Torrent Pharmaceuticals Ltd Directors Report

To,

The Shareholders

The Directors have the pleasure of presenting the Fifty First Annual Report of your Company together with the Audited Financial Statement for the year ended 31^st March, 2024.

HIGHLIGHTS

1. Celebrating Legacy, Shaping tomorrow: Branded business:

The branded business which now accounts for around 72% of the overall revenues of the Company has maintained its strength, consistently outperforming the market in the respective geographies of presence. This is a testament to the enduring legacy of excellence established over the years. The acquired India business of Curatio Health Care (I) Private Limited ("Curatio") continues to create value, expanding market reach and deepening our presence in the dermatology segment. With business now fully integrated, synergies have materialised leading to margin expansion.

Generic:

Germany has registered strong growth on the back of new tender wins and better conversion rate in tenders already won in the past. Incremental investments are being made to increase the share of OTC business over the next 3 years and also building portfolio around a new customer segment.

US, with the manufacturing facility at Dahej and Bileshwarpura approved by the USFDA, new products launch will start from April 2024. Over the next 3 years, US is expected to contribute positively to the overall performance of the Company.

2. India business:

• Market outperformance: As per AIOCD data set (MAT March 24), the Company grew at 11 % versus Indian Pharmaceutical Market (IPM) growth of 7%. Growth was aided by strong performance of top brands, new launch momentum, market share gain in focus therapies and growth from the Curatio acquired portfolio.

• Field force expansion: During the year, the Company has expanded field force to complement its new launches and selectively expand its reach amongst Consulting Physicians and General Practitioners. As at 31^st March 2024, total number of field force stood at around 5,700.

• In-Licensing: The Company entered into a strategic alliance with Zydus Lifesciences Ltd for co-marketing Saroglitazar, prescribed for critical treatment for Chronic liver diseases. The alliance will further augment our gastroenterology franchise and will help to address emerging unmet patient needs of NASH and NAFLD disease areas with high prevalence and limited therapeutic options availability.

• Consumer Health: The Consumer health segment was launched in H2 of 2022-23. The under this segment was Shelcal 500 and further during the year, the portfolio expanded with addition of more brands such as Unienzyme, Ahaglow and Tedibar. Various digital campaign activations are undertaken including nationwide TV advertisements, social media launch on websites and social handles.

• The Company is now ranked 5^th in the IPM. It has 21 brands in the Top 500 brands of IPM and has 16 brands with revenues of more than 100 crores.

• The Company will continue to strengthen its competitive position through focus on new launches, market expansion, improving field force productivity and brand building.

3. Brazil business:

• The Company continues to be ranked no. 1 Indian Pharmaceutical Company in Brazil.

• Brazil registered a growth of 20% (BRL growth of 12%). The performance was aided by new product launches, improvement of market share in existing products and higher growth in the generic segment.

• As per secondary market data, Brazil grew at 14% against market growth of 10% in value and 14 % vs market growth of 0.4% in volumes.

• The Company launched three products during the year.

• The Company has added a second sales team for its Central Nervous System (CNS) products. The expanded sales force will complement new launches.

• As at 31^st March 2024, total number of field force stood at around 321.

• The Company will continue to deepen its presence in the existing therapies of cardiology, diabetes and CNS by focusing on brand building, expansion of product portfolio and improvement in field force productivity. The Company is also preparing for two new therapeutic areas.

4. Germany business:

• The Company continues to be ranked no. 1 amongst the Indian Pharmaceutical Companies in Germany and is ranked no. 5 in the overall generic market.

• The Company saw sequential growth on rolling quarter with new tender wins, better conversion of existing tenders and growth in the non-tender segments. As per IQVIA dataset (MAT March 24), the Company grew at 11% against market growth of 4%.

• The Company continues to focus on cost efficiency efforts to improve its market share in the tender segment, launching products that face patent expiries, expanding non-tender segment & developing its OTC business.

5. US business:

• US business registered de-growth mainly due to lack of new products coupled with price erosion on existing products.

• USFDA approved Dahej facility has received Establishment Inspection Report (EIR), which paves way for the new product approvals. New product launches will start from April 2024. Oncology facility has received EIR and the first product is launched from this facility.

• At end of year, 34 ANDAs were pending approval with USFDA and 4 tentative approvals were received. During the year,

10 ANDAs were approved and 2 ANDAs were filed.

6. Financial Performance:

• The Company registered a revenue growth of 12% and Operating EBITDA growth of 19%.

• Operating EBITDA margins were 31% compared to 30% in the previous year. product to be launched

• At end of 2023-24, leverage in terms of Net debt to EBITDA stands at 0.87x.

