Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Corporate Governance Disclosure Practices of

Selected Pharmaceutical Companies in India
Raj Kamal Prajapati, Dr. K. K. Misra
Research Scholar, Professor, Faculty of Commerce Banaras
Faculty of Commerce University Hindu University Banaras Hindu University

Abstract:- Purpose of this paper is to examine the Shleifer and Vishny (1997) corporate governance is the way
corporate governance practice in the pharmaceutical in which suppliers of finance to corporations assure
industry in India as per new norms of SEBI (Listing themselves of getting a return on their investment.
Obligations and Disclosures Requirements) Regulations,
2015. For this study, top 20 companies are selected as (CFA, 2005)According to traditional definition of
sample companies on the basis of market capitalization. governance, it is the power delegated to the board of
Some norms are applicable from 01-04-2019 so data directors which act on behalf of and in interest of
were collected from that effective date (01-04-2019) and shareholders because shareholders usually do not have
only two financial years (2019-20 and 2020-21) were requisite skills to manage the company, however, they
selected as time periods because of non-availability of delegate the responsibility to people who can. (Swami,
other year data. Only secondary data were used for the 2007) According to Financial Times (1997), corporate
purpose of this study and most of the data were collected governance-which can be defined narrowly as the
through annual reports of selected companies. There are relationship of a company to its shareholders or more
159 items that are inserted to construct a corporate broadly, as its relationship to society.
governance disclosure index which is grouped into 21
parameters and a dummy value is used to score if a (Fernando, Muraleedharan, & Satheesh , 2018)
Corporate governance is basically based on the principles
particular item was followed by the company then score
i.e. Principle of fairness, transparency principle, principle of
one is given otherwise zero. Equal and unequal method
is used for the purpose of calculation of corporate accountability, fiduciary principle, reliability principle,
governance disclosure score. Finding of the study shows principle of dignity, propriety principle and responsiveness
that only three companies i.e. IPCA (91.19%), Cipla principle. (Sharma P. K2015)While scholars stated that there
Company (82.70%), Laurus Lab (79.87%) are nearest to are four principles of corporate governance i. e.
the maximum score and other companies are far away transparency, accountability, fairness and responsibility.
from the maximum score. Thus, there is a need to II. LITERATURE REVIEWS
improve the level of disclosures of corporate governance
so that domestic and abroad investor’s confidence may (Lipman&Lipman, 2006) Have stated that corporate
be maintained along with protection of interest of other governance image enhances the goodwill of entities and
stakeholders of the company. makes it more attractive to the customers, investors and
suppliers along with non-profit organizations also. (Gupta &
Keyword:- Corporate governance, SEBI (LODR) Sharma, 2014) Found that India has more stringent
Regulations, 2015, Committee, Independent women corporate governance practices which are based on the US
directors. model and it was also found that there was no impact of
I. INTRODUCTION corporate governance practices on share price of companies
but it had a very limited impact on financial performance.
Sustainable growth and success of any country or (Singhvi&Surendra , 1971)Examine the positive relation
society depends upon the collective function of a united between type of CPA firm and quality of disclosure. (Yu,
group and resources and for better unity and coordination in 2010)Found positive impact of corporate governance for
society or any organization there should be a clear set of different levels of analysts such as managers and investors,
rules and regulations( (Swami, 2007). There are different standard setters and regulators in emerging economies. It
types of organizational structure in the present era, some of also insists that companies can improve the information
the cases handled by single or small group ownership or in environment by improving corporate governance at
other cases, the large or diverse ownership. In single organization level. (Petra, 2006) Paper suggested that
ownership not more public interest are inherent while in corporate governance reforms should focus directly on
other cases more public interests are attached with corporate boardrooms where the shareholders may insist
organization. So, (BAJPAI, 2016) it is being increasingly directors’ interest to be separate from CEO and upper
believed that in the majority of cases, organizations land up management. It also suggested that the majority of reforms
in financial distress mainly due to deficiency in corporate would have been satisfied by the global governance
governance. (OECD, 2012)Corporate governance is treated structure. (Donker&Zahir, 2008)Research shows a weak
as arrangements that are all about achieving the appropriate relationship between corporate governance rating and
tradeoff between the degree of commitment and control to corporate performance. (Talamo, 2011)It was found
different parties with ensuring to promote corporate evidence that in less open market countries stronger
activities and its values. (Lahlou, 2018)According to ownerships were restricted and corporate seen the weak

