As at 31 st
March, 2011 As at 31st
Rs. in Million Rs. in Million
1 CONTINGENT LIABILITIES NOT PROVIDED FOR
Guarantees Given by the bankers on
behalf of the Company 160.1 106.4
Corporate Guarantees 46.0 51.5
Letters of Credit for Imports 166.7 505.5
Liabilities Disputed - Appeals filed
with respect to :
Income Tax on account of Disallowances /
Additions 290.2 446.6
Sales Tax on account of Rebate /
Classification 25.6 11.4
Excise Duty on account of Valuation /
Cenvat Credit 318.4 314.0
ESIC Contribution on account of
applicability 0.2 0.2
Drug Price Equalisation Account
[DPEA] on account of 14.0 14.0
demand towards unintended benefit,
including interest there on, enjoyed
by the Company
Demand by JDGFT import duty with respect to
import 11.5 11.1
alleged to be in excess of entitlement as
per the Advanced Licence Scheme
Other Claims against the Company not 15.3 6.7
acknowledged as debts
10 The net exchange gain of Rs. 307.3 Million (Previous Year gain of Rs.
36.4 Million) is included under various heads in the Profit and Loss
11 Disclosures under the Micro, Small and Medium Enterprises
Development Act, 2006:
(a) An amount of Rs. 33.0 Million (Previous Year Rs.14.8 Million) and Rs. NIL
(Previous Year Rs. NIL) was due and outstanding to suppliers as at the
end of the accounting year on account of Principal and Interest
(b) No interest was paid during the year.
(c) No interest is payable at the end of the year under Micro, Small
and Medium Enterprises Development Act, 2006.
(d) No amount of interest was accrued and unpaid at the end of the
The above information and that given in Schedule 12 - “Current
Liabilities and Provisions” regarding Micro, Small and Medium
Enterprises has been determined to the extent such parties have been
identified on the basis of information available with the Company.This
has been relied upon by the auditors.
12 Disclosure with respect to Accounting Standards notified by the
Companies (Accounting Standards) Rules, 2006 :
(i) Related Party Disclosure - as per Annexure ‘A'' Consequent to the
approval of the members of the Company and upon requisite regulatory
compliance, during the year, one equity share of Rs. 5 each of the
Company is sub-divided into five equity shares of Rs.1 each fully
paid-up. The Earnings Per Share of Rs.1 each has been restated for all
the corresponding periods in accordance with Accounting Standard
(AS-20) on “Earnings Per Share” as notified under The Companies
(Accounting Standards) Rules, 2006.
(iv) Accounting Standard (AS-15) on Employee benefits
Contributions are made to Recognised Provident Fund/ Government
Provident Fund, Family Pension Fund, ESIC and other Statutory 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 are made only by the
Company. The contributions are normally based on a certain proportion
of the employee''s salary. Amount recognised as expense in respect of
these defined contribution plans, aggregate to Rs. 108.1 Million
(Previous year Rs. 90.8 Million)
In respect of Gratuity, Contributions are made to LIC''s Recognised
Group Gratuity Fund Scheme based on amount demanded by LIC of India.
Provision for Gratuity is based on actuarial valuation done by
independent actuary as at the year end. Actuarial Valuation for
Compensated Absences is done as at the year end and the provision is
made as per Company rules amounting to Rs. 43.2 Million (Previous Year Rs.
38.8 Million) and it covers all regular employees. Major drivers in
actuarial assumptions, typically, are years of service and employee
compensation. After the issuance of the Accounting Standard 15 on
‘Employee Benefits'', commitments are actuarially determined using the
‘Projected Unit Credit'' method. Gains and losses on changes in
actuarial assumptions are accounted for in the Profit and Loss account.
(v) Accounting Standard (AS-19) on Operating Leases
(a) The company has obtained certain premises for its business
operations (including furniture and fittings, therein as applicable)
under operating lease or leave and license agreements. These are
generally not non-cancellable and range between 11 months to 5 years
under leave and licence, or longer for other lease and are renewable by
mutual consent on mutually agreeable terms. The Company has given
refundable interest free security deposits in accordance with the
(b) Lease payments are recognised in the Profit and Loss Account under
“Rent” in Schedule 17.
17 Intangible assets consisting of trademarks, designs, technical
knowhow, non compete fees and other intangible assets are stated at
cost of acquisition based on their agreements and are available to the
Company in perpetuity. The depreciable amount of intangible assets is
arrived at based on the management''s best estimates of useful lives of
such assets after due consideration as regards their expected usage,
the product life cycles, technical and technological obsolescence,
market demand for products, competition and their expected future
benefits to the Company.
