The Directors have the pleasure of presenting the Forty Sixth Annual Report of yourCompany together with the Audited Financial Statement for the year ended 31stMarch 2019.
1. India business:
- Integration objectives with respect to the Unichem India business acquisition weresuccessfully achieved and the business has become cash accretive in the first year ofacquisition.
- Torrent is ranked 7th (without bonus units) in the Indian PharmaceuticalsMarket and registered growth of 15% compared to 10% growth of the market (as per AIOCD).
- Torrent has 19 brands (PY18) in Top 500 brands of IPM and has 8 brands (PY 7) withsales of more than ' 100 crores.
- Shelcal XT got recognized as one of the best new introduction in chronic segment byAIOCD.
2. Brazil business:
- Torrent continues to be ranked no. 11ndian Pharmaceutical company in Brazil.
- Brazil business registered growth of 10% compared to 8% growth of the market.
- Launched 2 products during the year.
3. US business:
- Torrent's volume market share in covered market improved from 12.4% as of 31stMarch 2018 to 16.4% as of 31st March 2019 as per IMS data.
- Strengthened product pipeline by filing 20 ANDA (PY 13) and launching 9 products (PY7).
- Recalled 107 batches of Valsartan and 132 batches of Losartan due to detection ofcertain impurities in outsourced API.
- Torrent continues to be 4th largest generic company in Germany withstrong growth backed by new launches and gain in tender as well as non-tender business.
5. Rest of the World (ROW) business registered growth of 22%.
6. Torrent has invested in the state of art Oral Oncology manufacturing facility atBileshwarpura Indrad which will cater to the regulated and non-regulated markets in thenear term.
7 Dahej (India) & Levittown (US) manufacturing facilities were audited by USFDAduring the year.The Company has responded
comprehensively within the stipulated time on the observations received.
8. Leverage of the Company (Net Debt-to-EBITDA) reduced to 2.37 as of 31stMarch 2019 compared to 3.11 as of 31st March 2018.
The summary of Standalone (Company) and Consolidated (Company and its subsidiaries)operating results for the year and appropriation of divisible profit is given below:
(Rs in crores except per share data)
| || |
|2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Sales & Operating Income ||5762 ||4244 ||7673 ||5950 |
|Profit Before Depreciation Net Finance Cost Exceptional Items & Tax ||1977 ||1227 ||2025 ||1641 |
|Less Depreciation and Amortization ||579 ||384 ||618 ||409 |
|Less Net Finance Cost ||463 ||281 ||488 ||301 |
|Profit Before Exceptional Items & Tax ||935 ||562 ||919 ||931 |
|Less Exceptional Items ||- ||- ||357 ||- |
|Less Tax Expense ||190 ||80 ||126 ||253 |
|Less Minority Interest ||- ||- ||- ||- |
|Net Profit for the Year ||745 ||482 ||436 ||678 |
|Balance brought forward ||1453 ||1613 ||1554 ||1514 |
|Other Comprehensive income and other adjustments ||(5! ||(2) ||(6! ||2 |
|Balance available for appropriation ||2193 ||2093 ||1984 ||2194 |
|Appropriated as under: || || || || |
|Transfer to Debenture Redemption Reserve ||- ||375 ||- ||375 |
|Transfer to General Reserve ||- ||- ||- ||- |
|Dividend ||305 ||220 ||305 ||220 |
|Tax on Distributed Profits for Dividend ||4 ||45 ||63 ||45 |
|Balance Carried Forward ||1884 ||1453 ||1616 ||1554 |
|Earnings Per Share (' per share) ||44.05 ||28.48 ||25.78 ||40.07 |
Consolidated Operating Results
The consolidated sales and operating income increased to RS 7673 crores from ' 5950crores in the previous year showing a growth of 29%. The consolidated operating profit forthe year was ' 2025 crores as against ' 1641 crores in the previous year registeringgrowth of 23%. The consolidated net profit decreased to ' 436 crores from ' 678 crores inthe previous year mainly due to exceptional items of ' 357 crores (Impairment provision of' 217 crores on acquired business in US and product recall charges of '140 crores in US)and due to full year impact of intangibles amortization pertaining to acquired business inIndia of ' 170 crores.
Management Discussion and Analysis (MDA)
The details of operating performance of the Company for the year the state of affairsand the key changes in the operating environment have been analysed in the ManagementDiscussion and Analysis section which forms a part of the Annual Report.
