Note 17.1
25,000 13.75% Secured Non-Convertible Debentures of ' 38, 600 each aggregating 97 crore has been repaid and security given against the aforesaid debentures stands released.
Note 17.2
Loan from STCI Finance Limited with interest rate 12.40% (Previous year- 13%) is secured by way of first paripassu charge on present and future movable fixed assets of the Company and, pledge of shares of Company held by Themisto Trustee Company Private Limited which holds these shares in its capacity as the trustee of Habil Khorakiwala Trust, Which in turn holds these shares in its capacity as the partner of the Partnership firm Humuza Consultants.
The above loan shall be repaid at the end of 36 months with a call/put option every 6-12 months, and has been shown under 'Current Maturities of long term debt'.
Note 17.3
Loans from GOI carry interest rate of 3% p.a. Loan amounting to ' 2 crore (Previous year- ' 2 crore) is repayable in equal annual instalments by March 2029.
Note 17.4
Current maturities of the above borrowings have been disclosed under Note 19.
Note 17.5
Borrowings from related parties amounting ' 936 crore are repayable by June 20, 2027 with an option to the Company to further renew the loan basis Company's assessment of the cash flows and liquidity position on that date
Loans from related parties carry interest rate in the range of 6.05 % p.a to 13.10 % p a.
Note 19.1
Working capital facilities from Banks are secured by way of :
(i) First charge on pari passu basis on present and future stock of raw materials, consumables, spares, semi-finished goods, finished goods, book debts and other current assets.
(ii) Second charge on pari passu basis by way of mortgage of immovable properties and hypothecation of movable fixed assets, both present and future, located at all locations (other than Units at Kadaiya in Daman).
Note 19.2
Purchase financing from financial institution is secured against unconditional and irrevocable Bank Guarantees that stands as guarantee under this facility.
Note 19.3
Refer note 12 to 14 for carrying amount of current financial assets on which charge has been created.
The identification of micro and small enterprises is basis intimation received from vendors
In the previous year, the Company had written back interest amounting to ' 19 crore with respect to delayed payments to MSME vendors , basis the ageing of the dues, confirmation received from the vendors, considering the relevant regulatory provision, and basis the opinion obtained from external lawyer.
@ Professional services fee relating to issuance of shares on Qualified Institutional Placement basis amounting to ' 0.50 crore (Previous year- ' 0.42 crore) has been netted off from equity, hence, not included above.
32. During the previous year, Impairment of asset held for sale, consists of further impairment of nutrition business assets (classified as 'asset held for Sale') amounting ' 79 crore, basis quote received from prospective buyers.
Asset held for sale as on the balance sheet date consists of lands situated at Gujarat, Maharashtra and Punjab.
Efforts to sell the above assets classified as held for sale have commenced and a sale is expected to be concluded not beyond March 2026.
33. SEGMENT REPORTING
As the Company's annual report contains both Consolidated and Standalone Financial Statements, segmental information is presented only in the Consolidated Financial Statement.
The weighted average incremental borrowing rate used for discounting is in the range of 7.30% to 9.65%
Refer Note 28 for Interest on lease Liabilities
Also refer Note 4 for details of Right-of-Use Assets and depreciation thereon.
The summary of practical expedients elected on initial application are as follows:
The Company has availed the exemption of not recognising right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.
The Company's lease asset classes primarily consist of leases for land and buildings .The leases for land/buildings are generally for a period ranging 10 years to 99 years. These leases can be extended for further 10 years to 99 years by mutual consent. Office premises are generally for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms. There are no restrictions imposed by lease arrangements or contingent rent payable. Certain portion of the land has been subleased.
In case of land that have been leased out for 95 years to 99 years, there are no material annual payments for the aforesaid leases.
Rental expenses on leases for a period of less than 12 months amounting to ' Nil (Previous year- Nil) and rent for low value assets amounting to ' 0.01 crore (Previous year- ' 0.18 crore) have been included under "Note 29 - Other expenses" under Rent.
Further, Refer Note 43 for maturity profile of lease liabilities.
35. EXCEPTIONAL ITEMS:
Exceptional Items booked during previous year amounting ' 14 crore consists of provision made against certain inventory purchased pursuant to a contract manufacturing agreement, the contractual obligations and commitments of which was not fulfilled by the customer.
