Torrent Pharmaceuticals Ltd

To,

The Shareholders

The Directors have the pleasure of presenting the Fifty Second Annual Report of your Company together with the Audited Financial Statement for the year ended 31st March, 2025.

1. Reliable, Responsible, Resilient Branded business:

Our branded business accounts for approximately 74% of overall Company revenues, delivering continued strong performance and outpacing market growth across our core geographies. This sustained momentum underscores the strength of our business fundamentals and the enduring value of the foundation we have built over the years.

We are pleased to report that, now in the third year since the strategic acquisition of Curatio Health Care (I) Private Limited ("Curatio"), the integration efforts continue to surpass expectations. The portfolio has continued to deliver high double-digit growth, further consolidating our position in the high-potential dermatology and paediatric segments. Additionally selective expansion into the OTC space with key brands has further supported the sustained momentum, reinforcing our commitment to long-term value creation and disciplined strategic expansion.

Generic business:

Our generic business geographies are mainly Germany and US. In Germany, we witnessed healthy growth driven by new tender wins, launch of new products and better conversion rate in previously awarded tenders.

In the US, we have renewed our strategic focus and have initiated incremental investments in our future portfolio. Notably, our dedicated oncology facility in Gujarat has received FDA approval and we have successfully launched our first oncology drug in the US.

2. India business:

• Market out-performance: As per AIOCD data (MAT March 25), the Company recorded a growth of 13% versus Indian Pharmaceutical Market (IPM) growth of 8%. Growth was aided by strong performance of top brands, expanded field force coverage, new launch momentum, market share gain in focus therapies and robust growth from Curatio's portfolio.

• Field force expansion: During the year, the Company has expanded field force by 800 medical representatives to complement new product launches and selectively enhance our reach across key specialties. As of 31st March 2025, total field force stands at ~6,400 medical representatives.

• In-Licensing: To strengthen its portfolio, the Company has diversified its presence in several high-potential therapies through in-licensing of innovator drugs. We entered into non-exclusive licensing agreement with Takeda and Boehringer Ingelheim to commercialise Vonoprazan and Empagliflozin brands respectively. In March 2025, we acquired brands of Empagliflozin and its combination from Boehringer Ingelheim.

• Consumer Health: We entered the consumer health segment with the launch of Shelcal-500, a calcium supplement. Since then, we have expanded the portfolio to include key brands such as Ahaglow (face wash gel), Unienzyme (digestive enzyme tablets), and Tedibar (baby bathing bar). To accelerate growth, the Company has leveraged synergies between the prescription and consumer segments, driving increased brand performance. National consumer engagement campaigns, coupled with region-specific initiatives, continue to strengthen brand visibility and customer loyalty. The Company's products are now available in 72,000 outlets, 3,500+ pharmacy chains.

• The Company is now ranked 7th in the IPM. It has 21 brands in the Top 500 brands of IPM and has 18 mother brands with revenues of more than H100 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 Pharma Company in Brazil.

• Brazil registered a growth 9.4% in BRL. The performance was aided by new product launches, improvement of market share in existing portfolio and higher growth in the generic segment.

• As per IQVIA dataset (MAT March 25), Brazil grew at 9% against covered market growth of 7% in value.

• The Company launched two major products during the year.

• As of 31st March 2025, total number of field force stood at around 320.

• 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.

4. Germany business:

• The Company registered a market share of around 6% in the German generics market and continues to be ranked no. 1 amongst the Indian Pharma Companies. It is ranked no. 5 in the overall generic market.

• Germany registered a revenue growth of 7% against the market growth of 2% as per IQVIA dataset (MAT March 25).

• The German tender market remains extremely competitive with annual price declines. We have been successful in these challenging circumstances through our efforts in improving productivity and cost competitiveness. Our portfolio currently covers 57% of the overall generics market and we expect the coverage to expand in the coming years. We launched seven new Rx products and two OTC products during the year.

5. US business:

• US business registered de-growth mainly due to lack of new product launches and ongoing price erosion in the existing portfolio. With new launches over next two years, US business will contribute to consolidated revenue growth.

