ANNUAL REPORT - Wintac · PDF fileState Bank of India S.M.E. Branch, Peenya ... Details in respect of adequacy of internal financial controls with reference to the ... Managerial Remuneration:

ANNUAL REPORT 2016-2017

Winning Technologies

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BOARD OF DIRECTORS

Shri S.T.R. Mady ChairmanShri S. Jayaprakash Mady Managing DirectorShri B.R. Arun Eashwar DirectorShri R.A. Thirumoorti DirectorMs. Kavitha Krishnamoorthy DirectorShri B.P. Thyagaraj A.V.P. (Finance) & SecretaryShri Sunil B. Gundewar Manager (from 01.06.2017)

BANKERS State Bank of IndiaS.M.E. Branch, Peenya, Bangalore

AUDITORS M/s. Rao & Swami, Chartered Accountants, 2/1Connaught Road, Bangalore-560 052.

SHARE TRANSFER AGENT Canbank Computer Services Ltd.,No.218, J.P. Royale, I Floor, II Main,Sampige Road, (Near 14th Cross),Malleshwaram, Bangalore-560003.Phone No. : 080-23469661 / 9662

SHARES LISTED AT Bombay Stock Exchange Limited(Listing fee paid for the year 2016-17)

REGISTERED OFFICE & 54/1, Boodihal Village, Nelamangala Taluk,MANUFACTURING UNIT Bangalore District, Karnataka - 562 123

CORPORATE IDENTITY NUMBER (CIN) L85110KA1990PLC011166

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DIRECTORS’ REPORTTo the Members,Your Directors have pleasure in presenting the Twenty Seventh Annual Report on the business and operations of the Company for the Financial Year ended March 31, 2017.1. Financial summary and Performance of the Company ` Lakhs

For the year Ended 31st March 2017

For the year ended 31st March 2016

Gross Sales 3489.81 2011.17Excise Duty 209.60 201.32Net Sales 3280.21 1809.85Other Income 47.41 18.48Total Revenue 3327.62 1828.33Total Expenditure 3963.71 3159.08Operating Profit/(Loss) (636.09) (1330.75)Interest 134.92 77.50Profit/(Loss)before Depreciation (PBDT) (771.01) (1408.25)Depreciation 363.18 386.74Loss before exceptional expenditure (1134.19) (1794.99)Exceptional Expenditure 158.18 160.92Profit/(Loss) before Tax (976.01) (1634.07)Deferred tax 107.18 120.86Net Profit/(Loss) after Tax (868.83) (1513.21)

2. Dividend & Transfer to ReservesIn view of the operating losses, no dividend is considered during the year under review andno amount is transferred to reserves.

3. Brief description of the Company’s working during the yearThe net sales during the year under review was ` 3280.21 lakhs as compared to ` 1809.85lakhs during the previous year, a growth of 81.24%. The net loss before tax during thecurrent year was ` 976.01 lakhs as against the loss of Rs.1634.07 lakhs during the previousyear, a decrease in loss by 40.27%. The export supplies to US Market commenced fromOctober 2016 for the two products resulting in a considerable increase in the sales turnover.The Manufacturing Plant shut-down for the upgradation purposes during the first quarterand lower sales during the second quarter are the major factors contributing to the lossesduring the year. On commencement of export sales to US Market, the losses were reducedconsiderably during the third quarter and with the higher volume of sales, the fourth quarteroperations were positive.Your Directors are pleased to inform that USFDA Regulatory authorities inspected theManufacturing Plant during second week of April 2017 and the Inspection was successful andthere were No 483 observations. The Company expects the approval of few more productsin the near future and expect a reasonable increase in the sales and profitability during thecurrent year.The Order Bank position of the Company for both domestic and export market is good andexpect reasonable growth in turnover and to turnaround the operations during the financialyear 2017-18.In order to cater to the export US Market on approval of more ANDA’s, the Company proposes to set-up additional capacities for injectable and ophthalmic products during the currentfinancial year.There is no other material changes and commitments affecting the financial position betweenthe end of the financial year and date of report.

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

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

6. The Company has no subsidiaries. The company has investments in an Associate Company (Medispec Pharmaceutics Pvt. Ltd.) whose net worth has completely eroded and the investment in the Associate Company and the amount due from it has been fully provided for in the Books of the Company. The associate company has ceased to carry on any business since last three years and is now defunct and therefore the Company is not expecting any economic benefits from it. In the light of the same, separate consolidated financial statement incorporating the transactions of the associate company is not prepared as AS-27 “Financial Reporting of Interest in Associates and Joint Ventures” requires that the interest in such a JV has to be reported in accordance AS-13 ‘Accounting for investments’ which is now being followed in the standalone financial statement. As the Company has no other subsidiary or associates, the present standalone financial statement represent the consolidated financial statement required to be prepared as per Schedule III of the Companies Act, 2013.

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

The Company has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

8. Fixed Deposits The details relating to deposits, covered under Chapter V of the Companies Act, 2013: a. accepted during the year; : Nil b. remained unpaid or unclaimed as at the end of the year; : N.A. c. whether there has been any default in repayment of deposits : N.A. or payment of interest thereon during the year and if so, number of such cases and the total amount involved- d. at the beginning of the year; : Nil e. maximum during the year; : N.A. f. at the end of the year; : Nil The Company has not accepted or renewed any deposits during the year which are not in

compliance with the requirements of Chapter V of the Act.9. Share Capital During the year the Company has not issued any (i) equity shares with differential rights,

(ii) Sweat Equity Shares (iii) Employee Stock Options and (iv) the company has not provided money for purchase of its own shares by employees or by trustees for the benefit of employees.

10. Directors: A. Changes in Directors and Key Managerial Personnel: Sri.S.Jayaprakash Mady, whose term as Managing Director ended on 31st January 2017

and was re-appointed as the Managing Director on 11th February 2017. Sri.S.Jayaprakash Mady has resigned as the Managing Director of the Company from 30.05.2017. However, Mr.S.Jayaprakash Mady continues to be a non-executive Director on the Board.

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

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The Board has appointed Sri.Sunil Gundewar as the Manager of the Company under section 196 & 197 of the Companies Act 2013 and his appointment and terms and conditions are subject to approval of the shareholders at the ensuing Annual General Meeting.

B. Declaration by Independent Director (s): The Company has received necessary declaration from each independent director under

Section 149 (7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013.

C. Policy on Directors’ appointment and remuneration: The Company’s policy is to have an appropriate mix of executive and independent

Directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2017, the Board consists of 5 Members, one of them is the Managing Director and three are independent directors. However, the Managing Director has resigned as the Managing Director effective from 30.05.2017 and consequently, there is no executive Director on the Board from that date.

D. Formal Annual Evaluation: The Board evaluates the effectiveness of its functioning and that of the Committees and

of individual Directors by seeking their inputs on various aspects of Board proceedings. This would cover the active participation of Directors at the Board and Committee meetings, monitoring of corporate governance practices and participation in the long-term strategic planning of the Company.

The Chairman of the board interacted with all the Independent Directors to obtain Directors’ inputs on effectiveness of Board/Committee processes and the Board considered and discussed the inputs received from the Directors. Further Independent Directors at their meeting, reviewed the performance of Board, Chairman and Non-Executive Directors.

11. The Board met four times during the financial year, the details of which are provided in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act 2013.

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

Mr.Arun Eashwar - Chairman (Independent and non-executive Director) Mr.R.A.Thirumoorti - Member (Independent and non-executive Director) Ms.Kavitha Krishnamoorti - Member (Independent and non-executive Director) Mr.S.T.R.Mady - Member (Non-executive Chairman) The Company has established a vigil mechanism (Whistle Blower policy & Vigil Mechanism)

for Directors and employees to report concerns of unethical behaviour, actual or suspected, fraud or violation of the Company’s code of conduct. The Whistle Blower Policy & Vigil Mechanism is disclosed on the Company’s website.

13. Nomination and Remuneration Committee and Stakeholders Relationship Committee The Board has constituted a Nomination and Remuneration Committee. This Committee

consists of four non-executive Directors and three of them are Independent Directors. The Chairman of the Committee is an Independent Director. The role of the Committee is to identify persons who are qualified to become Directors, recommend to the Board their appointment. The Committee also recommends to the Board a policy relating to the remuneration for the Directors and Key Managerial personnel. As part of the policy Company strives to ensure that

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(i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate senior management personnel required to run the operations successfully and (ii) remuneration is commensurate with the performance and efficiency and meets performance benchmarks. The Committee has been now entrusted with the responsibility of administering the ESOP Scheme which is subject to the approval of shareholders in the ensuing AGM.

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

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

15. Managerial Remuneration: Details of the ratio of the remuneration of each director to the median employee’s

remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Ratio of the remuneration of Managing Director to the median remuneration of employees of the Company for the financial year – N.A. Percentage of increase in the remuneration of: Managing Director – Nil Company Secretary – 8.95% Chief Financial Officer - 9.02% Median Employee - 31.72% No. of employees on the rolls - 291 Average increase made in salaries of employees other than KMP - 10.55 % The remuneration is as per the remuneration policy of the Company. There was no employee employed during the year or part of the year drawing remuneration

in excess of the limits specified under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Corporate Governance – Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a Management Discussion and Analysis statement, Corporate Governance Report and Auditors’ Certificate on the compliance of conditions of Corporate Governance forms part of the Annual Report.

16. Particulars of contracts or arrangements with related parties: The particulars of contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto in the prescribed form AOC-2 is appended to the Board’s report.

17. Statutory Auditors – M/s.Rao & Swami, Chartered Accountants and the Auditors of the Company retire at the forthcoming Annual General Meeting and are not eligible for reappointment pursuant to provisions of Section 139(2) of the Companies Act 2013. Hence the Board of Directors have recommended the appointment of M/s.Ramadhyani & Co LLP, Chartered Accountants (Firm Registration No.002878S/S200021) as Statutory Auditors of the Company for a term of 5 years from the conclusion of 27th Annual General Meeting to the shareholders of the Company for approval

18. Secretarial Auditor – Parameshwar G Hegde, Practicing Company Secretary has been appointed to conduct the secretarial audit of the Company for the financial year 2016-17 as required under Section 204 of the Companies Act, 2013. The Secretarial Audit Report for FY 2016-17 is annexed to the Board’s Report and forms part of the Annual Report.

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19. Extract of the annual return – In accordance with the provisions of Section 134(3) (a) of the Companies Act, 2013, extract of the annual return in the prescribed format is enclosed to the Board’s Report.

20. Conservation of energy, technology absorption and foreign exchange earnings and outgo. The details of conservation of energy, technology absorption, foreign exchange earnings and

outgo are as follows: (A) Conservation of energy: (i) The steps taken and its impact on conservation of energy; • Installation of Automatic power factor correction panel. • Steam condensate recovery with insulated pipelines. • Rain water harvesting. • Recycling of purified water from process machineries as infeed water to boiler. (ii) The steps taken by the company for utilising alternate sources of energy; • Installation of Bricket fired Boilers which is environmental friendly and uses brickets

(agricultural by-product) as fuel instead of Diesel or Furnace Oil. • Energy efficient motors for Air Handling Units. (iii) The capital investment on energy conservation equipment: Nil (B) Technology absorption: (i) the efforts made towards technology absorption; • Formulation development activities for Export market i.e., USA and Europe is

carried out. ANDA for 1 product developed in house were filed for USA market during last year by our customer.

• ANDA for 6 products developed in house will be filed shortly for USA market. • 3 products got USFDA approval and commercialised. (ii) the benefits derived like product improvement, cost reduction, product development

or import substitution; • More Foreign Exchange revenue since the products are developed for export

market. • After approval of dossiers from respective Regulatory Agencies, regular commercial

supplies is expected and ensure good growth in export business. • Technical capability of the personnel strengthened to handle additional products. (iii) in case of imported technology (imported during the last three years reckoned from

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

21. Directors’ Responsibility Statement The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section

134 of the Companies Act, 2013, state that—

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

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year, of the profit and loss and cash-flow of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a going concern basis; e. the directors have laid down internal financial controls to be followed by the company

and that such internal financial controls are adequate and are operating effectively and f. the directors have devised proper systems to ensure compliance with the provisions of all

applicable laws and that such systems are adequate and operating effectively.22. Acknowledgements The Board places on record its appreciation of the continued cooperation and support

received from the various government authorities, shareholders, business associates, medical profession, employees, depositors and bankers.

