Notes to Accounts of Alpa Laboratories Ltd.

Mar 31, 2024

11. Provisions & Contingent liabilities and assets

a. Provisions are recognized only when there is a present obligation, because of past events and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.

b. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from the past events where it is probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

c. Contingent assets are neither recognized nor disclosed except when realization of income is virtually certain, related asset is disclosed.

12. Taxation

Tax expense recognized in Standalone Statement of Profit and Loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.

Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).

Minimum Alternate Tax (‘MAT’) credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the Standalone Statement of Profit and Loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is written down to the extent it is not reasonably certain that normal income tax will be paid during the specified period.

Deferred tax is recognized on temporary differences between the carrying amount of assets and liabilities in the financial statement and the corresponding tax bases used in computation of taxable profit under Income Tax Act, 1961.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside Standalone Statement of Profit and Loss is recognized outside Standalone Statement of Profit and Loss (either in other comprehensive income or in equity).

13. Financial Instruments

i) Financial Assets

A. Initial Recognition and Measurement

All Financial Assets are initially recognized atfair value. Transaction costs that are directly attributable to the acquisition orissue of Financial Assets, which are not at Fair Value Through Profit or Loss, are adjusted to the fair value on initialrecognition. Purchase and sale of Financial Assets are recognised using trade date accounting.

B. Subsequent measurement

a) Financial Assets measured at Amortised Cost(AC)

A Financial Asset is measured at Amortised Cost if it is held within a business model whose objective is to hold the assetto collect contractual cash flows and the contractualterms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)

A Financial Assetis measured at FVTOCI if itis held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and the contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)

A Financial Asset which is not classified in any ofthe above categories are measured at FVTPL.

C. Investments in subsidiaries, associates, and joint ventures

Investments in subsidiaries, associates and joint ventures are carried at cost/deemed cost less accumulated impairmentlosses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and an impairment provision is recognized, if required immediately to its recoverable amount. On disposal of such investments, difference between the net disposal proceeds and carrying amount is recognized in the statement of profit and loss.

D. Other Equity Investments

All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ‘Other Comprehensive Income’.

E. Impairment of Financial Assets

The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied dependson whether there has been a significant increase in credit risk.

ii) Financial Liabilities

A. Initial Recognition and Measurement

All Financial Liabilities are recognized atfair value and in case of borrowings, net of directly attributable cost. Fees ofrecurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

B. Subsequent Measurement

Financial Liabilities are carried at amortized cost using the effective interest method.

Fortrade and other payables maturing within one yearfrom the balance sheet date,the carrying amounts approximate fair value due to the short maturity ofthese instruments.

iii) Derecognition of Financial Instruments

The Company derecognizes a Financial Asset when the contractualrights to the cash flows from the Financial Asset expire orittransfers the Financial Asset, and the transfer qualifies for derecognition underInd AS 109. A Financial liability (or a part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contractis discharged or cancelled or expires.

iv) Offsetting

Financial Assets and Financial Liabilitiesare offset, and the net amountis presented in the balance sheet when, and only when,the Company has a legally enforceable rightto set off the amount and itintends, eitherto settle them on a net basis or to realise the asset and settle the liability simultaneously

14. Earnings Per Share

Basic earnings per share have been computed by dividing profit or loss for the year by the weighted average number of shares outstanding during the year. Partly paid-up shares are included as fully paid equivalents according to the fraction paid up.

Diluted earnings per share have been computed using the weighted average number of shares and dilutive potential shares except where the result would be anti-dilutive.

15. Government Grants

Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will bereceived and the Company will comply with all attached conditions.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as

deferred income and are credited to Profit and Loss on a straight - line basis over the expected lives of related assets andpresented within other income.

16. Leases

For any new contracts entered on or after 1 April 2019, (the transition approach has been explained and disclosed in Note 31) the Company considers whether a contract is or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period in exchange for consideration’.

Classification of leases

The Company enters leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to extend/purchase etc.

Recognition and initial measurement

At lease commencement date, the Company recognizes a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).

Subsequent measurement

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of use asset or the end of the lease term. The Company also assesses the right of use asset for impairment when such indicators exist.

At lease commencement date, the Company measures the lease liability at the present value of the lease payments unpaidat that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. After initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset.

The Company has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in standalone statement of profit and loss on a straight-line basis over the lease term.

17. Recent Accounting Pronouncements

The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:

Ind AS 1, Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of ‘accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its Standalone financial statements.

Ind AS 12, Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it

does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its Standalone financial statements.

B. Critical estimates and judgements -

The preparation of financial statements requires the use of accounting estimates which will seldom equal the actual results. Management also needs to exercise judgement in applying the Company’s accounting policies.

