1. Corporate Information

Lasa Supergenerics Limited (the Company) is a company registered under Companies Act, 2013 and incorporated on March 11, 2016. The Company is primarily engaged in the business of manufacturing API bulk drugs products. The company's shares got listed on National Stock Exchange & Bombay Stock Exchange as on 21st September, 2017 and has a registered office located at Plot No. C-105, Mahad Industrial Area, Mahad, Dist. Raigad, Maharashtra-402309

2A. Basis of preparation

The Statement of Assets and Liabilities of the Company as at March 31, 2018 and the Statement of Profit and Loss, the Statement of Cash flows and the Statement of Changes in Equity for the year ended March 31, 2018 has been prepared under Indian Accounting Standards ('Ind AS') notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015. The financial Statement as at and for the year March 31, 2018 along with financial statement as at and for the year ended March 31, 2017. The Company is in Phase-2 of Ind-AS adoption, accordingly date of transition is April 1, 2016.

The Company has elected to present both periods as per Ind AS, instead of Indian GAAP i.e The financial information for the year ended March 31, 2017 has been prepared on Ind AS basis in accordance with requirements of SEBI Circular SEBI/HO/CFD/ DIL/CIR/P/2016/47 dated March 31, 2016 ("SEBI Circular") and Guidance note on reports in company prospectuses issued by ICAI. For the purpose of Ind AS financial information for the year ended March 31, 2017 the Company has followed the same accounting policy and accounting policy choices (both mandatory exceptions and optional exemptions availed as per Ind AS 101) as initially adopted on transition date i.e. April 1, 2016. Accordingly, suitable adjustments (both re-measurements and re-classifications) in the accounting heads are made to the Ind AS financial information for the year ended and March 31, 2017 following accounting policies and accounting policy choices (both mandatory exceptions and optional exemptions) consistent with that used at the date of transition to Ind AS (i.e. April 1, 2016). Further, Lasa Supergenerics Ltd. (the Company) came into effect by virtue of scheme of arrangement duly approved and an order was passed by the Hon'ble National Company Law Tribunal, Mumbai on April 13, 2017. In view of the same, comparative figures for the year ended March 31, 2016 have not been given as the same are not applicable. The basis of preparation for specific item where exemptions has applied are as follows:

Accounting Estimates

The preparation of the financial statements, in conformity with the Ind AS, requires the management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Business Combination

In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from the date of transition to Ind AS i.e. April 1, 2016. As such, Indian GAAP balances relating to business combinations entered before that date have been carried forward. Business combination post April 1, 2016 has been accounted for as per the provisions of the Scheme of amalgamation approved by Hon'ble National Company Law Tribunal dated April 13, 2017.

The Board of Directors of Lasa Supergenerics Limited ('LASA') the company, have approved the Composite Scheme of Arrangement ('the Scheme') Veterinary API Undertaking of Omkar Speciality Chemicals Limited ('OSCL') to Lasa Supergenerics Limited for demerger with the Company with effect from appointed date April 1, 2015. The Hon'ble National Company Law Tribunal has approved the Scheme vide its order dated April 13, 2017 and it became effective from May 2, 2017 (being the date of filing with Registrar of Companies).

Appendix C to Ind AS 103 ("Business Combinations") deals with accounting for business combinations of entities or businesses under common control. The financial information in the financial statements in respect of prior periods are restated as if the business combination had occurred from the beginning of the preceding period in the financial statements i.e the appointed date. As the result, the company has restated Rs. 442.19 lacs to the opening balance of retained earnings on April 1, 2016 being the impact representing Profit and Loss for the year of 2015-16 in the terms of the composite scheme of arrangements sanctioned by the hon'ble NCLT Mumbai Bench vide order dated April 13, 2017.

The Company has issued 205.78 lakhs equity shares of Rs.10/- each, fully paid-up, of the Company to the holders of Equity shares of OSCL whose names will be registered in the register of members on the record date, without payment being received in cash, in the ratio of 1 (one) fully paid-up equity shares of Rs.10/- each of the Company for every 1 (one) fully paid-up equity shares of Rs.1 held in LASA.

In terms of the Scheme & provisions of Appendix C of Ind AS 103 all assets, liabilities and reserves of Veterinary API undertaking of Omkar Speciality Chemicals Limited (OSCL) have been vested with the Company with effect from April 1, 2015 and have been recorded at their respective book values in accordance with the Scheme.

Further, as per the Scheme, the excess of book value of assets over the book value of liabilities of the demerged undertaking shall be adjusted against the capital reserve account

The resulting company shall reimburse the demerged company for all liabilities incurred by the demerged company in so far as such liabilities relate to period prior to the appointed date i.e. 1 April 2016 in respect of the demerged undertaking as per the Scheme.

