CORPORATE INFORMATION
 
 Strides Arcolab Limited (the ''Company'' or ''Strides'') is a
 pharmaceutical Company headquartered in Bangalore, India and is listed
 on the Bombay Stock Exchange Limited and National Stock Exchange of
 India Limited.
 
 Strides develops and manufactures a wide range of IP-led niche
 pharmaceutical products. The Company has 13 manufacturing facilities
 across 5 countries and has presence in a number of countries comprising
 developed and emerging markets.
 
 Note No 1
 
 FOREIGN CURRENCY CONVERTIBLE BONDS
 
 The Company had issued zero coupon Foreign Currency Convertible Bonds
 (FCCB''s) (listed in the Singapore Exchange Securities Trading Limited,
 Singapore) to the extent of USD 100 Million (FCCB 100 Million) during
 the year ended December 31, 2007 which were redeemable on June 27,
 2012. During the term the FCCBs were outstanding, they were convertible
 at Rs. 461.55 per share with a fixed rate of exchange of Rs. 40.70 per
 USD on conversion. In 2009, as permitted by RBI, the Company had bought
 back FCCB''s with a face value aggregating to USD 20 Million. On the due
 date for redemption, FCCBs with a face value of USD 80 million were
 outstanding which were redeemed along with an effective premium of USD
 36.05 million (net) in terms of the contract. The premium paid out to
 the FCCB holders has been subjected to withholding taxes (Rs. 236.84
 Million) under the provisions of the Income tax Act.
 
 SCHEME OF ARRANGEMENT UNDER SECTION 391 - 394 OF THE COMPANIES ACT,
 1956
 
 40.1 The shareholders ofthe Company, in their meeting held on April 13,
 2009 approved the Scheme of Restructuring that envisaged interalia a
 Scheme of Arrangement (the ''Scheme'') to be filed under Sections 391 to
 394 ofthe Companies Act, 1956 covering the merger of some of the
 subsidiaries (Transferor companies) of the Company with itself
 (Transferee company), fair valuation of some of the assets of the
 Company and creation of a Reserve for Business Restructure (''BRR'') out
 of any surpluses arising from these, to be utilised as specified in the
 Scheme.
 
 40.2 The Scheme filed by the Company had been approved by the High
 Courts of Judicature with an appointed date of January 1, 2009 and an
 effective date of December 31, 2009 (''the Effective Date''), being the
 date on which the all requirements under the Companies Act had been
 completed.
 
 In terms ofthe Scheme and upon the Scheme becoming effective, amongst
 other things:
 
 - expenses incurred by the Company or its subsidiaries in the nature of
 impairment, diminution, loss, amortisation and/ or write-off of assets/
 investments/ intangibles, interest on borrowings for acquisitions,
 employee compensation expenses, additional depreciation charged or
 suffered by the Transferee Company on account of fair valuation, scheme
 expenses and other expenses or arising in the future as may be
 determined by the Board of Directors of the Transferee Company, shall
 be debited to the BRR. The maximum amount that can be written off
 against the BRR instead of being debited to the Statement of Profit and
 Loss on or at anytime after January 1, 2009 would be restricted to the
 balance in the BRR or upto December 31, 2012 and not beyond that. Any
 unutilised balance in the BRR is required to be transferred to
 Securities premium account by December 31, 2012.
 
 - the balance in the Securities premium account, as appearing in the
 books ofthe Transferee Company may be transferred to BRR, to such
 extent as determined by the Board.
 
 2.1 The accounting treatment effected for the Scheme is as follows:
 
 (a) The fair value of net assets acquired from the Transferor Companies
 in excess ofthe carrying value of investment in the subsidiaries and
 the value of equity shares issued to minority shareholders, amounting
 to Rs. 146.77 Million was credited to BRR during the year ended
 December 31, 2009.
 
 (b) Upon the Scheme becoming effective, and based on legal advice
 received, the assets and liabilities of the Transferee Company had been
 fair valued as determined by the Board of Directors of the Company and
 the net surplus arising out of such fair valuation (over the carrying
 value ofthe respective assets and liabilities prior to the fair
 valuation) was credited to the BRR as follows during the year ended
 December 31, 2009.
 
