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LETTER OF OFFER

Note: This document is important and requires your immediate attention.

This Letter of Offer is being sent to you as an existing shareholder of Alpha Drug India Limited ("ADIL"). If you require any clarifications about the action to be taken, you should consult your stockbroker or your investment consultant, otherwise you can also contact the Manager to the Offer. In case you have sold your shares in ADIL, please hand over this Letter of Offer and the FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT, FORM OF WITHDRAWAL and Transfer Deeds to the Member of the Stock Exchange through whom the sale was effected.

CASH OFFER AT AN OFFER PRICE OF Rs.5.50 PER EQUITY SHARE

Pursuant to the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto

TO ACQUIRE

75,84,690 equity shares of face value of Rs 10/- each representing 20% of the equity share capital, from existing shareholders

ALPHA DRUG INDIA LIMITED

having its registered office at Villages Kolimajra & Samalheri, (Chandigarh � Ambala Highway)

P.O. Lalru � 140 501, District Patiala, Punjab State, India.

Tel No. (0171) 2779210, Fax No. (0171) 2779292

PUNJAB CHEMICALS & PHARMACEUTICALS LIMITED, the acquirer

having its registered office at SCO 417-418, Sector 35C, Chandigarh 160 022.

Tel No. (0172) 2600955, Fax No. (0172) 2603621

Regulation 26 of SEBI (SAST) Regulations, 1997 provides for an upward revision of the Offer Price at anytime, upto seven working days prior to the date of the closure of the Offer. In case of a revision in the Offer Price, the public announcement for revision will be made in the newspapers as specified in para 2.2(a) of this Letter of Offer. In case of a revision in Offer Price, the same price shall be paid by the Acquirer for all the shares tendered anytime during the period the Offer is open.

"If there is a competitive bid :

The public offer under all the subsisting bids shall close on the same date.

As the offer price can not be revised during 7 working days prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final offer price of each bid and tender their acceptance accordingly."
THE PROCEDURE FOR ACCEPTANCE IS SET OUT IN PARAGRAPH 8. A FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT AND FORM OF WITHDRAWAL ARE ENCLOSED WITH THIS LETTER OF OFFER. A COPY OF LETTER OF OFFER (INCLUDING FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT AND FORM OF WITHDRAWAL) WILL ALSO BE AVAILABLE ON SEBI'S WEB SITE www.sebi.gov.in.

"Shareholders who have accepted the offer by tendering the requisite documents, in terms of the Public announcement / Letter of offer, can withdraw the same upto three working days prior to the date of the closure of the offer"

MANAGER TO THE OFFER

Fortune Financial Services (India) Limited

K. K. Chambers, 2^nd Floor, Sir Purshottamdas Thakurdas Road, Fort, Mumbai - 400 001

Tel No. - (022) 2207 7931 /4650 /3503 Fax No. - (022) 2207 7948 / 1776

e-mail - gfaspl@bom5.vsnl.net.in

Contact Person - Mr. Jinesh N. Mehta

REGISTRAR TO THE OFFER

Intime Spectrum Registry Limited

Building No. C-13, First Floor,

Kantilal Maganlal Industrial Estate (Pannalal Silk Mill Compound),

L. B. S. Marg, Bhandup (West), Mumbai - 400 078

Tel. No. +91 22 2592 3837 Fax No. +91 22 2567 2693

e-mail isrl@vsnl.com

Contact Person - Mr. Nikunj Daftary

TIMETABLE



Home	Back

Activity	Original Schedule	Revised Schedule
Date of Public Announcement	February 27, 2003 Thursday	February 27, 2003 Thursday
Specified Date	March 14, 2003 Friday	March 14, 2003 Friday
Last date for a competitive bid	March 19, 2003 Wednesday	March 19, 2003 Wednesday
Letter of Offer to be posted to shareholders	April 04, 2003 Friday	April 16, 2003 Wednesday
Date of opening of the Offer	April 21, 2003 Monday	April 21, 2003 Monday
Last date for Revising the Offer Price / Number of Shares	May 12, 2003 Monday	May 07, 2003 Wednesday
Last date for Withdrawal of Application	May 14, 2003 Wednesday	May 13, 2003 Tuesday
Date of closing of the Offer	May 20, 2003 Tuesday	May 20, 2003 Tuesday
Date of communicating rejection/acceptance and payment of consideration for applications accepted.	June 18, 2003 Wednesday	June 18, 2003 Wednesday

Note: Duly Signed Application and Transfer Deed(s) together with share certificate(s) should be despatched by Registered Post / Courier or hand delivered to the Manager to the Offer at above address to arrive not later than 5.00 p.m. on May 20, 2003.

INDEX

Sr. No.	Subject	Page No.
1	Disclaimer clause	3
2	Details of the offer	3
3	Background of Punjab Chemicals & Pharmaceuticals Limited	3
4	Delisting option	6
5	Background of Alpha Drug India Limited	6
6	Offer Price and Financial arrangements	9
7	Terms & Conditions of the offer	10
8	Procedure for acceptance and settlement of the offer.	11
9	Procedure for withdrawal of application	12
10	Material Documents for inspection	12
11	Responsibility Statement	13

Attached: FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT, FORM OF WITHDRAWAL

DEFINITIONS

The following definitions apply through this document, unless the context requires otherwise:

"Acquirer" or "PCPL" means Punjab Chemicals & Pharmaceuticals Limited;

"Company" or "ADIL" means Alpha Drug India Limited;

"DSM" or "Seller" means DSM Pharma Chemicals Venlo B.V (Formerly DSM Fine Chemicals Netherlands B.V);

"FEMA" means the Foreign Exchange Management Act 1999;

"Manager" or "Manager to the Offer" means Fortune Financial Services (India) Limited;

"NRI" means Non Resident Indians;

"OCBs" means Overseas Corporate Bodies;

"Offer" means the offer being made by PCPL to shareholders of ADIL as set out in this Letter of Offer;

"Offer Document" means this Letter of Offer;

"Offer Price" means Rs.5.50 (Rupees Five and Paise Fifty Only) per fully paid up (Rs.10.00 paid up) equity share of ADIL;

"Public Announcement" means announcement of the Offer dated February 27, 2003;

"PSIDC" means Punjab State Industrial Development Corporation;

"RBI" means the Reserve Bank of India;

"Registrar to the offer" or "Registrar" means Intime Spectrum Registry Limited;

"SEBI" means Securities & Exchange Board of India;

"SEBI (SAST) Regulations" means Securities & Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 and subsequent amendments thereto;

"Specified Date" means March 14, 2003

"Stock Exchanges" means each of The Stock Exchange, Mumbai (BSE), Delhi Stock Exchange (DSE), Calcutta Stock Exchange (CSE), Ahmedabad Stock Exchange (ASE) and Ludhiana Stock Exchange (LSE).

ATTENTION:

The Offer is subject to the approval of the Reserve Bank of India ("RBI") under the Foreign Exchange Management Act, 1999 ("FEMA") for acquiring shares tendered by non-resident shareholders including NRIs, OCBs, FIIs and foreign shareholders under this Offer. To the best of knowledge and belief of the Acquirer, there are no other statutory approvals envisaged to acquire equity shares that are tendered pursuant to this Offer.

