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Wintac Ltd.

BSE: 524758 Sector: Health care
NSE: N.A. ISIN Code: INE812C01016
BSE 16:01 | 24 Apr 206.50 5.35
(2.66%)
OPEN

201.00

HIGH

210.10

LOW

200.10

NSE 05:30 | 01 Jan Wintac Ltd
OPEN 201.00
PREVIOUS CLOSE 201.15
VOLUME 146
52-Week high 239.30
52-Week low 166.00
P/E
Mkt Cap.(Rs cr) 207
Buy Price 201.00
Buy Qty 25.00
Sell Price 206.50
Sell Qty 5.00
OPEN 201.00
CLOSE 201.15
VOLUME 146
52-Week high 239.30
52-Week low 166.00
P/E
Mkt Cap.(Rs cr) 207
Buy Price 201.00
Buy Qty 25.00
Sell Price 206.50
Sell Qty 5.00

Wintac Ltd. (WINTAC) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the Twenty Seventh Annual Report on thebusiness and operations of the Company for the Financial Year ended March 31 2017.

Financial summary and Performance of the Company Rs. Lakhs
For the year Ended 31st March 2017 For the year ended 31st March 2016
Gross Sales 3489.81 2011.17
Excise Duty 209.60 201.32
Net Sales 3280.21 1809.85
Other Income 47.41 18.48
Total Revenue 3327.62 1828.33
Total Expenditure 3963.71 3159.08
Operating Profit/(Loss) (636.09) (1330.75)
Interest 134.92 77.50
Profit/(Loss)before Depreciation (PBDT) (771.01) (1408.25)
Depreciation 363.18 386.74
Loss before exceptional expenditure (1134.19) (1794.99)
Exceptional Expenditure 158.18 160.92
Profit/(Loss) before Tax (976.01) (1634.07)
Deferred tax 107.18 120.86
Net Profit/(Loss) after Tax (868.83) (1513.21)

2. Dividend & Transfer to Reserves

In view of the operating losses no dividend is considered during the year under reviewand no amount is transferred to reserves.

3. Brief description of the Company's working during the year

The net sales during the year under review was Rs. 3280.21 lakhs as compared to Rs.1809.85 lakhs during the previous year a growth of 81.24%. The net loss before tax duringthe current year was Rs. 976.01 lakhs as against the loss of Rs.1634.07 lakhs during theprevious year a decrease in loss by 40.27%. The export supplies to US Market commencedfrom October 2016 for the two products resulting in a considerable increase in the salesturnover. The Manufacturing Plant shut-down for the upgradation purposes during the firstquarter and lower sales during the second quarter are the major factors contributing tothe losses during the year. On commencement of export sales to US Market the losses werereduced considerably during the third quarter and with the higher volume of sales thefourth quarter operations were positive.

Your Directors are pleased to inform that USFDA Regulatory authorities inspected theManufacturing Plant during second week of April 2017 and the Inspection was successful andthere were No 483 observations. The Company expects the approval of few moreproducts in the near future and expect a reasonable increase in the sales andprofitability during the current year.

The Order Bank position of the Company for both domestic and export market is good andexpect reasonable growth in turnover and to turnaround the operations during the financialyear 2017-18.

In order to cater to the export US Market on approval of more ANDA's the Companyproposes to set-up additional capacities for injectable and ophthalmic products during thecurrent financial year.

There is no other material changes and commitments affecting the financial positionbetween the end of the financial year and date of report.

4. The Company during the year has not provided any loans guarantees or investments interms section 186 of the Companies Act 2013.

5. There are no material orders by any Regulators or Courts or Tribunals during theyear impacting the going concern status and company's operations in future.

6. The Company has no subsidiaries. The company has investments in an Associate Company(Medispec Pharmaceutics Pvt. Ltd.) whose net worth has completely eroded and theinvestment in the Associate Company and the amount due from it has been fully provided forin the Books of the Company. The associate company has ceased to carry on any businesssince last three years and is now defunct and therefore the Company is not expecting anyeconomic benefits from it. In the light of the same separate consolidated financialstatement incorporating the transactions of the associate company is not prepared as AS-27"Financial Reporting of Interest in Associates and Joint Ventures" requires thatthe interest in such a JV has to be reported in accordance AS-13 'Accounting forinvestments' which is now being followed in the standalone financial statement. As theCompany has no other subsidiary or associates the present standalone financial statementrepresent the consolidated financial statement required to be prepared as per Schedule IIIof the Companies Act 2013.

7. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements.