FINANCIAL RESULTS

The summary of Standalone (Company) and Consolidated (Company and its subsidiaries) operating results for the year and appropriation of divisible profit is given below:

( H in crores except per share data)

	Standalone		Consolidated
	2023-24	2022-23	2023-24	2022-23
Sales & Operating Income	8,533	7,695	10,728	9,620
Profit Before Depreciation & Amortisation, Net Finance Cost, Exceptional Items & Tax	2,979	2,536	3,414	2,872
Less: Depreciation & Amortisation	761	672	808	706
Less: Net Finance Cost	301	287	342	319
Profit Before Exceptional Items & Tax	1,917	1,577	2,264	1,847
Less: Exceptional Items	-	-	(88)	-
Less: Tax Expense	560	526	696	602
Net Profit for the Year	1,357	1,051	1,656	1,245
Balance brought forward	3,394	3,213	3,303	2,917
Other Comprehensive income and other adjustments	0	(7)	(2)	4
Balance available for appropriation	4,751	4,257	4,957	4,166
Appropriated as under:
Transfer to General Reserve	-	-	-	-
Dividend	1,015	863	1,015	863
Balance Carried Forward	3,736	3,394	3,942	3,303
Earnings Per Share (H per share)	40.10	31.07	48.94	36.79

Consolidated Operating Results

The consolidated sales and operating income increased to H 10,728 crores from H 9,620 crores in the previous year showing a growth of 12%. The consolidated operating profit for the year was H 3,414 crores as against H 2,872 crores in the previous year registering growth of 19%. The consolidated net profit stood at H 1,656 crores compared to H 1,245 crores in the previous year registering growth of 33%.

Exceptional Item

Exceptional item of 88 crores pertains to gain on sale of manufacturing facility at US which was previously impaired.

Management Discussion and Analysis (MDA)

The details of operating performance of the Company for the year, the state of affairs and the key changes in the operating environment have been analysed in the Management Discussion and Analysis section which forms a part of the Annual Report.

APPROPRIATIONS

i) Dividend

The Company endeavours to distribute 50% of its annual consolidated net profit after tax without taking into account non-cash charges relating to the business acquisitions as dividend, in accordance with the dividend policy. The policy is available on the website https://www.torrentpharma.com/pdf/investors/Dividend_Policy.pdf

During the year under review, an interim dividend of H 22/- per equity share of face value of H 5/- each (@ 440%) amounting to H 745 crores was paid to the shareholders. Further the Board considered it prudent to recommend the final dividend for 2023-24 as per the Dividend Distribution Policy and accordingly recommended a final dividend of H 6/- per equity share of face value of H 5/- each (@ 120%) amounting to H 203 crores for approval of shareholders at the 51^st Annual General Meeting (AGM) of the Company. Hence, the total dividend paid / payable with respect to the year under review was of H 28/- per equity share

(@ 560%) amounting to H 948 crores.

ii) Transfer to Reserves

The Board of Directors of the Company has decided not to transfer any amount to the reserves for the year under review.

HUMAN RESOURCES

At Torrent Pharma, we recognise our employees as the Companys most valuable assets essential to our growth and success. Our employees at every level, contribute through their commitment, loyalty and hard work making our achievements possible. In order to sustain this, we continue to build competencies to embrace the new skills for a sustainable future. This has enabled the Company to develop an inclusive, multicultural organisation that fosters employee satisfaction, diversity and a sense of belonging.

We believe that the Companys success is the result of the combined efforts of all its employees. During the year, the Company took several initiatives to increase organisational performance and productivity in order to be a value-driven and future-ready Organisation.

With the acquisition of Curatio Health Care (I) Private Limited; the Human Resources Department has successfully facilitated the integration of the new employees into Torrents culture through various training and development programs. Moreover, continuous training programs for Managers, both in the field and at the Corporate Office, ensured the acquisition of new managerial skills, essential to be ready for future challenges.

The Company is committed to provide a safe and healthy working environment and achieving an injury and illness free work place. Economic considerations, never supersedes health and safety measures and our leaders actively demonstrate visible commitment towards health and safety.

All lead and lag incidents are reported through an incident reporting system. The system has well-established procedures for reporting incidents; later investigations are carried out to determine root cause, corrective actions and improvements in the current systems. This entire process is carried out, in a non-retaliatory mechanism for employees and contract staff equally resulting in reporting incidents without fear.

Through cadre and capability building efforts, we remain focused on strengthening our talent processes and building the talent pipeline for the Organisation. Significant efforts have been made to strengthen our leadership and hire the best talent available. These have helped to bring a new perspective and energy in the Organisation. Our training and development initiatives have played a pivotal role in talent development and enhancing employees managerial skills.

To foster a sense of togetherness amongst our employees, various initiatives such as SAMPARK have been implemented, facilitating regular interactions between management and new employees offering Orientation program and avenues for open communication.

Our coaching and mentoring programs alongside initiatives such as Sahyog, Baat-cheet and U Coffee sessions empower employees to speak out on issues, learn and grow both professionally and personally.

The Companys commitment towards health and safety extends to promote a culture of health, wellbeing and psychological safety. Every employee takes responsibility for their actions impact on others and on the workplace and engages in meaningful, open and respectful advice.