If, due to non-receipt of requisite statutory approvals, the Acquirer is unable to make the payment to the shareholders who have accepted the Offer within 30 days of the date of closure of the Offer, then SEBI may, if satisfied that the non-receipt of requisite statutory approvals was not due to any willful default or neglect of the Acquirer or the failure of the Acquirer to diligently pursue the applications for such approvals, grant extension of time for the purpose, subject to the Acquirer agreeing to pay interest to the shareholders for delay beyond 30 days, as may be specified by SEBI from time to time.

The Acquirer will not be responsible for any delay in payment, or non-payment or diminution of value, if any, on account of non-receipt or delay in receipt of permissions and/or approvals from appropriate Governmental and Regulatory authorities unless such delay or non-payment or diminution of value, if any, is directly attributable to willful default, neglect, act or omission to act on the part of the Acquirer.

1. DISCLAIMER CLAUSE

"IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF ALPHA DRUG INDIA LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF PUNJAB CHEMICALS & PHARMACEUTICALS LIMITED ("ACQUIRER") OR OF ALPHA DRUG INDIA LIMITED ("TARGET COMPANY") WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE ACQUIRER (S) IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT ACQUIRER (S) & PAC DULY DISCHARGE THEIR RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER - FORTUNE FINANCIAL SERVICES (INDAI) LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED MARCH 11, 2003 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVER) REGULATIONS 1997 AND SUBSEQUENT AMENDMENT (S) THERE OF.THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAYBE REQUIRED FOR THE PURPOSE OF THE OFFER."

2. DETAILS OF THE OFFER

2.1 Background of the Offer

Punjab Chemicals & Pharmaceuticals Limited, a Company incorporated and registered under the Companies Act, 1956 ('The Acquirer�) is making this offer pursuant to Regulations 10 & 12 of the SEBI (SAST) Regulations for substantial acquisition of shares and change of management of Alpha Drug India Limited (�ADIL").

No other person is acting in concert with the Acquirer for the purpose of this Offer.

Punjab Chemicals & Pharmaceuticals Limited ('Acquirer�) pursuant to its Board�s approval at the meeting held on 24^th February, 2003 entered into a Share Sale and Purchase Agreement (hereinafter referred as Agreement) dated 24^th February 2003 ("the Agreement") with DSM Pharma Chemicals Venlo B.V (Formerly DSM Fine Chemicals Netherlands B.V), a corporation organized and existing under the laws of the Netherlands and having its registered office at Grubbenvorsterweg 8, 5928 NX Venlo, The Netherlands ("the Seller" or "DSM"), the majority shareholder of Alpha Drug India Limited ("the Target Company" or "ADIL"), to acquire 18856058 fully paid up equity shares of Rs.10/- each representing 49.72% of paid up equity capital of ADIL at a aggregate value of Rs 25 Lacs (Rupees Twenty Five Lacs Only) working out to Re 0.1325 (Paise Thirteen only) per share ("the Negotiated Price") payable in cash (the 'Acquisition').

The acquirer, seller or the Target Company has not been prohibited by SEBI from dealing in securities in terms of direction issued u/s. 11B of SEBI Act.

None of present Directors on the Board of Directors of ADIL represents the Acquirer. Subject to the compliance of the provision of SEBI (SAST) Regulations, the Companies Act, 1956 and/ or any other regulation, the Acquirer intends to make the change in management of ADIL after the acquisition. It also proposes to reshuffle the present Board of Directors of Target Company.

PSIDC, the other promoter, who is holding 32,94,750 (8.69%) equity shares of ADIL is not the party to the above referred agreement dated 24.02.03 and therefore, PSIDC is eligible to participate in the instant offer along with public.

2.2 Details of the Proposed Offer

The Public Announcement dated February 27, 2003 was made in the following newspapers, in accordance with Regulation 15 of the SEBI (SAST) Regulations, 1997.

Publications	Language	Edition
Business Standard	English	All editions
Pratahkal	Hindi	All editions
Tarun Bharat	Marathi	Mumbai, Regional language paper where the shares are most frequently traded
Punjabi Tribune	Punjabi	Chandigarh, Regional language paper where the registered office of ADIL is situated.

Public Announcement will also be available on the SEBI�s website at www.sebi.gov.in under Takeover section

The Acquirer is making an offer to the public shareholders of ADIL to acquire 75,84,690 fully paid-up equity shares ('Shares') of Rs. 10/- each representing 20% of the paid- up equity share capital of Alpha Drug India Limited at a price of Rs.5.50 (Rupees Five and Paise Fifty only) per share ("Offer Price") payable in cash ("The Offer") subject to terms and conditions mentioned hereinafter.

Acquirer does not hold any equity shares in ADIL as on the date of this Public Announcement. Acquirer has not acquired either directly or through any other person, any shares of ADIL during the 12 months preceding the date of Public Announcement.

The equity shares of ADIL are to be acquired, pursuant to the Offer, free from all liens, charges and encumbrances and together with all rights attached thereto, including the rights to all dividend or other distributions hereinafter declared, made or paid.

The Offer is not conditional on any minimum level of acceptances.

PCPL has not acquired either directly or indirectly any shares of ADIL after the date of Public Announcement i.e. February 27, 2003.

3. BACKGROUND OF PUNJAB CHEMICALS & PHARMACEUTICALS LIMITED (�THE ACQUIRER�)

3.1 Punjab Chemicals & Pharmaceuticals Limited (The Acquirer)

Punjab Chemicals & Pharmaceuticals Limited is a company incorporated under the laws of Republic of India with its registered office at SCO 417-418, Sector 35C, Chandigarh 160 022. The Current promoters/persons in control are Excel Industries Limited & Shalil Shroff group.

PCPL is engaged in the business of manufacturing & dealing in Chemicals, Agro Chemicals and Speciality Chemicals.

The provisions of Chapter II of SEBI (SAST) Regulations are not applicable to PCPL as it does not hold any shares of ADIL.

Board of Directors of PCPL as of February 27, 2003:

Name	Designation	Residential Address
Mr. G. Narayana	Chairman	10, Gulmohar Park, Near Akola Gardens, Akola, Baroda - 20.
Mr. Shalil Shroff	Managing Director	SC-Lohtse Co-op. Hsg. Society Ltd., Ruia Park, Juhu, Mumbai - 400 049.
Mr. Gurucharan Singh	Director	HM-113, Phase - 3BII, Mohali, Punjab.
Mr. Vijay Rai	Director	6B, Dolphin Apartments, P. B. Road, Mumbai.
Mr. A.G. Shroff	Director	7, Charotkar Society, Old Padra Road, Baroda.
Mr. Mukesh D. Patel	Director	93, Unni Society, Baroda.
Mr. Jagdish R Naik	Director	6, Padma, S. V. Road, Vile Parle (W), Mumbai.
Mr. N Gopinath	Director	864/B-4, GIDC, Makarpura, Baroda - 390016.
Mr. Avtar Singh	Director	5411, Sector 38 (West), Chandigarh.

