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Notes to Accounts of Wanbury Ltd.

Mar 31, 2023

Nature of each reserve and surplus

Capital Reserve:-This Reserve repesents the difference between value of the net assets transferred to the Company in the course of business combinations and the consideration paid for such combinations earlier.

Securities Premium Account:- This Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.

Debenture Redemption Reserve:- This reserve is created out of the retained earnings for the amount of debentures to be redeemed, as per the provisions of Companies Act, 2013.

General reserve:- This Reserve is created by an appropriation from one component of equity to another, not being an item of other comprehensive income.

Employee Stock Option Outstanding:-This Reserve relates to stock options granted by the Company to employees. This Reserve is transferred to securities premium or retained earnings on exercise or cancellation of vested options.

Retained earnings:- This is net surplus or deficit in the statement of profit and loss.

Revaluation Surplus:- This reserve represents surplus on revaluation of Freehold & Leashold land. Amount equivalent to additional amortisation due to revaluation of leasehold land is transferred to retained earnings

The accompanying notes are an integral part of the standalone financial statements.

The carrying amounts of the trade receivables include receivables which are subject to factoring arrangement. Under this arrangement, the company has transferred the relevant receivables to the “Factor” in exchange for cash and is prevented from selling or pledging the reeceivables. However, the Company has retained late payment and credit risk. The Company therefore continues to recognise the transferred assets in thier entirety in its balance sheet. The amount repayable under the factoring agreement is presented as secured borrowing. The Company considers the held to collect business model to remain appropriate for these receivables and hence continues measuring them at amortised cost.

19.2 Terms/Rights attached to equity shares

The Company has only one class of equity shares with voting rights having a par value of ? 10 per share. The Company declares & 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.

19.3 Outstanding Options to subscribe to equity shares

11,25,236 warrants of the face value of ? 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 ? 10/- each at the premium of ? 125/- per share which is exercisable within five years from 27 June 2007,being the date of allotment of the warrants. Refer note 46a.

58,199 Zero Coupon Optionally Fully Convertible Debentures (OFCDs) of face value of ? 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 ? 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right. Refer note 46a.

19.7 The Company has neither alloted 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.

19.8 In the Extra-ordinary General Meeting of members held on 20 March 2021, the Company approved the issue and allotment of 76,15,381 equity shares of ''10 each on preferential basis to Non promoter group at issue price of '' 65 per share (including premium of '' 55 per equity share ) for a consideration of '' 49,49,99,765/-. The same have been alloted on 22nd April 2021.

19.9 During the previous year ended 31 March 2022, in accordance with SEBI regulations, with the approval of members by the Special resolution in the Extra Ordinary General meeting held on 17 March 2022, the Board is entitled to issue and allot 54,50,000 convertible share warrants to promoter group company on preferntial basis at issue price of ? 105 per warrant. 25% of issue price to be received at the time of issue and allotment of warrants. 75% of issue price to be received at the time of allotment of shares. Each warrant is convertible into 1 fully paid equity share of ? 10 each. Company has withdrawn the aforesaid issue of convertible share warrants.

24.1 Above loans are secured by first pari-passu charge on current assets including few brands of the Company, second charge on both present and future fixed assets of the company and Pledge of unencumbered shareholding in the company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc. and Pledge of 12,71,250 shares of Bravo Healthcare ltd and pledge of 5 shares of Wanbury Global FZE on pari passu basis. Further there is Corporate Guarantee of Experts Chemicals , Bravo Healthcare, Wanbury Global FZE and Kingsbury investments and Personal Guarantee of Mr. K Chandran, Director of the company.

24.2 Factoring facilities are secured by subservient (residual) charge on all present and future receivables, book debts, outstandings, monies receivables, claims and bills of the company, which are now due and or which may be due at anytime of its approved debtors and subservient charge on all present and future fixed asset and current assets of the company.

27.1 The NCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL. The NCD comprises of Part A of ? 60 and Part B of ? 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 ? 60 relating to 1,49,709 NCD''s in the earlier years. NCD''s amounting to ? 69.67 Lakhs (Pr. Yr. ? 69.67 Lakhs) and ? 63.37 Lakhs (Pr. Yr. ? 63.37 Lakhs) was due for repayment on 1 May 2009 and 1 May 2010 respectively. Refer Note 46a.

27.2 The OFCD are to be secured by a pari passu charge on the fixed assets of erstwhile PPIL. OFCD are convertible between 01 November 2008 and 30 April 2012 into equity shares at a price being higher of t 125/- and 67% of the three months average weekly closing price prior to the date of exercise of such right amounting to t 194.12 Lakhs (Pr. Yr. t 94.11 Lakhs) and t 194.56 Lakhs (Pr. Yr. t 94.38 Lakhs) was due for repayment on 30 April 2010 and 30 April 2011 respectively. Refer Note 46a.

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

27.4 The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR vide its order dated 24 April 2007. Refer Note 46a.

27.5 There is delay in repayment of

(i) amount payable to FCCB Holders aggregating to t 372.04 Lakhs (Pr. Yr. t 350.32 Lakhs) ranging from 1 to 3994 days (Pr. Yr. 1 to 3629 days).

(ii) interest on FCCB aggregating to t 124.76 (Pr. Yr. t 117.48 Lakhs) ranging from 1 to 4293 days (Pr. Yr. 1 to 3928 days).

(iii) Interest on Liability against Corporate guarantee to t 107.80 Lakhs (Pr. Yr. t 88.73 Lakhs) by 1 to 1432 days (Pr. Yr. 1 to 1067 days)

40. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances ? 486.09 Lakhs (Pr. Yr. ? 113.54 Lakhs).

b) Other Commitments - Non Cancellable Operating Lease (Refer Note 57)

41.

Contingent Liabilities:

(? in Lakhs)

Sr. No.

Particulars

31 March 2023

31 March 2022

a)

Contract of take out undertaking executed in favour of bank/ financial institution for loans given to step down subsidiary-Cantabaria Pharma SL.

Amount Payable at the year end for undertaking as above. (Refer note 43)

30,409.60 (Euro 340.00 Lakhs) 19,501.74 (Euro 218.04 Lakhs)

28,635.14 (Euro 340.00 Lakhs) 18,135.58 (Euro 215.33 Lakhs)

b)

Disputed demands by Sales Tax Authorities.

3,015.23

3,015.23

c)

Disputed demands by Service Tax Authorities. Amount paid under protest and shown as advance.

113.61

11.00

144.61

12.87

d)

Disputed demands by Excise Authorities.