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

The areas involving critical estimates or judgement are:

i. Estimation of current tax expenses and Payable and Recognition of deferred tax assets for carried forward tax losses

The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions (refer note 28). The extent to which deferred tax assets/minimum alternate tax credit can be recognized is based on management’s assessment of the probability of the future taxable income against which the deferred tax assets/minimum alternate tax credit can be utilized.

ii. Estimated Fair value of unlisted securities

Information about the valuation techniques and inputs used in determining the fair value of various assets, liabilities and share based payments are disclosed in the notes to standalone financial statements. (Refer note 36)

iii. Probable outcome of matters included under Contingent Liabilities

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, (refer note 30). By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgments by management and the use of estimates regarding the outcome of future events.

iv. Recoverability of advances / receivables

At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit losses on outstanding receivables and advances.

v. Classification of leases

The Company enters leasing arrangements for various premises. The assessment (including measurement) of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to extend/terminate etc. After the Commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to extend or to terminate.\

vi. Inventories

The Company estimates the net realizable values of inventories, considering the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future demand or other market-driven changes that may reduce future selling prices.

vii. Provisions

At each balance sheet date basis, the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

---

Mar 31, 2023

b) Rights, preferences and restrictions attached to shares

Equity shares: The Company has one class of equity shares having a par value of ''10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Significant Estimates : Based on the approved plans and budgets, the company has estimated that the future taxable income will be sufficient to absorb carried forward unabsorbed depreciation, which mangement believes is probable, accordingly the company has recognized deferred tax asset on aforesaid losses.

Note - "29" Contingent Liabilities And Capital Commitment (To The Extent Not Provided For) i) Contingent Liabilities (? in Lacs)
Particulars	As at 31st March, 2023	As at 31st March, 2022
(a) Claims against the Company not acknowledged as debts in respect of past disputed
(i) Disputed Sales Tax Dues	68.35	95.35
(ii) Disputed Income Tax Dues	27.00	27.00
(b) Guarantees
(i) Guarantees to Banks and Financial Institutions against	222.51	398.75
ii) Capital Commitment		(? in Lacs)
Particulars	As at 31st March, 2023	As at 31st March, 2022
Estimated amount of contracts remaining to be executed on capital account and not provided for (net of capital advances of ? 153.10 Lacs (31 March, 2022 : ? 153.10 Lacs))(refer note 34)	6.90	6.90

ii) Total cash outflow for leases for the year ended 31 March, 2023 was ''6.26 Lakhs (P.Y. ''7.02 Lakhs). (Refer note 27)

Note - "31"

Segement Reporting

As the Company operates in the single segement of drugs and chemicals which is the primary reportable segement as per Accounting Standard Ind As 108 on ‘Operating Segment ‘, no separate disclosure pertaining to the same has been given.

Note - "33"

Application for merger of Norfolk Mercantile Private Limited, Wholly owned subsidiary of Alpa laboratories Limited was filed before NCLT, Mumbai by Norfolk Mercantile Private Limited on 7th December, 2017.The same is pending before the Bench as on the date of the financial statements.

Note - "34"

(i) Court Case has been filed against Innovec Laboratories Private Limited ( Medicure Nagpur) for '' 28,94,502 (Previous Year- '' 28,94,502) for recovery of outstanding amounts.

(ii) Alpa Laboratories Limited ("The Company") has executed a registered Agreement on 24/08/2018 with Kabeer Reality Private Limited for purchase of property at Kibe Compound,Indore for a total sale consideration of ''

1,60,00,000/- against which a sum of '' 1,53,10,000 was paid . On the date of registry the seller had denied to execute registry in favour of the company and to protect the rights on the property, the company had lodged a complaint in the Jurisdictional Police Station and also filed a petition in Commercial Court, Indore Division which is pending for hearing.

Note"35"

Other statutory information

a. The Company do not have any Benami property, where any proceeding has been initiated or pending against them for holding any Benami property.

b. The Company do not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income T ax Act, 1961).

c. The Company has not been declared a wilful defaulter by any bank or financial institution or other lender (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

d. The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies (ROC) beyond the statutory period.

e The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.

f The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall :

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g The Company has not entered into any scheme of arrangement which has an accounting impact on the current or previous financial year.

h The Company has complied with the number of layers prescribed under the Companies Act, 2013.

i There were no transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 as of and for the year ended 31st March, 2023:

j The Company has not invested in any entitiy with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries).

k The Company has not advanced or loaned funds to any other person(s) or entity(ies), including foreign entities (Intermediaries).

Note - "36"

Fair Value Measurement

Financial Instrument by category and hierarchy

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

3. The fair values for loans and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

4. The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

Fcr financial assets and liabilities that are measured at fair value, the carriying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note - "37"

Financial Risk Management

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

The Company manages market risk by evaluating and exercising independent control over the entire process of market risk management. The recommend risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and policies.