None of the directors of PCPL are on the board of ADIL.

The shares of PCPL are listed on Ludhiana, Mumbai and Delhi Stock Exchanges.

Brief Financials of PCPL

Profit & Loss Statement	31.03.2000	31.03.2001	31.03.2002	31.12.2002
Income from operations	7247	7524	6874	7240
Other Income	140	132	61	56
Total Income	7387	7656	6935	7296
Total Expenditure.	6754	7075	6787	6767
Profit Before Depreciation, Interest and Tax	633	581	148	529
Depreciation	192	193	191	144
Interest	332	321	341	170
Extraordinary Gain	0	0	111	0
Profit (Loss) Before Tax	109	67	(273)	215
Provision for Tax	11	7	(78)	72
Profit (Loss) After Tax	98	60	(195)	143
Prior period adjustment	-4	1	10	-7
Profit / (Loss)	94	61	(185)	136
Notes :
1. Total Expenditure includes Increase(-) /Decrease (+) of stocks	-466	-54	425	-131
2. Provision for Tax includes provision for deferred tax (Assets)/ Liabilities	0	0	(78)	60
3. Profit / (Loss) after tax is before adjustment on account of Dividend Tax	7	3	0	0

Balance Sheet Statement	31.03.2000	31.03.2001	31.03.2002	31.12.2002
Sources of funds
Paid up share capital	215.57	215.57	215.57	215.57
Reserves & Surplus (incl. revaluation reserves)	2186.98	2217.89	1626.78	1762.78
Networth	2402.55	2433.46	1842.35	1978.35
Secured loans	1909.02	2058.66	1895.05	1944.26
Unsecured loans	1038.21	723.40	588.25	655.02
Deferred Tax Liabilities	0	0	328.27	388.27
Total	5349.78	5215.52	4653.92	4965.90
Uses of funds
Net fixed assets	2241.13	2331.00	2007.06	2133.80
Investments	375.23	374.23	374.23	374.23
Net current assets	2733.42	2510.29	2229.30	2389.37
Total misc. expenditure not written off	0	0	43.33	68.50
Total	5349.78	5215.52	4653.92	4965.90

Other Financial Data	31.03.2000	31.03.2001	31.03.2002	31.12.2002
Dividend (%)	15.00	12.50	0.00	0.00
Earning Per Share (Rs.)	4.54	2.77	-8.56	6.32
Return on Networth (%)	3.91	2.51	-10.04	6.87
Book Value Per Share (Rs.)	111.45	112.89	85.47	91.77

Notes :

1. Secured loans includes deferred payment credit

9.24

7.04

2. For preparing the above results, the Company has continued to follow the practice of not providing for diminution in the value of strategic long term investment on the basis that the diminution is not of a permanent nature. The position will be reviewed at the end of the year.

The above compilation is based on the Audited Annual accounts for the years ended 31.03.2000, 31.03.2001, 31.03.2002 and for the period ended 31.12.2002 certified by the management of PCPL.

M/s J R. Khanna & Co the Auditor's have stated that:

the company has followed the applicable accounting standards prescribed by the Institute of Chartered Accountants of India from time to time. We further certify that there is no change in the accounting policies of the company in respect of the year ended 31^st March, 2002 & preceding two years except as below :

Year of Change	Regarding	Particulars
1999-2000	Valuation of Inventories	The company had changed the method of determining cost for valuation of inventories by excluding certain overheads to make it commensurate with the mandatory Accounting Standards made applicable w. e. f. 1.4.99. As a result of this the closing stock, profit for the year, reserves and surplus and the current assets have decreased by Rs. 22,54,300/- The company had also changed the policy of valuation of inventories by including the excise duty on goods manufactured for domestic market and lying in the factory premises or bonded warehouses where as in the earlier year the relevant figure was being disclosed by way of a note. As a result of this the closing stock had increased by Rs. 9,69,853/- with the corresponding increase in the current liabilities. However this had no impact on the profits for the year.
2000 -01	Sales Accounting :	i. The company had changed the accounting method domestic sales by including the excise duty element as part of sales. As a result of this the sales for the year were more by Rs. 2,82,09,942/- with corresponding increase in charge of the excise duty in Operating & Other expenses in 'Schedule N' of the Profit & Loss account. It had no impact in the Profits for the year.
2001-02	Research & Development Costs: Amortisation of Expenses :	Research & Development cost (other than cost of Fixed Assets acquired) was being charged as an expense under the appropriate head of account till the commencement of the accounting year. Since the benefit of such expenditure accrued over a number of years, such expenditure relatable to the products, having reasonable certainty of being produced commercially in the year or in the subsequent period, had been considered as deferred revenue expenditure to be amortised over a period of 36 months starting from the date of commercial production of the new product. Toxicological expenses (including Registration fees) for new market Development were amortised over a period of three years from the date of registration. The company deferred the Expenditure incurred on Research & Development to the tune of Rs.21,48,055/- for the new products and toxicological expenses of Rs. 21,85,212/- for new market development over a period of three years which were hitherto expensed out as mentioned above in (i) & (ii). As a result of this, the loss for the year decreased and the Reserves & Surplus as at 31^st March, 2002 increased by Rs. 43,33,267.

3.2 Objects and Purpose of the Offer and Future Plans

Acquirer proposes to do a substantial acquisition of shares of ADIL pursuant to an Agreement and take over the management control. This Offer of 20% of the Equity Capital i.e. 75,84,690 shares of ADIL is made in terms of Regulations 10 & 12 of the SEBI (SAST) Regulations.

The Acquisition of ADIL by PCPL will provide the following synergies : -

An opportunity to enter the international market with existing set up of ADIL and explore the better product synergies between the two companies

Plants of both the companies are logistically situated in nearby area will help in improving the efficiency of human resources and technical inputs for both the companies.

Acquisition will help Acquirer to enter in the new product segment to widen its existing product line at much lower cost.

Acquirer does not have any plan to dispose of or otherwise encumber any assets of ADIL in two years from the date of closure of the Offer except in the ordinary course of business of ADIL. However re-organisation and/or streamlining of various businesses may be considered for commercial reasons and operational efficiencies which may include the restructuring and/or rationalization of assets of ADIL, however, not limited to, merger.

Further, Acquirer undertakes that in the next two years it shall not sell, dispose of or otherwise encumber any substantial asset of ADIL except with the prior approval of the ADIL�s shareholders.

4. DELISTING OPTION TO THE ACQUIRER IN TERMS OF REGULATION 21(3)

4.1 If, pursuant to the Offer and any acquisition of Shares by the Acquirer from the open market or through negotiations or otherwise made in compliance with the SEBI (SAST) Regulations, the public shareholding is reduced to 10% or less of the voting share capital of ADIL, then in accordance with Regulation 21(3) of the SEBI (SAST) Regulations, the Acquirer will make an offer to acquire the outstanding Shares remaining with the public shareholders in accordance with the guidelines specified by SEBI in respect of delisting of securities as may be applicable from time to time.

