Sun Pharmaceutical Industries Limited (SUNPHARMA) Earnings Call Transcript & Summary

Good afternoon. I, Sunil Ajmera, Company Secretary and Compliance Officer, welcome all the members and Mr. Israel Makov, Chairman, and the other Board members of the company at this 29th Annual General Meeting of Sun Pharmaceutical Industries Limited. In compliance with circulars issued by the Ministry of Corporate Affairs, Securities and Exchange Board of India, this meeting is being conducted through video conferencing or other audio-visual means. For the benefit of all, let me introduce to you the directors who have joined this meeting. Mr. Israel Makov, Chairman of the company, he is attending this meeting from Israel; Mr. Dilip S. Shanghvi, Managing Director of the company and Chairman of the Corporate Social Responsibility Committee and Risk Management Committee. He is attending this meeting from Mumbai; Mr. Sailesh T. Desai, Whole-Time Director, he is attending from Mumbai; Mr. Kalyanasundaram Subramanian, Whole-Time Director, he is attending from Bengaluru; Mr. Sudhir V. Valia, Non-Executive Director, is attending this meeting from Mumbai; Mr. Gautam Doshi, Independent Director and Chairman of the Audit Committee and Stakeholders Relationship Committee, he is attending this meeting from London. Ms. Rekha Sethi, Independent Director and Chairperson of the Nomination and the Remuneration Committee, she's attending from Delhi; Mr. Vivek Chaand Sehgal, Independent Director, is attending this meeting from Dubai; Dr. Pawan Goenka, Independent Director, is attending this meeting from Mumbai; Ms. Rama Bijapurkar , Independent Director, is attending this meeting from Mumbai. Apart from the directors, Mr. C. S. Muralidharan, Chief Financial Officer; Mr. Ashok Bhuta, Compliance Officer, have also joined this meeting from Mumbai. Other officers of the company have also joined the meeting through video conferencing from various locations. The representatives from SRBC & CO LLP Statutory Auditors, and from KJB & Co LLP, Secretarial Auditors and from B.M. Sharma & Associates, Cost Auditors of the company have also joined this meeting. All the members attending this meeting through video conferencing are being placed on mute by default to avoid any background noise during the meeting. Those shareholders who have registered to speak at the meeting will be given an opportunity to speak and express their views after all the regulations as per the office of AGM have been placed. In case, the shareholders who have registered to speak are not available at the time of their turn, the next shareholder in the queue will be given a chance to speak. The shareholders who speak are requested to express their views within the time limit of the meeting, members who have not registered themselves as speakers, but have any queries, may write to the company and we shall suitably reply to them in due course. With that, I'll now hand over to our Chairman, Mr. Israel Makov. Sir, you're on mute. Sir, you are -- please unmute. We can't hear you sir.

You hear me now?

Yes, sir.

Yes?

Yes, sir.

Okay. Sorry. Dear shareholders, Good afternoon. I hope you all are safe and doing well. I welcome all the shareholders to this 29th Annual General Meeting of the company, which is being conducted through video conferencing and other video-visual means. I also welcome my colleagues on the Board. We have requisite quorum present to conduct the proceedings of this meeting. The company has taken adequate and feasible steps to enable shareholders to participate in the meeting through video conferencing and cast their vote by electronic means. The company has appointed a Central Depository Services, CDSL, to provide facility of video conferencing and e-voting. All the books record registered as required under the Company's Act 2013 and other applicable laws and documents referred to in the notice of the 29th Annual General Meeting are available for inspection electronically during the meeting. I would like to inform the shareholders that if at any time during the meeting due to technical issues, the connections from my side is interrupted, and Mr. Dilip Shanghvi, Managing Director, will Chair of the proceedings and till my connection is restored. In case Mr. Shanghvi's connection is also interrupted at that time, then Mr. Gautam Doshi, Director, will Chair the meeting. As electronically -- as the electronic copy of the annual report for the year 2021, along with the notice convening this 29th Annual General Meeting, has already been e-mailed to the members of the company whose e-mail ID were available. With your permission, I should take the notice of the 29th Annual General Meeting as read. The auditor's report on the stand-alone and consolidated financial statements for the financial year 2021 does not contain any qualifications, observations or comments on financial transactions or matters which have any adverse effect on the functioning of the company. Accordingly, the said report is not required to be read out in the meeting as provided under the Company's Act 2013. The remarks stated in the secretarial audit report of the financial year 2021 are self-explanatory and do not require any further explanation. The secretarial audit report does not contain any other qualifications, observations or comments or other remarks, which had any material adverse effect on the company -- of the company. In accordance with the provision of the Companies Act 2013, I now request Mr. Ashok Bhuta to read out the relevant paragraph of the curtailed audit report for the financial year 2021.

Sure, sir. The company has complied with the provisions of the act, rules, regulations, guidelines, et cetera. Mentioned above, however, in respect of compliances relating to listed commercial papers in questions of SEBI's CP circulars, namely, A, while the company has fulfilled the payment obligations as per the redemption schedule, there are instances of delay in filing of certificate as required under Para 2.4 of Annexure II of SEBI's CP circulars, which was inadvertent delay as informed to us; and B, the company has annually submitted the quarterly certificates required under Para 4 of Annexure II 2 of SEBI's CP circulars, presuming that these compliances can be done annually. Thank you.