For and on behalf of the Board of Directors

Date : 29.05.2017 (S.T.R.MADY)Place : Bengaluru. Chairman

Form No. AOC-2(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the

Companies (Accounts) Rules, 2014)1. Details of contracts or arrangements or transactions not at arm’s length basis – NIL2. Details of material contract or arrangement or transactions at arm’s length basis

Name of Related Party Nature of Relationship

Duration of Contract

Salient Terms Amount ` Lakh

B.P.R.L. Pvt. Ltd. Bangalore Common Director 10 Year 1. Rental Income 9.001 Year 2. Inter Corporate Deposit (borrowing by

Company @ 11.4% interest p.a) 25.00SOMERSET THERAPEUTICS, USA Enterprises under

Common control of the Holding Company

On going 1. Reimbursement of Expenses incurred on behalf of Wintac

408.87

2. Product Development Services 425.323. Sale of Finished Goods 1838.924. Purchase of Materials & Capital items. 354.535. Reimbursement of Fees (USFDA) paid

on behalf of Wintac Limited 182.56GAVIS PHARMA, LLC Holding Company On going 1. Reimbursement of Expenses incurred

on behalf of Wintac104.83

2. Product Development Services 53.713. Purchase of Materials & Capital items. 147.52

Appropriate approvals have been obtained for the related party transaction. Advances paid will be adjusted against Bills/Invoices.

For Wintac Limited

Date : 29th May, 2017 (S.T.R.MADY)Place : Bengaluru. Chairman

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FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN AS ON FINANCIAL YEAR ENDED ON 31.03.2017Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company

(Management & Administration ) Rules, 2014.

I. REGISTRATION & OTHER DETAILS:

i. CIN : L85110KA1990PLC011166

ii. Registration Date : 23/08/1990iii. Name of the Company : WINTAC LIMITEDiv. Category/Sub-category of the Company : PUBLIC LIMITEDv. Address of the Registered office & contact

details: 54/1, BOODHIHAL, NELAMANGALA, BENGALURU -

562123. PH:- 080-67086500.

vi. Whether listed company : Company limited by sharesvii. Name, Address & contact details of the

Registrar & Transfer Agent, if any.: CANBANK COMPUTER SERVICES LTD., NO.218,

J.P.ROYALE, II MAIN, SAMPIGE ROAD, MALLESWARAM, BANGALORE - 560003. PH: 080-23469661/9662

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company shall be stated

Sl. No.

Name and Description of main products / servicesNIC Code of the Product/service

% to total turnover of the

company1 Formulation Sales 99532693 76.04%2 Manufacturing Charges 99532693 7.31%3 Formulation Development 99839390 16.65%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and address of the Company CIN/GLNHolding/ Subsidiary/

Associate

% of shares held

Applicable Section

1 GAVIS PHARMA LLC, USA ---- HOLDING COMPANY 54.99 2(46)

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IV. SHARE HOLDING PATTERN (Equity share capital breakup as percentage of total equity)(i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year (As on 31-March-2016)

No. of Shares held at the end of the year (As on 31-March-2017)

% Change during

the yearDemat Physical Total

% of Total Shares

Demat Physical Total% of Total

SharesA. Promoters (1) Indian a) Individual/HUF b) Central Govt. or State Govt. c) Bodies Corporates d) Bank/FI e) Any other SUB TOTAL:(A) (1) - - - 0.00% - - - 0.00% 0.00%

(2) Foreign a) NRI- Individuals b) Other Individuals c) Bodies Corp. 55,12,098 55,12,098 54.99% 55,12,098 55,12,098 54.99% 0.00%d) Banks/FI e) Any other… SUB TOTAL (A) (2) 55,12,098 - 55,12,098 54.99% 55,12,098 - 55,12,098 54.99% 0.00%Total Shareholding of Promoter (A)= (A)(1)+(A)(2)

55,12,098 - 55,12,098 54.99% 55,12,098 - 55,12,098 54.99% 0.00%

B. PUBLIC SHAREHOLDING (1) Institutions a) Mutual Funds 1,400 1,400 0.01% 1,400 1,400 0.01% 0.00%b) Banks/FI 100 100 0.00% 100 100 0.00% 0.00%C) Cenntral govt d) State Govt. e) Venture Capital Fund f) Insurance Companies g) FIIS h) Foreign Venture Capital Funds i) Others (specify) SUB TOTAL (B)(1): - 1,500 1,500 0.01% - 1,500 1,500 0.01% 0.00%(2) Non Institutions a) Bodies corporates i) Indian 12,71,480 8,000 12,79,480 12.76% 13,29,093 8,000 13,37,093 13.34% 0.57%ii) Overseas b) Individuals i) Individual shareholders holding nominal share capital upto `1 lakhs

3,40,171 4,92,153 8,32,324 8.30% 3,55,314 4,85,246 8,40,560 8.39% 0.08%

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakhs

88,599 - 88,599 0.88% 88,599 - 88,599 0.88% 0.00%

c) Others (specify) - 0.00% 0.00%

i) Director & Relative 21,52,687 56,400 22,09,087 22.04% 22,04,596 701 22,05,297 22.00% -0.04%

ii) Non Resident Indians 4,122 8,000 12,122 0.12% 6,248 8,000 14,248 0.14% 0.02%

iii) Clearing Members 69,670 - 69,670 0.70% 766 - 766 0.01% -0.69%

iv) HUF 19,352 10 19,362 0.19% 24,071 10 24,081 0.24% 0.05%

SUB TOTAL (B)(2): 39,46,081 5,64,563 45,10,644 45.00% 40,08,687 5,01,957 45,10,644 45.00% 0.00%

Total Public Shareholding (B)= (B)(1)+(B)(2)

39,46,081 5,66,063 45,12,144 45.01% 40,08,687 5,03,457 45,12,144 45.01% 0.00%

C. Shares held by Custodian for GDRs & ADRs

- - - 0.00% - - - 0.00%

Grand Total (A+B+C) 94,58,179 5,66,063 1,00,24,242 100.00% 95,20,785 5,03,457 1,00,24,242 100.00% 0.00%

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(ii) Shareholding of Promoter

Sl.No.

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in share holding

during the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged/

encumbered to total shares

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

1 GAVIS PHARMA LLC 5512098 54.99% - 5512098 54.99% - NIL

(iii) Change in Promoters’ Shareholding (Specify if there is no change)

Sl.No.

Particulars

Share holding at the beginning of the Year

Cumulative Share holding during the year

Changes during the year

No. of shares % of total shares No. of shares % of total shares No. of shares

1. GAVIS PHARMA LLC 5512098 54.99% 5512098 54.99% Nil

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sl. No

For Each of the Top 10 Shareholders

Date Reason

Shareholding at the end of the year

Cumulative Shareholding during

the yearNo. of shares

% of total shares

No of shares

% of total shares

1 B.P.R.L. PVT. LTD. At the beginning of the year 12,82,900 12.80% 12,82,900 12.80% At the end of the year 12,82,900 12.80% 12,82,900 12.80%2 KRIPA MADY At the beginning of the year 6,71,061 6.69% 6,71,061 6.69% At the end of the year 6,71,061 6.69% 6,71,061 6.69%3 RATNAKALA MADY At the beginning of the year 2,36,800 2.36% 2,36,800 2.36% At the end of the year 2,36,800 2.36% 2,36,800 2.36%4 ROOPA NAGARAJ At the beginning of the year 88,599 0.88% 88,599 0.88% At the end of the year 88,599 0.88% 88,599 0.88%5 RAJASTHAN GLOBAL

SECURITIES PRAt the beginning of the year 27,598 0.28% 27,598 0.28%

2016-17 Transfer (3,752) -0.04% 23,846 0.24% At the end of the year 23,846 0.24% 23,846 0.24%6 TOBBY SIMON At the beginning of the year 15,775 0.16% 15,775 0.16% At the end of the year 15,775 0.16% 15,775 0.16%7 KINNARI RAKESH

PUJARAAt the beginning of the year 13,257 0.13% 13,257 0.13%

At the end of the year 13,257 0.13% 13,257 0.13%8 CHAYADEEP

PROPERTIESAt the beginning of the yearAt the end of the year

10,536 10,536

0.11%0.11%

10,536 10,536

0.11%0.11%

9 DHARMESH R. SHAH HUF

At the beginning of the year2016-17At the end of the year

Transfer

3,370 3,860

7,230

0.03%0.04%0.07%

3,370 7,230 7,230

0.03%0.07%0.07%

10 KINNARI RAKESH PUJARA

At the beginning of the year2016-17At the end of the year

Transfer

- 7,027 7,027

0.00%0.07%0.07%

- 7,027 7,027

0.00%0.07%0.07%

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(v) Shareholding of Directors & KMP:

Sl. No

For Each of the Directors & KMP

Date Reason

ShareholdingCumulative

Shareholding during the year

No. of shares

% of total shares

No of shares

% of total shares

1 S JAYAPRAKASH MADY - M.D

At the beginning of the year 4,90,131 4.89% 4,90,131 4.89%30-05-2016 Transfer (428) 0.00% 4,89,703 4.89%31-05-2016 Transfer (26) 0.00% 4,89,677 4.88%18-02-2017 Transfer (904) -0.01% 4,87,273 4.86%20-02-2017 Transfer (323) 0.00% 4,86,950 4.86%10-02-2017 Transfer (177) 0.00% 4,86,773 4.86%22-03-2017 Transfer (107) 0.00% 4,86,666 4.85%24-04-2017 Transfer (76) 0.00% 4,86,590 4.85%27-03-2017 Transfer (250) 0.00% 4,86,340 4.85%At the end of the year 4,86,340 4.85% 4,86,340 4.85%

2 S.T.R. MADY - CHAIRMAN

At the beginning of the yearAt the end of the year

8,09,950 8,09,950

8.08%8.08%

8,09,950 8,09,950

8.08%8.08%

3

B.R. ARUN EASHWAR DIRECTOR

At the beginning of the yearAt the end of the year

445 445

0.00%0.00%

445 445

0.00%0.00%

4

B.P.THYAGARAJ K.M.P

At the beginning of the year06-06-2016At the end of the year

Transfer

771 (721)

50

0.01%-0.01%0.00%

771 50 50

0.01%0.00%0.00%

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for

payment.

ParticularsSecured Loans

excluding deposits Ùnsecured Loans ` Deposits `

Total Indebtedness `

Indebtedness at the beginning of the financial yeari) Principal Amount 9,49,20,180 25,00,000 - 9,74,20,180ii) Interest due but not paid - - - - iii) Interest accrued but not due - - - - Total (i+ii+iii) 9,49,20,180 25,00,000 - 9,74,20,180Change in Indebtedness during the financial year* Addition* Reduction (1,43,10,581) - - 1,43,10,581Net Change (1,43,10,581) - - 1,43,10,581Indebtedness at the end of the financial yeari) Principal Amount 8,06,09,599 25,00,000 - 8,31,09,599ii) Interest due but not paidiii) Interest accrued but not dueTotal (i+ii+iii) 8,06,09,599 25,00,000 - 8,31,09,599

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VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole time director and/or Manager:

Sl.No

Particulars of Remuneration Total Amount

Name and Designation: S. JAYAPRAKASH MADY - MANAGING DIRECTOR1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961. 1,70,000 (b) Value of perquisites u/s 17(2) of the Income tax Act, 1961 30,000 (c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961 - 2 Stock option - 3 Sweat Equity - 4 Commission - as % of profit others (specify) 5 Others, please specify - Total (A) 2,00,000 Ceiling as per the Act 84,00,000

B. Remuneration to other Directors

Sl.No

Particulars of RemunerationName of the Directors

TotalAmount (`) R.A.

TIRUMOORTI B.R. ARUN EASHWAR

STR. MADY KAVITHA K

1 Independent Directors (a) Fee for attending board committee meetings 5,000 10,000 7,500 22,500 (b) Commission - - (c ) Others, please specify - - Director Remuneration - Director Remuneration - Total (1) 5,000 10,000 - 7,500 22,500 2 Other Non Executive Directors - (a) Fee for attending board committee meetings - 10,000 10,000 (b) Commission - - (c ) Others, please specify. - - Total (2) - - 10,000 - 10,000

Total (B)=(1+2) 5,000 10,000 10,000 7,500 32,500 Total Managerial Remuneration (A + B) 2,32,500 Overall Cieling as per the Act. 97,00,000

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C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

Sl.No.

