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Wanbury
BSE: 524212|NSE: WANBURY|ISIN: INE107F01022|SECTOR: Pharmaceuticals
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Notes to Accounts Year End : Mar '13
1.  GENERAL INFORMATION:
 
 Wanbury Limited (the Company) is a public company domiciled in India
 and incorporated under the provisions of the Companies Act, 1956. Its
 equity shares are listed on two stock exchanges in India. The Company
 is engaged in the business of pharmaceutical and rented activities,
 including research.
 
 2.  The Company has received notice of demand of Rs. 190.58 Lacs from
 the National Pharmaceutical Pricing Authority (NPPA), Government of
 India on account of alleged overcharging in respect of certain products
 under the Drug Price Control Order. This was contested before the
 jurisdictional Bombay High Court and the said court vide its order
 dated 20 September 2010 has granted interim relief by granting stay on
 the implementation and /or enforcement of the aforesaid order of NPPA.
 
 3.  Exim Bank has subscribed to 4,511 Preference Shares of Euro
 1,000/- each of Wanbury Holding B. V, a subsidiary company pursuant to
 the Preference Share Subscription Agreement dated 7 December 2006.
 Pursuant to the said agreement, Exim Bank has exercised Put Option vide
 letter dated 8 November 2011 and Company is required to pay USD 60 Lacs
 (Rs. 3,263.40 Lacs)to acquire aforesaid preference shares. Further, State
 Bank of India, London vide its letter dated 11 July 2012, has demanded
 repayment of Euro 32.60 Lacs (Rs. 2,267.00 Lacs) together with interest
 till the date of repayment from the Company in terms of Guarantee &
 Loan agreement dated 27 September 2007 vide which aforesaid credit
 facilities was granted to Cantabria Pharma S L, the step down
 subsidiary of the Company. Both the above mentioned dues being part of
 the CDR Scheme will be accounted upon arriving at mutually agreed terms
 of settlement with the respective parties.
 
 4.  IDBI Bank vide its letter dated 4 August 2012 has invoked
 guarantee of Wanbury Limited in respect of dues from Bravo Healthcare
 Limited of Rs. 2,034.21 Lacs. Since Bravo Healthcare Limited is in the
 process of one time settlement with IDBI out of sales proceeds of its
 assets the Company dees not expect any liability at this stage.
 
 5.  The Company operates soiely in the pnarmaceuticals segment and
 nence no separate disclosure tor segment vv.se information is required.
 
 6.  Erstwhile the Pharmaceutical Products of India Limited (PPIL) was
 merged with the Company, pursuant to the Order dated 24 April 2007,
 passed by Hon''ble Board for Industrial and Financial Reconstruction
 (BIFR).
 
 The Hon''ble Supreme Court vide its order dated 16 May 2008, has set
 aside the above referred BIFR order and remitted the matter back to
 BIFR for considering afresh as per the provisions of Sick Industrial
 Companies (Special Provisions) Act, 1985 (SICA), in response to a
 petition filed by one of the unsecured creditors of erstwhile PPIL, The
 BIFR has directed IDBI Bank, which has been appointed as an Operating
 Agency, to formulate new Draft Rehabilitation Scheme (DRS) pursuant to
 the Order of Hon''ble Supreme Court of India dated 16 May 2008. In the
 meanwhile, the Company has sought legal opinion and the Company has
 been advised to maintain status quo ante with respect to the merger
 under the said Scheme and that it should take further steps only on the
 basis of the fresh BIFR Order. In view of the above, the Company has
 maintained a status quo. However, all actions taken by the Company
 pursuant to the sanctioned scheme shall remain subject to and without
 prejudice to the orders that may be passed by the BIFR white.
 considering the case a fresh pursuant to the directions of the Hon''ble
 Supreme Court in its Order dated 16 May 2008; As per BIFR Order dated
 24 April 2007, statutory dues of erstwhile PPIL comprising of income
 tax Rs. 250.36 Lacsj profession tax Rs. 6.06 Lacs, custom duty Rs. 230 Lacs,
 sales tax Rs. 8.50 Lacs and excise duty Rs. 15.62 Lacs were required to be
 paid in six annual installments and the Company has pursuant to the
 scheme, allotted Non-Convertible Debentures (NCDs) of Rs. 242.50 Lacs and
 Optionally Fully Convertible Debentures (OFCDs) of Rs. 581.99 Lacs, to
 some of the lenders of erstwhile PPIL, out of which dues amounting to Rs.
 152.67 Lacs and Rs. 581.99 Lacs in respect of NCDs and OFCDs
 respectively, remains payable at the year end. Since BIFR is
 considering the matter afresh, pending fresh directives from the BIFR,
 aforesaid dues have not been paid.
 
