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Notes to Accounts of Wanbury Ltd.

Mar 31, 2016

1.

58,199 Zero Coupon Optionally Fully Convertible Debentures (OFCDs) of face value of Rs. 1,000/- each were allotted to the lenders of erstwhile PPIL pursuant to the order dated 24 April 2007 of Hon''ble BIFR. OFCD were convertible between 1 November 2008 and 30 April 2012 into its equity shares at a price of Rs. 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right. The matter is under fresh consideration of BIFR pursuant to the order dated 16 May 2008 of Hon''ble Supreme Court.

Refer Note 33 for rights of lender under CDR scheme to convert dues into equity shares of the Company under certain condition stipulated in Master Restructuring Agreement dated 19 September 2011.

2. (a) For the year ended 31 March 2016:

Term Loans are secured by pari passu first charge on all the present and future movable and immovable fixed assets of the Company situated at Patalganga and Tarapur, few brands of the Company and second charge, except in respect of Term Loans from State Bank of India which has a first charge, on all the present and future movable and immovable fixed assets of the Company situated at Tanuku and second pari passu charge on entire present and future current assets of the Company and pledge of entire holding of equity shares of the Company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc., in addition to guarantee of Expert Chemicals (I) Private Limited, Bravo Healthcare Ltd., Wanbury Global FZE, Wanbury Holding BV, Kingsbury Investment Inc. and Mr. K. Chandran, director of the Company.

(b) For the period ended 31 March 2015 :

Term Loans are secured by pari passu first charge on all the present and future movable and immovable fixed assets of the Company situated at Patalganga and Tarapur, few brands of the Company and second charge, except in respect of Term Loans from State Bank of India which has a first charge, on all the present and future movable and immovable fixed assets of the Company situated at Tanuku and second pari passu charge on entire present and future current assets of the Company and pledge of entire holding of equity shares of the Company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc., in addition to guarantee of Expert Chemicals (I) Private Limited, Bravo Healthcare Ltd., Wanbury Global FZE, Wanbury Holding BV, Kingsbury Investment Inc. and Mr. K. Chandran, director of the Company.

3. The NCD are to be secured by a pari passu charge on the fixed assets of the Company situated at Patalganga and Plot No. J-17 at Tarapur. The NCD comprises of Part A of Rs. 60 and Part B of Rs. 40 which are redeemable at par at the end of two years and three years respectively from 1 May, 2007. The Company had redeemed Part A of Rs. 60 relating to 1,49,709 NCD''s in the earlier years. NCD''s amounting to Rs. 55.67 Lakhs and Rs. 97 Lakhs was due for repayment on 1 May 2009 and 1 May 2010 respectively. However, since the matter is under consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 32.

4. The OFCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL situated at Plot No 24 at Tarapur and fixed assets at Mazgaon. OFCD are convertible between 1 November, 2008 and 30 April, 2012 into equity shares at a price being higher of Rs. 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right amounting to Rs. 290.99 Lakhs and Rs. 291 Lakhs was due for repayment on 30 April 2010 and 30 April 2011 respectively. However, since the matter is under consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 32.

5. There is delay in repayment of

(i) term loan aggregating to Rs. 1,852.89 Lakhs (Pr. Yr. Rs. 1,158.09 Lakhs) ranging from 1 to 367 days ( Pr. Yr. 1 to 183 days).

(ii) amount payable to FCCB Holders aggregating to Rs. 717.56 Lakhs (Pr. Yr. Rs. 509.35 Lakhs) ranging from 92 days to 1438 days (Pr. Yr. 91 to 1072 days).

(iii) interest on secured borrowings aggregating to Rs. 1,036.83 Lakhs (Pr. Yr. Rs. 268.88 Lakhs) ranging from 1 to 367 days (Pr. Yr. 1 to 60 days) in respect of dues to banks/ financial institutions.

(iv) interest on FCCB aggregating to Rs. 329.28 Lakhs (Pr. Yr. Rs. 47.52 Lakhs) ranging from 1438 to 1737 days (Pr. Yr. 1072 to 1371 days).

6. Term loans of erstwhile PPIL amounting to Rs. 68.02 Lakhs (Pr. Yr. Rs. 68.02 Lakhs) are secured by a pari-passu first charge on its fixed assets of erstwhile PPIL.

7. The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR vide its order dated 24 April, 2007. However, since the matter is under fresh consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 32.

The management considers the Service Tax, Excise Duty, Custom Duty, Sales Tax and Income Tax demand received from the authorities and demand received from NPPA are not tenable against the company, and therefore no provision for these contingencies has been made.

Further, the Company does not expect, in respect of aforesaid matters, to have any material adverse effect on the company’s financial conditions, results of operations or cash flows.

Future cash flows in respect of liability under clause (a) is dependent on terms agreed upon with the parties and in respect of liability under clause (b) to (g) are dependent on decisions by relevant authorities of respective disputes.

8.. 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 Lakhs (Pr. Yr. USD 60 Lakhs) [Rs. 3,979.97 Lakhs (Pr. Yr. Rs. 3,755.45 Lakhs)] 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 Lakhs (Pr. Yr. Euro 32.60 Lakhs) [Rs. 2,448.11 Lakhs (Pr. Yr. Rs. 2,200.84 Lakhs)] 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.

9. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

10. 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 while considering the case afresh 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 Lakhs, profession tax Rs. 6.06 Lakhs, custom duty Rs. 230 Lakhs, sales tax Rs. 8.50 Lakhs and excise duty Rs. 15.62 Lakhs 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 Lakhs and Optionally Fully Convertible Debentures (OFCDs) of Rs. 581.99 Lakhs, to some of the lenders of erstwhile PPIL, out of which dues amounting to Rs. 152.67 Lakhs and Rs. 581.99 Lakhs in respect of NCDs and OFCDs respectively, remains payable at the period end. Since BIFR is considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues have not been paid.

11. 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.

MRA among other terms 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;

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; and

e) Right to receive recompense for the reliefs and sacrifices extended by Lenders within the CDR parameters with the approval of the CDR Empowered Group.

12. During the financial year ended on 31 March 2016, the Company did not have a Chief Financial Officer as required under Section 203 of the Companies Act, 2013. However, the Chief Financial Officer has been appointed w.e.f. 22 April 2016.

13. FCCB ‘A’ Bonds have matured on 23 April 2012. The Company had negotiated terms with bond holders holding 200 bonds and had been accounted for accordingly. For 30 FCCB ‘A’ Bonds, pending negotiation with bond holders, effect given in the financial statements are as per the terms at the time of issue of the bonds.

FCCB ‘B’ Bonds have matured on 17 December 2012. The Company has negotiated terms with 144 FCCB ‘B’ bondholder and effect in the accounts have been given as per the terms of settlement with the bondholder.

14. Disclosure of trade payable as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” is based on the information available with the Company regarding the status of the suppliers:

15. The Company has instituted Employee Stock Option Scheme 2015 (“ESOP 2015”) during the year which was approved by the shareholders vide their resolution dated 23 March 2015. The Board of Directors of the Company has granted 3,00,000 option to a employee pursuant to the ESOP 2015 on 5 November 2015. Each option entitles an employee to subscribe to one equity share of the Company at an exercise price of Rs. 61/- per share. Further, all the options granted have lapsed during the year. Subsequently, the Board has decided to come out with new ESOP Scheme and in view of the same, the ESOP Scheme 2015 stands withdrawn.

16. During the year, pursuant to the Corporate Debt Restructuring scheme, the Company has received Rs. 1,222.31 Lakhs from Expert Chemicals (India) Pvt. Ltd. being promoter’s contribution towards the preferential allotment of equity shares of Rs. 10/- each to be issued at a premium of Rs. 27.50 per equity share, upon completion of requisite approvals and compliances.

17. Net-worth of the Company as on 31 March 2016 is negative. The Company has initiated various measures, including restructuring of debts/ business and infusion of funds etc. Consequently, in the opinion of the management, operations of the Company will continue without interruption and hence, financial statements are prepared on a “going concern” basis.