Market Risk- Foreign currency risk.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

(a) (Hi) Market Risk- Price Risk

(a) Exposure

The Company’s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

(b) Sensitivity

The table below summarizes the impact of increases/decreases of the BSE index on the Company’s equity and Gain/Loss for the period. The analysis is based on the assumption that the index has increased by 5 % or decreased by 5 % with all other variables held constant, and that all the Company’s equity instruments moved in line with the index.

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates.Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not materia l hence no additiona l provision considered .

Note - "38"

Capital Risk Management

a) Risk Management

The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day-today needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Norfolk Mercantile PrivateLimited had issued 1,010 9% compulsory convertible Debentures of '' 1,00,000/- each to Alpa Laboratories Limited (holding company) in the earlier years. Due to shortage of liquidity, the Subsidiary company has went into the option of Merger with the holding Company to take the benefit of synergy. By virtue of this, the Board of Directors of the holding Company and the subsidiary company approved the Scheme of amalgamation in the nature of merger in the Board meeting held on 10th August,2017 and 11th August,2017 respectively. The Board of Director''s looking into the benefit of synergy and considering the fact of pending petition of Merger before the NCLT have waived the interest amount on debentures to be paid by Norfolk Mercantile PrivateLimited to Alpa Laboratories Limited.

Note - ”42”

Dues to Micro, Small and Medium Enterprises

The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’). The disclosure pursuant to the said

A/TCA/THTTA A ,-*t iifo oci 4v-,ll/n!irci*

Explanation for Variances exceeding 25%

(i) Debt Equity Ratio: Decrease in Debt Equity ratio is due to foreign currency loan repaid during the year.

(ii) Debt Services coverage Ratio: Decrease in the ratio is due to decrease in borrowings during the year.

(iii) Trade Receivable Turnover Ratio: Decrease in the ratio is due to increase in trade receivables and decrease in sales.

(iv) Return on Equity Ratio,Net Profit Ratio,Return on Capital Employed : Decrease in the ratio is due to increase in Capital Employed and decrease in EBIT during the year.

Note - ”44”

Significant Accounting Policies & Practices:

Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as per Annexure- "A".

Note - ”45”

Previous Years Figures:

Comparative financial information is presented in accordance with the corresponding figure reporting framework set out in standards on Auditing 710 on "Comparatives". Previous year''s figures have been regrouped or arranged as wherever appropriate to correspond to figures of the current year.

Note - ”46”

The Financial Statements were authorised for issue by the directors on 29th May, 2023

---

Mar 31, 2018

Note:

(a) Held as lien by bank against bank guarantees amounting to NIL (Rs.10,00,000 as at 31 st March, 2017 and Rs. 10,00,000 as at 1 st April, 2016) and Term Loan amounting to Nil (Nil as at 31st March, 2017 and NIL as at 1 st April 2016)

(b) Includes deposits aggregating NIL (NIL as at 31st March, 2017, NIL as at 1st April, 2016) earmarked against unsecured debentures due for redemption in next twelve months.

b) Rights, preferences and restrictions attached to shares

Equity shares: The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Tax effect of the amounts which are not deductible/(taxable) in calculating taxable income

Permanent Disallowances

Deduction under section 24 of the Income Tax Act

Interest income from Joint Venture on liability element of compound financial instrument

Significant Estimates : Based on the approved plans and budgets, the company has estimated that the future taxable income will be sufficient to absorb carried forward unabsorbed depreciation, which management believes is probable, accordingly the company has recognized deferred tax asset on aforesaid losses.

Note - "1"

Segment Reporting

As the Company operates in the single segment of drugs and chemicals which is the primary reportable segment as per Accounting Standard Ind As 108 on ‘Operating Segment ‘, no separate disclosure pertaining to the same has been given.

Note - "2"

Application for merger of Norfolk Mercantile Private Limited, Wholly owned subsidiary of Alpa laboratories Limited was filed before NCLT, Mumbai by Norfolk Mercantile Private Limited on 7th December, 2017.The same was approved by the Bench vide Order dated 15th December,2017.Application was also filed by Alpa laboratories Limited before NCLT Ahmedabad on 15th January, 2018.Against the application an order was issued by the Bench on 2nd February, 2018 for approval of th same in EGM by the Shareholders through Special Resolution. The EGM was conducted on 7th of May, 2018 which approved the same. The Scrutinizer report and the Chairman report was filed on 9th May, 2018. Final petition was filed before the Bench on 15th May, 2018.

BSE Limited has informed the company through letter dated 8th March, 2018 that a notice has been received by them from one of the advocates on 28th February, 2018 eluding some dispute on title of Equity Shares of Norfolk Mercantile Private Limited. Alpa Laboratories Limited will be filing requisite reply on the same.

