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Accounting Policies of Alembic Ltd. Company

Mar 31, 2015

A) Basis of Preparation of Financial Statements:

The Financial Statements of the Company have been prepared and presented in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) under the Historical Cost Convention on an accrual basis of accounting. The Company has prepared Financial Statements to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act, 2013 read with rule 7 of Companies (Accounts) Rules, 2014.

The Accounting Policies adopted in the preparation in Financial Statements are consistent with those of previous year.

The Company has elected to present earning before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the Statement of the Profit and Loss.

b) Use of Estimates and Judgements:

In preparation of the Financial Statements, in conformity with Indian GAAP the management is required to make judgements, estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of the Financial Statements and the reported amount of revenues and expenses for the year. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty of these assumptions and estimates could result in the outcomes different from the estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

c) Fixed Assets:

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use.

Certain Fixed Assets have been revalued and have been restated at a net book value including the net increase / decrease in the original net value of the assets as per the approved scheme of arrangement.

d) Depreciation / Amortisation:

Depreciation on Fixed Assets is provided on Straight Line Basis as per the useful life prescribed in Schedule II of the Companies Act, 2013, except for certain assets that have been revalued and restated. Depreciation on these assets has been provided on the net restated books value prospectively over the remaining useful life as per Schedule II of Companies Act, 2013.

Fixed assets pertaining to Real Estate division of company are depreciated considering its useful life of three years.

e) Borrowing Cost:

Borrowing Costs directly attributable to the acquisition and construction of an asset which takes a substantial period of time to get ready for their intended use are capitalised as part of the cost of such assets until such time the asset is ready for its intended use.

All other borrowing costs are recognised in the statement of Profit and Loss in the period they are incurred.

f) Investments:

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value.

g) Inventories:

All Inventories are valued at lower of cost and net realisable value.

Raw Materials, Stores and Spares & Packing Material are valued at lower of cost determined on weighted average basis and net realisable value.

Work in process is valued at lower of cost and net realisable value.

Finished Goods are valued at lower of cost including excise payable thereon and net realisable value.

Traded Goods are valued at lower of Purchase price and net realisable value.

Slow moving Raw Materials, Stores & Spares are valued at estimated net realizable value.

Construction work in progress is valued at cost and net realisable value whichever is lower. The cost is determined considering proportionate costs of a) value of land, b) direct construction cost, c) development expenses and d) attributable indirect expenses.

h) Revenue from Operations:

Revenue is recognised to the extent that it is probable that the ecomonic benefits will flow to the Company and the revenue can be reliabily measured.

Revenue is recognised when the significant risks and rewards of the ownership of the goods have been passed to the buyer. Sales are disclosed inclusive of excise duty, but net of sales return, service tax, value added tax and CST.

Income from operations includes revenue earned on account of job work income and rent income which is accounted as per the terms agreed with the customers.

Export benefits available under prevalent schemes are accounted to the extent considered receivable.

Revenue from Real Estate Projects is recognized based on sold areas as per the percentage completion method. The stage of completion is determined as per the proportion of the cost of construction and development actually incurred till reporting date and the total estimated cost of construction and development of the project. The total estimated cost of the project are estimated based on the technical and other estimates of saleable areas, costs, etc. The estimates costs are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.

i) Foreign Exchange Transactions:

Foreign Currency transactions are initially recorded at the rate of exchange prevailing on the date of transaction Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are converted at year end exchange rates.

The difference in conversion of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Statement of Profit and Loss.

j) Employee benefits:

Defined Contribution plan

Contribution to pension fund, Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by ICICI Prudential Life Insurance Company Ltd. and ESIC and labour welfare fund are recognised as an expense in the Statement of Profit and Loss.

Defined Benefit plan

The Company''s contribution to provident fund, administered through a Company managed trust, is recognised as an expense in the Statement of Profit and Loss.