 Had the Scheme not prescribed the above accounting treatment, in terms
 ofthe Company''s accounting policies, these assets would continue to
 have been carried at cost.
 
 (c) In accordance with the Scheme:
 
 (i) During the current year, an amount of Rs. 65.16 Million has been
 transferred from Securities premium account to the BRR during 2012.
 
 (ii) The following expenses have been adjusted against the BRR during
 the year ended:
 
 Had the Scheme not prescribed the above accounting treatment, these
 expenses would have been included in the Statement of Profit & Loss for
 the respective years.
 
 (iii) Had the Scheme not provided for the above accounting treatment,
 the effect of accounting as per the mandatory Accounting Standards
 issued under the Companies (Accounting Standards) Rules, 2006, would
 have been as under:
 
 In 2011, the Company transferred its non-current investment in Onco
 Therapies Limited (''OTL''), a wholly owned subsidiary of the Company, to
 Agila Specialties Private Limited (''ASPL''), another wholly owned
 subsidiary of the Company for a total consideration of Rs. 2,344.12
 Million which was receivable as at December 31, 2011. In 2012, Rs.
 2,300 Million out of the consideration has been settled through
 allotment of equity shares in ASPL.
 
 As of December 31,2011, the Company had remitted an amount of USD
 162.83 Million in Agila Specialties Limited, Cyprus (''Agila Cyprus'',
 formerly known as Starsmore Limited) and USD 114.42 Million in Strides
 Arcolab International Limited (SAIL), both wholly owned subsidiaries of
 the Company. These remittances were towards subscription of shares of
 these entities and as at December 31, 2011, shares were pending
 allotment. Out of the above, monies aggregating to USD 99.00 Million
 (Rs. 5,273.70 Million) remitted to Agila Cyprus and USD 93.00 Million
 (Rs. 4,954.11 Million) remitted to SAIL have been considered as
 monetary items as the Company expected these to be refunded.
 Accordingly, these were restated in accordance with the requirements of
 Accounting Standard 11 ''The Effect of Changes in Foreign Exchange
 Rates'' as at December 31, 2011 and an unrealised exchange gain of Rs.
 1,564 Million was included under exceptional items in the Statement of
 Profit and Loss.  In 2012, the Company has received these monies and
 exchange fluctuations arising thereon have also been included under
 exceptional items in the Statement of Profit and Loss.
 
 Note No. 3
 
 CONTINGENT LIABILITIES
 
 3.1 The Company has given corporate guarantees upto Rs. 26,298.57
 Million (Previous year Rs. 4,572.94 Million) to financial institutions
 and other parties, on behalf of its subsidiaries. At December 31, 2012,
 the subsidiaries had availed facilities from such financial
 institutions/ were obligated to the parties referred above for an
 aggregate amount ofRs. 4,068.85 Million (Previous year Rs. 3,672.54
 Million). The Company has additionally provided its fixed assets (under
 a paripassu second charge) as security in respect ofsome ofthese
 facilities.
 
 3.2 The Company has disputed tax liabilities arising from assessment
 proceedings relating to earlier years from the income tax authorities
 amounting to Rs. 741.31 Million (Previous year Rs. 741.27). The outflow
 on account of disputed taxes is dependent on completion of assessments.
 
 3.3 The Company has preferred an appeal with the CESTAT against the
 order of the Commissioner of Central Excise disallowing transfer of
 CENVAT credit ofRs. 3.86 Million (Previous year Rs. 3.86 Million) as on
 the date of conversion of one ofthe units ofthe Company into a 100%
 EOU. The outflow on account of disputed taxes is dependent on
 completion of assessments.
 
 EMPLOYEE STOCK OPTION PLAN
 
 (a) In the extraordinary general meeting held on January 25, 2007, the
 shareholders approved the issue of 1,000,000 options under the Plan
 titled Strides Arcolab ESOP 2006 (ESOP 2006).
 
