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Wockhardt Ltd.

BSE: 532300 Sector: Health care
NSE: WOCKPHARMA ISIN Code: INE049B01025
BSE 00:00 | 22 Apr 424.35 -14.75
(-3.36%)
OPEN

438.00

HIGH

440.50

LOW

423.10

NSE 00:00 | 22 Apr 424.70 -14.45
(-3.29%)
OPEN

437.40

HIGH

440.80

LOW

423.00

OPEN 438.00
PREVIOUS CLOSE 439.10
VOLUME 84115
52-Week high 852.55
52-Week low 375.00
P/E 37.85
Mkt Cap.(Rs cr) 4,697
Buy Price 424.35
Buy Qty 435.00
Sell Price 427.70
Sell Qty 1.00
OPEN 438.00
CLOSE 439.10
VOLUME 84115
52-Week high 852.55
52-Week low 375.00
P/E 37.85
Mkt Cap.(Rs cr) 4,697
Buy Price 424.35
Buy Qty 435.00
Sell Price 427.70
Sell Qty 1.00

Wockhardt Ltd. (WOCKPHARMA) - Auditors Report

Company auditors report

To the Members of Wockhardt Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of WockhardtLimited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referredto as "Ind AS Financial Statements").

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of theaffairs) (stateof financial position profit (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with relevant rules issuedthereunder. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls and ensuring their operating effectiveness and the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditors' judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at March 31 2018 its profit(financial performance including other comprehensive income) its cash flows and changesin equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(2) As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

b I our . proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss Cash Flow Statement and theStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued thereunder;

e. On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors noneofthedir ectors as on March 312018 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating eff ectiveness of such controls we give ourseparate Report in "Annexure 2";

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements Refer Note 45 on ContingentLiabilities to the standalone Ind AS financial statements;

(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts Refer Note 18 & 25 to the standalone Ind AS financial statements;

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

ANNEXURE 1 TO INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of WockhardtLimited on the standalone Ind AS financial statements for the year ended March 31 2018](i)

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) During the year Property Plant and Equipment have been physically verified by themanagement as per the regular programme of verification which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Asinformed no material discrepancies were noticed on such verification.

(c) According to the information & explanation given to us the title deeds ofimmovable properties other than self-constructed properties recorded as Property Plantand Equipment in the books of account of the Company as on March 31 2018 are held in thename of the Company except for the details given below: In respect of Freehold land withgross block and net block of Rs 0.31 Crore and Building comprising of certain flats withgross block of Rs 0.94 Crore and net block of Rs 0.58 Crore relevant transfer in the nameof the Company is pending.

(ii) The inventory (excluding stock lying with third parties) has been physicallyverified by the management during the year. In respect of inventory lying with thirdparties these have substantially been confirmed by them. In our opinion the frequency ofverification is reasonable. As informed no material discrepancies were noticed onphysical verification carried out during the year.

(iii) As informed the Company has not granted any loans secured or unsecured tocompanies fir ms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under. (vi) We have broadly reviewed the booksof account maintained by the Company in respect of products where the maintenance of costrecords has been specified by the Central Government under sub-section (1) of Section 148of the Act and the rules framed there under and we are of the opinion that prima faciethe prescribed accounts and records have been made and maintained.

(vii) (a) According to the information and explanation given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including provident fund incometax sales tax service tax value added tax goods and services tax customs duty exciseduty cess and any other material statutory dues applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax service tax value added taxgoods and services tax customs duty excise duty cess and any other material statutorydues applicable to it were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax goods and services taxcustoms duty excise duty on account of any dispute are as follows:

Name of the statute Nature of dues Amount ( in crore) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Demand and Penalty for Classification 1.10 February 2001 to February 2003 CESTAT Mumbai
Demand and Penalty for Classification 4.44 April 2005 to March 2009 CESTAT Mumbai
Demand Interest and Penalty towards exemption availed in EOU unit 21.22 May 2004 to March 2007 CESTAT Mumbai
EPO Formulation matter 6.25 February 2001 to February 2003 CESTAT Mumbai
Demand Interest and Penalty for exempted goods cleared 18.96 November 2006 to April 2013 CESTAT Mumbai
UP VAT/CST Act Demand under Section 28 & Section 9(2) 0.25 April 2009 to March 2010 Addl. Commissioner Grade 2 (Appeals) U.P.
Sales Tax Due to under Invoicing and late deposit of tax 0.08 2003-04 to 2005-06 Joint Commissioner (Appeals) U.P.
Demand under Section 28 & Section 9(2) 0.29 April 2008 to March 2009 Addl. Commissioner Grade 2 (Appeals) first Ghaziabad
Demand under Section 28(2) 5.15 April 2014 to March 2015 Addl. Commissioner Grade 2 (Appeals) first Ghaziabad
WB VAT/CST Act Demand under various Sections 2.44 2005-06 to 2015-16 Addl. Commissioner (Appeals) and Appellate & Revision Board W.B.
Kerala VAT Act Demand under Section 21 0.07 April 2011 to March 2012 Commissioner (Appeals) Kerala
Central Sales Tax/ VAT Act Demand under Section 9(2) 0.30 April 2005 to March 2006 Deputy Commissioner of Sales Tax (Appeals III) Maharashtra
Demand under CST and Goa VAT Act 1.25 2006-2007 Addl. Commissioner of Commercial Tax Goa
Demand under MVAT Act 3.04 April 2009 to March 2010 Appeal to be filed with The Maharashtra Sales Tax Tribunal
Demand under CST Act 0.41 April 2009 to March 2010 Appeal to be filed with The Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 0.71 April 2009 to March 2010 Appeal to be filed with The Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 22.06 April 2010 to March 2011 The Maharashtra Sales Tax Tribunal
Demand and Penalty under CST Act 2.59 April 2010 to March 2011 The Maharashtra Sales Tax Tribunal
Demand under CST Act 6.28 April 2011 to March 2012 Appeal to be filed with The Maharashtra Sales Tax Tribunal
Demand under MVAT Act 7.85 April 2011 to March 2012 Appeal to be filed with The Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 10.64 April 2012 to March 2013 Joint Commissioner (Appeals) Maharashtra
Demand under MVAT Act 1.66 April 2012 to March 2013 Joint Commissioner (Appeal) Maharashtra
Demand under MVAT Act 5.45 April 2013 to March 2014 Appeal to be filed with Joint Commissioner (Appeals)
Demand under CST Act 0.99 April 2013 to March 2014 Appeal to be filed with Joint Commissioner (Appeals)
The Finance Act 1994 (Service Tax) Interest and penalty on non- payment of Service Tax on Import of certain services 0.98 April 2005 to March 2010 Appeal to be filed with Commissioner (Appeals)
Interest on non-payment of Service Tax on Import of certain services 0.07 April 2011 to March 2012 Appeal to be filed with Commissioner (Appeals)
Income Tax Act 1961 Demand under Section 143(3) 4.04 FY 2003-04 High Court
Demand under Section 143(3) 12.8 FY 2006-07 Income Tax Appellate Tribunal
Demand under Section 143(3) 0.46 FY 2007-08 Income Tax Appellate Tribunal
TDS Assessment order u/s 201/201(A) 0.14 January 2007 to March 2009 Commissioner of Income Tax (Appeals) / TDS Officers
TDS (TRACES) 0.31 April 2011 to March 2017 TDS Officers
Demand under Section 143(3) read with Section 148 75.05 FY 2009-10 Commissioner of Income Tax (Appeals)
TDS Assessment order u/s 201/201(A) 54.25 FY 2009-10 Commissioner of Income Tax (Appeals) TDS
Demand under Section 143(3) 0.62 FY 2011-12 Commissioner of Income Tax (Appeals)
Demand under Section 143(3) 67.30 FY 2012-13 Commissioner of Income Tax (Appeals)
TDS Assessment order u/s 201/201(A) 36.66 FY 2010-11 Commissioner of Income Tax (Appeals) TDS
Demand under Section 143(3) 21.00 FY 2013-14 Commissioner of Income Tax (Appeals)

Note: Out of the above amount paid under protest by the Company for Excise VAT andIncome-tax is 0.47 Crore 4.48 Crore and 23.38 Crore respectively.

(viii) A ccording to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions banks or dues todebenture holders.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us the Company has obtained term loan of Rs 3.80 Crore duringthe year which as explained pending utilization has been kept in cash credit account.(x) During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanations given to us we have neither come across any instanceof material fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of any such instance by themanagement. (xi) According to the information and explanations given to us managerialremuneration has been paid in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions entered into by the Company withthe related parties are in compliance with Sections 177 and 188 of Act where applicable.

The details of related party transactions have been disclosed in the FinancialStatements as required under Indian Accounting Standards (Ind AS) 24 Related PartyDisclosures specified under Section 133 of the Act read with relevant rules issuedthereunder.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company. (xv) According to theinformation and explanations given to us the Company has not entered into any non-cashtransactions with directors or persons connected with him during the year.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

[Referred t in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date o to the members ofWockhardt Limited on the standalone Ind AS financial statements for the year ended March31 2018.]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of WockhardtLimited ("the Company") as of March 31 2018 in conjunction with our audit ofthe standalone Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No.103523W /W100048

Bhavik L. Shah

Partner

Membership No. 122071

Place : Mumbai

Date : May 04 2018