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Company Information

Home » Market » Company Information

Alembic Pharmaceuticals Ltd.

Feb 21
519.95 -4.30 ( -0.82 %)
VOLUME : 11792
Prev. Close 524.25
Open Price 529.60
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
Feb 21
522.80 -5.55 ( -1.05 %)
VOLUME : 39225
Prev. Close 528.35
Open Price 532.00
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
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Market Cap. ( ₹ ) 9855.61 Cr. P/BV 4.44 Book Value ( ₹ ) 117.77
52 Week High/Low ( ₹ ) 664/414 FV/ML 2/1 P/E(X) 23.89
Bookclosure 27/07/2018 TTM EPS ( ₹ ) 29.40 Div Yield (%) 0.77
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

1 General information

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 16th May, 2018

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.

Nature and purpose of each Reserve

Capital Reserve :- Capital Reserve is created on receipt of Government subsidy for setting up factory in backward area. General Reserve :- The reserve is created by transfer of a portion of the net profit.

iii Contingent Asset

(a) As per JV agreement, the interest on NCD issued by Aleor and subscribed by company will start accruing only when Aleor starts making cash profit. Since in pharma industry the gestation period is long and there is significant uncertainty as to when JV will start making profit, the fair value of such contingent asset is not ascertainable.

(b) The company has made application to Department of Industrial Policy and Promotion for subsidy for setting new plant in Sikkim. The same is yet to be approved by the relevant authorities. Also large number of claims of various companies (who set up their plants much before ours) are pending. Hence, the quantification of fair value of such subsidy are unascertainable.

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

To 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 - “Operating Segments” is given in the Consolidated financial statements of the Company

4 Defined benefit plans / compensated absences - As per actuarial valuation

The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company’s financial statements as at 31st March, 2018

A description of methods used for sensitivity analysis and its Limitations:

Sensitivity analysis is performed by varying single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously. The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

5 Disclosures in respect of Related Parties transactions

(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 Orit Laboratories LLC (Subsidiary of Alembic Pharmaceuticals Inc)

10 Okner Realty LLC (Subsidiary of Alembic Pharmaceuticals Inc)

11 Aleor Dermaceuticals Limited (Subsidiary of Alembic Pharmaceuticals Limited)

(c) Associate Companies:

1 Incozen Therapeutics Pvt. Limited

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

3 Dahlia Therapeutics (Wholly Owned Subsidiary of Rhizen Pharmaceuticals SA)

4 Rhizen Pharmaceuticals Inc (Wholly Owned Subsidiary of Rhizen Pharmaceuticals SA)

(d) Joint Venture

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

(e) Other Related Parties

1 Alembic Limited 6 Sierra Investments Pvt. Limited (Up to 12th December, 2017)

2 Nirayu Pvt.Limited 7 Viramya Packlight LLP (Formally Known as Viramya Packlight Ltd)

3 Shreno Limited 8 Shreno Publications Limited

4 Paushak Limited 9 Whitefield Chemtech Pvt. Limited (up to 12th December, 2017)

5 Quick Flight Limited (up to 9th May, 2017)

(f) Key Management Personnel

1 Mr. Chirayu Amin Chairman & CEO

2 Mr. Pranav Amin Managing Director

3 Mr. Shaunak Amin Managing Director

4 Mr. R. K. Baheti Director Finance & CFO

5 Mr. K. G. Ramnathan Non-Executive Independent Director

6 Mr. Pranav Parikh Non-Executive Independent Director

7 Mr. Paresh Saraiya Non-Executive Independent Director

8 Mr. Milin Mehta Non-Executive Independent Director

9 Ms. Archana Hingorani Non-Executive Independent Director

10 Mr. Ajay Kumar Desai Sr. Vice President - Finance & Company Secretary

(g) Relatives of Key Management Personnel :

1 Mrs. Malika Amin

2 Mr. Udit Amin

3 Ms. Yera Amin

4 Ms. Jyoti Patel

5 Mrs. Ninochaka Kothari

6 Mrs. Shreya Mukherjee

6 Pre-operative expenses pending capitalisation included in Capital Work-In-Progress represent direct attributable expenditure for setting up of plants commencement of commercial operation. The detail of pre-operative expenses are:

7 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 preceding 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 Rs.7.14 Crores on various projects during the year refer Annexure - A (point no 5) included in the Board’s Report.