 The ESOP 2005 allows the issue of options to employees of the Company
 and its subsidiaries (whether in India or abroad). Each option
 comprises one underlying equity share.
 
 As per the Plan, the Compensation committee grants the options to the
 employees deemed eligible. The exercise price of each option shall not
 be less than 85 per cent of the Market Price as defined in the
 Scheme. The options granted vest over a period of 3 years from the date
 ofthe grant in proportions specified in the Plan. Options should be
 exercised within 30 days ofvesting. No options are granted under this
 plan in 2012.
 
 In respect of the ESOP 2005 and all the other Employee Stock Option
 Plans detailed in this note, (i) the difference between the fair price
 of the share underlying the options granted, on the date of grant of
 option and the exercise price of the option, (being the intrinsic value
 of the option) representing Stock compensation expense, is expensed
 over the vesting period, (ii) all unvested options will vest
 immediately in the case of merger, dissolution or change in management
 ofthe Company.
 
 (b) The ESOP titled Strides Arcolab ESOP 2008 (ESOP 2008) was
 approved by the shareholders through postal ballot on June 18,
 2008.1,500,000 options are covered under the scheme for 1,500,000
 shares.
 
 During the current year, the Remuneration Committee in its meetings
 held on January 20, 2012 has granted 100,000 options under the ESOP
 2008 to eligible employees of the Company. The options allotted under
 ESOP 2008 are convertible into equal number of equity shares.
 
 The vesting period of these options range over a period of three years.
 The options must be exercised with in a period of 30 days from the date
 of vesting.
 
 (c) The ESOP titled Strides Arcolab ESOP 2008 (Directors) (ESOP
 2008 Directors Plan) was approved by the shareholders through postal
 ballot on January 12, 2009. 500,000 options are covered under the
 scheme for 500,000 equity shares.
 
 The Remuneration Committee of the Company, on July 27, 2012 has granted
 50,000 options under the ESOP 2008 Directors Plan to some Directors
 ofthe Company. The shares covered by such options were 50,000 equity
 shares.
 
 The vesting period of these options range over a period of three years.
 The options must be exercised with in a period of 30 days from the date
 of vesting.
 
 (d) The ESOP titled Strides Arcolab ESOP 2011 (ESOP 2011) was
 approved by the shareholders on May 30, 2011.
 
 1,500,000 options are covered under the scheme for 1,500,000 shares. No
 options are granted under this plan in the current year.
 
 (e) In terms of the Scheme of arrangement, employee compensation costs
 under the above referred various Employee Stock Option Plans may be
 recorded to BRR. Consequently, during the year, an amount ofRs. 20.87
 Million (net) (Previous year Rs. 19.59 Million) as noted below has been
 debited to BRR.
 
 EMPLOYEE BENEFITS PLANS
 
 Defined contribution plan
 
 The Company makes contributions to provident fund (a defined
 contribution plans) for qualifying employees. Under the schemes, the
 Company is required to contribute a specified percentage of the payroll
 cost to fund the benefits. The Company recognised Rs. 35.56 Million
 (Previous year Rs. 33.68 Million) for provident fund contributions. The
 contributions payable to these plans by the Company are at rates
 specified in the rules ofthe schemes.
 
 Defined benefit plan
 
 The Company offers gratuity under its employee benefit scheme to its
 employees. The following table sets out the funded status ofthe defined
 benefit scheme and the amount recognised in the financial statements:
 
 Note:
 
 (a) The discount rate is based on the prevailing market yields of
 Government of India securities as at the balance sheet date for the
 estimated term of the obligations.
 
 (b) The estimate of future salary increases considered, takes into
 account the inflation, seniority, promotion and other relevant factors
 such as supply and demand in the employment market.
 
 (c) In the absence of information relating to category wise breakup of
 plan assets, the same has not been disclosed.
 
 (d) The above disclosure on gratuity and compensated absences is to the
 extent of information available with the Company and as per the
 actuarial valuation reports for gratuity and compensated absences.
 
 Note No. 4
 
 Since the Company prepares consolidated financial statements, segment
 information has not been provided in these financial statements.
 
