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Directors Report of Wockhardt Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Sixteenth Annual Report of the Company along with the Audited Financial Statements for the year ended 31st March, 2015.

FINANCIAL RESULTS AND HIGHLIGHTS

(Rs. in crore)

Particulars Year ended Year ended March 31, March 31, 2015 2014

Consolidated

Total Revenue 4,548 4,869

Profit Before Depreciation, Finance 894 1,018 Cost & Tax

Profit Before Exceptional Items & Tax 575 841

Exceptional Items (Expense)/Income - 50

Profit Before Tax 575 891

Provision for Taxation (Expense)/Credit (162) (48)

Profit After Tax 413 843

Minority Interest (Profit)/Loss (8) (2)

Net Profit for the year 405 841

Standalone

Total Revenue 2,352 2,125

Profit Before Depreciation, Finance 490 385 Cost & Tax

Profit Before Tax 350 215

Provision for Taxation (Expense)/Credit (18) (16)

Profit After Tax 332 199

During the financial year ended 31st March, 2015, the Company registered Consolidated Revenue of Rs. 4,548 crore and Net Profit of Rs. 405 crore. On Standalone basis, the Company registered Total Revenue of Rs. 2,352 crore and growth of 11% as compared to the previous year. The Profit Before Depreciation, Finance Cost & Tax on Standalone basis increased from Rs. 385 crore to Rs. 490 crore thereby registering growth of 27%. The Profit After Tax grew from Rs. 199 crore to Rs. 332 crore registering healthy growth of 67%.

STATE OF COMPANY''S AFFAIRS

During the year, the Company continued to grow in various geographies particularly in UK by about 46% & Indian Operations by about 24% over the previous year. Such growth was achieved mainly due to contract manufacturing in UK and consistent focus on new product launch in India. During the year, 42 new products were launched in India. Inspite of restriction on export to USA & UK, the Company''s revenue share of the International Business was about 72%.

During the year, the R&D spent of the Company was about 11.7% reporting a growth of 14% over the previous year.

In a major boost to its New Chemical Entity (NCE) research program, the Company received the coveted Qualified Infectious Disease Product (QIDP) status for three products WCK 771, WCK 2349 and WCK 4873. Two of the products, WCK 771 & WCK 2349 received QIDP status during the year 2014-15 and WCK 4873 received the same in the current year 2015-16. QIDP status is granted to drugs, identified by CDC (Centre for Disease Control, USA), that act against pathogens which have a high degree of unmet need in their treatment. QIDP status provides fast track clinical development and review of the drug application by US FDA for drug approval. The drug is also awarded five-year extension of market exclusivity in addition to the regular patent protected period in U.S.A. QIDP was constituted under Generating Antibiotic Incentives Now (GAIN) Act in 2012 as part of the FDA Safety and Innovation Act to underline the urgency in new antibiotics development. Wockhardt is the only Indian Company to receive QIDP status for its NCE products.

The Company continued to strengthen its operations and creation of a robust Quality and Manufacturing Operations, a process initiated during the year before. A slew of measures like process automation in Quality with the use of high end IT system were undertaken to prevent manual intervention. Manufacturing also underwent a significant upheaval with development of a strong protocol based operations, continuous learning & training programs in cGMP (current Good Manufacturing Practice) and modernization of equipment with automated controls.

You would be happy to know that as a result of these measures, UK MHRA lifted the Statement of Non-Compliance from the L1-Chikalthana plant at Aurangabad and granted restricted Good Manufacturing Practice (GMP) certificate after their inspection during the year. The Company''s plants at Daman and Kadaiya too were inspected by UK MHRA and EU GMP status was restored for these plants. The number of products for supply to UK and EU markets has since then increased from these plants.

The Company''s clinical research organization at Aurangabad underwent a successful inspection by US FDA and continued to remain in compliance. The Company also offered its manufacturing facilities to US FDA for inspection during the year. US FDA visited two of the manufacturing facilities at Aurangabad: B-15/2, Waluj in February, 2015 and Ll-Chikalthana facility in March, 2015. The new quality control systems with automation features were thoroughly inspected and have been appreciated. There are no findings with respect to data security and control measures in Laboratory and Manufacturing facilities. The Company believes that all the outstanding issues at its plants pertaining to US FDA will be resolved in reasonable period of time.

During the year, India Ratings & Research Private Limited (Fitch Group) assigned a Long Term Issuer Rating of "Ind AA" with "Stable Outlook" in conformity to the sustained growth of the Company in its operation. The Company''s Short Term Fund & Non-Fund based facilities have also been rated as "IND A1 "

DIVIDEND AND RESERVES

During the year 2014-15, the Board of Directors of the Company declared and paid interim dividend @ 400% (Rs. 20/- per equity share of Rs. 5/- each) absorbing a sum of Rs. 220.08 crore.

The Board recommends dividend @ 0.01% (Rs. 0.0005 per Preference Share of Rs. 5/- each) on 47,56,59,941 Non-Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each and 12,14,54,927 Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each absorbing a sum of Rs. 298,557/-.

No amount is proposed to be transferred to the General Reserves of the Company out of the profits for the year.

REGISTERED OFFICE

Pursuant to the approval of the Shareholders by way of Special Resolution through Postal Ballot, the Registered Office of the Company has been shifted from Mumbai to Aurangabad with effect from 24th March, 2015.

SHARE CAPITAL

During the year under review, the paid-up equity share capital of the Company increased from Rs. 54,87,55,765/- to Rs. 55,03,64,515/- pursuant to the allotment of 3,21,750 equity shares of Rs. 5/- each against exercise of stock options granted under Wockhardt Employee Stock Option Scheme - 2011 (''ESOP Scheme'').

There was no issue of equity shares with differential voting rights and sweat equity shares during the year under review. Further, no shares have been issued to employees of the Company except under the ESOP scheme mentioned above.

DIRECTORS

Pursuant to the provisions of Section 149 of the Companies Act, 2013, Members of the Company at the Annual General Meeting (''AGM'') held on 15th September, 2014, appointed Mr. Shekhar Datta, Mr. R. A. Shah, Mr. Aman Mehta, Mr. Davinder Singh Brar and Dr. Sanjaya Baru as Independent Directors for a term of five consecutive years with effect from 1st April, 2014 to 31st March, 2019.

During the year under review, Mr. R. A. Shah relinquished directorship of the Company w.e.f. 30th September, 2014. The Board took the same on record and placed its appreciation for valuable contributions made by him during his long association with the Company.

Ms. Tasneem Mehta (DIN: 05009664) was appointed as an Additional Director (Non-Executive and Independent) with effect from 30th September, 2014. The resolution for the appointment of Ms. Tasneem Mehta as an Independent Director for a term upto 29th September, 2019 is placed for approval of Members of the Company at the ensuing AGM.

