STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31,2015
`
`For the Current
`Year ended
`31.03.2015
`
`For the Previous
`Year ended
`31.03.2014
`
`Note
`
`? in million
`
`? in million
`
`INCOME:
`
`Revenue from Operations (Gross)
`
`Less : Excise Duty
`
`Revenue from Operations (Net)
`Other Income
`
`Total Revenue
`EXPENSES:
`
`Cost of Raw and Packing Materials Consumed
`Purchases of Stock—in—Trade
`
`Changes in Inventories
`of Finished Goods, Work—in—Process and Stock—in—Trade
`
`Employee Benefits Expense
`Finance Costs
`
`Depreciation and Amortisation Expense
`
`Other Expenses
`
`Total Expenses
`Profit before Tax
`
`Tax Expense / (Benefit):
`
`— Current Tax Expense
`
`— Tax Benefit for Prior Years
`
`Net Current Tax Expense
`
`— Deferred Tax (net)
`
`Profit for the year
`
`Earnings per equity share (in ?)
`Basic
`
`Diluted
`
`Face Value of Equity Share (in ?)
`
`See accompanying notes forming part of the financial statements
`
`22
`
`23
`
`24
`48(A)
`
`25
`
`26
`27
`
`12
`
`28
`
`38
`
`98,459.8
`
`935.1
`
`97,524.7
`1,806.3
`
`99,331 .0
`
`22,393.2
`9,425.0
`
`(1,708.0)
`
`10,525.5
`49.0
`
`3,367.9
`
`23,156.5
`
`67,209.1
`32,121.9
`
`8,496.0
`
`(40.9)
`
`8,455.1
`
`(306.7)
`
`90,198.6
`
`804.8
`
`89,393.8
`4,153.8
`
`93,547.6
`
`21 ,320.0
`8,291.9
`
`(762.1)
`
`8,443.2
`209.9
`
`1,676.3
`
`22,977.5
`
`62,156.7
`31,390.9
`
`8,117.0
`
`(15.9)
`
`8,101.1
`
`47.6
`
`23,973.5
`
`23,242.2
`
`53.41
`
`53.07
`
`2.00
`
`51.88
`
`51.62
`
`2.00
`
`In terms of our report attached
`For Deloitte Haskins 84 Sells LLP
`Chartered Accountants
`
`K.A. Katki
`Partner
`
`For Lupin Limited
`
`Dr. Desh Bandhu Gupta
`Chairman
`DIN: 00209378
`
`Dr. Kamal K. Sharma
`Vice Chairman
`DIN: 00209430
`
`Vinita Gupta
`Chief Executive Officer
`DIN: 00058631
`
`Nilesh Gupta
`Managing Director
`DIN: 01734642
`Richard Zahn
`Director
`DIN: 02937226
`
`Dileep C. Choksi
`Director
`DIN: 00016322
`Ramesh Swaminathan
`Chief Financial Officer
`
`M. D. Gupta
`Executive Director
`DIN: 00209461
`R. A. Shah
`Director
`DIN: 00009851
`
`R. V. Satam
`Company Secretary
`ACS — 11973
`
`Dr. Vijay Kelkar
`Director
`DIN: 00011991
`Dr. K. U. Mada
`Director
`DIN: 00011395
`
`: Mumbai
`Place
`Dated : May 13,2015
`
`Annual Report 2015 | 167
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 168 of 212)
`
`

`
`CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015
`
`A. Cash Flow from Operating Activities
`Profit before Tax
`
`Adjustments for:
`Depreciation and Amortisation Expense
`_oss on Sale /Write—off of Fixed Assets (net)
`et Gain on sale of Current Investments
`Pinance Costs
`
`nterest on Deposits with Banks
`Dividend on Current Investments
`
`Dividend on Long—Term Investment from Subsidiary company
`Dividend on Long—Term Investment from Others
`Provision for Doubtful Trade Receivables /Advances / Deposits
`Excess of carrying cost over fair value of current investments
`Provision for Doubtful Trade Receivables /Advances / Deposits Written Back
`Expenses on Employees Stock Options / Stock Appreciation Rights
`Jnrealised Exchange (gain) / loss on revaluation (net)
`Operating Profit before Working Capital Changes
`Changes in working capital:
`Adjustments for (increase) / decrease in operating assets:
`Inventories
`Trade Receivables
`Short—Term Loans and Advances