18. Figures for the current financial year, being for twelve months from 1 April 2015 to 31 March 2016, are not strictly comparable with those of the previous financial period which are for six months i.e. from 1 October 2014 to 31 March 2015.

19. Figures of previous financial period are regrouped/ rearranged wherever necessary.


Mar 31, 2015

1. GENERAL INFORMATION:

Wanbury Limited ("the Company") is a public company domiciled in India. The Company is engaged in the business of pharmaceutical and related activities, including research.

2. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Rs, 113.67 Lacs (Pr. Yr. Rs, 154.06 Lacs).

b) Other Commitments - Non Cancellable operating leases (Refer Note 48).

The management considers the Service Tax, Excise Duty, Customs Duty, Sales Tax and Income Tax demand received from the authorities and demand received from NPPA are not tenable against the Company, and therefore no provision for these contingencies has been made.

Further, the Company does not expect, in respect of aforesaid matters, to have any material adverse effect on the Company,s financial conditions, results of operations or cash fows.

Future cash fows in respect of liability under clause (a) is dependent on terms agreed upon with the parties and in respect of liability under clause (b) to (g) are dependent on decisions by relevant authorities of respective disputes.

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 (Pr. Yr. USD 60 Lacs) [Rs, 3,755.45 Lacs (Pr. Yr. Rs, 3,696.81 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 (Pr. Yr. Euro 32.60 Lacs) [ Rs, 2,200.84 Lacs (Pr. Yr. Rs, 2,549.52 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. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

5. 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 fled 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 while considering the case afresh 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 Lacs, profession tax Rs, 6.06 Lacs, customs 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 period end. Since BIFR is considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues have not been paid.

6. 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.

MRA among other terms 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.

e) Right to receive recompense for the reliefs and sacrifces extended by Lenders within the CDR parameters with the approval of the CDR Empowered Group.

7. The Company does not have a Chief Financial Officer required under Section 203 of the Companies Act, 2013 and the Company is in process of identifying suitable candidate for the position of Chief Financial Officer.

8. 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 7.50 % 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 period under review the Company has not received any application for conversion of FCCB into equity shares of the Company. However till date 5,29,085 fully paid equity shares of face value of Rs, 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 with bond holders holding 218 bonds and have been accounted for accordingly. For the balance 30 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. Out of this, 556 bonds are repaid on 31 March 2014 and the Company has negotiated terms with 144 bondholder. Effects in the accounts have been given as per the terms of settlement with remaining bondholder.

9. a) Advance for investment to Wanbury Holding B.V., a subsidiary company, amounting to Rs, 10,004.46 Lacs

(Pr. Yr. Rs, 10,004.46 Lacs) are intended to be adjusted against the value of the Ordinary Shares to be issued by the aforesaid subsidiary.

b) The Company has invested Rs, 53.40 Lacs in equity shares of Bravo Healthcare Limited (BHL) and also given loan and advances aggregating to Rs, 7,598.04 Lacs in previous period. Net worth of BHL has been negative as per audited accounts for the year ended 31 March 2014.

The Company has invested 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 period end is Rs, 124.11 Lacs. Net worth of Ningxia has been negative as per audited accounts for the period ended 31 March 2015.

The Company has invested Rs, 68.33 Lacs in shares of Wanbury Global FZE ("FZE"), a wholly-owned subsidiary and Rs, 1,254.35 Lacs in quasi share capital of FZE.

The Company has invested Rs, 3,849.02 Lacs in ordinary share of Wanbury Holding B.V.("WHBV"), a wholly-owned subsidiary, which is created for making investment in step down subsidiaries and has given advances of Rs, 10,004.46 Lacs to be adjusted against shares which is pending allotment. WHBV has made investment in it,s wholly-owned subsidiary, Cantabria Pharma S.L. ("CP") and given loans & advances to CP. The Company has also receivable from CP of Rs, 1,219.33 Lacs as at the period end. CP has incurred losses and net worth of CP has been negative. Further, CP has fled for voluntary insolvency in the Commercial Court of Madrid, Spain on 4 November 2013. CP is in the process of liquidations and Receiver has taken the control of CP as per the order of Commercial Court of Madrid, Spain.

In the preceding financial statement for the eighteen months period ended on 30 September 2014, provision was made for Diminution in value of investments aggregating to Rs, 5,230.38 Lacs and for Doubtful Advances aggregating to Rs, 18,945.94 Lacs and the same had been considered as Exceptional Items - Refer Note 30.

10. Disclosure of trade payable under current liabilities is based on the information available with the Company regarding the status of the suppliers as defned under the "Micro, Small and Medium Enterprises Development Act, 2006".

Amount outstanding as on 31 March 2015 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs, 64.33 Lacs (Pr. Yr. Rs, 44.10 Lacs) and interest due thereon is Rs, 4.19 Lacs (Pr. Yr. Rs, 8.31 Lacs) and interest paid during the period Rs, Nil (Pr. Yr. Rs, Nil).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).

11. Employee Benefits

As required by Accounting Standard- 15 "Employees Benefits" the disclosure are as under:

Defned Contribution Plans

The Company offers its employees defned 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.

The estimates of future salary increase, considered in the actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected contribution for Defend Benefit Plan for the next financial year will be in line with current financial period.

Death Benefit:

The Company provides for death benefit, a defend 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 set forth in the sand 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 encased as per the Company,s rule. The liability of compensated absences, which is non-funded, has been provided based on report of independent actuary using the "Projected Unit Credit Method".

Accordingly aggregate of Rs, 375.19 Lacs (Pr. Yr. Rs, 383.86 Lacs) being liability as at the period end for compensated absences as per actuarial valuation has been provided in the accounts.

12. During the period, the Company has entered into forward exchange contract, being derivative instrument for hedge purpose and not intended for trading or speculation purposes , to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables.

13. 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) /cars under operating lease or leave and license agreements. These are generally cancellable and range from 11 months to 60 months under leave and license, 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, 170.90 Lacs (Pr. Yr. Rs, 475.97 Lacs) are recognized in the Statement of Profit and Loss under "Rent" under Note 29.

14. Related Party Disclosure: A. Relationship:

Category I: Major Shareholders:

- Expert Chemicals (India) Pvt. Ltd. Category II: Subsidiary Companies:

- Wanbury Holding B. V. (Netherlands)

- Cantabria Pharma S. L. (Spain)

- Ningxia Wanbury Fine Chemicals Co. Ltd (China)

- Wanbury Global FZE (Ras-Al-Khaimah, UAE)

Category III: Key Management Personnel and their relatives:

- Mr. K. Chandran - Vice Chairman

- Mr. P. V. Pasupathy - President, API

- Mr. Indranil Chakravartthy - President, Formulation

Category IV: Others (Enterprise owned or significantly influenced by key management personnel or their relatives)

- Wanbury Infotech Pvt. Ltd

- Bravo Healthcare Limited

- Wanbury Pharma Limited

15. Net-worth of the Company as on 31 March 2015 is negative. The Company has initiated various measures, including restructuring of debts/ business and infusion of funds etc. Consequently, in the opinion of the management, operations of the Company will continue without interruption and hence, financial statements are prepared on a "going concern" basis.

16. In compliance of Companies Act, 2013, the Company has changed its financial year. Hence, current financial period is from 1 October 2014 to 31 March 2015 as compared to the previous financial period of eighteen months i.e. from 1 April 2013 to 30 September 2014 and consequently, fgures are not strictly comparable.

17. Figures of previous year are regrouped/ rearranged wherever necessary.


Sep 30, 2014

1. GENERAL INFORMATION:

Wanbury Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (as amended by the Companies Act, 2013). The Company is engaged in the business of pharmaceutical and related activities, including research.

1.2 Terms/Rights attached to Equity Shares

The Company has only one class of equity shares with voting rights having a par value of Rs. 10 per share. The Company declares & pays dividend in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing annual general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the numbers of equity shares held by the shareholders.