Further, Mr. Baldev Raj Arora (DIN: 00194168) was appointed as an Additional Director (Non-Executive and Independent) with effect from 28th May, 2015. The resolution for the appointment of Mr. Baldev Raj Arora as an Independent Director for a term upto 27th May, 2020 is also placed for approval of Members of the Company at the ensuing AGM.

All the Independent Directors have furnished Declaration of Independence stating that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Clause 49(II)(B) of the Listing Agreement.

During the year under review, Dr. H. F. Khorakiwala, Chairman (DIN: 00045608) was re-appointed for a period of five years w.e.f. 1st March, 2015.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. Murtaza Khorakiwala, Managing Director (DIN: 00102650) retires by rotation as Director at the ensuing AGM and being eligible, offers himself for the re-appointment. The Board recommends his re-appointment.

As required under Clause 49 of the Listing Agreement, brief resume and other details of directors being appointed/ re-appointed are provided in the Notice of AGM.

NUMBER OF BOARD MEETINGS

During the financial year 2014-15, the Board of Directors met 5 (five) times on 26th May, 2014, 12th August, 2014, 15th September, 2014, 3rd November, 2014 and 4th February, 2015.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3)(c) of the Companies Act, 2013, the Directors state that:

(a) in the preparation of Annual Accounts for the year ended 31st March, 2015, the applicable Accounting Standards have been followed and that no material departures have been made from the same;

(b) such Accounting Policies as mentioned in the Notes to the Financial Statements for the year ended 31st March, 2015 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for the year ended 31st March, 2015;

(c) proper and sufficient care has been taken for the 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;

(d) the Annual Accounts for the year ended 31st March, 2015 have been prepared on a going concern basis;

(e) the internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and operating effectively; and

(f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and operating effectively.

STATUTORY AUDITORS

At the last Annual General Meeting (''AGM'') of the Company held on 15th September, 2014, Haribhakti & Co. LLP, Statutory Auditors of the Company were appointed for a term of five years i.e. till the conclusion of 20th AGM subject to ratification of their appointment at every AGM of the Company. The resolution for ratification of their appointment is placed for approval of Members of the Company at the ensuing AGM. The Company has received a letter from Haribhakti & Co. LLP confirming that they are eligible for ratification of their appointment.

AUDITORS'' REPORT

The report of the Statutory Auditors on Standalone and Consolidated Financial Statements forms part of the Annual Report. There are no qualifications, reservations, adverse remarks, disclaimer or emphasis of matter in the Auditors'' Report.

COST AUDIT

Pursuant to the provisions of Section 148 of the Companies Act, 2013 (''the Act''), read with the Companies (Audit and Auditors) Rules, 2014, as amended from time to time and as recommended by the Audit Committee, the Board of Directors of the Company appointed M/s. Kirit Mehta & Co., Cost Accountants as Cost Auditors to conduct the audit of cost records relating to pharmaceutical activities of the Company for the years 2014-15 and 2015-16. The Company has received consent from

M/s. Kirit Mehta & Co. to act as Cost Auditors. Further, pursuant to the aforesaid provisions of the Act, the remuneration payable to M/s. Kirit Mehta & Co. for conducting the audit of cost records for the year ending 31st March, 2016 needs to be ratified by the Members of the Company and resolution for the said ratification is placed for approval of Members of the Company at the ensuing AGM.

The Cost Audit Report for the financial year ended 31st March, 2014 was duly filed with the Central Government within the due date i.e., 25th September, 2014.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors of the Company had appointed Mr. Virendra Bhatt, Practising Company Secretary to conduct Secretarial Audit for the year ended 31st March, 2015. The Secretarial Audit Report issued by Mr. Virendra Bhatt is annexed to this Report as Annexure I. The report does not contain any qualifications, reservations, adverse remarks or disclaimer.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return under Section 92(3) of the Companies Act, 2013 is annexed as Annexure II to this Report.

EMPLOYEE STOCK OPTIONS

During the year under review, 2,00,000 stock options were granted under Employee Stock Option Scheme - 2011. The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder; and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided in Annexure III to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder and pursuant to the recommendation of the Committee, the Board has approved a Corporate Social Responsibility (''CSR'') policy and the same has been uploaded on the website of the Company www.wockhardt.com. CSR Policy contains the CSR activities which can be carried out by the Company, governance structure, implementation process, etc.

As the Average Net Profits of the Company for the immediately preceding 3 financial years calculated as per Section 198 of the Companies Act, 2013 were negative, no amount was required to be spent on CSR activities during the financial year 2014-15. However, as a continuing corporate governance practice, the Company contributed Rs. 1.21 crores to Wockhardt Foundation, CSR arm of the Company, for spending on CSR activities which has undertaken CSR projects in the areas of healthcare and education etc. The details on CSR activities are provided in Annexure IV to this Report.

KEY MANAGERIAL PERSONNEL

As on date, Mr. Manas Datta is the Chief Financial Officer (CFO) of the Company and Mr. Narendra Singh is the Company Secretary & Compliance Officer (CS).

During the financial year 2014-15, there were no changes in the Whole-time Directors and Managing Director. However, the following changes took place in CFO and CS (Key Managerial Personnel):-

Sl. Name of the KMP Designation Date of No. appointment

1. Mr. V. Suresh Chief Financial Officer N.A.

2. Mr. Vijay Khetan Company Secretary & Compliance 19th May, 2011 Officer 3. Mr. Nimesh Shah Company Secretary & Compliance 8th September, Officer 2014

4. Mr. Manas Datta Chief Financial Officer 10th September, 2014

Sl. Name of the KMP Date of resignation No.

1. Mr. V. Suresh 30th May, 2014

2. Mr. Vijay Khetan 30th May, 2014

3. Mr. Nimesh Shah 9th February, 2015

4. Mr. Manas Datta N.A.

Mr. Narendra Singh is appointed as the Company Secretary & Compliance Officer on 28th May, 2015.

COMPANY''S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

The Company has been following well laid down policy on appointment and remuneration of Directors, KMP and Senior Management personnel.

The appointment of Directors is made pursuant to the recommendation of Nomination and Remuneration Committee (NRC).

The remuneration of Executive Directors comprises of Basic Salary and Perquisites & follows applicable requirements of the Companies Act, 2013. Approval of shareholders and the Central Government, if any, for payment of remuneration to Executive Directors is sought, from time to time.

The remuneration of Non-Executive Directors comprises of sitting fees in accordance with the provisions of Companies Act, 2013 and reimbursement of expenses incurred in connection with attending the Board meetings, Committee meetings, General Meetings and in relation to the business of the Company.

A brief of the Remuneration Policy on appointment and remuneration of Directors, KMP and Senior Management is provided in the Report on Corporate Governance.

PERFORMANCE EVALUATION OF DIRECTORS

Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by Nomination and Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the parameters specified in the Report on Corporate Governance. The parameters of performance evaluation were circulated to the Directors in the form of questionnaire.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include well defined policies, guidelines, Standard Operating Procedures (''SOPs''), authorization and approval procedures and high technology intensive processes. The internal financial controls of the Company are adequate to ensure the accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient manner.

