i) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.
Minimum Alternative Tax (MAT credit) balance as on March 31, 2026 amounts to ' 196 crore (Previous year - ' 196 crore). Based on existing contracts and future business prospects and, actions taken to implement Company's business strategies including expected monetisation of assets, it is probable that the said MAT credit and business loss will be utilised in future years against the normal tax expected to be paid in those years.
ii) Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income by each jurisdiction in which the relevant entity operates and the period over which deferred income tax assets will be recovered.
iii) Aggregate temporary difference and carried forward tax losses / unabsorbed depreciation for which no deferred tax has been created is as given below. These tax losses are available for set off against future taxable profits over next 8 years.
b) The Company has only one class of equity shares having a par value of ' 5/- per share. Each holder of equity shares is entitled to one vote per share held and is entitled to dividend, if declared at the Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
c) Shares reserved for issue under options:
229,220 (Previous year - 185,595) equity shares of face value ' 5 each have been reserved for issue under Wockhardt Stock Option Scheme -2011.
Loan from State Bank of India (SBI) taken during the year and amounting to Rs. 50 crore* outstanding as on the balance sheet date with interest rate 9.85% is secured by way of hypothecation and first paripassu charge over the Company's entire current assets both present and future with other consortium member banks, also collateral coverage of first paripassu/ exclusive charge on factory land and building and plant and machinery owned by the company. The Company is in the process of getting charge created against the immoveable properties.
The above loan is repayable in 54 equal monthly instalments commencing 6 months after the first disbursement of the loan.
Other term loans consists of loan taken from STCI Finance Limited, Tata Capital Limited and Axis Finance Limited.
Loan from STCI Finance Limited amounting to ' 50 crore* outstanding as on the balance sheet date, with interest rate of 11.50% (Previous year- 12.40 %) is secured by way of first paripassu charge on present and future movable fixed assets of the Company and, pledge of shares of Company.
The above loan (after prepayment of ' 75 crore* during the year) shall be repaid at the end of 36 months with a call/put option every 6 months, and has been shown under 'Current maturities of long term debt'.
Loan taken from Axis Finance Limited during the year and amounting to ' 182 crore* outstanding as on the balance sheet date, with interest rate of 11.25% is also secured by a primary security in the form of first charge on specified movable and immovable Fixed Assets of the Company, and a collateral security in the form of pledge of unencumbered shares of the Company.
The above loan is repayable in 20 quarterly instalments in 5 years.
Further, loan taken from Tata Capital Limited during the year and amounting to ' 334 crore* outstanding as on the balance sheet date with interest rate of 10.55% is secured by way of first paripassu charge on Company's specified moveable and immovable fixed assets located in Aurangabad, and also pledge of unencumbered shares of the Company.
The above loan is repayable in quarterly equal instalments of 5% of the disbursed loan in first year, 10% of the disbursed loan in second year, and 28.33% each in third, fourth and fifth year.
The Company is in the process of creating charge on the immoveable properties for the loans taken from Axis Finance Limited and Tata Capital Limited.
The unencumbered shares pledged to lenders as mentioned above against loans taken are 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.
* represents outstanding borrowings before adjusting loan issue cost.
Note 17.3
Borrowings from related parties amounting ' 748 crore (Previous year- 936 crore) are repayable by June, 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 5.92 % p.a to 12.3 % p. a.
Note 17.4
Loans from GOI carry interest rate of 3% p.a. Loan amounting to ' 1 crore (Previous year- ' 2 crore) is repayable in equal annual instalments by March 2029.
Note 17.5
Current maturities of the above borrowings have been disclosed under Note 19.
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 which was secured against unconditional and irrevocable Bank Guarantees that stood as guarantee under that facility during previous year is Nil as on March 31,2026.
Note 19.3
Refer note 12 to 14 for carrying amount of current financial assets on which charge has been created.
32. Asset held for sale as on the balance sheet date consists of lands situated in Maharashtra and Punjab.
Efforts to sell the balance assets classified as held for sale have commenced and a sale is expected to be concluded not beyond March 2027.
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 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 ' 0.01 crore (Previous year- ' Nil) and rent for low value assets amounting to ' 0.003 crore (Previous year- ' 0.01 crore) have been included under "Note 29 - Other expenses" under Rent.
Further, Refer Note 43 for maturity profile of lease liabilities.