1.3 Outstanding Options to subscribe to equity shares

11,25,236 warrants of the face value of Rs. Nil have been allotted to the shareholders of Erstwhile PPIL as per the BIFR order. The warrant holders have the right to subscribe to one equity share of Rs. 10/- each at the premium of Rs. 125/- per share which is exercisable within five years from 27 June 2007,being the date of allotment of the warrants. Also refer note 36.

58,199 Zero Coupon Optionally Fully Convertible Debentures (OFCDs) of face value of Rs. 1,000/- each were allotted to the lenders of erstwhile PPIL pursuant to the order dated 24 April 2007 of Hon''ble BIFR. OFCD were convertible between 1 November 2008 and 30 April 2012 into its equity shares at a price of Rs. 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right. The matter is under fresh consideration of BIFR pursuant to the order dated 16 May 2008 of Hon''ble Supreme Court.

Refer Note 37 for rights of lender under CDR scheme to convert dues into equity shares of the Company under certain condition stipulated in Master Restructuring Agreement dated 19 September 2011.

1.4 The Company has neither allotted any shares as fully paid-up pursuant to contract without payment being received in cash and by way of bonus shares nor bought back any shares during the period of five years preceding the date of this balance sheet.

1.5 Out of the above Equity Shares 5,67,000 (Pr. Yr. 5,67,000) shares are represented by 1,89,000 (Pr. Yr. 1,89,000) Global Depository Receipts.

1.6 Pursuant to the Corporate Debt Restructuring Scheme, the Company has allotted 25,90,000 (Pr. Yr. Nil) Equity Shares of Rs. 10/- each at the premium of Rs. 27.50 per Equity Shares to Expert Chemicals (India) Private Limited on 5 August 2013 on preferential basis.

2.1 (a) For the period ended 30 September 2014:

Term Loans are secured by pari passu first charge on all the present and future movable and immovable fixed assets of the Company situated at Patalganga and Tarapur, few brands of the Company and second charge, except in respect of Term Loans from State Bank of India which has a first charge, on all the present and future movable and immovable fixed assets of the Company situated at Tanuku and second pari passu charge on entire present and future current assets of the Company and pledge of entire holding of equity shares of the Company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc, in addition to guarantee of Expert Chemicals (I) Pvt. Ltd., Bravo Healthcare Ltd.,Wanbury Global FZE, Wanbury Holding BV, Kingsbury Investment Inc and Mr. K. Chandran, Director of the Company.

(b) For the year ended 31 March 2013:

Term Loans are secured by pari passu first charge on all the present and future movable and immovable fixed assets of the Company situated at Patalganga and Tarapur, few brands of the Company and second charge, except in respect of Term Loans from State Bank of India which has a first charge, on all the present and future movable and immovable fixed assets of the Company situated at Tanuku and second pari passu charge on entire present and future current assets of the Company and pledge of entire holding of equity shares of the Company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc, in addition to guarantee of Expert Chemicals (I) Pvt. Ltd., Bravo Healthcare Ltd.,Wanbury Global FZE, Wanbury Holding BV, Kingsbury Investment Inc and Mr. K. Chandran, Director of the Company.

2.2 Vehicle & Other loans are secured by hypothecation of assets acquired against respective loans.

2.3 Rate of Interest:

(a) For the period ended 30 September 2014:

The rate of interest on term loans vary between 1% to 11.50%p.a. and on vehicle and other loans vary between 6.30% to 10.00%p.a.

(b) For the year ended 31 March 2013:

The rate of interest on term loans vary between 1% to 11.50%p.a., on vehicle and other loans vary between 8.62% to 12.65%p.a. and deferred sales tax loan is interest-free.

3.1 The NCD are to be secured by a pari passu charge on the fixed assets of the Company situated at Patalganga and Plot No. J-17 at Tarapur. The NCD comprises of Part A of Rs. 60 and Part B of Rs. 40 which are redeemable at par at the end of two years and three years respectively from 1 May, 2007. The Company had redeemed Part A of Rs. 60 relating to 1,49,709 NCD''s in the earlier years. NCD''s amounting to Rs. 55.67 Lacs and Rs. 97 Lacs was due for repayment on 1 May 2009 and 1 May 2010 respectively. However, since the matter is under consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 36.

3.2 The OFCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL situated at Plot No 24 at Tarapur and fixed assets at Mazgaon. OFCD are convertible between 1 November, 2008 and 30 April, 2012 into equity shares at a price being higher of Rs. 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right amounting to Rs. 290.99 Lacs and Rs. 291 Lacs was due for repayment on 30 April 2010 and 30 April 2011 respectively. However, since the matter is under consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 36.

3.3 There is delay in repayment of

(i) term loan aggregating to Rs. 1,366.36 Lacs (Pr. Yr. Rs. 903.71 Lacs) of 1 day (Pr.Yr. 1 day).

(ii) amount payable to FCCB Holders aggregating to Rs. 457.67 Lacs (Pr. Yr. Rs. 462.81 Lacs) of 890 days (Pr.Yr. 342 days).

(iii) interest on secured borrowings aggregating to Rs. 566.20 Lacs (Pr. Yr. Rs. 287.26 Lacs) ranging from 1 to 93 days (Pr. Yr. 1 to 60 days) in respect of dues to banks /financial institutions.

(iv) interest on FCCB aggregating to Rs. 46.25 Lacs (Pr. Yr. Rs. 36.94 Lacs) of 1189 days (Pr. Yr. 641 days).

3.4 Term loans of erstwhile PPIL amounting to Rs. 68.02 Lacs (Pr. Yr. Rs. 68.02 Lacs) are secured by a pari-passu first charge on its fixed assets of erstwhile PPIL.

3.5 The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR vide its order dated 24 April, 2007. However, since the matter is under fresh consideration of BIFR, the same will be paid as per the order of BIFR. Also Refer Note 36.

4. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Rs. 154.06 Lacs (Pr. Yr. Rs. 390.92 Lacs)

b) Other Commitments- Non Cancellable operating leases (Refer Note 50)

5. Contingent Liabilities:

Sr. Particulars 30 Sept 2014 31 Mar 2013 No. Rs. in Lacs Rs. in Lacs

a) Contract of take out undertaking executed in favour of bank/ 26,590.04 23,643.60

financial institution for loans given to subsidiaries. (Euro 340.00 Lacs) (Euro 340.00 Lacs) Loans outstanding at the period end. 19,995.38 16,545.94 (Euro 255.68 Lacs) (Euro 237.93 Lacs)

b) Disputed demands by Income Tax Authorities. 201.53 105.21

Amount paid under protest and shown as advance. 59.01 59.01

c) Disputed demands by Sales Tax Authorities. 3,299.27 3,360.28

Amount paid under protest and shown as advance. 26.30 26.30

d) Disputed demands by Service Tax Authorities. 724.93 589.04 Amount paid under protest and shown as advance. 61.37 48.50

e) Disputed demands by Excise Authorities. 85.06 37.89

f) Claims against the Company not acknowledged as debts. 1,531.35 1,702.59

Future cash flows in respect of liability under clause (a) is dependent on terms agreed upon with the parties and in respect of liability under clause (b) to (f) are dependent on decisions by relevant authorities of respective disputes.

6. 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.

7. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

8. 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 while considering the case afresh 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 Lacs, 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 period end. Since BIFR is considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues have not been paid.

9. 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.

MRA among other terms 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.

e) Right to receive recompense for the reliefs and sacrifices extended by Lenders within the CDR parameters with the approval of the CDR Empowered Group.

10. 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. 3,696.81 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. 2,549.52 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.