The Company has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the 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 of reliablefinancial disclosures.

8. Fixed Deposits

The details relating to deposits covered under Chapter V of the Companies Act 2013:

a. accepted during the year; Nil
b. remained unpaid or unclaimed as at the end of the year; N.A.
c. whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved- N.A.
d. at the beginning of the year; Nil
e. maximum during the year; N.A.
f. at the end of the year; Nil

The Company has not accepted or renewed any deposits during the year which are not incompliance with the requirements of Chapter V of the Act.

9. Share Capital

During the year the Company has not issued any (i) equity shares with differentialrights (ii) Sweat Equity Shares (iii) Employee Stock Options and (iv) the company has notprovided money for purchase of its own shares by employees or by trustees for the benefitof employees.

10. Directors:

A. Changes in Directors and Key Managerial Personnel:

Sri.S.Jayaprakash Mady whose term as Managing Director ended on 31stJanuary 2017 and was re-appointed as the Managing Director on 11th February2017. Sri.S.Jayaprakash Mady has resigned as the Managing Director of the Company from30.05.2017. However Mr.S.Jayaprakash Mady continues to be a non-executive Director on theBoard.

Sri.S.Jayaprakash Mady Director retires by rotation and being eligible offers himselffor re-appointment.

The Board has appointed Sri.Sunil Gundewar as the Manager of the Company under section196 & 197 of the Companies Act 2013 and his appointment and terms and conditions aresubject to approval of the shareholders at the ensuing Annual General Meeting.

B. Declaration by Independent Director (s):

The Company has received necessary declaration from each independent director underSection 149 (7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013.

C. Policy on Directors' appointment and remuneration:

The Company's policy is to have an appropriate mix of executive and independentDirectors to maintain the independence of the Board and separate its functions ofgovernance and management. As on March 31 2017 the Board consists of 5 Members one ofthem is the Managing Director and three are independent directors. However the ManagingDirector has resigned as the Managing Director effective from 30.05.2017 and consequentlythere is no executive Director on the Board from that date.

D. Formal Annual Evaluation:

The Board evaluates the effectiveness of its functioning and that of the Committees andof individual Directors by seeking their inputs on various aspects of Board proceedings.This would cover the active participation of Directors at the Board and Committeemeetings monitoring of corporate governance practices and participation in the long- termstrategic planning of the Company.

The Chairman of the board interacted with all the Independent Directors to obtainDirectors' inputs on effectiveness of Board/Committee processes and the Board consideredand discussed the inputs received from the Directors. Further Independent Directors attheir meeting reviewed the performance of Board Chairman and Non- Executive Directors.

11. The Board met four times during the financial year the details of which areprovided in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013.

12. Audit Committee - The Board has constituted an Audit Committee asrequired under Section 177 of the Companies Act 2013 and under the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015. Thecomposition of the Audit Committee is as under:

Mr.Arun Eashwar - Chairman (Independent and non-executive Director)
Mr.R.A.Thirumoorti - Member (Independent and non-executive Director)
Ms.Kavitha Krishnamoorti - Member (Independent and non-executive Director)
Mr.S.T.R.Mady - Member (Non-executive Chairman)

The Company has established a vigil mechanism (Whistle Blower policy & VigilMechanism) for Directors and employees to report concerns of unethical behaviour actualor suspected fraud or violation of the Company's code of conduct. The Whistle BlowerPolicy & Vigil Mechanism is disclosed on the Company's website.

13. Nomination and Remuneration Committee and Stakeholders Relationship Committee

The Board has constituted a Nomination and Remuneration Committee. This Committeeconsists of four non-executive Directors and three of them are Independent Directors. TheChairman of the Committee is an Independent Director. The role of the Committee is toidentify persons who are qualified to become Directors recommend to the Board theirappointment. The Committee also recommends to the Board a policy relating to theremuneration for the Directors and Key Managerial personnel. As part of the policy Companystrives to ensure that

(i) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate senior management personnel required to run the operationssuccessfully and (ii) remuneration is commensurate with the performance and efficiency andmeets performance benchmarks. The Committee has been now entrusted with the responsibilityof administering the ESOP Scheme which is subject to the approval of shareholders in theensuing AGM.

The Stakeholders Relationship Committee constituted by the Board reviews and ensuresredressal of investor grievances. The Committee consists of four non-executive directorsand the Chairman of the Committee is an Independent Director.

14. During the year the Company has not given any loans (other than loans to employeesas per the policy of the Company) Guarantee Security Investments under section 186 ofthe Companies Act 2013.

