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Wockhardt Ltd.

BSE: 532300 Sector: Health care
BSE 00:00 | 22 Oct 447.60 -14.45






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OPEN 466.00
VOLUME 185731
52-Week high 804.50
52-Week low 284.50
Mkt Cap.(Rs cr) 4,960
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 466.00
CLOSE 462.05
VOLUME 185731
52-Week high 804.50
52-Week low 284.50
Mkt Cap.(Rs cr) 4,960
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Wockhardt Ltd. (WOCKPHARMA) - Director Report

Company director report

Dear Members

The Board of Directors are delighted to present the Twenty Second Annual Report of theCompany along with the Audited Financial Statements for the year ended 31stMarch 2021.


(Rs. in Crore)
Particulars Year ended March 31 2021 Year ended March 312020
Continuing Operations
Total Revenue from Continuing Operations 2841 2883
Profit before Depreciation Finance Cost & Tax from Continuing Operations 69 158
Profit/(Loss) before Tax from Continuing Operations (568) (342)
Tax expense - Credit/(charge) of Continuing Operations 272 204
Profit/(Loss) after Tax before Other Comprehensive Income from Continuing Operations (296) (138)
Discontinued Operations
Profit/(Loss) from Discontinued Operation before Tax 1484 145
Tax expense of Discontinued Operations - (charge)/credit (499) (50)
Profit/(Loss) from Discontinued Operations 985 95
Profit/(Loss) for the year 689 (43)
Total Comprehensive Income 685 57
Continuing Operations
Total Revenue from Continuing Operations 1028 933
Profit before Depreciation Finance Cost & Tax from Continuing Operations (97) (90)
Profit/(Loss) before Tax from Continuing Operations (624) (484)
Tax expense - Credit/(charge) of Continuing Operations 232 158
Profit/(Loss) after Tax before Other Comprehensive Income from Continuing Operations (392) (326)
Discontinued Operations
Profit/(Loss) from Discontinued Operations before Tax 1484 145
Tax expense of Discontinued Operations - (charge)/credit (499) (50)
Profit/(Loss) from Discontinued Operations 985 95
Profit/(Loss) for the year 593 (231)
Total Comprehensive Income 593 (227)

The consolidated total revenue of the Company for the financial year ended 31stMarch 2021 stood at Rs.2894 crore as compared to Rs.3364 crore of previous year.Earnings before interest tax depreciation and amortization (EBITDA) for the year ended31st March 2021 are Rs.(47) crore vis-a-vis Rs.245 crore during previousyear. The Total Comprehensive Income for the year stood at Rs.685 crore vis-a-vis TotalComprehensive Income of Rs.57 crore of previous year. The above figures includeDiscontinued Operations figures.

On Standalone basis the Company registered total revenue of Rs.1028 crore fromContinuing Operations as compared to Rs.933 crore during previous year and Rs.54 crorefrom Discontinued operations as compared to Rs.481 crore during previous year. TotalComprehensive Income for the year stood at Rs.593 crore vis-a-vis Rs.(227) crore ofprevious year.


Financial year 2020-21 has seen some major developments for your Company.

Wockhardt in FY 21 became 1st Indian Pharmaceutical Company to launch a NewChemical Entity (NCE) in India in the Anti-Infective space

During the year your Company launched 2 new antibiotics EMROK (IV) and EMROK O(Oral) for acute bacterial skin and skin structure Infections including diabetic footinfections and concurrent bacteraemia. Earlier in January 2020 Indian Drug ControllerDCGI approved the same based on the Phase 3 study involving 500 patients in 40 centresacross India. The new drug will target superbug like Methicillin resistant Staphylococcusaureus (MRSA) which is a leading cause of rising antimicrobial resistance (AMR).

Antimicrobial Resistance (AMR) is a major public health problem globally. India carriesone of the largest burdens of drug-resistant pathogens worldwide. Infections caused bydrug-resistant organisms could lead to increased mortality and prolonged duration ofhospitalization causing a huge financial burden to the affected persons health-caresystems and hinder the goals of sustainable development. Two million deaths are projectedto occur in India due to AMR by the year 2050. World Health Organisation (WHO) in 2017 haslisted Methicillin resistant S. aureus (MRSA) as a 'high' priority pathogen due to highprevalence of resistance mortality rate and burden on community & health caresettings. In 2018 a national study conducted by the Indian council of Medical research(ICMR) and Anti-microbial resistant surveillance network (AMRSN) group highlighted thehigh prevalence of 38.6% of MRSA in India. A recent Indian study reports that 1 in 6patients infected with multidrug resistant Gram positive infections die in intensive careunits.

The size of Indian Antibiotic market is approx. Rs.16000 Crore growing at 7% and isone of the largest therapeutic segment with a 12% market share of the IndianPharmaceutical Market.