 7.  The Company had separate IBIS software for formulation sales
 accounting which had been switched over/ linked to SAP in earlier years
 and also had changed from DCB Model to Distributorship Model (C&F) for
 selling formulation products. Consequently, trade receivables
 pertaining to formulation business are subject to confirmation,
 reconciliations and adjustments, if any.
 
 Further, balances of trade receivables, loans and advances given, trade
 payables and other liabilities are subject to confirmation/
 reconciliation and adjustments, if any.
 
 However, in the opinion of management, as recovery and other measures
 are under active consideration, the receivable amounts outstanding have
 been considered good and recoverable.
 
 8.  The Corporate Debt Restructuring (CDR) proposal of the Company,
 having 30 September 2010 as the cutoff date, has been approved by the
 CDR Cell vide its Letter of Approval (LOA) dated 23 May 2011.
 Subsequently on execution of the Master Restructuring Agreement (MRA)
 dated 19 September 2011, effect of CDR Scheme has been given in the
 financial statements as per the MRA and excess interest accounted for
 the period 1 October 2010 to 31 March 2011 amounting to Rs. 783.21 Lacs
 has been reversed during the previous year ended 31 March 2012 and
 shown as exceptional item in the financial statements of the relevant
 year.
 
 MRA among otherterms and conditions, provide for:
 
 a) Additional fund, non fund based assistance from the CDR lenders;
 
 b) Promoters to bring further contributions in stages;
 
 c) Reporting and other compliances by the Company; and
 
 d) Right to the CDR lenders to convert at their option, the whole of
 the outstanding amount or 20% of rupee equivalent of the defaulted
 amount into fully paid-up equity shares of the Company at par, in case
 of certain defaults by the Company.
 
 9.  a) The Company had issued on 20 April 2007, 800 Nos. 1% Unsecured
 Foreign Currency Convertible A Bonds
 
 (A Bonds) and 700 Nos. 1% Unsecured Foreign Currency Convertible B
 Bonds (B Bonds) of face value of
 
  10,000 each maturing on 23 April 2012 and 17 December 2012
 respectively.
 
 The A Bonds were convertible at the option of the holders of such
 bonds, unless previously redeemed or purchased and cancelled, into
 equity shares of face value of Rs. 10 each at a premium of Rs. 128.43,
 being conversion price of
 
 Rs. 138.43 at a fixed exchange rate of Rs. 57.22 to  1 and such option
 being exercisable till 9 March 2012.
 
 The B Bonds were convertible at the option of the holders of such
 bonds, unless previously redeemed or purchased and cancelled, into
 equity shares of Rs. 10 each at a premium of Rs. 128.43, being reset
 conversion price of Rs. 138.43 at a fixed exchange rate of Rs. 57.22 to 1
 and such option being exercisable till 5 November 2012.  The Company
 may, at the option of any holders of any Bonds, repurchase at the early
 redemptions amount, together with accrued and unpaid interest.
 
 The A Bonds and the B Bonds are bearing interest @ 1 % p.a. payable
 semi annually and Yield to Maturity of 7.5 % p.a.  compounded semi
 annually.
 
 b) The pro-rata premium payable on redemption, exchange gain/loss on
 premium payable and issue expenses is charged to Securities Premium
 Account.
 
 c) During the year ended on 31 March 2010 the Company bought back and
 cancelled 424 Foreign Currency Convertible A Bonds of face value of 
 10,000 each.
 
 d) During the year under review the Company has not received any
 application for conversion of FCCB into equity shares of the Company.
 Howevertill date 5,29,085 fully paid equity shares of face value of ^
 10/- each have been issued at a conversion price of Rs. 138.43 per equity
 share upon conversion of 128 Foreign Currency Convertible A Bonds of
 face value of 10,000 each.
 
 e) 248 FCCB A Bonds have matured on 23 April 2012. The Company has
 negotiated terms vide agreement dated 14 September 2012 with the bond
 holder holding 200 bonds and have been accounted for accordingly. For
 the balance 48 FCCB A Bonds, pending negotiation effect given in the
 financial statements are as per the terms at the time of issue of the
 bonds.
 
 f) 700 FCCB B Bonds have matured on 17 December 2012.556 Bonds were
 converted into term loan of State Bank of India and the Company has
 negotiated terms with the 144 Bondholder. Effects in the accounts have
 been given as per the sanction letterfrom State Bank of India and the
 terms of settlement with remaining bondholder.
 
