents
2 56 Disclaimer:

Statements in this “Management

Discussion and Analysis” describing
the Company’s objectives, projections,
Management Business estimates, expectations, plans or
predictions or industry conditions
Discussion Responsibility
or events may be “forward-looking
and Analysis Report statements” within the meaning
of applicable securities laws
and regulations. Actual results,
performance or achievements could
differ materially from those expressed

14 63 or implied. Important factors that

could make a difference to the
Company’s operations include global
and Indian demand supply conditions,
competitors’ pricing in the Company’s
Board’s Financial principal markets, changes in
Report Statements Government regulations, tax regimes,
economic developments within India
and the countries within which the
Company conducts businesses and
other factors such as litigation and

31
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Company assumes no responsibility
to publicly update, amend, modify or
revise any forward-looking statements,
on the basis of any subsequent
development, new information or future
Corporate events or otherwise except as required
Governance by applicable law. Unless the context
Report otherwise requires, all references
in this document to “we”, “us” or
“our” refers to Sun Pharma Advanced
Research Company Limited.

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Corporate
Information

Board of Directors Auditors

Mr. Dilip S. Shanghvi S R B C & Co. LLP

Chairman and Non-Executive Director (Registration No. 324982E/E300003)

Mr. Sudhir V. Valia

Non-Executive Director Bankers

Dr. T. Rajamannar Kotak Mahindra Bank Ltd.

Non-Executive Director ICICI Bank Ltd.

Ms. Bhavna Doshi

Offices & Research Centres
Independent Director
Registered Office & Research Centre
Dr. Ferzaan Engineer
Plot No. 5 & 6/1, Savli G.I.D.C. Estate, Savli - Vadodara
Independent Director
Highway, Manjusar, District Vadodara – 391 775.
Dr. Robert J. Spiegel
Corporate Office & Research Centre
Independent Director
17-B, Mahal Industrial Estate,
Off Mahakali Caves Road,
Key Managerial Personnel Andheri (East), Mumbai - 400 093.

Mr. Anilkumar Raghavan Research Centres

Chief Executive Officer
• F.P.- 27, Part Survey No. 27, C.S. No. 1050, T.P.S. No. 24,
Mr. Chetan Rajpara Tandalja, Vadodara - 390 012.
Chief Financial Officer
• 907/4, GIDC, Makarpura, Vadodara - 390 010.
Mr. Dinesh Lahoti
Company Secretary
Registrar & Transfer Agent

Link Intime India Pvt. Ltd.

C 101, 247 Park, LBS Marg, Vikhroli West,
Mumbai - 400 083.
Tel: +91 22 4918 6000 | +91 22 4918 6270
Fax: +91 22 4918 6060
E-mail: rnt.helpdesk@linkintime.co.in
Sun Pharma Advanced Research Company Ltd

Management Discussion and Analysis (MD&A)

Global Pharmaceutical Industry • The growing body of knowledge: Leading to the
development of new therapeutic strategies that
During the FY 2021 – 2022, the biopharmaceutical industry increase treatment options and improve outcomes
continued to innovate and bring novel medications to for patients. Many patient populations that
patients worldwide. Apart from making ground-breaking previously were treated with nonselective agents are
contributions to COVID-19 in the form of vaccines and now receiving targeted agents that are tailored to
therapeutics, the biopharmaceutical industry has also the molecular and clinical features of their disease.
done a remarkable job of adapting and re-focusing,
overcoming many operational and organisational The cautious outlook has led to increase in investors
challenges. selectivity for the potential investment opportunities.
While the markets may ease but funding is expected to
Biotech sector soared during the pandemic, with venture remain challenging at the same time late stage data
capital investment and IPO volumes hitting all-time backed companies and technology validations would
highs. But recently, stock valuations have plummeted continue to attract significant level of capital.
as a result of being part of a larger market downturn,
pricing challenges and the concern that biotech stocks Overall, the outlook for the sector is positive and that is
are at unsustainable valuation levels. evident from the growth expected in the drug usage and
sales for the pharmaceuticals worldwide.
Industry leaders believe that the business outlook
for pharma companies continues to be positive. The The worldwide total prescription drug sales are
cautious positive outlook is driven by multiple factors, forecasted to increase at a 6.4% compound annual
key factors supporting the outlook are: growth rate (CAGR) from USD 1031 billion in 2021 to
USD 1407 billion in 2026. This includes generics, orphan
• New therapeutics are queued up in the pipeline: drugs, and other prescribed drugs.1
Different therapies are still in early development,
spurred by advances in gene editing and cell The growth in prescription drug sales is backed by a
therapy. pipeline of continuous development of Novel Active
Substances (NASs). The USFDA designated 44 (61%) of the
• Big pharma is prospering and ready for deals: Big 72 NASs introduced in the United States in 2021 as first-
pharma companies have “historic” amounts of cash in-class, and over half had an orphan drug designation,
on hand for deals and partnerships. Many companies suggesting that they were intended for patients with
have experienced growth and are emboldened with uncommon conditions. This is an increase over the last
stronger balance sheets from which to invest.

Worldwide Total Prescription Drug Sales1

1,600
ww Prescription Drug Sales (USD bn)

+6.4% CAGR 2021-26

1,400

1,200

1,000
1,040
800 967
901
817 846
600 794
659 681 689
613 614 624
400 598 598 598

200 221 248 268

138 155 172 194
66 72 78 82 90 99 111 123
0 67 70 76 78 81 82 74 74 74 82 85 89 92 96 99
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Generics Orphan Prescription excl. Generics & Orphan

2
Annual Report 2021-22 Management Discussion and Analysis (MD&A)

five years, when the proportion of approved NASs that use of CRISPR, the first human trials using gene-editing

Statutory Reports
were first-in-class drugs, stayed stable around 43%. technology. The USFDA drafted guidance to improve the
In the same five-year period, 51% of new drugs were flexibility and efficiency of drugs under development,
designated as orphan drugs.2 including how to combine multiple therapies into novel
trial designs like single "umbrella" trials to maximise
Orphan drugs are used to treat rare diseases, defined compatible evidence generation across medicines.
as less than 20,000 cases in the US. Multiple biopharma
companies have focused their innovation on this area Also, the USFDA updated its advice on oligonucleotides,
due to the abbreviated regulatory pathways in the real-world evidence (RWE), and digital health
US. Other developed countries have followed suit and technologies, among other areas of drug development.2

Financial Statements
enacted favorable regulatory policies, allowing for
growth over the last decade. It is estimated that the The conducive development environment has led to an
orphan drugs market was about USD 155 billion in 2021 increase in investment from the past 2 years, especially
and is expected to reach USD 268 billion by 2026.1 in the year 2021.The global Research & Development
(R&D) spend is expected to reach USD 254 billion at a
The USFDA (US Food and Drug Administration) kept pace on CAGR of 4.2% from 2020 to 2026.1 While the bulk of this
approval of new drugs, the US drugs regulator approved 58 increase in R&D spend is expected to come from large
novel drugs last year, the highest number for the last three biopharma companies, smaller players with cutting
years and well above the 10-year average of 48 novel edge science are expected to have access to capital
drugs. With travel limitations blamed for decision delays to support their R&D. Among large pharmaceutical
in a number of cases, this uptick could presumably have companies, Roche had the largest R&D budget in 2021 at
been steeper under more normal conditions.3 USD 16 billion (14.8 billion Swiss francs)4 and is expected
to retain this position in 2026.1 In the United States,
In addition to drug approvals, during the FY 2021-2022 the total R&D spending among major pharmaceutical
USFDA also made notable regulatory decisions. Some companies in 2020 stood at USD 72 billion, which was
of the significant events included the acceptance of approximately 21.4% of total sales.5
an IND (Investigational New Drug application) for the

USFDA Approvals of New Drugs3

70

61
60 58
56 56
54

49
Approval Count

50 49

42

40

32

25
30

20
2012 2014 2016 2018 2020

US New Drugs Approval Count

3
 Sun Pharma Advanced Research Company Ltd

Worldwide Total Pharmaceutical R&D Spend1,6

280 +16.0%
260
+4.2% CAGR 2020-26 254 +14.0%
WW Pharma R&D Spend (USD bn)

240 248
239
220 237 +12.0%

R&D Spend Growth (%)

226 202
200
+4.7% CAGR 2012-20 212
180 190 +10.0%
182
160 169
160
140 145 149 +8.0%
139 +7.0%
120 137 +7.8%
+7.1% +5.8%
100 +6.0%
+4.4% +5.9%
80
+4.0%
60 +4.2% +4.1%
+2.5%
+1.7% +3.5% +3.3% +3.5%
40 +2.9% +2.0%
20
0 +0%
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

While there have been bright spots during the past year, Volatility in energy prices, disruption of supply chains
the biopharmaceutical industry did face challenges in in Asia and Europe have built inflationary pressure
2021, prominent among which were those associated globally. In response, the Federal Reserve announced
with the COVID-19 pandemic which continued to loom the biggest benchmark interest rate increase in two
over ongoing clinical studies in FY 2021 - 2022, albeit decades. All of this contributes to rapid reduction in
to a lesser degree than in 2020. The number of new biopharma valuations.
clinical trial starts increased 14% in 2021 compared
to 2020 due to biopharma companies successfully It is possible that markets may ease in the near-to
adapting to the new environment.2 Among other medium-future, it is likely that valuations will continue
factors, this is partially attributable to the number of to be under pressure, even for companies with late-stage
clinical studies to test therapies and vaccines aimed clinical assets that can attract capital. While 2021 was
at COVID-19 and the studies-start that were delayed in a record year for healthcare IPOs, around two-thirds
2019 and 2020. The uptick is being driven by shifts to of companies that went public are now trading below
more data-driven methods across the value chain, more their issue price,9 further demonstrating the previously
strategic partnerships, and digital transformation. mentioned bearish sentiment and raising questions
While suspended trials did resume enrolment in 2021, over the funding models for early biotech companies.
many continued to experience enrolment disruptions or This trend continued in the first quarter of 2022, with
suspensions.7 low IPO volume and value; six companies went public
raising USD 735 million only.10

Trends in the US Biopharma Market One of the possible reasons for the caution amongst
investors is the lack of positive outcomes reported
While there was scientific advancement, market by the biotech companies. Per a report from Morgan
sentiment for the biopharmaceutical industry in the US Stanley, among companies with a market capitalization
was bearish in 2021 and in the first quarter of 2022. The of greater than USD 50 million, the proportion of
tumultuous ride US capital markets experienced during biotech companies reporting positive news has been
second half of 2021 continued into 2022. Since the 2008 steadily declining from 61% in the Q1 2020 to about 29%
financial crisis, this has been the longest period of high in Q1 2022,11 a drop of 30% in a period of 2 years. There
volatility as investors remain unsure of the outlook were multiple reasons for the negative data flow, chief
given geopolitical concerns and inflation in the US.8 among them being clinical holds, failure of clinical

4
 Annual Report 2021-22 Management Discussion and Analysis (MD&A)

hypotheses that held promise, and regulatory pressures In line with the USFDA’s push towards mandating

Statutory Reports
on new approvals. The downside of this negative data clinical trials from the perspective of ethnicity to
flow is the drag-down of any potential upside from treat a diverse population, as well as to ensure use
positive data. of comparators equivalent to standard-of-care in the
United States, pressure has been brought upon drugs
While the number of clinical holds have largely remained with single / few-country trials.
stable in the past 5 years, 2021 saw a significant
increase over the past years. In this context, it is worth noting that while it is possible
to score an approval with an aggressive regulatory
USFDA Clinical Holds 11
strategy, it does not guarantee commercial success.

Financial Statements
90 The most significant example of this is Aduhelm from
80 Biogen, which was approved by the USFDA despite
Number of clinical holds*

70 concerns raised by the Advisory Committee and the

subsequent restriction of coverage to clinical trials
60
by the Centers for Medicare and Medicaid Services.
50
This reveals the significant effort required to bring key
40 opinion leaders and payors on-board in parallel with
30 the registration process.
20
Another source of regulatory pressure on biopharma
10 innovation has been on drug pricing, especially in the
0
United States. While the issue of lowering drug prices has
2016 2017 2018 2019 2020 2021 2022 evinced interest recently, no specific legislative action
has been taken, furthering the volatility. However, non-
*Including Clinical and Partial Holds
legislative actions have taken place. A key example of
this is the USFDA’s decision to allow interchangeability
The US stock market has reacted negatively to clinical
of insulin biosimilars with their branded equivalents.
failures, a prominent example being BridgeBio, whose
stock lost 70% of value after the announcement of failure Although the capital environment is not conducive to
of its Phase III study in patients with symptomatic raising new capital in these turbulent times, validation
transthyretin amyloid cardiomyopathy (ATTR). Even of novel platforms and technologies will likely continue
large pharma such as Roche AG and Sanofi SA saw their to attract considerable capital. Some of the areas in
stock price dragged down following announcements which the industry witnessed transactions or attracted
of their SERD (Selective Estrogen Receptor Degrader) investors include ADCs (Antibody Drug Conjugates),
programs missing their primary endpoints. PROTACs (Proteolysis Targeting Chimeras), and RNA-
based therapies. ADCs have recently matured as a
Regulatory pressure on approved drug class also
therapeutic-class and validated by commercial success.
affected investor sentiment. As an example, the black
PROTACs have garnered lot of interest as they have
box warning of cardiac side effects for the entire class
the potential to target proteins that were previously
of JAK inhibitors has hurt companies and investors
considered undruggable. PROTACs are expected to be the
with significant commitment to the class. Similarly,
next generation therapies with blockbuster potential.
in oncology, USFDA highlighted several issues relating
There has been a boost in valuation of companies
to the development of PI3K inhibitors in hematologic
focussing on mRNA platforms reflecting optimism
malignancies: concerning trends in overall survival
that mRNA technology can deliver much more than the
(OS) in multiple randomized controlled trials (RCTs),
current prophylactic COVID-19 vaccines.
toxicities of the PI3K inhibitor class, inadequate dose
optimization, and trial design considerations regarding ADCs comprise an antibody that recognizes epitopes
the limitations of single-arm trials. The experience with on cells and delivers a payload to act on the cell. In
this class raises a question of whether single-arm trials case of oncological applications, the payloads are
should be avoided as a regulatory strategy in favor of intended to kill cancerous cells. Thus, these function
randomized controlled trials. as “Trojan Horses” with the potential to target the

5
Sun Pharma Advanced Research Company Ltd

delivery of highly potent chemotherapeutics to cancer therapies are that it can block all targets, including
cells without the systemic liabilities. In the clinic, this those that are ‘non-druggable’. Other types of drugs,
expands the treatment window for these therapies such as small compounds and monoclonal antibodies,
compared to non-targeted, systemic delivery. Due to function downstream of RNAi therapies, which is a
this, ADCs have blockbuster potential despite currently significant feature.
being overshadowed by immune checkpoint inhibitors
such as PD-1/PD-L1inhibitors. The burgeoning pipeline More than two decades after the natural gene-silencing
of ADCs in development, recent approvals, and positive mechanism of RNA interference was elucidated,
data coming out of pivotal clinical studies have siRNA-based therapeutics have finally broken into the
generated significant commercial interest from big pharmaceutical market. With multiple agents already
pharma. approved and many others in advanced stages of the
drug development pipeline, siRNA drugs are on their way
PROTACs or proteolysis-targeted chimera are small to becoming a standard modality of pharmacotherapy.
molecules with heterobifunctionality – to bind a protein The majority of late-stage candidates are indicated for
of interest (POI) at one end and E3 Ubiquitin ligase rare or orphan diseases, whose patients have an urgent
at the other. The protein of interest thus gets tagged need for novel and effective therapies. Additionally,
with ubiquitin and is shuttled through the proteolysis there are agents that have the potential to meet the
machinery. This approach has multiple advantages that need of a broader population.
could earn it blockbuster status. Chief among these is
that complete proteolysis eliminates functionality of Overall, RNAi therapies have a lot of promise as a
the protein. Weaker binding to the POI does not reduce therapeutic method, potentially introducing a new
efficacy and binding-site specificity is not as central to class of medications to address unmet needs.
its efficacy as with small molecules and monoclonal
In addition to the continued validation of new
antibodies. Perhaps most importantly for oncology
modalities, the industry is also witnessing availability
is that by virtue of binding anywhere on the POI, the
of funding for cutting-edge science. In the biotech
PROTAC is not affected by point mutations that may
sector, VC funding peaked in the first quarter of 2021
arise and confer resistance.
and has declined slightly since. Despite recent dips in
The COVID-19 pandemic saw a significant uptick in the valuations of newly public companies and a slight
valuation for RNA-based innovators, due to the global decline in VC funding over the past four quarters, VC
immunization campaign using mRNA vaccines. This companies continue to plow money into biotech. The
is evidenced by the increase in the combined market exuberance of these seasoned early-stage investors
capitalization of the 5 listed mRNA platform-focused signals that they see the potential for significant
companies from USD 15 billion at the end of 2019 to breakthroughs in how drugs are discovered, targeted,
over USD 300 billion by August 2021.12 This represents and delivered. Start-ups with cutting-edge platform
an optimism that mRNA therapeutics can go beyond technologies—which constitute a base or infrastructure
vaccines and be deployed as therapeutic interventions. on which other therapies can be developed—have
benefited the most. An example of this trend is Eikon
The biological process of RNA interference (RNAi), also Therapeutics which utilizes the 2014 Nobel Prize in
known as gene silencing, controls gene expression by Chemistry winning technology of super-resolution
interfering with messenger RNA (mRNA). Errors in DNA microscopy to design therapies for targets previously
coding results in incorrect mRNA, which produces thought to be ‘undruggable’. Their process also uses
disease-causing proteins. It is possible to target and CRISPR and Artificial Intelligence / Machine Learning
destroy particular mRNA using small interfering RNAs (AI/ML) technologies. Venture investors have responded
(siRNAs). siRNA can potentially be employed as a positively enabling Eikon to raise approximately USD
therapy by increasing the levels of non disease causing 660 million in two years.13,14
proteins that are implicated in disease pathways. The
main benefits of RNAi over small-molecule and protein

6
Annual Report 2021-22 Management Discussion and Analysis (MD&A)

More than two-thirds of venture capital biotech funding from 2019 to 2021 went to start-ups with

Statutory Reports
platform technologies15

Seed to series C VC funding in privately held biotech companies, 2019-21, USD billion

Cell Therapy 2.0 Next-generation

gene therapies

Financial Statements
7.7 7.6

Precision Machine Validated New Small

34.6 medicine learning- “undruggable” delivery molecules
Platform-based
enabled drug targets methods 0.8
therapeutics
discovery
Other
biologics

4.5 4.4 4.0 2.3 3.4

Immunology
Immuno-oncology Neurological Infectious Other
disorders diseases 0.9
Metabolic
17.2 diseases
Other 4.6 0.8
therapeutics Cardio-
Other oncology vascular
0.6
2.4 2.9 2.5 Aging
0.5 2.1

Increasingly, biopharma companies are employing technology such as electronic monitoring devices and
AI/ML tools in drug development. This is an added mobile applications and seek to eliminate/reduce
layer of sophistication to earlier computational drug physical sites. In the long term, virtual clinical trials
discovery resources. Traditionally, computational and enable sponsors to reach a broader patient population,
modelling tools have been used across the value chain increased patient diversity, broader geographical
from target identification, through lead optimization, representation, better compliance, and reduced
till preclinical testing. AI/ML builds on these tools and dropout rates, all the while being faster and more cost-
provides greater predictive capabilities. This includes effective than traditional clinical trials. Another use
predicting the 3D structures of proteins and de novo of technology in conduct of clinical trials include the
drug design. Importantly, AI can also be used to design use wearable devices and smartphone applications
multispecific drug molecules with polypharmacologic enabling collection of vast amounts of data, not always
efficacy for a greater potency. Multiple new technology- available in the clinical setting, in real time.
enabled drug discovery companies are now pushing the
Another positive disruption in the biopharma industry
frontiers of drug discovery. However, a critical caveat to
has been the rise of innovation in Emerging Markets.
this story is that AI-discovered drugs/targets have not
These Emerging Biopharma Companies or EBPs were
yet been clinically validated.
responsible for half of the NASs released in the United
The use of technology is also increasing in execution States in 2021. In 2021, the EBPs submitted a regulatory
of clinical trials; virtual, hybrid, or decentralized filing to the USFDA for approval of 76 % of their originally
clinical trials may become preferred options compared developed pharmaceuticals, maintaining the high
to classical trials. Virtual clinical trials utilize rate seen in prior years and demonstrating increased

7
 Sun Pharma Advanced Research Company Ltd

independence in development and commercialisation businesses have established a global imprint, owing to
operations.2 An example of this is the USFDA approval their price competitiveness and high quality.
of Brukinsa (Zanubrutinib). Brukinsa was developed by
China-headquartered BeiGene which now operates
globally. BeiGene and other China based pharmaceutical
Pharmaceutical Development through R&D in India
companies have successfully navigated the China-US The Indian pharmaceuticals industry has established itself
innovation corridor. This presents an attractive model
as an important contributor for the ever-growing demand
for other Emerging Biopharma Companies, including
for pharmaceutical products and solutions globally.
those in India.
However, India lacks adequate number of world class
Despite a decline in overall global activity and a wariness pharmaceutical R&D facilities focussed on innovative
from investors toward pre-profit companies in some drug discovery & research.
industries, the biopharmaceutical sector continues to see
significant levels of interest and investment. This is being Innovation in the pharmaceutical sector will require
driven by a number of factors, including a strong pipeline effective collaboration (amongst industry experts and
of innovative technology and new drugs in advanced academicians) and financial aid. According to the
R&D stages, robust demand from investors, who seek to Brookings report, India has a mere 216.2 researchers per
leverage the higher returns on investment associated 1 million population as against 1200 in China, 4300 in
with the industry and the need for pharma companies to the US, and 7100 in South Korea.20
replenish their pipeline to secure future revenue. Although
geopolitical factors are expected to impact the overall The Government of India has recently introduced many
global market. The underlying strength of this sector is initiatives for the advancement of R&D in the pharma
expected to promote deal making. sector. The government has developed measures
such as Bio-NEST and BioTech Science Clusters to
strengthen the biotechnology sector. Four bio-clusters
Indian Pharmaceutical Industry
have been formed to bridge the gap between industry
Indian Pharmaceutical sector has been growing over and academics in research and innovation, provide
the years and today ranks third in the world in terms incubation space for start-ups, and catalyse R&D and
of manufacturing volume. India accounts for about entrepreneurship activities.
20% of the global supply of generic medications.
Indian pharma companies have become significant The Department of Pharmaceuticals (DoP) has drafted
participants in the global market because of their a policy to encourage R&D and innovation in India's
high quality and low-priced products, thus making the pharmaceutical and medical device industries.
country the ‘Pharmacy of the World’. The Indian pharma
industry is currently valued at USD 41.7 billion and is Strengthening the legislative framework, rewarding
estimated to reach USD 65 billion by 2024 and USD 120 investments, and fostering a facilitatory innovation
- USD 130 billion by 2030.16 ecosystem should all be pillars in India's quest to
become the global pharma research and innovation hub.
Trade of Pharmaceutical industry17,18,19
30.0
24.4 However, there are still fundamental shortages in the
Value in USD billion

25.0
19.5 healthcare sector, such as universal health coverage,
18.75
20.0 16.91 R&D activities, trained labour availability, rural
16.61 16.45
15.0 population access to health services, and a favourable
regulatory environment for manufacturers. With
10.0 7
5.65 5.7 COVID-19, India has realised its considerable potential
4.89 4.45 4.89
5.0
of what can be accomplished if all stakeholders,
0.0 including industry, government, and regulators, work
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Imports Export together. With continued efforts to innovate new
products and provide quality, affordable drugs, India
With 60% of the world's vaccines and 20% of generic can rise up the value chain and genuinely becoming the
medications coming from India, Indian pharmaceutical world's pharmacy, both in terms of volume and value.21

8
Annual Report 2021-22 Management Discussion and Analysis (MD&A)

Opportunities and Challenges environments and curricula that produce talent that

Statutory Reports
are industry ready and can hit the ground running.
Opportunities
Challenges:
1. The Department of Pharmaceuticals has recently
introduced a draft policy to catalyse R&D and 1. Limited Financial Infrastructure: India's R&D
innovation in the Pharma- MedTech Sector in investment is significantly lower than that of
India with the objective of enabling a conducive other developing countries. Private finance is also
regulatory landscape to accelerate R&D and drive essential for a country's innovation to thrive. The
targeted funding, build strong industry-academia R&D process is lengthy and hazardous, especially

Financial Statements
collaboration in line with global best practices, and in the pharmaceutical industry. Even the largest
create best-in-class infrastructure for innovation in Indian pharmaceutical businesses find it difficult
pharma-medtech sectors. The policy aims to simplify to fund numerous breakthrough R&D projects
regulatory processes to enable rapid drug discovery; without external support.
to explore mechanisms to incentivize private sector
2. Keeping up with technology: In the last several
investment in research and evaluate various funding
decades, technology has advanced at an incredible
mechanisms; to identify mechanisms to strengthen
rate. There is a need to not only keep up with
the R&D ecosystem through increased collaboration
evolving technologies but also be at the forefront
between industry and academia
of embracing new ones.
2. The Indian Government has shown intent to reverse
3. Limited Incentives for R&D: There are limited
the brain drain with the New Education Policy, 2020.
schemes /incentives for the R&D segment in India
This is certainly an important step towards creating
compared to other developed nations. This hinders
a better academic ecosystem but there is more to
the growth of the pharma sector.
do to incentivize academia to build educational

Key Financial Ratios

Key Financial Ratios FY 2021 - 2022 FY 2020 - 2021 Reason
Debtors Turnover 6.06 15.05 Due to higher revenue during previous year
Inventory Turnover (no. of days) N.A. N.A. Due to nil inventory
Interest Coverage Ratio (in times) N.A. N.A. Due to higher losses
Current Ratio (in times) 0.42 0.26 Due to repayment of borrowings during
the year
Debt Equity Ratio (in times) 2.40 (1.37) Due to issue of convertible warrants
and equity shares during the year
Operating Profit Margin (in %) (139.85) (56.12) Due to higher revenue during previous year
Return on Net Worth (in %) N.A. N.A. Due to average negative net worth
Net Profit Margin (%) (148.19) (59.75) Due to higher revenue during previous year

SPARC’s Response to Global Trends to fully leverage the competitive advantages of its
operating model. We intend to move cautiously given
SPARC is currently focused on a narrow set of problems the demands on our resources.
in three therapeutic areas. Our endeavor is to narrow
that further so that we increase our depth and effort on In step with global trends, SPARC has pivoted to
each of the problems we focus. adopting new technologies and modalities across
the developmental value chain. Over the past years,
The key objective for SPARC in the near term is to SPARC has built expertise in computational drug
complete the current clinical trials to deliver the next discovery, bioinformatics, and AI/ML. As an example,
set of catalysts. Our recent successes in biologics our machine learning capabilities enables us to
promise a potential platform play centred on a set of predict pharmacokinetic properties of candidate
antibodies targeting Muc-1 α/β junction. We are also drug molecules. In parallel with building internal
exploring additional assets on the platform, most capabilities, SPARC collaborated with technology-
notably multi-specific immunofusions. SPARC will driven companies such as Schrödinger and Hitgen. In
continue to invest in several critical competency areas 2021, SPARC collaborated with One Three Biotech, an AI

9
Sun Pharma Advanced Research Company Ltd

company, to understand the mechanistic underpinnings by a variety of cancer cells, bearing the promise of a
of a key enzymatic pathway in oncogenesis. platform therapy across modalities: multi-specifics,
T-cell engagers, and antibody-drug conjugates (ADCs).
In the discovery stage, the Company has built robust
capabilities in biologics with the ability to create While lab operations of SPARC resumed in earnest in
modular platforms of immunofusions and antibody- 2020 and continued in 2021, COVID-19 continued to
drug conjugates. SPARC’s transition to antibodies and impact enrolment for our clinical studies. In FY 2021
conjugates provides SPARC with a unique advantage - 2022, SPARC continued to put in place measures to
of being able to develop both small molecules and improve enrolment and ramp-up patient recruitment in
large molecules in-house, which only a handful of R&D FY 2022 - 2023.
focused companies possess. SPARC’s foray in biologics
will expand the playing field for SPARC. Our clinical studies in six indications continue to
ramp-up and recruitment is underway. Our lead asset
SPARC’s continued efforts on external collaborations vodobatinib is currently being tested in early-stage
has led to building a mature process to source Parkinson’s Disease (PD) and late-stage refractory
innovative assets from both academia and biotech Chronic Myeloid Leukemia (CML). Sun Pharmaceutical
companies. SPARC has engaged multiple US academic Industries Ltd. (SPIL) continues to advance vibozilimod
centres for joint development programs targeting novel (SCD-044) through Phase 2 studies in two indications
biology in the area of oncology, neuro-degeneration and – psoriasis and atopic dermatitis. A Phase 1 study
immunology. During FY 2021 - 2022 SPARC progressed in healthy volunteers was completed for SCO-120,
on multiple collaborative projects and also acquired indicated for the treatment of metastatic breast cancer.
exclusive rights for antibody against a unique oncology
target from Biomodifying Inc. During the year we raised USD 148 million with
participation by our promoter group and other marquee
SPARC’s initial efforts on NDDS based programs have domestic and foreign institutional investors. SPARC
led to early success with multiple programs approved/ received INR 278 Cr (~USD 37 million) being 25%
filed and SPARC is well poised for next infliction point payable on application, balance 75% i.e. INR 834 Cr
with read outs from the key studies for the NCEs under (~USD 111 million) to be received within 18 months upon
clinical development expected in next 12 – 18 months. conversion of warrants by investors. The available cash
from conversion of warrants will be sufficient to cover
the cost of ongoing clinical studies.
SPARC’s Operating Model & Performance Overview
Additionally, to advance our pre-clinical assets and
During the year 2021-22 the Company completed the
to augment our pipeline we had obtained shareholder
pipeline transition towards novel biology and has
approval at the last AGM to raise an additional sum
built a multi-modal toolkit. Throughout this transition,
upto INR 1,800 crores (USD 240 million). The Company
our mission has remained consistent: to continuously
also has a line of credit of INR 475 crores (~USD 63
improve standards of care for patients globally through
million) to meet any interim funding requirements
innovation in therapeutics and delivery. SPARC’s portfolio
now comprises several high-value first- and best-in-
class opportunities at various stages of development. Progress on Key Programs

Overall, SPARC has built a mature R&D organization with 1. ElepsiaTM XR

capabilities across the value chain, and an attractive
portfolio with multiple high-value assets. SPARC had licensed the US commercialization
rights for ElepsiaTM XR 1000mg and 1500mg to
The FY 2021 - 2022 continued to provide validation for Tripoint Therapeutics. Under this agreement, SPARC
our business model. Following the positive readout is eligible to receive tiered royalties ranging from
from Phase 3 studies for our ophthalmology programs, 15% to 50% of net sales.
SPARC successfully licensed the commercialization
rights for PDP-716 and SDN-037 to Visiox Pharma, a The commercialization of ElepsiaTM XR commenced
specialty pharma company focused on ophthalmology. in 2021. Tripoint completed the field launch meet
Additionally, SPARC in-licensed the worldwide rights and training of the sales team. There are now 40
to a novel antibody against a unique target expressed representatives actively promoting ElepsiaTM XR in
the United States.

10
Annual Report 2021-22 Management Discussion and Analysis (MD&A)

2. PDP-716 for the treatment of open-angle glaucoma seizures in neonates. It was granted an orphan drug

Statutory Reports
designation by the USFDA. During FY 2021 - 2022,
PDP-716 is a novel, once-a-day formulation of SPARC submitted a NDA to the USFDA for approval
brimonidine developed using SPARC’s proprietary of its formulation of phenobarbital. SPARC is in
TearActTM technology. The previously concluded discussion with potential partners for licensing the
Phase 3 study demonstrated functional equivalence commercialization rights of phenobarbital.
of PDP-716 and Alphagan® P 0.1% dosed three times-
a-day in reducing intraocular pressure. 5. Vodobatinib for the treatment of CML (SCO-088)

SPARC licensed the global (excluding India Vodobatinib is a novel, highly-selective c-Abl

Financial Statements
and greater China) commercialization rights to inhibitor for refractory CML. The pivotal study
Visiox Pharma with eligibility to receive upfront is recruiting patients who have failed 3 lines
payment, milestone payments, and royalty on sales. of treatment including ponatinib. In FY 2021 -
Additionally, SPARC received a 10% equity stake in 2022, recruitment for this study was impacted as
Visiox Pharma (subject to regulatory approvals). multiple ponatinib using countries were still facing
COVID-19 related issues. SPARC continues to take
During FY 2021 - 2022, SPARC closed out the Phase steps to improve recruitment rates.
3 study and recently had a pre-NDA meeting with
USFDA. The outcome of the pre-NDA meeting was During FY 2021 - 2022, SPARC presented the results
positive and Visiox Pharma along with SPARC plans of the ongoing study at the 2021 ESH and ASH
to submit a NDA in FY 2022 - 2023. Annual Meetings as an oral presentation. This
was the second consecutive year of SPARC being
3. SDN-037 for the treatment of pain and inflammation selected for an oral presentation, demonstrating
following ocular surgery the hematology-oncology community’s belief in the
promise of vodobatinib.
SDN-037 is a novel, twice-a-day formulation of
difluprednate developed using SPARC’s proprietary Vodobatinib continues to demonstrate durable
technology. The previously concluded Phase 3 study long-term response across Phase 1 cohorts, with
demonstrated patients receiving SDN-037 achieved 68% of enrolled patients continuing on vodobatinib
an Anterior Cell Chamber [ACC] grade of 0 (zero after 1 year and ~47% continuing treatment after 2
inflammation) versus vehicle alone, with p value years from treatment initiation.
<0.0001. SDN-037 was generally well tolerated with
adverse events consistent with those generally SPARC expects pivotal study data readout of SCO-
observed with difluprednate. 088 in FY 2023 - 2024.

SPARC licensed the global (excluding India and 6. Vodobatinib for the treatment of neurodegenerative
greater China) commercialization rights to Visiox diseases (SCC-138)
Pharma.
Vodobatinib is being investigated for multiple
Visiox Pharma is working with SPARC for NDA neurodegenerative diseases and is a potentially
submission of SDN-037. first-in-class disease modifying treatment.

4. Phenobarbital Sodium for the treatment of neonatal The Phase 2 study in Parkinson’s disease (PROSEEK) is
seizures currently recruiting patients and over 65% patients
are randomized. This study was impacted due to
Phenobarbital injection is the current standard-of- COVID-19 related lockdowns and SPARC continues
care for neonatal seizures but is not approved by the to work on ramping up recruitment. SPARC aims
USFDA for safety, quality, or effectiveness. Critically, to complete the patient recruitment by the end of
the marketed formulation of phenobarbital contains FY 2022 - 2023 and the topline readout from this
benzyl alcohol as a preservative, which is known to study is expected in FY 2023 - 2024.
cause “gasping syndrome” in neonates.
An additional Phase 2 investigator-initiated study
SPARC has developed a benzyl alcohol-free is also recruiting patients with Lewy Body Dementia
formulation of phenobarbital for treatment of at Georgetown University, Washington D.C.

11
Sun Pharma Advanced Research Company Ltd

7. Vibozilimod for the treatment of autoimmune Human Resource Strategy

disorders (SCD-044)
Strategic human resource management is the foundation
Vibozilimod (SCD-044) is a selective S1PR1 agonist of a strong business. At SPARC, a young dynamic team of
in development for autoimmune disorders. promising and talented employees, work relentlessly to
pursue SPARC’s business plans. With high focus on the
SPARC previously licensed the global rights of
Sunology values of Innovation, Initiative, Passion and
vibozilimod to SPIL which is recruiting patients for
Humility, the HR of the Company is aligned towards hiring,
Phase 2 studies in Psoriasis and Atopic Dermatitis.
developing and retaining highly proficient talent and works
8. SCO-120 for the treatment of HR+, HER2- metastatic to provide an inclusive environment that is welcoming to
breast cancer all across diversities. The HR department continuously
benchmarks best practices across the industry - in the
SCO-120 is a novel, orally bioavailable, SERD areas of Talent Management, Learning & Development,
for the treatment of Hormone Receptor positive Performance Management System and Employee Care.
(HR+), Human Epidermal Growth Factor Receptor This is done with the objective to provide highest levels
2 negative (HER2-), metastatic breast cancer. of employee experience and keep its workforce motivated,
During FY 2021 - 2022, SPARC completed a Multiple knowledgeable and progressive, aligning employees with
Ascending Dose (MAD) study and a Food Effect study business goals. The team continuously works towards
in healthy volunteers. A Phase 1 study in patients improving processes and takes initiatives to align our
has been initiated and the study is expected to people processes with the changing business requirements
begin recruitment in H1FY 2022 - 2023. to create a culture of continuous learning and innovation.
To enhance its R&D capabilities, the Company regularly
collaborates with some of the top Indian universities and
Outlook
training institutes and imparts skill development trainings
SPARC’s portfolio has multiple mid-stage assets in to its employees and prepare them according to the
oncology, neurodegeneration, and immunology with change in business strategies. Effective communication
significant commercial promise. Additionally, our robust platforms are used to foster transparency and create open
translation engine has the potential to accelerate the forums for discussions to address concerns.
advancement of novel therapies from the lab to clinic.
As on 31st March 2022, the Company has a dedicated
In the near-term our focus will be on execution, we will team of 403 employees (Across India and the US), of
work with our partners to drive the uptake of XelprosTM which 85% are scientists.
and ElepsiaTM. Additionally, we will be working closely
with Visiox Pharma for the submission of NDAs for the Risks and Concerns
two ophthalmology programs in H1FY 2022 - 2023. We
have submitted the NDA for phenobarbital in FY 2021 - Company’s R&D activities takes it on new roads and
2022 and expect that this program will be partnered in paths but the core focus is to adhere to risk tolerance
H1FY 2022 - 2023. thresholds. The Company may be affected by risks
and uncertainties related to product development,
For our NCE programs in clinical development we regulatory approval, patent and proprietary
will continue our efforts for ramping up the patients rights scope, market competition, technological
recruitment rates. In the medium-term, we are working advancements. Foreign exchange rate variations can
on moving two additional programs to first-in-human also affect sales, profitability, and cash flows. As a
Phase 1 studies. Our hunt for new programs – both result the Company works hard to identify important
from internal ideation and external partnerships – will risks and adopt mitigation strategies to lessen the
continue to augment our pipeline. impact on the operations of the Company.

In the mid to long-term, our pivot towards NCEs, NBEs,

and complex modalities for targeted delivery, has Internal Control Systems and their Adequacy
the potential to create greater value. We continue to
aggressively build new capabilities to support this The Company maintains adequate internal control
transition to higher-value opportunities. systems commensurate with the size, nature and
complexity of its business operations. These controls are

12
Annual Report 2021-22 Management Discussion and Analysis (MD&A)

regularly tested for their adequacy and effectiveness by uncertainties that may materially alter actual results.

Statutory Reports
internal as well as external auditors of the Company. The assumptions hereby made are based on available
Further, the Audit Committee reviews the audit reports internal and external information and certain facts
for each quarter and monitors the implementation of and figures stated in the report. The factors underlying
auditors’ recommendations. such assumptions may change over time along with
the estimates on which they are based. The forward-
looking statements represent the Company’s intentions,
Disclaimer
beliefs or expectations and it speaks of assumptions
Certain statements in the annual report, related made on the date when the facts were made available.
to the future prospects of the Company may be The Company assumes no obligation to revise or

Financial Statements
forward looking statements which involve a number update forward-looking statements on account of new
of underlying identified / non identified risks and information, future events, or otherwise.

References:
1
World Preview 2021, Outlook to 2026, 14th Edition, July 2021, 12
Evolution of the market for mRNA technology, Xie et al.,
Evaluate Pharma September 2nd 2021, Nature Reviews Drug Discovery
2
Global Trends in R&D, Overview Through 2021, IQVIA Institute, 13
Company press release: May 5th 2021
February 2022 14
Company Press Release: January 6th 2022
3
The FDA brushes off the pandemic with a pick-up in novel drug 15
What are the biotech investment themes that will shape the
approvals; Evaluate Vantage, January 2022 industry? June 10th 2022, McKinsey Insights
4
Top 10 pharma R&D budgets in 2021, Fierce Biotech, Mar 14, 2022 16
Pharma industry in India: Invest in Indian Pharma Sector
5
2021 PhRMA Annual Membership Survey (investindia.gov.in)
6
Total global pharmaceutical R&D spending 2012-2026, July 27th 17
Department of Pharmaceuticals, Ministry of Chemicals &
2022, Statista Fertilizers, Government of India, 2019 – 20 Annual Report
7
Covid-19 two years on: persistent symptoms of clinical trial Department of Pharmaceuticals, Ministry of Chemicals &
18

disruption trouble certain therapy areas, March 31st, 2022, Fertilizers, Government of India, 2020 – 21 Annual Report
ClinicalTrials Arena 19
Economic Survey 2021-22, January 2022, Ministry of Finance,
8
PwC Insights Q2 2022 Capital Markets Watch Government of India
9
Evaluate Vantage 2022 Preview, December 2021 20
Why Indian Pharma Must Evolve As ‘Value Creator’?, BioSpectrum
Equity capital markets - healthcare: Q1 2022 review, April 2022,
10 India, July 2022.
Mizuho 21
Impact of the pharma industry on the Indian economy in the post-
Biotech Bears: Jumping A Lower Bar Or A Higher One?, Life Sci VC,
11 COVID era. A report by KPMG in India and FICCI.
March 17th, 2022

13
Sun Pharma Advanced Research Company Ltd

Board’s Report

Dear Members,

Your Directors take pleasure in presenting the Company’s 17th Annual Report and Audited Financial Statements for
the financial year ended March 31, 2022.

FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2022 is summarized below:
(H in Lakhs)
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Total Income 14,409.35 25,836.96
Profit/(Loss) before Finance Cost, Depreciation & Tax (17,990.48) (12,956.52)
Finance Cost 1,332.87 1,065.03
Depreciation 1,016.19 1,092.33
Profit/ (Loss) before Tax (20,339.54) (15,113.88)
Tax Expense - -
Profit/ (Loss) after Tax (20,339,54) (15,113.88)
Other Comprehensive Income/ (Loss) 169.64 152.55
Total Comprehensive Income/ (Loss) (20,169.90) (14,961.33)
Balance brought forward from Previous Year (1,16,888.48) (101,927.15)
Balance carried to Balance Sheet (1,37,058.38) (116,888.48)

MATERIAL CHANGES AND COMMITMENTS ANNUAL RETURN

AFFECTING THE FINANCIAL POSITION OF THE
COMPANY, BETWEEN THE END OF THE FINANCIAL The draft Annual Return as required under sub-
YEAR AND THE DATE OF THIS REPORT section (3) of Section 92 of the Companies Act, 2013
(hereinafter referred to as ‘the Act’) in form MGT-7 is
There were no material changes and commitments, made available on the website of the Company and can
affecting the financial position of the Company, which be accessed through the web link https://www.sparc.
have occurred between the end of the financial year life/announcements-disclosures.
ended March 31, 2022 and the date of this Report.
SUBSIDIARY/ JOINT VENTURE/ ASSOCIATE
DIVIDEND COMPANY
The Company does not have any subsidiary, joint venture
In view of loss incurred during the year, your Directors
or associate company. The Company is a subsidiary of
have not recommended any dividend for the year under
Shanghvi Finance Private Limited.
review.

