1 SIGNIFICANT ACCOUNTING POLICIES

I Basis of Accounting

These financial statements are brpared under historical cost convention on an accrual basis in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year.

II Use of estimates

The brsentation of financial statements in conformity with the generally accepted accounting principles in India requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known / materialised.

III Fixed Assets and Debrciation / Amortisation

Fixed Assets including intangible assets are stated at historical cost (net of cenvat credit) less accumulated debrciation/ amortisation thereon and impairment losses, if any. Debrciation on tangible assets is provided on straight line method on the basis of useful lives of fixed assets as indicated in Part C of Schedule II of the Companies Act, 2013 and amendment thereto vide notification dated August 29, 2014 issued by Ministry of Corporate Affairs. Assets costing X 5,000/- or less are charged off as expense in the year of purchase. Intangible assets consisting of trademarks, designs, technical knowhow, non-compete fees and other intangible assets, including computer software, are amortised on straight line method from the date they are available for use, over the useful life of the assets (5-20 years), as estimated by the Management considering the terms of agreement. Leasehold land is amortised over the period of lease.

IV Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating lease. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term.

V Revenue Recognition

Sale of products is recognised when risks and rewards of ownership of the products are passed on to the customers, which is generally on despatch of products. Export sales are recognised on the basis of Bill of lading / Airway bill. Sales include delayed payment charges and are stated net of returns including provision made on account of estimated breakages and expiry date based on past experience, applicable discounts, and VAT / Sales Tax, if any. Other operating income is recognised on an accrual basis or in accordance with the terms of the relevant agreements, if any.

VI Investments

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair value. Long Term Investments are stated at cost less provision, if any, for other than temporary diminution in value.

VII Inventories

Inventories consisting of raw and packing materials, other materials and consumables including R&D materials, work-in-progress, stock-in-trade and finished goods are stated at lower of cost and net realisable value. The cost is determined based on weighted average method, except in case of certain raw and packing materials specific identification method is applied and in respect of certain other materials and consumables FIFO method is applied.

VIII Research and Development

The research and development cost is accounted in accordance with Accounting Standard (AS) 26 'Intangible Assets'. All related revenue expenditure incurred on original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding up to the time when it is possible to demonstrate probable future economic benefits, is recognised as research expenses and charged off to the Statement of Profit and Loss, as incurred. All subsequent expenditure incurred for product development on the application of research findings or other knowledge upon demonstration of probability of future economic benefits, prior to the commencement of production, to the extent identifiable and possible to segregate are accumulated and carried forward as development expenditure under Intangible assets under development, to be capitalised as an intangible asset on completion of the project. In case a project does not proceed as per expectations / plans, the same is abandoned and the amount classified as development expenditure under Intangible assets under development is charged off to the Statement of Profit and Loss.

IX Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate that approximates the actual rate brvailing at the date of the transaction. Monetary items denominated in foreign currency at the year end are translated at year end rates. Non monetary items which are carried in terms of historical cost denominated in foreign currency, are reported using the exchange rate at the date of transactions. In respect of monetary items, which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognised as exchange difference and the brmium on such forward contracts is recognised over the life of the forward contract. The exchange differences arising on settlement / translation are recognised in the Statement of Profit and Loss.

X Derivative Accounting:

Derivative Instruments entered into for hedging the foreign currency fluctuation risk / interest rate risk are accounted for on the principles of prudence as enunciated in Accounting Standard (AS) 1 "Disclosure of Accounting Policies". Pursuant to this, losses, if any, on Mark to Market basis, are recognised in the Statement of Profit and Loss and gains are not recognised.

XI Taxes on Income

Provision for tax comprises of Current Tax and Deferred Tax. Current Tax provision is made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred tax resulting from ""timing differences"" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward for timing differences of items other than unabsorbed debrciation and accumulated losses only to the extent that there is a reasonable certainty that the assets can be realised in future. However, if there is unabsorbed debrciation or carry forward of losses deferred tax assets are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realise the assets. Deferred tax assets are reviewed as at each Balance sheet date for their realisability.

Minimum Alternate Tax ('MAT') under the provisions of the Income-tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Income-tax Act, 1961 in respect of MAT paid is recognised as an 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.

