Alpa Laboratories Ltd Management Discussions.

a) Industry Structure and Development Outlook: The Indian Pharmaceutical market is growingly rapidly with a solid boost of Research and Development, in the current scenario the Indian Pharmaceuticals Market (IPM) has seen double-digit growth. The Indian Pharmaceuticals market is forecasted to grow at an annual growth rate (CAGR) of 11.8% (+/-3%), between 2015 to 2020.

b) Financial Performance: During the financial year under report, the company registered a total income of 7175.25 Lacs as against 5959.43 Lacs in the previous financial year, a growth of 20.38% is noticed. During the year company suffered some setbacks in the overseas market due to shortage of dollars, it will effect some liquidity crunch during the year.

During the year under report Earning before finance cost and depreciation amounted to Rs.1112.07 Lacs as compared to 1290.81 Lacs in the previous financial year. The operations have resulted 572.04 lacs as against 773.96 lacs in the previous financial year at a slightly negative growth of -26% due to increase in cost of materials as compared to previous financial year.

c) SEGMENT REPORTING: The Company operates in a single segment of Drugs and Chemicals, which is the primary reportable segment, and the same is given in the notes to the financial statements.

d) OUTLOOK, RISKS AND CONCERNS: Although some troubles in economic sector of certain regions are impending the Pharma sales growth, long-term outlook for the pharmaceutical industry remains positive, The Pharma industry growth will be driven mainly by population growth. India enjoys an important position in the global pharmaceutical sector, Indian pharmaceuticals exports have significantly increased from US$ 2 billion in 2006 to about US$ 15 billion, the Indian pharmaceuticals is the third largest in terms of volume and thirteenth largest in terms of value. However some risk and concerns had been faced by the organization like:

a) Currency fluctuations,

b) Regulatory issues,

c) Government mandated price controls,

d) Inflation,

e) Litigation risk,

f) manufacturing and supplying risk and resultant all round increase in input costs are few causes of concern and risk needs to be control appropriately.

During the year under report, there was no change in the nature of company business.

e) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has reasonable system of internal controls in power, supervision, checks, policies and procedures, which are being tested on routine basis by the management. Moreover, the company continuously upgrades these systems in line with the best accounting practices. The Audit Committee also reviews the adequacy of internal controls systems and the compliance thereof. Further, the annual financial statements of the company are reviewed and recommended by the audit committee for the consideration and approval of the board of directors. The committee also reviews internal controls systems, significant accounting policy, major accounting entries, related party transactions, etc..

f) HUMAN RESOURCES: The human resource plays a important role in the growth and success of an organization. The company has maintained cordial and harmonious relations with employees across various locations. Company has a policy to retain talent at its high priority to enable achievement of organizational goal and vision. During the year under review, various training were conducted to improve the competency level of employees with an objective to improve the operational performance of individuals. The company strives to enhance the technical, work related and general skills of employees through training programs on a recurrent basis.

The company has 384 permanent employees as on 31st March, 2017.

g) CAUTIONARY STATEMENT: Certain statement in the management discussion and analysis may be forward looking within the meaning of applicable securities laws and regulations and actual results may differ materially from those expressed or implied. Factors that would make differences to companys operations include competition, currency fluctuations, regulatory issues, changes in government policies with in India and the countries in which the company conduct business and other incidental factors.