Basis of accounting
 
 These financial statements have been prepared and presented under the
 historical cost convention on an accrual basis of accounting and comply
 with the Accounting Standards as specified in the Companies (Accounting
 Standards) Rules, 2006, other pronouncements of the Institute of
 Chartered Accountants of India, the relevant provisions of the
 Companies Act, 1956 and guidelines issued by the Securities and
 Exchange Board of India, to the extent applicable and as adopted
 consistently by the Company.
 
 Use of estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements, and reported amounts of revenues and expenses for
 the year. Examples of such estimates include transfer pricing related
 adjustments, provisions of future obligation under employee benefit
 plans, the useful lives of fixed assets and intangible assets,
 provision for sales return, customer claims, expiry of exclusivity
 periods, expiry of drugs and impairment of assets. Actual results could
 differ from these estimates. Any revision to accounting estimates is
 recognised prospectively in the current and future periods.
 
 Fixed assets and depreciation
 
 Fixed assets are stated at the cost of acquisition or construction,
 less accumulated depreciation and impairment losses. Cost comprises the
 purchase price and any attributable costs of bringing the asset to its
 working condition for intended use.  Advances paid towards acquisition
 of fixed assets outstanding at each balance sheet date and cost of
 assets not ready for intended use before the year end, are shown as
 capital work in progress.
 
 Borrowing costs directly attributable to acquisition, construction or
 erection of fixed assets, which necessarily take a substantial period
 of time to be ready for the intended use, are capitalized.
 Capitalisation of borrowing costs ceases when substantially all the
 activities necessary to prepare the qualifying assets for their
 intended uses are complete. Borrowing costs include exchange
 differences arising from foreign currency borrowings to the extent that
 they are regarded as an adjustment to interest costs.  Other borrowing
 costs are recognised as an expense in the Profit and Loss Account in
 the year in which they are incurred.  Depreciation on fixed assets,
 except leasehold improvements (included in furniture and fixture), is
 provided on pro-rata basis, using the straight-line method and at the
 rates specified in Schedule XIV to the Companies Act, 1956, which in
 the opinion of the management are reflective of the estimated useful
 lives of the fixed assets. Leasehold improvements (included in
 furniture and fixture) are depreciated over their estimated useful
 life, or the remaining period of lease from the date of capitalization,
 whichever is shorter.
 
 Depreciation on additions is provided on a pro-rata basis from the date
 of acquisition/installation. Depreciation on sale/ deduction from fixed
 assets is provided for upto the date of sale/adjustment, as the case
 may be. Modification or extension to an existing asset, which is of
 capital nature and which becomes an integral part thereof is
 depreciated prospectively over the remaining useful life of that asset.
 
 Assets costing individually Rs. 5,000 or less are fully depreciated in
 the year of purchase.
 
 Intangible assets and amortization
 
 Intangible assets comprise patents, trademarks, designs and licenses
 and computer software are stated at cost less accumulated amortization
 and impairment losses, if any.
 
 These assets are amortized over their estimated useful lives on a
 straight-line basis, commencing from the date the asset is available to
 the Company for its use. The management estimates the useful Lives for
 the various intangible assets as follows:
 
                                                      Years
 
 Patents, trademarks, designs and licenses              5
 
 Computer software                                      6
 
 Impairment of assets
 
 The carrying values of assets are reviewed at each reporting date to
 determine if there is indication of any impairment. If any indication
 exists, the asset''s recoverable amount is estimated. For assets that
 are not yet available for use, the recoverable amount is estimated at
 each reporting date. An impairment loss is recognised whenever the
 carrying amount of an asset or its cash generating unit exceeds its
 recoverable amount and is recognised in the Profit and Loss Account. An
 impairment loss is reversed if there has been a change in the estimates
 used to determine the recoverable amount. An impairment loss is
 reversed only to the extent that the asset''s carrying amount does not
 exceed the carrying amount that would have been determined net of
 depreciation or amortisation, if no impairment loss had been
 recognised.
 