Note - "3"

Court Case has been filed against Innovec Laboratories Private Limited ( Medicure Nagpur) for Rs.28,94,502 (Previous Year- Rs.28,94,502) for recovery of outstanding amounts.

Note - "4"

Fair Value Measurement

Financial Instrument by category and hierarchy

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

3. The fair values for loans and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

4. The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carriying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note - "5"

Financial Risk Management

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommend risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures like foreign exchange forward contracts, borrowing strategies and ensuring compliance with market risk limits and policies.

Market Risk- Foreign currency risk.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

(a) (iii) Market Risk- Price Risk

(a) Exposure

The Company’s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet either at fair value through OCI or at fair value through profit and loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

(b) Sensitivity

The table below summarizes the impact of increases/decreases of the BSE index on the Company’s equity and Gain/Loss for the period. The analysis is based on the assumption that the index has increased by 5 % or decreased by 5 % with all other variables held constant, and that all the Company’s equity instruments moved in line with the index.

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional provision considered.

Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

Note - "6"

Capital Risk Management

a) Risk Management

The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders.

The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note - "7"

First-Time Adoption of Ind AS

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

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 1 st April, 2017, with a transition date of 1^st April, 2016. Ind AS 101 -First-time Adoption of Indian Accounting Standards requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements which is for the year ended 31st March, 2018 for the company, be applied retrospectively and consistently for all financial years presented. Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting difference in the carrying values of the assets and liabilities as at the transition date between the Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions availed

(a) Deemed Cost

The Company has opted paragraph D7 AA and accordingly considered the carrying value of property, plant and equipments and Intangible assets as deemed cost as at the transition date.

(b) Investments in subsidiaries, joint ventures and associates

The Company has opted para D14 and D15 and accordingly considered the Previous GAAP carrying amount of Investments as deemed cost as at the transition date.

B. Applicable Mandatory Exceptions

(a) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

(b) Classification and measurement of financial assets

As required under Ind AS 101 the company has assessed the classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:

I. Reconciliation of Balance sheet as at April 1, 2015 (Transition Date)

II. A. Reconciliation of Balance sheet as at March 31, 2016

B. Reconciliation of Total Comprehensive Income for the year ended March 31, 2016

III. Reconciliation of Equity as at April 1, 2015 and as at March 31, 2016

IV. Adjustments to Statement of Cash Flows

The presentation requirements under Previous GAAP differs from Ind AS, and hence, Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

A. Borrowings

As required under the IND AS 109 transactions costs incurred towards origination of borrowings have been deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit and loss over the tenure of the borrowing as interest expense, computed using the effective interest rate method corresponding effect being in Long term borrowings and to the extent attributable to Current maturity of long term debts.

Under the previous GAAP, these transaction costs were charged to the profit and loss as and when incurred. Consequently, borrowings as at 31st March, 2017 have been reduced by 16500 (April 1, 2016- ''Nil) with a corresponding adjustment to retained earnings resulting in increase in total equity.

B. Fair Valuation of Investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under IND AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings '' 69,81,846 as at 31st March, 2017 (''2,52,14,395 As at 1 April, 2016).

C. Retained earnings

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

D. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

E. Deferred Tax

Deferred Tax on aforesaid IND AS adjustments.

F. The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended 31st March, 2017 as compared with the previous GAAP.

Note - "8"

Norfolk Mercantile Private Limited had issued 1,010 9% compulsory convertible Debentures of Rs.1,00,000/- each to Alpa Laboratories Limited (holding company) in the earlier years. Due to shortage of liquidity, the Subsidiary company has went into the option of Merger with the holding Company to take the benefit of synergy. By virtue of this, the Board of Directors of the holding Company and the subsidiary company approved the Scheme of amalgamation in the nature of merger in the Board meeting held on 10th August,2017 and 11th August,2017 respectively. The Board of Director''s looking into the benefit of synergy and considering the fact of pending petition of Merger before the NCLT have waived the interest amount on debentures to be paid by Norfolk Mercantile Private Limited to Alpa Laboratories Limited.

Note - "9"

The Financial Statements were authorised for issue by the directors on 26th May, 2018.

---

Mar 31, 2015

1. * Terms and Rights attached to Equity Shares.

The Company has only one class of equity shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

Details of terms of repayment for the long term borrowings and security provided in respect of the secured long term borrowings:

A) Terms of Repayment :

1) Corporate Loan: Was repayable in 36 monthly installments commencing from April 2012. Last installment was due in March 2015,but was fully repaid in October 2014. Rate of interest was 13.50% p.a. till repayment. (Previous year: 13.25%)

2) Machinery Term Loan: Was repayable in 60 monthly installments commencing from June 2013. Last installment was due in May 2018,but was fully repaid in October 2014. Rate of interest was 13.50% p.a. till repayment. (Previous year: 13.25%)

B) Security Provided :

Term loans were secured by mortgage of immovable properties including factory land, building structures and all Plant and Machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future & hypothecation of assets purchased from term loan. Further, the loans were personally guaranteed by the Directors.

