Avon Lifesciences Limited
Your Directors are pleased to present their Report on your Company's businessoperations along with the Audited financial statements for the financial year ended on 31March 2017.
The highlights of the Company's performance during the financial year are as below:
SUMMARY OF FINANCIAL RESULTS (Rs in Lakhs)
|Particulars ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Total Income ||599.50 ||3296.49 |
|EBITDA/(LOSS) ||195.03 ||522.69 |
|PROFIT/ (LOSS) BEFORE TAX ||(1924) ||(1645.88) |
|PROFIT/ (LOSS) AFTER TAX ||(1924) ||(1645.88) |
|EARNINGS PER SHARE (EPS)(IN RS.) ||(8.07) ||(6.94) |
In view of loss incurred during the year under review your Directors do not recommendany divided on Equity Shares.
There was no operational activity during the year under review. The income of Rs.599.50 Lakhs includes an amount of Rs. 596.37 Lakhs derived on account of forfeiture of9175000 share warrant money received by the Company on issuance of share warrants sincethe allottees did not exercise the option for conversion of share warrants withinprescribed period.
The Board had informed the Bombay Stock Exchange where the securities of the Companyis listed vide its letter 24th October 2016 about certain events which took place in themonth of April 2016 and thereafter which would have material impact on the overalloperations and finances of the Company. The Company continues to operate only in onesegment i.e. pharmaceuticals and there is no change in the nature of business of theCompany.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review is provided ina separate section of this Annual Report and form a part of the Board's Report.
SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES:
Details regarding subsidiary/ associate Company or joint venture as given in Form MGT -9.
DIRECTORS Board of Directors
Mr. Ajit Kamath Non-Executive Chairman Mr. Rajendra Kaimal Non-Executive Director
In accordance with the provisions of section 152(6) of the Companies Act 2013("the Act") and Articles of Association of the Company Mr. Ajit Kamath and Mr.Rajendra Kaimal are liable to retire by rotation at the ensuing Annual General Meeting(AGM) and offers himself for re-appointment. The Board recommends his re-appointment.
The Board has recommended that Dr. Sunil Pitroda Mr. Palak Shah and Mr. AbhishekBuddhadev be appointed as an Independent Directors by the members for a term of 5 (five)consecutive years. The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence prescribed under the Actand the Listing Regulations.
Brief profiles of the abovementioned Directors are included in a separate"Annexure B" after the Notice forming part of this Annual Report.
a. Board meetings
During the year Seven Board meetings were held with gap between Meetings notexceeding the period prescribed under the Act. Details of Board and Board committeemeetings held during the year are given in the Corporate Governance Report. Board meetingdates are finalised in consultation with all directors and agenda papers backed up bycomprehensive notes and detailed background information are circulated well in advancebefore the date of the meeting thereby enabling the Board to take informed decisions. TheBoard is also apprised of updates important developments in industry segments businessoperations marketing products etc. b. Evaluation of Board Committees and Directors
The Board has carried out the annual evaluation of its own performance and of each ofthe directors individually. The manner in which the evaluation has been carried out hasbeen explained in detail in the Corporate Governance Report which forms part of thisAnnual Report. c. Policy on appointment and remuneration of Directors
The Company has formulated criteria for determining Qualifications AbilitiesExperience and Independence of a Director as also a Policy for remuneration of DirectorsKey managerial Personnel and senior management. The details of criteria laid down and theRemuneration Policy are given in the Corporate Governance Report.
AUDITORS a. Statutory Auditors
M/s. Mukesh Mehta & Associates Chartered Accountants were appointed as StatutoryAuditors at the Annual General Meeting (AGM) of the Company held on December 30 2014 fora term of three years subject to rati_cation by the members annually. Accordingly theywill cease to hold office at the conclusion of the forthcoming AGM and in view of section139(2) of the Companies Act 2013 will not be eligible for further reappointment.
It is therefore proposed to appoint M/s. N G JAIN & CO. Chartered Accountants asStatutory Auditor of the Company for a term as mentioned in AGM Notice. The Company hasreceived letter from them to the effect that their appointment if made will be within theprescribed limits and confirming that they are not disqualified for such appointmentpursuant to the Companies Act 2013 and applicable statutory provisions.
Accordingly the Audit Committee and Board of the Company have considered andrecommends to the members for their appointment as a Statutory auditor of the Company atthe ensuing Annual General Meeting.
b. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Ms. RiddhiShah Company Secretary in Practice to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is annexed herewith as "Annexure C" comments of theSecretarial Auditor in their report are self explanatory.
INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK
The Company has a proper and adequate Internal Financial Control System to ensure thatall assets are safeguarded and protected against loss from unauthorized use or dispositionand the transactions are authorized recorded and reported correctly.
The Company has formulated a whistle blower policy with a view to provide a vigilmechanism for the directors and employees of the company to report instances of unethicalbehavior fraud or mismanagement.
RISK MANAGEMENT POLICY
In accordance with Section 134(3) (n) of the Act the Company has framed a RiskManagement Policy to identify and assess the key risk areas. Your Board has identified anyelement of risk which may threaten the existence of the Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company which may have a potentialconflict with the interest of the Company at large and thus disclosure in Form AOC-2 isnot required.
None of the Non-Executive Directors has any pecuniary relationship or transactions withthe Company other than sitting fees payable (if any) to them.
INFORMATION ON EMPLOYEES
Information on particulars of employees' remuneration as per Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is reported to be nil as there are no employees who arein receipt of remuneration above the prescribed limit.
The ratio of remuneration of each director to the median employee's remuneration andother details in terms of Sub - Section 12 of Section 197 of the Companies Act 2013 readwith Rule 5 (1) of the Companies Appointment and Remuneration of Managerial Personnel)Rules 2014 are not applicable as the Directors did not draw and remuneration from theCompany for the Financial Year 2016-17.
LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantee and investments covered under applicable provisions ofsection 186 of the Act are given in the notes of the financial statement.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to the provisions of section 135 of the Act read with CSR Rules the Companyhas formed CSR committee.
However due to losses incurred by the Company in this and previous financial year theCompany did not undertake any CSR activity.
The Company has not accepted any deposits from the public and there are no outstandingdeposits from the public as on 31 March 2017.
EXTRACT OF THE ANNUAL RETURN
The extract of the annual return in form MGT 9 is annexed herewith as "AnnexureD"
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31March 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in the Financial Statements have beenselected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31 March 2017 and of the profit of the Company for the year ended on thatdate;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to Conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134 of the Act read with the Companies(Accounts) Rules 2014 is given as "Annexure A" and forms part of this report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT AND DETAILS OF SIGNIFICANT ANDMATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOINGCONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
The Board had informed the Bombay Stock Exchange where the securities of the Companyis listed vide its letter 24th October 2016 about certain events which took place in themonth of April 2016 and thereafter which would have material impact on the overalloperations and finances of the Company. Further whenever there is further development inthe subject same shall be promptly informed to the Stock exchange and to the stakeholders.
Due to financial difficulties faced by the Company there are few ongoing litigationsagainst the Company and its Directors which are being defended by the Company by way ofrepresentation through our Legal Counsels. The company has filed appropriate revisionapplication/ counter application wherever any orders have been passed.
OTHER INFORMATION / DISCLOSURES
The Company has in place a policy against sexual harassment at work place in line withthe requirements of the concern statute. There was no complaint received during the yearnor there are any pending complaints which need to be redressed.
The Compliance certificate from the auditors regarding compliance of conditions ofcorporate governance as stipulated in SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 shall be annexed with the report.
GRATITUDE & ACKNOWLEDGMENTS
Your directors wish to place on record their sincere thanks and appreciation to all ourcustomers suppliers banks authorities members and associates for their co-operationand support at all times and to all our employees for their unstinted contribution to theCompany's business and look forward to continued support.
For and on behalf of the Board of Directors
Avon Lifesciences Limited
(Formerly known as Avon Organics Ltd)
Date: 7.03.2018 DIN: 00032799
ANNEXURE _ A' TO THE DIRECTORS' REPORT
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Information under Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3)of the Companies (Accounts) Rules 2014 for the year ended 31 March 2017 is given herebelow and forms part of the Board's Report.
A. CONSERVATION OF ENERGY
The Company is engaged in continuous process of energy conservation through improvedoperational and maintenance practices.