Okay. Dear fellow shareholders, on behalf of the Board of Directors, I welcome all of you to the 29th AGM of your company. This meeting is being held virtually due to the COVID-19 pandemic. I hope you and your family members are safe and in sound health. The pharmaceutical industry is playing an important role is at the front run of the fight pilot against the global COVID-19 pandemic. From adapting to changing dynamics to ensuring business continuity, the industry quickly responded to the challenges of the global pandemic, so that patients continue to get access to their medication. Pharmaceutical companies have also applied multiple drugs used in treatment of COVID-19 and associated ailments. Some companies have developed COVID-19 vaccines in record time. At Sun Pharma, we were quick to respond to the challenges of the pandemic and adapt to the new normal. We have adopted a multipronged approach to overcome the challenges of the COVID-19 pandemic. The company has focused on: one, ensuring continued supply of medicine and maintaining continuity of manufacturing and global supply chain while adhering to all COVID-19 safety protocols; two, increased focus on use of technology tools to facilitate business; three, focused on the safety and well-being of employees, including vaccinating them and their immediate family members. Four, enhancing supply of multiple therapeutics used in treatment of a COVID-19 and associated ailments. The ration of COVID-19 medicines and other items like PPE kits, masks, sanitizers, gloves and food items, et cetera. Let me now share some highlights of the global pharmaceutical industry. The global pharmaceutical market is estimated to reach about USD 1.6 trillion by 2025, growing at a compounded rate of approximately 3% to 6%. This excludes the spend on COVID-19 vaccination. The main growth driver will be sustained growth in the emerging markets and the consistent launch of high-end specialty innovative products in developed markets. The U.S., the largest pharmaceutical market, is expected to grow at about 2 to 5 CAGR -- percent CAGR to USD 605 million to USD 635 billion by 2025, with a growth driven mainly by new innovative specialty products. The generic market in the U.S. will continue to be an important part of the overall effort to control health care core, giving you the company's strong presence in the U.S. generic -- generics market and the niche presence in some of specialty segments, it is well positioned to exploit the growth opportunity in the U.S. market. In the Indian, pharmaceutical market is estimated to reach about USD 28 billion to USD 32 billion by 2025, recording 8% to 10% compounded growth. Rising affordability, growing incidence of chronic ailments increasing access to modern medicine and improving health insurance coverage will be the key drivers of this growth. Sun Pharma's top position in India and its brand equity will help to leverage the benefits from this opportunity. The overall pharmaceutical market in emerging markets, including India, is estimated to grow at 7% to 10% CAGR to USD 415 billion to USD 445 billion by 2025. Sun Pharma is one of the largest Indian companies operating in this market and is well positioned to exploit this opportunity. Let me now discuss Sun Pharma's business and review some of our key opportunities, challenges and steps ahead. In the financial year 2021, government globally were forced to resort to stringent lockdowns and restrictions to prevent the spread of the pandemic, which were gradually relaxed in the second half of the year. These restrictions resulted in temporary closure of doctor clinics, travel restrictions and significant reduction in patient visit to the doctor's clinic. Non-critical treatments and elective surgeries were postponed. This led to lower demand for pharmaceutical products in the first half of the year, and gradual recovery was witnessed only in the second half. As governments gradually lifted the lockdown restrictions, it is against this backdrop that we reported a 2.5% growth in our overall revenues, which stood at INR 331 billion for the year. The comparable previous year, '19/'20, included a onetime special business in the U.S. And hence, while the U.S. business showed a decline in all our other businesses recorded growth for the full year, despite the challenges related to the global COVID-19 Pandemic. Sun Pharma India business has done well with 6.5% growth for the year, outperforming the average industry growth of 2.1%, driven by our leading presence in chronic segments, coupled with our strong brand equity doctors. Given our distribution to doctors reach, we continue to be a partner of choice for a potential in-licensing of new innovative products from global multinational companies. During the year, we completed the field force expansion in the India business, which further enhances our reach. While our U.S. sales for the year were lowered by 4%, but as stated in previous year, we had a onetime business opportunity, and hence, the numbers are not truly comparable. We are enthused by the momentum of our global specialty business, which grew by 11% to USD 475 million during the year, despite the various challenges resulting from global pandemic. We grew by 5% in emerging markets and by 6.6% in the rest of the world market during the year. Sun Pharma's API business grew by about 2% this year. The API business is of strategic importance since it give us the benefit of vertical integration and ensures consistency of supply chain of critical inputs. We spent approximately INR 21 billion on the R&D, which accounted for about 6.5% of our sales. We continue to be disciplined in identifying future R&D projects for the U.S. generics market and the focus is on developing