1. SIGNIFICANT ACCOUNTING POLICIES

(i) Basis of brparation

The financial statements have been brpared to comply in all material respects with the brscribed accounting standards under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Act to the extent notified. The financial statements have been brpared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year.

(ii) Use of estimates

The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that afect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. During the year the Company has changed the estimation criteria used for provision for doubtful debts, provision for slow moving and non-moving inventory. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(a) Fixed assets and debrciation/amortisation

Tangible assets:

Fixed assets are stated at cost less accumulated debrciation and impairment losses, if any. The Company capitalises all costs relating to the acquisition and installation of fixed assets.

Debrciation/amortisation:

Debrciation is provided, using the straight line method, pro-rata to the period of use of assets, in accordance with the requirements of Schedule II of the Companies Act, 2013, based on the useful lives of the assets determined through technical assessment by the management. The estimated useful lives followed by the Company are as follows:

Assets -Estimated useful life

Leasehold land Over the period of lease

Buildings 30 - 61 years

Plant and Machinery 15 - 21 years

Furniture and Fixtures 16 years

Office Equipments 4 years

Information Technology Equipments 3 - 5 years

Vehicles 3 - 5 years

Components having useful lives diferent from the life of parent assets as stated above are debrciated over the useful life of the components. Fixed assets whose aggregate cost is Rs 5,000 or less are debrciated fully in the year of acquisition.

Intangible assets:

Intangible assets are stated at cost less accumulated amortisation and impairment losses, if any.

The cost relating to Intangible assets, which are acquired, are capitalized and amortised on a straight line basis upto the period of ten years, which is based on their estimated useful life.

(b) Foreign currency translations

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Foreign currency monetary items are reported using closing foreign exchange rate. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction.

Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in brvious financial statements, are recognized as income or as expenses in the year in which they arise.

Premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.

(c) Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. Current investments are carried at lower of cost and market value determined on category basis. Long-term investments are stated at cost. Provision is made to recognise a diminution, other than temporary, in the value of investments.

(d) Inventories

All inventories are valued at moving weighted average price other than finished goods, which are valued on quarterly moving average price. Finished goods and Work in Progress is computed based on respective moving weighted average price of procured materials and appropriate share of labour and other manufacturing overheads.

Inventories are valued at cost or net realizable value, whichever is lower. Cost also includes all charges incurred for bringing the inventories to their brsent location and condition. Excise and customs duty accrued on production or import of goods, as applicable, is included in the valuation of finished goods.

Inventories of stores and spare parts are valued at cost.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

(e) Employee benefits

Employee benefits in the form of Provident Fund, Family Pension Fund and Superannuation Schemes, which are defined contribution schemes, are charged to the Statement of Profit and Loss of the period when the contributions to the respective funds accrue. There are no other obligations other than the contribution payable to the respective trusts.

Gratuity liability, which is a defined benefit scheme is provided for on the basis of an actuarial valuation made using Projected Unit Credit Method at the end of each financial year.

Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation made using Projected Unit Credit Method at the end of each financial year.

Actuarial gains and losses are immediately taken to Statement of Profit and Loss and are not deferred.

(f) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with dispatch of goods to customers. Revenues are recorded at invoice value net of sales tax, returns and trade discounts.

Sale of Services

Revenues from services are recognised on completion of rendering of services. Outlicensing fees and Assignment of New Chemical Entity

Outlicensing fees and Assignment of New Chemical Entity is recognized in accordance with the terms of the relevant agreement(s) as generally accepted and agreed with the customers.

Export Incentive

Duty drawback, Merchandise Exports from India Scheme (MEIS) and Focus marketing scheme (FMS) benefits are recognized at the time of exports and the benefits in respect of advance license received by the Company against export made by it are recognized as and when goods are imported against them.

Royalties

Revenue is recognized on an accrual basis in accordance with the terms of the relevant agreement. Dividend and Interest

Dividend income is recognized when the right to receive the payment is established. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Insurance claims

Insurance claims are accounted on acceptance of the claim and when it can be measured reasonably, and it is reasonable to expect ultimate collection.

(g) Research and development

Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(h) Impairment of Assets

The carrying values of assets / cash generating units at each Balance Sheet date, are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

(i) Taxation

Tax expense comprises of current and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of Income Tax Act, 1961 as applicable to the financial year. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax charge is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent it has timing differences the reversal of which will result in sufficient income. In situations where the Company has unabsorbed debrciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of Chartered Accountants of India. The said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

(j) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term are classified as operating lease. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

(k) Financing/Borrowing cost

Financing / Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of such assets, up to the date such assets are ready for their intended use. Other financing/borrowing costs are charged to Statement of Profit and Loss. Initial direct costs are recognised immediately as an expense.