4.2 If the public shareholding is reduced to 10% or less of the voting share capital of ADIL, then ADIL will be requested to make an application to the Stock Exchanges where the Shares are listed, for delisting of the Shares.

5. BACKGROUND OF ALPHA DRUG INDIA LIMITED (ADIL) ("THE TARGET COMPANY")

5.1 ADIL is an existing public limited company incorporated on 20^th February 1987 under the Companies Act, 1956 having its registered office at Villages Kolimajra & Samalheri, (Chandigarh - Ambala Highway) P.O. Lalru - 140 501, District Patiala, Punjab State, India. ADIL is engaged in the business of manufacture and sale of bulk drugs and its intermediaries.

5.2 The equity shares of ADIL are listed on The Stock Exchange, Mumbai (BSE), Delhi Stock Exchange (DSE), Calcutta Stock Exchange (CSE), Ahmedabad Stock Exchange (ASE) and Ludhiana Stock Exchange (LSE).

5.3 Share Capital structure of ADIL

Particulars	No. of Shares / Voting Rights (VR)	% of Shares / VR
Fully Paid up Equity Shares	3,79,23,448	100.00
Partly Paid up Equity Shares	--	--
Total Paid up Capital	3,79,23,448	100.00
Total Voting Rights	3,79,23,448	100.00

5.4 The total paid up equity share capital of Target Company, as on the date of this Public Announcement is Rs. 379,234,480/-, divided into 3,79,23,448 fully paid up shares of Rs.10/- each. There are no partly paid-up shares. There are no outstanding Convertible instruments (warrants / FCDs / PCDs) etc.

5.5 THE EXTENT OF COMPLIANCE WITH CHAPTER II OF SEBI(SAST) REGULATIONS BY :

a. Alpha Drug (India) Limited, the Target Company, Address - Villages Kolimajra & Samalheri, (Chandigarh - Ambala Highway) P.O. Lalru - 140 501, District Patiala, Punjab State, India.

Sl. No.	Regulation/ Sub- regulation	Due Date for compliance as mentioned in the regulation	Actual date of compliance	Delay, if any (in no. of days) Col. 4- Col. 3	Remarks
1	2	3	4	5	6
1	6(2)	20.05.1997	20.05.1997	--
2	6(4)	20.05.1997	20.05.1997	--
3	8(3)	30.04.1998	18.02.2003	1754	Regularised on 18/02/2003 by participating in the SEBI Regularisation Scheme, 2002
4	8(3)	30.04.1999	18.02.2003	1389
5	8(3)	30.04.2000	18.02.2003	1023
6	8(3)	30.04.2001	18.02.2003	658
7	8(3)	30.04.2002	18.02.2003	293
8	7(3)	N. A.	N. A.	--

There has been delay in compliance as mentioned in column 5, however the same is regularised by participating in SEBI Regularisation Scheme, 2002.

b. DSM, Promoter and person in control, Address - Noorderpoort 9, P. O. Box 81, 5900 AB Venlo, The Netherlands.

Sl. No.	Regulation/ Sub- regulation	Due Date for compliance as mentioned in the regulation	Actual date of compliance	Delay, if any (in no. of days) Col. 4- Col. 3	Remarks
1	2	3	4	5	6
1	6(1)	20.04.1997	01.05.1997	11
2	6(3)	20.04.1997	N. A.	N. A.	Regularised on 24/03/2003 by participating in the SEBI Regularisation Scheme, 2002
3	8(1)	21.04.1998	24.03.2003	1798
4	8(2)	21.04.1998	24.03.2003	1798
5	8(1)	21.04.1999	24.03.2003	1433
6	8(2)	21.04.1999	24.03.2003	1433
7	8(1)	21.04.2000	24.03.2003	1067
8	8(2)	21.04.2000	24.03.2003	1067
9	8(1)	21.04.2001	24.03.2003	702
10	8(2)	21.04.2001	24.03.2003	702
11	8(1)	21.04.2002	24.03.2003	337
12	8(2)	21.04.2002	24.03.2003	337
13	7(1) & 7 (2)	18.07.2002	No Compliance	Till date	Pref. Allotment dt. 14.07.2002
14	7(1A) & 7 (2)	18.07.2002	No Compliance	Till date	Pref. Allotment dt. 14.07.2002

There has been delay in compliance as mentioned in column 5, however the same is regularised by participating in SEBI Regularisation Scheme, 2002. Further there has been non-compliance of Regulation 7(1), 7 (1A) & 7 (2) for the preferential allotment done to them on 14.07.2002.

c. PSIDC, Promoter, Address - Udhyog Bhawan, 18 Himalaya Marg, Sector 17, P. Box. No. 81, Chandigarh - 160017.

Sl. No.	Regulation/ Sub- regulation	Due Date for compliance as mentioned in the regulation	Actual date of compliance	Delay, if any (in no. of days) Col. 4- Col. 3	Remarks
1	2	3	4	5	6
1	6(1)	20.04.1997	21.04.1997	1
2	6(3)	20.04.1997	21.04.1997	1
3	8(1)	21.04.1998	N. A.	N. A.
4	8(2)	21.04.1998	No Compliance	Till date
5	8(1)	21.04.1999	N. A.	N. A.
6	8(2)	21.04.1999	No Compliance	Till date
7	8(1)	21.04.2000	N. A.	N. A.
8	8(2)	21.04.2000	No Compliance	Till date
9	8(1)	21.04.2001	N. A.	N. A.
10	8(2)	21.04.2001	No Compliance	Till date
11	8(1)	21.04.2002	N. A.	N. A.
12	8(2)	21.04.2002	No Compliance	Till date
13	7(1) & 7 (2)	N. A.	N. A.	--
14	7(1A) & 7 (2)	N. A.	N. A.	--

There has been delay in compliance as mentioned in column 5. Further there has been non-compliance of Regulation 8 (2) for the years 1998, 1999, 2000, 2001 & 2002.

d. Shri V. K. Garg (VKG), Promoter and person in control during 1997, Address - House No.15, Sector 9B, Chandigarh - 160009

Sl. No.	Regulation/ Sub- regulation	Due Date for compliance as mentioned in the regulation	Actual date of compliance	Delay, if any (in no. of days) Col. 4- Col. 3	Remarks
1	2	3	4	5	6
1	6(1)	20.04.1997	09.05.1997	18
2	6(3)	20.04.1997	09.05.1997	18

There has been delay in compliance as mentioned in column 5. VKG and his associates sold their shares to DSM in 1997. Pursuant to this sale VKG was no longer promoter/person in control of ADIL, hence provision of Chapter II are not applicable to VKG after 31/03/1997.

5.6 There has been some delay in compliance of the listing requirements by ADIL, however Stock Exchanges have not levied any penalty till date.

5.7 The Board of Directors of ADIL as on February 27, 2003 is as follows:

Name	Designation	Residential Address
Dr. Nitya Anand	Chairman	B-62, Nirala Nagar, Lucknow (UP).
Mr. Anil Kohli	Managing Director	40, Sector 12, Panchkula.
Mr. Ajay K. Mahajan	Nominee Director of PSIDC	809/Sector 38A, Chandigarh.
Mr. K.L. Khurana	Director	103/Sector 35 A, Chandigarh.
Mr. Kuldeep Kaul	Director	2042/Sector 15 C, Chandigarh.
Mr. Pardeep Gupta	Director	33/ Sector 9, Chandigarh.

