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Notes to Accounts of Suven Life Sciences Ltd.

Mar 31, 2015

Note 1: Corporate Information

Suven Life Sciences, in the business of design, manufacture and supply of Bulk Actives, Drug Intermediates & Fine Chemicals, Drug Discovery and Development Support Services (DDDSS) and Contract Research and Manufacturing Services (CRAMS) catering to the needs of global Life Science Industry, is committed to provide customers with products fulfilling customer''s needs and expectations.

1.2 Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of Re. 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2015, the amount of per share dividend recognised as distributions to equity shareholders was Rs.0.60/- (Previous Year: Rs.2.50/-).

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

Terms and Conditions of Options Granted

Each option entitles the holder thereof to apply for and be allotted one equity share of the Company of Re. 1/- each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of three years from the date of vesting in respect of Options granted under the Suven Employee Stock Option Scheme -2004

The vesting period for conversion of Options is as follows:

On completion of 24 months from the date of grant of the Options: 25% vests

On completion of 36 months from the date of grant of the Options: 35% vests

On completion of 48 months from the date of grant of the Options: 40% vests

The Options have been granted at the ''market price'' as defined from time to time under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Post-employment benefit plans a) Gratuity

Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plan.

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

b) Other Employee Benefit Plan

The liability for Leave Encashment as at the year end is Rs.311.56 lakhs (Previous year: Rs.142.66 lakhs ) and the assumptions are as same as above.

NOTE 2: CONTINGENT LIABILITIES

For the year ended For the year ended 31st March 2015 31st March 2014 in lakhs in lakhs

Income tax appeal for Assessment Year 2010-11 - 16.98

Income tax appeal for Assessment Year 2011-12 7.64 7.64

Income tax appeal for Assessment Year 2012-13 20.94 -

Letter of Credit for imports 1,207.21 382.30

NOTE 3: COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account 609.07 1,360.11

Forward foreign exchange contracts 1,133.47 -

NOTE 4:

During the year unclaimed dividend pertaining to 2006-07 amounting to Rs.1.57 lakhs has been transferred to Investor Education and Protection Fund. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as of 31st March 2015 (Previous year: Nil)

NOTE 5:

Based on information available with the Company, no creditors have been identified as Micro and Small enterprises with in the meaning of "Micro, Small and Medium enterprises development (MSMED) Act ,2006".

NOTE 6:

Excise Duty amounting to Rs.7.33 lakhs on closing stock of finished goods has been provided during the year to comply with '' Guidance Note on Accounting treatment for excise duty issued by Institute of Chartered Accountants of India.

NOTE 7: SEGMENT REPORTING

(A) Primary Segment:

Business Segment

Segments have been identified and reported taking into account the nature of products, the differing risk and returns, the organisation structure and the internal financial reporting scheme.The company has identified the following segments as its reportable segments:

(a) Manufacturing (CRAMS)

(b) Services (DDDSS)

(c) Research and Development

I. Manufacturing (CRAMS) - Bulk Drugs & Intermediates under contract services products are developed and produced on an exclusive basis under contract Manufacturing services

II. Services (DDDSS) - Which consists of Collaborative Research Projects (CRP), Clinical Trials and Testing and Analysis services

(B) Secondary Segment:

Geographical Segment

The Company has identified the following geographical reportable segments:

(a) India-The company sells Bulk Drugs and Intermedites and Fine Chemicals.

(b) USA -The company sells Intermediates

(c) Europe-The company sells Bulk Drugs and Intermedites

(d) Others -The company sells Bulk Drugs and Intermedites

NOTE 8:

Previous year figures have been regrouped and reclassified wherever considered necessary to confirm to this year''s classifications.


Mar 31, 2013

NOTE 1: CORPORATE INFORMATION

Suven Life Sciences, in the business of design, manufacture and supply of Bulk Actives, Drug Intermediates & Fine Chemicals, Drug Discovery and Development Support Services (DDDSS) and CRAMS catering to the needs of global Life Science Industry, is committed to provide customers with products fulfilling customer''s needs and expectations. During the year ended 31st March, 2012 M/s. Suven Nishtaa Pharma Pvt. Ltd. was acquired by M/s. Suven Life Sciences Ltd. Subsequent to the acquisition of M/s. Suven Nishtaa Pharma Pvt. Ltd. were amalgamated with M/s. Suven Life Sciences Ltd., in accordance with the scheme of amalgamation approved by the High court is effective from 1st Jan, 2012. The amalgamation was effected in the accounts for the year ended 31st March, 2012.