(l) Employees Stock Option Cost

The Company measures compensation cost relating to employee stock options using the intrinsic value method. In accordance with the Securities and Exchange Board of India guidelines, the excess of the market price of shares, at the date of grant of options under the Employee stock option schemes, over the exercise price is treated as employee compensation and amortised over the vesting period.

(m) Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when an enterprise has a brsent obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its brsent value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for (1) possible obligations which will be confirmed only by future events not wholly within the control of the Company or (2) brsent obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements as this may result in the recognition of income that may never be realised.

(n) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting brference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue to existing shareholders and share split.

For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the efects of all dilutive potential equity shares from the exercise of options on unissued share capital. The number of equity shares is the aggregate of the weighted average number of equity shares and the weighted average number of equity shares, which would be issued on the conversion of all the dilutive potential equity shares into equity shares. Options on unissued equity share capital are deemed to have been converted into equity shares.

o) Derivative Financial Instruments

As per the Institute of Chartered Accountants of India (ICAI) Announcement, accounting for derivative contracts, if any, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored.

(p) Operating Cycle

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Act.

2. AMALGAMATION OF WHOLLY OWNED SUBSIDIARY COMPANIES

During the brviousyear, pursuant to the scheme ofamalgamation ('the scheme') of Wockhardt Biopharm Limited and Vinton Healthcare Limited, the unlisted wholly owned subsidiaries of the Company, with the Company under sections 391 to 394 of the Companies Act, 1956 sanctioned by the Hon'ble High Court, Bombay vide its order dated March 20, 2015, all assets and liabilties (excluding share capital) of the aforesaid subsidiaries were transferred in theCompanyeffective April 01,2014 ('the Appointed Date'). Accordingly the Scheme had been given effect to in the financial statements for the year ended March 31, 2015.

The main objects of Wockhardt Biopharm Limited include manufacturing, marketing, trading, packing of biotechnology products, pharmaceuticals and chemicals and, of Vinton Healthcare Limited include manufacturing, trading, packing, distribution of foods and other nutritional products. However, recently there were no operations in these subsidiaries.

The amalgamation had been accounted for in the brvious year under the 'Pooling of Interest' method as brscribed by the Accounting Standard 14,'Accounting for Amalgamations'. Accordingly the accounting treatment had been given as under:

a) The assets and liabilities as at April 01, 2014 amounting to Rs. 26.51 crore and Rs. 3.24 crore respectively were incorporated in the financial statement of the Company at its book value.

b) 10,000,000 equity shares and 982,819 7% Non-cumulative Redeemable Preference shares of Vinton Healthcare Limited, and 18,000,000 equity shares of Wockhardt Biopharm Limited, held as investment by the Company stands cancelled and the difference between the book value and face value of such shares amounting Rs. 27.11 crore had been credited to Capital Reserve in brvious year.

c) Outstanding inter corporate balance as on April 01, 2014 amounting Rs. 9.40 crore had been cancelled.

d) Debit balances in the Statement of Profit and Loss as on April 01, 2014 amounting Rs. 5.16 crore of the above subsidiaries had been incorporated under 'Surplus/(Deficit) in Statement of Profit and Loss' in Note 3 'Reserves and Surplus'.

3. Donations for Political purpose made during the brvious year and included in Note 26 under "Miscellaneous expenses":

a) Bhartiya Janata Party Rs. Nil (Previous year - Rs. 3.00 crore)

b) Maharashtra Pradesh Congress Committee Rs. Nil (Previous year - Rs. 2.00 crore)

4. As part of Corporate Social Responsibility (CSR), the Company had made voluntary contribution of Rs. 8.00 crore (Previous year - Rs. 1.21 crore) during the year for spending on CSR activities to Wockhardt Foundation and included the same in Note 26 under 'Miscellaneous expenses," being contribution and other expenses (Also Refer note 45). No amount has been incurred by the Company towards construction/acquisition of any assets.

5. The Company has taken office brmises on operating lease.These leave and license agreements 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. There are no subleases.

6. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

(a) 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 which have been confirmed Rs. 28.10 crore (Previous Year - Rs. 30.45 crore).

(b) Demand by Income tax authorities Rs. 70.10 crore (Previous Year - Rs. 70.00 crore) disputed by the Company.

(c) Demand by Sales Tax authorities Rs. 20.03 crore (Previous Year - Rs. 12.60 crore) disputed by the Company (including Rs. 1.33 Crore on account of amalgamation in Previous year).