complex generics. The company continues to fortify its R&D capabilities with focused investment to develop its long-term specialty and complex generics pipeline. Let me now update you on our specialty business. In a year which had multiple challenges due to the global pandemic, we are happy to witness an 11% growth in our global specialty segs. The lockdown restrictions in the U.S. resulted in a reduction in patient footfalls and the postponement of a certain treatment. This impacted our specialty sales in the first half including sales of Ilumya, Cequa and Levulan. It also impacted the ramp-up of ABSORICA, as the -- which we had launched in February 2020. The lockdown restrictions were gradually lifted in the second half, resulting in a recovery in our specialty sales. We undertook multiple initiatives during the year as part of our efforts to build the specialty business. These include: one, Ilumya launched in Japan; Two, during the year, we also reiterated Ilumya's potential through presentation of long-term clinical data at global medical conference; three, positive long-term clinical analysis for Odomzo and Levulan were also presented at medical conferences. We have also continued with our efforts of enhancing the specialty R&D pipeline. Currently -- the pipeline currently has 4 molecules undergoing clinical trials, which include Ilumya, which is currently undergoing Phase III clinical trials for psoriatic arthritis; we commenced Phase II trials of SCD-044 for atopic dermatitis and moderate-to-severe plaque psoriasis. We -- phase II trials for MM-II for knee pain in patients with a symptomatic knee osteoarthritis have also been initiated; our GLP-1R agonist has entered Phase I trial for diabetes. The focused area for our specialty portfolio include the dermatology, ophthalmology and oncology. The strategy is to build a robust portfolio of branded patented products for global markets. Now I will briefly talk about our initiative for improving overall productivity. We continue to focus on improving manufacturing efficiency, optimizing cost, rationalizing generics R&D investment and reducing interest cost. During the year, we have reduced our consolidated debt by about $580 million. And consequently, our interest have also come down. Although it is difficult to give a specific business guidance, given the uncertainty due to the COVID-19 pandemic, I am happy to share an overall outlook of your company. All our businesses are well positioned, and our endeavors will be to grow the overall business. Our strategy of developing the global specialty business as an additional growth engine has started delivering with the ramp-up in specialty revenues. We expect this momentum to continue over the next period. We will continue our R&D investments in developing the complex generics pipeline as well as in building our specialty pipeline in the coming years. We will continue with our efforts towards improving the overall return ratios of the company. We are grateful to our talented and dedicated employees who have put an extraordinarily efforts during the past period to ensure business continuity. We also thank all our frontline warriors for their selfless and tireless efforts in fighting the pandemic. We are also grateful to our Board of Directors for their guidance and support in these uncertain times. We thank all our other stakeholders, including our customers, vendors, business partners, the local community and various regulators for their constant support. Last but not least, we thank all our shareholders, and we hope that you will continue to extend your confidence in us. Thank you very much. And we now continue with the proceedings. And as the members are aware, as the requirements of the SEBI listing regulations 2015 and the Company Act's 2013, remote e-voting facility was made available from August 28 to August 30, '21, to the members to cast their votes on each of the resolutions as set out in the notice of the meeting. Mr. Chintan Goswami, Partner of KJB and aiding him, Mr. Alpeshkumar Panchal of KJB Practicing Company Secretaries, Mumbai are the scrutinizer for the e-voting process. I should now read out the resolutions for the times -- for the items set out in the ordinary business in the notice of this annual general meeting. Item #1a, adopting of the audited stand-alone financial statement of the company for the financial year ended March 31, '21, and the report of the Board of Directors and auditors their own. Resolved that the auditor stand-alone financial statements of the company and the report of the Board of Directors and auditors thereon for the financial year ended March 31, '21, be and are hereby received, considered and adopted. Item #1b, adoption of the audited consolidated financial statements of the company for the financial year ended March 31, '21. Resolved that the audited consolidated financial statement of the company and the report of the auditors thereon for the financial year ended 31 -- March 31, '21, be and are hereby received, considered and adopted. I now move to Item #2 relating to confirmation of an interim dividend and deceleration of final dividend for the financial year 2021. The Board of Directors of the company had in February '21 declared an interim dividend of INR 5.50 per equity share of INR 1 each. The interim dividend was paid on February 17, 2021, to all the shareholders as on the record date of February 10, '21, except for 9,25,000 equity shares on which the dividend was waived to be received by 1 shareholder amounting to INR 50,87,500 only. Further, the Board of Directors had proposed final dividend of INR 2 per equity share for 2021. I now request anyone from the secretarial team to read out the proposed resolution for dividend.