RISK MANAGEMENT

The Company has laid down the procedure for risk assessment and its mitigation through an internal Risk Committee. Key risks and their mitigation arising out of periodic reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis.

The current key risk relates to regulatory risk on overseas operations and business. This is arising out of regulatory audits at Company''s manufacturing locations, which is being adequately addressed through strengthening of current processes and controls by Company''s internal quality assurance and manufacturing teams and through the help of reputed external consultants. Other details about Risk Management have been elaborated in the Report on Corporate Governance forming part of this Annual Report.

PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has obtained approval of Shareholders through Postal Ballot for giving loans, guarantees and/or providing security(ies) and/or making investments upto Rs. 3,000 crore including the limit under Section 186 of the Companies Act, 2013. The particulars of loans, investments and guarantees are provided under Note 31 in the Notes to the Financial Statements.

PARTICULARS OF CONTRACTS/ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year 2014-15 with related parties were in the ordinary course of business and on arm''s length basis. The Particulars of contracts/arrangements with related parties in Form AOC-2 are provided in Annexure V to this Report.

AUDIT COMMITTEE

As on 31st March, 2015, the Audit Committee comprises of Mr. Shekhar Datta, Chairman, Mr. Aman Mehta, Mr. Davinder Singh Brar, Dr. Sanjaya Baru and Ms. Tasneem Mehta as its Members. All the Members of the Committee are Independent Directors and recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. Other details about the Audit Committee and other Committees of the Board are provided in the Report on Corporate Governance forming part of this Annual Report.

VIGIL MECHANISM

Pursuant to the requirement laid down in the Companies Act, 2013 and the Listing Agreement, the Company has established Vigil Mechanism. The details of the same are provided in the Report on Corporate Governance forming part of this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 (''Act'') read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in annexure to this report. Pursuant to the provision of Section 136(1) of the Companies Act, 2013, the Board''s Report is being sent to the Shareholders of the Company excluding the said annexure. Any Shareholder interested in inspection or obtaining a copy of the annexure, may write to the Company Secretary and the same will be furnished on request.

Disclosure pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure VI to this Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The 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 provided in Annexure VII to this Report.

SUBSIDIARIES

As on 31st March, 2015, the Company has total 28 subsidiaries.

During the year under review, two Wholly Owned Indian Subsidiaries of the Company viz. Wockhardt Biopharm Limited and Vinton Healthcare Limited were amalgamated with the Company w.e.f. 1st April, 2014 (''appointed date'') pursuant to the scheme of amalgamation sanctioned by the Hon''ble High Court, Bombay vide its order dated 20th March, 2015. Further, Nonash Limited, Ireland, indirect foreign subsidiary of the Company was liquidated during the year. With effect from 1st April, 2015, CP Pharmaceuticals Ltd., subsidiary of Wockhardt UK Holdings Limited, became subsidiary of Wockhardt Bio AG.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing salient features of the Subsidiaries of the Company is provided in Form AOC-1 attached as Annexure VIII to this Report and other details of the subsidiaries are also provided in the said Annexure.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Clause 32 of the Listing Agreement and the Companies Act, 2013, the Audited Consolidated Financial Statements prepared as per Companies Act, 2013 and Accounting Standards forms part of the Annual Report. In view of the same, the accounts and other documents of each subsidiaries and associate companies are not attached to this Report.

A copy of the Audited Financial Statements of the subsidiaries shall be made available for inspection at the Registered Office of the Company during business hours. The audited financial statements of the subsidiaries are also available on the website of the Company. Further, any Shareholder interested in obtaining a copy of the separate Financial Statements of the subsidiary(ies) shall make specific request in writing to the Company Secretary.

DEPOSITS

During the year under review, no deposits were accepted by the Company under Chapter V of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT

During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Corporate Governance along with a certificate from the Practicing Company Secretary on compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreement and Management Discussion and Analysis Report forms part of this Report.

ACKNOWLEDGEMENTS

Your Directors appreciate the significant contribution made by the employees of the Company at all levels towards its overall success. The Directors also take this opportunity to place on record their appreciation to all the Stakeholders of the Company viz. customers, members of medical profession, investors, banks, regulators for the support received from them during the year under review.

For and on behalf of the Board of Directors

DR. H. F. KHORAKIWALA Chairman DIN: 00045608

Mumbai, 28th May, 2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Fifteenth Annual Report of the Company along with the Audited Accounts for the financial year ended March 31, 2014.

FINANCIAL PERFORMANCE

(Rs.in crore)

Year ended Year ended March 31, 2014 March 31, 2013

Consolidated

Income 4,869 5,772

Profit Before Depreciation, Finance Cost & Tax 1,018 2,166

Profit/(Loss) Before Exceptional Items & Tax 841 1,799

Exceptional Items (Expense)/Income 50 61

Profit/(Loss) Before Tax 891 1,860

Provision for Taxation (Expense)/Credit (48) (265)

Share of Profit/(Loss) from Associates - (1)

Minority Interest (Profit)/Loss (2) -

Net Profit/(Loss) 841 1,594

Standalone

Income 2,125 2,628

Profit Before Depreciation, Finance Cost & Tax 385 640

Profit/(Loss) Before Exceptional Items & Tax 215 425

Exceptional Items (Expense)/lncome - 288

Profit/(Loss) Before Tax 215 713

Provision for Taxation (Expense)/Credit (16) (91)

Profit/(Loss) After Tax 199 623

For the year ended March 31, 2014, the Company registered Consolidated Income of" 4,869 crore and Net Profit of" 841 crore. On standalone basis, the Company registered income of" 2,125 crore and Net Profit of" 199 crore.

During the year, the Company has received regulatory alerts from USFDA on two of its manufacturing units located in Aurangabad. The said action did not affect the sale of inventories which were already lying in USA, thereby assuring no quality concerns on the products. Further, USFDA has also excluded 6 products and the supply of the same continues to the US market.

The Company has also received restricted GMP certificate from the UKMHRA for its manufacturing facilities at Aurangabad & Daman. The UKMHRA has however, allowed the Company to manufacture and supply 21 products. The UKMHRA had also initiated drug recalls for the products manufactured at two Aurangabad facilities, but has categorically mentioned that the recalls were only precautionary and there was no risk to patient safety.

The above has resulted in inventory write-off as well as decline in the sales and profitability during the year.

During the year, the company has reviewed its technical operations and as a result of the same has directed its energies into strengthening and upgrading its Quality & Manufacturing operations. The company has initiated a number of improvement measures to ensure creation of a robust, sustainable and compliant operating framework on a consistent basis. Some of these measures include restructuring and strengthening Quality & Manufacturing functions, initiating extensive training programs for upgrading competencies and improving information system security and integrity.