PREFERENTIAL ISSUE
DIVIDEND DISTRIBUTION POLICY
Pursuant to the approval by the Board of Directors at
In compliance with the requirements of Regulation 43A its meeting held on May 12, 2021 and approval by the
of the Securities and Exchange Board of India (Listing members of the Company at their Extra-Ordinary General
Obligations and Disclosure Requirements) Regulations, Meeting held on June 08, 2021 (‘EGM’), the Company, on
2015 (hereinafter referred to as ‘Listing Regulations’), July 08, 2021, has allotted 6,24,74,082 warrants, each
the Board of Directors of the Company has, formulated convertible into one equity share, on preferential basis
a Dividend Distribution Policy, which is available on the at an issue price of H178/- each, upon receipt of 25%
website of the Company and may be accessed through of the issue price (i.e. H44.50 per warrant) as warrant
the web link https://www.sparc.life/policies-and-codes. subscription money. Balance 75% of the issue price (i.e.

14
Annual Report 2021-22 Board’s Report

H 133.50 per warrant) is payable within 18 months from Company in future, in respect of the aforesaid shares

Statutory Reports
the allotment date, at the time of exercising the option shall be transferred to the aforesaid account until the
to apply for fully paid–up equity share of H 1/- each of rightful shareholders claim for the aforesaid shares. The
the Company, against each warrant held by the warrant voting rights on the aforesaid shares shall also remain
holder. frozen till the rightful owners claim the shares.

The Company, till date, has allotted 98,31,460 fully

paid up equity shares against conversion of equal no. of DIRECTORS AND KEY MANAGERIAL PERSONNEL
warrants by the concerned warrant holder(s).
Mr. Dilip S. Shanghvi (DIN: 00005588), retires by
The details of utilization of funds is given hereunder: rotation at the ensuing 17th Annual General Meeting

Financial Statements
of the Company and being eligible has offered himself
for re-appointment. The Board of Directors, on the
Particulars (J In Lakhs)
recommendation of the Nomination and Remuneration
Funds raised and available for 40,925.96 Committee, has recommended his re-appointment for
utilization till March 31, 2022 the approval of the members at the ensuing 17th Annual
Funds utilized during the year ended 39,665.47 General Meeting of the Company.
March 31, 2022
Funds available for utilization as on 1,260.49 During the year under review, the Mr. Dilip Shanghvi
March 31, 2022 (DIN: 00005588) has expressed his desire to step down
from his position as Managing Director of the Company.
There have been no deviation or variation in the use of He, however, would continue to be associated with the
proceeds from the objects stated in the offer document Company in his capacity as Non-Executive Director
(Private Placement Offer cum Application Letter dated and Chairman of the Company. The Nomination and
June 08, 2021) or explanatory statement to the EGM
Remuneration Committee and the Board at their
notice dated May 12, 2021.
respective meetings held on May 25, 2021 has noted and
accepted the same with immediate effect.
SHARE CAPITAL
On the recommendation of the Nomination and
The paid-up share capital of the Company at the Remuneration Committee, the Board at its meeting
beginning of the financial year was H 26,20,47,506/. held on May 25, 2021, had also considered, approved
During the year the Company has allotted 98,31,460 and recommended to the members of the Company,
equity shares of H 1/- each towards conversion of (i) appointment of Mr. Anilkumar Raghavan as the
warrants issued on preferential basis. As a result, the Manager and Whole-time Key Managerial Personnel of
paid-up capital of the Company as at the end of the the Company, designated as Chief Executive Officer
financial year stood increased to H 27,18,78,966/-. (CEO), for a term of 5 (five) years effective from May 25,
2021 upto May 24, 2026; and (ii) maximum remuneration
SHARES LYING IN UNCLAIMED SUSPENSE (of H 8,00,00,000 p.a.) to be paid to Mr. Anilkumar
ACCOUNT Raghavan for a period of 3 (three) years commencing
from May 25, 2021 upto May 24, 2024. The members at
In compliance with the requirements of Regulation their 16th Annual General Meeting of the Company
39(4) of the Listing Regulations, the Company had held on September 29, 2021 has approved the above
transferred 1,620 shares belonging to 14 shareholders appointment and maximum remuneration to be paid to
to “SPARC Unclaimed Suspense Account”, after sending Mr. Anilkumar Raghavan.
three reminders to the concerned shareholders and
following the procedures laid down under Schedule VI During the year under review, Mr. Debashis Dey has
of the aforesaid Regulations. resigned from his position of Company Secretary and
Compliance Officer with effect from end of working
As on March 31, 2022, 1,584 shares belonging to 13 hours of June 25, 2021. On the recommendation of the
shareholders were lying unclaimed in the aforesaid Nomination and Remuneration Committee, the Board
account. of Directors at its meeting held on July 26, 2021 has
considered and approved the appointment of Mr. Dinesh
In compliance with the requirements of the Listing
Lahoti as the Company Secretary and Compliance
Regulations, all corporate benefits declared by the
Officer of the Company with immediate effect.

15
Sun Pharma Advanced Research Company Ltd

DECLARATION BY INDEPENDENT DIRECTORS MEETINGS OF THE BOARD

The Company has received declarations from all the The Board of Directors of the Company have met seven
Independent Directors of the Company confirming times during the year. The dates of the Board meetings
that they meet with the criteria of independence as and particulars of attendance of the Directors at the
prescribed under the Act and the Listing Regulations. said meetings are detailed in the Corporate Governance
Report which forms a part of this Report. The intervening
In the opinion of the Board, the Independent Directors gaps between the meetings were within the period
of the Company fulfil the conditions specified under the prescribed under the Act and Listing Regulations.
Act and Listing Regulations and are independent of the
management.
EVALUATION OF PERFORMANCE OF THE BOARD,
ITS COMMITTEES AND INDIVIDUAL DIRECTORS
POLICY ON DIRECTORS’ APPOINTMENT AND
REMUNERATION In view of SEBI notification no. SEBI/HO/CFD/CMD/
CIR/P/2017/004 dated January 05, 2017 on ‘Guidance
For the purpose of selection of any Director, the Note on Board Evaluation’, on the recommendation
Nomination and Remuneration Committee identifies of the Nomination and Remuneration Committee, the
persons of integrity who possess relevant expertise, Board of Directors has adopted set of criteria, aligned
experience and leadership qualities required for with the recommendations of SEBI, for evaluation of
the position and also takes into consideration performance of the board, its committees and individual
recommendation received, if any, from a board member. directors.
The Committee also ensures that the incumbent
The Board of Directors have carried out an evaluation
fulfils such other criteria with regard to age and other
of its own performance, its various committees and
qualifications as laid down under the Act or other
individual directors pursuant to the provisions of the
applicable laws.
Act and the Listing Regulations.
The Board, on the recommendation of the Nomination
The performance of the Board was evaluated by the
and Remuneration Committee, has framed a policy for Board after seeking inputs from all the directors on
selection, appointment and remuneration of Directors the basis of various criteria such as Competency and
and Senior Management. The summary of Remuneration experience of the Directors, Meetings of the Board,
Policy is disclosed in the Corporate Governance Report, Roles and Responsibilities of the Board, Professional
which forms a part of this Report. Development, etc.

The complete Policy as approved by the Board is The performance of each committee of the board
available on the website of the Company and can be was evaluated by the board after seeking inputs from
accessed through the web link https://www.sparc.life/ the committee members on the basis of criteria such
policies-and-codes. as Mandate and Composition, Effectiveness of the
Committee, Independence of the Committee from the
Board, Contribution to Decisions of the Board etc.
FAMILIARISATION PROGRAMME FOR THE
INDEPENDENT DIRECTORS The Board reviewed the performance of the individual
Non-Independent Directors on the basis of criteria such
In compliance with the requirements of Regulation
as qualifications, experience, knowledge & competency,
25(7) of the Listing Regulations, the Company has
fulfilment of functions, ability to function as a team,
put in place a Familiarisation Programme for the
initiative, availability and attendance, commitment (as
Independent Directors to familiarise them with
a Director) and contribution. The performance of each
the Company, nature of the industry in which the
individual Independent Director was reviewed, based on
Company operates, business model, their roles, rights,
the additional criteria of Independence and Independent
responsibilities in the Company, etc. The details of the
Views & Judgment. Similarly, the performance of the
Familiarisation Programme conducted during the year
Chairman was evaluated based on additional criteria
are available on the website of the Company and can such as effectiveness of leadership and ability to steer
be accessed through the web link https://www.sparc. the meetings, impartiality, commitment (as Chairman)
life/announcements-disclosures. and ability to keep shareholders’ interests in mind.

16
Annual Report 2021-22 Board’s Report

In a separate meeting of Independent Directors, safe & harassment-free workplace for all employees

Statutory Reports
performance of non-independent directors, performance through various interventions and practices. This cannot
of the Chairman and performance of the Board as a be achieved without the Company making sure that the
whole was evaluated. environment at SPARC is free from discrimination and
harassment, including sexual harassment.
Performance evaluation of the Board, its various
Committees and individual Directors including During the financial year ended March 31, 2022, there
independent Directors and Chairman was found was no complaint received for sexual harassment. Also,
satisfactory. The Board also assessed the fulfillment there are no complains pending as at the end of the
of the independence criteria as specified in Listing financial year.

Financial Statements
Regulations, by the Independent Directors of the
Company and their independence from the management. The Company has complied with provisions relating
to the constitution of Internal Complaints Committee
under the Sexual Harassment of Women at Workplace
HUMAN RESOURCES (Prevention, Prohibition and Redressal) Act, 2013.

The Company is a close-knit family of 403 dedicated

individuals – 85% of which are highly qualified and AUDITORS
experienced scientists in various fields. Last year,
the Company has expanded its footprints into Large Statutory Auditors
Molecules, and hired some top quality scientific talent,
S R B C & Co. LLP, Chartered Accountants, (Firm’s Regn.
including the ones from large molecule background.
No. 324982E/E300003), were appointed as the Statutory
The Company also invested in international conferences Auditors of the Company for a term of five years, to hold
and scientific collaborations for continuous knowledge office upto the conclusion of the 17th Annual General
up-gradation. The Company has also strengthened its Meeting of the Company.
learning & development initiatives and initiated the
Based on the recommendation of the Audit Committee,
succession planning for its critical positions.
the Board at its meeting held on May 17, 2022 had
Your Directors recognize the team’s valuable support considered and approved the appointment of S R B C &
during the pandemic and place on record their Co. LLP, Chartered Accountants, (Firm’s Regn. No. 324982E/
appreciation for the Team SPARC. E300003) for a second term of five years, i.e. from the
conclusion of 17th Annual General Meeting till the
Information as per Section 197(12) of the Act, read with rule conclusion of the 22nd Annual General Meeting of the
5(1) of the Companies (Appointment and Remuneration of Company, subject to the approval of the shareholders at
Managerial Personnel) Rules 2014 is annexed as Annexure the ensuing Annual General Meeting. S R B C & Co. LLP have
1 to this Report. Further, pursuant to section 136 (1) of the consented to act as Statutory Auditors and confirmed
Act, the Annual Report and the accounts are being sent their eligibility to be re-appointed in terms of Section 141
to the members excluding the information under rule 5(2) and other applicable provisions of the Act.
& 5(3) of the aforesaid Rules. In terms of section 136 of
The Auditor’s Report for the financial year ended March
the Act, the said information is available for inspection
31, 2022, issued by the Statutory Auditors, does not
at the Registered Office of the Company. Any shareholder
contain any qualification, reservation, adverse remark
interested in obtaining a copy of the same may write
or disclaimer and no frauds were reported by the
to the Company Secretary of the Company either at the
Auditors to the Audit Committee or the Board, in terms
Registered/ Corporate Office address or by email to
of section 143(12) of the Act.
secretarial@sparcmail.com
Secretarial Auditors
DISCLOSURE UNDER THE SEXUAL HARASSMENT
Pursuant to the provisions of Section 204 of the Act,
OF WOMEN AT WORKPLACE (PREVENTION,
and the Companies (Appointment and Remuneration
PROHIBITION AND REDRESSAL) ACT, 2013
of Managerial Personnel) Rules, 2014, the Board had
The Company strongly believes in gender neutrality and appointed KJB & Co. LLP, Company Secretaries, Mumbai
also encourages hiring from all genders. It becomes to undertake the Secretarial Audit of the Company for
more & more important for us to focus on providing a the financial year 2021-22.

17
Sun Pharma Advanced Research Company Ltd

The Secretarial Audit Report in the Form No. MR-3 RISK MANAGEMENT
for the year ended March 31, 2022 is annexed as
Annexure 2. The Secretarial Audit Report does not contain The Board of Directors has developed and implemented
any qualification, reservation, adverse remark or an adequate Risk Management Policy, which lays down
disclaimer. the procedure to identify, monitor and mitigate the key
elements of risks that threaten the existence of the
Pursuant to the SEBI Circular No. CIR/CFD/ Company. Further, in compliance with the requirements
CMD1/27/2019 dated February 08, 2019, the Annual of Regulation 21 of the Listing Regulations as amended
Secretarial Compliance Report for the financial year from time to time, the Board of Directors of the Company
2021-22 has been obtained from the Secretarial Auditor has constituted a Risk Management Committee to
of the Company and the said Report was submitted with oversee risk mitigation measures in the Company. The
the stock exchanges within the prescribed time. details of composition of Risk Management Committee
are included in the Corporate Governance Report which
SECRETARIAL STANDARDS forms a part of this Report.

The Company has complied with the applicable The Risk Management Committee reviews, at regular
Secretarial Standards as amended from time to time. intervals, the status of key risks and steps taken by the
Company, to mitigate such risks.

LOANS, GUARANTEES & INVESTMENTS

INTERNAL FINANCIAL CONTROLS
The particulars of loans, guarantees and investments
have been disclosed in the financial statements. The Company has in place a well-defined organizational
structure and adequate internal controls for efficient
operations which is cognizant of applicable laws and
RELATED PARTY TRANSACTIONS regulations, particularly those related to protection
of intellectual properties, resources, assets, and the
All contracts/arrangements entered by the Company
accurate reporting of financial transactions in the
during the year with the related parties were in the
financial statements. The Company upgrades these
‘Ordinary Course of Business’ and on ‘Arm’s Length Basis’.
systems on continue basis.
As required under Section 134(3)(h) of the Act, details
of transactions entered with related parties under the CORPORATE SOCIAL RESPONSIBILITY(CSR)
Act exceeding ten percent of the annual consolidated
turnover as per the last audited financial statements In compliance with the requirements of Section 135
are given in Form AOC-2 provided as Annexure 3. of the Act read with the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the Board of Directors
The policy on Related Party Transactions as approved by has constituted a Corporate Social Responsibility
the Board is available on the website of the Company Committee. The details of membership of the
and may be accessed through the web link https://www. Committee and the meeting(s) of the Committee held
sparc.life/policies-and-codes. during the year are given in the Corporate Governance
Report which forms a part of this Report.
COMMITTEES OF THE BOARD
The CSR Policy of the Company as approved by the
As on March 31, 2022, the Board has 7(seven) Committees, Board on the recommendation of the Corporate Social
namely, Audit Committee, Stakeholders’ Relationship Responsibility Committee is available on the website
Committee, Nomination and Remuneration Committee, of the Company and may be accessed through the web
Corporate Social Responsibility Committee, Risk link https://www.sparc.life/policies-and-codes
Management Committee, Fund Management Committee,
Since the Company has incurred losses during the three
Securities Allotment Committee. The details pertaining
immediately preceding financial years, the Company
to the meetings and composition of the Committees
was not required to spend on CSR activities during
of the Board are included in the Corporate Governance
the financial year ended March 31, 2022. However,
Report, which forms a part of this Report.
in compliance with the requirements of Companies
During the year under review, all recommendations (Corporate Social Responsibility Policy) Rules, 2014,
made by the Committees (including Audit Committee) the Annual Report on ‘CSR Activities’ as per prescribed
were accepted by the Board. format, is annexed as Annexure 4.

18
Annual Report 2021-22 Board’s Report

PUBLIC DEPOSITS SIGNIFICANT AND MATERIAL ORDERS PASSED BY

Statutory Reports
THE REGULATORS OR COURTS OR TRIBUNALS
The Company has not accepted any Public Deposit
during the year, under the provisions of the Act and the No significant or material orders were passed by the
rules framed thereunder. Regulators or Courts or Tribunals during the year which
may impact the going concern status of the Company’s
future operations.
CREDIT RATING

Acuite Ratings & Research Ltd. has assigned the rating WHISTLE BLOWER POLICY/ VIGIL MECHANISM
of ACUITE AA/Stable for the long term facilities of the

Financial Statements
Company. The Company wants to continue enduring value for
all stakeholders and ensure highest levels of honesty,
integrity and ethical behavior in all its operations.
MANAGEMENT DISCUSSION AND ANALYSIS Hence, the Company continues to prioritize this vision
to all employees and gives more importance to the
The Management Discussion and Analysis on the
already created ‘SPARC Whistle Blower Policy’.
operations of the Company, as prescribed under
Schedule V read with Regulation 34(3) of the Listing SPARC encourages all employees to report suspected or
Regulations, is provided in a separate section and forms actual occurrence of illegal, unethical or inappropriate
part of this Report. events (behavior or practices) that may affect
Company’s working or interest / image.
CORPORATE GOVERNANCE REPORT
The Policy is available on the website of the Company
Report on Corporate Governance along with the and may be accessed through the web link https://
Certificate from the Auditors of your Company www.sparc.life/policies-and-codes.
confirming compliance of the conditions of Corporate
Governance as stipulated in Schedule V read with DIRECTORS’ RESPONSIBILITY STATEMENT
Regulation 34(3), of the Listing Regulations, are provided
in a separate section and forms part of this Report. 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
BUSINESS RESPONSIBILITY REPORT confirmed that:

The Business Responsibility Report of the Company for a) in the preparation of the annual accounts for the
the year ended March 31, 2022 describing the initiatives financial year ended March 31, 2022, the applicable
taken by them from an environmental, social and accounting standards have been followed along
governance perspective, in the prescribed format as with proper explanation relating to material
required under Clause 34(2)(f) of the Listing Regulations, departures;
forms part of this Report and is also available on the
website of the Company and may be accessed through b) the Directors have selected such accounting
the web link https://www.sparc.life/announcements- policies and applied them consistently and made
disclosures. 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, 2022
CONSERVATION OF ENERGY, TECHNOLOGY and of the loss of the Company for the year ended
ABSORPTION AND FOREIGN EXCHANGE on that date;
EARNINGS AND OUTGO
c) the Directors have taken proper and sufficient
The information on conservation of energy, technology care for the maintenance of adequate accounting
absorption and foreign exchange earnings and outgo records in accordance with the provisions of this
as stipulated under Section 134(3)(m) of the Act read Act for safeguarding the assets of the Company
with Rule 8 of the Companies (Accounts) Rules, 2014, is and for preventing and detecting fraud and other
annexed as Annexure 5. irregularities;

19
Sun Pharma Advanced Research Company Ltd

d) the Directors have prepared the annual accounts on ACKNOWLEDGEMENTS

a going concern basis; and
Your Directors wish to thank all stakeholders, business
e) the Directors have laid down internal financial partners, Company’s bankers, medical professionals
controls to be followed by the Company and such and business associates for their continued support
internal financial controls are adequate and and valuable co-operation. The Directors also wish to
operating effectively. express their gratitude to investors for the faith that
they continue to repose in the Company.
f) the Directors have devised proper systems to ensure
compliance with the provisions of all applicable
For and on behalf of the Board of Directors
laws and such systems are adequate and operating
effectively.
Dilip S. Shanghvi
Place: Mumbai Chairman
Date: August 08, 2022 (DIN: 00005588)

20
Annual Report 2021-22 Board’s Report

Annexure 1

Statutory Reports
INFORMATION REQUIRED UNDER SECTION 197 OF THE ACT READ WITH RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(i) Ratio of the remuneration of each director to the median remuneration of the employees and percentage
increase in remuneration of each Director, CEO, CFO and CS of the Company for the financial year 2021-22:

Ratio of remuneration1
% increase/ (decrease)
of each Director/ to

Financial Statements
Name Designation in remuneration1 in the
median remuneration of
FY 2021-22
employee
Mr. Dilip S. Shanghvi Chairman & Not Applicable2 0.23
Non-Executive Director
Mr. Sudhir V. Valia Non-Executive Director 30.00 0.59
Dr. T. Rajamannar Non-Executive Director 55.56 0.32
Ms. Bhavna Doshi Independent Director 18.18 0.59
Dr. Ferzaan Engineer Independent Director 14.29 0.54
Dr. Robert Spiegel Independent Director 20.00 0.54
Mr. Anilkumar Raghavan3 Chief Executive Officer Not Applicable6 --
Mr. Chetan Rajpara Chief Financial Officer 6.33 --
Mr. Debashis Dey4 Company Secretary and Not Applicable6 --
Compliance Officer
Mr. Dinesh Lahoti5 Company Secretary and Not Applicable6 --
Compliance Officer
1. Remuneration of all the Directors consists only of sitting fees drawn by them
2. For Mr. Dilip S. Shanghvi, there was no comparable available for previous year, and hence “Not Applicable”
3. Appointed as the Manager and the whole-time Key Managerial Personnel, designated as Chief Executive Officer effective from May
25, 2021
4. Resigned as Company Secretary and Compliance Officer effective from close of working hours of June 25, 2021
5 Appointed as Company Secretary and Compliance Officer effective from July 26, 2021
6. Since the remuneration is only for part of the year, the percentage increase/ (decrease) in remuneration is not comparable, hence
“Not Applicable”

(ii) Percentage increase in the median remuneration of employees in the financial year (Median 2021-22/Median
2020-21): 9.10%

(iii) Number of permanent employees on the rolls of the Company as on March 31, 2022: 403

(iv) Average percentile increase in the salaries of employees other than the managerial personnel in the last
financial year and its comparison with the percentile increase in the managerial remuneration and justification
thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase in salary of employees other than managerial personnel: 9.79%

Average percentage increase in salary of managerial personnel: 6.50%

(v) It is hereby affirmed that the remuneration paid is as per the as per the Remuneration Policy for Directors, Key
Managerial Personnel and other Employees.

Note: All the details of remuneration (except sitting fees) given/considered above are as per section 17 of the
Income Tax Act, 1961, and the ratios are calculated on that basis.

For and on behalf of the Board of Directors

Dilip S. Shanghvi
Place: Mumbai Chairman
Date: August 08, 2022 (DIN: 00005588)

21
Sun Pharma Advanced Research Company Ltd

Annexure 2
Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2022.
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015]

To,
The Members,
Sun Pharma Advanced Research Company Limited,
Vadodara, Gujarat.

We have conducted the Secretarial Audit of the Direct Investment, Overseas Direct Investment and
compliances of applicable statutory provisions and External Commercial Borrowings;
the adherence to good corporate governance practices
by Sun Pharma Advanced Research Company Limited v. The following Regulations and Guidelines
(“the Company”). Secretarial Audit was conducted prescribed under the Securities and Exchange Board
in a manner that provided us a reasonable basis of India (“SEBI”) Act, 1992:
for evaluating the corporate conducts / statutory
a) The Securities and Exchange Board of
compliances and expressing our opinion thereon.
India (Listing Obligations and Disclosure
Based on our verification of the Company’s books, Requirements) Regulations, 2015 and
papers, minute books, forms and returns filed and amendments made thereto from time to time
other records maintained by the Company and also (“LODR Regulations”);
the information provided by the Company, its officers,
b) The Securities and Exchange Board of India
agents and authorized representatives during the
(Prohibition of Insider Trading) Regulations,
conduct of secretarial audit, we hereby report that in
2015 and amendments made thereto;
our opinion, the Company has, during the audit period
covering the financial year ended on 31st March 2022, c) The Securities and Exchange Board of India
complied with the statutory provisions listed hereunder (Substantial Acquisition of Shares and
and also that the Company has proper Board-processes Takeovers) Regulations, 2011 - Not applicable to
and compliance-mechanism in place to the extent, in the the Company for the year under review;
manner and subject to the reporting made hereinafter:
d) The Securities and Exchange Board of India
We have examined the books, papers, minute books, (Buyback of Securities) Regulations, 2018 – Not
forms and returns filed and other records maintained by applicable to the Company for the year under
the Company for the financial year ended on 31st March review;
2022, according to the provisions of:
e) The Securities and Exchange Board of India
i. The Companies Act, 2013 (“the Act”) and the rules (Share Based Employee Benefits) Regulations,
made thereunder; 2014 – Not applicable to the Company for the
year under review;
ii. The Securities Contracts (Regulation) Act, 1956
(“SCRA”) and the rules made thereunder; f) The Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements)
iii. The Depositories Act, 1996 and the Regulations and
Regulations, 2018;
Bye-laws framed thereunder;
g) The Securities and Exchange Board of India
iv. Foreign Exchange Management Act, 1999 and the
(Delisting of Equity Shares) Regulations, 2009
rules and regulations made thereunder to the extent
– Not applicable to the Company for the year
applicable during the period under review of Foreign
under review;

22
Annual Report 2021-22 Board’s Report

h) The Securities and Exchange Board of with the size and operations of the Company to monitor

Statutory Reports
India (Issue and Listing of Debt Securities) and ensure compliance with applicable laws, rules,
Regulations, 2008 - Not applicable to the regulations and guidelines.
Company for the year under review;
We further report that, having regard to the compliance
i) The Securities and Exchange Board of India system prevailing in the Company and on examination
(Registrars to an Issue and Share Transfer of the relevant documents and records in pursuance
Agents) Regulations, 1993 regarding the thereof, on the basis of the representations made by the
Companies Act and dealing with client- Not respective plant heads of R&D centers, the Company
applicable to the Company for the year under has identified and complied with the following laws

Financial Statements
review; applicable to the Company:

We have also examined compliance with the applicable • Drugs and Cosmetics Act, 1940;
clauses of the Secretarial Standards with respect • Environment Protection Act, 1986;
to meeting of Board of Directors (SS-1) and General
• Factories Act, 1948.
Meetings (SS-2) issued by The Institute of Company
Secretaries of India under the provisions of Companies We further report that during the period under review
Act, 2013. on July 08, 2021, the Company had allotted 6,24,74,082
warrants, each convertible into one equity share, on
During the period under review, the Company has
preferential basis at an issue price of H 178/- each,
complied with the provisions of the Act, Rules,
upon receipt of 25% of the issue price (i.e. H 44.50 per
Regulations, Guidelines etc. mentioned above to the
warrant) as warrant subscription money. Balance 75%
extent applicable.
of the issue price (i.e. H133.50 per warrant) is payable
We further report that: within 18 months from the allotment date, at the time
of exercising the option to apply for fully paid-up equity
1. The Board of Directors of the Company is duly share of H 1 each of the Company, against each warrant
constituted with proper balance of Executive held by the warrant holder. During the period under
Directors, Non-Executive Directors, Independent review, the Company upon receipt of balance 75% of
Directors and Woman Director. the issue price (i.e. H 133.50/- per warrant) for 98,31,460
warrants, has allotted equal no. of fully paid-up equity
2. Adequate notice of at least seven days was given shares against conversion of said warrants exercised by
to all directors to schedule the Board Meetings and the warrant holders.
Meetings of Committees except in some cases where
the meeting was held on a shorter notice with the
consent of all the directors / committee members. For, KJB & CO LLP,
Agenda and detailed notes on agenda were sent Practicing Company Secretary
in advance in adequate time before the meetings Firm Unique Identification No. – L2020MH006600
and a system exists for Directors for seeking and Peer Review Certificate No. – 934/2020
obtaining further information and clarifications
on the agenda items before the meeting and for Alpeshkumar Panchal
meaningful participation at the meeting. Partner
ACS No.: 49008
3. On verification of minutes, we have not found any C P No.: 20120
dissent/disagreement on any of the agenda items UDIN: A049008D000762347
discussed in the Board and Committee meetings
from any of the Directors and all the decisions are Date: Shravan 17, 1944 / August 8, 2022
carried through. Place: Vadodara

Based on the information received and records This report is to be read with our letter of even date
maintained, we further report that there are adequate which is annexed as Annexure 1 and forms an integral
systems and processes in the Company commensurate part of this report.

23
Sun Pharma Advanced Research Company Ltd

ANNEXURE 1

To,
The Members,
Sun Pharma Advanced Research Company Limited,
Vadodara, Gujarat.

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility
is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure
that correct facts are reflected in secretarial records. We believe that the processes and practices we followed
provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the
Company.

4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and
regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy
or effectiveness with which the management has conducted the affairs of the Company.

For, KJB & CO LLP,

Practicing Company Secretary
Firm Unique Identification No. – L2020MH006600
Peer Review Certificate No. – 934/2020

Alpeshkumar Panchal
Partner
ACS No.: 49008
C P No.: 20120
UDIN: A049008D000762347

Date: Shravan 17, 1944 / August 8, 2022

Place: Vadodara

24
Annual Report 2021-22 Board’s Report

Annexure 3

Statutory Reports
FORM NO. AOC. 2

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties
referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms-length transactions
under fourth proviso thereto

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules,

Financial Statements
2014)

1. Details of contracts or arrangements or transactions not at arm's length basis: NIL

2. Details of material contracts or arrangement or transactions at arm's length basis:

Salient terms of Amount paid

Duration of
Name(s) of the related the contracts or as advances,
Nature of contracts/ the contracts/ Date(s) of approval
party and nature of arrangements or as on March
arrangements/ transactions arrangements/ by the Board, if any:
relationship transactions including 31, 2022, if
transactions
the value, if any: any:

Sun Pharmaceutical Sale of services (License On-going The related party Since these Nil
Industries Ltd. fees/ royalty on technology/ . transactions entered transactions were
(Majority stake owned R & D services), Purchase during the financial in ordinary course
and controlled by of goods, property, plant year 2021-22 were in of business and
the Promoter and and equipment, rent ordinary course of were on arm’s length
Promoter Group of expense (pertains to business and on an basis, approval of
Sun Pharma Advanced payment of lease liability), arm’s length basis. The the Board was not
Research Company Receiving of research and aggregate amount of applicable.
Ltd. (SPARC)) development services, and transactions for the
Reimbursement of expenses financial year 2021-22
received and expenses paid. was H 10,210.74 lakhs.
Sun Pharma Sale of services (license On-going The related party Since these Nil
Laboratories Limited fees/ royalty on technology/ transactions entered transactions were
(Wholly owned R & D services), and during the financial in ordinary course
subsidiary of Sun purchase of goods year 2021-22 were in of business and
Pharmaceutical ordinary course of were on arm’s length
Industries Ltd. whose business and on an basis, approval of
majority stake is arm’s length basis. The the Board was not
owned and controlled aggregate amount of applicable.
by the Promoter and transactions for the
Promoter Group of financial year 2021-22
SPARC). was H 4,421.68 lakhs.
Sun Pharmaceutical Sale of services (R & D On-going The related party Since these Nil
Industries Inc. services), reimbursement/ transactions entered transactions were
(Wholly owned receiving of research and during the financial in ordinary course
subsidiary of Sun development services and year 2021-22 were in of business and
Pharmaceutical purchase of goods ordinary course of were on arm’s length
Industries Ltd. whose business and on an basis, approval of
majority stake is arm’s length basis. The the Board was not
owned and controlled aggregate amount of applicable.
by the Promoter and transactions for the
Promoter Group of financial year 2021-22
SPARC). was H 2,311.92 lakhs.

For and on behalf of the Board of Directors

Dilip S. Shanghvi
Place: Mumbai Chairman
Date: August 08, 2022 (DIN: 00005588)

25
Sun Pharma Advanced Research Company Ltd

Annexure 4
Annual Report on Corporate Social Responsibility (CSR) Activities for the financial year ended
March 31, 2022

1. Brief outline on CSR Policy of the Company

The CSR policy of the Company encompasses its philosophy towards Corporate Social Responsibility and
lays down the guidelines and mechanism for undertaking socially useful programs for welfare & sustainable
development of the community at large.

The Company has identified health, education & livelihood, environment protection, water management and
disaster relief as the areas where assistance may be provided as needed on a case-to-case basis.

2. Composition of CSR Committee

Number of Number of meetings

Designation
Sl. Nature of meetings of CSR of CSR Committee
Name of Director in the CSR
No. Directorship Committee held attended during
Committee
during the year the year
1. Mr. Sudhir V. Valia Chairman Non-executive Non- 1 1
Independent Director
2. Mr. Dilip S Shanghvi Member Chairman of the Board 1 1
and Non-executive
Director
3. Ms. Bhavna Doshi Member Independent Director 1 1

3. Web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the
board are disclosed on the website of the company.

Details Web-Links
Composition of CSR committee https://www.sparc.life/committees-of-board-of-directors
CSR Policy https://www.sparc.life/policies-and-codes
CSR projects Not Applicable

4. Details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of
the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable

Not Applicable

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies
(Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the
financial year, if any

Not Applicable

26
Annual Report 2021-22 Board’s Report

6. Average net profit of the company as per section 135(5). –

Statutory Reports
The average net profit of the Company for the last three financial years was negative, due to loss incurred in the
preceding three financial years.

7.

(a) Two percent of average net profit of the company as per section 135(5).
(b) Surplus arising out of the CSR projects or programmes or activities of the previous
Not Applicable

Financial Statements
financial years
(c) Amount required to be set off for the financial year, if any.
(d) Total CSR obligation for the financial year (7a+7b-7c).

8. (a) CSR amount spent or unspent for the financial year

Amount Unspent
Total Amount
Total Amount transferred to Unspent Amount transferred to any fund specified under
Spent for the
CSR Account as per section 135(6) Schedule VII as per second proviso to section 135(5)
Financial Year
Amount Date of transfer Name of the Fund Amount Date of transfer
Not Applicable

(b) Details of CSR amount spent against ongoing projects for the financial year:

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Amount Mode of
Item from Amount
Location of the transferred to Implementation -
the list of Local Amount spent Mode of
Name project. Project Unspent CSR Through Implementing
Sl. activities area allocated in the Implementa
of the duration Account for Agency
No. in Schedule (Yes/ for the current tion - Direct
Project the project CSR
VII to the No) project financial (Yes/No)
State District as per per Name Registration
Act year
Section 135(6) number

Not Applicable

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

(1) (2) (3) (4) (5) (6) (7) (8)

Item from Location of the Mode of implementation -
the list of Local project Amount Mode of Through implementing agency
Name of
Sl. activities area spent for implementation -
the
No. in schedule (Yes/ the project Direct (Yes/No) CSR Registration
Project State District Name
VII to the No) number
Act
Not Applicable

(d) Amount spent in Administrative Overheads - Not Applicable

(e) Amount spent on Impact Assessment, if applicable - Not Applicable

(f) Total amount spent for the Financial Year (8b+8c+8d+8e) - Not Applicable

27
Sun Pharma Advanced Research Company Ltd

(g) Excess amount for set off, if any

Sl.
Particulars Amount
No.
(i) Two percent of average net profit of the company as per section 135(5)
(ii) Total amount spent for the Financial Year
(iii) Excess amount spent for the financial year [(ii)-(i)]
Not Applicable
(iv) Surplus arising out of the CSR projects or programmes or activities of the
previous financial years, if any
(v) Amount available for set off in succeeding financial years [(iii)-(iv)]

9. (a) Details of Unspent CSR amount for the preceding three financial years:

Amount Amount transferred to any fund

Amount transferred Amount remaining to
Preceding spent in the specified under Schedule VII as per
Sl. to Unspent CSR be spent in
Financial Year reporting section 135(6), if any.
No. Account under succeeding financial
Financial Name of the Date of
section 135 (6) Amount years
Year Fund transfer
Not Applicable

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Cumulative
Financial
Total amount Amount spent on amount spent Status of the
Year in Project
Sl. Project Name of allocated the project in the at the end project -
which the duration
No. ID the Project for the reporting Financial of reporting Completed
project was
project Year Financial /Ongoing
commenced
Year
Not Applicable

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so
created or acquired through CSR spent in the financial year (asset-wise details)

(a) Date of creation or acquisition of the capital asset(s).

(b) Amount of CSR spent for creation or acquisition of capital asset
(c) Details of the entity or public authority or beneficiary under whose name such
Not Applicable
capital asset is registered, their address etc.
(d) Provide details of the capital asset(s) created or acquired (including complete
address and location of the capital asset).

11. Reason(s), if the company has failed to spend two per cent of the average net profit as per
section 135(5) –

Not Applicable

_________________ _____________
Sudhir V. Valia Dilip S. Shanghvi
Chairman - CSR Committee Member - CSR Committee
Place: Mumbai and Director and Chairman of the Board
Date: August 08, 2022 (DIN: 00005561) (DIN: 00005588)

28
Annual Report 2021-22 Board’s Report

Annexure 5

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

I) CONSERVATION OF ENERGY • SCC-138 is also being evaluated

for the treatment of Lewy Body
Power and Fuel Consumption Dementia. The trial is being

Financial Statements
conducted as an investigator
Our processes are not energy exhaustive. However,
initiated study.
the Company undertakes actions to optimize the
use of energy and has taken measures to minimize b)
Oncology
wastage using the latest technology and equipment.
• SCO-088 a potent, orally active
Few examples of energy conservation are chilled and highly selective Bcr-Abl
water based cooling system in staff room and Tyrosine Kinase Inhibitor (TKI)
conference rooms, Chemical less water treatment being developed for treatment of
for cooling tower operations and Vacuum degasser Chronic Myeloid Leukaemia (CML).
in chilled water system which Prevents air-locks and Part C of the study was initiated in
cavitation and Increases heat transfer efficiency. patients failing 3 lines of treatment
including ponatinib.
II) TECHNOLOGY ABSORPTION
• SCO-120 is a novel, orally active
Research and Development
Selective Estrogen Receptor
1. SPECIFIC AREAS IN WHICH R&D IS CARRIED OUT Degrader (SERD) being evaluated
BY THE COMPANY (SPARC) for the treatment of HR positive,
HER2 negative metastatic breast
SPARC’s R&D focus is on developing novel cancer patients. Phase 1 study has
chemical entities, novel biological entities and been initiated to assess the safety
reformulations of existing products to address of the drug and also to establish the
the unmet medical needs of the patients. The recommended phase 2 dose.
products developed are commercialized in
multiple markets including US and India. c) Immunology

The current therapeutic focus of the Company is in • SCD-044 is a S1P Receptor 1

the areas of oncology, neurology and immunology. agonist which was developed
in collaboration with French
The Company out-licenses the products to biotechnology company Bioprojet
partners for commercialization activities for autoimmune disorders. SPARC
and generates revenue from royalty on sales, has licensed the worldwide rights
upfront payments, regulatory and sales based of SCD-044 to Sun Pharmaceutical
milestone payments. Industries Limited. Phase 2 studies
have been initiated for Psoriasis
i) New Chemical Entities (NCE)
and Atopic Dermatitis.
a)
Neurodegeneration
ii) Novel Drug Delivery Systems (NDDS)
• SCC-138 is being evaluated as a
Wrap MatrixTM Technology
a)
potentially disease modifying agent
for treatment of Parkinson’s Disease. Wrap MatrixTM technology is useful to
SPARC initiated a multi-center, develop controlled release tablets that
proof-of-concept Phase 2 study in have high daily dose requirement and
patients with Parkinson’s Disease drugs that have high solubility. Once-a-
(PROSEEK trail) and the trial sites day dosing can be achieved using this
are across US, Europe and India. technology.

29
Sun Pharma Advanced Research Company Ltd

ElepsiaTM XR (levetiracetam ER 1000 mg 3. FUTURE PLAN OF ACTION

and 1500 mg) was developed using Wrap
MatrixTM technology. Commercialization This is covered with the description of each
rights of ElepsiaTM XR for USA were product in (1) above. For more information,
licensed to Tripoint Therapeutics, please refer to Management Discussion &
subsequently Tripoint Therapeutics Analysis (MD&A) section.
initiated the commercialization of
4. EXPENDITURE ON R&D
ElepsiaTM XR.
H In Lakhs
b)
LipexelleTM technology for ophthalmic Year ended Year ended
Particulars
formulations March 31, 2022 March 31, 2021
a) Capital 3,270.86 714.04
LipexelleTM technology is a quaternary
b) Revenue 32,399.83 38,793.48
ammonium preservative/surfactant BAK
c) Total 35,670.69 39,507.52
(Benzalkonium Chloride)-free solubilizing
d) Total R&D 260 156
technology. SPARC has developed
expenditure as %
XelprosTM, a BAK free latanoprost eye
of Total Turnover
drops developed using proprietary
LipexelleTM technology. XelprosTM is
commercialised by Sun Pharmaceutical III) FOREIGN EXCHANGE EARNINGS AND OUTGO
Industries Limited (SPIL) in the USA .
H In Lakhs
c) TearAct TM
Technology Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
SPARC has developed PDP – 716 eye
Earnings 502.06 1,200.15
drops for treatment of Glaucoma based
Outgo 27,120.40 21,413.63
on its proprietary TearActTM technology.

SPARC licensed PDP – 716 to Visiox

pharma and is currently working with
Visiox pharma for filing NDA of PDP-716.

2. BENEFITS DERIVED AS A RESULT OF THE ABOVE

R&D

Upon successful development and For and on behalf of the Board of Directors
commercialization of the programs under
development it is expected that these programs
would help address the unmet medical needs of Dilip S. Shanghvi
the patients and provide them better quality of Place: Mumbai Chairman
life. Date: August 08, 2022 (DIN: 00005588)

30
Annual Report 2021-22 Corporate Governance Report

Corporate Governance Report

Statutory Reports
In compliance with regulation 34(3) read with Schedule V of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”), the Company
hereby submits the Corporate Governance Report for the financial year ended March 31, 2022 on the matters
mentioned in the said regulations and lists the practices followed by the Company.

1. Company’s Philosophy on Corporate Governance

Financial Statements
The Company’s philosophy on Corporate Governance is guided by strong emphasis on transparency,
accountability, responsibility, fairness, integrity, consistent value systems and delegation across all facets of
its operations leading to sharply focused and operationally efficient growth. The Company’s belief on Corporate
Governance is intended to support the management of the Company for competent conduct of its business and
ensuring long term value for shareholders, as well as customers, suppliers, employees and statutory authorities.

The Company is committed to implement the standards of good Corporate Governance and endeavors to
preserve and nurture these core values in all its activities with an aim to increase and sustain its corporate
value through growth and innovation.

2. Code of Conduct

The Board of Directors of the Company has laid down the Code of Conduct for all board members and employees
of the Company. In compliance with the requirements of Regulation 17(5) of the Listing Regulations, the Code
of Conduct, inter alia, incorporates the duties of Independent Directors as laid down under the Companies Act,
2013 (the “Act”). All the directors and senior management employees have affirmed compliance with the Code
of Conduct as approved and adopted by the Board of Directors and a declaration to this effect signed by the
Chief Executive Officer is annexed to this Report as Annexure I. The Code of Conduct is available on the website
of the Company and may be accessed through the web link https://www.sparc.life/policies-and-codes.