XII Employee Benefits

(a) The Company's contribution in respect of provident fund and other funds is charged to the Statement of Profit and Loss each year. With respect to certain employees contribution is made to the provident fund trust maintained by the Company. Provident fund liability for the trust is as determined on actuarial basis by the independent valuer is charged to the Statement of Profit and Loss.

(b) With respect to gratuity liability, Company contributes to Life Insurance Corporation of India (LIC) under LIC's Group Gratuity policy except for certain employees, the gratuity benefit of retirement plan where contribution is made to a gratuity fund established as a trust. Gratuity liability as determined on actuarial basis by the independent valuer is charged to the Statement of Profit and Loss.

(c) Pension plan, a defined benefit retirement plan, provides for lump sum payment to eligible employees at retirement. The pension liability, determined on actuarial basis by an independent valuer, is charged to the Statement of Profit and Loss.

(d) Liability for accumulated compensated absences of employees being other long term employee benefit is ascertained for on actuarial valuation basis and provided for as per the Company rules.

XIII Employee Stock Option based Compensation

With respect to employee stock option, the fair value of the options is calculated by using Black Scholes pricing model, in respect of the number of options that are expected to ultimately vest. Such cost is recognised on a straight line basis over the period over which the employees would become unconditionally entitled to apply for the shares. The cost recognised at any date at least equals the fair value of the vested portion of the option at the date. Adjustment, if any, for difference in initial estimate for number of options that are expected to ultimately vest and related actual experience is recognised in the Statement of Profit and Loss of that period. In respect of vested options that expire unexercised, the cost is reversed in the Statement of Profit and Loss of that period.

XIV Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualifying assets upto the date of capitalisation of such assets are capitalised and added to the cost of asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

XV Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate of the amount of the obligation can be made. 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 can not be made. Contingent Assets are not recognised in the financial statements.

XVI Government Grants / Subsidy

Government grants, if any, are accounted when there is reasonable assurance that the enterprise will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made. Capital subsidy in nature of government grants related to specific fixed assets is accounted for where collection is reasonably certain and the same is shown as a deduction from the gross value of the asset concerned in arriving at its book value and accordingly the debrciation is provided on the reduced book value.

XVII Impairment of Assets

The Company assesses, at each Balance Sheet date, whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a brviously assessed impairment loss no longer exists or may have decreased, the recoverable amount is reassessed and the asset is reflected at the lower of

1 ACCOUNTING STANDARD (AS-15) ON EMPLOYEE BENEFITS

Contributions are made to Recognised Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make brdetermined 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 X 377.8 Million (Previous year X 118.5 Million)

2 Pursuant to the Scheme of Arrangement u/s 391 to 394 of the Companies Act 1956 for amalgamation of erstwhile Ranbaxy Laboratories Ltd (RLL) with the Company as sanctioned by the Hon'ble High Court of Gujarat and Hon'ble High Court of Punjab and Haryana on March 24, 2015 (effective date) all the assets, liabilities and reserves of RLL were transferred to and vested in the Company with effect from 1st April 2014, the appointed date. RLL along with its subsidiaries and associates was operating as an integrated international pharmaceutical organisation with business encompassing the entire value chain in the production, marketing and distribution of pharmaceutical products. The scheme has accordingly been given effect to in these financial statements.

The amalgamation has been accounted for under the "Pooling of Interest Method" as brscribed under Accounting Standard 14-"Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified under section 133 of the Companies Act 2013 read with Rule 7 of the Companies Accounts Rules 2014. Accordingly and giving effect in compliance of the Scheme of Arrangement all the assets, liabilities and reserves of RLL, now considered a division of the Company, were recorded in the books of the Company at their carrying amounts and the form as at the appointed date in the books of RLL.

On April 10, 2015, In terms of the Scheme of Arrangement 0.80 equity share of X 1 each (Number of Shares 334,956,764 including 187,583 Shares held by ESOP trust) of the Company has been allotted to the shareholders of RLL for every 1 share of X 5 each (Number of Shares 418,461,476 including 234,479 shares held by ESOP trust) held by them in the share capital of RLL, after cancellation of 6,967,542 shares of RLL. These shares have been considered for the purpose of calculation of earnings per share appropriately. An amount of X 1,792.4 Million being the excess of the amount recorded as share capital to be issued by the Company over the amount of the share capital of erstwhile RLL has been credited to Capital Reserve.