The Company is committed to Diversity and Inclusivity in the Organisation. Various Women-friendly policies have created an ecosystem over the years that enable women to work and contribute to the Organisation. Maternity Benefits as well as Day care facilities are provided to further support female employees in advancing their careers. The Company believes in meritocracy and has a robust appraisal system in place for having a fair evaluation without any gender bias.

The Company believes and will continue to invest in the employees professional development, emphasising responsible growth and innovation. The Company fosters a commitment to address patient needs, contribute to community well-being and environmental sustainability.

The Company has a diverse workforce of 14,916 employees as on 31^st March, 2024 vis-?-vis 13,573 employees as on 31^st March, 2023.

VIGIL MECHANISM

The Company has built a strong reputation over the years for conducting its business with honesty and integrity and has exhibited zero tolerance towards any form of unethical behavior or misconduct.

Our commitment to professionalism, fairness, dignity, and ethical conduct is reinforced through a robust reporting system for all its employees and stakeholders detailed in the Corporate Governance Report.

This reporting system not only encourages the reporting of unethical behavior but also ensures the protection of whistle blowers, granting them direct access to the Audit Committee. Our Code of Business Conduct articulates important corporate ethical practices that shapes our business operations and represent our core values.

Both the Whistle blower Policy and Code of Business Conduct are accessible on our website at www.torrentpharma.com demonstrating our commitment to transparency and accountability.

Furthermore in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder, the Company has formulated a Policy on protection of women against sexual harassment at workplace. In this context, the Company regularly organises a series of interactive awareness workshops for its employees. The Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 relating to the formation of Internal Complaints Committee. During the year, no complaints were received under this policy.

In addition, the Company has in place the Human Rights Policy defining the guiding principles for respecting and protecting the Human Rights across the Companys operations.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Activities undertaken by the Company were under the thrust areas of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. During the year, the Company was required to spend H 29.65 crore (2% of the average net profit of the past three financial years). The total amount spent during the year was H 40.96 crore. Further, the unspent amount at the end of the year was transferred to "Unspent CSR Account". The brief details of the major CSR activities are described hereunder:

REACH: Driven by the belief of Chairman Emeritus, Sudhir Mehta ‘Children are the future of our nation and this future must be well preserved, the flagship CSR program of the Group "REACH" – Reach EAch CHild was initiated in the year 2016 under the aegis of UNM Foundation, a Section 8 Company ("UNMF").

In the past years, UNMF adjusted its approach towards community healthcare initiatives, which are now carried out in two distinct categories viz. Outreach Activities and Medical Services.

Outreach Activities

Targeting baseline health of children, these activities are designed to improve the health and well-being of children in underserved communities, establishing a foundation for a healthy future. Under this programme, UNMF organises baseline screening camps across various villages covered in three states including Gujarat, Maharashtra, Uttar Pradesh and Union Territory of Diu, Daman and Dadra Nagar Haveli. Children are screened for anaemia and malnourishment; necessary interventions are taken for possible improvement.

1,50,000+	1,600+
Children screened through grassroot interventions	Villages covered (Gujarat, Maharashtra, Uttar Pradesh,
	Union Territory – Diu, Daman and Dadra Nagar Haveli)
58%	89%
Children out of malnourishment	Children out of anemia

Expanding Outreach to More Lives

In 2023-24, UNMF expanded its initiatives in more than 600 villages targeting to cover cumulative total of 1,600 villages and screened additional 31,000 children totalling more than 1,50,000 children on a cumulative basis. UNMF plans to extend its interventions to over 400 additional villages in the year 2024-25 with this, we will be able to reach a total of 2,000 villages and make a positive impact on the health of both anaemic and malnourished children. To enhance its impact, UNMF plans to expand its community interventions in villages nearby Dholera, Junagadh and Naswadi in Gujarat and Agra in Uttar Pradesh.

Adolescent girls Healthcare and Sanitation

One of the Companys initiatives was focused on empowering adolescent girls in rural areas by addressing the taboo associated with menstruation and promoting menstrual hygiene. The programme included interventions to encourage the use of sanitary napkins and provide education on menstrual hygiene. Female volunteers / employees conducted counselling sessions and distributed sanitary napkins to 11 to 18 years old menstruating adolescent girls in SUGEN, Dahej, Indrad, Banaskantha and Radhanpur.

During 2023-24, UNMF has distributed bio-degradable reusable sanitary napkins to additional 27,000 adolescent girl beneficiaries owing to definite advantages like environment friendly and can be reused for 15 to 18 months after simple wash. Till 31^st March, 2024; 64,000 beneficiaries have been served with these unique sanitary pads.