`
`Long—Term Loans and Advances
`Other Current Assets
`
`Adjustments for increase / (decrease) in operating liabilities:
`Trade Payables
`Other Current Liabilities
`
`Other Long—Term Liabilities
`Short—Term Provisions
`
`Long—Term Provisions
`Cash Generated from Operations
`Net Income tax paid
`Net Cash Flow from Operating Activities
`B. Cash Flow from Investing Activities
`Capital expenditure on fixed assets, including capital advances
`Proceeds from sale of fixed assets
`
`Purchase of Long—Term Investment in subsidiaries
`Purchase of Long—Term Investment in others
`Advance against Investment in subsidiary
`et Gain on sale of Current Investments
`
`3ank balances not considered as Cash and Cash Equivalents (net)
`Dividend on Current Investments
`
`Dividend on Long—Term Investment from Subsidiary company
`Dividend on Long—Term Investment from Others
`nterest on Deposits with Banks
`Net Cash Used in Investing Activities
`
`168 | Lupin Limited
`
`For the Current
`Year ended
`31.03.2015
`
`For the Previous
`Year ended
`31.03.2014
`
`? in million
`
`? in million
`
`32,121.9
`
`31,390.9
`
`3,367.9
`38.6
`(4.0)
`49.0
`
`(29.2)
`(649.6)
`
`(37.1)
`(0.2)
`—
`2.5
`(157.1)
`676.8
`(182.9)
`35,196.6
`
`(3,672.7)
`3,747.1
`(322.3)
`
`222.5
`515.3
`
`571.0
`(144.7)
`
`(12.9)
`137.1
`
`262.0
`36,499.0
`(7,983.8)
`28,515.2
`
`(5,069.8)
`21.2
`
`(8,007.6)
`(4.5)
`—
`4.0
`
`597.8
`649.6
`
`—
`0.2
`29.2
`(11,779.9)
`
`1,676.3
`99.6
`(5.5)
`209.9
`
`(63.5)
`(25.0)
`
`(3,020.2)
`(0.2)
`269.4
`—
`(7.3)
`211.0
`595.5
`31 ,330.9
`
`(414.1)
`(10,769.1)
`261.0
`
`(657.3)
`111.0
`
`1,171.9
`362.7
`
`(6.2)
`6.5
`
`85.7
`21,483.0
`(6,201.7)
`15,281.3
`
`(3,941.5)
`22.9
`
`(3,010.1)
`—
`(14.6)
`5.5
`
`(636.2)
`25.0
`
`3,020.2
`0.2
`63.5
`(4,465.1)
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 169 of 212)
`
`

`
`C. Cash Flow from Financing Activities
`
`Repayment of Long—Term Borrowings (net)
`
`Repayment of Short—Term Borrowings — Loans from banks (net)
`
`Proceeds from issue of equity shares (ESOPs)
`Securities Premium Received (ESOPs)
`
`Finance Costs
`
`Dividends paid
`
`Corporate Tax on Dividend
`Net Cash Used in Financing Activities
`
`Net increase in Cash and Cash Equivalents
`
`Cash and Cash Equivalents as at the beginning of the year
`Cash and Cash Equivalents as at the end of the year
`
`Reconciliation of Cash and Cash Equivalents with the Balance Sheet
`
`Cash and Cash Equivalents as per Balance Sheet (Refer note 19)
`
`Less : Bank balances not considered as Cash and Cash Equivalents as defined
`in AS—3 — "Cash Flow Statements" (Refer note 19)
`
`Add : Current Investments Considered as part of Cash and Cash Equivalents
`(Refer note 16)
`
`Cash and Cash Equivalents as restated as at the year end
`
`Notes :
`
`For the Current
`Year ended
`31.03.2015
`
`For the Previous
`Year ended
`31.03.2014
`
`? in million
`
`? in million
`
`(50.5)
`
`(942.1)
`
`2.2
`410.8
`
`(58.4)
`
`(1,344.5)
`
`(228.7)
`(2,211.2)
`
`14,524.1
`
`2,553.1
`17,077.2
`
`593.0
`
`58.0
`
`16,542.2
`
`17,077.2
`
`(1,204.7)
`
`(4,111.5)
`
`1.7
`237.7
`
`(221.7)
`
`(3,127.0)
`
`(19.2)
`(8,444.7)
`
`2,371.5
`
`181.6
`2,553.1
`
`1,462.8
`
`655.8
`
`1,746.1
`
`2,553.1
`
`1.
`
`The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 (AS—3)
`"Cash Flow Statements".