The Company endeavours to distribute 30% of its annual consolidated net profit aftertax without taking into account non-cash charges relating to the business acquisitions asdividend in accordance with the dividend policy copy of which is attached as Annexure-A.The policy is also available on the websitehttp://www.torrentpharma.com/pdf/investors/Dividend_Policy.pdf .
Pursuant to this Interim dividend of ' 13/- per equity share of face value of ' 5/-each (@ 260%) amounting to ' 220 crores was paid to the shareholders during the year underreview. Further the Board has recommended a final dividend of ' 4/- per equity share offace value of ' 5/- each (@ 80%) amounting to ' 68 crores for approval to shareholders atthe 46th Annual General Meeting (AGM) of the Company. The aggregatedistribution amount without tax on distributed profits works out to be ' 288 crores(previous year ' 237 crores).
ii) Transfer to Reserves
The Board of Directors of the Company has decided not to transfer any amount to theReserves for the year under review.
At Torrent we firmly believe in a people first approach. The organisation takes pridein its human capital which comprises of people from diverse backgrounds and cultures.Guided by the core values which are deeply imbibed in each of the employees; theorganisation's achievements are an outcome of efforts dedication and convictiondemonstrated by its people. In order to sustain this vital resource the Company continuesto build on meritocracy that will aid the organisation to be ready to embrace the newcompetencies for a sustainable future. The HR department plays a major role in developingan inspiring work culture weaved by the values and processes that enables everyone torecognize their true potential and focus on individual growth along with the successfulgrowth of Company.
An emphasis on creating a conducive work environment and development of a robust andconsistent approach towards talent management & leadership development is one of thesignificant roles that the HR plays. It evaluates the requirement of staff based on thedemands of the business and also projects future requirements thus playing a crucial rolein corporate decision-making. It also strategically aligns HR Practices with the businessobjectives and priorities.
During the year the Company took initiatives to increase organizational capability andproductivity so as to be value driven and future ready. The HR department continued toarrange training and development programs which has helped to nurture talent sharpen andunderstand new management skills.
In an endeavor to encourage this feeling of oneness amongst the employees the Companycelebrates various events where employees and their families participate thereby imbibingthe reflection of a big Torrent family.
Various women friendly facilities like availability of creche flexi-work timing andextended maternity leave has supported the women employees in carrying on with theircareer along with other responsibilities. Special activities focusing on health wellbeing and stress free life is also organized thereby fostering a woman's personal andprofessional growth.
The year also saw reinforcement of the already existing "Whistle BlowerPolicy" in order to emphasize and encourage reporting of any wrongdoing or unethicalpractice.
The HR department has successfully integrated the Human Resources acquired fromUnichem. This includes the manpower integration and the cultural integration of both theentities. This has led to a cohesive team which strongly believes in our values andvarious practices adopted by Torrent.
On the Industrial front the Company continued to foster cordial Industrial Relationswith its workforce during the year.
The Company has a diverse workforce of 13598 employees as on 31st March2019 vis-a-vis 14700 employees as on 31st March 2018.
The Company believes in the conduct of its affairs in a fair and transparent manner tofoster professionalism honesty integrity and ethical behavior in its employees &stakeholders. The Company has adopted a Whistle Blower Policy as a part of vigilmechanism.
Also the Code of Business Conduct (Code) lays down important corporate ethicalpractices that shape the Company's value system and business functions and representscherished values of the Company.
Details of the above are explained in the Report of Corporate Governance.
As a part of Policy for Prevention of Sexual Harassment of Women at Workplace internalcomplaints committees had been set up for all the administrative units / offices toredress complaints received regarding sexual harassment. Under this Policy one complaintwas received during the year which was addressed appropriately.
CORPORATE SOCIAL RESPONSIBILITY
The CSR activities by the Company were under the thrust areas of Community HealthcareSanitation & Hygiene Education & Knowledge Enhancement and Social Care &Concern. During the financial year ended 31st March 2019 the Company incurredCSR expenditure of ' 26.45 crores which was higher than the obligation to spend 2% ofaverage net profit for the past three financial years amounting to ' 26.35 crores. Thebrief outline of the Corporate Social Responsibility (CSR) Policy of your Company and thedetails of key CSR programs and activities undertaken at Group level are provided in theAnnual Report on CSR Activities is annexed as Annexure-C to this Report.
