The Directors have the pleasure of presenting the Forty Seventh Annual Report of yourCompany together with the Audited
Financial Statement for the year ended 31st March 2020.
1. India business:
Torrent is ranked 8th in the Indian Pharmaceuticals Market (5thin the chronic/sub-chronic segment) and has registered 12% growth compared to 10% marketgrowth (as per AIOCD).
Torrent has 17 brands in Top 500 brands of IPM out of which 10 brands (PY 8)have revenues of more than Rs.100 crores.
Overall India business field force productivity has crossed Rs.7 Lakhs in theyear 2019-20 with substantial gains in productivity from the acquired Unichem portfolio.
Important new launches for the year included Vildagliptin and Ticagrelor alongwith the in-licensed Remogliflozin and novel FDC Repaglinide+Voglibose'
Azulix MV & Rozucor Gold were recognized to be one of the best newintroductions in chronic/sub-chronic segment by AIOCD AWACS.
2. Brazil business:
Torrent continues to be ranked no. 1 Indian Pharmaceutical Company in Brazil.
As per close up Brazil business registered growth of 15% compared to marketgrowth of 10%.
We continue to build brands in Brazil with 10 brands now with sales above BRL 15million of which two brands have sales greater than BRL 50 million.
We have nine pending filings with Anvisa.
3. US business:
Torrent's sales reached Rs. 207 million.
Sales came from existing products as only 3 new approvals were received duringthe year 2019-20. Pursuant to Dahej facility receiving OAI and Indrad facility receivingwarning letter the new product approvals from these facilities are on hold until thefacilities get cleared by USFDA. The remediation work at these facilities have advancedsignificantly during the course of the year 2019-20.
Upgradation of the liquid facility at Levittown US is progressing well andexpected to be ready by Q2 of the year 2020-21.
Strengthened product pipeline by filing 12 ANDAs. We now have a total of 48ANDAs pending approval and 6 tentative approvals.
4. Germany business:
Torrent continues to be 5th largest generic company and no.1 IndianPharmaceutical Company in Germany.
During the second half of the year the company faced temporary delays inreleasing the products to market due to upgradation of its quality management processes.
Torrent continues to expand its market coverage through new launches and gain intender as well as non-tender business.
5. Financial performance:
EBITDA margin is 29% for the year compared to 26% in the previous year.
Leverage (Net Debt-to-EBITDA) reduced to 2.22x as of 31st March 2020compared to 2.37x as of 31st March 2019.
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)
| || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Sales & Operating Income ||6168 ||5762 ||7939 ||7673 |
|Profit Before Depreciation Net Finance Cost Exceptional Items & Tax ||2148 ||1977 ||2284 ||2025 |
|Less Depreciation & Amortization ||607 ||579 ||654 ||618 |
|Less Net Finance Cost ||424 ||463 ||443 ||488 |
|Profit Before Exceptional Items & Tax ||1117 ||935 ||1187 ||919 |
|Less Exceptional Items ||- ||- ||- ||357 |
|Less Tax Expense ||178 ||190 ||162 ||126 |
|Net Profit for the Year ||939 ||745 ||1025 ||436 |
|Balance brought forward ||1884 ||1453 ||1616 ||1554 |
|Other Comprehensive income and other adjustments ||(11) ||(5) ||(14) ||(6) |
|Balance available for appropriation ||2812 ||2193 ||2627 ||1984 |
|Appropriated as under: || || || || |
|Transfer to General Reserve ||- ||- ||- ||- |
|Dividend ||609 ||305 ||609 ||305 |
|Tax on Distributed Profits for Dividend ||110 ||4 ||125 ||63 |
|Balance Carried Forward ||2093 ||1884 ||1893 ||1616 |
|Earnings Per Share (' per share) ||55.46 ||44.05 ||60.55 ||25.78 |
Consolidated Operating Results
The consolidated sales and operating income increased to Rs.7939 crores from Rs.7673crores in the previous year showing a growth of 3%. The consolidated operating profit forthe year was Rs.2284 crores as against Rs.2025 crores in the previous year registeringgrowth of 13%. The consolidated net profit stood at Rs.1025 crores compared to Rs.436crores in the previous year. Exceptional items during the previous year was Rs.357 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.