Covid-19 Vaccine Manufacturing in CP Pahrmaceuticals United Kingdom a step downsubsidiary of the Company

In a major development during the year the Company in Q2 announced agreement with theUK Government to fill finish COVID-19 vaccines. The manufacturing was undertaken at CPPharmaceuticals a subsidiary of Wockhardt based in Wrexham North Wales. As per the termsof the agreement the company has reserved manufacturing capacity to allow for the supplyof multiple vaccines to the UK Government in its fight against COVID19 including AZD1222the vaccine co-invented by the University of Oxford and licensed by AstraZeneca. InNovember 2020 Prime Minister of United Kingdom Mr. Boris Johnson visited themanufacturing facility.

This agreement was subsequently expanded from 18 to 24 months i.e until August 2022.

Your Company has also been exploring opportunities to tie up with various vaccinedevelopers for manufacturing and/or providing fill-finish facilities for Covid 19 dosages.

Part Divestment of India Domestic Branded Business

During the year your Company transferred 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 where some of the products which are beingtransferred were manufactured (together the "Business Undertaking") to Dr.Reddy's Laboratories Limited ("DRL") for a consideration of Rs.1850 croresubject to adjustments specified in the Business Transfer Agreement (BTA) dated 12thFebruary 2020.

In the aftermath of the COVID-19 pandemic government restrictions and recognisingconsequent reduction in the revenue from the sales of the Products forming part of theaforesaid BTA during March & April 2020 your Company decided to allow flexibility toassess the impact of the COVID-19 pandemic on the valuation of the Business Undertakingand the Company and DRL have executed an amendment agreement in terms of which the agreedconsideration of Rs.1850 crore to be paid as per following:

a) an amount equal to Rs.1550 crore to be paid on the Closing Date under the BTA whichhas been paid by DRL to the Company on June 09 2020;

b) an amount equal to Rs.67 crore which has been deposited by DRL in an escrow accountwhich shall be released subject to adjustments for inter alia Net working capitalemployee liabilities and certain other contractual and statutory liabilities); - Out ofwhich Rs.4 crore is pending as on date.

c) an amount equal to Rs.300 crore ("Holdback Amount") which shall be heldback by DRL on the Closing Date for assessment of the impact of the COVID-19 pandemic onthe Business Undertaking and shall be released as follows: If the revenue from sales ofthe products forming part of the Business Undertaking by DRL during the 12 monthspost-closing exceeds Rs.480 crore DRL will be required to pay to the Company from out ofthe Holdback Amount an amount equal to 2 (two) times the amount by which the revenueexceeds Rs.480 crore.

Due to the restrictions on movement into and within the state of Himachal Pradesh onaccount of the Covid-19 Pandemic the approval of the Government of Himachal Pradesh forthe transfer of the land underlying the manufacturing facility at Baddi Himachal Pradesh("Baddi Facility") as required under the Himachal Pradesh Tenancy and LandReforms Act 1972 is pending as of date. Accordingly the Company and DRL have agreedthat the Baddi Facility shall only be transferred once the approval of the Government ofHimachal Pradesh is received and in the meanwhile the Company and DRL will enter intointerim arrangements for management of the Baddi Facility by DRL.

Divestment of French Business:

During the year Wockhardt France (Holdings) S.A.S. (WFH) a Step down Subsidiary ofthe Company divested the Marketing Authorisations (MAH) of the products along with theirTrademarks (collectively known as 'Business Assets') for a consideration of Euro 11Million.

WFH had business/marketable assets in the form of pharmaceutical marketingauthorizations (MAH) of the branded generic products that has seen significant competitionand price erosion over the years as a generic business. Considering soaring competition inthe generic market and limited scope for further growth or to introduce new products inthe market it was prudent to divest Business Assets.

WFH received price consideration on 18th December 2020 and outstanding loanin the Business was repaid in full.

Key milestone achieved in Breakthrough Anti-infective NCEs (WCK 6777)

In Q1 your company received the Qualified Infectious Disease Product1('QIDP') designation for WCK 6777 from the United States Food and Drug Administration ('USFDA'). WCK 6777 is a once-a-day combination antibiotic based on Wockhardt's NCEZidebactam which imparts WCK 6777 novel mechanism of p-lactam enhancer. Driven by theenhancer action WCK 6777 overcomes an array of problematic bacterial resistancemechanisms such as metallo-p-lactamases KPC and OXA carbapenemases. Further Zidebactamhas the unique ability to overpower other tough resistance mechanisms such as reduced druguptake and drug efflux encountered in contemporary multidrug (MDR) resistant Gram negativepathogens.