In addition to above the Company also made donations amounting to ' 6.10 crores tovarious organisations for activities related to healthcare education community andsocial services socio-economic development including de-addiction self-help groupsyouth upliftment of women integrated development of tribes etc.
ENVIRONMENT HEALTH & SAFETY
The Company is committed in cultivating a proactive safety culture across the group. Weare in pursuit of a safe & secure workplace for our employees as well as all theinterested parties with our business operations.
Our sincere and focused endeavors in EHS domain has brought down all possible causes ofincidents leading to safe working environment.
As a part of green initiative we achieved major reduction in waste generationutilization of waste as an alternative fuel and conservation of energy to reduceenvironmental impact arising from the plant activities. We have disposed off more than 55%high calorific value hazardous waste for Co-processing / Pre-processing in cement industry(as an alternate fuel) instead of incineration. We have targeted to dispose off 90% oftotal such waste generation for co-processing in upcoming years. We have initiated theefforts to use canteen food waste and biological waste for generation of bio gas whichwill help us in reduction of 20% waste disposal under landfill category.
Under the Plastic Waste Management Rules 2016 the Company has been registered as abrand owner with Central Pollution Control Board (CPCB). The Company as a part of theExtended Producer's Responsibility under the initiative named EPR CONNECT- towardsa sustainable future' stated in the said rules has engaged a service provider who shallbe responsible for Collection and Sustainable End Disposal of Multi Layered Plastic (MLP)and Plastic waste. The service provider will take back 30% Plastic waste being generatedfor the first year (started from March 2019) and reach to 100% by third year as per CPCBguidelines.
During the year Company at all its facilities has implemented a drive on BehaviorBased Safety (BBS) to build the proactive safety culture and encourage employees toimmediately correct unsafe acts / conditions.
All of the Company's facilities have obtained certifications such as ISO-14001:2015& OHSAS-18001:2007. Regular audits of our operational units by our cross functionalteams global customers regulators and external third party auditors help us in achievingbenchmark / highest levels of compliance. Further to this implementation of New StandardISO-45001:2018 (Occupational Health and Safety Management System) in place of OHSAS -18001 has already been initiated.
The Company's Contractors are well conversant with our various EHS drives and executethe whole project activities following the Torrent's Project Safety Manual. Abiding by theprovisions of this manual is one of the key terms of the contract.
Throughout the year all of the Company's facilities remained compliant with applicableregulatory requirements pertaining to Environment Health & Safety.
Moreover the Company has in place the "Conviction of Safety Policy" whichprovides for substantial compensation to the personnel (Employees as well as Contractors)and their families who are adversely affected by any accident.
(a) Share Capital
As on 31st March 2019 the Authorised Capital of the Company is ' 150crores divided into 25 crores Equity Shares of ' 5/- each and 25 lacs Preference Sharesof ' 100/- each.
(b) Deposits and Loans Guarantees and Investments
The Company has neither accepted nor renewed any deposits. None of the deposits earlieraccepted by the Company remained outstanding unpaid or unclaimed as on 31stMarch 2019.
Details of Loans Guarantees and Investments by Company under the provisions of Section186 of the Companies Act 2013 during the year are provided in Note 9 and 10 to theFinancial Statements.
(c) Debentures and other debt instruments
The outstanding amount of Non-Convertible Debentures issued by the Company is '1956.95 crores as on 31st March 2019. During the year the Company issuedCommercial Papers (CPs) aggregating to ' 300 crores on private placement basis.
(d) Contracts or Arrangements with Related Parties
All Related Party transactions are entered in compliance to the provisions of law thePolicy on Materiality of Related Party Transactions and Dealing with Related PartyTransactions and were entered with the approval of Audit and Risk Management CommitteeBoard and Shareholders if and as applicable. The particulars of material contracts andarrangements entered into with the related parties in accordance with the Related PartyPolicy of the Company and pursuant to the provisions of Section 188(1) of the CompaniesAct 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 are annexed herewith asAnnexure-B.
(e) Internal Financial Control system
The Companies Act 2013 has mandated the Company to have a formal framework of InternalFinancial Controls (IFC) and has also laid down specific responsibilities on the BoardAudit Committee Independent Directors and Statutory Auditors with regard to IFC.
