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Cipla Ltd(Industry :   Pharmaceuticals - Indian - Bulk Drugs & Formln)
 
BSE Code:500087NSE Symbol: CIPLAP/E  (TTM): 37.28
ISIN Demat:INE059A01026Div Yield %:0.34EPS   (TTM) :15.77
Book Value (Rs):167.1117076Market Cap (RsCr):47328.93Face Value (Rs) :2
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Corporate Information

Cipla Ltd. ("the Company") is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Cipla Ltd. is a global pharmaceutical company which uses cutting edge technology and innovation to meet the everyday needs of all patients. The Company has its wide network of operations in local as well foreign markets.

Note: 1 Significant Accounting Policies and Key Accounting Estimates and Judgements

Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. For periods up to and including the year ended As at 31st March, 2016, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Indian GAAP'). These financial statements for the year ended As at 31st March, 2017 are the first Financial Statements prepared in accordance with Ind AS. Refer to note 53 for information on how the Company has adopted Ind AS. The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (including derivative instruments) and contingent consideration; assets and liabilities assumed on business combination, defined benefit plans, plan assets and share-based payments. The consolidated financial statements are presented in Indian Rupee and all values are rounded to the nearest crore, except when otherwise indicated.

Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Examples of such estimates include estimation of useful lives of tangible and intangible assets, valuation of inventories, sales return, employee costs, assessments of recoverable amounts of deferred tax assets and cash generating units, provisions against litigations and contingencies. Estimates and underlying assumptions are reviewed by management at each reporting date. Actual results could di3er from these estimates. Any revision of these estimates is recognised prospectively in the current and future periods.

Operating Cycle & Current Non-current Classification

Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/ non-current classification of assets and liabilities.

The Company presents assets and liabilities in the Balance Sheet based on current/ non-current classification. An asset is current when it is: Expected to be realised or intended to be sold or consumed in normal operating cycle.

Held primarily for the purpose of trading.

Expected to be realised within twelve months after the reporting period, or Cash or Cash Equivalent.

All other assets are classified as non-current. A liability is current when: It is expected to be settled in normal operating cycle. It is held primarily for the purpose of trading. It is due to be settled within twelve months after the reporting period, or There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Foreign currency transactions and balances

Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in profit or loss.

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Foreign Operations

Income and expenses have been translated into Indian Rupee at the average rate over the reporting period. Exchange Differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation Differences recognised in equity are reclassified to Statement of Profit and Loss and are recognised as part of the gain or loss on disposal.

Fair value measurement

The Company measures financial instruments at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which su3cient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

At each reporting date, the Company analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company's accounting policies.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

Disclosures for valuation methods, significant estimates and assumptions.

Contingent consideration.

Quantitative disclosures of fair value measurement hierarchy.

Financial instruments (including those carried at amortised cost).

Revenue recognition

(i) Sale of goods and rendering of services

Revenue is recognized when it is probable that economic benefits associated with a transaction flows to the Company in the ordinary course of its activities and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts, chargebacks and volume rebates allowed by the Company. Accrual for sales returns, chargebacks and other allowances are provided at the point of sale based upon past experience. Adjustments to such returns, chargebacks and other allowances are made as new information becomes available. Revenue includes only the gross inflows of economic benefits, including excise duty, received and receivable by the Company, on its own account. Amounts collected on behalf of third parties such as sales tax and value added tax are excluded from revenue.

Profit sharing revenues are generally recognized under the terms of a license and supply agreement in the period such amounts can be reliability measured and collectability is reasonably assured.

Revenue from sale of goods is recognized when the following conditions are satisfied: The Company has transferred the significant risks and rewards of ownership of the goods to the buyer; The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effect ive control over goods sold; The amount of revenue can be measured reliably; It is probable that the economic benefits associated with the transaction will flow to the Company;

The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue resulting from the achievement of milestone events stipulated in agreements is recognized when the milestone is achieved. Milestones are based upon the occurrence of a substantive element specified in the contract or as a measure of substantive progress towards completion under the contract.

Other Operating revenue is recognised on accrual basis.

(ii) Interest income

Interest income from a financial asset is recognised whenitisprobablethattheeconomicbenefitswillflow to the Company and the amount of income can be measuredreliably.Interestincomeisaccruedonatime basis, by reference to the principle outstanding and at the effect ive interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

(iii) Dividends

Dividend income from investments is recognised when the right to receive payment has been established, provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

Taxes

Income tax expense comprises of current tax expense and deferred tax expenses. Current and deferred taxes are recognized in Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

(i) Current income tax:

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act of the respective jurisdiction. The current tax is calculated using tax rates that have been enacted or substantively enacted, at the reporting date.

(ii) Deferred tax:

Deferred tax is recognized using the Balance Sheet approach on temporary Differences arising between the tax bases of assets and liabilities and their carrying amounts.

Deferred tax liabilities are recognised for all taxable temporary Differences.

Deferred tax assets are recognised for all deductible temporary Differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary Differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary Difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affect s neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that su3cient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary Differences are expected to be recovered or settled.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent it is reasonably certain that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Deferred tax assets and deferred tax liabilities are o3set if a legally enforceable right exists to set o3 current tax assets against current tax liabilities.

(iii) Sales tax

Expenses and assets are recognised net of the amount of sales tax, except, when the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.

Property, Plant and Equipment

All items of property, plant and equipment, including freehold land, are initially recorded at cost. Cost of property, plant and equipment comprises purchase price, non-refundable taxes, levies and any directly attributable cost of bringing the asset to its working condition for the intended use. Expenses directly attributable to new manufacturing facility during its construction period are capitalized if the recognition criteria is met. Subsequent to initial recognition, property, plant and equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in note below. Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision is met.

Capital work-in-progress includes cost of property, plant and equipment that are not ready for their intended use.

Depreciation on tangible assets is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

Capital work-in-progress included in Note 3 property, plant and equipment are not depreciated as these assets are not yet available for use.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Investment properties

Property that is held for non-current rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and borrowing costs where applicable. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is de-recognised.

Investment properties are depreciated using the straight-line method over their estimated useful lives. Investment properties generally have a useful life of 25-40 years. The useful life has been determined based on technical evaluation performed by management's expert.

Intangible assets

Intangibleassetssuchasmarketingintangibles,trademarks, technical know-how, brands and computer software acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalised and the related expenditure is recognized in the Statement of Profit and Loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.

Expenditure on Regulatory Approval

Expenditure incurred for obtaining regulatory approvals and registration of products for overseas markets is charged to the Statement of Profit and Loss.

Amortisation methods and periods

The Company amortises intangible assets with a finite useful life using the straight-line method over the following periods:

Marketing intangibles, Trademarks, Technical KnowHow and Brands 2-10 years.

Computer software 3 years.

Borrowing costs

Borrowing costs consists of interest, ancillary costs and other costs in connection with the borrowing of funds and exchange Differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to interest costs.

Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of such assets, up to the date such assets are ready for their intended use. Other borrowing costs are charged to the Statement of Profit and Loss.

Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss.

Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1st April, 2015, the date of inception is deemed to be 1st April, 2015 in accordance with Ind-AS 101 First-time Adoption of Indian Accounting Standard.

(i) Company as a lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the Statement of Profit and Loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an expense in the statement of profit and loss on accrual basis as escalation in lease arrangements are for expected inflationary cost.

(ii) Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Inventories

Raw materials and packing materials are valued at lower of cost and net realisable value after providing for obsolescence, if any. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

Work-in-process, stores, spares and consumables are valued at cost. Stock-in-trade and finished goods are valued at lower of cost and net realisable value.

Finished goods and work-in-process include costs of raw material, labour, conversion costs and other costs incurred in bringing the inventories to their present location and condition.

Cost of finished goods includes excise duty, wherever applicable.

Cost of inventories is computed on weighted moving average basis.

Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial Assets Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories:

Debt instruments at amortised cost.

Debt instruments at fair value through other comprehensive income (FVTOCI).

Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL). Equity instruments measured at fair value through other comprehensive income FVTOCI.

Debt instruments at amortised cost A ‘debt instrument' is measured at the amortised cost if both the following conditions are met:

The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, financial assets are subsequently measured at amortised cost using the effect ive interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.

Debt Instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Equity Investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

De-recognition

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company's continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of Financial Assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a Group of financial assets is impaired. A financial asset or a Group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an expected ‘loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the Group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a Group of debtors is experiencing significant financial di3culty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

(ii) Financial Liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effect ive hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Loans and Borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are de-recognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

This category generally applies to interest-bearing loans and borrowings.

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially Different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The Difference in the respective carrying amounts is recognised in the Statement of Profit or Loss.

(iii) Derivative Financial Instruments

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge its foreign currency risks and interest rate risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

(iv) Cash and Cash Equivalents

Cash and Cash Equivalents represent cash and bank balances and fixed deposits with banks. Cash and cash equivalent are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

(v) Trade Receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effect ive interest method, less provision for impairment.

Provisions

Provisions for legal claims, chargebacks and sales returns are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingencies

Disclosure of contingent liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Employee Benefits

Liability on account of short term employee benefits is recognised on an undiscounted and accrual basis during the period when the employee renders service/ vesting period of the benefit.

Post retirement contribution plans such as Employees' Pension scheme and Employees' Provident Fund (for employees other than those who are covered under Employees' provident fund trust) are charged to the Statement of Profit and Loss for the year when the contributions to the respective funds accrue.

Post retirement benefit plans such as gratuity and provident fund are determined on the basis of actuarial valuation made by an independent actuary as at the balance sheet date. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the consolidated balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Statement of Profit and Loss.

(i) Gratuity Obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries.

The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in Statement of Profit and Loss as past service cost.

(ii) Other Benefit Plan - Leave Encashment

Liability in respect of leave encashment becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of leave encashment becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary.