`
`2. Cash comprises cash on hand and Current Accounts with banks. Cash equivalents are short—term balances (with an original
`maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known
`amounts of cash and which are subject to insignificant risk of changes in value.
`
`In terms of our report attached
`For Deloitte Haskins 84 Sells LLP
`Chartered Accountants
`
`K.A. Katki
`Partner
`
`For Lupin Limited
`
`Dr. Desh Bandhu Gupta
`Chairman
`DIN: 00209378
`
`Dr. Kamal K. Sharma
`Vice Chairman
`DIN: 00209430
`
`Vinita Gupta
`Chief Executive Officer
`DIN: 00058631
`
`Nilesh Gupta
`Managing Director
`DIN: 01734642
`Richard Zahn
`Director
`DIN: 02937226
`
`Dileep C. Choksi
`Director
`DIN: 00016322
`Ramesh Swaminathan
`Chief Financial Officer
`
`M. D. Gupta
`Executive Director
`DIN: 00209461
`R. A. Shah
`Director
`DIN: 00009851
`
`R. V. Satam
`Company Secretary
`ACS — 11973
`
`Dr. Vijay Kelkar
`Director
`DIN: 00011991
`Dr. K. U. Mada
`Director
`DIN: 00011395
`
`: Mumbai
`Place
`Dated : May 13,2015
`
`Annual Report 2015 | 169
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 170 of 212)
`
`

`
`NOTES FORMING PART OF THE FINANCIAL STATEMENTS
`
`1A. OVERVIEW:
`
`is an innovation led Transnational Pharmaceutical Company producing,
`Lupin Limited, (‘the Company’) incorporated in 1983,
`developing and marketing a wide range of branded and generic formulations and active pharmaceutical ingredients (APIs). The
`Company along with its subsidiaries has manufacturing locations spread across India, Japan and Mexico with trading and other
`incidental and related activities extending to the global markets.
`
`1B. SIGNIFICANT ACCOUNTING POLICIES:
`
`a) Basis of accounting and preparation of Financial Statements:
`The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles
`in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013
`("the 2013 Act”), read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the 2013 Act/
`Companies Act, 1956 ("the 1956 Act”), as applicable. The financial statements have been prepared on accrual basis under the
`historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with
`those followed in the previous year.
`
`b) Use of Estimates:
`The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and
`assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported
`income and expenses during the year. The Management believes that the estimates used in preparation of the Financial
`Statements are prudent and reasonable. Future results could differ due to these estimates and the differences betv\/een the
`actual results and the estimates are recognised in the periods in which the results are known / materialise.
`
`c) Tangible Fixed Assets:
`if any. The cost of fixed assets includes
`Fixed Assets are carried at cost less accumulated depreciation and impairment losses,
`interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use
`and other incidental expenses incurred up to that date. The Company has adopted the provisions of paragraph 46A of AS—II
`"The Effects of Changes in Foreign Exchange Rates”, accordingly, exchange differences arising on restatement / settlement
`of long—term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the
`respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets
`is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed
`standard of performance.
`
`Capital work—in—progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct
`costs, related incidental expenses and attributable interest.
`
`d)
`
`Intangible Assets:
`Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset
`comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the
`taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.
`
`Expenditure on Research and development eligible for capitalisation are carried as Intangible assets under development where
`such assets are not yet ready for their intended use.
`
`e)
`
`Foreign Currency Transactions / Translations:
`i)
`Transactions denominated in foreign currency are recorded at exchange rates prevailing at the date of transaction or at
`rates that closely approximate the rate at the date of the transaction.
`
`ii)
`
`Foreign currency monetary items (other than derivative contracts) of the Company, outstanding at the balance sheet date
`are restated at the year—end rates. Non—monetary items of the Company are carried at historical cost.
`
`iii) Exchange differences arising on settlement/ restatement of short—term foreign currency monetary assets and liabilities of the
`Company and its integral foreign operations are recognised as income or expense in the Statement of Profit and Loss.
`
`The exchange differences arising on restatement/ settlement of long—term foreign currency monetary items are capitalised
`as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of
`such assets or amortised on settlement over the maturity period of such items if such items do not relate to acquisition of
`depreciable fixed assets. The unamortised exchange difference is carried under Reserves and Surplus as "Foreign currency
`monetary item translation difference account” net of the tax effect thereon, where applicable.
`
`iv)
`
`Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are
`amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date. Any
`
`170 | Lupin Limited
`
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`
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`|PR2015-01030
`
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`
`

`
`profit or loss arising on cancellation or renewal of such a fon/\/ard exchange contract is recognised as income or as expense
`in the period in which such cancellation or renewal is made.
