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Notes to Accounts of Alembic Ltd.

Mar 31, 2016

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 I33 of the Companies Act, 20I3 read with rule 7 of Companies (Accounts) Rules, 20I4.

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

b) Use of Estimates and Judgments:

In preparation of the Financial Statements, in conformity with Indian GAAP the management is required to make judgments, 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 recognized 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 Convert, 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.

Components of an asset are separated where their value is significant in relation to the total value of the asset and where those components have different useful lives to the remainder of the asset.

Where a component is replaced or restored, the carrying amount of the old component will be derecognized and value of new component / restoration cost will be added. Where the carrying value of the derecognized/replaced component is not known a best estimate will be determined by reference to the current cost.

Assets with a gross cost of Rs. 50 lacs and above will be considered for componentization. Of those assets, for the purpose of determining a ‘significant’ component of an asset, components with a value of 20% and more in relation to the overall value of the asset will be considered and then only if the component has a significant different useful life for depreciation purposes so as to result in depreciation expense that differ materially from the depreciation expenses had the asset not been componentized.

d) Depreciation / Amortization:

Depreciation on Fixed Assets is provided on Straight Line Basis as per the useful life prescribed in schedule II of the Companies Act, 20I3, 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., 20I3.

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 regonised 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 realizable value.

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

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

Construction work in progress is valued at cost and net realizable 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 economic 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 actual 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) Earnings 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.

VI As per information / documents available with the Company, there are no amounts payable to Micro, Small & Medium Enterprises. Hence information as per requirement of section 22 of Micro, Small & Medium Enterprises Development Act, 2006, is not given.

VII Segment Reporting

Primary Segment

The Company has identified “API” and “Real Estate” as the primary reportable segment.

Disclosures persuant to AS-17 i.e. Segment Reporting is as under:


Mar 31, 2015

(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, 2015 an amount of Rs. 0.15 per equity share was proposed for dividend to the equity shareholders ( PY Rs. 0.15 per equity share)

(b) Shares in the company held by each shareholder holding more than 5 percent shares specifying the number of shares held

Capital Reserve

The company has converted part of Land as Stock in Trade, the conversion has been done at fair market value of Rs. 1594 lacs based on report from approved valuer. The revaluation surplus has been credited to the capital reserve account. Accordingly the said land has been part of Work in Process Real Estate and shown as reduction from fixed assets.

Notes:

1 Sales proceeds are deducted from gross cost where cost is unascertainable.

2 Buildings : include Rs. 2,500/- (Rs. 2,500/-) being cost of bonds of Morning Star Co-Op. Housing Society Ltd.

3 No Depreciation has been claimed on assets to the extent of Cenvat claimed.

4 Certain office premises which were earlier used for Company own operations, have now been given on lease, as the Company does not have immediate usage of these premises in view of demerger and down size operations of its plant. These office premises continue to be included in the fixed assets of the Company.

5 ** Of the above Rs. 6.28 lacs (Rs. 6.29 lacs) has been transferred to Cost of Construction in the statement of Profit and Loss.

6 Pursuant to the provisions of Companies Act, 2013 (the Act) becoming effective from 01.04.2014, the Company has adopted the specified useful life of its Fixed Assets as per schedule II to the Act and consequently, a) the depreciation for the year is lower by Rs. 73.70 lacs b) depreciation charge in respect of earlier years amounting to Rs.. 259.26 lacs (Net of Tax Rs. 171.14 lacs) has been adjusted from the General Reserve of the Company,

II Contingent liabilities not provided for

(a) Wage revision and reinstatement of employees and other demands

Unascertained Unascertained

(b) Letter of credit and guarantees 447.84 393.59

(c) Liabilities Disputed in appeals

- Excise duty 563.20 413.35

- Sales Tax 132.68 226.45

- Income tax 702.86 729.36

- Green Cess 15.99 11.24

(d) Claims against the company not 4,882.87 3,555.76 acknowledged as debt

VI As per information / documents available with the Company, there are no amounts payable to Micro, Small & Medium Enterprises. Hence information as per requirement of section 22 of Micro, Small & Medium Enterprises Development Act, 2006, not given.

VII Segment Reporting Primary Segment

The Company has identified "API" and "Real Estate" as the primary reportable segment.

Disclosure persuant to AS-17 i.e. Segment Reporting

VIII Disclosures in respect of Related Parties pursuant to Accounting standard - AS 18 - issued by the Institute of Chartered Accountants of India are as follows.