3. Board of Directors

3.1 Composition and category of Directors:

The Board of Directors of your Company (‘hereinafter referred to as ‘the Board’ or ‘the Board of Directors’) as on
March 31, 2022 comprised of six directors as detailed below:

Inter-se Relationship
Name of Directors Category
between Directors
Mr. Dilip S. Shanghvi (Chairman) Promoter and Non-Executive Director Brother-in-law of Mr. Sudhir
V. Valia
Mr. Sudhir V. Valia Non- Promoter (however part of Promoter Brother-in-law of Mr. Dilip
Group) and Non-Executive Director S. Shanghvi
Dr. T. Rajamannar Non-Executive and Non Independent --
Director
Ms. Bhavna Doshi Independent Director --
Dr. Ferzaan Engineer Independent Director --
Dr. Robert Spiegel Independent Director --

31
Sun Pharma Advanced Research Company Ltd

3.2 Attendance of Directors and other Directorships:

Attendance of each director at the Board meetings, previous Annual General Meeting (AGM), and number of
other Directorships and Memberships/Chairmanships of Committee are given below:

No. of other directorships and

Attendance
Number committee memberships /
Particulars for the
of Board chairmanships as of
financial year Directorship in other
meetings March 31, 20221
Name of Directors listed companies as of
held 16th AGM Committee Committee
Other March 31, 2022
during Board Held on Member Chairman
Director
the year Meetings September ships2 ships2
ships
29, 2021
Mr. Dilip S. Shanghvi 7 7 Yes 1 1 - Sun Pharmaceutical
Industries Limited –
Managing Director
Mr. Sudhir V. Valia 7 7 Yes 4 3 1 Sun Pharmaceutical
Industries Limited
– Non-Executive
Director
Dr. T. Rajamannar 7 7 Yes - - - -
Ms. Bhavna Doshi 7 6 Yes 7 8 4 Everest Industries
Limited – Independent
Director
IndusInd Bank Limited
– Independent Director
Nuvoco Vistas
Corporation Limited –
Independent Director
KPIT Technologies
Limited – Independent
Director
Dr. Ferzaan Engineer 7 7 Yes - - - -
Dr. Robert Spiegel 7 7 Yes - - - -
1
Does not include Directorships, Committee Memberships / Chairmanships in Private Companies, Foreign Companies and Companies
incorporated under section 8 of the Act.
2
For Audit and Stakeholders’ Relationship Committee only.

3.3 Number of Board Meetings held:

Seven Board meetings were held during the financial year ended March 31, 2022 on following dates:

(i) May 12, 2021 (ii) May 17, 2021 (iii) May 25, 2021 (iv) July 26, 2021 (v) September 01, 2021 (vi) November 01, 2021
and (vii) February 04, 2022.

The Board of Directors of the Company were provided with all the information as set out in Part A of Schedule
II read with Regulation 17(7) of the Listing Regulations to the extent they were applicable and relevant. Such
information was submitted either as a part of the agenda papers in advance of the respective meetings or by
way of presentations or discussions during the meetings.

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Annual Report 2021-22 Corporate Governance Report

3.4 Shares/convertible instruments held by Non-Executive Directors:

Statutory Reports
Number of equity shares/convertible instruments held by Non-Executive Directors as on March 31, 2022

No. of shares held (singly or jointly No. of convertible instruments

Name of Directors
as first holder) (warrants) held
Mr. Dilip S. Shanghvi* 3,65,29,761 2,52,80,899
Mr. Sudhir V. Valia 18,33,951 NIL
Dr. T. Rajamannar 35,657 NIL
Ms. Bhavna Doshi Nil NIL

Financial Statements
Dr. Ferzaan Engineer Nil NIL
Dr. Robert Spiegel Nil NIL
* Non-Executive Director w.e.f. May 25, 2021.

3.5 Familiarization Program for Independent Directors:

The Company has put in place a system to familiarize its independent directors about the Company, its products,
the industry and business model of the Company. In addition, it also undertakes various measures to update the
independent directors about the ongoing events and development relating to the Company.

All the independent directors of the Company are made aware of their role, rights & responsibilities at the
time of their appointment/ re-appointment, through a formal letter of appointment, which inter-alia stipulates
various terms and conditions of their appointment/ re-appointment.

In compliance with regulation 25(7) of the Listing Regulations the details of familiarization sessions for the
independent directors, held during the financial year ended March 31, 2022 are available on the website of the
Company www.sparc.life and can be accessed through the web link - https://www.sparc.life/announcements-
disclosures

3.6 Skills/expertise/competence of the Board

In compliance with Listing Regulations, the Board, on the recommendation of the Nomination and Remuneration
Committee, has identified the core skills/expertise/competencies required in the context of Company’s
business(es) and sector(s) for it to function effectively and those actually available with the board. The
particulars of such skills/ expertise competence and Directors who possess the same are as follows:

Sr. Dilip S. Sudhir V. T. Bhavna Ferzaan Robert

Category Particulars
No Shanghvi Valia Rajamannar Doshi Engineer Spiegel
1 Knowledge Board members possessing specialist knowledge and experience in any one or more of the
and following fields
Experience Technical    
Finance & Accounts   
Legal/ Regulatory  
Governance     
Industry Knowledge     
Business & Risk      
Management
Human Resource 
Public Relations/   
Media

33
Sun Pharma Advanced Research Company Ltd

Sr. Dilip S. Sudhir V. T. Bhavna Ferzaan Robert

Category Particulars
No Shanghvi Valia Rajamannar Doshi Engineer Spiegel
2 Skills Board members possessing following skills required for effective execution of Board’s
responsibilities
Strategic Thinking/      
Planning Skills
Critical Thinking/      
Problem Solving
Skills
Analytical Skills      
Decision Making      
Skills
Leadership Skills      
3 Behavioral Board members possess following key behavioral attributes and competencies
traits Integrity      
Genuine interest      
Curiosity and      
courage
Instinct      
Inter-personal      
skills/
communication
Active Contributor      

3.7 Confirmation

The Board confirms that, in its opinion, the independent directors fulfill the conditions specified in the Listing
Regulations as amended from time to time and they are independent from the management.

4. Audit Committee

As on March 31, 2022, the Audit Committee of the Company comprised of three Independent Directors viz. Ms.
Bhavna Doshi, Dr. Ferzaan Engineer, Dr. Robert Spiegel and one Non-executive Director viz. Mr. Sudhir V. Valia.

Ms. Bhavna Doshi is the Chairperson and Mr. Dinesh Lahoti, Company Secretary is the secretary of the Audit
Committee.

The Committee acts as a link between the management, external & internal auditors and the Board of Directors
of the Company.

The terms of reference of the Audit Committee, inter alia, include the following:

a. To oversee the Company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statements are correct, sufficient and credible;

b. To recommend appointment, remuneration and terms of appointment of auditors of the company;

c. To approve payment to statutory auditors for any other services rendered by the statutory auditors;

d. To review with the management, quarterly and annual financial statements and auditor’s report thereon,
before submission to the Board for approval.

e. To review with the management, the statement of uses /application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), including the statement of funds utilized for purposes other than
those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations
to the Board to take up steps in this matter;

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Annual Report 2021-22 Corporate Governance Report

f. To review the utilization of loans and/ or advances from/investment by the holding company in the subsidiary

Statutory Reports
exceeding H 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans
/ advances / investments existing as on the date of coming into force of this provision;

g. To review and monitor the auditor’s independence and performance, and effectiveness of audit process;

h. To approve or any subsequent modification of transactions of the Company with Related Parties;

i. To scrutinize inter-corporate loans and investments;

j. To review valuation of undertakings or assets of the Company, wherever necessary;

Financial Statements
k. To evaluate of internal financial controls and risk management systems;

l. To review with the management, performance of statutory and internal auditors, adequacy of the internal
control systems;

m. To discuss with internal auditors of any significant findings, and follow up there on;

n. To discuss with statutory auditors before the audit commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern;

o. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors, if any,

p. To review the functioning of the Whistle Blower Mechanism/Vigil Mechanism;

q. To approve appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance
function or discharging that function) after assessing the qualifications, experience and background, etc. of
the candidate.

Executives from the finance department, representatives of the Statutory Auditors and Internal Auditors are
also invited to attend the Audit Committee meetings.

The Committee has discussed with the Statutory Auditors and Internal Auditors about their audit methodology,
audit planning and significant observations / suggestions.

In addition, the Committee has discharged such other role/ functions as are envisaged under Regulation 18 of
the Listing Regulations and the provisions of Section 177 of the Act.

Six Audit Committee Meetings were held during the financial year ended March 31, 2022 on the following dates:

(i) May 12, 2021 (ii) May 17, 2021 (iii) July 26, 2021 (iv) September 01, 2021 (v) November 01, 2021 and (vi) February
04, 2022.

The attendance of each member of the Committee is given below:

No. of meetings
Name of Director Chairperson/ Member No. of meetings attended
entitled to attend
Ms. Bhavna Doshi Chairperson 6 5
Dr. Ferzaan Engineer Member 6 6
Mr. Sudhir Valia Member 6 6
Dr. Robert Spiegel Member 6 6

35
Sun Pharma Advanced Research Company Ltd

5. Nomination and Remuneration Committee

As on March 31, 2022, the Nomination and Remuneration Committee comprised of three independent directors
viz. Dr. Ferzaan Engineer, Dr. Robert Spiegel and Ms. Bhavna Doshi.

Dr. Ferzaan Engineer is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

The terms of reference of the Committee, inter alia, include the following:

a. To identify persons who are qualified to become directors and who may be appointed in senior management
in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

b. To devise a policy on Board Diversity.

c. To formulate the criteria for determining qualifications, positive attributes and independence of a director
and recommend to the Board policy, relating to the remuneration for the directors, key managerial personnel
and other employees.

d. To specify the manner and formulate criteria for evaluation of the Board, its committees and individual
directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an
independent external agency and review its implementation and compliance.

e. To recommend whether to extend or continue the terms of appointment of Independent Directors on the
basis of the Report of Performance evaluation of Independent Directors.

g. To approve grant of stock options to Directors and employees

h. To recommend to the board, all remuneration, in whatever form, payable to ‘Senior Management’.

Six meetings of the Committee were held during the financial year ended March 31, 2022 on the following dates:

(i) May 17, 2021 (ii) May 25, 2021 (iii) June 26, 2021 (iv) July 26, 2021 (v) November 01, 2021 and (vi) February 04, 2022.

The attendance of each Member of the Committee is given below:

No. of meetings
Name of Director Chairman / Member No. of meetings attended
entitled to attend
Dr. Ferzaan Engineer Chairman 6 6
Ms. Bhavna Doshi Member 6 6
Dr. Robert Spiegel Member 6 6

5.1 Remuneration of Directors

a. Criterion for performance evaluation of individual directors

Based on the recommendation of the Nomination and Remuneration Committee and as approved by the
Board, the performance of the individual Directors is evaluated annually on basis of criteria such as
qualifications, experience, knowledge & competency, fulfillment of functions, ability to function as a team,
initiative, availability and attendance, commitment (as a director), contribution & integrity.

Further each individual independent director is reviewed, based on the additional criteria of independence
and independent views & judgment. Similarly, the performance of the chairman is evaluated based on
the additional criteria such as effectiveness of leadership and ability to steer the meetings, impartiality,
commitment (as chairperson) and ability to keep shareholders’ interests in mind.

b. Remuneration Policy

The key highlights of the remuneration policy for the directors, key managerial personnel and other
employees of the Company as approved by the Board of Directors on the recommendation of the Nomination
and Remuneration Committee are as follows:

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Annual Report 2021-22 Corporate Governance Report

i) Guiding principles for remuneration: The Company shall remunerate all its personnel reasonably and

Statutory Reports
sufficiently as per industry benchmarks and standards. The remuneration 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 the job,
work duration and risks associated with the work and attitude of the worker like positive outlook, team
work, loyalty etc.

ii) 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.

Financial Statements
o Fixed compensation: The fixed salaries of the Company’s personnel shall be competitive and based
on the individual personnel’s responsibilities and performance.

o 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.

o 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.

o 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 car with or without chauffer, share and share price related
incentive, reimbursement of electricity and telephone bills, etc:

o 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.

o 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.

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

Designation / Class To be determined by

Director Members on recommendation of Nomination and Remuneration Committee
and the Board
Key Managerial Board on recommendation of the Nomination and Remuneration Committee
Personnel
Other employees Human Resources Head

c. Details of remuneration paid / payable to all the directors for the year

Mr. Dilip S. Shanghvi was the Chairman and Managing Director of the Company till May 25, 2021. He did not
draw any remuneration from the Company in his capacity as Managing Director.

The Non-Executive Directors are paid sitting fees of H 30,000 for attending each meeting of the Board or of
Committee thereof.

37
Sun Pharma Advanced Research Company Ltd

The details of the remuneration paid/payable to the directors for the financial year 2021-22 are given below:
(H In lakhs)
Directors Salary Bonus Perquisites/Benefits Sitting Fees Total
Mr. Dilip S. Shanghvi* - - - 3.00 3.00
Mr. Sudhir V. Valia - - - 7.80 7.80
Dr. T. Rajamannar - - - 4.20 4.20
Ms. Bhavna Doshi - - - 7.80 7.80
Dr. Ferzaan Engineer - - - 7.20 7.20
Dr. Robert Spiegel - - - 7.20 7.20

* Mr. Dilip S. Shanghvi was paid sitting fees for the meetings he had attended as non-executive director

Notes: -
a) The Company presently does not have a scheme for grant of stock options either to the directors or to
the employees of the Company.

6. Stakeholders’ Relationship Committee

As on March 31, 2022, the Stakeholders’ Relationship Committee comprised of two non-executive directors viz.
Dr. T. Rajamannar, and Mr. Sudhir V. Valia and one independent Director viz. Dr. Ferzaan Engineer.

Dr. T. Rajamannar is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

The terms of reference of the Committee, inter alia, include the following:

a. To oversee and review all matters connected with resolving the grievances of the security holders of the
Company.

b. To approve transfer, transmission and issue of share certificates.

c. To oversee the performance of the Registrar and Share Transfer Agent and recommend measures for overall
improvement in the quality of investor services and review adherence to the service standards adopted by
the Company in respect of various services being rendered by the Registrar & Share Transfer Agent.

d. To review of measures taken for effective exercise of voting rights by shareholders.

e. To review various measures and initiatives taken by the Company for reducing the quantum of unclaimed
dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the
shareholders of the Company.

f . To seek information from the Registrar and Share Transfer Agent

Four meetings of the Committee were held during the financial year ended March 31, 2022 on following
dates:

(i) May 17, 2021 (ii) July 26, 2021 (iii) November 01, 2021 and (iv) February 04, 2022.

38
Annual Report 2021-22 Corporate Governance Report

The attendance of each Member of the Committee is given below:

Statutory Reports
No. of meetings
Name of Director Chairman/ Member No. of meetings attended
entitled to attend
Dr. T. Rajamannar Chairman 4 4
Mr. Sudhir V. Valia Member 4 4
Dr. Ferzaan Engineer Member 4 4

6.1 Shareholders’ Complaints

Financial Statements
Mr. Dinesh Lahoti, Company Secretary, is also the Compliance Officer of the Company.

The number of shareholder complaint(s) received and resolved during the year under review, were as follows:

Pending at the beginning of the year -

Received during the year 1
Resolved during the year 1
Pending at the end of the year -

7. Corporate Social Responsibility Committee

As on March 31, 2022, the Corporate Social Responsibility Committee of the Company comprise of two non-
executive directors viz Mr. Dilip S. Shanghvi and Mr. Sudhir V. Valia, and one independent director viz Ms. Bhavna
Doshi.

Mr. Sudhir V. Valia is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

The terms of reference of the Corporate Social Responsibility Committee, inter alia, include the following:

a. To formulate and recommend to the Board, a Corporate Social Responsibility Policy (CSR Policy) which shall
indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act,
2013

b. To monitor the CSR Policy of the Company from time to time

c. To recommend the amount of expenditure to be incurred on the activities referred above

d. To monitor amount spent on the CSR initiatives of the Company as per the CSR Policy

One meeting of the Committee was held on May 17, 2021 during the financial year ended March 31, 2022 which
was attended by all the members of the Committee

As recommended by the Committee, the Board of Directors of the Company at its meeting held on January 30,
2015 had approved the CSR Policy of the Company. During the previous financial year, there was no change in
the CSR Policy. The CSR Policy of the Company may be accessed through the web link https://www.sparc.life/
policies-and-codes.

8. Fund Management Committee

The Board of Directors of the Company, in its meeting held on October 28, 2016 constituted a Fund Management
Committee to oversee the deployment of funds raised by the Company through new issues/ loans & internal
accrual in various research projects & to meet general corporate expenditures of the Company. As on March 31,
2022, the Committee comprised of two non-executive Directors, Mr. Dilip S. Shanghvi and Mr. Sudhir V. Valia and
two independent directors, Ms. Bhavna Doshi and Dr. Robert Spiegel.

39
Sun Pharma Advanced Research Company Ltd

Mr. Sudhir V. Valia is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

Four meetings of the Committee were held during the financial year ended March 31, 2022 on following dates:

(i) May 17, 2021 (ii) July 26, 2021 (iii) November 01, 2021 and (iv) February 04, 2022.

The attendance of each Member of the Committee is given below:

No. of meetings
Name of Director Chairman/ Member No. of meetings attended
entitled to attend
Mr. Sudhir V. Valia Chairman 4 4
Mr. Dilip S. Shanghvi Member 4 4
Ms. Bhavna Doshi Member 4 4
Dr. Robert Spiegel Member 4 4

9. Securities Allotment Committee

The Board of Directors of the Company, in its meeting held on May 05, 2017 constituted a Securities Allotment
Committee to consider and approve allotment of shares and other securities including warrants and securities
convertible into shares that may be issued by the Company from time to time. As on March 31, 2022, the
Committee comprised of Dr. T Rajamannar, Mr. Dilip S. Shanghvi, Mr. Sudhir V. Valia and Ms. Bhavna Doshi.

Dr. T Rajamannar is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

Three meetings of the Committee were held during the financial year ended March 31, 2022 on following dates:

(i) July 08, 2021 (ii) August 25, 2021 and (iii) March 21, 2022

The attendance of each Member of the Committee is given below:

No. of meetings
Name of Director Chairman/ Member No. of meetings attended
entitled to attend
Dr. T. Rajamannar Chairman 3 3
Mr. Dilip S. Shanghvi Member 3 0
Mr. Sudhir V. Valia Member 3 2
Ms. Bhavna Doshi Member 3 1

10. Risk Management Committee

In compliance with the requirements of Regulation 21 of the Listing Regulations, the Board of Directors of the
Company at its meeting held on February 04, 2019 had constituted a Risk Management Committee. Considering
the amendments in the Listing Regulations, the Committee was re-constituted during the year and as on March
31, 2022, the Committee comprise of two non-executive directors viz. Mr. Dilip S. Shanghvi and Mr. Sudhir V. Valia
and one independent director, Ms. Bhavna Doshi. Mr. Anilkumar Raghavan, CEO of the Company is also a member
of the Committee.

Mr. Dilip S. Shanghvi is the Chairman and Mr. Dinesh Lahoti, Company Secretary, is the secretary of the Committee.

The roles and responsibilities of the Risk Management Committee, inter alia, include the following:

i. To formulate a detailed Risk Management Policy which shall include:

a. A framework for identification of internal and external risks specifically faced by the listed entity,
in particular including financial, operational, sectoral, sustainability (particularly, ESG related
risks), information, cyber security risks or any other risk as may be determined by the Committee.

40
Annual Report 2021-22 Corporate Governance Report

b. Measures for risk mitigation including systems and processes for internal control of identified risks.

Statutory Reports
c. Business continuity plan.

ii. To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate
risks associated with the business of the Company;

iii. To monitor and oversee implementation of the risk management policy, including evaluating the adequacy
of risk management systems;

iv. To periodically review the risk management policy, at least once in two years, including by considering the

Financial Statements
changing industry dynamics and evolving complexity;

v. To keep the board of directors informed about the nature and content of its discussions, recommendations
and actions to be taken;

vi. The appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject
to review by the Risk Management Committee. The Risk Management Committee shall coordinate its
activities with other committees, in instances where there is any overlap with activities of such
committees, as per the framework laid down by the board of directors.”

Two meetings of the Committee were held during the financial year ended March 31, 2022 on following
dates:

(i) September 24, 2021 and (ii) March 15, 2022

The attendance of each Member of the Committee is given below:

No. of meetings
Name of Director /Member Chairman/ Member No. of meetings attended
entitled to attend
Mr. Dilip S. Shanghvi Chairman 2 2
Mr. Sudhir V. Valia Member 2 2
Ms. Bhavna Doshi Member 2 2
Mr. Anilkumar Raghavan (CEO) Member 2 2

11. General Body Meetings

(i) Location date and time, where General Meetings including Annual General Meetings (AGM) were held during
the previous three financial years, are as follows:

Special Resolution(s) passed at

Year Meeting Location Date Time
the General Meeting
2018-19 Fourteenth Vasvik Auditorium, Trivia July 29, 09:45 NIL
AGM Complex, Race Course 2019 AM
Road, Gautam Nagar,
Vadiwadi, Vadodara –
390007, Gujarat, India

41
Sun Pharma Advanced Research Company Ltd

Special Resolution(s) passed at

Year Meeting Location Date Time
the General Meeting
2019-20 Fifteenth Held through Video Septem- 04:00 1. Appointment of Dr. Robert J.
AGM Conferencing (“VC”)/ ber 30, PM Spiegel (DIN: 08739625) as
Other Audio Visual Means 2020 an Independent Director of
(“OAVM”) and deemed to be the Company for a term of
held at the then registered five years.
office of the Company 2. Re-appointment of
at Sun Pharma Advanced Ms. Bhavna Doshi
Research Centre, Akota (DIN: 00400508) as an
Road, Akota, Vadodara, 390 Independent Director of the
020, as per the guidelines Company for a term of five
issued by the Ministry of years.
Corporate Affairs (MCA) 3. Re-appointment of
vide General Circular Dr. Ferzaan Engineer
No. 14/2020 dated April (DIN: 00025758) as an
8, 2020, General Circular Independent Director of the
No.17/2020 dated April 13, Company for a term of five
2020 and General Circular years.
No. 20/2020 dated May 05, 4. Approval for shifting of
2020. Registered Office of the
Company.
2020-21 Sixteenth Held through Video Septem- 05:00 1. Approved appointment
AGM Conferencing (“VC”)/ ber 29, PM and remuneration of Mr.
Other Audio Visual Means 2021 Anilkumar Raghavan, as the
(“OAVM”) and deemed to Manager and Whole-time
be held at the registered Key Managerial Personnel
office of the Company at of the Company, designated
Plot No. 5&6/1, Savli G.I.D.C. as Chief Executive Officer
Estate, Savli - Vadodara (CEO)
Highway, Manjusar - 391775, 2. Approved raising of the
Vadodara, Gujarat, as per funds through equity shares,
the guidelines issued by convertible warrants,
the Ministry of Corporate preference shares/ bonds
Affairs (MCA) vide General /debentures / any other
Circular No. 14/2020 dated instruments whether
April 8, 2020, General convertible into equity or
Circular No. 17/2020 dated not, American Depository
April 13, 2020, General Receipts (“ADRs”), Global
Circular No. 20/2020 dated Depository Receipts
May 05, 2020 and General (“GDRs”), Foreign Currency
Circular No. 02/2021 dated Convertible Bonds
January 13, 2021. (“FCCBs”), etc. (Passed
as an enabling special
resolution)

42
Annual Report 2021-22 Corporate Governance Report

Two Extra-Ordinary General Meetings of the Company were held during the year i.e. 2021-22, details of which

Statutory Reports
are as follows:

Special Resolution(s) passed at

Year Meeting Location Date Time
the General Meeting
2021-22 Extra – Held through Video April 26, 03:00 1. Authorised the Board
Ordinary Conferencing (“VC”)/ 2021 PM to borrow money not
General Other Audio Visual Means exceeding H 1000 Crores or
Meeting (“OAVM”) and deemed to the aggregate of the paid
be held at the registered up capital, free reserves

Financial Statements
office of the Compa-ny at and securities premium of
Plot No. 5&6/1, Savli G.I.D.C. the Company, whichever is
Estate, Savli - Vadodara higher.
Highway, Manjusar - 391775, 2. Authorised the Board to
Vadodara, Gujarat, as per create charge on the assets
the guidelines issued by of the Company, so that
the Ministry of Corporate the total amount secured
Affairs (MCA) vide General by such charge shall not,
Circular No. 14/2020 dated at any time exceed the
April 8, 2020, General limit of H 1000 Crores or
Circular No. 17/2020 dated the aggregate of the paid
April 13, 2020, General up capital, free reserves
Circular No. 20/2020 dated and securities premium of
May 05, 2020 and General the Company, whichever is
Circular No. 02/2021 dated higher.
January 13, 2021.
2021-22 Extra – Held through Video June 08, 04:00 1. Approved issue of upto
Ordinary Conferencing (“VC”)/ 2021 PM 6,74,70,203 (Six Crores
General Other Audio Visual Means Seventy Four Lakhs Seventy
Meeting (“OAVM”) and deemed to Thousand Two Hundred
be held at the registered and Three) warrants
office of the Compa-ny at each convertible into,
Plot No. 5&6/1, Savli G.I.D.C. or exchangeable for,
Estate, Savli - Vadodara one equity share of the
Highway, Manjusar - 391775, Company within the
Vadodara, Gujarat, as per period of 18 (eighteen
the guidelines issued by months) in accordance
the Ministry of Corporate with the applicable law
Affairs (MCA) vide General (“Warrants”) to the Promoter
Circular No. 14/2020 dated of the Company and certain
April 8, 2020, General identified non-promoter
Circular No. 17/2020 dated persons / entities
April 13, 2020, General
Circular No. 20/2020 dated
May 05, 2020 and General
Circular No. 02/2021 dated
January 13, 2021.

43
Sun Pharma Advanced Research Company Ltd

(ii) Postal Ballot -

The Company did not pass any resolution by Postal Ballot during financial year 2021-22.

12. Means of Communication

a. Quarterly Financial Results: The quarterly, half-yearly and annual Financial Results are posted by the
Company on its website. These are also submitted to the stock exchanges in accordance with the Listing
Regulations are published in all English Editions and in Gujarati Edition (Published in Ahmedabad) of
Financial Express.

b. Website: The Company’s www.sparc.life contains a dedicated ‘Investors’ section where shareholders’
information is available. The Annual Report is available on the website in a user friendly and downloadable
form. Apart from this, official news releases and media presentations to analysts are displayed on the
Company’s website.

c. Corporate Filing: Announcements, Quarterly Results, Shareholding Pattern etc. are regularly filed by the
Company with the Stock Exchanges and are available on the websites of BSE Ltd. - www.bseindia.com and
the National Stock Exchange of India Ltd. - www.nseindia.com and also on the website of the Company at
www.sparc.life.

d. Annual Report: Annual Report containing inter alia Audited Annual Accounts, Board’s Report, the Management
Discussion and Analysis Report, Auditor’s Report, and other important information is sent to the shareholders
whose e-mail IDs are registered. However pursuant to General Circular No. 14/2020 dated April 08, 2020,
General Circular No. 17/2020 dated April 13, 2020, General Circular No. 20/2020 dated May 05, 2020, and
General Circular No. 02/ 2021 dated January 13, 2021 and other applicable circulars issued by the Ministry
of Corporate Affairs and circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 read with
Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated January 15, 2021 and other applicable circulars, if
any, no physical copies of the Annual Report for FY 2020-21 were sent. Pursuant to the MCA’s General Circular
2/2022 dated May 05, 2022 and SEBI Circular No. SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated May 13, 2022
issued in continuation of above referred Circular(s), no physical copies of the Annual Report for FY 2021-22
are being sent, unless requested by the shareholder(s).

e. Presentation to Analyst: The Company also makes periodic presentations to analysts and also holds at
least one conference call with the analysts and investors, to allow them to raise their queries directly to the
management. A copy of all such presentations and a transcript of all such conference call are also made
available by the Company on its website www.sparc.life.

13. General Shareholder Information

13.1 Annual General Meeting :

(a) Day, Date and Time Thursday, September 22, 2022, at 05:00 P.M. (IST)
(b) Mode (Deemed Venue): Through Video Conferencing / Other Audio Visual Means and shall deemed
to be held at the registered office of the Company at Plot No. 5&6/1, Savli
G.I.D.C. Estate, Savli - Vadodara Highway, Manjusar - 391775, Vadodara,
Gujarat, as per the guidelines issued by the Ministry of Corporate Affairs
(MCA) vide General Circular No. 14/2020 dated April 8, 2020, General Circular
No. 17/2020 dated April 13, 2020, General Circular No. 20/2020 dated May
05, 2020; General Circular No. 02/2021 dated January 13, 2021 and General
Circular 2/2022 dated May 05, 2022.

44
Annual Report 2021-22 Corporate Governance Report

Statutory Reports
13.2 Financial Calendar - Results for quarter ended June 30, 2022 – On August 08, 2022.
- Results for quarter ending September 30, 2022 – First or Second week of
November 2022 (tentative).
- Results for quarter ending December 31, 2022 – First or Second week of
February 2023 (tentative).
- Results for quarter ending March 31, 2023 – Second or Third week of May,
2023 (tentative).
13.3 Dividend Payment Date N.A.
13.4 Details of Book-closure N.A.
13.5 (a) Listing of Equity Shares The equity shares of the Company are listed on:

Financial Statements
(i) BSE Limited
Phiroze Jeejeebhoy Towers
Dalal street,
Mumbai – 400001
(ii) National Stock Exchange of India Limited
Exchange Plaza, 5th Floor,
Plot No. C/1, G Block,
Bandra Kurla Complex,
Bandra (East),
Mumbai – 400 051
(b) Payment of Listing Fees: Listing Fees for the financial year 2022-23 have been paid, within the
stipulated time, to the BSE Limited and the National Stock Exchange of India
Limited, where the Company’s Equity Shares are listed.
13.6 Stock Code:
Equity Shares of J 1 each
(a) Trading Symbol in BSE: 532872
(b) Trading Symbol in NSE: SPARC
(c) ISIN for Equity Shares held INE232I01014
in Demat:

13.7 Market Price Data

The market price data of the equity shares of the Company on BSE Limited and National Stock Exchange of India
Limited for the financial year 2021-22 are as follows:

National Stock Exchange of

BSE Ltd.
India Ltd.
Month
Month’s High Month’s Low Month’s High Month’s Low
Price (In J) Price (In J) Price (In J) Price (In J)
April 2021 183.25 142.40 183.40 142.30
May 2021 248.00 170.25 247.80 170.20
June 2021 264.85 216.25 264.90 216.05
July 2021 277.00 228.50 277.10 228.60
August 2021 311.90 258.35 312.00 258.15
September 2021 310.30 275.40 310.40 275.05
October 2021 304.80 260.50 305.00 261.00
November 2021 279.80 241.70 279.95 243.10
December 2021 293.40 241.50 293.95 241.25
January 2022 338.00 283.55 337.85 283.40
February 2022 348.75 250.85 349.00 250.10
March 2022 309.00 249.65 309.05 250.00
(Source: BSE and NSE website)

45
Sun Pharma Advanced Research Company Ltd

13.8 Share Price Performance in comparison to broad-based indices – NSE Nifty and BSE Sensex

(a) SPARC Share Price Performance in comparison to NSE Nifty

SPARC and Nifty-50 Closing Price

20000 350.00
18000
300.00
16000
14000 250.00

12000 200.00
10000
150.00
8000
6000 100.00
4000
50.00
2000
0 0.00
21

21

21

21

21

21

22

22

2
-2

-2

-2

-2
r-

n-

l-

g-

p-

n-

b-
ay

ct

ov

ec

ar
Ap

Ju
Ju

Au

Se

Ja

Fe
O

M
N

D
M

SPARC Nifty-50 (Closing)

(b) SPARC Share Price Performance in comparison to BSE Sensex

SPARC and BSE Sensex Closing Price

70000 350.00

60000 300.00

50000 250.00

40000 200.00

30000 150.00

20000 100.00

10000 50.00

0 0.00
21

21

21

21

21

21

21

22

22
-2

-2

-2
r-

n-

l-

g-

p-

n-

-
ay

ct

ov

ec

ar
Ap

Ju
Ju

Au

Se

Ja

Fe
O

M
N

D
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SPARC BSE Sensex (Closing)

46
Annual Report 2021-22 Corporate Governance Report

13.9 Registrars & Transfer Agent

Statutory Reports
Link Intime India Pvt. Ltd.,
C 101, 247 Park,
L.B.S Marg, Vikhroli West,
Mumbai 400 083
E-Mail: rnt.helpdesk@linkintime.co.in
Tel No: +91 22 49186000 Fax: +91 22 49186060

13.10 Share Transfer System

Financial Statements
Effective from April 1, 2019, SEBI has mandated that shares can be transferred only in dematerialized mode.
Hence, no transfer of shares in physical form can be lodged by the shareholders.

13.11 Distribution of Shareholding as on March 31, 2022

Equity Shares held No. of Folios % to total No. of Shares % to total

Upto 100 63,737 67.18 23,76,379 0.87
101- 250 13,124 13.83 23,23,377 0.86
251 - 500 7,554 7.96 29,19,510 1.07
501 - 1000 4,562 4.81 35,39,525 1.30
1001 - 2000 3,421 3.61 48,19,209 1.77
2001 - 3000 830 0.87 21,13,865 0.78
3001 - 4000 346 0.36 12,39,040 0.46
4001 - 5000 282 0.30 13,24,925 0.49
5001 - 10000 475 0.50 35,15,810 1.29
10001 - 20000 218 0.23 31,08,052 1.14
20001 - 30000 93 0.10 23,26,895 0.86
30001 - 40000 43 0.05 15,24,616 0.56
40001 - 50000 24 0.03 11,18,089 0.41
50001 - 100000 57 0.06 41,67,280 1.53
100001 and above 115 0.12 23,54,62,394 86.61
Total 94,881 100.00 27,18,78,966 100.00

13.12 Shareholding Pattern of the Company as on March 31, 2022

Particulars No. of Shares No. of Shares

Promoter & Promoter Group 18,78,34,196 69.09%
Mutual Funds 6,51,702 0.24%
Alternate Investment Funds 14,08,494 0.52%
Financial Institutions/ Banks 650 0.00%
Foreign Portfolio Investors 64,77,388 2.38%
Bodies Corporate 1,75,34,480 6.45%
Individuals (holding nominal share capital upto H2 lakh) 3,11,66,175 11.46%
Individual (holding nominal share capital in excess of H 2 lakh) 88,81,980 3.27%
NRI (Repat) 6,06,095 0.22%
NRI(Non-Repat) 3,75,682 0.14%
HUF 17,95,892 0.66%
Trusts 1,03,25,879 3.80%
Others 48,20,353 1.77%
TOTAL 27,18,78,966 100.00%

47
Sun Pharma Advanced Research Company Ltd

Shareholding Pattern as on March 31, 2022

Promoter & Promoter Group 69.09%

Mutual Funds 0.24%
Alternate Investment Funds 0.52%
Financial Institutions/ Banks 0.00%
Foreign Portfolio Investors 2.38%
Bodies Corporate 6.45%
Individuals (holding nominal share 11.46%
capital upto J 2 lakh)
Individual (holding nominal share 3.27%
capital in excess of J 2 lakh)
NRI (Repat) 0.22%
NRI(Non-Repat) 0.14%
HUF 0.66%
Trusts 3.80%
Others 1.77%

13.13 Dematerialization of Shares

Out of the total 27,18,78,966 equity shares, 27,11,77,461* equity shares of the Company representing about 99.74%
of the total equity shares of the Company were held in dematerialized mode as on March 31, 2022.

* includes 8426966 equity shares allotted on March 21, 2022 upon conversion of warrants which were under listing as on March 31, 2022.

Liquidity:

The equity shares of the Company are actively traded on NSE and BSE. Relevant data for the average daily
turnover for the financial year 2021-22 is given below:

Particulars NSE BSE NSE + BSE

No. of shares (in Thousands) 1,375.46 135.85 1,511.31
Value of shares (H Lakhs) 3,575.33 347.46 3,922.79
(Source: Compiled from the data available on the BSE and NSE website)

13.14 Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, Conversion Date and Likely Impact on Equity

The Company, on July 08, 2021 had allotted 6,24,74,082 warrants, each convertible into one equity share, on
preferential basis at an issue price of H 178/- each, upon receipt of 25% of the issue price (i.e. H 44.50 per warrant)
as warrant subscription money. Balance 75% of the issue price (i.e. H 133.50 per warrant) shall be payable within
18 months from the allotment date, at the time of exercising the option to apply for fully paid–up equity share
of H 1/- each of the Company, against each warrant held by the warrant holder.

During the year, the Company upon receipt of balance 75% of the issue price (i.e. H 133.50/- per warrant) for
98,31,460 warrants, has allotted equal no. of fully paid up equity shares against conversion of said warrants
exercised by the warrant holder(s). For the remaining 5,26,42,622 warrants, the respective allottees are yet to
exercise their option for conversion/exchange the warrants into/for equity shares and accordingly, balance
75% money towards such remaining warrants is yet to be received. The last day for exercising the option for

48
Annual Report 2021-22 Corporate Governance Report

conversion/exchange the warrants into/for equity shares of the Company is January 07, 2023, being 18 months

Statutory Reports
from the date of allotment of warrants i.e. July 08, 2021.

13.15 Commodity Price Risk/ Foreign Exchange Risk and Hedging Activities

The Company being in the business of Research & Development does not face any significant Commodity Price
Risk. During the year, the Company had managed the foreign exchange risk to the extent considered adequate.
The details of foreign currency exposures, that have not been hedged by a derivative instrument or otherwise,
are disclosed in the Financial Statements.

13.16 R&D Centres

Financial Statements
1. Plot No. 5 & 6,/1, Savli G.I.D.C. Estate, Savli Vadodara Highway, Manjusar, 391 775, Gujarat.

2. 17/B, Mahal Industrial Estate, Off Mahakali Caves Road, Andheri (East), Mumbai - 400 093, Maharashtra.

3. F.P. 27 Part Survey No. 27, C.S. No. 1050, T.P.S. No.24, Tandalja, Vadodara - 390 012, Gujarat.

4. 907/4, GIDC, Makarpura, Vadodara - 390 010, Gujarat.

13.17 Investor Correspondence

(a) Registrar and Transfer Agent

Link Intime India Private Limited

Unit: Sun Pharma Advanced Research Company Limited
C 101, 247 Park,
L B S Marg, Vikhroli West, Mumbai 400 083
E-Mail: rnt.helpdesk@linkintime.co.in
Tel: +91 22 49186000,
Fax: +91 22 49186060

(b) For query on Annual Report

Mr. Jaydeep Issrani

Sun Pharma Advanced Research Company Limited
17/B, Mahal Industrial Estate,
Off. Mahakali Caves Road,
Andheri (East), Mumbai - 400 093.
E-Mail: jaydeep.issrani@sparcmail.com

(c) For any other query or grievances (including escalation of any query/ grievances not resolved through above
means)

Secretarial Department
Sun Pharma Advanced Research Company Limited
17/B, Mahal Industrial Estate,
Off. Mahakali Caves Road, Andheri (East), Mumbai - 400 093.
E-mail id designated by the Company for Investor Complaints: secretarial@sparcmail.com.

13.18 List of Credit Ratings

Rating Agency Facilities Rating

Acuite Ratings & Research Ltd. Long Term facilities ACUITE AA/Stable

49
Sun Pharma Advanced Research Company Ltd

14. Disclosures

• No transaction of a material nature has been entered into by the Company with the related parties that may
have a potential conflict with the interests of the Company at large. The transactions with the related parties
are disclosed in the Financial Statements.

• During the year, the Company has received H 40,925.96 lakhs towards allotment of warrants / upon conversion of
such warrants allotted on preferential basis. Of the above, H 39,665.47 lakhs has been utilised by the Company
for funding its research and development activities and/or for general corporate purposes and/or for purposes
as decided and approved by the Board from time to time. As on March 31, 2022, H 1,260.49 lakhs was available
for utilization.

• There were no instances of non-compliance by the Company on any matters related to the capital markets or
penalties/ strictures imposed on the Company by the Stock Exchange or SEBI or any statutory authority during
the last three financial years.

• The Company has laid down procedures to inform Board members about the risk assessment and its minimization,
which is periodically reviewed to ensure that risk control is exercised by the management effectively.

• The Board of Directors of the Company has approved a Whistle Blower Policy and put in place a mechanism to
monitor the actions taken on complaints received under the said policy. This Policy also outlines the reporting
procedure and investigation mechanism to be followed in case an employee blows the whistle for any wrong-
doing in the Company. Employees are given protection in two important areas - confidentiality and against
retaliation. It is ensured that employees can raise concerns regarding any violation or potential violation easily
and free of any fear of retaliation, provided they have raised the concern in good faith. An Ombudsperson
has been appointed to receive the complaints through portal, email or letters who would investigate the
complaints. The final decision would be taken by the Ombudsperson in consultation with the management and
the Audit Committee. The Policy is expected to help to draw the Company’s attention to unethical, inappropriate
or incompetent conduct which has or may have detrimental effects either for the organization or for those
affected by its functions. A copy of the Company’s Whistle Blower Policy is available on the website of the
Company and may be accessed at https://www.sparc.life/policies-and-codes. No personnel have been denied
access to the Audit Committee.

• During the year, one separate meeting of the independent directors was held on March 16, 2022. At the said
meeting of independent directors, the performance of non-independent directors and the board as a whole was
evaluated.

• Details of compliance with mandatory requirements and adoption / non-adoption of the discretionary
requirements:

(i) The Company complies with all the mandatory requirements specified under the Listing Regulations.

(ii) The Chairman of the Company is Non-Executive Director (effective from May 25, 2021) of the Company.

(iii) The Company does not send half-yearly financial results including summary of the significant events in
the last six months, to the household of each shareholder as the financial results are published in the
newspapers and also posted on the website of the Company and the websites of BSE and NSE.

(iv) The Auditors have issued an unmodified opinion to the financial statements of the Company.

(vi) Aneja Assurance Private Limited are the Internal Auditors of the Company. The Internal Auditors report their
findings to the Audit Committee of the Company.

• The Company does not have any policy on material subsidiaries since it does not have any subsidiary.

• The policy of the Company on dealing with Related Party Transactions is available on the website of the
Company and can be accessed through the web link: https://www.sparc.life/policies-and-codes.

50
Annual Report 2021-22 Corporate Governance Report

• The Company being in the business of Research & Development does not face any significant commodity price

Statutory Reports
risk.

• Mr. Debashis Dey has resigned from his position of Company Secretary and Compliance Officer with effect from
end of working hours of June 25, 2021. On the recommendation of the Nomination and Remuneration Committee,
the Board of Directors at its meeting held on July 26, 2021 has considered and approved the appointment of Mr.
Dinesh Lahoti as the Company Secretary and Compliance Officer of the Company with immediate effect.