The gratuity liability, actuarially valued, is funded through the scheme administered by the Life Insurance Corporation of India (LIC) and HDFC Standard Life Insurance and the amounts paid / provided under the scheme are charged to Statement of Profit and Loss

Accumulated leave liability (other than sick leave) as at the year end is provided as per actuarial valuation. Accumulated sick leave is provided for at actuals in the Statement of Profit and Loss.

k) Taxes on Income:

Provision for taxation comprises of Current Tax and Deferred Tax. Current Tax provision has been made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred Tax resulting from "timing differences" between taxable and accounting income is accounted in accordance with Accounting Standard 22 (AS-22) ''Accounting for taxes on income" notified under the Companies (Accounts ) Rules, 2014, using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The Deferred Tax Asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets can be realised in future. However, where there is unabsorbed depreciation or carry forward losses under taxation laws, Deferred Tax Assets are recognized only if there is virtual certainty of realisation of such assets. Deferred Tax Assets are reviewed as at each Balance sheet date to reassess its realisation.

The benefit of credit against the payment made towards MAT for the earlier years is available in accordance with the provisions of section II5J (AA) of Income Tax Act, 1961 over a period of subsequent 10 assessment year and same will be accounted for when actually realised.

l) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements.

m) Impairment of assets:

In accordance with Accounting Standard 28 (AS 28) on ''Impairment of Assets'' where there is an indication of impairment of the Company''s assets, the carrying amounts of the Company''s assets are reviewed at each Balance Sheet date to determine whether there is any impairment. The recoverable amount of the assets (or where applicable that of the cash generating unit to which the asset belongs) is estimated at the higher of its net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognized in the Statement of the Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the lower of recoverable amount and the carrying amount that would have been determined had no impairment loss being recognised.

n) Earning per share:

Basic and diluted earnings per share are computed by dividing the net profit after tax attributable to equity shareholders for the year, with the weighted average number of equity shares outstanding during the year.


Mar 31, 2014

A) Basis of Accounting

The Financial Statements are prepared as per historical cost convention and on accrual basis and are in confirmity with the Accounting Standards (AS) as notified under Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies Act, 1956.

b) Use of Estimates

The preparation of Financial Statements in conformity with generally accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities, Income and Expenditure and disclosure of Contingent Liabilities at the date of the Financial Statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

c) Fixed Assets

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use.

Certain fixed assets of the Company have been revalued and have been restated at a net book value including the net increase / decrease in the original net value of the assets as per the approved Scheme of Arrangement.

Borrowing Cost directly attributable to acquisition / construction of fixed asset which necessarily take a substantial period of time to get ready for their intended use are capitalised.

d) Depreciation / Amortisation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act,1956 except for certain assets that have been revalued and restated. Depreciation on these assets has been provided on the net restated book value prospectively over the remaining original specified life.

e) Investments

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair value.Long Term Investments are stated at cost less provision, if any, for decline other than temporary, in their value.

f) Inventories

All Inventories are valued at lower of cost and net realisable value.

Raw Materials, Stores and Spares & packing material are valued at lower of cost determined on weighted average basis and net realisable value.

Work in process is valued at lower of cost and net realisable value.

Finished Goods are valued at lower of cost including excise payable thereon and net realisable value.

Raw Materials, Stores & Spares which are slow moving valued at estimated net realizable value.

Construction work in progress is valued at cost and net realisable value whichever is lower. The cost is determined considering proportionate costs of a) value of land, b) direct construction cost, c) development expenses and attributable indirect expenses.

g) Revenue and Income from Operations.

Sale of products are recognised when risk and rewards of ownership of the products are passed on to the customers, which is generally on the despatch of goods. Sales are inclusive of excise duty, but net of sales return, Service Tax & Value Added Tax & CST

Export sales are recognised on the date of bill of lading / Arway bill.

Income from operations includes revenue earned, as per the terms agreed with the customers.