6. Financial Performance:

• The Company registered a revenue growth of 7% and Operating EBITDA growth of 10%. During the year insulin manufacturing was disrupted five months owing to upgradation of European guidelines and Brazilian real depreciated by 11%. While insulin manufacturing has normalised in Q4, we expect Brazilian real impact to normalise over next couple of quarters. Adjusted for these two impacts, the underlying revenue and operating EBITDA growth for the year stands at 9% and 14% respectively.

• Operating EBITDA margins improved to 32.3% over 31.4% in the previous year.

• At end of 2024-25, leverage in terms of Net debt to EBITDA stands at 0.62x against 0.87x in the previous year.

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)

* Operating EBITDA = Profit Before Depreciation & Amortisation, Finance Cost, Other Income, Exceptional Items & Tax

The consolidated sales and operating income increased to H11,516 crores from H10,728 crores in the previous year showing a growth of 7%. The consolidated operating EBITDA for the year was H3,721 crores as against H3,368 crores in the previous year registering growth of 10%. The consolidated net profit stood at H1,911 crores compared to H1,656 crores in the previous year registering growth of 15%.

The exceptional item relates to a demand raised by the NPPA in 2017 concerning alleged overcharging, which was under judicial consideration before the Hon'ble Gujarat High Court. During the year, the Company submitted detailed representations, which were favourably considered by the NPPA. As a result, the Company's legal exposure was substantially reduced. Following the issuance of a revised demand by the NPPA, the Company opted to settle the litigation and bring the matter to a definitive close.

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.

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/assets/Dividend_Policy.pdf.

During the year under review, an interim dividend of H26/- per equity share of face value of Rs. 5/- each (@ 520%) amounting to H880 crores was paid to the shareholders. Further the Board considered it prudent to recommend the final dividend for 2024-25 as per the Dividend Distribution Policy and accordingly recommended a final dividend of H6/- per equity share of face value of H5/- each (@ 120%) amounting to H203 crores for approval of shareholders at the 52nd Annual General Meeting (AGM) of the Company. Hence, the total dividend paid / payable with respect to the year under review was of H32/- per equity share (@ 640%) amounting to H1,083 crores.

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

At Torrent Pharma, we understand our employees are our most valuable assets, essential to our growth and success. Their commitment, loyalty, and hard work drive our achievements. In order to sustain this momentum, we continue to build competencies and embrace new skills for a sustainable future. This approach has fostered an inclusive, multicultural organisation that prioritises employee satisfaction, diversity, and a sense of belonging.

We firmly believe that our success is a direct result of our employees' collective efforts. Further to enhance organisational performance and productivity, we have implemented several initiatives, reinforcing our commitment to being a value-driven and future-ready organisation.

The Company provides a safe and healthy work environment, aiming for an injury- and illness-free workplace. Economic considerations never take precedence over health and safety measures. Our leadership demonstrates visible commitment to maintaining rigorous health and safety standards.

All lead and lag incidents are reported through a structured incident reporting system. This system ensures thorough documentation, investigation, and resolution through root cause analysis, corrective actions, and system improvements. Employees and contract staff can report incidents without fear of retaliation, ensuring transparency and accountability.

Through targeted capability-building efforts, we remain focused on strengthening our talent pipeline. Significant efforts have been made to enhance leadership and recruit top-tier talent, bringing fresh perspectives and energy to the organisation. Our robust training and development initiatives play a critical role in nurturing managerial skills and career growth.

Moreover, to foster open communication, we have introduced initiatives such as Sampark, which enables employees to connect with their functional heads, strengthen team dynamics and voice concerns.

Our structured coaching and mentoring programs, along with initiatives such as Sahyog, Baat-cheet, and U Coffee sessions provide employees with opportunities to share their perspectives, seek guidance, and enhance their personal and professional development.

Our commitment to health and safety extends beyond physical well-being to include psychological safety and overall employee wellness. Every employee is responsible for ensuring their actions contribute positively to the workplace, fostering a culture of open and respectful communication.