2. Security Provided:

Working Capital Loan is secured by way of book debts and hypothecation of present and future stock of raw material, finished goods, stock in process consumables, stores & spares, packing material etc.

The Company makes Provident Fund contributions under defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.29.97 lacs (Previous Year Rs.15.60 lacs) for Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

A. Relationships:

i. Subsidiary Companies

a. Norfolk Mercantile Private Limited

ii. Key Management Personnel

a. P. R. Patel, MD b. M. S. Chawla, Director c. P. C. Shah, Director

d. Jayesh Patel, CEO e. Paresh Chawla, COO f. B. C. Shah, CFO

iii. Relatives of Key Management Personnel and their enterprises where transactions have taken place

a. Shitul Shah b. Soni Chawla c. Nayana Patel

d. Rupal Shah e. Vinit Shah

3. Contingent Liabilities & Commitments (to the extent not provided for) (RS. in lacs)

2015 2014

a. Bank Guarantees given to various government departments for tenders for 31 00 50 04 supply of medicines

b. Liability in respect of arbitration proceedings (Refer Note No. 39) 0.04 -

c. Disputed demands before relevant authorities :

Value Added Tax 16.93 16.93

Central Sales Tax 31.52 31.52

Income Tax 21.00 21.00

4. Court Case has been filed against Innovec Laboratories Private Limited for '28.95 lacs (Previous Year: Rs. 28.95 lacs) for recovery of outstanding amounts.

5.segmentiReporting

a. As the Company operates in the single segment of Drugs and Chemicals which is the Primary Reportable Segment as per Accounting Standard (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, no separate disclosure pertaining to attributable Revenue, Profits, Assets, Liabilities and Capital Employed are given.

6. As per the terms of agreement dated 01st October 2014, the Company's manufacturing unit at Pithampur (Unit-II) has been transferred on slump sale basis to Ipca Laboratories Limited, w.e.f. 01st October 2014, for a total consideration of Rs.6,400 lacs.

Further,non-complete fees amounting to Rs. 10.00 lacs has been received by the company.

7. Schedule II Compliance

a. In accordance with the provisions of Schedule II of the Act, in case of fixed assets which have completed their useful life as at 01st April 2014, the carrying value (net of residual value) amounting to Rs.34.88 lacs (net of deferred tax of Rs.17.96 lacs) as a transitional provision has been recognized in the retained earnings.

b. Further, in case of assets acquired prior to 01st April 2014, the carrying value of assets (net of residual value) is depreciated over the remaining useful life as determined effective from 01st April 2014.

c. Depreciation and amortization expenses for the year would have been lower by Rs.153.42 lacs, had the Company continued with the previous assessment of useful life such assets.

8. During the year, the Company has invested an amount of Rs.1.00 lacs by purchasing shares of Norfolk Mercantile Private limited making it a wholly owned subsidiary of the company.

9. During the year, Ranbaxy Laboratories Limited (Petitioner) filed a Petition in the High Court at New Delhi to prevent the Company from selling its Unit-II division at Pithampur. To expedite the disposing of the said petition, the Company agreed to enter into arbitration proceedings with the Petitioner and furnish a bank guarantee to the tune of Rs.300.00 lacs in the name of the Petitioner which shall remain live till the final disposal of the arbitration proceedings. The Honorable High Court was pleased to dispose off the petition without restricting the Company from selling its Unit-II division and appointing an arbitrator to settler the claims and counter claims made by the parties against each other. The Company is of the view, supported by legal opinion, that no provision is required to made in the accounts as it expects favorable outcome of the arbitration proceedings and hence adjustments. if any, will be recorded by the company on final outcome of the matter.

10. The Company has invested during the F.Y. 2014-15 in the unsecured debentures issued by its wholly owned subsidiary "Norfolk Mercantile Private Limited" amounting to Rs.1,010 lacs for the purpose of meeting the working capital requirements and capital /investment requirement of the Company on the following terms and conditions:

a. The debentures shall compulsory be converted into fully paid shares of the Company.

b. The debentures shall have a term of 20 years from the date of issue.

c. The debentures shall earn interest at the rate of 9% payable at the end of each year till debentures are converted into shares.

d. No interest shall be payable in the year of conversion or buyback.

e. The first interest accrual date shall be 31/03/2016.

f. Interest shall be paid on a yearly basis, subject to availability of funds. In case interest is not paid on or before the end of the following quarter following the end of each financial year, the Company shall also pay interest of 9% on outstanding interest till

11. Significant Accounting Policies and Practices adopted by the Company are disclosed in the Statement annexed to these

12. Previous Year Figures

Comparative financial information is presented in accordance with the corresponding figure reporting framework as set out in Standards on Auditing 710 on "Comparatives". Previous Year figures have been regrouped or rearranged, as wherever appropriate to correspond to figures of the current year.

