The Directors have the pleasure of presenting the Forty Fourth Annual Report of your Company together with the Audited Financial Statement for the year ended 31st March, 2017


- India Business registered 13% growth as compared to 11% growth of the market.

- Sharp price erosion in the US market including in the limited competition product launched last year; ongoing customer consolidation accelerated the price erosion; sixteen ANDAS filed in US in the last fiscal year including six FTF and two derma products.

- Strong growth of 25% in top line in Brazil in Brazilian Reals (BRL) (37% in INR) vis a vis industry growth of 14%; five brands achieved annual sales greater than 20 million BRL.

- Indrad Plant approval by USFDA and European regulatory authorities; Establishment Inspection Report (EIR) received from USFDA for Pithampur plant; Dahej facility approved by all major markets i.e. US, EU & BR.

- Acquired a USFDA approved API manufacturing facility at Vizag, Andhra Pradesh.

- Commenced commercial dispatches from new facility at Sikkim during March 2017. Total capacity enhancement of 400 crores tablets when fully completed.


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)







Sales & Operating Income





Profit Before Depreciation, Finance Cost, Exceptional Items & Tax





Less Depreciation





Less Finance Cost





Profit Before Exceptional Items & Tax





Less Exceptional Items





Less Tax Expense





Less Minority Interest





Net Profit for the Year





Balance brought forward





Other Comprehensive income and other adjusments





Balance available for appropriation





Appropriated as under:

Transfer to General Reserve





Transfer to Debenture Redemption Reserve










Tax on Distributed Profits for Dividend





Balance Carried Forward





Earnings Per Share (Rs. per share)





*Includes final dividend of Rs.106 crores and dividend distribution tax of Rs.21 crores pertaining to FY 2014-15.

Consolidated Operating Results

The consolidated sales and operating income decreased to Rs.5857 crores from Rs.6687 crores in the previous year showing a degrowth of 12.41%. The consolidated operating profit for the year was Rs.1601 crores as against Rs.2959 crores in the previous year registering degrowth of 45.89%. The consolidated net profit decreased to Rs.934 crores from Rs.1733 crores in the previous year registering a degrowth of 46.11%. Previous year include exceptional sales and profit, primarily on account of the launch of a new product in US market which had limited competition.

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.


As per the provisions of the Regulation 43 (A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (“Listing Regulations”), the Company adopted a Dividend Policy which is broadly based on the same policy as has been followed by the Company since long. Copy of the Policy is attached as Annexure - A. As per the Policy, the Company endeavours to distribute 30% of its annual consolidated net profit after tax as dividend in one or more tranches.

Interim dividend of Rs.10/- per equity share of face value of Rs.5/- amounting to Rs.169 crores was paid to the shareholders during the year under review. Further, the Board has recommended a final dividend of Rs.4/- per equity share amounting to Rs.68 crores for approval to shareholders at the 44th Annual General Meeting of the Company. The aggregate distribution amount including dividend distribution tax works out to be Rs.286 crores (previous year Rs.713 crores). The total distribution towards dividend of Rs.14/per equity share of face value of Rs.5/- each amounts to 30.53% of annual consolidated net profit after tax.


Adapting to change is quintessential to a growing organization’s longevity. Over the time, Torrent has changed to adapt and evolve with the changing economic landscape, while keeping its core values firmly entrenched.

The Human Resource Department has strategic and functional responsibilities for all of the Human Resource disciplines in this changing scenario. There are four corresponding roles for Human Resource: (a) as a strategic partner working to align Human Resource and business strategy, (b) as an administrative expert working to improve organizational processes and deliver basic Human Resource services, (c) as an employee champion, listening and responding to employees’ needs, and (d) as a change agent managing change processes to increase the effectiveness of the organization.

Within organization, Human Resource Department has active engagement with employee issues, listening to their concerns, and building a professional and stable relation between employees and employers. Managing expectations, being flexible, communicating and adequate training are few of the most significant factors in keeping employees contented. Human Resource Department conducts performance appraisals, career development and up skilling, developing effective reward systems and designing jobs to fit both the needs of the business and employees.

On the Statutory front, during the year under review, there was one case received pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which was duly addressed. The year also saw reinforcement of the already existing “Whistle Blower Policy" in order to emphasize and encourage reporting of any wrongdoing or any unethical practice.