DIVIDEND AND RESERVES

During the year 2013-2014, the Board of Directors of the Company had declared and paid two interim dividends @100% each, totaling to 200% (" 5/- per equity share of" 5/- each) absorbing " 109.75 crore.

The Board recommends dividend @ 0.01% (" 0.0005 per Preference Share of " 5/- each) on 47,56,59,941 Non-Convertible Cumulative Redeemable Preference Shares of " 5/- each and 12,14,54,927 Optionally Convertible Cumulative Redeemable Preference Shares of" 5/- each, absorbing a sum of" 2,98,557/- and dividend distribution tax of" 50,740/-. An amount of " 19.86 crore is proposed to be transferred to the General Reserves of the Company out of the profits of the Company for the year.

CHANGES IN CAPITAL STRUCTURE

During the year under review, the issued, subscribed and paid-up equity share capital increased to Rs. 54,87,55,765/- pursuant to the allotment of 1,67,750 equity shares of Rs. 5/- each against exercise of employee stock options granted to the employees of the Company under Wockhardt Employee Stock Option Scheme - 2011 ("ESOP Scheme").

DIRECTORS

The Board of Directors of the Company at their meeting held on February 9, 2014 re-appointed Dr. Huzaifa Khorakiwala (DIN: 02191870) as "Executive Director" and Dr. Murtaza Khorakiwala (DIN: 00102650), as "Managing Director", liable to retire by rotation for a period of Five (5) years w.e.f. March 31, 2014 subject to the approval of members in ensuing Annual General Meeting. The Board recommends their re-appointment. Further, pursuant to the provisions of Section 152 of the Companies Act, 2013 (the''Act''), Dr. Huzaifa Khorakiwala, Executive Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Pursuant to Section 149 of the Companies Act, 2013, the Board proposes to appoint Mr. Rajendra Ambalal Shah (DIN: 00009851), Mr. Shekhar Datta (DIN: 00045591), Mr. Aman Mehta (DIN: 00009364), Mr. Davinder Singh Brar (DIN: 00068502) and Dr. Sanjaya Baru (DIN: 05344208), existing Independent Directors as Non-Executive Independent Directors of the Company for a term of five consecutive years with effect from April 1, 2014 to March 31, 2019, subject to the approval of members at the ensuing Annual General Meeting of the Company. These Independent Directors shall not be liable to retire by rotation. A brief resume and other details of Dr. Huzaifa Khorakiwala, Dr. Murtaza Khorakiwala and all Independent Directors as required under clause 49 (IV) (G) of the Listing Agreement are provided in the Notice of Annual General Meeting and forms part of this Annual Report.

STATUTORY AUDITORS

M/s Haribhakti & Co. (ICAI Firm Registration No: 103523W), the Statutory Auditors, hold office upto the conclusion of the ensuing Annual General Meeting.

M/s Haribhakti & Co. are Statutory Auditors of the Company from the financial year 2009-2010. It is proposed to appoint M/s Haribhakti & Co. as Statutory Auditors to hold office for a term of five years i.e. from conclusion of Fifteenth Annual General Meeting till the conclusion of Twentieth Annual General Meeting of the Company (subject to ratification by Members at every Annual General Meeting). M/s Haribhakti &Co. have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 140 of the Companies Act, 2013.

AUDITORS’ REPORT

The Independent Auditors'' Report issued by the Statutory Auditors to the Shareholders does not contain any qualifications. We draw your attention to Note No. 5 of the Independent Auditors''Report regarding matter of emphasis. The clarification of the same is provided in Note No. 47 of Notes to Accounts of the standalone accounts.

COST AUDITORS

The Board of Directors of the Company has appointed M/s Kirit Mehta & Co., Cost Accountants as Cost Auditors for the Audit of Cost Accounts relating to Pharmaceutical Activity of the Company for the year ended March 31, 2014 and for the year ending March 31, 2015. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under, the resolution for the ratification of the remuneration payable to M/s Kirit Mehta &Co. is placed for the approval of the members of the Company at ensuing Annual General Meeting.

The Company has filed the cost audit reports for the year ended March 31, 2013 with the Ministry of Corporate Affairs within due date i.e. on September 27, 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representation received from the operating management, confirm that:

In the preparation of annual accounts, the applicable accounting standards have been followed;

In order to provide a true and fair view of the state of affairs of the Company as on March 31, 2014 and the profits for the year ended on that date, reasonable and prudent judgments and estimates have been made and generally accepted accounting policies have been selected and consistently applied; for safeguarding the assets of the Company and for preventing and detecting any material fraud and irregularities, proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956;

The annual accounts presented to the members have been prepared on a going concern basis.

FIXED DEPOSITS

During the year under review, no fixed deposits were accepted by the Company.

PARTICULARS OF EMPLOYEES

Information as prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, amended from time to time forms part of this report. As per the provisions of Section 219(1 )(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under Section 217 (2A) of the Companies Act, 1956. Any shareholder interested in inspection or obtaining a copy of the statement may write to the Secretarial Department at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information pursuant to Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are provided in Annexure I to this report.

EMPLOYEE STOCK OPTIONS

During the year under review, no stock options were granted under Wockhardt Employee Stock Option Scheme - 2011. However, details pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) are provided in Annexure II to this report.

SUBSIDIARY COMPANIES & LEGAL COMPLIANCE

The Company has 31 subsidiaries as on March 31, 2014. The Ministry of Corporate Affairs vide its circular dated February 8, 2011 granted general exemption under Section 212 (8) of the Companies Act, 1956 to the Companies with regard to attaching of the balance sheet, profit and loss account and other documents of the Subsidiary Companies. Accordingly, the annual accounts and other documents of the Company''s subsidiaries for the year ended March 31, 2014 are not attached to this Annual Report. The annual accounts of the subsidiaries will be available for inspection by any member of the Company at the Registered Office of the Company and also at the Registered Office of the concerned subsidiaries. The annual accounts of the subsidiary companies and detailed information will be made available to the members of the Company and subsidiaries upon receipt of request from them. A statement pursuant to the provisions of Section 212 (1) (e) of the Companies Act, 1956 and the summary of the key financials of the Company''s subsidiaries are included in this Annual Report. Pursuant to Clause 32 of the Listing Agreement and Accounting Standard AS-21, the Audited Consolidated Financial Statements for the financial year ended March 31, 2014 forms part of this Annual Report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Corporate Governance along with a certificate from the Practicing Company Secretary on compliance of the conditions of Corporate Governance pursuant to the Clause 49 of the Listing Agreement and Management Discussion and Analysis Report are given separately in this Annual Report.

ACKNOWLEDGEMENTS

Your Directors acknowledge the significant contribution made by the employees of the Company at all levels towards its overall success. The Directors also take this opportunity to place on record their appreciation to all the stakeholders, bankers and members of medical profession for their continued support to the Company.