(iii) Termination Benefits

Termination benefits arising are recognised in the Statement of Profit and Loss when: the Company has a present obligation as a result of past event; a reliable estimate can be made of the amount of the obligation; and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Government Grants

Government Grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit and loss accounts over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual installments. When loans or similar assistance are provided by the government or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant.

The loan or assistance is initially recognised and measured at fair value and the government grant is measured as the Difference between initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.

Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit attributable to equity shareholders and the weighted average number of shares outstanding are adjusted for the effect of all dilutive potential equity shares from the exercise of options on unissued share capital. The number of equity shares is the aggregate of the weighted average number of equity shares and the weighted average number of equity shares which are to be issued in the conversion of all dilutive potential equity shares into equity shares.

Non-current assets and liabilities classified as held for sale and discontinued operations

Non-current assets classified as held for sale are presented separately and measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some held for sale assets such as financial assets or deferred tax assets, continue to be measured in accordance with the Company's relevant accounting policy for those assets. Once classified as held for sale, the assets are not subject to depreciation or amortisation.

Any profit or loss arising from the sale or re-measurement of discontinued operations is presented as part of a single line item, profit or loss from discontinued operations.

Share-based employee remuneration

The Company operates equity-settled share-based remuneration plans for its employees.

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values on the grant date. Grant date is the date when the

Company and employees have shared an understanding of terms and conditions on the arrangement.

Where employees are rewarded using share-based payments, the fair value of employees' services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).

All share-based remuneration is ultimately recognised as an expense in Statement of Profit and Loss. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

Non-marketvestingconditionsareincludedinassumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest di3ers from previous estimates. Any adjustment to cumulative share-based compensation resulting from a revision is recognised in the current period. The number of vested options ultimately exercised by holder does not impact the expense recorded in any period.

Market conditions are taken into account when estimating the fair value of the equity instruments granted. Services received from employees satisfying another vesting condition irrespective of whether market conditions are satisfied.

Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid as per agreed terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effect ive interest method.

Key accounting estimates and judgements

The preparation of the Company's financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affect ed in future periods.

Critical accounting estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:

Judgements (i) Leases

The Company has evaluated each lease agreement for its classification between finance lease and operating lease. The Company has reached its decisions on the basis of the principles laid down in Ind AS 17 "Leases" for the said classification. The Company has also used appendix C of Ind AS 17 for determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and based on the assessment whether: fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset); and the arrangement conveys a right to use the asset.

(ii) Deferred Income Taxes

The assessment of the probability of future taxable profit in which deferred tax assets can be utilized is based on the Company's latest approved forecast, which is adjusted for significant non-taxable profit and expenses and specific limits to the use of any unused tax loss or credit. The tax rules3 in the numerous jurisdictions in which the Company operates are also carefully taken into consideration. If a positive forecast of taxable profit indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full.

(iii) Research and Developments Costs

Management monitors progress of internal research and development projects by using a project management system. Significant judgement is required in distinguishing research from the development phase. Development costs are recognised as an asset when all the criteria are met, whereas research costs are expensed as incurred. Management also monitors whether the recognition requirements for development costs continue to be met. This is necessary due to inherent uncertainty in the economic success of any product development.

Estimates

(i) Useful lives of various assets Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Company. (ii) Current Income Taxes

The major tax jurisdictions for the Company are India, US and South Africa, though the Company companies also files tax returns in other foreign jurisdictions. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

(iii) Sales Returns

The Company accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a product sale. This allowance is based on the Company's estimate of expected sales returns. The Company deals in various products and operates in various markets. Accordingly, the estimate of sales returns is determined primarily by the Company's historical experience in the markets in which the Company operates.

(iv) Chargebacks

Chargebacks are estimated and provided for in the year of sales and recorded as reduction from revenue. Provisions for such chargebacks are accrued and estimated based on historical average chargebacks rate actually claimed over a period of time, current contract prices with distributors/other customers and estimated inventory holding by the distributors.

(v) Expected Credit Loss

The Company applies expected credit losses (ECL) model for measurement and recognition of loss allowance on the following:

i Trade receivables and lease receivables.

ii Financial assets measured at amortized cost (other than trade receivables and lease receivables).

iii Financial assets measured at fair value through other comprehensive income (FVTOCI).

In case of trade receivables and lease receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.

Incaseofotherassets(listedasiiandiiiabove),theCompany determines if there has been a significant increase in credit risk of the financial asset since initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to twelve month ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

(vi) Accounting for Defined Benefit Plans

In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected return on plan assets, discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may di3er materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.

(vii) Impairment

An impairment loss is recognised for the amount by which an asset's or cash-generating unit's carrying amount exceeds its recoverable amount to determine the recoverable amount, management estimates expected future cash flows from each asset or cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Company's assets.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

(viii) Fair Value of Financial Instruments

Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. Details of the assumptions used are given in the notes regarding financial assets and liabilities. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

Standards issued but not yet effect ive

In March 2017, the Ministry of Corporate A3airs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows' and Ind AS 102, ‘Share-based payment.' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows' and IFRS 2, ‘Share-based payment,' respectively. The amendments are applicable to the Company from 1st April, 2017.

(i) Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

(ii) Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values', but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement.

The Company is evaluating the requirements of the amendment and the impact on the financial statements is being evaluated.

Note 2: Property, Plant and Equipment

in Crore
Particulars Freehold Land Leasehold Land Buildings and Flats Plant and Machinery Furniture and Fixtures Offce Equipments Vehicles Total
Gross Block
Balance as at 1st April, 2015 32.74 20.37 1433.31 1850.87 66.30 42.27 3.95 3449.81
Additions - 1.21 242.27 407.66 10.40 14.31 1.14 676.99
Deletions and Adjustments - - 0.01 9.37 0.27 0.41 0.14 10.20
Balance As at 31st March, 2016 32.74 21.58 1675.57 2249.16 76.43 56.17 4.95 4116.60
Additions 6.41 1.23 204.60 623.21 19.85 19.52 1.22 876.04
Deletions and Adjustments - - 0.89 38.55 1.94 1.52 0.35 43.25
Balance As at 31st March, 2017 39.15 22.81 1879.28 2833.82 94.34 74.17 5.82 4949.39
Depreciation and Impairment
Balance as at 1st April, 2015 - - - - - - - -
Depreciation - 0.23 47.42 335.47 14.46 16.77 0.94 415.29
Deletions and Adjustments - - - 0.83 0.02 0.09 0.03 0.97
Balance As at 31st March, 2016 - 0.23 47.42 334.64 14.44 16.68 0.91 414.32
Depreciation - 0.25 52.25 355.10 12.97 15.71 0.88 437.16
Impairment - - - 18.74 - - - 18.74
Deletions and Adjustments - - 0.03 13.77 1.18 0.92 0.09 15.99
Balance As at 31st March, 2017 - 0.48 99.64 694.71 26.23 31.47 1.70 854.23
Net Block
As at 31st March, 2017 39.15 22.33 1779.64 2139.11 68.11 42.70 4.12 4095.16
As at 31st March, 2016 32.74 21.35 1628.15 1914.52 61.99 39.49 4.04 3702.28
As at 1st April, 2015 32.74 20.37 1433.31 1850.87 66.30 42.27 3.95 3449.81

i. The gross value of Buildings and Flats includes the cost of shares in Co-operative Housing Societies.

ii. The above additions to property, plant and equipment during the year includes 119.34 crore (As at 31st March, 2016 242.88 crore, 1st April, 2015

131.94 crore) used for Research and Development.

Details of Capital Work in Progress

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016
Opening Balance 512.81 339.00
Capitalised (391.33) (275.24)
Impairment (9.13) -
Additions During the Year 428.17 449.05
Closing Balance 540.52 512.81

 

Note 3: Investment Property
in Crore
Particulars Amount
Gross Block
Balance as at 1st April, 2015 0.33
Balance As at 31st March, 2016 0.33
Balance As at 31st March, 2017 0.33
Accumulated Depreciation
Balance as at 1st April, 2015 -
Depreciation 0.00
Balance As at 31st March, 2016 0.00
Depreciation 0.01
Balance As at 31st March, 2017 0.01
Net Block
As at 31st March, 2017 0.32
As at 31st March, 2016 0.33
As at 1st April, 2015 0.33
Fair value
As at 31st March, 2017 1.40
As at 31st March, 2016 1.31
As at 1st April, 2015 1.42

Estimation of Fair Value

The fair valuation of the assets is based on the perception about the macro and micro economic factors presently governing the construction industry, location of property, existing market conditions, degree of development of infrastructure in the area, demand supply conditions, internal amenities, common amenities etc.

This value is based on valuations performed by an accredited independent valuer using replacement cost method. The fair value measurement is categorised in level 2 fair value hierarchy.