Accordingly the Company has adopted financial control system and framework to ensure:
The orderly and efficient conduct of its business
Safeguarding of its assets
The prevention and detection of frauds and errors
The accuracy and completeness of the accounting records and
The timely preparation of reliable financial information.
The Board reviews the effectiveness of controls documented as part of IFC frameworkand take necessary corrective actions wherever weaknesses are identified as a result ofsuch reviews. This review covers entity level controls process level controls fraud riskcontrols and information technology environment.
Based on this evaluation no significant events had come to notice during the year thathave materially affected or are reasonably likely to materially affect our IFC. Themanagement has also come to a conclusion that the IFC and other financial reporting waseffective during the year and is adequate considering the business operations of theCompany.
The Statutory Auditors of the Company has audited the IFC with reference to FinancialReporting and their Audit Report is annexed as Annexure B and Annexure A to theIndependent Auditors' Report under Standalone Financial Statements and ConsolidatedFinancial Statements respectively.
(f) Material changes affecting the Company
No material changes and commitments has occurred after the close of the year till thedate of this Report which may affect the financial position of the Company.
The Company's plants properties equipment and stocks are adequately insured againstall major risks including loss on account of business interruption caused due to propertydamage. The Company has appropriate liability insurance covers particularly for productliability and clinical trials. The Company has also taken Directors' and Officers'Liability Policy to provide coverage against the liabilities arising on them.
BUSINESS RISK MANAGEMENT
The Company has in place a Risk Management Framework for a systematic approach tocontrol risks. The Risk Management process is reviewed and monitored by functional heads /business process owners. The Audit and Risk Management Committee (ARMC) dischargesfunctions of Risk Management and Risk minimization and has designated Chief FinancialOfficer as the Chief Risk Officer (CRO) to assist the committee by presenting the detailsof the risk profile of the Company coordinate with the functional heads who are the riskowners and monitor the status of the risk mitigation plan for the identified risks. TheARMC is periodically updated on key business risks including strategic and acquisitionrelated risks along with their mitigation plan / strategy.
The Company in the Management and Discussion Analysis section of the Annual Reportidentifies the key risks which can affect the performance of the Company. As on datethere is no risk envisaged which could threaten the existence of the Company.
The Board in its meeting held on 20th May 2019 has constituted a separateRisk Management Committee by segregating it from the Audit and Risk Management Committee.
SUBSIDIARIES & JOINT VENTURES
As of 31st March 2019 the Company has 16 subsidiaries out of which 4 arestep down subsidiaries.
Bio-Pharm Inc. a wholly owned subsidiary of Torrent Pharma Inc. USA ("TPI")merged with TPI with effect from 1st January 2019. The merger aims atadministrative convenience and to achieve higher operational efficiencies.
The highlights of performance of major subsidiaries of the Company have been discussedand disclosed under the Management Discussion and Analysis section of the Annual Report.The contribution of each of the subsidiaries in terms of the revenue and profit isprovided in Form AOC-1 which forms part of the Annual Report.
The details of two associate companies of the Company is also shown in the AOC-1. Theseassociate companies are Section 8 companies and primarily floated with another company ofthe Torrent group to carry out the CSR activities.
The annual accounts of the subsidiary companies will be made available to any Member ofthe Company seeking such information at any point of time and are also available forinspection by any Member of the Company at the Registered Office of the Company on anyworking day during business hours up to the date of the AGM. The annual accounts of thesubsidiary companies are also available on the website of the Company atwww.torrentpharma.com .
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(a) Board of directors
The Board of Directors of the Company is led by the Executive Chairman and comprisessix other Directors as on 31st March 20191 including one WholeTime Director four Independent Directors which includes two Woman Director and oneNon-Executive Director (other than Independent Directors).
All the Independent Directors of the Company have furnished declarations that they meetthe criteria of independence as prescribed under the Companies Act 2013 and under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").
During the year under review:
Shri Markand Bhatt retired from the Board with effect from 2ndAugust 2018 (i.e. date of last AGM).
Smt. Renu Challu and Shri Pradeep Bhargava have completed their tenure asIndependent Director of the Company on 26th July 2018 and 31stMarch 2019 respectively.
The Board places on record its deep appreciation for the guidance and support providedby them for the overall growth of the Company during their tenure as a member of the Boardand its Committees.