-

20.03

e)

Disputed demand by National Pharmaceutical Pricing Authority (NPPA)

190.58

190.58

f)

Claims against the Company not acknowledged as debts.

50,907.05

40,834.22

g)

Custom Duty on import under Advance License Scheme, pending fulfillment of Exports obligation.

3,025.57

2,389.43

The management considers the Service Tax, Excise Duty, Custom Duty, Sales Tax, GST etc 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, in respect of aforesaid matters, the Company does not expect 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.

Code of Social Security,2020

The new Code on Social Security, 2020 (Code) has been enacted, which could impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. The Company will complete its evaluation and will give appropriate impact in its financial statements in the period in which the Code becomes effective and the related rules are published.

42. a. 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 the Company is required to pay USD 60 Lakhs (Pr. Yr. USD 60 Lakhs) equivalent to ? 4,930.20 Lakhs (Pr. Yr. ? 4,547.55 Lakhs) to acquire aforesaid preference shares, against which the Company has made provision of approximately 20%.

The said dues are part of the CDR Scheme

Pursuant to Exim Bank letter dated 27 September 2021, the aforesaid liability has been settled under One Time Settlement(OTS) at USD 12 Lakhs (Pr. Yr. USD 12 Lakhs) equivalent to ? 986.04 Lakhs (Pr. Yr. ? 909.51 Lakhs).

Further, vide letter dated 3 July 2023, Exim bank has approved extension of time for repayment upto 30 September 2023.

The company has been providing interest at the stipulated rate on the outstanding amount.

In respect of this matter Contingent Liability on cut off date is ? 4,230.20 Lakhs (Pr. Yr. ? 3,847.55 lakhs).

b. State Bank of India, London filed legal proceedings dated 28 February 2017, demanding repayment of Euro 38.23 Lakhs (Pr. Yr. Euro 38.23 Lakhs) equivalent to ? 3,419.39 Lakhs (Pr. Yr. ? 3,219.73 Lakhs) together with interest till the date of repayment by 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.

State Bank of India, London, vide compromise settlement letter dated 01 February 2018 approved the settlement of their dues at 20% in respect of loan availed by Cantabria Pharma SL.

Further, vide letter dated 16 June 2023, State Bank of India, London, has approved extension of time for repayment upto 31 December 2023

The Company has been providing interest at the stipulated rate on the outstanding amount.

In respect of this matter Contingent Liability on cut off date is ? 2,774.75 Lakhs (Pr. Yr. ? 2,575.13 lakhs).

43. The Company expects to settle Corporate Guarantee liability of Cantabria Pharma SL, the step down subsidiary of the Company & Wanbury Holding B.V., a subsidiary company (Refer note 41(a) & 42), at approximately ? 3,413.49 Lakhs (Pr. Yr. ? 3,519.96 Lakhs) excluding interest thereon if any, and the same is shown under “Current Financial Liabilities - Others”.

During the previous year ended 31 March 2022, considering the above OTS & Compromise Settlement letter from the lenders, during the year, ? 1,011.74 lakhs has been recognised as gain on extinguishment of financial liability & shown the same under exceptional items. (Refer Note 44)

45. The Company has one segment of activity namely “Pharmaceutical”.

46. a. 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, had 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 had directed IDBI Bank, which was 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 had sought legal opinion and the Company was 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 had maintained a status quo in the past. However, all actions taken by the Company pursuant to the sanctioned scheme were kept subject to and without prejudice to the order 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 ? 250.36 Lakhs, profession tax ? 6.06 Lakhs, custom duty ? 230 Lakhs, sales tax ? 8.50 Lakhs and excise duty ? 15.62 Lakhs were required to be paid in six annual installments and remains payable at the period end.

Further, the Company had pursuant to the scheme, allotted Non Convertible Debentures (NCDs) of ? 242.50 Lakhs and Optionally Fully Convertible Debentures (OFCDs) of ? 581.99 Lakhs, to some of the lenders of erstwhile PPIL, out of which dues amounting to ? 152.67 Lakhs and ? 581.99 Lakhs in respect of NCDs and OFCDs respectively, which remains payable till the year ended 31 March 2021.

During the previous year ended 31 March 2022, Company had Provided for Additional Liability of ? 100 Lakhs and ? 150 Lakhs for NCDs and OFCDs respectively. Further during the previous year, the Company has sold some of the land & building of erstwhile PPIL and the sales proceeds have been utilized towards partial repayment of NCDs and OFCDs of ? 119.63 Lakhs and ? 543.50 Lakhs respectively. Hence, ? 133.04 Lakhs and ? 188.49 Lakhs in respect of NCDs and OFCDs respectively, remains payable as on 31 March 2022.

During the year 31 March 2023, the company had provided for additional liability of f 200.19 Lakhs for OFCD''s. Hence f 133.04 Lakhs and f 388.68 Lakhs in respect of NCD''s and OFCD''s respectively remains payable as on 31 March 2023.

Since BIFR was considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues were not paid.

However, the Government of India had, vide Notification No. S.O. 3568(E) dated 25 November 2016, notified the SICA Repeal Act, 2003, w.e.f. 1 December 2016, and as a consequence thereof, BIFR and AAIFR stood dissolved w.e.f. 1 December 2016. Simultaneously, in terms of Section 252 of Insolvency & Bankruptcy Code (“IBC 2016”), the government amended Section 4(b) of the said repeal act in the manner specified in the Eighth Schedule of IBC 2016, resulting in the abatement of all pending proceedings including pending merger scheme before BIFR.

In view of the foregoing developments, the management is currently considering various other options available under the laws and as may be advised by the legal experts either to regularize lawfully all acts and deeds done under the erstwhile merger scheme or to undo what was done in pursuance and as a sequel of the erstwhile merger scheme sanctioned by BIFR vide order dated 24 April 2007.

b. Assets held for sale:

As per the scheme of rehabilitation and merger approved by BIFR, erstwhile PPIL is required to sell 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 classified as held for sale and measured at lower of carrying cost and fair value less cost to sell. The Company is not charging any depreciation on assets held for sale.

During the year, the Company has sold Building at Turbhe, Navi Mumbai and sales proceeds have been used for partial repayment of NCD & OFCD as mentioned above in the Note No 46a.

47. During the year ended 31 March 2017, SBI and SBM had sold its loan exposure and have assigned all the rights, title and interests in financial assistance on the Company to Edelweiss Asset Reconstruction Company Limited (EARCL) at an agreed value.

