Directors’ Report

Your Directors are pleased to recommend an equity dividend of Rs.13.75 per equity share of face value Rs.5/- each (previous year Rs.10.50 per equity share of face value Rs.5/- each) for the year ended 31st March, 2009.

The management discussion and analysis on the operations of the Company is provided in a separate section and forms part of this report.

A committed human capital of over 8000 multi-cultural employees have been pushing boundaries of your aspirational organisation to maximize opportunities across our corporat office, two R&D centres & 19 plants (including associate companies) spread across three continents. The potential and ability to deliver consistently is established by our remarkable team, evident from our consistent growth. The company recognizes the importance and contribution of human capital and therefore appreciates and motivates them to pursue excellence. Focused efforts to develop and nurture human capital through in-house, external professional development programmes and on-job training are used for upgrading technical, marketing and management skills. Performance orientation and ethics are high priority areas. The work environment and career opportunities help retain talent. Your Directors recognize the team's valuable contribution and place on record their appreciation for Team Sun Pharma. Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

The additional information relating to energy conservation, technology absorption, foreign exchange earning and outgo, pursuant to Section 217(1)(e) of the Companies Act 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given in Annexure and forms part of this Report.

Report on Corporate Governance and Certificate dated June 24, 2009 of the auditors of your Company regarding compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with stock exchanges, are enclosed.

The Ministry of Corporate Affairs, Government of India, vide order No. 47/447/2009-CL-III dated June 18, 2009 has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in subsection (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said order, is disclosed in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company and its subsidiaries who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office & Corporate / Head Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies.

The banks in consortium continue to offer their highest rating to your Company enabling it to source funds from banks at attractive rates of interest. CRISIL continued to reaffirm their highest rating of “P1+”, for your Company's Short Term Borrowing Programme throughout the year. The Company does not offer any Fixed Deposit scheme.

Your organization has identified health, education, disaster relief and civic utilities around the plants and research centers as areas where assistance is provided on a need-based and case to case basis.

Shri Dilip S. Shanghvi and Shri Keki Minoo Mistry retire by rotation and being eligible.

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed: (i) that in the preparation of the annual accounts for the financial year ended 31st March, 2009, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and on the profit of the Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and,

(iv) that the Directors have prepared the annual accounts for the financial year ended 31st March, 2009 on a 'going concern' basis.

Your Company's auditors, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming Annual General Meeting. Your Company has received a letter from them to the effect that their re-appointment, if made, will be in accordance with the provisions of Section 224(1-B) of the Companies Act, 1956.

Your Directors wish to thank all stakeholders and business partners, your Company's bankers, financial institutions, medical profession and business associates for their continued support and valuable co-operation. The Directors also wish to express their gratitude to investors for the faith that they continue to repose in the Company.

For and on behalf of the Board of Directors
Dilip S. Shanghvi
Chairman & Managing Director
June 20, 2009.
Mumbai