DIRECTORS' REPORT To The Members, Your Directors have pleasure in presenting herewith the 27th Annual Report together with Audited Accounts of the Company for the Financial Period (Period of 6 months) ended on 31 March, 2015. OPERATIONAL REVIEW/AFFAIRS OF THE COMPANY & FUTURE OUTLOOK: The figures of Financial Period 2014-15 being 6 months are not strictly comparable with Financial Period 2013-14 being 18 months. However, the financial highlights are as under: The Total Revenue for the Financial Period under review was Rs. 25,640.73 Lacs as against Rs. 66,732.11 Lacs in the previous period. The Total Expenditure incurred in the current Financial Period was Rs. 25,192.47 Lacs as against Rs. 69,271.06 Lacs in the previous period. Exceptional items during the period under review were Rs. Nil as against Rs. 24,176.32 Lacs in the previous period. The Profit after tax for the Financial Period under review was Rs. 320.78 Lacs as against a Loss after Tax of Rs.27,000.93 Lacs for the previous Financial Period. The Company entered into a Corporate Debt Restructuring (CDR) in 2011 with its lenders. Post CDR also, the Bankers have reposed faith in the Company's business model and have continuously supported the Company with additional working capital facilities and term loans. DIVIDEND: The Board of Directors of the Company has not recommended any dividend for the financial period 2014-2015 to conserve the resources of the Company. DISCLOSURE UNDER SECION 134 (3) (j) OF THE COMPANIES ACT, 2013: It is not proposed to carry any amount to any reserves from the profits of the Company. Hence, disclosure under Section 134 (3) (j) of the Companies Act, 2013 is not required. EXTRACT OF ANNUAL RETURN: Persunt to Section 92 of the Companies Act 2013, Extract of Annual Return of the Company in Form MGT-9 is annexed herewith as Annexure - I to this Report. DEPOSITS: The Company has not accepted any deposits during the period under review. Further, there are no deposits which remained unpaid/unclaimed at the beginning or at the end of the period under review. DECLARATION BY INDEPENDENT DIRECTORS: Independent Directors have given declaration that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186: The Company has not given any loans, guarantee and made any investments pursuant to the provisions of Section 186 of the Companies Act, 2013 during the period under review. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the period under review, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The transactions entered into with Wanbury Infotech Private Limited, related party are in normal course of business and at arm's length. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.wanbury.com The details, in specified format, of the transactions with the related parties are given in the Annexure - II forming part of this Report. Your Directors draw attention of the Members to Note No. 50 to the financial statement which sets out Related Party disclosures. AUDITORS' AND AUDITORS REPORT: The Shareholders of the Company in their Twenty Sixth Annual General Meeting held on 23 March, 2015 had accorded their approval pursuant to the provisions of Sections 139 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder to appoint M/s. Kapoor & Parekh Associates, Chartered Accountants, as the Statutory Auditors of the Company for the period of three years commencing from the conclusion of Twenty Sixth Annual General Meeting until the conclusion of Twenty Ninth Annual General Meeting in the Calendar year 2017. The Shareholders of the Company in their Twenty Sixth Annual General Meeting held on 23 March, 2015 had accorded their approval pursuant to the provisions of Sections 139 and other applicable provisions of Companies Act, 2013 and Rules made thereunder to appoint M/s. Kolath & Co., Chartered Accountants, as Branch Auditor to audit the accounts of the Company's Plant Situated at Tanuku, West Godavari District, Andhra Pradesh, for the period of three years commencing from the conclusion of Twenty Sixth Annual General Meeting until the conclusion of Twenty Ninth Annual General Meeting in the Calendar year 2017. The Board of Directors of the Company has, pursuant to the provisions of Section 139, recommended the ratification of appointment of M/s. Kapoor & Parekh Associates, Chartered Accountants and M/s. Kolath & Co., Chartered Accountants, for the approval of the Shareholders from the conclusion of Twenty Seventh Annual General Meeting till the conclusion of Twenty Ninth Annual General Meeting. The observations made in the Standalone Auditor's Report read together