2.1 Contingent Liabilities

(Rs. in lakhs)

Particulars For the year ended For the year ended 31st March 2013 31st March 2012

Un expired Letters of Credit 550.58 358.71

Income tax appeal for Asst.year 2010-11 86.98 0.00

2.2 Capital commitments not provided for on account of capital works net of advance Rs. 278.39 lakhs (Previous year Rs. 225.19 lakhs)

2.3 During the year Unclaimed Dividend pertaining to 2004-05 amounting to Rs. 1.40 Lakhs has been transferred to Investor Education and Protection Fund. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as of 31st March 2013 (Previous year Nil)

2.4 Based on information available with the company, no creditors have been identified as Micro and Small enterprises with in the meaning of "Micro, Small and Medium enterprises development (MSMED) Act, 2006".

2.5 National Savings Certificates to the extent of Rs. 3,000/- have been pledged with Government Authorities.

2.6 Employee Stock Option Scheme

The Company instituted the Employees Stock Option 2004 plan for all eligible employees. The Scheme covers all eligible employees of Suven Life Sciences Limited and its subsidiary.

2.7 Excise Duty amounting to Rs. 26.18 lakhs on Closing Stock of finished goods has been provided during the year to comply with ''Guidance Note on Accounting treatment for Excise duty'' issued by Institute of Chartered Accountants of India.

2.8 Hedging and Derivatives

Company has entered into Forward Exchange contract, being derivative instruments for hedging purpose and not intended for trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables. The following are the outstanding Forward Exchange Contracts as on 31st March 2013, entered into by the Company;

NOTE 3: SEGMENT REPORTING

A) PRIMARY SEGMENT :

Business Segment

Segments have been identified and reported taking into account the nature of products, the differing risk and returns,the organisation structure,and the internal financial reporting scheme.The company has identified the following segments as its reportable segments:

a) Manufacturing (CRAMS)

b) Services (DDDSS)

c) Research and Development

I. Manufacturing (CRAMS) - Bulk Drugs & Intermediates under contract services products are developed and produced on an exclusive basis under contract Manufacturing services

II. Services (DDDSS) - Which consists of Clinical Trials and Testing and Analysis services

B) SECONDARY SEGMENT : Geographical Segment

The Company has identified the following geographical reportable segments:

a) India-The company sells Bulk Drugs and Intermedites and Fine Chemicals.

b) U.S.A -The company sells Intermediates

c) Europe-The company sells Bulk Drugs and Intermedites

d) Others -The company sells Bulk Drugs and Intermedites

NOTE 10: RELATED PARTY DISCLOSURES

List of and relationship with related parties with whom transactions have taken place during the year : Key Managerial Personnel : Mr. Venkateswarlu Jasti (Chairman & CEO)

Mrs. Sudha Rani Jasti (Whole-time Director)

Relative of key managerial persons : Ms. Kalyani Jasti (Daughter of Mr.Venkateswarlu Jasti)

NOTE 11 :

M/s. Suven Nishtaa Pharma Pvt. Ltd., wholly owned subsidiary was merged with the company on 01.01.2012 . Accordingly previous year figures includes combined operations for three months and hence previous year figures are not comparable.

NOTE 12 :

Previous year figures have been regrouped and reclassified wherever considered necessary to conform to this year''s classifications.


Mar 31, 2012

1.1 Shares allotted as fully paid up by way of Bonus Shares for the Period of five years immediately preceding 31st March,2012;

The Company allotted 5,76,33,250 Equity Shares as fully paid-up Bonus Shares by utilization of Securities Premium in April 2007 except this no shares have been allotted by way of bonus during the preceding period of the five years.

1.2 Rights, preferences and restrictions attached to the Ordinary Shares

The Shares of the Company, having par value of Rs.1.00 per share, rank pari passu in all respects including voting rights and entitlement to dividend.