There are no common director between ADIL & PCPL and none of the above director represents PCPL.

5.8 There have been no mergers/demergers/spin-offs during the past three years involving ADIL.

5.9 There has been no change in the name of ADIL since listing.

5.10 Brief Financials of ADIL

(Amount Rs. In lacs)

Profit & Loss Statement	31/03/2000	31/03/2001	31/03/2002	31/12/2002
Income from operations (Net)	5125.11	3212.81	1833.99	1294.08
Other Income	171.03	154.49	176.53	34.63
Total Income	5296.14	3367.30	2010.52	1328.71
Total Expenditure.	5110.80	3543.56	2375.32	1389.82
Profit Before Depreciation Interest and Tax	185.34	(176.26)	(364.80)	(61.11)
Depreciation	292.96	254.60	219.05	135.00
Interest	238.36	176.30	185.30	75.74
Profit Before Tax	(345.98)	(607.16)	(769.15)	(271.85)
Provision for Tax (Deferred Tax Assets)	NIL	NIL	NIL	NIL
Profit After Tax	(345.98)	(607.16)	(769.15)	(271.85)

Balance Sheet Statement	31/03/2000	31/03/2001	31/03/2002	31/12/2002
Sources of funds
Paid up share capital	3792.34	3792.34	3792.34	3792.34
Reserves and Surplus (excluding revaluation reserves)	673.39	673.39	1018.47	1018.89
Debit Balance in P & L Account	(2710.51)	(3317.68)	(3373.17)	(3645.02)
Networth	1755.22	1148.05	1437.64	1166.21
Secured loans	492.15	398.00	478.03	532.45
Unsecured loans	431.93	738.41	0.00	0.00
Total	2679.30	2284.46	1915.67	1698.66
Uses of funds
Net fixed assets	1905.09	1681.51	1493.79	1359.17
Net current assets	774.21	602.95	421.88	339.49
Total	2679.30	2284.46	1915.67	1698.66

Other Financial Data	31/03/2000	31/03/2001	31/03/2002	31/12/2002
Dividend (%)	0.00	0.00	0.00	0.00
Earning Per Share (Rs.) *	-0.91	-1.60	-2.75	-0.72
Return on Networth (%)	-19.71	-52.89	-53.50	-23.31
Book Value Per Share (Rs.) *	4.63	3.03	3.79	3.08

* Face Value per share - Rs.10

The above compilation is based on audited financial statements for the years ending 31.03.2000, 31.03.2001 & 31.03.2002 respectively and as per Unaudited results certified by management for 9 Months ended 31.12.2002)

Following are the important notes to account added by M/s. S. Tandon & Associates, the Auditors for Financial Year 2001-02:

The company has been continuously incurring losses from operation, which has resulted in accumulated losses of Rs. 3373.17 Lacs as at 31^st March, 2002, which has eroded the net worth/Share capital to that extent. During the year, the majority stakeholder, DSM, has withdrawn its Nominee Directors from the Board of Directors and stopped taking interest in the day-to-day management and future plans of the Company. The existing management is considering various options for revival of the Company. Accordingly, a revival plan has already been submitted to the Banks, which is under their consideration. On the basis of above, the accounts are being prepared on a going concern basis.

DSM, N.V, the Netherlands, the majority stakeholder had paid Rs. 1070.93 lacs. DSM has expressed that this repayment to Deutsche Bank may be treated as per management decision. Therefore, considering the above facts, the Board has decided to treat it as a grant, which has been treated as Extra Ordinary Income to the extent of Rs.689.34 lacs. Repayment of Term Loan of Rs.350 lacs has been treated as Capital Reserve and Rs.31.59 lacs have been taken as Margin Money for Bank Guarantees provided by Deutsche Bank

During the year, the majority stakeholder, DSM, has withdrawn its proposal under which it had agreed to transfer the shares held by it to Alpha Employees Holding Private limited (AEHPL) (a company promoted by the employees of the company) free of Cost. DSM had also proposed to provide one time grant of Rs.1444.25 lacs and an interest free long term loan of Rs.420 lacs to facilitate the Company's turnaround and development. The Securities and Exchange Board of India had awarded its approval to aforesaid proposal which was pending with Punjab & Haryana High Court due to an appeal by another shareholder.

Name of the shareholder that filed above referred appeal - PSIDC

Current Status of Appeal - In view of the inordinate delay in the implementation of aforesaid proposal DSM withdraw its support to the proposal. As a result the writ petition filed by the PSIDC was rendered infructuous and disposed of accordingly on 27/08/2001.

Reason as to why it is pending in Punjab & Haryana High Court - Nothing is pending in this connection with Punjab & Haryana High Court.

5.11 Break up of Shareholding Pattern of ADIL

Shareholders� category	Shareholding & voting rights prior to the agreement/ acquisition and offer. (A)		Shares /voting rights agreed to be acquired which triggered off the Regulations. (B)		Shares/voting rights to be acquired in open offer(Assuming full acceptances (C)		Share holding / voting rights after the acquisition and offer. i.e. (A)+(B)+(C) (D)
	No.	%	No.	%	No.	%	No.	%
1. Promoter group Parties to Agreement 1. DSM (Seller) Other than (a) above 1. PSIDC	1,88,56,058 32,94,750	49.72 8.69	(1,88,56,058)	(49.72)	-- **	-- **	-- **	-- **
Total (a+b)	2,21,50,808	58.41	(1,88,56,058)	(49.72)	**	**	**	**
2. Acquirers Main Acquirer (PCPL)	--	--	1,88,56,058	49.72	75,84,690	20.00	2,64,40,748	69.72
3. Parties to Agreement (Other than 1(a) & 2)	--	--	--	--	--	--	--	--
4. Public (Other than 1 to 3) FIs/MFs/FIIs/Banks, SFIs (list given below) Others	4,68,799 1,53,03,841	1.24 40.35	-- --	-- --
Total (a+b)	1,57,72,640	41.59			**	**	**	**
5. Promoter group / Public					(75,84,690)	(20.00)	1,14,82,700	30.28
No. of Shareholders in Public Category		48342
Total	3,79,23,448	100.00	--	--	--	--	3,79,23,448	100.00

** Exact quantities of individual category of shareholders will be based on the acceptances in the respective categories.

