Notes to Accounts of Auro Laboratories Ltd.

Mar 31, 2024

H. Provisions

Provisions are recognized when the Company has a present obligation [legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the Company''s best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

Information on contingent liabilities is disclosed in the notes to the consolidated financial statements, unless the possibility of an outflow of resources embodying economic benefits is remote.

I. Contingent Liabilities and Contingent Assets

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Contingent Assets are neither recognised nor disclosed in the financial statements.

J. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted

earnings per share, the net profit or loss for the period attributable to the equity shareholders, and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

K. Impairment reviews

Ind AS requires management to undertake an annual test for impairment of indefinite lived assets and, for finite lived assets, to test for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Impairment testing is an area involving management judgment, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including management''s expectations of:

i) growth in Earnings before interest, tax, depreciation and amortization (EBITDA), calculated as adjusted operating profit before depreciation and amortization;

ii) timing and quantum of future capital expenditure;

iii) long-term growth rates; and

iv) selection of discount rates to reflect the risks involved.

Changing the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow projections, could significantly affect the Company''s impairment evaluation and hence results

Standards issued but not yet effective

Ind AS 115 Revenue from Contract with Customers: MCA issued Ind AS 15, Revenue from Contract with Customers, but subsequently the same has been deferred by a notification dated 30 March 2016. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The Company has evaluated the impact of Ind AS 115 on the financial statements and the same is not material.

M. Capital Management

The company''s objectives when managing capital are to

i) 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 maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity.

N. Balance of Trade Receivables and Trade payable are subject to confirmations.

VI. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

VII. Related Party Disclosures

Related parties where control exists or where significant influence exists and with whom transaction have taken place during the year.

Concern in which a Director is a Director/member

Auro Impex Pvt. Limited Auro Deorah Foundation

Key Management personnel of the Company

Managing Director Mr. Sharat Deorah

XI. Segment Information:

The Company is into the business of Bulk Drugs predominantly in India which in the context of Indian Accounting Standards 108 - “Segment Information" represent single reportable business segment. The revenues, total expenses and net profit as per the statement of the profit and loss represents the revenue, total expenses and the net profit of the sole reportable segment.

XIII. Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013 read with rules made thereunder and amendments thereof, the Company does not fall into the criteria specified in Section 135(1) during the immediately preceding financial year and hence not liable to make any contribution towards CSR activities for the financial year 2022-23.

XIV. Other regulatory Information

i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

ii. The Company does not have any transactions with companies struck off.

iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

iv. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

v. The Company have not advanced or given loan or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

vi. The company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

vii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Ac, 1961 (such as search or survey or any other relevant provisions of Income Tax Act, 1961).

viii. The Company has not been declared as Willful Defaulter by any Banks, Financial Institutions or Other lenders.

Reasons for Variance (More than 25%):

1) Current ratio has reduced due to reduction in inventory and cash and cash equivalents.

2) Debt - Equity ratio has increased due to borrowings taken for expansion project to increase the production capacity.

3) Debt service Coverage ratio has reduced, even though Profit after taxes before Interest & Depreciation has increased, due to increase in debt taken for expansion project to increase the production capacity.

4) Inventory Turnover ratio reduced due reduced purchase resulting in reduced cost of goods sold.

5) Trade receivables Turnover ratio reduced due to increase in trade receivables arising from delay in export receivable.

6) Trade payables Turnover ratio improved due to import payment terms.

7) Net Capital Turnover ratio increased due to reduction in working capital.

8) Return on Equity improved due to increase in Profit after tax.

9) Net Profit ratio improved due to increase in Profit after tax.

10) Return on Capital employed improved due to increase in earnings after interest and taxes.

In terms of our report attached For and on behalf of the Board of Directors

For Kothari Jain & Associates Auro Laboratories Limited

Chartered Accountants FIRM REG.NO. 113041W

(Sharat Deorah) (Siddhartha Deorah)

(Sunil Kumar Kothari) Managing Director Whole Time Director

Proprietor DIN: 00230784 DIN: 00230796

M. NO. 043842

UDIN: 24043842BKCOLT3151

(Shaan Jain) (Sweta Agarwal)

Place: Mumbai Chief Financial Officer Company Secretary

Date: May 25, 2024

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Mar 31, 2018

A. The following explain the material adjustments made while transition from previous Accounting Standards to Ind AS.

a. Fair value of security deposits:

Under the previous GAAP, interest free security deposits are recorded at transactions value. Under Ind AS, all financial assets are required to be fair valued.

b. Other comprehensive income:

Under Ind AS all items of income and expenses recognised in the period should be included in the profit & loss for the period, unless a Standard requires or permits otherwise.