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Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
corporate governance while in open market countries have code of governance, 28 items for Board of Directors, 11
powerful and larger opportunities of investment. ( Proimos, items for Audit Committee, 9 items for Nomination and
2005)It was insisted in this paper that corporate governance Remuneration Committee, 8 items for Remuneration of
should be effective so that it does not work as a guideline directors, 11 items for Shareholder Relationship committee,
but also work as monitoring with stringent penalties if 4 items for Risk Management Committee, 30 items for
breaching of corporate governance principles. (Paul, 2017) Other Disclosure Practices, 9 items for Functional Websites,
Paper indicates that board meetings have positively related 5 items for Corporate governance requirements with respect
to firm performance (in this paper ROA is used as a firm to subsidiary of listed entity, one item for Secretarial Audit,
performance tools), here it was clearly indicated that all 7 items for Obligation with respect to Independent
major board activities related decisions are made in board Directors, 3 items for Obligations with respect to employees
meetings so significant attendance in board meetings is good including senior management, key persons, directors and
indicators for monitoring of board activities. (Saravanan, promoters, 6 items for General Body Meeting, 5 items for
Srikanth, &Avabruth , 2016) It is indicated that good Means of Communication, 18 items for General
governance practices in the firm depend upon the presence Shareholders Information, one item for Declaration signed
of a Non-executive director in the boardroom. Corporate by CEO stating that the members of board of directors and
governance has a positive impact on firm performance. senior management person of directors, One item for
(Arora&Bhandari, 2017) In this paper it is also stated that Compliance certificate from either Auditor or company
along with governance practices firms should focus on the secretary related to compliance of conditions of corporate
CSR initiative as it leads to increase in firm value. After governance and one items for Disclosures with respect to
study of many research reports it is found that nobody demat suspense account/unclaimed suspense account (Para
conducted research work done with new norms of SEBI no. F schedule –V).
(LODR) Regulations, 2015 in India which is affected 01-04-
2019. E. Equal and Unequal Weight Method: (Singh &Gite,
2015)
A. Objective of the study: It is used to calculate the corporate governance
 To study the corporate governance practices as per disclosure score of selected pharmaceutical companies.
new norms of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 in Corporate governance score =
𝑆𝑐𝑜𝑟𝑒 𝑔𝑎𝑖𝑛𝑒𝑑 𝑏𝑦 𝑠𝑒𝑙𝑒𝑐𝑡𝑒𝑑 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠
selected Pharmaceutical Industry. 𝑋100
𝑡𝑜𝑡𝑎𝑙 𝑠𝑐𝑜𝑟𝑒
 To study the corporate governance disclosure practices
according to SEBI (Listing Obligations and Disclosure F. Results of Corporate Governance Disclosure (Item wise)
Requirements) Regulations, 2015 of selected Items wise corporate governance disclosures of selected
pharmaceutical companies in India. Pharmaceutical companies in India are shown in above
table-1. The gist of the table-1 highlights, there is 100
III. RESEARCH METHODOLOGY percent of disclosure of 59 items out of 164 items in the
checklist. There are 21 parameters in corporate governance
A. Scope of the study: disclosures which contain some points. The summary of all
The study includes all pharmaceutical companies listed parameters are as follows:
on BSE selected as population for this study, for the
financial year 2019-20 to 2020-21. The total numbers of G. Corporate Philosophy of code of governance:
companies are 150 out of which top 20 pharmaceutical Corporate governance philosophy was disclosed by all
companies are selected on the basis of market capitalization selected pharmaceutical companies in each year of study,
as sample. there was 100 percent of mean disclosure score for these
items.
B. Period of the Study:
The study has been conducted for two years only from H. Board of directors:
the financial year 2019-20 to 2020-21. These years have Board of directors monitor managers and control
been selected as per availability of data because of new companies on behalf of all shareholders and they are
SEBI (Listing Obligations and Disclosure Requirements) expected to oversee corporate policies and strategies related
regulations, 2015 mostly affected from the date 1.4.2019 to companies (Swami, 2007). Board of directors covers 28
and for the next financial year. points out of those 11 items were 100 percent disclosed by
selected all pharmaceutical companies as shown in
C. Data Collection: calculated mean in table-1. Other items like number shares
The study is basically based on secondary data. Annual and convertible instruments held by non-executive director
reports of all selected companies are used as a source of was disclosed by 77.5 percent companies, both code of
data. conduct for board of directors and senior management
D. Analysis of Data: disclosed by 90 percent, whereas code of conduct for
The study uses the 159 items of corporate governance independent directors depicted by 52.5% companies,
which includes mandatory and non-mandatory disclosures disclosure for relationship between directors inter-se
as per the SEBI (Listing Obligations and Disclosure disclosed by 95% companies, board of directors periodically
Requirements) Regulations, 2015. These items were divided reviewed compliance report related to all laws applicable to
into 20 parameters, one item for corporate philosophy on listed entity disclosed only 12.5% companies, The board of