On the Industrial front, the Company continued to foster cordial Industrial Relations with its workforce during the year.

The Company has a diverse workforce of 11781 employees as on 31st March, 2017 vis-a-vis 10892 employees as on 31st March, 2016. Going forward, the Company will continue to focus on nurturing the right talent to achieve the business goal.


The Company has adopted Whistle Blower Policy to provide a formal mechanism to all the stakeholders of the Company to report their concerns about unethical behaviour, actual or suspected fraud that may affect its business or reputation. The policy provides for adequate safeguarding to the person who avail the mechanism. The investigations are conducted in a fair manner and after the conclusion of the investigation, a written report of the finding is prepared. The outcome of the investigation is informed to all the concerned. The Audit and Risk Management Committee reviews the functioning of the Whistle Blower mechanism on a quarterly basis.

The details of the Whistle Blower Policy is explained in the Report of Corporate Governance and the Policy is available on the website of the Company at http://www.torrentpharma.com/pdf/whistleblower/Clean_Pharma_whishtleblower.pdf


(‘ Sarve bhavantu sukhinah, sarve santu niramayah, sarve bhadrani paschyantu, ma kaschita dukh bhagbhavet’). Torrent Group believes in the well being of the society at large. As a social corporate citizen, it has always believed in the philosophy of “Think of others also when you think about yourself’.’ Over past many years, the Group has contributed to the society in the field of Community Healthcare, Sanitation and Hygiene, Education & Knowledge enhancement and Social Care and Concern.

In line with the provisions of the Companies Act, 2013 and Rules made thereunder, a Corporate Social Responsibility (CSR) Committee has been formed by the Board of Directors. The Composition of the CSR Committee is as under:

Name of Director

Category of Directorship

Shri Pradeep Bhargava, Chairperson

Independent Director

Dr. Chaitanya Dutt

Whole time Director

Smt. Renu Challu

Independent Director

During FY 2016-17 the CSR programs and activities undertaken at Group level are described hereunder:

- REACH: In January 2016, Torrent Power Limited and Torrent Pharmaceuticals Limited jointly initiated a Child Centric Health Care Program - REACH - Reach EAch CHild under the aegis of Tornascent Care Institute. The program encompasses three major activities - (a) SHAISHAV for grass root intervention, (b) JATAN for greenfield action and (c) MUSKAN for other allied initiatives. The focus during current year was mainly on SHAISHAV:

- Identification of villages with underserved population around the four regions where Torrent Group has its manufaturing facilities i.e. Indrad, Nadiad, Surat and Dahej.

- Conducting 157 paediatric camps covering 219 villages and 36,142 children to obtain the base line health status of children in the age group of 6 months to 6 years, identify and treat anaemia and malnutrition and provide speciality treatment to those identified with other ailments like cardiac, neurological and respiratory disorders.

Periodic assessments and follow up actions for all such cases under the supervision of qualified Paediatricians. The intial results were encouraging with 66% children cured of their anemic condition and around 52% of children pulled out of severe malnourishment. Around 405 children were provided specialised treatment for cardiac, neurological, respiratory, etc. disorder.

During later part of the year, the following activities under Greenfield Action - ‘JATAN’ were initiated:

a) Procurement of Mobile vans for all the four locations providing mobile OPDs and reaching out to the villages covered under SHAISHAV.

b) Starting of two fully equiped Paediatric Centres at Sugen (near Surat) and Pakhajan (near Dahej) to provide free high quality primary medical treatment to the nearby villages.

- Shiksha Setu - During FY 2016-17, through UNM Foundation, Phase II of the Program was initiated in 13 schools, located in Sugen, Chhatral, Chhapi, Memadpur and Ahmedabad locations covering about 4300 students and 150 teachers and with following components:

i) ‘sLate’ - technology based teaching tool provided through Smartboards and Tablets

ii) ‘sLearn’ - skill based adaptive learning tool for students provided on Tablets

iii) ‘sLQuiz’ - technology based learning assessment tool

iv) Continuous teachers support trainings for subject related topics, soft skills and leadership skills Further, following activities were conducted under the programme in FY 2016-17:

a) Provision of ~ 1,250 Tablets and 20 Smartboards in 13 programme schools.

b) Training to the students and teachers on the new educational tools.

c) Step by step improvisation in the tools based on the feedbacks received from the teachers and students from different schools.

d) Community meetings involving more than 1500 parents to seek their support.