For and on behalf of the Board

DR. H. F. KHORAKIWALA

Chairman

Mumbai, May 26, 2014


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the Fourteenth Annual Report of the Company along with the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL PERFORMANCE (Rs. in crore)

Year ended Year ended March 31, 2013 March 31, 2012

Consolidated

Income 5,772 4,637

Profit Before Depreciation, Interest & Tax 2,139 1,442

Profit/(Loss) Before Exceptional Items & Tax 1,799 1,051

Exceptional Items (Expense)/lncome 61 (474)

Profit/(Loss) Before Tax 1,860 577

Provision for Taxation (Expense)/Credit (265) (235)

Share of Profit/(Loss) from Associates (1) 1

Net Profit/(Loss) 1,594 343

Standalone

Income 2,628 2,581

Profit Before Depreciation, Interest & Tax 660 827

Profit/(Loss) Before Exceptional Items & Tax 425 545

Exceptional Items (Expense)/lncome 288 (162)

Profit/(Loss) Before Tax 713 384

Provision for Taxation (Expense)/Credit (91) (200)

Profit/(Loss) After Tax 623 184

The Company registered a 24% growth in consolidated income to Rs. 5,772 crore and 2% growth in standalone income to Rs. 2,628 crore for the year ended March 31, 2013, on a year on year basis. The Profit before depreciation, interest and tax on a consolidated basis grew from Rs. 1,442 crore to Rs. 2,139 crore thereby registering a healthy growth of 48% and profit aftertax on consolidated basis grew from Rs. 343 crore to Rs. 1,594 crore thereby registering a growth of 365%. On a standalone basis, the profit after tax stood at Rs. 623 crore against Rs. 184 crore for the previous year, thereby registering a growth of 239%.

In the Month of May 2013, the Company has received an Import Alert from the US FDA on its manufacturing unit located at Waluj near Aurangabad. The impact of the Import Alert on the consolidated revenues is expected to be approximately US$ 100 million on an annualised basis. The Company is taking all steps to address the concerns raised by US FDA and is also working on various measures to mitigate the above impact.

DIVIDEND AND RESERVES

An amount of Rs. 62 crore is proposed to be transferred to the General Reserves of the Company out of the profits of the Company for the year. Further, an amount ofRs. 463 crore is transferred to Capital Redemption Reserve towards redemption of preference shares.

The Board recommends a Dividend @ 0.01% (Rs. 0.0005 per Preference Share of Rs. 5/- each) on 47,56,59,941 Non-Convertible Cumulative Redeemable Preference shares ofRs. 5/-each and 12,14,54,927 Optionally Convertible Cumulative Redeemable Preference Shares ofRs. 5/- each absorbing a sum ofRs. 298,557/- and dividend distribution tax ofRs. 50,740/-.

Your Board has recommended a Dividend @ 100% (Rs. 5/- per equity share ofRs. 5/- each) on 10,95,83,403 equity shares of the Company for the year ended March 31, 2013. The dividend if approved by the members at the Annual General Meeting, will absorb a sum ofRs. 55 crore and dividend distribution tax ofRs. 9 crore.

CHANGES IN CAPITAL STRUCTURE

During the year under review, the issued, subscribed and paid-up equity share capital increased to Rs. 54,79,17,015/- pursuant to the allotment of 1,47,500 equity shares ofRs. 5/- each against exercise of employee stock options granted to the employees of the Company under Wockhardt Employee Stock Option Scheme - 2011 ("ESOP Scheme").

The issued, subscribed and paid-up preference share capital reduced from Rs. 7,61,37,44,685/- to Rs. 2,98,55,74,340/- due to redemption of 92,56,34,069 preference shares of Rs. 5/- each during the year.

EMPLOYEE STOCK OPTIONS

During the year under review, the Compensation Committee of the Board granted 3,58,500 stock options convertible into 3,58,500 equity shares of the Company of face value of Rs. 5/- each under Wockhardt Employee Stock Option Scheme - 2011 ("ESOP Scheme") to various employees and Independent Directors of the Company. Pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999, the details of employee stock options are provided in Annexure to this report.

DIRECTORS

Dr. Sanjaya Baru and Mr. Davinder Singh Brar, were appointed as Additional Directors w.e.f. August 6, 2012 and were appointed as Directors of the Company in the Annual General Meeting held on September 13, 2012. Mr. Bharat Patel ceased to be a Director of the Company w.e.f. September 13, 2012.

Mr. Shekhar Datta and Mr. Aman Mehta retire by rotation as Directors at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment.

A brief resume and other details of the Directors seeking re-appointment at the forthcoming Annual General Meeting as required under Clause 49(IV)(G) of the Listing Agreement are provided in the Notice of Annual General Meeting and forms part of this Annual Report.

STATUTORY AUDITORS

M/s. Haribhakti & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.They have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224(1B) of the Companies Act, 1956.

The Independent Auditor''s Report issued by the Statutory Auditors to the shareholder does not contain any qualifications. We draw your attention to note no. 5 of the Independent Auditor''s Report regarding matters of emphasis and for clarification request you to refer Note No. 37(i) of the Notes to Accounts of the Standalone Financial Statements.

COST AUDITORS

The Company had appointed M/s. Kirit Mehta & Co., Cost Accountants as Cost Auditors for the Audit of Cost Accounts relating to Pharmaceutical activity for the year ended March 31, 2012 and March 31, 2013.The full particulars of Cost Auditors are as under:

M/s. Kirit Mehta & Co.

Membership No. 4105

3, 423-424, Ramjharukha,

71, S. V. Road, Andheri (West),

Mumbai 400 058

The Cost Audit Reports for the financial year ended March 31, 2012 were duly filed with Central Government on February 28, 2013 (Due Date: February 28, 2013).

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representation received from the operating management, confirm that:

- in the preparation of annual accounts, the applicable accounting standards have been followed;

- in order to provide a true and fair view of the state of affairs of the Company as on March 31, 2013 and the profits for the year ended on that date, reasonable and prudent judgments and estimates have been made and generally accepted accounting policies have been selected and consistently applied;

- for safeguarding the assets of the Company and for preventing and detecting any material fraud and irregularities, proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956;

- the annual accounts presented to the members have been prepared on a going concern basis.

FIXED DEPOSITS

During the year under review, no fixed deposits were accepted by the Company.

PARTICULARS OF EMPLOYEES

Information as prescribed under Section 217(2A) ofthe Companies Act, 1956 ("the Act"), read with the Companies (Particulars of Employees) Rules, 1975, amended from time to time forms part of this report. As per the provisions of Section 219(1)(b)(iv) ofthe Act, the Report and Accounts are being sent to the shareholders ofthe Company excluding the statement of particulars of employees under Section 217(2A) ofthe Act. Any shareholder interested in obtaining a copy ofthe statement or inspection may write to the Company Secretary at the Registered Office ofthe Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information pursuant to Section 217(1)(e) ofthe Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are provided in Annexure to this report.

