Wockhardt Ltd Directors Report.

To the Members of Wockhardt Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Wockhardt Limited ("the Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

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

Revenue recognition

The Key Audit Matter How the matter was addressed in our audit
The Company recognises revenue from sale of goods when control over the goods is transferred to the customer. The actual point in time when revenue is recognised varies depending on the specific terms and conditions of the sale contracts entered into with customers. Our audit procedures included the following:
Revenue is a key performance indicator of the Company and there is risk of overstatement of revenue due to fraud resulting from pressure to achieve targets, earning expectations or incentive schemes linked to performance. • We have assessed the Company’s accounting policies relating to revenue recognition by comparing with applicable accounting standards.
Given the risk of overstatement of revenue due to fraud, this is a key audit matter. • We have evaluated the design, implementation and operating effectiveness of the Company’s key internal control over revenue recognition.
Refer note 3(j) of accounting policy and note 39 in standalone financial statements. • We have examined the samples, selected using statistical sampling, of revenue recorded during the year with the underlying documentation.
• We have performed cut off procedures by selecting samples, using statistical sampling, of revenue recorded as at the period end.
• We have examined the manual journals posted to revenue during the year to identify unusual or irregular items.
• We have assessed the adequacy of the disclosures made in respect of revenue from sale of goods.

Assessment of recoverability of carrying value of certain Property, Plant and Equipment and Capital Work in progress

The Key Audit Matter How the matter was addressed in our audit
Certain property, plant and equipment of the Company is affected by lower capacity utilization. Our audit procedures included the following:
Further, the Company has made investments in certain projects which has been deferred. These are lying in capital work in progress. • We have assessed the Company’s accounting policies relating to impairment by comparing with applicable accounting standards.
The Company’s investment in these facilities was made considering market feasibility and potential of existing / future products. • We have inquired the progress made on remediation work for facilities impacted due to regulatory approvals with key managerial personnel.
As at 31 March 2022, carrying value of such Property, Plant and Equipment and Capital Work in Progress amounts to 455 crores and Rs.58 crore respectively Given the significance of carrying value and judgement involved in assessing the recoverability of such facilities this is considered to be a key audit matter. • We have verified the reports of physical verification of property, plant and equipment and capital work in progress by the Company.
Refer note 3(d) and 3(q) of accounting policy and note 4, 40 and 48(a) in standalone financial statements • We have assessed the capabilities and objectivity of the experts (internal and external) used by the Company in the process of verification of assets, assessing the usability of assets and determining recoverable amounts, where required.
• We have evaluated the basis applied by the Company in determining cash generating unit for impairment testing purpose.
• We have challenged the significant assumptions considered by the Company while making impairment assessment with respect to revenue forecast, margin and discount rate.
• We have involved our valuation specialists to assess the valuation methodologies applied by the Company to determine the recoverable amount for certain assets.

Recoverability of carrying value of Intangible assets under development

The Key Audit Matter How the matter was addressed in our audit
The Company has intangible under development amounting 756 Crore as at 31 March 2022. Our audit procedures included the following:
These acquired intangible under development is in relation to the New Chemical Entities (NCE). • We have assessed the Company’s accounting policies relating to intangible under development by comparing with applicable accounting standards.
Company has acquired NCE amounting to Rs.336 Crore during the current year. • We have inquired the progress made on NCE development with the key managerial personnel.
The carrying value of such intangible under development is tested for recoverability, based on the estimates future cash flows, market conditions, etc. • We have inspected the correspondences with regulatory authorities, third parties, scientific documentation and the market release made by the Company.
Changes in these assumptions could lead to an impairment to the carrying value of these intangible under development Given the significance of the amount involved and the estimates and judgement involved in assessment of their recoverability, this is considered to be a key audit matter. • We have evaluated the Company’s assessment of estimated future cash flows relating to the NCE project and their recoverability plans.
Refer note 3(b) of accounting policy and note 5 in standalone financial statements. • We have obtained and verified the purchase agreement for NCE acquired during the year.
• We have assessed the capabilities and objectivity of the external expert used by the Company in determining the fair value of the NCE purchased during the year.

Other Information

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the financial statements and our auditors’ report thereon.

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

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

Management’s and Board of Directors’ Responsibility for the Standalone Financial Statements

The Company’s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

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

• E valuate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant de ciencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order, 2020 ("the Order") issued by the Central Government in terms of section 143 (11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account. d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act. f) With respect to the adequacy of the internal financial controls with reference to financial statements of the

Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". (B) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 45 to the standalone financial statements;

b) The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

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

d) (i) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party

provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d)(i) and (d)(ii) contain any material mis-statement.

e) The Company has neither declared nor paid any dividend during the year.