During the previous year ended 31 March 2022, pursuant to the settlement arrangement letter dated 13 December 2021, EARCL has agreed final settlement amount of f 8,500 Lakhs. Major part of the settlement aunt was paid and interest had been provided at stipulated rates. Consequently, f 6,875.02 Lakhs was recognized as gain on extinguishment of financial liability and shown under “Exceptional Item”.

Further, during the previous year ended 31 March 2022, Union Bank of India and Exim Bank vide letter dated 1 December 2021 and 7 December 2021 respectively have assigned all the rights, title and interests in financial assistance on the Company to EARCL at agreed value.

During the year ended 31 March 2023, in respect of aforesaid dues, EARCL has agreed for the Revised Settlement amount to be payable within the stipulated time. Consequently f 981.58 Lakhs has been recognised as loss on settlement of financial liability and shown under “Exceptional Item”.

48. The balances of trade receivables, trade payables, loans and advances are subject to confirmation/reconciliation and adjustments, if any.

B. Reconciliation of Effective Tax Rate:For the year ended 31 March 2023:

The Company has incurred loss during the yar ended 31 March 2023. Since there is book loss as well as tax loss and hence no tax Is payable as per provision of Income Tax Act 1961. Therefore, calculation of effective tax rate Is not relevant and hence not given.

53. Employee Benefits

As required by Ind AS 19 “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 employees. 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: Under the gratuity plan, the eligible employees are entitled to post -retirement benefit at the rate of 15 days salary for each year of service until the retirement or resignation with a payment ceiling of ? 20 lakhs. The Company makes annual contributions to Employees'' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of LIC, a funded defined benefit plan for qualifying employees. The scheme provides for payment to vested employees as under:

i) 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.

ii) On the death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Although the analysis does not take into account full distribution of cash flows expected under the plan, it does provide an approximation of sensitivity of assumptions. 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.

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

The Average outstanding terms of obligations (years) as at valuation date is 8.86 years (Pr.Yr. 8.69 years) .

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 ? 516.52 Lakhs (Pr. Yr. ? 457.23 Lakhs) being liability as at the year end for compensated absences as per actuarial valuation has been provided in the accounts.

The Actuary has outlined the following risks associated with the plans:A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates:

If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

If actual mortality rates are higher than assumed mortality rate assumption than the leave benefit will be paid earlier than expected. The acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates:

If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

If actual withdrawal rates are higher than assumed withdrawal rate assumption than the leave benefit will be paid earlier than expected. The impact of this will depend on the relative values of the assumed salary growth and discount rate.

Variability in availment rates:

If actual availment rates are higher than assumed availment rate assumption then leave balances will be utilised earlier than expected. This will result in reduction in leave balances and Obligation.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the Company there can be strain on the cashflows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognised immediately in the year when any such amendment is effective.

54. Employees Stock Options Plan (''ESOP'')

The Company has established an Employee Stock Options Plan 2016 (‘WANBURY ESOP - 2016'') which was approved by the shareholders vide their resolution dated 29 September 2016. The options issued under the above scheme vest in phased manner. Each option entitles an employee to subscribe to one equity share of the Company at an exercise price of ? 10 per share.

The options will be vested over a period of five years subject to continuous employment with the Company and the fulfillment of performance parameters.

55. Disclosure for leases under Ind AS 116- “Leases”:

The Company has taken various/few premises on lease.Rental contracts are made from 12 months to 60 months and are renewable by mutual consent on mutually agreeable terms. Some of these lease agreements have price escalation clauses. There are no restriction imposed by lease agreements and there are no sub leases. There are no contingent rents.

The Company has adopted Ind AS 116 effective from 1 April 2019, using the modified retrospective method.

Right-of-use assets is depreciated on a straight-line basis over the shorter of the lease term and useful life of the asset.

58. During the year, the Company has incurred losses and Company''s net-worth is negative. Its current liabilities far exceeds its current assets and one of the lender has filed application with Mumbai Debt Recovery Tribunal for the recovery of dues. The Company has infused funds in the past and initiated various measures, including restructuring and realigning of debts/business. As part of overall debt resolution plan, the Company is in final stage of raising funds from an Alternative Investment Fund and the proceeds will be utilised in repayment of debts/dues. 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.

59. Capital Management

The primary objective of the Company''s capital management is to maximise shareholder value.

The capital structure of the Company is based on the management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company has initiated various measures, including restructuring of debts and infusion of funds etc.

During the previous year ended 31 March 2022, the Board of Directors at their meeting held on 22 April 2021 allotted 76,15,381 Equity Shares of face value ? 10/- each at an issue price of ? 65/- per equity share (including premium of ? 55/-per equity share) aggregating to ? 4,950 Lakhs. Further, during the previous year, the Company had sold some of its Land & Building aggregating to ? 1,069.57 Lakhs. Proceeds from the same had been utilised in repayment/settlement of existing debts.

For the purpose of the Company''s capital management, the Company monitors Net Debts and Equity.

Equity includes all components of equity i.e. paid up equity capital, share premium and all other equity reserves attributable to the equity holders of the Company.

Net Debt includes all liabilities i.e. interest bearing loans and borrowings, trade payables, provisions and other liabilities less cash and cash equivalents.

B. Fair Value Measurements Fair Value Hierarchy

This section explains the Judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian Accounting Standard. An explanation of each level is as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets or identical assets and liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market (like forward contracts) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value as instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities etc. included in level 3.

i. Risk Management Framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. Management is responsible for developing and monitoring the Company''s risk management policies, under the guidance of Audit Committee.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligation.

The Company''s Audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

(a) Trade Receivables

Customer credit risk is managed by the Company subject to Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from wholesalers, non-interest bearing and are generally on 7 days to 120 days credit term. Credit limits are established for all customers based on internal rating criteria and any deviation in credit limit require approval of Directors. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. Trade receivables do not contain any significant financing component and hence, the Company recognises life time expected credit loss based on simplified approach.

(b) Other Financial Instruments

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks or financial institutions with high credit rating assigned by credit rating agencies. For other financial assets, the Company assesses and manages the credit risk internally. The Company considers the probability of default upon initial recognition and assess whether there has been a significant increase in credit risk subsequently based in the historical losses and forward looking supportable information. Based on general approach, if there is a significant increase in credit risk of a financial asset since its initial recognition the Company recognises life time expected credit loss otherwise 12 months expected credit loss is recognised.

iii. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to maintain optimum level of liquidity at all times, to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt etc. at an optimised cost. Working capital requirements are adequately addressed by internally generated and borrowed funds.