SUBSIDIARY COMPANIES

The Company has 32 subsidiaries as on 31st March 2013. During the year 2012-2013, Laboratories Lerads S.A.S. was merged with Wockhardt France (Holdings) S.A.S., the holding Company. Further, Haripar S.C. (a subsidiary of Laboratories Pharma 2000 S.A.S.) and S.C.I. Salome (a subsidiary of Laboratories Negma S.A.S.) were liquidated. Further, 2 subsidiaries were incorporated in Mexico namely Wockhardt Farmaceutica SA DE CV and Wockhardt Services SA DE CV.

LEGAL COMPLIANCE

The Ministry of Corporate affairs vide its circular dated February 8, 2011 granted general exemption under Section 212(8) of the Companies Act, 1956 to the Companies with regard to attaching ofthe balance sheet, profit and loss account and other documents ofthe Subsidiary Companies. Accordingly, the annual accounts and other documents of Company''s subsidiaries for the year ended March 31, 2013 are not attached to this Annual Report. The annual accounts of subsidiaries will be available for inspection by any member ofthe Company at the registered office ofthe Company and also at the registered office ofthe concerned subsidiaries. The annual accounts ofthe subsidiary companies and detailed information will be made available to the members ofthe Company and subsidiaries upon receipt of request from them. A statement pursuant to the provisions of Section 212(1)(e) ofthe Companies Act, 1956 and the summary ofthe key financials ofthe Company''s subsidiaries are included in this Annual Report. Pursuant to Clause 32 ofthe Listing Agreement and Accounting Standard AS -21, the Audited Consolidated Financial Statements for the financial year ended March 31, 2013 forms part of this Annual Report.

SECRETARIAL AUDIT

The Company has voluntarily carried out Secretarial Audit for the year ended March 31, 2013 from V. G. Bhatt & Associates, Practising Company Secretary.

The said Secretarial Audit Report confirms that the Company has complied with all the applicable provisions ofthe Companies Act, 1956, Listing Agreements with stock exchanges and all the requirements of Securities and Exchange Board of India (SEBI) as applicable to the Company, including the SEBI (Substantial Acquisition ofShares and Takeovers) Regulations, 2011 (erstwhile Regulation of 1997) and the SEBI (Prohibition of Insider Trading) Regulations, 1992.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

A Report on Corporate Governance along with a certificate from the Practicing Company Secretary on compliance of the conditions ofCorporate Governance pursuant to Clause 49 ofthe Listing Agreement and Management Discussion and Analysis Report are given separately in this Annual Report.

ACKNOWLEDGEMENTS

Your Directors acknowledge the significant contribution made by the employees ofthe Company at all levels towards its overall success. The Directors also take this opportunity to place on record their appreciation to all the stakeholders, bankers and members of medical profession for their continued support to the Company.

For and on behalf of the Board

DR. H. F. KHORAKIWALA

Chairman

Mumbai, May 27, 2013


Mar 31, 2012

The Directors have pleasure in presenting the Thirteenth Annual Report of the Company along with the Audited Accounts for the financial year ended March 31, 2012.

FINANCIAL PERFORMANCE

(Rs. in crore)

Year ended Year ended March 31, 2012 March 31, 2011

Consolidated

Income 4,637 3,767

Profit before Depreciation, Interest & Tax 1,463 932

Profit/(Loss) Before Exceptional Items & Tax 1,105 685

Exceptional Items (528) (581)

Profit/(Loss) Before Tax 577 104

Provision for Taxation (Expense)/Credit (235) (9)

Share of Profit/(Loss) from Associates 1 (5)

Net Profit/(Loss) 343 90

Standalone

Income 2,581 1,772

Profit Before Depreciation, Interest & Tax 854 410

Profit/(Loss) Before Exceptional Items & Tax 600 161

Exceptional Items (216) (293)

Profit/(Loss) Before Tax 384 (132)

Provision for Taxation (Expense)/Credit (200) -

Profit/(Loss) After Tax 184 (132)

The Company registered 23% growth in consolidated income to Rs. 4,637 crore and 46% growth in standalone income to Rs. 2,581 crore for the year ended March 31, 2012, on a year on year basis. The Profit before depreciation, interest and tax on a consolidated basis grew from Rs. 932 crore to Rs. 1,463 crore thereby registering a healthy growth of 57% and profit after tax on consolidated basis grew from Rs. 90 crore to Rs. 343 crore. On a standalone basis, the Company registered profit after tax of Rs. 184 crore as against loss of Rs. 132 crore for the previous year.

DIVIDEND AND RESERVES

The Board recommends dividend @ 0.01% (Rs. 0.0005 per Preference Share of Rs. 5/- each) on 107,61,98,988 Non-Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each and 44,65,49,949 Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each of the Company on cumulative basis absorbing a sum of Rs. 21,75,171/- and dividend distribution tax of Rs. 3,52,867/-. Considering the brought forward losses of previous years, directors do not recommend any dividend on equity shares of the Company for the year ended March 31, 2012 and no amount is transferred to the General Reserve. However, an amount of Rs. 12.50 crore is transferred to Debenture Redemption Reserve.

CHANGES IN CAPITAL STRUCTURE

During the year under review, the Company allotted 3,23,15,130 Non-Convertible Cumulative Redeemable Preference Shares of Rs. 5/- each aggregating to Rs. 16.16 crore in terms of approved CDR package dated July 4, 2009. There was no change in paid up equity share capital of the Company

EMPLOYEE STOCK OPTIONS

During the year under review, the Compensation Committee of the Board granted 15,40,000 stock options convertible into 15,40,000 equity shares of the Company of face value of Rs. 5/- each under Wockhardt Employee Stock Option Scheme - 2011 ("ESOP Scheme") to permanent employees of the Company/Subsidiary Company. Pursuant to SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999, the details of employee stock options are provided in Annexure to this report.

DIVESTMENT OF NUTRITION BUSINESS

Pursuant to the approval provided by the members of the Company, divestment of Nutrition business to Danone was completed on July 26, 2012. The Company along with its wholly owned subsidiary has received the entire consideration of Rs. 1,280 crore towards this divestment.

