Notes to Accounts of Alpa Laboratories Ltd.

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.

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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.

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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

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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.

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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.

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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.