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are at floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange contracts to manage its exposures to foreign exchange fluctuations. All such transactions are carried out within the guidelines set by the risk management committee.

The analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non financial assets and liabilities.

(a) Currency Risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company.

The currencies in which these transactions are primarily denominated are US dollars (US $), Pound (GBP) and Euro.

As the share of exports to total sales made by your Company is considerable, same is partly hedge through natural hedging via raw material imports. Further management exercise close monitoring of currency fluctuations.

During the previous year ended 31 March 2022 the Company has not entered into any forward exchange contract.

During the year ended 31 March 2023, the Company has entered into forward exchange contract, being derivative instrument to mitigate foreign currency risk, to establish the amount of currency in India Rupees required or avaibale at the settlement date of certain payables and receivables

Sensitivity:

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments.

The following table details the Company''s sensitivity to 1% increase and decrease in the exchange rate between the Indian Rupee and respective currencies. A positive number below indicates an increase in profit/ decrease in losses and negative number indicates decrease in profit/ increase in losses:

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Majority of borrowings of the Company are at fixed interest rate and are carried at amortised cost. They are therefore not subject to interest rate risks, since neither the carrying amount nor the future cash flows will fluctuate because off a change in market interest rates.

(c) Price risk

The Company is exposed to equity price risks arising from equity investments. However, there is no material impact of the sensitivity.

61. Revenue (Ind AS 115)

The operations of the Company are limited to only one segment viz. pharmaceuticals and related products. Revenue from contract with customers is from sale of manufactured/traded goods. Sale of goods are made at a point in time and revenue is recognised upon satisfaction of the performance obligations which is typically upon dispatch / delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established. The credit period provided by the Company is not significant, hence there is no significant financing component.

Explanation where variance in ratios is more than 25%Debt-Service Coverage ratio:

Current period ratio is lower due to lower EBITDA mainly due to loss and Exceptional items (refer note 44) as against previous year ratio better due to improved profitability and exceptional items(Refer note 44).

Trade receivables turnover ratio:

Current period ratio is lower due to increased average receivable.

Net profit ratio:

Current period ratio is lower due to lower sales and low profitability

Return on Capital employed:

Current year ratio is lower due to Loss and further decrease in earnings. As against, previous year ratio was better due to better gross margins.

63. Disclosure of Transactions With Struck Off Companies:

The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year.

64. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

65. During the year, there are no transaction/details to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:

a. Crypto Currency or Virtual Currency

b. Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder

c. Registration of charges or satisfaction with Registrar of Companies

d. Undisclosed Income

e. Relating to borrowed funds:

i. Discrepancy in utilisation of borrowings

ii. Borrowings from banks and financial institutions for the specific purpose

66. Disclosure of borrowings obtained on the basis of security of current assets:

The Company has been sanctioned working capital borrowing of ? 892 Lakhs comprising of ? 589 Lakhs fund based and ? 303 Lakhs non-fund based from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with banks in lieu of the sanctioned working capital facilities. Discrepancies are as under.

# The quarterly statements submitted to banks were prepared and filed before the completion of all the financial statement closure activities including IndAS related adjustments/reclassifications & regrouping as applicable, which led to these differences between the final books of accounts and the quarterly statements submitted to banks based on provisional books of accounts

67. Compliance with approved Scheme(s) of Arrangements:

During the Year, the Company has not entered into any Scheme of Arrangements in terms of sections 230 to 237 of the Companies Act, 2013.

68. Utilisation of borrowed funds and share premium:

A. During the year, the Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),

including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

B. During the year, the Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

70. The Company is facing some challenges on raw material availability mainly due to working capital constraints. The current supplier arrangement and fund availability ensures material availability sufficient to cater only to the plants at Tanuku and Patalganga which being USFDA & EUGMP approved facilities, fetch better realisation of API produced. Hence, the Company has shut the operations at Tarapur plant. However, the Company is maintaining facilities to keep it ready for restart once material availability is re-established. Management is exploring various business opportunities for productive use of Tarapur plant.

71. Previous year''s figures have been re-grouped / re-classified wherever necessary, to confirm to current year''s classification


Mar 31, 2018

1. CORPORATE INFORMATION:

Wanbury Limited (“the Company”) is a public limited company incorporated and domiciled in India.

Its shares are listed on Bombay Stock Exchange and National Stock Exchange. The Registered office of Company is located at BSEL Tech Park, B-Wing, 10th Floor, Sector 30-A, Opp. Vashi Railway Station, Vashi, Navi Mumbai - 400 703.

The Company is engaged in the business of pharmaceutical and related activities, including research. The financial statements of the Company for the year ended 31 March 2018 were authorized for issue by Company''s Board of Directors on 10th August 2018.

2. BASIS OF PREPARATION

The financial statements of Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016.

These Financial Statements are Company''s first Ind AS Financial Statements and are covered by Ind AS 101, “First-time adoption of Indian Accounting Standards”.

For all periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with the Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Companies (Accounts) Rules 2014 (“Previous GAAP”).

An explanation of how the transition to Ind-AS has affected Company''s equity and its net loss is provided in note no. 66.

The Financials statements have been prepared on an accrual basis and under the historical cost basis, except for certain financial instruments that are measured at fair value.

3. FUNCTIONAL AND PRESENTATION CURRENCY

The financial statements are presented in Indian Rupees (''INR'' or ''Rupees'' or ''Rs.'' or ''?'') which is the functional currency for Company.

4. ROUNDING OFF OF AMOUNTS

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh.

5. CURRENT VERSUS NON-CURRENT CLASSIFCATION

The assets and liabilities in the balance sheet are presented based on current/non-current classification.

An asset is a current asset when it is:

- expected to be realized or intended to be sold or consumed in normal operating cycle, or

- held primarily for the purpose of trading, or

- expected to be realised within twelve months after the reporting period, or

- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current assets.

A liability is a current liability when it is:

- expected to be settled in normal operating cycle, or

- held primarily for the purpose of trading, or

- due to be settled within twelve months after the reporting period, or

- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are treated as non-current liabilities.

Deferred tax assets and liabilities are classified as non- current assets and liabilities respectively.

Nature of each Reserve and Surplus

Capital Reserve:-This Reserve represents the difference between value of the net assets transferred to the Company in the course of business combinations and the consideration paid for such combinations earlier.

Securities Premium Account:- This Reserve represents the premium on issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.

Debenture Redemption Reserve:- This reserve is created out of the retained earnings for the amount of debentures to be redeemed, as per the provisions of Companies Act, 2013.