 Revenue recognition
 
 Revenue from sale of goods is recognised on transfer of significant
 risks and rewards of ownership to the customers. Revenue includes
 excise duty and is net of sales tax, value added tax and applicable
 discounts and allowances. Allowances for sales returns are estimated
 and provided for in the year of sales.
 
 Service income is recognised as per the terms of contracts with
 customers when the related services are rendered, or the agreed
 milestones are achieved.
 
 Income from royalty, technical know-how arrangements, exclusivity and
 patents settlement, licensing arrangements is recognised on an accrual
 basis in accordance with the terms of the relevant agreement.
 
 Non-compete fee is recognised over the term of the agreement on a
 straight line basis.
 
 Export incentive entitlements are recognised as income when the right
 to receive credit as per the terms of the scheme is established in
 respect of the exports made, and where there is no uncertainty
 regarding the ultimate collection of the relevant export proceeds.
 
 Profit on sale of investments is recognised as income in the period in
 which the investment is sold/ disposed off.
 
 Dividend income is recognised when the right to receive the income is
 established. Income from interest on deposits, loans and interest
 bearing securities is recognised on the time proportion method.
 
 Investments
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments.  All other
 investments are classified as long-term investments.
 
 Current investments are carried at the lower of cost or fair value,
 determined on an individual investment basis. Long-term investments are
 carried at cost less any other-than-temporary diminution in value,
 determined, separately in respect of individual investment.
 
 Inventories
 
 Raw materials, packaging materials and stores and spares are carried at
 cost. Cost includes purchase price, taxes (excluding those subsequently
 recoverable by the enterprise from the concerned revenue authorities),
 freight inwards and other expenditure incurred in bringing such
 inventories to their present location and condition. In determining the
 cost, weighted average cost method is used. The carrying cost of raw
 materials, packaging materials and stores and spare parts are
 appropriately written down when there is a decline in the price of
 materials and finished products in which these will be incorporated are
 expected to sold below cost.
 
 Work-in-progress, manufactured finished goods and traded goods are
 valued at the lower of cost and net realisable value. Net realisable
 value is the estimated selling price in the ordinary course of business
 less the estimated costs of completion and the estimated costs
 necessary to make the sale.
 
 Work in progress includes Active Pharmaceutical Ingredients lying at
 plants for captive consumption. The comparison of cost and net
 realisable value is made on an item by item basis. Cost of
 work-in-progress and manufactured finished goods is determined on the
 weighted average basis and comprises direct material, cost of
 conversion and other costs incurred in bringing these inventories to
 their present location and condition. Cost of traded goods is
 determined on a weighted average basis.
 
 Excise duty liability is included in the valuation of closing inventory
 of finished goods.
 
 Cash and cash equivalents
 
 Cash and cash equivalents comprise cash balances on hand, cash balance
 with bank, and highly liquid investments with original maturities, at
 the date of purchase/investment, of three months or less.
 
 Research and development costs
 
 Revenue expenditure on research and development is expensed off under
 the respective heads of account in the year in which it is incurred.
 
 Expenditure on development activities, whereby research findings are
 applied to a plan or design for the production of new or substantially
 improved products and processes, is capitalised, if the cost can be
 reliably measured, the product or process is technically and
 commercially feasible and the Company has sufficient resources to
 complete the development and to use and sell the asset. The expenditure
 capitalised includes the cost of materials, direct labour and an
 appropriate proportion of overheads that are directly attributable to
 preparing the asset for its intended use. Other development expenditure
 is recognised in the Profit and Loss Account as an expense as incurred.
 
 Capitalised development expenditure is stated at cost less accumulated
 amortisation and impairment losses. Fixed assets used for research and
 development are depreciated in accordance with the Company''s policy
 as stated above.
 
 Materials identified for use in research and development process are
 carried as inventories and charged to Profit and Loss Account on
 issuance of such materials for research and development activities.
 
 Employee stock option based compensation
 
 The Company follows Securities and Exchange Board of India (SEBI)
 guidelines for accounting of employee stock options.  The cost is
 calculated based on the intrinsic value method i.e. the excess of value
 of underlying equity shares as of the date of the grant of options over
 the exercise price of such options is recognised and amortised on a
 straight line basis over the aggregate vesting period of the entire
 option (i.e. vesting period of the last separately vesting portion of
 the option). The cost recognised at any date at least equals the
 intrinsic value of the vested portion of the option at that date.
 