The Financial Statement (including Ind AS financial Statement for the year ended March 31, 2017) have been compiled by the Company from the Audited Financial Statements of the Company prepared under Ind AS and for the year ended March 31, 2017 prepared under the previous generally accepted accounting principles followed in India ('Previous GAAP or Indian GAAP').

For all periods up to and including the year ended March 31, 2017, the Company prepared its audited financial information in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the Year ended March 31, 2018 are the first financial statement the Company has prepared in accordance with Ind AS. The date of transition to Ind AS is April 1, 2016.

In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a reconciliation from the presentation of Financial Information under Accounting Standards notified under Previous GAAP to Ind AS of Shareholders' equity as at March 31, 2017 of the Statement of Profit and loss and other comprehensive Income for the for the year ended March 31, 2017. The financial statement are presented in Indian Rupees (INR) and all values are rounded to the nearest lacs, expect where otherwise indicated.

(a) Property, plant and equipment pledged as security

Refer to Note 15 and 18 for information on property, plant and equipment and other intangible assets pledged as security by the company

(b) Capital work-in-progress

Capital work-in-progress mainly comprises of plant & machinery and factory building.

(c) Intangible Assets - Patents

Intangible assets is assessed with indefinite useful lives hence no depreciation has been charged for the same.

(E) The company has one class of Equity Shares having a par value of Rs. 10.00 per share. Each Shareholder is eligible for one vote per share held and has same right to dividend.

(F) No bonus shares have been issued during five years immediately preceding 31st March, 2018.

(G) No dividend Proposed, Declared and paid.

(H) Shares reserved for issue under options and contracts or commitments for the sale of shares of disinvestment, including the terms and amounts - Nil

(I) For the period of five years immediately preceding the date at which the Balance Sheet is prepared-.

1) aggregate number and class of shares allotted as fully paid up pursuant to contract without payment being received in cash - Nil

2) aggregate number and class of shares bought back - Nil

a) Term Loans are secured by way of hypothecation of stocks and book debts and first charge on land building and plant and machinery situated at Plot No. D-27/5, MIDC, Lote Parshuram Industrial Area, Taluka - Khed, Dist. Ratnagiri

b) Personal guarantee of the promoter director of the company.

c) ECB loan from Bank of Baroda carries interest rate of Base rate 4.7% plus 6 Months Libor 1.41544 % (6.11544% p.a. at 31 March 2018) and is repayable in 28 Quaterly installments commenced from Sep 2014

d) Car Loan from Tata Motors Finance Ltd carries interest rate of (9.50% p.a. at 31 March 2018) and is repayable in 60 Monthly installments commenced from March 2015

e) Car Loan from Ford Credit India Pvt Ltd carries interest rate of (9.50% p.a. at 31 March 2018) and is repayable in 60 Monthly instalments commenced from September 2016

Working Capital Loans

a) From banks were secured by way of hypothecation of stock and book debts and first charge on land building and plant and machinery situated at Plot No C-105. MIDC, MAHAD. Dist: Raigad & C-4, MIDC, Lote Parshuram Industrial Area, Taluka - Khed, Dist. Ratnagiri

b) Personal guarantee of the promoter directors of the company

c) Working Capital loan carries interest rate in the range of 10.50% p.a

Exceptional items consist of the difference between the fair value and book value of assets taken from Demerged company amounting to Rs.26,19,10,397/- . The Same has been charged to the Profit & Loss Account of the company in the terms of the composite scheme of arrangements as sanctioned by the hon'ble NCLT Mumbai Bench vide order dated April 13, 2017.

Notes

Basic Earnings Per Share (EPS) is calculated by dividing net profit after tax by weighted average no. of equity shares, including shares alloted in persuance of schemes of arragement. Actual allotment of shares took place on June 14, 2017.

Note 3 : Financial instruments

(1.) The fair value of the financial assets are included at amounts at which the instruments 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 value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments

(b) 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 the expected losses of these receivables."

2) Fair Value Hierarchy

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

Measurement of Fair Values:

The fair value of the financial assets and liabilities is 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:

The fair values of loans taken from banks and other parties, and preference shares is estimated by discounting cash flows using rates currently available for debt/instruments with similar terms, credit risks and remaining maturities. Management regularly assessses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

The fair values of loans given to employees and other parties, and security deposit given is estimated by discounting cash flows using rates currently available for instruments with similar terms, credit risks and remaining maturities. Management regularly assessses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

Note 4 : Employee Benefit

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on retirement / resignation or retirement under VRS at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The service cost and the net interest cost would be charged to the Profit & Loss account. Actuarial gains and losses arise due to difference in the actual experience and the assumed parameters and also due to changes in the assumptions used for valuation. The Company recognises these remeasurements in the Other Comprehensive Income (OCI).