15. Managerial Remuneration:

Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.

Ratio of the remuneration of Managing Director to the median remuneration of employees of the Company for the financial year - N.A.
Percentage of increase in the remuneration of:
Managing Director - Nil
Company Secretary - 8.95%
Chief Financial Officer - 9.02%
Median Employee - 31.72%
No. of employees on the rolls - 291
Average increase made in salaries of employees other than KMP - 10.55 %

The remuneration is as per the remuneration policy of the Company.

There was no employee employed during the year or part of the year drawing remunerationin excess of the limits specified under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

Corporate Governance - Pursuant to Clause 49 of the Listing Agreement with the StockExchange a Management Discussion and Analysis statement Corporate Governance Report andAuditors' Certificate on the compliance of conditions of Corporate Governance forms partof the Annual Report.

16. Particulars of contracts or arrangements with related parties: Theparticulars of contract or arrangements entered into by the Company with related partiesreferred to in sub-section (1) of section 188 of the Companies Act 2013 including certainarm's length transactions under third proviso thereto in the prescribed form AOC-2 isappended to the Board's report.

17. Statutory Auditors - M/s.Rao & Swami Chartered Accountants and theAuditors of the Company retire at the forthcoming Annual General Meeting and are noteligible for reappointment pursuant to provisions of Section 139(2) of the Companies Act2013. Hence the Board of Directors have recommended the appointment of M/s.Ramadhyani& Co LLP Chartered Accountants (Firm Registration No.002878S/S200021) as StatutoryAuditors of the Company for a term of 5 years from the conclusion of 27thAnnual General Meeting to the shareholders of the Company for approval

18. Secretarial Auditor - Parameshwar G Hegde Practicing Company Secretaryhas been appointed to conduct the secretarial audit of the Company for the financial year2016-17 as required under Section 204 of the Companies Act 2013. The Secretarial AuditReport for FY 2016-17 is annexed to the Board's Report and forms part of the AnnualReport.

19. Extract of the annual return - In accordance with the provisions ofSection 134(3) (a) of the Companies Act 2013 extract of the annual return in theprescribed format is enclosed to the Board's Report.

20. Conservation of energy technology absorption and foreign exchange earningsand outgo.

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

(A) Conservation of energy:

(i) The steps taken and its impact on conservation of energy;

• Installation of Automatic power factor correction panel.

• Steam condensate recovery with insulated pipelines.

• Rain water harvesting.

• Recycling of purified water from process machineries as infeed water to boiler.

(ii) The steps taken by the company for utilising alternate sources of energy;

• Installation of Bricket fired Boilers which is environmental friendly and usesbrickets (agricultural by-product) as fuel instead of Diesel or Furnace Oil.

• Energy efficient motors for Air Handling Units.

(iii) The capital investment on energy conservation equipment: Nil

(B) Technology absorption:

(i) the efforts made towards technology absorption;

• Formulation development activities for Export market i.e. USA and Europe iscarried out. ANDA for 1 product developed in house were filed for USA market during lastyear by our customer.

• ANDA for 6 products developed in house will be filed shortly for USA market.

• 3 products got USFDA approval and commercialised.

(ii) the benefits derived like product improvement cost reduction product developmentor import substitution;

• More Foreign Exchange revenue since the products are developed for exportmarket.

• After approval of dossiers from respective Regulatory Agencies regularcommercial supplies is expected and ensure good growth in export business.

• Technical capability of the personnel strengthened to handle additionalproducts.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-

(a) the details of technology imported : Nil
(b) the year of import : N.A.
(c) whether the technology been fully absorbed : N.A.
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and : N.A.
(iv) the expenditure incurred on R & D : Rs. 596.22 Lakhs
(C) Foreign exchange earnings and Outgo:
Foreign Exchange Earnings : Rs. 2148.51 Lakhs
Foreign Exchange Outflows : Rs. 581.37 Lakhs

21. Directors' Responsibility Statement

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 state that—

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

b. the directors have selected such accounting policies and applied them consistentlyand 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 at the end of the financial year of theprofit and loss and cash-flow of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d. the directors have prepared the annual accounts on a going concern basis;

e. the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively and

f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

22. Acknowledgements

The Board places on record its appreciation of the continued cooperation and supportreceived from the various government authorities shareholders business associatesmedical profession employees depositors and bankers.

For and on behalf of the Board of Directors
Date : 29.05.2017 (S.T.R.MADY)
Place : Bengaluru. Chairman