DIRECTORS

Dr. Abid Hussain passed away on June 21, 2012 and accordingly ceased to be a Director of the Company. The Board places on record its appreciation for the valuable guidance and contribution to the Board made by him during his tenure as a Director of the Company and extends its deepest condolence to his family

Dr. Sanjaya Baru and Mr. Davinder Singh Brar were appointed as Additional Directors of the Company w.e.f. August 6, 2012. They hold office upto the ensuing Annual General Meeting of the Company. The resolutions for their appointment as Directors are being moved at the ensuing Annual General Meeting. The Board recommends appointment of Dr. Sanjaya Baru and Mr. D. S. Brar as Directors of the Company

Mr. R. A. Shah retires by rotation as Director at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

Mr. Bharat Patel who also retires by rotation at the ensuing Annual General Meeting, has expressed his inability to offer himself for re-appointment. The Board places on record its appreciation for the valuable guidance and contribution to the Board made by him during his tenure as a Director of the Company

AUDITORS

M/s. Haribhakti & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. They have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224(1B) of the Companies Act, 1956. The Board recommends their appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representation received from the operating management, confirm that:

- in the preparation of annual accounts, applicable accounting standards have been followed along with proper explanation relating to material departure;

- in order to provide a true and fair view of the state of affairs of the Company as on March 31, 2012 and the profits for the year ended on that date, reasonable and prudent judgments and estimates have been made and generally accepted accounting policies have been selected and consistently applied;

- for safeguarding the assets of the Company and for preventing and detecting any material fraud and irregularities, proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956;

- the annual accounts presented to the members have been prepared on going concern basis.

FIXED DEPOSITS

During the year under review, no fixed deposits were accepted by the Company

PARTICULARS OF EMPLOYEES

Information as prescribed under Section 217(2A) of the Companies Act, 1956 ("the Act"), read with the Companies (Particulars of Employees) Rules, 1975, amended from time to time forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement or inspection may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are provided in Annexure to this report.

COST AUDIT

The Company had appointed M/s. Kirit Mehta & Co., Cost Accountants as Cost Auditors for the Audit of Cost Accounts relating to Bulk Drugs and Formulations for the year ended March 31, 2011 and March 31, 2012. The full particulars of Cost Auditors are as under:

M/s. Kirit Mehta & Co.

3, 423-424, Ramjharukha, 71, S. V. Road, Andheri (West), Mumbai 400058 Membership No. 4105

The Cost Audit Reports for the financial year ended March 31, 2011 were duly filed with Central Government on September 27, 2011 (Due Date: September 27, 2011).

LEGAL COMPLIANCE

The Ministry of Corporate affairs vide its circular dated February 8, 2011, granted general exemption under Section 212(8) of the Companies Act, 1956 to the Companies with regard to attaching of the balance sheet, profit and loss account and other documents of the Subsidiary Companies. Accordingly, the annual accounts and other documents of Company's subsidiaries for the year ended March 31, 2012 are not attached to this Annual Report. The annual accounts of subsidiaries will be available for inspection by any member of the Company at the registered office of the Company and also at the registered office of the concerned subsidiaries. The annual accounts of the subsidiary companies and detailed information will be made available to the members of the Company and subsidiaries upon receipt of request from them. A statement pursuant to the provisions of Section 212(1)(e) of the Companies Act, 1956 and the summary of the key financials of the Company's subsidiaries are included in this Annual Report. Pursuant to Clause 32 of the Listing Agreement and Accounting Standard (AS-21), the Audited Consolidated Financial statements for the financial year ended March 31, 2012 forms part of this Annual Report.

SECRETARIAL AUDIT

As directed by Securities and Exchange Board of India (SEBI) secretarial audit is being carried out at the specified period by the practicing company secretary. The findings of the secretarial audit were entirely satisfactory

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

A detailed report on Corporate Governance along with the certificate on compliance with the conditions of corporate governance under clause 49 of the Listing agreement and Management Discussion and Analysis Report are given separately in this Annual Report.

ACKNOWLEDGEMENTS

Your Directors acknowledge the impeccable service rendered by the employees of the Company at all levels towards its overall success. The Directors also take this opportunity to place on record their appreciation to the stakeholders, bankers and members of medical profession for their continued support to the Company

For and on behalf of the Board

DR. H. F. KHORAKIWALA

Chairman

Mumbai, August 6, 2012


Mar 31, 2010

The Directors hereby present the Eleventh Annual Report of the Company along with the audited accounts for the fifteen months period ended March 31, 2010.

The Financial Year of the Company was extended from December 31, 2009 to March 31, 2010 in order to avoid duplication in preparation and audit of accounts under the Companies and Income Tax Act. Consequently, the current Annual Accounts and Reports of the Company are for a period of fifteen months, from January 1, 2009 to March 31, 2010; these figures are therefore not comparable with those of previous year ended December 31, 2008.

FINANCIAL PERFORMANCE

(Rs. In millions)

Fifteen Twelve Months ended Months ended March December 31,2010 31,2008

Consolidated

Income 45,309 36,254

Profit before Depreciation, Interest & Tax 8,527 8,211

Profit/(Loss) Before Exceptional Items & Tax 3,093 3,300

Exceptional Items (12,949) (5,810)

Profit/(Loss) Before Tax and after Exceptional Items (9,856) (2,510)

Provision for Taxation (Expense)/Credit (167) 916

Share of Profit/(Loss) from Associates 16 205

Net Profit/(Loss) (10,007) (1,389)

Standalone

Income 19,019 14,861

Profit Before Depreciation, Interest & Tax 4,850 3,398

Profit/(Loss) Before Exceptional Items & Tax 1,372 (133)

Exceptional Items (9,305) (4,438)

Profit/(Loss) Before Tax and after Exceptional Items (7,933) (4,571)

Provision for Taxation (Expense)/Credit (9) 1,083

ProfitV(Loss) After Tax (7,942) (3,488)

For the fifteen months period ended March 31, 2010, the Company registered 25% growth in consolidated turnover to ? 45,014 million. The Profit before depreciation, interest and tax grew from ? 8,211 million to ? 8,527 million. However, the Company incurred loss of ? 10,007 million, primarily on account of Mark to Market (MTM) loss.

DIVIDEND AND RESERVES

In view of the losses during the fifteen months period ended March 31, 2010, no amount is transferred to the General Reserve and the directors do not recommend any dividend on equity shares and preference shares for the period under review.

CORPORATE DEBT RESTRUCTURING

The Company had approached the Corporate Debt Restructuring (CDR) Cell through ICICI Bank Limited in April 2009 for restructuring the debts of the Company through CDR mechanism. The final restructuring package was approved by CDR Empowered Group vide its letter dated July 4, 2009. The detailed information on Corporate Debt Restructuring is provided in Management Discussion and Analysis Report.

CHANGES IN CAPITAL STRUCTURE

During the period under review, the Company allotted 912,994,875 Non-Convertible Cumulative Redeemable Preference Shares of ? 5/- each and 424,163,605 Optionally Convertible Cumulative Redeemable Preference Shares of ? 5/- each aggregating to ? 6,685.79 millions in terms of approved CDR package dated July 4, 2009. The Authorised Share Capital of the Company was increased from ? 1,750/- millions to ? 9,250/- millions to accommodate the said issue of preference shares. There was no change in paid up equity share capital of the Company.

DIVESTMENTS

During the period under review, the Company divested Animal Health Care Division to Vetoquinol, France. The business of Esparma GmbH was also divested to Mova GmbH.