(C) With respect to the matter to be included in the Auditors’ Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No. 101248W/W-100022
Koosai Lehery
Partner
Membership No.: 112399
ICAI UDIN: 22112399AJWETT7833
Place : Mumbai
Date : 30 May 2022

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT 31 MARCH 2022

With reference to the Annexure A referred to in the Independent Auditors’ Report to the members of the Company on the standalone financial statements for the year ended 31 March 2022, we report the following (i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme of physical verification of its Property, Plant and Equipment by which all property, plant and equipment are verified in a phased manner over a period of three years. In accordance with this programme, certain property, plant and equipment were verified during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company, except for the following which are not held in the name of the Company:

Description of property Gross carrying value (INR in crs) Held in name of Whether promoter, director or their relative or employee Period held – indicate range, where appropriate Reason for not being held in name of company
Freehold land 0.31 Mr. Habil Khorakiwala Promoter & Director 18 years The Company is in the process of
Building 0.91 Former employees Former employees 26 years transferring the assets in the name of the Company

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.

(e) According to information and explanations given to us and on the basis of our examination of the records of the

Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(ii) (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the year. For stocks lying with third parties at the year -end, written confirmations have been obtained and for goods-in-transit subsequent evidence of receipts has been linked with inventory records. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were more than 10% in the aggregate of each class of inventory.

(b ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. In our opinion, the quarterly returns or statements filed by the Company with such banks or financial institutions are in agreement with the books of account of the Company except as follows:

Quarter Name of bank Particulars Amount as per books of account (INR in crores) Amount as reported in the quarterly return/ statement (INR in crores) Amount of difference (INR in crores) Whether return/ statement subsequently recti ed
-State Bank of India
-ICICI Bank Limited
-Punjab National Bank
-IDBI Bank Limited Trade
Sep-21 -Bank of Baroda Receivables 1,031.94 1059.83 (27.89) No

(iii) According to the information and explanations given to us and on the basis of our examination of the records of the

Company, the Company has not provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, limited liability partnership or any other parties during the year. The Company has made an investment of Rs.0.05 crores in a company. The Company has not made any investments in firms, limited liability partnership or any other parties.

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT 31 MARCH 2022

(a) Based on the audit procedures carried on by us and as per the information and explanations given to us, the Company has not granted any loans to subsidiaries or to a party other than subsidiaries. Accordingly, clause (iii)(c) to (iii)(f) of the Order are not applicable to the Company.

(b ) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investment made during the year is, prima facie, not prejudicial to the interest of the Company.

(iv) According to the information and explanations given to us and on the basis of our examination of records of the

Company, in respect of investments made and loans, guarantees and security given by the Company, the provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the

Central Government for maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of its manufactured goods (and/or services provided by it) and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination of the records with a view to determine whether these are accurate or complete.

(vii) (a) The Company does not have liability in respect of Service tax, Duty of excise, Sales tax and Value added tax during the year since effective 1 July 2017, these statutory dues has been subsumed into GST. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Goods and Services Tax (‘GST’), Provident fund, Employees’ state insurance, Income-tax, duty of customs, cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed statutory dues in respect of provident fund, employees’ state insurance, income-tax, goods and services tax, duty of customs, cess and other material statutory dues were in arrears as at 31 March 2022 for a period of more than six months from the date they became payable.

(b ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, details of dues of Income-tax, Sales-tax, Service tax, Duty of Excise, Goods and Services tax, Customs Duty and Value added tax which have not been deposited as at 31 March 2022 on account of disputes are given in Enclosure I to this report. (viii) According to the information and explanations given to us and on the basis of our examination of the records of the

Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

(ix) (a) Loans (including interest) amounting to INR 574 crores are repayable on demand and terms and conditions for payment of interest thereon have not been stipulated. According to the information and explanations given to us, such loans and interest thereon have not yet been demanded for repayment during the relevant financial year. In respect of other loans and borrowings and interest thereon, according to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in repayment of any other loans and borrowing or in the payment of interest thereon to any lender.

(b ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a wilful defaulter by any bank or financial institution or government or government authority.

(c) In our opinion and according to the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(d) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the company, we report that the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures as defined under Companies Act, 2013.

(f ) According to the information and explanations given to us and procedures performed by us, we report that the company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies (as defined under Companies Act, 2013).

(x) (a) In our opinion and according to the information and explanations given to us, the Company has utilised the money raised by way of initial public offer/ further public offer (including debt instruments) for the purposes for which they were raised except for an amount of Rs.189 crore which is unutilized as on the balance sheet date and parked in bank accounts.

(b ) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT 31 MARCH 2022

(xi) (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit.