During the year an interim dividend of Rs.32/- per equity share of face value ofRs.5/- each (@ 640%) amounting to Rs.542 crores was paid to the shareholders. Thisincludes a special dividend of Rs.15/- per equity share in view of successful integrationof the acquired business. The integration has complemented in enhancing the overallperformance of the Company. No further dividend was considered by the Board for the yearunder review.
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.
Human resources are invaluable assets of the Company. The organization takes pride inits human capital which comprises of people from diverse backgrounds and cultures. Guidedby the core values which are deeply imbibed in each of the employees the organization'sachievements are an outcome of efforts dedication and conviction demonstrated by itspeople. In order to sustain this vital resource the Company continues to build onmeritocracy that will aid the organization to be ready to embrace the new competencies fora sustainable future. The company has benchmarked various HR processes and policies andsimplified these in order to eliminate redundancy. It has also significantly automated HRprocesses which have increased compliance and reduced unproductive time.
Focused efforts were undertaken to improve employee connect. In an endeavor toencourage this feeling of oneness amongst the employees the Company has also takeninitiative of one stop solution for end to end information/facility related to mediclaimthrough its M-Connect portal. The organization celebrates various events where employeesand their families participate thereby imbibing the reflection of a big Torrent family.
Through continuous efforts new talent both experienced as well as new entrants to theworkforce were acquired and aligned to the culture of the organisation. The HR departmentcontinued to arrange training and development programs which has helped to nurture talentsharpen and understand new management skills. On the Industrial front the Companycontinued to foster cordial Industrial Relations with its workforce during the year.
Various women friendly facilities like flexi-work timing and maternity leaves hassupported the women employees in carrying on with their career along with otherresponsibilities. Special activities focusing on health well-being and stress free lifeis also organized thereby fostering a woman's personal and professional growth.
The year also saw reinforcement of the already existing "Whistle BlowerPolicy" in order to emphasize and encourage reporting of any wrongdoing or unethicalpractice.
Robust people practices best-in-class work environment and learning initiatives werethe prime drivers behind the achievements.
The Company has a diverse workforce of 12881 employees as on 31st March2020 vis-a-vis 13598 employees as on 31st March 2019.
Over the years Company has established a reputation for doing business with integrityand has displayed zero tolerance for any form of unethical behaviour/misconduct. To fosterprofessionalism honesty integrity and ethical behaviour in its employees andstakeholders the Company has in place a robust vigil mechanism to report unethicalbehaviour details of which are covered in the Corporate Governance Report.
The said mechanism provides adequate safeguards against victimization of employees whouse the vigil mechanism and provides direct access to the Audit Committee. Also the Codeof Business Conduct (Code) lays down important corporate ethical practices that shape theCompany's value system and business functions and represents cherished values of theCompany.
Whistleblower Policy and Code of Business Conduct has been hosted on Company's websitewww.torrentpharma.com
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 to redresscomplaints received regarding sexual harassment. Under this Policy no complaints werereceived during the year.
CORPORATE SOCIAL RESPONSIBILITY
During the year 2019-20 the Company incurred CSR expenditure of 18.07 crores which wasmuch higher than the statutory requirement of 2% of average net profit for the past threefinancial years amounting to Rs.16.85 crores. The CSR activities undertaken by the Companywere under the thrust areas of Community Healthcare Sanitation & Hygiene Education& Knowledge Enhancement and Social Care & Concern. The brief outline of theCorporate Social Responsibility (CSR) Policy of your Company and the details of key CSRprograms and activities undertaken at Group level are provided in the Annual Report on CSRActivities annexed herewith as Annexure C.
In addition to above the Company continued other social activities during the yearthe brief details of the same is described hereunder.
During the year Swadhar community healthcare facility was renamed Sumangal andintegrated into Rangtarang hospital complex comprising 150 bed paediatric hospitalinaugurated in February 2020. Sumangal now operates with an enhanced scope which includesspecialized consultations in the areas of dental care ophthalmology dermatologygynecology physiotherapy and orthopedic. During the year 2019-20 100311 patients havebenefited from the facility.
The Company made donations amounting to Rs.10.74 crores to various organisations foractivities related to healthcare education community and social services socio-economicdevelopment including de-addiction & rehabilitation preservation of heritage sitesetc.
The Company has also dontated Rs.20.00 crores to Prime Minister's Citizen Assistanceand Relief in Emergency Situations Fund (PM - CARES Fund) to fight the COVID-19 pandemicand its fallout on poor sections of the society.