The Annual Report on CSR Activities is given as Annexure C to this Report which indicates that the Company has spent Rs.27.55 crores in this regard.

Other CSR initiatives undertaken by the Company during FY 2016-17 include:

a) Conducted various programs among the students at Middle School at Bhud, Baddi through employee volunteers for their development and advancement.

b) The Company had also made donations to various organizations involved in education, healthcare, promotion of social welfare, culture, social economic development, etc.


We believe that Environment, Health and Safety (EHS) are essential and paramount pillars for sustainable growth of our business.

We have developed policies and guidelines which take our EHS compliance beyond the regulatory requirements. The policies also ensure consistent and continuous implementation of the EHS requirements throughout the Company.

A responsibility towards the environment is part of our mandate. We continuously endeavour to minimize adverse environmental impact, and demonstrate our commitment to protect the environment by adopting various green technologies for maximising usage of natural light in office buildings. The waste water generated in various units is treated and reused in the green belt and spaces across all units.

Most of our facilities have achieved various recognition / certifications such as ISO-14001 - 2015 & OHSAS - 18001 - 2007. Regular audits of our locations by our global customers and regulators help in our efforts to benchmark with the highest levels of compliance.

During the year, all our manufacturing sites remained compliant with applicable EHS regulations monitored through online systems.

Moreover, the Company has in place the “Conviction of Safety Policy, which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents.


(a) Deposits

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 31st March, 2017.

(b) Loans, Guarantees and Investments

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 9 and 10 to the Financial Statements.

(c) Debentures

The Company has raised an amount of Rs.1000 crores by way of issue of Non-Convertible Debentures on private placement basis during the year. The said Non-Convertible Debentures are listed on the National Stock Exchange of India Ltd. The aggregate Non-Convertible Debentures issued by the Company amounts to Rs.1490 crores as on 31st March, 2017

(d) Contracts or Arrangements with Related Parties

All Related Party transactions that were entered during the year were in ordinary course of business and were on arm’s length basis. Pursuant to Regulation 23 of the Listing Regulations and applicable provisions of the Companies Act, 2013, the Company has formulated "Related Party Transactions Policy" for dealing with Related Party transactions. Details of the said Policy are provided under the Corporate Governance Report of this Annual Report. In accordance with the Related Party Transactions Policy of the Company and pursuant to the provisions of Section 188(1) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of material contracts and arrangements entered between the Company and the Related Parties are annexed herewith as Annexure - B. The Company had also adopted ‘Criteria for granting omnibus approval by Audit and Risk Management Committee’ for the Related Parties transactions.

(e) Internal Financial Control System

The Companies Act, 2013 has mandated the Company to have a formal framework of Internal Financial Controls (IFC) and has also laid down specific responsibilities on the Board, Audit Committee, Independent Directors and Statutory Auditors with regard to IFC. The IFC system and framework is required 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 framework, and take necessary corrective actions where weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology environment.

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 over Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors’ Report under Standalone Financial Statements and Consolidated Financial Statements.


The Company’s plant, property, equipments and stocks are adequately insured against major risks. The Company also has appropriate liability insurance covers particularly for product liability and clinical trials. The Company has also taken Directors’ and Officers’ Liability Policy to provide coverage against the liabilities arising on them.


The Company has in place a Risk Management Framework for a systematic approach to control risks. The Risk Management process is reviewed and monitored by functional heads / business process owners. The Audit and Risk Management Committee (ARMC) discharges functions of Risk Management and Risk minimization and has designated Chief Financial Officer as the Chief Risk Officer (CRO) to assist the committee by presenting the details of the risk profile of the Company, coordinate with the functional heads who are the risk owners and monitor the status of the risk mitigation plan for the identified risks. The ARMC is periodically updated on key business risks including strategic and acquisition related risks along with their mitigation plan / strategy.

The Company in the Management and Discussion Analysis section of the Annual Report identifies the key risks which can affect the profitability of the Company. As on date, there is no risk envisaged which could threaten the existence of the Company.


As of 31st March, 2017, the Company has 16 Subsidiaries, out of which 4 are step down subsidiaries.