(b ) According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the

Companies Act, 2013 has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government. (c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause

3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, and the details of the related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. (xiv) (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(b ) We have considered the internal audit reports of the Company issued till date for the period under audit.

(xv) In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Accordingly, clause 3(xvi)(a) of the Order is not applicable.

(b ) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

Accordingly, clause 3(xvi)(b) of the Order is not applicable.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of

India. Accordingly, clause 3(xvi)(c) of the Order is not applicable.

(d) The Company is not part of any group (as per the provisions of the Core Investment Companies (Reserve Bank)

Directions, 2016 as amended). Accordingly, the requirements of clause 3(xvi)(d) are not applicable.

(xvii) The Company has incurred cash losses of Rs.46 crores in the current year. The Company has not incurred cash losses in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

(xx) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of section 135 of the Companies Act, 2013 pursuant to any project. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No. 101248W/W-100022
Koosai Lehery
Partner
Membership No.: 112399
ICAI UDIN: 22112399AJWETT7833
Place : Mumbai
Date : 30 May 2022

ENCLOSURE I TO ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT 31 MARCH 2022

Name of the statute Nature of dues Amount* ( in crore) Period to which the amount relates Forum where dispute is pending
Central Excise Act, 1944 Goods destroyed in fire accident. Demand, Interest and Penalty towards exemption availed in EOU Unit. 4.44 21.22 April 2005 to March 2009 May 2004 to March 2007 CESTAT, Ahmedabad CESTAT, Mumbai
Demand, Interest and Penalty for exempted goods cleared. 18.96 November 2006 to April 2013 CESTAT, Mumbai
Education cess on Export Consignments 0.02 April 2005 to March 2006 Joint Commissioner
UP VAT/CST Act Demand under Section 28 & Section 9(2) 0.25 April 2009 to March 2010 Addl. Commissioner Grade 2 (Appeals), U.P
Sales Tax Due to under Invoicing and late deposit of tax 0.08 2003-04 to 2005-06 Joint Commissioner (Appeals), U.P
Demand under Section 28 & Section 9(2) 0.29 April 2008 to March 2009 Addl. Commissioner Grade 2 (Appeals) first, Ghaziabad
WB VAT/CST Act Demand under various Sections 1.43 2007-08 UP 2014-15 Commissioner (Appeals), West Bengal
Kerala VAT Act Demand under Section 21 0.16 April 2011 to March 2014 Commissioner (Appeals), Kerala
Gujarat VAT Act Additional tax on Fuel consumption 0.60 April 2010 to March 2013 Joint Commissioner (Appeals), Gujarat
Central Sales Tax/ VAT Act Demand under CST and Goa VAT Act 1.25 2006-2007 Addl. Commissioner of Commercial Tax, Goa
Demand under MVAT Act 3.04 April 2009 to March 2010 Maharashtra Sales Tax Tribunal
Demand under CST Act 0.41 April 2009 to March 2010 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 0.71 April 2009 to March 2010 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 19.39 April 2010 to March 2011 Maharashtra Sales Tax Tribunal
Demand and Penalty under CST Act 2.59 April 2010 to March 2011 Maharashtra Sales Tax Tribunal
Demand under CST Act 6.28 April 2011 to March 2012 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 7.85 April 2011 to March 2012 Maharashtra Sales Tax Tribunal
Demand and Penalty under MVAT Act 8.72 April 2012 to March 2013 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 0.76 April 2012 to March 2013 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 4.16 April 2013 to March 2014 Maharashtra Sales Tax Tribunal
Demand under CST Act 0.27 April 2013 to March 2014 Maharashtra Sales Tax Tribunal
Demand under MVAT Act 14.03 April 2014 to March 2015 Joint Commissioner (Appeals)
Demand under CST Act 1.40 April 2014 to March 2015 Joint Commissioner (Appeals)
Demand under MVAT Act 4.09 April 2015 to March 2016 Deputy Commissioner
Demand under CST Act 0.13 April 2015 to March 2016 Deputy Commissioner
Demand under MVAT Act 3.91 April 2016 to March 2017 Joint Commissioner (Appeals)
Demand under CST Act 0.55 April 2016 to March 2017 Joint Commissioner (Appeals)
Demand under MVAT Act 0.79 April 2017 to March 2018 Joint Commissioner (Appeals)
Demand under CST Act 0.31 April 2017 to March 2018 Joint Commissioner (Appeals)
Demand Under MVAT Act 1.25 1992-93 to 1997-98 Joint Commissioner (Appeals)
Goods and Services Tax Act, 2017 Interest on late filing of GST returns of Himachal Pradesh for the period Jul17 to Dec17 due to technical glitches on GST portal 0.59 July 2017 to December 2017 Pending with First appellate authority
Recovery of excess refund issued on account of exports value was wrongly considered i.e. lower of statement-2 and FOB value. 1.66 April 2018 to March 2019 Pending with First appellate authority
Demand for GST, Penalty and 0.24 April 2017 to March 2018 Assistant Commissioner,
Interest towards short / non payment of taxes on account of certain products, transitional credits. CGST Audit Commissionerate
Authorities are challenging the ITC credit received from Input Service distributors in 2019-20 and refund is rejected on technical glitch in GSTN portal. 2.06 April 2019 to March 2020 Additional Commissioner (Appeals)
The Finance Act, 1994 (Service Tax) Interest and penalty on non- payment of Service Tax on Import of certain services 0.81 April 2005 to March 2010 CESTAT, Mumbai
Interest on non-payment of Service Tax on Import of certain services 0.07 April 2011 to March 2012 CESTAT, Mumbai
Custom Act, 1962 Customs Duty, Penalty and Interest 0.39 June 2012 to November 2014 CESTAT, Mumbai
Customs Duty, Penalty and Interest 0.25 January 2013 to March 2015 CESTAT, Mumbai
Income tax Act, 1961 Demand under Section 143(3) 4.04 FY 2003-04 High Court
Demand under Section 143(3) 26.02 FY 2006-07 High Court
TDS Assessment order u/s 201/201(A) 1.99 FY 2009-10 Commissioner of Income Tax (Appeals) - TDS
Demand under Section 143(3) 20.17 FY 2010-11 Commissioner of Income Tax (Appeals)
Demand under Section 143(3) 253.12 FY 2011-12 Commissioner of Income Tax (Appeals)
Demand under Section 143(3) Nil FY 2012-13 Income Tax Appellate Tribunal
Demand under Section 143(3) Nil FY 2013-14 Commissioner of Income Tax (Appeals)
TDS (TRACES) 0.31 January 2012 to December 2017 TDS officers
TDS Assessment order u/s 201/201(A) 43.51 FY 2012-13 Commissioner of Income Tax (Appeals) - TDS
TDS Assessment order u/s 201/201(A) 36.30 FY 2013-14 Commissioner of Income Tax (Appeals) - TDS
TDS Assessment order u/s 201/201(A) 46.33 FY 2014-15 Commissioner of Income Tax (Appeals) - TDS
Demand under Section 143(3) Nil FY 2016-17 Commissioner of Income Tax (Appeals)
Demand under Section 143(3) Nil FY 2017-18 Commissioner of Income Tax (Appeals)