Note 4: Intangible Assets

in Crore
Particulars Software Marketing Intangibles Technical Know-how Trademarks Brands Total
Gross Block
Balance as at 1st April, 2015 101.31 24.27 - - - 125.58
Additions 9.49 - 4.66 10.45 1.08 25.68
Deletions and Adjustment 0.04 - - - - 0.04
Balance As at 31st March, 2016 110.76 24.27 4.66 10.45 1.08 151.22
Additions 51.20 - - - - 51.20
Deletions and Adjustment - - - - - -
Balance As at 31st March, 2017 161.96 24.27 4.66 10.45 1.08 202.42
Amortisation and Impairment
Balance as at 1st April, 2015 - - - - - -
Amortisation 21.17 5.02 0.51 0.58 0.12 27.40
Deletions and Adjustment 0.01 - - - - 0.01
Balance As at 31st March, 2016 21.16 5.02 0.51 0.58 0.12 27.39
Amortisation 27.71 5.02 0.93 1.05 0.22 34.93
Balance As at 31st March, 2017 48.87 10.04 1.44 1.63 0.34 62.32
Net Block
As at 31st March, 2017 113.09 14.23 3.22 8.82 0.74 140.10
As at 31st March, 2016 89.60 19.25 4.15 9.87 0.96 123.83
As at 1st April, 2015 101.31 24.27 - - - 125.58

Details of Intangible Assets Under Development

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016
Opening Balance 37.91 21.71
Capitalised (35.43) (1.58)
Additions during the Year 12.77 17.78
Closing Balance 15.25 37.91

Note 5: Non-Current Investments

in Crore
Particulars No. of Units As at 31st March, 2017 No. of Units As at 31st March, 2016 No. of Units As at 1st April, 2015
Investments in Equity Instruments -
(Unquoted)
I. Subsidiaries
Equity Shares of Cipla FZE of AED 10,00,000 Each, Fully Paid 15 18.69 15 18.69 15 18.69
Equity Shares of Goldencross Pharma Pvt. Ltd. of 10 each, Fully Paid 45,966 191.12 45,966 191.12 45,966 191.12
Equity shares of Meditab Specialities Pvt. Ltd. of 1 each, Fully Paid 61,72,237 158.42 61,72,237 158.42 61,53,382 155.72
Meditab Specialities Pvt. Ltd. (Equity Component of Inter corporate Deposits) - 107.50 - 107.50 - 107.50
Ordinary Shares of Cipla (Mauritius) Ltd. of USD 1 each, Fully Paid 2,15,50,001 129.42 2,15,50,001 129.42 2,15,50,001 129.42
Shares of Cipla (EU) Ltd. of GBP 1 Each, Fully Paid 2,70,00,000 264.70 2,33,70,000 233.51 35,30,000 37.76
Ordinary Shares of Cipla Medpro South Africa (Proprietary) Ltd. of 0.1 Cent each, Fully Paid (Refer Note 53-III-c) 45,07,40,684 2081.09 45,07,40,684 2081.09 45,07,40,684 2081.09
Shares of Cipla Holding B.V. of EUR 100 each, Fully Paid 2,15,367 172.69 2,15,367 172.69 2,15,367 172.69
Equity Shares of Cipla BioTec Pvt. Ltd. of 10 each, Fully Paid 24,69,48,959 104.21 15,77,30,000 203.95 10,00,00,000 105.81
Shares of Saba Investment Ltd. of USD 1 each, Fully Paid 2,01,33,633 266.63 2,01,33,633 266.63 1,35,15,000 224.61
Equity Shares of Jay Precision Pharmaceuticals Pvt. Ltd. of 10 each, Fully Paid 24,06,000 96.24 24,06,000 96.24 24,06,000 96.24
Equity Shares of Cipla Health Ltd. of 10 each, Fully Paid 14,40,208 57.00 14,40,208 57.00 - -
II. Associates
Ordinary Shares of Biomab Holding Ltd. of USD 1 each, Fully Paid* - - - - 87,33,333 114.78
III. Other investments - FVTPL
Equity Shares of The Saraswat Co-operative Bank Ltd. of 10 each, Fully Paid 10.000 (As at 31st March, 2017, 10.000; 1st April, 2017, 10.000) 1,000 0.00 1,000 0.00 1,000 0.00
Investments in Government and Trust Securities
National Savings Certificates 41000 0.00 0.00 0.00
(As at 31st March, 2017, 41000; 1st April, 2017
41000)
3647.71 3716.26 3435.43
Aggregate Amount of Unquoted Investments 3647.71 3716.26 3435.43
* Divested on 22nd January 2016

 

Note 6: Non-Current Loans
Particulars As at 31st March, 2017 As at 31st March, 2016 in Crore As at 1st April, 2015
Unsecured, Considered Good
Deposits with Body Corporates and Others 32.55 32.98 31.00
Loans to Subsidiaries (Refer Note 48) 183.20 186.39 179.74
215.75 219.37 210.74
Note 7: Other Non-Current Financial Assets
Particulars As at 31st March, 2017 As at 31st March, 2016 in Crore As at 1st April, 2015
Fixed Deposits as Margin Money (maturity more than 12 Months) 3.66 6.96 3.89
Capital Subsidy Receivable 33.08 33.08 33.08
Forward Contracts 20.34 - 16.14
57.08 40.04 53.11

Note 8: Income Taxes

The major components of income tax expense for the years ended As at 31st March, 2017 and As at 31st March, 2016 are:

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Current Income Tax Charge 311.06 356.64
Deferred Tax on account of Temporary Differences (99.06) (74.97)
Income Tax Expense Reported in the Statement of Profit and Loss 212.00 281.67

Deferred Tax Related to Items Recognised in OCI during the year:

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Net Loss/(Gain) on Re-measurements of Defined Benefit Plans 3.67 (3.71)
Income Tax Expense/(Income) Charged to OCI 3.67 (3.71)

Reconciliation of Tax Expense and the accounting profit multiplied by India's domestic tax rate for As at 31st March, 2017 and As at 31st March, 2016:

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Profit Before Income Tax 1186.94 1743.97
At India's Statutory Income Tax Rate of 34.608% (As at 31st March, 2016: 34.608%) 410.78 603.55
Prior Year Adjustments to Deferred Tax 16.64 (13.57)
Weighted Deductions and Exemptions (316.88) (292.86)
Non-deductible Expenses for Tax Purpose 13.75 (14.02)
Impairment of Investment 87.01 -
Others 2.65 -
Differential Tax Rate Impact (1.95) (1.43)
Income Tax Expense Reported in the Statement of Profit and Loss 212.00 281.67
Effect ive Income Tax Rate 17.86% 16.15%

Deferred Tax:

Deferred Tax relates to the following:

in Crore
Balance Sheet Profit & Loss
Particulars For the year ended For the year ended
As at As at 31st March, 2017 As at As at 31st March, 2016 As at 1st April, 2015 As at 31st March, 2017 31st March, 2016
Property, Plant and Equipment and (490.92) (430.00) (335.11) 60.92 94.89
Intangible Assets
Employment Benefits 49.77 77.12 62.74 23.68 (10.67)
Others 11.64 14.86 13.97 3.22 (0.89)
Provision for Doubtful Debts3 45.07 33.71 22.20 (11.37) (11.51)
Deferred Revenue 28.28 30.73 27.30 2.45 (3.43)
Provision for Right of Return 51.56 54.82 22.84 3.27 (31.98)
MAT Credit Entitlement 364.14 182.91 71.53 (181.23) (111.38)
Deferred Tax Expense/(Income) in (99.06) (74.97)
Statement of Profit and Loss
Net Deferred Tax Assets/(Liabilities) 59.54 (35.85) (114.53)

Reflected in the Balance Sheet as Follows:

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Deferred Tax Assets 551.31 397.17 224.00
Deferred Tax Liabilities (491.77) (433.02) (338.53)
Deferred Tax Assets/(Liabilities) (net) 59.54 (35.85) (114.53)

 

Reconciliation of Deferred Tax Assets/(Liabilities) (net):
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Opening Balance (35.85) (114.53)
Tax Income during the Period recognised in Statement of Profit and Loss 99.06 74.97
Tax Income/(Expense) during the Period recognised in OCI (3.67) 3.71
Closing Balance 59.54 (35.85)

 

Note 9: Other Non-Current Assets
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Secured, Considered Good
Capital Advances# 4.69 6.46 4.74
Unsecured, Considered Good
Capital Advances* 212.30 153.83 98.12
Deferred Lease Assets 38.27 39.75 41.23
Prepaid Expenses 1.90 2.22 0.15
VAT Receivable 41.05 44.56 45.51
298.21 246.82 189.75
# Secured against Bank Guarantees * Includes 55.74 crore (As at 31st March, 2016 55.74 crore, 1st April, 2015 55.74 crore) paid to wholly owned subsidiary - Meditab Specialities Pvt. Ltd.
Note 10: Inventories
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Raw Materials and Packing Materials 1111.95 1302.59 1470.28
Work-in-Process 544.95 762.20 874.31
Finished Goods 680.12 602.57 668.41
Stock-in-Trade 282.01 198.58 248.98
Stores, Spares and Consumables 34.47 52.53 27.22
The Company recorded inventory write down of 169.89 crore ( 31st March, 2016 238.13 crore). This is included as part of Cost of Materials Consumed and Changes in Inventories of Finished Goods, Work-in-Process and Stock- in-Trade in the Statement of Profit and Loss. 2653.50 2918.47 3289.20
Included above, Stock-in-Transit
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Raw Materials and Packing Materials 5.12 35.12 109.54
Work-in-Process 12.88 7.86 20.66
Finished Goods 93.96 65.14 65.34
Stock-in-Trade 18.77 4.03 6.71
130.73 112.15 202.25

 

Note 11: Current Investments
in Crore
Particulars No. of Units As at 31st March, 2017 No. of Units As at 31st March, 2016 No. of Units As at 1st April, 2015
Investment in Mutual Funds (Unquoted)
Axis Liquid Fund - Direct - Growth 286,347 51.63 268,158 45.04 - -
Baroda Pioneer Liquid Fund - Plan B - Direct
- Growth 148,488 27.77 - - - -
Baroda Pioneer Liquid Fund Plan B - Growth - - - - 280,546 45.04
Birla Sun Life Cash Plus - Direct - Growth - - 2,005,213 46.04 1,892,389 45.04
Franklin India Treasury Management Account Super Institutional Plan - Direct - Growth - - - - 239,539 50.06
Reliance Liquid Fund - Cash Plan - Direct - Growth - - 184,267 45.06 - -
Reliance Liquid Fund - TP - Direct - Growth 142,720 56.62 121,898 45.04 - -
Reliance Liquidity Fund - Direct - Growth - - 179,683 41.03 211,177 44.53
DHFL Pramerica Insta Cash Plus Fund -
Direct - Growth 767,782 16.23 - - - -
HDFC Cash Mgmt Fund - Savings Plan -
Direct - Growth - - 139,164 44.03 8,562,289 25.02
DSP BlackRock Liquidity Fund - Direct -
Growth 233,411 54.29 - - - -
Principal Cash Management Fund - Direct
Plan-Growth Option - - - - 330,868 45.04
L&T Liquid Fund - Direct - Growth 255,077 56.88 - - - -
ICICI Prudential Money Market Fund -
Direct- Growth 675,752 15.21 2,149,063 45.04 - -
Indiabulls Liquid Fund - Direct- Growth 115,738 18.39 304,951 45.05 - -
JM High Liquidity - Direct - Growth 10,961,538 48.79 10,871,272 45.05 - -
Kotak Floater - ST - Direct - Growth 110,706 29.55 12,077 3.00 - -
Invesco India Liquid Fund - Direct - Growth 253,691 56.79 - - - -
SBI Magnum Insta Cash - Direct - Growth 156,645 56.35 - - 92,339 28.58
SBI Premier Liquid Fund - Direct - Growth - - 189,247 45.06 - -
Sundaram Money Fund - Direct - Growth 16,264,992 55.78 - - 17,322,750 51.13
Tata Liquid Fund - Direct - Growth 185,141 55.54 - - - -
Taurus Liquid Fund - Direct - Growth - - 274,216 45.04 330,391 50.02
UTI Money Market -Direct- Growth 210,272 38.36 265,152 45.04 - -
638.18 539.52 384.46
Aggregate amount of unquoted investments 638.18 539.52 384.46