We are committed to diversity and inclusivity, with various women-friendly policies creating an ecosystem that enables women to thrive professionally. Maternity benefits and daycare facilities further support female employees in advancing their careers. The Company upholds meritocracy with a robust appraisal system, ensuring fair evaluations devoid of gender bias.

Our investment in professional development underscores our focus on responsible growth and innovation. We remain dedicated to addressing patient needs, contributing to community well-being, and promoting environmental sustainability.

As of 31st March, 2025, our workforce has grown to 16,107 employees, compared to 14,916 employees as of 31st March, 2024.

The Company has built a strong reputation for conducting business with integrity and upholding zero tolerance for unethical behaviour or misconduct. Our commitment to professionalism, fairness, and ethical conduct are reinforced through a robust reporting system available to all employees and stakeholders, as detailed in the Corporate Governance Report.

This system encourages the reporting of unethical behaviour while ensuring whistleblower protection, with direct access to the Audit Committee. Our Code of Business Conduct outlines key corporate ethical practices that guide our business operations and reflect our core values.

Both the Whistleblower Policy and Code of Business Conduct are accessible on our website at www.torrentpharma.com, underscoring our commitment to transparency and accountability.

To further enhance confidentiality and ease of reporting, we have partnered with an independent third-party agency to manage the Whistleblower complaint registration process. Complaints can now be registered through a dedicated web portal, with additional support available via chatbot, toll-free helpline and IVR support.

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, we have implemented a comprehensive policy to protect women against workplace harassment. Regular interactive awareness workshops are conducted, and the Internal Complaints Committee is in place to address any grievances. During the year, no complaints were received under this policy.

Additionally, the Company has in place Human Rights Policy defining the principles for respecting and protecting human rights across all operations.

The CSR Activities undertaken by the Company were under the thrust areas of Community Healthcare, Education & Knowledge Enhancement and Social care & concern. During the year, the Company was required to spend H33.31 crores (2% of the average net profit of the past three financial years). The total amount spent during the year was H35.03 crores. Further, the unspent amount at the end of the year was transferred to "Unspent CSR Account" of related ongoing projects by the Company. 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 programme 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.

Our Outreach activities focus on reducing malnutrition & anemia amongst children in the age – group of 6 months to 6 years. Under this programme, we organise baseline screening camps across various villages covered in two states including Gujarat, Maharashtra and Union Territory of Diu, Daman and Dadra Nagar Haveli. Children are screened for anemia and malnourishment; necessary interventions are done for possible improvement. Children identified as malnourished or anemic or both are provided medical treatment and supplementary nutrition. The treatment plan for malnourished children is spread over a period of 3 months and anemia treatment spans across 6 months.

In 2024-25, we have expanded our initiatives in more than 300 villages with target to cover cumulative total of more than 1,900 villages and screened additional 18,000 children totalling more than 1,74,000 children on a cumulative basis.

In year to come, we plan to extend our interventions in 200 new villages & 100 ongoing villages to serve more children. With this, we will be able to reach more than 2,100 villages and make a positive impact on the health of both anaemic and malnourished children.

The programme will also be expanded to villages near Bhatiya, Khambhadiya, Surel and Babra & our newly established PHCs in Maharashtra & Gujarat.

One of our initiatives was focused on empowering adolescent girls in rural areas by addressing the taboo associated with menstruation and promoting menstrual hygiene. Our programme included interventions to encourage the use of bio-degradable re-usable sanitary pads and provide education on menstrual hygiene. Female volunteers / employees conduct counselling sessions and distributes sanitary pads to adolescent girls in Sugen, Dahej, Indrad, Banaskantha, Radhanpur, Balasinor, Junagadh, Dholera, Bhatiya, Khambhadiya, Surel and Babra.

During 2024-25, 29,935 bio-degradable reusable sanitary kits were distributed. Till 31st March, 2025; we have served more than 1,00,000 beneficiaries with these unique sanitary kits.