38. EMPLOYEE BENEFITS
(A) Defined benefit plans:
Gratuity liability is provided in accordance with the provisions of the Payment of Gratuity Act, 1972 based on actuarial valuation. The plan provides a lump sum gratuity payment to eligible employee at retirement Termination of their employment or death of the Employee. The amounts are based on the respective employee's last drawn salary and the years of employment with the Company. The most recent actuarial valuation of the defined benefit obligation was carried out at the balance sheet date. The present value of the defined benefit obligations and the related current service cost and past service cost were measured using the Projected Unit Credit Method.
Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation as at balance sheet date:
Notes:
(a) Amount recognised as an expense in the Statement of Profit and Loss and included in Note 27 under Salaries and wages:
Gratuity ' 4 crore (Previous year - ' 4 crore) and Compensated Absences ' 4 crore (Previous year - ' 4 crore).
The above amount includes amount pertaining to Key Managerial personnel ' 1 crore (Previous year- ' 1 crore)
(b) The plan above is typically exposed to actuarial risk such as Mortality risk, withdrawal rate risk and salary risk
- Mortality risk: The present value of the Defined benefit plan liability is calculated by reference to the best estimate of
the mortality plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.
- Withdrawal rate risk: The plan faces the withdrawal rate risk. If the actual withdrawal rate is higher, the benefits would be paid earlier than expected.
- Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
(c) Expected Employers contribution for the next year is Nil
The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
(B) Defined contribution plan -
The Company makes contributions towards provident fund and superannuation fund which are in the nature of defined contribution post employment benefit plans. Under the plan, the Company is required to contribute a specified percentage of payroll cost to fund the benefits.
39. SHARE BASED PAYMENTS TO EMPLOYEES
The ESOP Compensation Committee of the Board of Directors has, under Wockhardt Stock Option Scheme -2011 ('the Scheme' or 'ESOS') granted options to the selected employees of the Company and its subsidiaries, in accordance with the provisions of Securities and Exchange Board of India (Share based Employee Benefits) Regulations, 2014. The method of settlement is by issue of equity shares to the selected employees who have exercised the options. The scheme shall be administered by the compensation committee of Board of directors.
The options issued vests in periods ranging 1 year to 7 years 6 months from the date of grant, and can be exercised during such period not exceeding 7 years.
The working of stock prices has been done by taking historical price movement of the closing prices which includes change in price due to dividend, hence dividend is not factored separately. Volatility is based on the movement of stock price on NSE based on the price data for last 12 months upto the grant date.
40. REVENUE:
(a) As per Ind AS 115: "Revenue from Contracts with Customers" , the Company has classified its Revenue as:
- Sale of products and services: Revenue is recognised when a contractual promise to a customer (performance obligation) has been fulfilled by transferring control over the promised goods and/or services to the customer. This transfer of control is generally at a point of time of shipment to or receipt of products by the customer or when the services are performed. The amount of Revenue to be recognised is based on the consideration the Company expects to receive in exchange for its goods/services. If the contract contains more than one obligation, the consideration is allocated based on the standalone selling price of each performance obligation.
Rebates, discounts, commissions and bonuses (including cash discounts offered to customers for prompt payment) are provided and recorded as deduction from revenue at the time the related revenue is recorded. These rebates are calculated based on the historical experience and the specific terms in individual agreements. Sales returns are recognised and recorded as deductions based on historical experience of customer returns. and such other relevant factors.
- Sale of intellectual property, Assignment of New Chemical Entity, Sale of Trademarks and Out licensing fees: Revenue is recognised when a contractual promise to a customer (performance obligation) has been fulfilled by transferring control to the customer taking into consideration the specific terms of the agreement and when the risk of reversal of revenue recognition is remote.
There is no significant financing component as the credit period provided by the Company is not significant.
Variable components such as discounts, sales returns etc. continues to be recognised as deductions from revenue in compliance
with Ind AS 115.
B. Measurement of fair values:
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
- The fair values of the loans taken from banks and other parties is estimated by discounting cash flows using rates currently available for debt/instruments on similar terms, credit risks and remaining maturities. Management regularly assesses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value.
- The change in the unobservable inputs for unquoted investments of Narmada Clean Tech Limited (formerly known as Bharuch Eco-Aqua Infrastructure Limited) and Bharuch Enviro Infrastructure Limited instruments does not have a significant impact in its value.