Particulars of RemunerationName of Key Managerial Personnel Total Amount

(` Lakhs)CEO CFO(` Lakhs)

CS(` Lakhs)

1 Gross salary 10.15 29.21 39.36(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

- - - -

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - -(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

- - - -

2 Stock Option - - - -3 Sweat Equity - - - -4 Commission - - - -

- as % of profit - - - -- others, specify - - - -

5 Others, please specify - - - -Total - - - -

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES: Company - Nil Directors - Nil Other Officers in Default - Nil

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SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017(Pursuant to section 204 (1) of Companies Act 2013 and rule No 9 of the

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

To: The Members Wintac Limited,I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Wintac Limited (hereinafter called the company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.Based on my verification of the company’s books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the company, its officers, agents and authorized representatives during the conduct of secretarial audit, I hereby report that in my opinion, the company has, during the audit period covering the financial year ended on March 31, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:I have examined the books, papers, minute books, forms and returns filed and other records maintained by the company for the financial year ended on March 31, 2017 according to the provisions of:i. The Companies Act, 2013 (the Act) and the rules made thereunder;ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules (SCRR) made thereunder;iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to

the extent of Foreign Direct Investment and Overseas Direct Investment. v. The following Regulations and Guidelines prescribed under the Securities and Exchange

Board of India Act, 1992 (‘SEBI Act’):- a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider Trading Regulations,

2015; c. The Securities and Exchange Board of India (Registrars to Issue and Share Transfer Agents)

Regulations, 1993 regarding the Companies Act and dealing with client; d. The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015,v. Other laws applicable specifically to the company namely: a. Drugs and Cosmetics Act 1940 and the rules made thereunder b. The Patents Act, 1970 (Not applicable to the company during the audit period) c. The Trade Marks Act, 1999 (Not applicable to the company during the audit period).

I have also examined compliance with the applicable clauses of the Secretarial Standards issued by The Institute of Company Secretaries of India. I report that, during the period under review the company has complied with the provisions of the Acts, Rules, Regulations and Guidelines mentioned above.I further report that, as regards compliance of ‘SCRA’, it is noticed that Article (1)(1)(e) of the Articles of Association of the company states that “Promoter Group” means and includes

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Mr. Sadanand Mady, Mr. S.T.R. Mady and Mr. Jayaprakash Mady, their relatives, the firms of which either of them are partners, any company in which they jointly or severally hold not less than 25% of its paid up capital. However the Company has represented that upon and consequent to substantial acquisition of shares by Gavis Pharma LLC, USA through preferential allotment and public offer for acquisition of shares made during the year 2013, as per the disclosure made in the listing application/offer documents, the above promoter group has ceased to be the promoters of the company and accordingly they have been reclassified as Public and are being shown as such in the shareholding pattern (calculated as per SCRR 1957) filed with the Stock Exchange.I further report that, there were no events/actions in pursuance of:a. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2009;b. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations

2014;c. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,

2008;d. The Securities and Exchange Board of India (Delisting of Equity shares) Regulations 2009;e. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998,

requiring compliance thereof by the company during the Audit period.

I further report, that the compliance by the company of applicable financial laws like direct and indirect tax laws and maintenance of financial records and books of accounts has not been reviewed in this Audit since the same have been subject to review by statutory financial audit and other designated professionals.I further report that, the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance to all Directors, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.As per the minutes of the meetings duly recorded and signed by the Chairman the decisions of the Board were unanimous and no dissenting views have been recorded. I further report that based on the review of compliance reports taken on record by the Board of Directors of the company, in my opinion, there are systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.I report further that there were no specific events / actions having a major bearing on the company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, etc during the Audit Period.

P.G.HEGDE Hegde & Hegde Date : 29th May, 2016 Company SecretariesPlace: Bengaluru FCS:1325 / C.P.No: 640

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MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian economy has witnessed several path breaking developments in the year 2016-17. From Demonetization to the landmark GST Bill passage, the year has seen several initiatives & policy reform measures. These changes are taking place in the country at a time when inflation is benign amidst a modest current account deficit, credible fiscal consolidation efforts, rising foreign exchange reserves, increase in foreign inflows and growth supportive policy measures and reform initiatives. On the economic growth front, as per the second advance estimate the Central Statistical Organisation (CSO) estimated India’s real GDP growth was at 7.1% in the financial year 2016-17 compared to 7.9% in the financial year 2015-16. Despite the transient impact of demonetization on the growth front, India continues to be the fastest growing emerging market economies in the world. The growth prospects are expected to strengthen in the days ahead on account of several factors, including, pick-up in discretionary consumer spending after remonetisation, the emphasis in the Union Budget on the rural economy and affordable housing, higher govt. capital spending & pick-up in export growth, improved investor confidence after passage of bills such as GST, Insolvency & Bankruptcy Code etc.The Indian Pharmaceutical Market is the third largest in terms of volume and thirteenth largest in terms of value. India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume. India enjoys an important position in the global pharmaceuticals sector. The Indian pharma industry, which is expected to grow over 15 per cent per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5 per cent between the same period. Branded generics dominate the pharmaceuticals market, constituting nearly 80 per cent of the market share (in terms of revenues).

OPPORTUNITIES AND THREATS

The Government of India unveiled ‘Pharma Vision 2020’ aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments. Further, the government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanisation, and raising healthcare insurance among others.Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.Increasing affordability among the fast growing middle class coupled with improving medical infrastructure and rising insurance penetration will continue to drive the growth of the industry. The hospital segment in particular is expected to grow at a significant rate with continuing expansion of the corporate hospital groups, especially in the metro cities. Regulatory challenges, raising input costs, fading away of block-buster drugs, etc are some of the challenges faced by the Pharma industry.

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OPERATIONAL PERFORMANCE & OUTLOOK

The operational performance of the Company during the year under review has improved although the cumulative results for the year are still negative. The export sales began during third quarter of the year and volumes improved during the fourth quarter. The Plant shut down during the first quarter and lower production/sales during the second quarter resulted in substantial losses during the first half of the year. With the approval of ANDA’s for couple of products and commencement of export sales to USA, the operations improved during the second half of the year. The total revenue from the operations during the year under review was `3327.62 lakhs as compared to `1828.33 lakhs during the previous year, an increase of 82%. The net loss before tax during the current year was `976 lakhs as against the loss of `1634 lakhs during the previous year. The Company successfully completed the USFDA inspection during April 2017 with zero 483 observations. The Order Bank position of the Company for both domestic and export market is good and expect the operations to turnaround during the current financial year.OUTLOOK, RISKS AND CONCERNS

The Company continues to focus aggressively on the Product Development activity. As the Company is focusing more in product development activity of Generic Products for the US Market and reduce the domestic business, sustaining the cost of operations till the optimum utilization of capacities are the major challenges faced by the Company. The operational costs of the Manufacturing Plant is considerably higher to meet the international quality standards and therefore optimum utilization of the capacities for export market would be very crucial for the Company. The delay in approval of the dossiers by the overseas regulatory authorities increases the risk of losses.INTERNAL CONTROL SYSTEMS

The Company has adequate Internal Control System commensurate with its size and nature of business. The Internal controls are regularly audited by an external firm of Chartered Accountants. The internal audit program aims at reasonable reassurance of operating controls and continuously upgrading controls to meet requirements of the changing environment. The Audit Committee oversees the internal audit function, compliance with the Companies policies and procedures and facilitates the management to take pre-emptive steps to minimize exceptions based on the materiality of transactions.FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company reported a net loss of `868.83 lakhs during the year. The operating loss before interest, depreciation and exceptional items was `636.09 lakhs as compared to `1330.75 lakhs during the previous year. The total interest cost for the year was higher at Rs.134.92 lakhs as against `77.50 lakhs during the previous year due to increase in the bank interest rate from 11.30% to 16.40%. The servicing of interest and repayment instalments of the bank borrowings was regular and on time during the year. HUMAN RESOURCES AND INDUSTRIAL RELATIONSAs on 31st March 2017, there were 311 employees on the rolls of the Company and the relationship with the employees has been very cordial.

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CORPORATE GOVERNANCE

The Report on Corporate Governance is pursuant to Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms a part of the report of the Board of Directors. 1. Corporate Governance Philosophy

Wintac Limited is committed to high standards of Corporate Governance in all its activities and processes. The Company believes that good corporate governance practices enable the management to direct and control the affairs of the Company in an efficient manner and to achieve the Company’s goal of maximising value for all its stakeholders.

2. Board of Directors

The Board consists of Five Directors, one executive and four non executive directors. There are three Independent Directors, including a Women Director, on the Board. The Chairman of the Board is a non-executive and non-independent Director. From 30.05.2017 there is no executive director on the Board consequent to resignation of Managing Director.

None of the Directors on the Board is a member in more than 10 Committees and Chairman of more than 5 Committees across all the companies in which they are Directors. Further none of the Independent Directors serve as an Independent Director in more than seven listed companies and also serve as a whole time director in any listed company. The Directors have made necessary disclosures regarding committee positions and other Directorships. The Company has not had any pecuniary relationship and transaction with any of the Non-Executive Directors during the year under review. None of the Directors are related to any other Director on the Board in terms of the provisions of the Companies Act, 2013.

The names and categories of the Directors on the Board, their attendance at Board Meetings during the year and at the Last Annual General Meeting as also the number of Directorships and committee Memberships held by them in other companies are given below: -

Names Category

No. of Board Meetings attended

during 2016-17

Whether Attended AGM held

on 27.9.2016

No. of Directorship in other Public

Limited Companies

No. of Committee positions held in other Public

Limited CompaniesChairman Member Chairman Member

S.T.R.Mady Non-Independent Non-Executive 4 Yes - - - -

S.JayaprakashMady Non-Independent Non-Executive 4 Yes - - - -

B.R.ArunEashwar IndependentNon-Executive 4 Yes - - - -

R.A.Thirumoorti IndependentNon-Executive 2 No - - - -

KavithaKrishnamoorthy IndependentNon-Executive 3 No - - - -

Four Board meetings were held during the financial year 2016-17 and the gap between two meetings did not exceed one hundred and twenty days. The dates on which the Board Meetings were held are as follows:

May 28th2016, August 5th2016, November 10th2016February 11th 2017.

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3. AuditCommittee The scope and the terms of reference of the Audit Committee is as set out in Regulation (3) of

SEBI (Listing Obligations and Disclosure Requirements) Regulations which, inter alia, includes the following:

i. Overseeing the Company’s financial reporting process and the disclosure of its financial information.

ii. Examination of quarterly and annual financial statements and auditors report thereon before submission to the Board

iii. Reviewing with the management the adequacy of internal control systems, adequacy of internal audit function, etc.

iv. Review and approval of transactions of the company with related parties. v. Recommendation for appointment of KMP, Auditors and their remuneration and other

terms. vi. Valuation of undertakings or assets of the Company wherever it is necessary. The composition of the Audit Committee and the details of meetings attended by the

Directors are given below:-

Name of Members Category No. of Meetings attended during the year 2016-17

Mr.B.R.Arun Eashwar (Chairman)

Independent, Non-Executive 4

Mr.S.T.R.Mady Non-Independent, Non-Executive 4Mr.R.A.Thirumoorthi Independent, Non-Executive 2Ms.Kavitha.K. Independent, Non-Executive 3

Audit committee meetings are attended by the Managing Director and Head of Finance. Statutory Auditors attended the meeting held on May 28, 2016. The Company Secretary acts as the Secretary of the Audit Committee.

Four Audit Committee meetings were held during the year on the following dates: May 28th2016, August 5th2016, November 10th2016 February 11th 2017. The necessary quorum was present at the meetings.4. Nomination&RemunerationCommittee: The company has constituted a Nomination and Remuneration committee. The broad

terms of reference of the remuneration committee are to recommend to the Board the remuneration of the Directors, KMP and other senior employees and formulation of policy for evaluation of Independent Directors and the Board.

Mr.R.A.Thirumoorthi, Independent and Non-executive Director is the Chairman of the Nomination and Remuneration Committee. Mr.ArunEashwar, Ms.Kavitha K, Independent and Non-executive Directors and Mr.S.T.R.Mady, Non-Independent and Non-executive Director are the other Members of the Committee. The details of performance evaluation criteria for Directors are provided in the Directors Report.

Committee held one meeting during the year on 11-02-2017 and all the members, except Ms.Kavitha.K, were present at the meeting.

5. RemunerationPolicy The company while deciding the remuneration package of the Senior Management members

takes into consideration (a) Employment Scenario (b) Remuneration package of the industry. The Company pays sitting fees of Rs.2500 per Board Meeting to Non-Executive Directors.

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The Company pays remuneration to the Managing Director by way of Salary and Perquisites within the limits recommended by the remuneration Committee and approved by the Board of Directors and Shareholders. However, in view of the increased losses the Managing Director opted not to draw salary from May 2017 onwards.