 10.  The Company has invested Rs. 53.40 Lacs (Pr. Yr. Rs. 53.40 Lacs) in
 equity shares of Bravo Healthcare Limited (BHL) and also given loan and
 advances aggregating to Rs. 7,558.02 Lacs (Pr. Yr. Rs. 7,502.60 Lacs). Net
 worth of BHL has been negative as per audited accounts for the year
 ended 31 March 2012.
 
 The Company has invested Rs. 5.29 Lacs (Pr. Yr. Rs. 5.29 Lacs) in shares of
 Ningxia Wanbury Fine Chemicals Company Limited (Ningxia), a
 wholly-owned subsidiary and net amount recoverable as at the year end
 is Rs. 124.11 Lacs (Pr. Yr.  Rs. 123.81 Lacs). Net worth of Ningxia has
 been negative as per audited accounts for the year ended 31 March 2013.
 The Company has invested Rs. 3,849.02 Lacs (Pr. Yr. Rs. 3,849.02 Lacs) in
 ordinary share of Wanbury Holding B.V.fWHBV), a wholly-owned
 subsidiary, which is created for making investment in step down
 subsidiaries and has given advances of Rs. 5,375.35 Lacs (Pr. Yr. Rs.
 5,348.35 Lacs) to be adjusted against shares which is pending
 allotment.  WHBV has made investment in its wholly-owned subsidiary,
 Cantabria Pharma SI. (CP) and given loans & advances to the CR
 Further, the Company has also receivable from CP of Rs. 4,813.53 Lacs
 (Pr. Yr. Rs. 4,686.59 Lacs) as at the year end. CP has incurred losses
 and suffered significant erosion of net worth.
 
 The Company''s involvement in the aforesaid companies is of strategic
 importance and for long term and is contemplating steps for their
 revival, fund infusion etc. Hence, no provision has been considered
 necessary at this juncture in respect of aforesaid investments in and
 dues recoverable from them.
 
 11. Disclosure of trade payable under current liabilities is based on
 the information available with the Company regarding the status of the
 suppliers as defined under the Micro, Small and Medium Enterprises
 Development Act, 2006. Amount outstanding as on 31 March 2013 to
 Micro, Small and Medium Enterprises on account of principal amount
 aggregate to Rs. 35.64 Lacs (Pr. Yr. Rs. 71.43 Lacs) [including overdue
 amount of Rs. 26.05 Lacs (Pr. Yr. Rs. 48.39 Lacs)]and interest due thereon
 is Rs. 20.12 Lacs (Pr. Yr. Rs. 10.03 Lacs) and interest paid during the
 yearRs. Nil (Pr. Yr. Rs. Nil). Since as per the terms/understanding with
 the parties, no interest is payable, hence no provision has been made
 for the aforesaid interest (Refer Note 9).
 
 12.  The aggregate amount of revenue expenditure, except depreciation,
 incurred during the year on Research and Development and shown in the
 respective heads of account is Rs. 651.65 Lacs (Pr. Yr. Rs. 478.91 Lacs).
 
 13.  Employee Benefits
 
 As required by Accounting Standard-15 Employees Benefits the
 disclosure are as under:
 
 Defined Contribution Plans
 
 The Company offers its employees defined contribution plans in the form
 of provident fund (PF) and Employees'' Pension Scheme (EPS) with the
 government, and certain state plans such as Employees'' State Insurance
 (ESI). PF and EPS cover substantially all regular employees and the ESI
 covers certain workers. Contributions are made to the Government''s
 funds. While both the employees and the Company pay predetermined
 contributions into the provident fund and the ESI Scheme, contributions
 into the pension fund is made only by the Company. The contributions
 are normally based on a certain proportion of the employee''s salary.
 During the year, the Company has recognised the following amounts in
 the Account:
 
 Defined Benefit Plans Gratuity:
 
 The Company makes annual contributions to the Employees'' Group
 Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a
 funded defined benefit plan for qualifying employees. The scheme
 provides for payment to vested employees as under:
 
 a) On normal retirement/early retirement/withdrawal/resignation:
 
 As per the provisions of Payments of Gratuity Act, 1972 with vesting
 period of 5 years of service.
 
 b) On the death in service:
 
 As per the provisions of Payment of Gratuity Act, 1972 without any
 vesting period.
 
