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Wanbury Ltd.

BSE: 524212 Sector: Health care
NSE: WANBURY ISIN Code: INE107F01022
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VOLUME 100
52-Week high 35.70
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P/E
Mkt Cap.(Rs cr) 56
Buy Price 23.50
Buy Qty 161.00
Sell Price 23.35
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OPEN 23.50
CLOSE 23.60
VOLUME 100
52-Week high 35.70
52-Week low 14.90
P/E
Mkt Cap.(Rs cr) 56
Buy Price 23.50
Buy Qty 161.00
Sell Price 23.35
Sell Qty 90.00

Wanbury Ltd. (WANBURY) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

WANBURY LIMITED

Report on Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of WANBURYLIMITED ("the Company") which comprise the Balance Sheet as at 31 March2018 the Statement of Profit and Loss including Other Comprehensive Income (Loss) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fairview of the financial position financial performance including other comprehensive income(loss) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the Ind AS and other accounting principles generally accepted in India of the stateof affairs of the Company as at 31 March 2018 and its Loss other comprehensive income(loss) its cash flows and changes in equity and for the year ended on that date.

Material Uncertainty Related to Going Concern

In spite of negative net worth of the Company the financial statements of the Companyhave been prepared on a going concern basis for the reasons stated in Note no.64 of thefinancial statements.

Our opinion is not modified in respect of the same.

Emphasis of Matters

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

a) The Company has given guarantee in respect of Exim Bank's investments of USD 60Lakhs (Rs. 3902.64 Lakhs) in Wanbury Holding B.V. a subsidiary of the Company which hasbeen invoked. The said dues being part of the CDR Scheme will be accounted upon arrivingat mutually agreed terms of settlement as stated in Note 43(a) of the financialstatements.

b) Note No. 46 of the financial statements regarding the status of merger of erstwhilePPIL with the Company.

Our opinion is not modified in respect of these matters.

Other Matters

The comparative financial information for the year ended 31 March 2017 and thetransition date opening balance sheet as at 1 April 2016 prepared in accordance with IndAS included in these standalone financial statements are based on the previously issuedstatutory financial statements for the year ended 31 March 2017 and 31 March 2016respectively prepared in accordance with Accounting Standards prescribed under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (as amended) whichwere audited by the predecessor auditor whose reports dated 30 May 2017 and 18 May 2016respectively expressed unmodified opinion on those standalone financial statements andhave been adjusted for the differences in the accounting principles adopted by the Companyon transition to Ind AS which have been audited by us.

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 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

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 Balance Sheet the Statement of Profit and Loss including other comprehensiveincome (loss) the Cash Flow Statement and the Statement of Changes in Equity dealt withby this Report are in agreement with the books of account;

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with relevantrules issued thereunder;

e) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B"; and

g) 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 March2018 on its financial position in its standalone Ind AS financial statements - Refer Note42 to the standalone Ind AS financial statements;

ii. The Company has not entered into any long-term contracts including derivativecontracts requiring provision under the applicable law or Ind AS for material foreseeablelosses;

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

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they do not pertain to the financial year ended 31 March 2018.However amounts as appearing in the audited standalone financial statements for the yearended 31 March 2017 have been disclosed - Refer note 68 to the standalone Ind AS financialstatements.

For V. Parekh & Associates
Chartered Accountants
ICAI FRN 107488W
Rasesh V. Parekh
Partner
Mumbai 10th August 2018 M. No. 38615

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 WANBURYLIMITED on the standalone Ind AS financial statements for the year ended 31 March2018.)

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/leasedeeds and other records examined by us we report that the title deeds/lease deeds inrespect of all the immovable properties of land which are freehold immovable propertiesof land that have been taken on lease and buildings as disclosed in Note 8 - fixed assetsin the standalone Ind AS financial statements are held in the name of the Company or inthe erstwhile name of the Company or in the name of the transferor companies which havemerged into the Company as at the balance sheet date.

2) According to the information and explanation 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) According to the information and explanations given to us the Company has notaccepted any deposits as per the directives issued by the Reserve Bank of India under theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

6) We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Companies Act 2013 in relation to products manufactured and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not made a detailed examination of the records with a view todetermine whether they are accurate and complete.