In 2017, we have started four paediatric centres in Sugen, Dahej, Indrad, and Balasinor of Gujarat with a focus on outpatient departments (OPDs) as ‘CARE' measures. In 2020, we achieved a significant milestone by transforming the SUGEN paediatric centre into a 150-bedded hospital, providing critical care to children. Consequently, 9 more PHCs have been started on daily basis at locations of Dediapada, Waghai, Naswadi, Radhanpur, Chhapi, Junagadh, Ankleshwar, Bhestan and Dholera to reach and to serve people in interior rural areas deprived of quality affordable medical facilities. These centres provide primary healthcare services to children, including free medical consultations, basic laboratory tests, and medications.

Looking at the response from community, we intend to establish few more UNM Children PHCs at needy underprivileged areas in Maharashtra and Gujarat in next year.

Cumulative status across all 12 UNM Children PHCs (excluding UNM Children Hospital):

The PHCs serves as spokes, providing primary care, while UNM Children Hospital at Sugen serves as the central hub managing more complex healthcare needs. Cases identified at the PHCs that require advanced care are referred to the hospital for further treatment.

In addition to primary care, we focus on providing secondary and tertiary care. In 2020, we reached a significant milestone by upgrading our Sugen Paediatric Centre into a 150-bedded UNM Children Hospital, which now serves as the hub of our medical services.

UNM Children Hospital is a state-of-the-art facility offering both outpatient (OPD) and inpatient (IPD) services, including advanced and critical surgeries across multiple disciplines. Our hospital provides advanced care in specialties such as Orthopaedics, Ophthalmology, Neurology, Urology, Plastic Surgery, Dental, ENT, and more. The hospital is equipped with 150 beds, 4 operation theatres, a 20-bed NICU, a 17-bed PICU, and is NABH certified. As a NABH-certified hospital, we are committed to delivering high-quality healthcare services that meet national standards of excellence.

In 2022, Torrent Group made a strategic decision to move its focus from outpatient services (OPDs) to advanced surgical care. This shift enabled the Group to provide complex and critical surgical treatments, addressing the increasing need for specialised care for children.

As part of its ongoing transformation, the SUGEN Paediatric Centre has been upgraded to the UNM Children Hospital in Kamrej, further reinforcing its dedication to delivering exceptional paediatric healthcare. The hospital now features cutting-edge facilities, including a Linde liquid oxygen tank, which provides medical oxygen with a purity of at least 99.0%, ensuring optimal care, particularly for patients with critical and long-term respiratory needs. With the opening of its fourth modular operating theatre, the hospital is equipped with the Carl Zeiss TIVATO 700 surgical microscope, renowned for its advanced visualisation capabilities, making it an essential tool for complex surgical procedures. In addition, the newly constructed audiometry room, featuring Inter-acoustics audiometers, creates an ideal environment for conducting a wide range of hearing tests, ensuring precise diagnostic outcomes. The hospital's diagnostic services have now received NABL certification. This recognition underscores our commitment to delivering high-quality pathological services that adhere to national standards of excellence, ensuring the highest level of care and accuracy for our patients. Additionally, 1 ambulance is equipped with advanced ICU facilities – ICU on wheels, ensuring critical care during transport. With life-saving equipment and a skilled medical team on board, it provides seamless, high-quality care from the scene to the hospital, improving patient outcomes in emergencies. The installation of an in-house CT Scan is currently underway, aiming to offer patients more accessible and convenient diagnostic services. Hospital commenced the integration of CMS and e-MRD systems on 01st December, 2024. This initiative aims to enhance the management of digital content, including patient records and administrative documents, while improving communication, compliance, and overall operational efficiency. By digitizing medical records, the hospital is streamlining data accessibility and organisation, which will lead to faster decision-making and better patient care outcomes.

With a team of highly skilled paediatric surgeons and healthcare professionals, UNM Children Hospital has rapidly become a trusted healthcare facility, attracting children from across India who require specialised treatments. This transformation highlights Torrent Group's ongoing commitment to advancing paediatric healthcare by enhancing capabilities and expanding the scope of services offered.

As part of UNM Children Hospital's commitment to reaching underserved populations, surgical screening camps were organised at UNM Children Hospital, Naswadi, and Sagbara. These initiatives focused on extending healthcare services to the remote communities of Narmada and Chhota Udepur districts of Gujarat. The camps provided primary screening and consultations, helping to identify surgical patients in need of care. Those requiring further treatment were referred to UNM Children Hospital for surgeries, which were performed based on patient consent and fitness. This effort significantly contributed to improving access to essential healthcare in these rural areas.