 DETAILS OF LEASING ARRANGEMENTS
 
 The Company''s significant leasing arrangements are mainly in respect
 offactory buildings, residential and office premises.  The aggregate
 lease rentals payable on these leasing arrangements charged to the
 Statement of Profit and Loss is Rs. 26.25 Million (Previous year Rs.
 37.14 Million).
 
 The Company has entered into non-cancellable lease agreements for its
 facilities and office premises. The tenure of lease ranges from 3 years
 to 15 years. The said lease arrangements have an escalation clause
 wherein lease rental is subject to an increment ranging from 5% to 10%.
 Details ofthe lease commitment at the year end are as follows:
 
 Note: for the purpose of computing diluted earnings per share, the
 existence of FCCB''s until the date of redemption has been considered in
 accordance with AS 20 (''Earnings per Share''). The FCCB''s are anti
 dilutive for 2011 and hence ignored for computing diluted EPS in 2011.
 
 Note No.5
 
 TRANSFER PRICING
 
 The detailed Transfer Pricing regulations (''regulations'') for
 computing the income from transactions between ''associated
 enterprises'' on an ''arm''s length'' basis is applicable to the Company.
 These regulations, inter alia, also require the maintenance of
 prescribed documents and information including furnishing a report from
 an Accountant which is to be filed with the Income tax authorities.
 
 The Company has undertaken necessary steps to comply with the
 regulations. The Management is of the opinion that the transactions are
 at arm''s length, and hence the aforesaid legislation will not have any
 impact on the financial statements, particularly on the amount of tax
 expense and that of provision for taxation.
 
 Note No.6
 
 EARLY ADOPTION OF AS-30: FINANCIAL INSTRUMENTS: RECOGNITION AND
 MEASUREMENT, ISSUED BY INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
 
 The Company has chosen to early adopt AS 30: ''Financial Instruments:
 Recognition and Measurement'', (as announced by the Institute of
 Chartered Accountants of India (ICAI)) during the year ended December
 31, 2008, with effect from January 1, 2008. However, pursuant to a
 notification issued by the ICAI on February 11, 2011, the Company has
 adopted AS30 only to the extent they do not conflict with the other
 mandatory accounting standards notified under Section 2H(3C) of the
 Companies Act, 1956.
 
 The impact of adoption of AS30 as above is as follows:
 
 6.1 Foreign Currency Convertible Bonds (the ''FCCBs'' orthe ''Bonds''):
 
 The FCCBs were split into two components comprising (a) option
 componentwhich represents the value ofthe option in the hands of the
 FCCB-holders to convert the bonds into equity shares of the Company and
 (b) debt component which represents the debt to be redeemed if the
 conversion option was not exercised by FCCB-holder, net of issuance
 costs.
 
 The debt component was recognised and measured at amortised cost while
 the fair value of the option component was determined using a valuation
 model using the following assumptions.
 
 Assumptions used to determine fair value of the options:
 
 Valuation and amortisation method— The Company estimates the
 fairvalue of stock options granted using the Black Scholes Merton Model
 and the principles ofthe Roll-Geske-Whaley extension to the Black
 Scholes Merton model. The Black Scholes Merton model along with the
 extensions above requires the following inputs for valuation of
 options:
 
 Stock Price as at the date of valuation - The Company''s share prices as
 quoted in the National Stock Exchange Limited (NSE), India have been
 converted into equivalent share prices in US Dollar terms by applying
 currency rates as at valuation dates. Further, stock prices have been
 reduced by continuously compounded stream of dividends expected over
 time to expiry as per the principles ofthe Black-Scholes Merton model
 with Roll Geske Whaley extensions.
 
 Strike price for the option— has been computed in dollar terms by
 computing the redemption amount in US dollars on the date of redemption
 (if not converted into equity shares) divided by the number of shares
 which shall be allotted against such FCCBs.
 
 Expected Term— The expected term represents time to expiry,
 determined as number of days between the date of valuation of the
 option and the date of redemption.
 