Note 1: The aforesaid amounts under Income Tax Act, 1961 are net off the below claims made by the assessee, pending formal acceptance by the tax authorities for the relevant benefit.

Financial Year Amount Pending acceptance by Tax authorities for
(in Crs)
2012-13 67.29 Order giving effect (OGE) to the favourable order of CIT(A) and rectification effect arising out of order for FY 2011-12
2010-11 27.33 Eligibility for entitlement and set-o of MAT credit utilisation, arising out of the effect of OGE to the favourable order of CIT(A) for FY 2009-10
2013-14 21.00 Rectification application for granting credit for TDS deducted by non-resident
2016-17 65.74 Rectification application for adjusting brought forward Losses for FY 2015-16
2017-18 36.21 Rectification application for adjusting MAT entitlement Credit for FY 2013-14 and FY 2014-15

Note 2: The aforesaid amounts under Income Tax Act, 1961 does not include demand against which the favorable order has been received by the assesse but has been further appealed by tax authorities at higher level.

Financial Year Amount Forum where dispute is further appealed
(in Crs)
2000-01 5.00 High Court
2004-05 12.68 High Court
2007-08 0.45 High Court

* Out of the above, amount paid/adjusted under protest by the Company for Excise, VAT, Service tax, Custom Duty, GST and income tax is 0.47 Crore, 44.64 Crores, 0.15 Crores, 0.22 Crores, 3.72 Crores and 85.71 Crores.

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT ON THE STANDALONE FINANCIAL STATEMENTS OF WOCKHARDT LIMITED FOR THE YEAR ENDED 31 MARCH 2022

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

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

Opinion

We have audited the internal financial controls with reference to financial statements of Wockhardt Limited ("the Company") as of 31 March 2022 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "Guidance Note").

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as "the Act").

Auditors’ Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

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

Meaning of Internal Financial controls with Reference to Financial Statements

A company’s internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to Financial Statements

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

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No. 101248W/W-100022
Koosai Lehery
Partner
Membership No.: 112399
ICAI UDIN: 22112399AJWETT7833
Place : Mumbai
Date : 30 May 2022