General reserve:- This Reserve is created by an appropriation from one component of equity to another, not being an item of other comprehensive income.

Employee Stock Option Outstanding:-This Reserve relates to stock options granted by the Company to employees. This Reserve is transferred to securities premium or retained earnings on exercise or cancellation of vested options.

Retained earnings:- This is net surplus or deficit in the statement of profit and loss.

6.1 The title deeds of the immovable properties transferred pursuant to the Scheme of Merger are yet to be transferred in the name of the Company.

6.2 Capital Work in Progress includes Machinery under installation, Construction material purchases and other assets under erection. It includes Rs. 896.54 Lacs (31 March 2017 - Rs.896.54 Lacs) of erstwhile PPIL (Refer Note 46).

6.3 Addition includes Rs.4.33 Lakh (31 March 2017 - Rs.3.61 Lakh) used for Research & Development

7.1 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.

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.

7.2 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 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. Refer note 46.

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. Refer note 46.

Refer Note 47 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.

8.1 In compliance with the terms of the Corporate Debt Restructuring Scheme, during the previous year ended 31 March 2017, the Company has allotted 32,50,831 Equity Shares of Face value of Rs.10 each at a premium of Rs. 27.60 per equity share to the promoter Company Expert Chemicals (India) Pvt. Ltd., on preferential basis.

8.2 During the previous year ended 31 March 2017, the Company had allotted 5,00,000 numbers of Zero % Compulsorily Convertible Debentures (CCDs) of face value of Rs.200/- each at par aggregating to Rs.1,000 lakhs and during the current year ended 31 March 2018, CCDs has been converted into 5,00,000 Equity Shares of Face value of Rs.10 each at premium of Rs.190 per share.

8.3 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.

8.4 The Company is not a subsidiary Company.

9.1 Above loans are secured by first pari-passu charge on current assets including few brands of the Company, second charge on both present and future fixed assets of the company and pledge of unencumbered shareholding in the company held by Expert Chemicals (I) Private Limited & Kingsbury Investment Inc. and pledge of 12,71,250 shares of Bravo Healthcare ltd and pledge of 5 shares of Wanbury Global FZE on pari passu basis. Further there is Corporate Guarantee of Experts Chemicals , Bravo Healthcare, Wanbury Global FZE and Kingsbury investments and Personal Guarantee of Mr. K Chandran, director of the company.

9.2 Factoring facilities are secured by subservient (residual) charge on all present and future receivables, book debts, outstandings, monies receivables, claims and bills of the Company, which are now due and or which may be due at anytime of its approved debtors and subservient charge on all present and future fixed asset and current assets of the Company.

10.1 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 Lakhs and Rs.97 Lakhs was due for repayment on 1 May 2009 and 1 May 2010 respectively. Refer Note 46.

10.2 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 ? 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 ? 291 Lakhs was due for repayment on 30 April 2010 and 30 April 2011 respectively. Refer Note 46.

10.3 There is delay in repayment of

(i) term loan aggregating to Rs.1,991.40 Lakhs (31 March 2017 - Rs.1,481.86 Lakhs; 1 April 2016 - Rs.1,852.89 Lakhs) ranging from 1 to 640 days (31 March 2017 - 1 to 366 days ; 1 April 2016 - 1 to 367 days).

(ii) amount payable to FCCB Holders aggregating to Rs.397.04 Lakhs ( 31 March 2017 – Rs.941.81 Lakhs ; 1 April 2016 - Rs. 717.56 Lakhs) ranging from 1439 to 2168 days (31 March 2017 -17 to 1803 days ; 1 April 2016 - 92 to 1438 days)

(iii) interest on secured borrowings aggregating to Rs.408.70 Lakhs (31 March 2017 - Rs.625.12 Lakhs ; 1 April 2016 Rs.1,036.83 Lakhs) ranging from 1 to 731 days ( 31 March 2017 - 1 to 457 days ; 1 April 2016 - 1 to 367 days) in respect of dues to banks/ financial institutions.

(iv) interest on FCCB aggregating to Rs.115.70 (31 March 2017 - Rs.387.46 Lakhs ; 1 April 2016 - Rs. 329.28 Lakhs) ranging from 2103 to 2467 days (31 March 2017 - 17 to 2102 days ; 1 April 2016 - 1438 to 1737 days).

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

10.5 The said dues were payable as per Merger Cum Revival Scheme approved by the BIFR vide its order dated 24 April, 2007. Refer Note 46.

10.6 During the year ended 31 March 2018, Company has transferred unpaid dividend of Rs. 4.15 lacs to Investor Education and Protection Fund within due date.

11. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Rs.21.63 Lakhs (31 March 2017 - Rs.212.99 Lakhs, 1 April 2016 - Rs.131.88 Lakhs).

b) Other Commitments- Non Cancellable operating leases (Refer Note 61).

The management considers the Service Tax, Excise Duty, Custom Duty, Sales Tax, GST 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, in respect of aforesaid matters, the Company does not expect 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.

12.

a) 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.3,902.65 Lakhs (Pr. Yr. Rs.3,890.32 Lakhs)] to acquire aforesaid preference shares. The said dues being part of the CDR Scheme will be accounted upon arriving at mutually agreed terms of settlement (Refer note 44)

b) State Bank of India, London has filed legal proceedings dated 28 February 2017, demanding repayment of Euro 38.23 Lakhs (Pr. Yr. Euro 38.23 Lakhs) [Rs. 2,647.43 Lakhs (Pr. Yr. Rs. 2,647.43 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. During the current Financial Year, State Bank of India, London vide One Time Settlement (“OTS”) letter dated 11 August 2017 agreed to settle the dues in respect of loan availed by Cantabria Pharma SL at 20%. As per the terms agreed, Company has to pay the settled amount by March 2019. The above OTS is subject to approval from appropriate authority. (Refer note 44)

13. The Company expects to settle liability of Cantabria Pharma SL, the step down subsidiary of the Company & Wanbury Holding B.V., a subsidiary Company at approximately Rs.50 crores. Hence Company has made provision for Corporate Guarantee of Rs.50 crores as on transition date i.e 1 April 2016. Provision for Corporate guarantee is shown under Current other financial liabilities- Other payables. (Refer note 42(a) & 43)

14. The Company has one segment of activity namely “Pharmaceuticals”.

15. 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, had 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 had directed IDBI Bank, which was 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 had sought legal opinion and the Company was 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 had maintained a status quo in the past. However, all actions taken by the Company pursuant to the sanctioned scheme were kept subject to and without prejudice to the order 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 ? 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 ? 242.50 Lakhs and Optionally Fully Convertible Debentures (OFCDs) of ? 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 was considering the matter afresh, pending fresh directives from the BIFR, aforesaid dues were not paid.

