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Twilight Litaka Pharma Ltd.

BSE: 506985 Sector: Health care
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Twilight Litaka Pharma Ltd. (TWILITAKA) - Director Report

Company director report

Dear Shareowners

Of Twilight Litaka Pharma Ltd.

Your Directors are pleased to present this 40th Annual Report of your Company for theyear ended 30th June 2014.



Year ended 30th June 2014 Period ended 30th June 2013 Year ended 30th June 2014
(Rs. in crs.) (Rs. in crs.) (Rs. in crs.)
TOTAL INCOME 31.50 337.69 338.59
NET PROFIT AFTER TAX (139.58) (162.72) (170.95)
Add : Surplus brought
forward from the Balance Sheet (47.11) 115.61 112.74
Amount available for disposal - - -
General Reserve - - -
Surplus carried to Balance Sheet (186.69) (47.11) (58.21)
Earnings Per Share (Rs.) * (56.32) (65.66) (68.98)
Book Value per Share (Rs.) * -5.70 5.30 (2.43)

* Face Value Rs. 5/- per share. PRESENT STATUS OF THE COMPANY

In the Financial year 2010- 11 your Company has acquired 100% stake of M/s BriociaPharma (India) Limited from the funds available on the expectation that substantial fundswill be infused by way of Private Equity. This investment was necessary as the existingplants in Pimpri and Vadgaon were very old and additional capacities were required. Sincethe Company has entered into Joint Venture with M/s Interpro Healthcare of Republic ofSouth Africa it was necessary to have a modern facility complying with the regulationsapplicable in Republic of South Africa. The facility of M/s Briocia Pharma (India) Limitedhas substantial capacity and was also compliant with Modern WHO GMP guidelines.

The decision to acquire M/s Briocia Pharma (India) Ltd and other capital expenditureduring 2010-11 coupled with the as yet unsuccessful attempt to infuse substantial funds byway of private equity lead to a severe liquidity crunch and an acute shortage of workingcapital. Additionally the hostile economic environment prevented seeking any suitablealternatives that were before the Company in the form of liquidation of certain non-coreassets or obtaining liquidity from the financial markets. This lead to a prolonged periodof financial hardship to the Company with a cascading effect of slow recoveries fromdebtors drop in sales labour unrest disruption of manufacturing activities and theconsequent loss of key customers and unrelenting pressure from banks and creditors.

The cumulative effect of the inconsistent cash flows from operations and the inabilityto draw down the sanctioned limits from the bankers and over cautious investment climatein the capital markets lead to defaults and delays in honouring financial commitments. Asa result the bankers have classified the Company's accounts as a NPA during 2012 andfurther recalled their facilities initiated recovery proceedings by seeking legal actionthrough winding up petitions initiating DRT applications action under Section 138 of theN I Act and SARFAESI Act. Several creditors and workers have also taken legal action forrecovery against the Company.

The Bankers and Unsecured Creditors of the Company and its Subsidiary had initiatedproceedings before the Hon'ble Bombay High Court for winding up of the Company. Consequentto one of the customer who had offered to buy the Company's manufacturing unit at Baddiand which offer was informed to the Court in the aforesaid proceedings withdrawing hisoffer to buy the said property Honorable

Bombay High Court in their order dated 30th April 2014 appointed "ProvisionalLiquidator" to take charge of the of Company's Books of Account assets andproperties both movable and immovable. Further the Court ordered the Company itsDirectors and Officers and Agents from creating any dispossession of any of the assets orproperties without leave of the Court except in the ordinary and usual course of itsbusiness.

Consequent to the Losses exceeding the Share Capital and Reserves the Company throughits application u/s 15 of SICA Act 1985 has sought registration before BIFR and protectionu/s 22 of SICA Act 1985. The application has been duly acknowledged vide No 1366 dated02.07.2014. Company has also briefly narrated therein its proposal to revive the operationand turn the negative Net Worth to positive.

Majority of the secured Lenders (Consortium of Banks) have pursuant to an auctionprocess assigned their dues in favour of an Asset Reconstruction Company (ARC). ARC ispresently leading the dialogue with the Company for a comprehensive settlement of the duesof the Consortium. Company is hopeful that the settlement as aforesaid would benefit itand coupled with other proposals under evaluation such as developing the properties asresidential/commercial complexes negotiations with strategies investors for infusion offunds to commence the operations etc. will go a long way in bringing about turn around inthe operations and to a large extent make the existing negative net worth become positive.The Company has included the same in the presentations that have been made before BIFR. Onthe Winding up petition field before Bombay High Court against the Company it has beenlegally advised that since reference has already been made to BIFR it has fair amount ofchance in succeeding.

Based on these factors viewed cumulatively Management is of the view that the Companycontinues to operate as a going concern and is having the ability to meet its financialcommitments.


As regards Adverse opinion/qualifications stated in the Auditor's Report dated 29thAugust 2014 by the Statutory Auditors' of the Company the Board is of the view that in theNotes to Accounts all these issues are adequately dealt with.