Terms and Conditions of Options Granted

Each Option entitles the holder thereof to apply for and be allotted one Equity Shares of the Company of Rs.1.00 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of three years from the date of vesting in respect of Options granted under the Suven Employee Stock Option Scheme -2004

The vesting period for conversion of Options is as follows:

On completion of 24 months from the date of grant of the Options: 25% vests On completion of 36 months from the date of grant of the Options: 35% vests On completion of 48 months from the date of grant of the Options: 40% vests

The Options have been granted at the 'market price' as defined from time to time under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Capital Work in progress for the year 2011-12 Rs.2735.65 lakhs (Previous year Rs.335.62 lakhs)

Depreciation on R & D Equipment of Rs.254.74 lakhs has been added to R & D Expenses (Previous Year Rs.246.02 lakhs) Amalgamated Assets pertains to M/s. Suven Nishtaa Pharma Pvt. Ltd.

* depredation for the year includes depreciation on account of amalgamation for a period of 3 months.

In accordance with Accounting Standard 15 "Employees Benefits", the Company has classified various benefits provided to employees as under:

b) Other Employee Benefit Plan

The liability for Leave Encashment as at the year end is Rs.186.70 Lakhs (previous year Rs.142.06 Lakhs) and the assumptions are as same as above.

2.1 Contingent Liabilities

(Rs. in lakhs)

Particulars Year Ended Year Ended 2011-12 2010-11

Corporate Guarantee given on behalf of Suven Nishtaa Pharma Private Limited Nil 2375.00

Un expired Letters of Credit 358.71 478.31

Disputed Service Tax demands against which company is in appeal Nil 38.25

Disputed VAT demands against which company is in appeal Nil 7.53

2.2 Capital commitments not provided for on account of pending execution [net of advance Rs.225.19 Lakhs (Previous year Rs.2.80 Lakhs)]

2.3 During the year Unclaimed Dividend pertaining to 2003-04 amounting to Rs.0.91 Lakhs has been transferred to Investor Education and Protection Fund. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as of 31st March 2012 (Previous year Nil).

2.4 There are no delays in payments to Micro and Small enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006. The information regarding Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

The Company has paid a minimum remuneration of Rs.4.00 Lakhs per month to Mr. Venkateswarlu Jasti, Chairman & CEO of the Company and Rs.3.05 Lakhs per month to Mrs. Sudha Rani Jasti, Whole-time Director of the Company for the financial year ending 31st March 2012.

The above remuneration excludes provision for gratuity, since the liability is determined for all the employees on an independent actuarial valuation basis. The specific amount of gratuity Directors cannot be ascertained separately.

2.5 National Savings Certificates to the extent of Rs.3,000/- have been pledged with Government Authorities.

2.6 Employee Stock Option Scheme

The Company instituted the Employees Stock Option 2004 plan for all eligible employees. The Scheme covers all eligible employees of Suven Life Sciences Limited and its subsidiary.

2.7 Excise Duty amounting to Rs.18.38 Lakhs on Closing Stock of finished Goods has been provided during the year to comply with ' Guidance Note on Accounting treatment for Excise duty' issued by Institute of Chartered Accountants of India.

2.8 Hedging and Derivatives

Company has entered into Forward Exchange contract, being derivative instruments for hedging purpose and not intended for trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables. The following are the outstanding Forward Exchange Contracts as on 31st March 2012, entered into by the company;

A) Primary Segment:

Business Segment

Segments have been identified and reported taking into account the nature of products, the differing risk and returns, the organization structure, and the internal financial reporting scheme. The company has identified the following segments as its reportable segments:

a) Manufacturing (CRAMS)

b) Services (DDDSS)

c) Research and Development

I. Manufacturing (CRAMS) - Bulk Drugs & Intermediates under contract services products are developed and produced on an exclusive basis under contract manufacturing services

II. Services (DDDSS) - Which consists of Collaborative Research Projects (CRP), Clinical Trials and Testing and Analysis services

B) Secondary Segment:

Geographical Segment

The Company has identified the following geographical reportable segments:

a) India-The Company sells Bulk Drugs and Intermediates and Fine Chemicals.

b) U.S.A -The Company sells Intermediates

c) Europe--The Company sells Bulk Drugs and Intermediates

d) Others-The Company sells Bulk Drugs and Intermediates

* Capital expenditure related to Amalgamation of Suven Nishtaa Pharma Pvt. ltd

A) Related Parties

1. Subsidiary : Suven Nishtaa Pharma Pvt. Ltd

2. Key Managerial Personnel : Mr. Venkateswarlu Jasti

Mrs. Sudha Rani Jasti

Note: Figures in bracket indicates previous year figures

NOTE 3: AMALGAMATION OF M/S. SUVEN NISHTAA PHARMA PVT. LTD.