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 surrounding communitiesas well as all the interested parties with our business operations.
The Company has an established EHS policy and applied to all its manufacturing sitesand R & D center. Policy is regularly evaluated and updated with consideration forInternational Organization for Standardization (ISO) and other global requirements toensure that company's EHS systems remains globally oriented and best in class.
Our sincere and focused endeavors in EHS domain has brought down all possible causes ofincidents leading to safe working environment resulting into significant reduction innumber of incidents.
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 are striving for continuouslybringing down the waste quantity to incineration facilities. This year we havedisposed-off more than 60% high calorific value hazardous waste forCo-processing/Pre-processing in cement industries (as an alternate fuel) instead ofincineration. We have targeted to dispose-off 90% of total such waste generation forco-processing in upcoming years. We have made efforts to use canteen food waste andbiological waste from ETP for generation of bio gas which will help us in reduction of 20%annual waste disposal under landfill category.
Under the Plastic Waste Management Rules 2016 the Company is registered as a brandowner with Central Pollution Control Board (CPCB). The Company has initiated ExtendedProducer Responsibility (EPR) program under these Rules. The Company has engaged a serviceprovider for collection and sustainable end of disposal of plastic waste on pan Indiabasis.
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.
Majority of the plants are certified for ISO 14001: 2015 (Environment ManagementSystems) and ISO 45001:2018. newly introduced standard for Occupational Health &Safety Management system.
Regular audits of our operational units by in-house cross functional teams globalcustomers regulators and external third party auditors help us in achievingbenchmark/highest levels of compliance.
The Company's Contractors are well conversant with our various EHS drives. It isessential for all contractors to receive EHS training appropriately and follow guidelinesstipulated in Project Safety Manual. Abiding by the provisions of this manual is one ofthe key terms of the contract.
Throughout the year all of the Company's facilities remained compliant with applicableregulatory requirements pertaining to Environment Health & Safety. Major projectsactivities like green field project of Oncology Plant have been commissioned witheffective compliance of our set procedures for project safety management.
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 2020 the Authorised Capital of the Company is Rs.150crores divided into 25 crores Equity Shares of Rs.5/- each and 25 lacs Preference Sharesof Rs.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 2020.
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 10 and 11 to theStandalone Financial Statements.
(c) Debentures and other debt instruments
The Company has raised an amount of Rs.300 crores by way of issue of Non-ConvertibleDebentures on private placement basis during the year. The outstanding amount ofNon-Convertible Debentures issued by the Company is Rs.1706.84 crores as on 31stMarch 2020.
During the year the Company issued Commercial Papers (CPs) aggregating to Rs.300 croreson 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 Committee Board and Shareholdersif and as applicable. The particulars of material contracts and arrangements entered intowith the related parties in accordance with the Related Party Policy of the Company andpursuant to the provisions of Section 188(1) of the Companies Act 2013 and Rule 8(2) ofthe Companies (Accounts) Rules 2014 are annexed herewith as annexure-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
Risk Management is an integral part of our strategy for stakeholders' value enhancementand is embedded in to governance & decision making process across the organization.The Company has implemented an integrated risk management framework to ensure effectiveresponses to strategic operational financial and compliance risks faced by theorganization.
As a part this framework all the risks are discussed and deliberated with theconcerned functional heads and business process owners to continually identify assessmitigate and monitor risks across the entity its business functions and units. The RiskManagement Committee meets periodically to assess and deliberate on the key risks andadequacy of mitigation plan. It has formulated a comprehensive Rs.Risk Register' which iscontinuously updated to capture new risks/threats augmenting from changes ininternal/external environment. Inputs from risk assessment are also embedded in to annualinternal audit program. Key risks and mitigation measures are summarized in ManagementDiscussion and Analysis section of the Annual Report.
SUBSIDIARIES & JOINT VENTURES
As of 31st March 2020 the Company has 15 subsidiaries out of which 3 arestep down subsidiaries.
Aptil Pharma Limited (Aptil") a wholly owned subsidiary of Torrent Pharma(UK) Limited. UK was dissolved w.e.f. 15th October 2019. The business ofAptil was merged into Torrent Pharma (UK) Limited.