Revenue from Real Estate Projects is recognised based on sold areas as per the percentage completion method. The stage of completion is determined as per the proportion of the cost of construction and development actually incurred till reporting date and the total estimated cost of construction and development of the project. The total estimated cost of the project are estimated based on the techincal and other estimates of saleable areas, costs etc. The revenue from the Real Estate project is recongnised when 40% of the stage of completion is reached and the outcome of the project can reliably be estimated.

h) Foreign Exchange Transactions

Foreign Exchange Transcations are intially recorded at the rate of exchange prevailing on the date of transaction.

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are converted at year end exchange rates.

The difference in conversion of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Statement of Profit and Loss.

i) Employee benefits

Defined Contribution plan

Contribution to pension fund, Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the ICICI Prudential Life Insurance Co.Ltd, ESIC and labour welfare fund are recognised as an expense in the statement of profit and loss.

Defined Benefit plan

The Company''s contribution to provident fund, administered through a Company managed trust, is recognised as an expense in the statement of profit and loss.

The gratuity liability, actuarially valued, is funded through the scheme administered by the Life Insurance Corporation of India (LIC) and HDFC Standard Life Insurance Co. Ltd and the amounts paid / provided under the scheme are charged to statement of profit and loss.

Accumulated leave liability (other than sick leave) as at the year end is provided as per actuarial valuation. Accumulated sick leave is provided for at actuals in the Statement of Profit and Loss.

j) Taxes on Income

Provision for taxation comprises of Current Tax and Deferred Tax. Current Tax provision has been made on the basis of reliefs and deductions available under the Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted in accordance with Accounting Standard 22 (AS-22) "Accounting for taxes on income" notified under the Companies (Accounting Standards) Rules, 2006, using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets can be realised in future. However, where there is unabsorbed depreciation or carry forward losses under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance sheet date to reassess its realisation.

The benefit of credit against the payment made towards MAT for the earlier years is available in accordance with the provisions of section 115J (AA) of income tax act 1961 over a period of subsequent 10 assessment year and same will be accounted for when actually arised

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements.

l) Measurement of EBITDA

The Company has elected to present earning before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the statement of the profit and loss.

m) Impairment of assets

In accordance with Accounting Standard 28 (AS 28) on ''Impairment of assets'' where there is an indication of impairment of the Company''s assets, the carrying amounts of the Company''s assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of the assets (or where applicable that of the cash generating unit to which the asset belongs) is estimated at the higher of its net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the assets and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognized in the statement of profit and loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the lower of recoverable amount and the carrying amount that would have been determined had no impairment loss being recognised.

n) Earning per share

Basic and diluted earnings per share are computed by dividing the net profit after tax attributable to equity shareholders for the year, with the weighted number of equity shares outstanding during the year.


Mar 31, 2013

A) Basis of Accounting :

The Financial Statements are prepared as per historical cost convention and on accrual basis and are in conformity with mandatory Accounting Standards and relevant provisions of the Companies Act, 1956.

b) Use of Estimates :

The preparation of Financial Statements in conformity with generally accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities, Income and Expenditures and disclosure of Contingent Liabilities at the date of the Financial Statements. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

c) Fixed Assets :

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use.

Certain fixed assets of the Company have been revalued and have been restated at a net book value including the net increase / decrease in the original net value of the assets as per the approved Scheme of Arrangement

Borrowing Cost directly attributable to acquisition / construction of fixed asset which necessarily take a substantial period of time to get ready for their intended use are capitalised.

d) Depreciation / Amortisation :

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act,1956 except for certain assets that have been revalued and restated. Depreciation on these assets has been provided on the net restated book value prospectively over the remaining original specified life.

e) Investments :

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value.

f) Inventories:

All Inventories are valued at lower of cost and net realisable value.

Raw Materials, Stores and Spares & packing material are valued at lower of cost determined on weighted average basis and net realisable value.

Work in process is valued at lower of cost and net realisable value.

Finished Goods is valued at lower of cost including excise payable thereon and net realisable value.