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Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
directors satisfied itself that plans are in proper ways for Only one item i.e. disclosures in respect to remuneration
orderly succession for appointment to the board of directors such as salary, benefits, bonuses, stock options, pension etc.
and senior management disclosed by mere 5% companies, was disclosed by all companies and other items such as All
Matrix setting out the skill/expertise/competence of the pecuniary relationship of non-executive directors disclosed
board of directors disclosed by 92.5% companies, Detail in annual report in case of listed entity, Criteria of making
reasons for resignation of an Independent director payments to non-executive directors, Details of performance
(resignation before the expiry of his tenure) disclosed by incentive along with criteria, Service contracts of directors,
only 27.5% companies, Minimum information are placed Notice period of director, Severances fees of director and
before Board of directors disclosed by 15% companies, Detail of stock option were disclosed 82.5 percent, 90
Chief Executive Officer (CEO) and Chief Financial Officer percent, 67.5 percent, 85 percent, 65 percent, 52.5 percent,
provided compliance certificate to the board of directors 72.5 percent companies respectively.
disclosed by 52.5% companies, Independent directors have
not any stock option disclosed by 20 percent companies, L. Shareholder relationship committee:
Board of directors comprise minimum half of Independent According to section 178 of Company Act, 2013 board
directors disclosed by 55 percent companies, Listed entity of directors shall constitute Stakeholder Relationship
did not appoint a person or continue the directorship of any Committee to look into redressal of shareholders’
person as a non-executive directors who has attained the age complaints (Sharma , 2018). Under this head, 4 items were
of 75 years disclosed by 7.5 percent companies, Evaluation disclosed by all companies (i. e. Chairperson of the
of Independent director has done by BOD disclosed by 80 committee is non-executive director, Name of chairperson,
percent companies and Separate post of chairperson and Minimum three directors are in committee and Chairperson
chief executive officer disclosed by 65% companies. of SRC was present at annual general meeting to answer
queries of shareholders with 100 percentage disclosure
I. Audit Committee: score). Similarly, others items such as Name and
According to Section 177 of the Companies Act, 2013 designation of compliance officer, At least one director is
and Rule 6 of the Companies (Meeting of Board and its independent director, Meeting of SRC held at least once in a
Powers) Rule, 2014 the board of directors shall constitute an year, Roll of SRC, Number of shareholders’ complaints
Audit Committee. It works as a link between board of received so far, Number of unsolved complaints to
directors and auditors (external and internal) and it oversees satisfaction of shareholders and Number of pending
the financial reporting process and disclosure of its financial complaints were disclosed by 92.5 percent companies, 90
information is correct and sufficient (Sharma, 2018). This percent companies, 92.5 percent companies, 92.5 percent
head covers eleven items out of which 8 items were companies, 95 percent companies, 95 percent companies
disclosing by all selected companies (100 percent companies and 95 percent companies respectively.
followed eight items) remaining items like all members of
audit committee are financial literate and minimum one M. Risk Management Committee:
member having accounting or related financial management Risk management is the identification, assessment, and
expertise was disclosed by 55 percent companies, prioritization of risks and RMC is to assist the board of
Chairperson of the audit committee is present at annual directors in fulfilling its oversight responsibilities related to
general meeting to answer shareholders’ queries disclosed risks inherent in organization (Sharma , 2018). It covers 4
by 97.5 percent companies, The company secretary acted as items and all items like Constitution of Risk Management
the secretary of audit committee disclosed by 80 percent Committee, Majority of board of directors in membership of
companies. RMC; Chairperson of RMC was member of the board of
directors and At least once meeting in a year were disclosed
J. Nomination and Remuneration Committee: by all companies (100 percent score gained by all
According to Section 177 of the Companies Act, 2013 companies).
and Rule 6 of the Companies (Meeting of Board and its
Powers) Rule, 2014 the board of directors shall constitute N. Disclosures practices:
Nomination and Remuneration Committee and it determines According to Howard Schultz ‘the currency of leadership
the slate of directors nominees for election to company is transparency while Narayan Murthy, the Chairman of
identify and recommend candidates to fill vacancies Infosys adds ‘Good disclosures are needed to enhance the
occurring between AGM (Sharma , 2018). It includes nine trust of stakeholders at large’ (BAJPAI, 2016). It contains
items in which only five items were disclosed by all 30 items out of that 6 items were 100 percent disclosed by
companies (100 percent disclosure), whereas items like All selected companies and other items like significant related
the directors of committee are non-executive directors was party transactions that may have potential conflict with the
disclosed by 65 percent companies, Chairperson of the interest of listed entity at large was disclosed by 92.5%
committee is Independent director disclosed by 92.5 percent selected companies, Prior approval of audit committee for
companies, Chairperson was present at annual general all related party transactions disclosed by 50% selected
meeting to answer shareholders’ queries and Performance companies, Details of compliance of mandatory requirement
evaluation criteria for Independent Directors by 90 percent disclosed by 45 % selected companies, adaption of the non-
companies. mandatory requirements disclosed by 60% selected
companies, Web link containing policy determining material
K. Remuneration of Directors: subsidiaries disclosed by 90 % selected companies,
Disclosure of commodity price risks and commodity