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 Subsidiries in terms of the revenue and profit is provided in Form AOC-1, marked as Note 43 of the Consolidated Financial Statements. The details of two Associates of the Company is also shown in the AOC-1. These Associates are Section 8 companies and primarily floated with another company of the Torrent group to carry out the CSR activities. On account of various economic, market and regulatory isssues, the operations in Romania and France are no longer viable. The business is being wound up and the subsidiary companies in these countries would be closed during the coming year.

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 Annual General Meeting. The annual accounts of the Subsidiary Companies are also available on the website of the Company at http://www.torrentpharma.com/subsidiaries-financials.php.


(a) Board of Directors

The Board of Directors of the Company is led by the Executive Chairman and comprises eight other Directors as on 31st March, 2017, including one Whole Time Director, five Independent Directors which includes one Woman Director as required under Section 149(1) of the Companies Act, 2013 and two Non-Executive Directors (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 Listing Regulations.

At the Annual General Meeting of the Company held on 27th July, 2016, the members approved the reappointment of Shri Samir Mehta (holding DIN 00061903) who had retired by rotation.

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 Annual General Meeting and being eligible has offered himself for re-appointment.

Dr. Dutt has been re-appointed as a Whole time Director for a period of 3 (three) years effective from 1st January, 2018, subject to approval of the shareholders.

The brief resume and other relevant documents of the Director being re-appointed are given in the Explanatory Statement to the Notice convening the Annual General Meeting, 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, four meetings of the Board of Directors were convened and held on 23rd May, 2016, 27th July, 2016, 26th October, 2016 and 3rd February, 2017 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) Committees of the Board of Directors

In compliance with the requirement of applicable laws and as part of best governance practices, the Company has following Committees of the Board as on 31st March, 2017:

i. Audit and Risk Management Committee

ii. Securities Transfer and Stakeholders Relationship Committee

iii. Nomination and Remuneration Committee

iv. Corporate Social Responsibility Committee

The details with respect to the aforesaid Committees forms part of the Corporate Governance Report.

(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 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 that understanding o Relating to Corporate Functioning

o 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.

(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 delibrate the matter and recommend such proposal to the Board.

Board considers such proposal on merit and decide suitably.

(e) Familiarization 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 alongwith necessary documents, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. The Company endeavours, through presentations at regular intervals to familiarize 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 are organized for the Directors to enable them to understand the operations of and CSR activities carried out by the Company. The Independent Directors also met with senior management team of the Company in informal gatherings. During the FY 2016-17 the Company has conducted 15 programmes for familiarizing the Directors for a total duration of 18 hours.

On cumulative basis, the Company has conducted 28 programmes for familiarizing the Directors for a total duration of 27 hours and 30 minutes.

The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at http://www.torrentpharma.com/pdf/bod/Familiarisation_Program_of_Independent_Directors.pdf

(f) Board Evaluation

Some clarificatory notes were added to the existing the Evaluation Criteria considering the SEBI’s Guidance Note on 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 Nomination and Remuneration Committee:

- The obtaining and consolidation of feedback from all directors for the evaluation of the Board and its Committees, Individual Directors (i.e. Independent and Non Independent Directors), were co-ordinated by the Chairman of the Board. The feedback on evaluation of the Board and its Committees was discussed in their respective meetings and the feedback on the evaluation of Individual Directors was discussed individually with them.

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

- The Independent Directors met twice on 2nd February, 2017 and 1st May, 2017 with respect to the above.

(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 31st March, 2017, 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 31st March, 2017 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.


(a) Remuneration Policy

The Company has formulated policy relating to the remuneration for the Directors, Key Managerial Personnel and other employees of the Company. The salient features of this policy are as under:

1. Components of Remuneration

1.1. Fixed Pay comprising of Basic Salary, HRA, Car Allowance (applicable to General Manager and above employees), Conveyance Allowance / Reimbursement, Company’s Contribution to Provident Fund, Superannuation Fund, Gratuity, etc.

1.2. Variable Pay which is either in the form of :

(i) Commission to Managing Directors

(ii) Commission to Whole - time Directors for special one-time reward

(iii) Performance based Pay to General Managers and above [upto 20% of Cost to Company (CTC)], based on unit performance grades.