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 comprisesseven other Directors as on 31st March 2020 including two Whole TimeDirectors four Independent Directors which includes two Women Directors 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 the members of the Company have approved (through PostalBallot):
Re-appointment of Shri Samir Mehta (holding DIN 00061903) as Executive Chairmanof the Company with effect from 1st April 2020 till 31st March2025 subject to provisions contained in Regulation 17(1B) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("Listing Regulations Amendment")which are scheduled to be effective from 1st April 2022 or such later date asmay be determined by SEBI and upon the Listing Regulations Amendment coming into effectShri Samir Mehta shall cease to be the Executive Chairman of the Company.
Appointment of Shri Jinesh Shah (holding DIN 00406498) as Director andWhole-time Director designated as Director (Operations) of the Company for the period of 5(five) years with effect from 1st August 2019.
As per the provisions of the Companies Act 2013 Dr. Chaitanya Dutt Director(Research and Development) (holding DIN 00110312) retires by rotation at the ensuing AGMand being eligible has offered himself for re-appointment.
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 ofBoard/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 five meetings of the Board of Directors were convened and held on 20thMay 2019 23rd July 2019 23rd October 2019 27thJanuary 2020 and 11th March 2020. The intervening gap between two consecutivemeetings was not more than one hundred and twenty days. Detailed information on themeetings of the Board is included in the Corporate Governance Report which forms part ofthe Annual Report.
(c) Audit Committee
The composition of the Audit Committee is in compliance with the provisions of Section177 of the Companies Act 2013 and Regulation 18 of the Listing Regulations. Thecomposition of the Committee as on 31st March 2020 is given below:
|Name of Director ||Category of Directorship |
|Shri Shailesh Haribhakti Chairman ||Independent Director |
|Shri Haigreve Khaitan ||Independent Director |
|Ms. Ameera Shah ||Independent Director |
|Ms. Nayantara Bali1 ||Independent Director |
1 Ms. Nayantara Bali was appointed as Member of the Committee with effect from 6thApril 2019.
The Committee was renamed as Audit Committee from Audit and Risk Management Committeeon constitution of separate Risk Management Committee on 20th May 2019.
During the year the Board has accepted all the recommendations made by the AuditCommittee.
(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/operationsof the Company;
have the 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/expertisein unrelated areas may also be considered);
have appropriate comprehension to understand or be able to acquire thatunderstanding
> Relating to Corporate Functioning
> 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 along withnecessary 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 2019-20 the Company has conducted 12programs for familiarising the Directors for a total duration of 9 hours 50 minutes.
On cumulative basis since 1st April 2015 the Company has conducted 60programs for familiarising the Directors for a total duration of 52 hours and 45 minutes.
The details of such familiarisation programs for Independent Directors are posted onthe website of the Company and can be accessed athttp://www.torrentpharma.com/pdf/cms/Familiarization_Programme_2019-20.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 and Individual Directors (i.e. Independent andNon Independent 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 27th January 2020 with respect tothe above process.
(g) Key Managerial personnel
There was no change in the Key Managerial Personnel during the year under review otherthan the directors as already captured in this report.
(h) Directors' Responsibility statement
In terms of Section 134 (3)(c) of the Companies Act 2013 in relation to financialstatements of the Company for the year ended 31st March 2020 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 2020 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
The Remuneration policy covers the remuneration for the Directors (Chairman ManagingDirector Whole-time directors Independent Directors and other non-executive Directors)and other employees (under senior management cadre and management cadre). The Policy hasbeen formulated with the following key objectives:
To ensure that employee remuneration is in alignment with business strategy& objectives organisation values and long-term 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 Listing Regulations approval of theshareholders by special resolution shall be required every year in which the annualremuneration 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 Rs.1 lakh is paid to Independent Directors for each meeting of theBoard or any Committee thereof 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-dto this Report.
(a) Statutory Auditors
B S R & Co. LLR 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 with respect to the financial year 2016-17 up tothe conclusion of the Forty Ninth AGM to be held with respect to the financial year2021-22.
(b) Cost Auditors
In 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 2019-20.
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 2020. The Cost Audit Report to the Central Government for thefinancial year ended 31st March 2019 was filed on 19th August2019 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 2020-21and 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 2019-20.
M/s. M. C. Gupta & Co. have carried out the Secretarial Audit of the Company foryear 2019-20 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 2019-20 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 |
|26th May 2020 ||Executive Chairman |