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Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
hedging activities disclosed by 52.5% companies, Detail of P. Corporate governance requirements with respect to
uses of funds raised through preferential allotment or subsidiary of listed entity:
qualified institutions placements disclosed by 80 percent Items such as, Material subsidiary of listed entity
companies, Certificate from company secretary ( none of the (disclosed by 62.5 percent companies), At least one
directors on the board of the company have been debarred or independent directors of listed entity be director on the
disqualified in case of appointment ) disclosed by 87.5 board of unlisted material subsidiary (disclosed by 17.5
percent companies, If the board did not accept any percent companies), Audit committee of listed entity
recommendation of any committee of the board which is reviewed financial statement which contained investments
mandatory required in relevant FY to be disclosed along made by unlisted subsidiary (disclosed by 37.5 percent
with reason disclosed by 57.5% companies, Total fees for all companies), Minutes of meetings of the board of directors of
services paid by listed entity and its subsidiaries to statutory the unlisted subsidiary placed at the meeting of the board of
auditor and network firm of which statutory auditor is part listed entity (disclosed by 35 percent companies),
disclosed by 95 percent companies, Details of non- Statements of all significant transactions and arrangements
compliance by listed entity, penalties, strictures imposed on entered into by the unlisted subsidiary (disclosed by 30
the listed entity, at any matter related to capital market percent companies). It means none of the companies
during the last three years disclosed by 85 percent followed 100 percent score under this head.
companies, Non-compliance of any requirement of
corporate governance report of sub-paras (2) to (10) above, Q. Secretarial audit
with reasons disclosed by 25% percent companies, The It includes only one item and all companies disclose its
Company has duly complied with the requirements specified item.
in Regulations 17 to 27 and Clauses (b) to (i) of sub-
regulation (2) of Regulation 46 Regulation disclosed by 50 R. Obligations with respect to Independent directors:
percent companies, Disclosure of quarterly compliance This includes seven items out of which only items i.e. At
report on corporate governance & Sign either by compliance least one meeting of independent directors in a year and List
officer or chief executive officer on quarterly compliance of various programs through which independent directors
report disclosed by none of the selected companies, Audit are familiarized disclosed by all companies whereas items
qualification/ Modified opinion in audit report disclosed by such as , no person is appointed or continued as alternate
77.5% companies, Half yearly declaration of financial directors for and independent directors disclosed by 15
performance sent to shareholders disclosed by 17.5% percent companies, Maximum tenure of independent
companies, Summary of significant events in last six months directors disclosed by 42.5 percent companies, Review the
sent to shareholders disclosed by only 10 percent performance of independent directors and the board of
companies, Reporting of internal auditing disclosed by 62.5 directors disclosed by 77.5 percent companies, Review the
percent companies, Separate non-executive chairman’s performance of the chairperson disclosed by 80 percent
office disclosed by 45 percent companies, Intimation to companies, Assess the quality, quantity and timelines of
shareholders about appointment of new directors or flow of information between the management and the board
reappointment of a director shareholder disclosed by 22.5 disclosed by 42.5 percent companies and so on.
percent companies, Disclosure of resignation of directors S. Obligations with respect to employees including senior
disclosed by and Disclosures of formal letter of appointment management, key persons, directors and promoters:
disclosed by 27.5 percent companies, Disclosure of It includes only three items out of which two items
remuneration policy and evaluation criteria disclosed by 90 (Limits of committees and Affirmation on compliance of
percent companies etc. code of conduct by director and senior management) were
O. Functional websites (SEBI regulation 46): disclosed by all selected companies while one items i.e.
None of the companies disclosed all the items with 100 Disclosure by senior management to the board of directors
percent included in this head. In comparatively other head of about all material, financial and commercial transactions
corporate governance score, this head covers least disclosure was disclosed by only 22.5 percent of companies.
of corporate governance score. Three items like as Terms T. General Body Meeting:
and conditions of appointment of Independent director, General body meeting covers 6 items two items such as
Composition of various committee of board of director and Location and time (last three AGMs held) and whether the
Criteria of making payments to non-executive directors were any special resolutions passed in the previous three annual
disclosed by only 5 percent companies whereas two items general meetings were disclosed by 100 percent (disclosed
such as Code of conduct of board of director and Detail of by all companies) whereas Whether any resolution passed
familiarization programs imparting to Independent director last year through postal ballot-details of voting pattern
were disclosed by mere 12.5 percent companies. Similarly, disclosed by 85 percent companies, Person who conducted
another two items such as Code of conduct of senior the postal ballot exercise disclosed by 77.5 percent
management personnel and Policy concerning related party companies, Whether any special resolution is proposed to be
transactions were disclosed by 15 percent companies conducted through postal ballot disclosed by 60 percent
whereas two items including detail of establishment of vigil companies and Procedure for postal ballot disclosed by 80
mechanism and Policy for determining material subsidiaries percent companies.
were disclosed by 10 percent companies.
U. Means of Communication:

