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Dec 04, 2018, 21:19
Sun Pharmaceuticals Ltd.Concall Key Takeaways

With reference to an article update regarding whistleblower's submission of 150 pages to SEBI against the company


The points raised in the articles are the information picked from the public domain and some of these are not related to Sun Pharmaceutical Ltd and some matters are more than 20 years old and some issues are factually incorrect.


Sun Pharmaceutical follows a high level of corporate governance expected by the global company of their size.


An Audit Firm Valia and Timbadia, the company explained that the matter related to one of its partner involved in stock marketing rigging case is 20 years old and these auditors are handling Sun Pharmaceutical’s non-material subsidiaries and they consist of only 0.6% of FY18’s consolidated revenue.


The company clarified that the issue relating Foreign Currency Convertible Bonds (FCCBs) issued by Jeremyn LLC, The Lead manager and sole books runner for issuing FCCBs was JP Morgan, not Jeremyn LLC. They were Co-Manager also this case was 14 years old and law and SEBI Norms were different.


The issue was raised that the company provided loan without any security, they explained that this issue was 20 Years old (1995-96) and also the exposure to those entities was minimal to certain Lakh and the amount was fully recovered. Complied with the guideline of that year.


The Company explained that they are not involved in any insider trading regarding the Ranbaxy deal. There was an issue with regards to Trading Window Disclosure which was not announced by the company as the deal was disclosed on a Sunday and the markets are closed on Sunday. SEBI took due diligence for the same


The Promoter of the company made a personal investment in Orange Mauritius Ltd. he invested in this company for long-term and from his personal account and was disclosed duly to the shareholder and the Exchanges.


The Lakshdeep is an investment company of Mr Valia and as per legal advice received to the company, they have classified this company as Non-Promoter entity and disclosure made accordingly.


Orbit investments and Investment Trust of India’s are an investment made by private investments made by certain Pharma parties and the company is not responsible for the same


Issued raised on company’s Domestic Formulation business being routed by a related party, It is Undertaken by Aditya Medisales Ltd (AML) which became a related party in FY18 and its transactions are conducted for many years. AML became a related Party due to the consolidation of its shareholding among fewer entities as compared to its past and Sun Pharma has taken the approval for the same in its Annual General Meeting (AGM) in 2017. AML doesn't enjoy any special benefits from Sun Pharma. AML got Sales of Rs. 8000 crores EBITDA margin of 1.7% Net Profit Margin-0.4% in FY18. The company is open to change the distribution business if required. This will not impact any material change in the structure. The distribution structure with the help of AML was efficient for tax efficiency previously.


The company clarified that they have not given any Loan or guarantee to Suraksha Realty in past.


The Increase in Loans and Advances in this fiscal year were due to some investments made in the Pharmaceutical business by Sun Pharma and are estimated to yield 10-15%. These loans will be realized after two and a half years. Furthermore, there was no clarity at the sudden rise to Loans and advances in this fiscal year


Sun Pharma is ready to make changes in the business in order to bring the confidence of the shareholders.


While admittance to the issue was limited, given the recent price correction Sun Pharma can be a trading bet.


Q2FY19 Results, Sun Pharmaceutical Industries posted 218.8 cr net loss

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