 

Note 12: Trade Receivables
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Considered good
Unsecured 1938.79 1896.41 2019.89
Considered doubtful
Unsecured 130.24 97.40 64.13
Less: Allowance for Doubtful Debts* 130.24 97.40 64.13
- - -
1938.79 1896.41 2019.89
* charged during the year 41.12 crore (previous year 47.08 crore)
Note 13: Cash and Cash Equivalents
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Balances with Banks
In current accounts 43.97 38.62 63.14
Cash on hand 0.63 1.14 1.20
44.60 39.76 64.34
Note 14: Bank Balance other than Cash and Cash Equivalents
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Bank Deposits (maturity between 3 months and 12 months) 3.78 1.34 5.13
Balance earmarked for Unclaimed Dividend* 10.08 11.91 13.29
13.86 13.25 18.42
* the above balances are restricted for specific use
Note 15: Current Loans
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Deposits with body corporates and others 2.25 2.75 3.05
Less: Allowance for Doubtful Advances 2.25 2.25 2.25
- 0.50 0.80
Loan to Employees 9.53 10.42 11.52
9.53 10.92 12.32

 

Note 16: Other Current Financial Assets
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Other Loans and Advances
Considered good 0.31 0.18 0.36
Considered doubtful 0.46 0.46 0.46
Less: allowance for doubtful advances 0.46 0.46 0.46
0.31 0.18 0.36
Share Application Money Pending Allotment - - 12.69
Other Inter-company Receivables* 22.86 9.84 8.92
Deposit# 175.08 - -
Other Receivables^ 8.62 15.71 24.30
*Includes ESOS, guarantee commission and other cross charge to subsidiaries 206.87 25.73 46.27
# pertains to deposit given to DPCO (Refer note 43 B)
^Includes depot advances, employee advances
Note 17: Other Current Assets
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Advances to Suppliers 111.23 188.17 158.56
Prepaid Expenses 33.39 50.22 36.54
Export Incentives Receivable 216.55 258.93 144.79
Balances with Statutory/Revenue Authorities like excise, customs, service tax and value added tax, etc. 478.82 525.98 366.73
Others 0.02 0.01 0.16
840.01 1023.31 706.78
Note 18: Share Capital
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Authorised
87,50,00,000 Equity Shares of 2 each
(As at 31st March, 2016 87,50,00,000; 1st April, 2015 87,50,00,000 Equity 175.00 175.00 175.00
Shares of 2 each)
175.00 175.00 175.00
Issued
80,55,13,469 Equity Shares of 2 each
(As at 31st March, 2016 80,43,87,677; 1st April, 2015 80,39,63,835 Equity 161.10 160.88 160.79
Shares of 2 each)
161.10 160.88 160.79
Subscribed & Paid-up
80,45,10,074 Equity Shares of 2 each fully paid
(As at 31st March, 2016 80,33,84,282; 1st April, 2015 80,29,60,440 Equity 160.90 160.68 160.59
Shares of 2 each fully paid)
160.90 160.68 160.59

Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period

As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Particulars Number of shares Amount ( in crore) Number of shares Amount ( in crore) Number of shares Amount ( in crore)
Equity Shares at the beginning of the year 80,33,84,282 160.68 80,29,60,440 160.59 80,29,21,357 160.58
Add: Equity Shares issued on exercise of employee stock options 11,25,792 0.22 4,23,842 0.09 39,083 0.01
Equity Shares at the end of the year 80,45,10,074 160.90 80,33,84,282 160.68 80,29,60,440 160.59

Details of Shareholders holding more than 5 percent shares in the Company

As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Particulars Number of shares % of Holdings Number of shares % of Holdings Number of shares % of Holdings
Dr. Y. K. Hamied 16,67,42,687 20.73% 16,67,42,687 20.76% 12,48,27,750 15.55%
Ms. Farida Hamied - - - - 4,19,14,937 5.22%
ICICI Prudential Mutual Fund 4,11,90,092 5.12% 3,44,09,246 4.28% 86,96,421 1.08%
Ms. Sophie Ahmed 4,59,82,000 5.72% 4,59,82,000 5.72% 4,59,82,000 5.73%
Life Insurance Corporation of India 4,53,25,137 5.63% 4,81,10,237 5.99% 4,42,13,904 5.51%

Terms and Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Equity shares reserved for issue under employee stock options

Refer Note 46 for number of stock options against which equity shares to be issued by the Company upon vesting and exercise of those stock options by the option holders as per the relevant schemes.

* Share Application Money Pending Allotment for As at 31st March, 2017 is 11,172.

Note 19: Other Equity

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Capital Reserve 0.08 0.08 0.08
Securities Premium Reserve 1505.24 1449.28 1430.59
General Reserve 3141.60 3141.43 3141.43
Outstanding Employee stock options 59.40 89.41 76.40
Retained Earnings 7933.29 7145.00 5870.62
12639.61 11825.20 10519.12

Nature and Purpose of Reserve:-

Securities Premium Reserve

Securities Premium Reserve is used to record the premium on issue of shares. These reserve is utilised in accordance with the provisions of the Act.

General Reserve

The General Reserve is used from time to time to transfer profit from retained earning for appropriation purpose.

Outstanding Employee stock options

The Company has established various equity settled share based payment plan for certain categories of employees.

Note 20: Borrowings

(a) Non-Current

in Crore
Particulars
As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Deferred Payment Liability -Sales Tax Deferral Loan* 0.07 0.13 0.41
0.07 0.13 0.41
*Sales tax deferral loan is interest free and repayable by 2018-19
(b) Current
in Crore
Particulars
As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Loans repayable on demand
From Banks
Secured
Cash Credit from Banks (Secured by Hypothecation of Trade - - 0.67
Receivables and Inventories)
Unsecured
Packing Credit from Banks 324.25 917.63 1156.25
Buyers' Credit - 205.00 223.28
Bank overdraft 0.01 9.05 -
324.26 1131.68 1380.20
Note 21: Other Financial Liabilities
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Security Deposits 45.06 40.00 40.00
Payable for Acquisition of Business - - 36.09
Others - 2.12 -
45.06 42.12 76.09

 

Note 22: Provisions
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
(a) Non - Current
Leave Encashment 125.61 132.00 101.93
125.61 132.00 101.93
(b) Current
Leave Encashment 3.30 22.43 16.37
Gratuity 4.46 37.22 57.57
Bonus 91.20 31.16 5.43
Provision for Right of Return 148.97 158.41 66.00
247.93 249.22 145.37

 

in Crore
Particulars Leave Encashment Gratuity Bonus Provision for Right of Return Total
At 1st April, 2015 118.30 57.57 5.43 66.00 247.30
Arising during the year 71.20 36.08 59.96 92.41 259.65
Utilised (35.07) (56.43) (34.23) - (125.73)
At As at 31st March, 2016 154.43 37.22 31.16 158.41 381.22
Arising during the year 4.58 19.32 70.79 77.79 172.48
Utilised (30.10) (52.08) (10.75) (87.23) (180.16)
At As at 31st March, 2017 128.91 4.46 91.20 148.97 373.54

Note 23: Other Non-current Liabilities

in Crore
As at As at As at
Particulars
As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Deferred Government Grant 5.48 6.87 8.26
Deferred Revenue 74.66 81.73 72.90
80.14 88.60 81.16
Note 24: Trade Payables
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Micro and Small Enterprises 36.91 7.30 2.72
Others 1261.30 983.54 1379.51
1298.21 990.84 1382.23

The details of amounts outstanding to Micro, Small and Medium Enterprises based on information available with the Company is as under:

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
a. The principal amount and the interest due thereon remaining unpaid to any Supplier as at the end of each accounting year
Principal amount due to micro and small enterprises - - -
Interest due on above - - -
b. the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year - - -
c. The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006 - - -
d. The amount of interest accrued and remaining unpaid at the end of each accounting year - - -
e. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006 - - -

 

Note 25: Other Financial Liabilities
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Current maturities of non-current debt
Sales tax deferral loans 0.07 0.07 0.01
Unclaimed Dividend* 10.08 11.91 13.29
Unclaimed Preference Share Capital - 0.01 0.01
Security Deposits 1.61 1.86 2.20
Capital Creditors 165.90 135.69 61.93
Contingent Consideration Payable - 45.18 69.39
Employee Dues 82.67 120.01 83.35
Other Payable 195.27 169.29 114.36
455.60 484.02 344.54
*There are no amounts due and outstanding to be credited to Investor
Education & Protection Fund.
Note 26: Other Current Liabilities
in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Advance from customers 169.50 25.61 103.89
Other Payables:
Statutory dues 51.71 57.18 40.18
Book Overdraft - 6.64 46.89
Interest payable 0.16 0.82 0.67
Deferred Government Grant 1.39 1.39 1.39
Deferred Revenue 7.07 7.07 5.99
229.83 98.71 199.01