Resolved that, the interim dividend of INR 5.50 per equity share of INR 1 each as declared by the Board of Directors at their meeting held on January 29, 2021, for the financial year ended March 31, 2021, and paid on 2,39,84,09,070 and seventy equity shares of INR 1 each, amounting to 1,39,12,54,835 [indiscernible] hereby conform. Resolved for the final dividend of INR 2 per equity share of INR 1 each, as recommended by the Board of Directors at their meeting held on May 27, 2021, for the financial year ended March 31, 2021, on INR 2,39,93,34,970 equity shares of INR 1 each amounting to INR 4,79,86,69,940 [indiscernible] hereby declared and that the same be paid to the equity shareholders whose names stood in the register of members has beneficial owners as at the close of business hours on August 24, 2021, as for the list provided by NSDL and CDSL in respect of shares held in electronic form and as members -- in the register of members of the company.

Okay. I shall now move to Item #3 relating to the reappointment of Mr. Dilip Shanghvi, who retires by rotation. Resolved that Mr. Dilip Shanghvi, who retires by rotation under Section 152 of the Company's Act 2013 and being eligible for reappointment, has offered himself for reappointment be and is hereby reappointed as the Director of the company liable to retire by rotation. Item #4 relates to reappointment of Mr. Kal, who retires by rotation. Resolved that Mr. Kal Subramanian, who retires by rotation under Section 152 of the Company's Act 2013 and being eligible for appointment, has offered himself for reappointment be and is hereby reappointed as a Director of the company liable to retire by rotation. I now proceed to the special business items. The items listed under special business are: Item #5, ordinary resolution for ratification of remuneration to cost auditors; item #6, special resolution for approval of reappointment and maximum remuneration to Mr. Kal as a Whole-Time Director of the company for a further period of 3 years. Item #7, special resolution for approval of maximum remuneration to Mr. Sailesh Desai for a further period of 3 years. Item #8, ordinary resolution for appointment of Dr. Pawan Goenka as an Independent director of the company for a period of 5 years. Item #9, ordinary resolution for the appointment of Ms. Rama Bijapurkar as an Independent Director for a period of 5 years; Item #10, ordinary resolution for payments of commission to Nonexecutive Directors of the company up to 1% of the net profit of the company. Since the resolutions for these items, along with explanatory statement, are already provided in the notice of this 29th Annual General Meeting, they are not being read out. Now we will take up questions from the shareholders who have registered to speak. We will answer the questions put before the meeting after all the speakers have asked their questions. We can now call out the names of the shareholders who have registered themselves as speakers one by one.

Serial #1. [ Yusuf Yunus Rangwala ].

I am from Mumbai, sir. Hello, I'm speaking from Mumbai, sir, my name is Mr. Yusuf Rangwala. I'm thankful for a 2-time dividend, INR 5.50 and INR 2.50. Sir [Foreign Language] not possible, it will do. And I wish our company, sir. Today, sir, happy Govinda, sir. Wish you a very -- the whole Board -- my Director and my friend, wish you a very happy Govinda, sir. And I wish our company good luck, and I also thank our agents who have taken a good care and good services, sir. Thank you very much. And one more time, I will thank Mr. Ashok sir, who is a very dynamic secretary, sir. [Foreign Language] thank you very much. Jai hind, Jai Maharashta and Jai Gujarat. Thank you very much, sir.

Thank you, Mr. Serial #2. [Celestine Elizabeth Mascarenhas]

Hello, can you hear me? Hello?

Yes, madam.

Am I audible?

Yes.

Yes. Respected Chairman Executive, Israel Makov; MD, Mr. Dilip S. Shanghvi; other honorable directors attending this virtual meet; my fellow shareholders who are attending, my name is [ Mrs. Celestine Elizabeth ]. I am speaking from Mumbai. First of all, I thank the company secretary for sending me e-annual report and also registering me as a speaker. Thank you so much. And also I thank the platform, which has given me this -- to speak in this virtual meet. Now I come to the annual report, which is good, which is self-explanatory, very informative. I thank the secretarial team and the communication team for giving such a good document. Now I come to the working. Working was -- is definitely good because we are getting a dividend of total INR 7.50 for INR 1 share par value, which is definitely good, and market has also started giving now somewhat very good thumbs up. So keep it up, and we see our company growing further more and more, and we should -- Sun Pharma should again become the darling of bourses, I'm waiting for that just like yesterday, the [ Viz Lab ] and others pharmas have become like that. And our Sun Pharma should not lag behind. Now I congratulate for all the awards received, as already given in the annual report, also the CSR work which I appreciate very much and keep it up because these were very difficult COVID days. Now my query, sir. Total global employees are 37,000 in 44 global manufacturing sites across the world. Sir, I would like to know how many were affected by COVID, recovered, fatalities and the vaccination level? And the average age of our employees, and what is the attrition level? Number two, Ilumya is launched in Japan. Ilumya is for severe plaque psoriasis. Sir, when it will be launched in India because for the psoriasis, I think Biocon had also come some time years back. Now I don't know what is the progress of that. And I mean, how effective is this medicine, Ilumya. Now what is the market share of special medicines in India? Sun Pharma has many capabilities for a variety of dosage forms, such as injectables, sprays, ointments, creams, hormones, drug delivery system, tablets, capsules. I would like to know where is our core competence and which will -- which has got a very good margin and which will be very good demand for the future. Sir, we are #1 pharma company and the fourth largest in specialty generic pharma. Sir, how in global -- so how do we see our Indian market for it? Sir, our licensing agreement in SPRC, S-P-R-C and SCD-044, what is the progress of that? Sir, any more acquisition after acquiring Pola Pharma in Japan for inorganic growth? Sir, even earlier days, I remember it was 10 years back, Sun Pharma has been always acquiring some company or the other and really going very much inorganic growth. I remember of [NJ] Pharma and Pradeep. So many companies which were not doing well, our management was very good, and they could do a lot of turnover.