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

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Sales Tax Service TaxGoods and Service Tax Custom Duty Excise Duty Value Added Tax Cess and other materialstatutory dues with the appropriate authorities during the year. There are no undisputedamounts payable in respect of aforesaid material statutory dues as at 31 March 2018 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 46 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 Goods and Service Tax Customs DutyExcise Duty Value Added Tax and Cess as at 31 March 2018 which have not been depositedon account of a dispute except as enumerated herein below which are pending beforerespective 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 Income Tax/TDS/ 46.20 AY 1997-98 Bombay High Court
Act 1961 Interest /Penalty 503.71 AY 2010-11 Deputy Commissioner of Income tax Mumbai
The Central Sales Tax Act 1956 Sales Tax/Interest/Penalty 42.95 FY 1997-98 to FY 2004-05 Andhra Pradesh High Court
2972.28 FY 1992-93 FY 1994-95 FY 1996-97 FY 1997-98 & FY 2000-01 to FY 2004-05 Bombay High Court
Service Tax under Finance Act 1994 Service Tax/ Interest/ Penalty 282.37 FY 2005-06 to FY 2010-11 Central Excise and Service Tax Appellate Tribunal Mumbai
31.43 FY 2011-12 The Commissioner of Central Excise (Appeals) Mumbai
The Central Excise Act 1944 Excise Duty/ Penalty 26.10 Mar 2013 to Dec 2013 The Custom Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad
41.94 Jan 2014 to Oct 2014 The Custom Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad
20.03 Nov 2014 to Aug 2015 The Commissioner of Central Excise (Appeals) Guntur Andhra Pradesh

*Net of amounts paid under protest or otherwise. Amount as per demand order includinginterest and penalty wherever quantified.

8) Based on our audit procedures information and explanations given to us there is nodelay in respect of repayment of loans or borrowings to financial institutions banksGovernment and dues to debenture holders except for the following defaults.

Particulars Amount of default as at the balance sheet date (Rs. in Lakhs) Period of default (in days) and Remarks
Andhra bank
- Principal 515.27 1 to 366 days
- Interest 166.31 1 to 366 days
Axis Bank
- Principal 133.63 1 day
- Interest 2.14 1 day
EXIM Bank
- Principal 244.04 1 to 91 days
- Interest 39.36 1 to 731 days
IDBI Bank
- Principal 11.52 1 to 91 days
- Interest 1.20 1 day
Edelweiss Asset Reconstruction Company Limited ("EARCL")
- Principal 1086.94 1 to 640 days
- Interest 199.69 366 to 640 days
Foreign Currency Convertible Bond Holders
- Principal 397.04 1 to 2168 days
- Interest 115.70 1 to 2467 days
Non Convertible Debentures 55.67 Unpaid from 1 May 2009
97.00 Unpaid from 1 May 2010 Refer Note 28.1 and 46 of the financial statements
Optionally Fully Convertible Debentures 290.99 Unpaid from 30 April 2010
291.00 Unpaid from 30 April 2011
Refer Note 28.2 and 46 of the financial statements
Term Loans taken by erstwhile 68.02 Unpaid from respective due dates.
PPIL from banks/financial institutions Refer Note 28.4 28.5 and 46 of the financial statements

9) According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) and has not taken any 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 material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

11) According to the information and explanation given to us:

During the year ended 31 March 2018 31 March 2017 and 31 March 2016 the Company haspaid Rs. 45.77 Lakhs Rs. 41.77 Lakhs and Rs. 49.77 Lakhs respectively in excess of theremuneration payable as per the provisions of section 197 read with Schedule V to theCompanies Act 2013 which is recoverable from whole time director. The Company hasapplied to the Central Government for the approval of the excess remuneration paid forF.Y. 2015-16. Amount recoverable from whole time director aggregating to Rs. 137.31 Lakhsis shown under "Other Current Assets - Non Financial". In case of non approvalfrom Central Government the Board of Directors at its meeting held on 10 August 2018 hasdecided to recover the said dues on or before 9 August 2019. (Refer Note 57).

12) In our opinion and according to the information and explanation 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 Ind AS financialstatements as required by the applicable Ind AS.

14) According to the information and explanation given to us as per the terms of itsdebt settlement the Company has during the year made preferential allotment of EquityShares to the lender on conversion of Compulsory Convertible Debentures (CCDs)issued/allotted in part settlement of dues to lenders in the earlier year. Therequirements of section 42 of the Companies Act 2013 have been complied with to theextent applicable.

15) In our opinion and according to the information and explanation given to us theCompany has not entered into any non-cash 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 V. Parekh & Associates
Chartered Accountants
ICAI FRN 107488W
Rasesh V. Parekh
Partner
Mumbai 10th August 2018 M. No. 38615

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 Ind AS financial statements for the year ended 31 March2018.)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof WANBURY LIMITED ("the Company") as of 31 March 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India ("ICAI").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation andpresentation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the ICAI and the Standards on Auditing issued by ICAI anddeemed to be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls. Those Standards and the above mentioned Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements 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 controls systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31 March 2018 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the ICAI.

For V. Parekh & Associates
Chartered Accountants
Firm Regn. No. 107488W
Rasesh V. Parekh
Partner
Mumbai10 August 2018 M. No. 38615