However, the Government of India had, vide Notification No. S.O. 3568(E) dated 25 November 2016, notified the SICA Repeal Act, 2003, w.e.f. 1 December 2016, and as a consequence thereof, BIFR and AAIFR stood dissolved w.e.f. 1 December 2016. Simultaneously, in terms of Section 252 of Insolvency & Bankruptcy Code (“IBC 2016”), the government amended Section 4(b) of the said repeal act in the manner specified in the Eighth Schedule of IBC 2016, resulting in the abatement of all pending proceedings including pending merger scheme before BIFR.

In view of the foregoing developments, the management is currently considering various other options under the available laws and as may be advised by experts either to regularize lawfully all acts and deeds done under the erstwhile merger scheme or to undo what was done in pursuance and as a sequel of the erstwhile merger scheme sanctioned by BIFR vide order dated 24 April 2007.

16. 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 in accordance with applicable Indian Accounting Standard.

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.

17. During the year, Bank of India (“BOI”) has approved One Time Settlement(“OTS”) vide letter dated 29 September 2017 in respect of loans availed and outstanding by the Company including external commercial borrowing and interest accrued upto 9 June 2017. As per the terms of settlement, Company has to pay the agreed amount within 9 months from settlement date with an interest at base rate plus 1% on agreed amount. Consequently, a gain of Rs.5,296.02 lakhs has been recognised on derecognition of earlier loan and included in “other income”. The outstanding liability at the year end is shown under “Current Financial Liabilities- Borrowings”. Further the Company''s request for extension of time for payment of balance amount is under consideration by BOI. Pending the same, effect of OTS continues in the financial statements.

18. State Bank of Mysore (“SBM”) vide its letter dated 31 March 2017, has informed about sale of its loan exposure on the Company to Edelweiss Asset Reconstruction Company Limited (“EARCL”). However, pending completion/execution of necessary agreements etc. no further impact has been considered in the financial statements for the year ended 31 March 2018. Considering the facts and generally accepted practice of the similar arrangements, no interest is charged by EARCL for the period from takeover of loan exposure till new repayment terms are agreed, hence the Company has not provided interest expenses from 1 April 2017.

19. 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.

18. During the year, on 26 January 2018, fire had broken out at R & D Center, Mahape, Navi Mumbai, and was brought under control. There is an adequate insurance cover to mitigate damages of assets. Appropriate effect of damages has been given in the books of accounts. Company has lodged claim to Insurance Company for the same. Pending admission of claim, no effect of the claim receivable has been given in the financial statements. Management does not expect any adverse financial losses.

19. Asset held for Sale

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(Refer note 46). Consequently, the said assets are classified as held for sale and measured at lower of carrying cost and fair value less cost to sell. The Company is not charging any depreciation on asset held for sale.

21. Some of the balances of trade receivables, trade payables, loans and advances are subject to confirmation/reconciliation and adjustments, if any.

22. 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:

23. Research and Development Expenditure

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.1,230.82 lakhs (previous year Rs.1,354.79 lakhs)

24. Income Tax

Income tax (expense)/benefit recognized in the income statement consist of the following :

A. Current Tax :

B. Reconciliation of Effective Tax Rate:

a. The Company has incurred loss during the year ended 31 March 2018 and no tax is payable as per provisions of Income Tax Act, 1961.

b. The Company has incurred book loss as per previous GAAP (Refer note 67) and tax loss during the previous year ended 31 March 2017, not tax is payable as per provisions of Income Tax Act, 1961.

Therefore, calculation of effective tax rate is not relevant and hence, not given.

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

The Company has applied to the Central Government on 18 January 2016 for the approval of excess remuneration amounting to Rs. 49.77 Lakhs pertaining to F.Y. 2015-16. Pending approval, the same is shown as recoverable in the Financial Statements. Further, excess remuneration amounting to Rs.41.77 Lakhs for the F.Y. 2016-17 and Rs. 45.77Lakhs for the F.Y 2017-18 is shown as recoverable in the Financial Statements. Amount recoverable from Director aggregating to Rs.137.31 Lakhs (Pr. Yr. Rs. 91.54 Lakhs) is shown under “Other Current Assets - Non Financial” (Refer Note 20). In case of non-approval from Central Government, the Board of Directors at its meeting held on 10 August 2018 has decided to recover the said dues on or before 9 August 2019.

(b) Sitting fees to Directors'' Rs.17.10 Lakhs (Pr. Yr. Rs.13.30 Lakhs).

25. Employee Benefits

As required by Ind AS 19 “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 employees. 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: Under the gratuity plan, the eligible employees are entitled to post -retirement benefit at the rate of 15 days salary for each year of service until the retirement or resignation with a payment ceiling of Rs.20 lakhs. The Company makes annual contributions to Employees'' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of LIC, a funded defined benefit plan for qualifying employees. The scheme provides for payment to vested employees as under:

i) 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.

ii) On the death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Although the analysis does not take into account full distribution of cash flows expected under the plan, it does provide an approximation of sensitivity of assumptions. 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.

The expected contribution for Defined Benefit Plan for the next Financial Year will be in line with current financial 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.517.40 Lakhs (Pr. Yr. Rs.486.07 Lakhs) being liability as at the year end for compensated absences as per actuarial valuation has been provided in the accounts.

The Actuary has outlined the following risks associated with the plan:

A. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates : If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates : If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B. Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

C. Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the Company there can be strain on the cashflows.

D. Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

E. Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/ regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

26. Employees Stock Options Plan (‘ESOP'')

The Company has implemented an Employee Stock Options Plan 2016 (''WANBURY ESOP - 2016'') which was approved by the shareholders vide their resolution dated 29 September 2016. During the year, the Board of Directors of the Company has granted 3,00,000 (Pr. Yr. 3,00,000) stock options to its employees pursuant to the ''WANBURY ESOP -2016''. Each option entitles an employee to subscribe to one equity share of the Company at an exercise price of Rs.10/- per share.

The options will be vested over a period of five years subject to continuous employment with the Company and the fulfillment of performance parameters.