with relevant notes thereon are self explanatory and explained in notes to accounts and hence do not call for any further comments under the Companies Act, 2013. Auditors' Report to the Shareholders for the year under review does not contain any qualification, reservation or adverse remark or disclaimer. DETAILS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES: Your Company has five subsidiaries viz. Wanbury Holdings B. V., Cantabria Pharma S. L., Laboratories Wanbury S. L., Ningxia Wanbury Fine Chemicals Co. Ltd. and Wanbury Global FZE. The Accounts of Cantabria Pharma S. L. and Laboratories Wanbury S. L. are not available due to the companies being in liquidation. The salient features of the financial statements of the subsidiaries in pursuance of Section 129 (3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014 are given in prescribed Form AOC-1 attached as Annexure - III to this Report. The Company is not having any Holding Company or Joint Venture or any Associate Company. Report in specified format on the performance and financial position of other subsidiary companies are attached as Annexure - III to this Report. RISK MANAGEMENT COMMITTEE: The Board of Directors of the Company has constituted Risk Management Committee to consider the potential risks of the business of the Company and to plan for the mitigation of the same. Following are the members of the Risk Management Committee: 1. Mr. N. K. Puri - Chairman 2. Mr. A. L. Bongirwar - Member 3. Mr. S. K. Bhattacharyya - Member 4. Mr. K. Chandran - Member DIRECTORS AND KEY MANAGERIAL PERSONNEL: In accordance with the provisions of Section 152 (6) of the Act and the Articles of Association of the Company, Mr. K. Chandran, Whole-time Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Mr. N. K. Puri, Mr. A. L. Bongirwar, Dr. P. L. Tiwari and Mr. S. K. Bhattacharya are Independent Directors who are not liable to retire by rotation. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. During the period under review, pursuant to Nomination of Mr. Manish Joshi (DIN: 06532127) withdrawn by EXIM Bank, he ceased to be the Nominee Director on the Board of the Company with effect from 4 December, 2014. During the period under review, Mr. Mangesh Bhosale, Vice President - Finance and Company Secretary of the Company resigned with effect from 26 November, 2014. The Board of Directors in their meeting held on 23 March, 2015 has appointed Mr. Jitendra J. Gandhi (ICSI Membership No.: F7209) as Company Secretary of the Company with effect from 20 April, 2015. Other than this no Director or Key Managerial Personnel was appointed or has resigned during the period under consideration. ANNUAL PERFORMANCE EVALUATION: The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of the Non-executive Directors and Executive Directors. The Company follows the best practices prevalent in the industry with respect to evaluation of Board Members. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.wanbury.com ADEQUACY OF INTERNAL FINANCIAL CONTROLS: Your Company has made special efforts to improve its internal control systems by improving the information flow and automating the processes in support systems. Support functions are now monitored through a Quarterly Shared Services Survey for the field employees to ensure that we are able to provide the best services to our internal customers. Your Company has sound, well-established and adequate internal control systems commensurate with its size and nature of business. The internal control systems ensure protection of assets and proper recording of all transactions. The Company has an Internal Audit Department consisting of a team of skilled employees, which carries out regular audits across all operations of the Company. SECRETARIAL AUDIT REPORT: Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed CS Ajit Sathe [FCS: 2899 and COP: 738] - Proprietor of M/s. A. Y. Sathe & Co., Practising Company Secretary, to conduct the Secretarial Audit for the period from 1 October, 2014 to 31 March, 2015. The Secretarial Audit Report in Form MR-3 is annexed as Annexure - IV to this Report. The observations made in the Secretarial Audit Report are as under: 1. the appointment of Woman Director on the Board of Directors of the Company is yet to be made. 2. the Company is required to appoint Key Managerial Personnel (KMP) viz. Chief Financial Officer and Company Secretary. The Company has not complied with this condition during the period under review. 