 

Note 27: Revenue from Operations
in Crore
Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016
Sale of products (including excise duty) 10637.08 11828.74
10637.08 11828.74
Details of products sold
Manufactured Goods
Bulk Drugs 737.03 1005.11
Tablets and Capsules 5378.64 6778.54
Liquids 160.26 195.88
Creams 203.67 187.98
Aerosols/Inhalation Devices 1181.71 1030.96
Injections/Sterile Solutions 1353.42 1184.41
Others 10.93 72.40
9025.66 10455.28
Stock-in-Trade
Bulk Drugs 125.14 82.72
Tablets and Capsules 785.34 681.19
Liquids 306.63 249.94
Creams 104.17 77.95
Aerosols/Inhalation Devices 94.29 73.35
Injections/Sterile Solutions 152.91 154.21
Others 42.94 54.10
1611.42 1373.46
10637.08 11828.74
Earnings in Foreign Exchange
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
F.O.B. Value of Exports 5004.97 6683.67
Technical Know-how and Licensing Fees 45.94 38.43
Others - Service fees, etc 55.72 24.03
5106.63 6746.13

 

Note 28: Other Operating Revenue
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Rendering of Services 36.44 44.72
Export Incentives 162.31 150.16
Technical Know-how and Licensing Fees 52.02 30.58
Scrap Sales 26.53 37.49
Others 60.20 26.03
337.50 288.98
Note 29: Other Income
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Interest income 27.67 27.61
Dividend Income* 11.30 60.92
Government Grants 1.39 1.39
Net Gain on Foreign Currency Transaction and Translation - 66.13
Profit on sale of current investments# 46.96 81.66
Profit on sale of Fixed Asset - 6.27
Sundry Balance Written Back 5.77 10.46
Insurance Claims 5.33 10.74
Rent 1.60 1.41
Miscellaneous Receipt 29.83 13.71
129.85 280.30
* Includes 5.50 crore received from Cipla (Mauritius) Ltd. and 5.80 crore received from Saba Investment Ltd. (As at 31st March, 2016 60.92 crore received from Meditab Specialities Pvt. Ltd.) # As at 31st March, 2016 includes 55.71 crore gain on sale of investment in associate (Biomab Holding Ltd.)
Note 30: Cost of Materials Consumed
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Cost of Raw and Packing Materials
Opening Stock 1302.59 1470.28
Add: Purchases 2765.40 3465.65
Less: Closing Stock 1111.95 1302.59
2956.04 3633.34

 

Break-up of Materials Consumed
in Crore
Class of Goods For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Semi Finished goods 1079.06 1409.10
Raw Material 870.94 1190.19
Packing Material 878.54 956.03
Others 127.50 78.02
Total Consumption (Net of Cenvat) 2956.04 3633.34

 

Consumption of Raw and Packing Materials/Spares and Components
in Crore
For the year ended For the year ended
Class of Goods As at 31st March, 2017 As at 31st March, 2016
Value % Value %
Purchased Indigenously 1755.48 59.39 2039.15 56.12
Imported 1200.56 40.61 1594.19 43.88
Total Consumption (Net of Cenvat) 2956.04 100.00 3633.34 100.00

 

Note 31. Purchases of Stock-in-Trade
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Bulk Drugs 104.24 115.08
Tablets and Capsules 523.24 459.28
Liquids 209.59 170.42
Creams 67.81 58.33
Aerosols/Inhalation Devices 59.07 77.66
Injections/Sterile Solutions 118.65 107.31
Others 46.39 49.48
1128.99 1037.56

Note 32. Changes in Inventories of Finished Goods, Work-in-Process and Stock-in-Trade

in Crore
Particulars For the year ended 31st March, 2017 For the year ended As at 31st March, 2016
Opening Stock
Work-in-Process 762.20 874.31
Finished Goods 602.57 668.41
Stock-in-Trade 198.58 248.98
1563.35 1791.70
Less: Closing Stock
Work-in-Process 544.95 762.20
Finished Goods 680.12 602.57
Stock-in-Trade 282.01 198.58
1507.08 1563.35
56.27 228.35

 

Break-up of Inventories
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Work-in-Process
Formulations 242.61 208.74
Bulk Drugs 302.34 553.46
544.95 762.20
Finished Goods
Bulk Drugs 23.22 22.72
Tablets and Capsules 406.48 369.64
Liquids 22.30 19.23
Creams 26.73 19.04
Aerosols/Inhalation Devices 63.89 58.40
Injections/Sterile Solutions 135.58 109.57
Others 1.92 3.97
680.12 602.57
Stock-in-Trade
Bulk Drugs 12.71 7.18
Tablets and Capsules 133.54 96.74
Liquids 49.57 30.82
Creams 15.12 11.16
Aerosols/Inhalation Devices 13.84 13.45
Injections/Sterile Solutions 47.21 34.90
Others 10.02 4.33
282.01 198.58
Note 33. Employee Benefits Expenses
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Salaries and Wages 1540.14 1572.90
Contribution to Provident and Other Funds 70.82 74.49
Employee Stock Option Scheme (Refer note 46) 22.18 32.41
Sta3 Gratuity 38.89 25.12
Sta3 Welfare Expense 56.94 73.64
1728.97 1778.56
Note 34. Finance Costs
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Interest Expense 39.20 147.07
39.20 147.07

 

Note 35. Depreciation and Amortisation Expense
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Depreciation of Tangible Assets 437.16 415.29
Impairment of Tangible Assets 27.87 -
Depreciation on Investment Properties 0.01 0.00
Amortisation of Intangible Assets 34.93 27.40
499.97 442.69
Note 36. Other Expenses
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Manufacturing Expenses 443.37 405.08
Stores and Spares 94.14 112.28
Repairs and maintenance
Plant and machinery 63.84 56.03
Buildings 34.72 32.09
Insurance 16.49 18.94
Rent 56.76 51.60
Rates and taxes 26.98 40.44
Power and Fuel 206.28 207.56
Travelling and Conveyance 239.12 286.37
Sales Promotion Expenses 231.90 207.14
Commission on Sales 234.41 182.21
Freight and Forwarding 157.82 194.04
Bad Debts, provision for doubtful debts and advances (net) 41.12 47.08
Loss on foreign exchange fluctuation (net) 13.30 -
Contractual Services 163.55 162.27
Non-Executive Directors' Remuneration 6.90 2.33
Postage and Telephone Expenses 31.54 26.99
Professional fees 395.26 594.61
Payment to Auditors
Audit fee 1.22 0.74
Taxation Matters 0.05 0.06
Other Services 0.29 0.59
Reimbursement of Expenses 0.04 -
Loss/(Gain) on sale of fixed Assets/Asset Disposed O3 (net) 16.83 -
CSR expenditure (Refer Note 50) 28.25 20.48
Charitable Donations 0.04 0.07
Research - Clinical Trials, Samples and Grants 280.03 262.66
Excise Duty 206.09 167.03
Miscellaneous Expenses 266.30 307.79
3256.64 3386.48

 

Note 37: Impairment of Investment
in Crore
For the year ended For the year ended
Particulars
As at 31st March, 2017 As at 31st March, 2016
Impairment of Investment* 251.41 -
251.41 -
*The Company's wholly owned subsidiary Cipla BioTec Pvt. Ltd. has decided to reposition the Biotechnology business to explore new business development opportunities including in-licensing to de-risk future investments in the segment without solely relying on in-house development. Accordingly, the Company had re-assessed the carrying value of investment in Cipla BioTec Pvt. Ltd. and recorded impairment charge of 251.41 crore during the year ended As at 31st March, 2017.
Note 38: Research and Development Expenditure
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
The amount of expenditure as shown in the respective heads of account is as under:
R&D Capital Expenditure (Gross)
Building 8.64 141.96
Assets Other than Building 110.70 100.92
119.34 242.88
Less: Realisation on Sale of R&D Assets
Building - -
Assets Other than Building 0.20 0.14
0.20 0.14
119.14 242.74
R&D Revenue Expenditure Charged to the Statement of Profit and Loss
Materials Consumed 261.51 222.22
Employee Benefits Expenses 183.08 170.39
Power and Fuel 24.77 16.60
Repairs and Maintenance 25.46 21.37
Manufacturing Expenses 17.75 18.47
Professional Fees 48.59 45.98
Depreciation 50.76 44.24
Research - Clinical Trials, Samples and Grants 96.08 123.23
Printing and Stationery 0.55 0.46
Travelling Expenses 12.68 12.75
Other Research and Development Expenses 151.50 77.66
Allocated Manufacturing Expenses for R&D Batches 38.70 39.23
911.43 792.60
1030.57 1035.34

 

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Amount Eligible for weighted deduction under Section 35(2AB) of the Income
Tax Act, 1961
R&D Capital Expenditure (Gross) 110.70 100.92
R&D Revenue Expenditure 749.21 640.54
859.91 741.46
Less: Realisation on Sale of R&D Assets 0.20 0.14
859.71 741.32
Sales for the year 10974.58 12117.72
Total R&D Expenditure / Sales 9.39% 8.54%
Total Eligible R&D Expenditure / Sales 7.83% 6.12%

Note 39. Net Difference in foreign exchange credited / (debited) to the Statement of Profit and Loss

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Net Difference in foreign exchange credited / (debited) to the Statement of Profit and (13.30) (27.20)
Loss
(13.30) (27.20)
Note 40. Value of Imports on C.I.F. basis
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Raw Materials and Packing Materials 938.94 1453.01
Components and Spare Parts 22.67 27.00
Capital Goods 258.67 247.00
1220.28 1727.01
Note 41. Expenditure in Foreign Currency
in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Legal and Professional charges 286.68 485.30
Royalties 2.46 2.34
Interest 0.83 2.07
Commission 99.67 66.56
Director Travel And Sitting Fees - 0.04
Other Matters – Travelling, Registration fees, etc. 157.88 189.55
547.52 745.86

Note 42: Lease Accounting

Where the Company is a Lessee

The Company has obtained certain premises for its business operations (including furniture and fixtures, therein as applicable) under cancellable operating lease or leave and license agreements ranging from 11 months to 5 years or longer which are subject to renewal at mutual consent. The cancellable lease arrangements can be terminated by either party after giving due notice. Lease payments are recognised in the Statement of Profit and Loss under ‘Rent' in Note 36.