---

Mar 31, 2014

1. Terms and Rights attached to Equity Shares.

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

2. A) Terms of Repayment :

1) Corporate Loan: Repayable in 36 monthly installments commencing from April 2012. Last instalment due in March 2015. Rate of interest 13.25% p.a. as at year end. (Previous year 13.75% p.a.)

2) Machinery Term Loan: Repayable in 60 monthly installments commencing from June 2013. Last installment due in May 2018. Rate of interest 13.25% p.a. as at year end. (Previous year 13.75% p.a.)

B) Security Provided :

Term loans are secured by mortgage of immovable properties including factory land, building structures and all Plant and Machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future & hypothecation of assets purchased from term loan. Further, the loans are personally guaranteed by the Directors.

3. Contingent Liabilities & Commitments (Rs. in lacs) (to the extent not provided for) 2014 2013 a. Bank Guarantees of Rs. 50.04 lacs (Previous Year - Rs. 77.91 lacs) have been given to various government departments for tenders for supply of medicines.

b. Bank Guarantee of Rs. Nil (Previous Year - Rs. 17.85 lacs) has been given to Deputy Commissioner of Customs against import of capital goods under Export Promotion Capital Goods Scheme.

c. Bank Guarantee of Rs. Nil (Previous Year - Rs. 3.70 lacs) has been given in favor of President of India through Commissioner of Customs Nhava Sheva, Raigarh for import of Raw Materials without payment of import duty under DEEC Scheme.

d. Bank Guarantee of Rs. Nil (Previous Year - Rs. 0.83 lacs) has been given in favor of President of India through Deputy Commissioner of Central Excise for Bond for procurement of Raw Material ( Methyl Prednisolone Buffered Sterile) Without Payment of Duty for production of Life Saving Drugs.

e. Notices have been received form Central Excise Department Range Pithampur for Late Filling of Returns for few months in F.Y. 2012-13 for which obligation may arise. Due to pendency of case amount of obligation can not be ascertained.

f. Disputed demands before relevant authorities :

Value Added Tax 16.93 16.93

Central Sales Tax 31.52 31.52

Income Tax 21.00 21.00

Service Tax - 37.85

4. Court Cases have been filed against Innovec Laboratories Private Limited for `28.95 lacs (Previous Year – `28.95 lacs) for recovery of outstanding amounts.

5. Segment Reporting

a. As the Company operates in the single segment of Drugs and Chemicals which is the Primary Reportable Segment as per Accounting Standard (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, no separate disclosure pertaining to attributable Revenue, Profits, Assets, Liabilities and Capital Employed are given.

b. The secondary segment based on geographical segmentation is considered to be business Outside India and Within India.

6. The Company has passed a special resolution on 04th April 2014 by way of Postal Ballot authorizing the Board to dispose off its Unit at 481, 470, 471 Sector III Industrial Area, Pithampur, District Dhar (M.P.) along with all the employees as well as the assets and liabilities of the said undertaking including the concerned licenses, permits, consents, approvals whatsoever, as a "going concern" and by way of a slump sale or any other mechanism in the interest of the Company at a consideration as may be decided by the Board of Directors and that such consideration not be less than Rs. 50 Crores (Rupees Fifty Crores Only) to such prospective buyers/ parties and along with non compete undertaking from the Company and the promoters of the Company to refrain from carrying on a similar business, and on such other terms and conditions as may be decided by the Board. The said unit was mainly financed out of the IPO proceeds of the Company received in the month of July, 2007.

7. Significant Accounting Policies and Practices adopted by the Company are disclosed in the Statement annexed to these

8. Previous Year Figures

Comparative financial information is presented in accordance with the corresponding figure reporting framework as set out in Standards on Auditing 710 on "Comparatives". Previous Year figures have been regrouped or rearranged, as wherever

---

Mar 31, 2013

(Rs.in lacs)

1. Contingent Liabilities & Commitments (to the extent not provided for) 2013 2012

a. Bank Guarantees of Rs.77.91 lacs (Previous Year Rs.58.37 lacs) have been given to various government departments for tenders for supply of medicines.

b. Bank Guarantee of Rs.17.85 lacs (Previous Year - Rs.17.85 lacs) has been given to Deputy Commissioner of Customs against import of capital goods under Export Promotion Capital Goods Scheme for a period of ten years ending 09/02/2020.