In terms of the Scheme of Amalgamation & Arrangement (Scheme) approved by orders dated 10.07.2012 of Hon'ble High Court of Andhra Pradesh, M/s. Suven Nishtaa Pharma Private Limited (Nishtaa) a wholly owned subsidiary whose core business is to carry on the business of Pharmaceutical Formulations contract services has been amalgamated with the Company with effect from 1st January, 2012.

The amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed by Accounting Standard (AS-14) "Accounting for Amalgamation" issued by the Institute of Chartered Accountants of India.

In accordance with the said scheme all the assets, debts, liabilities, duties and obligations of "Nishtaa" have been vested in the Company with effect from 1st January, 2012 and have been recorded at their respective book values under pooling of Interest method of accounting for amalgamation. There were no differences in the accounting policies of "Nishtaa" and the Company.

NOTE 4:

On account of the Amalgamation of M/s. Suven Nishtaa Pharma Private Limited with the company w.e.f 01.01.2012, previous year figures are not comparable with the current year figures.

NOTE 5:

Previous year figures have been regrouped and reclassified wherever considered necessary to conform to this year's classification.


Mar 31, 2011

1. Contingent Liabilities

Rs. in Lakhs

Particulars Year ended Year ended

2010-11 2009-10

Guarantees given by Banks 53.18 87.66

Corporate Guarantee given on behalf of Suven Nishtaa Pharma Private Limited 2375.00 2375.00

Un expired Letters of Credit 478.31 481.17

Disputed Service Tax demands against which company is in appeal 38.25 Nil

Disputed VAT demands against which company is in appeal 7.53 Nil

2. Capital commitments not provided for on account of pending execution [net of advance Rs. 2.80 Lakhs (Previous year Rs. 3.53 Lakhs)]

3. During the year Unclaimed Dividend pertaining to 2002-03 amounting to Rs. 1.04 Lakhs has been transferred to Investor Education and Protection Fund. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as of 31st March 2011 (Previous year Nil).

4. There are no delays in payments to Micro and Small enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006. The information regarding Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

The Company has paid a minimum remuneration of Rs.4.00 Lakhs per month to Mr. Venkateswarlu Jasti, Chairman & CEO of the Company and Rs.3.05 Lakhs per month to Mrs. Sudha Rani Jasti, Wholetime Director of the Company for the financial year ending 31st March 2011.

The Company is seeking approval of the members by way of special resolution(s) in the Annual General Meeting for payment of remuneration as stipulated under the provisions of Section II of Part II of the Schedule XIII to the Companies Act, 1956.

The above remuneration excludes provision for gratuity, since the liability is determined for all the employees on an independent actuarial valuation basis. The specific amount of gratuity Directors cannot be ascertained separately.

5. Material consumption includes material destroyed in fire accident in the godown of unit - II.

6. National Savings Certificates to the extent of Rs. 3,000/- have been pledged with Government Authorities.

7. Employee Stock Option Scheme

The Company instituted the Employees Stock Option 2004 plan for all eligible employees. The Scheme covers all eligible employees of Suven Life Sciences Limited and its subsidiary.

8. Excise Duty amounting to Rs. 10.86 Lakhs on Closing Stock of finished Goods has been provided during the year to comply with' Guidance Note on Accounting treatment for Excise duty' issued by Institute of Chartered Accountants of India.

9. Hedging and Derivatives

Company has entered into Forward Exchange contract, being derivative instruments for hedging purpose and not intended for trading or speculation purposes , to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables . The following are the outstanding Forward Exchange Contracts as on 31st March 2011, entered into by the company;

10. Employee Benefits

In accordance with Accounting Standard 15 "Employees Benefits", the Company has classified various benefits provided to employees as under:

b. Other Employee Benefit Plan

The liability for Leave Encashment as at the year end is Rs. 142.06 Lakhs (previous year Rs. 99.08 Lakhs) and the assumptions are as same as above.