72,000+	1200+
Adolescent girls benefited	Villages covered in cumulative basis

Medical Services – UNM Children Hospital & PHC:

UNMF offers medical services to children up to 18 years of age who live in remote areas with limited access to medical facilities. The initiative involves setting up multidisciplinary UNM Children Paediatric Health Centres to provide free medical consultation, basic laboratory services, and medication to underprivileged children. In 2017, UNMF had launched four paediatric centres in SUGEN, Dahej, Indrad, and Balasinor of Gujarat with a focus on outpatient departments (OPDs). In 2020, UNMF achieved a significant milestone by transforming the SUGEN paediatric centre into a 150-bedded hospital, providing critical care to children. Consequently, five more PHCs have been started on rented premise on once in a weekly basis at locations of Dediapada, Waghai, Naswadi, Radhanpur and Chhapi to reach to and serve beneficiaries in interior rural areas with less medical facilities.

In 2023-24, UNMF started conducting OPDs on regular basis at Naswadi and Radhanpur locations, and new Urban UNM Children PHCs at Ankleshwar and Bhestan.

Looking at the response from community, UNMF intends to establish UNM Children PHCs at Dholera and Junagadh rural locations and 2 at urban areas in next year.

Cumulative status across all 10 UNM Children PHCs & 1 UNM Children Hospital.

620+	1,87,000+	6,21,000+
OPDs / day	OPDs FY 2023-24	OPDs since inception

UNM Children Hospital: Enhancing Healthcare Facilities

In 2022, Torrent Group took a strategic decision to shift its focus from OPDs to surgeries, allowing the company to offer advanced surgical procedures to children in need. This decision led to the transformation of the SUGEN paediatric centre into the UNM Children Hospital, symbolising the companys commitment to providing comprehensive medical services to children. Located in Kamrej, the hospital boasts state-of-the-art infrastructure, including advanced pneumatic tube systems and cutting-edge operation theatres. With a team of highly skilled paediatric surgeons and doctors, the hospital has become a beacon of hope, attracting beneficiaries from cities across India for critical treatments.

Through UNM Children Hospital, Torrent Group has been enhancing facilities and expanding services to meet the growing healthcare demands of the community. The hospital offers specialised cardiac care and has expanded its facilities:

Particulars	Beneficiaries	FY 2023-24
	till March 2024
	(Cumulative since
	April 2020)
OPD	1,17,336	61,001
IPD	4,354	2,725
Surgery	2,539	1,709
Neonatal ICU (NICU)	327	207
Paediatric ICU (PICU)	267	178

Surgical Camps: Bringing Healthcare Closer

Torrent Group conducts surgical screening camps as part of the UNM Children Hospital - Intensive Awareness Action Plan to identify and provide primary screening and consultation facilities to surgical patients in remote areas. These camps facilitate the identification of surgical needs and provide essential medical services to underserved communities.

Impact of Surgical Camps in FY 23-24

Location	Number of
	Surgeries
UNMCH	110
Waghai	16
Pakhajan	16
Ucchal	5
Balasinor	6
Radhanpur and Chappi	29
Total	182

Through these initiatives, Torrent Group is committed to improving the healthcare infrastructure and services available to communities, ensuring better health outcomes and well-being for all.

Pratiti - Public Park Development:

The Pratiti program aims to provide citizens with accessible, sustainable green spaces for leisure and recreation. The Company has successfully revamped nine parks in Ahmedabad, covering more than 98,000 square meters. The Companys commitment to maintaining these green spaces ensures their longevity and continued accessibility to the public.

All the gardens are designed and developed with a mission to provide the best environmental conditions to live in, by providing the citizens with recreational areas by creating parks, gardens, ponds, and lakes near their neighborhood with reduced level of air and noise pollution by improving micro-alignment at the city level, and to recharge groundwater through ponds and lakes.

The Company along with one of Indias best-known landscape design firms conceptualised an approach for development of urban public parks.

The development / re-development of 4 parks in Ahmedabad admeasuring approx. 2,65,000 square meters area is in progress.

Lake Development:

The Company has also taken two Lakes for development at Zolapur and Kesardi villages in Sanand and Bavla districts respectively for providing the villagers with basic facilities and recreational areas. The major activities undertaken include refurbishing of crematorium, community hall & surrounding area near by temple, development of gazebo with siting arrangement, children play area, open gym area and Green belt development with walking track.

Both the lakes have been fully developed, inaugurated and opened for public use during the year. The Report on CSR activities is annexed herewith as Annexure A.

ENVIRONMENT, HEALTH & SAFETY (HSE)

Our Pharmaceuticals business is built on trust and responsibility with the patients and consumers at the heart of everything we do. We are prioritising HSE at every level of our operations for protecting the planet from the challenges of climate change, preserving our natural resources and keeping our employees and communities safe. We are driven by strong HSE Policies that encompass rigid safety procedures and guidelines, environmental and sustainable programmes and employee well-being initiatives.

Statutory requirements are dynamic in nature and keeping up with HSE compliance is a foundational necessity for businesses to sustain and grow. We keep on assessing and updating our applicable statutory compliances which are being ensured through various internal and external mechanisms.