`
`v)
`
`In respect of foreign offices, which are integral foreign operations, all revenues and expenses during the year are reported
`at average rates. Outstanding balances in respect of monetary assets and liabilities are restated at the year end exchange
`rates. Outstanding balances in respect of non—monetaiy assets and liabilities are stated at the rates prevailing on the date
`of the transaction. Net gain / loss on foreign currency translation is recognised in the Statement of Profit and Loss.
`
`f)
`
`Hedge Accounting:
`"he Company uses foreign currency fon/\/ard contracts to hedge its risks associated with foreign currency fluctuations relating
`o highly probable forecast transactions. The Company designates such fon/\/ard contracts in a cash flow hedging relationship
`by applying the hedge accounting principles set out in Accounting Standard 30 (AS—30) "Financial Instruments: Recognition
`and I\/Ieasurement”. These fon/\/ard contracts are stated at fair value at each reporting date. Changes in the fair value of these
`on/\/ard contracts that are designated and effective as hedges of future cash flows are recognised directly in "Cash Flow
`-Iedge Reserve Account” under Reserves and Surplus, net of applicable deferred income taxes and the ineffective portion is
`ecognised immediately in the Statement of Profit and Loss. Amounts accumulated in the "Cash Flow Hedge Reserve Account”
`are reclassified to the Statement of Profit and Loss in the same period during which the forecasted transaction affects profit and
`oss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer
`qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument recognised
`"n "Cash Flow Hedge Reserve Account” is retained until the forecasted transaction occurs.
`If the forecasted transaction is no
`onger expected to occur, the net cumulative gain or loss recognised in "Cash Flow Hedge Reserve Account” is immediately
`ransferred to the Statement of Profit and Loss.
`
`Derivative Contracts:
`
`9)
`
`"he Company enters into derivative contracts in the nature of currency options, fon/\/ard contracts and currency futures with
`an intention to hedge its existing assets and liabilities and highly probable forecast transactions in foreign currency. Derivative
`contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency
`"ransactions / Translations.
`
`Derivative contracts designated as a hedging instrument for highly probable forecast transactions are accounted as per the
`policy stated for Hedge Accounting.
`
`The gain or loss in respect of currency futures contract the pricing period of which has expired or squared off during the year
`are recognised in the Statement of Profit and Loss. In respect of contract as at the year end, losses, if any, are recognised in the
`Statement of Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.
`
`if any, are recognised in the Statement of
`All other derivative contracts are marked—to—market on a portfolio basis and losses,
`Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.
`
`h)
`
`Investments:
`
`Long—term investments are carried individually at cost, less provision for diminution, other than temporary, in the value of such
`investments. Current investments are carried individually at lower of cost and fair value. Cost of investments includes expenses
`directly incurred on acquisition of investments.
`
`Inventories:
`
`nventories of all procured materials and Stock—in—Trade are valued at the lower of cost (on moving weighted average basis) and
`he net realisable value after providing for obsolescence and other losses, where considered necessary Cost includes all charges
`"n bringing the goods to their present location and condition, including octroi and other levies, transit insurance and receiving
`charges. Work—in—process and finished goods include appropriate proportion of overheads and, where applicable, excise duty.
`
`J)
`
`Revenue recognition:
`Revenue from sale of goods is recognised net of returns, product expiry claims and trade discounts, on transfer of significant
`isks and rewards in respect of ownership to the buyer. Sales include excise duty but exclude sales tax and value added tax. Sales
`are also netted off for probable non — saleable return of goods from the customers, estimated on the basis of historical data of
`such returns.
`
`licenses, dossiers and other intangibles) is
`ncome from Research Services including sale of technology/ know—how (rights,
`ecognised in accordance with the terms of the contract with customers when the related performance obligation is completed,
`or when risks and rewards of ownership are transferred, as applicable.
`
`Revenue is recognised when it is reasonable to expect that the ultimate collection will be made.
`
`Annual Report 2015 | 171
`
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`
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`|PR2015-01030
`
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`
`

`
`nterest income is accounted on accrual basis. Dividend from investment is recognised as revenue when right to receive is
`established.