18 Legal Proceedings
The Company and / or its subsidiaries are involved in various legal
proceedings including product liability, contracts, employment claims
and other regulatory matters relating to conduct of its business. The
Company carries product liability insurance / is contractually
indemnified by the manufacturer, in an amount it believes is sufficient
for its needs. In respect of other claims, the Company believes, these
claims do not constitute material litigation matters and with its
meritorious defences the ultimate disposition of these matters will not
have material adverse effect on its Financial Statements.
19 Taro Pharmaceutical Industries Ltd (Taro), a pharmaceutical company,
incorporated in Israel became a subsidiary of the Company on September
20 As per the best estimate of the management, no provision is required
to be made as per Accounting Standard (AS) 29 as notified by Companies
(Accounting Standards) Rules, 2006, in respect of any present
obligation as a result of a past event that could lead to a probable
outflow of resources, which would be required to settle the obligation.
22 The Company enters into Forward Exchange Contracts being derivative
instruments, which are not intended for trading or speculative
purposes, but for hedge purposes, to establish the amount of reporting
currency required or available at the settlement date.
23 Previous years'' figures are restated / regrouped / rearranged
wherever necessary in order to conform to current years'' groupings and
Annexure ‘A'' to Notes on Account
Names of related parties and description of relationship
Alkaloida Chemical Company Zrt
Caraco Pharmaceutical Laboratories Ltd.
Chattem Chemical Inc.
Green Eco Development Centre Ltd.
OOO “Sun Pharmaceutical Industries” Ltd.
Sun Farmaceutica Ltda (upto 30th September, 2010)
TKS Farmaceutica Ltda.
Sun Pharma De Mexico S.A. DE C.V.
Sun Pharma De Venezuela, CA
Sun Pharma Global Inc.
Sun Pharmaceutical (Bangladesh) Ltd.
Sun Pharmaceutical Industries (Europe) B.V.
Sun Pharmaceutical Industries Inc.
Sun Pharmaceutical Spain, S.L.
Sun Pharmaceuticals France
Sun Pharmaceuticals Germany GmbH
Sun Pharma Global (FZE)
Sun Pharmaceuticals Italia S.R.L.
Sun Pharmaceuticals UK Ltd.
Taro Pharmaeutical Industries Ltd.
Sun Pharmaceutical Industries (Australia) Pty. Ltd.
Aditya Acquisition Company Ltd.
Sun Pharmaceuticals (SA) (Pty) Ltd.
Sun Global Canada Pty Ltd.
Sun Pharmaceutical Peru S.A.C.
Taro Development Corporation
Sun Development Corporation I (upto 20th September, 2010)
ZAO Sun Pharma Industries Ltd.
SPIL De Mexico S.A. DE C.V.
Caraco Pharma Inc.
3 Sky Line LLC
One Commerce Drive LLC
Taro Healthcare Ltd.
Taro Hungary Intellectual Property Licensing LLC
Taro Industries Ltd.
Taro International Ltd - Isaral
Taro Laboratories Ltd.
Taro Manufacturing Ltd.
Taro Pharmaceutical INC.
Taro Pharmaceutical India Pvt. Ltd.
Taro Pharmaceutical Laboratories INC.
Taro Pharmaceutical U.S.A., INC.
Taro Pharmaceuticals Europe B.V.
Taro Pharmaceuticals Ireland Ltd.
Taro Pharmaceuticals North America INC
Taro Pharmaceuticals UK Ltd.
Taro Research Institute Ltd.
Morley and Company Inc.
Sun Laboratories FZE
Taro Pharmaceuticals Canada Ltd.
Sun Laboratories Inc.
Taro International Ltd - UK
2. Controlled Entity
Sun Pharma Exports
Sun Pharmaceutical Industries
Sun Pharma Sikkim
Sun Pharma Drugs
Universal Enterprise Pvt. Ltd.
3. Key Management Personnel
Mr. Dilip S. Shanghvi Chairman & Managing Director
Mr. Sudhir V. Valia Wholetime Director
Mr. Sailesh T. Desai Wholetime Director
Mr. S. Kalyanasundaram Chief Executive Officer and Wholetime Director
4. Relatives of Key Management Personnel
Mr. Aalok Shanghvi Son of Chairman and Managing Director
Ms. Khyati Valia Daughter of Wholetime Director
5. Enterprise under significant Influence of Key Management Personnel
or their relatives
Sun Petrochemicals Pvt. Ltd.
Navjivan Rasayan (Gujarat) Pvt. Ltd.
Sun Pharma Advanced Research Company Ltd.