 Expected Volatility— Management establishes volatility of the stock
 by computing standard deviation of the simple exponential daily returns
 on the stock. Stock prices for this purpose have been computed by
 expressing daily closing prices as quoted on the NSE into equivalent US
 dollar terms. For the purpose of computing volatility of stock prices,
 daily prices for the last one year have been considered as on the
 respective valuation dates.
 
 Risk-Free Interest Rate— The risk-free interest rate used in the
 Black-Scholes valuation method is the riskfree interest rate applicable
 to the Company.
 
 Expected Dividend— Dividends have been assumed to continue, for each
 valuation rate, at the rate at which dividends were earned by
 shareholders in the last preceding twelve months before the date of
 valuation.
 
 Measurement of Amortised cost of debt component:
 
 For the purpose of recognition and measurement of the debt component,
 the effective yield has been computed considering the amount ofthe debt
 component on initial recognition, origination costs ofthe FCCB and the
 redemption amount if not converted into Equity Shares. To the extent
 the effective yield pertains to redemption premium and the origination
 costs, the effective yield has been amortised to the Securities Premium
 Account (along with related exchange fluctuations) as permitted under
 section 78 ofthe Companies Act, 1956. The balance ofthe effective yield
 is charged to the Statement of Profit and Loss.
 
 Consequent to the above method of accounting of FCCBs, the following
 adjustments were made:
 
 During the year ended December 31, 2011:
 
 (a) Amortisation of interest of Rs. 147.48 Million (net) and redemption
 premium (net) on FCCBs amounting to Rs. 676.23 Million had been
 recorded in the Statement of Profit and Loss and in the Securities
 premium account respectively.
 
 (b) Change in the fair values of option component in the FCCBs, being a
 gain ofRs. 188.85 Million had been recorded in the Statement of Profit
 & Loss under exceptional items.
 
 During the year ended December 31, 2012:
 
 (a) Amortisation of interest (net) Rs. 84.98 Million and redemption
 premium (net) on FCCBs amounting to Rs. 164.13 Million have been
 recorded in the Statement of Profit and Loss and in the Securities
 premium account respectively.
 
 (b) Change in the fair values of option component in the FCCBs, being a
 gain ofRs. 2.09 Million has been recorded in the Statement of Profit &
 Loss under exceptional items.
 
 6.2: The financial assets and liabilities arising out of issue of
 corporate financial guarantees to third parties are accounted at fair
 values on initial recognition. Financial assets continue to be carried
 at fair values. Financial liabilities are subsequently measured at the
 higher of the amounts determined under AS 29 or the fair values on the
 measurement date. At December 31, 2012 and December 31, 2011, the fair
 values of such financial assets and financial liabilities amount to Rs.
 Nil.
 
 6.3 Gains/ losses on fair valuation of all the open derivative
 positions as on December 31, 2012 not designated as hedging instruments
 have been recognised in the Statement of Profit and Loss.
 
 6.4 The Company has availed bill discounting facilities from Banks
 which do not meet the de-recognition criteria for transfer of
 contractual rights to receive cash flows from the respective trade
 receivables since they are with recourse to the Company. Accordingly,
 as at December 31, 2012, trade receivables balances include Rs. 515.99
 Million (Previous year Rs. 1,130.70 Million) and the corresponding
 financial liability to the Banks is included as part of short-term
 secured loans.
 
 6.5 The Company has designated certain highly probable forecasted US
 dollar denominated sales transactions and certain forward contracts to
 sell US dollars as hedged items and hedging instruments respectively,
 in a Cash Flow Hedge to hedge the foreign exchange risk arising out of
 fluctuations between the India rupee and the US dollar. The exchange
 fluctuations arising from marking to market ofthe hedging instruments,
 to the extent relatable to the hedge being effective has been
 recognised in a Hedge reserve account in the Balance sheet. Accordingly
 exchange fluctuations losses amounting to Rs. 6.59 Million as at
 December 31, 2012 (At December 31, 2011 Rs. 447.10 Million) have been
 recognised in the Hedge Reserve account. These exchange differences are
 considered in Statement of Profit and Loss as and when the forecasted
 transactions occur.
 