Your Company's strategic focus continues to be on Research and Development ('R&D').With New Chemical Entity ('NCE') WCK 6777 of your Company getting QIDP designation fromthe US FDA Wockhardt became the only Company in the world to hold QIDP Status for sixantibiotics. Three of them are targeting Gram Negative pathogens and the other three areeffective against Gram positive difficult-to-treat "Superbugs". R&Dendeavours in the pharmaceutical business not only have long gestation period but demandsheavy investments; and your Company year-on-year continues to invest substantial part oftopline on R&D. During the year R&D expenses stood at Rs.172 crore (6.23% ofconsolidated revenue) vis-a-vis. Rs.208 crore of previous year.

Being a research based global Pharmaceutical and Biotech company your Company hasstrong focus on developing intellectual property. During the year the Company has filed22 patent applications and 41 patents were granted during the year. Accordingly theCompany as on 31st March 2021 cumulatively filed 3187 patents and holds 763patents worldwide.

During the year under review the following key events had taken place:

• Russian GMP audit was carried out at Biotech H14/2 OSD API and Formulation(Injectable) Facilities.

• State FDA and WHO (GMP) audit was carried out at Bhimpore Daman and Biotech APIFacilities.

• BPOM Indonesia audit (virtual audit) was carried out at Biotech Formulation(Injectable) Facility.

During the year the following approvals post successful audits were received fromvarious authorities:

• State FDA and WHO (GMP) approval for Bhimpore Daman facility.

• PMDA-Japan approval for Ankleshwar facility.

1 QIDP status is granted to drugs identified by CDC (Centre for Disease ControlUSA) that act against pathogens which have a high degree of unmet need in theirtreatment. QIDP status provides fast track clinical development and review of the drugapplication by US FDA for drug approval. The drug is also awarded five-year extension ofmarket exclusivity. 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 newantibiotics development.

Your Company during the year also continued its long-term strategic initiatives invalue creation through cost containments fostering culture of cost-consciousnessbudgetary controls to improve efficiencies and working capital optimization which gavepositive impact. Nonetheless ongoing expenditures on remedial measures (for US FDArelated matter) continued to impact the profitability of the Company.

Current status of QIDP products: Spurring Clinical development of NCEs in differentterritories:

WCK 5222: An abridged Phase III global study protocol finalized in consultationwith US FDA EMA and Chinese FDA (NMPA). The study is estimated to commence in September2021.

WCK 4282: Protocol for Global Phase III study has been discussed and approved byFDA and EMA. Chinese NMPA has agreed with the Clinical development plan and clinical studyprotocol . The study is being planned in 1000 patients globally and it is estimated tocommence in December 2021.

WCK 4873: Biotechnology Industry Research Assistance Council (BIRAC) grant forIndia Phase III study approved and first milestone received. The study enrolment commencedin February 2021.

WCK 771 & WCK 2349: Both WCK 771 (IV) the brand name EMROK and WCK 2349(Oral) brand name EMROK O were launched in June 2020. Both the products have been wellreceived by the intensivists and senior infectious disease specialists. Both the productsare available across the country in all the major hospitals

WCK 6777: Successful submission of WCK 6777 US IND application and received QIDPdesignation from US FDA. Phase I studies scheduled to commence in 2022 in USA.

All the above NCEs have distinction of QIDP status by US FDA.

There is no change in the nature of business of the Company or any of its Subsidiaries.


The first quarter of 2020 saw an unprecedented outbreak of COVID-19 pandemic whichcaused an all-round disruption of economies around the world and dampened the alreadybleak economic prospects. It has proved to be one of the most damaging events of humanhistory and believed to have deep and cascading impact across the entire economic chain.Another significant disruption was in the area of Global supply chain wherein China is thekey link and was being heavily impacted by the Pandemic.

The second half of the year showcased the resilience of the Pharmaceutical Industrywith significant outcome of efforts on vaccine development with multiple vaccineapprovals. The launch of vaccination in some countries in End 2020 raised hopes of aneventual end to the pandemic. Moreover economic data released after the October 2020World Economic Organisation (WEO) forecast suggest stronger-than-projected momentum onaverage across regions in the second half of 2021.

Your Company had undertaken proactive steps from the inception of the pandemic acrossall facets of business operations & safety of its people. Anticipating the onset ofmajor crisis in time to come and in the best interest of all the internal stakeholders infocus your Company quickly took decision to enable work from home (WFH) for itsassociates as early as third week of March 2020.

The Corporate IT Team quickly swung into action leveraging technology to enable WFH.Timely training sessions on remote connectivity were held in parallel before WFH rollout;access to laptop devices connectivity to SAP Email and GXP applications access tovarious user folders were enabled. Collaborative tools like Zoom and MS Teams for makingthe collaboration more effective and productive while working from home were introduced.Post roll out a dedicated IT Help Desk was created to cater to the WFH needs ofassociates.