Our constant and focused endeavours in HSE domain like adopting various digitalisation in our prevailing HSE practices like Online portal for reporting Unsafe Act / Conditions and Incidents with Corrective and Preventive actions, Continual Safety training and counselling on Technical and behavioural approach, Organising various HSE Campaigns, Internal and External Safety Inspections

& audits have contributed substantially to bring down incident rates and thus leading to sustainable, safe and healthy working environment for our work force and other Stakeholders. Health and Safety training is provided to all employees and contract workers on a regular basis by external and internal HSE Specialist. To foster a healthy HSE culture inside the firm, we encourage all employees, including contract workers to embrace safe working habits and behavior.

The Board remains highly engaged in overseeing ESG (Environmental, Social & Governance) progress against defined roadmap to translate our climate strategy into actions and deliver significant improvements in carbon footprint, energy & water efficiency and more efficient waste management for business sustainability.

As a commitment towards green energy resources, the Company has commissioned Hybrid (Solar & Wind) Power generation plant with an investment of 85 crores for Indrad and Bileshwarpura manufacturing facilities and R&D Centre. This generation facility is situated at Kalawad, Dist: Jamnagar, Gujarat and comprises of two wind mills having capacity of 2.7 MW each and 5.0 MW AC Solar Power plant. During FY 2023-24, 21 Mn KWH green energy has been generated reducing the environmental impact / carbon footprint significantly by 21.5% compared to previous fiscal and also resulting into an annual saving of 14.60 crores.

Further, the Company has taken one more step in the direction of optimum utilisation of renewable resources by commissioning of Agro waste based (In briquette form) boiler at its Indrad, Dahej and Baddi manufacturing facilities. In order to achieve this green initiative, the Company has invested capex of around 35 crores. This initiative has resulted into reduction in fossil fuel consumption by 38% and reducing the environmental impact / carbon footprint significantly by 39% compared to previous fiscal and also resulting into annual saving of 10 crores.

Captive renewable power generation system (Solar Roof Top – 1.7 MW) at Indrad, Bileshwarpura and Sikkim manufacturing facilities and R& D Centre contributed to generate 22 lakh KWH of green energy and annual cost saving of 1.5 crores in FY 2023-24.

Our waste management strategy commits us to finding ethical, economical, and efficient ways to reduce the volume and minimise our waste foot print. It also goes further, with a commitment to maximise recovery of resources and improve operating efficiency while reducing environmental risks and impacts.

Incineration of Hazardous waste disposal from all manufacturing facilities have been reduced by 52% from previous year. The majority of waste quantity is diverted from incineration to co-processing (Energy Recovery) in cement industries.

Land fillable Hazardous waste disposal from all manufacturing facilities have been reduced by 35% from previous year. Generation of land fillable quantity has been reduced and in addition to this, majority of waste quantity is diverted from landfill to co-processing (Energy Recovery) in cement industries. Almost 50% of manufacturing facilities in operation have achieved target of zero landfill waste disposal. We aspire to achieve remarkable reduction in disposal quantity and to continue our efforts for remaining sites to become Zero Landfill Hazardous waste.

The majority of waste quantities are diverted from incineration and landfilling to co-processing (Energy Recovery) in cement industries.

Under the Plastic Waste Management Rules, 2016 and its subsequent amendment, the Company is registered as a Brand Owner with Central Pollution Control Board (CPCB). As an extended producers responsibilities (EPR), the Company is collecting back 100% equivalent quantity of plastic waste across PAN India and disposing them off safely.

All our manufacturing facilities across India including few functions at our Corporate Office are certified for ISO 14001:2015 (Environment Management System) and 45001:2018 (Occupational Health & Safety Management System). Two Manufacturing facilities and R&D Centre of the Company are also accredited with ISO 50001:2018 (Energy Management System).

Our goal is "Zero Harm, Zero Injury, Zero Accident". We have been striving to achieve it by having state-of-the art system, process & trained / skilled manpower.

In line with our sustainability goals, we are committed to reduce carbon emissions and energy consumption. To achieve this goals, we have developed action plans to utilise hybrid renewable sources such as solar and wind power, bio- briquettes, flash steam systems and heat pumps.

FINANCE

(a) Share Capital

As on 31^st March, 2024 the Authorised Capital of the Company is 235 crores, divided into 42 crores Equity Shares of 5/- each and 25 Lakh Preference Shares of 100/- each.

(b) Deposits and Loans, Guarantees and Investments

The Company has neither accepted nor renewed any deposits. None of the deposits earlier accepted by the Company remained outstanding, unpaid or unclaimed as on 31^st March, 2024.

Details of Loans, Guarantees and Investments by Company under the provisions of Section 186 of the Companies Act, 2013, during the year, are provided in Note 10 and 11 to the Standalone Financial Statements.

(c) Debentures and other debt instruments

The outstanding amount of Non-Convertible Debentures issued by the Company is H 785.70 crores as on 31^st March, 2024.

