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Wanbury Ltd.

BSE: 524212 Sector: Health care
NSE: WANBURY ISIN Code: INE107F01022
BSE LIVE 14:32 | 18 Oct 37.00 -0.40
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OPEN 38.45
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VOLUME 1110
52-Week high 75.95
52-Week low 35.55
P/E
Mkt Cap.(Rs cr) 86
Buy Price 37.00
Buy Qty 290.00
Sell Price 37.90
Sell Qty 250.00
OPEN 38.45
CLOSE 37.40
VOLUME 1110
52-Week high 75.95
52-Week low 35.55
P/E
Mkt Cap.(Rs cr) 86
Buy Price 37.00
Buy Qty 290.00
Sell Price 37.90
Sell Qty 250.00

Wanbury Ltd. (WANBURY) - Auditors Report

Company auditors report

TO THE MEMBERS OF WANBURY LIMITED Report on Standalone Financial Statements

We have audited the accompanying standalone financial statements of WANBURY LIMITED("the Company") which comprise the Balance Sheet as at 31 March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error. Auditor’sResponsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its loss-and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) Note 52 in the financial statements which indicate that the Company has accumulatedlosses and its net worth has been fully eroded. The financial statements of the Companyhave been prepared on a going concern basis for the reasons stated therein.

b) The Company has given guarantee in respect of Exim Bank’s investments of USD 60Lakhs (' 3979.97 Lakhs) in Wanbury Holding B.V. a subsidiary of the Company and StateBank of India’s loan of Euro 32.60 Lakhs (' 2448.11 Lakhs) to Cantabria Pharma S.L.the step down subsidiary of the Company which have been invoked by the respectiveparties. The said dues being part of the CDR Scheme will be accounted upon arriving atmutually agreed terms of settlement with the respective parties as stated in Note 30 ofthe financial statements.

Our opinion is not modified in respect of these matters.

Other Matter

We did not audit the financial statements/financial information of one branch includedin the standalone financial statements of the Company whose financial statements/financialinformation reflect total assets of ' 10090.60 Lakhs as at 31 March 2016 and totalrevenues of ' 16072.61 Lakhs for the year ended on that date as considered in thestandalone financial statements. The financial statements/information of this branch havebeen audited by the branch auditor whose reports have been furnished to us and ouropinion in so far as it relates to the amounts and disclosures included in respect of thisbranch is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section 11 ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 bestof 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 thecompany so far as it appears from our examination of those books.

c) The reports on the accounts of the branch of the Company audited under Section143(8) of the Act by branch auditors have been sent to us and have been properly dealtwith by us in preparing this report.

d) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

f) On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at 31 March2016 on its financial position in its standalone financial statements - Refer Note 29 tothe financial statements;

ii. The Company has not entered into any long-term contracts including derivativecontracts requiring provision under the applicable law or accounting standards formaterial foreseeable losses.

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

For Kapoor & Parekh Associates
Chartered Accountants
ICAI FRN 104803W
Nikhil Patel
Partner
Mumbai 18 May 2016 M. No.37032

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

(The Annexure referred to in Para 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the Members of WANBURY LIMITEDon the financial statements for the year ended 31 March 2016.)

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As informed to us by the management the Company has a policy of physicallyverifying fixed assets in a phased manner over a period which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. We areinformed that there were no material discrepancies noticed on such verification and thesame has been properly dealt with in the books of account.

c) According to the information and explanations given to us and the title deeds /lease deeds and other records examined by us we report that the title deeds / lease deedsin respect of all the immovable properties of land which are freehold immovableproperties of land that have been taken on lease and buildings as disclosed in Note 11 -fixed assets in the standalone financial statements are held in the name of the Companyor in the erstwhile name of the Company or in the name of the transferor companies whichhave merged into the Company as at the balance sheet date.

2. According to the information and explanations given to us the inventories have beenphysically verified by the management at reasonable intervals during the year except forstocks with third parties for which most of the confirmation certificates have beenobtained by the Company. The discrepancies noticed on such physical verification betweenphysical stock and book records were not material and have been adequately dealt with inthe books of account.

3. According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms Limited Liability Partnershipor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Accordingly paragraph 3(iii) of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act2013.

5. The Company has not accepted any deposit from the public within the meaning ofSection 73 to 76 or any other relevant provisions of the Companies Act 2013. Accordinglyparagraph 3(v) of the Order is not applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records under148(1) of the Companies Act 2013 in relation to products manufactured and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the records with a viewto determine whether they are accurate and complete.

7. According to the information and explanations given to us :

a) Except in some cases where there have been delays the Company has been generallyregular in depositing undisputed statutory dues including Provident Fund Employees’State Insurance Income Tax Sales Tax Service Tax Custom Duty Excise Duty Value AddedTax Cess and other material statutory dues with the appropriate authorities during theyear. According to the information and explanations given to us there are no undisputedamounts payable in respect of aforesaid material statutory dues as at 31 March 2016 whichwere in arrears for a period of more than six months from the date they became payableexcept statutory dues of erstwhile PPIL referred to in note 32 of the financialstatements.

b) On the basis of our examination of the documents and records of the Company thereare no dues of Income Tax Sales Tax Service Tax Customs Duty Excise Duty Value AddedTax and Cess which have not been deposited on account of a dispute except as enumeratedherein below which are pending before respective authorities as mentioned there against :

