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Notes to Accounts of Alembic Pharmaceuticals Ltd.

Mar 31, 2017

1.1 Description of Business

Alembic Pharmaceuticals Limited is principally engaged in the manufacturing and selling of Pharmaceuticals products i.e. Active Pharmaceutical Ingredients and Formulations. The Company is the public limited Company domiciled in India and is incorporated under the provision of the Companies Act applicable in India. Its shares are listed on the two recognised Stock Exchanges in India. The registered office of the Company is located at Alembic Road, Vadodara - 390 003, India.

The Financial Statements are approved by the Company’s Board of Directors on 3rd May, 2017.

1.2 Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Act to be read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies ( Indian Accounting Standards) Amendment Rules, 2016. The Company’s Financial Statements for the year ended 31st March, 2017 comprises of the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, Statement of Changes in Equity and the Notes to Financial Statements.

For all periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards specified under section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2015. The financial statements for the year ended 31st March 2017 are the first Financial Statements of the Company prepared in accordance with Ind AS based on the permissible options and exemptions available to the Company in terms of Ind AS 101 “First time adoption of Indian Accounting Standards” in Note No. 39 Reconciliations and descriptions of the effect of the transition have been summarized in Note No. 39.1

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements have been prepared on a historical cost convention on the accrual basis, except for Derivative financial instruments which have been measured at fair value.

1.3 Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value on reporting date based on an external report.

1.4 Significant Accounting Judgments, Estimates and Assumptions

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.

2. Disclosure required under Micro, Small and Medium Development Act 2006

On the basis of confirmation obtained from the supplier who have registered themselves under the Micro, Small and Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the company the following are the details.

3 Segment Reporting

Segment information as required under Ind AS 108 i.e Operating Segments is given in the Consolidated Ind AS financial statements of the Company.

4 Disclosures in respect of Related Parties transactions

List of Related Parties with whom the Company has entered into transactions during the year.

(a) Controlling Companies: There is no controlling Company

(b) Subsidiary and Fellow Subsidiary

1 Alembic Global Holding SA (Subsidiary of Alembic Pharmaceuticals Limited)

2 Alembic Pharmaceuticals Australia Pty Ltd. (Subsidiary of Alembic Global Holding SA)

3 Alembic Pharmaceuticals Europe Ltd. (Subsidiary of Alembic Global Holding SA)

4 Alnova Pharmaceuticals SA (Subsidiary of Alembic Global Holding SA)

5 Alembic Pharmaceuticals Inc (Subsidiary of Alembic Global Holding SA)

6 Alembic Pharmaceuticals Canada Ltd. (Subsidiary of Alembic Global Holding SA)

7 AG Research Private Limited (Subsidiary of Alembic Pharmaceuticals Limited)

8 Genius LLC (Subsidiary of Alembic Global Holding SA)

9 Aleor Dermaceuticals Limited (Subsidiary of Alembic Pharmaceuticals Limited)

(c) Associate Companies:

1 Alembic Limited

2 Whitefield Chemtech Pvt. Limited

3 Nirayu Pvt.Limited

4 Quick Flight Limited

5 Shreno Limited

6 Paushak Limited

7 Sierra Investments Private Limited

8 Viramya Packlight LLP

9 Incozen Therapeutics Pvt. Limited

10 Rhizen Pharmaceuticals SA (Associate of Alembic Global Holding SA)

11 Dahlia Therapeutics (Subsidiary of Rhizen Pharmaceuticals SA)

12 Rhizen Pharmaceuticals Inc (Subsidiary of Rhizen Pharmaceuticals SA)

(d) Joint Venture:

1 Alembic Mami SPA (Joint venture of Alembic Global Holding SA)

(e) Key Management personnel

1 Shri C .R. Amin Chairman & CEO

2 Shri R. K. Baheti Director - Finance & CFO

3 Shri Pranav Amin Managing Director

4 Shri Shaunak Amin Managing Director

5 Shri Ajay Desai Vice President - Finance & Company Secretary

(f) Relatives of Key Management Personnel :

1 Smt. Malika Amin

2 Shri Udit Amin

3 Ms. Yera Amin

4 Ms. Jyoti Patel

5 Ms.Ninochaka Kothari

6 Ms. Shreya Mukherjee

5 Corporate Social Responsibility

As per section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceeding three financial years on corporate social responsibility (CSR) activities. A CSR Committee has been formed by the Company as per the Act. The company spent ?4.22 crores on various projects during the year, refer Annexure - A (point no. 5) included in the Board’s Report.

6 Disclosure on Specified Bank Notes (SBNs)

During the year, the Company had specified bank notes (i.e. as provided in the notification no. S.O. 3407(E), dated 8th Nov, 2016 issued by the Government of India) or other denomination note as defined in the MCA notification G.S.R. 308 (E) dated 31st March, 2017, on the details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016, the denomination wise SBNs and other notes as per the notification is given below:

7. First Time Adoption of Ind AS

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

The significant accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March, 2017, the comparative information presented in these financial statements for the year ended 31st March, 2016, and in the preparation of an opening Ind AS balance sheet at 1st April, 2015 ( the 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 the other relevant provisions of the Act (previous GAAP or Indian GAAP).