27. Disclosure for operating leases under Ind AS 17 - “Leases”:

The Company has taken various premises under operating lease. These are generally cancellable and ranges from 11 months to 60 months and are renewable by mutual consent on mutually agreeable terms. Some of these lease agreements have price escalation clauses. There are no restrictions imposed by lease arangements and there are no sub leases. There are no contingent rents. The lease rent of Rs.320.40 Lakhs (Pr. Yr. Rs.367.75 Lakhs) are recognised in the Statement of Profit and Loss under “Rent” under Note 39.

The Company does not have non-cancellable operating leases during the current and previous Financial Year.

28. Net-worth of the Company as on 31 March 2018 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.

29. Capital Management

The primary objective of the Company''s capital management is to maximise shareholder value.

The capital structure of the Company is based on the management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The Company has initiated various measures, including restructuring of debts and infusion of funds etc.

In compliance with the terms of the Corporate Debt Restructuring Scheme, during the year ended 31 March 2017, the Company has allotted 32,50,831 Equity Shares of Face value of Rs.10 each at a premium of Rs.27.60 per equity share to the promoter Company Expert Chemicals (India) Pvt. Ltd., on preferential basis.

During the year ended 31 March 2017, the Company has allotted 5,00,000 numbers of Zero % Compulsorily Convertible Debentures (CCDs) of face value of Rs.200/- each at par aggregating to Rs.1,000 lakhs. Further, during the year ended 31 March 2018, the Company has converted the CCD''s into 5,00,000 Equity Shares of face value of Rs.10/- at premium of Rs.190/For the purpose of the Company''s capital management, Company monitors Net Debts and Equity.

Equity includes all components of equity i.e. issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company.

Net Debt includes all liabilities i.e. interest bearing loans and borrowings, trade payables, provisions and other liabilities less cash and cash equivalents.

B. Fair Value Measurements Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Indian Accounting Standard. An explanation of each level is as follows -

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets or identical assets and liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market (like forward contracts) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value as instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities etc. included in level 3.

Valuation techniques used to determine fair value

1. The fair value of the quoted investment is determined using traded quoted bid prices in an active market. The fair value of unquoted investments is determined using inputs other than quoted prices included in level 1 that are observable for assets and liabilities.

2. Fair value of forward contracts is determined using quoted forward exchange rates at the reporting date. Quotes are being taken from banks/ financial institutions.

C. Financial Risk Management

Company has exposure to following risks arising from financial instruments:

- Credit Risk

- Trade Receivables

- Other Financial Instruments

- Liquidity Risk

- Market Risk

- Currency Risk

- Interest Rate Risk

- Price Risk

i. Risk Management Framework

Company''s board of Directors has overall responsibility for the establishment and oversight of Company''s risk management framework. Management is responsible for developing and monitoring Company''s risk management policies, under the guidance of Audit Committee.

Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and Company''s activities. Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations

Company''s Audit committee oversees how management monitors compliance with Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by Company. The Audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

ii. Credit Risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

(a) Trade Receivables

Customer credit risk is managed by the Company subject to Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from wholesalers, non-interest bearing and are generally on 7 days to 150 days credit term. Credit limits are established for all customers based on internal rating criteria and any deviation in credit limit require approval of Directors. Outstanding customer receivables are regularly monitored. Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.

(b) Other Financial Instruments

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks or financial institutions with high credit rating assigned by credit rating agencies. For other financial assets, the Company assesses and manages the credit risk internally. Company considers the probability of default upon initial recognition and assess whether there has been a significant increase in credit risk subsequently based in the historical losses and forward looking supportable information. When there is a significant increase in credit risk of a financial asset since its initial recognition, Company recognises the life time expected credit losses otherwise 12 months expected credit losses. is based on general approach

iii. Liquidity Risk

Liquidity risk is the risk that Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. Company''s objective is to maintain optimum level of liquidity at all times, to meet its cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt etc. at an optimised cost. Working capital requirements are adequately addressed by internally generated and borrowed funds.

The following tables detail the Company''s remaining contractual maturity for its financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

iv. Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.

Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. Company uses derivative financial instruments such as foreign exchange contracts to manage its exposures to foreign exchange fluctuations. All such transactions are carried out within the guidelines set by the risk management committee.

The analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations, provisions and on the non financial assets and liabilities.

The sensitivity of the relevant income statement item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of 31 March 2018 and 31 March 2017.

(a) Currency Risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the functional currency of the Company.

The currencies in which these transactions are primarily denominated are US dollars (US $), Pound (GBP) and Euro.

Company uses forward exchange contracts to mitigate its currency risk, most with a maturity of less than one year from the reporting date.

During the period, the Company has entered into forward exchange contract, being derivative instrument to mitigate foreign currency risk, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables.

Sensitivity:

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Majority of borrowings of the Company are at fixed interest rate and are carried at amortised cost. They are therefore not subject to interest rate risks, since neither the carrying amount nor the future cash flows will fluctuate because off a change in market interest rates.

(c) Price risk

The Company is exposed to equity price risks arising from equity investments. However, there is no material impact of the sensitivity.

30. First-time adoption of Ind AS

Pursuant to the Companies (Indian Accounting Standard) Rules, 2015, Company has applied Indian Accounting Standards (Ind AS) for the first time for the Financial Year ended 31 March 2018. The financial statements for the year ended 31 March 2018, are the first financials, prepared in accordance with Ind-AS. Upto the Financial Year ended 31 March 2017, Company prepared its financial statements in accordance with the Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Companies (Accounts) Rules 2014 (Previous GAAP). For preparing the financial statements as per Ind AS, opening balance sheet as per Ind AS was prepared as at 1 April 2016 i.e. the date of transition to Ind-AS. The figures for the previous comparative periods and for the year ended 31 March 2017 have been adjusted, regrouped and reclassified, wherever required to comply with Ind-AS and Division II of Schedule III to the Companies Act, 2013 and to make them comparable.

This note explains the principal adjustments made by Company in transitioning its financial statements from Previous GAAP to Ind AS, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Exemptions and Exceptions availed

Set out below are the applicable optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS in accordance with Ind AS 101“First-time Adoption of Indian Accounting Standards” (Ind AS 101)

Ind AS Optional Exemptions:

Ind AS 101 allows first-time adopters certain optional exemptions from the retrospective application of certain requirements under Ind AS.

- Business Combinations

The Company has elected to not apply Ind AS 103 “Business Combinations” retrospectively to past business combinations pursuant to the exemption under Ind AS 101.Business combinations occurring prior to the transition date have not been restated.

- Deemed Cost

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the respective assets.

