Wintac Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting their 29th Annual Report on the business and operations of the Company for the Financial Year ended March 31, 2019.

1. Financial summary and Performance of the Company

For the year ended 31st March 2018 For the year Ended 31st March 2019
Revenue from Operations 4479.70 7192.01
Other Income 71.88 194.95
Total Revenue 4551.58 7386.96
Total Expenditure 5077.00 6854.46
Operating Profit/(Loss) (525.42) 532.50
Interest 89.92 93.38
Profit/(Loss) before Depreciation (615.34) 439.12
Depreciation 354.64 418.13
Loss before exceptional expenditure (969.98) 20.99
Exceptional Expenditure - -
Profit/(Loss) before Tax (969.98) 20.99
Deferred tax 9.24) 10.08
Net Profit/(Loss) after Tax (979.22) 10.91
Other comprehensive Income (10.32) (26.87)
Total comprehensive income for the period (989.54) (15.96)

2. Dividend & Transfer to Reserves

In view of the inadequate profits and carry forward losses, no dividend is considered during the year under review and no amount is transferred to reserves.

3. Brief description of the Companys working during the year

The net sales during the year under review was 7192.01 lakhs as compared to 4479.70 lakhs during the previous year, a growth of 60.55%. The net profit after tax during the current year was 10.91 lakhs as against the loss of 979.22 lakhs during the previous year, a turnaround in the operations during the year. The total comprehensive income for the year was a loss of 15.96 lakhs as compared to a loss of 989.54 lakhs during the previous year. The improved operating results are due to increase in the export supplies to 5931 lakhs as compared to 2759 lakhs during the previous year.

In order to cater to the export US Market on approval of more ANDAs, the Company is setting up additional capacities for injectable and ophthalmic products during the current financial year at a cost of 95 crores.

Update on proposal for Sale of Business Undertaking - During the year the Shareholders had approved the proposal for sale of pharmaceutical Business Undertaking of the company to Par Formulations Private Limited subject to successful completion of delisting process by the Promoters. Since the delisting process was not completed within the stipulated time period, Par Formulations cancelled the Agreement for purchase of Pharmaceutical Business undertaking. The Company continues the current business activities as usual in the normal course and the current promoters have re-affirmed their support and association with the Company for a longer period of time.

4. Material changes and commitments affecting the financial position between the end of the financial year and date of report.

The Delisting proposal from Promoters - The Department of Pharmaceuticals (DOP) did not acceded to the promoters proposal for increasing their shareholding in Wintac Limited to 100% which is a pre-requisite for carrying out the delisting proposal citing non-filing of the Annual Compliance Report as required under the previous approval letter. The Promoters have since complied with the same and have also filed a fresh application seeking approval for enhancement of their shareholding in Wintac Limited to 100%. The promoters have reaffirmed that on receipt of the DOP approval, they would pursue the delisting proposal in compliance with the SEBI (Delisting of Equity Shares) Regulations, 2019

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

6. There are no material orders by any Regulators, or Courts or Tribunals during the year impacting the going concern status and companys operations in future..

7. The Company has no subsidiaries. The Companys investment in an Associate Company (Medispec Pharmaceuticals Pvt. Ltd.), whose net worth was completely eroded, has been written off fully and thus ceases to be an Associate Company.

8. 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 Companys 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.

9. 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 or payment of interest thereon during the year and if so number of such cases and the total amount involved- N.A.
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.

10. The Company maintains the cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013.

11. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

12. 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.

13. Directors:

A. Changes in Directors and Key Managerial Personnel

Mr.S.Jayaprakash Mady, Director (DIN 00240744) retires by rotation and being eligible offers himself for re-appointment.

Mr.S.T.Raghavendra Mady, Director (DIN 00065918) is the Non-Executive Director and Chairman of the Company and in terms of provision of Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a resolution for approval of the members of the Company is proposed to continue to hold his office as such until the end of his current tenure at the Annual General Meeting to be held during the calendar year 2020 notwithstanding he having attained/above the age of 75 years.

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 Companys 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, 2019, the Board consists of 5 Members and all are nonexecutive Directors and three are independent directors. The Company has formulated a Remuneration Policy of Directors, Key Managerial Personnel and others pursuant to the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with Part D of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 NonExecutive Directors.

