wockhardt ltd share price Directors report


Dear Members,

The Board of Directors are delighted to present the Twenty-fourth Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended March 31, 2023 ("year under review").

FINANCIAL RESULTS AND HIGHLIGHTS

A summary of your Companys financial results for the Financial Year 2022-23 is as under:

(Rs. in Crore)

Particulars Year ended Year ended
March 31, 2023 March 31, 2022
Consolidated
Total Revenue 2,773 3,250
Profit before Depreciation and Amortisation, Finance Cost and Tax 223 318
Loss before Exceptional Items and Tax (330) (228)
Loss before Tax (624) (411)
Tax expense - Credit 3 132
Loss after Tax for the year before other Comprehensive Income (621) (279)
Other Comprehensive Income/ (Loss) 78 (27)
Total Comprehensive Income/ (Loss) (543) (306)
Standalone
Total Revenue 1,139 1,410
Profit before Depreciation and Amortisation, Finance Cost and Tax 137 260
Loss before Exception Items and Tax (278) (184)
Loss before Tax (513) (184)
Tax expense - Credit 47 44
Loss after Tax for the year before other Comprehensive Income (466) (140)
Other Comprehensive Income/ (Loss) 4 (1)
Total Comprehensive Income / (Loss) (462) (141)

The Consolidated Total Revenue of the Company for the financial year ended March 31, 2023 stood at Rs. 2,773 crore as compared to Rs. 3,250 crore of the previous year. Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) for the year ended March 31, 2023 is Rs. 223 crore vis-?-vis Rs. 318 crore during the previous year. The Total Comprehensive Income/ (Loss) for the year stood at Rs. (543) crore vis-?-vis total Comprehensive Income/ (Loss) of Rs. (306) crore of previous year. On a standalone basis, the Company registered Total Revenue of Rs. 1,139 crore as compared to Rs. 1,410 crore of the previous year. Total Comprehensive Income/ (Loss) for the year stood at Rs. (462) crore vis-?-vis Rs. (141) crore in the previous year.

STATE OF COMPANYS AFFAIRS

The financial year 2022-23 has seen some significant developments for your Company, including the following:

1) Initiation of Global Phase 3 clinical study of WCK 5222: Wockhardt successfully initiated the Global Phase 3 Clinical Study of its novel antibiotic WCK 5222. WCK 5222 is a Super-drug and an entirely a new class of antibiotic known as "?-lactam ENHANCER". This is a double-blind, multi-center, eRs.cacy, safety, and tolerability study in the treatment of hospitalized adults with Complicated Urinary Tract Infections, including Acute Pyelonephritis. This study will have 70 centres worldwide in 11 countries including the US, Europe, India, China and Latin America. This global study is expected to be completed in 18 months. In this regard, it is also worth mentioning 5 lives of critically ill patients, who were not responding to any of the available drugs, were saved during the previous year through the use of WCK5222 on compassionate basis.

2) Restructuring of the US Business: In view of the changed pharmaceutical market situation in the United States of America (USA), the management had initiated various steps to restructure its USA business by closing down its manufacturing facility in Illinois, USA and undertaking its business through Contract manufacturing the products sold by it in USA/North America by engaging USFDA approved manufacturing partners meeting the quality standards acceptable to the Company.

In line with the above, the Company has now engaged multiple USFDA approved manufacturing partners, after thorough due diligence and inspection of their facilities, to manufacture various products of the Company for sale in USA/ North America under the same brand and Wockhardt name.

The Company believes, that this new arrangement is in the best interest of the Company as this will help the Company to avoid the manufacturing and quality management cost completely and allow the management to focus on penetrating and expansion of the market share of its products in US/ North America.

Amidst various challenges during the year, your Company was focused on deployment of funds and setting its investments priorities to ensure maximum return. Secondly, it dedicated focus on the expense side with cost containment measures. Significant efforts to identify new revenue streams and enhance profitability and cash flow also translated into new partnerships in International geographies.

Updates on Research & Development:

Your Company continues to focus on Drug Discovery Program to bring novel antibiotics to the market for catering to unmet needs in the area of resistant Gram-positive and Gram-negative infections where there is dearth of medicines across the world. With the global rise in the prevalence of resistant strains, and the emergence of newer resistance mechanisms as well as new pathogenic organisms, where the existing antibiotics show little impact, the overall infectious disease scenario is highly concerning. This is further buttressed by a recent publication in reputed Journal, ‘The Lancet which estimated the annual global mortality touching 4.95 million due to antibiotic resistant infections. The Company with its array of drugs under development in this space aims to counter these diseases in both regulated and unregulated markets.