(d) Claims against Company not acknowledged as debt in respect of electricity expense Rs. 5.24 crore (Previous Year - Rs. 4.65 crore) and interest expense Rs. 4.68 crore (Previous Year - Rs. Nil).

(e) Demand from National Pharmaceutical Pricing Authority (NPPA) in respect of overcharging of certain products disputed by the Company Rs. 7.30 crore (Previous Year - Rs. 7.30 crore).

(f) Corporate Guarantee given on behalf of a subsidiary in respect of credit facilities amounts to Rs. 62.12 crore (Previous Year - Rs. 449.22 crore).

This comprises corporate guarantee given by the Company and Wockhardt UK Holdings Limited against loan of USD 9.38 million (Previous Year - USD 71.88 million) amounting to Rs. 62.12 crore (Previous Year -Rs. 449.22 crore) taken by Wockhardt Bio AG in earlier years. The said loan has been fully rescheduled and all lenders have acceded to the reschedulement. The last installment of the above loan is repayable on May 16, 2016.

This loan availed by the subsidiary is secured by:

(i) first ranking pari passu charge on immovable properties of Wockhardt Limited situated at Kadaiya in Daman and Baddi in Himachal Pradesh.

(ii) second ranking pari passu charge by way of hypothecation on all the current assets, movables, inventories and book debts of Wockhardt Limited.

Further, out of loan of Rs. 62.12 crore (Previous Year - Rs. 449.22 crore), security has been created in respect of term loan of USD 3.79 million (Previous Year - USD 29.04 million) amounting to Rs. 25.10 crore (Previous Year - Rs. 181.48 crore), in addition to aforesaid security, as follows :

(i) subservient charge on movable properties of Wockhardt Limited situated at Bhimpore in Daman, Ankleshwar, L-1, D-4, Chikhalthana and Biotech Park, Waluj in Aurangabad (except book debts and current assets)

(ii) subservient charge on movable properties of Wockhardt Infrastructure Development Limited situated at Shendra in Aurangabad (WIDL).

Also, an application has been made to Reserve Bank of India for obtaining its approval to create a subservient charge on fixed assets of WIDL and of the Company situated at all locations except Baddi in Himachal Pradesh and Kadaiya in Daman.

(g) Comfort to extend financial support, subject to certain approvals, to one of its subsidiaries towards credit facilities availed by the subsidiary, the impact of which is currently not ascertainable

(h) The Company is involved in other disputes, lawsuits, claims, inquires 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.

(i) One of the customer of a step down subsidiary of the Company, has brought a daim relating to a commercial dispute over a contract which is sub-judice. The financial impact of the daim, if any, that may resuit from ultimate resolutions of the proceedings is currently not ascertainable.

(j) Bank guarantees issued against various liabilities/obligations Rs. 24.35 crore (Previous year - Rs. 31.72 crore).

(k) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 127.64 crore (Previous Year -Rs. 113.47 crore) after deducting advance on capital account of Rs. 28.98 crore (PreviousYear - Rs. 17.37 crore).

7. During the year, Company has undergone inspections at its L1-Chikalthana, Aurangabad manufacturing facility by UK MHRA and have received communication confirming the closure of the inspection and issuance of an unrestricted GMP certificate. Accordingly, supplies have been resumed from L1 facility to UK Market. US FDA has also recently completed inspections of our manufacturing unit at Ankleshwar, Gujarat and Shendra, Aurangabad and made some observations for which appropriate reply has been submitted. Shendra manufacturing unit is a new facility supplying to India, UK& Irish market. Presently there are no supplies of products from the said facility to the US market. Waluj Facility received the Establishment Inspection Report (EIR) from US FDA.The company's on-going efforts towards remediation and compliance measures for its manufacturing facilities continue to be in place.

8. Premium on redemption of brference shares will be provided for before redemption of the brference shares.

9. Previous year figures have been regrouped where necessary to conform to current year's classification.

As per our attached report of even date

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W

Bhavik L. Shah

Partner

Membership No. 122071

For and on behalf of the Board of Directors

H. F. Khorakiwala Chairman DIN:00045608

Murtaza Khorakiwala Managing Director DIN:00102650

Narendra Singh Company Secretary

Manas Datta Chief Financial Officer

Shekhar Datta Directors DIN: 00045591

Aman Mehta Directors DIN: 00009364

D. S. Brar Directors DIN:00068502

Sanjaya Baru Directors DIN: 05344208

Tasneem Mehta Directors DIN:05009664

Baldev Raj Arora DirectorsDIN: 00194168

Place : Mumbai

Date : May 06, 2016