• A certificate issued by M/s. Veenit Pal & Associates Practicing Company Secretary, certifying that none of the
directors on the Board of the Company have been debarred or disqualified from being appointed or continuing

Financial Statements
as directors of companies by the Board/ Ministry of Corporate Affairs or any such statutory authority has been
attached as – Annexure II to this Report.

• During the year, the Board accepted all recommendations made to it by its duly constituted Committees.

• Total fees for all services paid by the Company to the statutory auditor and all entities in the network firm/
network entity of which the statutory auditor is a part was 27.28 lakhs, for the year under review.

• Disclosure in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 are as follows:

Number of complaints disposed Number of complaints pending

Number of complaints filed during the
of during the financial year as at end of the financial year
financial year 2021-22
2021-22 2021-22
Nil Nil Nil

• The Company has complied with all the requirements of Corporate Governance Report as prescribed under Part
C of Schedule V of Listing Regulations.

• The Company has complied with all the Corporate Governance requirements specified in regulation 17 to 27 and
clauses (b) to (i) of sub-regulation (2) of regulation 46 of the Listing Regulations.

For and on behalf of the Board of Directors

Place: Mumbai Dilip S. Shanghvi

Date: August 08, 2022 Chairman
(DIN: 00005588)

51
Sun Pharma Advanced Research Company Ltd

ANNEXURE – I
TO CORPORATE GOVERNANCE
DECLARATION OF COMPLIANCE WITH CODE OF CONDUCT FOR THE YEAR ENDED MARCH 31, 2022

I, Anilkumar Raghavan, Chief Executive Officer of Sun Pharma Advanced Research Company Limited (“the Company”)
hereby declare that, to the best of my information, all the Board Members and senior management personnel of the
Company have affirmed their compliance and undertaken to continue to comply with the Code of Conduct laid
down by the Board of Directors of the Company for Board members and senior management.

For Sun Pharma Advanced Research Company Limited

Place: Mumbai Anilkumar Raghavan

Date: August 08, 2022 Chief Executive Officer

ANNEXURE - II
TO CORPORATE GOVERNANCE
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulation, 2015)

To,
The Members,
SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED,
Plot No. 5 & 6, 6/1, Savli G.I.D.C Estate,
Savli - Vadodara Highway,
Manjusar Vadodara-391 775
CIN:- L73100GJ2006PLC047837

I have examined the relevant registers, records, forms, return and disclosures received from the Directors of SUN
PHARMA ADVANCED RESEARCH COMPANY LIMITED having CIN L73100GJ2006PLC047837 and having registered office
at Plot No. 5 & 6, 6/1, Savli G.I.D.C Estate, Savli - Vadodara Highway, Manjusar Vadodara-391 775 (hereinafter referred
to as ‘the Company’), produced before me by the company for the purpose of issuing this certificate, in accordance
with Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulation, 2015.

In my opinion and to the best of my information and according to the verifications (including Director Identification
Number (DIN) status at the portal www.mca.gov.in as considered necessary and explanation furnished to me by the
Company and its officer(s), I hereby certify that none of the Directors on the Board of Directors of the Company
as stated below for the financial year ending on 31st March, 2022 have been debarred or disqualified from being
appointed or continuing as Directors of the Companies by the Securities and Exchange Board of India, Ministry of
Corporate Affairs or any such Statutory Authority.

52
Annual Report 2021-22 Corporate Governance Report

Statutory Reports
Date of appointment in
Sr. No. Name of Director DIN
the Company
1 Sudhir Vrundavandas Valia 00005561 01.03.2006
2 Dilip Shantilal Shanghvi 00005588 01.03.2006
3 Ferzaan Nariman Engineer 00025758 05.05.2017
4 Bhavna Gautam Doshi 00400508 31.10.2014
5 Rajamannar Thennati 01415412 04.06.2007
6 Robert Jay Spiegel 08739625 01.06.2020

Financial Statements
Ensuring the eligibility for the appointment/continuity of every director on the board is the responsibility of the
management of the Company. Our responsibility is to express an opinion on these based on our verification.

This certificate is neither as assurance as to the future viability of the Company nor of the efficiency of effectiveness
with which the management has conducted the affairs of the Company.

For Veenit Pal & Associates

Company Secretaries

Veenit Pal
(Proprietor)
ACS : 25565
CP : 13149
Peer Review No. 1433/ 2021

Place : Mumbai
Date : August 2, 2022
UDIN : A025565D000729191

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Sun Pharma Advanced Research Company Ltd

Independent Auditor’s Report on compliance with the conditions of Corporate Governance as per provisions of
Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, as amended
The Members of Sun Pharma Advanced Research Company Limited

1. The Corporate Governance Report prepared by Sun Pharma Advanced Research Company Limited (hereinafter
the “Company”), contains details as specified in regulations 17 to 27, clauses (b) to (i) and (t) of sub – regulation
(2) of regulation 46 and para C, D, and E of Schedule V of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable
criteria’) for the year ended March 31, 2022 as required by the Company for annual submission to the Stock
exchange.

Management’s Responsibility

2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company
including the preparation and maintenance of all relevant supporting records and documents. This responsibility
also includes the design, implementation and maintenance of internal control relevant to the preparation and
presentation of the Corporate Governance Report.

3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies
with the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities
and Exchange Board of India.

Auditor’s Responsibility

4. Pursuant to the requirements of the Listing Regulations, our responsibility is to provide a reasonable assurance
in the form of an opinion whether, the Company has complied with the conditions of Corporate Governance as
specified in the Listing Regulations.

5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on
Reports or Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance,
both issued by the Institute of Chartered Accountants of India (“ICAI”). The Guidance Note on Reports or
Certificates for Special Purposes requires that we comply with the ethical requirements of the Code of Ethics
issued by ICAI.

6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and
Related Services Engagements.

7. The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated in
compliance of the Corporate Governance Report with the applicable criteria. Summary of procedures performed
include:

i. Read and understood the information prepared by the Company and included in its Corporate Governance
Report;

ii. Obtained and verified that the composition of the Board of Directors with respect to executive and non-
executive directors has been met throughout the reporting period;

iii. Obtained and read the Register of Directors as on March 31, 2022 and verified that atleast one independent
woman director was on the Board of Directors throughout the year;

iv. Obtained and read the minutes of the following committee meetings / other meetings held during the period
April 01, 2021 to March 31, 2022:

(a) Board of Directors;

(b)
Audit Committee;

(c) Annual General Meeting (AGM);

(d) Nomination and Remuneration Committee;

54
Annual Report 2021-22 Corporate Governance Report

(e) Stakeholders Relationship Committee;

Statutory Reports
(f) Risk Management Committee;

(g) Securities Allotment Committee;

(h) Corporate Social Responsibility Committee;

(i) Fund Management Committee.

v. Obtained necessary declarations from the directors of the Company.

vi. Obtained and read the policy adopted by the Company for related party transactions.

Financial Statements
vii. Obtained the schedule of related party transactions during the year and balances at the year- end. Obtained
and read the minutes of the audit committee meeting where in such related party transactions have been
pre-approved prior by the audit committee.

viii. Performed necessary inquiries with the management and also obtained necessary specific representations
from management.

8. 
The above-mentioned procedures include examining evidence supporting the particulars in the Corporate
Governance Report on a test basis. Further, our scope of work under this report did not involve us performing audit
tests for the purposes of expressing an opinion on the fairness or accuracy of any of the financial information
or the financial statements of the Company taken as a whole.

Opinion

9. Based on the procedures performed by us, as referred in paragraph 7 above, and according to the information
and explanations given to us, we are of the opinion that the Company has complied with the conditions of
Corporate Governance as specified in the Listing Regulations, as applicable for the year ended March 31, 2022,
referred to in paragraph 4 above.

Other matters and Restriction on Use

10. This report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.

11. This report is addressed to and provided to the members of the Company solely for the purpose of enabling it
to comply with its obligations under the Listing Regulations with reference to compliance with the relevant
regulations of Corporate Governance and should not be used by any other person or for any other purpose.
Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any
other party to whom it is shown or into whose hands it may come without our prior consent in writing. We have
no responsibility to update this report for events and circumstances occurring after the date of this report.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003

per Paul Alvares

Partner
Membership Number: 105754
UDIN: 22105754AOMRIA1827
Place of Signature: Mumbai
Date: August 08, 2022

55
Sun Pharma Advanced Research Company Ltd

Business Responsibility Report

SECTION A: GENERAL INFORMATION ABOUT THE 3. Total profit/ (loss) after taxes (J in lakhs): (20,339.54)
COMPANY
4. Total Spending on Corporate Social Responsibility
1. Corporate Identity Number (CIN) of the Company: (CSR) as percentage of profit after tax (%): NIL*
L73100GJ2006PLC047837
5. List of activities in which expenditure in 4 above has
2. 
Name of the Company: Sun Pharma Advanced been incurred: NA
Research Company Limited (SPARC)
* In view of the negative average net profit of the Company
during the three immediately preceding financial years, the
3. Registered address: Plot No. 5&6/1, Savli G.I.D.C.
Company was not required to spend on CSR activities pursuant
Estate, Savli – Vadodara Highway, Manjusar - to the provisions of the Companies Act, 2013 read with rules
391775, Vadodara, Gujarat, India made thereunder.

4. Website: https://www.sparc.life SECTION C: OTHER DETAILS

5. E-mail id: secretarial@sparcmail.com 1. Does the Company have any Subsidiary Company/
Companies?: No
6. Financial Year reported: 2021-22
2. Do the Subsidiary Company/Companies participate
7. Sector(s) that the Company is engaged in (industrial
in the BR Initiatives of the parent Company? If
activity code-wise):
yes, then indicate the number of such subsidiary
Company(s): NA
Sub
Group Class Description
Class 3. Do any other entity/entities (suppliers, distributors,
721 7210 72100 Research and experimental and so on) that the Company does business with,
development on natural participate in the BR initiatives of the Company? No
sciences and engineering

8. List three key products/services that the Company

SECTION D: BUSINESS RESPONSIBILITY (BR)
manufactures/provides (as in balance sheet):
INFORMATION

(a) Details of the Director/Directors responsible for

The Company does not manufacture any products.
implementation of the BR policy/policies
9. Total number of locations where business activity is
1. DIN: 00005561
undertaken by the Company:
2. Name: Sudhir V. Valia
(a) Number of International locations (Provide
details of major 5): 1 3. Designation: Non- Executive Director
(b) Number of National locations: 4 (b) Details of the BR head
10. 
Markets served by the Company – Local/State/
National/ International: NA No. Particulars Details
1 DIN (if 03548731
applicable)
SECTION B: FINANCIAL DETAILS OF THE
2 Name Mr. Anilkumar Raghavan
COMPANY
3 Designation CEO
1. Paid up Capital (J in lakhs): 2,718.87 4 Telephone +91 22 6645 5645
number
2. Total Turnover (J in lakhs): 14,409.35 5 E-mail id anil.raghavan@sparcmail.com

56
Annual Report 2021-22 Business Responsibility Report

2. Principle-wise (as per NVGs) BR Policy/policies:

Statutory Reports
(a) Details of compliance (Reply in Y/N)

No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy/ policies for: Y Y Y Y Y Y Y Y Y
2 Has the policy been formulated in consultation Yes. After due consultation with the concerned
with the relevant stakeholders? Management Team, the BR Policy and other related
policies have been formulated.

Financial Statements
3 Does the policy conform to any national / Yes. The policies do comply with the respective
international standards? If yes, specify? principles under National Voluntary Guidelines
(NVG).
4 Has the policy been approved by the Board? Yes. The Board of Directors has approved the policies
If yes, has it been signed by MD/ owner/ CEO/ and they are signed by the CEO.
appropriate Board Director?
5 Does the Company have a specified committee The Board has appointed Mr. Sudhir V. Valia, Director
of the Board/ Director/ Official to oversee the of the Company, to oversee policy implementation.
implementation of the policy?
6 Indicate the link for the policy to be viewed The link to access the policy shall be made available
online? on receipt of written request from a shareholder.
7 Has the policy been formally communicated Yes
to all relevant internal and external
stakeholders?
8 Does the Company have in-house structure to Y Y Y Y Y Y Y Y Y
implement the policy/ policies?
9 Does the Company have a grievance redressal Yes
mechanism related to the policy/ policies to
address stakeholders’ grievances related to the
policy/ policies?
10 Has the policy been formulated in consultation Yes, by an internal committee.
with the relevant stakeholders?

b) If answer to the question at serial number 1 against any principle is ‘No’, please explain why: (Tick up to 2
options):

No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the Principles
2 The Company is not at a stage where it finds
itself in a position to formulate and implement
the policies on specified principles
3 The Company does not have financial or ----------------------NA----------------------
manpower resources available for the task
4 It is planned to be done within next 6 months
5 It is planned to be done within the next 1 year
6 Any other reason (please specify)

57
Sun Pharma Advanced Research Company Ltd

3. Governance related to BR: • Resolve conflicts ethically, as a priority over

personal and professional relationships;
(a) 
Indicate the frequency with which the Board
of Directors, Committee of the Board or CEO • Ensure safety of confidential information
assesses the BR performance of the Company: related to the Company or its clients;

• Protect the Company’s assets and ensure its

The BR performance of the Company is assessed
proper utilisation;
by the Board annually.
• Consider all statutory compliances as
(b) Does the Company publish a BR or a Sustainability important;
Report? What is the hyperlink for viewing this
report? How frequently it is published? • Enable reporting of incidents of infringements or
non-compliance, following necessary internal
Yes, the BR Report is published annually as processes and procedures
part of the annual report. It is available on the
Company’s website, www. sparc.life at https:// Upholding Governance with Whistle Blower Policy
www.sparc.life/announcements-disclosures.
The Company’s Whistle Blower Policy clearly mentions
the process for reporting violation, breach, non-
SECTION E: PRINCIPLE-WISE PERFORMANCE compliance, infringement, or infraction of the Code
of Conduct. It also precisely states the provision for
Principle 1: Businesses should conduct and govern protection. During the year, no violations to the Code of
themselves with Ethics, Transparency and Accountability Conduct were reported.
SPARC is guided by the values and it aims to pursue 1. 
Does the policy relating to ethics, bribery and
growth while keeping responsibilities intact. The corruption cover only the Company? Yes/ No. Does
focus lies on ensuring organic growth, with a holistic it extend to the Group/Joint Ventures/ Suppliers/
approach. The Company’s core values of transparency, Contractors/NGOs /Others?
integrity, good governance and accountability form
the heart of Company’s Code of Conduct and it strives Yes, the policy extends only to the Company.
to stand by it at all times. The Company believes in
adhering to statutory regulations and it helps the 2. How many stakeholder complaints have been received
Company to retain stakeholders’ trust while creating in the past financial year and what percentage was
long term value for them. satisfactorily resolved by the management? If so,
provide details thereof, in about 50 words or so.
The following constitute the Company’s guiding
principles: The Company had received 1 complaint from a
shareholder during the financial year which was
a. Leading by example satisfactorily resolved.

The responsibility to lead by example lies with Principle 2: Business should provide goods and services
the Company’s top management and the desire that are safe and contribute to sustainability throughout
to practice and uphold values and fair business their lifecycle.
practices is passed on from the top to the bottom of
the organisational hierarchy. The Board of Directors The Company is consistently trying to find ways to
plays a key role to set an example for others to utilise science for improving and enriching human
follow. The board also emphasises on adherence life. The Company’s expertise and scientific research
to compliance norms set by the Company and capabilities enable it to deliver therapeutic solutions
facilitating mechanism to review and monitor the that serve a wide range of patient requirements.
business responsibility functions of the Company. Treatment for a broad spectrum of healthcare needs are
addressed through its research initiatives. In its journey
b. Abiding by a comprehensive Code of Conduct to ensure better healthcare, the Company remains
dedicated to pursue sustainability standards across its
The Company has a well-defined Code of Conduct processes and practices.
and its directors and employees operate within this
framework. A legal and ethical code guides this Our quest for sustainability can be explained through
framework and is designed to intercept misconduct the following measures:
by clearly highlighting certain practices:

58
Annual Report 2021-22 Business Responsibility Report

– Lipixelle TechnologyTM – This technology helps to work? If yes, what steps have been taken to improve

Statutory Reports
overcome the challenge of solubilising ophthalmic their capacity and capability of local and small
drugs without the use of Benzalkonium Chloride vendors?
(BAK). Lipixelle TechnologyTM helps to remove the
use of toxic BAK, which is known to cause ocular NA
surface damage, if used over long time.
5. 
Does the Company have a mechanism to recycle
– Wrap MatrixTM Technology – It is a proprietary oral products and waste? If yes what is the percentage
drug delivery technology, the use of technology of recycling of products and waste (separately as
helps in reducing the pill size as the drug to <5%, 5-10%, >10%). Also, provide details thereof, in

Financial Statements
excipient ratio is high. This technology is suitable about 50 words or so.
for high solubility - high dose drugs.
NA
– Phenobarbital formulation – SPARC has developed
Principle 3: Businesses should promote the well-being of
novel formulation of phenobarbital for treatment
all employees.
of neonatal seizures. SPARC’s formulation does
not contain benzyl alcohol. Currently marketed 1. Please indicate the total number of employees:
formulations contain benzyl alcohol which is known
to cause gasping syndrome in neonates. 403 permanent employees as on March 31, 2022

2. Please indicate the Total number of employees hired

Note: As the Company does not manufacture any product
on temporary/contractual/casual basis:
and primarily focuses on R&D, the following queries are
not applicable. 168

1. List up to three of your products or services whose 3. 

Please indicate the number of permanent women
design has incorporated social or environmental employees:
concerns, risks and/or opportunities.
136
NA
4. Please indicate the number of permanent employees
2. For each such product, provide the following details with disabilities:
in respect of resource use (energy, water, raw
NIL
material, and so on) per unit of product (optional):
5. 
Do you have an employee association that is
(a)
Reduction during sourcing/production/ recognised by the management?
distribution achieved since the previous year
throughout the value chain? No

NA 6. What percentage of your permanent employees are

members of this recognised employee association?
(b) Reduction during usage by consumers (energy,
water) has been achieved since the previous NA
year? 7. Please indicate the number of complaints relating
to child labour, forced labour, involuntary labour,
NA
sexual harassment in the last financial year and
3. 
Does the Company have procedures in place for pending, as on the end of the financial year.
sustainable sourcing (including transportation)?
Nil
If yes, what percentage of your inputs was sourced
sustainably? Also, provide details thereof, in about 8. 
What percentage of your employees were given
50 words or so. safety and skill up- gradation training in the last
year?
NA
(a) Permanent Employees - Behavioural - 80%;
4. Has the Company taken any steps to procure goods Technical - 65%
and services from local and small producers,
including communities surrounding their place of (b) Permanent Women Employees - Behavioural -
85%; Technical - 65 %

59
Sun Pharma Advanced Research Company Ltd

(c) Casual/Temporary/Contractual Employees – and across every touch point, are preserved. Certain
Nil imperatives are uncompromisingly adhered to by
the Company. These include:
(d) Employees with Disabilities - NA
• Ensuring fair wages, freedom of association
Principle 4: Businesses should respect the interests of and
and collective bargaining;
be responsive towards all stakeholders, especially those
who are disadvantaged, vulnerable and marginalised. • Maintaining an open redressal mechanism to
address stakeholder concerns about human
The Company’s internal and external stakeholders are
rights;
classified under the following:
1. Employees • Providing a safe and secure work-place that
2. Communities is free from discrimination, harassment or
indignity;
3. Patients
4. Healthcare professionals • Strict condemnation of inhuman practices of
5. Payers child labour, forced labour or any such labour.

6. Regulators 2. 
How many stakeholder complaints have been
7. Shareholders received in the past financial year and what percent
was satisfactorily resolved by the management?
The Company is consistently committed to maximise
the value creation for its internal as well as external Nil
stakeholders. Taking into consideration the expectations
of each stakeholder group, deliverables are efficiently Principle 6: Businesses should respect, protect and make
mapped, measured and managed to take care of efforts to restore the environment.
divergent and minority interests. In order to sustain
1. Does the policy related to Principle 6 cover only the
high benchmarks of transparency and accountability,
Company or extend to the Group/Joint Ventures/
a stakeholder policy has been formulated to ensure
Suppliers/ Contractors /NGOs/ others.
involvement of each and every stakeholder in the
decision-making process. Presently it covers only the Company.

1. Has the Company mapped its internal and external 2. 

Does the Company have strategies/ initiatives
stakeholders? to address global environmental issues such as
climate change, global warming, and so on? If yes,
Yes
please give hyperlink for webpage.
2. 
Out of the above, has the Company identified No
the disadvantaged, vulnerable and marginalised
stakeholders? 3. 
Does the Company identify and assess potential
environmental risks?
No
Yes
3. 
Are there any special initiatives taken by the
Company to engage with the disadvantaged, 4. Does the Company have any project related to Clean
vulnerable and marginalised stakeholders? If so, Development Mechanism? If so, provide details
provide details thereof, in about 50 words or so. thereof, in about 50 words or so. Also, if Yes, whether
any environmental compliance report is filed?
NA
No
Principle 5: Businesses should respect and promote
5. Has the Company undertaken any other initiatives
human rights.
on — clean technology, energy efficiency, renewable
1. Does the policy of the Company on human rights energy, and so on. If yes, please give hyperlink for
cover only the Company or extend to the Group/Joint web page.
Ventures/ Suppliers/Contractors/NGOs/Others?
No
Yes. The Company ensures that the fundamental
rights of all individuals, within the organisation

60
Annual Report 2021-22 Business Responsibility Report

6. Are the Emissions/Waste generated by the Company 3. 

Have you done any impact assessment of your

Statutory Reports
within the permissible limits given by CPCB/SPCB initiative?
for the financial year being reported?
NA
Yes
4. 
What is your Company’s direct contribution to
7. Number of show cause/ legal notices received from community development projects — Amount in J and
CPCB/ SPCB which are pending (not resolved to the details of the projects undertaken?
satisfaction) as on end of the financial year.
NA
Nil

Financial Statements
5. Have you taken steps to ensure that this community
Principle 7: Businesses when engaged in influencing development initiative is successfully adopted by
public and regulatory policy, should do so in a responsible the community? Please explain in 50 words, or so
manner.
NA
To improve the standards of scientific research and
innovation in India, the Company actively engages with Principle 9: Businesses should engage with and provide
trade and industry. value to their customers and consumers in a responsible
manner.
1. Is your Company a member of any trade and chamber
or association? If Yes, Name only those major ones As part of its larger purpose and objective to enrich lives,
that your business deals with: the Company assumes a responsibility and obligation
towards patients, even if it does not engage with its end
The Company is a member of IMC Chamber of consumers directly. To fulfil this purpose, the Company
Commerce & Industry. follows a customer-centric policy encapsulating
certain broader themes:
2. 
Have you advocated/lobbied through above
associations for the advancement or improvement of – Emphasis on health, safety, and satisfaction;
public good? – Maintain a socially responsible and ethical product
development lifecycle to ensure sustainability;
Yes
– Prioritise customer feedbacks and address concerns,
Principle 8: Businesses should support inclusive growth systematically and effectively.
and equitable development.
1. What percentage of customer complaints/consumer
By extending the benefits of better healthcare to a cases are pending as on the end of financial year?
larger group, the Company aims to enable inclusive
growth of all its beneficiaries. Our CSR policy clearly Nil
resonates this endeavour. However, in the last three
years, the Company was not required to spend on CSR 2. Does the Company display product information on
activities owing to operational loss and negative the product label, over and above what is mandated
cash flow. Nonetheless, the Company remains focused as per local laws?
to bring better healthcare to a larger section of the
NA
society.
3. Is there any case filed by any stakeholder against
1. 
Does the Company have specified programmes/
the Company regarding unfair trade practices,
initiatives/ projects in pursuit of the policy related
irresponsible advertising and/or anti-competitive
to Principle 8?
behaviour during the last five years and pending
No as on end of financial year. If so, provide details
thereof, in about 50 words or so.
2. 
Are the programmes/projects undertaken through
in-house team/own foundation/external NGO/ No
government structures/any other organisation?
4. Did your Company carry out any consumer survey/
NA consumer satisfaction trends?

No

61
Financial
Statements
Annual Report 2021-22 Independent Auditor’s Report

Independent Auditor’s Report

Statutory Reports
To the Members of
Sun Pharma Advanced Research Company Limited

Report on the Audit of the Financial Statements

Opinion ethical requirements that are relevant to our audit of

Financial Statements
the financial statements under the provisions of the
We have audited the accompanying financial statements Act and the Rules thereunder, and we have fulfilled our
of Sun Pharma Advanced Research Company Limited (the other ethical responsibilities in accordance with these
"Company”), which comprise the Balance Sheet as at requirements and the Code of Ethics. We believe that
March 31, 2022, the Statement of Profit and Loss, including the audit evidence we have obtained is sufficient and
the Statement of Other Comprehensive Income, the appropriate to provide a basis for our audit opinion on
Statement of Cash Flows and the Statement of Changes the financial statements.
in Equity for the year then ended, and notes to the
financial statements, including a summary of significant
Key Audit Matters
accounting policies and other explanatory information.
Key audit matters are those matters that, in our
In our opinion and to the best of our information and
professional judgment, were of most significance in our
according to the explanations given to us, the aforesaid
audit of the financial statements for the financial year
financial statements give the information required by
ended March 31, 2022. These matters were addressed in
the Companies Act, 2013, as amended (the "Act”) in
the context of our audit of the financial statements as
the manner so required and give a true and fair view in
a whole, and in forming our opinion thereon, and we do
conformity with the accounting principles generally
not provide a separate opinion on these matters. For
accepted in India, of the state of affairs of the
each key audit matter below, our description of how our
Company as at March 31, 2022, its loss including other
audit addressed the matter is provided in that context.
comprehensive income, its cash flows and the changes
in equity for the year ended on that date. We have determined the matters described below to be
the key audit matters to be communicated in our report.
Basis for Opinion We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the financial
We conducted our audit of the financial statements statements section of our report, including in relation
in accordance with the Standards on Auditing (SAs), to these matters. Accordingly, our audit included the
as specified under section 143(10) of the Act. Our performance of procedures designed to respond to
responsibilities under those Standards are further our assessment of the risks of material misstatement
described in the ‘Auditor’s Responsibilities for the Audit of the financial statements. The results of our audit
of the Financial Statements’ section of our report. procedures, including the procedures performed to
We are independent of the Company in accordance address the matters below, provide the basis for
with the ‘Code of Ethics’ issued by the Institute of our audit opinion on the accompanying financial
Chartered Accountants of India together with the statements.

63
Sun Pharma Advanced Research Company Ltd

Key audit matter How our audit addressed the key audit matter
(a) Revenue recognition (as described in Note 27 of the financial statements)
The Company is engaged in the business of Our audit procedures amongst others included the following:
Research and Development of pharmaceutical • Read the accounting policy for revenue recognition of the
products. The Company has various Company and assessed compliance with the principles
contractual arrangements with customers enunciated under Ind AS 115.
which are entered into at various stages of
research and development. The Company, in • Evaluated the design and tested the operating effectiveness
line with Ind AS 115 recognises revenue based of management’s controls in respect of revenue recognition.
on the contractual terms and performance
• Obtained a sample of contracts and reviewed the terms of
obligations with customers. Some of these
the arrangements to determine whether the work performed
arrangements involve judgments which may
under the contract qualified for revenue recognition having
impact the manner and timing of revenue
regard to the performance obligations under the contracts.
recognition.
• Assessed the disclosures in the accompanying financial
Considering that contractual arrangements
statements.
with customers involve judgments which may
impact the manner and timing of revenue
recognition, accordingly it is considered as a
key audit matter.

Evaluation of direct tax and indirect tax litigations (as described in Note 42 of the financial statements)
The Company has material direct tax Our audit procedures amongst others included the following:
and indirect tax litigations which involve • Evaluated the design and tested the operating effectiveness
significant judgment to determine the possible of controls in respect of the identification and evaluation
outcome of these disputes and accordingly it is of tax litigations and the recording and reassessment of the
considered as key audit matter. related liabilities and provisions and disclosures.

• Obtained list of ongoing tax litigations from management

along with their assessment of the cases based on past
precedents, judgements and matters in the jurisdiction,
legal opinions sought by management, correspondences
with tax department etc.

• Engaged tax specialists, to evaluate management’s

assessment of the outcome of these litigations. Our
specialists considered legal precedence and other rulings in
evaluating management’s position on these tax litigations.

• Assessed contingent liability disclosure in the

accompanying financial statements.

Other Information Our opinion on the financial statements does not cover
the other information and we will not express any form
The Company’s Board of Directors is responsible for the of assurance conclusion thereon.
other information. The other information comprises the
In connection with our audit of the financial statements,
information included in the Management Discussion and
our responsibility is to read the other information
Analysis Report and Board’s Report, but does not include
identified above when it becomes available and, in
the financial statements and our auditor’s report thereon.
doing so, consider whether such other information is
The Management Discussion and Analysis Report and materially inconsistent with the financial statements
Board’s Report is expected to be made available to us or our knowledge obtained in the audit or otherwise
after the date of this auditor's report. appears to be materially misstated.

64
Annual Report 2021-22 Independent Auditor’s Report

Responsibilities of Management for the As part of an audit in accordance with SAs, we exercise

Statutory Reports
Financial Statements professional judgment and maintain professional
skepticism throughout the audit. We also:
The Company’s Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect • Identify and assess the risks of material
to the preparation of these financial statements that misstatement of the financial statements, whether
give a true and fair view of the financial position, due to fraud or error, design and perform audit
financial performance including other comprehensive procedures responsive to those risks, and obtain
income, cash flows and changes in equity of the audit evidence that is sufficient and appropriate
Company in accordance with the accounting principles to provide a basis for our opinion. The risk of not

Financial Statements
generally accepted in India, including the Indian detecting a material misstatement resulting from
Accounting Standards (Ind AS) specified under section fraud is higher than for one resulting from error, as
133 of the Act read with the Companies (Indian fraud may involve collusion, forgery, intentional
Accounting Standards) Rules, 2015, as amended. This omissions, misrepresentations, or the override of
responsibility also includes maintenance of adequate internal control.
accounting records in accordance with the provisions of
• Obtain an understanding of internal control relevant
the Act for safeguarding of the assets of the Company
to the audit in order to design audit procedures
and for preventing and detecting frauds and other
that are appropriate in the circumstances. Under
irregularities; selection and application of appropriate
section 143(3)(i) of the Act, we are also responsible
accounting policies; making judgments and estimates
for expressing our opinion on whether the Company
that are reasonable and prudent; and the design,
has adequate internal financial controls with
implementation and maintenance of adequate internal
reference to financial statements in place and the
financial controls, that were operating effectively
operating effectiveness of such controls.
for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and • Evaluate the appropriateness of accounting
presentation of the financial statements that give a true policies used and the reasonableness of accounting
and fair view and are free from material misstatement, estimates and related disclosures made by
whether due to fraud or error. management.
In preparing the financial statements, management • Conclude on the appropriateness of management’s
is responsible for assessing the Company’s ability to use of the going concern basis of accounting and,
continue as a going concern, disclosing, as applicable, based on the audit evidence obtained, whether a
matters related to going concern and using the going material uncertainty exists related to events or
concern basis of accounting unless management conditions that may cast significant doubt on the
either intends to liquidate the Company or to cease Company’s ability to continue as a going concern.
operations, or has no realistic alternative but to do so. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s
Those Board of Directors are also responsible for
report to the related disclosures in the financial
overseeing the Company’s financial reporting process.
statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
Auditor’s Responsibilities for the Audit of the on the audit evidence obtained up to the date
Financial Statements of our auditor’s report. However, future events or
conditions may cause the Company to cease to
Our objectives are to obtain reasonable assurance about
continue as a going concern.
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, • Evaluate the overall presentation, structure and
and to issue an auditor’s report that includes our opinion. content of the financial statements, including the
Reasonable assurance is a high level of assurance but is disclosures, and whether the financial statements
not a guarantee that an audit conducted in accordance represent the underlying transactions and events in
with SAs will always detect a material misstatement a manner that achieves fair presentation.
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in We communicate with those charged with
the aggregate, they could reasonably be expected to governance regarding, among other matters,
influence the economic decisions of users taken on the the planned scope and timing of the audit and
basis of these financial statements. significant audit findings, including any significant

65
Sun Pharma Advanced Research Company Ltd

deficiencies in internal control that we identify (d)

In our opinion, the aforesaid financial
during our audit. statements comply with the Accounting
Standards specified under Section 133 of the
We also provide those charged with governance with Act, read with Companies (Indian Accounting
a statement that we have complied with relevant Standards) Rules, 2015, as amended;
ethical requirements regarding independence, and to
communicate with them all relationships and other (e) On the basis of written representations received
matters that may reasonably be thought to bear on from the directors as on March 31, 2022, taken
our independence, and where applicable, related on record by the Board of Directors, none of the
safeguards. directors is disqualified as on March 31, 2022,
from being appointed as a director in terms of
From the matters communicated with those charged Section 164 (2) of the Act;
with governance, we determine those matters that
were of most significance in the audit of the financial (f) With respect to the adequacy of the internal
statements for the financial year ended March 31, 2022 financial controls with reference to these
and are therefore the key audit matters. We describe financial statements and the operating
these matters in our auditor’s report unless law or effectiveness of such controls, refer to our
regulation precludes public disclosure about the matter separate Report in “Annexure 2” to this report;
or when, in extremely rare circumstances, we determine
(g) Based on the information and explanations
that a matter should not be communicated in our report
provided to us and based on our examination
because the adverse consequences of doing so would
of books of accounts, the Company has not
reasonably be expected to outweigh the public interest
accrued / paid any managerial remuneration
benefits of such communication.
to its directors. Accordingly, the provision of
section 197 read with Schedule V to the Act are
Report on Other Legal and Regulatory not required to be complied with;
Requirements
(h) With respect to the other matters to be included
1. As required by the Companies (Auditor’s Report) in the Auditor’s Report in accordance with Rule
Order, 2020 (the “Order”), issued by the Central 11 of the Companies (Audit and Auditors) Rules,
Government of India in terms of sub-section (11) of 2014, as amended in our opinion and to the
section 143 of the Act, we give in the “Annexure 1” a best of our information and according to the
statement on the matters specified in paragraphs 3 explanations given to us:
and 4 of the Order.
i. The Company has disclosed the impact of
2. As required by Section 143(3) of the Act, we report pending litigations on its financial position
that: in its financial statements – Refer Note 42
to the financial statements;
(a)
We have sought and obtained all the
information and explanations which to the best ii. The Company did not have any long-term
of our knowledge and belief were necessary for contracts including derivative contracts for
the purposes of our audit; which there were any material foreseeable
losses;
(b) In our opinion, proper books of account as
required by law have been kept by the Company iii. There were no amounts which were required
so far as it appears from our examination of to be transferred to the Investor Education
those books; and Protection Fund by the Company.

(c) The Balance Sheet, the Statement of Profit iv. (a)

The management has represented
and Loss including the Statement of Other that, to the best of its knowledge and
Comprehensive Income, Statement of Cash belief and read with note 48 to the
Flows and Statement of Changes in Equity dealt financial statements, no funds have
with by this Report are in agreement with the been advanced or loaned or invested
books of account; (either from borrowed funds or share

66
Annual Report 2021-22 Independent Auditor’s Report

premium or any other sources or kind (“Ultimate Beneficiaries”) or provide any

Statutory Reports
of funds) by the Company to or in any guarantee, security or the like on behalf
other person(s) or entity(ies), including of the Ultimate Beneficiaries; and
foreign entities (“Intermediaries”), with
the understanding, whether recorded c) Based on such audit procedures that
in writing or otherwise, that the were considered reasonable and
Intermediary shall, whether, directly appropriate in the circumstances,
or indirectly lend or invest in other nothing has come to our notice that
persons or entities identified in any has caused us to believe that the
manner whatsoever by or on behalf of representations under sub-clause

Financial Statements
the Company (“Ultimate Beneficiaries”) (a) and (b) contain any material
or provide any guarantee, security misstatement.
or the like on behalf of the Ultimate
iv. No dividend has been declared or paid
Beneficiaries;
during the year by the Company.
(b)
The management has represented
that, to the best of its knowledge and For S R B C & CO LLP
belief and read with note 48 to the Chartered Accountants
financial statements, no funds have ICAI Firm Registration Number: 324982E/E300003
been received by the Company from
any person(s) or entity(ies), including per Paul Alvares
foreign entities (“Funding Parties”), with Partner
the understanding, whether recorded in Membership Number: 105754
writing or otherwise, that the Company UDIN: 22105754AJCIAF4837
shall, whether, directly or indirectly,
lend or invest in other persons or entities
identified in any manner whatsoever Place of Signature: Mumbai
by or on behalf of the Funding Party Date: May 17, 2022

67
Sun Pharma Advanced Research Company Ltd

Annexure 1 referred to in paragraph 1 under the heading

“Report on Other Legal and Regulatory Requirements”
of our report of even date on the Financial Statements
of Sun Pharma Advanced Research Company Limited
(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details
and situation of Property, Plant and Equipment.

(i) (a) (B) The Company has maintained proper records, where relevant, showing full particulars of intangible
assets.

(i) (b) Property, Plant and Equipment have been physically verified by the management during the year and no
material discrepancies were identified on such verification.

(i) (c) T
 he title deeds of immovable properties (other than properties where the Company is the lessee and the
lease agreements are duly executed in favour of the lessee) disclosed in note 3a to the financial statements
included in Property, Plant and Equipment are held in the name of the Company except for the following
immovable properties for which registration of title deeds is in process:

Whether
Gross promoter,
Period
carrying director
Description of held Reason for not being held in the
value Held in name of or their
Property (In name of Company
(J in relative
Year)
Lakhs) or
employee
R&D building 285.99 Sun No 15 The building was transferred
located at Pharmaceutical (pending registration) to the
Mahakali Industries Company pursuant to a scheme
Caves Road. Limited of arrangement in the nature
Andheri, of demerger and transfer
Mumbai of Innovative Research and
admeasuring Development business of Sun
1041.29 square Pharmaceutical Industries
meters. Limited under Section 391 to
394 of the Companies Act, 1956
in terms of the approval of the
Honorable High court of Gujarat.
The agreement is in the name of
Sun Pharmaceutical Industries
Limited

(i) (d) The Company does not follow the revaluation model for subsequent measurement of its Property, Plant and
Equipment (including Right of use assets) or intangible assets. Accordingly, the requirement to report on
clause 3(i)(d) of the Order is not applicable to the Company.

(i) (e) There are no proceedings initiated or pending against the Company for holding any benami property under
the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder. Accordingly, the
requirement to report on clause 3(i)(e) of the Order is not applicable to the Company.

(ii) (a) According to the information and explanation given to us and having regard to the nature of the Company’s
business, the Company does not have any inventory during the year since procurements are issued directly
for consumption to the user department. Accordingly, the requirement to report on clause 3(ii)(a) of the
Order is not applicable to the Company.

68
Annual Report 2021-22 Independent Auditor’s Report

(ii)
(b) As disclosed in note 17 to the financial (iii) (e) In respect of loans and advances in the nature

Statutory Reports
statements, the Company has been sanctioned of loans granted to employees, there were
working capital limits in excess of INR five no amounts which have fallen due during the
crore in aggregate from banks during the year year, that have been renewed or extended or
on the basis of security of current assets of the fresh loans granted to settle the overdues of
Company. Based on the records examined by us existing loans given to the same employees.
in the normal course of audit of the financial Accordingly, the requirement to report on clause
statements, the quarterly return/statement 3(iii)(e) of the order is not applicable.
filed by the Company with such bank and
financial institution is in agreement with the (iii) (f) In respect of loans and advances in the nature

Financial Statements
books of accounts of the Company. of loans granted to employees, there were no
amounts granted which were either repayable
(iii) (a) During the year the Company has not provided on demand or without specifying any terms
loans, advances in the nature of loans, stood or period of repayment. Accordingly, the
guarantee or provided security to any other requirement to report on clause 3(iii)(f) of the
entity, other than to its employees as follows. Order is not applicable to the Company.

Loans to (iv) There are no loans, investments, guarantees, and

Particulars employees security in respect of which provisions of sections
(J in Lakhs) 185 and 186 of the Companies Act, 2013 are
applicable and accordingly, the requirement to
Aggregate amount granted 36.08
report on clause 3(iv) of the Order is not applicable
during the year
Balance outstanding as at 15.49 to the Company.
balance sheet date
(v) The Company has neither accepted any deposits
Accordingly, the requirement to report on from the public nor accepted any amounts which
clause 3(iii)(a)(A) and (B) of the Order are not are deemed to be deposits within the meaning of
applicable to the Company. sections 73 to 76 of the Companies Act and the
rules made thereunder, to the extent applicable.
(iii) (b) During the year the investment made and the Accordingly, the requirement to report on clause
terms and conditions of the grant of all loans 3(v) of the Order is not applicable to the Company.
and advances in the nature of loans to its
employees are not prejudicial to the Company’s (vi) The Central Government has not specified the
interest. Since, the Company has not provided maintenance of cost records under Section 148(1) of
loans, advances in the nature of loans, the Companies Act, 2013, for the products/services
stood guarantee or provided security to any of the Company and accordingly, the requirement to
other entity, other than to its employees, the report on clause 3(vi) of the Order is not applicable
requirement to report on clause 3(iii)(b), 3(iii) to the Company.
(c), 3(iii)(d), 3(iii)(e) and 3(iii)(f) of the Order is
(vii) (a) Undisputed statutory dues including goods and
not applicable to the Company in respect of
service tax, provident fund, employees’ state
any entity other than employees.
insurance, income-tax, sales-tax, duty of customs,
(iii) (c) The Company has granted loans and advances in duty of excise, value added tax, cess and other
the nature of loans during the year to its employees statutory dues, where applicable, have generally
where the schedule of repayment of principal and been regularly deposited with the appropriate
payment of interest has been stipulated and the authorities where applicable, though there has
repayment/receipts are regular. been a slight delay in a few cases. According
to the information and explanations given to us
(iii) (d) In respect of loans and advances in the nature of and based on audit procedures performed by us,
loans granted to employees during the year, there no undisputed amounts payable in respect of
are no amounts overdue for more than ninety these statutory dues were outstanding, at the
days. Accordingly, the requirement to report on year end, for a period of more than six months
clause 3(iii)(d) of the order is not applicable. from the date they became payable.

69
Sun Pharma Advanced Research Company Ltd

(vii) (b) The dues of goods and service tax, provident fund, employees’ state insurance, income-tax, sales-tax, service
tax, duty of customs, duty of excise, value added tax, cess and other statutory dues, where applicable and
which have not been deposited on account of any dispute, are as follows:

Amount involved
Name of the Nature of the Period to which the Forum where the
(J in lakhs)
statute dues amount relates dispute is pending

The Income Income Tax and 3,738.83 AY 2011-12, AY 2013-14 Commissioner of

Tax Act, 1961 Interest and AY 2014-15 Income Tax (Appeals)
The Income Income Tax and 1,319.35 AY 2015-16, AY 2016- Commissioner of
Tax Act, 1961 Interest* 17, AY 2017-18 and AY Income Tax (Appeals)
2018-19
Finance Act, Service Tax, 6,938.27 April 2016 to June 2017 Custom Excise and
1994 Interest and Service Tax Appellate
Penalty Tribunal (CESTAT)
* The disallowances pertaining to AY 2015-16, AY 2016-17, AY 2017-18 and AY 2018-19 will impact the income tax losses assessed by
the assessee in these years.
Note: The amounts disclosed above are net of the payments made to the respective authorities where the dispute is pending and
includes interest till the date of demand.

