You are here » Home » Companies » Company Overview » Wockhardt Ltd

Wockhardt Ltd.

BSE: 532300 Sector: Health care
NSE: WOCKPHARMA ISIN Code: INE049B01025
BSE 00:00 | 22 Sep 280.05 -11.55
(-3.96%)
OPEN

290.15

HIGH

293.05

LOW

277.20

NSE 00:00 | 22 Sep 279.65 -11.90
(-4.08%)
OPEN

293.75

HIGH

293.75

LOW

277.15

OPEN 290.15
PREVIOUS CLOSE 291.60
VOLUME 41167
52-Week high 411.60
52-Week low 147.20
P/E
Mkt Cap.(Rs cr) 3,101
Buy Price 280.00
Buy Qty 10.00
Sell Price 280.65
Sell Qty 20.00
OPEN 290.15
CLOSE 291.60
VOLUME 41167
52-Week high 411.60
52-Week low 147.20
P/E
Mkt Cap.(Rs cr) 3,101
Buy Price 280.00
Buy Qty 10.00
Sell Price 280.65
Sell Qty 20.00

Wockhardt Ltd. (WOCKPHARMA) - Auditors Report

Company auditors report

To the Members of Wockhardt Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of WockhardtLimited ("the Company") which comprise the standalone balance sheet as at 31March 2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on theStandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Revenue recognition

The Key Audit Matter How the matter was addressed in our audit
The Company recognises revenue from sale of goods when control over the goods is transferred to the customer. The actual point in time when revenue is recognised varies depending on the specific terms and conditions of the sale contracts entered into with customers. Our audit procedures included the following:
Revenue is a key performance indicator of the Company and there is risk of overstatement of revenue due to fraud resulting from pressure to achieve targets earning expectations or incentive schemes linked to performance. • We have assessed the Company's accounting policies relating to revenue recognition and sales returns by comparing with applicable accounting standards.
Company's assessment of accrual towards rebates discounts returns and allowances requires significant estimates and judgement and change in these estimates can have a significant financial impact. • We have evaluated the design implementation and operating effectiveness of the Company's internal control over revenue recognition and measurement of rebates discounts returns and allowances.
Given the risk of overstatement of revenue due to fraud and significant estimates and judgement required to assess various accruals referred above this is considered to be a key audit matter. • We have examined the samples selected using statistical sampling of revenue recorded during the year with the underlying documentation.
Refer note 3(j) of accounting policy and note 40 in standalone financial statements • We have performed cut off procedures by selecting samples using statistical sampling of revenue recorded during the year.
• We have verified Company's assessment of accruals of rebates discounts returns and allowances in line with the past practices to identify bias.
• We have examined the manual journals posted to revenue to identify unusual or irregular items.
• We have assessed the adequacy of the disclosures made in respect of revenue from sale of goods.

Assessment of recoverability of carrying value of certain PropertyPlant and Equipment and Capital Work in progress

The Key Audit Matter How the matter was addressed in our audit
Certain property plant and equipment and capital work in progress of the Company is a_ected by lower capacity utilization mainly due to regulatory alert from U.S. Food and Drug Administration and are currently not being used for alternate purposes. Our audit procedures included the following:
The Company's investment in these facilities was made considering market feasibility and potential of existing/ future products. • We have assessed the Company's accounting policies relating to impairment by comparing with applicable accounting standards.
As at 31 March 2020 carrying value of such Property Plant and Equipment and Capital Work in Progress amounts to _ 183.55 crores and _ 286.31 crores respectively. • We have performed test of controls over impairment assessment made by the Company through inspection of evidences of performance of these controls.
The Company's remediation work of such facilities is underway and is expected to fully utilise the facilities post necessary approvals from the regulator. • We have inquired the progress made on remediation work with key managerial personnel.
Given the significance of carrying value and judgement involved in assessing the recoverability of such facilities this is considered to be a key audit matter. • We have assessed the competence capabilities and objectivity of the experts (internal and external) used by the Company in the process of determining recoverable amounts.
Refer note 3(d) of accounting policy and note 51 in standalone financial statements • We have challenged the significant assumptions considered by the Company while carrying out impairment assessment.
• We have involved our valuation specialists to assess the valuation methodologies applied by the Company.