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: There is no Subsidiary Company

(c) Associate Companies:

1 Alembic Pharmaceuticals Ltd. 6 Paushak Ltd.

2 Sierra Healthcare Ltd. 7 Alembic Export Ltd.

3 Nirayu Pvt. Ltd. 8 Whitefield Chemtech Pvt. Ltd.

4 Quick Flight Ltd. 9 Sierra Investments Ltd.

5 Shreno Ltd.

(d) Key Management personnel

1 Shri Udit Amin Director & President, Operations

(e) Relatives of Key Management Personnel :

1 Shri Chirayu Amin 4 Shri Shaunak Amin

2 Smt. Malika Amin

3 Shri Pranav Amin


Mar 31, 2014

Rs. in lacs

As at 31st March,

2014 2013

I Estimated amount of contracts (net of advances) remaining to be executed on capital accounts 270.21 179.42

II Contingent liabilities not provided for.

i Wage revision and reinstatement of employees and other demands Unascertained Unascertained

ii Letter of credit, Guarantees and counter guarantees 393.59 752.96

iii Liabilities Disputed in appeals

- Excise duty 413.35 412.50

- Sales Tax 226.45 242.21

- Income tax 729.36 740.69

- Green Cess 11.24 -

iv Claims against the Company not acknowledged as debt 3,555.76 -

v Non fulfillment of export obligation against advance licence - 91.03

III The remuneration paid to Managerial personnel / Whole Time Director for Financial Year 11-12 was in excess of the remuneratioi prescribed under schedule XIII to the Companies Act, 1956. The Company in Financial Year 11-12 has applied for the necessar approval from the Central Government for the excess paid remuneration in the prescribed limits. Central Government has partiall approved the waiver of the excess remuneration paid, however the Company has again represented to the Central Government fo full waiver of the same and the same is under consideration of the Central Government.

X Listing Agreement clause 32 disclosure

Disclosures as required under clause 32 of listing agreement have not been given as there are no such transactions with any such party / Employee.

XVII The previous year''s figure have been regrouped / rearranged wherever necessary to make it comparable with the current year.


Mar 31, 2013

I The remuneration paid to Managerial / Whole Time Director for Financial Year 11-12 was in excess of the remuneration prescribed under schedule XIII to the Companies Act, 1956 The Company has applied for the necessary approval from the Central Government for the excess paid remuneration in the prescribed limits. The application is pending for approval with the Central Government.

ii Disclosure pursuant to AS-7 i.e. Construction Contracts in relation to Samsara Project of the Company - Real Estate Business

iii. As per information / documents available with the Company, there are no small scale undertaking. Hence information as per requirement of section 22 of Micro, Small & Medium Enterprises Development Act, 2006, not given. viii. Segment Reporting

Primary Segment

The Company has identified ''API" and "Real Estate" as the primary reportable segment.

Disclosure pursuant to AS-17 i.e. Segment Reporting

iv Listing Agreement clause 32 disclosure

Disclosures as required under clause 32 of listing agreement have not been given as there are no such transactions with any such party / Employee.

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


Mar 31, 2012

I There was lack of Government support for levying anti-dumping duty despite efforts of the Company. Hence, the Company has suspended the production of "Penicillin-' as import from China have resulted in unviable prices.

The Company is in process of exploring other alternative options to utilize its manufacturing capacity.

ii The remuneration paid to Managerial / Whole Time Director is in excess of the remuneration prescribed under schedule XIII to the Companies Act, I956 .The Company is in process of making an application for the necessary approval from the Central Government for the excess paid remuneration in the prescribed limits.

iii. As per information / documents available with the Company, there are no small scale undertaking. Hence information as per requirement of section 22 of Micro, Small & Medium Enterprises Development Act, 2006, not given.

iv. Segment Reporting

Primary Segment

The Company has identified "Pharmaceuticals" and "Real Estate" as the primary reportable segment.

The Company has started a real estate project for residential use. The project is in initial stage and no revenue / profit is recognized in the current quarter / period and therefore, the Company has reported only pharmaceutical segment in accordance with the Accounting Standard on Segment Reporting (AS-I7).

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

v Listing Agreement clause 32 disclosure

Disclosures as required under clause 32 of listing agreement have not been given as there are no such transactions with any such party / Employee.

vi During the year ended 3Ist March, 20I2 the revised schedule VI notified under the Companies Act, I956 has become applicable to the Company for perpetration and presentation of its financial statement. The adoption of revised schedule VI does not impact recombination 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 applicable 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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