DIRECTORS

Mr. Rajiv Gandhi resigned from the position of Director - Corporate Finance and Information with effect from March 31, 2010. The Board places on record their appreciation for the valuable services rendered by him during his tenure as a Director of the Company.

Mr. Aman Mehta and Mr. Bharat Patel retire by rotation as directors at the upcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their appointment at the forthcoming Annual General Meeting. As required under clause 49 of the listing agreement, brief information about them is as under:

Mr. Aman Mehta has been a Director of the Company since February 12, 2004. Mr. Aman Mehta graduated with Honors degree in Economics from University of Delhi in 1967 and has since participated in numerous management programmes. Mr. Aman Mehta was earlier associated with HSBC, during this association he has worked in variety of roles all over the world and has headed HSBC operations in the Middle East, America and Asia Pacific. He is on the Boards of Tata Consultancy Services Limited, Jet Airways Limited, Cairn India Limited, Godrej Consumer Products Limited, Vedanta Resources Pic, PCCW Ltd., Hongkong, Emaar MFG Land Limited, ING Group N.V. Netherlands and Max India Limited. He is Chairman of Audit Committee of Tata Consultancy Services Limited, Cairn India Limited, Jet Airways Limited and Vedanta Resources Pic and member of Audit Committee of Emaar MFG Land Limited, Godrej Consumer Products Limited and PCCW Ltd., Hongkong. He is also Chairman of Remuneration Committee of Tata Consultancy Services Limited and Emmar MFG Land Limited and member of Remuneration Committee of Vedanta Resources Pic. UK, Cairn India Limited and Jet Airways Limited. Mr. Aman Mehta does not hold any equity shares of the Company.

Mr. Bharat Patel has been a Director of the Company since October 30, 2001. He is M.B.A. from Notre Dame University and M.B.A. in Marketing from University of Michigan, U.S.A. He is renowned expert with wide experience in fast moving consumer goods industry. He is on the boards of Force Motors Limited, NESCO Limited, Yes Bank Limited and Sasken Communication Technologies Limited. He is Chairman of Shareholders Grievance Committee and member of Audit Committee of Yes Bank Limited. He is also a member of Remuneration Committee of Force Motors Limited and NESCO Limited. Mr. Bharat Patel does not hold any equity shares of the Company.

AUDITORS

M/s Haribhakti & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. They have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. The Board recommends their appointment.

AUDITORS REPORT

With regard to qualification and emphasis of matter contained in the Auditors Report, explanations are given below:

(a) Point 5 (a) of Auditors Report - Note 32 of Notes to Accounts to the financial statements:

Corporate Debt Restructuring (CDR) Scheme is effective from April 15, 2009. The Outstanding liabilities of the Company are being restructured under the aegis of Corporate Debt Restructuring Scheme. As required under the scheme the Master Restructuring Agreement (MRA) and other necessary documents have been executed and effective. The CDR Scheme comprehensively covers the FCCB liabilities and crystallized derivatives/ hedging liabilities.

(b) Point 5 (b) of Auditors Report - Note 36 of Notes to Accounts to the financial statements:

Winding up petitions are filed by certain lenders/banks in Bombay High Court and the Company has filed affidavit in reply. ICICI Bank, as empowered by CDR and Employee Union have filed intervention application against the winding up. The matter are sub-judice and outcome of which cannot be currently ascertained.

(c) Point 6 of Auditors Report

The Company has charged the crystallized derivative losses to the Profit & Loss Account and some of the documentation trail is being co-related, for which the Company has formed a task force and necessary actions are being taken.

(d) Point 7 of Auditors Report

Certain derivatives/hedging contracts have been unilaterally cancelled by banks. The Company has treated the demand of ? 8,483.22 million as a contingent liability and has not acknowledged as debt, since the liability cannot be currently ascertained even on a best effort basis till the final outcome of the matter.

The Company is of the view that these are contingent liabilities as these arise from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within control of the Company and therefore, has not acknowledged these claims against the Company as debts.

(e) Point (vii) of Annexure to Auditors Report

The Company has an internal audit system which it believes to be commensurate to the size of its operations. The Company has already commenced the process of further strengthening the internal audit system to enlarge its scope in respect of Treasury Operations. Further, as per the CDR Scheme the Company cannot execute any new derivative transactions (excluding forwards strictly for hedging purposes for a maximum period of 180 days) without prior approval of CDR Empowered Group and accordingly the treasury operations of the Company have been significantly reduced.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representation received from the operating management, confirm that:

- in the preparation of annual accounts, applicable accounting standards have been followed along with proper explanation relating to material departure; ., .

- in order to provide a true and fair view of the state of affairs of the Company as on March 31, 2010 and the loss for the period ended on that date, reasonable and prudent judgments and estimates have been made and generally accepted accounting policies have been selected and consistently applied;

- for safeguarding the assets of the Company and for preventing and detecting any material fraud and irregularities, proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956;

- the annual accounts presented to the members have been prepared on going concern basis.

FIXED DEPOSITS

During the period under review, no fixed deposits were accepted by the Company.

PARTICULARS OF EMPLOYEES

Information as prescribed under Section 217 (2A) of the Companies Act, 1956 ("the Act"), read with the Companies (Particulars of Employees) Rules, 1975, amended from time to time forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the statement may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information pursuant to section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are set out in Annexure A to this report.

LEGAL COMPLIANCE

The Company has received an exemption from the Central Government under Section 212 (8) of the Companies Act, 1956 with regard to attaching of the balance sheet, profit and loss account and other documents of the subsidiaries for the fifteen months period ended March 31, 2010 to this report. The annual accounts of the subsidiaries will be made available for inspection by any member of the Company at the registered office of the Company and also at the registered office of the concerned subsidiaries. The annual accounts of the subsidiary companies and detailed information will be made available to the members of the company and subsidiaries upon receipt of request from them. A statement pursuant to the provisions of Section 212(1)(e) of the Companies Act, 1956 and the summary of the key financials of the companys subsidiaries are included in this Annual Report. Pursuant to Clause 32 of the Listing

Agreement and Accounting Standard AS-21, the Audited Consolidated Financial Statements for the fifteen months period ended March 31, 2010 forms part of the Annual Report.

SECRETARIAL AUDIT

As directed by Securities and Exchange Board of India (SEBI), secretarial audit is being carried out at the specified period by the practicing company secretary. The findings of the secretarial audit were entirely satisfactory.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

A detailed report on Corporate Governance along with the certificate on compliance with the conditions of corporate governance under clause 49 of the Listing Agreement and Management Discussion and Analysis Report are given separately in this Annual Report.

ACKNOWLEDGEMENTS

Your Directors acknowledge the impeccable service rendered by the employees of the Company at all levels towards its overall success. The Directors also take this opportunity to place on record their appreciation to the stakeholders, bankers and members of medical profession for their continued support to the Company.

For and on behalf of the Board

H. F. KHORAKIWALA

Chairman

Mumbai, May 20, 2010

 
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