(d) Contracts or Arrangements with Related Parties

All Related Party transactions are entered in compliance to the provisions of law, the Policy on Materiality of and dealing with Related Party Transactions ("Related Party Policy") and were entered with the approval of Audit Committee, Board and Shareholders if and as applicable. All the related party transactions were entered into during the financial year were on arms length basis. Further there were no related party transactions which could be considered material based on the definition of material transaction as mentioned under explanation to Sub Regulation (1) of Regulation 23 of the the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company for 2023-24 and hence does not form part of this report.

(e) Internal Financial Control System

The Company has a formal framework of Internal Financial Control ("IFC") in alignment with the requirement of Companies Act, 2013 and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC.

Accordingly, the Company has a well-placed, proper and adequate IFC system, which ensures:

• 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 framework, and take necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology controls.

Based on this evaluation, no significant events had come to notice during the year that have materially affected, or are reasonably likely to materially affect, our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company. The Statutory Auditors of the Company has audited the IFC with reference to Financial Reporting and their Audit Report is annexed as Annexure B to the Independent Auditors Report under Standalone Financial Statements and Consolidated Financial Statements.

(f) Material changes affecting the Company

No material changes and commitments have occurred after the close of the year till the date of this Report which may affect the financial position of the Company.

INSURANCE

The Companys manufacturing facilities, properties, equipment and stocks are adequately insured against all major risks including loss on account of business interruption caused due to property damage. The Company has appropriate liability insurance covers particularly for product liability, clinical trials and cyber liability. 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 enhancement and is embedded in to governance & decision making process across the Organisation. The Company has in place the Risk Management Policy to ensure effective responses to strategic, operational, financial and compliance risks faced by the Organisation.

As a part of this Policy, all the risks are discussed and deliberated with the concerned functional heads and business process owners to continually identify, assess, mitigate and monitor risks across the entity, its business functions and units. The Policy also encompasses identification, assessment and mitigation of ESG risks. The Risk Management Committee meets periodically to assess and deliberate on the key risks and adequacy of mitigation plan. It has formulated a comprehensive ‘Risk Register, which is periodically updated to capture new risks / threats augmenting from changes in internal / external environment. Inputs from risk assessment are also embedded into annual internal audit programme. Key risks and mitigation measures are summarised in Management Discussion and Analysis section of the Annual Report.

SUBSIDIARIES & JOINT VENTURES

As of 31^st March, 2024, the Company has 17 subsidiaries, out of which 3 are step down subsidiaries.

During the year, Farmaceutica Torrent Colombia SAS, wholly owned subsidiary of the Company was incorporated on 03^rd January, 2024.

The highlights of performance of major subsidiaries of the Company have been discussed and 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 is provided in Form AOC-1, which forms part of the Annual Report.

The details of UNM Foundation, associate company of the Company is also shown in the AOC-1. This associate company is Section 8 Company and primarily floated with another company of the Torrent group to carry out the CSR activities.

The annual accounts of the subsidiary companies will be made available to any Member of the Company seeking such information at any point of time and are also available for inspection by any Member of the Company at the Registered Office of the Company on any working day during business hours up to the date of the AGM. The annual accounts of the subsidiary companies are also available on the website of the Company at www.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 comprises ten other Directors as on 31^st March, 2024¹, including two Whole Time Directors and seven Independent Directors which includes two Women Directors and one Non-Executive Director (Other than Independent Directors).

All the Independent Directors of the Company have furnished declarations that they meet the criteria of independence as prescribed under the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

During the year under review:

• Sudhir Mehta (holding DIN 00061871), Chairman Emeritus, has stepped down as Non-Executive, Non-Independent Director of the Company on 31^st March, 2024 with a desire to spend more quality time with family and on social causes. The Board put on record its deep appreciation for the pioneer role played by him in building up the Company. He will continue to be Chairman Emeritus of the Company without holding any position on the Board of Directors of the Company.

• Shailesh Haribhakti (holding DIN 00007347) and Haigreve Khaitan (holding DIN 00005290), Independent Directors of the

Company, who were appointed for second and final term for a period from 01 ^st April, 2019 to 31^st March, 2024 ceased as Directors on the Board of the Company on 31^st March, 2024 pursuant to completion of second and final term. The Board put on record its sincere appreciation for the valuable role played by them in guiding the functioning of the Board and its Committees.

The Board places on record its profound appreciation for the guidance & support provided by them for overall growth of the Company.

During the last AGM held on 07^th August, 2023, the members approved appointment of Nikhil Khattau (holding DIN 00017880) as an Independent Director of the Company for a term of 5 (five) consecutive years effective from 01^st October, 2023.

1 Shailesh Haribhakti and Haigreve Khaitan have completed their tenure as Independent Directors of the Company on 31^st March, 2024 and Sudhir Mehta has stepped down as Director of the Company effective 31^st March, 2024.