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

In case of investment in equity instuments, cost has been considerd as approximate fair value in view of materiality of value of investment.

8 Financial Risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit Risk;

- Liquidity Risk; and

- Market Risk

i) 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, deposit and other receivables.

Trade receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer, demographics of the customer, default risk of the industry and country in which the customer operates. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company has used expected credit loss model for assessing the impairment loss.

Cash and cash equivalents

As at the year end, the Company held cash and cash equivalents of Rs.9.45 Crores (31st March, 2017 - Rs.0.69 Crores). The cash and cash equivalents other bank balances and derivatives are held with bank with good credit rating.

Other financial assets

Other financial assets are neither past due nor impaired.

ii) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they fall due. The Company ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions. The Company has sufficient unutilised fund and non fund based working capital credit limit duly sanctioned by various banks.

The company is rated by leading credit agency CRISIL, the rating “CRISIL A1 ” and “AA /Stable” has been assigned for short term and long term facility respectively, indicating high degree of sefty regarding timely payment and servicing of financial obligation.

Exposure to liquidity risk

The following are the remaining contractual maturities of undiscounted financial liabilities at the reporting date.

iii) Market Risk

Currency Risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues, expenses and borrowings. The Company uses foreign exchange forward contracts and option contracts, to mitigate the risk of changes in foreign currency exchange rates in respect of its budgeted business transactions and recognized assets and liabilities. The Company enters into foreign currency options and forward contracts which are not intended for trading or speculative purposes but for hedge purposes.

The Company’s exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows:

Sensitivity analysis

For the years ended 31st March, 2018 and 31st March, 2017 every 5% weakening in the exchange rate between the Indian Rupee and the respective major currencies for the above mentioned financial assets/liabilities would increase Company’s profit and equity by approximately Rs.19.87 Crores and Rs.14.96 Crores respectively. A 5% strengthening of the Indian Rupee and the respective major currencies would lead to an equal but opposite effect.

Interest Rate Risk and Exposure to Interest Rate Risk

The Company has loan facilities on floating interest rate, which exposes the company to risk of changes in interest rates.

For the years ended 31st March, 2018 and 31st March, 2017, every 50 basis point decrease in the floating interest rate component applicable to its loans and borrowings would decrease the Company’s loss by approximately Rs.3.11 Crores and Rs.0.04 Crores respectively. A 50 basis point increase in floating interest rate would have led to an equal but opposite effect.

Commodity Rate Risk

The Company’s operating activities involve purchase and sale of Active Pharmaceutical Ingredients (API), whose prices are exposed to the risk of fluctuation over short periods of time. Commodity price risk exposure is evaluated and managed through procurement and other related operating policies.

Other Risk

Since Company is significantly dealing in regulatory market, continuous compliance of all manufacturing facilities is pre requisite, any adverse action by regulatory authority of the Company’s target market can adversely affect its operation.

9 Capital Management

The Company’s capital management objectives are:

* to ensure the Company’s ability to continue as a going concern; and

* to provide an adequate return to shareholders through optimisation of debts and equity balance.

The Company monitors capital on the basis of the carrying amount of debt less cash and cash equivalents as presented on the face of the financial statements. The Company’s objective for capital management is to maintain an optimum overall financial structure.

Dividend on equity shares paid during the year

During the year ended 31st March, 2018 dividend of Rs.4 per equity share was paid to the equity shareholders after the AGM approval. Rs.75.41 Crores and corporate tax of Rs.15.35 in relation to FY 2016-17

The Board of Directors has recommended dividend on Equity Shares at Rs.4 per share i.e. 200% for the year ended on 31st March, 2018. Dividend Proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

10 Donation includes political contributions of Rs.6 Crores to Bharatiya Janata Party.

11 Recent Accounting Pronouncements

On 28th March, 2018 Ministry of Corporate Affairs has notified the Ind AS 115, Revenue form Contract with Customers. 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. The company will adopt the standard on 1st April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ended 31st March, 2018 will not be retrospectively adjusted. the effect on adoption of Ind As 115 on the operations of the company is being assessed by the company.

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

Lease receipts / payments are recognised in the statement of profit and loss under “Lease Rent Income” and “Rent” in Note 22 and 25 respectively..

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