11. Segment Reporting (2010-11)

Business Segment

Segments have been identified and reported taking into account the nature of products, the differing risk and returns, the organisation structure, and the internal financial reporting scheme

The company has identified the following segments as its reportable segments:

a) Manufacturing (CRAMS)

b) Services (DDDSS)

c) Research and Development

I. Manufacturing (CRAMS) - Intermediates under contract services products are developed and produced on an exclusive basis under contract manufacturing services

II. Services (DDDSS) - Which consists of Collaborative Research Projects (CRP)? Clinical Trials and Testing and Analysis services

Geographical Segment

The Company has identified the following geographical reportable segments:

a) India-The Company sells Bulk Drugs and Intermediates and Fine Chemicals.

b) U.S.A -The Company sells Intermediates

c) Europe--The Company sells Bulk Drugs and Intermediates

d) Asia-The Company sells Bulk Drugs and Intermediates

12. Related Party Disclosures

List of and relationship with related parties with whom transactions have taken place during the year:

Key Managerial Persons : Mr. Venkateswarlu Jasti

Mrs. Sudha Rani Jasti

Enterprises in which the company has

substantial interest : M/s. Suven Nishtaa Pharma Pvt Ltd

13. Previous year figures have been regrouped and reclassified wherever considered necessary to conform to this year's classification. Signatures of Schedules A to U


Mar 31, 2010

1. Contingent Liabilities

Rupees in Lakhs

Particulars Year ended Year ended 2009-10 2008-09

Guarantees given by Banks 87.66 91.61

Corporate Guarantee given on behalf of Suven Nishtaa Pharma Private Limited 2375.00 2375.00

Un expired Letters of Credit 481.17 329.96

2. Capital commitments not provided for on account of pending execution (net of advance) Rs. 3.53 Lakhs (Previous year Rs.14.31 Lakhs)

3. During the year Unclaimed Dividend pertaining to 2001-02 amounting to Rs. 0.84 Lakhs has been transferred to Investor Education and Protection Fund. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as of 31st March 2010 (Previous year Nil).

4. There are no delays in payments to Micro and Small enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006. The information regarding Micro and Small enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

5. Events Occurring After Balance Sheet Date

There has been fire accident in the Unit-II of the Company on 5th April2010 and the stock of worth Rs.95 Lacs was lying in the godown was destroyed. However , the said stock was fully insured and the company has made claim for the same.

6. National Savings Certificates to the extent of Rs. 3,000/- have been pledged with Government Authorities.

7. Employee Stock Option Scheme

The Company instituted the Employees Stock Option 2004 plan for all eligible employees. The Scheme covers all eligible employees of Suven Life Sciences Limited and its subsidiary.

8. Excise Duty amounting to Rs. 20.19 Lakhs on Closing Stock of finished Goods has been provided during the year to comply with Guidance Note on Accounting treatment for Excise duty issued by Institute of Chartered Accountants of India.

9. Employee Benefits

In accordance with Accounting Standard 15 "Employees Benefits", the Company has classified various benefits provided to employees as under:

10. Segment Reporting (2009-10)

Business Segment

Segments have been identified and reported taking into account the nature of products, the differing risk and returns, the organisation structure, and the internal financial reporting scheme

The company has identified the following segments as its reportable segments:

a) Manufacturing (CRAMS)

b) Services (DDDSS)

c) Research and Development

I. Manufacturing (CRAMS) - Intermediates under contract services products are developed and produced on an exclusive basis under contract Manufacturing services

II. Services (DDDSS) - Which consists of Collaborative Research Projects (CRP), Clinical Trials and Testing and Analysis services

Geographical Segment

The Company has identified the following geographical reportable segments:

a) India-The company sells Bulk Drugs and Intermedites and Fine Chemicals.

b) U.S.A -The company sells Intermediates

c) Europe--The company sells Bulk Drugs and Intermedites

11. Previous year figures have been regrouped wherever considered necessary to conform to this years classification.

 
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