During the last AGM held on 2nd August 2018 the members approved:
the appointment of Ms. Ameera Shah as an Independent Director to hold office fora term of 3 (three) consecutive years effective from the date of AGM;
the re-appointment of Shri Shailesh Haribhakti and Shri Haigreve Khaitan asIndependent Directors of the Company for a second term of 5 (five) consecutive yearseffective from 1st April 2019.
Further the members of the Company have approved (through Postal Ballot) theappointment of Ms. Nayantara Bali as an Independent Director of the Company w.e.f. 7thMarch 2019 for a term of 3 (three) consecutive years.
As per the provisions of the Companies Act 2013 Shri Samir Mehta Executive Chairman(holding DIN 00061903) retires by rotation at the ensuing AGM and being eligible hasoffered himself for re-appointment.
Shri Mehta has been re-appointed by the Board of directors in its meeting held on 20thMay 2019 as Executive Chairman of the Company with effect from 30th July 2019till 31st March 2020 subject to approval of the members.
The brief resume and other relevant documents of the Director being re-appointed aregiven in the Explanatory Statement to the Notice convening the AGM for your perusal.
(b) Meetings of Board of Directors
Regular meetings of the Board are held to review performance of the Company to discussand decide on various business strategies policies and other issues. A calendar of Board/ Committee meetings for the year is prepared and circulated to the Directors well inadvance to enable them to plan their schedule for effective participation in the meetings.During the year four meetings of the Board of Directors were convened and held on 30thMay 2018 2nd August 2018 3rd November 2018 and 30thJanuary 2019. The intervening gap between two consecutive meetings was not more than onehundred and twenty days. Detailed information on the meetings of the Board is included inthe Corporate Governance Report which forms part of the Annual Report.
(c) Audit and Risk Management Committee
The composition of the Audit and Risk Management Committee is in compliance with theprovisions of Section 177 of the Companies Act 2013 and Regulation 18 of the ListingRegulations. The composition of the Committee as on 31st March 2019 is givenbelow:
|Name of director ||Category of directorship |
|Shri Shailesh Haribhakti Chairman ||Independent Director |
|Shri Pradeep Bhargava1 ||Independent Director |
|Shri Haigreve Khaitan ||Independent Director |
|Ms. Ameera Shah ||Independent Director |
1. Shri Pradeep Bhargava ceased to be the Member of the Committee consequent tocompletion of his term on the Board on 31st March 2019. The Committee wasexpanded by appointing Ms. Nayantara Bali as its member with effect from 6thApril 2019.
The Committee was renamed as Audit Committee on constitution of separate RiskManagement Committee on 20th May 2019.
During the year the Board has accepted all the recommendations made by the Audit andRisk Management Committee.
(d) Appointment of Directors
(i) Criteria for appointment of directors
The Board of Directors of the Company has identified following criteria for determiningqualification positive attributes and independence of Directors:
1) Proposed Director ("Person") shall meet all statutory requirements andshould:
possess the highest ethics integrity and values;
not have direct / indirect conflict with present or potential business /operations of the Company;
have balance and maturity of judgment;
be willing to devote sufficient time and energy;
have demonstrated high level of leadership and vision and the ability toarticulate a clear direction for an organization;
have relevant experience (in exceptional circumstances specialization /expertise in unrelated areas may also be considered);
have appropriate comprehension to understand or be able to acquire thatunderstanding o Relating to Corporate Functioning
o I nvolved in scale complexity of business and specific market and environmentfactors affecting the
functioning of the company.
2) The appointment shall be in compliance with the Board Diversity Policy of theCompany.
The key qualifications skills and attributes which the Board is collectively expectedto have for the effective discharge of their duties are explained in Corporate GovernanceReport of the Company.
(ii) Process for Identification / Appointment of Directors
Board members may (formally or informally) suggest any potential person to theChairman of the Company meeting the above criteria. If the Chairman deems fit necessaryrecommendation shall be made by him to the Nomination and Remuneration Committee (NRC).
Chairman of the Company can himself also refer any potential person meeting theabove criteria to the NRC.
NRC delibrates the matter and recommends such proposal to the Board.
Board considers such proposal on merit and decide suitably.