(viii)The Company has not surrendered or disclosed any (x) (b) The Company has complied with provisions
transaction, previously not recorded in the books of of sections 42 and 62 of the Companies Act,
account, in the tax assessments under the Income 2013 in respect of the preferential allotment of
Tax Act, 1961 as income during the year. Accordingly, shares during the year. The funds raised, have
the requirement to report on clause 3(viii) of the been used for the purposes for which the funds
Order is not applicable to the Company. were raised.

(ix) (a) The Company has not defaulted in repayment of (xi) (a) No fraud by the Company or no fraud on the
loans or other borrowings or in the payment of Company has been noticed or reported during
interest thereon to any lender. the year under audit.

(xi) (b) During the year, no report under sub-section

(ix) (b) The Company has not been declared wilful
(12) of section 143 of the Companies Act, 2013
defaulter by any bank or financial institution or
has been filed by secretarial auditors or by
government or any government authority.
us in Form ADT–4 as prescribed under Rule 13
(ix) (c) Term loans were applied for the purpose for of Companies (Audit and Auditors) Rules, 2014
which the loans were obtained. with the Central Government.

(ix) (d) On an overall examination of the financial (xi) (c) As represented to us by the management, there
statements of the Company, no funds raised on are no whistle blower complaints received by
short-term basis have been used for long-term the Company during the year.
purposes by the Company. (xii) The Company is not a Nidhi Company as per the
provisions of the Companies Act, 2013. Therefore,
(ix) (e/f) The Company does not have any subsidiary,
the requirement to report on clause 3(xii)(a), 3(xii)
associate or joint venture. Accordingly, the
(b) and 3(xii)(c) of the Order is not applicable to the
requirement to report on clause 3(ix)(e) and
Company.
3(ix)(f) of the Order is not applicable to the
Company. (xiii)Transactions with the related parties are
in compliance with sections 177 and 188 of
(x) (a) The Company has not raised any money during Companies Act, 2013 where applicable and the
the year by way of further public offer (including details have been disclosed in the notes to the
debt instruments). Accordingly, the requirement financial statements, as required by the applicable
to report on clause 3(x)(a) of the Order is not accounting standards.
applicable to the Company.

70
Annual Report 2021-22 Independent Auditor’s Report

(xiv) (a)The Company has an internal audit system (xviii)

There has been no resignation of the statutory

Statutory Reports
commensurate with the size and nature of its auditors during the year. Accordingly the
business. requirement to report on Clause 3(xviii) of the
Order is not applicable to the Company.
(xiv) (b)The internal audit reports of the Company
issued till the date of the audit report, for the (xix)According to the information and explanation given
period under audit have been considered by us. to us and on the basis of the financial ratios disclosed
in note 48 to the financial statements, ageing and
(xv)
The Company has not entered into any non-
expected dates of realization of financial assets and
cash transactions with its directors or persons
payment of financial liabilities, other information
connected with its directors and accordingly the

Financial Statements
accompanying the financial statements, our
requirement to report on clause 3(xv) of the Order is
knowledge of the Board of Directors and management
not applicable to the Company.
plans and based on our examination of the evidence
(xvi) (a) The provisions of section 45-IA of the Reserve supporting the assumptions, nothing has come to
Bank of India Act, 1934 (2 of 1934) are not our attention, which causes us to believe that any
applicable to the Company. Accordingly, the material uncertainty exists as on the date of the
requirement to report on clause (xvi)(a) of the audit report that Company is not capable of meeting
Order is not applicable to the Company. its liabilities existing at the date of balance sheet
as and when they fall due within a period of one year
(xvi) (b)The Company has not conducted any Non- from the balance sheet date. We, however, state that
Banking Financial or Housing Finance activities this is not an assurance as to the future viability of
without obtaining a valid Certificate of the Company. We further state that our reporting is
Registration (CoR) from the Reserve Bank of based on the facts up to the date of the audit report
India as per the Reserve Bank of India Act, 1934. and we neither give any guarantee nor any assurance
that all liabilities falling due within a period of one
(xvi) (c) The Company is not a Core Investment Company
year from the balance sheet date, will get discharged
as defined in the regulations made by Reserve
by the Company as and when they fall due.
Bank of India. Accordingly, the requirement to
report on clause 3(xvi)(c) of the Order is not (xx) The provisions of Section 135 to the Companies Act,
applicable to the Company. 2013 in relation to Corporate Social Responsibility
is not applicable to the Company. Accordingly, the
(xvi) (d)Based on information and explanation provided
requirement to report on clause 3(xx)(a) and clause
by the management of the Company, there is
3(xx)(b) of the Order is not applicable to the Company.
no Core Investment Company as a part of the
Group, hence, the requirement to report on
For S R B C & CO LLP
clause 3(xvi)(d) of the Order is not applicable
Chartered Accountants
to the Company and hence not reported upon.
ICAI Firm Registration Number: 324982E/E300003
We have not, however, separately evaluated
whether the information provided by the
management is accurate and complete. per Paul Alvares
Partner
(xvii) The Company has incurred cash losses amounting
Membership Number: 105754
to H 19,392 Lakhs in the current year and amounting
UDIN: 22105754AJCIAF4837
to H 14,037 Lakhs in the immediately preceding
financial year respectively. Place of Signature: Mumbai
Date: May 17, 2022

71
Sun Pharma Advanced Research Company Ltd

Annexure 2 to the Independent Auditor’s Report of

even date on the financial statements of Sun Pharma
Advanced Research Company Limited

Report on the Internal Financial Controls under Those Standards and the Guidance Note require that we
Clause (i) of Sub-section 3 of Section 143 of the comply with ethical requirements and plan and perform
Companies Act, 2013 (the “Act”) the audit to obtain reasonable assurance about whether
adequate internal financial controls with reference
We have audited the internal financial controls with to these financial statements was established and
reference to financial statements of Sun Pharma maintained and if such controls operated effectively in
Advanced Research Company Limited (the “Company”) all material respects.
as of March 31, 2022 in conjunction with our audit of the
financial statements of the Company for the year ended Our audit involves performing procedures to obtain
on that date. audit evidence about the adequacy of the internal
financial controls with reference to these financial
statements and their operating effectiveness. Our audit
Management’s Responsibility for Internal
of internal financial controls with reference to financial
Financial Controls
statements included obtaining an understanding of
The Company’s Management is responsible for internal financial controls with reference to these
establishing and maintaining internal financial controls financial statements, assessing the risk that a material
based on the internal control over financial reporting weakness exists, and testing and evaluating the design
criteria established by the Company considering the and operating effectiveness of internal control based
essential components of internal control stated in the on the assessed risk. The procedures selected depend
Guidance Note on Audit of Internal Financial Controls on the auditor’s judgement, including the assessment
Over Financial Reporting issued by the Institute of the risks of material misstatement of the financial
of Chartered Accountants of India (“ICAI”). These statements, whether due to fraud or error.
responsibilities include the design, implementation
and maintenance of adequate internal financial We believe that the audit evidence we have obtained
controls that were operating effectively for ensuring the is sufficient and appropriate to provide a basis for
orderly and efficient conduct of its business, including our audit opinion on the Company’s internal financial
adherence to the Company’s policies, the safeguarding controls with reference to these financial statements.
of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting Meaning of Internal Financial Controls with
records, and the timely preparation of reliable financial Reference to these Financial Statements
information, as required under the Act.
A Company's internal financial controls with reference
to financial statements is a process designed to
Auditor’s Responsibility
provide reasonable assurance regarding the reliability
Our responsibility is to express an opinion on the of financial reporting and the preparation of financial
Company's internal financial controls with reference statements for external purposes in accordance
to these financial statements based on our audit. We with generally accepted accounting principles. A
conducted our audit in accordance with the Guidance Company's internal financial controls with reference
Note on Audit of Internal Financial Controls Over to financial statements includes those policies and
Financial Reporting (the “Guidance Note”) and the procedures that (1) pertain to the maintenance of
Standards on Auditing, as specified under section records that, in reasonable detail, accurately and fairly
143(10) of the Act, to the extent applicable to an audit reflect the transactions and dispositions of the assets
of internal financial controls, both issued by ICAI. of the Company; (2) provide reasonable assurance

72
Annual Report 2021-22 Independent Auditor’s Report

that transactions are recorded as necessary to permit Opinion

Statutory Reports
preparation of financial statements in accordance
with generally accepted accounting principles, and In our opinion, the Company has, in all material respects,
that receipts and expenditures of the Company are adequate internal financial controls with reference to
being made only in accordance with authorisations these financial statements and such internal financial
of management and directors of the Company; and (3) controls with reference to financial statements were
provide reasonable assurance regarding prevention or operating effectively as at March 31, 2022, based on
timely detection of unauthorised acquisition, use, or the internal control over financial reporting criteria
established by the Company considering the essential
disposition of the Company's assets that could have a
components of internal control stated in the Guidance
material effect on the financial statements.

Financial Statements
Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered
Inherent Limitations of Internal Financial Accountants of India .
Controls with Reference to Financial Statements

Because of the inherent limitations of internal For S R B C & CO LLP

financial controls with reference to financial Chartered Accountants
statements, including the possibility of collusion or ICAI Firm Registration Number: 324982E/E300003
improper management override of controls, material
misstatements due to error or fraud may occur and not per Paul Alvares
be detected. Also, projections of any evaluation of the Partner
internal financial controls with reference to financial Membership Number: 105754
statements to future periods are subject to the risk that UDIN: 22105754AJCIAF4837
the internal financial control with reference to financial
statements may become inadequate because of
changes in conditions, or that the degree of compliance Place of Signature: Mumbai
with the policies or procedures may deteriorate. Date: May 17, 2022

73
Sun Pharma Advanced Research Company Ltd

Balance Sheet as at March 31, 2022

H In Lakhs
As at As at
Particulars Notes
March 31, 2022 March 31, 2021
ASSETS
(A) Non-current assets
(a) Property, plant and equipment 3a 9,139.77 8,987.33
(b) Capital work-in-progress 3b 372.01 523.43
(c) Other intangible assets 3c 47.05 68.50
(d) Intangible assets under development 3d 2,264.52 -
(e) Financial assets
(i) Other financial assets 4 2,318.05 39.86
(f) Deferred tax assets (net) 5 - -
(g) Non-current tax assets (net) 6 6,691.49 7,023.63
(h) Other non-current assets 7 60.16 15.10
Total non-current assets (A) 20,893.05 16,657.85
(B) Current assets
(a) Financial assets
(i) Investments 8 1,166.49 642.52
(ii) Trade receivables 9 2,773.61 1,757.55
(iii) Cash and cash equivalents 10 122.42 930.45
(iv) Bank balances other than cash and cash equivalents 11 0.21 0.71
(v) Loans 12 33.47 6.81
(vi) Other financial assets 13 285.46 0.01
(b) Other current assets 14 2,733.57 2,642.14
Total current assets (B) 7,115.23 5,980.19
(C) Assets held for sale 3a & 3b - 330.94
TOTAL ASSETS 28,008.28 22,968.98
EQUITY AND LIABILITIES
Equity
(a) Equity share capital 15 2,718.87 2,620.56
(b) Other equity 16 403.70 (19,445.72)
Total equity 3,122.57 (16,825.16)
Liabilities
(A) Non-current liabilities
(a) Financial liabilities
(i) Borrowings 17 - 11,250.00
(ia) Lease liabilities 18 243.69 421.51
(b) Provisions 19 814.63 863.21
(c) Other non-current liabilities 20 6,684.50 3,924.25
Total non-current liabilities (A) 7,742.82 16,458.97
(B) Current liabilities
(a) Financial liabilities
(i) Borrowings 21 7,500.00 11,804.52
(ia) Lease liabilities 22 177.68 162.11
(ii) Trade payables 23
Total outstanding dues of micro enterprises and small enterprises 57.16 7.30
Total outstanding dues of creditors other than micro enterprises 7,161.55 9,109.50
and small enterprises
(iii) Other financial liabilities 24 1,139.53 1,167.63
(b) Other current liabilities 25 578.75 509.44
(c) Provisions 26 528.22 574.67
Total current liabilities (B) 17,142.89 23,335.17
Total liabilities (A + B) 24,885.71 39,794.14
TOTAL EQUITY AND LIABILITIES 28,008.28 22,968.98
Significant accounting policies 2

The accompanying notes are integral part of the financial statements

As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
Chartered Accountants
ICAI Firm Registration No : 324982E/E300003
ANILKUMAR RAGHAVAN DILIP S. SHANGHVI
Chief Executive Officer Chairman
DIN: 00005588

per PAUL ALVARES CHETAN M. RAJPARA RAJAMANNAR THENNATI

Partner Chief Financial Officer Director
Membership No. 105754 DIN: 01415412
Place : Mumbai DINESH LAHOTI Place : Mumbai
Date : May 17, 2022 Company Secretary Date : May 17, 2022

74
Annual Report 2021-22 Balance Sheet & Statement of Profit and Loss

Statement of Profit and Loss

Statutory Reports
for the year ended March 31, 2022

H In Lakhs
Year ended Year ended
Particulars Notes
March 31, 2022 March 31, 2021

(I) Revenue from operations 27 & 44 13,724.89 25,295.71

(II) Other income 28 684.46 541.25
(III) Total income (I + II) 14,409.35 25,836.96

Financial Statements
(IV) Expenses
Cost of materials consumed 29 1,827.12 1,817.58
Employee benefits expense 30 9,677.87 9,158.57
Clinical trial expenses / products development expense 10,842.59 18,401.89
Professional charges 6,742.92 5,392.70
Finance costs 31 1,332.87 1,065.03
Depreciation and amortisation expenses 3a & 3c 1,016.19 1,092.33
License and fees 32a 342.81 945.25
Other expenses 32b 2,966.52 3,077.49
Total expenses (IV) 34,748.89 40,950.84
(V) Loss before tax (III - IV) (20,339.54) (15,113.88)
(VI) Tax expense - -
(VII) Loss for the year (V - VI) (20,339.54) (15,113.88)
(VIII) Other comprehensive income (OCI)
A) Items that will not be reclassified to profit or loss
Gain on remeasurement of the defined benefit plans 169.64 152.55
Total other comprehensive income (A) 169.64 152.55
(IX) Total comprehensive loss for the year (VII + VIII) (20,169.90) (14,961.33)
(X) Loss per equity share 37
(Face value H 1/- per equity share)
Basic and Diluted (in H) (7.73) (5.77)
Significant accounting policies 2

The accompanying notes are integral part of the financial statements

As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
Chartered Accountants
ICAI Firm Registration No : 324982E/E300003

ANILKUMAR RAGHAVAN DILIP S. SHANGHVI

Chief Executive Officer Chairman
DIN: 00005588

per PAUL ALVARES CHETAN M. RAJPARA RAJAMANNAR THENNATI

Partner Chief Financial Officer Director
Membership No. 105754 DIN: 01415412

Place : Mumbai DINESH LAHOTI Place : Mumbai

Date : May 17, 2022 Company Secretary Date : May 17, 2022

75
Sun Pharma Advanced Research Company Ltd

Statement of Changes in Equity for the year ended March 31, 2022

A Equity share capital

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021

At the beginning of the year 2,620.56 2,620.56

Changes in equity share capital during the year (Refer Note 15) 98.31 -
At the end of the year 2,718.87 2,620.56

B Other equity
H In Lakhs
Other equity
Money Reserves and surplus
Particulars received
General Securities Retained Total
against share
warrants reserves premium earnings

Balance as at April 1, 2020 - 3,397.66 94,045.10 (1,01,927.15) (4,484.39)

Loss for the year - - - (15,113.88) (15,113.88)
Other comprehensive income for the year - - - 152.55 152.55
Balance as at March 31, 2021 - 3,397.66 94,045.10 (1,16,888.48) (19,445.72)
Add : Amount received on issue of 23,425.97 - - - 23,425.97
warrants convertible into equity shares
Add : Premium on issue of equity shares - - 17,401.69 - 17,401.69
against conversion of warrants
Less : Transaction cost related to equity (808.34) (808.34)
share capital
Loss for the year - - - (20,339.54) (20,339.54)
Other comprehensive income for the year - - - 169.64 169.64
Balance as at March 31, 2022 23,425.97 3,397.66 1,10,638.45 (1,37,058.38) 403.70

Note : There are no changes in accounting policies and prior period errors during the current and previous year.

Significant accounting policies Note 2

The accompanying notes are integral part of the financial statements

As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
Chartered Accountants
ICAI Firm Registration No : 324982E/E300003

ANILKUMAR RAGHAVAN DILIP S. SHANGHVI

Chief Executive Officer Chairman
DIN: 00005588

per PAUL ALVARES CHETAN M. RAJPARA RAJAMANNAR THENNATI

Partner Chief Financial Officer Director
Membership No. 105754 DIN: 01415412

Place : Mumbai DINESH LAHOTI Place : Mumbai

Date : May 17, 2022 Company Secretary Date : May 17, 2022

76
Annual Report 2021-22 Statement of Changes in Equity & Statement of Cash Flows

Statement of Cash Flows

Statutory Reports
for the year ended March 31, 2022

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021

A. Cash flow from operating activities

Loss before tax (20,339.54) (15,113.88)
Adjustments to reconcile loss before tax to net cash flows:

Financial Statements
Depreciation and amortisation expenses 1,016.19 1,092.33
Gain on disposal of property, plant and equipment (net) (489.32) (26.39)
Finance costs 1,332.87 1,065.03
Interest income (140.21) (89.31)
Net gain on sale of financial assets measured at fair value through (45.11) (56.30)
profit or loss
Net gain arising on financial assets measured at fair value through (1.28) (0.41)
profit or loss
Net unrealised foreign exchange loss / (gain) (7.42) 60.78
Sundry balances written off / (written back), net 1.49 (19.93)
Product development expense - 2,849.29
Operating loss before working capital changes (18,672.33) (10,238.79)
Working capital adjustments :
(Increase) / decrease in trade receivables (1,014.59) (154.39)
(Increase) / decrease in other assets (2,638.12) 1,535.45
Increase / (decrease) in trade payables (1,935.77) (5,991.64)
Increase / (decrease) in other liabilities 2,908.60 (213.73)
Increase / (decrease) in provisions 74.61 36.68
Cash used in operations (21,277.60) (15,026.42)
Direct taxes (paid) net of refund 454.35 (163.14)
Net cash used in operating activities (A) (20,823.25) (15,189.56)
B. Cash flow from investing activities
Payments for purchase of property, plant and equipment (including (3,267.79) (599.51)
capital work-in-progress, intangible assets and intangible assets under
development)
Proceeds from disposal of property, plant and equipment (net) 810.16 481.75
Purchase of investment (net) (477.58) 263.28
Bank balances not considered as cash and cash equivalents
Fixed deposits placed - (0.50)
Fixed deposits matured 0.50 10.46
Interest received 18.01 0.70
Net cash generated from / (used in) investing activities (B) (2,916.70) 156.18

77
Sun Pharma Advanced Research Company Ltd

Statement of Cash Flows for the year ended March 31, 2022

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
C. Cash flow from financing activities
Proceeds from borrowings 10,700.00 40,500.00
Re-payment of borrowings (26,254.52) (23,555.95)
Payment of lease liabilities (209.23) (202.73)
Proceeds from issue of equity shares (on conversion of warrants) 17,500.00 -
Transaction costs on issue of warrants convertible into equity shares (808.34) -
Proceeds from issue of warrants convertible into equity shares 23,425.97 -
Interest paid (1,421.79) (812.89)
Net cash generated from financing activities (C) 22,932.09 15,928.43
Net increase/(decrease) in cash and cash equivalents (A+B+C) (807.86) 895.05
Cash and cash equivalents at the beginning of the year (Refer Note 10) 930.45 35.23
Effect of exchange differences on restatement of foreign currency cash (0.17) 0.17
and cash equivalents
Cash and cash equivalents at the end of the year (Refer Note 10) 122.42 930.45
Cash and cash equivalents comprises of
Balances with banks
In current accounts 122.08 930.00
Cash on hand 0.34 0.45
Cash and cash equivalents (Refer Note 10) 122.42 930.45
Significant accounting policies

The accompanying notes are integral part of the financial statements

As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
Chartered Accountants
ICAI Firm Registration No : 324982E/E300003

ANILKUMAR RAGHAVAN DILIP S. SHANGHVI

Chief Executive Officer Chairman
DIN: 00005588

per PAUL ALVARES CHETAN M. RAJPARA RAJAMANNAR THENNATI

Partner Chief Financial Officer Director
Membership No. 105754 DIN: 01415412

Place : Mumbai DINESH LAHOTI Place : Mumbai

Date : May 17, 2022 Company Secretary Date : May 17, 2022

78
Annual Report 2021-22 Statement of Cash Flows & Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

1. Corporate Information

Sun Pharma Advanced Research Company Limited ("the Company") is a public limited company incorporated
and domiciled in India and has its listing on the BSE Limited and National Stock Exchange of India Limited.
The registered office is located at Plot No. 5 & 6/1, Savli, G. I. D. C. Estate, Manjusar, Vadodara – 391 775. The
Company is in the business of research and development (R&D) of pharmaceutical products.

Financial Statements
The financial statements were approved for issue in accordance with the resolution of the Board of Directors on
May 17, 2022.

2. Significant accounting policies

2.1 Basis of preparation and presentation

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and
presentation requirement of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule
III), as applicable to the financial statements.

The financial statements have been prepared on the historical cost basis, except for : (i) certain financial
instruments that are measured at fair values at the end of each reporting period (ii) non-current assets classified
as held for sale which are measured at the lower of their carrying amount and fair value less costs to sell and
(iii) defined benefit plans – plan assets that are measured at fair values at the end of each reporting period, as
explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services.

The Company has prepared the financial statement on the basis that it will continue to operate as a going
concern.

The financial statements are prepared in INR and all values are rounded to the nearest lakhs upto two decimal,
except when otherwise stated. The Company has consistently applied the following accounting policies to all
periods presented in these financial statements.

For the purpose of these financial statements, previous year means the financial year ended March 31, 2021.

a) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is :

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.

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Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue
of equity instruments do not affect its classification.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in
cash and cash equivalents. The Company has identified twelve months as its operating cycle.

b) Foreign currencies

The Company’s financial statements are presented in INR, which is also the Company’s functional currency.

Transactions and balances

On initial recognition, transactions in currencies other than the Company's functional currency (foreign
currencies) are translated at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are translated into the functional currency at the
exchange rate at that date. Exchange differences arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they were translated on initial recognition during the
period or in previous period are recognised in statement of profit and loss in the period in which they arise.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

c) Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either :

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.

80
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is

Financial Statements
significant to the fair value measurement as a whole :

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.

d) Segment reporting

Based on the "Management Approach" as defined in Ind AS 108 - Operating Segment, the Chief Operating
Decision Maker (CODM) of the Company is responsible for allocating resources and assessing performance
of the operating segments and accordingly is identified as the CODM. Operating segments are reported in
a manner consistent with the internal reporting provided to the CODM.

The Company prepares its segment information in conformity with the accounting policies adopted for
preparing and presenting the financial statements of the Company as a whole.

e) Property, plant and equipment

Items of property, plant and equipment and other intangible assets are stated in balance sheet at cost
net of accumulated depreciation and accumulated impairment losses, if any. Cost directly attributable
to acquisition are capitalised until the property, plant and equipment are ready for use, as intended by
the management. Subsequent expenditures are capitalised only when they increase the future economic
benefits embodied in the specific asset to which they relate.

Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for
as separate items (major components) of property, plant and equipment. All other repairs and maintenance
cost are recognised in the statement of profit and loss account as incurred.

An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of property, plant and equipment and is recognised in statement of profit
and loss.

81
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Depreciation is calculated on a straight line basis over the estimated useful life of the assets as follows:

Asset category No. of years

Buildings 60
Plant and equipment 3-25
Vehicles 5
Office equipment 2-5
Furniture and fixtures 10

The Company, based on technical assessment made by technical experts and management estimate,
depreciates certain items plant and equipment, vehicle over estimated useful lives which are different from
the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these
estimated useful lives are realistic and reflects fair approximation of the period over which the assets are
likely to be used. Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

f) Intangible assets

Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost
less accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditures are
capitalised only when they increase the future economic benefits embodied in the specific asset to which
they relate.

Software for internal use, which is primarily acquired from third-party vendors, including consultancy
charges for implementing the software, is capitalised. Subsequent costs are charged to the statement
of profit and loss as incurred. The capitalised costs are amortised over the estimated useful life of the
software i.e. 5 years.

Derecognition of intangible assets

Intangible assets are de-recognised either on their disposal or where no future economic benefits are
expected from their use. Any, Gain or loss arising on such de-recognition is recognised in statement of profit
and loss and are measured as the difference between the net disposal proceeds, if any, and the carrying
amount of respective intangible assets as on the date of de-recognition.

g) Research and development cost

Expenditure on research activities undertaken with the prospect of gaining new scientific or technical
knowledge and understanding are recognised as an expense when incurred. Development expenditures on
an individual project are recognised as an intangible asset when the Company can demonstrate:

• The technical feasibility of completing the intangible asset so that the asset will be available for use
or sale

• Its intention to complete and its ability and intention to use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during development

82
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

The expenditure to be capitalised include the cost of materials and other costs directly attributable to
preparing the asset for its intended use. Other development expenditure is recognised in statement of profit
and loss as incurred.

Procurement of research and development materials are issued directly for consumption to the user
department and disclosed under cost of materials consumed.

Financial Statements
Acquired research and development intangible assets which are under development, are recognised as In-
Process Research and Development assets (“IPR&D”). IPR&D assets are not amortised, but evaluated for
potential impairment on an annual basis or when there are indications that the carrying value may not
be recoverable. Any impairment charge on such IPR&D assets is recognised in profit and loss. Intangible
assets relating to products under development, other intangible assets not available for use and intangible
assets having indefinite useful life are tested for impairment annually, or more frequently when there is an
indication that the assets may be impaired.

h) Impairment of non-financial assets

The carrying amounts of the Company’s tangible and intangible assets are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated in order to determine the extent of the impairment loss, if any.

The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value
in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset or the cash-generating unit for which the
estimates of future cash flows have not been adjusted. For the purpose of impairment testing, assets are
grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognised in the statement of profit and loss if the estimated recoverable amount
of an asset or its cash generating unit is lower than its carrying amount. Impairment losses recognised in
respect of cash-generating units are allocated to reduce the carrying amount of the other assets in the unit
on a pro-rata basis.

In respect of other asset, impairment losses recognised in prior periods are assessed at each reporting
date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would
have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

i) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement-

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date.

83
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Subsequent measurement-

For purposes of subsequent measurement, financial assets are classified in three categories:

i. Debt instruments measured at amortised cost

ii. Debt instruments measured at fair value through other comprehensive income (FVTOCI)

iii. Debt instruments measured at fair value through profit or loss (FVTPL)

iv. Equity instruments are measured at fair value through other comprehensive income (FVTOCI)

A. Debt instruments

i. Debt instruments measured at amortised cost - A ‘debt instrument’ is measured at the amortised
cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in Other Income in the statement of profit or loss. The losses arising from
impairment are recognised in the profit or loss.

ii. Debt instruments measured at FVTOCI - A ‘debt instrument’ is measured as at FVTOCI if both of the
following criteria are met:

• The objective of the business model is achieved both by collecting contractual cash flows and
selling the financial assets, and

• The contractual terms of the instrument give rise on specified dates to cash flows that are SPPI
on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognised in the other comprehensive
income (OCI). However, the Company recognises interest income, impairment losses and reversals
and foreign exchange gain or loss in the statement of profit or loss. On derecognition of the asset,
cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of
profit or loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income
using the EIR method.

iii. Debt instruments measured at FVTPL - FVTPL is a residual category for debt instruments. Any debt
instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI,
is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets
amortised cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing
so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting
mismatch’).

84
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

B. Equity instruments

All equity instruments in scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present subsequent changes in the fair value in OCI. The Company makes such
election on an instrument-by-instrument basis. The classification is made on initial recognition and is

Financial Statements
irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, including foreign exchange gain or loss and excluding dividends, are recognised in the OCI.
There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. However, the
Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes
recognised in the statement of profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

• The contractual rights to receive cash flows from the asset have expired.

• The Company has transferred its rights to receive contractual cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a third party
under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the
risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred asset
to the extent of the Company’s continuing involvement. In that case, the Company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has retained.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost

b) Trade receivables or any contractual right to receive cash or another financial asset

c) Loan commitments which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade
receivables or any contractual right to receive cash or another financial asset.

The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.

85
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance
on portfolio of its trade receivables. The provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At
every reporting date, the historical observed default rates are updated and changes in the forward-
looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognized during the year is recognized as income/
expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’
in the statement of profit or loss. The balance sheet presentation for various financial instruments is
described below:

Financial assets measured as at amortised cost, contractual revenue receivables :

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the
balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria,
the Company does not reduce impairment allowance from the gross carrying amount.

Financial liabilities and equity instruments-

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.

Equity instruments-

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No
gain or loss is recognised in statement of profit or loss on the purchase, sale, issue or cancellation of
the Company's own equity instruments.

Initial recognition and measurement-

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.

Subsequent measurement-

All financial liabilities are subsequently measured at amortised cost using the effective interest rate
method or at FVTPL.

Financial liabilities at fair value through profit or loss-

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or is
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred principally for the purpose of repurchasing in the
near term or on initial recognition it is part of a portfolio of identified financial instruments that the
Company manages together and has a recent actual pattern of short-term profit-taking. This category
also includes derivative entered into by the Company that are not designated and effective as hedging
instruments in hedge relationships as defined by Ind AS 109. Gains or losses on liabilities held for trading
are recognised in the statement of profit or loss.

86
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Financial liabilities subsequently measured at amortised cost-

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortised cost in subsequent accounting periods. The carrying amounts of financial liabilities that
are subsequently measured at amortised cost are determined based on the effective interest rate (EIR)
method. Interest expense that is not capitalised as part of costs of an asset is included in the finance

Financial Statements
costs line item in the statement of profit or loss.

After initial recognition, such financial liabilities are subsequently measured at amortised cost using
the EIR method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as
finance costs in the statement of profit or loss.

Derecognition-

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new
liability. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in statement of profit or loss.

Reclassification of financial assets-

The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments and
financial liabilities. For financial assets which are debt instruments, a reclassification is made only
if there is a change in the business model for managing those assets. Changes to the business model
are expected to be infrequent. The Company’s senior management determines change in the business
model as a result of external or internal changes which are significant to the Company’s operations.
Such changes are evident to external parties. A change in the business model occurs when the Company
either begins or ceases to perform an activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification prospectively from the reclassification date
which is the first day of the immediately next reporting period following the change in business model.
The Company does not restate any previously recognised gains, losses (including impairment gains or
losses) or interest.

j) Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments
and right-of-use assets representing the right to use the underlying assets.

87
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets, as follows:

• Building 3-5 years

The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (h)
Impairment of non-financial assets.

ii)
Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases that are
considered to be low value. Lease payments on short-term leases and leases of low-value assets are
recognised as expense on a straightline basis over the lease term.

k) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of 3 months or less which are subject to an insignificant risk of change in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and fixed
deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of
the Company’s cash management.

l) Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of past event, it is probable that an overflow of resources embodying economic benefits will be required

88
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

to settle the obligation and a reliable estimate can be made of the amount of obligation. If the effect of
the time value of money is material, provisions are determined by discounting the expected future cash
flow as a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time
is recognised as a finance cost.

Financial Statements
Contingent liabilities and contingent assets-

Contingent liability is disclosed for,

i. Possible obligations which will be confirmed only by future events not wholly within the control of the
Company, or

ii. Present obligations arising from past events where it is not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be
made.

Contingent assets are not recognised in the financial statements unless it becomes virtually certain that
an inflow of economic benefits will arise. When an inflow of benefits is probable, contingent assets are
disclosed in financial statements.

m) Revenue from operations

Revenue from contracts with customers

Milestone payments and out licensing arrangements

Revenues include amounts derived from product out-licensing agreements. These arrangements typically
consist of an initial up-front payment on inception of the license and subsequent payments dependent on
achieving certain milestones in accordance with the terms prescribed in the agreement. Non-refundable up-
front license fees received in connection with product out-licensing agreements are deferred and recognised
over the period in which the Company has continuing performance obligations. Milestone payments which
are contingent on achieving certain clinical milestones are recognised as revenues either on achievement
of such milestones, if the milestones are considered substantive, or over the period the Company has
continuing performance obligations, if the milestones are not considered substantive. If milestone payments
are creditable against future royalty payments, the milestones are deferred and released over the period in
which the royalties are anticipated to be received.

Research and development services

Revenue from services rendered, which primarily relate to research and development, is recognised in the
statement of profit and loss as the underlying services are performed.

Royalties

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant
agreement (provided that it is probable that economic benefits will flow to the Company and the amount
of revenue can be measured reliably). Royalty arrangements that are based on sales and other measures are
recognised by reference to the underlying arrangement.

Dividend

Dividend income is recognised when the Company’s right to receive the payment is established, which is
generally when shareholders approve the dividend.

89
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued on
a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount on initial recognition.

Contract balances

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer.
If the Company performs by transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration that is
conditional.

Trade receivables

A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract.

n) Employee benefits

Defined benefit plans

The Company operates a defined benefit gratuity plan which requires contribution to be made to a separately
administered fund.

The liability in respect of defined benefit plans is calculated using the projected unit credit method with
actuarial valuations being carried out at the end of each annual reporting period. The present value of the
defined benefit obligation is determined by discounting the estimated future cash outflows by reference
to market yields at the end of the reporting period on government bonds. The currency and term of the
government bonds shall be consistent with the currency and estimated term of the post-employment benefit
obligations. The current service cost of the defined benefit plan, recognised in the statement of profit and
loss as employee benefits expense, reflects the increase in the defined benefit obligation resulting from
employee service in the current year, benefit changes, curtailments and settlements. Past service costs
are recognised in statement of profit and loss in the period of a plan amendment. The net interest cost is
calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. This cost is included in employee benefit expense in statement of profit and loss.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to OCI in the period in which they arise and is reflected immediately in retained
earnings and is not reclassified to statement of profit and loss.

90
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Termination benefits

Termination benefits are recognised as an expense at the earlier of the date when the Company can no
longer withdraw the offer of those benefits and when the entity recognises costs for a restructuring that is
within the scope of Ind AS 37 and involves the payment of termination benefits.

Short-term and other long-term employee benefits

Financial Statements
Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term
employee benefit. The Company measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such long-term compensated absences are provided for based
on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses
are immediately taken to the statement of profit and loss and are not deferred.

The Company’s net obligation in respect of other long term employee benefits is the amount of future benefit
that employees have earned in return for their service in the current and previous periods. That benefit is
discounted to determine its present value.

Defined contribution plans

The Company’s contributions to defined contribution plans are recognised as an expense as and when the
services are received from the employees entitling them to the contributions. The Company does not have
any obligation other than the contribution made.

o) Borrowing cost

Borrowing costs that are directly attributable to the construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the
cost of that asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs
consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

p) Income tax

Income tax expense consists of current and deferred tax. Income tax expense is recognised in statement of
profit and loss except to the extent that it relates to items recognised in OCI or directly in equity, in which
case it is recognised in OCI or directly in equity respectively. Current tax is the expected tax payable on
the taxable profit for the year, using tax rates enacted or substantively enacted by the end of the reporting
period, and any adjustment to tax payable in respect of previous years. Current tax assets and tax liabilities
are offset where the Company has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the end of the
reporting period. Deferred tax assets and liabilities are offset if there is a legally enforceable right to set
off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred
tax liabilities relate to income taxes levied by the same tax authority on the Company.

91
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised. Withholding tax arising out of payment of dividends to shareholders under the Indian Income
Tax regulations is not considered as tax expense for the Company and all such taxes are recognised in the
statement of changes in equity as part of the associated dividend payment.

Minimum Alternate Tax (‘MAT’) credit is recognised as deferred tax asset only when and to the extent there
is convincing evidence that the Company will pay normal income tax during the period for which the MAT
credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset
is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence
no longer exists.

Accruals for uncertain tax positions require management to make judgments of potential exposures.
Accruals for uncertain tax positions are measured using either the most likely amount or the expected value
amount depending on which method the entity expects to better predict the resolution of the uncertainty.
Tax benefits are not recognised unless the management, based upon its interpretation of applicable laws
and regulations and the expectation of how the tax authority will resolve the matter, concludes that such
benefits will be accepted by the authorities. Once considered probable of not being accepted, management
reviews each material tax benefit and reflects the effect of the uncertainty in determining the related
taxable amounts.

q) Earnings/(loss) per share

The Company presents basic and diluted earnings/(loss) per share (“EPS”) data for its equity shares. Basic
EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity
shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options
granted to employees.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all
periods presented for any share splits and bonus shares issues including for changes effected prior to the
approval of the financial statements by the board of directors.

r) Share issue expenses

The Company incurs various costs in issuing or acquiring its own equity instruments. The transaction costs
of an equity transaction are accounted for as a deduction from equity to the extent they are incremental
costs directly attributable to the equity transaction that otherwise would have been avoided. The costs of
an equity transaction that is abandoned are recognised as an expense in the statement of profit and loss.

s) Recent accounting pronouncements

Standards issued but not yet effective and not early adopted by the Company

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. The Company has not
early adopted any new standards or amendments to the existing standards that has been issued but is not
yet effective.

92
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

t) Changes in accounting policies and disclosures

New and amended standards

Several amendments and interpretations apply for the first time in March 2022, but do not have an impact on
the financial statements of the Company. The Company has not early adopted any standards or amendments
that have been issued but are not yet effective.

Financial Statements
u) Non-current assets, held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use. This condition is
regarded as met only when the asset (or disposal group) is available for immediate sale in its present
condition subject only to terms that are usual and customary for sales of such asset (or disposal group)
and its sale is highly probable. Management must be committed to the sale, which should be expected to
qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Non-current assets held for sale are not depreciated or
amortised.

93
94
Notes to Financial Statements for the year ended March 31, 2022

NOTE 3a

PROPERTY, PLANT AND EQUIPMENT

H In Lakhs
Lease hold Right of Plant and Furniture Office
Particulars Buildings* Vehicles Total
land use assets# equipment and fixtures equipment

At cost or deemed cost

As at April 1, 2020 1,146.57 855.06 2,672.42 7,963.87 362.73 387.59 56.60 13,444.84
Additions - 1.43 64.49 385.81 16.06 67.06 11.45 546.30
Disposals ##(343.07) (1.18) - (1,362.62) (7.30) (128.73) (4.44) (1,847.34)
As at March 31, 2021 803.50 855.31 2,736.91 6,987.06 371.49 325.92 63.61 12,143.80
Additions - - 263.77 794.54 27.75 69.18 2.52 1,157.76
Disposals - - - - - (93.66) (0.15) (93.81)
As at March 31, 2022 803.50 855.31 3,000.68 7,781.60 399.24 301.44 65.98 13,207.75
Sun Pharma Advanced Research Company Ltd

Accumulated depreciation
As at April 1, 2020 25.95 162.15 28.97 2,629.45 58.18 214.89 26.79 3,146.38
Depreciation expenses 14.55 162.36 45.75 724.38 36.05 70.52 17.52 1,071.13
Eliminated on disposals of assets ##(12.13) (0.45) - (916.32) (6.98) (122.77) (2.39) (1,061.04)
As at March 31, 2021 28.37 324.06 74.72 2,437.51 87.25 162.64 41.92 3,156.47
Depreciation expenses 10.19 162.21 48.20 658.80 35.66 66.94 12.74 994.74
Eliminated on disposals of assets - - - - - (83.08) (0.15) (83.23)
As at March 31, 2022 38.56 486.27 122.92 3,096.31 122.91 146.50 54.51 4,067.98
Carrying amounts
As at March 31, 2021 775.13 531.25 2,662.19 4,549.55 284.24 163.28 21.69 8,987.33
As at March 31, 2022 764.94 369.04 2,877.76 4,685.29 276.33 154.94 11.47 9,139.77
* Pending registration of one location (Deemed cost : H 228.87 Lakhs)
# Refer Note 39.

## Represents amount reclassified as assets held for sale [Gross block J Nil (Previous year : H 343.07 Lakhs) and accumulated depreciation J Nil (Previous year : H 12.13
Lakhs)]

The Company follows a Cost Model for subsequent measurement of Property Plant and Equipment and hence no revaluation is done.
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

No assets acquired or transferred as part of business combination.

The title deeds of immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) are held in the name of the Company except for the following
immovable properties for which registration of title deeds is in process:

Financial Statements
Whether title deed holder Property Reason for
Relevant line Description Gross is a promoter, director or held not being
Title deeds held in
item in the of item of carrying relative(#) of promoter(*) since held in the
the name of
Balance sheet property value /director or employee of which name of the
promoter / director date Company

Property, plant Building 285.99 Sun No March 1, (**)

and equipment Pharmaceutical 2007
Industries Limited
# relative here means relative as defined in the companies act, 2013.
*promoter here means promoter as defined in the companies act, 2013.
** the building was transferred (pending registration) to the company pursuant to a scheme of arrangement in the nature of demerger and
transfer of innovative research and development business of Sun Pharmaceutical Industries Limited under section 391 to 394 of the erstwhile
Companies Act, 1956 in terms of the approval of the honourable High Court of Gujarat.

NOTE 3b

CAPITAL WORK-IN-PROGRESS
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Capital work-in-progress (CWIP) 372.01 523.43
372.01 523.43

Capital-work-in-progress ageing schedule

H In Lakhs
As at March 31, 2022
Amount in CWIP for a period of
CWIP
Less than More than
1-2 years 2-3 years Total
1 year 3 years
Projects in progress 214.88 138.16 18.97 - 372.01
Projects temporarily suspended - - - - -

H In Lakhs
As at March 31, 2021
Amount in CWIP for a period of
CWIP
Less than More than
1-2 years 2-3 years Total
1 year 3 years
Projects in progress 494.04 29.39 - - 523.43
Projects temporarily suspended - - - - -

There is no project which is overdue or has exceeded its cost compared to its original plan as at balance sheet date.

95
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 3c

OTHER INTANGIBLE ASSETS H In Lakhs

Computer
Particulars
software
At cost or deemed cost
As at April 1, 2020 105.54
Additions 1.69
Disposals -
As at March 31, 2021 107.23
Additions -
Disposals -
As at March 31, 2022 107.23
Accumulated amortisation
As at April 1, 2020 17.53
Amortisation expenses 21.20
Eliminated on disposals of assets -
As at March 31, 2021 38.73
Amortisation expenses 21.45
Eliminated on disposals of assets -
As at March 31, 2022 60.18
Carrying amounts
As at March 31, 2021 68.50
As at March 31, 2022 47.05

NOTE 3d

INTANGIBLE ASSETS UNDER DEVELOPMENT

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Intangible assets under development 2,264.52 -
2,264.52 -

Intangible assets under development ageing schedule

H In Lakhs
As at March 31, 2022
Amount in CWIP for a period of
Intangible assets under development
Less than More than
1-2 years 2-3 years Total
1 year 3 years
Projects in progress 2,264.52 - - - 2,264.52
Projects temporarily suspended - - - - -

H In Lakhs
As at March 31, 2021
Amount in CWIP for a period of
Intangible assets under development
Less than More than
1-2 years 2-3 years Total
1 year 3 years
Projects in progress - - - - -
Projects temporarily suspended - - - - -

There is no intangible asset where completion is over due or has exceeded its cost compared to its original plan as
at balance sheet date.

