Wockhardt

The Directors take pleasure in presenting the Ninth Annual Report of
 the Company and audited accounts for the year ended December 31, 2007.
 
 FINANCIAL PERFORMANCE
 
                                                      (Rs. in millions)
 
                                             Year 2007        Year 2006
 Consolidated
 
 Operating Income                              26,532          17,290
 
 Profit before Interest & Depreciation          6,390           4,003
 
 Profit Before Tax                              4,742           2,942
 
 Provision for Taxation                           917             529
 
 Share of Profit/(Loss) from Associates            33              -
 
 Net Profit                                     3,858           2,413
 
 Standalone
 
 Operating Income                              12,368          11,345
 
 Profit Before Tax                              2,731           2,526
 
 Provision for Taxation                           592             391
 
 Profit After Tax                               2,139           2,135
 
 SUBSIDIARIES
 
 The year under review had been good for the Company, in terms of
 acquisitions. In the month of May 2007 Negma Lerads, France was
 acquired and in the month of November 2007, Morton Grove
 Pharmaceuticals, USA was acquired.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 Your Company recorded 53.5% growth in consolidated revenue for the year
 at Rs. 26,532 million. The Consolidated Net Profit grew by 59.9% at Rs.
 3,858 million as against Rs. 2,413 million for the previous financial
 year. As required under Clause 32 of the Listing Agreements with the
 Stock Exchanges, audited consolidated financial statements form part of
 the annual Report and the same are annexed to this report.
 
 DIVIDEND AND RESERVES
 
 The Board of Directors in the month of October, 2007 had declared and
 paid an interim dividend of 175% on equity shares for the year December
 31, 2007, absorbing an amount of Rs. 957.56 million. The Board further
 recommends a final dividend of 50%, which will absorb an amount of Rs.
 273.59 million. It is recommended that an amount of Rs. 500.00 million
 be transferred to General Reserve.
 
 CHANGES IN CAPITAL STRUCTURE
 
 During the year there has been no change in the capital structure of
 the Company.
 
 BOARD OF DIRECTORS
 
 Mr. Shekhar Datta and Dr. B. L. Maheshwari retire by rotation as
 director at the upcoming Annual General Meeting and being eligible,
 offer themselves for reappointment.
 
 Mr. Shekhar Datta has been a director of the Company since February 25,
 2000. He is non-executive Chairman on the Board of Bombay Stock
 Exchange Limited, former Managing Director of Greaves Limited and a
 past President of Confederation of Indian Industry and the Bombay
 Chamber of Commerce. He is an engineering graduate from London. His
 other directorships include Bharat Heavy Electricals Limited and
 Vesuvius India Limited.
 
 Dr. B. L. Maheshwari has been a director of the Company since February
 25, 2000. He has a Phd. from the University of Pennsylvania. He is the
 Founding Director of the Centre of Organisation Development, Hyderabad
 since January 1980. He is a pioneer in the field of “management by
 objectives”.
 
 The Board recommends their appointment.
 
 APPOINTMENT OF AUDITORS
 
 M/s. S. R. Batliboi & Co. retire as auditors of the Company at the
 conclusion of the ensuing Annual General Meeting and being eligible,
 offer themselves for reappointment.
 
 DIRECTORS’ RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
 based on the representation received from the operating management,
 confirm that:
 
 - The annual accounts presented to the members have been prepared on
 going concern basis and applicable accounting standards have been
 followed.
 
 - In case of any material departures from the applicable accounting
 standards, proper explanations have been provided.
 
 - In order to provide a true and fair view of the state of affairs of
 the Company as on December 31, 2007 and the profits for the year ended
 on that date reasonable and prudent judgements and estimates have been
 made and generally accepted accounting policies have been selected and
 consistently applied.
 
 - For safeguarding the assets of the Company and for preventing and
 detecting any material fraud and irregularities, proper and sufficient
 care has been taken for maintenance of adequate accounting records in
 accordance with the provisions of the Companies Act, 1956.
 
 LEGAL COMPLIANCES
 
 The Company has received an exemption from the central Government under
 Section 212(8) of the Companies Act, 1956 with regard to attaching of
 the balance sheet, profit and loss account and other documents of the
 subsidiaries for the year ended December 31, 2007. The accounts of the
 subsidiaries will be made available for inspection by any member of the
 Company at its registered office and also at the registered office of
 the concerned subsidiary. The accounts of the subsidiary companies and
 detailed information will be made available to the members upon receipt
 of request from them. The summary of the key financials of the
 company’s subsidiaries is included in this annual report.
 
 Information as per Section 217(2A) of the Companies Act, 1956 (“the
 Act”), read with the Companies (Particulars of Employees) Rules, 1975,
 forms part of this report. As per the provisions of Section 219(1) (b)
 of the Act, the Report and Accounts are being sent to the shareholders
 of the Company excluding the statement of particulars of employees
 under Section 217(2A) of the Act. Any shareholder interested in
 obtaining a copy of the statement may write to the Company Secretary at
 the Registered Office of the Company.
 
 Information pursuant to Section 217(1)(e) of the Companies Act, 1956,
 read with the Companies (Disclosure of particulars in the Report of
 Board of Directors) Rules, 1988, relating to the Conservation of
 Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
 are also annexed.
 
 SECRETARIAL AUDIT
 
 As directed by Securities and Exchange Board of India (SEBI)
 secretarial audit is being carried out at the specified period, by the
 practicing company secretary. The findings of the secretarial audit
 were entirely satisfactory.
 
 CORPORATE GOVERNANCE
 
 A detailed compliance report on Corporate Governance is annexed to this
 report. The Auditors’ certificate on compliance with the conditions of
 corporate governance under Clause 49 of the Listing Agreement is also
 annexed to this report.
 
 ACKNOWLEDGEMENTS
 
 Your Directors acknowledge the impeccable service rendered by the
 employees of the Company at all levels towards its overall success. The
 Directors also take this opportunity to place on record their
 appreciation to the stakeholders, bankers and members of medical
 profession for their continued support to the Company.
 
 
                                  For and on behalf of the
                                  Board of Directors
 
                                  H. F. KHORAKIWALA
 
                                  Chairman
 Mumbai, February 20, 2008