Current status of Qualifies Infectious Disease Product (QIDP) category NCEs: Spurring Clinical development of NCEs in different territories: WCK 5222: Phase 3 study involving patients with complicated urinary tract infections started in October 2022 and is progressing well. As of now, 162 patients have been enrolled and completed treatment with either study drug WCK 5222 or comparator drug meropenem without any incidence of Serious Adverse Effects. Meanwhile, under compassionate use, DCGI approved the use of WCK 5222 on patients infected with extreme-drug-resistant pathogens that did not respond to available/ last line antibiotics. Five (5) such critically-ill patients were successfully treated with WCK 5222. WCK 4282: The start of Phase 3 study involving cUTI patients is deferred for now in view of need to prioritize WCK 5222 clinical study. Recently, a collaborative study between Albany College of Pharmacy and Health Sciences, USA & Christian Medical College and Hospital, India, showing promising activity of WCK 4282 against emerging resistant pathogens was presented in the 33rd European Congress of Clinical Microbiology and Infectious Diseases (ECCMID) at Copenhagen, Denmark.

WCK 4873: The recruitment of required target numbers of patients for Phase 3 study has been successfully completed in May 2023. New drug Application (NDA) filing is planned to be completed in December, 2023. WCK 771 & WCK 2349: Since their launch, both Emrok & Emrok O have been gaining wider clinical acceptability by virtue of their ability to address unmet need in the management of serious Gram-positive infections with about 48,000 patients already treated with these novel drugs. To further expand the treatment scope of Emrok & Emrok O, four new clinical studies have been successfully completed.

WCK 6777: Worlds most prestigious and largest bio-medical research organization, the National Institutes of Health (NIH), USA has recognized the clinical significance of WCK 6777 and accordingly selected it for the conduct of Phase 1 study. The study was initiated in April 2023 and is progressing well.

New NCE/ Patents:

Your Company has strong focus on developing intellectual property and has filed 11 new patents during the year under review. During the same period, 7 patents were granted of which 5 patents were for NCEs. Thus, year after year an impressive success rate for the grant of NCE patents is maintained. As on March 31, 2023, combined pool of the Companys patents has reached 3,239 filings and 810 grants.

Biotechnology Research

Development of Biosimilars and Biobetters is our Biotech R&D teams primary focus area. Biotechnology is viewed by global experts as the Pharmaceutical Technology of the future, and we have a very strong commitment to this field. Our highly accomplished multidisciplinary team of committed Biotechnologists, Biochemists, Biophysicists, Biochemical and Chemical Engineers as well as Protein Chemists is poised to develop Biological Drugs to address unmet clinical needs. Biotechnology R&D team of the Company has succeeded in developing and commercializing Recombinant Hepatitis-B Vaccine (Biovac-B), Recombinant Human Erythropoietin (WEPOX), Recombinant Human Insulin (WOSULIN), Recombinant Insulin Glargine (GLARITUS), which have all been well received in the market.

Your Company has a robust pipeline of recombinant therapeutic proteins for major healthcare needs. Out of these, Recombinant Interferon Alfa 2b and PEGylated G-CSF have already been approved for manufacturing and marketing in India. The overall focus is the development and commercialization of antidiabetic Biosimilar products. Other products at different stages of development are Recombinant Insulin Analogues (Insulin Aspart, Insulin Lispro), Recombinant Darbepoetin, GLP-1 Agonists etc. Pharmacokinetic and Pharmacodynamic (PK/PD) study for Insulin Aspart has been initiated and is estimated to be completed in FY 22-23. E. coli-based platform technology for Insulin has started displaying its potential, as revealed by the scale up studies in Project E, promising more than 24 Kg/batch in Project C and a capacity of ~3 tons/year in the existing plant and with DSP up-gradation a capacity of > 6 tons/annum is achievable. The platform technology offers an opportunity with a surmountable challenge to replicate the same for other Insulin Analogues. E. coli-based platform technology for Insulin Aspart has also been successfully scaled up under Project E.

Biobetters:

Insulin for insulin resistant/higher BMI diabetic patients:

In-house developed Biobetter Recombinant Human Insulin (200IU/mL): Consegna R and Consegna 30/70, have already been launched in India. With 50% volume reduction per dose, Consegna which promises reduced pain and better compliance has been well received in the market.

Biotechnology team is also developing other Biobetter drugs like combination of Insulin and Insulin Analogues; Insulin/Insulin Analogues and GLP-1 agonist for addressing the patients needs, particularly of Insulin Resistant/higher BMI diabetic patients. Preclinical study for one of the Insulin/Insulin Analogue Biobetter drug products is planned to be initiated in 2023-24.