c. Bank Guarantee of Rs.3.70 lacs (Previous Year - Rs.3.70 lacs) has been given in favor of President of India through Commissioner of Customs Nhava Sheva, Raigarh for import of Raw Materials without payment of import duty under DEEC Scheme for a period of three years ending 30 Aug 2013.

d. Bank Guarantee of Rs.0.83 lacs (Previous Year - Nil) has been given in favor of President of India through Deputy Commissioner of Central Excise for Bond for procurement of Raw Material ( Methyl Prednisolone Buffered Sterile) Without Payment of Duty for production of Life Saving Drugs for a period of one year ending 29 Aug 2013.

e. Disputed demands before relevant authorities

2. Court Cases have been filed against M/s Rajiv Pharma Udyog & Innovec Laboratories Private Limited for Rs.0.59 lacs and Rs.28.95 lacs respectively, for recovery of outstanding amounts.

3. In compliance with Para 9 of Accounting Standard-10 issued by The Institute of Chartered Accountants of India administration and other general overheads up to the date of the commencement of commercial production i.e.18 Oct 2012 and which are specifically attributable to construction of a project amounting to Rs.1,461.14 lacs have been included as part of the cost of the new unit at Plot No. 470,471 & 481 at Sector-III, Pithampur Dist. Dhar

The same have been further appropriated to the cost of fixed assets commissioned, in the proportion of their individual cost to the total cost of the new plant.

4. Segment Reporting

a. As the Company operates in the single segment of Drugs and Chemicals which is the Primary Reportable Segment as per Accounting Standard (AS-17) "Segment Reporting" issued by the Institute of Chartered Accountants of India, no separate disclosure pertaining to attributable Revenue, Profits, Assets, Liabilities and Capital Employed are given.

b. The secondary segment based on geographical segmentation is considered to be business Outside India and Within India.

5. The Company successfully completed the installation of its Unit-II at Pithampur, District Dhar, Madhya Pradesh for manufacturing of High Potency Tablets and commenced commercial production with effect from 18th Oct, 2012.

b. Capital WIP includes Advances for Capital Expenditure Nil ( P.Y.- Rs.115.48 lacs)

6. Change in Accounting Policy

In order to make presentation of Financial Statements of the Company more appropriate, the Company has changed the policy of recognizing expenses relating to consumption of columns used for providing analytical services from the year of acquisition to the year of actual consumption. As a result the Company has recognized stock of unused columns which are used for providing analytical services amounting to Rs.35.38 lacs. Due to such change of policy, the loss for the year has been understated and reserves have been overstated by Rs.35.38 lacs as compared to previous accounting policy.

7. Significant Accounting Policies and Practices adopted by the Company are disclosed in the Statement annexed to these Financial Statements as Annexure A.

8. Previous Year Figures

Comparative financial information is presented in accordance with the corresponding figure reporting framework as set out in Standards on Auditing 710 on "Comparatives". Previous Year figures have been regrouped or rearranged, as wherever appropriate to correspond to figures of the current year.

COMPANY BACKGROUND

Incorporated as Alpa Laboratories Private Limited on 18th March 1988 under the Companies Act, 1956 and converted to public limited company on 03rd September 1998 with the name of Alpa Laboratories Limited. The Company has been listed on the Bombay Stock Exchange and the National Stock Exchange since 06th August 2007.

---

Mar 31, 2012

COMPANY BACKGROUND

Incorporated as Alpa Laboratories Private Limited on 18th March, 1988 under the Companies Act, 1956 and converted to public limited company on 03rd September, 1998 with the name of Alpa Laboratories Limited. The Company has been listed on the Bombay Stock Exchange and the National Stock Exchange since 06th August, 2007.

- Terms and Rights attached to Equity Shares.

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets, after distribution of all preferential amounts, in proportion of their shareholding.

- Terms of Repayment

Repayable in 36 monthly installments commencing from April, 2012. Last installment due in March, 2015. Rate of interest 13% p.a. as at year end.

- Security Provided

Term loan is secured by hypothecation of present and future stock of raw material, finished goods, stock in process consumables, stores & spares, packing material etc.

- Security Provided

Working capital loans are secured by hypothecation of present and future stock of raw material, finished goods, stock in process consumables, stores & spares, packing material etc.

The Company has recognized deferred tax arising on account of timing differences being the difference between the taxable income and accounting income, that originates in one period and is capable of reversal in one or more subsequent period in compliance with Accounting Standard ("AS-22") - "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

1. Contingent Liabilities (to the extent no provided for)

(in Rs.)