(e) Familiarisation Programme of Independent Directors
The Independent Directors have been updated with their roles rights andresponsibilities in the Company by specifying them in their appointment letter alongwithnecessary documents reports and internal policies to enable them to familiarise with theCompany's procedures and practices. The Company endeavours through presentations atregular intervals to familiarise the Independent Directors with the strategy operationsand functioning of the Company and also with changes in the regulatory environment havinga significant impact on the operations of the Company and the pharmaceutical industry as awhole. Site visits to various plant locations and CSR sites get organized for theDirectors to enable them to understand the operations of and CSR activities carried out bythe Company. The Independent Directors also meet with senior management team of theCompany in informal gatherings. During the year 2018-19 the Company has conducted 11programs for familiarising the Directors for a total duration of 6 hours.
On cumulative basis since 1st April 2015 the Company has conducted 48programs for familiarising the Directors for a total duration of 42 hours and 55 minutes.
The details of such familiarisation programs for Independent Directors are posted onthe website of the Compan and can be accessed athttp://www.torrentpharma.com/pdf/cms/Familiarisation_Programme_2018-19.pdf .
(f) Board Evaluation
The Evaluation of Board its Committees Individual Directors (Independent and NonIndependent Directors) and Chairperson was carried out as per the process and criterialaid down by the Board of Directors based on the recommendation of the NRC:
The obtaining and consolidation of feedback from all directors for theevaluation of the Board and its Committees Individual Directors (i.e. Independent and NonIndependent Directors) were co-ordinated by the Chairman of the Board. The feedback onevaluation of the Board and its Committees was discussed in their respective meetings andthe feedback on the evaluation of Individual Directors was discussed individually withthem.
The evaluation of Chairperson was co-ordinated by the Chairman of theIndependent Directors meeting.
The Independent Directors met on 30th January 2019 with respect tothe above.
(g) Key Managerial Personnel
Shri Sudhir Menon was designated as the Chief Financial Officer and Whole-time KeyManagerial Personnel of the Company w.e.f 1st September 2018 consequent to therelinquishment of such position by Shri Ashok Modi w.e.f closing hours of 31stAugust 2018.
(h) Directors' Responsibility Statement
In terms of Section134(3)(c) of the Companies Act 2013 in relation to financialstatements of the Company for the year ended 31st March 2019 the Board ofDirectors state that:
i. the applicable Accounting Standards have been followed in preparation of thefinancial statements and there are no material departures from the said standards;
ii. reasonable and prudent accounting policies have been used in preparation of thefinancial statements and that they have been consistently applied and that reasonable andprudent judgments and estimates have been made in respect of items not concluded by theyear end so as to give a true and fair view of the state of affairs of the Company as at31st March 2019 and of the profit for the year ended on that date;
iii. proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. the financial statements have been prepared on a going concern basis;
v. proper internal financial controls were in place and were adequate and operatingeffectively; proper systems to ensure compliance with the provisions of applicable lawswere in place and were adequate and operating effectively.
(a) Remuneration Policy
During the year under review new Remuneration Policy was introduced replacing theexisting policy considering the amendments introduced under the Companies Act 2013 andthe Listing Regulations. The policy covers the remuneration for the Directors (ChairmanManaging Director Whole-time directors Independent Directors and other non-executiveDirectors) and other employees (under senior management cadre and management cadre). ThePolicy has been formulated with the following key objectives:
To ensure that employee remuneration is in alignment with business strategy& objectives organisation values and longterm interests of the organisation.
To ensure objectivity fairness and transparency in determination of employeesremuneration.
To ensure the level and composition of remuneration are reasonable andsufficient to attract retain and motivate a high performance workforce and are incompliance with all applicable laws.
It covers various heads of remuneration including benefits for Directors and employees.It also covers the process followed with respect to annual performance reviews andvariables considered for revision in the remuneration. The said Policy is available on thewebsite of the Company www.torrentpharma.com .
(b) Criteria for Remuneration to Non-Executive Directors (NEDs):
1. The payment of commission to the Directors of the Company who are neither in thewhole time employment nor Managing Director(s) (NEDs) is approved by the shareholders ofthe Company and is subject to the condition that total commission paid to the NEDs shallnot exceed the percentage limits of the net profit of the Company as specified in theCompanies Act 2013 (presently 1% of the net profit) calculated in accordance withSection 197 read with Section 198 and any other applicable provisions of the CompaniesAct 2013.