3. There was a delay in transferring the unclaimed/unpaid amount of dividend for the Financial Year 2006-07 to Investor Education and Protection Fund. 4. the Company has paid excess remuneration to the Whole Time Director beyond the prescribed limits under Section 197 read with Schedule V of the Companies Act, 2013. 5. the Company has not filed Form CRA-2 with Registrar of Companies for the appointment of Cost Auditor for the Financial Year 2014-15. 6. there were non-disclosure of following information on the website: • Email ID & other relevant details of grievance redressal division/ compliance officer. • The Terms & Conditions of appointment of Independent Directors. • Details of familiarization programmes for Independent Directors. 7. the Company is ensuring the compliances of applicable clauses of Listing Agreement except that the Company has not complied with Clause 31 regarding submission of copies of Annual Report (Form A and Form B) to stock exchange for the financial year ended on 30 September 2014. 8. the Company has not filed Form ECB-2 for the month of January, 2015, February, 2015 and March, 2015 with the Authorised Dealer. 9. the Form ODI-Part IV -APR for the year ended 30 September, 2014 of Wanbury Holding B.V. and Wanbury Global FZE Wholly owned Subsidiaries is yet to be filed with the Authorised Dealer. No Form ODI-Part IV-APR for Ningxia Wanbury Fine Chemicals Co. Ltd., China has been filed by the Company. Management Response to the aforesaid observations is as under: 1. We confirm that the Company has not made the said appointment during the period under review and the appointment will be made on or before 31 July, 2015.. 2. In this connection, the Board has selected certain candidates for CFO position after taking into account the scope of work of the concerned person, the salary which may have to be paid and other relevant matter. The same will get appointed on or before 31 July, 2015. The Company did not appoint Company Secretary for the period 26 November, 2014 to 31 March, 2015 due to administrative problems. However, we have appointed Mr. Jitendra J. Gandhi as Company Secretary w.e.f. 20 April, 2015. 3. Due to administrative problems, there was a delay in transferring the unclaimed/unpaid amount of dividend for the Financial Year 2006-07 to Investor Education and Protection Fund. We have transferred the same on 8 May, 2015. 4. We confirm that the Company has paid excess remuneration to the Whole Time Director beyond the prescribed limits under Section 197 read with Schedule V of the Companies Act, 2013. The Company is in the process of making necessary application to Central Government for waiver of excess remuneration. 5. We confirm that the Company has not filed Form CRA-2 with Registrar of Companies for the appointment of Cost Auditor for the Financial Year 2014-15. However the same was filed on 13 May, 2015. 6. The Company's website was under maintenance so there was non-disclosure of following information on the website: • Email ID & other relevant details of grievance redressal division/ compliance officer. • The Terms & Conditions of appointment of Independent Directors. • Details of familiarization programmes for Independent Directors. 7. The Company is ensuring the compliances of applicable clauses of Listing Agreement except that the Company has not complied with Clause 31 regarding submission of copies of Annual Report (Form B) to stock exchanges for the financial year ended on 30 September, 2014. However, the same will be filed with Stock Exchanges in due course of time. 8. However, we confirm that the Company has not filed Form ECB-2 for the month of January, 2015, February, 2015 and March, 2015 with the Authorised Dealer in time. However, the same will be filed with Reserve Bank of India in due course of time. 9. We confirm that the Form ODI-Part IV -APR for the year ended 30 September 2014 of Wanbury Holding B.V. and Wanbury Global FZE Wholly owned Subsidiaries is yet to be filed with the Authorised Dealer. No Form ODI-Part IV-APR for Ningxia Wanbury Fine Chemicals Co. Ltd., China has been filed by the Company. CORPORATE SOCIAL RESPONSIBILITY POLICY: Provisions of Section 135 related with Corporate Social Responsibility are not applicable to the Company. Therefore, the Company has not constituted Corporate Social Responsibility Committee. AUDIT COMMITTEE: Your Company's Audit Committee has been constituted in accordance with the provisions of Clause 49 of Listing Agreement and Section 177 of the Companies Act, 2013. During the period under review, the Audit Committee met 4 times on 26 November 2014, 18 December 2014, 11 February 2015 and 23 March 2015. Following are the Members of the Audit