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ISSN No:-2456-2165
It covers 5 items such as Quarterly results, Newspapers, transfer system disclosed by 75 percent companies, ADR,
Any website, Official news releases and Presentations made GDR or warrants or any convertible instrument conversion
to institutional investors or to analysts. All these items were date and equity disclosed by 82.5 percent companies,
disclosed by 100 percent companies. Commodity price risk or foreign exchange risk and hedging
activities disclosed by 75 percent companies, Plant locations
V. General shareholder information: disclosed by 92.5 percent companies and List of all credit
There are eighteen items included in this head out of ratings obtained by the entity disclosed by 85 percent
which only 8 items were disclosed by 100 percent companies.
companies while the other ten were not disclosed by all
companies. these items such as Dividend payments date There are three items in spite of above items such as
disclosed by 85 percent companies, Name and address of Declaration signed by CEO stating that the members of
each stock exchange at which securities of listed entity are board of directors and senior management persons of
listed disclosed by 87.5 percent companies, Confirmation directors, Compliance certificate from either Auditor or
about payment of annual listing fee to each stock exchange company secretary related to compliance of conditions of
disclosed by 92.5 percent companies, In case the securities corporate governance and Disclosures with respect to demat
are suspended from trading, the directors report shall suspense account/unclaimed suspense account (Para no. F
explain the reason thereof disclosed by 22.5 percent schedule –V) were disclosed by 97.5 percent, 97.5 percent
companies, Appointment of Registrar to an issue and share and 62.5 percent respectively.
transfer agents disclosed by 80 percent companies, Share

Company 2019-20 2020-21 Mean SD

Sun Pharma 118 123 120.5 3.54
Divis Labs 115 127 121 8.49
Dr. Reddy Labs 115 114 114.5 0.71
Cipla 129 134 131.5 3.54
Cadila Health 126 125 125.5 0.71
AurobindoPharma 125 126 125.5 0.71
Lupin 108 110 109 1.41
Gland 14 110 62 67.88
Torrent pharma 118 119 118.5 0.71
Alkem Lab 115 123 119 5.66
Abbott India 119 128 123.5 6.36
Laurus Labs 125 129 127 2.83
Ipca Labs 153 137 145 11.31
GlaxoSmithKline 116 112 114 2.83
NatcoPharma 103 109 106 4.24
Alembic Pharma 117 125 121 5.66
Glenmark 108 117 112.5 6.36
Ajanta Pharma 124 125 124.5 0.71
SuvenPharma 116 132 124 11.31
Table 1
Source: Compile from annual report selected companies)

The table-1 shows the mean score of IPCA Lab (145) are IPCA (91.19%), Cipla Company (82.70%), Laurus Lab
is maximum followed by Cipla Company (131.5),Laurus (79.87%), and both Cadila Health and Aurobindo (78.93%)
Labs (127), Cadila Health (125.5), AurobindoPharma and disclosure score of other companies are below these
(125.5), Ajanta Pharma (124.5), SuvenPharam (124), Abott score.
India (123.5), both Divis Lab and Alembic Pharma (121),
Sun Pharma (120.5), Alembic Lab(119), Torrent Pharma IV. CONCLUSION
(118.5), Dr. Reddy Lab (114.5), Glaxo Smith Line (114),
Glenmark (112.5), Lupin (109), NatcoPharma (106) and It has been observed from the items wise analysis that
Gland (62). Similarly, Highest standard deviation has been four parameters such as Corporate Philosophy on code of
seen in the Gland (67.88) followed by both IPCA Labs and governance, Risk Management committee, Secretarial audit,
SuvenPharma (11.31), Divis Lab (8.49), both Glenmark and Means of Communication were disclosed by all companies
Abbott (6.36), both Alem Lab and Alembic (5.66), while other five parameters were disclosed by above the 90
NatcoPharma (4.24), both Sun Pharma and Cipla (3.54), percent (Nomination and Remuneration Committee 93.05 %
Glaxo Smith Kline and Laurus Lab (2.83), Lupin (1.41), companies, audit committee 93.86, shareholders
four companies i.e. Dr. Reddy Lab, Cadila Health, Relationship Committee 95.86% companies, Declaration
AurobindoPharma, TorrentoPharma and Ajanta Pharma signed by CEO and Compliance certificate from either
(0.71). The maximum governance score are determined 100 Auditor or company secretary both 97.5 % companies) but
percent (total 159 score ) while top five scores companies less than 100 percent companies. Similarly, eights