Slow moving, Raw Materials, Stores & Spares are valued at estimated net realizable value.

Construction work in progress is valued at cost and net realisable value whichever is lower. The cost is determined considering proportionate costs of a) value of land, b) direct construction cost, c) development expenses and attributable indirect expenses.

g) Sales and Income from Operations :

Sale of products are recognised when risk and rewards of ownership of the products are passed on to the customers, which is generally on the despatch of goods. Sales are inclusive of excise duty, but net of sales return, Service Tax & Value Added Tax &CST

Export sales are recognised on the date of bill of lading / Airway bill.

Income from operations includes revenue earned, as per the terms agreed with the customers.

Revenue from Real Estate Projects is recognised based on sold areas as per the percentage completion method. The stage of completion is determined as per the proportion of the cost of construction and development actually incurred till reporting date and the total estimated cost of construction and development of the project. The total estimated cost of the project are estimated based on the technical and other estimates of salable areas, costs, etc.

The revenue from the Real Estate project will be recongnised when 40% of the stage of completion is reached and the outcome of the project can reliably be estimated.

h) Foreign Exchange Transactions :

Foreign Currency transactions are initially recorded at the rate of exchange prevailing on the date of transaction

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are converted at year end exchange rates.

The difference in conversion of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Statement of Profit and Loss.

i) Employee benefits :

Defined Contribution plan

Contribution to pension fund, Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the ICICI Prudential Life Insurance Co. Ltd, ESIC and labour welfare fund are recognised as an expense in the statement of profit and loss.

Defined Benefit plan

The Company''s contribution to provident fund, administered through a Company managed trust, is recognised as an expense in the statement of profit and loss.

The gratuity liability, actuarial valued, is funded through the scheme administered by the Life Insurance Corporation of India (LIC), and the amounts paid / provided under the scheme are charged to statement of profit and loss

Accumulated leave liability (other than sick leave) as at the year end is provided as per actuarial valuation. Accumulated sick leave is provided for at actuals in the statement of profit and loss.

j) Taxes on Income :

Income tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income tax law).

Deferred Tax asset & liabilities are recognised as per accounting standard -22 on accounting for Taxes on Income, issued pursuant to the Companies (Accounting Standards) Rules, 2006 by the Central Government.

k) Provisions, Contingent Liabilities and Contingent Assets :

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements.

l) Measurement of EBITDA :

The Company has elected to present earning before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the statement of the profit and loss.


Mar 31, 2012

A) Basis of Accounting

The accounts are prepared as per historical cost convention and on accrual basis and are in conformity with mandatory Accounting Standards and relevant provisions of the Companies Act, I956.

b) Use of Estimates

The preparation of Financial Statements in conformity with generally accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities, Income and Expenditures and disclosure of Contingent Liabilities at the date of the Financial Statements. Although these estimates are based upon management's best knowledge of current events and actions, actual result could differ from these estimates.

c) Fixed Assets

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use.

Certain fixed assets of the Company have been revalued and have been restated at a net book value including the net increase / decrease in the original net value of the assets as per the approved Scheme of Arrangement

Borrowing Cost directly attributable to acquisition / construction of fixed asset which necessarily take a substantial period of time to get ready for their intended use are capitalized.

d) Depreciation / Amortization

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act,I956 except for certain assets that have been revalued and restated. Depreciation on these assets has been provided on the net restated book value prospectively over the remaining original specified life.

e) Investments

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair market value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value.

f) Inventories:

All Inventories are valued at lower of cost and net realizable value.

Raw Materials, Stores and Spares & packing material are valued at lower of cost determined on weighted average basis and net realizable value.

Work in process is valued at lower of cost and net realizable value.

Finished Goods is valued at lower of cost including excise payable thereon and net realizable value.

Slow moving, Raw Materials, Stores & Spares are valued at estimated net realizable value.

Project work in progress is valued at cost which is determined based on fair value of land on conversion and direct construction and development expenses and attributable indirect expenses.

g) Sales and Income from Operations.