(iv) One time reward for identified employees, given in exceptional cases to employees who undertake tasks, which go beyond their normal call of duties and play a crucial role in success of an event.

1.3. Retention Pay: In case where stability is an issue, part of the CTC is kept as retention pay which is being paid after 3 years or more.

2. Annual Appraisal Process:

2.1. Annual Appraisals are conducted following which annual increments and promotions in deserving cases are decided once in a year based on:

(i) Employees Self-Assessment

(ii) Assessment of Immediate Superior and

(iii) Assessment of Head of Department

2.2. The increments as decided for a particular financial year are paid during the subsequent financial year. e.g. the performance appraisal of an employee for the year FY 2015-16 is conducted in FY 2016-17 and his / her salary rise in FY 2016-17 reflects his performance for FY 2015-16.

2.3. Performance Based Pay is also based on annual appraisal process.

2.4. Annual increment consist of

(i) Economic Rise: Based on All India Consumer Price Index published by the Government of India or Internal survey wherein inflation on commonly used items is calculated; and

(ii) Performance Rise: Based on Industry and overall business scenario and factoring the following aspects:

1) Company’s performance vis-a-vis the industry

2) Unit Performance* (Grades ranging from A to C-. Higher the grades, higher the rating)

3) Individual Performance / track record including care for health / balance between quality of work and family life.

*Unit Performance is carried out based on various financial and non-financial parameters (also used for working out overall ceiling at unit level and performance based pay) such as

a) Comparison of Company’s Revenue and Profit growth with competition.

b) Employee Cost.

c) Return on Equity.

d) Production, Quality and Regulatory compliance.

Unit: Domestic and International Operations, Manufacturing, Research & Development and Corporate.

2.5. Promotion Rise (Other than Managing Director)

(b) Criteria for Remuneration to Non-Executive Directors (NEDs):

1. T he 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. The Board or its Committee specifically authorised for this purpose, determines the manner and extent upto which the commission is paid to the NEDs in accordance with the shareholders’ approval. 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.

2. Payment of Commission to be made annually on determination of profit.

3. Commission as per above criteria is subject to the condition that total commission paid to all Directors (other than Managing Director or Whole-time Director) including service tax thereon shall not exceed the limit of 1% of net profit in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the said Act.

4. Independent Directors will be 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) Information as required pursuant to Section 197 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Sr. No.

Name of the Director

Ratio of the Remuneration of Director to Median Remuneration


Shri Sudhir Mehta



Shri Samir Mehta$



Shri Markand Bhatt



Shri Shailesh Haribhakti



Shri Haigreve Khaitan



Shri Pradeep Bhargava



Smt Renu Challu



Prof. Ashish Nanda



Dr. Chaitanya Dutt$


$ Remuneration does not include premium for group personal accident and group mediclaim policy.

# No remuneration has been paid during the year 2016-17 and hence ratio has not been calculated.

2. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary.

Sr. No.

Name of the Director / Key Managerial Personnel


% increase in Remuneration


Shri Sudhir Mehta

Chairman Emeritus



Shri Samir Mehta#

Executive Chairman



Shri Shailesh Haribhakti$

Independent Director




Shri Haigreve Khaitan$

Independent Director




Shri Pradeep Bhargava$

Independent Director




Smt Renu Challu$

Independent Director




Prof. Ashish Nanda$

Independent Director




Dr. Chaitanya Dutt#

Whole-time Director




Shri Ashok Modi#

Chief Financial Officer




Shri Mahesh Agrawal#

Company Secretary



No remuneration has been paid in 2015-16 and 2016-17 to Shri Markand Bhatt and hence % increase has not been calculated.

(a) The % change in remuneration after considering the payment of one time additional commission paid during the last year to the Independent Directors namely Shri Shailesh Haribhakti, Shri Haigreve Khaitan, Shri Pradeep Bhargava, Smt. Renu Challu and Prof. Ashish Nanda is (67.35%), (67.65%), (68.09%), (58.75%), and (80.00%) respectively.

(b) The percentage change in remuneration for the year after considering onetime commission paid during the last year is (4.84%).

(c) The percentage change in remuneration is excluding onetime reward and performance pay.

$ Remuneration of INEDs is based on their membership in the board committees and their attendance in the meeting of the committees and the board.