96
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 4

OTHER FINANCIAL ASSETS (NON-CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021

Financial Statements
Security deposits - Unsecured, considered good 44.35 39.86
Other receivables 2,273.70 -
2,318.05 39.86

NOTE 5

DEFERRED TAX ASSETS (NET)

H In Lakhs
As at Recognised in As at
Particulars
March 31, 2021 profit or loss March 31, 2022
Deferred tax (liabilities) / assets in relation to :
Difference between written down value of property, (2,062.46) 506.34 (1,556.12)
plant and equipment and capital work-in-progress as
per books of accounts and income tax
Difference in carrying value and tax base of financial (0.12) (0.25) (0.37)
assets of investments
Expenses claimed for tax purpose on payment basis 418.71 (25.22) 393.49
Deferred revenue 730.60 154.44 885.04
Unabsorbed business losses / capital expenditure 913.27 (635.31) 277.96
(unabsorbed depreciation) (Restricted to the extent of
deferred tax liability on depreciation on account of
uncertainty of future taxable income)
- - -

H In Lakhs
As at Recognised in As at
Particulars
April 1, 2020 profit or loss March 31, 2021
Deferred tax (liabilities) / assets in relation to:
Difference between written down value of property, (2,314.98) 252.52 (2,062.46)
plant and equipment and capital work-in-progress as
per books of accounts and income tax
Difference in carrying value and tax base of financial - (0.12) (0.12)
assets of investments
Expenses claimed for tax purpose on payment basis 452.45 (33.74) 418.71
Deferred revenue 1,142.74 (412.14) 730.60
Unabsorbed business losses / capital expenditure 719.79 193.48 913.27
(unabsorbed depreciation) (Restricted to the extent of
deferred tax liability on depreciation on account of
uncertainty of future taxable income)
- - -

Unrecognised deferred tax assets relate primarily to unabsorbed business losses which will expire in 8 years after
the year in which they originate as per Income Tax Act, 1961. These unexpired losses will expire based on the year
of origination as follows:

97
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Deductible temporary differences, unused tax losses and unused tax
credits for which no deferred tax assets have been recognised are
attributable to the following :
Tax losses 1,11,105.82 93,739.16
Unabsorbed depreciation 19,391.45 16,803.23

The unused tax losses will expire from financial year 2022 - 2023 to financial year 2030 - 2031.

NOTE 6

NON-CURRENT TAX ASSETS (NET)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Advance income tax* (Net of provisions) 6,691.49 7,023.63
6,691.49 7,023.63
* Includes amount paid under protest.

NOTE 7

OTHER ASSETS (NON-CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Unsecured, considered good unless otherwise stated
Capital advances 46.67 0.30
Prepaid expenses 13.49 14.80
60.16 15.10

NOTE 8

INVESTMENTS (CURRENT)
H In Lakhs
As at March 31, 2022 As at March 31, 2021
Quantity Amount Quantity Amount
(In No.) ( J In Lakhs) (In No.) ( J In Lakhs)
Investments stated at fair value through
profit and loss
Investments in mutual funds
Unquoted*
Nippon India Overnight Fund - Direct Plan 10,22,165 1,166.49 - -
Growth Plan - (ONAG) Face Value of H 100 each)
PGIM India Overnight Fund - Direct Plan - - - 60,502 642.52
Growth (Face value of H 1,000 each)
Aggregate value of unquoted investments 1,166.49 642.52
*Investments in mutual funds have been fair valued at closing net asset value (NAV).

98
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 9

TRADE RECEIVABLES
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021

Financial Statements
Unsecured, considered good (Refer Note 44) 2,773.61 1,757.55
Receivables which have significant increase in credit risk - -
- -
Less : Impairment allowance (allowance for bad and doubtful debts) - -
2,773.61 1,757.55

Note : There are no trade receivables which are due from directors or other officers of the Company either severally
or jointly. Trade receivables comprise of receivable due from related parties as mentioned in Annexure A of Note 41.
For terms and conditions relating to related party receivables, refer Annexure A of Note 41.

Trade receivables are non-interest bearing and are generally on terms of 30 - 60 days.

Trade receivables ageing schedule

H In Lakhs
As at March 31, 2022
Outstanding periods from due date of payment
Particulars More
Unbilled Less than 6 6 months 1-2 2-3
Not due than 3 Total
dues months -1 year years years
years
(i) Undisputed trade receivables– - 2,664.42 109.19 - - - - 2,773.61
considered good
(ii) Undisputed trade receivables– - - - - - - - -
which have significant increase in
credit risk
(iii) Undisputed trade receivables– - - - - - - - -
credit impaired
(iv) Disputed trade receivables– - - - - - - - -
considered good
(v) Disputed trade receivables– - - - - - - - -
which have significant increase in
credit risk
(vi) Disputed trade receivables - - - - - - - - -
credit impaired
Less : Impairment allowance
(allowance for bad and doubtful debts)
(i) Undisputed and disputed trade - - - - - - - -
receivables– considered credit
impaired

99
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

H In Lakhs
As at March 31, 2021
Outstanding periods from due date of payment
Particulars More
Unbilled Less than 6 6 months 1-2 2-3
Not due than 3 Total
dues months -1 year years years
years
(i) Undisputed trade receivables– - 1,731.15 8.51 17.86 0.03 1,757.55
considered good
(ii) Undisputed trade receivables– - - - - - - - -
which have significant increase in
credit risk
(iii) Undisputed trade receivables– - - - - - - - -
credit impaired
(iv) Disputed trade receivables– - - - - - - - -
considered good
(v) Disputed trade receivables– - - - - - - - -
which have significant increase in
credit risk
(vi) Disputed trade receivables - - - - - - - - -
credit impaired
Less : Impairment allowance
(allowance for bad and doubtful debts)
(i) Undisputed and disputed trade - - - - - - - -
receivables– considered credit
impaired

NOTE 10

CASH AND CASH EQUIVALENTS

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Balances with banks
In current accounts 122.08 930.00
Cash on hand 0.34 0.45
122.42 930.45

Changes in liabilities arising from financing activities

H In Lakhs
Balance Balance Balance Balance
as at as at as at as at
Particulars Cashflows Other Cashflows Other
April 01, March 31, April 01, March
2021 2022 2020 31, 2021
Current borrowings 11,804.52 (4,304.52) - 7,500.00 6,000.00 5,804.52 - 11,804.52
Current Lease Liabilities 162.11 (209.23) 224.80 177.68 142.10 (202.73) 222.74 162.11
Non-current borrowings 11,250.00 (11,250.00) - - 54.52 11,195.48 - 11,250.00
Non Current Lease Liabilities 421.51 - (177.82) 243.69 583.31 - (161.80) 421.51

100
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 11

BANK BALANCES OTHER THAN CASH AND CASH EQUIVALENTS

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021

Financial Statements
Deposit accounts
Balances held as margin money or security against guarantees - 0.50
Earmarked balances with banks
Share application money refund account 0.21 0.21
0.21 0.71

NOTE 12

LOANS (CURRENT)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Loans and advances to employees
Unsecured, considered good 33.47 6.81
33.47 6.81

The Company has not granted any loans or advances in the nature of loans to promoters, directors, KMPs and the
related parties (as defined under the Companies Act, 2013), either severally or jointly with any other person.

NOTE 13

OTHER FINANCIAL ASSETS (CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Interest accrued but not due on fixed deposits (considered good) - 0.01
Unbilled revenue (Refer Note 44) 282.86 -
Other receivable 2.60 -
285.46 0.01

NOTE 14

OTHER ASSETS (CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Prepaid expenses 247.61 479.09
Advances for supply of goods and services (considered good) 107.76 79.61
Balances with government authorities* 2,378.20 2,083.44
2,733.57 2,642.14
*Includes balances of Goods and Services Tax.

101
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 15

EQUITY SHARE CAPITAL

H In Lakhs
As at March 31, 2022 As at March 31, 2021
Number of Amount Number of Amount
shares J In Lakhs shares J In Lakhs
Authorised
Opening balance (Equity shares of H 1 each) 37,50,00,000 3,750.00 32,50,00,000 3,250.00
Addition during the year 5,00,00,000 500.00 5,00,00,000 500.00

Closing balance (Equity shares of H 1 each) 42,50,00,000 4,250.00 37,50,00,000 3,750.00

Issued, subscribed and fully paid up
Equity shares of H 1 each* 26,20,47,506 2,620.56 26,20,47,506 2,620.56
Add : Shares issued against conversion of 98,31,460 98.31 - -
warrants (Refer note iv)
27,18,78,966 2,718.87 26,20,47,506 2,620.56
*Consequent to forfeiture of 12,537 equity shares in prior years and on reciept of unpaid amount thereon, the paid-up share capital of the
Company have increased by H 0.08 Lakhs

Disclosures relating to share capital

i Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares and declares and pays dividend in Indian Rupees. The equity
shares of the Company, having par value of H 1/- per share, rank pari passu in all respects including voting rights
and entitlement to dividend. The dividend proposed by the Board of Directors, if any, is subject to the approval
of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive remaining assets of the Company on pro-rata basis. The distribution
will be in proportion to the number of equity shares held by the shareholders.

ii Equity shares held by each shareholder holding more than 5% equity shares in the Company are as follows :

H In Lakhs
As at March 31, 2022 As at March 31, 2021
Name of the shareholder No. of Equity No. of Equity
% of Holding % of Holding
shares held shares held
Dilip Shantilal Shanghvi 3,65,29,761 13.44% 2,81,02,795 10.72%
Shanghvi Finance Private Limited 13,72,11,787 50.47% 13,72,11,787 52.36%

iii Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting
year.
H In Lakhs
As at March 31, 2022 As at March 31, 2021
Particulars No. of Equity Amount No. of Equity Amount
shares held J in Lakhs shares held J in Lakhs
Opening balance 26,20,47,506 2,620.56 26,20,47,506 2,620.56
Add : Shares issued against conversion 98,31,460 98.31 - -
of warrants (Refer note iv)
Closing balance 27,18,78,966 2,718.87 26,20,47,506 2,620.56

102
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

iv During the year, the Company has allotted 6,24,74,082 warrants, each convertible into one equity share, on
preferential basis at an issue price of H 178/- each, upon receipt of 25% of the issue price (i.e. H 44.50 per warrant)
as warrant subscription money. Balance 75% of the issue price (i.e. H 133.50 per warrant) shall be payable within
18 months from the allotment date, at the time of exercising the option to apply for fully paid–up equity share
of H 1/- each of the Company, against each warrant held by the warrant holder.

Financial Statements
During the year, the Company upon receipt of balance 75% of the issue price (i.e.H 133.50/- per warrant) for
98,31,460 warrants, has allotted equal no. of fully paid up equity shares against conversion of said warrants
exercised by the warrant holder(s). For the remaining 5,26,42,622 warrants, the respective allottees have not yet
exercised their option for conversion/exchange the warrants into/for equity shares and accordingly, balance
75% money towards such remaining warrants is yet to be received. The last day for exercising the option for
conversion/exchange the warrants into/for equity shares of the Company is January 07, 2023, being 18 months
from the date of allotment of warrants i.e. July 08, 2021.

v No equity share has been allotted as fully paid up bonus shares and / bought back during the period of five years
immediately preceding the date at which the balance sheet is prepared.

vi Details of shares held by promoters

As at March 31, 2022

H In Lakhs
No. of shares No. of % of Total
Equity shares held by promoters / Change % change
Sr. at the shares at shares at
members of promoter group / person during during
No. beginning of the end of the end of
acting in concert the year the year
the year the year the year
1 Mr. Dilip Shantilal Shanghvi 2,81,02,795 84,26,966 3,65,29,761 13.44 2.71
2 Shanghvi Finance Private Limited 13,72,11,787 - 13,72,11,787 50.47 (1.89)
3 Mr. Sudhir V. Valia 18,33,951 - 18,33,951 0.67 (0.03)
4 Mrs. Vibha Dilip Shanghvi 10,63,236 - 10,63,236 0.39 (0.01)
5 Mr. Aalok Dilip Shanghvi 3,50,162 - 3,50,162 0.13 (0.00)
6 Ms. Vidhi Dilip Shanghvi 3,44,081 - 3,44,081 0.13 (0.00)
7 Mrs. Kumud S. Shanghvi 38,795 - 38,795 0.01 (0.00)
8 Shanghvi Family & Friends Benefit Trust 1,54,922 - 1,54,922 0.06 (0.00)
(Kumud S. Shanghvi and Dilip S. Shanghvi)
9 Mrs. Raksha S.Valia 41,45,231 - 41,45,231 1.52 (0.06)
10 Unimed Investments Limited 12,67,963 - 12,67,963 0.47 (0.02)
11 Flamboyawer Finance Private Limited 2,543 - 2,543 0.00 (0.00)
12 Sanghvi Properties Private Limited 1,887 - 1,887 0.00 (0.00)
13 Gujarat Sun Pharmaceutical Industries 1,751 - 1,751 0.00 (0.00)
Private Limited
14 Aditya Medisales Limited 48,88,126 - 48,88,126 1.80 (0.07)
Total 17,94,07,230 84,26,966 18,78,34,196 69.09 0.63

103
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

As at March 31, 2021

H In Lakhs
No. of shares No. of % of Total
Equity shares held by promoters / Change % change
Sr. at the shares at shares at
members of promoter group / person during during
No. beginning of the end of the end of
acting in concert the year the year
the year the year the year
1 Mr. Dilip Shantilal Shanghvi 2,81,02,795 - 2,81,02,795 10.72 0.00
2 Shanghvi Finance Private Limited 13,72,11,787 - 13,72,11,787 52.36 0.00
3 Mr. Sudhir V. Valia 18,33,951 - 18,33,951 0.70 0.00
4 Mrs. Vibha Dilip Shanghvi 10,63,236 - 10,63,236 0.41 0.00
5 Mr. Aalok Dilip Shanghvi 3,50,162 - 3,50,162 0.13 0.00
6 Ms. Vidhi Dilip Shanghvi 3,44,081 - 3,44,081 0.13 0.00
7 Mrs. Kumud S. Shanghvi 38,795 - 38,795 0.01 0.00
8 Shanghvi Family & Friends Benefit Trust 1,54,922 - 1,54,922 0.06 0.00
(Kumud S. Shanghvi and Dilip S. Shanghvi)
9 Mrs. Raksha S.Valia 41,45,231 - 41,45,231 1.58 0.00
10 Unimed Investments Limited 12,67,963 - 12,67,963 0.48 0.00
11 Flamboyawer Finance Private Limited 2,543 - 2,543 0.00 0.00
12 Sanghvi Properties Private Limited 1,887 - 1,887 0.00 0.00
13 Gujarat Sun Pharmaceutical Industries 1,751 - 1,751 0.00 0.00
Private Limited
14 Aditya Medisales Limited 48,88,126 - 48,88,126 1.87 0.00
Total 17,94,07,230 - 17,94,07,230 68.45 0.00

NOTE 16

OTHER EQUITY
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
A Securities premium
Opening balance 94,045.10 94,045.10
Add: Premium on issue of equity shares against conversion of warrants 17,401.69 -
[Refer Note 15(iv)]
Less : Transaction cost related to equity share capital (808.34) -
1,10,638.45 94,045.10
B General reserve 3,397.66 3,397.66
C Money received against share warrants
Amount received on issue of warrants convertible into equity shares 23,425.97 -
[Refer Note 15(iv)]
D Retained earnings
Opening balance (1,16,888.48) (1,01,927.15)
Add : Loss for the year (20,339.54) (15,113.88)
Add : Actuarial gain on remeasurement of defined benefit plan 169.64 152.55
(1,37,058.38) (1,16,888.48)
Total (A+B+C+D) 403.70 (19,445.72)

Nature and purpose of each reserve

Securities premium - The amount received in excess of face value of the equity shares is recognised in securities
premium. This would be utilised in accordance with the provisions of the Companies Act, 2013.

General reserve - The reserve arises on transfer portion on the net profit pursuant to the earlier provisions of the
Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. The
Company can use this reserve for payment of dividend and issue of fully paid-up and not paid-up bonus shares.

104
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 17

BORROWINGS (NON-CURRENT)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021

Financial Statements
Secured term loan
Kotak Mahindra Bank Limited#
Term loan from bank (secured) - 11,250.00
- 11,250.00
# The 7.20% term loan tenor is repayable by way of three equal instalments of H 2,500 lakhs as at March 31, 2022. The loan is secured
by Corporate Guarantee given by Shanghvi Finance Private Limited and charge on all existing and future current assets. For the current
maturities of long-term loan Refer Note 21 "Borrowings (Current)" .

The Company has availed working capital facilities from Kotak bank on the basis of security of current assets.
However, for the year ended March 31, 2022 Company is not required to file quarterly statement with the bank.
Further, the Company in the month of January 2022, has availed working capital facilities from ICICI bank on the
basis of security of book debts (i.e. trade receivables). The Company has filed the Statement of trade receivables
with value of H 2,773.61 lakhs as at March 31, 2022 for the quarter ended March 31, 2022 which is as per books of
accounts.

NOTE 18

LEASE LIABILITIES (NON-CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Lease liability (Refer Note 39) 243.69 421.51
243.69 421.51

NOTE 19

PROVISIONS (NON-CURRENT)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Provision for employee benefits
Compensated absences 626.45 571.01
Gratuity (Refer Note 43) 188.18 292.20
814.63 863.21

NOTE 20

OTHER LIABILITIES (NON-CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Deferred revenue (Refer Note 44) 6,684.50 3,924.25
6,684.50 3,924.25

105
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 21

BORROWINGS (CURRENT)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Unsecured loan from Shanghvi Finance Pvt. Ltd. - 8,000.00
(Unsecured term loan carried fixed rate of interest @8% p.a. repaid during
the year)
Current maturity of long term borrowings
Secured term loan
Kotak Mahindra Bank Limited
- Term loan from bank (secured) (Refer Note 17) 7,500.00 3,750.00
Unsecured term loan
Department of Science and Technology (DST), Government of India under - 54.52
the "Drug and Pharmaceutical Research Program''
7,500.00 11,804.52

NOTE 22

LEASE LIABILITIES (CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Lease liability (Refer Note 39) 177.68 162.11
177.68 162.11

NOTE 23

TRADE PAYABLES
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Total outstanding dues of micro and small enterprises (Refer Note 38) 57.16 7.30
Total outstanding dues of creditors other than micro and small enterprises 7,161.55 9,109.50
7,218.71 9,116.80

Note : There are no trade payables which are due to directors or other officers of the Company either severally or
jointly. Trade payables comprises of payables due to related parties as mentioned in Annexure A of Note 41.

Trade payables are non interest bearing and are generally on terms of 30 - 90 days.

106
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Trade payable ageing schedule

H In Lakhs
As at March 31, 2022
Outstanding periods from due date of payment
Particulars
Unbilled Less than 1 1-2 2-3 More than
Not due Total
dues year years years 3 years

Financial Statements
(i) Micro and small enterprises 13.87 27.59 15.70 - - 57.16
(ii) Others 3,225.10 1,623.16 1,523.08 111.22 20.11 658.88 7,161.55
(iii) Disputed dues - Micro and small - - - - - - -
enterprise
(iv) Disputed dues - others - - - - - - -

Trade payable ageing schedule

H In Lakhs
As at March 31, 2021
Outstanding periods from due date of payment
Particulars
Unbilled Less than 1 1-2 2-3 More than
Not due Total
dues year years years 3 years
(i) Micro and small enterprises 0.55 2.15 4.60 - 7.30
(ii) Others 1,941.54 1,732.05 3,936.01 570.89 171.48 757.53 9,109.50
(iii) Disputed dues - Micro and small - - - - - -
enterprise
(iv) Disputed dues - others - - - - - -

NOTE 24

OTHER FINANCIAL LIABILITIES (CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Interest accrued but not due on borrowings 57.21 193.11
Security deposits 17.74 38.42
Payable on purchase of property, plant and equipment 175.12 146.36
Payable to employees 888.29 789.53
Unclaimed excess share application money 0.21 0.21
Other financial liability 0.96 -
1,139.53 1,167.63

NOTE 25

OTHER LIABILITIES (CURRENT)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Statutory remittances 575.83 480.74
Advances from customers (Refer Note 44) 2.92 27.00
Other advance - 1.70
578.75 509.44

107
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 26

PROVISIONS (CURRENT)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Provision for employee benefits
Compensated absences 267.98 328.71
Gratuity (Refer Note 43) 260.24 245.96
528.22 574.67

NOTE 27

REVENUE FROM OPERATIONS

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Revenue from contracts with customers
Sale of services - licence fees / royalty on technology / R&D services 13,724.89 25,295.71
(Refer Note 44)
13,724.89 25,295.71

NOTE 28

OTHER INCOME
H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Interest income on:
Deposits with banks 18.00 0.31
Loans to employees 0.83 0.40
Others (refund from government authorities) 122.21 89.00
141.04 89.71
Net gain on sale of financial assets measured at fair value through profit 45.11 56.30
or loss
Net gain arising on financial assets measured at fair value through profit 1.28 0.41
or loss
46.39 56.71
Net gain on foreign currency transactions and translation - 301.40
Net gain on disposal of property, plant and equipment 489.32 26.39
Miscellaneous income 7.71 47.11
Sundry balances written back, net - 19.93
684.46 541.25

108
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 29

COST OF MATERIALS CONSUMED

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021

Financial Statements
Materials consumed 1,827.12 1,817.58
1,827.12 1,817.58

NOTE 30

EMPLOYEE BENEFITS EXPENSE

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Salaries, wages and bonus 8,774.96 8,347.59
Contribution to provident and other funds* 591.03 591.10
Staff welfare expenses 311.88 219.88
9,677.87 9,158.57
* includes gratuity expense of H 187.40 Lakhs (Previous year: H 210.69 Lakhs)

NOTE 31

FINANCE COSTS
H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Interest expense on:
Borrowings 1,285.89 1,004.09
Lease liabilities 46.98 60.94
1,332.87 1,065.03

NOTE 32a

LICENSE AND FEES

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
License and fees 342.81 945.25
342.81 945.25

109
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 32b

OTHER EXPENSES
H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Consumption of stores and spare parts 437.77 447.23
Power and fuel 462.20 459.64
Rent (Refer Note 37) - -
Rates and taxes 17.07 15.89
Insurance 150.51 142.95
Repairs and maintenance 528.90 523.07
Printing and stationery 14.88 13.50
Travelling and conveyance 253.00 187.57
Communication expenses 31.55 54.54
Net loss on foreign currency transactions 83.86 -
Payment to auditor
As auditor
For statutory audit 18.19 16.54
For limited review 7.06 6.51
For certification services 2.00 -
For reimbursement 0.04 0.86
Contract labour expenses 320.00 311.54
Membership fees and subscription 63.61 38.33
Software expenses 418.98 511.07
Miscellaneous expenses 156.90 348.25
2,966.52 3,077.49

NOTE 33

CATEGORIES OF FINANCIAL INSTRUMENTS

H In Lakhs
As at March 31, 2022 As at March 31, 2021
Fair value Fair value Fair value Fair value
Particulars through through other Amortised through through other Amortised
profit or comprehensive cost profit or comprehensive cost
loss income loss income
Financial assets
Investments in mutual funds 1,166.49 - - 642.52 - -
Loans and advances to - - 33.47 - - 6.81
employees
Security deposits - - 44.35 - - 39.86
Trade receivables - - 2,773.61 - - 1,757.55
Cash and cash equivalents - - 122.42 - - 930.45
Bank balances other than - - 0.21 - - 0.71
above
Interest accrued on fixed - - - - - 0.01
deposit
Unbilled revenue - - 282.86 - - -
Other receivables - - 2,276.30 - - -
Total 1,166.49 - 5,533.22 642.52 - 2,735.39

110
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

H In Lakhs
As at March 31, 2022 As at March 31, 2021
Fair value Fair value Fair value Fair value
Particulars through through other Amortised through through other Amortised
profit or comprehensive cost profit or comprehensive cost
loss income loss income

Financial Statements
Financial liabilities
Borrowings - - 7,500.00 - - 23,054.52
Interest accrued but not due - - 57.21 - - 193.11
on borrowings
Trade payables - - 7,218.71 - - 9,116.80
Security deposits - - 17.74 - - 38.42
Payables on purchase - - 175.12 - - 146.36
of property, plant and
equipment
Unclaimed excess share - - 0.21 - - 0.21
application money
Lease liabilities - - 421.37 - - 583.62
Payable to employees - - 888.29 - - 789.53
Others - - 0.96 - -
Total - - 16,279.61 - - 33,922.57

NOTE 34

FAIR VALUE HIERARCHY

The carrying value and fair value of financial instruments by categories as at balance sheet date were as follows:

H In Lakhs
Carrying Value Fair Value
Particulars As at As at As at As at
March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021
Financial assets:
FVTPL financial investments 1,166.49 642.52 1,166.49 642.52
Total 1,166.49 642.52 1,166.49 642.52

The management assessed that cash and cash equivalents, trade receivables, loans, trade payables, other financial
assets and other financial liabilities approximate their carrying amounts largely due to the short-term maturities
of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Financial assets and liabilities measured at fair value on a recurring basis at the end of each reporting period

H In Lakhs
As at March 31, 2022 As at March 31, 2021
Name of the shareholder
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial assets at FVTPL
Investments in mutual funds 1,166.49 - - 642.52 - -
Total 1,166.49 - - 642.52 - -

111
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

There were no transfers between Level 1 and 2 during the years ended March 31, 2022 and March 31, 2021.

NOTE 35

CAPITAL MANAGEMENT

The Company’s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern; and

- to provide an adequate return to shareholders through optimisation of debts and equity balance.

The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as
presented on the face of the financial statements. The Company’s objective for capital management is to maintain
an optimum overall financial structure.

(i) Net debt equity ratio

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Debt (includes non-current and current borrowings) 7,500.00 23,054.52
Less : cash and cash equivalents 122.42 930.45
Net debt 7,377.58 22,124.07
Total equity 3,122.57 (16,825.16)
Net debt to total equity ratio 2.36 (1.31)

NOTE 36

FINANCIAL RISK MANAGEMENT

The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk.
The Company’s risk management assessment, policies and processes are established to identify and analyse the
risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance
with the same. Risk assessment, management policies and processes are reviewed regularly to reflect changes in
market conditions and the Company’s activities.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers,
loans and investments. Credit risk is managed through credit approvals, establishing credit limits and continuously
monitoring the creditworthiness of counterparty to which the Company grants credit terms in the normal course
of business. However, the Company does not have any credit risk from financial assets as on balance sheet date.

112
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties
that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties,
and does not have any significant concentration of exposures to specific industry sectors or specific country risks.

Liquidity risk

Financial Statements
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The
Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risk to the Company’s reputation.

The Company has unutilised working capital lines from banks of H 7,500 Lakhs as on March 31, 2022 (Previous year :
H 6,500 Lakhs)

The table below provides details regarding the contractual maturities of significant financial liabilities based on
the contractual undiscounted payments :
H In Lakhs
As at March 31, 2022 As at March 31, 2021
Particulars Less than 1 - 3 More than Less than 1 - 3 More than
Total Total
1 year years 3 years 1 year years 3 years
Non derivative
Borrowings 7,500.00 - - 7,500.00 11,804.52 11,250.00 - 23,054.52
Trade payables 7,218.71 - - 7,218.71 9,116.80 - - 9,116.80
Other financial liabilities 1,139.53 - - 1,139.53 1,167.63 - - 1,167.63
Lease liabilities 209.23 136.80 159.60 505.63 209.59 277.96 228.00 715.55
Total 16,067.47 136.80 159.60 16,363.87 22,298.54 11,527.96 228.00 34,054.50

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price
risk, such as equity price risk. Financial instruments affected by market risk include investments. The Company has
designed risk management frame work to control various risks effectively to achieve the business objectives. This
includes identification of risk, its assessment, control and monitoring at timely intervals.

Foreign exchange risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues and expenses,
(primarily in US Dollars, Euros). As a result, if the value of the Indian Rupee fluctuates relative to these foreign
currencies, the Company’s revenues and expenses measured in Indian Rupees may fluctuate. The exchange rate
between the Indian Rupee and these foreign currencies have changed substantially in recent periods and may
continue to fluctuate substantially in the future.

113
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

a) Significant foreign currency risk exposure relating to trade receivables and payables
H In Lakhs
As at March 31, 2022 As at March 31, 2021
Particulars
US Dollars Euro Others Total US Dollars Euro Others Total
Financial assets
Trade receivables 11.38 - - 11.38 649.44 - - 649.44
Other receivables 2,273.70 - - 2,273.70 - - - -
Financial liabilities
Trade payables 6,308.74 29.89 82.97 6,421.61 8,103.09 36.45 30.90 8,170.44

b) Sensitivity

For the years ended March 31, 2022 and March 31, 2021, every 5% strengthening in the exchange rate between
the Indian Rupee and the respective currencies for the above mentioned financial assets / liabilities would
decrease the Company’s loss and increase the Company's equity by approximately H 206.83 Lakhs and H 376.05
Lakhs respectively. A 5% weakening of the Indian rupee and the respective currencies would lead to an equal
but opposite effect.

Interest rate risk

The Company has no loan facilities on floating interest rate, which exposes the Company to risk of changes in
interest rates. The Company’s exposure to interest rate risk is not significant.

Commodity rate risk

The Company being in the business of Research & Development, does not face any significant Commodity Price Risk.

NOTE 37

LOSS PER SHARE

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Loss for the year (H in Lakhs) (20,339.54) (15,113.88)
Weighted average number of shares used in computing basic and diluted 26,31,44,166 26,20,47,506
loss per share
Nominal / face value per share (in H) 1.00 1.00
Basic and diluted loss per share (in H) (7.73) (5.77)

NOTE 38

DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of
information available with the Company.

a) The principal amount remaining unpaid as at March 31, 2022 in respect of enterprises covered under the "Micro,
Small and Medium Enterprises Development Act, 2006" (MSMED) is H 57.16 Lakhs (Previous year : H 7.30 Lakhs).

b) There are no amounts of interest paid/due/payable during the year/previous year/succeeding year. Also, there is no
amount of interest accrued and remaining unpaid at the end of current accounting year/previous accounting year.

c) The list of undertakings covered under MSMED was determined by the Company on the basis of information
available with the Company and has been relied upon by auditors.

114
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

NOTE 39

LEASES

Right-of-use (ROU assets)

H In Lakhs
Particulars Amount

Financial Statements
At cost or deemed cost
As at April 1, 2020 855.06
Additions 1.43
Disposals (1.18)
As at March 31, 2021 855.31
Reclassified from property, plant and equipment
Additions -
Disposals -
As at March 31, 2022 855.31
Accumulated depreciation
As at April 1, 2020 162.15
Depreciation expenses 162.36
Eliminated on disposals of assets (0.45)
As at March 31, 2021 324.06
Depreciation expenses 162.21
Eliminated on disposals of assets -
As at March 31, 2022 486.27
Carrying amounts (Refer Note 3a)
As at March 31, 2021 531.25
As at March 31, 2022 369.04

Lease liability

Below are the carrying amounts of lease liabilities recognised and the movements during the period:
H In Lakhs
Particulars Amount
As at April 1, 2020 725.41
Accretion of interest 60.94
Payments towards lease liability (202.73)
As at March 31, 2021 583.62
Accretion of interest 46.98
Payments towards lease liability (209.23)
As at March 31, 2022 421.37
Lease liabilities (non-current) (Refer Note 18)
Lease liability 243.69
Lease liabilities (Current) (Refer Note 22)
Lease liability 177.68
Total lease liability 421.37

115
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Lease liabilities - maturity analysis - contractual undiscounted cash flows

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Not later than one year 209.23 214.93
Later than one year and not later than five years 296.40 477.13
Later than five years - 22.80
Amounts recognised in statement of profit and loss
Interest on lease liabilities 46.98 61.07
Expenses relating to short-term leases - -
Depreciation on right-to-use assets 162.21 162.36
Annual lease costs on short term leases and low value asset leases amounted to NIL in the year ended March 31,
2022 and March 31, 2021.

NOTE 40

SEGMENT REPORTING

i. Primary segment

The Company has identified "Pharmaceuticals Research and Development" which as per Ind AS 108 - "operating
segment" is considered the only reportable business segment.

ii. Secondary segment

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Revenue by geography
Within India 13,222.83 24,095.56
Outside India 502.06 1,200.15
Total revenue from operations 13,724.89 25,295.71

The Company does not have any customer (other than related parties), with whom revenue from transactions is more
than 10% of Company's total revenue.

NOTE 41
RELATED PARTY DISCLOSURE

Disclosure with respect to Ind AS 24 on “Related Party Disclosures” is as per Annexure - “A” annexed.

NOTE 42
CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
i. Contingent liabilities
a) Guarantees given by the bankers against custom licenses 0.50 2.10
b) Disputed demands by Income tax authorities* (gross) 8,848.45 8,931.73
c) Disputed demands by Service tax authorities** (gross) 5,190.17 5,190.17

116
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
* Amount paid under protest is classified under income tax assets 5,509.63 4,512.33
(Refer Note 6)
**Amount paid under protest is classified under other current assets 172.65 172.65

Financial Statements
(Refer Note 14)

Note: includes, interest till the date of demand, wherever applicable.

Future cash outflows in respect of the above matters are determinable only on receipt of judgements/decisions
pending at various forums/authorities. The Company does not expect the outcome of the matters stated above
to have material adverse impact on the Company’s financial condition, results of operation or cash flows.

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
ii. Commitments
Estimated amount of contracts remaining to be executed on capital 508.75 88.66
account and not provided for (Net of advances)

iii. For commitments relating to lease arrangement. (Refer Note 39)

iv. There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated 28th February,
2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC
order. The Company will update its provision, on receiving further clarity on the subject.

NOTE 43

EMPLOYEE BENEFIT PLANS

Defined contribution plan

Contributions are made to Regional Provident Fund (RPF), Family Pension Fund, Employees State Insurance Scheme
(ESIC) and other funds which covers all regular employees. While both the employees and the Company make
predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund and other
statutory funds are made only by the Company. The contributions are normally based on a certain percentage of
the employee’s salary. Amount recognised as expense in respect of these defined contribution plans, aggregate to
H 387.58 Lakhs (Previous year : H 365.27 Lakhs).
H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Contribution to Provident Fund and Family Pension Fund 399.97 377.13
Contribution to ESIC and Employees Deposit Linked Insurance (EDLI) 3.65 3.27
Contribution to Labour Welfare Fund 0.00 0.00

117
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

Defined benefit plan

a) Gratuity

In respect of Gratuity, a defined benefit plan, contributions are made to LIC’s Recognised Group Gratuity Fund
Scheme. It is governed by the Payment of Gratuity Act, 1972. Under the Gratuity Act, employees are entitled
to specific benefit at the time of retirement or termination of the employment on completion of five years or
death while in employment. The level of benefit provided depends on the member’s length of service and salary
at the time of retirement/termination age. Provision for gratuity is based on actuarial valuation done by an
independent actuary as at the year end. Each year, the Company reviews the level of funding in gratuity fund. The
Company decides its contribution based on the results of its annual review. The Company aims to keep annual
contributions relatively stable at a level such that the fund assets meets the requirements of gratuity payments
in short to medium term.

b) Other long term benefit plan

Actuarial valuation for compensated absences is done as at the year end and the provision is made as per
Company rules with corresponding charge to the statement of profit and loss amounting to H 161.63 Lakhs
(Previous year : H 204.28 Lakhs) and it covers all regular employees. Major drivers in actuarial assumptions,
typically, are years of service and employee compensation.

Obligation in respect of defined benefit plan and other long term employee benefit plans are actuarially
determined as at the year end using the ‘Projected Unit Credit’ method. Gains and losses on changes in actuarial
assumptions relating to defined benefit obligation are recognised in other comprehensive income whereas
gains and losses in respect of other long term employee benefit plans are recognised in the statement of profit
and loss.
H In Lakhs
Year ended Year ended
March 31, March 31,
Particulars
2022 Gratuity 2022 Gratuity
(Funded) (Funded)
I. Reconciliation of liability/(asset) recognised in the balance sheet
Present value of obligation at the end of the year 2,019.97 1,908.85
Fair value of plan assets at the end of the year (1,571.55) (1,370.69)
Net liability recognised in the financial statement 448.42 538.16
II. Movement in net liability / (asset) recognised in the balance sheet
Net liability / (assets) as at beginning of the year 538.16 672.77
Net expense recognised in the statement of profit and loss 187.40 210.69
Net expense / (gain) recognised in other comprehensive income (169.64) (152.55)
Net (liability) / asset transfer out (22.88) (172.75)
Net (liability) / asset transfer in 9.95 -
Contribution during the year (86.17) (20.00)
Benefit paid by the employer (8.40) -
Net liability / (asset) as at the end of the year (Refer Note 20 and 448.42 538.16
26)
III. Net interest cost for the current year
Interest cost 120.83 124.31
Interest income (86.77) (83.68)
Net interest cost for the current year 34.06 40.63

118
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

H In Lakhs
Year ended Year ended
March 31, March 31,
Particulars
2022 Gratuity 2022 Gratuity
(Funded) (Funded)
IV. Expense recognised in the statement of profit and loss

Financial Statements
Current service cost 153.34 170.06
Net interest cost for the current year 34.06 40.63
Expense charged to the statement of profit and loss 187.40 210.69
V. Expense recognised in the other comprehensive income (OCI)
Actuarial (gains) / losses on obligation for the year (74.37) (161.41)
Return on plan assets excluding interest income (95.27) 8.86
Net expenses/ (income) recognised in the OCI (169.64) (152.55)
VI. Return on plan assets
Expected return on plan assets 86.77 83.68
Actuarial gain 95.27 (8.86)
Actual return on plan assets 182.04 74.82
VII. Reconciliation of defined-benefit obligations
Obligation as at the beginning of the year 1,908.85 2,058.18
Current service cost 153.34 170.06
Liability transfer out (22.88) (172.75)
Liability transfer in 9.95
Interest cost 120.83 124.31
Benefits paid (67.35) (109.54)
Benefit paid by the employer (8.40) -
Actuarial (gain) / loss arising from changes in financial (84.73) (38.62)
assumptions
Actuarial (gain) / loss arising from demographic assumptions 1.69 -
Actuarial (gain) / loss arising from changes in experience 8.67 (122.79)
adjustments
Obligation as at the end of the year 2,019.97 1,908.85
VIII. Reconciliation of plan assets
Plan assets as at the beginning of the year 1,370.69 1,385.41
Expected return on plan assets 86.77 83.68
Actuarial gain on plan assets 95.27 (8.86)
Employer’s contribution during the year 86.17 20.00
Benefits paid (67.35) (109.54)
Plan assets as at the year end 1,571.55 1,370.69
IX. Actuarial assumptions
Discount rate 6.96% 6.33%
Expected return on plan assets 6.96% 6.33%
Expected rate of salary increase 10.00% 10.00%
Mortality Indian Assured Indian Assured
Lives Mortality Lives Mortality
(2012-14) (2006-08)
Attrition rate 8% p.a. 8% p.a.
Retirement age (years) 60-67 years 60 years
X. Investment details
Insurance fund 1,571.55 1,370.69

119
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

H In Lakhs
Year ended Year ended
March 31, March 31,
Particulars
2022 Gratuity 2022 Gratuity
(Funded) (Funded)
XI. Sensitivity analysis for significant assumptions :
Benefit obligation as at the end of the year 2,019.97 1,908.85
Increase / (decrease) in the present value of benefit obligation as
at the end of the year:
Delta effect of +1% change in rate of discounting (121.69) (122.35)
Delta effect of -1% change in rate of discounting 137.72 139.86
Delta effect of +1% change in rate of salary increase 132.40 133.58
Delta effect of -1% change in rate of salary increase (119.55) (119.54)
Delta effect of +1% change in rate of employee turnover (24.69) (30.64)
Delta effect of -1% change in rate of employee turnover 27.34 34.16
XII. Maturity analysis of projected benefit obligation
Projected benefits payable in future years from the date of reporting
1st following year 146.99 360.67
2nd following year 285.78 106.62
3rd following year 172.24 109.24
4th following year 294.55 148.16
5th following year 119.29 144.90
Sum of years 6 to 10 911.37 860.95
Sum of Years 11 and above 1,593.85 1,537.18

Salary escalation rate

The estimates of future salary increases take account of inflation, seniority, promotion and other relevant
factors, such as supply and demand in the employment market.

Basis used to determine rate of return on plan assets

The rate of return on plan assets is based on expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligation.

The contribution expected to be made by the Company for gratuity, during financial year ending March 31, 2022
is H 260.25 Lakhs (Previous year : H 175.40 Lakhs).

NOTE 44

REVENUE FROM CONTRACT WITH CUSTOMERS:

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Revenue from contract with customers 13,724.89 25,295.71

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Trade receivables (Refer Note 9) 2,773.61 1,757.55
Contract assets (Refer Note 13) 282.86 -
Contract liabilities (Refer Note 19 and 25) 6,687.42 3,951.25

120
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Contract assets are initially recognised for revenue from sale of goods. Contract liabilities are on account of
the upfront revenue received from customer for which performance obligation has not yet been completed. The
performance obligation is satisfied when control of the goods or services are transferred to the customers based on
the contractual terms. Payment terms with customers vary depending upon the contractual terms of each contract.

The Company has recorded an additional amount of H 2,760.25 Lakhs (Previous year : H NIL ) as deferred revenue

Financial Statements
pursuant to the requirements of Ind AS 115.

NOTE 45

USE OF ESTIMATES AND JUDGEMENTS

The preparation of the Company’s financial statements requires the management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected. In particular,
information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements is included in
the following notes:

1 Provisions [Refer Note 20 and 26]

2 Contingent liabilities [Refer Note 42]

3 Financial risk management [Refer Note 36]

NOTE 46

There are 9 struck off companies holding 4,801 shares of the Company in aggregate as at March 31, 2022 and March
31, 2021.