14. The Board met six 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.

15. 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:

i. Mr.R.A.Thirumoorti - Chairman (Independent and non-executive Director)
ii. Dr.K.Paranjothy - Member (Independent and non-executive Director)
iii. Ms.K.M.Ganga - Member (Independent and non-executive Director)
iv. Mr.S.T.R.Mady - Member (Non-Independent and non-executive Director)

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 Companys code of conduct. The Whistle Blower Policy & Vigil Mechanism is disclosed on the Companys website.

16. Nomination and Remuneration Committee and Stakeholders Relationship Committee

The Board has constituted a Nomination and Remuneration Committee. This Committee consists of three non-executive Directors and two 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 (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 remuneration policy of the Company is placed on the website of the Company www.wintaclimited.com.

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.

17. 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.

18. Managerial Remuneration:

A. Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

i. Ratio of the remuneration of Director to the median remuneration of employees of the Company for the financial year

-

N.A
ii. Percentage of increase in the remuneration of:
a. Manager/C.O.O. - 10.08%
b. Company Secretary - 11.46%
c. Chief Financial Officer - 12.99%
d. Median Employee - 20.63 %
e. No. of employees on the rolls - 351
f. Average increase made in salaries of employees other than KMP - 17.46%

The remuneration is as per the remuneration policy of the Company.

B. 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.

C. Corporate Governance - Pursuant to Regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 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.

19. 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 arms length transactions under third proviso thereto in the prescribed form AOC-2 is appended to the Boards report.

20. Statutory Auditors - M/s.Ramadhyani & Co LLP, Chartered Accountants (Firm Registration No.002878S/S200021) were appointed as the Statutory Auditors of the Company for a term of 5 years from the conclusion of 27th Annual General Meeting by the shareholders of the Company during the AGM held on 10.08.2017.

21. Secretarial Auditor - Parameshwar G Hegde, Practicing Company Secretary has been appointed to conduct the secretarial audit of the Company for the financial year 2018-19 as required under Section 204 of the Companies Act, 2013. The Secretarial Audit Report for FY 2018-19 is annexed to the Boards Report and forms part of the Annual Report.

22. 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 Boards Report.

23. 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.

• Express feeder project

• New HVAC installed at new SVP service area with BMS automation

• New Nitrogen plant with optimal power consumption

• Energy efficient motor for compressor

• Energy efficient motor for VAM and Cooling tower

• Energy efficient motors for Air Handling Units.

• All production area Florescent light fixture replaced with LED fixture

• Secondary packing area Sodium lamp replaced with High bay LED fixture

• Hot water system replaced for Heaters used in HVAC system to control Humidity

• Electrical DX units replaced with Chilled water coil system

(ii) The steps taken by the company for utilising alternate sources of energy;

• Installation of Briquette fired Boilers which is environmental friendly and uses briquette (agricultural by-product) as fuel instead of Diesel or Furnace Oil..

• Installation of new 1010 KVA DG

(iii) The capital investment on energy conservation equipment: 261.50 lakhs. .

(B) Technology absorption:

(i) Efforts made towards technology absorption;

• Formulation development activities for Export market i.e., USA is carried out. ANDA for 8 products developed in house were filed for USA market during last year by our customer.

• ANDA for 5 products developed in house will be filed shortly for USA market.

• 4 products developed in house are ready for execution of exhibit batches for USA market.

• 11 products got USFDA approval and out of that 6 products have been 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 taken place, and the reasons thereof; and : N.A.
(iv) the expenditure incurred on R & D : 868.00 Lakhs

(C) Foreign exchange earnings and Outgo:

Foreign Exchange Earnings : 6662.60 Lakhs
Foreign Exchange Outflows : 3981.19 Lakhs

24. 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—

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 laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and;

e. 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.

25. Acknowledgements

The Board places on record its appreciation of the continued cooperation and support received from the various government authorities, shareholders, business associates, employees, depositors and bankers.

For and on behalf of the Board of Directors
Date : 22.05.2019 (S.T.R.MADY)
Place : Bengaluru. Chairman