Security standards were verified through third party audit. Covid Health assessment appwas rolled out to assess the health of the associates. To strengthen the system securityface recognition and a contactless IR-Based wrist temperature monitoring solution wasevaluated and implemented at all manufacturing locations R&D centre and Corporateoffice.


During the year 2020-21 CARE Ratings Limited ('CARE Ratings') has revised theCompany's ratings for Long-Term Bank Facilities (Fund Based) as "CARE BBB-;Stable" from "CARE BB+; Under credit watch with positive implications"; andfor Short Term Bank Facilities (Non Fund Based) as "CARE A3" from "CAREA4+; Under credit watch with positive implications".

CARE Ratings has also assigned a rating for the Company's Non-Convertible Debenturesissue aggregating to Rs.200 crore as "CARE BBB-; Stable".

Further India Rating & Research Private Limited has also revised the Company'sratings for Long-Term Loan Facilities to "IND BBB-/Stable" from "IND BB+/RWE (Rating Watch Evolving)" and for Short-Term Loan Facilities to "IND A3"from "IND A4+/RWE (Rating Watch Evolving)".


The Board of Directors of your Company do not recommend any dividend on the equityshares of the Company for the year ended 31st March 2021; and no amount hasbeen transferred to the General Reserve of the Company.


Dividend Distribution Policy of your Company aims at striking the right balance betweenthe quantum of dividend paid to its shareholders and the amount of profits retained forits business requirements present and future. The intent of the Policy is to broadlyspecify various external and internal factors that shall be considered while declaringdividend and the circumstances under which the shareholders of the Company may or may notexpect dividend.

The Policy is available on the website of the Company weblink thereto is distribution-policy.pdf


Pursuant to the allotment of 46150 equity shares of Rs.5 each against exercise ofstock options granted under Wockhardt Employees' Stock Option Scheme - 2011 ('theScheme') the paid-up equity share capital of the Company increased from Rs.553675015to Rs.553905765 during the year under review.

During the year under review the Company redeemed 160000000 0.01% Non-ConvertibleCumulative Redeemable Preference Shares ('NCRPS Series 5') of Face value of Rs.5 each and500000000 4% Non-Convertible Non-Cumulative Redeemable Preference Shares ('NCCRPS') ofFace value of Rs.5 each along with the accumulated dividend and redemption premium if anyon 19th October 2020 on predetermined terms and conditions as decided earlierat the time of issuance/extension of said Preference Shares before the extended due dateof the redemption as per the agreed terms of issuance/extension of the said PreferenceShares.

There were no issue of equity shares with differential voting rights and sweat equityshares during the year 2020-21. The Company does not have any scheme to fund its employeesto purchase the shares of the Company. Further no shares have been issued to employees ofthe Company except under the Scheme mentioned above.


During the year under review Mr. Akhilesh Gupta (DIN: 00359325) was appointed as anAdditional Director (Non-Executive Independent) with effect from 29th August2020. The resolution for his appointment as a Non-Executive Independent Director for aterm upto 28th August 2025 is placed for the approval of Members of theCompany at the ensuring Annual General Meeting.

In terms of the provision of:

• Section 149 and other applicable provisions of the Act and SEBI ListingRegulations Mr. Vinesh Kumar Jairath (DIN: 00391684) Independent Director of theCompany holds office upto 9th November 2021 and being eligible offershimself for re-appointment. Considering the performance evaluation the resolution for hisre-appointment as recommended by the Nomination & Remuneration Committee and the Boardfor another term upto 9th November 2026 as Independent Directors is placedfor the approval of Members of the Company at the ensuring AGM.

• Section 152 of the Act Dr. Huzaifa Khorakiwala (DIN: 02191870) ExecutiveDirector retires by rotation as Director at the ensuing AGM and being eligible offershimself for re-appointment. The Board recommends his re-appointment.

All the Independent Directors have furnished Declaration of Independence stating thatthey meet the criteria of independence as provided under Section 149(6) of the CompaniesAct 2013 ('the Act') and Regulation 16 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ('SEBI ListingRegulations') and there has been no change in the circumstances which may affect theirstatus as Independent Directors during the year. Independent Directors have also submitteddeclaration that they have registered themselves on the online data bank of IndianInstitute of Corporate Affairs (IICA) in accordance with the Companies (Appointment andQualification of Directors) Fifth Amendment Rules 2019.

In accordance with the provisions of Section 2(51) and 203 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Dr. MurtazaKhorakiwala Managing Director Mr. Manas Datta Chief Financial Officer and Mr. GajanandSahu Company Secretary & Compliance Officer are the Key Managerial Personnel ('KMP')of your Company.

