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Moneycontrol.com India | Notes to Account > Pharmaceuticals > Notes to Account from Alembic - BSE: 506235, NSE: ALEMBICLTD
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Alembic

BSE: 506235|NSE: ALEMBICLTD|ISIN: INE426A01027|SECTOR: Pharmaceuticals
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Notes to Accounts Year End : Mar '18

Note:

1. Property, Plant and Equipments as recognized in financial statements as at the date of transition to Ind ASs measured as per the previous GAAP and use that as its deemed cost as at the date of transition and accordingly, Presentation has been made during the year (with corresponding restatement of comparative amounts).

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

3. Buildings: include Rs. 0.025 Lakhs being cost of bonds of Morning Star Co-Operative Housing Society Limited.

# Of the above Rs.2.78 Lakhs C 3.60 Lakhs) has been transferred to Cost of Construction in the Statement of Profit and Loss.

* Disposal includes net block of Rs.I32.47 lakhs transferred to Assets held for sale at lower of its carrying amount and fair value less cost to sale.

Note 1 :- During the year, I% OCPS of Shreno Limited (7,62,549 nos) were converted into Equity Shares (2,54,183 nos) upon exercise of option by the Company.

Note 2 :- During the year, the Company has acquired additional 5,00,000 shares at a cost of Rs.2,759.87 lakhs.

Note 3 :- During the year, the Company acquired 55% of Equity Shares of Alembic City Limited ( Earlier known as Alembic Exports Limited) resulting into it becoming a wholly owned subsidiary of the Company.

e) 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 as approved by the shareholders at the Annual General Meeting. During the year ended 3I st March, 2018 an amount of Rs.0.20 of dividend per equity share was paid for Financial Year 2016-I7.

g) Shares allotted as fully paid up (during 5 years preceeding March 31, 2018)

In the Financial Year 2013-14, the Company has allotted 13,35,I5,914 equity shares as fully paid up bonus shares by capitalisation of General Reserves Rs.2,670.32 lakhs.

h) Buy-back of Shares

The Board of Directors of the Company had approved the proposal for Buy-back of Equity Shares at its meeting held on 23rd January, 2018. The same was approved by the members through Postal Ballot, the result of which was declared on I2th March, 2018. In furtherance to the said approval, the Company has completed the settlement for Buy-back of 1,02,50,000 Equity Shares of Rs.2/- each (representing 3.84 % of total pre Buy-back paid up Equity Capital) from the shareholders on a proportionate basis by way of a tender offer at a price of Rs.80/- per Equity Share for an aggregate amount of Rs.82 crores, on 9th May, 2018 in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, I998.

A Disclosure pursuant to Ind AS 17 - Leases:

The Company has obtained premises for its business operations under operating lease or leave and license agreements. These are not non-cancellable and are renewable by mutual consent on mutually agreeable terms.

Lease payments are recognised in Statement of Profit and Loss under the head “Rent Expense” in note no 30.

B Corporate Social Responsibility (CSR):

As per section I35 of the Companies Act , 2013 , a CSR committee has been formed by the Company.The areas for CSR activities are promoting education, art and culture, healthcare, destitute care and rehabilitation and rural development projects as specified in Schedule VII of the Companies Act, 2013.The details of amount required to be spent and actual expenses spent during the year is as under:

C Details of Hypothecation of Assets:

Inventory and Debtors are Hypothecated as security for working capital borrowings.

D Disclosure related to Micro, Small & Medium Enterprises:

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, there is no principal or interest remaining unpaid to any Micro,Small & Medium Enterprise Suppliers.

E SEBI (Listing Obligation & Disclosure Requirements) Regulation 2015:

Disclosures are required under Regulation 34 (3) read with schedule V of the SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015 have not been given as there are no such transactions with any such party.

F Information on Dividend for the year ended March 31, 2018:

Dividends proposed or declared after the balance sheet date but before the financial statements have been approved by the Board of Director for issue are not recognised as a liability at the balance sheet date.

The Board of Director recommended final dividend of '' 0.20 per equity share for the financial year ended on March 3I, 2018. The payment is subject to approval of share holder in ensuing Annual General Meeting of the Company. (Previous year '' 0.20 per equity share).

G Inter Reserve transfer:

In previous year, Rs.9,007.00 Lakhs were transferred from Business Restructuring Reserve to General Reserve as permitted in the scheme of arrangement in respect of losses of Vadodara undertaking of the Company.

Estimation of fair value: Method of Estimation

In the absence of valuation reports, the Company has used the government registration rates for the purpose of determining the fair value of Land and Buildings.

There are no contractual obligations to purchase, construct or develop investment property.

* Includes Rental Income of Rs.38.23 Lakhs of the premises for which completion certificate is yet to be received from requisite authority.

Level 1: Level I hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

There are no transfers between levels I and 2 during the year.

The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting period.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of the remaining financial instruments is determined using discounted analysis

v) Valuation Processes

Valuation of unquoted equity shares/preference shares is done by an external valuation agency.

The main level 3 inputs for unlisted equity securities used by the Company are derived and evaluated as follows:

Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.

Changes in level 2 and 3 fair values are analysed at the end of each reporting period.

H. Financial Risk Management:

The Company has exposure to credit risk, liquidity risk and market risk arising from financial instruments.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed periodically to reflect changes in market conditions and the Company’s activities.

The Company monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

a. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans and investments. Credit risk is managed through continuous monitoring of receivables and follow up for overdues.

Investments

The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter parties, and does not have any significant concentration of exposures to specific industry sector or specific country risks.

Trade Receivables

The Company has used Expected Credit Loss (ECL) model for assessing the impairment loss. For the purpose, the Company uses a provision matrix to compute the expected credit loss amount. The provision matrix takes into account external and internal risk factors and historical data to credit losses from various customers.

b. Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions.

Maturities of Financial Liabilities

The table herewith analyse the Company’s Financial Liabilities into relevant maturity groupings based on there contractual maturities for:

The amount disclosed in the table are the contractual undiscounted cash flows. Balance dues within the I2 months equal there carrying balances as the impact of discounting is not significant.

c. Market Risk

1. Price Risk

The Company is mainly exposed to the price risk due to its investment in equity instruments and equity and debt mutual fund. The price risk arises due to unascertainity about the future market value of these investments.

Management Policy

The Company maintains its portfolio in accordance with framework set by risk management policies.

2. Currency Risk

The Company has no significant exposure to export revenue and import of raw material and property, plant and equipments so the Company is not subject to significant risk that changes in foreign currency value impact.

I. Capital Management:

Risk management

For the purpose of Company’s Capital Management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the share holders and make adjustments to it in light of changes in economic conditions or its business requirements. The Company’s objective is to safe guard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to share holders through continuing growth and maximise the share holders value. The Company funds its operations through internal accruals. The Management and Board of Directors monitor the return of capital as well as the level of dividend to share holders.

J. Segment Reporting:

Primary Segment

The Company has identified “Active Pharmaceutical Ingredient (API)” and “Real Estate” as the primary reportable segment.

Part-III

Amount of revenue from major external customer of API Division Rs.5,777.87 Lakhs (Previous year Rs.5,736.73 Lakhs)

K. Commission to Director:

Managerial Remuneration of '' II0.00 lakhs to the Non-Executive Director is subject to approval of the Company in ensuing General Meeting and will be paid on obtaining of the said approval.

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

M. These Financial Statements were authorised for issue in accordance with the resolution of the Board of Directors in its meeting held on I7th May, 2018.

Source : Dion Global Solutions Limited
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