A. 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.
Basis of Preparation of Financial Statements
(i) Compliance with IndAS
These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to Section 133
of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian Accounting Standards) Rules,2015 as
amended and other relevant provisions of the Act.
The accounting policies are applied consistently to all the periods presented in the financial statements.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) certain financial assets and liabilities that are measured at fair value.
2) assets held for sale - measured at lower of carrying amount or fair value less cost to sell.
(iii) Current non-current classification
All the assets and liabilities have been classified as current or non-current as per the Company’s normal
operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of
products and the time between the acquisition of assets for processing and their realisation in cash and cash
equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current -
noncurrent classification of assets and liabilities.
(iv) Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
2. Use of estimates and critical accounting judgements
In the preparation of financial statements, the Company makes judgements, estimates and assumptions
about the carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are
relevant. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised, and future periods affected.
Key source of estimation of uncertainty at the date of standalone financial statements, which may cause
material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in
respect of impairment, useful lives of property, plant and equipment and intangible assets, valuation of
deferred tax assets, provisions, contingent liabilities, and fair value measurements of financial instruments
as discussed below. Key source of estimation of uncertainty in respect of revenue recognition and
employee benefits have been discussed in the respective policies.
3. Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable net of discounts,
considering contractually defined terms and excluding taxes and duties collected on behalf of the
government.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the Company and specific criteria have been met for each of the
Company’s activities as described below.
Sale of goods
Revenue from sale of goods is recognised when the Company has transferred to the buyer the significant
risks and rewards of ownership, no longer retains control over the goods sold, the amount of revenue can
be measured reliably, it is probable that the economic benefits associated with the transaction will flow to
the Company and the costs incurred or to be incurred in respect of the transaction can be measured
reliably. Depending on the contractual terms, risks and rewards of ownership is transferred when the
delivery is completed. In case of exports sale delivery is completed on issuance of bill of lading
Interest income
Interest income is accrued on a time proportion basis, by reference to the principal outstanding and
effective interest rate applicable.
Dividend income
Dividend income is recognized at the time when the right to receive is established by the reporting date.
Other operating revenue - Export incentives
Export Incentives under various schemes are recognized on accrual basis.
Other Incomes
Other incomes have been recognized on accrual basis in the financial statements, except when there is
uncertainty of collection.
4. Property, plant, and equipment
An item of property, plant and equipment is recognised as an asset if it is probable that future economic
benefits associated with the item will flow to the Company and its cost can be measured reliably. This
recognition principle is applied to costs incurred initially to acquire an item of property, plant, and
equipment and to costs incurred subsequently to add to, replace part of, or service it. All other repair and
maintenance costs, including regular servicing, are recognised in the statement of profit and loss as
incurred. When a replacement occurs, the carrying value of the replaced part is derecognised. Where an
item of property, plant and equipment comprises major components having different useful lives, these
components are accounted for as separate items.
Property, plant, and equipment is stated at cost/deemed cost, less accumulated depreciation, and
impairment. Cost includes all direct costs and expenditures incurred to bring the asset to it
s working condition and location for its intended use. Trial run expenses (net of revenue) are capitalised.
Capital work-in-progress and intangible assets under development represents expenditure incurred in
respect of capital projects / intangible assets under development and are carried at cost. Cost comprises of
purchase cost, related acquisition expenses, development / construction costs, borrowing costs and other
direct expenditure.
Borrowing costs incurred during the period of construction is capitalised as part of cost of qualifying
asset. The gain or loss arising on disposal of an item of property, plant and equipment is determined as the
difference between sale proceeds and carrying value of such item and is recognised in the statement of
profit and loss.
5. Depreciation and amortisation of property, plant and equipment and intangible assets
Depreciation of these assets commences when the assets are ready for their intended use which is
generally on commissioning. Items of property, plant and equipment are depreciated in a manner that
amortizes the cost (or other amount substituted for cost) of the assets after commissioning, less its
residual value, over their useful lives as specified in Schedule II of the Companies Act, 2013 on a Written
Down Value basis. Land is not depreciated.
Property, plant and equipment’s residual values and useful lives are reviewed at each balance sheet date
and changes, if any, are treated as changes in accounting estimate.
a. Fixed asset is depreciated on a written down value basis over the useful lives of assets as prescribed under
Part C of Schedule II of the Companies Act 2013.
b. Depreciation for assets purchased or sold during the period is charged to revenue pro-rata to the period of
their use.
6. Inventories
Finished goods (including for trade), work in process and raw materials are stated at ‘Cost or Net
Realizable Value, whichever is lower’. Cost of Inventories comprises cost of purchases and other costs
incurred in bringing the inventories to their present location and condition. ‘First In First Out’ cost
formula is used for determination of cost of inventories.
7. Foreign Currency Transactions
(i) Functional and presentation currency
The financial statements are presented in Indian rupee (INR), which is Company’s functional and
presentation
currency.
(ii) Transactions and balances
Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction
dates. Realizedgains and losses on settlement of foreign currency transactions are recognized in the
Statement of Profit and Loss. Monetary foreign currency assets and liabilities at the year-end are
translated at the year-end exchange rates and the resultant exchange differences are recognized in the
Statement of Profit and Loss.
8. Employee Benefit
a. The Company’s contribution to Life Insurance Corporation of India (LIC) for group gratuity policy is
charged to theProfit and Loss account each year. The contribution for Group Gratuity Policy is based on
values as actually determined and demanded by LIC at the year end.
b. Payments to defined contribution plans are charged as an expense as they fall due. Payments made to
state managed retirement benefit schemes are dealt with as payments to defined contribution schemes
where the Company’s obligations under the schemes are equivalent to those arising in a defined
contribution retirement benefit scheme.
9. Borrowing Cost
Borrowing cost consists of interest and other costs incurred in connection with the borrowing of funds
and include exchange differences to the extent regarded as an adjustment to the same. Borrowing costs
directly attributable to the acquisition and/ or construction of a qualifying asset are capitalized during the
period that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is
one that necessarily takes substantial period to get ready for its intended use. All other borrowing costs
are charged to the Standalone Statement of Profit and Loss as incurred.
10. Borrowings
Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized
in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
Preference shares, which are mandatorily redeemable on a specific date are classified as liabilities. The
dividend on these preference shares is recognised in Statement of Profit and Loss as finance costs.
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