 6.7 Details on Derivatives Instruments & Un-hedged Foreign Currency
 Exposures :
 
 The following derivative positions are open as at December 31, 2012.
 These transactions have been undertaken to act as economic hedges for
 the Company''s exposures to various risks in foreign exchange markets.
 These instruments are therefore classified as held for trading and
 gains/ losses recognised in the Statement of Profit and Loss except to
 the extent they qualified as Cash flow hedges in the context ofthe
 rigour of such classification under Accounting Standard 30.
 
 I. The Company has entered into the following derivative instruments:
 
 (a) Forward Exchange Contracts [being a derivative instrument], which
 are not intended for trading or speculative purposes, but for hedge
 purposes, to establish the amount of reporting currency required or
 available at the settlement date of certain payables and receivables.
 
 (b) Interest Rate Swaps to hedge against fluctuations in interest rate
 changes: No. of contracts: Nil (Previous year: Nil)
 
 (c) Currency Swaps (other than forward exchange contracts stated above)
 to hedge against fluctuations in changes in exchange rate. No. of
 contracts: Nil (Previous Year: Nil)
 
 6.7 Categories of Financial Instruments :
 
 (a) Loans and Receivables:
 
 The following financial assets in the Balance Sheet have been
 classified as Loans and Receivables as defined in Accounting Standard
 30. These are carried at amortised cost less impairment if any.
 
 (c) Financial Liabilities Held for Trading are as follows:
 
 i.  The option component of FCCBs has been classified as held for
 trading, being a derivative under AS 30.  The carrying amount of the
 option component was Rs. Nil as at December 31, 2012 (since the FCCB''s
 were redeemed during 2012) and Rs.2.09 Million as at December 31, 2011.
 The difference in carrying value between the two dates, amounting to
 Rs. 2.09 Million is considered as a gain in the Statement of Profit and
 Loss of the year in accordance with provisions of AS 30.
 
 The fair value of the option component has been determined using a
 valuation model. Refer to Note 51.1 above on FCCBs for detailed
 disclosure on the valuation method.
 
 ii.  Provisions carried towards mark to market losses on forward
 exchange contracts Rs. 6.59 Million as at December 31, 2012 and Rs.
 447.10 Million as at December 31, 2011.
 
 (d) There are no other financial assets / liabilities in the following
 categories:
 
 Financial assets:
 
 - Carried at fair value through profit and loss designated as such at
 initial recognition.
 
 - Held to maturity.
 
 - Available for sale (other than investment in Subsidiaries & Joint
 Ventures).
 
 Financial liabilities:
 
 - Carried at fair value through profit and loss designated as such at
 initial recognition.
 
 6.8 Nature and extent of risks arising from financial instruments:
 
 The main financial risks faced by the Company relate to fluctuations in
 interest and foreign exchange rates, the risk of default by
 counterparties to financial transactions, and the availability of funds
 to meet business needs. The Balance Sheet as at December 31, 2012 is
 representative of the position through the year. Risk management is
 carried out by a central treasury department under the guidance of the
 Management.
 
 Interest rate risk
 
 Interest rate risk arises from long term borrowings. Debt issued at
 variable rates exposes the Company to cash flow risk. Debt issued
 atfixed rate exposes the company to fairvalue risk. In the opinion
 ofthe management, interest rate risk during the year under report was
 not substantial enough to require intervention or hedging through
 derivatives or other financial instruments. For the purposes of
 exposure to interest risk, the Company considers its net debt position
 evaluated as the difference between financial assets and financial
 liabilities held at fixed rates and floating rates respectively as the
 measure of exposure of notional amounts to interest rate risk. This net
 debt position is quantified as under:
 
 Credit risk
 
 Credit risk arises from cash and cash equivalents, financial
 instruments and deposits with banks and financial institutions. Credit
 risk also arises from trade receivables and other financial assets.
 
 The credit risk arising from receivables is subject to concentration
 risk in that the receivables are predominantly denominated in USD and
 any appreciation in the INR will affect the credit risk. Further, the
 Company is not significantly exposed to geographical distribution risk
 as the counterparties operate across various countries across the
 Globe.
 