11. 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 Euro 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 Euro 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 Euro 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 Euro 10,000 each.

d) During the period under review the Company has not received any application for conversion of FCCB into Equity Shares of the Company. However till date 5,29,085 fully paid Equity Shares of face value of Rs. 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 Euro 10,000 each.

e) 248 FCCB "A Bonds" have matured on 23 April 2012. The Company has negotiated terms with bond holders holding 218 bonds and have been accounted for accordingly. For the balance 30 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. Out of this, 556 bonds are repaid on 31st March 2014 and the Company has negotiated terms with 144 bondholder. Effects in the accounts have been given as per the terms of settlement with remaining bondholder.

12. Advance for investment to Wanbury Holding B.V, a subsidiary company, amounting to Rs. 10,004.46 Lacs (Pr. Yr. Rs. 5,375.35 Lacs) are intended to be adjusted against the value of the Ordinary Shares to be issued by the aforesaid subsidiary.

13. The Company has invested Rs. 53.40 Lacs in equity shares of Bravo Healthcare Limited (BHL) and also given loan and advances aggregating to Rs.7,598.04 Lacs. Net worth of BHL has been negative as per audited accounts for the year ended 31 March 2014.

The Company has invested 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 period end is Rs.124.11 Lacs. Net worth of Ningxia has been negative as per audited accounts for the period ended 30 September 2014.

The Company has invested Rs. 68.33 Lacs in shares of Wanbury Global FZE ("FZE"), a wholly-owned subsidiary and Rs. 1,254.35 Lacs in quasi share capital of FZE.

The Company has invested Rs. 3,849.02 Lacs in ordinary share of Wanbury Holding B.V.("WHBV"), a wholly-owned subsidiary, which is created for making investment in step down subsidiaries and has given advances of Rs.10,004.46 Lacs to be adjusted against shares which is pending allotment. WHBV has made investment in it''s wholly-owned subsidiary, Cantabria Pharma S.L. ("CP") and given loans & advances to C P. The Company has also receivable from CP of Rs.1,219.33 Lacs as at the period end. CP has incurred losses and net worth of CP has been negative. Further, CP has filed for voluntary insolvency in the Commercial Court of Madrid, Spain on 4 November 2013. CP is in the process of liquidations and Receiver has taken the control of CP as per the order of Commercial Court of Madrid, Spain.

Till last year, no provision had been considered necessary in respect of above mentioned investments and advances. However, during the Current period, provision has been made for Diminution in value of investments aggregating to Rs. 5,230.38 Lacs and for Doubtful Advances aggregating to Rs. 18,945.94 Lacs. The same has been considered as Exceptional Items (Refer Note 30).

14. IDBI Bank vide its letter dated 4 August 2012 has invoked guarantee of Wanbury Limited in respect of dues from Bravo Healthcare Limited ("BHL"). BHL has repaid the dues of IDBI Bank during the current period, pursuant to letter dated 25 March 2014 for one time settlement. Consequently, IDBI released the Company from the guarantee provided to IDBI against loan given to BHL. No further liability is envisaged towards the dues of BHL.

15. 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 30 September 2014 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 44.10 Lacs (Pr. Yr. Rs. 35.64 Lacs) and interest due thereon is Rs. 8.31 Lacs (Pr. Yr. Rs. 20.12 Lacs ) and interest paid during the period Rs. 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).

16. 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.

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 Payments 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 set forth 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''s rule. The liability of compensated absences, which is non-funded, has been provided based on report of independent actuary using the "Projected Unit Credit Method".

Accordingly aggregate of Rs. 383.86 Lacs (Pr. Yr. Rs. 519.51 Lacs) being liability as at the period-end for compensated absences as per actuarial valuation has been provided in the accounts.

17. 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) /cars under operating lease or leave and license agreements. These are generally cancellable and range from 24 months to 60 months 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. 475.97 Lacs (Pr. Yr. Rs. 322.08 Lacs) are recognised in the Statement of Profit and Loss under "Rent" under Note 29.

18. Net-worth of the Company as on 30 September 2014 is negative. The Company has initiated various measures, including restructuring of debts/ business and infusion of funds etc. Consequently, in the opinion of the management, operations of the Company will continue without interruption. Hence, financial statements are prepared on a "going concern" basis.

19. Figures for the Current Period, being for eighteen months from 01 April 2013 to 30 September 2014, are not strictly comparable with those of the previous year which are for twelve months.

20. Figures of previous year are regrouped/ rearranged wherever necessary.


Mar 31, 2013

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.


Mar 31, 2012

1. GENERAL INFORMATION:

Wanbury Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. It's equity shares are listed on two stock exchanges in India. The Company is engaged in the business of pharmaceutical and related activities, including research.

2.1 Terms/Rights attached to Equity Shares :

The Company has issued only one class of Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Shares is entitled to one vote per share.The Company declares and pays dividend in indian rupees.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the numbers of Equity Shares held by the shareholders.

2.2 Outstanding Options to subscribe to Equity Shares :

11,25,236 warrants of the face value of Rs. Nil have been allotted to the shareholders of Erstwhile PPIL as per the BIFR order. The warrantholders have the right to subscribe to one Equity Share of Rs. 10/- each at the premium of Rs. 125/- per share which is excercisable within five years from 27 June 2007, being the date of allottment of the warrants.

Refer Note 36(a) for terms of conversion of Foreign Currency Convertible Bonds into Equity Share of the Company.

Refer Note 35 for rights of lender under CDR scheme to convert dues into Equity Shares of the Company under certain condition stipulated in Master Restructuring Agreement dated 19 September 2011.

2.3 13,48,175 Shares were allotted in the financial year ended 301 September 2008 pursuant to the scheme of amalgamation of erstwhile PPIL and erstwhile DOCL with the Company, without payment being received in cash.

2.4 Out of the above Equity Shares 5,67,000 (Pr. Yr. 5,67,000) shares are represented by 1,89,000 (Pr. Yr. 1,89,000) Global Depository Receipts.

2.5 The Company has allotted 26,90,000 Equity Shares of Rs. 10/- each at the premium of Rs. 27.50 per Equity Shares to Expert Chemicals (India) Private Limited on 30 March 2012 on preferential basis pursuant to the Corporate Debt Restructuring Scheme.

3.1 (a) For the year ended 31 March 2012:

Term Loans are secured by pari passu first charge on all the present and future movable and immovable fixed assets of the Company situated at Patalganga and Tarapur, three brands of the Company and second charge, except in respect of Term Loans from State Bank of India which has a first charge, on all the present and future movable and immovable fixed assets of the Company situated at Tanuku and second pari passu charge on entire present and future current assets of the Company and pledge of 8,22,242 equity shares of the Company held by Expert Chemicals (I) Private Limited, in addition to guarantee of Expert Chemicals (I) Pvt. Ltd., Bravo Healthcare Ltd. and Mr. K. Chandran, Director of the Company.

(b) For the year ended 31 March 2011:

Rupee term loans are secured by pari-passu first charge on immovable properties and other fixed assets, present and future and current assets of the Company situated at Patalganga, Tarapur, Tanuku, Turbhe and furniture and fixtures at Head Office, Vashi and on certain Brands of the Company and second charge on current assets of the Company, equitable mortgage on fixed assets at Tanuku, pledge of some of the shares of the Company held by Expert Chemicals (India) Private Limited, in addition to guarantee by Expert Chemicals (India) Private Limited, Wanbury Holding B.V. (Netherland) and a Director of the Company.

The Foreign currency term loans are to be secured by a first pari passu charge on the fixed assets and a second pari passu charge on the current assets of the Company. The Company also has to provide additional security by way of first pari passu charge on some of the Companys brands. An exclusive pledge on a portion of promoters' shares has already been created.

3.2 Vehicle and other loans are secured by hypothecation of assets acquired against respective loans.

3.3 Rate of Interest:

(a) For the Year Ended 31 March 2012 :

The rate of interest on term loans vary between 1% to 9.5% p.a., on vehicle and other loans vary between 8.62% to 12.65%p.a. and deferred sales tax loan is interest free.

(b) For the Year Ended 31 March 2011 :

The rate of interest on term loans vary between 13% to 13.5% p.a., on vehicle and other loans vary between 8.3% to 12.65%p.a. and deferred sales tax loan is interest free.