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Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
parameters were disclosed by above the 60 percent but less and Etrepriese, Corporate Governance . OECD
than 90 percent companies expect two parameter i.e. CG publishing,
requirements with respect to subsidiaries of listed entities http://dx.doi.org/10.1787/9789264179547-en.
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 Volume 7, Issue 10, October – 2022 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165

Corporate Governance Parameters total 2019-20 % 2020-21 %

Corporate Philosophy on code of governance 20 20 100 20 100

Board of Directors
Optimum combination of executive and non-executive directors 20 20 100 20 100
At least one independent women directors in the board 20 20 100 20 100
Board meeting 20 20 100 20 100
Attendance of director at board meeting 20 20 100 20 100
Attendance of directors at annual general meeting 20 20 100 19 95
Number of board meeting held 20 20 100 20 100
Date of board meeting 20 20 100 20 100
Number of share and convertible instrument held by non-executive directors 20 15 75 16 80
Code of conduct for board of directors 20 18 90 18 90
Code of conduct for senior management 20 18 90 18 90
Code of conduct for Independent directors which included duties of Independent
directors 20 10 50 11 55
Disclosure of relationship between directors inter-se 20 19 95 19 95
Details of familiarization programs provided to Independent directors is disclosed on web
link 20 20 100 20 100
The board of directors periodically reviewed compliance reports related to all laws
applicable to listed entity 20 2 10 3 15
The board of directors satisfied itself that plans are in proper ways for orderly succession
for appointment to the board of directors and senior management 20 1 5 1 5
Matrix setting out the skill/expertise/competence of the board of directors 20 18 90 19 95
Detail reasons for resignation of an Independent director (resignation before the expiry of
his tenure) 20 5 25 6 30
Minimum information are placed before Board of directors 20 2 10 4 20
Chief Executive Officer (CEO) and Chief Financial Officer provided compliance
certificate to the board of directors 20 11 55 10 50
Listing entities laid down procedure to inform members of board of directors about risk
assessment and minimization procedures 20 20 100 20 100
Independent directors have not any stock option 20 4 20 4 20
Board of director of the top 1000 listed entities comprise minimum six directors 20 20 100 20 100
Board of directors comprise minimum half of Independent directors 20 10 50 12 60
Listed entity did not appoint a person or continue the directorship of any person as a non-
executive directors who has attained the age of 75 years 20 1 5 2 10
Quorum of meeting (1/3 total strength or 3 directors whichever is higher) 20 20 100 20 100
Quorum of meeting comprise of at least one Independent director 20 20 100 20 100
Evaluation of Independent director has done by BOD 20 15 75 17 85
Separate post of chairperson and chief executive officer 20 13 65 13 65
Audit Committee
Audit committee has minimum three members as directors 20 20 100 20 100
Two third members of audit committee are independent directors 20 20 100 20 100
All members of audit committee are financial literate and minimum one member having
accounting or related financial management expertise 20 10 50 12 60
Chairperson of the audit committee is Independent director 20 20 100 20 100
Chairperson of the audit committee is present at annual general meeting to answer
shareholders’ queries 20 20 100 19 95
The company secretary acted as the secretary of audit committee 20 15 75 17 85
Audit committee meeting 20 20 100 20 100

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Quorum of audit committee meeting (2 or 1/3 whichever is more ) 20 20 100 20 100

