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Notes to Accounts of Suven Life Sciences Ltd.

Mar 31, 2017

NOTE 1: FINANCIAL RISK MANAGEMENT

The company''s activities expose it to market risk, liquidity risk and credit risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity loss exposed to and how the entity manages the risk and the impact of them in the financial statements

The company''s risk management is carried out by the management. Company treasury identifies, evaluates and hedges financial risk in close cooperation with the company''s operating units. The management provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of derivative financial instruments and non derivative financial instruments and investment of excess liquidity.

(A) Credit Risk Management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

i) Financial instruments and cash deposits

For banks and financial institutions, only high rated banks/ institutions are accepted. Other Financial assets (excluding Bank deposits) majorly constitute deposits given to State electricity departments for supply of power, which the company considers to have negligible credit exposure. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

ii) Expected credit loss for trade receivables under simplified approach

For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables

(B) Liquidity Risk:

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to dynamic nature of the underlying business, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the company''s liquidity position(comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the company in accordance with practice and limits set by the company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market risk - foreign exchange risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, GBP and EUR. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign forecast transactions.

The company''s risk management policy is to hedge part of forecasted foreign currency sales for the subsequent months. As per the risk management policy, foreign exchange forward contracts are taken to hedge part of the forecasted sales by taking consultancy from external treasury management forms . The imports were hedged naturally by payment through EEFC account.

NOTE 2: CAPITAL MANAGEMENT (a) Risk management

The Company''s objective when managing capital are to:

1. Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

2. Maintain and optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts

Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio: -Net debt (total borrowings net of cash and cash equivalents) divided by total equity (as shown in the balance sheet)

Loan covenants:

During the tenor of the facility with the bank , the following financial covenant should be complied with:

Current Ratio Minimum of 1.33 times

TOL/TNW Maximum of 1.75 times

Interest Coverage Ratio Minimum of 2.00 times

Debt Service Coverage Ratio Minimum of 1.50 times

Borrower to maintain the above financial indicators at the stipulated levels during the currency of the facility. In case of non-compliance of any covenant or other terms and conditions of sanction, penal interest @ 2% per annum above the applicable rate on the utilized facilities shall be charged. Such Interest shall be charged for the period of default/ noncompliance on the amount outstanding under the facility. Such interest shall also be payable/ compounded on monthly basis

NOTE 3: UTILIZATION OF FUND RAISED THROUGH QIP

During the year ended 31st March 2015 the company has raised ''20,000 lacs primarily for clinical development expenses, capital expenditure and general corporate purposes and any other purposes as may be permissible under applicable law.

NOTE 4: SEGMENT INFORMATION

(a) Description of segments and principal activities

The Chief Executive Officer has been identified as being the chief operating decision maker (CODM). The CODM examines the Company''s performance both from a product and a geographic perspective and has identified two reportable segments:

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

Geographical Segment

The Company has identified the following geographical reportable segments:

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

(b) USA -The company sells Intermediates

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

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

The Company''s subsidiaries as at March 31, 2017 are set out below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the Company

NOTE 34: RELATED PARTY TRANSACTIONS

(a) Holding Company : M/s. Jasti Property and Equity Holdings Private Limited

(In its capacity as sole trustee of the Jasti Family Trust)

(b) Subsidairies: : M/s. Suven Inc.

(c) Key Management personnel(KMP) : Mr. Venkateswarlu Jasti (Chairman & CEO)

Mrs. Sudharani Jasti (Whole-time Director)

Mr. P Subba Rao (Chief Financial Officer)

Mr. K. Hanumatha Rao (Company Secretary)

(d) Relative of Key Management personnel : Ms. Kalyani Jasti (Daughter of Mr. Venkateswarlu Jasti)

Ms. Sirisha Jasti (Daughter of Mr. Venkateswarlu Jasti)

(e) Jointly controlled entity : Suven Trust

Based on the information available with the Company, there are no suppliers who are registered as micro and small enterprises under "The Micro, Small and Medium Enterprises Development Act, 2006" to whom the Company has paid interest or any interest payable on balances outstanding as at March 31, 2017 and March 31, 2016.