 Death Benefit:
 
 The Company provides for death benefit, a defined benefit plan, (the
 death benefit plan) to certain categories of employees The death
 benefit plan provides a lump sum payment to vested employees on Death,
 being compensation received from the insurance company and restricted
 to limits setforth in the said plan. The death benefit plan is
 non-funded.
 
 Leave Encashment:
 
 The Company''s employees are entitled for compensated absences which are
 allowed to be accumulated and encashed as per the Company policies and
 the same is being provided based on report of independent actuary using
 the Projected Unit Credit Method.
 
 Accordingly Rs. 519.51 Lacs (Pr. Yr. Rs. 377.43 Lacs) (including towards
 current liability of Rs. 69.52 Lacs (Pr. Yr. Rs. 31.35
 Lacs)) being liability as at the year-end for compensated absences as
 per actuarial valuation has been provided in the accounts.
 
 14.  In terms of the requirements of the Accounting Standards -28 on
 Impairment of Assets issued by the Institute of Chartered Accountants
 of India, the amount recoverable against Fixed Assets has been
 estimated for the year end by the management based on the valuation
 carried out by the approved valuer. The recoverable amount so assessed
 was found to be adequate to coverthe carrying amount of the assets.
 
 15.  The Company has entered into Derivatives structure for hedge
 purpose and not intended fortrading or speculation. The year end
 foreign currency exposures that have been hedged by a derivative
 instrument or otherwise are as below:
 
 16.  Disclosure for operating leases under Accounting Standard
 19-Accounting for Leases:
 
 The Company has taken various residential /godown / office premises
 (including furniture and fittings, therein as applicable) under
 operating lease or leave and license agreements. These are generally
 not non-cancellable and range from 33 months to 5 years under Leave and
 Licence, or longer for other leases and are renewable by mutual consent
 on mutually agreeable terms. The Company has given refundable interest
 free security deposits in accordance with the agreed terms. The lease
 payments of Rs. 322.08 Lacs (Pr. Yr. Rs. 318.77 Lacs) are recognised in the
 Statement of Profit and Loss under Rent under Note 29.
 
 17.  Advance for investment to Wanbury Holding B.V, a subsidiary
 company, consists of expenses incurred /payment made to / on behalf of
 aforesaid subsidiary amounting to Rs. 5,375.35 Lacs (Pr.  Yr. Rs. 5,348.35
 Lacs) which are intended to be adjusted against the value of the
 Ordinary Shares to be issued by the aforesaid subsidiary.
 
 18.  Related Party Disclosure: (With whom the transactions have taken
 place during the year) A.  Relationship:
 
 Category 1: Major Shareholders:
 
 Expert Chemicals (India) Pvt. Ltd.  Category 2: Subsidiary Companies:
 
 Wanbury Holding B. V. (Netherlands)
 
 Cantabria Pharma S. L. (Spain;
 
 Ningxia Wanbury Fine Chemicals Co. Ltd (China)
 
 Wanbury Global FZE (Ras-AI-Khaimah. UAE; Category 3: Key Management
 Personnel and their relatives:
 
 Mr. K. Chandran Vice Chairman
 
 Category 4: Others (Enterprise owned or significantly influenced by key
 management personnel or their relatives)
 
 Wanbury Infotech Pvt. Ltd
 
 Bravo Healthcare Limited
 
 Note-Sales excludes free replacements, offers
 
 19.  The Company has incurred losses since last 3 years and net-worth
 of the Group (the Company & its subsidiaries), based on consolidated
 financial statements for the year ended on 31 March 2013 is negative.
 The Company has initiated various measures, including restructuring of
 debts, business ara infusion of funds etc. Consequently, in the opinion
 of the management, operations of the Company will continue.. ithout
 interruption. Hence, financial statements are prepared on a going
 concern basis.
 
 20.  Other Long Term Loans and Advances (Refer Note 14) including the
 interest receivable thereon aggregating to Rs. 2,853.18 Lacs are
 outstanding at the year-end. These amounts are repayable on demand. The
 Company has received the amount when demanded. Further respective
 parties have confirmed their balances at the end of the year and
 management considers these amounts as receivable and hence no
 provisions have been considered necessary.
 
 21.  Figures of previous year are regrouped rearranged wherever
 necessary so as to maKe them comparable with the current year.
Source : Dion Global Solutions Limited
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