1.  Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention on accrual basis and in accordance with accounting
 principles generally accepted in India and as per applicable accounting
 standards notified by the Companies (Accounting Standards) Rules, 2006.
 
 2.  Fixed Assets
 
 Tangible Assets
 
 Fixed Assets are stated at cost (net of CENVAT & VAT) less
 depreciation. Cost includes installation and expenditure during
 construction, including freight, insurance, borrowing costs and
 incidental expenses relating to acquisition. Premium on leasehold land
 is amortised over the period of the lease. Fixed Asset costing less
 than Rs.5000 are fully depreciated in the year of purchase.
 
 Depreciation is provided pro-rata on straight-line method as per the
 rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956, except in respect of the following where the rates applied
 are higher than Schedule XIV rates: -
 
 Intangible Assets
 
 Intangible Assets are stated at cost less amortisation. These are
 amortised on a straight line basis using the following rates such that
 the related assets are depreciated over their economical useful lives.
 
 3.  Investments
 
 Investments are stated at cost of acquisition. Provision for diminution
 in value of long-term investments, other than temporary, is made in the
 accounts.
 
 4.  Inventories
 
 Raw materials, Stores & Spares and Work-in-process are valued at cost
 using monthly weighted average cost method. Appropriate share of
 utilities and other overheads are included in the cost of
 Work-in-process and Finished goods. Semi-finished goods included in
 Work-in-process are valued at cost. Materials in transit are valued at
 cost. Inventories are valued at cost or net realizable value whichever
 is lower.
 
 5.  Deferred Tax
 
 Deferred Tax is accounted for by computing the tax effect of timing
 differences, which arise during the year and reverse in subsequent
 periods.
 
 Deferred Tax assets on accumulated losses and unabsorbed depreciation
 are recognized only to the extent that there is virtual certainty of
 realization of such assets in future.
 
 6.  Employee Benefits
 
 Liability for employee benefits, both short and long term, for present
 and past services, which are due as per the terms of employment are
 recorded in accordance with Accounting Standard AS-15 Employee
 Benefits notified by the Companies (Accounting Standards) Rules, 2006.
 
 a) Gratuity
 
 The Company has an obligation towards gratuity, a defined benefit
 retirement plan covering eligible employees. The plan provides for a
 lump sum payment to vested employees on retirement, death while in
 employment or on termination of employment in an amount equivalent to
 15 days (30 days for post 30 years of service) salary payable for each
 completed year of service. Vesting occurs upon completion of five years
 of service. Contributions to Gratuity fund are made to recognized funds
 managed by the Life Insurance Corporation of India.  The Company
 accounts for the liability for future Gratuity benefits on the basis of
 an independent actuarial valuation. Actuarial gains or losses are
 recognized immediately in the profit and loss account.
 
 b) Superannuation
 
 The Company has a superannuation plan, which is a defined contribution
 plan. Under the plan, the Company contributes up to 15% of the eligible
 employees salary to the fund each year. Contributions are made to
 recognized funds managed by the Life Insurance Corporation of India.
 The Company
 
 recognizes such contributions as an expense when incurred. The Company
 has no further obligation beyond this contribution.
 
 c) Provident Fund
 
 In accordance with applicable local laws, eligible employees of the
 Company are entitled to receive benefits under the provident fund, a
 defined contribution plan to which both the employee and employer
 contribute monthly at a determined rate (currently at 12% of an
 employees salary). These contributions are either made to the
 respective Regional Provident Fund Commissioner and the Central
 Provident Fund under the state pension scheme, and are expensed as
 incurred.
 
 d) Liability for Leave
 
 Liability for leave is treated as a short term liability and is
 accounted for as and when earned by the employee.
 
 7.  Revenue Recognition
 
 a) Revenue from sale of goods is recognised when significant risks and
 rewards in respect of ownership of products are transferred by the
 Company.
 
 b) Gross Sales are inclusive of excise duty.
 
 c) Export incentive under the Duty Entitlement Pass Book Scheme is
 recognized on accrual basis.
 
 d) In respect of ANDA/Dossier licensing revenue is recognized as per
 the milestones achieved under the arrangement. In respect of product
 development services, revenue is recognized on accrual basis as the
 services are rendered.
 
 8.  Research & Development (R&D)
 
 Revenue expenditure (including depreciation) on R&D is charged to
 revenue in the year in which it is incurred.  Capital expenditure, if
 any, on R&D is added to fixed assets.
 
 9.  Foreign Currency Transactions
 
 Transactions in foreign currencies are translated at the exchange rates
 prevailing on the dates of transactions and in case of purchase of
 materials and sale of goods, the exchange gains/losses on settlements
 during the year, are credited/charged to Profit and Loss Account.
 
 Monetary assets and liabilities denominated in foreign currencies are
 translated at the rates prevailing on the date of Balance sheet.
 Exchange gains/losses including those relating to fixed assets are
 dealt with in the Profit and Loss Account.
 
 Premium or discount on forward contracts is amortized over the life of
 such contracts and is recognised as income or expense.
 
 Derivative Instruments and Hedge Accounting
 
 The Company uses foreign currency forward contracts to hedge its risks
 associated with foreign currency fluctuations relating to certain firm
 commitments and forecasted transactions. The Company designates these
 as cash flow hedges.
 
 The use of foreign currency forward contracts is governed by the
 Companys policies approved by the board of directors, which provide
 written principles on the use of such financial derivatives consistent
 with the Companys risk management strategy. The Company does not use
 derivative financial instruments for speculative purposes.
 
 Foreign currency forward contract derivative instruments are initially
 measured at fair value, and are remeasured at subsequent reporting
 dates. Changes in the fair value of these derivatives that are
 designated and effective as hedges of future cash flows are recognised
 directly in Cash Flow Hedge Account in Reserves &Surplus and the
 ineffective portion is recognized immediately in profit and loss
 account.
 
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognized in profit and loss
 account as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. At that time for forecasted transactions, any cumulative
 gain or loss on the hedging instrument recognised in Cash Flow Hedge
 Account in Reserves & Surplus is retained there until the forecasted
 transaction occurs. If a hedged transaction is no longer expected to
 occur, the net cumulative gain or loss recognised in Cash Flow Hedge
 Account in Reserves & Surplus is transferred to profit and loss account
 for the year.
 
 10.  Employee Stock Option Schemes (ESOP)
 
 The Company accounted for compensation expense under the Employee Stock
 Option Schemes using the intrinsic value method as per the Guidance
 Note Accounting for Employee Share-based Payments issued by the
 Institute of Chartered Accountants of India. The difference between the
 market price and the exercise price as at the date of the grant is
 treated as compensation expense and charged over the vesting period.
 
 11.  Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized till the date the
 assets put to use. All other borrowing costs are charged to revenue.
 
 12.  Leases
 
 Leases that do not transfer substantially all of the risks and rewards
 of ownership are classified as operating leases.  Lease payments under
 an operating lease are recognized as expense in the statement of profit
 and loss on a straight line basis over the lease term.
 
 13.  Earning Per Share
 
 The basic earning per share (EPS) is calculated by dividing the
 Profit / (Loss) after Tax by the weighted average number of Equity
 Shares outstanding. The diluted EPS is calculated after adjusting the
 weighted average number of Equity shares to give effect to the
 potential equity shares on the stock options outstanding.
 
 14.  Provisions and contingent liabilities
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and if it is probable that these liabilities can be properly
 estimated at the period end. Contingent liabilities are not recognized
 but are disclosed in the notes as an item where, substantial estimation
 is dependent on the happening of another event which cannot be
 adequately judged during the period end.