4.1 The NCD are to be secured by a pari passu charge on the fixed assets of the Company situated at Patalganga and Plot No. J-17 at Tarapur.The NCD comprises of Part A of Rs. 60 and Part B of Rs. 40 which are redeemable at par at the end of two years and three years respectively from 1 May 2007. The Company had redeemed Part A of Rs. 60 relating to 1,49,709 NCD's in the earlier years. NCD's amounting to Rs. 55.67 Lacs and Rs. 97 Lacs was due for repayment on 1 May, 2009 and 1 May 2010 respectively. However, since the matter is under consideration of BIFR, the same wil be paid as per the order of BIFR. Also Refer Note 33.

4.2 The OFCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL situated at Plot No. 24 at Tarapur and fixed assets at Mazgaon. OFCD are convertible between 1 November 2008 and 30 April 2012 into equity shares at a price being higher of Rs. 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right. amounting to Rs. 290.99 Lacs and Rs. 291 Lacs was due for repayment on 30 April 2010 and 30 April 2011 respectively. However, since the matter is under consideration of BIFR, the same wil be paid as per the order of BIFR. Also Refer Note 33.

4.3 In the previous year, there is delay in repayment of term loans aggregating to Rs. 1,287.13 Lacs ranging from 1 to 152 days. There is delay in payment of interest on secured borrowings aggregating to Rs. 7.46 Lacs ( Pr. Yr. Rs. 557.95 Lacs) ranging from 3 to 18 days ( Pr. Yr. 1 to 152 days) in respect of dues to banks /financial institutions. There is delay ranging from 91 to 275 days (Pr. Yr. Nil) in payment of interest on FCCB aggregating to Rs. 64.79 Lacs ( Pr. Yr. Nil).

4.4 Term loans of erstwhile PPIL amounting to Rs. 68.02 Lacs( Pr. Yr. Rs. 68.02 Lacs)are secured by a pari-passu first charge on its fixed assets of erstwhile PPIL.The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR wide its order dated 24 April 2007. However, since the matter is under fresh consideration of BIFR, the same wil be paid as per the order of BIFR. Also Refer Note 33.

The market price of the equity shares of the Company being less than the exercise price in respect of various outstanding options to subscribe to equity shares, the outstanding options as at the period end are considered to be anti-dilutive.

5. Contingent liabilities:

Sr Particulars 31 March 2012 31 March 2011 No. Rs.in Lacs Rs.in Lacs

a) Letter of Credit Opened 1,071.00 2,730.27

b) Bank Guarantee issued 35.76 33.09

c) Guarantees given to banks/financial 27,336.00 25,296.00 institutions for loans given to subsidiaries (Euro 400 Lacs) (Euro 400 Lacs) Loans outstanding at the year end 16,713.59 15,007.66

(Euro 244.57 Lacs) (Euro 237.31 Lacs)

d) Guarantees given to banks /financial institutions for loans given to Other 2,700.00 2,700.00 Loans outstanding at the year end 1,784.33 1,555.15

e) Estimated amounts of contracts remaining to be 379.25 105.99 executed on capital account and not provided for (net of advances)

f) Disputed demands by Income Tax Authorities 40.43 40.43

Amount paid there against 40.43 40.43

Disputed demands by Sales Tax Authorities 33.27 33.27

Amount paid under protest 13.32 13.32

g) Claims against the Company not 425.65 1,098.23 acknowledged as debts

Future cash flows in respect of liability under clause (a) to (e) are dependent on terms agreed upon with the parties and in respect of liability under clause (f) & (g) are dependent on decisions by relevant authorities of respective disputes.

6. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

7. 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 suit filed by one of the unsecured creditors of Erstwhile PPIL.

The BIFR has directed IDBI Bank, which has been appointed as 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 while 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 Lacs, 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.

8. 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, trade payables, loans and advances 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 amount outstanding has been considered good and recoverable.

9. 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 year and shown as exceptional item in the financial statement.

MRA among other terms 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.

10. a) The Company has 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 are 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 are 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 is 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. However, till date 5,29,085 fully paid equity shares of face value of Rs. 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) The balance of 248 "A bonds" & 700 "B Bonds" have remained outstanding at the year-end.

11. 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. 7,502.60 Lacs (Pr. Yr. Rs. 7,221.58 Lacs). Networth of BHL has been negative as per audited accounts for the year ended 31 March 2011.

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. 123.81Lacs (Pr. Yr. Rs. 104.69 Lacs). Networth of Ningxia has been negative as per audited accounts for the year ended 31 March 2012.

The Company has invested Rs. 3,849.02 Lacs (Pr. Yr. Rs. 3,849.02 Lacs) in ordinary share of Wanbury Holding B.V. ("WHBV"), a wholly-owned subsidiary, which is created for making investment in step down subsidiaries and has given advances of Rs. 5,348.35 Lacs (Pr. Yr. Rs. 5,240.27 Lacs) to be adjusted against shares which is pending allotment. WHBV has made investment in it's wholly-owned subsidiary, Cantabria Pharma S.L. ("CP") and given loans & advances to the CP. Further, the Company has also receivable from CP of Rs. 4,686.59 Lacs (Pr. Yr. Rs. 4,301.57 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.

12. 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 2012 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 71.43 Lacs (Pr. Yr. Rs. 167.00 Lacs) [including overdue amount of Rs. 48.39 Lacs (Pr. Yr. Rs. 154.90 Lacs)] and interest due thereon is Rs. 10.03 Lacs (Pr. Yr.{ Rs. 10.77 Lacs) and interest paid during the year Rs. 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).

13. Remittance in foreign currency on account of dividend:

During the previous year ended 31 March 2011, the Company has paid dividend for FY 2009-2010 in respect of shares held by Non-Resident Shareholders on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External A/c. The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remitted in this respect is given below:

*The Company has paid excess Remuneration of Rs. 19.37 Lacs for the year ended 31 March 2012 as compared to remuneration payable under the provisions of Schedule XIII of the Companies Act, 1956 which is subject to approval of the Central Government. The Company is in the process of making the application for the same. Pending such approval excess amount as aforesaid has been charged to the revenue. Above excludes provision for the future liabilities in respect of retirement benefits, which are based on actuarial valuation done on overall Company basis.

(b) Sitting fees to directors Rs. 4.56 Lacs (Pr. Yr. Rs. 3.48 Lacs).

14. 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. 478.91 Lacs (Pr. Yr. Rs. 575.73 Lacs).

15. 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 Employee's Pension Scheme (EPS) with the government, and certain state plans such as Employee's 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 Employee's 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 set forth 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. Up to previous year ended on 31 March 2011, liability of compensated absences aggregating Rs. 277.54 Lacs was provided as per management's estimate. From this year the same is being provided based on report of independent actuary using the Projected Unit Credit Method. Accordingly Rs. 377.43 Lacs being liability as at the year-end for compensated absences as per actuarial valuation has been provided in the accounts.

16. 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 present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets. There is no reversal of impairment amount during the year.

17. The Company has entered into Derivatives structure for hedge purpose and not intended for trading or speculation. The year-end foreign currency exposures that have been hedged by a derivative instrument or otherwise are as below :

18. Mark to Market loss is Rs. Nil (Pr. Yr. Rs. Nil) in respect of foreign currency derivative instruments outstanding as at 31 March 2012. The management is of the view that application of aS-30 "Financial Instrument Recognition and Measurement" is not mandatory for the financial year under report. However, out of abundant caution and as a measure of financial prudence the Company has provided an amount of Rs. Nil (Pr. Yr. Rs. Nil ) to meet the anticipated forex losses.

19. Disclosure for operating leases under Accounting Standard 19-"Accounting for Leases":

The Company has taken various residential /godowns / 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. 318.77 Lacs (Pr. Yr. Rs. 315.29 Lacs) are recognised in the Statement of Profit and Loss under "Rent" under note 29.