Vaccines:

During the covid-19 pandemic, your Company successfully transferred non-replicating viral vector based covid-19 vaccine technology and carried out process validation at its manufacturing facility. The Company also successfully obtained the necessary regulatory approvals for manufacturing and export of the covid-19 vaccine. However, due to unforeseen event of the Russia-Ukraine conflict, our Russian partner was put under US led sanctions, due to which this business did not take shape as anticipated.

Impact of COVID-19 on use of Medicines

Global spending on medicines from 2020 to 2027 is expected to exceed the pre-pandemic outlook by $497 Billion in aggregate, largely due to new spending on COVID-19 vaccines and novel therapeutics, as well as the impact on other therapeutic areas. Global market growth will return to pre-pandemic projected rates by 2024 despite year-to year fluctuations and geographical variations.

Most regions around the world have exceeded previously projected first wave of COVID-19 vaccination rates, resulting in 530Rs.million more vaccinated people by the end of 2023 than initially modelled. The COVID-19 pandemic has transitioned to a new phase with vaccines and therapeutics available but inconsistently used and resulting periodic emergence of infection and hospitalization surges leaving significant uncertainty in the years ahead.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for the year under review are prepared in compliance with applicable provisions of the Companies Act, 2013 (‘the Act) read with the Rules issued thereunder, applicable Accounting Standards and provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations).

A copy of the Financial Statements of the Subsidiaries shall be made available for inspection at the Registered Office of the Company during business hours. The Audited Financial Statements of the Company including Consolidated Financial Statements and Financial Statements of its Subsidiaries are also available on the website of the Company. Any shareholder interested in obtaining a copy of the separate Financial Statements of the Subsidiary (ies) can make specific request in writing to the Company Secretary and the same will be furnished on request.

The Company discloses Consolidated and Standalone Financial Results on a Quarterly basis which are subjected to Limited Review and publishes Consolidated and Standalone Audited Financial statements on an Annual basis. There were no revisions made to the Financial Statements during the year under review.

DIVIDEND AND RESERVES

The Board of Directors of your Company does not recommend any dividend on the Equity Shares of the Company for the year ended March 31, 2023; and no amount has been transferred to the General Reserve of the Company.

DIVIDEND DISTRIBUTION POLICY

Dividend Distribution Policy of your Company aims at striking the right balance between the quantum of dividend paid to its Shareholders and the amount of profits retained for its business requirements, present and future. The Policy intends to broadly specify various external and internal factors that shall be considered while declaring dividend and the circumstances under which the Shareholders of the Company may or may not expect dividend.

The Policy is available on the website of the Company, at https://www.wockhardt.com/wp-content/uploads/2020/05/dividend-distribution-policy.pdf.

CAPITAL AND DEBT STRUCTURE

During the year under review, the Company had allotted 28,170 Equity Shares of Rs.5 each against exercise of stock options granted under Wockhardt Employees‘ Stock Option Scheme – 2011 (‘the Scheme) on 6th February, 2023 and consequently, theRs. issued, subscribed and paid-up share capital of the Company as on March 31, 2023 increased from Rs. 72,03,00,765 (dividedRs.into 14,40,60,153 equity shares of Rs. 5 each) to Rs. 72,04,41,615 (divided into 14,40,88,323 equity shares of Rs. 5 each). Further 6,250 equity shares were allotted on 5th May, 2023 upon exercise of stock options granted under the Scheme. TheRs.EquityRs.Shares issued under the Scheme ranked pari-passu with the existing equity shares of the Company. Other than the above, there were no other issue/ allotment of Equity Shares, securities convertible into Equity Shares or Debentures during the year under review. The Company does not have any scheme to fund its employees to purchase the shares of the Company. Further, no shares have been issued to employees of the Company except under the Scheme mentioned above. The Company has not issued any shares having differential rights.

During the previous year, the Company had partly repaid its outstanding Debentures and consequently, the details of Non-Convertible Debentures (‘NCDs) outstanding as on March 31, 2023 were as under:

Date of Allotment/ Disbursement No. of (‘NCDs) Issued Issue Price Maturity Date Amount Raised Amount Repaid Face value after part payment Amount Outstanding
28/04/2021 7,500 Rs. 1,00,000/- each 36 months from the date of Allotment Rs. 75 crore Rs. 7.5 crore Rs. 90,000/- each Rs.67.5 crore
12/05/2021 7,500 Rs. 1,00,000/- each 36 months from the date of Allotment Rs. 75 crore Rs. 7.5 crore Rs. 90,000/- each Rs. 67.5 crore
28/05/2021 5,000 Rs. 1,00,000/- each 36 months from the date of Allotment Rs. 50 crore Rs. 5 crore Rs. 90,000/- each Rs. 45 crore
21/10/2021 5,000 Rs. 1,00,000/- each 36 months from the date of Allotment Rs. 50 crore Rs. 5 crore Rs. 90,000/- each Rs. 45 crore

Catalyst Trusteeship Limited is acting as the Trustee for all the aforesaid (‘NCDs).