NOTE 5: SHARE BASED PAYMENTS (a) Employee option plan

Suven Employee Stock Option Scheme -2004 was approved by shareholders at the 2004 annual general meeting. Each option entitles the holder thereof to apply for and be allotted one equity share of the Company of ''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.

Fair value of options granted

The fair value at grant date of options granted during the year ended March 31, 2017 was '' NIL per option (31 March 2016-'' NIL). The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

NOTE 6: FIRST-TIME ADOPTION OF IND AS Transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 01, 2015 (company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation on how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A.1. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS. A.1.1 Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.1.2 Investment of Subsidiaries Investment in subsidiaries are carried at Cost.

A.2 Mandatory exceptions A.2.1 Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with the estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 01, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP: -Investment in Equity instruments carried at FVPL or FVOCI -Impairment of financial asset based on expected credit loss model.

A.2.2 Classification and measurement of financial asset

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investments in debt instruments) on the basis of the facts and circumstances that exist on the date of transition to Ind AS

C: NOTES TO FIRST-TIME ADOPTION: 1: Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long term investments or current investments based on the intended holding period and realizibility. Long term investments were carried at cost less provision for other than temperory decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) has been recognized in retained earnings as at the date of transition and subsequently in the profit and loss for the year ended March 31, 2016. This increased the retained earnings by Rs,1.67 Lakhs as at March 31, 2016 ( April 01, 2015-Rs,2.25 Lakhs).

2: Proposed dividend

Under the previous GAAP dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and tax thereon of Rs, Nil as at March 31, 2016 ( April 01, 2015- Rs, 919.17 Lakhs) included under provisions have been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

3: Excise duty

Under the previous GAAP revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2016 by Rs,75.95 Lakhs. There is no impact on the total equity and profit.

4: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. Acturial gains and losses and the return on plan assets , excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by Rs, 45.22 Lakhs. There is no impact on the total equity as at March 31 2016.

5: Retained Earnings

Retained earnings as at April 01, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

6: Other comprehensive income

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

7: QIP Expenses

QIP expenses incurred towards issue of equity shares has been netted off from the Securities Premium account as these expenses are directly attributable to the issue of shares.

8: Government Grants

Under previous GAAP loan form Government is carried at transition value whereas under IndAS the same is fair valued and the difference between fair value of the loan and transaction value is considered as Government grant and is deferred over the term of loan.

9: Borrowings

Under previous GAAP borrowings are carried at gross value ( excluding transition cost) whereas under IndAS borrowings net of transition cost are carried in the books and transaction cost are considered in the computation of effective interest rate on that borrowings

Note 7: Previous year figures have been regrouped and reclassified wherever considered necessary to conform to this year''s classifications


Mar 31, 2016

Note 1: Depreciation on R Et D Equipment of? 723.25 Lakhs has been added to R Et D Expenses (Previous Year: ?1243.63 Lakhs)

Note 2: Pursuant to the enactment of Companies Act 2013, the Company has applied the estimated useful lives as specified in Schedule II, except in respect of certain assets as disclosed in Accounting Policy on Depreciation, Amortization and Depletion. Accordingly the unamortized carrying value is being depreciated / amortized over the revised/ remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted net of tax, in the opening balance of Profit and Loss Account amounting to ? 469.06 Lakhs

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 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) USA -The Company sells Intermediates

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

(d) Others -The Company sells Bulk Drugs and Intermediates

4. RELATED PARTY DISCLOSURES

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

Holding Company M/s. Jasti Property and Equity Holdings Private Limited

Wholly owned subsidiary M/s. Suven Inc.

Key Managerial Personnel Mr. Venkateswarlu Jasti ( Chairman & CEO)

Mrs. Sudha Rani Jasti ( Whole-time Director)

Mr. P. Subba Rao (Chief Financial Officer)

Mr. Hanumatha Rao (Company Secretary)

Relative of Key Managerial Personnel Ms. Kalyani Jasti ( Daughter of Mr.Venkateswarlu Jasti)

Ms. Sirisha Jasti (Daughter of Mr. Venkateswarlu Jasti) Jointly controlled entity Suven Trust

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


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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