The future lease payments and payment profile of non cancellable operating leases are as under:

20. 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. 5,348.35 Lacs (Pr. Yr. Rs. 5,240.27 Lacs) which are intended to be adjusted against the value of the Ordinary Shares to be issued by the aforesaid subsidiary.

Notes:

i) Above Loans/Advances are repayable on demand.

ii) Loans and Advances to employees/customers and investments by such employees/customers in the shares of the Company if any are excluded from the above disclosure.

c) Investment by loanee:

21. Related Party Disclosure: (With whom the transactions have taken place)

A. Relationship:

Category

1: Major Shareholders:

- Kingsbury Investment Inc.

- 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-Al-Khaimah, UAE)

Category 3: Key Management Personnel and their relatives:

- Mr. K. Chandran Vice Chairman

- Mr. K. R. N. Moorthy Joint Managing Director (Up to 31 Aug 2010)

- Mr. Ashok Shinkar Whole-time Director (Up to 31 Dec 2010)

- Dr. Rajaram Samant Whole-time Director (Up to 20 May 2010)

Category 4: Others (Enterprise owned or significantly influenced by key management personnel or their relatives)

- Wanbury Infotech Pvt. Ltd.

- Bravo Healthcare Limited

- Magnum Equifin Pvt. Ltd.

22. Assets held for disposal:

As per the scheme of rehabilitation and merger approved by BIFR, erstwhile PPIL is required to sale office premises at Saki Naka, Mumbai and R & D premises at Turbhe, Navi Mumbai in settlement of part dues of secured and unsecured payables mentioned in the aforesaid scheme. Consequently, the said assets are held for disposal and stated at cost since estimated realisable value is higher than cost and included in note-12 "Fixed Assets".


Mar 31, 2011

1. Contingent Liabilities:

a) Bank Letter of Credit outstanding at the year-end Rs.2,730.27 Lacs (Rs. 3,950.02 Lacs).

b) Bank Guarantees issued Rs.33.09 Lacs (Rs.19.18 Lacs).

c) Disputed demands by Income Tax Authorities Rs. 40.43 Lacs (Rs. 40.43 Lacs). Amount paid there against and included under the head Loans and Advances Rs.40.43 Lacs (Rs.40.43 Lacs).

Disputed demands by Sales Ta x Authorities Rs.33.27 Lacs (Rs. 33.27 Lacs) paid under protest Rs.13.32 Lacs (Rs. 13.32 Lacs).

d) Claims against the Company not acknowledged as debts Rs. 1,098.23 Lacs (Rs. 860.21 Lacs).

e) Estimated amounts of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 105.99 Lacs (Rs. 65.16 Lacs).

f) Guarantees given to banks/financial institutions for loans given to subsidiaries Rs.25,296 Lacs (Rs. 24,224 Lacs). Loans outstanding at the year-end Rs. 15,007.66 Lacs (Rs. 14,773.71 Lacs).

g) Guarantees given to banks/financial institutions for loans given to Associate Company Rs. 2,700.00 Lacs (Rs. 2,700.00 Lacs). Loans outstanding at the year-end Rs. 1,555.15 Lacs (Rs. 1,719.29 Lacs).

h) Future cashflows in respect of liability under clause (c) and (d) is dependent on decisions by relevant authorities of respective disputes and in respect of clause (e) the liability is dependent on terms agreed upon with the parties.

2. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

3. The Pharmaceutical Products of India Limited (PPIL) was merged with the Company, pursuant to the Order dated 24th April, 2007, passed by Hon'ble Board for Industrial and Financial Reconstruction (BIFR).

The Hon'ble Supreme Court vide its order dated 16th 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 SICA, in response to a suit filed by one of the unsecured creditors of PPIL .

The Hon'ble Board for Industrial and Financial Reconstruction is considering afresh, the Rehabilitation and Revival cum Merger of PPIL with the Company pursuant to the Order of Hon'ble Supreme Court of India dated 16th 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 while considering the case a fresh pursuant to the directions of the Hon'ble Supreme Court in its order dated 16th May, 2008.

As per BIFR Order dated 24th April 2007, statutory dues of erstwhile PPIL comprising of income tax Rs. 250.36 Lacs, 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 instalments 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.582 Lacs, to some of the lenders of erstwhile PPIL, out of which dues amounting to Rs.152.67 Lacs and Rs.291 Lacs in respect of NCDs and OFCDs respectively, remains payable at the end. Since BIFR is considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues have not been paid.

4. Interest expenses include interest of fixed period loan Rs. 1,712.83 Lacs (Rs. 1,910.67 Lacs). Interest expense is net of interest income amounting to Rs. 1,218.13 Lacs (Rs. 594.61 Lacs).

5. The Company had separate IBIS software for formulation sales accounting which has been switched over to SAP. Further, the Company has changed from DCB Model to Distributionship Model (C&F) for selling formulation products. Consequently, sundry debtors pertaining to formulation business are subject to confirmation, reconciliations and adjustments,if any. Balances of debtors, creditors, loans and advances are subject to confirmation/ reconciliation and adjustments, if any.

6. The Company's application for a proposed restructuring of its debts with a cut-off date of 30th September, 2010 was admitted to the Corporate Debt Restructuring (CDR) mechanism on 6th December, 2010. The Restructuring scheme approved by CDR Empowered Group (CDR EG) vide letter of approval (LOA) dated 23rd May, 2011 is to be implemented within four months from the date of LOA. Pending implementation of restructuring scheme CDREG has approved implementation of "Holding On Operations", pursuant to which banks are forbidden to collect any interest/principal from the Company w.e.f 1st October, 2010. Since restructuring scheme will be effective upon it's implementation, no effect is given in the accounts.

7. a) The Company has issued on 20th 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 EURO 10,000 each maturing on 23rd April, 2012 and 17th December, 2012 respectively.

The A Bonds are 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 EURO 1 and such option is exercisable till 9th March, 2012.

The B Bonds are convertible at the option of the holders of such bonds, unless previously redeemed or purchased and cancelled, into equity shares of face value 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 EURO 1 and such option is exercisable till 5th 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 previous year ended on 31st March, 2010, the Company bought back 424 Foreign Currency Convertible "A" Bonds of face value of EURO 10,000 each at EURO 9,000 per bond. Consequently, profit on buy back amounting to Rs. 248.85 Lacs, net of expenses incurred on buy back had been credited to the Profit & Loss Account and Rs.603.77 Lacs, being premium provided on aforesaid bonds had been reversed by crediting to Securities Premium Account, in the previous year ended 31 st March, 2010.

d) During the year under review the Company has not received any application for conversion of FCCB into equity shares of the Company. However till date 5,29,085 fully paid equity shares of face value of Rs. 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 EURO 10,000 each.

e) The balance of 248 "A Bonds" & 700 "B Bonds" have been included and disclosed in the schedule of "Unsecured Loans" (Schedule 4).

f) The Company has fully utilised the FCCB Proceeds for the purposes mentioned in offering circular dated 25th April, 2007.

8. The Company has invested Rs.53.40 Lacs (Rs.53.40 Lacs) in equity shares of Bravo Healthcare Limited (BHL) and also given loan and advances aggregating to Rs. 7,221.58 Lacs (Rs.4,711.75 Lacs). Networth of BHL has been negative as per audited accounts for the year ended 31st March, 2010.

The Company has invested Rs. 5.29 (Rs.5.29 Lacs) 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. 104.96 (Rs. 45.69 Lacs). Networth of Ningxia has been negative as per audited accounts for the year ended 31st March, 2011.

The Company has invested Rs. 3,849.02 Lacs (Rs. 3,849.02 Lacs) in ordinary shares of Wanbury Holding B.V. ("WHBV"), a wholly-owned subsidiary, which is created for making investment in step down subsidiaries and has given advances of Rs. 5,240.27 Lacs (Rs. 4,957.87 Lacs) to be adjusted against shares which is pending allotment. WHBV has made investment in it's wholly-owned subsidiary, Cantabria Pharma S.L. ("CP") and given loans & advances to the CP. Further, the Company has also receivable from CP of Rs. 4,301.57 Lacs (Rs.2,270.52 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. Hence, no provision has been considered necessary at this juncture in respect of aforesaid investments in and dues recoverable from them.