35. EXCEPTIONAL ITEMS:
a) Settlement of Legal Dispute (Dr. Reddy's Laboratories) : The Company had previously concluded a Business Transfer Agreement ("BTA”) with Dr. Reddy's Laboratories Limited ("Purchaser”) on February 12, 2020, with further amendments thereto, for the transfer of a portion of its Domestic Branded Division. Out of the total consideration of ' 1,850 Crores, an amount of ' 300 Crores was designated as a "Holdback Amount” to be released contingent upon the Business Undertaking achieving specific revenue benchmarks.
The Company entered into a settlement agreement with Purchaser towards full and final settlement of all claims and disputes under BTA and legal proceedings effective March 31, 2026 and recognized net gain of ' 35 crore under 'Exceptional Items' during the year
b) Impact of New Labour Codes: Effective November 21, 2025, the Government of India has consolidated multiple existing labour legislations into a unified framework comprising four Labour Codes ('Code'). All set of rules under the Code are yet to be notified.
The Company has assessed and accounted the incremental impact of the new Code based on the best available information and actuarial valuation amounting to ' 10 Crores as 'Exceptional items'. The Company continues to monitor the finalisation of Central / State Rules and clarifications from the Government on other aspects of the Labour Code and would provide appropriate accounting effect on the basis of such developments as needed.
38. EMPLOYEE BENEFITS
(A) Defined benefit plans:-
Gratuity liability is provided in accordance with the provisions of Indian law 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.
Notes:
(a) Amount recognised as an expense in the Statement of Profit and Loss and included in Note 27 under Salaries and wages :
Gratuity ' 5 Crore (Previous year - ' 4 crore) and Compensated Absences ' 7 crore (Previous year - ' 4 crore).
The above amount includes amount pertaining to Key Managerial personnel ' 0.44 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 ESOS 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 and Sweat Equity) Regulations, 2021. 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 10 years 1 month from the date of grant, and can be exercised during such period not exceeding 7 years.
Expected Volatility has been computed using the annualised standard deviation of daily closing prices of the Company's equity shares over a period aligned with the expected life of the options. Dividend has been considered as Nil.
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 Outlicensing 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.
The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the significant inputs used.
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 has 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, 2026 and March 31, 2025, the Company did not have any significant concentration of credit risk with any external customers except Wockhardt Bio AG that accounts for 69% of total trade receivables during current year (Previous year: 60%)
Expected credit loss assessment for customers as at March 31,2026 and March 31,2025:
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 ' 107 crore (Previous year - ' 113 crore). These balances are held with bank and financial institution counterparties with good credit rating.
Derivatives
The forward contract had been entered into with banks /financial institution counterparties with good credit rating, however there are no open forward contracts as on the balance sheet date.
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.
Borrowings from related parties amounting ' 748 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.
* It includes contractual interest payment over the tenure of the Borrowings. The floating-interest Borrowings are based on interest rate prevailing as at the reporting date.
@ It includes contractual interest payment over the tenure of the Borrowings.
iii. Market risk
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 ' 207 crore (Previous year- ' 231 crore), including ' 41 crore (Previous year- 41 crore) for guarantee fees receivable. Also the Company has outstanding payable and advances amounting to ' 53 crore (Previous year- ' 74 crore) and ' 17 crore (Previous year- ' 17 crore) respectively, beyond the period permitted under Master circular issued by Reserve bank of India. The Company is in the process of regularising these overdue balances.
b) Interest rate risk
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 ' 345 crore (Previous year - ' 321 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 ' 117 crore (Previous year - ' 116 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 ' 14 crore (Previous year - ' 13 crore)
- remediation against the pollution of ground water ' 1 crore (Previous year - ' 1 crore)
(i) Demand from National Pharmaceutical Pricing Authority (NPPA) in respect of overcharging of certain products disputed by the Company ' 136 crore (Previous year - ' 114 crore).
(j) 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 Inc. The entire amount has been paid by WUSA during previous year.
(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 ' 18 crore (Previous year -' 16 crore) after deducting advance on capital account of ' 13 crore (Previous year - ' 3 crore).
48. a) Certain manufacturing facilities, having net book value of ' 312 crore (Previous year - ' 332 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 2025-26. Development expenditure incurred during the year ' 317 crore (Previous year- ' 404 crore) has been capitalised and included under Intangible assets under Development as at March 31, 2026.
Reasons for more than 25% increase/(decrease):
a) Debt Service Coverage Ratio has increased mainly due to impact in earnings
b) Net profit ratio, Return on equity and Return on capital employed have increased due to profit during the year
c) Net capital turnover ratio has increased due to profit during the year
d) Inventory turnover has decreased due to increase in average inventory.
51. There are no other significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.
52. 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.
|