Remunerationpaidduring2016-17: Non-Executive Directors: Name of the Director Sitting Fees (`) Mr.S.T.R.Mady 10,000 Mr.B.R.Arun Eashwar 10,000 Mr.R.A.Thirumoorthi 5,000 Ms.Kavitha.K 7,500 Managing Director Name Salary Perquisites Stock Options Shri.S.Jayaprakash Mady `1,70,000 `30,000 Nil Period of Contract – 1 year from 11.02.2017. The contract may be terminated by either party

with one month notice. Severance fee - Nil Details of Equity Shares of the Company held by Non-Executive Directors as on March 31,

2017 are as under: Name of the Director No. of Shares Mr.S.T.R.Mady 8,09,950 MR.B.R.Arun Eashwar 4456. StakeholdersRelationshipCommittee: The composition of the committee and the details of the meetings attended by the Directors

are given below:

Name of Members Category No Meetings attended During the year 2016-17

Mr.R.A.Thirumoorti, Chairman Independent, Non-Executive 2Mr.S.T.R.Mady Non-Independent, Non-Executive 4Mr.Arun Eashwar Independent, Non-Executive 4Ms.Kavitha.K. Independent, Non-Executive 3

Four meetings of the Stakeholders Relationship Committee were held during the year 2016-17 on the following dates:-

May 28th2016, August 5th2016, November 10th2016 February 11th 2017 No. of complaints from Shareholders from 01.04.2016 to 31.03.2017 - 1 Complaints not solved to the satisfaction of the shareholders as on 31.03.2017 - Nil No. of pending share transfers as on 31.03.2017 - Nil Name, designation and address of Compliance officer: Shri.B.P.Thyagaraj, A.V.P.(Finance) &

Secretary, 54/1, NH4, Boodihal Village, Nelamangala, Bangalore-562123, Phone No.080-67086500, Email - [email protected]

7. Code of Conduct The Company has adopted the code of conduct for all the Board Members and senior

management of the Company and is posted on the Company’s website. All the Board members and senior management of the Company have affirmed compliance with the Code of Conduct of the Company as at 31st March 2017. A declaration duly signed by the Managing Director is annexed hereto.

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8. GeneralBodyMeetings: LocationandtimewherelastthreeAnnualGeneralMeetingswereheld:-

FinancialYearended Date&Time Venue31stMarch,2014 29.09.2014at10am RegisteredOfficeofWintacat#54/1,

BoodihalVillage,Nelamangala,Bangalore.

31stMarch,2015 20.06.2015at10.30am -“-31stMarch,2016 27.09.2016at10.30am -“-

WhetherSpecialResolutions: a. PassedinthepreviousthreeAnnualGeneralMeetings-Yes b. Wereputthroughpostalballotlastyear -No c. Whetheranyspecialresolutionisproposedtobeconductedthroughpostalballot-Yes,

Twospecialresolutionsareproposedtobeconductedthroughpostalballotfor: (i)Toborrowfundsfromtheholdingcompany(Relatedparty)asECBuptoRs.40crores (ii)To increase the borrowing powers of the company upto Rs.50 crores pursuant to

section180(1)(c)oftheCompaniesAct,2013.9. Means of Communications: The quarterly and half years results are published in Financial Express and E-Sanje

NewspapersandarealsodisplayedatCompany’swebsite.ThesearenotsentindividuallytotheShareholders.ThemanagementdiscussionandAnalysisreportformspartofthisAnnualreport.

10. General Shareholders Information • AGMdate,timeandVenue - 10-08-2017at10.30amattheRegisteredOffice

of the Company at No.54/1, Boodihal Village,Nelamangala,Bangalore-561123.

• FinancialYear - 1stApril2016to31stMarch2017 • DateofBookClosure - 04-08-2017to10-08-2017 • Dividendpaymentdate - N.A. • Listingonstockexchange - TheStockExchange,Mumbai,DalalStreet, Mumbai-400001.StockCode:524758 Listingfeefortheyear2017-18hasbeenpaid. Market price data: High,Lowofmarketpriceofthecompany’ssharestradedontheStockExchange,Mumbai

duringeachmonthin lastfinancialyear(2016-17)andperformanceincomparisontoBSESensex:-

Period Company’s Share Price `

High LowApril 2016 201.90 175.00May 2016 205.00 155.00June 2016 186.95 148.00July 2016 217.95 165.00August 2016 193.85 150.00September 2016 193.00 141.10October 2016 184.95 150.00November 2016 169.60 130.00December 2016 168.90 130.00January 2017 159.90 138.15February 2017 228.30 152.00March 2017 203.55 166.00

22

RegistrarsandShareTransferAgents:Canbank Computer Services Ltd., No.218, J.P.Royale, 1st Floor, 2nd Main, Sampige Road (Near 14thCross), Malleswaram, Bangalore-560 003. Email: [email protected]:Share Transfers in physical form can be lodged either with the Company at the Registered office or with the Registrar and Share Transfer Agents of the Company. The transfers are normally processed within 15 days from the date of receipt, if the documents are complete in all respects.The distribution of Shareholding as on 31.03.2017 is as follows: -RangeofHoldings No. of Holders Amount (`)Upto 5000 5175 60,43,3105001 to 10000 98 7,89,69010001 to 50000 69 14,58,51050001 to 100000 7 4,39,290100001 and above 11 9,15,11,620Total 5360 10,02,42,420

Dematerialization of Shares and liquidity: 95,20,786 Shares (94.98% of paid up capital) has been dematerialization as on 31.03.2017Outstanding GDR’s/ADR’s/Warrants or any convertible instruments – NilPlant location: The Company’s plant is located at 54/1, NH4 Near 39th Mile, BoodhialVillage,

NelamangalaTaluk, Bangalore Dist., Karnataka.Address for correspondence: Shareholders can correspond with the Registrar and Share Transfer Agents at the addressed mentioned above. The Shareholders may also contact Mr.B.P.Thyagaraj, Ast.V.P.(Finance) & Secretary at the Registered office of the Company for any assistance.11. Disclosures: (a) Related Party Transactions: During the year under review, besides the transactions

reported elsewhere in the Annual Report, there were no other material related party transactions of the Company with its promoters, Directors or the management or their subsidiaries or relatives that may have potential conflict with the interest of company at large. Further there are no material individual transactions that are not in normal course of business or not on an arm’s length basis.

23

(b) The Company has complied with the statutory requirements of the Stock Exchanges/SEBI and statutory authority on all matters related to capital markets during the last three years. SEBI has issued a Notice under Rule 4 of SEBI (Procedure for Holding Inquiry and imposing penalties by Adjudicating officer) Rules, 1995 on 10.12.2013 for the delay in filing Disclosures under Regulation 7(3) of the SAST Regulations on 3 occasions during 2003, 2005 & 2011. The Company has filed the necessary reply and is awaiting the outcome of the proceedings. Apart from this no other penalties or strictures imposed on the company by these authorities.

(c) The Company has formulated and implemented a Whistle Blower policy and that it is hereby affirmed that no personnel has been denied access to the audit committee.

(d) The Company has complied with all the mandatory requirements relating to Corporate Governance as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 including requirements specified in Regulation 17 to 27 and Clauses (b) to (i) of Regulation 46(2) of the said SEBI (LODR) Regulations.

(e) The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of financial statements, the Company has not adopted a treatment different from that prescribed in any accounting standard.

(f) The policy on dealing with related party transactions is posted on the website of the Company www.wintaclimited.com

DECLARATIONI, S.JayaprakashMady, Managing Director of Wintac Limited hereby declare that all the members of the Board of Directors and the Senior Management personnel have affirmed compliance with the Code of Conduct, for the year ended March 31, 2017.

For Wintac Limited S.Jayaprakash Mady Managing Director

AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETo:The Members of Wintac LimitedWe have examined the compliance of the conditions of Corporate Governance by Wintac Limited (the Company) for the year ended March 31, 2017, as stipulated in Chapter IV of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations , 2015 (“Listing Regulations”).The Compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the review of procedures and implementation thereof as adopted by the Company for ensuring compliance with conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement and the Listing Regulations applicable for the respective periods as mentioned above. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the company.

FOR RAO AND SWAMIPlace: Bengaluru CHARTERED ACCOUNTANTS (FRN0031055)Date : 29th May, 2017 (H. Anil Kumar) Partner M.No: 022329

24

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WINTAC LIMITEDREPORT ON THE FINANCIAL STATEMENTS1) We have audited the accompanying financial statements of WINTAC LIMITED (“the Company”),

which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’sResponsibilityfortheFinancialStatements2) The Company’s Board of Directors is responsible for the matters stated in Section 134(5)

of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Rule 7 of the Companies (Accounts) Rules,2014 in respect of Section 133 of the Companies Act, 2013 in so far as applicable to the Company. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’sResponsibility3) Our responsibility is to express an opinion on these financial statements based on our audit.4) We have taken into account the provisions of the Act, the accounting and auditing standards

and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5) We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6) An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

7) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion8) In our opinion and to the best of our information and according to the explanations given

to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2017, and its loss and cash flows for the year ended on that date.

EmphasisofMatter9) Your attention is drawn to the following Notes forming Part of the Financial Statements for

the year ended 31-03-2017: a) Note 28.11 a) of the Financial Statements that these Financial Statements also give

the information as required to be given under Part III of Schedule III of the Companies Act,2013 in consolidated financial statements of interest in the sole associate

25

b) Note 19.1 A) detailing claims against the Company not acknowledged as debts (including demands of about `135.92 lakhs (excluding interest and penalty) upheld by the lower appellate authorities and contested by the Company) in respect of which the management expects favourable orders,

Our opinion is not qualified in respect of the above matters.REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS10) As required by Section 143 (3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of

our knowledge and belief were necessary for the purposes of our audit. b) In our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books. c) The Balance Sheet, the Statement of Profit and Loss dealt with by this Report are in

agreement with the books of account. d) In our opinion, the aforesaid financial statements comply with the Accounting Standards

in material aspects in so far as applicable to the Company. e) We report that as on 31st March 2017, no director of the Company is disqualified from being

appointed as a director under Section 164 (2) of the Companies Act, 2013 by virtue of the directorship in this Company. In respect of directorships in other companies, we have relied on the written representations made by the directors, in the prescribed form to the Board and taken on record that they are not subject to disqualification under the said section.

f) During the course of our audit of the financial statements we have observed that the company has internal financial controls though some of these controls are in our opinion not adequate or could have been better deployed or monitored to improve their effectiveness. As required by the auditing standards the perceived deficiencies in these controls which were considered significant have been duly communicated to the Management and the Audit Committee of the Board. We have however not carried out an audit of internal financial controls with an objective of expressing a view on the adequacy or effectiveness of these controls. Had we performed more extensive procedures on internal control we may have identified more such deficiencies to be included in our communication or concluded some of the deficiencies need not in fact have been communicated.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Notes 19.1 A) and 19.1 B) to the financial statements;

ii) The Company has not entered into derivative contracts. Further, with regard to the Long Term Contracts entered into by the Company we are informed that there will be no material foreseeable losses arising from those contracts.

iii) There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

The company has provided requisite disclosures in Note 28.12 to its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December,2016 which as explained therein are derived from the books and records of the company.

11) As required by the Companies (Auditors’ Report) Order 2017, issued by the Government of India in terms of subsection (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

FOR RAO AND SWAMIPlace: Bengaluru Chartered Accountants (FRN 03105S)Date : 29th May, 2017 (H. Anil Kumar) Partner M.No: 022329

26

ANNEXURE REFERRED TO IN PARAGRAPH 11 OF OUR REPORT OF EVEN DATERE:WINTACLIMITED

1) FixedAssets: a) The Company is maintaining proper records which show full particulars of the fixed assets

including quantitative details and their situation. b) As informed to us by the management, the fixed assets have been verified once in three

years which is considered reasonable. The last of such verification was carried out in the year 2015-16 and no material discrepancies found on such verification .

c) The title deeds of the immovable properties are in the name of the Company. However attention is drawn to Note 9.1 a) regarding disputes regarding title of its land at Sarjapur Road where claimant is holding Khatha in his name.

2) Inventory a) According to the information and explanations furnished to us, physical verification has

been conducted by the management during the year/as at the year end of inventory in its possession. The stock in the possession of third parties has also been verified by the management and supported by certificates furnished by them and/or other relevant documents. Materials in transit have been taken as per records. In our opinion the frequency of verification is reasonable considering the size of the Company and nature of its business.

b) As informed to us, the discrepancies noticed on such physical verification as compared to the book records were not material and have been properly dealt with in the books of account.

3) LoanstopartiescoveredintheRegistermaintainedunderSection189

The Company has not given any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. Hence our reporting on the matters specified in clause (iii) paragraph 3 of the order does not arise.

4) ComplianceofSection185and186oftheCompaniesAct,2013withrespecttoLoansandInvestments.

The Company has not made any loans or investments or given guarantees or provided security which require compliance of Section 185 and 186 of the Act.

5) FixedDeposits:

The Company is not found to have accepted any deposits to which the provisions of Section 73 to 76 the Companies Act, 2013 are applicable. No order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

6) CostRecords:

The Company is not required to maintain cost records in terms of the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013.

7) StatutoryDues:

a) The Company is generally found to be depositing the undisputed statutory dues (as ascertained and provided in its books) in respect of Provident Fund, Employees’ State Insurance, Income tax, Sales Tax, Excise Duty, Customs Duty, Service Tax, etc. though there may be some delay. There are no undisputed tax dues outstanding for more than six months as on the balance sheet date.