9. Disclosure of Sundry Creditors 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" and relied upon by the auditors. Amount outstanding as on 31st March, 2011 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 167 Lacs (Rs. 178.55 Lacs) [including overdue amount of Rs. 154.90 Lacs (Rs. 100.11 Lacs)] and interest due thereon is Rs.10.77 Lacs (Rs. 3.40 Lacs) and interest paid during the year Rs. Nil (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.

10. Provision for the current tax includes Rs. 1.31 Lacs (Rs. 0.45 Lac) for wealth tax.

11. In respect of Deferred Sales Tax Liability, due within a year is Rs. 4.13 Lacs (Rs.6.59 Lacs).

12. The Company has reversed revaluation of brands as on 31st March, 2010, and hence, Rs. 1,140.16 Lacs, being in Revaluation Reserve, has been adjusted against value of the Brands in the previous year ended 31st March, 2010.

13. (a) Managerial Remunerations:

Notes:

i) The Company has paid excess remuneration of Rs 63.45 Lacs for the year ended 31st March 2011 as compared to remuneration payable under the provisions of Schedule XIII of the Companies Act,1956 which is subject to approval of the Central Government.The Company is in the process of making application for the same. Pending such approval excess amount as aforesaid has been charged to the Revenue.

ii) Above excludes provision for the future liabilities in respect of retirement benefits, which are based on actuarial valuation done on overall Company basis.

(b) Sitting fees to directors Rs.3.48 Lacs (Rs. 6.94 Lacs).

14. 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.575.73 Lacs (Rs.576.87 Lacs).

15. Earning Per Share :

The market price of the equity shares of the Company being less than the exercise price in respect of various outstanding options to subscribe to equity shares, the outstanding options as at the year-end are considered to be anti dilutive.

16. Employee Benefits

As required by Accounting Standard- 15 "Employees Benefits" the disclosures 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.

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 set forth in the said plan. The death benefit plan is non- funded.

Disclosures for defined benefit plans (i.e. Gratuity Funded Plan) based on actuarial reports as on 31st March 2011.

The estimate of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

17. During the previous year, the Company has revalued leasehold land & development expenses, factory buildings, plant, machinery & equipments, furniture & fixture, office equipments & electrical installations at the manufacturing locations at Tarapur, Patalganga, Tanaku and R&D Centre at Turbhe as on 31st March, 2011. Based on the valuation report of approved valuers, book values of aforesaid fixed assets have been increased by Rs.5,426.34 Lacs and equivalent amount has been credited to the Revaluation Reserve in the previous year ended 31st March, 2010.

18. 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 present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets. There is no reversal of impairment amount during the year.

19. The Company has entered into Derivatives structure for hedge purpose and not intended for trading or speculation. The year-end foreign currency exposures that have been hedged by a derivative instrument or otherwise are as below:

Note: FCCB of Euro 94.8 Lacs (Euro 94.8 Lacs) are convertible at a fixed exchange rate (refer Note No.6 above).

20. Mark to Market loss is Rs. Nil (Rs. 12.73 Lacs) in respect of foreign currency derivative instruments outstanding as at 31st March, 2011. The management is of the view that application of AS-30 "Financial Instrument Recognition and Measurement" is not mandatory for the financial year under report. However, out of abundant caution and as a measure of financial prudence the Company has provided an amount of Rs Nil (Rs. 20.00 Lacs ) to meet the anticipated forex losses.

21. Disclosure for operating leases under Accounting Standard 19-“Accounting for Leases”:

The Company has taken various residential /godowns / office premises (including furniture and fittings, therein as applicable)/ laptops 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. 315.29 Lacs (Rs. 219.27 Lacs) are recognised in the Profit and Loss Account under "Rent, Rates & Taxes" under Schedule-16.

22. 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. 5,240.27 Lacs (Rs. 4,957.87 Lacs) which are intended to be adjusted against the value of the Ordinary Shares to be issued by the aforesaid subsidiary.

b) Interest bearing Loans/ Advances in the nature of Loans/Advances to:

Notes:

i) Above Loans/ Advances are repayable on demand.

ii) Loans and Advances to employees/customers and investments by such employees/customers in the shares of the Company if any are excluded from the above disclosure.

c) Investment by loanee in the shares of :

29. Related Party Disclosure: (With whom the transactions have taken place)

A. Relationship:

Category 1: Major Shareholders:

- Kingsbury Investment Inc.

- Expert Chemicals (India) Pvt. Ltd.

- Magnum Equifin 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-Al-Khaimah, UAE) Category 3: Associate Companies:

- Wanbury Infotech Pvt. Ltd.

- Bravo Healthcare Limited

Category 4: Key Management Personnel and their relatives:

- Mr. K. Chandran Vice-Chairman

- Mr. K. R. N. Moorthy Joint Managing Director (Up to 31st Aug. 2010)

- Mr. Ashok Shinkar Whole-time Director (Up to 31st Dec. 2010)

- Dr. Rajaram Samant Whole-time Director (Up to 20th May. 2010)

23. Details of Installed Capacity and Production:

Notes : 1) In terms of Press Note No. 4 (1994 series) Dated 25.10.1994 issued by the Dept of Industrial Development, Ministry of Industry, Government of India, industrial licensing has been abolished in respect of bulk drugs and formulations. Hence, there is no registered / licensed capacity for these bulk drugs and formulations.

2) Production excludes manufactured for others on job work basis.

3) Installed capacities, being a technical matter, have not been verified by the Auditors.

24. Details of Purchases & Sales of Finished/Traded Goods:

Note -Sales excludes free replacements / offers

25. Figures for the previous year have been recast and regrouped wherever necessary. Figures in brackets are for previous year.


Mar 31, 2010

1. Contingent Liabilities:

a) Bank Letter of Credit outstanding at the year-end, Rs. 3,950.02 Lacs (Rs. 2,197.39 Lacs).

b) Bank Guarantees issued Rs. 19.18 Lacs (Rs. 4.18 Lacs).

c) Disputed demands by Income Tax Authorities Rs. 40.43 Lacs (Rs. 16.85 Lacs). Amount paid there against and included under the head Loans and Advances Rs. 40.43 Lacs (Rs.16.85 Lacs).

Disputed demands by Sales Tax Authorities Rs.33.27 Lacs (Rs.33.27 Lacs) paid under protest Rs. 13.32 Lacs (Rs. 13.32 Lacs).

d) Claims against the Company not acknowledged as debts Rs.860.21 Lacs (Rs.829.84 Lacs).

e) Estimated amounts of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 65.16 Lacs (Rs. 23.97 Lacs).

f) Guarantees given to banks/financial institutions for loans given to subsidiaries Rs 24,224 Lacs (Rs. 26,992 Lacs). Loans outstanding at the period end Rs. 14,773.71 Lacs (Rs.17,868.67 Lacs).

g) Guarantees given to banks/financial institutions for loans given to Associate Company Rs 2,700 Lacs (Rs. 2,700 Lacs). Loans outstanding at the period end Rs. 1,719.29 Lacs (Rs. 2,416.46 Lacs).

h) Future cashflows in respect of liability under clause (c) and (d) is dependent on decisions by relevant authorities of respective disputes and in respect of clause (e) the liability is dependent on terms agreed upon with the parties .

2. The Company operates solely in the pharmaceuticals segment and hence no separate disclosure for segment wise information is required.

3. The Pharmaceutical Products of India Limited (PPIL) was merged with the Company, pursuant to the Order dated 24th April, 2007, passed by Hon’ble Board for Industrial and Financial Reconstruction(BIFR).

The Hon’ble Supreme Court vide its order dated 16th 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 SICA, in response to a suit filed by one of the unsecured creditors of PPIL.