Sale of products are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on the dispatch of goods. Sales are inclusive of excise duty, but net of sales return, Service Tax & Value Added Tax & CST.

Export sales are recognized on the date of bill of lading / Airway bill.

Income from operations includes revenue earned, as per the terms agreed with the customers.

Revenue from Real Estate Projects is recognized based on sold areas as per the percentage completion method. The stage of completion is determined as per the proportion of the cost of construction and development actually incurred till reporting date and the total estimated cost of construction and development of the project. The total estimated cost of the project are estimated based on the technical and other estimates of salable areas, costs, etc. The revenue from the Real Estate project will be recognized when 40% of the stage of completion is reached and the outcome of the project can reliably be estimated.

h) Foreign Exchange Transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are converted at year end exchange rates.

The difference in conversion of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Profit and Loss Account.

i) Employee benefits

The gratuity liability is funded through the scheme administered by the Life Insurance Corporation of India (LIC), and the amounts paid / provided under the scheme are charged to Profit and Loss account.

Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the ICICI Prudential Life Insurance Co.Ltd.

Accumulated leave liability as at the year end is provided as per actuarial valuation.

j) Taxes on Income

Income tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income tax law).

Deferred Tax asset & liabilities are recognized as per accounting standard -22 on accounting for Taxes on Income, issued pursuant to the Companies (Accounting Standards) Rules, 2006 by the Central Government.

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent Assets are not recognized in the financial statements.

l) Measurement of EBITDA

The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of the profit and loss.


Mar 31, 2011

A) Basis of Accounting

The accounts are prepared as per historical cost convention and on accrual basis and are in confirmity with mandatory Accounting Standards and relevant provisions of the Companies Act, 1956.

b) Fixed Assets

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price net of Cenvat, Service Tax and Value Added Tax and any attributable cost of bringing the assets to its working condition for its intended use.

Fixed Assets of the Vadodara undertaking of the Company have been revalued during the year and have been restated at a net book value including the net increase / decrease in the original net value of the assets as per the approved Scheme of Arrangement

Borrowing Cost directly attributable to acquisition / construction of fixed asset which necessarily take a substantial period of time to get ready for their intended use are capitalised.

c) Depreciation / Amortisation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act,1956 except for the assets of the Vadodara undertaking that have been revalued and restated. Depreciation on these assets has been provided on the net restated book value prospectively over the remaining original specified life.

Leasehold Land is amortized over the period of Lease. Depreciation on Research and Development Equipments :. Acquired upto 31.03.2003 @ 100% and Acquired from 01.04.2003 on Straight Line Method at the rate prescribed in schedule XIV of the Companies Act,1956.

d) Investments

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair market value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value.

Investment in Subsidiary company are stated at cost of acquisition.

e) Inventories

All Inventories are valued at lower of cost and net realisable value.

Raw Materials, Stores and Spares & packing material are valued at lower of cost determined on weighted average basis and net realisable value.

Work in process is valued at lower of cost and net realisable value.

Finished Goods is valued at lower of cost including excise payable thereon and net realisable value.

Slow moving, Raw Materials, Stores & Spares are valued at estimated net realizable value.

Land converted into Stock in Trade for the real estate business of the Company has been valued at fair market value as on 10th January, 2011 duly certified by approved valuer.

f) Sales and Income from Operations

Sale of products are recognised when risk and rewards of ownership of the products are passed on to the customers, which is generally on the despatch of goods. Sales are inclusive of excise duty, but net of sales return, Service Tax & Value Added Tax & CST.

Export sales are recognized on the date of bill of lading / Airway bill.

Income from operations includes revenue earned, as per the terms agreed with the customers.

g) R & D Expenses

All revenue expenses related to R & D including expenses in relation to development of product/ processes and expenses incurred in relation to compliances are charged to the profit & loss account in the year in which it is incurred.

h) Foreign Exchange Transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end exchange rates.