 Foreign currency transactions, derivatives and hedging
 
 Transactions in foreign currency are recorded at the exchange rate
 prevailing at the date of the transaction. Exchange differences arising
 on foreign currency transactions settled during the year are recognised
 in the Profit and Loss Account.  Monetary assets and liabilities
 denominated in foreign currencies as at the balance sheet date, not
 covered by forward exchange contracts, are translated at year end
 rates. The resultant exchange differences are recognised in the Profit
 and Loss Account. Non-monetary assets are recorded at the rates
 prevailing on the date of the transaction.
 
 Profit and Loss items at representative offices located outside India
 are translated at the exchange rate that approximates the actual
 exchange rate on date of the transaction. Monetary Balance sheet items
 at representative offices at the balance sheet date are translated
 using the year-end rates. Non-monetary Balance Sheet items are recorded
 at the rates prevailing on the date of the transaction.
 
 The Company uses various forms of derivative instruments such as
 foreign exchange forward contracts, options, cross currency swaps and
 interest rate swaps to hedge its exposure on account of movements in
 foreign exchange and interest rates. These derivatives are generally
 entered with banks and not used for trading or speculation purposes.
 These derivative instruments are accounted as follows:
 
 - For forward contracts which are entered into to hedge the foreign
 currency risk of the underlying outstanding on the date of entering
 into that forward contract, the premium or discount on such contracts
 is amortized as income or expense over the life of the contract. Any
 profit or loss arising on the cancellation or renewal of forward
 contracts is recognised as an income or expense for the period. The
 exchange difference on such a forward exchange contract is calculated
 as the difference between-
 
 (a) the foreign currency amount of the contract translated at the
 exchange rate at the Balance Sheet date, or the settlement date where
 the transaction is settled during the reporting period; and
 
 (b) the same foreign currency amount translated at the later of the
 date of inception of the forward exchange contract and the last
 reporting date. Such exchange differences are recognised in the Profit
 and Loss Account in the reporting period in which the exchange rates
 change.
 
 - Other derivatives such as forward and option contracts, cross
 currency swaps and interest rate swaps etc are fair valued at each
 Balance Sheet date. The resultant gain or loss (except relating to
 effective portion of cash flow hedges) from these transactions are
 recognised in the Profit and Loss Account. The gain or loss on
 effective portion of cash flow hedges is recorded in the Hedging
 Reserve (reported under the head ''Reserves and Surplus'') which is
 transferred to the Profit and Loss Account in the same period in which
 the hedged item affects the Profit and Loss Account. If the hedging
 instrument no longer meets the criteria for hedge accounting, expire or
 is sold, terminated or exercised, or the designation is revoked, then
 hedge accounting is discontinued prospectively. If the forecast
 transaction is no longer expected to occur, then the balance in hedging
 reserve is reclassified in the Profit and Loss Account. To designate a
 derivative instrument as an effective cash flow hedge, the management
 objectively evaluates and evidences with appropriate supporting
 documents at the inception of each contract and throughout the period
 of hedge relationship whether the contract is effective in achieving
 offsetting cash flows attributable to the hedged risk. The gain or loss
 on ineffective portion of cash flow hedge is recognised in the Profit
 and Loss Account.
 
 Employee benefits
 
 Short - term employee benefits
 
 All employee benefits payable / available within twelve months of
 rendering the service are classified as short-term employee benefits.
 Benefits such as salaries, wages and bonus etc., are recognised in the
 Profit and Loss Account in the period in which the employee renders the
 related service.
 
 Defined benefit plans
 
 Defined benefit plans of the Company comprise gratuity, provident fund
 and pension plans.
 
