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Avon Corporation Ltd.

BSE: 532995 Sector: Engineering
NSE: N.A. ISIN Code: INE207I01016
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Avon Corporation Ltd. (AVONCORPORATION) - Director Report

Company director report

Directors' Report

Dear Shareholders,

We are delighted to present 14* Annual Report on the business and operations of theCompany together with the Audited Accounts for the year ended 31st March, 2013.

Your Company has taken many strategic steps during the year to strengthen itsfinancials and to achieve all round growth of the business. The focus during the year wasto accelerate growth through widening of network expanding capacities to capitalise on thegrowth opportunities besides optimum utilisation of the resources.

Consolidated Financial Statements pursuant to Clause 41 of the Listing Agreemententered into with the Stock Exchanges and prepared in accordance with the AccountingStandards prescribed by the Institute of Chartered Accountants of India, are attached foryour reference.

FINANCIAL RESULTS:

(Rs.)

Particulars Current Year Previous Year
(2012-2013) (2011-2012)
Sales Revenue 611959135.23 1362657516.00
Other Income 1777543.88 2307658
(Increase)/ Decrease in Stock -56603008 -1205348
Less: Total expenditure 1706997201.32 1195691319
Loss/Profit before Depreciation,
Interest and Tax (PBDIT) -1149863530.21 168068507.00
Less: Interest 88551452.30 71798212
Less: Depreciation 23004800.37 26140808
Loss/Profit before Tax -1261419782.88 70129487
Less: Provision for Taxation 1092394 16299375.33
Loss/Profit after Tax -1262512176.88 53830111.67
Less: right back from General Reserve/transfer 110717676.00 5000000
Less: Dividend Distribution & Tax thereon - -
Less: Dividend Paid (Short Provision) - -
Balance carried forward to Balance Sheet -824423071.21 327371429.67

Industry Structure and Developments:

Weighing industry is booming like fire in the forest, in today's wodd althoughconsciously or unconsciously we weigh most of the things from the time we get up from thebed till we are off to sleep, starting from your tooth paste how much to use till how manycalories to consume in our day. So these situations have created hyper growth in weighingindustry. Weighing industry is may be ranked among the necessaries of life to everyindividual of human society. They enter into the economical arrangements and dailyconcerns of every family. They are necessary to every occupation to human industry. Thedemand for weighing scales is expected to increase considering growth of user industriesviz. diversified with different kinds of software related to various industries likehealthcare, pharma, government, retail, gyms, jewellery, etc.. There are a number ofplayers in the Industry, many in SSI Sector. Therefore, the Markets & Capacities arefragmented in the Country.

Business Performance:

Our Company is engaged in manufacturing Weighing Scales, which has utilizations invarious industries healthcare, pharma, government, retail, gyms, jewellery, etc. Sinceyears the Company has served its customers successfully. As market demand for the weighingscales is increasing, opportunities for our Company is also growing high and ourcompetition in the market is becoming tough but we have confidence in our high qualityproduct to survive and grow in a competitive market.

Your Company Consolidated registering Sales of Rs. 611959135.23 as against Rs. 1362657516.00in the previous year. Consolidated, net profit/Loss After Tax for the year hasregistered an decrease of Rs -1262512176.88 as compared to Rs. 53830111.67 inthe previous year.

Barring unforeseen circumstances, your Directors are confident of achieving betterresults in the ensuing year.

Share Capital:

The paid up capital of the Company Rs.64,58,03,170 (Rupees Sixty Four Crores FiftyEight Lakhs Three Thousand One Hundred and Seventy only).

Dividend:

Your Directors are not recommending a dividend for the year ended 31stMarch, 2013.

Cash Flow Statement

In conformity with the provisions of Clause 32 of the Listing Agreement with the StockExchange, the cash flow statement for the year ended 31st March, 2013 isannexed hereto.

Directors' Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm thefollowing:

that in the preparation of the annual accounts, the applicable accounting standardshave been followed and that no material departures have been made from the same.

they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that year.

proper and sufficient care have been taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities, the attachedStatement of Accounts for the year ended March 31,2013 have been prepared on a goingconcern basis.

Public Deposits:

The deposits accepted by the Company are in accordance with the provisions of Section58A of the Companies Act, 1956 read with the Company (Acceptance of Deposits) Rules, 1975as amended.

Subsidiary Companies:

a. In accordance with the general circular issued by the Ministry of CorporateAffairs, Government of India, the Balance Sheet, Profit and Loss Account and otherdocuments of the subsidiary companies are not being attached with the related detailedinformation to any member of the company who may be interested in obtaining the same. Theannual accounts of the subsidiary companies will also be kept open for inspection at theRegistered Office of the company. The Consolidated Financial Statements presented by thecompany including the financial results of its subsidiary companies.

b. A statement relating to subsidiary Company pursuant to Section 212 of theCompanies Act, 1956 is annexed. The Audited Balance Sheet and Profit and Loss Accounts ofthe Subsidiary Company, as on their respective year ended on various dates as per the lawsof the country wherein this company is incorporated, are annexed.