Presentation of discontinued operations

The Key Audit Matter How the matter was addressed in our audit
The Board of Directors have approved the Business Transfer Agreement between the Company and Dr. Reddy's Laboratories Limited for divestment of its identified domestic branded business for a consideration of Rs. 1850 crores. operations as discontinued operations. The Company has classified the related assets and liabilities as held for sale. Our audit procedures included the following:
– Given the size and complexity of transaction the classification presentation and disclosure of discontinued operations/assets classified held for sale requires judgement and is therefore considered to be a key audit matter. • We have assessed the Company's accounting policies relating to discontinued operations/assets held for sale by comparing with applicable accounting standards.
Refer note 3(q) of accounting policy and note 41 in standalone financial statements • We have read the minutes of meetings of Board of Directors of the Company Business Transfer Agreement and the Company's related press releases.
• We have inquired with the key managerial personnel to obtain an understanding of the disposal process and the key terms of sale.
• We have reconciled the assets liabilities and results of operations of the divested business to the underlying information in the Company's financial reporting system.
• We have evaluated the adequacy of the presentation and disclosures of discontinued operations/assets classified as held for sale in accordance with applicable accounting standards.

Other Information

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and ourauditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's and Board of Directors' Responsibility for theStandalone Financial Statements

The Company's Management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparationof these standalone financial statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance 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 that were operating effectively for ensuring accuracy and completenessof the accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.As part of an audit in accordance with SAs we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of thestandalone financial statements of the current period and are therefore the key auditmatters.

We describe these matters in our auditors' report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matters

The comparative financial statements of the Company for the year ended31 March 2019 included in these standalone financial statements have been audited by thepredecessor auditor who had expressed an unmodiffed opinion thereon as per their reportdated 6 May 2019 and which has been furnished to us by the Management and has been reliedupon by us for the purpose of our audit. Our opinion is not modiffed in respect of thismatter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government in terms of section 143 (11) of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

2. (A) 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) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors is disquali_edas on 31 March 2020 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' 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 as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 46 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors' Report undersection 197(16): In our opinion and according to the information and explanations given tous the remuneration paid by the company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

ANNEXURE _ A TO THE INDEPENDENT AUDITOR'S REPORT _ 31 MARCH 2020

( Referred to in our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this programmecertain fixed assets were physically verified by the Management during the year. In ouropinion and according to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except for the following which are not heldin the name of the Company:

In respect of Freehold land with gross block and net block of _ 0.31 crore for onefreehold land and Building comprising of twenty-two _ats with gross block of _ 0.90 croreand net block of _ 0.55 crore

(ii) The inventory except goods-in-transit and stocks lying with third parties hasbeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. For inventory lying with third parties at theyear-end written confirmations have been obtained and in respect of goods-in-transitsubsequent goods receipts have been verified or confirmations have been obtained from theparties. The discrepancies noticed on verification between the physical stocks and thebook records have been properly dealt with in the books of account.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly paragraphs 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company.

(iv) In our opinion and according to the information and explanations given to us TheCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans investments guarantees and securities.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

(vi) We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofproducts manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees'state insurance income-tax goods and services tax duty of customs cess and othermaterial statutory dues have been generally regularly deposited during the year by theCompany with the appropriate authorities after considering the extension of due dategranted by employee's state insurance corporation for payment of such dues for themonth of March 20. Provident Fund payment related to implementing the judgment ofHonourable Supreme Court of India dated 28 February 2019 was delayed. This payment wasmade by December 2019.

According to the information and explanations given to us no undisputed statutory duesin respect of provident fund employees' state insurance income-tax goods andservices tax duty of customs cess and other material statutory dues were in arrears asat 31 March 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company details of dues of Income-tax Sales-taxService tax Duty of Excise and Value added tax which have not been deposited as at 31March 2020 on account of disputes are given in Enclosure I to this report.

(viii) In our opinion and according to the information and explanations given to usand based on the records of the Company the Company has not defaulted in repayment ofloans or borrowings to financial institutions banks and government. As per RBINotification ref. RBI/2019-20/186: DOR.No.BP.BC.47/21.04.048/2019-20 dated March 27 2020on COVID-19 – Regulatory Package Company has availed the benefit of moratorium onpayment of unpaid installments of the Company which were falling due for payment duringthe period 1 March 2020 to 31 March 2020.

(ix) According to the information and explanations given to us the term loans havebeen applied by the Company during the year for the purposes for which they were obtained.The Company did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3 (ix)of the Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 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. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with the provisions of Sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

ENCLOSURE I TO ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT _ 31MARCH 2020