Considering the Losses incurred by the Company your Directors do not recommend anyDividend for the Year ended as on 30th June 2014. (Previous Year Rs. Nil.)


Briocia Pharma (India) Limited is a Wholly owned Subsidiary of your Company by virtueof acquisition of 100% stake by the Company.

The Ministry of Corporate Affairs Government of India vide its circular no. 2/2011dated 8 February 2011 has provided an exemption to companies from complying with Section212 provided such companies publish the audited consolidated financial statements in theAnnual Report. Accordingly the Annual Report 2013-14 does not contain the financialstatements of our subsidiary. The consolidated financial statements in terms of Clause 32of the Listing Agreement and prepared in accordance with Accounting Standard 21 asspecified in Companies (Accounting Standards) Rules 2006 also form part of this AnnualReport.

The audited annual accounts and related information of our subsidiary whereapplicable will be made available for inspection during business hours at our registeredoffice in Pune. The annual accounts of Briocia Pharma (India) Limited and the relateddetailed information will be made available to the members on the specific request made bythem.


A detailed review of the operations performance and future outlook of your Company isgiven in the Management Discussion and Analysis Report which forms part of this Report.


Your Company follows healthy Corporate Governance practices since it believes thatCorporate Governance is a voluntary code of self-discipline. A separate report on theinitiatives on Corporate Governance adopted by your Company along with a certificate ofCompliance from the Auditors given in this Annual Report forms part of this Report.


The term of appointment of present Auditors M/s V. Sankar Aiyar & Co. CharteredAccountants Mumbai having Firm Registration No. 109208W is due to expire on conclusion ofthe forth coming Annual General Meeting. They have informed the Company about theirunwillingness to be reappointed. Accordingly the appointment of M/s. KRSHNA &ASSOCIATES Chartered Accountants having Firm Registration No. 122950W is recommended asthe new Auditors of the Company to hold the office from the conclusion of this AnnualGeneral Meeting till the conclusion of 45th Annual General Meeting of the Company to beheld hereafter subject to ratification by the Members at every Annual General Meeting.

Accordingly necessary Resolution under Section 139 has been recommended for theapproval of the Shareholders.


Pursuant to the provisions of Section 233B of the Companies Act 1956 and with theprior approval of the Central Government Mrs. Swati Joshi (Fellow Membership No. 28717)practicing Cost Accountant was appointed to conduct audit of cost records relating toformulations


Mr. Nainish Rajendra Bora (DIN: 00152040) retires by rotation and has informed hiswillingness to be reappointed as the Director of the Company liable to retire by rotation. Necessary Resolution for his reappointment is recommended for your approval.

As per the provisions of the Companies Act 2013 Independent Directors are required tobe appointed for a term upto five consecutive years and shall not be liable to retire byrotation during that period. Necessary resolutions for the appointment of Mr. AvinashShantaram Chandvankar and Mr. Raghavan Mathurakavi Srinivasa Ayyangar have beenrecommended for your approval.

In the Extra Ordinary General Meeting held on 29th September 2012 the Shareholders ofthe Company have approved the recduction in the remuneration payable to Mr. Gopal Ramourtias Managing Director and Mr. Nainish Bora as Executive Director of the Company. HoweverConsidering the present liquidity crunch and the losses incurred your Company has notmade payment of remuneration to these Directors during the period under Report.


The Company has not invited / received any fixed deposits during the year.


In accordance with the provisions of Section 217 (2A) of the Companies Act 1956 readwith the Companies (Particulars of Employees) Amendment Rules 2011 as amended none ofthe employee of the Company was in the receipt of excess of Amount prescribed in the(Particulars of Employees) Amendment Rules 2011.


As required under Section 217 (1) (e) of the Companies Act 1956 read with theCompanies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 theinformation under the said section has not been provided since no employee of the companyhas received the remuneration beyond the limits pecribed under this section.


Pursuant to the provisions of Section 217(2AA) of the Companies Act 1956 yourDirectors hereby confirm -

(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed and there has been no material departure.

(b) that the selected accounting policies were applied consistently and the directorshave made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on 30th June 2014 and of the Loss ofthe Company for the year ended on that date.

(c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the Company and preventing and detecting fraud and otherirregularities.

(d) that the annual accounts have been prepared on a going concern basis.


Your Board of Directors wish to place on record their appreciation of the contributionmade by the employees at all levels.

The Board takes this opportunity to express their gratitude to Bankers SuppliersRegulatory and government authorities Stock Exchanges and other Business Associates fortheir continued support and cooperation received by your Company.

Your Directors are thankful to the esteemed shareholders all investors clientsvendors for their continued faith and valued support.

By Order of the Board of Directors
For Twilight Litaka Pharma Ltd.
Date : 29th August 2014 RAJENDRA C. BORA
Place : Mumbai CHAIRMAN