At least two Independent directors in the audit committee meeting 20 20 100 20 100
Attendance of member during the year 20 20 100 20 100
Role of the audit committee 20 20 100 20 100
Nomination and Remuneration Committee
Committee has minimum three directors 20 20 100 20 100
Name of the member and chairman 20 20 100 20 100
All the directors of committee are non-executive directors 20 12 60 14 70
At least half of directors are independent directors in committee 20 20 100 20 100
Chairperson of the committee is Independent director 20 18 90 19 95
Chairperson was present at annual general meeting to answer shareholders’ queries 20 17 85 19 95
Nomination and Remuneration committee has been conducted at least once meeting in
year 20 20 100 20 100
Quorum for meeting (two or one third of committee) 20 20 100 20 100
Performance evaluation criteria for Independent Directors 20 18 90 18 90
Remuneration of Directors
All pecuniary relationship of non-executive directors disclosed in annual report in case of
listed entity 20 16 80 17 85
Criteria of making payments to non-executive directors, 20 17 85 19 95
Disclosure in respect to remuneration such as salary, benefits, bonuses, stock options,
pension etc. 20 20 100 20 100
Details of performance incentive along with criteria 20 12 60 15 75
Service contracts of directors 20 16 80 18 90
Notice period of director 20 13 65 13 65
Severances fees of director 20 9 45 12 60
Detail of stock option 20 14 70 15 75
Shareholder relationship committee
Chairperson of the committee is non-executive director 20 20 100 20 100
Name of chairperson 20 20 100 20 100
Name and designation of compliance officer 20 18 90 19 95
Minimum three directors are in committee 20 20 100 20 100
At least one director is independent director 20 17 85 19 95
Chairperson of SRC was present at annual general meeting to answer queries of
shareholder 20 20 100 20 100
Meeting of SRC held at least once in a year 20 18 90 19 95
Roll of SRC 20 18 90 19 95
Number of shareholders’ complaints received so far 20 19 95 19 95
Number of unsolved complaints to satisfaction of shareholders 20 19 95 19 95
Number of pending complaints 20 19 95 19 95
Risk Management Committee
Constitution of Risk Management Committee 20 20 100 20 100
Majority of board of directors in membership of RMC 20 20 100 20 100
Chairperson of RMC was member of the board of director 20 20 100 20 100
At least once meeting in a year 20 20 100 20 100
Disclosures practices
Significant related party transactions that may have potential conflict with the interest of
listed entity at large 20 18 90 19 95
Prior approval of audit committee for all related party transactions 20 9 45 11 55

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Establishment of vigil mechanism 20 20 100 20 100

Details of compliance of mandatory requirement 20 8 40 10 50
adaption of the non-mandatory requirements 20 10 50 14 70
Web link containing policy determining material subsidiaries 20 18 90 18 90
Web link contains policy related to related party transactions 20 20 100 20 100
Disclosure of commodity price risks and commodity hedging activities 20 9 45 12 60
Detail of uses of funds raised through preferential allotment or qualified institutions
placements 20 16 80 16 80
Certificate from company secretary ( none of the directors on the board of the company
have been debarred or disqualified in case of appointment ) 20 17 85 18 90
If the board did not accept any recommendation of any committee of the board which is
mandatory required in relevant FY to be disclosed along with reason 20 11 55 12 60
Total fees for all services paid by listed entity and its subsidiaries to statutory auditor and
network firm of which statutory auditor is part 20 19 95 19 95
Disclosure in relation to sexual harassment of women at workplace (includes only
13,14,15)
Total complaints filed during financial year 20 20 100 20 100
Total complaints disposed of during the financial year 20 20 100 20 100
Total complaints pending as on and of financial year 20 20 100 20 100
Details of non-compliance by listed entity, penalties, strictures imposed on the listed
entity, at any matter related to capital market during the last three years 20 16 80 18 90
Non-compliance of any requirement of corporate governance report of sub-paras (2) to
(10) above, with reasons thereof are disclosed 20 4 20 6 30
The Company has duly complied with the requirements specified in Regulations 17 to 27
and Clauses (b) to (i) of sub-regulation (2) of Regulation 46 Regulation 20 10 50 10 50
Discloser of quarterly compliance report on corporate governance 20 0 0 0 0
Sign either by compliance officer or chief executive officer on quarterly compliance
report 20 0 0 0 0
Audit qualification/ Modified opinion in audit report 20 15 75 16 80
Half yearly declaration of financial performance sent to shareholders 20 3 15 4 20
Summary of significant events in last six months sent to shareholders 20 2 10 2 10
Reporting of internal auditing 20 11 55 14 70
Separate non-executive chairman’s office 20 9 45 9 45
Management discussion and analysis 20 20 100 20 100
Intimation to shareholders about appointment of new directors or reappointment of a
director shareholder 20 4 20 5 25
Disclosure of resignation of directors 20 4 20 7 35
Disclosures of formal letter of appointment 20 5 25 6 30
Disclosure of remuneration policy and evaluation criteria 20 17 85 19 95
Functional websites (SEBI regulation 46)
Terms and conditions of appointment of Independent director 20 1 5 1 5
Composition of various committee of board of director 20 1 5 1 5
Code of conduct of board of director 20 2 10 3 15
Code of conduct of senior management personal 20 3 15 3 15
Detail of establishment of vigil mechanism 20 2 10 2 10
Criteria of making payments to non-executive directors 20 1 5 1 5
Policy concerning to related party transactions 20 3 15 3 15
Policy for determining material subsidiaries 20 2 10 2 10
Detail of familiarization programs imparting to Independent director including to
following details 20 2 10 3 15
Corporate governance requirements with respect to subsidiary of listed entity