3 RLL had early adopted Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" and AS 31 "Financial Instruments: Presentation" for accounting of derivative instruments which are outside the scope of Accounting Standard 11 'The Effects of Changes in Foreign Exchange Rates' such as forward contracts to hedge highly probable forecast transactions, option contracts, currency swaps, interest rate swaps etc. In order to align with the Company's policy, derivative instruments are now accounted for in accordance with the announcement issued by the Institute of Chartered Accountants of India dated March 28, 2008. On the principles of prudence as enunciated in Accounting Standard 1 "Disclosure of Accounting Policies" which requires to provide losses in respect of all outstanding derivative instruments at the balance sheet date by marking them to market. Accordingly, the unrealized MTM gain of Rs. 905.4 Million as at April 1, 2014 has been reversed and MTM gain as at March 31, 2015 amounting to  Rs.  1,121.0 Million has not been recognized in these financial statements

4 Out of a MAT credit of Rs.  8,222.7 Million which was written down by the erstwhile RLL during the quarter ended December 31, 2014, an amount of Rs.  7,517.0 Million has been recognized by the Company, on a reassessment by the Management at the year-end, based on convincing evidence that the combined amalgamated entity would pay normal income tax during the specified period and would therefore be able to utilize the MAT credit so recognised. Current tax for the year also includes Rs.  284.7 Million pertaining to earlier years.

5 Pursuant to the Scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956 and u/s 52 of the Companies Act, 2013 for amalgamation of erstwhile Sun Pharma Global Inc.(Transferor Company) with the Company, with effect from January 1, 2015 (appointed date), as sanctioned by the Hon'ble High Court of Gujarat, filed with the Registrar of Companies on August 6, 2015 (effective date), all the assets, liabilities, reserves and surplus of Transferor Company were transferred to and vested in the Company without any consideration, on going concern basis. Transferor Company is a wholly owned subsidiary of the company and was engaged in the business activities of strategic and non-strategic investments and financing mainly to its group subsidiary or associate companies worldwide. The amalgamation has been accounted for under the "Pooling of Interest Method" as brscribed under Accounting Standard 14- "Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies Accounts Rules 2014. The scheme has been given effect to in these financial statements and accordingly; (i) The Financial Statements for the year ended March 31, 2015 which were earlier approved by Board of Directors on May 29, 2015 and audited by the statutory auditors of the Company have been revised. (ii) All the assets, liabilities, reserves and surplus of Transferor Company were recorded in the books of the Company at their carrying amounts and in the same form as at the appointed date. Transferor Company being a wholly owned subsidiary of the Company neither any shares are required to be issued nor any consideration is paid. The Equity Share Capital, Preference Share Capital, Share application money pending allotment and securities brmium account of the Transferor Company and the carrying value of investment in Equity Shares, Preference Shares and Share application money of the Transferor Company in the books of the Transferee Company stands cancelled. Accordingly the difference of X 6,498.8 Million between the amount of share capital of the Transferor Company and the consideration being Nil, after adjusting for the carrying value of Investments in the books of the Company is credited to Capital Reserve.

With regard to tangible assets, the Company has adopted the useful life of fixed assets as indicated in Part C of Schedule II of the Companies Act, 2013 and amendment thereto vide notification dated August 29, 2014 issued by the Ministry of Corporate Affairs. Pursuant to the transition provisions brscribed in Schedule II to the Companies Act, 2013, the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, have been fully debrciated and an amount of X 491.8 Million has been charged to the Statement of Profit and Loss. The debrciation expense in the Statement of Profit and Loss for the year is higher by Rs.  3,069.9 Million consequent to the change in the useful life of the assets.