Where the Company is a Lessor

The Company has given certain premises under operating lease or leave and license agreement. The Company retains substantially all risks and benefits3 of ownership of the leased asset and hence classified as Operating lease.3 Lease income on such operating lease is recognised in Statement of Profit and Loss under ‘Rent' in Note 29.

Note 43: Contingent Liabilities, Commitments and Other Litigations (to the extent not provided for)

A. Details of Contingent Liabilities and Commitments

in Crore
Particulars As at As at 31st March, 2017 As at As at 31st March, 2016 As at 1st April, 2015
Contingent Liabilities
Claims against the Company not acknowledged as debt (note i) 315.30 17.36 15.85
Guarantees* 3956.74 3754.60 126.95
Letters of Credit 26.70 43.37 49.30
Income Tax on account of disallowance/additions 100.29 137.69 108.42
Excise Duty/Service Tax on account of valuation/cenvat credit 116.89 161.74 108.47
Sales Tax on account of credit/classification 2.43 2.34 5.66
4518.35 4117.10 414.65
Commitments
Estimated amount of contracts unexecuted on Capital Account 404.39 617.92 367.10
4922.74 4735.02 781.75
*The Company has given guarantees in favour of various banks for 3805.72 crore (As at 31st March, 2016 3644.03 crore, 1st April, 2015 Nil) against the loan granted to Cipla (EU) Ltd. and InvaGen Pharmaceuticals Inc.

Note: i. Claims against the company not acknowledged as debt include claim relating to pricing, commission etc. ii. It is not practicable for the group to estimate the timing of cash outflow, if any, in respect of our pending resolution of the respective proceedings as it is determined only on receipt of judgements/decisions pending with varoius authorities.

B. Details of Other Litigations

i The Government of India has served demand notices in March 1995 and May 1995 on the Company in respect of six bulk drugs, claiming that an amount of

5.46 crore along with interest due thereon is payable into the DPEA under the Drugs (Prices Control) Order, 1979 on account of alleged unintended benefit enjoyed by the Company. The Company has filed its replies to the notices and has contended that no amount is payable into the DPEA under the Drugs (Prices Control) Order, 1979.

ii The Company had received notices of demand from the National Pharmaceutical Pricing Authority (NPPA), Government of India, on account of alleged overcharging in respect of certain drugs under the Drugs (Prices Control) Order, 1995 ("DPCO, 1995"). These notices have been subject to challenge by the Company on the question of fixation of retail prices without adhering to the formula/process laid down in DPCO, 1995 and also if some of the specified drugs be subjected to price control, based on the parameters contained in the Drug Policy, 1994. The Company challenged these notices in the Hon'ble Bombay High Court on the ground that bulk drugs contained in the said formulations are not amenable to price control, based on the parameters contained in the Drug Policy, 1994 on which the DPCO, 1995 is based and in the Hon'ble Allahabad High Court on process followed for fixation of pricing norms. These Petitions were decided in favour of the Company and the matters were carried in Appeal by the Government to the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India in August 2003 remanded the question of inclusion of certain drugs under price control to the Hon'ble Bombay High Court, after interpreting some of the criteria laid down in the Drug policy for inclusion/exclusion of drugs under price control.

In February 2013, the Hon'ble Supreme Court of India transferred the Hon'ble Bombay High Court Petitions, also before itself for a final hearing on both the matters. These Petitions were thereafter transferred back to Bombay High Court vide Order dated 20th July, 2016, along with directions that 50% of the demands raised as mentioned in its earlier

Order dated August 2003 be deposited by the Petitioners in the Bombay Petitions, within six (6) weeks. Accordingly, the Company deposited a sum of 175.08 crore on 22nd August, 2016.

The Hon'ble Supreme Court of India vide its Order and Judgment dated 21st October, 2016, allowed the Appeals filed by the Government against the Judgment and Order of the Hon'ble Allahabad High Court regarding fixation of retail prices. Further, the said order was specific to fixation of retail prices without adhering to the formula/process laid down in DPCO, 1995. The grounds relating to inclusion of certain drugs within the span of price control continues to be sub-judice with the Hon'ble Bombay High Court. The Company has been legally advised that it has a substantially strong case on the merits of the matter, especially under the guidelines/principles of interpretation of the Drug Policy enunciated by the Hon'ble Supreme Court of India. Although, the recent decision of Hon'ble Supreme Court dated 21st October, 2016 referred above was in favour of the Government, basis the facts and legal advice on the matter sub-judice with the Hon'ble Bombay High Court, no provision is considered necessary in respect of the notices of demand received till date aggregating to 1768.51 crore. It may be noted that NPPA in its public disclosure has stated the total demand amount against the Company to be 2567.53 crore, however, the Company has not received any further notices beyond an aggregate amount of 1768.51 crore.3

Note 44: Employee Benefits

Employee Benefits i Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short terms compensated absences, etc., and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

ii Long Term Employee Benefits

The disclosures as per Ind AS-19 are as under:

a. Brief description of the Plans

Defined Contribution Plan:

The Company's defined contribution plan is Employees' Pension Scheme (under the provisions of Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions.

Defined Benefit and other Long term Benefit Plans: i. The Company has two schemes for long term benefits namely, Provident Fund and Gratuity:

333 The provident fund plan, a funded scheme is operated by the Company's Provident Fund

Trust, which is recognised by the Income tax authorities and administered through trustees/ appropriate authorities.

The Company provides for Gratuity, a defined Benefit plan based on actuarial valuation as of the Balance Sheet date, based upon which, the Company contributes all the ascertained liabilities to the Insurer Managed Funds.

ii.333The employees of the Company are also entitled to leave encashment .The provision is made based on actuarial valuation for leave encashment at the year end. b. Charge to the Statement of Profit and Loss i. Based on contribution

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended

As at 31st March, 2016

Employees' Pension Scheme 25.65 27.84
Provident Fund 42.37 45.13
68.02 72.97

ii. Charge towards leave encashment to the Statement of Profit and Loss amounts to 50.48 crore (As at 31st March, 2016 71.33 crore)

c. Disclosures for defined benefit plans based on actuarial reports as on As at 31st March, 2017

in Crore
Particulars 2017 Gratuity (Funded Plan) 2016 Gratuity (Funded Plan)
i. Change in defined benefit obligation
Opening defined benefit obligation 134.06 99.36
Interest cost 10.82 7.96
Current service cost 27.05 20.33
Actuarial (gain)/loss on obligations (8.97) 13.65
Benefits paid (23.23) (7.24)
Liability at the end of the year 139.73 134.06
ii. Change in fair value of assets
Opening fair value of plan assets 96.83 41.78
Expected return on plan assets 7.81 3.35
Actuarial gain/(loss) 1.63 2.94
Contributions by employer 52.02 56.00
Benefits paid (23.23) (7.24)
Closing fair value of plan assets 135.06 96.83
iii. Amount recognised in Balance Sheet
Present value of obligations as at year end (139.73) (134.06)

 

in Crore
Particulars 2017 Gratuity (Funded Plan) 2016 Gratuity (Funded Plan)
Fair value of plan assets as at year end 135.06 96.83
Net asset/(liability) recognised (4.67) (37.23)
iv. Expenses recognised in Statement of Profit and Loss
Current service cost 27.05 20.33
Interest on defined benefit obligation 10.82 7.96
Expected return on plan assets (7.81) (3.35)
Total expense recognised in Statement of Profit and Loss 30.06 24.94
v. Expenses recognised in Statement of Profit and Loss [ OCI ] Actuarial (Gains)/Losses on Obligation For the Period (8.97) 13.65
Return on Plan Assets, Excluding Interest Income (1.63) (2.94)
Change in Asset Ceiling - -
Net (Income)/Expense For the Period Recognized in OCI (10.60) 10.71
vi. Actual return on plan assets Expected return on plan assets 7.81 3.35
Actuarial gain/(loss) on plan assets 1.63 2.94
Actual return on plan assets 9.44 6.29
vii Asset information Insurer managed funds 100% 100%
viii. Expected employer's contribution for the next year 32.04 51.24

The actuarial calculations used to estimate commitments and expenses in respect of gratuity and compensated absences are based on the following assumptions which if changed, would affect the commitment's size, funding requirements and expense:

Principal Actuarial assumptions used For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Discounted rate (per annum) 7.64% 8.07%
Expected rate of return on plan assets 7.64% 8.07%
Expected rate of future salary increase 5.00% p.a. 5.00% p.a.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.