2012 2011

Bank Guarantees given to various government departments for tenders 62,07,373 62,58,273

Bank Guarantees given to Deputy Commissioner of Customs against import of capital goods under Export Promotion Capital Goods Scheme for a period of ten years ending 09/02/2020 17,85,000 17,85,000

Disputed demand of Value Added Tax 36,66,924 48,40,184

Disputed demand of Central Sales Tax 66,32,240 47,30,934

Disputed demand of Entry Tax - 45,30,456

Total Contingent Liabilities (to the extent not provided for) 1,82,91,537 2,21,44,847

2. Court Cases have been filed against M/s Rajiv Pharma Udyog & Innovec Laboratories Private Limited for Rs. 59,420 and Rs.28,98,502 respectively for recovery fo outstanding amounts.

3. Expenses of Rs. 13,11,50,915 (Previous Year Rs. 9,72,52,860) incurred by the Company for the new unit has been treated as pre-operative expenses.

As the Company is only engaged in Pharmaceutical Business which is considered the Primary Reportable Segment as per Accounting Standard (AS-17) "Segment Reporting" issued by the the Institute of Chartered Accountants of India, no separate disclosure pertaining to attributable Revenue, Profits, Assets, Liabilities and Capital employed are given.

4. Interest Received includes Tax Deducted at Source amounting to Rs. 13,122 (Previous Year Rs. 45,332) on such interest.

5. The Company has completed the basic installation of their new unit at Pithampur, District Dhar, MP for manufacturing of High Potency Tablets. However, the operational validation of the same has not been completed which would certify the is usability of the same for production activity. As such the same cannot be put to use till such validation is complete.

6. Significant Accounting Policies and Practices adopted by the Company are disclosed in the Statement annexed to these Financial Statements as Annexure A.

7. Previous Year Figures

The Financial Statements for the year ended 31st March 2011 had been prepared as per the then applicable pre-revised Schedule VI to the Companies Act,1956. Consequent to the notification under the Companies Act,1956, the Financial Statements for the year ended 31st March 2012 have been prepared under the revised Schedule VI. The previous year figures have also been reclassified to conform to this year's classification.

---

Mar 31, 2010

1. Loan Funds:

a. Term Loans: Secured by hypothecation of Building, Plant & Machinery and personal guarantee of directors.

b. Working Capital Loans: Secured by hypothecation of stocks & book debts of the Company and personal guarantee and collateral security of directors and other third parties.

2. Court Case were filed against M/s Arvind Agencies and M/s Rajiv Pharma Udyog for Rs. 3.57 lacs, and Rs. 2.27 lacs respectively, for recovery of outstanding amounts.

3. Contingent liabilities not provided for:

a. Bank Guarantees of Rs. 81.06 lacs (Previous Year Rs. 82.98 lacs) have been given to various government departments for tenders for supply of medicines.

b. Disputed demands before relevant authorities:

Rs. in lacs

Year Ended 31st Mar, 2010 Year Ended 31st Mar, 2009

Value Added Tax 48.40 48.40

Central Sales Tax 47.31 47.31

Entry Tax 45.59 45.59

4. Provision for Gratuity :

Accounting Standard - 15 ("AS-15") on "Employees Benefits" [AS-15 (Revised)] requires an enterprise to recognize its obligation and employee benefits cost under defined benefit plans such as Gratuity based on actuarial valuation. The obligation and employee benefits cost are to be reflected in the balance sheet and profit and loss account, respectively.

As regards gratuity, the Company is under the Employee Group Gratuity Scheme of the Life Insurance Corporation of India ("LIC") and as per their renewal intimation, the Company has contributed a sum of Rs. 7.00 lacs and Rs. 11.06 lacs are outstanding as on 31st March, 2010.

5. Expenses of Rs. 704.33 lacs (Previous Year Rs. 585.97 lacs) incurred by the Company for new unit has been treated as pre-operative expenses for the year.

6. In cases where letters of confirmation have been received from parties, book balances have been generally reconciled and adjusted, if required. In other cases, balances in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account.

7. The Company is operating in the single segment of Drugs & Chemicals. All the activities of the Company revolve around the main business. Further, the Company does not have any separate reportable geographical segments in accordance with Accounting Standard – 17 on "Segmental Reporting". As such there are no separate reportable segments as per said accounting standard.

8. Interest received includes tax deducted at source on such interest and amounts to Rs 15.40 lacs (Previous Year Rs. 38.95 lacs).

9. Significant accounting policies and practice adopted by the company are disclosed through Annexure I to these accounts.

10. Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are disclosed through Annexure II to these accounts.

11. Additional information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956 are disclosed through Annexure III to these accounts.

12. Previous Year Figures:

Comparative financial information is presented in accordance with the Corresponding figure reporting framework as set out in Standards on Auditing 710 on "Comparatives". Previous years figures have been regrouped or rearranged, as wherever appropriate to correspond to figures of the current year except interest expenditure for the current period has been shown net of interest received including tax deducted at source but not for previous periods, neither of which have an impact on net profit.