Name of the statute Nature of dues Amount * (Rs. in crore) Period to which the amount relates Forum where dispute is pending
Central Excise Act Goods destroyed in _re accident. 4.44 April 2005 to March 2009 CESTAT Ahmedabad
1944 Demand Interest and Penalty towards exemption availed in EOU Unit. 21.22 May 2004 to March 2007 CESTAT Mumbai
Demand Interest and Penalty for exempted goods cleared. 18.96 November 2006 to April 2013 CESTAT Mumbai
Education cess on Export Consignments 0.02 April 2005 to March 2006 Joint Commissioner
UP VAT/CST Act Demand under Section 28 & 0.25 April 2009 to March 2010 Addl. Commissioner
Section 9(2) 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) 5.19 April 2014 to March 2015 Addl. Commissioner Grade 2 (Appeals) first Ghaziabad
WB VAT/CST Act Demand under various Sections 1.43 2007-08 to 2014-15 Commissioner (Appeals) West Bengal
Kerala VAT Act Demand under Section 21 0.16 April 2011 to March 2014 Commissioner (Appeals) Kerala
Gujarat VAT Act Additional tax on Fuel consumption 0.60 April 2010 to March 2013 Joint Commissioner (Appeals) Gujarat
Central Sales Tax/ VAT Act 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 Maharashtra Sales Tax Tribunal
Demand under CST Act 0.41 April 2009 to March 2010 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 0.71 April 2009 to March 2010 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 19.39 April 2010 to March 2011 Maharashtra Sales Tax Tribunal
Demand and Penalty under CST Act 2.59 April 2010 to March 2011 Maharashtra Sales Tax Tribunal
Demand under CST Act 6.28 April 2011 to March 2012 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 7.85 April 2011 to March 2012 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 8.72 April 2012 to March 2013 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 0.76 April 2012 to March 2013 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 9.28 April 2013 to March 2014 Maharashtra Sales Tax Tribunal
Central Sales Tax/ VAT Act Demand under CST Act 0.27 April 2013 to March 2014 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 14.03 April 2014 to March 2015 Joint Commissioner (Appeals)
Demand under CST Act 1.40 April 2014 to March 2015 Joint Commissioner (Appeals)
Demand under MVAT Act 4.09 April 2015 to March 2016 Deputy Commissioner
Demand under CST Act 0.13 April 2015 to March 2016 Deputy Commissioner
The Finance Act 1994 (Service Tax) Interest and penalty on non- payment of Service Tax on Import of certain services 0.81 April 2005 to March 2010 CESTAT Mumbai
Interest on non-payment of Service Tax on Import of certain services 0.07 April 2011 to March 2012 CESTAT Mumbai
Income tax Act Demand under Section 143(3) 4.04 FY 2003-04 High Court
1961 Demand under Section 143(3) 26.02 FY 2006-07 Income Tax Appellate Tribunal
TDS Assessment order u/s 201/201(A) 1.99 FY 2009-10 Commissioner of Income Tax (Appeals) - TDS
Demand under Section 143(3) 20.17 FY 2010-11 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) 253.12 FY 2011-12 Commissioner of Income Tax (Appeals)
TDS Assessment order u/s 201/201(A) 42.47 FY 2011-12 Commissioner of Income Tax (Appeals) - TDS
Demand under Section 143(3) Nil FY 2012-13 Income Tax Appellate Tribunal
Demand under Section 143(3) Nil FY 2013-14 Commissioner of Income Tax (Appeals)
TDS (TRACES) 0.31 January 2012 to December 2017 TDS officers
TDS (TRACES) 0.14 January 2007 to December 2009 TDS officers

Note 1: The aforesaid amounts are net of the below claims made by theassesses pending formal acceptance by the tax authorities for the relevant benefit.

Financial Year Amount Rs. ( in crore) Pending acceptance by Tax authorities for
2012-13 67.29 Order giving effect (‘OGE') to the favorable order of CIT(A) and rectification effect arising out of order for FY 2011-12
2010-11 27.33 Eligibility for entitlement and set-o_ of MAT credit utilisation arising out of the effect of OGE to the favorable order of CIT(A) for FY 2009-10
2013-14 21.00 Rectification application for granting credit for TDS deducted by non-resident

* out of the above amount paid/adjusted under protest by the Companyfor Excise VAT Service tax and Income tax is _ 0.47 crore _ 6.19 crore _ 0.15 croreand _ 89.01 crore.

ANNEXURE _ B TO THE INDEPENDENT AUDITORS' REPORT ON THE STANDALONEFINANCIAL STATEMENTS OF WOCKHARDT LIMITED FOR THE YEAR ENDED 31 MARCH 2020

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013

(Referred to in paragraph (2A(f)) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference tofinancial statements of Wockhardt Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2020 based on theinternal financial controls with reference to standalone financial statements 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 (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to standalone financial statements.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to financial statements were established and maintainedand whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to FinancialStatements

A company's internal financial controls with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial controls with reference tostandalone financial statements include those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reffect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the standalone financialstatements.

Inherent Limitations of Internal Financial controls with Reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Koosai Lehery
Partner
Membership Number: 112399
ICAI UDIN: 20112399AAAABA9034
Place : Mumbai
Date : 11 May 2020

.