As part of our ongoing awareness initiatives, a successful event was held in Waghai Taluka to educate mothers in relation to ANC (Antenatal Care) and PNC (Postnatal Care), importance of breastfeeding and complementary feeding. The event featured expert-led sessions and practical demonstrations, engaging participants in learning about early childhood nutrition. This programme aimed to empower mothers with essential knowledge to ensure the health and well-being of both themselves and their infants.

The Pratiti programme aims to provide citizens with accessible, sustainable green spaces for leisure and recreation. The Company has successfully revamped ten parks in Ahmedabad, covering more than 1,05,000 square meters. We also maintain green space at Adalaj Clover leaf junction measuring approximately 1,65,000 square meters. Two gardens in Ahmedabad are under redevelopment measuring approximately 46,000 square meters and nearing completion. The Company's 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 neighbourhood with reduced level of air and noise pollution by improving micro-alignment at the city level, and to recharge groundwater through ponds and lakes.

In FY 2024–25, the Company and other Member Companies of the Indian Pharmaceutical Alliance (IPA) collaborated to establish a skilling institute for the purpose of developing talent for pharmaceutical industry through Foundation for Pharmaceutical Academy for Global Excellence (PAGE Foundation), a not-for-profit company set up by IPA member companies, at a total estimated cost of approximately Rs. 200 crores. The participating members including the Company will contribute the cost of the project in equal ratio. PAGE Foundation has already acquired land in Hyderabad and is in the process of acquiring land in Gujarat.

The Company has allocated the budget of Rs. 10 crores for FY 2024-25. The Report on CSR activities is annexed herewith as Annexure A._

The Company remains fully committed to upholding the highest standard of Environment, Health & Safety across all its operations. We recognise that a safe and healthy workplace is integral to the success and sustainability of our business.

Continual improvement in Health, Safety, Environment, and Sustainability (HSE&S)_involves a proactive, ongoing process of identifying and implementing improvements to enhance performance, reduce risks, and promote a culture of safety and sustainability. Accordingly, the Company has revamped the HSE&S policy during the year and implemented at all its manufacturing facilities. We prioritise safety, health and environmental responsibility through our comprehensive HSE&S Policy which is aligned with legal regulations and ISO standards.

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.

We have defined robust Safety Management System which provides the Company with a framework to improve employee safety and health, reduce workplace risks and create better, safe working conditions. The development and implementation of a comprehensive Safety Management System will support continual improvement and enables us to develop and maintain a strong safety culture. It consists of processes, practices, policies, incident and hazard management, inductions and training, risk management, statutory compliance, audits and inspections for managing safety risks.

As a part of our dedication to sustainability and responsible practices, we have set ambitious targets to reduce our greenhouse gas emissions and are actively exploring innovative methods to minimise our environmental impact. By diversifying our energy mix with cleaner fuels and renewable sources, we aim to significantly reduce our carbon footprint. We also prioritise water conservation through initiatives such as rain water harvesting and responsible fresh water consumption. Our goal is to achieve 100% non-hazardous recycling and zero waste at landfill sites, reflecting our commitment to environmental stewardship. As a part of our HSE&S policy to explore and increase renewable energy stack in our overall energy mix, the Company has commissioned new solar system of 1.0 MW Power generation plant with an investment of H3 crores at the Company's Dahej manufacturing facility.

During the current fiscal, 27 million KWH green energy has been generated significantly reducing the environmental impact / carbon footprint.

As a part of our sustainable commitment, we have commissioned Agro waste based (In briquette form) boiler at Company's high productivity manufacturing facilities at Indrad, Dahej, Baddi & Vizag and at other manufacturing facilities at Bileshwarpura and Pithampur and at R & D, boilers are operated on Natural Gas. This has helped us to drastically reduce our fossil fuel consumption & Scope 1 emission by 42% compared to previous year and 72 % to base line year FY 2019-20.