- Leases

Appendix C of Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. This assessment should be carried out at the inception of the contract or arrangement. However, Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

- Investment in Subsidiaries

The Company has elected to continue with the carrying amount of all of its investment in subsidiaries as of 1 April 2016 measured as per previous GAAP as its deemed cost as on the date of transition to Ind AS.

Ind AS Mandatory Exceptions:

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements.

- Estimates

Ind AS estimates as at the date of transition are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVTPL; and

- Impairment of financial assets based on expected credit loss model

- Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

Measurement and recognition difference between Ind AS and Previous GAAP for the year ended 31 March 2017.

1. Measurement of borrowings at amortised cost

As per the CDR scheme, there was substantial change in terms of the loans including extension of repayment schedule and reduction in interest rates. The restructuring of corporate loans qualifies as substantial modification as per Ind AS resulting into extinguishment of liability for old loans and recognition of new liability under Ind AS from the date of modification. New loans are recorded at fair value on initial recognition. Gain arising thereon has been recognised as on 1 April 2016 and given effect in retained earnings. This has resulted in an increase in equity by Rs.2,948.36 lakhs as at 1 April 2016 and Rs.1,487.46 lakhs as at 31 March 2017. Interest expenses have been recognised using effective interest method which has resulted in decrease of profit by Rs.1,460.90 for the year ended 31 March 2017.

2. Gain on extinguishment of financial liability

During the previous year ended 31 March 2017, State bank of India has sold its loan exposure on the Company to Edelweiss Asset Reconstruction Company Limited (EARCL) at an agreed value. As part of the settlement, Company has agreed to pay the agreed value in structured installments. This arrangement has been accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference being gain arising on extinguishment of financial liability has been recognised in the year ended 31 March 2017. This has resulted an increase in profit for the year ended 31 March 2017 by Rs.8,193 Lakhs and equity as at 31 March 2017 by Rs.8,193 lakhs.

3. Classification of compulsory convertible debentures as equity

During the previous year ended 31 March 2017, as a part of the settlement as mentioned in point 2 above, the Company has allotted 5,00,000 Zero % Compulsory Convertible Debentures (CCDs) of face value of Rs. 200/- each at par aggregating to Rs. 1,000 lakhs to Edelweiss Asset Reconstruction Company Limited (EARC) as a Trustee of EARC Trust SC145. Each CCD is convertible to 1 equity share of Rs. 10/- each at a premium of Rs. 190/- within a period of 18 months from the date of allotment of CCDs. CCDs were recognised as liability under previous GAAP. However, as per the terms of instrument under Ind AS, CCDs has been recognised as equity under Ind AS. This has resulted in increase in equity by Rs.1,000 lakhs as at 31 March 2017.

4. Expected Credit Loss

Under previous GAAP, the Company has created provision for doubtful debts on receivables on the basis of incurred loss. Under Ind AS, loss allowance on financial assets has been determined on the basis of Expected Credit Loss (ECL) model. Consequently, the Company has recognized Expected credit loss on its financial assets and expected credit loss on financial guarantees issued by the Company. This has resulted in decrease in equity by Rs.6,616.40 lakhs as at 1 April 2016 and 31 March 2017

5. Fair Valuation of Investment

Under the previous GAAP, investments in equity instruments were classified as long term investments and are carried at cost less provision for other than the temporary decline in the value. Under Ind AS these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the statement of profit and loss. This has resulted in increase in equity by Rs.0.94 lakhs as at 1 April 2016 and Rs. 1.70 as at 31 March 2017, and increase in profit by Rs.0.76 lakhs for the year ended 31 March 2017.

6. Measurement of Derivative at Fair Value

Under previous GAAP, foreign currency forward contract has been accounted by amortising the forward premium/ discount. Under Ind AS, these derivative instruments are measured at fair value at each reporting date and changes in the fair value is recognised in the Statement of Profit and Loss. This has resulted into increase in equity by Rs.8.38 lakhs as at 1 April 2016 and decrease in equity by Rs.3.82 lakhs as at 31 March 2017 and decrease in profit by Rs.12.20 lakhs for the year ended 31 March 2017.

7. Defined Benefit Obligation

Both under Previous GAAP & Ind AS, Company recognised costs related to its post-employment defined benefit plan on an actuarial valuation basis. Under Previous GAAP, the entire cost related to post- employment defined benefit plans, including actuarial gains and losses, were charged to statement of profit and loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income. This has resulted in increase in employee benefit expenses by Rs.14.25 Lakhs and corresponding increase in income by Rs.14.25 Lakhs which is recognised in Other Comprehensive Income.

8. Other adjustment

Under the previous GAAP, interest free lease security deposits (that are refundable in cash) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value on initial recognition. Accordingly, the Company has measured these security deposits at fair value at initial recognition under Ind AS. These deposits are measured at amortised cost subsequently by recognising interest income using effective interest method. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent and amortised on straight line basis over the lease term. This has resulted in decrease in equity by Rs. 1.25 lakhs as at 1 April 2016 and Rs. 0.98 lakhs as at 31 March 2017 and increase in profit by Rs. 0.27 lakhs for the year ended 31 March 2017.

9. Deferred Tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under previous GAAP.

In addition, the various transitional adjustments lead to different temporary differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

10. Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under the previous GAAP.

11. Statement of Cash Flows

The transition from Previous GAAP to Ind AS has not had a material impact on the statement of cash flows.

12. Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by Rs.982.52 lakhs. There is no impact on the total equity and profit.

13. Cash Discount

Under previous GAAP, cash discount and other rebates of Rs.281.90 lakhs was recognised as part of other expenses which has been adjusted against the revenue under Ind AS during the year ended 31 March 2017. This has resulted in decrease in total revenue and total expenses for the year ended 31 March 2017 by Rs.281.90 lakhs. There is no impact on the total equity and profit.

14. In the preparation of these Ind-AS Financial Statements, the Company has made several presentation differences between previous GAAP and Ind-AS. These differences have no impact on reported profit or total equity. Accordingly, some assets and liabilities have been reclassified into another line item under Ind-AS at the date of transition. Further, in these Financial Statements, some line items are described differently under Ind-AS compared to previous GAAP, although the assets and liabilities included in these line items are unaffected.

31. Specified Bank Note

During the previous year, the Company had Specified Bank Notes (SBNs) or other denomination notes as defined in the MCA notification, G.S.R. 308(E), dated 31 March 2017. The details of SBNs held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification are as follows:

For the purposes of this note, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8 November 2016. No similar disclosure has been given for the year ended 31 March 2018 as it is not applicable.


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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