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Material subsidiary of listed entity 20 12 60 13 65

At least one independent directors of listed entity be director on the board of unlisted
material subsidiary 20 3 15 4 20
Audit committee of listed entity reviewed financial statement which contained
investments made by unlisted subsidiary 20 7 35 8 40
Minutes of meetings of the board of directors of the unlisted subsidiary placed at the
meeting of the board of listed entity 20 6 30 8 40
Statements of all significant transactions and arrangements entered into by the unlisted
subsidiary 20 6 30 6 30
Secretarial audit 20 20 100 20 100
Obligations with respect to Independent directors
No person is appointed or continued as alternate directors for and independent directors 20 2 10 4 20
Maximum tenure of independent directors 20 8 40 9 45
At least one meeting of independent directors in a year 20 20 100 20 100
Review the performance of independent directors and the board of directors 20 15 75 16 80
Review the performance of the chairperson 20 16 80 16 80
Assess the quality, quantity and timelines of flow of information between the
management and the board 20 8 40 9 45
List of various programs through which independent directors are familiarized 20 20 100 20 100
Obligations with respect to employees including senior management, key persons,
directors and promoters
Limits of committees (membership not more than 10 public company and chairmanship
not more than 5 committees) 20 20 100 20 100
Affirmation on compliance of code of conduct by director and senior management 20 20 100 20 100
Discloser by senior management to board of directors about all material, financial and
commercial transactions 20 4 20 5 25
General Body Meeting
Location and time (last three AGMs held) 20 20 100 20 100
Whether the any special resolutions passed in the previous three annual general
meetings 20 20 100 20 100
Whether any resolution passed last year through postal ballot-details of voting pattern 20 16 80 18 90
Person who conducted the postal ballot exercise 20 14 70 17 85
Whether any special resolution is proposed to be conducted through postal ballot 20 12 60 12 60
Procedure for postal ballot 20 15 75 17 85
Means of Communication
Quarterly results 20 20 100 20 100
Newspapers 20 20 100 20 100
Any website 20 20 100 20 100
Official news releases 20 20 100 20 100
Presentations made to institutional investors or to analysts 20 20 100 20 100
General shareholder information
AGM: date, time and venue 20 20 100 20 100
Financial year 20 20 100 20 100
Dividend payments date 20 16 80 18 90
Name and address of each stock exchange at which securities of listed entity are listed 20 16 80 19 95
Confirmation about payment of annual listing fee to each stock exchange 20 18 90 19 95
Stock code 20 20 100 20 100
Market price date (high and low during the each month in last financial year) 20 20 100 20 100
Performance in comparison to broad-based indices such as BSE sensex, CRISIL Index 20 20 100 20 100

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etc.
In case the securities are suspended from trading, the directors report shall explain the
reason thereof 20 4 20 5 25
Appointment of Registrar to an issue and share transfer agents 20 15 75 17 85
Share transfer system 20 13 65 17 85
Distribution of shareholding 20 20 100 20 100
Dematerialization of shares and liquidity 20 20 100 20 100
ADR, GDR or warrants or any convertible instrument conversion date and equity 20 16 80 17 85
Commodity price risk or foreign exchange risk and hedging activities 20 15 75 15 75
Plant locations 20 18 90 19 95
Address for correspondence 20 20 100 20 100
List of all credit ratings obtained by the entity 20 17 85 17 85
Declaration signed by CEO stating that the members of board of directors and senior
management personn of directors 20 19 95 20 100
Compliance certificate from either Auditor or company secretary related to compliance
of conditions of corporate governance 20 19 95 20 100
Disclosures with respect to demat suspense account/unclaimed suspense account (Para
no. F schedule –V) 20 12 60 13 65

Table 2: Corporate Governance Disclosure Score of selected Pharmaceutical Indian companies

Source: Compiled with the help of SEBI (LODR), Regulations 2015

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