 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 at retirement, death while in
 employment or on termination of employment of an amount based on the
 respective employee''s salary and the tenure of employment. Vesting
 occurs upon completion of five years of service. The Company makes
 annual contributions to gratuity fund established as a trust. In
 respect of gratuity, the Company fully contributes all ascertained
 liabilities in the respective employee trusts. Trustees administer
 contributions made to the Trusts and contributions are invested in
 specific instruments, as permitted by the law.
 
 Provident fund
 
 In respect of employees, the Company makes specified monthly
 contribution towards the employees'' provident fund to the provident
 fund trust administered by the Company. The minimum interest payable by
 the provident fund trust to the beneficiaries every year is notified by
 the Government. The Company has an obligation to make good the
 shortfall, if any, between the return on respective investments of the
 trust and the notified interest rate.
 
 Pension
 
 The Company has an obligation towards pension, a defined benefit
 retirement plan covering eligible employees. The plan provides for a
 lump sum payment to vested employees at retirement, death while in
 employment or on termination of employment of an amount based on the
 respective employee''s salary and the tenure of employment. Vesting
 occurs upon completion of 20 years of service.
 
 Actuarial valuation
 
 The contributions made to provident fund trust are charged to Profit
 and Loss Account as and when these become payable.  In addition, the
 Company recognizes liability for shortfall in the plan assets vis-a-vis
 the fund obligation, if any. The Guidance on implementing AS 15,
 Employee Benefits (revised 2005) issued by Accounting Standard Board
 states that benefits involving employer established provident funds,
 which require interest shortfalls to be recompensed are to be
 considered as defined benefit plans. Till previous year, pending the
 issuance of the guidance note from the Actuarial Society of India, the
 Company''s actuary had expressed an inability to reliably measure
 provident fund liabilities. Accordingly, the Company was unable to
 recognize the expected shortfall in future, if any and exhibit the
 related information. During the year ended 31 December 2011, the
 guidance note has been issued by the Actuarial Society of India.
 Pursuant to the same, liability in respect of provident fund schemes
 (as a defined benefit plan) has been determined on the basis of
 actuarial valuation.
 
 The liability in respect of all defined benefit plans is accrued in the
 books of account on the basis of actuarial valuation carried out by an
 independent actuary using the Projected Unit Credit Method, which
 recognizes each year of service as giving rise to additional unit of
 employee benefit entitlement and measure each unit separately to build
 up the final obligation.  The obligation is measured at the present
 value of estimated future cash flows. The discount rates used for
 determining the present value of obligation under defined benefit
 plans, is based on the market yields on Government securities as at the
 balance sheet date, having maturity periods approximating to the terms
 of related obligations. Actuarial gains and losses are recognised
 immediately in the Profit and Loss Account. Gains or losses on the
 curtailment or settlement of any defined benefit plan are recognised
 when the curtailment or settlement occurs.
 
 Past service cost
 
 Past service cost is recognised as an expense the Profit and Loss
 Account on a straight-line basis over the average period until the
 benefits become vested. To the extent that the benefits are already
 vested immediately following the introduction of, or changes to, a
 defined benefit plan, the past service cost is recognised immediately
 in the Profit and Loss Account. Past service cost may be either
 positive (where benefits are introduced or improved) or negative (where
 existing benefits are reduced).
 
 Defined contribution plans
 
 The employees'' superannuation fund scheme and employee state
 insurance scheme of the Company are defined contribution plans. The
 Company''s contribution paid/payable under the scheme is recognised as
 an expense in the Profit and Loss Account during the year in which the
 employee render the related service i.e. on an accrual basis.
 
 Other long term employee benefits
 
 Compensated absences
 
 As per the Company''s policy, eligible leaves can be accumulated by
 the employees and carried forward to future periods to either be
 utilised during the service, or encashed. Encashment can be made during
 service, on early retirement, on withdrawal of scheme, at resignation
 and upon death of the employee. The value of benefits is determined
 based on the seniority and the employee''s salary.
 
 Long service award
 
 As per the Company''s policy, employees of the Company are eligible
 for an award after completion of a specified number of years of service
 with the Company.
 