The environmental aspect of ESG is a critical area for hazardous waste producers. Our efforts are not just complying the standards and applicable regulations; but paving the way for a more sustainable and responsible business landscape.

Effective management of hazardous waste involves meticulous classification, handling, and disposal, ensuring these materials do not pose risks to the environment or human health. The Company collaborates with third-party integrated facility management partners to manage site waste in an environmentally responsible manner. We use only approved waste disposal facilities. We audit the facilities that treat our hazardous waste periodically to ensure they have the systems, technologies and processes in place to manage the waste streams responsibly and in compliance with all applicable requirements._ With our whole hearted efforts, we were able to reduce incineration of hazardous waste disposal from all manufacturing facilities by 15% from previous year and 91% from the base 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 and 81% from base year. This year Company's Dahej, Indrad and Bileshwarpura manufacturing facilities became Zero waste to Landfill thus total 75% of the Company's manufacturing facility have achieved target of Zero landfill waste disposal.

While hazardous waste receives much of the attention due to its immediate risks to health and safety, whereas non-hazardous waste management also plays a crucial role in environmental sustainability. The management of non-hazardous waste require careful handling to prevent pollution and encourage recycling and reuse. The Company dispose off 100 % of its non-hazardous waste from all sites for its recycling. As an extended producer's responsibilities (EPR), the Company has channelised programme for 100% take back of plastic waste quantity equivalent to plastic quantity consumed by us across PAN India and disposing them off safely.

All of the Company's manufacturing facilities are certified for ISO 14001:2015 (Environment Management System) and 45001:2018 (Occupational Health & Safety Management System). Four Manufacturing facilities and R&D Centre of the Company are also accredited with ISO 50001:2018 (Energy Management System).

Moving forward, the Company remains focused on continuous improvement of its HSE performance, promoting a culture where safety and sustainability are embedded in every aspect of our business.

As on 31st March, 2025 the Authorised Capital of the Company is H235 crores, divided into 42 crores Equity Shares of H5/- each and 25 Lakh Preference Shares of H100/- each.

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, 2025.

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.

The outstanding amount of Non-Convertible Debentures issued by the Company is H642.84 crores as on 31st March, 2025. The Company has issued Commercial Papers amounting to H900 crores during FY 2024-25. As on 31st March, 2025, the outstanding amount of Commercial Papers is H500 crores. These Commercial Papers are listed on the Wholesale Debt Market Segment of NSE.

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 arm's 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 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 2024-25 and hence does not form part of this report.

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.

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.

The Company's 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.

Risk Management is an integral part of our strategy for stakeholders' value enhancement and is embedded in to governance & decision making process across the Organization. The Company has in place the Risk Management Policy to ensure effective responses to strategic, operational, financial and compliance risks faced by the Organization.

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.

As of 31st March, 2025, the Company has 18 subsidiaries, out of which 3 are step down subsidiaries.

During the year, Torrent Pharmaceuticals Chile SpA, wholly owned subsidiary of the Company was incorporated on 25th September, 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.

The Board of Directors of the Company is led by the Executive Chairman and comprises seven other Directors as on 31st March, 20251, including one Whole Time Director and five 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 Listing Regulations.

During the year under review, Jinesh Shah, Whole-time Director (holding DIN: 00406498) has stepped down as the director of the Company with effect from 23rd July, 2024 (i.e. date of last AGM). The Board places on record its profound appreciation for the guidance and support provided by him for overall growth of the Company.

During the last AGM held on 23rd July, 2024, the members approved:

• Reappointment of Samir Mehta (holding DIN: 00061903) as Executive Chairman of the Company for the period of 5 (five) years effective from 01st April, 2025.

• Appointment of Jinal Mehta (holding DIN: 02685284) as Non-Executive Non-Independent Director of the Company effective from 24th May, 2024.

Dr. Maurice Chagnaud (holding DIN: 09592878), Independent Director of the Company, who was appointed for a term of 3 (three) years effective from 11th May, 2022 to 10th May, 2025 ceased as Director on the Board of the Company on 10th May, 2025 pursuant to completion of his term. The Board put on record its sincere appreciation for the valuable role played by him in guiding the functioning of the Board and its Committees.