In the opinion of the Board, the directors appointed during the year possess requisite expertise, integrity and experience (including proficiency) for appointment as Independent Directors of the Company.

Jinesh Shah (holding DIN 00406498), Whole time Director, is liable to retire by rotation at the forthcoming AGM. He has expressed his desire to step down as the Director of the Company and not getting re-appointed.

Samir Mehta (holding DIN 00061903) has been re-appointed by the Board of Directors in its meeting held on 24^th May, 2024 as Executive Chairman of the Company for the period of 5 years with effect from 01^st April, 2025, subject to approval of the Members.

On the recommendation of Nomination and Remuneration Committee, the Board appointed Jinal Mehta (holding DIN 02685284) as an Additional (Non-Executive Non-Independent) Director of the Company effective 24^th May, 2024 subject to approval of shareholders in the next General Meeting of the Company or within the period of three months from the date of appointment, whichever is earlier. The Board has recommended the appointment of Jinal Mehta (holding DIN 02685284) as a Director to the Members at the ensuing AGM.

The brief resume and other relevant information of the Directors being appointed / re-appointed is given 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 discuss and 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 in advance 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 02^nd May, 2023, 30^th May, 2023, 07^th August, 2023, 23^rd October, 2023 and 02^nd February, 2024. The intervening gap between two consecutive meetings was not more than one hundred and twenty days. Detailed information on the meetings of the Board is included in the Corporate Governance Report which forms part of the Annual Report.

(c) Audit Committee

The composition of the Audit Committee is in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations. The composition of the Committee as on 31^st March, 2024 is given below:

Name of Director	Category of Directorship
Shailesh Haribhakti, Chairman1	Independent Director
Haigreve Khaitan2	Independent Director
Ameera Shah	Independent Director
Nayantara Bali	Independent Director
Dr. Maurice Chagnaud	Independent Director
Nikhil Khattau3	Independent Director

1 Shailesh Haribhakti ceased to be Member and Chairman of the Committee due to completion of his term on the Board on 31^st March, 2024.

2 Haigreve Khaitan ceased to be Member of the Committee due to completion of his term on the Board on 31^st March, 2024.

3 Nikhil Khattau was appointed as the Member of the Committee with effect from 14^th October, 2023 and as Chairman of the Committee with effect from 24^th May, 2024.

During the year, the Board has accepted all the recommendations made by the Audit Committee.

(d) Appointment of Directors

(i) Criteria for Appointment of Directors

The Board of Directors of the Company has identified following criteria for determining qualification, positive attributes and independence of Directors:

1) Proposed Director ("Person") shall meet all statutory requirements and should: • possess the highest ethics, integrity and values;

• not have direct / indirect conflict with present or potential business / operations of 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 to articulate a clear direction for an organisation;

• have relevant experience (in exceptional circumstances, specialisation / expertise in unrelated areas may also be considered);

• have appropriate comprehension to understand or be able to acquire that understanding

Relating to Corporate Functioning

Involved in scale, complexity of business and specific market and environment factors affecting the functioning of the Company.

2) The appointment shall be in compliance with the Board Diversity Policy of the Company.

The key qualifications, skills and attributes which the Board is collectively expected to have for the effective discharge of their duties are explained in Corporate Governance Report of the Company.

(ii) Process for Identification / Appointment of Directors

• Board members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him to the Nomination and Remuneration Committee (NRC).

• Chairman of the Company can himself also refer any potential person meeting the above 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 and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarise with the Companys procedures and practices. The Company endeavours, through presentations at regular intervals, to familiarise the Independent Directors with the strategy, operations and functioning of the Company and also with changes in the regulatory environment having a significant impact on the operations of the Company and the pharmaceutical industry as a whole. Site visits to various plant locations and CSR sites get organised for the Directors to enable them to understand the operations of and CSR activities carried out by the Company. The Independent Directors also meet with senior management team of the Company in formal / informal gatherings.

The details of such familiarisation programs for Independent Directors are posted on the website of the Company and can be accessed at https://www.torrentpharma.com/pdf/cms/Familiarisation_Programme_2023-24.pdf

(f) Board Evaluation

The Evaluation of Board, its Committees, Individual Directors (Independent and Non Independent Directors) and Chairperson was carried out as per the process and criteria laid down by the Board of Directors based on the recommendation of the NRC:

• Chairperson of meeting of Independent Directors briefed the Board that the Independent Directors have carried out the performance evaluation of the Board as a whole, its committees, the Non-Independent Directors, Chairman and flow information between the management and the Board.

• The evaluation of Chairperson was co-ordinated by the Chairperson of the Independent Directors meeting.

• Pursuant to above, the Board expressed the satisfaction on the functioning of the Board, the Committees and performance of Individual Directors.

• The Independent Directors met on 02^nd February, 2024 with respect to the above process.

(g) Key Managerial Personnel

There was no change in the Key Managerial Personnel during the year under review.