Elizabeth -- madam, just sorry to interrupt. I mean, you have crossed almost 4 minutes because there are other speakers also. So kindly shorten your speech and...

What is the for the next 3 years, especially from the CapEx side? And when will our earlier glory be restored. Thank you very much for giving me this patient hearing and wish you and your team all the best. Thanks a lot.

Thank you, madam. Serial #3, Mr. Kaushik.

I hope am I audible, sir?

Yes.

At the outset, let me introduce myself as Kaushik Sahukar from Mumbai. Good afternoon to all. I hope I am properly audible, sir?

Yes.

Hello?

Yes, sir.

Sir, it gives me joy to say all our beloved Directors, and Chairman Director of [ Food Health ] I remember saying of our grandparents, they used to tell us health is your wealth, the same holds good [Technical Difficulty ] 55% of my body is paralyzed, and this is impacting right hand, my right leg and face. I have not, however, treated this as a hindrance, despite my medical [indiscernible] successfully completed my chartered accountancy course, I just strongly believe that I am self-reliant, self-dependent. I admire the virtue of Sun Pharma that share the same principle of making people self-reliant to your ongoing continuous philanthropic growth to have made and are making a positive change on society. Sir, I appreciate that despite my medical [indiscernible] I still prefer to work, support me and my family rather than expecting to take money from anyone. This shows that I am self-reliant. Sir, If our company can show some generosity and shower some blessings, I think it can change my life too. change my life, too. Sir, are you supporting -- physically every person is [indiscernible] activity in the eyes of our company. And our company supports that [indiscernible] act I had directly approached our company to work on therapeutic area. Unfortunately, it cannot progressed. I would, therefore, like to use this forum to reach our and [indiscernible] that we could work together. I'm confident that you would find much of [indiscernible] value add to our esteemed organization. And we [indiscernible] condition and will support certification work. I would like to thank the Board of Directors for giving opportunity to speak and also patiently hearing me. I will like to give special thanks to entire quarter secretary team, including Mr. Ashok Bhuta. It was only their efforts which have made possible for me. Please accept my big thanks from bottom of the heart. I'm also hopeful that company will empathize with me and will seriously consider me. Can I expect the possible response from our company? And I support all the resolutions have already voted on the favor. I will -- and I have been and always will be proud shareholder of our company. And sir, am I properly audible. Thank you, sir.

Thank you, Mr. Serial #4, Sravan Kumar Agarwal.

Hello? Hello?

We can hear you.

Can you hear me?

Yes, we can hear you.

First of all, I thank the company's secretary and his team for sending me the link. And next time, you don't keep it in CDSL. CDSL doesn't give that time proper full day chart. They only give half an hour before that you can join. And since I got the link, there's more no problem. And I got nothing else to say and that much. Next time, I'll speak properly. Thank you very much.

Thank you, sir.

Serial #5, Shri [ Mahendra Pal Ludhianwi ].

[Technical Difficulty]

No, there is a echo?

[Technical Difficulty]

Hello? Yes. [ Santosh ], we [indiscernible].

We can't hear you.

Sir, we can't hear you. There's a lot of disturbance. Or you can reconnect otherwise. We'll take up later.

Yes.

Is he reconnecting? Is he reconnecting? We're unable to hear. So we will go to the sixth then. We can connect later.

Serial #6, [ Aswini Dasania ].

Chairman, sir. Yes, can you see me and hear me?

Yes, yes.

Okay. Sir, I'm Aswini from Bombay. Sir, welcome, Mr. Pawan Goenka and Ms. Rama Bijapurkar. Both are capable people and they'll contribute to the company. Sir, I congratulate the entire management on excellent profit before exceptional items and tax. Every time, exceptional items reduce our profits, never increase them. Sir, Taro has paid INR 3,000 crore to Department of Justice for conduct between 2013 and '15. Was Taro a subsidiary from '13 to '15%? If it was not a subsidiary, is it not possible to claim from previous owners? If it was our subsidiary, why this conduct of our subsidiary? Sir, our company has increased dividend from INR 4 to INR 7.5 in spite of reduced profits. What do you see in the company, any exceptional thing which you see in the company to be so optimist to increase the dividend almost double? Sir, promoter volume is 54%. So what are your plans for increasing? Sir, we have an investment in Zenotech? Sir, what are our plans for Zenotech? Sir, in skin segment, your products only in clinical dermatology, not in cosmetology. Products like chemical peels, Botox, fillers, face wash. Companies like L'Oréal are making a lot of money. Then why can we go into such items? Of course, you'll have to spend on advertisement. And sir, do you have any vaccines for COVID because ours is the biggest company, sir, we should have something for COVID. Sir, thank you and all the best.

