MY DEAR SHAREOWNERS
The calendar year 2020 and financial year 2020-21 has been traumatic due to theunprecedented disruption caused by the COVID-19 pandemic. Lives and livelihoods were lostbusinesses faced losses routines were broken and normalcy has come close to extinction.
But amidst all the chaos a semblance of order is slowly but surely emerging. Anumber of positive developments have taken place that are driving a global change inindividual and organisational perspectives mind-sets outlooks behaviours andendeavours. The use of technology to connect and communicate with each other; theheightened awareness of the need for sanitisation as a routine; the unprecedented speed ofdevelopment of effective vaccines; the spirit of collaboration and cooperation within themedical community; and the coming together of nations and governments for the common good;all portend great hope for the future of mankind.
While there are many lessons to be learnt from this global upheaval due to COVID-19one of the most relevant and abiding lesson highlights the need for and importance ofbuilding immunity as a proactive measure and not as a reactive response. Applied not onlyin the context of the pandemic but also to the current business environment characterisedby Volatility Uncertainty Complexity and Ambiguity (commonly described as the VUCAworld) fortifying immunity will help people and businesses alike to survive and thrivein the face of any adverse condition or situation in the future.
Thus the theme for our Annual Report for FY 2020-2021 is appropriately focussed:Immunity Wins. Life wins.
I am pleased to announce that our timely and effective measures taken to minimise theeffect of the pandemic on our business performance has yielded satisfactory results.
In the financial year under review FY 2020-21 we posted consolidated revenues ofRs.2762 crore as compared to Rs.3325 crore in FY 2019-20 and our Profit After Tax (PAT)stood at Rs.686 crore as compared to Rs.(69) crore in the previous year. This includesProfit in connection with the transfer of the business comprising 62 products and lineextensions along with related assets and liabilities contracts permits intellectualproperties employees marketing sales and distribution of the same in the DomesticBranded Division in India Nepal Bhutan Sri Lanka and Maldives and the manufacturingfacility at Baddi Himachal Pradesh (together the "Business Undertaking") toDr. Reddy's Laboratories Limited ("DRL") which was completed in Q1FY21.
As on March 31 2021 our Net Debt stood at Rs.2040 crore as compared to Rs.2945crore as on March 312020. Currently Net Debt to Equity Ratio is 0.54 as compared to 0.96as on March 31 2020. The above stated figures are inclusive of continuing anddiscontinued operations of Consolidated Financials.
In FY 2020-21 our international business contributed 83% of total revenues with the EU& UK US and Emerging Markets businesses accounting for 46% 16% and 21% of totalrevenues respectively. Our India business accounted for 17% of total sales.
Due to the pandemic in-person audits were cancelled by all regulatory authoritiesworldwide. I am proud to report that we leveraged technology and built requisiteinfrastructure to facilitate virtual audits to ensure continuity in regulatory compliance.During the year we successfully completed several virtual audits for our variousfacilities. These include WHO GMP Russian GMP MHRA GMP HPRA GMP ISO 13485 Indian FDAetc.
One of the most significant developments during the pandemic year and a historicachievement for Wockhardt was the agreement signed with the UK government in August 2020to fill-finish the Oxford/AstraZeneca COVID-19 vaccine at our Wrexham facility in NorthWales UK. The government has reserved one production line for its exclusive use for 18months to supply about 350 million doses of the vaccine every year; which was furtherextended to 24 months. Wockhardt UK had the privilege of hosting the Prime Minister of UKMr. Boris Johnson who visited the facility to oversee the progress made by thefill-finish production line. The Honourable Prime Minister was informed and assured thatWockhardt's global facilities had the capacity to produce over 1 billion doses of thevaccine annually.
Our performance in a year of unprecedented disruption can be described as one of greatlearning. We have realised the benefits of agility adaptability positivity focus andinnovation in immunising the business against any trials and tribulations. While thepandemic revealed our vulnerabilities the measures taken to minimise its effect on ourbusiness have instilled great confidence in our ability to rise up to any challenge.
Tal Gur author of 'The Art of Fully Living' said "Health is not the absence ofgerms toxins or cancer cells. It's how well your body responds to them. Sturdy immunityequals sturdy health." I agree wholeheartedly.
Research and Development has always been the mainstay of our vision for sustainabilityand value creation as a research-based global pharmaceutical and biotech company. Ourfocus on new drug discovery in the antibiotics space has put us in a unique positionglobally.
While the pandemic has impacted our global studies and trials of the 4 New ChemicalEntities (NCEs) with Qualified Infectious Disease Product (QIDP) status from US FDA andbeing developed as novel antibiotics for global markets we will be back on track withstudies expected to be resumed from FY 2021-22 onwards. You will be pleased to know that 2NCEs WCK 771 and WCK 2349 launched in India in May 2020 as EMROK Oral and IV havereceived positive reviews amongst the medical fraternity. As it scores over all otherexisting antibiotics on safety and efficacy parameters we aim to become the Number 1prescribed Anti-MRSA and Gram positive agent in all hospitals pan-India in 2021.
We continued to build on our Intellectual Property base with 3187 cumulative patentsfiled and 763 cumulative patents granted as on 31 March 2021. Naturally we will continueto stay invested in and focussed on innovation. In FY 2020-21 our R&D investmentincluding capital expenditure accounted for 9.6% of sales at Rs.265 crore. Thisdemonstrates our deep commitment to build a new foundation for Wockhardt in the next fewyears.
At Wockhardt we believe that our endeavours as part of our Corporate SocialResponsibility initiatives is satisfying as well as very rewarding. We implement them withan empathy dedication professionalism and enthusiasm that is very fulfilling. LikeMarianne Williamson American author spiritual leader and peace advocate says"Every act of kindness on your part is a boost to your own immune system"
Wockhardt Foundation along with Wockhardt Hospitals and several other corporatepartners implement a host of social programmes to serve the underprivileged. BesidesMobile 1000 our flagship programme providing free medical services and medicines inremote and rural areas our other initiatives include e-learning skill developmentpotable water sanitation etc. This year too as in the previous several years WockhardtFoundation and its associates have managed to touch millions of lives across varioussocial outreach programmes and initiatives.
With the COVID-19 pandemic and the consequent lockdown throwing lives and livelihoodsinto disarray Wockhardt Foundation swiftly swung into action and implemented ANAAJ+ aprogramme to support families living in Mumbai's slums with monthly essentials. Severalcorporate organisations students and individuals joined the Foundation's 'Fight Corona'initiative as 'Corona Warriors' and have supported and are continuing to support over5000 disadvantaged families. I am pleased to announce that our contribution has beenacknowledged and appreciated with an Award of Appreciation' from Bhartiya Vikas Sansthanand a Community Contribution Award from Kotak Life.
I will conclude with an insightful quote on immunity by Jonas Salk an Americanvirologist who developed one of the first successful polio vaccines who said "Themind in addition to medicine has powers to turn the immune system around" I believethat it holds true for life as well as business.
Stay prepared and stay positive!
Dr. Habil Khorakiwala