The Hon’ble Board for Industrial and Financial Reconstruction is considering afresh, the Rehabilitation and Revival cum Merger of PPIL with the Company pursuant to the Order of Hon’ble Supreme Court of India dated 16th 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 while considering the case a fresh pursuant to the directions of the Hon’ble Supreme Court in its order dated 16th May, 2008.

As per BIFR Order dated 24th April, 2007, statutory dues of erstwhile PPIL comprising of income tax Rs. 250.36 Lacs, 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 of Rs. 242.50 Lacs to some of the lenders of erstwhile PPIL, out of which dues amounting to Rs. 55.67 Lacs 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.

4. Interest expenses include interest on fixed period loan Rs. 1,910.67 Lacs (Rs. 672.82 Lacs). Interest expense is net of interest income amounting to Rs. 594.61 Lacs (Rs. 181.95 Lacs).

5. Some of the balances of debtors, creditors, liabilities, loans and advances are subject to confirmation/ reconciliation and adjustments, if any.

6. a) The Company has issued on 20th 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 EURO 10,000 each maturing on 23rd April, 2012 and 17th December, 2012 respectively.

The A Bonds are 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 conversion price of Rs. 138.43 at a fixed exchange rate of Rs. 57.22 to EURO 1 and such option is exercisable till 9th March, 2012.

The B Bonds are 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 EURO 1 and such option is exercisable till 5th 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.

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 the Company has bought back 424 Foreign Currency Convertible "A" Bonds of face value of EURO 10,000 each at EURO 9,000 per bond. Consequently, profit on buy back amounting to Rs. 248.85 Lacs, net of expenses incurred on buy back, has been credited to the Profit & Loss Account and Rs 603.77 Lacs, being premium provided on aforesaid bonds, have been reversed by crediting to Securities Premium Account.

d) During the year under review the Company has not received any application for conversion of FCCB into equity shares of the Company. However till date 5,29,085 fully paid equity shares of face value of Rs. 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 EURO 10,000 each.

e) The balance of 248 "A Bonds" & 700 "B Bonds" have been included and disclosed in the schedule of "Unsecured Loans" (Schedule 4).

f) The Company has fully utilised the FCCB Proceeds for the purposes mentioned in offering circular dated 25th April, 2007.

7. The Company has invested Rs 53.40 Lacs in equity shares of Bravo Healthcare Limited (BHL) and also given loan and advances aggregating to Rs 4,711.75 Lacs . Networth of BHL has been negative as per audited accounts for the year ended 31st March, 2009.

The Company has invested 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. 45.69 Lacs. Networth of Ningxia has been negative as per audited accounts for the year ended 31st March, 2010.

The Company has invested Rs 3,849.02 Lacs in ordinary shares of Wanbury Holding B. V.("WHBV"), a wholly-owned subsidiary, which is created for making investment in step down subsidiaries and has given advances of Rs. 4,957.87 Lacs to be adjusted against shares which is pending allotment . WHBV has made investment in it’s wholly-owned subsidiary, Cantabria Pharma S.L. ("CP") and given loans and advances to the CP. Further, the Company has also receivable from CP of Rs. 2,270.52 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 . Hence, no provision has been considered necessary at this juncture in respect of aforesaid investments in and dues recoverable from them.

8. The Company has filed an F.I.R. on 20th May, 2010 with Vashi police station against Dr. Rajaram Samant, a whole-time director of the Company , for misusing his fiduciary power and for conspiring against the Company . The extent of fraud and amount of loss is under investigation .

9. Disclosure of Sundry Creditors 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" and relied upon by the auditors. Amount outstanding as on 31st March, 2010 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 178.55 Lacs (Rs.173.57 Lacs) [including overdue amount of Rs. 100.11 Lacs(Rs Nil)] and interest due thereon is Rs 3.40 Lacs (Rs Nil) and interest paid during the year Rs. Nil (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.

10. Provision for the current tax includes Rs. 0.45 Lac (Rs. 0.58 Lac) for wealth tax.

11. In respect of Deferred Sales Tax Liability, due within a year is Rs. 6.59 Lacs (Rs. Nil).

12. The Company has reversed revaluation of brands as at the year end. Hence , Rs. 1,140.16 Lacs, being in Revaluation Reserve, has been adjusted against value of the Brands.

13. The deferred tax assets/(liabilities) arising out of timing differences comprise of the following major components:

Particulars 31.03.2010 31.03.2009 Rs. In Lacs Rs. In Lacs Liabilities: Depreciation (2,152.83) (1,873.67) Assets:

43 B Disallowance and other deferments 162.40 121.61 Unabsorbed Depreciation Business Loss restricted to deferred Tax Liabilities 1,990.43 1,752.06

Deferred Tax Asset Restricted to 2,152.83 (1,873.67)

Net Deferred Tax Assets (Liabilities) Nil Nil



As a measure of prudence, deferred tax assets are recognised to the extent of deferred tax liabilities .

14. Remittance in foreign currency on account of dividend:

The Company has not paid any dividend for the Financial Year 2008-09. For the Financial Year 2007-08 the Company has paid dividend in respect of shares held by Non-Resident Shareholders on repatriation basis. Further Financial Year 2007-08 figures inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External A/c

15. 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. 576.87 Lacs (Rs. 187.02 Lacs).

16. Employee Benefits

As required by Accounting Standard-15 "Employee Benefits" the disclosures 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.

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 set forth in the said plan. The death benefit plan is non- funded.

17. The Company has revalued leasehold land & development expenses, factory buildings, plant, machinery & equipments, furniture & fixtures, office equipments & electrical installations at the manufacturing locations at Tarapur, Patalganga, Tanaku and R & D Centre at Turbhe as on 31st March, 2010. Based on the valuation report of approved valuers, book values of aforesaid fixed assets have been increased by Rs. 5,426.34 Lacs and equivalent amount has been credited to the Revaluation Reserve.

18. 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 present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, except in respect of some brands for which impairment of Rs NIL (Rs.343.04 Lacs) has been provided for and is adjusted against revaluation reserve during the year. There is no reversal of impairment amount during the year.

19. Mark to Market loss is Rs. 12.73 Lacs in respect of foreign currency derivative instruments outstanding as at 31st March, 2010. The management is of the view that application of AS-30 "Financial Instrument Recognition and Measurement" is not mandatory for the financial year under report. However, out of abundant caution and as a measure of financial prudence the Company has provided an amount of Rs 20.00 Lacs to meet the anticipated forex losses.

20. Disclosure for operating leases under Accounting Standard 19-"Accounting for Leases":

The Company has taken various residential /godowns / office premises (including furniture and fittings, therein as applicable), laptops 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.219.27 Lacs (Rs.47.47 Lacs) are recognised in the Profit and Loss Account under "Rent, Rates & Taxes" under Schedule-16. No contingent rents are recognised in the Profit and Loss Account.

21. 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. 4,957.87 Lacs (Rs. 5,512.50 Lacs) which are intended to be adjusted against the value of the Ordinary Shares to be issued by the aforesaid subsidiary.

22. Related Party Disclosure: (With whom the transactions have taken place)

A. Relationship:

Category 1: Major Shareholders:

- Kingsbury Investment Inc.

- Expert Chemicals (India) Pvt. Ltd.

- Magnum Equifin 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-Al-Khaimah, UAE) Category 3: Associate Companies:

- Wanbury Infotech Pvt. Ltd.

- Bravo Healthcare Limited

Category 4: Key Management Personnel and their relatives:

- Mr. K. Chandran Vice-Chairman

- Mr. K. R. N. Moorthy Joint Managing Director

- Mr. Ashok Shinkar Executive Director (w.e.f. 30.06.2009)

- Dr. Rajaram Samant Whole-time Director (w.e.f. 29.09.2009)

23. Figures for the current period, being for twelve months, are not strictly comparable with those of the previous period, which are for six months.

24. Figures for the previous period have been recast and regrouped wherever necessary. Figures in brackets are for previous period.

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