NOTE 47

RATIO ANALYSIS AND ITS ESTIMATES

March 31, March 31, %

Ratio Numerator Denominator
2022 2021 change
Current ratio (Refer Note Current Assets Current Liabilities 0.42 0.26 62%
47.1)
Debt- Equity Ratio Total debt Total equity 2.40 (1.37) -275%
(Refer Note 47.2) (Non-current and
current borrowings)
Debt Service Coverage Earnings for debt Debt service = Interest (0.65) (0.41) 58%
Ratio (Refer Note 47.3) service = Loss for and lease payments +
the year + Non-cash Principal repayments
operating expenses
Return on Equity ratio Loss for the year Average shareholder's (296.87%) (161.74%) -
(Refer Note 47.3) equity

121
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

March 31, March 31, %

Ratio Numerator Denominator
2022 2021 change
Inventory Turnover ratio Not applicable Not applicable - - -
(Refer Note 47.4)
Trade Receivable Turnover Revenue from Average trade receivable 6.06 15.05 -60%
Ratio (Refer Note 47.5) operations
Trade Payable Turnover Cost of materials Average trade payable 1.55 1.67 -7%
Ratio consumed and
Clinical trial
expenses
Net Capital Turnover Ratio Revenue from Working capital = (1.37) (1.46) -
(Refer Note 47.6) operations Current assets – Current
liabilities
Net loss ratio (Refer Note Loss for the year Revenue from operations (1.48) (0.60) -
47.7)
Return on Capital Employed Loss before interest Capital Employed = (228.69%) (228.03%) 0%
(Refer Note 47.3) and taxes Tangible Net Worth +
Total Debt + Deferred Tax
Liability
Return on Investment Income from Average investment 7.12% 7.59% -6%
investment

Note 47.1 Increase in current ratio is due to repayment of borrowings during the year.

Note 47.2 Change is on account of issue of convertible warrants and equity shares during the year.

Note 47.3 Debt service coverage ratio/Return on equity/Return on Capital employed is negative since the company
has incurred losses in the current year and previous year.

Note 47.4 The Company does not have inventory and hence, this ratio is not applicable.

Note 47.5 Decrease in trade receivable turnover ratio is due to higher out-licensing revenue in the previous year.

Note 47.6 Ratio is negative because net working capital is negative.

Note 47.7 Increase in net loss ratio is due to higher out-licensing revenue in the previous year.

NOTE 48

OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the company for holding any Benami property.

(ii) The Company has not been declared as wilful defaulter.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

122
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

(v) The Company has not advanced or loaned or invested either from borrowed funds or share premium or any
other sources or kind of funds to any other person or entity, including foreign entities (Intermediaries) with the
understanding, (whether recorded in writing or otherwise) that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the company (Ultimate Beneficiaries) or

Financial Statements
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any funds from any person or entity, including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company does not have any such transaction which is recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(viii) The Company does not have any scheme of arrangements during the year.

(ix) The Company does not have not any such transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

NOTE 49

The global spread of COVID–19 has been a fluid and challenging situation facing all the industries. The Company
has taken all possible effective measures to limit and keep the impact of COVID-19 under control in order to ensure
business continuity with minimal disruption. The Company has considered internal and external information while
finalizing various estimates in relation to its financial statement captions upto the date of approval by the Board
of Directors.

The Company continues to pay close attention to the development of COVID–19, and will further evaluate and
actively respond to such impact on the financial position and financial performance of the Company.

123
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

NOTE 50

There have been no events after the reporting date that require disclosure in these financial statements other than
disclosed below:

The date of implementation of the Code on Wages 2019 and the Code on Social Security, 2020 is yet to be notified
by the Government. The Company will assess the impact of these Codes and give effect in the subsequent financial
statements when the Rules/Schemes thereunder are notified.

NOTE 51

Figures for previous year has been regrouped/reclassified wherever considered necessary.

As per our report of even date For and on behalf of the Board of Directors of
For S R B C & CO LLP SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
Chartered Accountants
ICAI Firm Registration No : 324982E/E300003

ANILKUMAR RAGHAVAN DILIP S. SHANGHVI

Chief Executive Officer Chairman
DIN: 00005588

per PAUL ALVARES CHETAN M. RAJPARA RAJAMANNAR THENNATI

Partner Chief Financial Officer Director
Membership No. 105754 DIN: 01415412

Place : Mumbai DINESH LAHOTI Place : Mumbai

Date : May 17, 2022 Company Secretary Date : May 17, 2022

124
Annual Report 2021-22 Notes to Financial Statements

Notes to Financial Statements

Statutory Reports
for the year ended March 31, 2022

Annexure "A"

Indian Accounting Standard (Ind AS-24) " Related Party Disclosures "

Names of related parties and description of relationship

Financial Statements
1. Key Management Personnel

Dilip S. Shanghvi Chairman & Non-Executive Director (Designation changed from Managing Director
to Non-Executive Director from May 25, 2021)#
Sudhir V. Valia Non Executive Director
Rajamannar Thennati Non-Executive Director
AnilKumar Raghavan Chief Executive Officer#
Bhavna Doshi Independent Director
Ferzaan Engineer Independent Director
Robert Jay Spiegel Independent Director

2. Holding Company

Shanghvi Finance Private Limited

3. Other Enterprises under significant influence controlled by Key Management Personnel (with whom transactions
are entered)
Alkaloida Chemical Company ZRT Sun Pharma Global FZE**
Antique Stock Broking Limited Sun Pharma Laboratories Limited
Dusa Pharmaceuticals Inc. Sun Pharmaceutical Industries Europe BV
Insite Vision Inc.* Sun Pharmaceutical Industries Inc.
OHM Laboratories Inc. Sun Pharmaceutical Industries Limited
Spiegel Consulting LLC Taro Pharmaceutical Industries Limited

* Insite Vision Inc. has been merged with Sun Pharmaceutical Industries Inc. w.e.f. April 01, 2020.
** Sun Pharma Global FZE has been merged with Sun Pharmaceutical Industries Ltd. w.e.f. October 1, 2021

1. Transaction with Key Management Personnel

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Received against issue of convertible warrants 11,250.00 -
Received on issue of equity shares 15,000.00 -
Remuneration# 389.23 -
Sitting fees paid 37.20 27.60

Key Management Personnel (KMP) who is under the employment of the Company is entitled to post employment
benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’. As these
employee benefits are lump sum amount provided on the basis of actuarial valuation, the same is not included
above.


#
Mr. Dilip S. Shanghvi voluntarily stepped down from the position of Managing Director of the Company with effect from May 25, 2021.
Consequently, with effect from May 25, 2021, Mr. Anilkumar Raghavan has been appointed as “Manager” and “Key Managerial Personnel“
of the Company, designated as the Chief Executive Officer. Accordingly, the remuneration is on pro-rata basis.

125
Sun Pharma Advanced Research Company Ltd

Notes to Financial Statements for the year ended March 31, 2022

2. Transaction with Holding Company

H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Loan recevied 7,000.00 25,500.00
Loan repaid 15,000.00 23,500.00
Interest paid 236.60 691.10
Corporate guarantee recevied 20,000.00 20,000.00

3. Other Enterprises under significant influence controlled by Key Management Personnel (with whom transactions
are entered)
H In Lakhs
Year ended Year ended
Particulars
March 31, 2022 March 31, 2021
Sale of services - License fees / Royalty on technology / R&D services 13,242.54 25,038.28
Sale of property, plant and equipment - 446.76
Reimbursement of expenses received 46.40 23.81
Purchase of services 2,773.54 2,767.09
Purchase of goods 541.29 397.59
Purchase of property, plant and equipment 20.50 131.14
Reimbursement of expenses paid 411.03 1,309.28
Professional fees paid 843.78 -
Rent paid (pertains to payment of lease liability) 209.23 203.37

Balances outstanding - receivable / (payable)

H In Lakhs
As at As at
Particulars
March 31, 2022 March 31, 2021
Receivable
Others 2,773.61 1,472.08
Payable
Key management personnel - (1.53)
Holding company* - (8,094.70)
Others (1,729.73) (3,814.26)

Terms and condition of transactions with related parties.


The sale of services to related parties are made on terms equivalent to those that prevail in arms length
transactions. Outstanding balances at the year end are unsecured and interest free except for borrowing from
Shanghvi Finance Private Limited and settlement occurs in cash. There have been no guarantees provided or
received for any related parties receivables or payables.

* The Company has an outstanding corporate guarantee from Shanghvi Finance Private Limited amounting to H 20,000 Lakhs (Previous
year : H 20,000) as at March 31, 2022. Refer Note 17.

126
Notes
Notes
Sun Pharma Advanced Research Company Ltd.
Plot No. 5 & 6/1, Savli G.I.D.C. Estate,
Savli - Vadodara Highway, Manjusar,
District Vadodara – 391 775.
CIN: L73100GJ2006PLC047837
www.sparc.life
 Notice

Notice of Annual General Meeting

NOTICE is hereby given that Seventeenth (17th) Annual on September 30, 2020 and September 29, 2021
General Meeting of the members of Sun Pharma respectively and pursuant to applicable provisions
Advanced Research Company Limited (“Company”) will of the Companies Act, 2013 including the Rules
be held on Thursday, September 22, 2022, at 05:00 P.M. made thereunder and the provisions of Regulation
IST (Indian Standard Time), through Video Conferencing 23(4) of the SEBI (Listing Obligations and Disclosure
(“VC”) / Other Audio-Visual Means (“OAVM”), to transact Requirements) Regulations, 2015 (including any
the following business: statutory modification(s) or re-enactment thereof,
for the time being in force), approval of the members
of the Company be and is hereby accorded to revise
ORDINARY BUSINESS:
the terms, as set out in the explanatory statement,
1. To receive, consider and adopt the audited financial for the line of credit of upto H 250 Crores (Rupees
statements of the Company for the financial year Two Hundred and Fifty Crores only), availed
ended March 31, 2022 and the reports of the Board from Shanghvi Finance Private Limited (CIN:
of Directors and Auditors thereon. U65910MH1989PTC053111), the Holding Company as
defined under Section 2(46) of the Companies Act,
2. To appoint Mr. Dilip S. Shanghvi (DIN: 00005588), 2013 and a ‘Related Party’ as defined under Section
who retires by rotation and being eligible, has 2(76) of the Companies Act, 2013 and Regulation
offered himself for re-appointment. 2(zb) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015;
3. To re-appoint S R B C & Co. LLP, Chartered Accountants
as the Statutory Auditors of the Company. RESOLVED FURTHER THAT the Board of Directors of
the Company or any Committee of the Board, be
To consider and, if thought fit, to pass, the following
and is hereby authorised to do or cause to be done
resolution as an Ordinary Resolution:
all such acts, deeds and things, settle any queries,
“RESOLVED THAT pursuant to the provisions of Section difficulties, doubts that may arise with regard to
139, 142 and other applicable provisions, if any, of the any transactions with the related party, and make
Companies Act, 2013 read with the Companies (Audit such changes to the terms and conditions as may
and Auditors) Rules, 2014 (including any statutory be considered necessary, expedient or desirable and
modification(s) or re-enactment(s) thereof, for the time execute such addendum agreements, documents
being in force), S R B C & Co LLP, Chartered Accountants and writings and to make such filings as may be
(Firm’s Registration No. 324982E/ E300003) be and are necessary or desirable, in order to give effect to this
hereby re-appointed as the Statutory Auditors of the Resolution in the best interest of the Company.”
Company for a second term of 5 (Five) consecutive
5. To approve continuation of transactions with Sun
years to hold office from the conclusion of this 17th
Pharmaceutical Industries Inc., USA under Shared
Annual General Meeting till the conclusion of the
Services Agreement.
22nd Annual General Meeting of the Company, at such
remuneration as shall be fixed by the Board of Directors To consider and, if thought fit, to pass, the following
of the Company from time to time in consultation with resolution as an Ordinary Resolution:
them.”
“RESOLVED THAT in furtherance to the resolution
passed by the members at their 12th Annual General
SPECIAL BUSINESS:
Meeting held on August 05, 2017 and pursuant to
4. To approve revision in terms of Line of Credit availed applicable provisions of the Companies Act, 2013
from Shanghvi Finance Private Limited. including the Rules made thereunder and the provisions
of Regulation 23(4) of the SEBI (Listing Obligations
To consider and, if thought fit, to pass, the following and Disclosure Requirements) Regulations, 2015
resolution as an Ordinary Resolution: (including any statutory modification(s) or re-
enactment thereof, for the time being in force),
“RESOLVED THAT in furtherance to the resolution approval of the members of the Company be and is
passed by the members at their 15th Annual General hereby accorded for continuation and entering into
Meeting and their 16th Annual General Meeting held

1
Sun Pharma Advanced Research Company Ltd

transactions with Sun Pharmaceutical Industries execute such addendum agreements, documents
Inc., USA, a ‘Related Party’ as defined under Section and writings and to make such filings as may be
2 (76) of the Companies Act, 2013 and Regulation necessary or desirable, in order to give effect to this
2(zb) of the SEBI (Listing Obligations and Disclosure Resolution in the best interest of the Company.”
Requirements) Regulations, 2015 , pursuant to the
Shared Services Agreement having the terms and 7. To approve raising of funds through equity shares,
conditions as set out in the explanatory statement; convertible warrants, preference shares/ bonds
/debentures /any other instruments whether
RESOLVED FURTHER THAT the Board of Directors or convertible into equity or not, American Depository
any Committee of the Board of the Company be Receipts (“ADRs”), Global Depository Receipts
and is hereby authorised to do or cause to be done (“GDRs”), Foreign Currency Convertible Bonds
all such acts, deeds and things, settle any queries, (“FCCBs”), etc.
difficulties, doubts that may arise with regard to
any transactions with the related party, and make To consider and, if thought fit, to pass, the following
such changes to the terms and conditions as may enabling resolution, as a Special Resolution:
be considered necessary, expedient or desirable and
“RESOLVED THAT in supersession of the resolution
execute such addendum agreements, documents
passed by the shareholders at their meeting held on
and writings and to make such filings as may be
September 29, 2021 and pursuant to the provisions
necessary or desirable, in order to give effect to this
of Sections 23, 41, 42, 55, 62(1)(a), 62(1)(c), 71, 179,
Resolution in the best interest of the Company.”
180(1)(a), 180(1)(c) and other applicable provisions,
6. To approve continuation of transactions with Sun if any, of the Companies Act, 2013 (“Companies
Pharmaceutical Industries Inc., USA under Master Act”), the Companies (Prospectus and Allotment of
Support Services Agreement Securities) Rules, 2014, the Companies (Share Capital
and Debentures) Rules, 2014 and other applicable
To consider and, if thought fit, to pass, the following rules made thereunder (including any amendment(s),
resolution, as an Ordinary Resolution: statutory modification(s) or re-enactment thereof),
the provisions of the Memorandum of Association
“RESOLVED THAT in furtherance to the resolution and the Articles of Association of the Company and
passed by the members at their 12th Annual in accordance with the Securities and Exchange
General Meeting held on August 05, 2017 and Board of India (Issue of Capital and Disclosure
pursuant to applicable provisions of the Companies Requirements) Regulations, 2018, as amended (“SEBI
Act, 2013 including the Rules made thereunder ICDR Regulations”), the Securities and Exchange
and the provisions of Regulation 23(4) of the SEBI Board of India (Listing Obligations and Disclosure
(Listing Obligations and Disclosure Requirements) Requirements) Regulations, 2015, as amended (“SEBI
Regulations, 2015 (including any statutory Listing Regulations”), the listing agreements entered
modification(s) or re-enactment thereof, for the into by the Company with BSE Limited and National
time being in force), approval of the members Stock Exchange of India Limited (“Stock Exchanges”)
of the Company be and is hereby accorded for on which the equity shares having face value of H 1/-
continuation and entering into transactions each of the Company (“Equity Shares”) are listed, the
with Sun Pharmaceutical Industries Inc., USA, a provisions of the Foreign Exchange Management Act,
‘Related Party’ as defined under Section 2 (76) of the 1999 and rules and regulations framed thereunder, as
Companies Act, 2013 and Regulation 2(zb) of the SEBI amended (the “FEMA”), including the Foreign Exchange
(Listing Obligations and Disclosure Requirements) Management (Non-debt Instruments) Rules, 2019,
Regulations, 2015 , pursuant to the Master Support as amended, Foreign Exchange Management (Debt
Services Agreement having terms and conditions as Instruments) Rules, 2019, as amended, the Issue of
set out in the explanatory statement; Foreign Currency Convertible Bonds and Ordinary
Shares (Through Depository Receipt Mechanism)
RESOLVED FURTHER THAT the Board of Directors or
Scheme, 1993, as amended, the Depository Receipts
any Committee of the Board of the Company be
Scheme, 2014, as amended, the extant Consolidated
and is hereby authorised to do or cause to be done
FDI Policy issued by the Department for Promotion of
all such acts, deeds and things, settle any queries,
Industry and Internal Trade, Ministry of Commerce
difficulties, doubts that may arise with regard to
and Industry, Government of India, the Securities and
any transactions with the related party, and make
Exchange Board of India (Issue and Listing of Non-
such changes to the terms and conditions as may
Convertible Securities) Regulations, 2021, as amended,
be considered necessary, expedient or desirable and

2
 Notice

(the “Debt Listing Regulations”), the Reserve Bank of capital funds (foreign or Indian), alternate investment
India Master Directions on Foreign Investment in India funds, foreign institutional investors, foreign portfolio
and subject to other applicable rules, regulations investors, qualified foreign investors, Indian and/
and guidelines issued by the Ministry of Corporate or multilateral financial institutions, non-resident
Affairs (“MCA”), the relevant Registrar of Companies, Indians, stabilizing agents, pension funds and/or any
Securities and Exchange Board of India (“SEBI”), other categories of investors, whether they be holders
Reserve Bank of India (“RBI”), Government of India of Securities of the Company or not (collectively
(“GoI”), Stock Exchanges and / or any competent called the “Investors”), as may be decided by the Board
statutory, regulatory, governmental or any other in its discretion and permitted under applicable laws
authorities whether in India or abroad (herein referred and regulations, for an aggregate consideration of up
to as “Applicable Regulatory Authorities”), from time to H 1,800 crores (Rupees One Thousand Eight Hundred
to time and to the extent applicable, and subject to Crores only) (inclusive of such premium as may be fixed
such approvals, permissions, consents and sanctions on such Securities) at such time or times, at such price
as may be necessary or required from the Applicable or prices, at a discount or premium to market price or
Regulatory Authorities in this regard and further prices, as permitted under applicable laws and in such
subject to such terms and conditions or modifications manner and on such terms and conditions including
as may be prescribed or imposed by any or all of security, rate of interest etc. and any other matters
them while granting any such approvals, permissions, incidental thereto as may be deemed appropriate
consents and / or sanctions, which may be agreed to by the Board in its absolute discretion including the
by the Board of Directors of the Company (hereinafter discretion to determine the categories of Investors
referred to as the “Board”, which term shall include to whom the offer, issue and allotment of Securities
any committee thereof which the Board may duly have shall be made to the exclusion of other categories of
constituted or may hereinafter constitute to exercise Investors at the time of such creation, offer, issue and
its powers including the powers conferred by this allotment considering the prevailing market conditions
Resolution), consent, authority and approval of the and other relevant factors and wherever necessary in
Members of the Company, be and is hereby accorded to consultation with book running lead manager(s) and/
the Board and the Board be and is hereby authorised to or underwriter(s) and/or other advisor(s) appointed
create, offer, issue and allot (including with provisions and/or to be appointed by the Board, in foreign
for reservations on firm and/ or competitive basis, or currency and/ or equivalent Indian Rupees as may be
such part of issue and for such categories of persons, determined by the Board, or in any convertible foreign
including employees, as may be permitted) with or currency, as the Board in its absolute discretion may
without green shoe option such number of Equity deem fit and appropriate (the “Issue”).
Shares, convertible warrants, preference shares/
bonds /debentures /any other instruments whether RESOLVED FURTHER THAT if any issue of Securities is
convertible into equity or not, American Depository made by way of a QIP in terms of Chapter VI of the
Receipts (“ADRs”), Global Depository Receipts (“GDRs”), SEBI ICDR Regulations:
Foreign Currency Convertible Bonds (“FCCBs”), or any
(a) the allotment of the Securities, or any
other securities or combination of such securities
combination of Securities as may be decided
(hereinafter collectively referred to as “Securities”) or
by the Board, shall be completed within 365
any combination of Securities, in one or more tranches,
days from the date of passing of the special
whether Rupee denominated or denominated in one or
resolution by the Members or such other
more foreign currencies in the course of international
time as may be allowed under the SEBI ICDR
and / or domestic offerings, in one or more foreign
Regulations from time to time;
markets and/or domestic markets, through public and/
or private offerings and/or rights offering and/ or by (b) the Securities shall not be eligible to be sold
way of Qualified Institutions Placement(“QIP”), or by the allottees for a period of 1 year from the
any combination thereof, through issue of prospectus date of allotment, except on a recognized stock
and/or preliminary placement document, placement exchange, or except as may be permitted under
document and/or other permissible/ requisite offer the SEBI ICDR Regulations;
documents to any eligible person, including Qualified
Institutional Buyers (“QIBs”) as defined under the SEBI (c) the relevant date for the purpose of pricing of
ICDR Regulations, or otherwise, including foreign/ the Securities shall be the date of the meeting
resident investors (whether institutions, incorporated in which the Board decides to open the QIP
bodies, mutual funds, individuals or otherwise), venture and at such price being not less than the price

3
Sun Pharma Advanced Research Company Ltd

determined in accordance with the pricing (c) the manner in which allotment of the additional
formula provided under Chapter VI of the SEBI Equity Shares, if any, shall be made in the proportion
ICDR Regulations; to be decided by the Board at its discretion;

(d) no single allottee shall be allotted more than (d) the Securities to be so created, offered, issued,
50% of the proposed QIP size and the minimum and allotted shall rank pari passu in all
number of allottees shall be two, where the respects with the existing Securities, if any,
issue size is less than or equal to H 250 crores of the Company and shall be subject to the
and five, where the issue size is greater than provisions of the Memorandum of Association
H 250 crores, in accordance with Chapter VI of and the Articles of Association of the Company;
the SEBI ICDR Regulations;
(e) the Board may dispose of the unsubscribed
(e) in the event that convertible securities and/ portion in such manner as it may think most
or warrants which are convertible into Equity beneficial to the Company;
Shares of the Company are issued along with
nonconvertible debentures to QIBs under (f) all monies received out of Rights Issue shall
Chapter VI of the SEBI ICDR Regulations, the be transferred to a separate bank account
relevant date for the purpose of pricing of such maintained by the Company for the purpose of
securities, shall be the date of the meeting in the Rights Issue;
which the Board (or relevant committee thereof)
(g) the Company shall utilize the monies received
decides to open the issue of such convertible
pursuant to the Rights Issue upon a confirmation
securities and/or warrants simultaneously with
from the lead manager(s) to the bankers by way
non-convertible debentures or any other date
of copies of listing and trading approvals that
in accordance with applicable law and such
all formalities in connection with the issue
Securities shall be issued at such price being not
have been completed, in accordance with the
less than the price determined in accordance
provisions of the SEBI ICDR Regulations and
with the pricing formula provided under Chapter
other applicable laws;
VI of the SEBI ICDR Regulations; and
(h) details of all monies utilised out of the Rights
(f) the Board may, in accordance with applicable law,
Issue referred to in (g) hereinabove shall be
also offer a discount of not more than 5% or such
disclosed under an appropriate separate head
percentage as permitted under applicable law on
in the balance sheet of the Company indicating
the price calculated in accordance with the pricing
the purpose for which such monies had been
formula provided under the SEBI Regulations.
utilized, or in any other manner as may be
RESOLVED FURTHER THAT if any issue of Securities required under the applicable laws; and
is made by way of a rights issue to the existing
(i) details of all unutilised monies out of the
shareholders of the Company as on a record
Rights Issue, if any, shall be disclosed under an
date to be determined, including reservation of
appropriate separate head in the balance sheet
Equity Shares in favour of holders of outstanding
of the Company indicating the form in which
convertible debt instruments, if any, as on a record
such unutilised monies have been invested, or
date to be determined, in terms of Chapter III of the
in any other manner as may be required under
SEBI ICDR Regulations (“Rights Issue”), the same
the applicable laws.
shall be on such other terms and conditions as may
be mentioned in the draft letter of offer and letter RESOLVED FURTHER THAT the issue to the holders
of offer to be issued by the Company in respect of of the Securities, which are convertible into or
the Rights Issue, including: exchangeable with Equity Shares at a later date
shall be, inter alia, subject to the following terms
(a) rights to the existing shareholders to whom the
and conditions:
offer is made to renounce, the Equity Shares
being offered, in favour of any other person(s); (a) in the event the Company is making a bonus issue
by way of capitalization of its profits or reserves
(b) the persons to whom the Equity Shares are being
prior to the allotment of the Equity Shares, the
issued shall be entitled to apply for additional
number of Equity Shares to be allotted shall
Equity Shares in the Rights Issue;
stand augmented in the same proportion in

4
 Notice

which the equity share capital increases as amendment or replacement/substitution thereof)

a consequence of such bonus issue and the and other applicable pricing provisions issued by
premium, if any, shall stand reduced pro tanto; the Ministry of Finance.

(b) in the event the Company is making a rights RESOLVED FURTHER THAT in pursuance of the
offer by issue of Equity Shares prior to the aforesaid resolutions the Securities to be so created,
allotment of the Equity Shares, the entitlement offered, issued and allotted shall be subject to the
to the Equity Shares will stand increased in the provisions of the Memorandum of Association and
same proportion as that of the rights offer and Articles of Association of the Company.
such additional Equity Shares shall be offered
to the holders of the Securities at the same price RESOLVED FURTHER THAT for the purpose of giving
at which the same are offered to the existing effect to any creation, offer, issue or allotment
shareholders; of Equity Shares and/ or Securities or instruments
representing the same, the Board be and is hereby
(c) in the event of merger, amalgamation, takeover authorised on behalf of the Company to seek listing
or any other re-organization or restructuring or of any or all of such Securities, on one or more Stock
any such corporate action, if and as required, Exchanges in India or outside India and the listing
the number of Equity Shares, the price and of Equity Shares underlying the ADRs and/or GDRs
the time period as aforesaid shall be suitably on the Stock Exchanges in India.
adjusted; and
RESOLVED FURTHER THAT without prejudice to the
(d) in the event of consolidation and/or division of generality of the above, subject to applicable laws
outstanding Equity Shares into smaller number and subject to approval, consents, permissions, if any,
of Equity Shares (including by way of stock split) of any governmental body, authority or regulatory
or re-classification of the Securities into other institution including any conditions as may be
securities and/or involvement in such other prescribed in granting such approval or permissions
event or circumstances which in the opinion by such governmental authority or regulatory
of concerned stock exchange requires such institution, the aforesaid Securities may have such
adjustments, necessary adjustments will be made. features and attributes or any terms or combination
of terms that provide for the tradability and free
RESOLVED FURTHER THAT in pursuance of the aforesaid transferability thereof in accordance with the
resolutions the Equity Shares that may be issued prevailing practices in the capital markets including
by the Company (including issuance of the Equity but not limited to the terms and conditions for issue
Shares pursuant to conversion of any Securities, as of additional Securities and the Board subject to
the case may be in accordance with the terms of applicable laws, regulations and guidelines be and
the offering) shall rank pari passu with the existing is hereby authorized in its absolute discretion in
equity shares of the Company in all respects. such manner as it may deem fit, to dispose of such
Securities that are not subscribed.
RESOLVED FURTHER THAT in the event the Securities
are proposed to be issued as ADRs or GDRs, the RESOLVED FURTHER THAT for the purpose of giving
relevant date for the purpose of pricing the Securities effect to the above resolutions, the Board be and is
shall be the date of the meeting in which the Board hereby authorized to negotiate, modify, sign, execute,
decides to open the issue of such Securities in register, deliver including sign any declarations
accordance with the Depository Receipts Scheme, required in connection with the private placement offer
2014 (including any amendment or replacement/ letter, information memorandum, draft prospectus,
substitution thereof) and other applicable pricing prospectus, the draft offer document, application
provisions issued by the Ministry of Finance. form, Confirmation Allocation Note (“CAN”), abridged
prospectus, offer letter, offer document, offer circular,
RESOLVED FURTHER THAT in the event the Securities
preliminary placement document or placement
are proposed to be issued as FCCBs, the relevant
document for issue of the Securities, term sheet, issue
date for the purpose of pricing the Securities shall be
agreement, registrar agreement, escrow agreement,
the date of the meeting in which the Board decides
underwriting agreement, placement agreement,
to open the issue of such Securities in accordance
consortium agreement, trustee agreement, trust
with the Issue of Foreign Currency Convertible
deed, subscription agreement, purchase agreement,
Bonds and Ordinary Shares (through the Depository
agency agreement, agreements with the depositories,
Receipt Mechanism) Scheme, 1993 (including any

5
Sun Pharma Advanced Research Company Ltd

security documents, and other necessary agreements, desirable or expedient including to resolve and
memorandum of understanding, deeds, general settle any questions and difficulties that may arise
undertaking/indemnity, certificates, consents, in connection with the proposed creation, offer,
communications, affidavits, applications (including issue and allotment of the Securities.(including in
those to be filed with the regulatory authorities, if relation to the issue of such Securities in one or more
any) (the “Transaction Documents”) (whether before tranches from time to time) and the utilization of the
or after execution of the Transaction Documents) issue proceeds in such manner as may be determined
together with all other documents, agreements, by the Board, subject however, to applicable laws,
instruments, letters and writings required in and to take such actions or give such directions as
connection with, or ancillary to, the Transaction may be necessary or desirable and to obtain any
Documents (the “Ancillary Documents”) as may be approvals, permissions, sanctions which may be
necessary or required for the aforesaid purpose necessary or desirable, as it may deem fit or as the
including to sign and/or dispatch all forms, filings, Board may suo moto decide in its absolute discretion
documents and notices to be signed, submitted and/ in the best interests of the Company
or dispatched by it under or in connection with the
documents to which it is a party as well as to accept RESOLVED FURTHER THAT the Board be and is hereby
and execute any amendments to the Transaction authorized to delegate all or any of the powers
Documents and the Ancillary Documents and further herein conferred, to a committee of the Board or
to do all such other acts, deeds mentioned herein as any such persons as it may deem fit in its absolute
it may deem necessary in connection with the issue discretion, with the power to take such steps and
of the Securities in one or more tranches from time to to do all such acts, deeds, matters and things as
time and matters connected therewith. they may deem fit and proper for the purposes of
the issue(s) and settle any questions or difficulties
RESOLVED FURTHER THAT the Board be and is hereby that may arise in regard to the issue(s).”
authorized to engage/ appoint consultants, lead
managers, underwriters, guarantors, depositories,
custodians, registrars, stabilizing agent, escrow By Order of the Board of Directors
agent, trustees, bankers, legal advisors and any other For Sun Pharma Advanced Research Company Limited
advisors, professionals and intermediaries and all
Dinesh Lahoti
such agencies as may be involved or concerned in
Company Secretary and
such offerings of Securities and to remunerate them
Compliance Officer
by way of commission, brokerage, fees or the like and
(ICSI Membership No. A22471)
to enter into and execute all contracts, agreements/
arrangements/memorandums of understanding/fee Place: Mumbai
letters/documents with such agencies as may be Date: August 08, 2022
required or desirable in connection with the issue
and listing of the Securities, on any stock exchanges Registered Office:
in India or abroad Plot No. 5 & 6/1, Savli G.I.D.C. Estate,
Savli - Vadodara Highway, Manjusar,
RESOLVED FURTHER THAT the Board or person(s) Vadodara - 391775, Gujarat, India.
as may be authorized by the Board, be and is/are CIN: L73100GJ2006PLC047837
hereby severally authorised to finalize all the terms Tel.: +91 026 6766 6800
and conditions and the structure of the proposed Fax: +91 022 6645 5685
Securities, to do all such acts, deeds, matters Website: www.sparc.life
and things as it may be considered necessary, E-mail: secretarial@sparcmail.com

6
 Notice

NOTES:

1. The Ministry of Corporate Affairs (“MCA”) has, vide 4. In line with MCA Circulars read with circulars
its circular dated May 5, 2022, read together with issued by Securities and Exchange Board of India
circulars dated April 8, 2020, April 13, 2020, May (SEBI) vide SEBI/HO/CFD/CMD2/CIR/P/2022/62
5, 2020, January 13, 2021, December 8, 2021 and dated May 13, 2022 (hereinafter referred to as “SEBI
December 14, 2021 (collectively referred to as Circular for AGM”), the Notice of the AGM along
“MCA Circulars”), permitted convening the Annual with the Annual Report for 2021-22 is being sent only
General Meeting (“AGM” / “Meeting”) through through electronic mode to those members whose
Video Conferencing (“VC”) or Other Audio Visual e-mail addresses are registered with the Company’s
Means (“OAVM”), without physical presence of the Registrar & Share Transfer Agents, Link Intime India
members at a common venue. In accordance with Pvt. Ltd. (“RTA”) / Depositories. Hard copies shall be
the MCA Circulars and applicable provisions of the sent to those members who shall request for the
Companies Act, 2013 (”the Act”) read with Rules same. Members may note that the Notice of the
made thereunder and the Securities and Exchange 17th AGM along with the Annual Report 2021-22 is
Board of India (Listing Obligations and Disclosure also available for download on the website of the
Requirements) Regulations, 2015 (“Listing Company at www.sparc.life and on the websites of
Regulations”), the 17th Annual General Meeting of the Stock Exchanges, i.e. BSE Limited and National
the Company (hereinafter referred to as the “AGM” Stock Exchange of India Limited at www.bseindia.
or “Meeting”) is being held through VC / OAVM. The com and www.nseindia.com respectively and on the
deemed venue for the AGM shall be the Registered website of CDSL at www.evotingindia.com.
Office of the Company.
5. The Members can join the AGM through VC/OAVM
2. The Explanatory Statement pursuant to Section thirty (30) minutes before the scheduled time of the
102(1) of the Act setting out material facts commencement of the Meeting by following the
concerning the business item no. 3 to 7 of the Notice, procedure mentioned in the Notice. The facility of
is annexed hereto. The relevant details as required participation at the AGM through VC/OAVM will be
under Regulation 36 of the Listing Regulations and/ made available to at least 1000 members on first
or Clause 1.2.5 of Secretarial Standard on General come first served basis. This will not include large
Meetings issued by the Institute of Company Shareholders (2% or more shareholding), Promoters,
Secretaries of India (SS-2), in respect of the Director Institutional Investors, Directors, Key Managerial
seeking reappointment are given under the heading Personnel, Auditors of the Company etc. who are
“Profile of Director” forming part of this Notice. allowed to attend the AGM without restriction on
account of first come first served basis.
3. In terms of the provisions of Section 152 of the Act,
Mr. Dilip S. Shanghvi, Director of the Company, retire 6. Since the AGM will be held through VC/OAVM, the
by rotation at the Meeting and being eligible for route map of the venue of the Meeting is not annexed
re-appointment, the Nomination and Remuneration hereto.
Committee and the Board of Directors of the
Company have recommended his re-appointment 7. Participation of members through VC/OAVM will be
to the shareholders for their approval. Mr. Dilip reckoned for the purpose of quorum for the AGM as
Shanghvi is interested in the Item no. 2 of the per Section 103 of the Act.
Notice with regard to his re-appointment. Mr. Sudhir
8. Members are informed that in case of joint holders
V. Valia (being related to Mr. Dilip Shanghvi) may
attending the AGM, only such joint holder whose
be deemed to be interested in Item No. 2 of the
name stands first in the Register of Members of
Notice. Other relatives of Mr. Dilip Shanghvi, may be
the Company will be entitled to vote, provided the
deemed to be interested in Item No. 2 of the Notice
votes are not already cast by remote e-voting.
to the extent of their shareholding in the Company.
Save and except the above none of the Directors / 9. Generally, a member entitled to attend and vote at
Key Managerial Personnel of the Company / their the meeting is entitled to appoint a proxy to attend
relatives are, in any way, concerned or interested, and vote on a poll instead of himself and the proxy
financially or otherwise, in the Ordinary Business need not be a member of the Company. Since this
set out under Item Nos. 1 & 2 of the Notice. AGM is being held through VC / OAVM pursuant to

7
Sun Pharma Advanced Research Company Ltd

the MCA Circulars, physical attendance of members 13. Members will be able to attend the 17th AGM on
has been dispensed with. Accordingly, the facility September 22, 2022 through VC/OAVM by following
for appointment of proxies by the members will not the instructions detailed in Note no. 20.
be available for the AGM and hence the proxy form
and attendance slip are not annexed hereto. 14. Relevant registers as required under the Act, will
be available for inspection electronically by the
10. In pursuance of Section 112 and Section 113 of the members during the AGM. Relevant documents
Act, Representatives of the members such as the referred to the Notice will also be available for
President of India or the Governor of a State or body inspection electronically by the members, without
corporate can attend the AGM through VC/OAVM any fee, from the date of circulation of this Notice
and cast their votes through e-voting. Institutional/ up to the date of AGM. Those shareholders who
Corporate members intending to appoint authorised wish to inspect the aforementioned documents
representative to attend and vote on their behalf electronically may send their requests to
at the AGM are required to send a scanned copy secretarial@sparcmail.com, mentioning their
(PDF/JPEG format) of its Board or Governing body name, Demat account number/folio number, e-mail
resolution /Authorization letter etc. authorizing its id and mobile number.
representative to attend the AGM through VC/OAVM
on its behalf before the commencement of the AGM. 15. The members are requested to get their physical
The said resolution / authorization shall be sent by shares dematerialised, since vide SEBI Circular
e-mail to secretarial@sparcmail.com or upload on dated June 08, 2018 read with SEBI Circular dated
the e-voting portal i.e. www.evotingindia.com. December 03, 2018 with effect from April 01, 2019, the
securities shall not be transferred unless they are
11. The voting rights of members shall be in proportion held in the dematerialised form. Further, vide SEBI
to their shareholding in the paid-up equity share Circular dated January 25, 2022, securities shall be
capital of the Company as on the cut-off date of issued in dematerialised form only while processing
Thursday, September 15, 2022. A person who is not requests for transmission/ transposition/ duplicate
a Member as on the cut-off date should treat this certificates, etc.
Notice solely for information purposes. Those who
acquire equity shares of the Company and become 16. Members who would like to express their views/ ask
members of the Company after the Notice is sent, questions during the AGM may register themselves
and hold equity shares as of the cut-off date, can as a speaker by sending their request, mentioning
vote/ attend the AGM, in the manner as detailed in the name, Demat account number/folio number,
the Note no. 20. email id, mobile number, at secretarial@sparcmail.
com latest by September 18, 2022. Only those
12. Members who have not registered their email Members who have registered themselves as a
addresses with the Company/ RTA or their speaker will be allowed to express their views/ ask
Depositories Participants for receiving all questions during the AGM for a maximum time of
communication (including Notice and Annual 3 (three) minutes each, once the floor is open for
Report) from the Company electronically can get shareholder queries. The Company reserves the
the same registered as follows: right to restrict the number of speakers and number
of questions depending on the availability of time
(i) Process to be followed by the Members holding for the AGM.
shares in physical mode has been detailed in
Note No. 23. 17. Members who do not wish to speak during the AGM
but have queries may send their queries, mentioning
(ii) Members holding shares in dematerialized the name, securities demat account number/folio
mode are requested to register/ update their number, email id, mobile number, to secretarial@
email addresses with the relevant Depository sparcmail.com. These queries will be suitably
Participants. replied to by the Company by email.

8
 Notice

18. Pursuant to the provisions of Section 108 of the Act not cast their vote on the Resolutions through
read with Rule 20 of the Companies (Management remote e-voting and are otherwise not barred
and Administration) Rules, 2014 (as amended) from doing so, shall be eligible to vote through
and Regulation 44 of the Listing Regulations (as e-voting system during the 17th AGM.
amended), and MCA Circulars, the Company is
providing facility of remote e-voting to its Members ii. Shareholders who have already voted prior to
in respect of the business to be transacted at the the meeting date would not be entitled to cast
AGM of the Company. For this purpose, the Company their vote again.
has appointed Central Depository Services (India)
iii. Pursuant to SEBI Circular No. SEBI/HO/CFD/
Limited (“CDSL”) for facilitating voting through
CMD/CIR/P/2020/242 dated December 9, 2020,
electronic means, as the authorised e-voting
under Regulation 44 of the Listing Regulations
agency.
listed entities are required to provide remote
19. The Board of Directors of the Company have e-voting facility to its shareholders, in respect
appointed Mr. Alpesh Panchal, Company Secretary, of all shareholders’ resolutions.
Partner of KJB & Co. LLP, Practicing Company
E-voting has been enabled for all the demat
Secretaries, and failing him, Mr. Chintan Goswami,
account holders by way of a single login
Company Secretary, Partner of KJB & Co. LLP,
credential through their demat accounts/
Practicing Company Secretaries, as the Scrutinizer
websites of Depositories/ Depository
to scrutinize the voting during the AGM by electronic
Participants. Demat account holders would
mode and remote e-voting process in a fair and
be able to cast their vote without having
transparent manner. They have communicated their
to register again with the e-voting service
willingness to be appointed as such and will be
providers, thereby, not only facilitating
available for the said purpose.
seamless authentication but also enhancing
20.
Instructions for Remote E-Voting and E-Voting ease and convenience of participating in
during the AGM: e-voting process.

i. The remote e-voting period begins on Monday, iv. In terms of SEBI Circular no. SEBI/HO/CFD/CMD/
September 19, 2022 at 9:00 a.m. (IST) and ends CIR/P/2020/242 dated December 9, 2020 on
on Wednesday, September 21, 2022 at 5:00 p.m. e-voting facility provided by listed companies,
(IST), during this period, shareholders of the individual shareholders holding securities in
Company holding shares either in physical demat mode are allowed to vote through their
form or in dematerialised form, as on the cut- Demat account maintained with Depositories
off date, i.e. Thursday, September 15, 2022, may and Depository Participants. Shareholders are
cast their vote electronically. The e-voting advised to update their mobile number and
module shall be disabled by CDSL for voting e-mail id in their demat accounts in order to
thereafter. Those members who will be present access e-voting facility.
in the AGM through VC/ OAVM facility and have

9
Sun Pharma Advanced Research Company Ltd

Pursuant to aforesaid circular, login method for e-voting and joining virtual meetings for individual
shareholders holding securities in demat mode CDSL/NSDL is given below:

Type of shareholders Login Method

Individual 1) Users who have opted for CDSL Easi / Easiest facility, can login through
Shareholders holding their existing user id and password. Option will be made available to reach
securities in Demat e-Voting page without any further authentication. The URL for users to login
mode with CDSL to Easi / Easiest are https://web.cdslindia.com/myeasi/home/login or visit
www.cdslindia.com and click on Login icon and select New System Myeasi.
2) After successful login the Easi / Easiest user will be able to see the e-Voting
option for eligible companies where the e-voting is in progress as per the
information provided by company. On clicking the evoting option, the user
will be able to see e-Voting page of the e-Voting service provider i.e. CDSL for
casting your vote during the remote e-Voting period or joining virtual meeting
& voting during the meeting. Additionally, there is also links provided to access
the system of all e-Voting Service Providers i.e. CDSL, so that the user can visit
the e-Voting service providers’ website directly.
3) If the user is not registered for Easi / Easiest, option to register is available at
https://web.cdslindia.com/myeasi/Registration/EasiRegistration
4) Alternatively, the user can directly access e-Voting page by providing
Demat Account Number and PAN No. from a e-Voting link available on www.
cdslindia.com home page or click on https://evoting.cdslindia.com/Evoting/
EvotingLogin The system will authenticate the user by sending OTP on
registered Mobile & Email as recorded in the Demat Account. After successful
authentication, user will be able to see the e-Voting option where the e-voting
is in progress and also able to directly access the system of all e-Voting
Service Provider i.e. CDSL.
Individual 1) If you are already registered for NSDL IDeAS facility, please visit the e-Services
Shareholders holding website of NSDL. Open web browser by typing the following URL: https://
securities in demat eservices.nsdl.com either on a Personal Computer or on a mobile. Once the
mode with NSDL home page of e-Services is launched, click on the “Beneficial Owner” icon under
“Login” which is available under ‘IDeAS’ section. A new screen will open. You
will have to enter your User ID and Password. After successful authentication,
you will be able to see e-Voting services. Click on “Access to e-Voting” under
e-Voting services and you will be able to see e-Voting page. Click on company
name – Sun Pharma Advanced Research Company Limited or e-Voting service
provider name – CDSL and you will be re-directed to e-Voting service provider
website for casting your vote during the remote e-Voting period or joining
virtual meeting & voting during the meeting.
2) If the user is not registered for IDeAS e-Services, option to register is available
at https://eservices.nsdl.com. Select “Register Online for IDeAS “Portal or
click at https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp
3) Visit the e-Voting website of NSDL. Open web browser by typing the following
URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a
mobile. Once the home page of e-Voting system is launched, click on the icon
“Login” which is available under ‘Shareholder/Member’ section. A new screen will
open. You will have to enter your User ID (i.e. your sixteen digit Demat account
number hold with NSDL), Password/OTP and a Verification Code as shown on the
screen. After successful authentication, you will be redirected to NSDL Depository
site wherein you can see e-Voting page. Click on company name – Sun Pharma
Advanced Research Company Limited or e-Voting service provider name – CDSL
and you will be redirected to CDSL’s website for casting your vote during the
remote e-Voting period or joining virtual meeting & voting during the meeting

10
 Notice

Type of shareholders Login Method

Individual 1) You can also login using the login credentials of your Demat account through
Shareholders your Depository Participant registered with NSDL/CDSL for e-Voting facility.
(holding securities After Successful login, you will be able to see e-Voting option. Once you click
in Demat mode) on e-Voting option, you will be redirected to NSDL/CDSL Depository site after
login through successful authentication, wherein you can see e-Voting feature. Click on
their Depository company name – Sun Pharma Advanced Research Company Limited or e-Voting
Participants service provider name - CDSL and you will be redirected to e-Voting service
provider website for casting your vote during the remote e-Voting period or
joining virtual meeting & voting during the meeting.