27

b) Regarding disputed statutory dues, we are informed that Note 19.1 gives full particulars of dues not deposited on account of dispute/ settlement proceedings.

c) There are no dues to the Investor Education and Protection Fund.8) Loan: The Company has taken a dropline overdraft facility as referred to in Note 3 and balance as

on 31.03.2017 is within the limit.9) End use of Funds The money raised by dropline overdraft facility from the Bank were applied for the purposes

for which the facility was granted.10) Frauds No fraud on or by the Company was noticed or reported during the year under report.11) ManagerialRemuneration The Managerial Remuneration paid to its Managing Director is within the limits specified

under Section 197 read with Schedule V of the Companies Act. 12) RelatedPartyTransactions All transactions with the related parties effecting during the year are in compliance with

section 177 and 188 of the Companied Act, 2013 and has been disclosed in Note 28.1 to the Financial Statement as required by AS-18 “Related Parties” which is the applicable Accounting Standard.

13) Private Placements No private placement or preferential allotment of the shares or debentures were made

during the year.14) NoncashtransactionswithDirectors: The Company has not entered into any non cash transactions with the Directors.15) RegistrationwithRBI The Company is not required to be registered with the Reserve Bank of India under Section

45 – IA of the Reserve Bank of India Act, 1934. FOR RAO AND SWAMI Chartered Accountants (FRN 003105S)

Place: Bengaluru (H. Anil Kumar) Date : 29th May, 2017 Partner M.No: 022329

28

BALANCE SHEET AS AT 31ST MARCH, 2017

Particulars Note NoAs at

31.03.2017As at

31.03.2016` `

I. EQUITY AND LIABILITIES

(1) Shareholder’s Funds Share Capital 1 10,02,97,920 10,02,97,920 Reserves and Surplus 2 (4,60,21,370) 4,08,61,244 (2)Non-CurrentLiabilities Long-term borrowings 3 6,86,09,599 8,29,20,180 Other Long term liabilities 4 7,50,000 7,50,000 (3)CurrentLiabilities Short-term borrowings 5 25,00,000 25,00,000 Trade payables - Total outstanding dues (i) Micro enterprises and small enterprises - - (ii) Other than micro enterprises and small enterprises 6 6,25,26,679 5,83,47,119 Other current liabilities 7 38,18,19,362 23,69,79,886 Short-term provisions 8 90,39,803 80,96,811

Total 57,95,21,993 53,07,53,160II. ASSETS

(1)Non-currentassets Fixed assets 9 (i) Tangible assets 30,98,53,378 30,63,12,579 (ii) Intangible assets 68,26,757 88,30,823 (iii) Capital work-in-progress 5,11,575 2,45,26,697 Non-current investments 10 - - Deferred tax assets (net) 11 6,37,11,994 5,29,93,983 Long term loans and advances 12 79,37,575 67,79,523 Other non-current assets 13 1,55,30,593 2,02,71,184 (2) Current assets Inventories 14 7,86,39,904 6,52,49,885 Trade receivables 15 3,62,51,052 2,91,87,964 Cash and bank balances 16 84,879 29,54,342 Short-term loans and advances 17 27,64,027 17,82,383 Other current assets 18 5,74,10,259 1,18,63,797

Total 57,95,21,993 53,07,53,160ContingentLiabilities&Commitments 19 Other Disclosures 28SignificantAccountingPolicies 29For and on behalf of the Board, Refer our report of even date

For RAO & SWAMIS.T.R. MADY S JAYAPRAKASH MADY Chartered AccountantsChairman Managing Director F R N NO. 003105 S

ARUN EASHWAR KAVITHA KRISHNAMOORTHYDirector Director H ANIL KUMAR

PartnerB P THYAGARAJ V S KRUPENDRA M. No. 022329A.V.P (Finance) & Secretary Chief Financial OfficerPlace : Bengaluru Place : BengaluruDate : 29.05.2017 Date : 29.05.2017

29

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2017Particulars Note

NoFiguresforreporting

period ended 31.03.2017

Figuresforprevious

year ended 31.03.2016

` Ì. Revenue from operations 20 32,80,20,937 18,09,85,241 II. Other Income 21 47,41,270 18,47,862 III. Total Revenue (I +II) 33,27,62,207 18,28,33,103

IV. Expenses: Cost of materials consumed 22 14,85,28,966 8,34,05,233 Purchase of Finished Goods 23 - - Changes in inventories of finished goods, work-in- progress and Stock-in-Trade 24 (1,29,53,950) 54,42,917 Employee Expenses & Benefits 25 14,67,88,731 12,88,37,049 Finance costs 26 1,34,92,296 77,49,995 Depreciation and amortization expense 3,63,17,781 3,86,74,040 Other expenses 27 11,40,07,497 9,82,22,405 Total Expenses (IV) 44,61,81,321 36,23,31,640

V. Profit/(Loss) before exceptional and extraordinary items and tax (III - IV)

(11,34,19,114) (17,94,98,537)

VI. Exceptional Items Net Gain / (Loss): 28.9 1,58,18,489 1,60,92,459VII. Profit/(Loss) before extraordinary items and tax (V- VI) (9,76,00,625) (16,34,06,078)VIII. Extraordinary Items - - IX. Profit/(Loss) before tax (VII - VIII) (9,76,00,625) (16,34,06,078)X. Tax expense: (1) Current tax - - (2) Deferred tax (1,07,18,011) (1,20,85,570)XI. Profit/(Loss) for the year (IX - X ) (8,68,82,614) (15,13,20,508)

XII. Earning per equity share (1) Basic (8.67) (15.10) (2) Diluted (8.67) (15.10)XIII. Other Disclosures 28XIV. SignificantAccountingPolicies 29

For and on behalf of the Board, Refer our report of even date For RAO & SWAMI

S.T.R. MADY S JAYAPRAKASH MADY Chartered AccountantsChairman Managing Director F R N NO. 003105 S



30

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017

Particulars Current Year Previous Year2016-17 2015-16

` ` ` À. CASH FLOW FROM OPERATING ACTIVITIES

Profit/ ( Loss) for the year before tax (9,76,00,625) (16,34,06,078) Adjustments for - Depreciation 3,63,17,781 3,86,74,040 - Provisions/Write offs/Write backs under Exceptional Items 39,31,412 81,51,138 - Exchange Fluctuation on restating closing balance of monetary assets and liabilities (31,657) (34,29,830) - Loss / (Profit) on sale of Fixed Assets 7,26,559 - - Interest/dividend received (7,80,528) (4,03,377) - Interest paid 1,34,92,296 5,36,55,863 77,49,996 5,07,41,967 Operating profit before working capital changes (4,39,44,762) (11,26,64,111) Adjustment for : - Trade & Other Receivables (4,80,72,775) 10,27,151 - Inventories (1,11,51,988) (2,09,19,758) - Trade & Other Payables 14,32,33,071 8,40,08,309 9,35,94,799 7,37,02,192 Net Cash from Operating Activities (A) 4,00,63,546 (3,89,61,919)

B. CASH FLOW FROM INVESTMENT ACTIVITIES

- Purchase of Fixed assets (1,73,23,739) (4,89,93,182) - Sale of Fixed Assets 14,13,079 - - Interest/Dividend Received 7,80,528 4,03,377 - Decrease / ( Increase ) in Other Bank Balances - 3,89,403 Net Cash from/(used in) Investing Activities (B) (1,51,30,132) (4,82,00,402)

C. CASH FLOW FROM FINANCING ACTIVITIES

- Proceeds from (Repayment of) borrowings (1,43,10,581) 9,40,65,180 - Interest Paid (1,34,92,296) (77,49,996) Net Cash from/(used in) Financing Activities ( C ) (2,78,02,877) 8,63,15,184 Net Increase in cash and cash equivalents (A)+(B)+(C) (28,69,463) (8,47,138)

D. OPENING CASH AND CASH EQUIVALENTS (D) 29,54,342 38,01,480

E. CLOSING BALANCE OF CASH AND CASH EQUIVALENT (E) 84,879 29,54,342 NETINCREASEINCASHANDCASHEQUIVALENTS(E-D) (28,69,463) (8,47,138)

Note:CashandcashequivalentsareasdetailedinNote16(a)totheFinancialStatements.

For and on behalf of the Board, Refer our report of even date For RAO & SWAMI

S.T.R. MADY S JAYAPRAKASH MADY Chartered AccountantsChairman Managing Director F R N NO. 003105 SARUN EASHWAR KAVITHA KRISHNAMOORTHYDirector Director H ANIL KUMAR


31

NOTES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2017As at

31ST MARCH, 2017As at

31ST MARCH, 20161. SHARE CAPITAL ` `1.1 AUTHORISED 2,50,00,000 (2,50,00,000) Equity Shares of ` 10/- each 25,00,00,000 25,00,00,000 1.2 ISSUED, SUBSCRIBED & FULLY PAID UP 1,00,24,242 (1,00,24,242) Equity Shares of ` 10/- each 10,02,42,420 10,02,42,420 1.3 FORFEITED SHARES 55,500 55,500

10,02,97,920 10,02,97,920

1.4 RECONCILIATION OF NUMBER OF SHARES

ParticularsEquityShares

31.03.2017 31.03.2016Shares outstanding at the beginning of the year 1,00,24,242 1,00,24,242Shares Issued during the year - -Shares redeemed during the year - -Shares outstanding at the end of the year 1,00,24,242 1,00,24,242

1.5 DETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% OF THE SHARES

Name of Shareholder As at 31ST MARCH, 2017 As at 31ST MARCH, 2016No. of

Shares held % of Holding No. of Shares held % of Holding

EQUITY SHARESGAVIS Pharmaceuticals LLC, USA 55,12,098 54.99 55,12,098 54.99 Bangalore Pharmaceutical & Research Laboratory P Ltd 12,82,900 12.80 12,82,900 12.80 Mr. S.T.Raghavendra Mady 8,09,950 8.08 8,09,950 8.08 Mrs. Kripa Mady 6,71,061 6.69 6,71,061 6.69 Mr. S Jayaprakash Mady 4,86,340 4.85 4,90,131 4.89

1.6 Rights, Preferences and Restrictions: Equity shares are on par with each other, both with regard to payment of dividend and voting

rights.

2. RESERVE & SURPLUS SECURITIES PREMIUM ACCOUNT Opening Balance 50,98,63,366 50,98,63,366 Additions during the year - - Closing Balance 50,98,63,366 50,98,63,366 GENERAL RESERVE As per previous Balance Sheet 4,09,83,740 4,09,83,740 SURPLUS Opening balance (50,99,85,862) (35,86,65,354) (+) Net Profit/(Net Loss) for the current year (8,68,82,614) (15,13,20,508) Closing Balance (59,68,68,476) (50,99,85,862)

(4,60,21,370) 4,08,61,244

32

NOTES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2017

As at 31ST MARCH, 2017 As at 31ST MARCH, 2016Non

Currentmaturity

Current maturity

Non Currentmaturity

Current maturity

3. LONG TERM BORROWINGS ` ` ` `

SECURED DroplineoverdraftfacilityfromBanks(Secured by way of equitable mortgage of Company’s land and building, hypothecation of plant and machinery and further personal guarantee of Mr. S JayaprakashMady, Managing Director of the Company)From State Bank of India 6,86,09,599 1,20,00,000 8,29,20,180 1,20,00,000

6,86,09,599 1,20,00,000 8,29,20,180 1,20,00,000

3.1 Terms of Repayment The drawing power under the dropline overdraft limit from State Bank of India is reduced

monthly over a period of 92 months after 4 months moratorium - `10 Lakhs per month for 72 months and `14 Lakhs for 20 months.

3.2 There are no defaults /continuing defaults in repayment of principal amount of the loan or interest as on the balance sheet date.

As at 31ST MARCH, 2017

As at 31ST MARCH,2016

4. OTHER LONG TERM LIABILITIES ` `Security Deposits - from a Related Party 7,50,000 7,50,000

7,50,000 7,50,000

5. SHORT TERM BORROWINGSUNSECUREDLoans and Advances from Related PartyInter Corporate Deposit 25,00,000 25,00,000

25,00,000 25,00,000

6.TRADEPAYABLESTrade Payables 6,25,26,679 5,83,47,119 There is no information reportable under the Micro, Small, & Medium Enterprises Development (MSMED) Act, 2006. 6,25,26,679 5,83,47,119

33



As at 31ST MARCH,2016

` `7. OTHER CURRENT LIABILITIES

(a) Current maturities of long-term debt (Refer Note No.3) 1,20,00,000 1,20,00,000 (b) Interest accrued but not due on borrowings - - (c) Other payablesCustomer Advances / Credit balances [includes `20,15,66,184 (`12,58,15,130) due to one of the related party enterprises described in Notes 28.1 A-9]

21,08,74,258 13,49,38,538

Statutory Liabilities 35,68,173 23,07,519 Security Deposits 50,000 50,000 Due to one of the related party enterprises described in Notes 28.1 A-9 (See Note 7.2 below) 13,86,86,525 7,02,25,716 Others (See Note 7.3 below) 1,66,40,406 1,74,58,113

38,18,19,362 23,69,79,8867.1 Amounts due to be credited to the Investor Education and Protection Fund as on 31-03-2017

` Nil ( Nil)7.2 Towards reimbursement of cost of materials ,equipment and services procured through

these parties against production of bills of original vendor/service provider.7.3 Others include employee dues and accrued liabilities.