`
`k) Depreciation and Amortisation:
`Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
`
`life
`Depreciation on tangible fixed assets of the Company has been provided on the straight—line method as per the useful
`prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets,
`in whose case
`he life of the assets has been assessed as under based on independent technical evaluation and management's assessment
`hereof, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset,
`past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:
`Particulars
`Estimated useful life
`
`_easehold Land
`Dlant and Equipment
`Office Equipment (Desktop)
`Certain assets provided to employees
`ntangible assets are amortised over their estimated useful life on Straight Line l\/lethod as follows:
`Particulars
`
`Over the period of lease
`lOto l5years
`4 years
`3 years
`
`Estimated useful life
`
`5 years
`Goodwill — Acquired
`5 to 6 years
`Computer Software
`4 to 5 years
`Trademark and Licences
`The estimated useful lives of intangible assets and the amortisation period are reviewed at the end of each financial year and
`the amortisation method is revised to reflect the changed pattern, if any.
`
`I)
`
`Employee Benefits:
`Employee benefits include provident fund, superannuation fund, gratuity fund, and compensated absences.
`i)
`De ined Contribution Plans:
`The Company's contribution to provident fund and superannuation fund for certain eligible employees are considered as
`de ined contribution plans as the Company does not carry any further obligations, apart from the contributions made on
`a monthly basis. Such contributions are charged as an expense to the Statement of Profit and Loss based on the amount
`of contribution required to be made and when services are rendered by the employees.
`De ined Benefit Plans:
`For defined benefit plan in the form of gratuity fund, the cost of providing benefits is determined using the Projected
`Jnt Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are
`ecognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately
`o he extent that the benefits are already vested and otherwise is amortised on a straight—line basis over the average period
`un il the benefits become vested.
`
`ii)
`
`"he etirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit
`ob igation as adjusted for unrecognised past service cost, as reduced by the fair value of plan assets. Any asset resulting
`rom this calculation is limited to past service cost, plus the present value of available refunds and reductions in future
`cont ibutions to the scheme.
`
`3rov'dent Fund forcertain employees is administered through the "Lupin Limited Employees Provident Fund Trust”. Periodic
`cont ibutions to the Fund are charged to the Statement of Profit and Loss. The Company has an obligation to make good
`he shortfall, if any, between the return from the investment of the trust and interest rate notified by the Government of
`ndia.
`
`iii)
`
`Shor —Term Employee Benefits:
`he undiscounted amount of short—term employee benefits expected to be paid in exchange for the services rendered by
`empoyees are recognised during the year when the employees render the service. These benefits include performance
`incentive and compensated absences which are expected to occur within twelve months after the end of the period in
`which the employee renders the related service.
`
`The cost of short—term compensated absences is accounted as under:
`a.
`in case of accumulated compensated absences, when employees render the services that increase their entitlement of
`future compensated absences; and
`
`b.
`
`in case of non—accumulating compensated absences, when the absences occur.
`
`iv)
`
`Long—Term Employee Benefit:
`The cost of compensated absences which are not expected to occur within twelve months after the end of the period
`
`172 | Lupin Limited
`
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`|PR2015-01030
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`
`

`
`in which the employee renders the related service is determined using the Projected Unit Credit method, with actuarial
`valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit
`and Loss in the period in which they occur.
`
`m) Taxes on Income:
`Tax expense comprises both Current Tax and Deferred Tax. Current tax is the amount of tax payable on taxable income for
`the year as determined in accordance with the applicable tax rates and the provisions of the |ncome—tax Act, 1961 and other
`applicable tax laws.
`
`Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of
`ad'ustment to future income tax liability,
`is considered as an asset if there is convincing evidence that the Company will pay
`no mal income tax. Accordingly,
`l\/|AT is recognised as an asset in the Balance Sheet when it is highly probable that future
`economic benefit associated with it will flow to the Company.
`
`De erred tax is recognised on timing differences, being the differences between the taxable income and the accounting income
`that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the
`tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for
`all
`iming differences. Deferred tax assets for timing differences in respect of unabsorbed depreciation, carry fon/\/ard of losses
`and items relating to capital losses are recognised only if there is virtual certainty supported by convincing evidence that there
`wil be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences
`of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against
`wh'ch these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the
`same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at
`each Balance Sheet date for their realisability.
`
`Cur ent and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of
`Pro it and Loss.
`
`n) Operating Leases:
`Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor are classified as
`operating lease. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight line basis
`over the lease term in accordance with the respective lease agreement terms.
`
`0)
`
`Provisions, Contingent Liabilities and Contingent Assets:
`A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow
`of resources will be required to settle the obligation in respect ofwhich a reliable estimate can be made. Provisions (excluding
`retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle
`the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best
`estimates. Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for (1) possible obligations which
`will be confirmed only by future events not wholly within the control of the Company or (Z) presen obligations arising from
`past events where it is not probable that an outflow of resources will be required to settle the obliga ion or a reliable estimate
`of the amount of the obligation cannot be made. Contingent assets are not recognised in the financ'al statements.