As on March 31, 2023, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company.

During the year under review, there were no instance where the Company failed to implement any corporate action within the specified time limit.

CREDIT RATINGS

During the year 2022-23, CARE Ratings Limited (‘CARE Ratings) has re-afirmed the Companys ratings for Long-Term Bank Facilities (Fund Based) as "CARE BBB-; Stable" and for Short Term Bank Facilities (Non Fund Based) as "CARE A3". CARERs.RatingsRs.hasRs.also assigned a rating for the Companys Non-Convertible Debentures issue aggregating to Rs. 250 crore as "CARE BBB-; Stable" on September 2, 2022.

Further, India Rating & Research Private Limited has revised the Companys ratings for Long Term Loan Facility of

Rs.Rs. 111.2Rs. crore to "IND BB+/ Stable", Fund Based limits of Rs. 339 crore as "IND BB+/ Stable", Non-Fund Based limits of Rs.Rs.171.2Rs.crore as "IND A4+" and Fund Based /Non-Fund Based Interchangeable limits of Rs. 173.75 crore as "INDRs.BB+/Stable/ IND A4+" on December 22, 2022. The ratings were revised by the Agency inter alia, due to refinancing risks in the medium term, financial performance during 1HFY23 (although Financial Performance on Q2Q basis showed improvement), consolidated debt level (including promoter loans), impact on liquidity due to NCE R&D commitments etc.

EMPLOYEE STOCK OPTION SCHEME

Pursuant to Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and other applicable laws, if any, the required disclosures as on March 31, 2023 are annexed as Annexure I to this Report. The Certificate from the Secretarial Auditor on the implementation of the Scheme in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) ("SEBI SBEB Regulations"), has been uploaded on the website of the Company at https://www.wockhardt.com/wp-content/uploads/2023/07/wl-esos-31-03-2023.pdf and also forms part of the Annexure.

During the year under review, there were no changes in the Employee Stock Option Scheme and the same complies with the SEBI SBEB Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Exim Bank withdrew its nomination of Ms. Rima Marphatia, as Exim Banks Nominee Director on the Board of Directors of the Company on August 3, 2022, consequent to full repayment of loan taken from the Bank. Further, Mr. Pramod Gupta, who was appointed as the Chief Financial Officer of the Company on April 4, 2022 resigned from his position on June 6, 2022 on health grounds. Consequently, based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on June 7, 2022 appointed Mr. Deepak Madnani as the Chief Financial Officer and Key Managerial Personnel of the Company effective that date. The Board places on record its appreciation for the valuable contributions during the short but important tenure of Mr. Gupta as the Chief Financial Officer of the Company. In terms of the provision of Section 152 of the Act Ms. Zahabiya Khorakiwala (DIN: 00102689), Non-Executive Director retires by rotation as a Director at the forthcoming Annual General Meeting (‘AGM) and being eligible, offers herself for re-appointment. The Board recommends the proposal of her re-appointment for the consideration of the Members of the Company at the forthcoming AGM.

All the Independent Directors have furnished ‘Declaration of Independence stating that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations) and there has been no change in the circumstances which may affect their status as Independent Director and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence and that they are independent of the management. The Independent Directors have also afirmed that they have complied with the Companys Code of Business Conduct & Ethics and Code for Independent Directors prescribed in Schedule IV to the Act. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors have also submitted declaration that they have registered themselves on the online data bank of the Indian Institute of Corporate Affairs.

In accordance with the provisions of Section 2(51) and 203 of the Act read with the Companies (Appointment and RemunerationRs. of Managerial Personnel) Rules, 2014, Dr. Murtaza Khorakiwala, Managing Director, Mr. Deepak Madnani, ChiefRs. Financial Officer and Mr. Debashis Dey, Company Secretary & Compliance Officer are the Key Managerial Personnel (‘KMP) of your Company.

None of the Directors are disqualified under Section 164 of the Act. Further, they are not debarred from holding the office of Director pursuant to order of SEBI or any other authority.

MEETINGS OF THE BOARD

During the year under review, 6 (six) meetings of the Board of Directors were held and they have accepted all recommendations made to it by its various committees. The details of these meetings of the Board of Directors are given in the Report on Corporate Governance forming part of this Annual Report.