Name of the Statute Nature of the Dues Amount Rs in Lakhs* Period to which amounts relate Forum where dispute is Pending
The Income Tax Act 1961 Income Tax/ TDS/ Interest / Penalty 46.20 AY 1997-98 Bombay High Court
96.32 AY 2010-11 Deputy Commissioner of Income tax Mumbai
5.65 AY 2010-11 Commissioner of Income tax (Appeals) Mumbai
The Central Sales Tax Act 1956 Sales Tax/Interest / Penalty 220.39 60.35 19.95 42.95 FY 2006-07 FY 2007-08 FY 2002-03 FY 1997-98 to FY 2004-05 Sales Tax Appellate Tribunal Andhra Pradesh Andhra Pradesh High Court
The Central Sales Tax Act 1956 Sales Tax/Interest / Penalty 2972.28 FY 1992-93 FY 1994-95 FY 1996-97 FY 1997-98 & Bombay High Court
FY 2000-01 to FY 2004-05
Service Tax under Finance Service Tax/ Interest/ 275.42 FY 2004-05 to FY 2010-11 Central Excise and Service Tax Appellate Tribunal Mumbai
Act 1994 Penalty 31.43 FY 2011-12 The Commissioner of Central Excise (Appeals) Mumbai
The Central Excise Act 1944 Excise Duty 25.31 FY 2009-10 to FY 2010-11 Central Excise and Service Tax Appellate Tribunal Bangalore
2.97 Apr 2011 to Dec 2011 Central Excise and Service Tax Appellate Tribunal Bangalore
9.61 Apr 2005 to Sept 2007 Central Excise and Service Tax Appellate Tribunal Bangalore
21.07 Apr 2011 to Feb 2012 The Commissioner of Central Excise (Appeals) Guntur Andhra Pradesh
26.10 Mar 2013 to Dec 2013 The Commissioner of Central Excise (Appeals) Guntur Andhra Pradesh
41.94 Jan 2014 to Oct 2014 The Commissioner of Central Excise (Appeals) Guntur Andhra Pradesh

*Net of amounts paid under protest or otherwise. Amount is as per demand orderincluding interest and penalty wherever quantified.

8. Based on our audit procedures and on the basis of information and explanations givento us there is no delay in respect of repayment of loans or borrowings to financialinstitutions banks government and dues to debenture holders except for the followingdefaults.

Particulars Amount of default as at the balance sheet date (Rs in Lakhs) Period of default (in days) and Remarks
Andhra bank
- Principal 19.20 1 day
- Interest 27.94 1 to 32 days
Axis Bank
- Principal 1.90 1 day
- Interest 2.27 1 day
Bank of India
- Principal 146.20 1 day
- Interest 29.27 1 day
EXIM Bank
- Principal 2.14 1 day
- Interest 10.34 1 to 92 days
IDBI Bank
- Principal 2.15 1 day
- Interest 1.69 1 day
State bank of Mysore
- Principal 89.97 1 day
- Interest 70.18 1 to 61 days
State bank of India
- Principal 1591.32 1 to 367 days
- Interest 895.15 1 to 367 days
Foreign Currency Convertible Bond Holders
- Principal 717.56 92 to 1438 days
- Interest 329.28 1438 to 1737 days
Non Convertible Debentures 55.67 Unpaid from 1 May 2009
97.00 Unpaid from 1 May 2010
Pending fresh order from BIFR - Refer Note
9.1 and 32 of the financial statements
Optionally Fully Convertible Debentures 290.99 Unpaid from 30 April 2010
291.00 Unpaid from 30 April 2011 Pending fresh order from BIFR - Refer Note 9.2 and 32 of the financial statements
Term Loans taken by erstwhile PPIL from banks / financial institutions 68.02 Unpaid from respective due dates.
Pending fresh order from BIFR - Refer Note 9.4 9.5 and 32 of the financial statements

9. According to the information and explanations given to us the Company has notraised any moneys by way of initial public offer or further public offer and has not takenany term loan during the year.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of any such case by the Management.

11. According to the information and explanation given to us during the year theCompany has paid ' 49.77 Lakhs in excess of the remuneration payable as per the provisionsof section 197 read with Schedule V to the Companies Act 2013 for which application hasbeen made to the Central Government on 18 January 2016 and the said amount pendingapproval of the Central Government is shown as recoverable in the financial statements.

In respect of the excess managerial remuneration recoverable aggregating to ' 166.19Lakhs pertaining to financial years 2011-12 to 2014-15 [Refer Note 38(a)] the Board ofDirectors at its meeting held on 18 May 2016 has extended repayment date and accordinglythe said dues are repayable on or before 31 March 2017.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

13. The company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Companies Act 2013. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

14. According to the information and explanation given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly paragraph 3(xiv) of the Order is notapplicable to the Company.

15. In our opinion and according to the information and explanation given to us theCompany has not entered into any noncash transactions with directors or persons connectedwith directors. Accordingly paragraph 3(xv) of the Order is not applicable to theCompany.

16. In our opinion and according to the information and explanation given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For Kapoor & Parekh Associates
Chartered Accountants
ICAI FRN 104803W
Nikhil Patel
Partner
Mumbai 18 May 2016 M. No. 37032

ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT

(The Annexure referred to in para 2 (f) under the heading "Report on Other Legaland Regulatory Requirements" of our report of even date to the Members of WANbUrYLIMITED on the Standalone financial statements for the year ended 31 March 2016.) Reporton the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of WANBURYLIMITED ("the Company") as of 31 March 2016 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date. Management’sResponsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the ICAI and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls. Those Standards and the above mentioned Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For Kapoor & Parekh Associates
Chartered Accountants
ICAI FRN 104803W
Nikhil Patel
Partner
M. No.37032
Mumbai 18 May 2016