Thank you, Mr. [ Dasania ]. Thank you. Serial #7. Mr. [ Santosh Kumar Saraf ]. [ Santoshji ]

[Foreign Language]

Okay, okay, sir. Okay.

[Foreign Language]

[Foreign Language], we are listening you, sir. We can hear you.

[Foreign Language]

Thank you, Mr. [ Saraf ]. Next Mr. [ Ramesh Shankar Bhola ].

#9. #8 is not there. So #9, we will go. #9 is also no there.

So #10, Mr. [ Bharat Shah ].

Hello? Hello?

Yes, we can hear you.

[Foreign Language]

Yes.

Okay, okay. [Foreign Language]

Okay.

[Foreign Language]

[Foreign Language]

Thank you, [ Smita-ben, Bharat bhai ]. Serial #12, [ Surekha Sharadkumar Shah, Sharadkumar Shah ].

Sir -- can you hear me, sir? Hello?

Yes.

And can you see my video?

No. We really can't see.

[Technical Difficulty] Chairman and Managing Directors and the Company Secretary and Compliance Officer, I could not hear your speech because I was in RPG Life Science meeting. Once that is over, I came to this meeting. And he has given me a very good mind, which I can add in your meeting, sir. Another thing, sir, I have seen a photo -- the video of CS and CO, but I'm not able to recognize -- differentiate who is Ajmera and who is Bhuta because that name is coming [Technical Difficulty]. So I am not [Technical Difficulty] You can do better next time. Because first time I came to know that company is having Company Secretary. Earlier, I was thinking all the time that Ashok Bhuta is the only Company Secretary. Here, we have got 2 separate: one is Company Securely, one is Company Officer and -- Compliance Officer. Sir, I refer Page #17, you are saying that you are #1 company in India because of the revenue. Then Page #27, again, you are saying that you are #1 in generic in India with 31% of revenue of ours is from generic and our market share in India is 8.2% in generic. Sir, in R&D, we spend INR 2,149 crores, which is 2.5x of Cipla. And now we have got new Director from Mahindra & Mahindra, and he will tell you what is the difference and what is the necessity of R&D. And the R&D is the part of pharma and auto industry. So he will initiate you to spend more and more money on R&D, sir. Sir, our debit (sic) [ debt ] equity ratio is 0.08. And that -- what you said that this time, we have reduced the reduction in debit (sic) [ debt ]. So that's a good thing. And finally, debit (sic) [ debt ] equity ratio is reduced. And I refer Page #22, #25, #31, #32, it is for U.S.A. U.S.A., we have got business of our 30% revenue from U.S.A. And most of the companies are doing business in U.S.A. because the profit margins are more, sir. And we have got 3 [Technical Difficulty] got a location in Boston, California or Seattle. Another thing, sir, this RPG Life Science, what they -- they don't have any presence in U.S.A., and the reason was very clear. They say that doing business in U.S.A. is very difficult to getting approval from FDA of U.S.A. is very difficult and we have to spend more money. So that is why, right now, they are not in U.S.A. business. But definitely, they will go into the -- and U.S.A. business is definitely good of our business because the profit margins are very high, sir. And Page #62, you talked about biomass briquettes that we use in place of HSD and furnace oil. But what is happening that in all plants, still we are using HSD and furnace oil. So my request is that we should avoid all these HSD and FO in a pharma company to have a clean pharma company. And definitely, this will be the -- our first priority. And the solar is definitely a priority, but it is next, not the first. And when -- our foreign exchange rate -- foreign exchange earning is INR 5,418 crores is a good foreign exchange -- net foreign exchange. The PAT is INR 2,903 crores, but our employment cost is INR 6,862 crores. And here, now we have got new Director from ICICI, right, financial expert. Definitely, you ask her opinion and how you can decrease employment cost or how you can increase PAT whatever way so that we don't -- the PAT is always more than the employment cost. And another thing, sir, I hold shares in 1 demat account. In the same order, I hold in folio number S90637. And I have received one letter from Compliance Officer, there is an unclaimed dividend. So that I have submitted all the documents for needful. Then what message I got from your Secretarial Department and the LinkedIn that it is okay, we'll do needful, but do not raise this issue in NCLT meeting, which was conducted in March 2021. And after that, what has happened, I have received a mail from LinkedIn saying that there is no unclaimed dividend. So I don't have anything on this, but what happened? This is the same thing has happened with Mahindra & Mahindra Financial. And what they have done, on 2nd August, they have given me a confirmation from Company Secretary and Compliance Officer from 2005 complete statement is there, what dividend I have received in each year and no unclaimed dividend. Also, this particular letter, I have already forwarded to you. Another thing, sir, same letter -- similar letter I had received from Larsen & Toubro from 2002 to 2021, how I received the dividend and there is no unclaimed. So these people are confirming there is no unclaimed dividend. And this -- future, this will help us. So I request Company Secretary, Compliance Officer to write a letter to me in a similar line and tell me that there is no unclaimed dividend. And another thing, sir, why we depend totally on RPA, because once unclaimed dividend -- you've got some website. From that, you can make out what is unclaimed dividend or not unclaimed dividend. And another thing in unclaimed dividend, not in your case, but in other cases, why shareholder cannot claim dividend. The reason was very different, because the checks doesn't come on the name of the shareholder. It comes on somebody else. So we cannot encash. So that also you must look into it. And I'm very happy that Page #74, you want to take care of the shareholder, and you mentioned that you remind shareholders every year what is unclaimed dividend, but that is not sufficient. You have to analyze why unclaimed dividend remains. And once you analyze, then only action can be taken. Thank you very much for giving me opportunity. And I request you to -- request your Company Secretary and CO to write to me that whatever dividend I have received plus last so many years as statements like M&M Financial, like Larsen & Toubro. Thank you very much, sir, giving me opportunity.