The maximum interval between any two Board meetings did not exceed 120 days, as prescribed by the Act and the SEBI Listing Regulations.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 of the Act the Directors state that:

(a) in the preparation of Annual Accounts for the year ended March 31, 2023 the applicable Accounting Standards have been followed and that no material departures have been made from the same; (b) such Accounting Policies as mentioned in the notes to the Financial Statements for the year ended March 31, 2023 have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year ended March 31, 2023; (c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Annual Accounts for the year ended March 31, 2023 have been prepared on a going concern basis; (e) the internal financial controls to be followed by the Company have been laid down and that such internal financial controls are adequate and operating effectively; and (f) proper systems to ensure compliance with the provisions of all the applicable laws have been devised and that such systems are adequate and operating effectively.

PERFORMANCE EVALUATION

The Board, on the recommendation of the Nomination and Remuneration Committee have laid down criteria for performance evaluation of the Board of Directors including Independent Directors. Pursuant to the requirement of the Act the SEBI Listing Regulations and considering criteria specified in the SEBI Guidance Note on Board Evaluation, the Board has carried out the Annual Performance Evaluation of the entire Board, Committes and all the Directors based on the parameters as detailed in the Report on Corporate Governance forming part of this Annual Report. The parameters of performance evaluation were circulated to the Directors in the form of questionnaire.

The performance evaluation of the Non-Independent Directors including the Chairman of the Company and performance of the Board as a whole was discussed at the separate meeting of the Independent Directors held on March 14, 2023.

COMMITTEES OF THE BOARD

The Board of Directors has constituted the following Committees: a) Audit Committee b) Nomination and Remuneration Committee c) Stakeholders Relationship Committee d) Corporate Social Responsibility Committee e) Risk Management Committee f) ESOS Compensation Committee g) Finance and Management Committee (Formerly known as Credit Facilities Committee) h) Capital Raising Committee i) Share Allotment Committee

The details of the Committees of the Board along with their composition, number of meetings and attendance at the meetings are provided in the Report on Corporate Governance forming part of this Annual Report.

AUDITORS AND REPORTS OF THE AUDITORS a. STATUTORY AUDITOR

M/s. B S R & Co. LLP, Chartered Accountants (Firms Registration No. 101248W/W-100022), were appointed as the Statutory Auditors of the Company at the 20th Annual General Meeting (‘AGM) of the Company held on August 14, 2019 for a term of 5 (five) years i.e. till the conclusion of ensuing 25th AGM (to be held for the financial year 2023 - 24) at a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors.

The reports of the Statutory Auditors on the Standalone and Consolidated Financial Statements forms part of this Annual Report. The Auditors Report does not contain any qualification, reservation and adverse remark. There were no instances of fraud reported by the Auditors during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the Rules framed thereunder. b. COST AUDITORS

During the year under review, the Company has maintained Cost Records pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time and as recommended by the Audit Committee, the Board of Directors of the Company appointed M/s. Kirit Mehta & Co., Cost Accountants as Cost Auditors to conduct the audit of Cost Record of the Company for the financial year 2023-24. The Company has received consent from M/s. Kirit Mehta & Co. to act as Cost Auditors. Further, pursuant to the aforesaid provisions of the Act the remuneration payable to M/s. Kirit Mehta & Co. for conducting the audit of the Cost Records of the Company for the financial year ending on March 31, 2024 needs to be ratiRs.ed by the Members of the Company and accordingly the resolution for the said ratiRs.cation shall be placed for approval of Members of the Company at the ensuing AGM.

The Cost Auditors Report for the financial year ended March 31, 2023 did not contain any qualification, reservation or adverse remark, and the same was duly filed with the Ministry of Corporate Affairs within the due date during the year under review. Further, there were no instances of fraud reported by the Cost Auditors during the year under review, which required the Cost Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the Rules framed thereunder. c. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and rules made thereunder, the Board on the recommendation of the Audit Committee, has appointed Mr. Virendra G. Bhatt, Practising Company Secretary (COP No. 124) as Secretarial Auditors to conduct Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit Report issued in the Form MR-3 by Mr. Bhatt is self-explanatory and is annexed as Annexure II to this Report.

Pursuant to Regulation 24A of Listing Regulations read with SEBI Circular No. CIR/CFD/CMD1/27/2019 dated February 08, 2019, the Company has obtained the Annual Secretarial Compliance Report for the year under review from a Practicing Company Secretary and submitted the same to the Stock Exchanges where the shares of the Company are listed.