8. SHORT TERM PROVISIONSProvisionforEmployeeBenefits(ReferNote8.1)Gratuity 55,59,145 33,42,188 Earned Leave 31,51,178 31,40,983 Other ProvisionsTowards future commitments of Joint Venture (Refer Note 28.11) 3,29,480 4,18,900

For cenvat credit reversal in respect of inventory proposed to be scrapped - 11,94,740

90,39,803 80,96,8118.1 Disclosures pursuant to AS-15 and AS-29 in respect of provision for employee benefit are

given in Note 25.18.2 Movement in Other Provisions

Current Year Previous YearCommitment

in JVCenvat

ReversalCommitment

in JV Cenvat Reversal

Opening Balance 4,18,900 11,94,740 5,00,000 13,22,673 Addtions during the year - - - -

4,18,900 11,94,740 5,00,000 13,22,673 Less: Provision utilized / reversed 89,420 11,94,740 81,100 1,27,933ClosingBalance 3,29,480 - 4,18,900 11,94,740

34

NOTES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 20179.

FIX

ED A

SSET

S

GrossBlock

Accum

ulated

Dep

reciati

onNetBlock

Bala

nce

as a

t 01

.04.20

16Add

ition

s D

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/

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hdra

wn

Bala

nce

as a

t 31

.03.

2017

Bala

nce

as a

t 01

.04.20

16Dep

reciati

on

for

the

year

Dep

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on

wit

hdra

wn

Bala

nce

as a

t 31

.03.

2017

Bala

nce

as a

t 31

.03.

2017

Bala

nce

as a

t 31

.03.20

16

``

``

``

``

``

ATA

NG

IBLE

ASS

ETS

Land

2,48

,02,

135

3,33

,625

-

2,51

,35,

760

- -

-

-

2,5

1,35

,760

2

,48,

02,1

35

Build

ings

13,2

7,52

,507

15

,34,

800

- 13

,42,

87,3

07

5,62

,61,

147

45,9

9,44

3 -

6,0

8,60

,590

7

,34,

26,7

17

7,6

4,91

,360

Plan

t and

Equ

ipm

ent

28,6

2,16

,038

3

,50,

56,0

86

24,8

6,22

5 31

,87,

85,8

99 1

3,84

,58,

042

1,8

2,11

,992

16

,86,

400

15,4

9,83

,634

16,

38,0

2,26

5 14

,77,

57,9

96

Furn

iture

and

Fix

ture

s1,

19,4

7,91

1 6,

73,3

76

- 1

,26,

21,2

87

34,4

1,73

9 11

,73,

061

-

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14,8

00

8

0,06

,487

85,0

6,17

2

Vehi

cles

78,6

9,21

9 -

10,8

8,79

8 67

,80,

421

61,7

5,79

8 6,

10,1

71

6

,97,

584

60,8

8,38

5

6,

92,0

36

1

6,93

,421

Offi

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quip

men

t58

,22,

805

14,4

1,94

6 -

72,6

4,75

1 27

,80,

522

12,5

7,97

5

-

40,

38,4

97

3

2,26

,254

30,

42,2

83

Gard

en20

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091

- -

20,7

3,09

1 -

-

-

-

20,

73,0

91

20

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091

R &

D E

quip

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ts 7

,17,

69,4

33

- -

7,17

,69,

433

2,98

,23,

312

84,5

5,35

3

- 3

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78,6

65

3,3

4,90

,768

4

,19,

46,1

21

Tot

al

54,3

2,53

,139

3

,90,

39,8

33

35,7

5,02

3 57

,87,

17,9

49 2

3,69

,40,56

0 3

,43,

07,9

95

23,

83,9

84 2

6,88

,64,57

130

,98,

53,3

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0,63

,12,57

9

Prev

ious

Yea

r50

,74,

83,2

25

3,8

4,53

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26,8

3,95

1 54

,32,

53,1

39 2

0,03

,51,

161

3,6

6,47

,195

57,

796

23,6

9,40

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30,

63,1

2,57

9 30

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64

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49,9

4,08

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54,3

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9,48

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4

9,99

,800

1

1,40

,137

6,

52,4

55

-

17,9

2,59

2 32

,07,

208

38,5

3,94

3

Accr

edita

tion

1,35

,66,

596

-

-

1,3

5,66

,596

85,8

9,71

6 1

3,57

,331

-

99

,47,

047

36,1

9,54

9

49,

76,8

80

Tot

al

1,85,60

,676

9,

54,3

20 9,48,60

01,85,66

,396

97,

29,8

53 20,09

,786

-1,17,39

,639

68,26

,757

88,

30,8

23

Prev

ious

Yea

r 1

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86

1

1,42

,490

-

1,8

5,60

,676

76,

45,2

12

2

0,84

,641

-

97,2

9,85

3

88

,30,

823

9

7,72

,974

Total(a+b)

56,18,13

,815

3

,99,

94,1

53 45

,23,62

359

,72,

84,3

45 2

4,66

,70,41

33,63,17

,781

23,

83,9

84 2

8,06

,04,21

031

,66,80

,135

31,

51,4

3,40

2

Prev

ious

Yea

r52

,49,

01,4

11

3,9

5,96

,355

2

6,83

,951

56,

18,1

3,81

5 20

,79,

96,3

73

3,8

7,31

,836

57,7

96 2

4,66

,70,

413

31,5

1,43

,402

31,

69,0

5,03

8

CCA

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RK IN

PRO

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5,11

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26,6

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Tot

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75

2,45

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7

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Land

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Th

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f the

land

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pur R

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Orig

inal

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71,4

38.

Ther

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said

land

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was

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e Kh

ata

to h

is na

me

and

the

Com

pany

has

file

d a

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Peti

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in th

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gh C

ourt

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whi

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35


As at 31.03.2017 As at 31.03.2016Number Value Number Value

10. INVESTMENTS ` `TradeInvestments,Unquoted,atCostInvestment in Equity Shares of Medispec Pharmaceuticals Private Limited a Joint Venture Company

9,00,000 90,00,000 9,00,000 90,00,000

Less : Provision for diminution in value 90,00,000 90,00,000 9,00,000 - 9,00,000 -



11. DEFERRED TAX ASSET ` À. Deferred Tax Asset

1. Carry Forward Depreciation 8,33,68,481 7,29,94,065 2. Expenditure not allowed as a deduction under tax laws pending actual payment 33,97,502 25,29,233

8,67,65,983 7,55,23,298 B. Deferred Tax Liability

Difference between book depreciation and tax depreciation 2,30,53,989 2,25,29,315 C. Net Deferred Tax Asset 6,37,11,994 5,29,93,983

11.1 The assessment of deferred tax asset is provisional and is subject to adjustments on company filing its income tax return, assessment of returned income, outcome of appeals, etc.

11.2 In light of the Company since retaining the regulatory approval for sales to US markets, regulatory approvals available for export to European markets and the current valuation of the company, the Management is virtually certain that the company will be able to earn taxable income in subsequent years to absorb deferred tax asset comprising carry forward depreciation.

12. LONG TERM LOANS AND ADVANCES(UNSECURED)Considered GoodCapital Advances 38,45,889 28,10,897 Security Deposits 40,91,686 39,68,626

(a) 79,37,575 67,79,523 ConsideredDoubtfulLoans and advances to related partiesMedispec Pharmaceutical Private Limited (b) 8,53,25,614 8,53,25,614 (a) + (b) 9,32,63,189 9,21,05,137 Less: Provision for doubtful loans and advances 8,53,25,614 8,53,25,614

79,37,575 67,79,523

36


As at 31.03.2017

As at 31.03.2016

` `13. OTHER NON CURRENT ASSETS

UNSECURED, CONSIDERED GOODTaxes Refundable 1,55,30,593 2,00,71,184 Other Receivables - 2,00,000

1,55,30,593 2,02,71,184

13.1 Taxes Refundable includes payments made/ refunds adjusted to pending demands and interest thereon which are under appeal as detailed in Note 19.1.

14. INVENTORIESRaw Materials and components 1,91,02,120 2,49,16,197 Packing Materials and components 4,23,91,229 3,31,54,394 Work-in-progress 1,18,29,816 82,582 Finished goods (Including Purchased) 13,90,688 1,83,972 Stores and spares 39,26,051 19,54,651 Material in Transit - - Material in Bonded Warehouse - 49,58,089

7,86,39,904 6,52,49,885

15. TRADE RECEIVABLESUNSECUREDConsidered Good:Debts outstanding for a period exceeding six months from due date

56,155 -

Other debts 3,61,94,897 2,91,87,964 3,62,51,052 2,91,87,964

16.CASHANDBANKBALANCESCashandCashEquivalent

Cash on hand 25,957 22,942 BankBalancesIn Deposit Accounts - Less Than 3 months maturity - 24,74,554 In Current Accounts 58,922 4,56,846

84,879 29,54,342

16.1 Bank deposits with more than 12 months maturity - Nil (Nil)16.2 Statement of Account and confirmation of balance have not been received in respect of

one account with book balance of ` 34,381/- (Previous Year - 2 Current Account Balance ` 51,323) which is non-operative and subject to reconciliation.

37


As at 31.03.2017

As at 31.03.2016

17. SHORT TERM LOANS AND ADVANCES ` Òther Loans and Advances Recoverable in Cash or Kind or ForValue to be Received *Unsecured, considered good 27,64,027 17,82,383

27,64,027 17,82,383 * Includesloanstostaff,advancestosuppliers,etc.

18. OTHER CURRENT ASSETSPrepaidExpenses 46,62,762 66,14,624 Interest Accrued but not due - - InputTaxCredits 67,75,633 49,49,173 CompensationReceivable(ReferNote28.9) 1,18,87,077 -AmounttobebilledtooneoftherelatedpartyenterprisesdescribedinNotes28.1A-9(ReferNote20.1) 3,37,87,662 -Due fromBangalore Pharmaceuticals Private Limited - aRelatedParty 2,97,125 3,00,000

5,74,10,259 1,18,63,797

19) CONTINGENT LIABILITIES AND COMMITMENTS19.1) CLAIMS AGAINST THE COMPANY NOT ACKNOWLEDGED AS DEBTA) CLAIMS TOWARDS TAXES

NATURE OF CASE FORUM WHERE CASE IS BEING ADJUDICATED

Demand of Duty/

Tax

AMOUNT PAID

REMARKS

` Lakhs ` LakhsCOMPANY IN APPEALCENTRAL EXCISE1. ValuationofPhysiciansSamples

for the period Jan. 2005 toDecember 2006

CESTAT,BENGALURU

44.95 - (withinterestasapplicable)Penaltyequalamount

2 Penalty under Rules 209 A oftheCentralExciseRules

CESTAT,AHMEDABAD

2.00 -

3 Claimofpenaltyonremovalofexemptedproducts

CESTAT,BENGALURU

10.36 0.05 Penalty

4 Claim of Service Tax Credit onSalesCommission

COMMISSIONERAPPEALS

3.56 0.27 withinterestandPenaltyasapplicable

VAT / SALES TAX

5 Difference inSalesTax fornonsubmission of Statutory Forms2003-04 at Mumbai

DCST-NAVIMUMBAI

2.33 1.75

INCOME TAX6. Appeal against order of

rectification passed by AO forAsst Year 2001-02

HIGHCOURTOFKARNATAKA

38.26 70.00(approx.)

Rs.70Lakhsapproximatelyhas been recovered out of refunds due to thecompany for subsequentassessment years towardstaxandinterest

38


7. Appeal against order of assessment for A.Y. 2011-12 ITAT, BENGALURU 7.11 - plus interest as applicable

FRINGE BENEFIT TAX

8. Appeal against order for A.Y. 2008-09 passed pursuant to order of revision

ITAT, BENGALURU 5.24 - Appeal against order of revision pending before the High Court

PROVIDENT FUND

9. Appeal against levy of damages for delay in remittance of P.F dues for the period 01.04.1996 to 24.12.2013

TRIBUNAL 32.37 -

DEPARTMENT IN APPEAL

CENTRAL EXCISE

10. Central Excise on Sale of brands to Recon Health Care Pvt. Ltd.

SUPREME COURT OF INDIA

400.00 - Liability if any will be on account of the purchaser which is now merged with Cadila Healthcare Limited

11. KVAT Input tax refund originally allowed and nowwithheld by Departmentallegging the claim wasbelated.

ACCT LVO(065) 29.34

NOTE: In some of the cases an unfavourable order may lead to further costs by way of interest and penalty.