Items of income and expenses that are not recognised in the statement of profit & loss but are shown in the statement of profit or loss as other comprehensive income includes re-measurement of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

c. Deferred tax :

Deferred tax impact on the above adjustments.

d. Retained earnings:

Retained earnings as at 1st April, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

B. Summary of the Company’s exposure to credit risk by age of the outstanding from various customers is as follows:

The Ageing analysis of Account receivables has been considered from the date the invoice falls due:

C. Capital Management

The company’s objectives when managing capital are to

i) 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 maintain an optimal capital structure to reduce the cost of capital. The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity.

D. Balance of Trade Receivables and Trade payable are subject to confirmations

I. SEGMENT INFORMATION_

Based on the guiding principles given in the Accounting Standard 17 on “Segment Reporting” issued by The Institute of Chartered Accountants of India, the Company is a single segment Company engaged in the business of Bulk Drugs.

II. Previous year’s figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2015

1. Notes on Financial Statements:

I. CONTINGENT LIABILITIES AND COMMITMENTS 2015 2014

II. A. Contingent liabilities and commitments 22471566 24986627

B. Claims against the Company not acknowledged Nil Nil As debts

C. Estimated amount of contracts remaining to be Nil Nil Executed on capital account and not provided for

2. RELATED PARTY DISCLOSURES

A] Related parties where control exists or where significant influence exists and with whom transaction have taken place during the year.

Associate Company

1. Auro Impex Pvt. Limited

2. Phalguni Enclave Private Limited

Key Management personnel Represented on the board

1. Shri Sharat Deorah - Managing director

2. Shri Siddhartha Deorah - Director

Non Executive/lndependent Directors on the Board

1. Shri Kailash Chandra Bubna

2. Shri Goverdhandas Aggarwal

3. SEGMENT INFORMATION

Based on the guiding principles given in the Accounting Standard 17 on "Segment Reporting" issued by The Institute of Chartered Accountants of India, the Company is a single segment Company engaged in the business of Bulk Drugs.

4. DEFERRED TAX ASSETS/ LIABILITIES

Considering the past performance and present scenario, the Company does not expect future taxable profits/ no provision has been made for the deferred tax assets/ liabilities as on 31sl March 2015.

5. Previous year's figures have been regrouped, rearranged and reclassified wherever necessary.

6. In accordance with the provision of schedule II of the act, in case of fixed assets which have been completed their useful life as at 1st April 2014, the carrying value amounting to Rs. 1,55,732/- charged to profit & Loss Accounts.

Further In case of assets acquired prior to 1st April 2014, the carrying value of assets is depreciated over the remaining useful life as determined effective 1st April 2014.

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Mar 31, 2014

Note 1: Long-term borrowings

1. Term Loans from Allahabad Banks are secured by mortgage of immovable assets, both present and future.

Notes:

1. The Working Capital facilities from Allahabad bank are secured by Hypothecation of all types of Stock and book debts.

2. There is no default in repayment of loans and interest.

2. Notes on Financial Statements:

I. CONTINGENT LIABILITIES AND COMMITMENTS

A. Contingent liabilities and commitments 24986627 44518561

B. Claims against the Company not acknowledged As debts Nil Nil

C. Estimated amount of contracts remaining to be Executed on capital account and not provided for Nil Nil

II. The Income Tax Assessments of the Company have been completed up to Assessment year 2010-11.

III. RELATED PARTY DISCLOSURES

Related parties where control exists or where significant influence exists and with whom transaction have taken place during the year.

Associate Company

1. Auro Impex limited

2. Phalguni Enclave Private Limited

Key Management personnel Represented on the board

1. Shri Sharath Deorah - Managing director

2. Shri Siddharth Deorah - Director

Non Executive/Independent Directors on the Board

1. Shri Kailash Chandra Bubna

2. Shri Goverdhandas Aggarwal

IV. SEGMENT INFORMATION

Based on the guiding principles given in the Accounting Standard 17 on "Segment Reporting" issued by The Institute of Chartered Accountants of India, the Company is a single segment Company engaged in the business of Bulk Drugs.

V. DEFERRED TAX ASSETS/LIABILITIES

Considering the past performance and present scenario, the Company does not expect future taxable profits/no provision has been made for the deferred tax assets/liabilities as on 31st March 2014.

VI. Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2013

I. CONTINGENT LIABILITIES AND COMMITMENTS

2013 2012

A. Contingent liabilities and commitments 44518561 16757714

B. Claims against the Company not acknowledged Nil Nil

As debts

C. Estimated amount of contracts remaining to be Nil Nil

Executed on capital account and not provided for

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Mar 31, 2012

I. CONTINGENT LIABILITIES AND COMMITMENTS 2012 2011

A. Contingent liabilities and commitments Nil Nil

B. ClaimsagainsttheCompanynotacknowledged Nil Nil As debts

C. Estimated amount of contracts remaining to be Nil Nil Executed on capital account and not provided for

II. The Income Tax Assessments ol the Company have been completed up to Assessment year 2009-10.

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Mar 31, 2010

1) Other retirement benefits except Gratuity is accounted on cash basis. Liability for Gratuity as at 31.03.2010 is not ascertained.