None of the directors are disqualified under Section 164(2) of the Companies Act 2013.Further they are not debarred from holding the office of Director pursuant to order ofSEBI or any other authority.

The term of Mr. Baldev Raj Arora (DIN: 00194168) as an Independent Director was upto 27thMay 2020. Considering his age Mr. Arora decided not to seek re-appointment for 2ndterm as an Independent Director of the Company. Mr. Arora has made contribution for thesustainable growth and success of the Company.


During the financial year 2020-216 (six) meetings of the Board of Directors and 4(four) meetings of the Audit Committee were held. Details of these meetings and otherCommittees of the Board/General Meeting are given in the Report on Corporate Governanceforming part of this Annual Report.


As on 31st March 2021 the Audit Committee comprises of Mr. Aman Mehta asChairman; and Mr. Davinder Singh Brar Dr. Sanjaya Baru Mrs. Tasneem Mehta Mr. VineshKumar Jairath and Mr. Akhilesh Gupta as its Members.

All the Members of the Committee are Independent Directors and recommendations made bythe Audit Committee were accepted by the Board of Directors of the Company. Further theCommittee has carried out the role assigned to it. Other details about the Audit Committeeand other Committees of the Board are provided in the Report on Corporate Governanceforming part of this Annual Report.

Mr. Akhilesh Gupta was inducted as a member of the Audit Committee w.e.f. 29thAugust 2020.


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

(a) i n the preparation of Annual Accounts for the year ended 31st March2021 the applicable Accounting Standards have been followed and that no materialdepartures have been made from the same;

(b) such Accounting Policies as mentioned in the Notes to the Financial Statements forthe year ended 31st March 2021 have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the loss of the Company for the year ended 31st March 2021;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Annual Accounts for the year ended 31st March 2021 have beenprepared on a going concern basis;

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

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


M/s. B S R & Co. LLP Chartered Accountants were appointed as the StatutoryAuditors of the Company at the Annual General Meeting ('AGM') of the Company held on 14thAugust 2019 for a term of five years i.e. till the conclusion of ensuing 25thAGM (to be held during calendar year 2024).

The reports of the Statutory Auditors on Standalone and Consolidated Ind AS FinancialStatements forms part of this Annual Report. The Auditors' Report does not contain anyqualification reservation and adverse remark.


Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 as amended from time to time and asrecommended 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 cost audit of theCompany for the financial year 2021-22. The Company has received consent from M/s. KiritMehta & Co. to act as Cost Auditors. Further pursuant to the aforesaid provisions ofthe Act the remuneration payable to M/s. Kirit Mehta & Co. for conducting the costaudit of the Company for the financial year ending on 31st March 2022 needs tobe ratified by the Members of the Company and resolution for the said ratification isplaced for approval of Members of the Company at the ensuing AGM.

The Cost Auditors' Report for the financial year ended 31st March 2020 didnot contain any qualification reservation and adverse remark and the same was duly filedwith the Ministry of Corporate Affairs within the due date.


The Board of Directors of your Company has appointed Mr. Virendra Bhatt PractisingCompany Secretary as Secretarial Auditors to conduct Secretarial Audit of the Company forthe year ended 31st March 2021. The Secretarial Audit Report issued by Mr.Virendra Bhatt does not contain any qualification reservation and adverse remark. TheSecretarial Audit Report is annexed as Annexure I to this Report.

During the year your Company has complied with all the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.


Pursuant to the provision of Section 92 of the Companies Act 2013 copy of the annualreturn is available at


Pursuant to SEBI (Share Based Employee Benefits) Regulations 2014 and other applicablelaws if any the required disclosures as on 31st March 2021 are annexed asAnnexure II to this Report.

During the year under review there were no changes in the Employee Stock Option Schemeand the same is in compliance with the said Regulations.


Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 'CSR Policy' asrecommended by the CSR Committee and approved by the Board is uploaded on the website ofthe Company

The average Net Profit of the Company for the immediately preceding 3 financial yearscalculated as per Section 198 of the Companies Act 2013 was negative. Hence no amountwas required to be spent on CSR activities during the financial year 2020-21. Howeverconsidering the pandemic situation and as a continuing corporate governance practice theCompany contributed Rs.2.12 crore to Wockhardt Foundation the CSR arm of the Company forspending on CSR activities in the areas of healthcare education etc.

The details on CSR activities as required under Section 135 of the Companies Act 2013and the Companies (Corporate Social Responsibility Policy) Rules 2014 as amended fromtime to time is annexed as Annexure III to this Report.


Your Company has been following well laid down policy on appointment and remunerationof Directors KMP and Senior Management Personnel.

The appointment of Directors is made pursuant to the recommendation of Nomination andRemuneration Committee ('NRC'). The remuneration of Executive Directors comprises of BasicSalary Perquisites & Allowances and follows applicable requirements as prescribedunder the Companies Act 2013. Approval of shareholders for payment of remuneration toWhole-time Directors is sought from time to time.