 Liquidity risk
 
 Liquidity risk is the risk that the Company will not be able to meet
 its financial obligations as they fall due. The Company''s approach to
 managing liquidity is to ensure, as far as possible, that it will
 always have sufficient liquidity to meet its liabilities when due,
 under both normal and stressed conditions, without incurring
 unacceptable losses or risking damage to Company''s reputation.
 Liquidity risk is managed using shortterm and long term cash flow
 forecasts.
 
 The following is an analysis of contractual cash flows payable under
 financial liabilities and derivatives as at December 31, 2012. (Figures
 in brackets relates to Previous Year)
 
 Foreign exchange risk
 
 The Company is exposed to foreign exchange risk principally via:
 
 Debt availed in foreign currency
 
 - Net investments in subsidiaries and joint ventures in foreign
 currencies
 
 Exposure arising from transactions relating to purchases, revenues,
 expenses etc. to be settled in currencies other than Indian Rupees, the
 functional currency of the Company.
 
 6.9 Sensitivity analysis as at December 31, 2012 :
 
 Financial instruments affected by interest rate changes include Secured
 Long term loans from banks, Secured Long term loans from others,
 Secured Short term loans from banks and Unsecured Short term loans from
 banks. The impact of a 1% change in interest rates on the profit of an
 annual period will be Rs. 83.14 Million (Previous year Rs. 99.55
 Million) assuming the loans as of December 31, 2012 continue to be
 constant during the annual period. This computation does not involve a
 revaluation of the fair value of loans as a consequence of changes in
 interest rates. The computation also assumes that an increase in
 interest rates on floating rate liabilities will not necessarily
 involve an increase in interest rates on floating rate financial
 assets.
 
 Financial instruments affected by changes in foreign exchange rates
 include FCCBs untill redemption in 2012, External Commercial Borrowings
 (ECBs), investments in subsidiaries, and loans to subsidiaries and
 joint ventures. The Company considers US Dollar to be principal
 currency which requires monitoring and risk mitigation. The Company is
 exposed to volatility in other currencies including the Great Britain
 Pounds (GBP) and the Australian Dollar (AUD).
 
 For the purposes ofthe above table, it is assumed that the carrying
 value ofthe financial assets and liabilities as at the end of the
 respective financial years remains constant thereafter. The exchange
 rate considered for the sensitivity analysis is the Exchange Rate
 prevalent as at December 31, 2012.
 
 7.  The Company has not received a written representation from Mr. K.
 R. Ravishankar, one ofthe directors ofthe Company as at December 31,
 2012, confirming that he is not disqualified from being appointed as a
 director of the Company in terms of Section 274(l)(g) of the Companies
 Act, 1956.
 
 8.  The Revised Schedule VI (RSCH VI) has become effective from April
 1,2011 for the preparation of financial statements and RSCH VI is
 applicable to the Company from the current year. This has significantly
 impacted the disclosure and presentation made in the financial
 statements. Previous year''s figures have been regrouped / reclassified
 wherever necessary to correspond with the current year''s classification
 / disclosure.
 
 9.  Post Balance Sheet Event :
 
 The Company and its subsidiary, Agila Specialties Asia Pte. Ltd. (Agila
 Asia), have entered into definitive agreements with Mylan Inc. on
 February 27, 2013for the sale ofshares in the following subsidiaries
 ofthe Company:
 
 - Agila Specialties Private Limited, and
 
 - Agila Specialties Global Pte. Limited, a step subsidiary.
 
 In terms ofthe agreements, the consideration is subject to certain
 retentions, post completion adjustments and deposit of escrow amounts
 as set out in the agreements. The completion of the sale is subject to
 various regulatory and corporate approvals as may be required and
 fulfillment of other terms and conditions agreed between the parties
 and set out in the agreements. Upon satisfaction of the terms and
 conditions and receipt of all regulatory and corporate approvals, the
 Company and its subsidiary will tender the shares to the buyer.