Corporate Governance:

A Report on Corporate Governance along with a certificate from Nishant Jawasa,Practicing Company Secretary regarding compliance of the requirements of CorporateGovernance, as also a Management Discussion & Analysis Report pursuant to Clause 49 ofthe Listing Agreement with the Stock exchange are annexed hereto.

Directors:

In accordance with the provisions of the Companies Act, 1956 and the Articles ofAssociation of the Company Mrs. Santaben R Saraiya, Director of the Company retires byrotation and being eligible, offers himself for re-appointment. During the Year Mr. GauravSinha and Mr. Satish Mehta were appointed as an Independent Director of the Company.Necessary Resolution is given in the Notice for regularizing their appointment.

A brief profile of the above Directors, as required by Clause 49VIA of the ListingAgreement with the Bombay Stock Exchange

Limited, Mumbai is attached to the Notice of the ensuing Annual General Meeting

Auditors:

M/s. A. B. Shah & Co., Chartered Accountants, the Statutory Auditors of theCompany.

Auditors' Comment:

The observations made by the Auditors in the Auditors' Reports read with relevant notesgiven in the Notes on Accounts are self explanatory and therefore do not call for anyfurther comments under Section 217 (3) of the Companies Act, 1956.

Practicing Company Secretary:

Mr. Rakesh Kapur & Nishant Jawasa, Practicing Company Secretary of the Company hasgiven his report on Secretarial Audit for the year.

Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo:

The relevant data pursuant to Section 217(1) (e) of the Companies Act, 1956 read withthe Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988is annexed hereto and forms part of this report.

Particulars of employees:

During the year under review, none of the employees of the Company, whether employedfor the whole year or part thereof, was in receipt of remuneration aggregating to or inexcess of the limits specified under Section 217(2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) rules, 1975 as amended, and hence, no particularsare required to be furnished in connection with the same.

Acknowledgements

Your Directors take this opportunity to express their gratitude for the support andco-operation received during the year from the Investors, Financial Institutions, Bankers,Statutory Authorities and all organizations connected with its business. Your Directorsalso take pleasure in commending the valuable contributions made by the employees of theCompany at all levels during the year.

For and on behalf of the Board
Place: Mumbai Pankaj Saraiya
Dated: 30/05/2013 Chairman & Managing Director)

ANNEXURE A TO THE DIRECTORS' REPORT Information under Section 217(1)(e) of theCompanies Act, 1956 read with the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988 and forming part of the Directors' Report for the yearended 31st March, 2013.

A. POWER AND FUEL CONSUMPTION Unit 2012-2013 2011-2012
1) Electricity
Total Amount Rs. In lacs 5.46 9.17

B. RESEARCH & DEVELOPMENT

Research & Development

1. Specific areas In which R&D work is carried out:

The focus of the Company's R&D efforts was on the following areas:

I. Development of new technology for existing and newer weighing scales

ii. Updation for existing processes for better and efficient production of weighingscales.

iii. Development of new innovative technology for the manufacture of existing and newscales.

iv. Development of new products.

v. Development of methods to improve safety procedures, effluent control, pollutioncontrol, etc.

vi. Process / product design improvements.

vii. Productivity research for increased efficiency in use of resources.

2. Some of the major benefits derived as a result of R&D include:

I. Successful commercial scale up of several new weighing scales.

ii. Development of methods of operations which are cost effective.

iii. Improved processes and enhanced productivity in manufacturing of products.

iv. Enhanced fuel efficiency

v. Effective use of raw materials and fuels with innovative technology

3. Future plan of action:

The Company will continue its R&D efforts in the various areas as indicated above.The major thrust would be on developing new and efficient products. Improve productquality particularly with respect to long term durability and reduction in its cost ofmanufacture

4. Expenditure on R&D:

Rs. in lakhs
Total NIL

C. FOREIGN EXCHANGE EARNING AND OUTGO

2012-2013 2011-2012
Total Foreign Exchange earned:
a) From Export - -
b) Advance reed from Debtors - -
Total Foreign Exchange outgo:
a) For Purchase 122689.70US$ 271882.12 US$
19389.11 EURO

77924 EURO

b) ForTravel

NIL

1453.75 US$

ANNEXURE B TO THE DIRECTORS' REPORT

Statemenl Pursuant to Section 212 of the companies Act. 1956 relating to SubsidiaryCompany:

Name of the Subsidiary Company Avon Corporation FZE
The Financial Year of the Subsidiary Company ended on 31.03.13
Number of Shares held and extent of holding thereof by the
holding Company, at the above date:
a) The number of shares 1
b) Face Value of each share (AED) 150000
c) Extent of holding in percentage terms 100%
The net aggregate profits or (losses) (PAT) of the Subsidiary Company for the current Rs NIL
financial year so far as it concerns the members of the holding Company
The net aggregate profits or (losses) of the Subsidiary Company for the previous
financial year so far as it concerns the members of the holding Company NA

 

For and on behalf of the Board
Place: Mumbai Pankaj Saraiya
Dated: 30/05/2013 Chairman & Managing Director)

 

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