43. FINANCIAL RISK MANAGEMENT
The Company has exposure to the following risks arising from financial instruments:
• Credit risk ;
• Liquidity risk ; and
• Market risk
Risk management framework
The Company's Board of Directors have overall responsibility for the establishment and oversight of the Company's risk management framework.
The Company's Risk Management Framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks in achieving key business objectives.
The Company has laid down the procedure for risk assessment and their mitigation through an internal Risk Committee. Key risks and their mitigation arising out of periodic reviews by the Committee are assessed and reported to the Audit Committee, on a periodic basis.
The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to policies and procedures.
The Company has a co-sourced model of independent Internal Audit and assurance function. There is a practice of reviewing various key select risks and report to Audit Committee from time to time. The co-sourced internal audit function carry out internal audit reviews in accordance with the approved internal audit plan and reviews the status of implementation of internal audit and assurance recommendations. Summary of Critical observations, if any, and recommendations under implementation are reported to the Audit Committee.
i. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred and expected losses in respect of trade and other receivables and investments.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
As at March 31, 2025 and March 31, 2024, the Company did not have any significant concentration of credit risk with any external customers except Wockhardt Bio AG that accounts for 60% of total trade receivables during current year (Previous year: 57%)
Expected credit loss assessment for customers as at March 31,2025 and March 31,2024:
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available information etc.) and applying experienced credit judgement.
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.
The Management believes that the unimpaired amounts that are past due by more than 180 days are still collectible in full, based on historical payment behaviour and assessment of customer credit risk.
Cash and bank balances
The Company held cash and bank balances of ' 113 crore (Previous year - ' 486 crore). These balances are held with bank and financial institution counterparties with good credit rating.
Derivatives
The forward contract has been entered into with banks /financial institution counterparties with good credit rating.
Others
The Company does not expect any credit loss on other receivables. ii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities. The Company monitors the net liquidity position through forecasts on the basis of expected cash flows.
The Company has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Company has access to funds from debt markets to manage short of current assets to current liabilities. The Company invests its surplus funds in bank fixed deposit/ mutual funds. Of the current liabilities, ' 244 crore (Previous year- ' 218 crore) pertains to loan received from Related parties.
Borrowings from related parties amounting ' 936 crore are repayable by June 20, 2027 with an option to the Company to further renew the loan basis Company's assessment of the cash flows and liquidity position on that date
The following are the remaining contractual maturities of financial liabilities and financial assets at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and other prices such as equity price. These will affect the Company's income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. Financial instruments affected by market risk include loans, borrowings and deposits. The Market risk the Company is exposed can be classified as Currency risk and Interest rate risk.
(a) Currency risk:
The Company is exposed to currency risk on account of its operations in other countries. The functional currency of the Company is Indian Rupee. The Foreign currency exchange rate exposure is partly balanced through natural hedge. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.
The Company has other overdue receivables from Wockhardt Bio AG amounting to ' 231 crore (Previous year- ' 262 crore), including ' 41 crore (Previous year- ' 76 crore for guarantee fees receivable . Also the Company has outstanding payable and advances amounting to ' 74 crore (Previous year- ' 133 crore) and ' 17 crore (Previous year- ' 17 crore) respectively, beyond the period permitted under Master circular issued by Reserve bank of India. The Company expects to receive and pay these overdue balances by FY 2025-26
I nterest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing instruments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing instruments will fluctuate because of fluctuations in the interest rates.
44. CAPITAL MANAGEMENT
The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.
The Company determines the amount of capital required on the basis of annual and long-term strategic plans. The Company's policy is aimed at combination of short-term and long-term borrowings.
The Company monitors the capital structure on the basis of 'adjusted net debt' to 'adjusted equity'. For this purpose adjusted net debt is defined as total liabilities comprising interest bearing loans and borrowings excluding lease liabilities under Ind AS 116 , less cash and cash equivalents, Bank balance and current investments. Adjusted equity comprises Total equity.
45. Contingent liabilities and commitments (to the extent not provided for)
(a) Demand by Income tax authorities ' 321 crore (Previous year - ' 546 crore) disputed by the Company.