Amount for current period and previous four periods are as follows:

in Crore
Particulars 2017 As at 31st March, 2016 2015 2014 2013
Gratuity
Defined benefit obligation 139.73 134.06 99.36 74.43 59.39
Plan assets (135.06) (96.83) (41.78) (41.23) (33.74)
(Surplus)/Deficit 4.67 37.23 57.58 33.20 25.65

The sensitivity analysis below has been determined based on reasonable possible changes of the respective assumption occurring at the end of the reporting period while holding all other assumptions constant:

in Crore
Particulars For the year ended For the year ended
As at 31st March, 2017 As at 31st March, 2016
Discount rate Increase by 1% Decrease by 1% Increase by 1% Decrease by 1%
Increase / (decrease) in the defined benefit liability (17.30) 21.14 (16.24) 19.89
Salary growth rate Increase by 1% Decrease by 1% Increase by 1% Decrease by 1%
Increase / (decrease) in the defined benefit liability 21.50 (17.84) 20.32 (16.82)
Attrition rate Increase by 1% Decrease by 1% Increase by 1% Decrease by 1%
Increase / (decrease) in the defined benefit liability 5.98 (6.93) (6.85) (8.00)

d. The following table sets out the status of the provident fund plan and the amounts recognised in the Company's Financial Statements as on As at 31st March, 2017

in Crore
Particulars 2017 Provident Fund (Funded Plan) 2016 Provident Fund (Funded Plan)
i. Change in defined benefit obligation
Opening defined benefit obligation 654.84 516.37
Interest cost 56.90 47.18
Current service cost 42.37 45.13
Past Service Cost - -
Employee Contribution 78.09 83.59
Liability transferred in 9.33 11.00
Actuarial (gain)/loss on obligations - -
Benefits paid (76.67) (48.69)
Liability at the end of the year 764.86 654.58
ii. Change in fair value of assets
Opening fair value of plan assets 664.83 524.51
Expected return on plan assets 56.90 47.18
Actuarial gain/(loss) 3.28 2.10
Contributions by employer 120.47 128.73
Transfer of plan assets 9.33 11.00
Benefits paid (76.67) (48.69)
Closing fair value of plan assets 778.14 664.83
iii. Amount recognised in Balance Sheet
Present value of obligations as at year end (764.86) (654.58)
Fair value of plan assets as at year end 778.14 664.83

 

in Crore
Particulars 2017 Provident Fund (Funded Plan) 2016 Provident Fund (Funded Plan)
Funded status (13.28) (10.25)
Unrecognised actuarial gain/(loss) - -
Net asset/(liability) recognised - -
iv. Expenses recognised in Statement of Profit and Loss
Current service cost 42.37 45.13
Past Service Cost - -
Interest cost 56.90 47.18
Interest on defined benefit obligation - -
Expected return on plan assets (56.90) (47.18)
Net actuarial (gain)/loss recognised in the current year - -
Transfer of plan assets - -
Total expense recognised in Statement of Profit and Loss 42.37 45.13
v. Actual return on plan assets
Expected return on plan assets 56.90 47.18
Actuarial (gain)/loss on plan assets (3.28) (2.10)
Actual return on plan assets 53.62 45.08
vi. Asset information
Investment in PSU bonds 368.94 320.62
Investment in Government Securities 331.41 278.89
Bank Special deposit 15.58 15.58
Investment in other securities 24.39 30.57
Private Sector Bonds 4.00 7.11
Equity/Insurer Managed Funds/Mutual Funds 32.82 11.45
Cash and Cash Equivalents 1.00 0.61
Total Assets at the end of the year 778.14 664.83
vii. Principal Actuarial assumptions used
Discounted rate (per annum) 7.64% 8.07%
Expected rate of return on plan assets (per annum) 8.65% 8.80%
The estimates of future salary increases, considered in Actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market. 5.00% p.a. 5.00% p.a
viii. Experience adjustments
Defined benefit obligation 764.86 654.58
Plan assets (778.14) (664.83)
Deficit/(Surplus) (13.28) (10.25)
Experience adjustment on Plan Liabilities -(gain)/loss - -
Experience adjustment on Plan assets -gain/(loss) 3.28 2.10

Note 45. Related Party Disclosures

As per Ind AS-24, "Related Party Disclosures", the related parties where control exists or where significant influence exists and with whom transaction have taken place are as below:

A. Subsidiary Companies including step-down subsidiaries and associate companies are as follows:

Name of the Company

Subsidiaries (held directly)

1 Cipla FZE

2 Goldencross Pharma Pvt. Ltd.

3 Cipla (Mauritius) Ltd.

4 Meditab Specialities Pvt. Ltd.

5 Cipla Medpro South Africa Proprietary Ltd.

6 Cipla Holding B.V.

7 Cipla BioTec Pvt. Ltd.

8 Cipla (EU) Ltd.

9 Saba Investment Ltd.

10 Jay Precision Pharmaceuticals Pvt. Ltd.

11 Cipla Health Limited

Subsidiaries (held indirectly)

12 Four M Propack Pvt. Ltd.**

13 Cipla (UK) Ltd.

14 Cipla Australia Pty. Ltd.

15 Medispray Laboratories Pvt. Ltd.

16 Sitec Labs Pvt. Ltd.

17 Meditab Holdings Ltd.

18 Meditab Specialities New Zealand Ltd.

19 Cipla 3la Ticaret Anonim 3irketi

20 Cipla Kenya Ltd.

21 Cipla Malaysia Sdn. Bhd.

22 Cipla Europe NV

23 Cipla Quality Chemical Industries Ltd.

24 Cipla Croatia d.o.o.

25 Galilee Marketing Proprietary Ltd.

26 Inyanga Trading 386 Proprietary Ltd.

27 Xeragen Laboratories Proprietary Ltd.

28 Cipla Medpro Holdings Proprietary Ltd.

29 Cape to Cairo Exports Proprietary Ltd.

30 Cipla Agrimed Proprietary Ltd.

31 Cipla Dibcare Proprietary Ltd.

32 Cipla Life Sciences Proprietary Ltd.

33 Cipla-Medpro Proprietary Ltd.

34 Cipla-Medpro Distribution Centre Proprietary Ltd.

35 Cipla Medpro Botswana Proprietary Ltd.

36 Cipla Medpro Research and Development Proprietary Ltd.*

37 Cipla Nutrition Proprietary Ltd.

Sr. No. Name of the Company

38 Cipla Vet Proprietary Ltd.

39 Medpro Pharmaceutica Proprietary Ltd.

40 Med Man Care Proprietary Ltd.

41 Breathe Free Lanka (Private) Ltd.

42 Cipla Canada Inc. ***

43 Medica Pharmaceutical Industries Company Ltd.

44 Al Jabal For Drugs And Medical Appliances Company Ltd.

45 Cipla Pharma Lanka (Private) Ltd.

46 Cipla Pharma Nigeria Ltd.

47 Cipla Brasil Importadora E Distribuidora De Medicamentos Ltda.

48 Cipla Maroc SA

49 Cipla Middle East Pharmaceuticals FZ-LLC

50 Quality Chemicals Ltd.

51 Cipla Philippines Inc.

52 Cipla USA Inc.

53 InvaGen Pharmaceuticals Inc.

54 Exelan Pharmaceuticals Inc.

55 Cipla BioTec South Africa Proprietary Ltd ##

56 CIPLA Algrie #

Associates

57 Stempeutics Research Pvt. Ltd.

* De-registered on 6th December, 2016

** Ceased to be subsidiary w.e.f. 1st February, 2017 *** D-registered on 1st March, 2017 ## w.e.f 10th June, 2016 # w.e.f. 6th June, 2016

B. Key Management Personnel

Ms. Samina Vaziralli – Executive Vice-Chairperson *

Mr. Umang Vohra – Managing Director and Global Chief Executive Offcer ** Mr. S. Radhakrishnan – Whole-time Director Mr. Kedar Upadhye – Global Chief Financial Offcer (w.e.f. 1st August, 2016)

Mr. Subhanu Saxena – Managing Director and Global Chief Executive Offcer (resigned w.e.f. close of business hour on 31st August, 2016)

Mr. Rajesh Garg – Executive Director and Global Chief Financial Offcer (Demitted Offce w.e.f. close of business hours on 12th June, 2015)

* appointed as Executive Director (w.e.f. 10th July, 2015) and as Executive Vice-Chairperson (w.e.f. 1st September, 2016)

** Global Chief Operating Offcer and Global Chief Financial Offcer upto 31st3July, 2016; Global Chief Operating Offcer from 1st3August, 2016 to 31st3August, 2016 and Managing Director and Global Chief Executive Offcer w.e.f. 1st3September, 2016

C. Non-Executive Chairman & Non-Executive Vice-Chairman

Dr. Y. K. Hamied – Chairman

Mr. M. K. Hamied – Vice-Chairman

D. Non-Executive Directors

Mr. Ashok Sinha

Mr. Adil Zainulbhai

Ms. Punita Lal

Ms. Naina Lal Kidwai (w.e.f. 6th November, 2015)

Dr. Nachiket Mor (resigned w.e.f. 7th August, 2015)

Ms. Ireena Vittal (w.e.f. 1st December, 2016)

Mr. Peter Lankau ( w.e.f. 10th January, 2017)

Dr. Peter Mugyenyi

E. Entities over which Key Management Personnel are able to exercise significant influence

Cipla Foundation

Hamied Foundation (w.e.f. 3rd February, 2016)

Cipla Cancer & AIDS Foundation

F. Trust over which Entity has control/significant influence

Cipla Employees Stock Option Trust

Cipla Health Employees Stock Option Trust

i. Transactions during the year with related parties as at 31st March:

in Crore
Particulars

Subsidiary

Associates

Key Management Personnel including transactions with relatives of Key Management Personnel Entities over which Key Management Personnel exercise significant influence Total
2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015
Loans repaid 22.25 10.00 30.67 - - - - - - - - - 22.25 10.00 30.67
Investment in Equity 182.86 395.61 708.72 - - - - - - - - - 182.86 395.61 708.72
Loans Given 18.56 0.50 55.67 - - - - - - - - - 18.56 0.50 55.67
Outstanding Payables 176.05 135.02 62.14 - 1.00 0.02 - - - - - - 176.05 136.02 62.16
Outstanding Receivables 605.06 608.75 711.01 - - - - - - - - - 605.06 608.75 711.01
Loan to Subsidiaries 183.20 186.89 179.74 183.20 186.89 179.74

ii. Transactions during the year with related parties for the year ended 31st March:

in Crore
Particulars Subsidiary Key Management Personnel including transactions with relatives of Key Management Personnel