Important note: Members who are unable to retrieve User ID/ Password are advised to use Forget User ID and
Forget Password option available at above mentioned website.

Helpdesk for Individual Shareholders holding securities in Demat mode for any technical issues related to
login through Depository i.e. CDSL and NSDL.

Login type Helpdesk details

Individual Shareholders holding Members facing any technical issue in login can contact CDSL
securities in Demat mode with CDSL helpdesk by sending a request at helpdesk.evoting@cdslindia.
com or call at toll free no.: 1800 22 55 33
Individual Shareholders holding Members facing any technical issue in login can contact NSDL
securities in Demat mode with NSDL helpdesk by sending a request at evoting@nsdl.co.in or call at
toll free no.: 1800 1020 990 and 1800 22 44 30

v. Login method for e-voting and joining virtual meetings for Physical shareholders and shareholders other
than individual holding in Demat form.

• The shareholders should log on to the e-voting website www.evotingindia.com.

• Click on “Shareholders” module.
• Now enter your User ID
a) For CDSL: 16 digits beneficiary ID
b) For NSDL: 8 Character DP ID followed by 8 Digits Client ID
c) Shareholders holding shares in Physical Form should enter Folio Number registered with the Company.
• Next enter the Image Verification as displayed and Click on Login
• If you are holding shares in Demat form and had logged on to www.evotingindia.com and voted on an
earlier e-voting of any company, then your existing password is to be used.
• If you are a first time user follow the steps given below:

For Physical shareholders and other than individual shareholders holding

shares in Demat.
PAN Enter your 10-digit alpha-numeric *PAN issued by Income Tax Department
(Applicable for both Demat shareholders as well as physical shareholders)
• Shareholders who have not updated their PAN with the Company/
Depository Participant are requested to use the sequence number sent by
Company/RTA or contact Company/RTA.
Dividend Bank Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as
Details OR recorded in your Demat account or in the company records in order to login.
Date of Birth (DOB) • If both the details are not recorded with the depository or company, please
enter the member id / folio number in the Dividend Bank details field as
mentioned in instruction (v).

11
Sun Pharma Advanced Research Company Ltd

vi. After entering these details appropriately, click xvi. Additional Facility for Non – Individual
on “SUBMIT” tab. Shareholders and Custodians –For Remote
Voting only.
vii. Shareholders holding shares in physical form
will then directly reach the Company selection • Non-Individual shareholders (i.e. other than
screen. However, shareholders holding shares in Individuals, HUF, NRI etc.) and Custodians
Demat form will now reach ‘Password Creation’ are required to log on to www.evotingindia.
menu wherein they are required to mandatorily com and register themselves in the
enter their login password in the new password “Corporates” module.
field. Kindly note that this password is to be
also used by the Demat holders for voting for • A scanned copy of the Registration Form
resolutions of any other company on which they bearing the stamp and sign of the entity
are eligible to vote, provided that company opts should be e-mailed to helpdesk.evoting@
for e-voting through CDSL platform. It is strongly cdslindia.com.
recommended not to share your password with
• After receiving the login details a
any other person and take utmost care to keep
Compliance User should be created
your password confidential.
using the admin login and password. The
viii.
For shareholders holding shares in physical Compliance User would be able to link the
form, the details can be used only for e-voting account(s) for which they wish to vote on.
on the resolutions contained in this Notice.
• The list of accounts linked in the login should
ix. Click on the EVSN 220822002 for the Sun Pharma be mailed to helpdesk.evoting@cdslindia.
Advanced Research Company Limited. com and on approval of the accounts they
would be able to cast their vote.
x. On the voting page, you will see “RESOLUTION
DESCRIPTION” and against the same the option • A scanned copy of the Board Resolution
“YES/NO” for voting. Select the option YES or and Power of Attorney (POA) which they
NO as desired. The option YES implies that you have issued in favour of the Custodian,
assent to the Resolution and option NO implies if any, should be uploaded in PDF format
that you dissent to the Resolution. in the system for the scrutiniser to verify
the same. Alternatively Non Individual
xi. Click on the “RESOLUTIONS FILE LINK” if you shareholders are required to send the
wish to view the entire Resolution details. relevant Board Resolution/ Authority letter
etc., to the Scrutiniser and to the Company
xii. After selecting the resolution, you have decided at the e-mail address viz; secretarial@
to vote on, click on “SUBMIT”. A confirmation sparcmail.com (designated e-mail address
box will be displayed. If you wish to confirm by company), if they have voted from
your vote, click on “OK”, else to change your individual tab & not uploaded same in the
vote, click on “CANCEL” and accordingly modify CDSL e-voting system for the scrutiniser to
your vote. verify the same.

xiii. Once you “CONFIRM” your vote on the resolution, xvii. Instructions for shareholders attending the
you will not be allowed to modify your vote. AGM through VC/OAVM & E-voting during the
AGM are as under: -
xiv. You can also take a print of the votes cast by
clicking on “Click here to print” option on the 1. The procedure for attending meeting &
Voting page. e-voting on the day of the AGM is same
as the instructions mentioned above for
If a Demat account holder has forgotten the
e-voting.
login password then Enter the User ID and the
image verification code and click on Forgot 2. The link for VC/OAVM to attend meeting will
Password & enter the details as prompted by be available where the EVSN of Company
the system. will be displayed after successful login as

12
 Notice

per the instructions mentioned above for All grievances connected with the facility for
e-voting. voting by electronic means may be addressed
to Mr. Rakesh Dalvi, Sr. Manager, (CDSL) Central
3. Shareholders who have voted through Depository Services (India) Limited, A Wing,
Remote e-Voting will be eligible to attend 25th Floor, Marathon Futurex, Mafatlal Mill
the meeting. However, they will not be Compounds, N M Joshi Marg, Lower Parel (East),
eligible to vote at the 17th AGM. Mumbai - 400013 or send an e-mail to helpdesk.
evoting@cdslindia.com or call at toll free no.:
4. Shareholders are encouraged to join the
1800 22 55 33.
Meeting through Laptops / IPads for better
experience. 21. The Scrutinizer will, immediately after the
conclusion of voting at the 17th AGM, start
5. Shareholders will be required to allow
scrutinizing the votes cast at the Meeting along
Camera and use Internet with a good
with remote e-voting and prepare a consolidated
speed to avoid any disturbance during the
Scrutinizer’s Report and submit thereafter to the
meeting.
Chairman of the Meeting or any person authorised
6. Please note that participants connecting by him. The voting result declared along with the
from mobile devices or tablets or through consolidated Scrutinizer’s Report will be placed on
laptop connecting via mobile hotspot the Company’s website at www.sparc.life and on the
may experience audio/video loss due to website of CDSL at www.evotingindia.com, as well
fluctuation in their respective network. It is as displayed on the notice board at the Registered
therefore recommended to use stable Wi-Fi Office and Corporate Office of the Company, within
or LAN connection to mitigate any kind of three days of the conclusion of the Meeting. The
aforesaid glitches. Company will simultaneously forward the voting
results to BSE Limited and National Stock Exchange
7. Only those shareholders, who are present in of India Limited, where the shares of the Company
the AGM through VC/OAVM facility and have are listed.
not casted their vote on the Resolutions
through remote e-voting and are otherwise 22. Subject to receipt of requisite number of votes, the
not barred from doing so, shall be eligible Resolutions proposed in the Notice shall be deemed
to vote through e-voting system available to be passed on the date of the Meeting, that is,
during the AGM. September 22, 2022.

8. If any votes are cast by the shareholders 23. The Securities and Exchange Board of India (SEBI)
through the e-voting available during the vide its circular dated April 20, 2018 has mandated
AGM and if the same shareholders have not the registration of Permanent Account Number (PAN)
participated in the meeting through VC/ and Bank Account details by shareholders holding
OAVM facility, then the votes cast by such securities in physical form. Further SEBI vide its
shareholders shall be considered invalid as circular dated November 03, 2021 and December 14,
the facility of e-voting during the meeting 2021 has mandated shareholders holding securities
is available only to the shareholders in physical form to furnish PAN, Nomination details,
attending the Meeting. Contact details (Address alongwith PIN code,
Mobile No. and Email address), Bank Account details,
xviii. In case you have any queries or issues regarding (bank name, branch name, account number and IFS
attending AGM & e-voting from the e-voting code) and Specimen signature before they could
System, you may write an e-mail to helpdesk. any investor related service. Folios wherein any one
evoting@cdslindia.com or call at toll free no.: of the above mentioned details are not available
1800 22 55 33. by April 01, 2023, shall be frozen. The relevant forms

13
Sun Pharma Advanced Research Company Ltd

prescribed by SEBI for furnishing the above details For Sun Pharma Advanced Research Company Limited
are available on the website of the Company. The
concerned shareholders are requested to register/ Dinesh Lahoti
update the above mentioned details by submitting Company Secretary and
the prescribed form duly filled and signed by the Compliance Officer
registered holders, by email from their registered (ICSI Membership No. A22471)
email address to rnt.helpdesk@linkintime.com or by
Place: Mumbai
submitting a physical copy thereof to the Company’s
Date: August 08, 2022
RTA, Link Intime India Private Limited (Unit: Sun
Pharma Advanced Research Company Ltd.) C-101, Registered Office:
247 Park, LBS Marg, Vikhroli West, Mumbai - 400083. Plot No. 5 & 6/1, Savli G.I.D.C. Estate,
Savli - Vadodara Highway, Manjusar,
Shareholders holding shares in demat mode are
Vadodara - 391775, Gujarat, India.
requested to register / update their PAN, Nomination
CIN: L73100GJ2006PLC047837
details, Contact details (Address alongwith PIN
Tel.: +91 02667 666800
code, Mobile No. and Email address), Bank Account
Fax: +91 22 6645 5685
details, (bank name, branch name, account number
Website: www.sparc.life
and IFS code) and Specimen Signature with the
E-mail: secretarial@sparcmail.com
relevant Depository Participant.

14
 Notice

Explanatory Statement pursuant to Section 102(1) of the Companies Act, 2013 and additional
information as required under the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015

The following Explanatory Statement sets out material facts relating to the business set out at Item Nos. 3 to 7 of
the accompanying Notice.

Item No. 3 None of the Directors or Key Managerial Personnel or

their relatives are in anyway concerned or interested in
The members of the Company at the 12th Annual General the resolution as set out in Item no. 3 of the Notice.
Meeting, had approved the appointment of S R B C & Co.
LLP, (“SRBC”) Chartered Accountants (Firm’s Registration
No. 324982E / E300003) as the Statutory Auditors of the Item No. 4
Company for a term of 5 (five) consecutive years to hold
To approve revision in terms of Line of Credit availed
office until the conclusion of the 17th Annual General
from Shanghvi Finance Private Limited
Meeting of the Company at such remuneration as may
be fixed by the Board of Directors of the Company in The members at the 15th Annual General Meeting held
consultation with them. on September 30, 2020, had considered, ratified and
approved an unsecured line of credit facility of upto
Under the provisions of Section 139(2) of the Companies
Rs.200 crores at Interest Rate of 10.5% p.a. from Shanghvi
Act, 2013 (the ‘Act’), the Company is permitted to appoint
Finance Private Limited (CIN: U65910MH1989PTC053111),
the aforementioned Statutory Auditors (being an audit
the Holding Company and a Related Party of the
firm) for one more term of 5 (five) consecutive years.
Company to meet the working capital requirements
Basis various parameters such as industry experience, of the Company. Further, at the 16th Annual General
credibility, efficiency in conduct of audit, independence, Meeting held on September 29, 2021 the members of
etc., the Board of Directors of the Company, based the Company had ratified and approved changes in the
on the recommendation of the Audit Committee, at terms of said line of credit facility whereby the facility
its meeting held on May 17, 2022, has proposed to the amount was revised from Rs. 200 crores to Rs. 250 crores
members of the Company re-appointment of SRBC, and the rate of interest was revised (i) from 10.50% to
Chartered Accountants, (Firm’s Registration No. 324982E 9.75% per annum with effect from October 01, 2020 and
/ E300003) as the Statutory Auditors for a second term (ii) from 9.75% to 8.00% per annum with effect from April
of 5 (five) consecutive years to hold office from the 01, 2021.Considering the changes in financial markets,
conclusion of this 17th Annual General Meeting till from time to time, and looking at the proposed tenure
the conclusion of 22th Annual General Meeting of the of 5 years, it may be considered as a good practice to
Company, at such remuneration as may be fixed by the link the interest rate to some relevant benchmark like
Board of Directors in consultation with them. State Bank of India - Marginal Cost of Funds-based
Lending Rate (SBI-MCLR). Accordingly, approval of the
SRBC has consented to act as Statutory Auditors and shareholders is being sought to link the rate of interest
have confirmed that their appointment, if made, will with a transparent benchmark i.e. the rate of interest be
be in accordance with Section 139 read with Section revised to a rate which does not exceed prevailing SBI-
141 of the Act and the rules made thereunder. SRBC has MCLR + 250 basis points, subject to arm’s length pricing.
also confirmed, that they have subjected themselves to The Audit Committee and the Board of Directors at
the peer review process of the Institute of Chartered their respective meetings held on August 08, 2022 have
Accountants of India (ICAI) and holds a valid certificate considered, approved and have recommended the same
issued by the ‘Peer Review Board’ of the ICAI. to the members of the Company for their approval.

The Board recommends the Resolution as set out at item Information pursuant to SEBI Circular No. SEBI/HO/
no. 3 of the Notice for approval of the Members as an CFD/CM1/CIR/P/2021/662 dated November 22, 2021
Ordinary Resolution. and the Act, including terms and conditions, are given
below:

15
Sun Pharma Advanced Research Company Ltd

Sr.
Particulars Details
No.
1 Name of the related party and its relationship Name of the Related Party:
with the listed entity or its subsidiary, Shanghvi Finance Private Limited (SFPL)
including nature of its concern or interest Relationship:
(financial or otherwise) SFPL is a holding company of the Company (50.47%)
2 Type, material terms and particulars of the Presently, the Company has a Line of Credit of H 250 crores
proposed transaction at the rate of 8% p.a. (rate effective from April 01, 2022) from
SFPL. The said transaction was approved / ratified by the
shareholders at the 16th AGM of the Company.
In the current resolution, existing 8% p.a. rate of interest is
proposed to be revised to a rate which does not exceed
prevailing SBI-MCLR + 250 basis points, subject to arm’s length
pricing.
3 Tenure of the proposed transaction The Company shall have the Line of Credit for a further period
(particular tenure shall be specified) of 5 (five) years (i.e. from the conclusion of this 17th AGM till
conclusion of 22nd AGM)
4 Value of the proposed transaction Principal - The principal amount withdrawn under the Line of
Credit shall not exceed an amount of Rs. 250 Crores (Rupees
Two Hundred and Fifty Crores only), outstanding at any point
in time.
Interest – Not to exceed prevailing SBI-MCLR plus 250 basis
points, subject to arm’s length pricing
5 The percentage of the listed entity’s annual ~ 180% (calculated on the basis of principal value i.e. Rs 250
consolidated turnover, for the immediately crores)
preceding financial year, that is represented
by the value of the proposed transaction
(and for a RPT involving a subsidiary, such
percentage calculated on the basis of the
subsidiary’s annual turnover on a standalone
basis shall be additionally provided)
6 Any advance paid or received for the Not applicable
contract or arrangement, if any
7 The manner of determining the pricing and The pricing / commercial terms are determined on arm’s
other commercial terms, both included as length basis
part of contract and not considered as part
of the contract
8 Whether all factors relevant to the contract Yes
have been considered, if not, the details of
factors not considered with the rationale for
not considering those factors
9 Name of the director or key managerial Mr. Dilip S. Shanghvi
personnel who is related, if any Mr. Sudhir V. Valia
10 Justification as to why the RPT is in the SFPL is a non-banking finance company and providing a line
interest of the listed entity of credit facility is in its ordinary course of business.

The Company, to carry out its research and other business

activities, requires funds from time to time. Having a line of
credit facility from SFPL will benefit the Company with timely
disbursements and at the competitive rate. Therefore, in the
opinion of the Board, the transaction is in the best interest of
the Company.

16
 Notice

Sr.
Particulars Details
No.
11 If the transaction relates to any loans, inter- Not applicable
corporate deposits, advances or investments
made or given by the listed entity or its
subsidiary:
(i) details of the source of funds in connection
with the proposed transaction
(ii) where any financial indebtedness is
incurred to make or give loans, inter-
corporate deposits, advances or
investments,
• nature of indebtedness;
• cost of funds; and
• tenure;
(iii) applicable terms, including covenants,
tenure, interest rate and repayment
schedule, whether secured or unsecured;
if secured, the nature of security the
purpose for which the funds will be
utilized by the ultimate beneficiary of
such funds pursuant to the RPT
12 A statement that the valuation or other Not applicable
external party report, if any such report
has been relied upon by the listed entity in
relation to the proposed transaction will
be made available through the registered
email address of the shareholders
13 Percentage of the counter-party’s annual --
consolidated turnover that is represented
by the value of the proposed RPT on a
voluntary basis
14 Any other information that may be relevant None

Pursuant to regulation 23(4) of the SEBI (Listing Mr. Dilip S. Shanghvi, Chairman & Non-Executive Director, Mr.
Obligations and Disclosure Requirements) Regulations, Sudhir V. Valia, Non-Executive Director, and their relatives
2015 all material related party transactions requires are deemed to be interested in the proposed resolution.
approval of the members in which the related parties Other than Mr. Dilip S Shanghvi, Mr. Sudhir V Valia, and their
shall not vote to approve the transaction. The above relatives, none of the other Directors or Key Managerial
facility would exceed the threshold limit of ‘materiality’ Persons or their relatives are concerned or interested
as per Related Party Transaction Policy of the Company financially or otherwise in the proposed resolution.
and Regulation 23(4) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and
Item No. 5
accordingly it is proposed for approval by the members
of the Company. The related parties shall not vote to To approve continuation of transactions with Sun
approve this transaction. Pharmaceutical Industries Inc., USA under Shared
Service Agreement:
In the opinion of the Board proposed revision in the rate
of interest is in line with the market practices and in The members of the Company at their 12th Annual
the interest of the Company. The Board recommends General Meeting held on August 05, 2017, gave approval
the Resolution as set out at item no.4 of the Notice for for entering into transactions pursuant to the Shared
approval by the Members as an Ordinary Resolution. Service Agreement under which Sun Pharmaceutical

17
Sun Pharma Advanced Research Company Ltd

Industries Inc. USA (SPI Inc.), has agreed to allow the to voluntarily put up the proposal for continuation of
Company to avail the services of certain identified the arrangement, for the approval of the members
employees of SPI Inc to manage the affairs of the after every five years, as a measure of good Corporate
Company in United States of America. Governance and accordingly the approval of the
members is sought for continuing of transactions with
Basis the above approval, the Company is entering into SPI Inc for a further period of 5 years.
the transactions with SPI Inc. from time to time. Since
this is continual and ongoing nature of the arrangement Information pursuant to SEBI Circular No. SEBI/HO/
and was earlier approved by the shareholders at the CFD/CM1/CIR/P/2021/662 dated November 22, 2021
Annual General Meeting held on August 05, 2017 and and the Act, including terms and conditions, are given
as no maximum term for entering into the aforesaid below:
transaction was sought or specified by the members
while approving the above transactions, it was decided

Sr.
Particulars Details
No.
1 Name of the related party and its relationship Name of the Related Party:
with the listed entity or its subsidiary, Sun Pharmaceutical Industries Inc., USA (SPI Inc.)
including nature of its concern or interest Relationship:
(financial or otherwise) SPI Inc is a wholly owned subsidiary of Sun Pharmaceutical
Industries Limited where promoter of the Company is a
promoter.
2 Type, material terms and particulars of the Based on the Company’s requirements, the Company may
proposed transaction utilise the services of certain identified employees of SPI
Inc. from time to time, for various research and development
activities and other support services to manage the affairs of
the Company in United States of America in its ordinary course
of business.
In consideration of the services provided by such identified
employees of SPI Inc., the Company shall reimburse SPI Inc.
proportionate employee cost based on actual man hours spent
by such identified employees towards providing such services
to the Company along with a suitable mark-up, to be decided
on arm’s length basis.
3 Tenure of the proposed transaction 5 (five) years (i.e. from FY 23 till FY 27)
(particular tenure shall be specified)
4 Value of the proposed transaction FY 23 – upto H 80 crores
FY 24 – upto H 85 crores
FY 25 – upto H 90 crores
FY 26 – upto H 95 crores
FY 27 – upto H 100 crores
5 The percentage of the listed entity’s annual ~ 58 % (calculated basis the proposed transaction value for
consolidated turnover, for the immediately FY 23)
preceding financial year, that is represented
by the value of the proposed transaction
(and for a RPT involving a subsidiary, such
percentage calculated on the basis of the
subsidiary’s annual turnover on a standalone
basis shall be additionally provided)

18
 Notice

Sr.
Particulars Details
No.
6 Any advance paid or received for the Not Applicable
contract or arrangement, if any
7 The manner of determining the pricing and In consideration of the services provided by such identified
other commercial terms, both included as employees of SPI Inc., the Company shall reimburse SPI Inc.
part of contract and not considered as part proportionate employee cost based on actual man hours
of the contract spent by such identified employees towards providing such
services to the Company along with a suitable mark-up, to be
decided on arm’s length basis.

8 Whether all factors relevant to the contract Yes

have been considered, if not, the details of
factors not considered with the rationale for
not considering those factors
9 Name of the director or key managerial Mr. Dilip S. Shanghvi
personnel who is related, if any Mr Sudhir V. Valia
10 Justification as to why the RPT is in the The Company would need man-power to carry out research
interest of the listed entity and development related activities and for providing other
support services from time to time to manage its operations
/ affairs in United States of America (USA). The said
arrangement allows the parties to contract for multiple/
periodic assignments (as and when required) through
the issuance of multiple oral/ written instructions to the
identified employees, without having to re-negotiate the
basic terms and conditions again and again. SPI Inc have in
place the requisite infrastructure to provide such services to
the Company. The arrangement would also support smooth
conduct of business operations of the Company in USA.
11 If the transaction relates to any loans, inter- Not applicable
corporate deposits, advances or investments
made or given by the listed entity or its
subsidiary:
(i) details of the source of funds in connection
with the proposed transaction
(ii) where any financial indebtedness is
incurred to make or give loans, inter-
corporate deposits, advances or
investments,
• nature of indebtedness;
• cost of funds; and
• tenure;
(iii) applicable terms, including covenants,
tenure, interest rate and repayment
schedule, whether secured or unsecured;
if secured, the nature of security the
purpose for which the funds will be
utilized by the ultimate beneficiary of
such funds pursuant to the RPT

19
Sun Pharma Advanced Research Company Ltd

Sr.
Particulars Details
No.
12 A statement that the valuation or other Not applicable
external party report, if any such report
has been relied upon by the listed entity in
relation to the proposed transaction will be
made available through the registered email
address of the shareholders
13 Percentage of the counter-party’s annual --
consolidated turnover that is represented by
the value of the proposed RPT on a voluntary
basis
14 Any other information that may be relevant The list of identified employees shall be subject to periodic
review & modification through mutual consent.

Pursuant to Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 all
material Related Party Transactions requires approval of the members in which the related parties shall not vote to
approve the transaction. The transactions to be entered into by the Company pursuant to Shared Services Agreement
may exceed the threshold limit of ‘Materiality’ as per Related Party Transaction Policy of the Company and Regulation
23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and accordingly it is proposed
for approval by the members of the Company. The related parties shall not vote to approve this transaction. Copy
of the draft Shared Service Agreement is available for inspection by any member as detailed in point no. 14 of Notes
to this Notice.

In the opinion of the Board entering into transactions pursuant to above is in the best interest of the Company. The
Board recommends the Resolution as set out at item no. 5 of the Notice for approval of the members as an Ordinary
Resolution.

Mr. Dilip S Shanghvi, Chairman & Non-Executive Director, Mr. Sudhir V Valia, Non-Executive Director and their relatives
are deemed to be interested in the Agreement. Other than Mr. Dilip S. Shanghvi, Mr. Sudhir V. Valia and their relatives,
none of the other Directors or Key Managerial Persons or their relatives are concerned or interested financially or
otherwise in the proposed resolution.

Item No. 6

To approve continuation of transactions with Sun Pharmaceutical Industries Inc., USA under Master Support Services
Agreement

The members of the Company at their 12th Annual General Meeting held on August 05, 2017, gave approval for
entering into transactions pursuant to the Master Support Services Agreement under which Sun Pharmaceutical
Industries Inc., (SPI Inc.), and the Company have agreed for rendering / availing of certain range of research &
development activities and other ancillary support services between each other.

Basis the above approval, the Company is entering into the transactions with SPI Inc. from time to time. Since this
is continual and ongoing nature of the arrangement and was earlier approved by the shareholders at the Annual
General Meeting held on August 05, 2017 and as no maximum term for entering into the aforesaid transaction was
sought or specified by the members while approving the above transactions, it was decided to voluntarily put
up the proposal for continuation of the arrangement, for the approval of the members after every five years, as a
measure of good Corporate Governance and accordingly the approval of the members is sought for continuing of
transactions with SPI Inc. for a further period of five years.

Information pursuant to SEBI Circular No. SEBI/HO/CFD/CM1/CIR/P/2021/662 dated November 22, 2021 and the Act,
including terms and conditions are given below:

20
 Notice

Sr.
Particulars Details
No.
1 Name of the related party and its relationship Name of the Related Party:
with the listed entity or its subsidiary, Sun Pharmaceutical Industries Inc., USA (SPI Inc.)
including nature of its concern or interest
Relationship:
(financial or otherwise)
SPI Inc. is a wholly owned subsidiary of Sun Pharmaceutical
Industries Limited where promoter of the Company is a
promoter.
2 Type, material terms and particulars of the Based on requirements from time to time, either party may
proposed transaction request the other party to provide certain range of research
and development activities and other support services in its
ordinary course of business, on various terms and conditions
which are on arm’s length basis.
In consideration of the services provided by performing party
to receiving party, receiving party shall pay to performing party
such amount as may be determined in accordance with the
arm’s length principles under the Transfer Pricing Regulations,
which shall consist of the fully absorbed internal costs incurred
by performing party in providing the services plus a mark-up of
up to thirty percent (30%).
3 Tenure of the proposed transaction 5 (five) years (i.e. from FY 23 till FY 27)
(particular tenure shall be specified)
4 Value of the proposed transaction FY 23 – upto H 20 crores
FY 24 – upto H 25 crores
FY 25 – upto H 30 crores
FY 26 – upto H 35 crores
FY 27 – upto H 40 crores
5 The percentage of the listed entity’s annual ~ 15 % (calculated basis the proposed transaction value for
consolidated turnover, for the immediately FY 23)
preceding financial year, that is represented
by the value of the proposed transaction
(and for a RPT involving a subsidiary, such
percentage calculated on the basis of the
subsidiary’s annual turnover on a standalone
basis shall be additionally provided)
6 Any advance paid or received for the Not Applicable
contract or arrangement, if any
7 The manner of determining the pricing and In consideration of the services provided by performing party
other commercial terms, both included as to receiving party, receiving party shall pay to performing
part of contract and not considered as part party such amount as may be determined in accordance
of the contract with the arm’s length principles under the Transfer Pricing
Regulations, which shall consist of the fully absorbed
internal costs incurred by performing party in providing the
services plus a mark-up of up to thirty percent (30%)
8 Whether all factors relevant to the contract Yes
have been considered, if not, the details of
factors not considered with the rationale for
not considering those factors
9 Name of the director or key managerial Mr. Dilip S. Shanghvi
personnel who is related, if any Mr Sudhir V. Valia

21
Sun Pharma Advanced Research Company Ltd

Sr.
Particulars Details
No.
10 Justification as to why the RPT is in the The Company being in the business of Research and
interest of the listed entity Development may need external support to carry out its
research activities from time to time. Similarly, SPI Inc.
being in pharma business may need external support for its
business activities. The “Master” form of Contract, allows
the parties to contract for multiple/ periodic assignments
(as and when required) through the issuance of multiple
Statement of Work (“SOW”) without having to re-negotiate the
basic terms and conditions again and again and hence would
be in the interest of both the parties.
11 If the transaction relates to any loans, inter- Not applicable
corporate deposits, advances or investments
made or given by the listed entity or its
subsidiary:
(i) details of the source of funds in connection
with the proposed transaction
(ii) where any financial indebtedness is
incurred to make or give loans, inter-
corporate deposits, advances or
investments,
• nature of indebtedness;
• cost of funds; and
• tenure;
(iii) applicable terms, including covenants,
tenure, interest rate and repayment
schedule, whether secured or unsecured;
if secured, the nature of security the
purpose for which the funds will be
utilized by the ultimate beneficiary of
such funds pursuant to the RPT
12 A statement that the valuation or other Not applicable
external party report, if any such report
has been relied upon by the listed entity in
relation to the proposed transaction will be
made available through the registered email
address of the shareholders
13 Percentage of the counter-party’s annual --
consolidated turnover that is represented by the
value of the proposed RPT on a voluntary basis
14 Any other information that may be relevant Performing party shall make available sufficient quantities of
materials to carry out the service(s) at the cost of receiving
party or such cost sharing mechanism as may be mutually
agreed from time to time in connection with the particular SOW.

The receiving party shall grant the performing party and its
authorized representatives and/or agents a limited non-
exclusive, non-transferable, revocable license to use the
technical information and intellectual property rights for
the purpose of rendering services under the contract and
the respective SOW. The license shall be royalty-free, unless
otherwise agreed in writing between the parties.

22
 Notice

Pursuant to Regulation 23(4) of the SEBI (Listing aforesaid approval from shareholders is approaching,
Obligations and Disclosure Requirements) Regulations, the Board of Directors (“Board”) of the Company in its
2015 all material Related Party Transactions requires meeting held on August 08, 2022 decided to seek a fresh
approval of the members in which the related parties approval from the shareholders on the fund raising
shall not vote to approve the transaction. The for the same amount, as also to have the flexibility in
transactions to be entered into by the Company pursuant timing of raising of funds as and when it is required, and
to the Master Support Services Agreement may exceed approved the raising of capital by the Company through
the threshold limit of ‘Materiality’ as per Related Party further public offer or issuance of American Depository
Transaction Policy of the Company and Regulation Receipts / Global Depository Receipts / Foreign
23(4) of the SEBI (Listing Obligations and Disclosure Currency Convertible Bonds or qualified institutions
Requirements) Regulations, 2015 and accordingly it is placement or through a combination thereof, as may be
proposed for approval by the members of the Company. considered appropriate, subject to requisite approvals.
The related parties shall not vote to approve this
transaction. Copy of the draft Master Support Services In order to enable the Company to raise funds through
Agreement is available for inspection by any member a public issue and/or private offering and/or rights
as detailed in point no. 14 of Notes to this Notice. offering and/or qualified institutions placement or any
combination thereof , the approval of the Members is
In the opinion of the Board entering into transactions hereby sought for the proposal to create, offer, issue and
pursuant to the above is in the best interest of the allot equity shares of the Company of face value of H 1/-
Company. The Board recommends the Resolution as each (“Equity Shares”) convertible warrants, preference
set out at item no. 6 of the Notice for approval of the shares/ bonds /debentures /any other instruments
members as an Ordinary Resolution. whether convertible into equity or not, American
Depository Receipts (“ADRs”), Global Depository
Mr. Dilip S Shanghvi, Chairman & Non-Executive Director, Receipts (“GDRs”), Foreign Currency Convertible Bonds
Mr. Sudhir V Valia, Non-Executive Director and their (“FCCBs”), or any other securities (collectively referred
relatives are deemed to be interested in the Agreement. to as “Securities”) or any combination of Securities, in
Other than Mr. Dilip S. Shanghvi, Mr. Sudhir V. Valia one or more tranches, to eligible investors, whether they
and their relatives, none of the other Directors or Key being existing shareholders or not, as may be decided
Managerial Persons or their relatives are concerned by the Board in its discretion and permitted under
or interested financially or otherwise in the proposed applicable laws, for an aggregate consideration of up
resolution. to H 1,800 Crores (Rupees One Thousand Eight Hundred
Crores only) or equivalent thereof, in one or more
Item No. 7 currency(ies).

To approve raising of funds through equity shares, As the issue may result in the issue of Equity Shares
convertible warrants, preference shares/ bonds / of the Company to investor(s) who may or may not be
debentures /any other instruments whether convertible members of the Company, consent of the members is
into equity or not, American Depository Receipts being sought pursuant to Section 62(1)(c) and other
(“ADRs”), Global Depository Receipts (“GDRs”), Foreign applicable provisions, if any, of the Companies Act,
Currency Convertible Bonds (“FCCBs”), etc. 2013 (“Act”), the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements)
In view of the future outlook of the Company, its growth Regulations, 2018 (“SEBI ICDR Regulations”), the
targets and prospects, the Company would require Securities and Exchange Board of India (Listing
additional funding. While it is expected that the internal Obligations and Disclosure Requirements) Regulations,
generation of funds would partially finance the need for 2015 (“SEBI Listing Regulations”) and any other law for
capital but, it is thought prudent for the Company to the time being in force and being applicable.
have enabling approval to raise funds through the issue
of appropriate securities as mentioned below. In case of issuance of securities through a qualified
institutions placement (“QIP”), in terms of Chapter VI
An enabling Resolution in this regard was passed by the of the SEBI ICDR Regulations, an issue of securities
shareholders at the 16th Annual General Meeting held pursuant to a QIP shall be made at a price not less than
on September 29, 2021, for H 1800 crore (Rupees One the average of the weekly high and low of the closing
Thousand Eight Hundred crore) which was valid for 365 prices of the equity shares of the same class quoted
days. No amount was raised by the Company pursuant to on the stock exchange during the two weeks preceding
the said enabling Resolution. Since, the expiry date of the the “relevant date.” The relevant date for the purpose

23
Sun Pharma Advanced Research Company Ltd

of pricing of the securities shall be the date of the decision on matters on which it has the discretion,
meeting in which the Board decides to open the QIP and necessary disclosures will be made to the relevant
at such price being not less than the price determined stock exchanges on which the Equity Shares are listed
in accordance with the pricing formula provided under under the provisions of the SEBI Listing Regulations.
Chapter VI of the SEBI Regulations. In case of a QIP, the
special resolution has a validity period of 365 within In case the securities to be issued are Debentures
which allotments under the authority of said resolution or any other debt instruments then in such case the
should be completed. resolution passed herein above shall also be treated
as the approval for the limits in terms of 180(1)(a) and
In case of issuance of ADRs or GDRs, the relevant date 180(1)(c) of the Companies Act, 2013 and the existing
for the purpose of pricing the Securities shall be the limits under the said sections approved by the members
date of the meeting in which the Board decides to open of the Company at their extra ordinary general meeting
the issue of such Securities in accordance with the held on April 26, 2021 shall not in any case be affected.
Depository Receipts Scheme, 2014 and other applicable
pricing provisions issued by the Ministry of Finance. The Directors accordingly recommend this resolution at
Item No. 7 of the Notice for the approval of the Members
In case of issuance of FCCBs, the relevant date for the of the Company as an enabling special resolution.
purpose of pricing the Securities shall be the date of
the meeting in which the Board decides to open the None of the Directors or Key Managerial Personnel of
issue of such Securities in accordance with the Issue of the Company and / or their relatives are concerned or
Foreign Currency Convertible Bonds and Ordinary Shares interested, financially or otherwise, in the proposed
(through Depository Receipt Mechanism) Scheme, 1993 resolution except to the extent of his/her holding of
and other applicable pricing provisions issued by the Equity Shares and to the extent of his/her subscribing to
Ministry of Finance. Equity Shares if and when issued as also to the extent of
subscription by a financial institution/ company/body
The issue / allotment / conversion would be subject to corporate in which the KMPs, Director or his/her relative
the receipt by the Company of regulatory approvals, may be directly or indirectly interested.
if any. The conversion of Securities held by foreign
investors, into Equity Shares would be subject to the
By Order of the Board of Directors
applicable foreign investment cap.
For Sun Pharma Advanced Research Company Limited
The proceeds of the proposed issue of Securities shall
Dinesh Lahoti
be utilized for any of the purposes as may be decided by
Company Secretary and
the Board, subject to applicable laws. The Resolution at
Compliance Officer
Item No. 7 is an enabling resolution conferring authority
on the Board to do all acts and deeds, which may be Place: Mumbai
required to issue/offer Securities of appropriate nature Date: August 08, 2022
at appropriate time, including the size, structure, price (ICSI Membership No. A22471)
and timing of the issue(s) /offer(s) at the appropriate
time(s). The detailed terms and conditions for the Registered Office:
domestic/international offering will be determined in Plot No. 5 & 6/1, Savli G.I.D.C. Estate,
consultation with the lead managers, merchant bankers, Savli - Vadodara Highway, Manjusar,
global business coordinators, guarantors, consultants, Vadodara - 391775, Gujarat, India.
advisors, underwriters and/or such other intermediaries CIN: L73100GJ2006PLC047837
as may be appointed for the issue/offer. Wherever Tel.: +91 02667 666800
necessary and applicable, the pricing of the issue/ Fax: +91 22 6645 5685
offer will be finalized in accordance with applicable Website: www.sparc.life
guidelines in force. As and when the Board takes a E-mail: secretarial@sparcmail.com

24
 Notice

PROFILE OF DIRECTOR
(Details of Director retiring by rotation at the AGM)

As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(“Listing Regulations”) and under Secretarial Standards on General Meetings issued by the Institute of Company
Secretaries of India (SS – 2), the particulars of Director who is proposed to be reappointed are given below.

Name of the Director Mr. Dilip S. Shanghvi

DIN 00005588
Date of Birth and Age 18-10-1955 (66 years)
Resume / Experience / Expertise Mr. Dilip Shanghvi, Chairman of the Company, is also the founder and
in specific functional areas and Managing Director of Sun Pharmaceutical Industries Limited and has
Qulifications: extensive industrial experience in the pharmaceutical industry. A first-
generation entrepreneur, Mr. Shanghvi has won numerous awards and
recognitions, including Forbes’s Entrepreneur of the Year Award (2014),
Economic Times’ Business Leader of the Year (2014), CNN IBN’s Indian
of the Year (Business) (2011), Business India’s Businessman of the Year
(2011) and Ernst and Young’s World Entrepreneur of the Year (2011).
He has also been awarded the Economic Times’ Entrepreneur of the
Year (2008), Business Standard’s CEO of the Year (2008), and CNBC
TV 18’s First Generation Entrepreneur of the Year (2007). Mr. Shanghvi
was conferred with the prestigious ‘Padma Shri’ award by the Hon’ble
President of India in the year 2016.
He has been actively involved in international pharmaceutical
markets, business strategy, business development and research and
development functions.
He holds a B. Com degree from the University of Kolkata.
Terms of appointment / re-appointment Mr. Dilip S. Shanghvi retires by rotation at the AGM and being eligible
has offered himself for re-appointment
Remuneration last drawn NIL
Remuneration proposed to be paid Mr. Dilip S. Shanghvi is a non-executive Director and he will not draw
any remuneration. He, however, shall be entitled to sitting fees for
attending Board/ Committee meetings.
Date of first appointment on the Board March 01, 2006
of the Company
Relationship with other Directors / Mr. Dilip Shanghvi is brother-in-law of Mr. Sudhir V Valia.
KMP’s of the Company Except as stated above, he is not related to any Director / KMP of the
Company.
No. of Meetings of the Board attended He had attended all the meetings (seven board meetings) held during
during the FY 22. the FY 22.
Directorship held in other companies in Sun Pharmaceutical Industries Limited (Listed Company)
India (excluding foreign companies and Sun Petrochemicals Private Limited
section 8 companies)
Alfa Infraprop Private Limited
Aditya Clean Power Ventures Private Limited
Listed companies from which Director Mr. Dilip Shanghvi stepped down as the Managing Director of the
has resigned in the past 3 years (i.e. FY Company effective from May 25, 2021. He, however, continue to be
20, FY 21, and FY 22) associated with the Company in his capacity as the Chairman and
Non-Executive Director.

25
Sun Pharma Advanced Research Company Ltd

Membership/ Chairmanship of Sun Pharmaceutical Industries Limited

Committees of other public companies a) Stakeholders’ Relationship Committee (Member)
in India
b) Risk Management Committee (Chairman)
c) Corporate Social Responsibility Committee (Chairman)
No. of Equity Shares held in the Holding singly or jointly as first holder:
Company (including as a beneficial 3,65,29,761 (13.44%)
owner for non‑executive director) as on
March 31, 2022 As a beneficial owner:
14,35,28,979 (52.79%)*
No. of Warrants (convertible into equal 2,52,80,899
no. of equity shares of the Company) as
on March 31, 2022

*Disclosure w.r.t. SBO – Calculations for holdings / exercise of right of the SBO in the reporting company, has been
done on the basis of the shareholding of the registered owner in the Company and not on proportionate basis.

26
Notes
Notes