(b) Demands by Central Excise authorities in respect of Classification/ Valuation/ Cenvat Credit related disputes; stay orders have been obtained by the Company in case of demands ' 45 crore (Previous year - ' 45 crore).1
(c) Demand by Sales Tax (including GST) authorities ' 116 crore (Previous year - ' 129 crore) disputed by the Company.111
(d) Demand by Service tax authorities in respect of non-payment of Service Tax on Import of certain services disputed by the Company ' 5 crore (Previous year - ' 5 crore).1
(e) Demand by Municipal Corporation, Local body Tax on inputs used for manufacture of exported goods ' 3 crore (Previous year: 3 crore)
(f) Differential custom duty for misclassification/ penalty disputed by the Company ' 0.26 crore (Previous year - ' 0.26 crore)
(g) Differential MEIS for misclassification disputed by the Company ' 9 crore (Previous year- ' 9 crore)
(h) Other matters:
- electricity expense ' 13 crore (Previous year - ' 9 crore)
- remediation against the pollution of ground water ' 1 crore (Previous year - ' 1 crore)
- compensation for products ordered and not purchased, under dispute ' Nil ( Previous year - ' 20 crore)
- Other matters not acknowledged as debts ' Nil ( Previous year- ' 0.20 crore)
(i) Demand from National Pharmaceutical Pricing Authority (NPPA) in respect of overcharging of certain products disputed by the Company ' 114 crore (Previous year - ' 108 crore).
(j) During the previous year, pursuant to a settlement agreement entered with the State of Texas on February 8, 2022 in regards to Civil Investigative Demand ('CID') with respect to submission of price information and updates to Texas Medicaid programme in US, Wockhardt USA LLC (WUSA) and Company had agreed to pay USD 36 million and interest over nine instalments between 2022 and 2025 for the aforesaid matter relating to WUSA and Morton Grove Pharmaceuticals.
Further ' 54.2 crore (USD 6.3 million) has been paid by WUSA during the current year and ' Nil is outstanding as on March 31,2025.
(k) The Company is involved in other disputes, lawsuits, claims, inquiries and proceedings including commercial matters that arise from time to time in the ordinary course of business. The Company believes that there are no such pending matters that are expected to have any material adverse effect on its financial statements in any given accounting period.
(l) Estimated amount of contracts remaining to be executed on capital account and not provided for ' 16 crore (Previous year -' 7 crore) after deducting advance on capital account of ' 3 crore (Previous year - ' 2 crore).
48. a) Certain manufacturing facilities, having net book value of ' 332 crore (Previous year - ' 379 crore) and capital work-in-progress amounting to ' 48 crore (Previous year - ' 48 crore), of the Company are having low utilisation of assets and the Company is evaluating various alternate purposes of these assets.
b) (i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c) The Company's 'New Chemical Entity' (NCE) research programme continued to progress in their clinical trials during the financial year 2024-25. Development expenditure incurred during the year ' 404 crore (Previous year- ' 10 crore) has been capitalised and included under Intangible assets under Development as at March 31, 2025.
Note : The above ratios are calculated on basis of continuing operations figures.
(1) Total debt = Non- current Borrowings Current Borrowings
(2) Earnings available for debt service = Net Loss after tax depreciation and other amortizations and other Non-cash operating expenses Interest (Finance cost) ; Debt Service = Interest and Lease payments Principal Repayments made during the period for long term loans
(3) Cost of goods sold = Cost of materials consumed Purchase of Stock-in-Trade Changes in inventories of finished goods, work-in-progress and Stock-in-Trade
(4) Working capital = Current asset - Current liability
(5) Capital Employed = Tangible Net Worth* Total Debt
(6) Cost of Investment = Total equity - Other comprehensive income
* Tangible net worth = Total equity - Intangible asset - Intangible asset under development
# Not applicable as the Company has incurred a loss and working capital is negative Reasons for more than 25% increase/(decrease):
a) Current ratio has increased mainly due to increase in inventory during the year, increase in investments from the funds received during QIP and decrease in trade payables.
b) Debt Equity Ratio has reduced mainly due to repayment of loans and equity infusion from QIP
c) Debt Service Coverage Ratio has increased mainly due to impact in earnings
d) Net profit ratio and Return on capital employed have increased due to reduction of loss during the year
e) Return on equity and Net capital turnover ratio, have not been computed due to loss.
50. There are no other significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.
51. Previous year figures have been regrouped wherever necessary to conform to current year classification.
1
Note: Amounts mentioned excludes interest after the date of the order, if any.
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