List of Shareholders at 4(a) above

Name	Holding	Name	Holding
Life Insurance Corporation (FI)	3,19,467	Chemtechno SRL (FII)	1,05,665
Fortress Financial Services Ltd. (FI)	100	Unit Trust of India	1,800
Canara Bank MF	3,100	Canara Bank MF	7,900
Canara Bank MF	3,800	PNB Mutual Fund	2,200
PNB Mutual Fund	6,267	SBI MF 5	10,600
SBI MF 2	2,600	SBI MF Magnum ELSS	300
LIC MF	3,300	Bank of India	100
Karnataka Bank Ltd.	200	Maninagar Co-op. Bank Ltd.	900
State Bank of India	400	United Bank of India	100

(Source : All the data about Target Company is provided by Alpha Drug India Limited)

6. OFFER PRICE AND FINANCIAL ARRANGEMENTS

6.1 Justification of Offer Price

The equity shares of ADIL are listed on The Stock Exchange, Mumbai (BSE), Delhi Stock Exchange (DSE), Calcutta Stock Exchange (CSE), Ahmedabad Stock Exchange (ASE) and Ludhiana Stock Exchange (LSE).

The annualised trading turnover during the preceding 6 calendar months (i.e. August 2002 to January 2003) prior to the month in which the Public Announcement is made in each of stock exchange is detailed below :

Name of stock exchange(s)

Total no. of shares traded during the 6 calendar months prior to the month in which PA was made.

Total No. of listed Shares

Annualized Trading turnover( in terms of % to total listed shares)

BSE

11,07,290

3,79,23,448

5.84

DSE

Nil

3,79,23,448

--

CSE

76,051

3,79,23,448

0.40

LSE

Nil

3,79,23,448

--

ASE

Nil

3,79,23,448

--

As the annualised trading turnover by number of shares is more than 5% of the total number of shares listed on BSE, the shares of ADIL are deemed to be frequently traded in terms of the SEBI (SAST) Regulations on BSE.

The offer price of Rs.5.50 per fully paid up equity shares is justified in terms of Regulation 20(4) of the SEBI (SAST) Regulations as it is the higher than the following :

i.

Negotiated Price

Re.0.1325 per fully paid Equity share

ii.

Highest Price paid by Acquirer/PACs for any Acquisitions including public or rights issue or Preferential issue in 26 weeks prior to the PA

Not Applicable

iii.

The average price calculated as per Regulation 20(4)( c) during the 26 weeks preceding the date of Public Announcement (i.e. February 27, 2003)

Rs.3.77 per fully paid Equity share

iv.

The average price calculated as per Regulation 20(4)( c) during the 2 weeks preceding the date of Public Announcement (i.e. February 27, 2003)

Rs.4.60 per fully paid Equity share

The weekly high and low of the closing prices of the equity shares of ADIL during the 26-week period preceding the date of Public Announcement i.e. February 27, 2003 are given below:

Sr. No.	Week ending	High (Rs.)	Low (Rs.)	Average (Rs.)	Volume (shares)
1	9/4/02	4.00	3.60	3.80	19982
2	9/11/02	3.85	3.55	3.70	11005
3	9/18/02	3.75	3.50	3.63	12451
4	9/25/02	3.65	3.40	3.53	12436
5	10/2/02	3.30	3.15	3.23	10254
6	10/9/02	3.75	3.15	3.45	15171
7	10/16/02	3.60	3.35	3.48	12901
8	10/23/02	3.40	3.05	3.23	25575
9	10/30/02	3.30	3.00	3.15	10600
10	11/6/02	3.20	3.00	3.10	3960
11	11/13/02	3.20	2.80	3.00	26550
12	11/20/02	3.20	3.00	3.10	6740
13	11/27/02	3.00	2.90	2.95	53516
14	12/4/02	3.90	3.15	3.53	49225
15	12/11/02	3.60	3.10	3.35	20683
16	12/18/02	3.25	3.20	3.23	18687
17	12/25/02	3.30	3.10	3.20	14533
18	1/1/03	3.70	3.10	3.40	53982
19	1/8/03	6.00	3.95	4.98	318499
20	1/15/03	5.55	5.25	5.40	146633
21	1/22/03	5.40	4.70	5.05	93826
22	1/29/03	4.95	4.50	4.73	51691
23	2/5/03	4.35	4.10	4.23	43148
24	2/12/03	4.30	4.10	4.20	49700
25	2/19/03	4.80	4.10	4.45	46387
26	2/26/03	5.10	4.70	4.90	162318
	Average of 26 weeks			3.77

The daily high and low of closing prices of equity shares of ADIL during the 2-week period preceding the date of Public Announcement i.e. February 27, 2003 are given below:

Day	High	Low	Average	Volume
14 February 2003	4.15	3.85	4.00	9690
17 February 2003	4.25	4.00	4.13	14550
18 February 2003	4.40	4.05	4.23	8909
19 February 2003	4.90	4.35	4.63	13238
20 February 2003	5.25	4.70	4.98	10289
21 February 2003	5.10	4.75	4.93	15050
24 February 2003	5.55	4.50	5.03	48797
25 February 2003	5.25	4.60	4.93	41742
26 February 2003	4.90	4.20	4.55	46440
Average of 2 weeks			4.60

Further as the shares of ADIL are infrequently traded on ASE, DSE, CSE and LSE, the offer price is justified as follows :

The offer price of Rs.5.50 per fully paid up equity share of ADIL is justified in terms of Regulation 20(5) of the SEBI (SAST) Regulations as it is the highest of the following :

iii. Other parameters

31.03.2002

31.12.2002

Return on Networth (%)

-53.50

-23.31

Book Value per share (Rs.)

3.79

3.08

Earning per Share (Rs.)

-2.75

-0.72

Price to Earnings Ratio (based on Offer Price)

NA

NA

Industry Price Earning Ratio **

16.8x

** (Source: Capital Market Vol. XVII/24 February 16, 2003 Industry-Bulk Drug MNCs)

Based on the aforementioned information, in the opinion of the Manager to the offer and PCPL, the offer price of Rs.5.50 per fully paid up Equity share of ADIL is justified in terms of Regulations 20(4) & 20(5).

If PCPL acquires equity shares of ADIL after the date of Public Announcement upto 7 working days prior to the closure of the offer at a price higher than the offer price, then the highest price paid for such acquisition shall be payable for all the shares tendered in the offer and accepted under the offer.

6.2. Financial Arrangements

The total fund requirement for the acquisition of 75,84,690 equity shares, being 20% of the paid up equity capital of ADIL at Rs 5.50 per share is Rs. 4,17,15,795/- (Rupees Four Crore Seventeen Lacs Fifteen Thousand Seven Hundred Ninety Five only).

In accordance with Regulation 28 of the SEBI (SAST) Regulations, Acquirer has created an Escrow Account in the form of a Bank Guarantee, issued by Bank of Baroda valid till June 30, 2003, in favour of Fortune Financial Services (India) Limited - the Manager to the Offer, for an amount of Rs. 1,05,00,000/- (Rupees One Crore Five Lacs only), being in excess of 25% of the total consideration.

Further, Acquirer has also made a cash deposit of Rs. 4,25,000/- (Rupees Four Lacs Twenty Five Thousand only) being in excess of 1% of the maximum purchase consideration payable under this Offer, in a bank escrow account with Bank of Baroda. Fortune Financial Services (India) Limited, the Manager to the Offer has been empowered to realise the value of the Escrow in terms of the SEBI (SAST) Regulations.

In case of a revision in the Offer price, the Acquirer would raise the amount in the escrow account to ensure compliance with Regulation 28 of SEBI (SAST) Regulations.

