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Notes to Accounts of Avon Lifesciences Ltd.

Mar 31, 2015

1. The disclosure as per Accounting Standard (AS) 22 "Taxes on Income" as notified by Companies (Accounting Standard) Rules,2006 are as under.

2. The company has entered into the settlement agreement on April' 2015 with the workers employed in Sadashivpet Plant and the company has agreed to pay Rs. 282 lacs in full & final settlement of workers and the company will pay the amount in due course.

3. Exceptional Items and Changes in Accounting Policies Rs 253.76 Lakhs is towards reversal of certain employee related accruals made in earlier period.

4. Other Notes

(a) Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

(b) In the opinion of the Board of Directors, other current assets have a value on realization in the ordinary course of the Company's business, which is at least to the amount at which they are stated in the balance sheet.


Mar 31, 2014

1 Contingent Liabilities not provided for:

(Amount in Rs.)

Particulars 2013-14 2012-13

a. Estimated Amount of Unexecuted - 9,426,315 Capital Contracts

b. Bank Guarantees 3,500,000 4,800,000

c. Others 2,938,000 2,938,000

11 other Notes

(a) Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

(b) In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the Company''s business, which is at least to the amount at which they are stated in the balance sheet.

(c) The Ministry of Corporate Affairs, Government of India, Vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the companies Act 1956, subject to fulfilment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.


Mar 31, 2013

1 Basis of Preparation of Financial Statements:

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) The Company follows mercantile system of accounting and recognizes all significant items of income and expenditure on accrual basis.

c) All income & expenditure having material bearing on the financial statements are recognised on an accrual basis.

d) Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assumptions and estimates which it believes are reasonable under the circumstances that affect the reported amounts of assets, liabilities and contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognised in the year in which the results are known / materialized.

2. Contingent Liabilities not provided for:

(Amount in Rs.) Particulars 2012-13 2011-12

a. Estimated Amount of Unexecuted Capital Contracts 9,426,315 22,238,000

b. Letters of Credit 2,137,135

c. Bank Guarantees 4,800,000 3,360,000

d. Others 2,938,000 2,938,000

3. In view of brought forwared losses provision for Income Tax as per MAT provision u/s 115JB is made.

4. The Company is engaged solely in the business of''Pharmaceuticals''. The entire operations are governed by the same set of risks and returns and hence the same has been considered as representing a single segment. This treatment is in accordance with the guiding principles enunciated in the Accounting Standard 17 on ''Segment Reporting'' as notified underthe CompaniesAct, 1956. However the geographical break up of sales is as under

5. Other Notes

(a) Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/disclosure.

(b) In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the Company''s business, which is at least to the amount at which they are stated in the balance sheet.

(c) The Ministry of Corporate Affairs, Government of India, Vide General Circular No. 2 and 3 dated 8"1 February 2011 and 21s'' February 2011 respectively has granted a general exemption from compliance with section 212 of the companies Act 1956, subject to fulfilment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.


Mar 31, 2012

I. Basis of Preparation of Financial Statements:

a) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) The Company follows mercantile system of accounting and recognizes all significant items of income and expenditure on accrual basis.

c) All income & expenditure having material bearing on the financial statements are recognised on an accrual basis.

d) Use of Estimates: The preparation of financial statements in confirmity with generally accepted accounting principles requires management to make assumptions and estimates which it believes are reasonable under the circumstances that affect the reported amounts of assets, liabilities and contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognised in the year in which the results are known/materialized.

1. Contingent Liabilities not provided for : (Amount in Rs.)

Particulars 2011-12 2010-11

a. Estimated Amount of Unexecuted Capital Contracts 22,238,000 -

b. Letters of Credit 2,137,135 11,896,000

c. Bank Guarantees 3,360,000 3,000,000

d. Others 2,938,000 2,938,000

2. In view of brought forward losses provision for Income Tax as per MAT provision u/s 115JB is made.

3. Pursuant to AS-18 the names, relationships and particulars of transactions with related parties during the year are as under:

A) List of Related parties

Sl Particulars Relationship No.

1 Mr. Ajit Kamath Key Management Person

2 Mr. Manoj Jain Key Management Person

3 Mr. VS Soma Key Management Person

4 Arch Pharmalabs Ltd Holding Company

5 Regal Pharma Pte. Ltd Subsidiary Company

4. Other Notes

(a) The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

(b) In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the Company's business, which is at least to the amount at which they are stated in the balance sheet.

(c) During the year, the company has migrated to new ERP system i.e SAP, for which the Company has changed the method of valuation of inventory from FIFO to weighted average. Had such change not been made the value of the inventory as at the year end and the profit for the year would be lower by Rs. 13.88 Lakhs

(d) The Ministry of Corporate Affairs, Government of India, Vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 212 of the companies Act 1956, subject to fulfilment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.