Thank you, Mr. [ Shah ]. Serial #14, [ Ashish Kumar Pathak ].

So #13 is not there, Mr. [ Manjit Singh ].

Hello? Am I audible, sir? Hello? Am I audible, sir? Hello?

Yes, sir, we can year you. Yes, sir. we can hear you very well.

My name is [ Ashish Kumar Pathak ]. Respected Chairman, Board of Directors, fellow members, Company Secretary, staff present at AGM of Sun Pharma Industries Limited. My name is [ Ashish Kumar Pathak ]. My esteemed gratitude to Company Secretary, Mr. Sunil Ajmera, to give me chance to speak and send me the balance sheet very well in advance. Sir, government, in budget session financial year '22, declared boost in health infra. So with Aatmanirbhar Bharat initiative and the domestic business from my company shared 33% and international is 67%. For this strategy, what is the main strategy company is taking initiative to enhance domestic business? Because domestic market is very big business and also U.S. market is a very big market and international market is big market, but also impacted in pandemic. This is my first view. Sir, any future buyback plan? My previous speaker also mentioned issue of bonus shares. Foreign exchange earnings is very nice than previous years. Also, sir, cost of raw materials, prices and some geopolitical issue where drugs -- raw materials import from China is very reasonable cost. So any impact in our business operation? If possible, throw some highlights. Reliance Industries Limited also innovating vaccines and also in ongoing. So maybe in future, my company has any plan for doing vaccine drive? Last year also, you mentioned about this stand-alone net profit margin also came down previous year and the revenue also had than previous year. But profit after tax is down, also consolidated, mostly down because I don't know that what the subsidiary companies are giving the financial support to my company. If any subsidiary is good -- not good in performance, so what strategy my company is taking or either potential subsidiaries acquiring? And sir -- also, sir, my last question is CapEx, the top priorities mentioned in annual report financial year '22, our CapEx program, the CapEx incurred. If possible, throw some highlights. And sir, finally, also, we are getting good dividend apart from this pandemic and financial year performance. Thanks to our management team for rewarding dividend, INR 7.50, and also is praying to God for good health to everybody. And financial year '22 is very good financial performance and capital market appreciation, also a debt-free company. Because U.S. -- also my company repaid debt, USD 580 million mentioned. Very, very, very nice initiative from my company. I am thanking the management team for this debt-reducing policies. Thanking you, sir.

Thank you, Mr. [ Pathak ]. Serial #13, Sayantan Bhowmick, authorized representative for PineBridge Investments.

Am I audible?

Yes.

Okay. Thank you. Respected Chairman sir, members of the Board and my fellow shareholders, I'm Sayantan Bhowmick and I represent PineBridge Investments. At the outset, I'd like to thank all the employees and the management of the company for ensuring uninterrupted supply of pharmaceutical ingredients in these trying times. Thank you. I would like to now present my views on a subject that we, at PineBridge Investments, feels very strongly about. It was universally understood that an institutional investor's main objective and the invested company's main obligation is to maximize returns for shareholders. However, with the rise of responsible investing, considerations such as environment, social and governance are increasingly gaining importance. ESG considerations are slowly but surely becoming an integral part of an investor's fiduciary duty. ESG considerations can relate to ESG reporting or disclosure ESG performance, that is how our company is performing in ESG domains and ESG score or rating. The European Union has recently come out with regulations governing the conduct of companies for environmental, social and governance-related issues. These regulations commonly known as SFDR, Sustainable Finance Disclosure Regulations, have come into force as of the March 10, 2021. The EU financial regulators have drafted technical standards on the parameters that companies need to disclose. This includes a set of mandatory disclosures and additional environmental and social disclosures. In this regard, it is heartening to see the excellent and detailed sustainability report published by the company. I hope that we can keep on enhancing our efforts on sustainable business and our sustainability report sets benchmarks for the industry. On a related point, I wanted to know if the company has set any deadline for becoming carbon-neutral, a number of corporates in India have announced time lines for becoming carbon-neutral. As a leader of the pharmaceutical industry, we should do. With this, I would like to thank -- I'd like to once again thank the company for the opportunity to present my views at this AGM. And I would wish the company all the very best for future endeavors. Thank you.

Thank you, Sayantan.

So all questions are over now. Questions are completed. So Mr. Murali, he will be responding to the questions.