(h) Directors Responsibility Statement

In terms of Section134(3)(c) of the Companies Act, 2013, in relation to financial statements of the Company for the year ended 31^st March, 2024, the Board of Directors state that:

i. the applicable Accounting Standards have been followed in preparation of the financial statements and there are no material departures from the said standards;

ii. reasonable and prudent accounting policies have been used in preparation of the financial statements and that they have been consistently applied and that reasonable and prudent judgments and estimates have been made in respect of items not concluded by the year end, so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the profit for the year ended on that date;

iii. proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets 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 operating effectively; proper systems to ensure compliance with the provisions of applicable laws were in place and were adequate and operating effectively.

REMUNERATION

(a) Remuneration Policy

The Remuneration policy covers the remuneration for the Directors (Chairman, Managing Director, Whole-time Directors, Independent Directors and other non-executive Directors) and other employees (under senior management cadre and management cadre). The Policy has been 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 employees remuneration.

• To ensure the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate a high performance workforce and are in compliance 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 and variables considered for revision in the remuneration. The said Policy is available on the website 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 the whole time employment nor Managing Director(s) (NEDs) is approved by the shareholders of the Company and is subject to the condition that total commission paid to the NEDs shall not exceed the percentage limits of the net profit of the Company as specified in the Companies Act, 2013 (presently 1% of the net profit), calculated in accordance with Section 197 read with Section 198 and any other applicable provisions of the Companies Act, 2013.

Further, as per the Regulation 17(6)(ca) of the Listing Regulations, approval of the shareholders by special resolution shall be required every year, in which the annual remuneration payable to a single NED exceeds fifty per cent of the total annual remuneration payable to all NEDs, giving details of the remuneration thereof.

2. The Board or its Committee specifically authorised for this purpose, determines the manner and extent upto which the commission is paid to the NEDs within the limit as approved by the Members. The commission is determined based on the participation of the Directors in the meetings of Board and / or Committees thereof, as well as on industry practice, 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 H 1 lakh is paid to Independent Directors for each meeting of the Board or any Committee thereof attended by them.

5. Independent Directors are reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof and which may arise from performance of any special assignments given by the Board.

(c) Remuneration to Managerial Personnel

The details of remuneration paid to the Managerial Personnel forms part of the Corporate 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 Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in the Annexure B to this Report.

AUDITORS

(a) Statutory Auditors

As per Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the members of the Company in Forty Ninth AGM of the Company approved the re-appointment of B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as Statutory Auditors of the Company for a term of 5 (five) consecutive years from the conclusion of Forty Ninth AGM until the conclusion of the Fifty Forth AGM to be held with respect to the financial year 2026-27.

(b) Cost Auditors

In terms of the Section 148 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the Company has prepared and maintained the cost accounts and records for the year 2023-24.

The Company has appointed M/s. Kirit Mehta & Co., Cost Accountants, Mumbai (Firm Registration No. 000353) as the Cost Auditors of the Company for audit of cost accounting records of its activities (Formulation & Bulk Drugs activities) for the financial year ended 31^st March, 2024. The Cost Audit Report to the Central Government for the financial year ended 31^st March, 2023 was filed on 02^nd September, 2023, 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 2024-25 and fixed their remuneration, subject to ratification by the Members in the ensuing AGM of the Company.

(c) Secretarial Auditor

The Board, pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, had appointed M/s. M. C. Gupta & Co., Company Secretaries, as the Secretarial Auditors of the Company to conduct the Secretarial Audit as per the provisions of the Companies Act, 2013 for the year 2023-24.

M/s. M. C. Gupta & Co. have carried out the Secretarial Audit accordingly and their report in Form MR-3, is annexed with this Report as Annexure C. There were no qualification / observations in the report.

During the year 2023-24, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

CORPORATE GOVERNANCE

As required by Regulation 34 read with Schedule V of the Listing Regulations, a separate Report on Corporate Governance forms part of the Annual Report. The Report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause E of Schedule V of the Listing Regulations forms part of this Report as Annexure D.

ANNUAL RETURN

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the link https://torrentpharma.com/index.php/ investors/annual_return

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.

A statement containing the necessary information on Conservation of energy, Technology absorption and Foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure E.

APPRECIATION AND ACKNOWLEDGEMENTS

Your Directors appreciate the trust reposed by the medical fraternity and patients in the Company and look forward to their continued patronage. The Directors are also grateful and pleased to place on record their appreciation for the excellent support, guidance and cooperation extended by the Government of India and various State Governments specifically the Governments of Gujarat, Himachal Pradesh, Sikkim, Madhya Pradesh and Andhra Pradesh Central and State Government Bodies and Authorities, Financial Institutions and Banks. The Board also expresses its appreciation of the understanding and support extended by the shareholders and the commitment shown by the employees of the Company.

	For and on behalf of the Board of Directors
	Samir Mehta
Mumbai	Executive Chairman
24th May, 2024	DIN: 00061903