(b) The steps taken by the company for utilizing alternate sources of energy: NIL (c)The capital investment on energy conservation equipment: NIL
B. TECHNOLOGY ABSORPTION
(i) The efforts made towards technology absorption: NIL
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: NIL
(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) NIL
(iv) Details of expenditure on Research and Development during the year under review isas under:
(Rs. In lakhs)
|a) Capital ||NIL |
|b) Recurring ||NIL |
|c) Total expenditure ||NIL |
|d) Total expenditure as a % of Net Sales ||NIL |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
| || ||(Rs. In lakhs) |
|Particular ||Year 2016-17 ||Year 2015-16 |
|Foreign Exchange earned ||- ||2421.33 |
|Foreign Exchange used / outgo ||- ||- |
ANNEXURE _B' DETAILSOF DIRECTORSSEEKING APPOINTMENT /REAPPOINTMENTIN FORTHCOMINGANNUAL GENERAL MEETING:
|Name ||Mr. Rajendra Kaimal ||Mr. Ajit Kamath ||Dr. Sunil Pitroda ||Mr. Palak Shah ||Mr. Abhishek Buddhadev |
|Date of ||23.06.1973 ||12.12.1969 ||29.11.1959 ||08.06.1992 ||03.08.1991 |
|Birth || || || || || |
|Date of Appoint- ment ||30.05.2013 ||31.01.2009 ||31.03.2018 (proposed) ||31.03.2018 (proposed) ||31.03.2018 (proposed) |
|Nation- ality ||Indian ||Indian ||Indian ||Indian ||Indian |
|Category ||Promoter ||Promoter ||Independent ||Independent ||Independent |
|Designa- tion ||Non Executive Director ||Chairman & Non Execu- tive Director ||Independent Director ||Independent Director ||Independent Director |
|Qualifi- cation / ||Mr. Rajendra Kaimal aged 44 years holds ||Mr. Ajit Kamath aged 48 years holds a Bachelor's ||Dr. Sunil Pitroda aged 57 years holds Bachelor ||Mr. Palak Shah aged 25 years is Chartered Ac- ||Mr. Abhishek Buddhadev aged 26 years is Compa- |
|Exper- tise in Specific ||a Bachelors Degree in Commerce from the Uni- versity of Mumbai. He has ||degree in Commerce from University of Mum- bai. He has more than 16 ||of Medicine Bachelor of Surgery (MBBS) Degree from the University of ||countant by profession holds Bachelor of com- merce degree from uni- ||ny Secretary by profes- sion holds Master of commerce degree from |
|Func- tional ||completed his Masters in Management Studies ||years of experience in the pharmaceutical industry. ||Mumbai. He has over 33 years of experience in ||versity of Mumbai. He is a successful enterprenure ||university of Mumbai. He is having 5 years of |
|Areas ||from Narsee Monjee In- stitute of Management Studies Mumbai and is a Cost Accountant from the Institute of Cost and Works Accountants of In- dia. He has over 14 years of experience in the phar- maceutical industry. ||He has been involved and instrumental in plan- ning and formulating the overall business strategy and developing business relations for our Compa- ny. ||the Medical and surgi- cal filed. His experience in the field of Medicines and understanding of the healthcare vertical will help our Company grow further. ||has experience around 4 years in allied fields such as finance & accounts taxation and marketing etc. ||exerience in the field of Secretarial Compliance & Corporate Laws. |
|Occupa- tion ||Service ||Service ||Business ||Business ||Service |
|Other ||1. ||Arch Pharmachem Ltd ||1. ||Arch Investment Private Ltd ||1. ||Arch Pharmalabs Ltd ||1. ||Arch Pharmalabs Ltd ||NIL |
|Director- ships/ Director- ships held ||2. ||Arch Impex Private Limited ||2. ||Arch Herbals Private || || ||2. ||Dhara Technosystem LLP || |
|in other companies ||3. ||Arch Pharmalabs Ltd ||3. ||Arch Impex Private Limited || || || || || |
| ||4. ||Arch Life Sciences Limited ||4. ||Arch Pharmachem Ltd || || || || || |
| ||5. ||A M R Investments ||5. ||Arch Pharmalabs || || || || || |
| || ||Private Limited || ||Limited || || || || || |
| ||6. ||Arch Finechemicals Limited ||6. ||Marm Realty Private Limited || || || || || |
| ||7. ||Arch Infra Ventures Limited ||7. ||Arch Life Sciences Limited || || || || || |
| ||8. ||Amra Remedies Limited ||8. ||A M R Investments Private Limited || || || || || |
| ||9. ||Arch Agro Industries Private Limited ||9. ||Arch Finechemicals Limited || || || || || |
| ||10. ||Amra Renal Care Limited ||10. ||Arch Infra Ventures || || || || || |
| || || || ||Limited || || || || || |
| ||11. ||Arch Investment Private Limited ||11. ||Amra Remedies Limited || || || || || |
| ||12. ||Arch Herbals Private Limited ||12. ||Arch Agro Industries || || || || || |
| || || ||13. ||Amra Renal Care Limited || || || || || |
| || || ||14. ||Regal Pharma Pte. Ltd. (Singapore) || || || || || |
|Sharehold- ing in the Company ||NIL || ||NIL || ||NIL || ||NIL || ||NIL |
|Rela- tionship between directors inter-se ||NIL || ||NIL || ||NIL || ||NIL || ||NIL |