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions applied in the transition from previous GAAP to Ind AS

A.1. Ind AS optional exemptions

A.1.1 Business Combinations

The Company has elected to apply Ind AS 103 prospectively to business combinations occuring after its transition date.

Business Combinations occuring prior to the transition date have not been restated. The Company has applied same exemption for investment in associates and joint venture.

The Company has elected not to apply Ind AS 21 retropectively to fair value adjustment and goodwill arising in business combination that occurred prior to the transition date

A.1.2 Deemed cost

The Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value i.e deemed cost.

A.1.3. Investments in subsidiaries, associates and joint venture

The Company has elected to measure all of its investments in subsidiaries, associates and joint venture at their previous GAAP carrying value.

An explanation of 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.

8.1 Reconciliations

The following reconciliations provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

1. Equity as at 1st April, 2015 and 31st March, 2016

2. Net profit for the year ended 31st March, 2016

8.1.1 Reconciliation of equity as previously reported under IGAAP to Ind AS

8.1.2 Impact of Ind AS adoption on the statement of cash flow for the year ended 31st March, 2016

The transition from previous GAAP to Ind AS has not affected the cash flows of the Company.

9 The previous year’s figures have been regrouped / rearranged wherever necessary to make it comparable with the current year.


Mar 31, 2013

I Segment Reporting

Primary Segment

The Company has identified "Pharmaceuticals" as the only primary reportable segment.

In view of the inter-woven/inter-mixed nature of business and manufacturing facility other secondary segmental information is not ascertainable.

II Disclosures in respect of Related Parties pursuant to Accounting standard - AS 18 - issued by the Institute of Chartered Accountants Of India pursuant to Companies (Accounting Standards) Rules 2006 are as follows

List of Related Parties with whom the Company has entered into transactions during the yean

a) Controlling Companies: There is no controlling Company

b) Subsidiary and Fellow Subsidiary:

1 Alembic Global Holding SA (Subsidiary of Alembic Pharmaceuticals Limited)

2 Alembic Pharmaceuticals Australia Pty Ltd (Subsidiary of Alembic Global Holding SA.)

3 Alembic Pharmaceuticals Europe Ltd (Subsidiary of Alembic Global Holding SA.)

4 Alnova Pharmaceuticals SA (Subsidiary of Alembic Global Holding SA.)

5 Alembic Pharmaceuticals Inc. (Subsidiary of Alembic Global Holding SA.)

c) Associate Companies:

1 Alembic Ltd.

2 Whitefield Chemtech Pvt. Ltd.

3 Nirayu Pvt. Ltd.

4 Quick Flight Ltd.

5 Shreno Ltd.

6 Paushak Ltd.

7 Sierra Investments Ltd.

8 Viramya Packlight Ltd

9 Incozen Therapeutics Pvt. Ltd.

10 Rhizen Pharmaceuticals SA

d) Key Management personnel

1 Shri C .R. Amin Chairman and Managing Director

2 Shri R. K Baheti Director, President - Finance & Company Secretary

3 Shri Pranav Amin Director, President-International Business

4 Shri Shaunak Amin President - Formulations

e) Relatives of Key Management Personnel :

1 Smt. Malika Amin

2 Shri Udit Amin

3 Ms.Yera Amin

4 Ms. Jyoti Patel

5 Ms. Ninochaka Kothari

6 Ms. Shreya Mukherjee

III The previous year''s figures have been regrouped / rearranged wherever necessary to make it comparable with the current year


Mar 31, 2012

(a) The rights, preferences and restrictions including restrictions on the distribution of dividends and the repayment of capital;

The company is having only one class of shares i.e Equity carrying a nominal value of Rs 2/- per share Every holder of the equity share of the Company is entitled to one vote per share held

In the event of liquidation of the Company, the equity shareholders will be entitled to receive remaining assets of the Company after the distribution / repayment of all creditors. The distribution to the equity shareholders will be in proportion of the number of shares held by each shareholder

The Company declares and pays dividend on the equity shares in Indian Rupees. Dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting

During the year ended 31st March, 2012 an amount of Rs 1.40 of dividend per equity share was proposed for the equity shareholders ( PY Rs 1/- per equity share)

i. Segment Reporting

Primary Segment

The Company has identified "Pharmaceuticals" as the only primary reportable segment.

In view of the inter-woven/inter-mixed nature of business and manufacturing facility, other secondary segmental information is not ascertainable.

ii During the year ended 31st March, 2012 the revised schedule VI notified under the Companies Act, I956 has become applicable to the Company for perperation and presentation of its financial statement. The adoption of revised schedule VI does not impact recongination and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year's figures in accordance with the requirements appliable in the current year. In view of this reclassification certain figures of current year are not strictly comparable with those of the previous year.

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