Further, there were no instances of fraud reported by the Secretarial Auditors during the year under review, which required the Secretarial Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the Rules framed thereunder.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, your Company has complied with all the mandated Secretarial Standards issued by the Institute of Company Secretaries of India.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, the Annual Return of the Company in Form MGT-7 has been placed on the Companys website and can be accessed using the link viz. https://www.wockhardt.com/investors/annual-return/.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, ‘CSR Policy as recommended by the CSR Committee and approved by the Board is uploaded on the website of the Company and can be accessed using the link https://www.wockhardt.com/wp-content/uploads/2020/05/csr-policy.pdf. The average Net Profit of the Company for the immediately preceding 3 financial years calculated as per Section 198 of the Act was negative. Hence, no amount was required to be spent on CSR activities during the financial year 2022-23. TheRs.details on CSR activities as required under the Act and the Relevant rules as amended from time to time, is annexed as Annexure III to this Report.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

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

The appointment of a Director is made pursuant to the recommendation of Nomination and Remuneration Committee (‘NRC). The remuneration of Executive Directors comprises of Basic Salary, Perquisites & Allowances, and follows applicable requirements as prescribed under the Act. Approval of Shareholders for payment of remuneration to such Executive Directors is sought, from time to time.

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

A brief of the Remuneration Policy on the appointment and remuneration of Directors, KMP and Senior Management is provided in the Report on the Corporate Governance forming part of this Annual Report. Further, the Policy is available on the website of the Company and the web link thereto is https://www.wockhardt.com/wp-content/uploads/2020/05/wl-remuneration-policy.pdf NRC has also formulated criteria for determining qualifications, positive attributes and independence of a Director and the same have been provided in the Report on Corporate Governance forming part of this Annual Report.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include well defined policies, guidelines, Standard Operating Procedures (‘SOPs), authorization and approval procedures and technology intensive processes. The internal financial controls of the Company are adequate to ensure the accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient Rs.manner. The Company continues with its past practice of a co-sourced model for Internal Audit. The Companys internal audit team is assisted by M/s. Ernst and Young, who carry out internal audit reviews in accordance with the approved Internal Audit Plan. The Internal Audit team reviews the status of implementation of internal audit recommendations. Summary of critical observations, if any and recommendations under implementation are reported to the Audit Committee.

During the year under review, M/s. Ernst and Young has reviewed the self-assessment tool on the adequacy of Internal Financial Control (‘IFC) process of the Company in accordance with the requirement of the Act. There were no material adverse observations noted in this review.

RISK MANAGEMENT

The Board has constituted a Risk Management Committee comprising of Dr. Habil Khorakiwala as Chairman, Mr. Davinder Singh Brar, Independent Director and Dr. Murtaza Khorakiwala, Managing Director as its members. During the financial year under review, the Risk Management Committee met twice and the details of these meetings are given in the Report on Corporate Governance forming part of this Annual Report.

Enterprise Risk Management (ERM) framework encompasses practices relating to the identification, analysis, evaluation, mitigation and monitoring of the strategic, external and operational controls risks in achieving key business objectives. The Company identifies and tries to mitigate risks that matter on an ongoing basis. Risk Management Policy approved by the Board is in place. Risk management is embedded in strategic business decision-making of the Company.

The current key risk relates to regulatory risk on overseas operations and business. This is arising out of periodic regulatory audits at the Companys manufacturing locations, which are being adequately addressed through strengthening of the current processes and controls by the Companys internal quality assurance and manufacturing teams and through the help of reputed external consultants. There are no risks, which in the opinion of the Board, threaten the existence of your Company. Other details about Risk Management have also been elaborated in the Report on Corporate Governance forming part of this Annual Report.

INSURANCE

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

GREEN INITIATIVE

Your Company regularly undertakes green initiatives to preserve the environment, which includes energy saving, water conservation and usage of electronic mode in internal processes & control, statutory and other requirements. Shareholders, who have not already done so, are requested to register their e-mail IDs with the Depositories/ RTA/ Company, as the case may be, for receiving all communication from the Company electronically.

POLICIES

For better conduct of operations and in compliance with regulatory requirements, your Company has framed and adopted certain policies. In addition to the Companys Code of Business Conduct and Ethics, key policies/codes that have been adopted by the Company are as follows:

Name of the Policy/ Code Brief Description Web Link
Policy for determining Materiality of Events Archival Policy This Policy aims to determine Materiality of events/ information. The Policy deals with archival of the Companys records https://www.wockhardt.com/wp-content/ uploads/2020/05/policy-determining- materiality-of-events.pdf https://www.wockhardt.com/wp-content/
Policy for determining Material and documents. The Policy determines the material subsidiaries and of uploads/2020/05/archival-policy.pdf https://www.wockhardt.com/wp-content/
Subsidiaries the Company and to provide the governance framework forfithem. uploads/2022/08/pms-31122.pdf
Policy on Materiality of and Dealing with Related Party Transactions The Policy regulates all transactions between the Company and its related parties. https://www.wockhardt.com/wp-content/ uploads/2022/08/prt-31122.pdf
Vigil Mechanism / Whistle Blower Policy The Company has adopted the Vigil Mechanism for Directors and Employees of the Company to report concerns about unethical behaviour, actual or suspected fraud, or violation of the Companys code of conduct. https://www.wockhardt.com/wp-content/ uploads/2020/05/whistle-blower- policy-04-03-20.pdf
Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information The Code determines the principles for fair disclosure of Unpublished Price Sensitive Information. https://www.wockhardt.com/wp-content/ uploads/2020/05/code-of-fair-disclosur-of- upsi-2-4-19.pdf
Corporate Social Responsibility Policy The Policy outlines the Companys strategy to bring about a positive impact on the society through programs relating to education, healthcare, environment, etc. https://www.wockhardt.com/wp-content/ uploads/2020/05/csr-policy.pdf
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. https://www.wockhardt.com/wp-content/ uploads/2020/05/wl-remuneration-policy.pdf

 

Name of the Policy/ Code Brief Description Web Link
Dividend Distribution Policy The Policy determines the parameters/ basis for declaration of dividend. https://www.wockhardt.com/wp-content/ uploads/2020/05/dividend-distribution- policy.pdf
Policy on Preservation of Records The Policy deals with periodicity of retention of the Company records and documents. https://www.wockhardt.com/wp-content/ uploads/2023/07/policy-for-preservation-of- documents.pdf
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. https://www.wockhardt.com/wp-content/ uploads/2023/07/risk-management-policy. pdf
Forex Risk Management Policy The Policy defines, identifies, measures, manages, mitigates and reviews potential risks pertaining to fluctuations in Foreign Exchange. https://www.wockhardt.com/wp-content/ uploads/2023/07/forex-risk-management- policy.pdf
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 and their Immediate relatives. https://www.wockhardt.com/wp-content/ uploads/2023/07/prohibition-of-insider- trading-code.pdf
Anti-bribery and Anti-corruption Policy The Policy provides for the 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. https://www.wockhardt.com/wp-content/ uploads/2023/04/anti-bribery-and- corruption-policy.pdf
Human Right Policy The 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. https://www.wockhardt.com/wp-content/ uploads/2023/04/human-rights-policy.pdf
Stakeholder Grievance Policy The Policy aims to create a sustainable environment by laying out a mechanism through which relevant Stakeholders, who may be affected by or can influence organisations decisions may communicate and convey their grievances and suggestions to the Company. https://www.wockhardt.com/wp-content/ uploads/2023/04/stakeholders-relationship- policy.pdf
Acceptable usage Policy for IT System The Policy outlines the acceptable use of computing equipment and information security awareness. https://www.wockhardt.com/wp-content/ uploads/2023/07/acceptable-usage-policy- for-it-systems.pdf
Business Responsibility and Sustainability Policy The Policy outlines the Company?s view on and overall ambitions in the sustainability segment, which serves as a broad framework for the whole growth. https://www.wockhardt.com/wp-content/ uploads/2023/04/business-responsibility- and-sustainability-policy.pdf
Environment, Health, Safety and Sustainability (EHS&S ) Policy The Policy aims at ensuring a safe and healthy work environment, taking active steps to ensure goal of zero accidents and Environmental incidences through continual improvement of the applicable systems. https://www.wockhardt.com/wp-content/ uploads/2023/04/environment-health-safety- sustainability-policy.pdf
Anti – Trust and Fair Competition Policy The Policy provides for Wockhardts commitment to Antitrust and Competition Laws to conduct business in a Fair, Ethical and Transparent manner demonstrating zero tolerance towards "Unfair Methods of Competition" and "Unfair or Deceptive acts or Practices". https://www.wockhardt.com/wp-content/ uploads/2023/04/anti-trust-and-fair- competition-policy.pdf
Diversity Inclusion and Equal Opportunity Policy Communication Policy The Policy sets out the principles and requirements by which Wockhardt will enhance the diversity, equity and inclusion throughout the organization. The Policy outlines prompt communication of any information to the public, including those that could have a significant effect on the price of its securities, such as shares, debentures and bonds, if any. https://www.wockhardt.com/wp-content/ uploads/2023/04/diversity-inclusion-and- equal-opportunity-policy.pdf https://www.wockhardt.com/wp-content/ uploads/2023/04/communications-policy.pdf
Familiarisation Program The Policy ensures that the Independent Directors are familiarised with with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the company operates, business model of the Company etc. through various programs. https://www.wockhardt.com/investors/ corporate-governance/familiarisation- programs/
Terms of appointment of ID The terms comprises of Role, Duties and Responsibilities, accompanying liabilities, etc for the Independent Directors ("ID"). https://www.wockhardt.com/wp- content/uploads/2020/05/draft-letter-of- appointment-of-independent-diector- including-terms-of-reference.pdf
Cyber Security Policy This Policy outlines implementation of robust security measures and establishes guidelines for the responsible use and protection of digital assets. https://www.wockhardt.com/wp-content/ uploads/2023/07/wockhardt-cybersecurity- policy.pdf
Code of Business Conduct and Ethics This Code is intended to focus the Board, each director and each of the Senior Management personnel on areas of ethical risk, provide guidance to help them recognise and deal with ethical issues, provide mechanism to report unethical conduct, and help foster a culture of honesty and accountability. https://www.wockhardt.com/wp-content/ uploads/2023/07/code-of-business-conduct- and-ethics.pdf