The difference in translation of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Profit and Loss Account.

In respect of transactions covered by forward contracts, the difference between the contract rate and the rate on the date of the transactions is charged to Profit and Loss Account over the contract period.

i) Employee benefits

The gratuity liability is funded through the scheme administered by the Life Insurance Corporation of India (LIC), and the amounts paid / provided under the scheme are charged to Profit and Loss account.

Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the ICICI Prudential Life Insurance Co.Ltd.

Accumulated leave liability as at the year end is provided as per actuarial valuation.

j) Taxes on Income

Income tax expense comprises current tax (i.e amount of tax for the year determined in accordance with the Income tax law).

Deferred Tax asset & liabilities are recognised as per accounting standard -22 on accounting for Taxes on Income, issued by Institute of Chartered Accountant of India.

k) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements.


Mar 31, 2010

A. Basis of Accounting

The accounts are prepared as per historical cost convention and on accrual basis and are in confirmity with mandatory Accounting Standards and relevant provisions of the Companies Act, 1956.

B. Fixed Assets

Fixed Assets are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the assets to its working condition for its intended use, but excluding Cenvat/Service tax/Value Added Tax credit availed

Borrowing Cost directly attributable to acquisition / contruction of fixed asset which necessarily take a substantial period of time to get ready for their intended use are capitalised.

C. Depreciation / Amortisation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act,1956

Leasehold Land is amortized over the period of Lease. Depreciation on Research and Development Equipments. Acquired upto 31.03.2003 @ 100% Acquired from 01.04.2003 on Straight Line Method at the rate prescribed in schedule XIV of the Companies Act,1956.

D. Investments

Investments are classified into Current and Long Term Investments. Current Investments are valued at lower of cost and fair market value. Long Term Investments are stated at cost less provision, if any, for decline other than temporary in their value. Investment in Subsidiary company are stated at cost of acquisition.

E. Inventories

All Inventories are valued at lower of cost and net realisable value.

Raw Materials, Stores and Spares & Packing Material are valued at lower of cost determined on weighted average basis

and net realisable value.

Work in process is valued at lower of cost and net realisable value.

Finished Goods is valued at lower of cost including excise payable thereon and net realisable value.

Slow moving, Raw Materials, Stores & Spares are valued at estimated net realizable value.

F. Sales and Income from Operations

Sale of products are recognised when risk and rewards of ownership of the products are passed on to the customers, which is generally on the despatch of goods. Sales are inclusive of excise duty, but net of sales return, Service Tax, CST & Value Added Tax.

Export sales are recognized on the date of bill of lading / Airway bill.

Income from operations includes revenue earned, as per the terms agreed with the customers, from development of

products and assignment of patent rights of Alembic I P.

G. R & D Expenses

All revenue expenses related to R & D including expenses in relation to development of product/ processes and expenses incurred in relation to compliances with international regulatory authorities in obtaining of Abbreviated New Drug Applications (ANDA) are charged to the Profit & Loss Account in the year in which it is incurred.

H. Foreign Exchange Transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end exchange rates.

The difference in translation of monetary assets & liabilities and realized gains & losses on foreign exchange transaction are recognized in the Profit and Loss Account.

In respect of transactions covered by forward contracts, the difference between the contract rate and the rate on the date of the transactions is charged to Profit and Loss Account over the contract period.

I. Employee benefits

The gratuity liability is funded through the scheme administered by the Life Insurance Corporation of India, and the amounts paid / provided under the scheme are charged to Profit and Loss account.

Superannuation payable as per superannuation scheme is provided by payment to superannuation trust fund, administered by the ICICI Prudential Life Insurance Co.Ltd.

Accumulated leave liability as at the year end is provided as per actuarial valuation.

J. Deferred tax

Deferred Tax asset & liabilities are recognised as per Accounting Standard -22 on accounting for Taxes on Income, issued by Institute of Chartered Accountant of India.

K. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements.

 
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