In March 2014, the US FDA issued an import alert to the Company for its cephalosporin facility located at Karkhadi, Gujarat in India. The warning letter pertaining to this import alert was issued by the US FDA in May 2014. The letter identifies practices at the facility which are non-compliant with current Good Manufacturing Practice (cGMP) regulations. The Company remains fully committed to compliance and corrective steps are on-going to address the observations made by the US FDA. The Company is committed to working co-operatively and expeditiously with the US FDA to resolve the matters indicated in its letter. Until these matters are resolved to the satisfaction of the US FDA, the US FDA may, in the near term, withhold approval of pending new drug applications from this facility. The contribution of this facility to Company's revenues is not significant.

The US FDA had, on January 23, 2014, prohibited from manufacturing and distributing APIs from its Toansa manufacturing facility and finished drug products containing APIs manufactured at this facility into the USA regulated market. Consequentially, the Toansa manufacturing facility is subject to certain terms of the Consent decree of permanent injunction entered into by the Company in January 2012.

In addition, the Department of Justice of the USA ('US DOJ'), United States Attorney's Office for the District of New Jersey had also issued an administrative subpoena dated March 13, 2014 seeking information primarily related to Toansa manufacturing facility for which a Form 483 containing findings of the US FDA was issued in January 2014. The Company is fully cooperating with this information request and is in dialogue with the US DOJ for submission of the requisite information.

In the absence of net profits in the Company for the year ended March 31, 2015 remuneration to the Managing Director and a Whole-time Director of the Company for the year ended March 31, 2015 is in excess of the limits specified under Schedule V of the Companies Act, 2013 by X 20.7 Million. In this regard the Company has made necessary applications to the Central Government for approving of the amounts of maximum remuneration payable, which includes the excess amounts already paid / provided. Consequent to giving effect to the scheme of arrangement for the merger of Specified Undertaking of Sun Pharma Global FZE into the Company effective from May 1, 2013, resulting in the absence of net profits in the Company for the brvious year ended March 31, 2014 (i) remuneration to the Managing Director and the Whole-time Directors of the Company has exceeded the limits specified under Schedule XIII to the Companies Act, 1956 by Rs.  44.7 Million; and (ii) commission of Rs.  6.4 Million for the brvious year ended

March 31, 2014, to the Non-Executive Directors of the Company is in excess, since there is absence of net profits for the brvious year under section 309(4) read with section 309(5) of the Companies Act, 1956. The Company has made necessary applications to the Central Government for the waiver of the excess remuneration and commission for the brvious year ended March 31, 2014. The Company has obtained approval from the shareholders of the Company in respect of the aforesaid remuneration and commission, as applicable for the years March 31, 2014 and 2015. The approval from the Central Government of India is awaited in respect of the said applications.

6 EMPLOYEE SHARE-BASED PAYMENT PLANS

Erstwhile Ranbaxy Laboratories Limited had the Employee Stock Option Schemes ("ESOSs") for the grant of stock options to its eligible employees and Directors of the Company and of its subsidiaries. The ESOSs are used to be administered by the Compensation Committee ("Committee"). Options are used to be granted at the discretion of the Committee to the selected employees depending upon certain criterion. As at 31 March 2015, there were two ESOSs, namely, "ESOS 2005" and "ESOP 2011". ESOS II discontinued on January 17, 2015.

ESOS II provided that the grant price of options would be determined at the average of the daily closing price of the erstwhile RLL's equity shares on the NSE during a period of 26 weeks brceding the date of the grant. ESOS 2005 provided that the grant price of options would be the latest available closing price on the stock exchange on which the shares of the erstwhile RLL were listed, prior to the date of the meeting of the Committee in which the options were granted. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date shall be considered. The options vested evenly over a period of five years from the date of grant. Options lapse, if they were not exercised prior to the expiry date, which was ten years from the date of grant.

During the year ended December 31, 2011, a new ESOS scheme was introduced by erstwhile RLL viz "ESOP 2011" with effect from July 01, 2011. ESOP - 2011 provides that the grant price will be the face value of the equity share i.e. Rs.  5 per share. The options vested evenly over a period of three years from the date of grant. Options lapsed, if they were not exercised prior to the expiry date, which was three months from the date of the vesting. An ESOP Trust had been formed to administer ESOP-2011 scheme. Shares issued to the ESOP Trust were allocated to the eligible employees upon exercise of stock options from time to time. As per the opinion of the Expert Advisory Committee (EAC) of The Institute of Chartered Accountants of India, as on the reporting date, the shares issued to an ESOP Trust but yet to be allocated to the employees be shown as a deduction from the Share Capital with a corresponding adjustment to the loan receivable from ESOP Trust. Accordingly, the Company has adjusted shares held by the ESOP Trust on the reporting date as a deduction from the Share Suspense Account.