The Company has a defined benefit obligation for Leave encashment which is partly funded. Generally the leave encashment is paid to employees in case of resignation, retirement under VRS or retirement except in some case the same is paid annually .

Discount Rate

As per para 83 of Ind AS 19,the rate used to discount other long term employee benefit obligation (both funded and unfunded ) shall be determined by reference to market yield at the Balance Date on high quality corporate bonds. In countries where there is no deep market in such bonds the market yields (at the Balance Sheet Date) on government bonds shall be used. The currency and term of the corporate bond or government bond shall be consistent with currency and estimated term of the post employment benefit obligation.

Salary Growth Rate

This is Management's estimate of the increases in the salaries of the employees over the long term. Estimated future salary increases should take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

Rate of Return on Plan Assets

This assumption is required only in case of funded plans. Interest income on plan assets is calculated using the rate used to discount the defined benefit obligation. The following tables summarise the funded status and amounts recognised in the balance sheet for gratuity & leave encashment benefits.

Note - Transaction With Related Party Transactions - Directors Remuneartion

Remuneration for FY 2016-17 - Mr.Shivanand Hegde, Mr.Sumant Kharsamble and Mrs.Ketki Parte, - They were directors in M/s Lasa Laboratory Pvt Ltd, however Mr.Shivanand Hegde and Mr.Sumant Kharsamble, were transfer in the M/s. Lasa Supergenerics Limited as per the demerger scheme effective date. This statement is given for, more clarity on related party transactions.

* Reclassified of Promoters & Promoters Group w.e.f. 16 April , 2018

Note 5 : First time adoption of Ind AS Transition to Ind AS

These are the company's first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the company's date of transition). In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the company's financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

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

A.1 Ind AS optional exemptions A.1.1 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.1.2 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments (other than equity investments in subsidiaries, associates & joint arrangements) at FVPL on the basis of the facts and circumstances at the date of transition to Ind AS.

The company has elected to apply this exemption for its investment in equity investments.

A.1.3 Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

The company has elected to apply this exemption for such contracts/arrangements.

A.2 Ind AS mandatory exceptions

The company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:

A.2.1 Estimates

An entity's estimates in accordance with Ind ASs 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), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

1) Investment in equity instruments carried at FVPL or FVOCI;

2) Impairment of financial assets based on expected credit loss model.

Consequently, the company has applied the above requirement prospectively.

B Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Note 6 : Financial Risk Management 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. The details of different types of risk and management policy to address these risks are listed below:

(a) Market Risk:-

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 objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs (a)(i) Market Risk - Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The company's exposure to the risk of changes in market interest rates primarily to the Company's borrowings, both short term and long term obligations with floating interest rates.

The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits.

Sensitivity analysis to interest rate risk

The company doesn't account for any fixed rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

(a)(ii) Market Risk - Price Risk

The Company has no surplus for investment in debt mutual funds, deposits etc. The Company does make deposit with the banks to provide security against gurantee issued by bank to company’s trade payables. Deposit is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

(a)(iii) Market Risk - Currency Risk

The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The company is exposed to currency risk on account of its trade payables in foreign currency. The functional currency of the company is Indian Rupees. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible

(b) Credit Risk

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers. The carrying amount of Financial Assets represents the maximum credit exposure

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company's review includes external ratings, if they are available, financial statements, industry information, business intelligence and in some cases bank references.

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers' financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impariment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts available in relation to defaults and delays in collection thereof The movement of the expected loss provision (allowance for bad and doubtful loans and receivables etc.) made by the company are as under:

Other Financial Assets

The company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Expected credit loss on financial assets other than trade receivable:

With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet

The Company's maximum exposure to credit risk as at 31st March, 2018, 2017 and 1st April, 2016 is the carrying value of each class of financial assets.

(c)Liquidity Risk

Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational requirements is retained as Cash and Cash Equivalents (to the extent required).

Exposure to Liquidity Risk

The following table shows the maturity analysis of the Company's Financial Liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet Date

(d) Collateral

The Company has pledged its Non-Current as well as Current Assets to a consortium of lenders as collateral towards borrowings by the Company. Refer Note No. 15 and Refer Note No. 18 for the detailed terms and conditions of the collaterals pledged.