Can you hear me?

Yes, sir.

Okay. So I wish to thank all the shareholders for expressing their views and sharing some of their concerns and suggestions. We will try and respond to all the questions. In case if something is missed, I think you can get in touch with Mr. Bhuta or Sunil Ajmera, so they can share the information with you. So there was a -- first question was around the type of different drugs that we manufacture. So we manufacture large number of specialty products, but most of the products that we manufacture are prescription products. So you need prescription of a specialist to get the product from the retail store. So I can't share the name of the product specifically on the call. But we are -- we have a very large market leader in pantoprazole. We are #1 in terms of share of prescription in diabetology. And we will continue to focus on growing this business going forward. So there were questions about the number of employees and number of employees who are vaccinated. I think we have different levels of vaccination in different factories, but I'm happy to share with you that it is anywhere between 60% to 85% to 90%. And the reason why it is lower in some of the locations is because people below 45 were only vaccinated recently as per the government guidance, and their second dose is not yet due. But as soon as that becomes due, we will see that all the employees and their family members will get attended to. Attrition, I am also happy to share with you that we're one of the or possibly the lowest attrition in the whole pharma industry in India. And last year, we had less than 5% total attrition. There was a question about ILUMYA in India. So we filed for ILUMYA registration in India. Hopefully, once we get approval for the product, we should launch the product. Our core competence is to sell specialty products in India and emerging markets. And in U.S., our core business is specialty generics as well as selling branded specialty products in dermatology and ophthalmology and oncology. SCD-044 was licensed from SPARC. And as we have shared with people, Phase II clinical study for the product for psoriasis as well as atopic dermatitis is continuing. As a company, I think our focus is to find a way to grow in each of the business that we are present in. I read -- I heard there was some challenge in terms of my being able to hear. Unfortunately, the shareholder talked about some movement disorder and some challenges that he is facing. So if you need some help in identifying a good neurologist who is an expert on movement disorder, we can suggest some names. There are also suggestions about using a site other than CDSL for organizing the call. We will consider that and study that. There was some question about the penalty paid by SPARC -- I mean not SPARC, but Taro. I think the shareholders need to keep in perspective that the shareholder and in the penalty paid by Taro is not an admission of guilt. However, in the opinion of the Taro management, they felt that instead of carrying the uncertainty and risk of litigation and its negative impact on the business, they felt it is better that we settle the case with the concerned authority. As on today, promoters own 54% of the company, and they have not disclosed any intention for increasing shareholding. There is a suggestion for introducing drugs or products for cosmetology and COVID vaccine, which we will consider in our business meetings. There were also suggestions about empowerment of women as well as rainwater harvesting. So as a company, I think we have a strong agenda for gender diversity and empowering the women in different parts of our organization. And we will continue to focus on that. There is a general appreciation of the performance of the company and the dividend, which is paid. So I thank you for the appreciation. There's also suggestions for bonus as well as face-to-face meeting. There's also some suggestions about buyback. So we will consider all of these options in our management meeting. Some suggestions about importance of R&D in the pharmaceutical business, and thank you for pointing that out. And also, I think, as a company, we believe that our focus should be on raising the return on equity by improving overall profitability, not by adding to the return on equity by raising further debt. There is some confusion about unclaimed dividend. Mr. Bhuta will look at that. There's also a suggestion from PineWood (sic) [ PineBridge ] in terms of increased focus on ESG as well as social responsibility. I am happy that the first report that we've come out with, it's something that you find positive. I can only promise you from our side that we will continue to focus on improving our performance. And you would have seen that even though this is the first time that we've come out with the ESG report. But looking at the consistent year-to-year trend over last 3 years, in spite of our not disclosing the numbers, we were focusing on improving our overall performance on ESG as well as on governance. We will consider your suggestions for coming out with a plan for becoming carbon-neutral. That will require a comprehensive analysis and study, but we will take that seriously. So I, once again, thank all the shareholders for their interest. And in case if I have overlooked to respond to some specific questions, please get in touch with Mr. Bhuta or Sunil Ajmera. And yes, I think -- there were also multiple suggestions about the face-to-face meeting. We would also hope that at some point in time in near future, we can have a face-to-face meeting. So thank you.

Thank you, Mr. Shanghvi. We have answered the questions before the meeting, however -- put before the meeting. However, if we inadvertently have missed to respond to any questions, we should address them separately. The e-voting will remain open until 15 minutes from the conclusion of the meeting to enable shareholders to vote. I request the scrutinizer to complete the scrutinizing process and then submit their report to me or to the person authorized maybe. The scrutinizer's report and the e-voting results will be submitted to stock exchanges within 48 hours of conclusion of the meeting and will also be placed on the company's and CDSL website. Also, the results will be displayed on noticeboard -- on the noticeboard of the company and its registered office and corporate office. I thank one and all for attending of this meeting. And we can now conclude this 29th Annual General Meeting of the company. Thank you.

Thank you.

I propose an open thanks to the Chair. And with the permission of the Chair, I declare this meeting has concluded. Thank you all.

Thank you.