`
`p) Borrowing Costs:
`Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences aris'ng from foreign currency
`borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of
`funds to the extent not directly related to the acquisition of qualifying assets are charged to the Sta ement of Profit and Loss
`over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, perta'ning to the period from
`commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of
`such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and cha ged to the Statement of
`Profit and Loss during extended periods when active development activity on the qualifying assets is 'nterrupted.
`
`q)
`
`Stock based Compensation:
`i)
`Employees Stock Option Plans ("ESOPs”):
`The compensation cost of stock options granted to employees is measured by the intrinsic value method, i.e. the difference
`between the market price of the Company's shares on the date of the grant of options and the exercise price to be paid
`by the option holders. The compensation cost, if any,
`is amortised on a straight—line basis over the vesting period of the
`options.
`
`ii)
`
`Stock Appreciation Rights ("SARs”):
`The compensation cost of SARs granted to employees is measured by the intrinsic value method,
`
`i.e. the excess of
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`
`the market price of the Company's shares as at the period end and the acquisition price as on the date of grant. The
`compensation cost is amortised on a straight line basis over the vesting period of the SARs.
`
`r) Government Grants, subsidies and export incentives:
`Government grants and subsidies are accounted when there is reasonable assurance that the Company will comply with the
`conditions attached to them and it
`is reasonably certain that the ultimate collection will be made. Capital grants relating
`to specific fixed assets are reduced from the gross value of the respective fixed assets. Revenue grants are recognised in the
`Statement of Profit and Loss.
`
`Export benefits available under prevalent schemes are accrued in the year in which the goods are exported and there is no
`uncertainty in receiving the same.
`
`s) Research and Development:
`Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are
`also charged to the Statement of Profit and Loss in the year it is incurred, unless a product's technological feasibility has been
`established,
`in which case such expenditure is capitalised. These costs are charged to the respective heads in the Statement
`of Profit and Loss in the year it is incurred. The amount capitalised comprises of expenditure that can be directly attributed or
`allocated on a reasonable and consistent basis for creating, producing and making the asset ready for its intended use. Fixed
`assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible
`Fixed Assets and Intangible Assets.
`
`t)
`
`Impairment of Assets:
`The carrying values of assets/ cash generating units at each balance sheet date are reviewed for impairment if any indication
`of impairment exists. The following intangible assets are tested for impairment each financial year even if there is no indication
`that the asset is impaired:
`
`(a)
`(b)
`
`an intangible asset that is not yet available for use; and
`an intangible asset that is amortised over a period exceeding ten years from the date when the asset is available for use.
`
`fthe carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess
`amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the asset is carried at
`evalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a
`evaluation reserve is available for that asset.
`
`The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting
`he future cash flows to their present value based on an appropriate discount factor.
`
`When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting
`periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and
`_oss, to the extent the amount was previously charged to the Statement of Profit and Loss.
`In case of revalued assets, such
`eversal is not recognised.
`
`u) Earnings per share:
`Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items,
`"f any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed
`by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items,
`if any) by the weighted average
`number of equity shares outstanding during the year adjusted for the effects of all dilutive potential equity shares.
`
`v)
`
`Insurance claims:
`Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that the amount
`recoverable can be measured reliably and it is reasonable to expect the ultimate collection.
`
`w) Service tax input credit:
`Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and
`when there is reasonable certainty in availing / utilising the credits.
`
`x) Operating cycle:
`Based on the nature of products/ activities of the Company and the normal time between acquisition of assets and their
`realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of
`classification of its assets and liabilities as current and non—current.
`
`174 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
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`
`

`
`2.
`
`SHARE CAPITAL
`
`a) Share Capital
`Particulars
`
`Authorised
`
`As at 31 March 2015
`No. of Shares
`? in million
`
`As at 31 March 2014
`No. of Shares
`? in million
`
`Equity Shares of ? 2 each
`Issued, Subscribed and Paid up
`Equity Shares of ? 2 each fully paid
`
`500,000,000
`
`1,000.0
`
`500,000,000
`
`1,000.0
`
`Total
`
`449,488,335
`449,488,335
`
`899.0
`899.0
`
`448,375,804
`448,375,804
`
`896.8
`896.8
`
`b) Reconciliation of the number of shar