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

The particulars of loans, investments and guarantees covered under the provisions of Section 186 of the Act are provided under Note 6 in the Notes to financial statements forming part this Annual Report.

PARTICULARS OF CONTRACTS/ ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2022-23, all contracts/ arrangements/ transactions entered into by the Company with its related parties were reviewed and approved by the Audit Committee and were in accordance with the Policy on dealing with and materiality of related party transactions and the related party framework, formulated and adopted by the Company. Prior omnibus approvals were obtained from the Audit Committee for related party transactions which were repetitive in nature, entered in the ordinary course of business and on an arms length basis. No transaction with any related party was in conflict with the interest of the Company.

The Company did not enter into any related party transaction directly with its Key Managerial Personnel or their relatives. The details of related party transactions are provided under Note 40 in the Notes to financial statements forming part of this Annual Report.

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

VIGIL MECHANISM

Pursuant to the requirements laid down under Section 177 of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has well laid down Vigil Mechanism. The details of the same are provided in the Report on Corporate Governance forming part of this Annual Report. During the year under review, the Company did not receive any complaint under VigilRs.Mechanism.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosure with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been annexed to this Report as Annexure V.

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANY

As on March 31, 2023 the Company had total of 29 Subsidiaries. There are no associates or joint venture companies within the meaning of Section 2(6) of the Act.

During the year under review, Laboratories Pharma 2000 S.A.S, Niverpharma S.A.S, Negma Beneulex S.A. and Phytex S.A.S were wound up and hence ceased to be the Subsidiaries of the Company.

In accordance with Section 129(3) of the Act a statement containing salient features of the Subsidiaries of the Company is provided in Form AOC-1 annexed as Annexure VII to this Report.

DEPOSITS

During the year under review, your Company has not accepted any Deposits under Chapter V of the Act and as such, no amount on account of principal or interest on Deposits from the Public was outstanding as on March 31, 2023.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company strongly believes in providing a safe and harassment-free workplace for every individual working for the Company through various interventions and practices. It is the continuous endeavor of the Management of the Company to create and provide an environment to all its associates that is free from sexual harassment. Pursuant to the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 the Company has constituted Internal Committees (IC) across all the locations which are responsible for redressal of complaints related to sexual harassment at respective locations. The Company arranged various interactive awareness workshops in this regard for the Associates at all the manufacturing sites & Corporate Office during the year under review. During the financial year 2022-23, the Company did not receive any complaints on sexual harassment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT

There are no significant and material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and operations of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENTS OCCURRED AFTER THE END OF FINANCIAL YEAR

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

MANAGEMENT DISCUSSION & ANALYSIS (MDA)

MDA for the year under review, as stipulated under the SEBI Listing Regulations, is presented in a separate section which forms a part of this Annual Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

The Business Responsibility and Sustainability Report of the Company for the year ended March 31, 2023, is provided in a separate section and forms part of this Annual Report and is also made available on the website of the Company at www.wockhardt.com.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a Certificate from Practicing Company Secretary confirming the compliance of the conditions of Corporate Governance forms a part of this Annual Report.

STATUTORY INFORMATION AND OTHER DISCLOSURES a. A detailed disclosure with regard to the unclaimed dividend required to be transferred to IEPF by your Company forms part of the Report on Corporate Governance; b. No application has been made under the Insolvency and Bankruptcy Code hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable; c. There were no deviation or variation in connection with the terms of Rights Issue; d. During the year under review, there was no change in the nature of business of the Company; e. There was no revision of Financial Statements and the Boards Report of the Company during the year under review; f. The requirement to disclose the details of difference between the amount of the valuation done at the time of one time settlement and the valuation done while taking a loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors

HABIL KHORAKIWALA

Chairman DIN: 00045608 Place : Mumbai Date : May 26, 2023