The Acquirer has adequate resources to meet the financial requirements of the Offer. The same is certified by Mr. Anil Khanna (Proprietor), M/s. J. R. Khanna & Co., Chartered Accountants, (Membership No. 83275), Address: SCO No. 10, Second Floor, Sector-17E, Chandigarh. Tel No.: +91 172 703802 Fax No.: +91 172 600696.

The Manager to the Offer is satisfied about the ability of Acquirer to implement the Offer in accordance with the SEBI (SAST) Regulations. The Offer will be implemented by internal accruals and/or borrowings by Acquirer.

7. TERMS AND CONDITIONS OF OFFER

7.1 Statutory Approvals

The Offer is subject to receipt of: Approval by Acquirer from Reserve Bank of India ("RBI"), under Foreign Exchange Management Act, 1999 ("FEMA").

Besides this, as on the date of this Public Announcement, no other statutory approval is required to acquire the shares tendered pursuant to this Offer. Acquirer will not proceed with the Offer in the event the statutory approval indicated above is refused in terms of Regulation 27 of the SEBI (SAST) Regulations.

Acquirer has made an application to the Reserve Bank of India vide their letter dated March 05, 2003 to seek permission under FEMA for the acquisition of shares from DSM.

The provisions of Section 372A of the Companies Act, 1956, will be complied wherever applicable along with any permissions required to be taken from Banks/FIs for this Offer.

The Offer shall be subject to all statutory approvals that may become applicable prior to completion of the Offer.

In case of delay in receipt of statutory approvals, SEBI has power to grant extension of time to Acquirer for payment of consideration to shareholders, subject to Acquirer agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations. Further, if the delay occurs on account of willful default by Acquirer in obtaining the requisite approvals, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.

7.2 Others Terms and Conditions

The Letter of Offer together with FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT, FORM OF WITHDRAWAL will be mailed to the shareholders of ADIL, except the Acquirer, seller and parties to the agreement, if any, whose names appear on the Register of Members of ADIL at the close of business hours on March 14, 2003 (specified date)

All the shareholders, except the Acquirer, seller and parties to the agreement, who own the shares of ADIL anytime before the closure of the offer are eligible to participate in the Offer.

Unregistered owners can send their application in writing to the Registrar to the offer on a plain paper stating the Name, Address, Number of shares held, Number of shares offered, Distinctive Numbers, Folio Number, together with the original share certificate(s), valid transfer deeds and the original contract note issued by the SEBI registered broker through whom they acquired their shares. No indemnity is required from the unregistered owners.

The Lock-in shares, if any, whether acquired pursuant to an Acquisition Agreement or in the offer will be transferred to the acquirer subject to the condition that it will be lock-in in their hands. It will be ensured that there will be no discrimination in acceptance of lock-in and non lock-in shares.

Accidental omission to dispatch this offer document to any person to whom this offer is made or the non-receipt or delayed receipt of this offer document by any such person will not invalidate this offer in any way.

8. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

Shareholders who wish to tender their shares will be required to send the Form of Acceptance cum Acknowledgement, original Share Certificate(s) and transfer deed(s) duly signed to the Registrar to the Offer: Intime Spectrum Registry Limited, Building No. C-13, First Floor, Kantilal Maganlal Industrial Estate (Pannalal Silk Mill Compound), L. B. S. Marg, Bhandup (West), Mumbai - 400 078 Tel. No. +91 22 2592 3837 Fax No. +91 22 2567 2693 e-mail isrl@vsnl.com Contact Person - Mr. Nikunj Daftary either by Hand Delivery between ( 11.00 a.m. to 5.00 p.m. from Monday to Saturday.) or by Registered Post on or before the closure of the Offer, i.e. May 20, 2003, in accordance with the instructions specified in the Letter of Offer and in the Form of Acceptance cum Acknowledgement.

Registered Shareholders should enclose

Form of Acceptance Cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, by all shareholders whose names appear on the share certificates.

Original Share Certificate(s)

Valid Share Transfer deed(s) duly signed as transferors by all shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with ADIL and duly witnessed at the appropriate place.

Unregistered Shareholders should enclose

Form of Acceptance Cum Acknowledgement duly completed and signed in accordance with the instructions contained therein by the person(s) accepting the Offer.

Original Share Certificate(s)

Original Contract Note(s) from the broker through whom the shares were acquired.

Valid Share Transfer deed(s) as received from market. The details of buyer should be left blank failing which, the same will be invalid under this offer. All other requirements for valid transfer will be pre condition for valid acceptance.

The share certificate, transfer deed and the FORM OF ACCPETANCE CUM ACKNOWLEDGEMENT, FORM OF WITHDRAWAL should be sent only to the Registrar to the Offer at the address mentioned in (a) above and not to the Manager, Acquirer or to the Target Company.

The Registrar to the Offer has opened a special depository account with Infrastructure Leasing & Financial Services Limited styled " ISRL- ADIL Open Offer A/c". The DP ID is IN300095 and Beneficiary ID is 10801665.

Beneficial owners (holders of shares in Dematerialised form) who wish to tender their shares will be required to send their Form of Acceptance cum Acknowledgement along with a photocopy of the delivery instructions in "Off-Market" mode or counterfoil of the delivery instruction in "Off-Market" mode, duly acknowledged by the Depository Participant ("DP"), in favour of the special depository account to the Registrar to the Offer either by Hand Delivery between (11.00a.m. to 5.00 p.m.) or by Registered Post on or before, the close of the Offer, i.e. May 20, 2003, in accordance with the instructions specified in the Letter of Offer and in the Form of Acceptance cum Acknowledgement. The beneficial owner should also ensure that the credit of the shares in the special depository account should be received before closure of the Offer i.e. May 20, 2003. In case of non-receipt of the aforesaid documents, but receipt of the shares in the special depository account, it will be deemed that the shareholder has tendered acceptance of the Offer.

Shareholders having their beneficiary account with Central Depository Services Limited (CDSL), have to use inter-depository delivery instruction slip for the purpose of crediting their Equity shares in favour of the Special Depository Account with NSDL.

Shareholders who have sent their physical shares for Dematerialisation need to ensure that process of getting shares dematerialised is completed well in time so that the credit in the special depository account should be received before closure of the Offer i.e. May 20, 2003, else the application will be rejected.

In case of non-receipt of the Letter of Offer and/or persons who have sent the shares for transfer may make an application on plain paper stating their name, address, number of shares held, distinctive numbers, folio number and the number of shares in respect of which they are accepting the Offer along with the original share certificate(s) and duly signed transfer deed(s). In case of non-receipt of the Letter of Offer by beneficial owners, they may send the application in writing to the Registrar to the offer, on a plain paper stating the name, address, No. of Shares held, no. of shares offered, DP name, DP ID, Beneficiary account number and a photocopy of the delivery instruction in "Off-Market" mode or counter foil of the delivery instruction in "Off-Market" mode duly acknowledged by the DP, in favour of the special depository account, to the Registrar to the Offer, during the period the Offer is open for acceptance i.e. between April 21, 2003 and May 20, 2003.