B) OTHERS

NATURE OF CASEFORUM WHERE CASE IS

BEING ADJUDICATEDAmount of Claim AMOUNT PAID

1. A petition by an ex employeeclaiming re-instatement inservice

Labour Department Not Quantifiable -

As at 31 March 2017

As at 31 March 2016

` Lakhs ` Lakhs19.2) Other Commitments:a) Custom Duty:

i. On goods held in bonded ware house: - 15.31ii. On other goods: - -

b) Estimated amount of contracts remaining to beexecuted on capital account not provided for 38.56 97.31

39

NOTES ANNEXED TO AND FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2017Current Year

2016-17Previous Year

2015-1620 REVENUE FROM OPERATIONS ` `

Sales: Formulations- Gross Sales (Refer note 20.1 & 29(i)) 27,03,90,767 10,88,29,559 - Less : Excise Duty 2,09,60,194 2,01,31,938 - Net Sales 24,94,30,574 8,86,97,621 Income from Services:- Manufacturing Charges 2,39,81,117 3,15,19,895 - Formulation Development 5,46,09,246 6,07,67,725

32,80,20,937 18,09,85,241 20.1) Gross Sales includes `3,37,67,862/- unbilled revenue from manufacture of goods against

an export order from the one of the related party enterprises described in Notes 28.1 A-9 awaiting instructions for shipment.

21 OTHER INCOMEa) Interest Received

From Bank 90,647 1,89,888 Interest on Tax Refunds 6,83,764 - Other 6,117 2,13,489

b) Other Non Operative IncomeLease Rent 9,00,000 8,12,960 Custom duty draw back 78,121 3,32,731 Miscellaneous Income 29,82,621 2,98,794 Profit / (Loss) on Sale of Fixed Assets (net) - -

47,41,270 18,47,862 22 COST OF MATERIAL CONSUMED

Raw Materials (Bulk Drugs and other Pharmaceutical inputs) 9,85,21,249 4,75,02,676 Packing materials (Ampoules, vials, bottles, labels, cartons, shippers etc.) 5,00,07,717 3,59,02,557

14,85,28,966 8,34,05,233

23 PURCHASE FINISHED GOODS (Formulations) - -

24 CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROGRESS ( FORMULATIONS)Closing StockFinished Goods (including Purchased Goods) 13,90,688 1,83,972 Semi-Finished Goods 1,18,29,816 82,582

1,32,20,504 2,66,554 Less: Opening StockFinished Goods (Including Purchased Goods) 1,83,972 14,45,408 Semi-Finished Goods 82,582 42,64,063

2,66,554 57,09,471 Increase / ( Decrease ) in Inventory 1,29,53,950 (54,42,917)

25 EMPLOYEE EXPENSES & BENEFITSSalaries & Wages 13,52,41,278 11,95,58,786 Contribution to Provident and Other Funds 77,37,655 58,61,286 Staff Welfare 38,09,798 34,16,977

14,67,88,731 12,88,37,049

40


25.1a) OverviewofEmployeesBenefits1) The compensation to employees for services rendered are as follows:i. Salaries and Wages including compensated absences. Compensated absences such as

eligibility towards earned leave are allowed to be accumulated as per company’s rules.Such earned leave can be encashed at the time of separation.

ii Bonus as per the Bonus Act, 2015.iii. Contributions under defined contribution plans such as Provident Fund as per Employees

Provident and Miscellaneous Provisions Act, Employees Insurance Scheme, etc.iv. Defined Benefit Plans such as Gratuity on cessation of employment. The Company has

taken a Master Policy from LIC to fund this defined benefit obligation.v. Other employee benefits such as leave travel allowance.

The above benefits are subject to eligibility and other criteria as per company’s rules.b) RecognitionandMeasurementi. Employee benefits are recognised on accrual basis. Liability to compensated absence

such as leave encashment are determined by multiplying the actual leave accumulated atthe end of the year by the applicable component of salary.

ii. Liability to defined benefit plan viz. Gratuity are valued on actuarial basis under ProjectedUnit Credit Method. byLIC.

iii. Liability under defined contribution schemes such as contribution to Provident Fund, ESIetc. are measured based on the contribution due for the year.

c) DisclosurespursuanttoAS-15(Revised2005) As on 31/03/2017

As on 31/03/2016

i. Leave EncashmentOpening Liability 31,40,983 31,96,977 Leave encashed during the year 7,97,977 6,59,447 Closing liability as on 31st March 2016 31,51,178 31,40,983 Charge to the Profit and Loss A/c 8,08,172 6,03,453

ii GratuityTable Showing changes in present value of Obligation Present value of obligations as at beginning of year* 68,49,778 59,44,097 Interest cost 5,47,982 4,75,528 Current Service Cost 12,79,355 12,04,678 Benefits Paid (13,52,495) (7,66,901)Actuarial (gain)/ loss on obligations 7,10,304 (7,624)Present value of obligations as at end of year 80,34,924 68,49,778 Table showing changes in the fair value of plan assetsFair value of plan assets at beginning of year 35,07,590 38,33,196 Expected return on plan assets 2,16,053 3,34,621 Contributions 1,04,631 1,06,674 Benefits Paid (13,52,495) (7,66,901)Actuarial gain/(loss) on Plan assets - - Fair value of plan assets at the end of year 24,75,779 35,07,590 Table showing fair value of plan assetsFair value of plan assets at beginning of year 35,07,590 38,33,196 Actual return on plan assets 2,16,053 3,34,621

41


Contributions 1,04,631 1,06,674 Benefits Paid (13,52,495) (7,66,901)Fair value of plan assets at the end of year 24,75,779 35,07,590 Funded status (55,59,145) (33,42,188)Excess of Actual over estimated return on plan assets NIL NIL(Actual rate of return = Estimated rate of return as ARD falls on 31st March)The amounts to be recognized in the Balance Sheet Present value of obligations as at the end of year 80,34,924 68,49,778 Fair value of plan assets as at the end of the year 24,75,779 35,07,590 Funded status (55,59,145) (33,42,188)Net asset/ (liability) recognized in the Balance Sheet (55,59,145) (33,42,188)Actuarial Gain/Loss recognizedActuarial (gain)/ loss for the year - plan assets NIL NIL Actuarial (gain)/ loss on obligations 7,10,304 (7,624)Actuarial (gain)/ loss recognized in the year 7,10,304 (7,624)Expenses Recognised in the Statement of Profit and LossCurrent Service cost 12,79,355 12,04,678 Interest Cost 5,47,982 4,75,528 Expected return on plan assets (2,16,053) (3,34,621)Net Actuarial (gain)/ loss recognized in the year 7,10,304 (7,624)Excess Provision held/ (reversed) - - Difference in opening balance - - Expenses recognised in the Statement of Profit and Loss 23,21,588 13,37,961

EXPLANATORY NOTES for the period ended1. Experience Adjustments 31.03.2017 31.03.2016 31.03.2015 31.03.2014

Defined benefit obligation 80,34,924 68,49,778 59,44,097 47,48,774Plan Assets 24,75,779 35,07,590 38,33,196 37,90,598Surplus / (Deficit) (55,59,145) (33,42,188) (21,10,901) (9,58,176)Experience adjustment on plan liability - - (4,68,613) 7,30,840Experience adjustment on plan asset - - - -

2. Principal Actuarial assumptions at the Balance Sheet Date in respect of gratuity as perstatement from LICParticulars As at 31.03.2017 As at 31.03.2016Discount rate 8% 8% Salary Escalation 7% 7% Withdrawal Rate 1% to 3% 1% to 3%

Depending on age Depending on age Mortality Rate LIC(1994-96) LIC(1994-96)

ultimate ultimate3. The estimates of salary increases furnished by the company to LIC for the purposes of the

actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors.

42


Current Year 2016-17

Previous Year 2015-16

` `26 FINANCE COST

Interest on borrowings 1,34,92,296 77,49,9961,34,92,296 77,49,996

27 OTHER EXPENSESAdvertisement & Sales Promotion 1,00,644 98,058 Auditor’s Remuneration 7,10,000 6,50,000 Commission Paid - 4,03,727Communication Expense 13,84,522 10,13,051Director’s Sitting Fees 32,500 67,500 Outward Freight 5,16,954 6,60,142 Insurance 17,44,868 9,12,098 Interest (Other than considered as Finance Cost) 3,12,829 16,40,991 Legal and professional charges 1,55,62,907 33,08,811 Loss on Sale / Discarding of Fixed Assets 7,26,559 -Recruiting 5,59,195 -Manufacturing Charges - -Miscellaneous Expenses 97,12,070 66,61,704 Net gain or loss on foreign currency transaction and translation (other than considered as finance cost) (33,01,453) 51,89,934 Power 4,08,45,587 3,19,42,456 Rent 14,25,917 15,24,836 Repairs and Maintenance :Machinery 1,72,01,372 1,45,64,004 Buildings 57,69,905 90,85,837 Others 49,18,501 36,25,359 Rates and Taxes 35,76,167 74,10,533 Travelling Expense 94,53,241 67,62,728 Vehicle Maintenance 27,55,212 27,00,636

11,40,07,497 9,82,22,405 27.1 DetailsofRemunerationtoAuditors

As Auditor 5,00,000 5,00,000 For taxation matters 1,00,000 1,00,000 For other services 1,10,000 50,000

7,10,000 6,50,000

43


28) OTHER DISCLOSURES28.1 Related Party Transactions

A. IntermsofAccountingStandard18“RelatedPartyDisclosures”thefollowingrelationshipsandrelatedpartieshavebeenidentified:

Relationship Related Party1 HoldingCompany GavisPharmaLLC-USA

2 EnterprisesunderCommoncontroloftheHoldingCompany

None

3 Associates/JointVentures MedispecPharmaceuticals(P)Ltd4 Investing Party in respect of which the

companyisanAssociateorJointVentureNone

5 Individuals who directly or indirectlyare in a position to control or exercisesignificantinfluenceoverthecompany

Dr.VeerappanSubramanian

6 Enterprises/Individuals holding 20%or more of the voting power in thecompanydirectlyorindirectly(otherthancontrollinginterest)

None

7 KeyManagementPersonnel Mr.S.JayaprakashMady,(AsdefinedunderAS-18) ManagingDirector

8 Relativesof5,6or7 S. JayaprakashMady(HUF)Mrs.GovindammalSubramanianMs.AnuBalasubramaniamMr.IlangoSubramanianMrs.MeenakshiMady

9 Enterprises over which any persondescribedin5,6,7or8isabletoexercisesignificant influence (has control or 20%or more interest in the voting powerdirectlyorindirectly.)

Subramanian2015IrrevocableTrustMendhamHoldings,LLCSomersetTherapeutics,LLCManianHoldings,LLC800CentennialAvenue,LLCSubramanian2016IrrevocableTrustVGSTrustCompany,LLCOakdeneHoldings,LLCKaliCapitalLPKaliManagementLLCVGSFoundation,IncGavisPharma,LLCBangalorePharmaceutical&ResearchLaboratoryPrivateLimited

44


B. Transactions with Related Parties (Other than expenses re-imbursed)

Nature of TransactionsHolding

Company`

Associates / Joint Venture

`

Key Management

Personnel`

Relatives`

Enterprises `

1. Managerial Remuneration Nil Nil 2,00,000 Nil Nil(Excluding Provision for Gratuity) (NIL) (NIL) (24,00,000) (NIL) (NIL)

2. Loans received and outstanding Nil Nil NIL Nil 25,00,000(NIL) (NIL) (NIL) Nil (25,00,000)

3. Balance Receivable Nil 8,53,25,614 Nil Nil 2,97,125(NIL) (8,53,25,614) (NIL) (NIL) (5,00,000)

4. Guarantee & Collaterals Nil Nil Nil NIL Nil(NIL) (NIL) (NIL) (NIL) (NIL)

5. Formulation Development Fee 53,70,772 Nil Nil Nil 4,25,31,924(3,07,35,875) (NIL) (NIL) (NIL) (NIL)

6. Sales + Nil Nil Nil Nil 15,01,04,293(NIL) (NIL) (NIL) (NIL) (NIL)

7. Purchase of Goods, Equipment and Services * 1,47,51,893 Nil Nil Nil 3,54,52,760(1,92,26,748) (NIL) (NIL) (NIL) (NIL)

8. Advance Received / Amounts Payable / Security Deposit Received **

Nil Nil Nil Nil 30,72,15,047(19,60,40,846) (NIL) (NIL) (NIL) (7,50,000)

9. Lease Rent Received Nil Nil Nil Nil 9,00,000(NIL) (NIL) (NIL) (NIL) (8,12,960)

10. Lease Rent Paid Nil Nil Nil 30,000 Nil(NIL) (NIL) (NIL) (3,60,000) (NIL)

11. Interest Paid Nil Nil Nil Nil 2,85,000(NIL) (NIL) (NIL) (NIL) (76,521)

+ Sales includes `3,37,67,862/- unbilled revenue from manufacture of goods against an export orderawaiting instructions for shipment and is reduced from advance received.*Purchase of goods/equipments and services from GavisPharma, LLC (Holding Company) is by way ofreimbursement of cost of goods and services procured on behalf of the Company against production of bill of the original vendor/ Service providers.**The advances / amount payable to enterpirses under Common control of the Holding Compnay includes the amounts due to holding compnay which was transferred / assigned to enterprises under common control of the Holding Compnay vide assignment letter dated 01 october 2016.28.2 Segment Reporting: The Company recognizes only one business segment, viz formulations.