Mar 31, 2011

1 Secured Loans:

a. Term Loans

The term loans from banks of Rs. 6740.23 lakhs (previous year Rs. 5905.06 lakhs) are secured by way of first pari passu charge on fixed assets, second pari pasu charge on current assets, personal gurantee of promoter director and also by way of corporate guarantee.

b. Working Capital

The working capital loans from the banks of Rs. 4783.58 lakhs (previous year Rs. 4715.42 lakhs) are secured by first pari pasu charge on the current assets, second pari pasu charge on fixed assets and personal gurantee of promotor directors of the company.

c. Vehicle Loans

The Vehicle loans of Rs. 1.83 lakhs (previous year Rs. 8.67 lakhs) availed under hire purchase are secured by way of hypothecation of vehicles and also personal guarantee of some of the erstwhile Directors of the Company.

2. Contingent Liabilities not provided for: (Rs. in Lakhs)

Particulars 2010-11 2009-10

a. Estimated Amount of Unexecuted Capital Contracts 00.0 502.40

b. Letters of Credit 118.96 24.15

c. Bank Guarantees 30.00 51.00

d. Others 29.38 29.38

3. The Company has been availing interest free Sales Tax deferement loan from States Government Authorities and the balance outstanding as on 31st March, 2011 was Rs. 1,610.41 lakhs (Previous year Rs. 1,634.26 lakhs)

4. In view of brought forwared losses provision for Income Tax as per MAT provision u/s 115JB is made.

5. The Company is engaged solely in the business of Pharmaceuticals. The entire operations are governed by the same set of risks and returns and hence the same has been considered as representing a single segment. This treatment is in accordance with the guiding principles enunciated in the Accounting Standard 17 on Segment Reporting as notified under the Companies Act, 1956. However the geographical break up of sales is as under:

i) Domestic Rs. 6,724.37 lakhs

ii) Direct Exports Rs. 4,223.65 lakhs

iii) Deemed Exports Rs. 5,264.05 lakhs

6. In the absence of necessary information with the company relating to information to the registration status of suppliers under the Micro, Small and Medium Enterprises Development Act, 2006, the information required under the said Act could not be complied and disclosed. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises.

7. Pursuant to Accounting Standard - 18 - "Related Party Transactions" issued by the Institute of Chartered Accountants of India, the names, relationships and particulars of transactions with related parties during the year are as under:

A) List of Related parties

Particulars Relationship

1 Mr. Ajit Kamath Key Management Person

2 Mr. Manoj Jain Key Management Person

3 Mr. V S Soma Key Management Person

4 Arch Pharmalabs Ltd Holding Company

5 Regal Pharma Pte. Ltd. Subsidiary Company

8. Previous years figures have been regrouped and re-classified, wherever necessary.

9. The schedules referred to the above form part of the accounts.

10. Paise has been rounded off to the nearest rupee.


Mar 31, 2010

1 Secured Loans

a. Term Loans

The term loans from banks of Rs. 5905.06 lakhs (previous year Rs. 4044.16 lakhs) are secured by way of first pari passu charge on fixed assets, second pari pasu charge on current assets, personal guarantee of promoter director and also by way of corporate guarantee.

b. Working Capital

The working capital loans from the banks Rs. 4715.42 lakhs (previous year Rs. 3946.97 lakhs) are secured by first pari pasu charge on the current assets, second pari pasu charge on fixed assets and personal guarantee of promoter directors of the company.

c. Vehicle Loans

The Vehicle loans of Rs. 8.67 lakhs (previous year Rs. 14.97 lakhs) availed under hire purchase are secured by way of hypothecation of vehicles and also personal guarantee of some of the erstwhile Directors of the Company.

2. Contingent Liabilities not provided for: (Rs. in Lakhs)

Particulars 2009-10 2008-09

a. Estimated Amount of Unexecuted Capital Contracts 502.40 135.36

b. Letters of Credit 24.15 142.74

c. Bank Guarantees 51.00 51.00

d. Others 29.38 29.38

9. The Company has been availing interest free Sales Tax deferement loan from States Government Authorities and the balance outstanding as on 31st March, 2010 was Rs. 1,634.26 lakhs (Previous year Rs. 1,549.82 lakhs), out of which Rs. 31.74 lakhs (Previous year Rs. NIL) is due within one year.

10. No Provision is made for Income Tax on account of unabsorbed losses.

11. The company has one segment of activity namely "Pharmaceuticals".

The Company is engaged solely in the business of Pharmaceuticals. The entire operations are governed by the same set of risks and returns and hence the same has been considered as representing a single segment.

12. Some of Sundry Creditors, Sundry Debtors and Advances as on 31sl March, 2010 are subject to confirmation.

13. In the absence of necessary information with the company relating to information to the registration status of suppliers under the Micro, Small and Medium Enterprises Development Act, 2006, the information required under the said Act could not be complied and disclosed. The company has not received information from vendors regarding theirstatus underthe Micro, Small and Medium Enterprises.

15. Previous years figures have been regrouped and re-classified, wherever necessary.

16. The schedules referred to the above form part of the accounts.

17. Paise has been rounded off to the nearest rupee.

 
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