Pursuant to the Scheme of Amalgamation, Sun Pharmaceutical Industries Limited ('transferee company') formulated two Employee Stock Option Schemes namely (i) SUN Employee Stock Option Scheme-2015 (ii) SUN Employee Stock Option Plan-2015 (ESOS Schemes) among other things to grant to the eligible employees of erstwhile RLL ('transferor company') stock options. Further, the number of transferee options issued shall equal to the product of number of transferor options outstanding on effectiveness of Scheme multiplied by the Share exchange ratio (0.80) and each transferee option shall have an exercise price per equity share equal to transferor option exercise price per equity shares divided by the share exchange ratio (0.80) and fractions rounded off to the next higher whole number. The terms and conditions of ESOS Schemes of Sun Pharma are not less favourable than those of ESOS Schemes of erstwhile RLL. Under the ESOS Schemes of Sun Pharma, stock options have been issued to the eligible employees of erstwhile RLL.

7 DETAILS OF LONG TERM BORROWINGS AND CURRENT MATURITIES OF LONG TERM DEBT (included under Other Current Liabilities)

(I) External Commercial Borrowings (ECBs) has 6 loans of USD 288.0 Million equivalent to Rs.  18,001.4 Million (Previous Year Nil)

[(included in long term borrowings Rs.  11,625.9 Million (Previous Year Nil) and Rs.  6,375.5 Million (Previous Year Nil) in current maturity of long term debt.)] For the loans outstanding as at March 31, 2015, the terms of repayment for borrowings are as follows:

(a) USD 100 Million equivalent to Rs.  6,250.5 Million (Previous Year Nil). The loan was taken on June 4, 2013 and is repayable on June 3, 2018.

(b) USD 50 Million equivalent to Rs.  3,125.3 Million (Previous Year Nil). The loan was taken on September 20, 2012 and is repayable on September 19, 2017.

(c) USD 30 Million equivalent to Rs. 1,875.2 Million (Previous Year Nil). The loan was taken on June 30, 2011 and is repayable in 3 equal installments at the end of 4th year, 5th year and 6th year.

(d) USD 30 Million equivalent to Rs.  1,875.2 Million (Previous Year Nil). The loan was taken on September 9, 2010 and is repayable on September 8, 2015.

(e) USD 50 Million equivalent to Rs.  3,125.3 Million (Previous Year Nil). The loan was taken on August 12, 2010 and is repayable on August 11, 2015.

(f) USD 28 Million equivalent to Rs.  1,750.1 Million (Previous Year Nil). Loan amounting to USD 40 Million equivalent to Rs.  2,500. 2 Million (Previous Year Nil) was taken on March 25, 2011 and is repayable fully by March 24, 2017 in 3 installments viz., 30% each of the drawn amount at the end of 4th year and 5th year each and 40% of the drawn amount at the end of the 6th year. First installment of USD 12 Million equivalent to Rs.  747.91 Million (Previous Year Nil) has been repaid in current year. The Company has not defaulted on repayment of loan and interest during the year.

(II) Rs.  5,000 Million (Previous Year Nil) redeemable non-convertible debentures issued by erstwhile RLL on November 23, 2012 for a period of 36 months at a coupon rate of 9.20% p.a. Such debentures are secured by a pari-passu first ranking charge on the Company's specified fixed assets so as to provide a fixed asset cover of 1.25x and are listed on the National Stock Exchange.

(III) Loan of Rs.  2,500 Million (Previous Year Nil). The loan is repayable on October 2, 2015. The Company has not defaulted on repayment of loan and interest during the year.

Previous year figures are regrouped wherever necessary. In view of the amalgamation as referred in Note 48 and Note 51 the figures for the current year are not comparable with the corresponding figures of the brvious year.