# Remuneration does not include premium for group personal accident and group mediclaim policy.

3. The percentage increase in the median remuneration of employees in the financial year under review is 21.65%. The unionized employees whose remuneration is determined based on negotiations have been excluded for this purpose.

4. The Company has 11,781 employees on the rolls of Company as on 31st March, 2017.

5. The increase already made in the salaries of employees other than managerial personal in the last financial year, based on the performance of the Company for 2015-16, was 18.53%. There was no rise in salary of Shri Samir Mehta and rise of 16.39% in the salary of Dr. Chaitanya Dutt (without considering the onetime reward paid during the year 2015-16).

The year 2016-17 was a watershed year in the momentous journey of the Company, after the boost from significant growth from low competition products in the US market and post the major overhauling of domestic business practices relating to institutional and discounted business, free goods, etc., during the previous year. The subdued growth in both domestic and international markets and the enhanced outlay on research and development, critical to ensure survival in ever changing market conditions, has resulted in a moderate bottom-line growth for the year. To overcome the issues like pricing pressures on generic products across the globe, uncertain currency fluctuations and aggressive regulatory scrutiny, there is a need for the businesses to pause to regroup and ring fence itself to be able to survive this pressure and outpace the market.

6. The remuneration paid is as per the Remuneration Policy of the Company.

(d) Remuneration to Managerial Personnel

The details of remuneration paid to the Managerial Personnel forms part of the Corporate Governance Report.

(e) Particulars of Employees

The information required under Section 134(3)(q) and 197(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as Annexure-D. However, as per the provisions of Section 134 and Section 136 of the Companies Act, 2013, the Reports and Accounts are being sent to the Members excluding the information on employees’ particulars which are available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. Any Member interested in obtaining a copy of such statement may write to the Company Secretary at the Registered Office of the Company.


(a) Statutory Auditors

Deloitte Haskins & Sells, Ahmedabad (Firm Registration No. 117365W), Statutory Auditors of the Company along with their network of firms of Chartered Accountants has completed more than 10 years as Statutory Auditors of your Company. Considering the requirements of Section 139(2) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company at their meeting held on 26th May, 2017 based on the recommendation of the Audit and Risk Management Committee, have made its recommendation for appointment of M/s. B S R & Co. LLP, (Firm Registration No 101248W/W - 100022), as the Statutory Auditors of the Company by the Members at the 44th Annual General Meeting of the Company for a term of five consecutive years i.e. from the conclusion of 44thAnnual General Meeting till the conclusion of 49th Annual General Meeting of the Company, subject to ratification of appointment for each year by shareholders at Annual General Meeting pursuant to Section 139 of the Companies Act, 2013. Accordingly, a resolution, proposing to the aforesaid appointment of M/s. B S R & Co. LLP, as the Statutory Auditors of the Company forms part of the Notice of the 44th Annual General Meeting of the Company. The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and rules framed thereunder.

(b) Cost Auditors

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 31st March, 2017 Further, the Cost Audit Report to the Central Government for the financial year ended 31st March, 2016 was filed on 24th August, 2016, within the statutory timeline. The Board of Directors has, on recommendation of the Audit and Risk Management Committee, at its meeting held on 26th May, 2017 appointed M/s. Kirit Mehta & Co. as the Cost Auditor of the Company for audit of cost accounting records of its activities (Formulation & Bulk Drugs activities) for the FY 2017-18 and has also fixed their remuneration. In terms of Section 148(3) of the Companies Act, 2013 and Rule 14 of the Companies (Audit & Auditors) Rules, 2014, it is proposed by the Board to recommend the remuneration approved in its meeting, for ratification by the shareholders in the ensuing Annual General Meeting 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, including any statutory modification(s) or re-enactment thereof, 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 2016-17 (Apr-16 to Mar-17).

M/s. M. C. Gupta & Co., Company Secretaries have carried out the Secretarial Audit of the Company for FY 2016-17 and the Report of Secretarial Auditors in Form MR-3, is annexed with this Report as Annexure-E. There were no qualification / observations in the report.


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 - F.


As required under the provisions of Section 134(3)(a) and of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extracts of annual return in Form No. MGT-9 forms part of this report as Annexure-G.


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-H.


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, 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

Ahmedabad Samir Mehta

26th May, 2017 Executive Chairman

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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