In case the shares tendered in the Offer by the shareholders, are more than the shares to be acquired under the Offer, the acquisition of shares from each shareholder will be as per the provisions of Regulation 21 (6) of the SEBI (SAST) Regulations on a proportionate basis, in such a way that the acquisition from a shareholder shall not be less than the minimum marketable lot or the entire holding if it is less than the marketable lot. Market lot for the Target Company�s share is 1 (one) share.

In case of delay in receipt of statutory approvals, SEBI has power to grant extension of time to Acquirer for payment of consideration to shareholders, subject to Acquirer agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations. Further, if the delay occurs on account of willful default by PCPL in obtaining the requisite approvals, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.

Payment of the consideration due under the Offer to those shareholders/unregistered owners whose share certificates and other documents are found in order and accepted by the Acquirer will be made by crossed account payee cheques/demand drafts and sent by Registered Post / Courier, at the shareholders�/unregistered owners� sole risk. All cheques/demand drafts will be drawn in the name of the first registered holder. In case of joint registered holders, it is desirable that registered shareholders provide bank details in the Form of Acceptance and Acknowledgement, for incorporation in the Cheques /demand draft. In case of unregistered owners of the shares, payment will be made by crossed account payee Cheques / demand draft in the name of the person specified by such owner.

Unaccepted Share Certificates, transfer forms and other documents, if any, will be returned by Registered Post at the shareholders�/unregistered owners� sole risk to the sole/first shareholder. Shares held in demat form to the extent not accepted will be credited back to the beneficial owners' depository account with the respective depository participant as per the details furnished by the beneficial owner in the Form of Acceptance cum Acknowledgement.

The Registrar to the Offer will hold in trust the Shares / Share certificates, Form of Acceptance-cum-Acknowledgement, if any, and the transfer form/s on behalf of the shareholders of ADIL who have accepted the Offer, till the cheques/drafts for the consideration and/or the unaccepted shares/share certificates are despatched/returned.

9. PROCEDURE FOR WITHDRAWAL OF APPLICATION / ACCEPTANCE

In accordance with Regulation 22(5A) of the SEBI (SAST) Regulations 1997, shareholders shall have the option to withdraw acceptances tendered up to three working days prior to the Offer Closing Date i.e. May 13, 2003.

Shareholders who wish to withdraw their shares from the Offer will be required to send the Form of Withdrawal duly completed & signed alongwith the requisite documents.

In case of non receipt of Form of Withdrawal, the withdrawal can be exercised by making an application on plain paper along with following details :-

In case of physical shares: by stating Name, Address, Distinctive numbers, Folio number, Number of shares tendered.

In case of dematerialized shares: by stating Name, Address, Distinctive numbers, Folio number, Number of shares tendered, DP Name, DP ID, beneficiary account number, photocopy of the delivery instruction in "Off Market" mode duly acknowledged by the DP in favour of the special depository account.

In either case: a copy of the acknowledgement received from the Registrar to the Offer upon tendering of the Shares,

so as to reach the Registrar to the Offer either by hand delivery or by registered post on or before May 13, 2003.

10. MATERIAL DOCUMENTS FOR INSPECTION

The following documents are regarded as material documents and are available for inspection at the office of Fortune Financial Services (India) Limited, K. K. Chambers, 2^nd Floor, Sir P. T. Marg, fort, Mumbai - 400 001 from 10.30 a.m. to 12.30 p.m. and from 2.30 p.m. to 4.30 p.m. on any working day, except Saturdays, Sundays, and Public/Bank Holidays until the offer closes i.e. Tuesday, May 20 2003

Memorandum & Articles of Association and Certificate of Incorporation of Alpha Drug India Limited.

Memorandum & Articles of Association and Certificate of Incorporation of Punjab Chemicals & Pharmaceuticals Limited.

Copy of Share Sale & Purchase Agreement dated February 24, 2003 between PCPL and DSM.

Copy of Letter appointing M/s Fortune Financial Services (I) Ltd. as Managers to the Offer.

MOU between Punjab Chemicals & Pharmaceuticals Limited Acquirer and M/s Fortune Financial Services (I) Ltd., Managers to the Offer.

Copy of Letter appointing M/s Intime Spectrum Registry Ltd. as Registrar to the Offer.

MOU between Punjab Chemicals & Pharmaceuticals Limited Acquirer and M/s Intime Spectrum Registry Ltd., Registrar to the Offer.

Copy of Certificate from M/s J. R. Khanna & Co., Auditors of PCPL certifying the adequacy of resources of the acquirer in fulfilling the obligations of the offer.

Annual Reports of Punjab Chemicals & Pharmaceuticals Limited. Acquirer for the Financial year 1999-2000, 2000-01 and 2001-02 and Unaudited accounts for 9 months ended December 31, 2002 certified by management of the Company.

Annual Reports of ADIL for the Financial year 1999-2000, 2000-01 and 2001-02 and Unaudited accounts for 9 months ended December 31, 2002 certified by management of the Company.

Bank Guarantee from Bank of Baroda for Escrow in favour of Fortune Financial Services (India) Limited and a letter from Bank of Baroda confirming deposit of Rs.4,25,000, in excess of 1% of total consideration by PCPL in current account

Copy of an application made to the Reserve Bank of India by Acquirer vide their letter dated March 05, 2003 to seek permission under FEMA for the acquisition of shares from DSM.

Copy of Public Announcement dated February 27, 2003

SEBI Observation Letter no. TO/AG/6725/03 dated April 03, 2003.

11. RESPONSIBILITY STATEMENT

The Directors of the Acquirer accept full responsibility for the information contained in this Letter of Offer.

PCPL accept full responsibility for ensuring compliance of the SEBI (SAST) Regulations.

Signed on behalf of the Board of Directors of

PUNJAB CHEMICALS & PHARMACEUTICALS LIMITED

Sd/-

(SHALIL SHROFF)

(MANAGING DIRECTOR)

Date : April 10, 2003

Place: Mumbai

Encl. : FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT, FORM OF WITHDRAWAL

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Name of stock exchange(s)	Total no. of shares traded during the 6 calendar months prior to the month in which PA was made.	Total No. of listed Shares	Annualized Trading turnover( in terms of % to total listed shares)
BSE	11,07,290	3,79,23,448	5.84
DSE	Nil	3,79,23,448	--
CSE	76,051	3,79,23,448	0.40
LSE	Nil	3,79,23,448	--
ASE	Nil	3,79,23,448	--

i.	Negotiated Price	Re.0.1325 per fully paid Equity share
ii.	Highest Price paid by Acquirer/PACs for any Acquisitions including public or rights issue or Preferential issue in 26 weeks prior to the PA	Not Applicable
iii.	The average price calculated as per Regulation 20(4)( c) during the 26 weeks preceding the date of Public Announcement (i.e. February 27, 2003)	Rs.3.77 per fully paid Equity share
iv.	The average price calculated as per Regulation 20(4)( c) during the 2 weeks preceding the date of Public Announcement (i.e. February 27, 2003)	Rs.4.60 per fully paid Equity share