The remuneration of Non-Executive Directors comprises of sitting fees & commissionif any in accordance with the provisions of Companies Act 2013; and reimbursement ofexpenses incurred in connection with attending the Board meetings Committee meetingsGeneral meetings and in relation to the business of the Company. During the year underreview the Company has not paid any commission to the Non-Executive Directors.

A brief of the Remuneration Policy on appointment and remuneration of Directors KMPand Senior Management is provided in the Report on Corporate Governance forming part ofthis Annual Report. Further the Policy is available on the website of the Company and theweblink thereto is

NRC have also formulated criteria for determining qualifications positive attributesand independence of a Director and the same have been provided in the Report on CorporateGovernance forming part of this Annual Report.


The Nomination and Remuneration Committee of the Board of Directors of the Company havelaid down criteria for performance evaluation of the Board of Directors includingIndependent Directors. Pursuant to the requirement of the Companies Act 2013 the SEBIListing Regulations and considering criteria specified in the SEBI Guidance Note on BoardEvaluation the Board has carried out the annual performance evaluation of entire BoardCommittee and all the Directors based on the parameters as detailed in the Report onCorporate Governance forming part of this Annual Report. The parameters of performanceevaluation were circulated to the Directors in the form of questionnaire.


The Company has adequate internal financial control procedures commensurate with itssize and nature of business. These controls include well defined policies guidelinesStandard Operating Procedures ('Sops') authorization and approval procedures andtechnology intensive processes. The internal financial controls of the Company areadequate to ensure the accuracy and completeness of the accounting records timelypreparation of reliable financial information prevention and detection of frauds anderrors safeguarding of the assets and that the business is conducted in an orderly andefficient manner.

M/s. Ernst and Young during the year reviewed self-assessment tool on adequacy ofInternal Financial Control ('IFC') process of the Company in accordance with therequirement of the Companies Act 2013. There were no material observations noted in thisreview.

The Company during the year continued with its past practice of a co-sourced modelfor internal audit. The Company's internal audit team is assisted by M/s. Ernst and Youngwho carry out internal audit reviews in accordance with the approved internal audit plan.Internal audit team reviews the status of implementation of internal auditrecommendations. Summary of critical observations if any and recommendations underimplementation are reported to the Audit Committee.

During the year under review there were no instances of fraud reported by the Auditorsunder Section 143(12) of the Companies Act 2013.


As on 31st March 2021 Risk Management Committee comprises of Dr. H. F.Khorakiwala as Chairman; and Mr. Davinder Singh Brar Independent Director Dr. MurtazaKhorakiwala Managing Director and Mr. Manas Datta Chief Financial Officer as itsmembers. During the year under review the Risk Management Committee met for 2 (two) timesand the details of these meetings are given in the Report on Corporate Governance formingpart of this Annual Report.

Enterprise Risk Management (ERM) framework encompasses practices relating to theidentification analysis evaluation mitigation and monitoring of the strategic externaland operational controls risks in achieving key business objectives. The Companyidentifies and tries to mitigate risks that matter on an ongoing basis. Risk ManagementPolicy approved by the Board is in place. Risk management is embedded in the strategicbusiness decision making.

Strategic Risks comprises of risks inherent to Pharmaceutical Industry andcompetitiveness Company's choices of target markets business models and talent base.Your Company periodically assesses risks in new initiatives the impact of strategy onfinancial performance competitive landscape growth models and attracting and retainingtalented workforce.

External Risks arising out of uncontrollable factors in the external environment due tovarious developments especially the unprecedented COVID-19 pandemic in the regulatoryenvironment in which your company operates unfavourable trends in the macroeconomicenvironment including currency fluctuations Country specific risks economic andpolitical environment technology disruptions etc. are actively assessed to takeappropriate risk mitigation.

Operational controls risks encompasses risks of disruptions to supply chainmanufacturing operations due to the COVID-19 pandemic non-compliance to policiesinformation security data privacy intellectual property individuals engaging inunlawful or fraudulent activity or breaches of contractual obligations that couldtypically result in penalties financial loss litigation and loss of reputation; arereviewed on an ongoing 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 isbeing adequately addressed through strengthening of current processes and controls byCompany's internal quality assurance and manufacturing teams and through the help ofreputed external consultants. There are no risks which in the opinion of the Boardthreaten the existence of your Company. Other details about Risk Management have also beenelaborated in the Report on Corporate Governance forming part of this Annual Report.


All properties and insurable interests of the Company including buildings plant &machinery and stocks have been adequately insured.