2) The Intercorporate Deposits of Rs.17,60,108/- has been classified as doubtful and therefore no provision for interest income has been made on Inter corporate advances & deposits. No provision for doubtful unsecured loans and advances to the tune of Rs. 39,33,684/- has been made, which are considered doubtful.

3) Investment in shares is in the nature of long term Investment. Provision for diminution in the value of shares as at the year-end amounting to Rs. 3,80,872/- (Previous Year Rs. 4,08,398/-) has not been provided for.

4) Contingent Liability;

Arrears of Water charges Rs. 86,464/-

Particulars Amount in Rs Remarks

Arrears of Water 86,464.00 Case pending from

Charges Year 2000

5) Considering the carry forward losses, No provision for Taxation has been made.

6) Balances of the Sundry Debtors, Sundry Creditors and Loans and Advances have been taken as per books pending respective confirmation and reconciliation.

7) In the opinion of the Board of Directors of the Company, the current assets, loans and advances have a value, on realizations in the ordinary course of business, at least equal to the amounts at which they are stated and the provisions for all known liabilities are adequate and are not in excess of the amount reasonably necessary.

8) Process loss /gain on Raw material consumption has not been separately ascertained and adjusted in production.

9) Sales Tax Assessment has been completed up to the accounting year ended 31.3.2002 and the Company does not foresee any liability for the pending years.

10) Income Tax Assessment has been completed up to Assessment Year 2007-08 i.e. Accounting year ended 31.3.2007. The Company does not foresee any liability for the pending years.

11) Earning and outgo in Foreign Currency.

FOB Value of export: Rs. 3,86,42,206/- (Previous Year Rs. 4,05,55,737/-). Foreign traveling expenses: Rs. 8,62,240/- (Previous Year Rs. 6,19,742/-). Plant & Machinery : Rs. Nil/- (Previous Year Rs.Nil)

12) Segment Reporting.

Based on the guiding principles given in the Accounting Standard- 17 on Segment Reporting issued by The Institute of Chartered Accountants of India, the company is a single segment company engaged in the business of Bulk Drugs.

Considering the past performance and present scenario, the company does not expect future taxable profits, no provision has been made for the Deferred Tax Asset as on 31 st March 2010.

13. Related Party Disclosure:

14) The figures of the previous accounting period are re-grouped, re-classified, rearranged wherever necessary and are not comparable with the figure of the current accounting year.

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Mar 31, 2009

1) Other retirement benefits except Gratuity is accounted on cash basis. Liability for Gratuity as at 31.03.2009 is not ascertained.

2) The Inter corporate Deposits of Rs. 17,60,108/- has been classified as doubtful therefore no provision for interest income has been made on Inter corporate advances & deposits. No provision for doubtful unsecured loans and advances to the tune of Rs. 39,33,684/- has been made, which are considered doubtful.

3) Investment in shares is in the nature of long term Investment. Provision for diminution in the value of shares as at the year-end amounting to Rs. 43,819/- (Previous Year Rs. 4,08,398/-) has not been provided for.

4) Contingent Liability;

Arrears of Water charges Rs. 86,464/-

Particulars Amount in Rs Remarks

Arrears of Water 86,464.00 Case pending from Charges Year2000

5) Considering the carry forward losses, No provision for Taxation has been made.

6) Balances of the Sundry Debtors, Sundry Creditors and Loans and Advances have been taken as per books pending respective confirmation and reconciliation.

7) In the opinion of the Board of Directors of the Company, the current assets, loans and advances have a value, on realizations in the ordinary course of business, at least equal to the amounts at which they are stated and the provisions for all ! known liabilities are adequate and are not in excess of the amount reasonably necessary.

8) Process loss /gain on Raw material consumption has not been separately ascertained and adjusted in production.

9) Production during the year includes NIL. (Previous Year 48,663.000 Kgs.) produced for third party on Job work basis.

10) Sales Tax Assessment has been completed upto the accounting year ended 31.3.2002 and the Company does not foresee any liability for the pending years.

11) Income Tax Assessment has been completed upto Assessment Year 2006-07 i.e. Accounting year ended 31.3.2006. The Company does not foresee any liability for the pending years.

12) Earning and outgo in Foreign Currency.

FOB Value of export: Rs. 3,71,53,6121- (Previous Year Rs. 2,99,42,709/-). Foreign traveling expenses: Rs. 6,48,655/- (Previous Year Rs. 6,40,320/-). Plants Machinery : Rs. Nil/-(Previous Year Rs.Nil)

13) Segment Reporting.

Based on the guiding principles given in the Accounting Standard- 17 on Segment Reporting" issued by The Institute of Chartered Accountants of India, the company is a single segment company engaged in the business of Bulk Drugs.

14) The figures of the previous accounting period are re-grouped, re-classified, rearranged wherever necessary and are not comparable with the figure of the current accounting year.