Committee: 1. Mr. N. K. Puri - Chairman 2. Mr. A. L. Bongirwar - Member 3. Mr. S. K. Bhattacharyya - Member 4. Mr. K. Chandran - Member The broad terms and conditions are already given in Corporate Governance Report. The Members are requested to refer the same. NOMINATION AND REMUNERATION COMMITTEE POLICY: Nomination and Remuneration Committee Policy inter alia containing appointment criteria, qualifications, positive attributes, independence of Directors, removal, retirement and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel of the Company has been formulated by the Nomination and Remuneration Committee of the Company and approved by the Board of Directors. Nomination and Remuneration Policy is available on the website of the Company at www.wanbury.com CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled as 'Corporate Governance' is attached to this Annual Report. COST AUDITORS: Your Directors have appointed M/s. Hemant Shah & Associates, Cost Accountant as the Cost Auditor for the Financial Year 2015-16. M/s. Hemant Shah & Associates will submit the cost audit report along with annexure to the Central Government (Ministry of Corporate Affairs) in the prescribed form within specified time and at the same time forward a copy of such report to your Company. The Cost Audit Report for the Financial Year ended 30 September, 2014 which was due for filing on 31 March 2015 was filed with the Central Government (Ministry of Corporate Affairs) on 13 May, 2015. As required by Section 148 of the Act, necessary resolution has been included in the Notice convening the Annual General Meeting, seeking ratification by members to the Remuneration proposed to be paid to the Cost Auditors for the Financial Year 2015-16. PARTICULAR OF EMPLOYEES: In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other Particular of Employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are also forms part of this Report. However, having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during business hours for a period of 21 days before the date of ensuing Annual General Meeting and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. VIGIL MECHANISM / WHISTLE BLOWER POLICY: Proper vigil mechanism, which includes a Whistle Blower Policy, has been established for directors and employees to report their genuine concerns or grievances to the Company. The Whistle Blower Policy is posted on the Website of the Company at www.wanbury.com SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013: The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed of during the year 2014-15: - No. of complaints received: Nil - No. of complaints disposed of: Nil FRAUD REPORTING (REQUIRED BY COMPANIES AMENDMENT BILL, 2014): During the period under review, there are no any such instances reported by the Company. DISCLOSURE UNDER SECTION 134 (3) (ca) READ WITH SECTION 143 (12) OF THE COMPANIES ACT, 2013: The Auditors of the Company have not reported any instances of fraud or irregularities in the Management of the Company during financial period under review. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: As required by the Companies (Accounts) Rules, 2014 the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure as Annexure -V forming part of this Report. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the provisions of sub-section (5) of Section 134 of the Companies Act, 2013, your Directors confirm that: i) in the preparation of the annual accounts for the financial period ended on 31 March, 2015 the applicable accounting standards had been followed along with proper explanation relating to material departures; ii) the accounting policies had been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial period ended on 31 March, 2015 and of the profit and loss of the Company for that period; iii) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) the annual accounts had been prepared on a going concern basis; v) internal financial controls, to be followed by the Company, had laid down and these controls are adequate and were operating effectively; and vi) the Company had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. ACKNOWLEDGEMENT: Your Company and its Directors wish to extend their sincere thanks to the Bankers, Central & State Government, Customers, Suppliers, Stakeholders and Staff for their continuous co-operation, guidance and support and also expect the same in the future. For and on behalf of the Board of Directors, K. Chandran Vice Chairman (DIN: 00005868) N. K. Puri Director (DIN: 00002226) PLACE : MUMBAI, DATE : 21 MAY 2015 |