Your Company regularly undertakes green initiatives to preserve environment whichincludes energy saving water conservation and usage of electronic mode in internalprocesses & control statutory and other requirement. Shareholders are also requestedto register their e-mail IDs with the Depositories/ RTA/ Company as the case may be forreceiving all communication from the Company electronically.


For better conduct of operations and in compliance with regulatory requirement yourCompany has framed and adopted certain policies. In addition to the Company's Code ofBusiness Conduct and Ethics key policies/code that have been adopted by the Company areas follows:

Name of the Policy Brief Description Web Link
Policy for determining Materiality of Events This policy aims to determine Materiality of events/ information. determining-materiality-of-events.pdf
Archival Policy The policy deals with archival of the Company's records and documents. policy.pdf
Policy for determining Material Subsidiaries The policy determines the material subsidiaries and material non-listed Indian subsidiaries of the Company and to provide the governance framework for them. material-subsidiaries-17-12-2515.pdf
Policy on Materiality of and Dealing with Related Party Transactions The policy regulates all transactions between the Company and its' related parties. rpt-01-4-19.pdf
Vigil Mechanism/Whistle Blower Policy The Company has adopted the Vigil Mechanism for directors and employees to report concerns about unethical behaviour actual or suspected fraud or violation of the Company's code of conduct. blower-policy-04-03-20.pdf
Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information The Code determines principles for fair disclosure of Unpublished Price Sensitive Information. fair-disclosur-of-upsi-2-4-19.pdf
Corporate Social Responsibility Policy The policy outlines the Company's strategy to bring about a positive impact on society through programs relating to education healthcare environment etc.
Remuneration Policy This policy formulates the criteria for determining qualification competencies positive attributes and independence for the appointment of directors and also the criteria for determining the remuneration of the directors key managerial personnel and other employees. remuneration-policy.pdf
Dividend Distribution Policy The policy determines the parameters/ basis for declaration of dividend. distribution-policy.pdf
Policy on Preservation of Records The policy deals with periodicity of retention of the Company records and documents. Available on internal portal
Risk Management Policy The Policy is intended to institutionalize the risk management framework of the Company which includes identification review and reporting of material risks.
Forex Risk Management Policy The policy defines identify measure manage mitigate and review potential risks pertaining to fluctuations in Foreign Exchange.
Code of Conduct for Regulating Monitoring and Reporting Trading by Designated Persons The policy provides the framework in dealing with securities of the Company by designated persons.
Policy for Inquiry in case of Leak/ Suspected Leak of Unpublished Price Sensitive Information ('UPSI') The Policy is intended to set procedure to conduct inquiry in case of leak or suspected leak of UPSI in violation of SEBI (Prohibition of Insider Trading) Regulations 2015 and Code of Conduct for Regulating Monitoring and Reporting Trading by Designated Persons.
Anti-bribery and Anti-corruption Policy The policy provides for prevention deterrence and detection of fraud bribery and other corrupt business practices in order to conduct the business activities with honesty integrity with highest possible ethical standards.
Human Right Policy Policy aims at social & economic dignity and freedom regardless of nationality ethnicity gender race economic status or religion. Also focuses to uphold international human rights standards.
Stakeholder Engagement Policy Policy aims to create a sustainable environment that involves relevant Stakeholders who may be affected by or can influence organisation's decisions.
Policy on Safety Health and Environment The policy provides the provision of a safe and healthy work place for every employee and care for the environment to make the world a better place to live in.
Acceptable usage Policy for IT System The policy outlines the acceptable use of computing equipment and information security awareness.
HR Policy Handbook This encompasses work timings Leave Policy No Smoking in Company Premises Employee Benefit related guidelines Policy on prevention of Sexual Harassment at work place etc.


In accordance with the approval of the Shareholders' sought by way of Postal Ballot on15th March 2018 under Section 186 of the Companies Act 2013 the Company cangive loans guarantees and/or provide security(ies) and/or make investments upto Rs.6000crore. The particulars of loans investments and guarantees are provided under Note 36 andNote 6 in the Notes to the Financial Statements.


During the financial year 2020-21 all contracts/ arrangements/ transactions enteredinto by the Company with its related parties were reviewed and approved by the AuditCommittee. Prior omnibus approvals were obtained from the Audit Committee for relatedparty transactions which were of repetitive nature entered in the ordinary course ofbusiness and on an arm's length basis. No transaction with any related party was inconflict with the interest of the Company.

The Company did not enter into any related party transaction with its Key ManagerialPersonnel. The details of related party transaction are provided under Note 43 in theNotes to the Financial Statements.

The particulars of contracts/ arrangements with related parties in Form AOC-2 areprovided in Annexure IV to this Report. VIGIL MECHANISM

Pursuant to the requirements laid down under Section 177 of the Companies Act 2013 andRegulation 22 of the SEBI Listing Regulations the Company has well laid down VigilMechanism. The details of the same are provided in the Report on Corporate Governanceforming part of this Annual Report. During the year the Company did not receive anycomplaint under Vigil mechanism.


Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Act and Rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 have been annexed to this report as Annexure V.

In accordance with the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said ruleswhich includes the name of top 10 employees in term of remuneration drawn forms part ofthis Report. Pursuant to the provisions of Section 136(1) of the Companies Act 2013 theBoard's Report is being sent to the Shareholders of the Company excluding the saidstatement. Any shareholder interested in inspection or obtaining a copy of the statementmay write to the Company Secretary and the same will be furnished on request.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is provided in Annexure VI to this Report.


As on 31st March 2021 the Company has total 32 Subsidiaries. Howeverduring the year under review the Company does not have any joint venture or associatecompany.

There were no companies who ceased to be Subsidiaries of the Company during thefinancial year under review.

In accordance with Section 129(3) of the Companies Act 2013 a statement containingsalient features of the Subsidiaries of the Company is provided in Form AOC-1 annexed asAnnexure VII to this Report.


The Consolidated Financial Statement of your Company for the financial year 2020-21 areprepared in compliance with applicable provisions of the Companies Act 2013 read with theRules issued thereunder applicable Accounting Standards and provisions of the SEBIListing Regulations.

A copy of the Audited Financial Statements of the Subsidiaries shall be made availablefor inspection at the Registered Office of the Company during business hours. The AuditedFinancial Statement of the Company including Consolidated Financial Statement andFinancial Statements of its Subsidiaries are also available on the website of the Company.Any Shareholder interested in obtaining a copy of the separate Financial Statement of theSubsidiary(ies) shall make specific request in writing to the Company Secretary and thesame will be furnished on request.


During the year under review your Company has not accepted any Fixed Deposits underChapter V of the Companies Act 2013 and as such no amount on account of Principal orInterest on Deposits from Public was outstanding as on 31st March 2021.


The Company strongly believes in providing a safe and harassment free workplace foreach and every individual working for the Company through various interventions andpractices. It is the continuous endeavor of the Management of the Company to create andprovide an environment to all its Associates that is free from sexual harassment. Pursuantto the requirement of the Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013 ("Act") the Company has constituted InternalCommittees (IC) across all the locations which are responsible for redressal of complaintsrelated to sexual harassment at respective locations. The Company arranged variousinteractive awareness workshops in this regard for the Associates at all the manufacturingsites & Corporate Office during the year under review. During the year 2020-21 theCompany has not received any Complaints in the matter.


There are no significant and material orders passed by the Regulators or Courts orTribunals which impact the going concern status and operations of the Company during theyear under review. However Member's attention is drawn on the following:

a) Writ Petition filed against Notification No. S.O. 4379(E) dt 07.09.2018("Impugned Notification") Aceclofenac + Paracetamol + Rabeprazol on 14thSeptember 2018. The judgement is passed by Hon'ble High Court Delhi with a view that theimpugned notification cannot be sustained. The same is set aside. The matter is remandedto DTAB/ Sub-committee constituted by it to examine the issue regarding the said FDC inaccordance with the directions issued by the Hon'ble Supreme Court in Pfizer Ltd. (supra).The DTAB/ Sub-committee shall submit a report to the Central Government. The CentralGovernment may take an informed decision whether to restrict or approve the said FDC. Nodecision is taken by Central Government in the matter so far.

b) The Company has earlier filed the caveat before Hon'ble Supreme Court and the Unionof India (Uol) has filed a Special Leave Petition (SLP) in Supreme Court of India againstthe Judgment passed by the Delhi High Court quashing the notification issued by the Uolwherein it stipulated the prohibition of the manufacture sale and distribution of certainFDCs being manufactured by the Company. The Hon'ble Supreme Court has after hearing theparties dismissed the SLP filed by Uol on 14th October 2019.


There are no material changes and commitments between the end of the financial year ofthe Company and as on the date of this report which can affect the financial position ofthe Company.


In compliance with Regulation 34(2)(f) of the SEBI Listing Regulations the BusinessResponsibility Report forms part of this Annual Report.


A Report on Corporate Governance along with a Certificate from Practicing CompanySecretary confirming the compliance of the conditions of Corporate Governance andManagement Discussion and Analysis Report forms part of this Annual Report.


Your Directors wish to place on records their sincere appreciation and acknowledge thededication & contribution made by the employees of the Company at all levels. YourDirectors wish to place on record their appreciation to all the Stakeholders of theCompany viz. customers members of medical profession investors banks regulators fortheir unrelenting support during the year under review.

For and on behalf of the Board of Directors
DIN: 00045608
Place : Mumbai
Date : 27th May 2021