All the operations are in India. Hence separate segment information in terms of Accounting Standard 17 “Segment Reporting” issued by the Institute of Chartered Accountants on India, is not given.

28.3 The company has no significant operating leasing arrangements requiring additional disclosure as per AS-19:Leases. The Company has not entered into any financial leasing arrangement.



` `28.4 EarningsPerSharehasbeencomputedasunder:

(8,68,82,614) (15,13,20,508)(8,68,82,614) (15,13,20,508) 1,00,24,242 1,00,24,242

a) Profit after taxb) Profit after tax but before extra ordinary itemsc) Total weighted average number of shares of `10 eachd) Earnings per Share (Basic/ Diluted) (a/c)e) Earnings per Share (Basic/ Diluted) before extra ordinary items (b/c)

(8.67) (15.10) (8.67) (15.10)

45




` `28.5 Value of Import calculated on CIF Basis

Raw Materials 1,68,66,899 62,29,714Packing Materials & Consumables 3,77,21,810 1,48,22,033Capital Goods 32,10,127 60,17,648

5,77,98,836 2,70,69,395

28.6 BreakupofConsumption Percentage PercentageQty Value Qty Value

Raw MaterialsImported 17.11% 1,68,52,759 10.52% 49,95,821 Indigenous 82.89% 8,16,68,491 89.48% 4,25,06,855

100.00% 9,85,21,249 100.00% 4,75,02,676PackingMaterials&ConsumablesImported 63.95% 3,19,79,856 21.16% 75,95,520 Indigenous 36.05% 1,80,27,861 78.84% 2,83,07,037

100.00% 5,00,07,716 100.00% 3,59,02,557 28.7 EarningsinForeignCurrency

From Export of Goods calculated on FOB Basis 14,83,54,797 1,79,29,324 Formulation Development Fees 5,46,09,246 5,78,65,225 Composition received (Refer Note 28.9) 1,18,87,077 -

21,48,51,120 7,57,94,54928.8 ExpenditureinForeignCurrency

Travelling Expenses 3,37,600 - Maintenance Computer Software - 46,737USFDA Fees (net of reimbursements) - 43,72,013

3,37,600 44,18,750

28.9 ExceptionalItemsNetGain/(Loss)Bad debts written off - (4,10,022)Sundry Creditors written back 63,08,990 35,20,116Advances Written back - 1,08,32,276Provision for Doubtful Advances (1,39,547) - Advances Written Off - (42,431)Inventory Write down (22,38,031) (41,78,569)Reimbursements of earlier years’ USFDA fees received - 63,71,089Compensation Received on Termination of Agreement (Net of Legal Fees of $ 91,667 retained by the Counsel) 1,18,87,077 -

1,58,18,489 1,60,92,45928.11 a) The Company has no subsidiaries. It has investments in only one joint venture company,

M/s Medispec Pharmaceuticals Pvt. Ltd. (the JV) whose net worth has completely eroded and the investment in JV and the amount due from the said JV is fully provided for (refer Note 10 and 12) .The Company is not expecting any economic benefits from the JV. It has ceased to carry on business since over two years and is now defunct and necessary steps have been taken to strike off its name/ liquidate it pursuant to the provisions of the Companies Act.In light of the same separate consolidated financial statement

46


incorporating the transactions of the Joint venture is not prepared as AS-27 “Financial Reporting of Interest in Associates and Joint Ventures” requires that the interest in such a J.V has to be reported in accordance with AS-13 Accounting for Investments which is now being followed in the stand alone financial statement. As the Company has no other subsidiary or associates the present standalone financial statement represent the consolidated financial statement required to be prepared as per Schedule III of the Companies Act, 2013.InformationasperPartIIIofScheduleIII:

Nameoftheentity Net Assets, i.e., total assets minustotalliabilities

Shareinprofitorloss

As % of consolidated net assets

Amount As % of consolidated profitorloss

Amount

1 2 3 4 5Associate/Joint Venture (As per the Equity Method)IndianMEDISPEC PHARMACEUTICALS PVT LTD 47.37% Negative 47.37% NIL

b) Provision for future commitments of Joint VentureAs the other partner in the JV has ceased to participate in the operations of said JV’sbusiness since over 15 years the Company was effectively managing the JV and certainobligations of the JV have to be met by the Company till the said JV company’s name isstruck off or that company is liquidated. Accordingly , a provision of `5,00,000 had beenmade as on 31.03.2015 to meet these present and future obligations and the Companywill meet the expenses of the joint venture out of said provision till the JV’s name isstruck of by the Registrar or liquidated. Balance heald as on 31.03.2017 is `3,29,480/-.

28.12 Details of Specified bank notes (SBN) held and transacted during the period 08.11.216 to 30.12.2016 as derived from companies books of accounts and records.

Particulars SBNs OtherDenominationNotes TOTAL

` ` `Closing Balance as at 8 November 2016 40,000.00 4,95,423.00 5,35,423.00 Add : Permitted Receipts - 2,26,674.40 2,26,674.40 Less: Permitted Payments - 2,03,698.00 2,03,698.00 Less: Deposited in bank accounts 40,000.00 - 40,000.00 Closing balance as at 30 december 2016 - 5,18,399.40 5,18,399.40

28.13 With the commencement of production after the shut-down and successful USFDA inspection, comfortable order book position and approval of new ANDAs, the company has turned around the operations during the last quarter of the financial year. Further in view of the advances / support received from major Customers, the Management does not expect any constraints in cash flow which might affect Companies ability to meet its liabilities. Accordingly, despite the cumulative results of the current financial year wiping out the opening balance of Reserves, the management does not find any material uncertainly which may cast significant doubt on the companies ability to continue as a going concern. During April 2017, the Company successfully completed the USFDA Inspection of the manufacturing facility with Nil observations.

28.14 a. The Company has classified assets and liabilities as long term and short term in terms of Schedule III of the Companies Act, 2013 based on an Operating Cycle of One year.

b. In the assessment of the Management the impact on the financial statements fromongoing review/ reconciliations of balances will not be significant.

c. Figures in brackets pertain to the previous year.d. Previous year figures have been regrouped wherever necessary to be in conformity with

current year’s figures.

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29. SIGNIFICANT ACCOUNTING POLICIESa) Fixed assets are stated at acquisition cost which comprises of purchase price, import duties,

levies and any directly attributable cost of bringing the asset to its working condition forits intended use and also include an appropriate share of expenditure (including cost oftrial runs and finance charges) during construction / installation. Income (if any) from trialruns is reduced from the Project Cost. Fixed Assets required for Research & Developmentare capitalized and depreciated in the like manner as other fixed assets of the company.Intangible assets are likewise stated at acquisition cost.Machinery Spares of the nature of capital spares/insurance spares are capitalized separatelyat the time of their purchase whether procured at the time of purchase of concerned fixedasset or subsequently, and are allocated on a systematic basis over a period not exceedingthe useful life of the principal item i.e. the fixed asset to which they relate . When therelated fixed asset is either discarded or sold, the written down value less disposal value,if any of the capital spares/insurance spares is written off.

b) Depreciation on tangible assets is provided on straight-line method by amortizing thedepreciable amount of an asset over it residual useful life. From 01.04.2014 the residualuseful life is determined as per Part ‘C’ of Schedule II of the Companies Act, 2013.Intangible assets are amortized over their useful life as estimated by the management inaccordance with AS-26. Depreciation on assets whose actual cost do not exceed Rs.5000/-is depreciated at the rate of 100%.

c) Current investments are carried at lower of cost or fair value. Long-term investments arecarried at cost (except where in the opinion of the Directors, there is a decline in value, otherthan temporary, in which case appropriate provision is made for such reduction in value).

d) Inventories are valued at lower of cost and net realizable value. Stock of stores are valuedat cost. Cost is determined on Moving Weighted Average basis.

e) Expenses incurred at premises taken on lease by the company on modification / partitionsetc to meet the company’s requirements are expensed under repairs. Extensions /Additions are capitalized.

f) Transactions during the year in foreign currencies are recorded at the rate prevailing onthe transaction date. Net exchange difference arising on settlement of monetary items oron reporting the monetary items at the closing rate are recognizedas income or expense.

g) The Company follows the accrual system of accounting. Revenue from sales is recognizedon transfer of significant risks and rewards of ownership to the buyer. Revenue fromcontract manufacturing charges is recognized on completed contract method. Revenuefrom Formulation Development Contracts is recognized when the right to receive anon-refundable payment as per the payment mile stones under the individual contractis established. Excise Duty payable on finished goods is recognized when it falls due onclearance from the factory premises/ place of manufacture.

h) Sales as recorded in the books is net of excise duty and value added tax/sales tax. For thepurpose of disclosure as per AS-9, Revenue Recognition, the figures of gross sales in Note20 to the Financial Statements is derived by adding excise duty collected to the recordedsales which is then reduced to arrive at the net sales.

i) Employee Benefitsa) Employee Benefits are recognized, measured and disclosed as per Accounting Standard

-15 (Revised 2005) – “Employee Benefits”.b) The company relies on the actuarial valuation made by LIC using Projected Unit Credit

Method for measurement of obligation towards Post-Employment Benefits underDefined Benefit Plans such as Gratuity. Actuarial gains or losses are recognized in theStatement of Profit & Loss.

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c) Provision towards earned leave is made based on the actual leave accumulated as atthe balance sheet date.

d) Termination Benefits are expensed in the year of termination of employment.j) Borrowing costs directly attributable to the acquisition or construction of a qualifying assets

are capitalized as a part of the cost of the asset. A qualifying asset is one that necessarilytakes substantial period of time to get ready for its intended use. All other borrowing costsare charged to the profit and loss account of the year in which they are incurred.

k) Income tax expense comprises current tax (i.e. amount of tax for the period determinedin accordance with the Income tax law and deferred tax charge or credit (reflecting thetax effects of timing difference between accounting income and taxable income for theperiod). The deferred tax charge or credit and corresponding deferred tax liability orassets are recognized using the tax rates that have been enacted or substantively enactedby the balance sheet date. Deferred tax assets are recognized only to the extent thereis reasonable certaintythat the assets can be realized in future; however where there isunabsorbed depreciation or carried forward loss under taxation laws, deferred tax assetsare recognized only if there is a virtual certainty of realization of such assets.

l) Provision is recognized for losses arising from claims, litigations, assessments, fines,penalties, etc., when it is probable that a liability has been incurred and the amount canbe reasonably ascertained / estimated.

m) The basic earnings (loss) per share is computed by dividing the net profit or loss after taxattributable to equity shareholders for the year by the weighted average number of equityshares outstanding during the year. This is further adjusted for the effect of all dilutivepotential equity shares for calculating diluted earnings per share.

n) Disclosure of related party relationships are made when control exists or where there havebeen related party transactions. For this purpose, transactions which are carried out on thesame terms and conditions as applicable to the general public, such as acceptance of FixedDeposits and payment of interest thereon, are not considered as related party transactions.

o) Leases:Assets acquired under finance leases are capitalized at the fair value of the leased asset atthe inception of the lease and included within fixed assets. Such assets are depreciated asper the depreciation policy for such assets stated in Note 1(b) above.

p) Impairment of AssetsAs at each Balance Sheet date, the carrying amount of assets is tested for impairment soas to determine:a. the provision for impairment loss, if any, required; orb. the reversal, if any, required of impairment loss recognized in previous periods.

For and on behalf of the Board, Refer our report of even dateFor RAO & SWAMI

S.T.R. MADY S JAYAPRAKASH MADY Chartered AccountantsChairman Managing Director F R N NO. 003105 S



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