As per the provisions of the Companies Act, 2013, Aman Mehta, Whole-time Director (holding DIN: 08174906), retires by rotation at the ensuing AGM and being eligible has offered himself for re-appointment.

On the recommendation of Nomination and Remuneration Committee, the Board appointed Aman Mehta as Managing Director of the Company effective 01st August, 2025 subject to approval of the Members in the ensuing AGM of the Company. The brief resume and other relevant information of the Director being appointed is given in the explanatory statement to the Notice convening the AGM, for your perusal.

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, six meetings of the Board of Directors were convened and held on 23rd April, 2024, 24th May, 2024, 10th June, 2024, 23rd July, 2024, 25th October, 2024 and 24th January, 2025. 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.

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 31st March, 2025 is given below:

1. Nikhil Khattau was selected as Chairman of the Committee with effect from 24th May, 2024.

2. Dr. Maurice Chagnaud ceased to be Member of the Committee due to completion of his term on the Board on 10th May, 2025.

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

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 judgement;

• 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.

• 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 deliberate the matter and recommends such proposal to the Board.

Board considers such proposal on merit and decide suitably.

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 Company's 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/Familiarization_Programme_2024-25.pdf

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of all Individual Directors (Independent and Non Independent Directors) and Chairperson as per the process and criteria laid down by the Board of Directors based on the recommendation of the NRC.

Evaluation Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as Board composition, frequency of meetings, fulfilment of key responsibilities, effectiveness of board process and information sharing, quality of decisions, establishment and delineation of responsibilities to Committees and facilitation of Independent Directors. The performance evaluation was carried out based on the responses received from the Directors.

The performance evaluation of Committees was based on criteria such as Adequacy of Committee composition, frequency and effectiveness of meetings, degree of fulfilment of key responsibilities as outlined by terms of reference of Committee and as required by the statute, Committee dynamics especially openness of discussions, including with the Board and quality of relationship of the Committee with the Board and the management.

The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors.

The performance evaluation of Independent Directors was based on various criteria, such as participation in Board in terms of adequacy, contribution at meetings, fulfilment of functions, guidance and support to management outside Board / Committee meetings and independent views and judgement.

The performance evaluation of Chairman of the Board was based on various criteria, like Attendance, steering the meetings, effectiveness as Chairman of the board including leading the decision making on the vision, strategy, ability to keep shareholder's interest in mind and communicating with external stake holders and impartiality etc.

Independent Directors have carried out the performance evaluation of the Board as a whole and the Non-Independent Directors, the Committees, Chairman and flow of information between the management and the Board. Thereafter, the Board expressed the satisfaction on the functioning of the Board, the Committees and performance of Individual Directors.

There was no change in the Key Managerial Personnel during the year under review other than what has already been captured above.

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, 2025, 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, 2025 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.

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.

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 financial 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 H1 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.

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

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.

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.

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 2024-25.

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, 2025. The Cost Audit Report to the Central Government for the financial year ended 31st March, 2024 was filed on 17th August, 2024, 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 2025-26 and fixed their remuneration, subject to ratification by the Members in the ensuing AGM of the Company.

Pursuant to the provisions of Regulation 24A of the Listing Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have approved and recommended the appointment of M/s. M. C. Gupta & Co, (Firm Registration No.: S1986GJ003400 and Peer Review Certificate No.: 5380/2023) as Secretarial Auditors of the Company for a term of upto 5 (Five) consecutive years to hold office from the conclusion of 52nd AGM till the conclusion of 57th AGM of the Company to be held in the Year 2030, for approval of the Members at ensuing AGM of the Company. Brief resume and other details of M/s. M. C. Gupta & Co., Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s. M. C. Gupta & Co. have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits specified by the Institute of Company Secretaries of India. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and the Listing Regulations.

The Board 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 2024-25.

M/s. M. C. Gupta & Co. have carried out the Secretarial Audit for FY 2024-25 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 2024-25, the Company has complied with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

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.

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

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.

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.