 Actuarial valuation
 
 The Company accounts for the liability for compensated absences payable
 in future and long service awards based on an independent actuarial
 valuation using the projected unit credit method as at the year end.
 Actuarial gains and losses are recognised immediately in the Profit and
 Loss Account. Gains or losses on the curtailment or settlement of any
 defined benefit plan are recognised when the curtailment or settlement
 occurs.
 
 Taxes on income
 
 Income tax expense comprises current tax (i.e. amount of tax for the
 year determined in accordance with the Income-tax law) and deferred tax
 charge or credit.
 
 Deferred tax charge or credit in Profit and Loss Account reflects the
 tax effects of timing differences between accounting income and taxable
 income for the period. The deferred tax charge or credit and the
 corresponding deferred tax liabilities or assets are recognised using
 the tax rates that have been enacted or substantively enacted by the
 balance sheet date. Deferred tax assets are recognised only to the
 extent there is reasonable certainty that the assets can be realised in
 future; however, where there is unabsorbed depreciation or carry
 forward of losses, deferred tax assets are recognised only if there is
 a virtual certainty of realisation of such assets.
 
 Further, tax effect in respect of timing differences originated from
 items adjusted against reserves are recognised with a corresponding
 adjustment to such reserves.
 
 Deferred tax assets are reviewed at each balance sheet date and are
 written-down or written-up to reflect the amount that is reasonably /
 virtually certain (as the case may be) to be realised. Deferred tax
 consequences of timing differences that originate in the tax holiday
 period and reverse after the tax holiday period are recognised in the
 period in which the timing differences originate. Timing differences
 that originate and reverse within tax holiday period are not considered
 for deferred tax purposes.
 
 Minimum alternate tax payable under the provisions of the Income Tax
 Act 1961 is recognised as an asset in the year in which credit becomes
 eligible and is set off to the extent allowed in the year in which the
 Company becomes liable to pay income taxes at the enacted tax rates.
 
 Provisions, contingent liabilities and contingent assets
 
 A provision is created when there is a present obligation as a result
 of a past event and it is more likely than not that there will be an
 outflow of resources embodying economic benefits to settle such
 obligation and the amount of such obligation can be reliably estimated.
 Provisions are not discounted to its present value, and are determined
 based on the management''s best estimate of the amount of obligation
 required at the year end. These are reviewed at each Balance Sheet date
 and adjusted to reflect current management estimates.
 
 Contingent liabilities are disclosed in respect of possible obligations
 that have arisen from past events and the existence of which will be
 confirmed only by the occurrence or non occurrence of future events not
 wholly within the control of the Company. When there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision or disclosure is made.
 
 Provision for onerous contracts, i.e. contracts where the expected
 unavoidable costs of meeting the obligations under the contract exceed
 the economic benefits expected to be received under it, are recognised
 when it is probable that an outflow of resources embodying economic
 benefits will be required to settle a present obligation as a result of
 an obligating event, based on a reliable estimate of such obligation.
 
 The Company does not recognise assets which are of contingent nature
 until there is virtual certainty of realisability of such assets.
 However, subsequently, if it becomes virtually certain that an inflow
 of economic benefits will arise, asset and related income is recognised
 in the financial statements of the period in which the change occurs.
 
 Leases
 
 Lease arrangements, where the risks and rewards incidental to ownership
 of an asset substantially vest with the lessor, are recognised as an
 operating lease.
 
 Lease payments under operating leases are recognised as expense on a
 straight-line basis over the lease period.
 
 The assets given under operating lease are shown in the Balance Sheet
 under fixed assets and depreciated on a basis consistent with the
 depreciation policy of the Company. The lease income is recognised in
 the Profit and Loss Account on a straight-line basis over the lease
 period.
 
 Earnings per share
 
 Basic earnings/(loss) per share are calculated by dividing the net
 profit/ loss for the year attributable to equity shareholders by the
 weighted average number of equity shares outstanding during the year.
 The weighted average number of equity shares outstanding during the
 period is adjusted for events of bonus issue and share split. For the
 purpose of calculating diluted earnings/(loss) per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the year are
 adjusted for the effects of all dilutive potential equity shares. The
 dilutive potential equity shares are deemed converted as of the
 beginning of the period, unless they have been issued at a later date.