Further as per the Regulation 17(6)(ca) of the revised Listing Regulations approvalof the shareholders by special resolution shall be required every year in which theannual remuneration payable to a single NED exceeds fifty per cent of the total annualremuneration payable to all NEDs giving details of the remuneration thereof.
2. The Board or its Committee specifically authorised for this purpose determines themanner and extent upto which the commission is paid to the NEDs within the limit asapproved by the shareholders'. The commission is determined based on the participation ofthe Directors in the meetings of Board and / or Committees thereof as well as on industrypractice performance of the Company and contribution by the Directors etc.
3. Payment of Commission is made annually on determination of profit.
4. Sitting fees of ' 1 lac is paid for each meeting of the Board or any Committeethereof attended by them.
5. Independent Directors are reimbursed for all the expenses incurred for attending anymeeting of the Board or Committees thereof and which may arise from performance of anyspecial assignments given by the Board.
(c) remuneration to Managerial Personnel
The details of remuneration paid to the Managerial Personnel forms part of theCorporate Governance Report.
(d) Particulars of employees and related disclosures
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014disclosures pertaining to remuneration and other details are provided in the Annexure-D tothis Report.
(a) statutory Auditors
B S R & Co. LLP Chartered Accountants (Firm Registration No. 101248W/W-100022)were appointed as the Statutory Auditors of the Company to hold office for five years fromthe conclusion of Forty Fourth AGM held in the year 2016-17 up to the conclusion of theForty Ninth AGM to be held in the year 2021-22.
(b) Cost Auditors
I n terms of the Section 148 of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 the Company has made and maintained the cost accountsand records for the year 2018-19.
The Company has appointed M/s. Kirit Mehta & Co. Cost Accountants Mumbai (FirmRegistration No. 000353) as the Cost Auditors of the Company for audit of cost accountingrecords of its activities (Formulation & Bulk Drugs activities) for the financial yearended 31st March 2019. The Cost Audit Report to the Central Government for thefinancial year ended 31st March 2018 was filed on 29th August2018 within the statutory timeline. Further the Board of Directors has appointed M/s.Kirit Mehta & Co. as the Cost Auditor of the Company for the financial year 2019-20and fixed their remuneration subject to ratification by the shareholders in the ensuingAGM of the Company.
(c) secretarial Auditor
The Board pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hadappointed M/s. M. C. Gupta & Co. Company Secretaries as the Secretarial Auditors ofthe Company to conduct the Secretarial Audit as per the provisions of the Companies Act2013 for the year 2018-19.
M/s. M. C. Gupta & Co. have carried out the Secretarial Audit of the Company foryear 2018-19 and the Report of Secretarial Auditors in Form MR-3 is annexed with thisReport as Annexure-E. There were no qualification / observations in the report.
During the year 2018-19 the Company has complied with all the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
As required by Regulation 34 read with Schedule V of the Listing Regulations aseparate Report on Corporate Governance forms part of the Annual Report. The Report onCorporate Governance also contains certain disclosures required under the Companies Act2013. A certificate from the Statutory Auditors of the Company regarding compliance ofconditions of Corporate Governance as stipulated under Clause E of Schedule V of theListing Regulations forms part of this Report as Annexure-F.
EXTRACT OF ANNUAL RETURN
As required under the provisions of Section 134(3)(a) and 92(3) of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 theextracts of annual return in Form No. MGT-9 forms part of this Report as Annexure-G.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ETC.
A statement containing the necessary information on Conservation of energy Technologyabsorption and Foreign exchange earnings and outgo stipulated under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed to this Report as Annexure-H.
APPRECIATION AND ACKNOWLEDGEMENTs
Your Directors appreciate the trust reposed by the medical fraternity and patients inthe Company and look forward to their continued patronage. The Directors are also gratefuland pleased to place on record their appreciation for the excellent support guidance andcooperation extended by the Government of India and various State Governments specificallythe Governments of Gujarat Himachal Pradesh Sikkim Madhya Pradesh and Andhra PradeshCentral and State Government Bodies and Authorities Financial Institutions and Banks. TheBoard also expresses its appreciation of the understanding and support extended by theshareholders and the commitment shown by the employees of the Company.
| ||For and on behalf of the Board |
|Ahmedabad ||Samir Mehta |
|20th May 2019 ||Executive Chairman |