Entities over which Key Management Personnel exercise significant influence

Total
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Interest Received 42.85 23.25 - - - - - - - - 42.85 23.25
Remuneration - - - - 55.85 36.40 - - - - 55.85 36.40
Purchase of Goods 411.06 469.90 0.57 2.01 - - - - - - 411.63 471.91
Processing Charges Paid 115.61 88.97 - - - - - - - - 115.61 88.97
Testing and Analysis Charges Paid 68.10 84.33 - - - - - - - - 68.10 84.33
Freight Charges Paid 0.49 0.66 - - - - - - - - 0.49 0.66
Sale of Goods 1061.39 1046.16 - - - - - - - - 1061.39 1046.16
Sale of Fixed Assets 2.76 17.02 - - - - - - - - 2.76 17.02
Purchase of Fixed Assets 0.03 - - - - - - - - - 0.03 -
Advances Paid against Services - - - - - - - - - - - -
Processing Charges Received 7.82 6.78 - - - - - - - - 7.82 6.78
Service Charges Paid 188.00 435.09 - - - - 2.49 1.76 - - 190.49 436.85
Service Charges Received 22.04 19.65 - - - - - - - - 22.04 19.65
Donations Given - - - - - - 23.30 12.44 - - 23.30 12.44
Rent Received 1.72 1.52 - - 0.00 0.00 - - - - 1.72 1.52
Reimbursement of operating/other expenses 0.56 1.04 - - - - - - - - 0.56 1.04
Reimbursement received of operating/other 13.40 41.89 - - - - - - - - 13.40 41.89
expenses
Royalty received 2.44 0.10 - - - - - - - - 2.44 0.10
Security Deposit taken - - - - - - - - - - - -
Dividend received 11.30 60.92 - - - - - - - - 11.30 60.92
Guarantee given on behalf of subsidiary 3805.72 3644.03 - - - - - - - - 3805.72 3644.03
company

Transactions during the year with related parties:

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
A. Loans Repaid
Meditab Specialities Pvt. Ltd. - - 18.45
Jay Precision Pharmaceuticals Pvt. Ltd. 21.75 10.00 -
Cipla Health Ltd. 0.50 - -
Cipla BioTec Pvt.Ltd. - - 12.22
22.25 10.00 30.67
B. Investment in Equity
Cipla (Mauritius) Ltd. - - 121.34
Cipla Holding B.V. - - 119.62
Cipla (EU) Ltd. 31.19 195.75 37.76
Saba Investment Ltd. - 42.01 257.69
Meditab Specialities Pvt. Ltd. - 2.71 22.00
Cipla BioTec Pvt. Ltd. 151.67 98.14 54.07
Cipla Health Ltd. - 57.00 -
Jay Precision Pharmaceuticals Pvt. Ltd. - - 96.24
182.86 395.61 708.72
C. Loans Given
Jay Precision Pharmaceuticals Pvt. Ltd. - - 35.00
Meditab Specialities Pvt. Ltd. 18.56 - 8.45
Cipla Health Ltd. - 0.50 -
Cipla BioTec Pvt.Ltd. - - 12.22
18.56 0.50 55.67
D. Outstanding Payables
Goldencross Pharma Pvt. Ltd. 45.25 48.82 16.08
Medispray Laboratories Pvt. Ltd. - 9.59 -
Four M Propack Pvt. Ltd. - - 1.06
Sitec Labs Pvt. Ltd. 14.37 13.47 12.33
Cipla Health Ltd. - 6.46 -
Cipla Europe NV - 30.58 -
Cipla Pharma Nigeria Ltd. - 0.18 -
Cipla (UK) Ltd. 0.44 0.29 6.51
Cipla Australia Pty. Ltd. - 1.16 1.58
Cipla Ilac Ticaret Anonim Sirketi 0.07 0.07 0.15
Cipla Kenya Ltd. 0.26 0.75 0.34
Cipla USA Inc. - 2.91 -
Cipla Medpro Manufacturing Proprietary Ltd. - - 0.04
Cipla Malaysia Sdn. Bhd. 1.52 0.40 0.30

 

in Crore
Particulars

As at 31st March, 2017

As at 31st March, 2016

1st April, 2015
Cipla Canada Inc.

-

4.70

2.86
Cipla (Mauritius) Ltd.

-

-

2.81
Meditab Holdings Ltd.

-

-

2.15
Stempeutics Research Pvt. Ltd.

-

1.00

0.02
Cipla (EU) Ltd.

103.35

-

-
Jay Precision Pharmaceuticals Pvt. Ltd.

10.79

9.47

15.93
Cipla Quality Chemical Industries Ltd.

-

6.17

-

176.05

136.02

62.16
E. Outstanding Receivables
Four M Propack Pvt. Ltd.

-

0.67

-
Al-Jabal For Drugs and Medical Appliances Company Ltd.

67.86

90.37

39.03
Meditab Specialities Pvt. Ltd.

51.36

112.57

124.00
Medispray Laboratories Pvt. Ltd.

31.23

-

10.44
Quality Chemicals Ltd.

7.01

9.14

-
Breathe Free Lanka Private Ltd.

62.56

52.63

-
Cipla BioTec Pvt. Ltd.

0.44

0.18

0.01
Cipla Quality Chemical Industries Ltd.

4.12

-

3.77
Cipla (EU) Ltd.

-

93.00

76.74
Cipla Australia Pty. Ltd.

10.54

-

-
Cipla USA Inc.

148.55

-

-
Cipla Agrimed Proprietary Ltd.

-

-

4.82
Cipla Life Sciences Proprietary Ltd.

-

-

30.13
Cipla Vet Proprietary Ltd.

-

-

1.68
Cipla Medpro South Africa (Pty) Ltd.

207.59

246.75

259.96
Cipla Medpro Manufacturing Proprietary Ltd.

-

-

0.08
Cipla USA Inc.

-

-

59.53
Cipla Pharma Lanka (Private) Ltd.

-

-

96.45
Cipla Europe NV

2.07

-

4.21
Cipla Holding B.V.

7.52

0.17

0.16
Cipla Croatia d.o.o.

0.69

2.64

-
Cipla Health Ltd.

3.52

-

-
Medica Pharmaceutical Industries Company Ltd.

-

0.63

-

605.06

608.75

711.01
F. Loan to Subsidiaries
Cipla Health Ltd.

-

0.50

-
Jay Precision Pharmaceuticals Pvt. Ltd

3.25

25.00

35.00
Meditab Specialities Pvt. Ltd.

179.95

161.39

144.74

183.20

186.89

179.74
Transactions during the year with related parties:

in Crore

Particulars

For the year ended As at 31st March, 2017

For the year ended As at 31st March, 2016

G. Interest Received
Jay Precision Pharmaceuticals Pvt. Ltd.

1.61

3.73

Meditab Specialities Pvt. Ltd.

18.56

16.65

Cipla Health Ltd.

0.001

0.01

Cipla (EU) Ltd.

14.67

2.86

InvaGen Pharmaceuticals Inc.

8.01

-

42.85

23.25

H. Remuneration
Dr. Y. K. Hamied

2.02

0.03

Mr. M. K. Hamied

2.09

0.11

Ms. Samina Vaziralli

3.90

2.47

Mr. Umang Vohra

12.90

4.40

Mr. S. Radhakrishnan

4.06

3.37

Mr. Kedar Upadhye

3.13

-

Mr. Ashok Sinha

0.51

0.54

Mr. Adil Zainulbhai

0.42

0.50

Ms. Punita Lal

0.38

0.41

Ms. Naina Lal Kidwai

0.43

0.17

Dr. Nachiket Mor

-

0.14

Ms. Ireena Vittal

0.14

-

Mr. Peter Lankau

0.11

-

Dr. Peter Mugyenyi

0.42

0.46

Mr. Subhanu Saxena

25.34

12.36

Mr. Rajesh Garg

-

11.44

55.85

36.40

I. Purchase of Goods
Goldencross Pharma Pvt. Ltd.

133.27

158.81

Medispray Laboratories Pvt. Ltd.

155.14

147.62

Meditab Specialities Pvt. Ltd.

0.94

1.05

Four M Propack Pvt. Ltd.

6.79

8.12

Sitec Labs Pvt. Ltd.

1.07

3.33

Jay Precision Pharmaceuticals Pvt. Ltd.

91.96

103.29

Cipla Quality Chemical Industries Ltd.

21.62

47.68

Cipla Health Ltd.

0.27

-

Stempeutics Research Pvt. Ltd.

0.57

2.01

411.63

471.91

J. Processing Charges Paid
Goldencross Pharma Pvt. Ltd.

43.04

11.29

Medispray Laboratories Pvt. Ltd.

43.12

45.53

Meditab Specialities Pvt. Ltd.

29.45

32.15

115.61

88.97

 

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
K. Testing and Analysis Charges Paid
Sitec Labs Pvt. Ltd. 68.10 84.33
68.10 84.33
L. Freight Charges Paid
Medispray Laboratories Pvt. Ltd. - 0.01
Meditab Specialities Pvt. Ltd. - 0.41
Goldencross Pharma Pvt. Ltd. 0.49 0.24
0.49 0.66
M. Sale of Goods
Goldencross Pharma Pvt. Ltd. 1.73 3.19
Meditab Specialities Pvt. Ltd. 3.75 4.61
Medispray Laboratories Pvt. Ltd. 37.12 39.47
Cipla Quality Chemical Industries Ltd. 23.92 24.08
Cipla Health Ltd. 0.53 0.10
Sitec Labs Pvt. Ltd. 0.66 0.61
Cipla (EU) Ltd. (22.59) 15.48
Cipla Europe NV 89.97 26.73
Cipla Agrimed Proprietary Ltd. - 0.95
Cipla Life Sciences Proprietary Ltd. - 43.76
Cipla Vet Proprietary Ltd. - 5.68
Cipla Medpro South Africa (Pty) Ltd. 439.58 595.06
Cipla Australia Pty. Ltd. 11.58 1.14
Cipla USA Inc. 243.20 15.53
Al-Jabal For Drugs and Medical Appliances Company Ltd. 124.58 146.95
Quality Chemicals Ltd. 8.22 8.51
Invagen Pharmaceuticals Inc. 0.03 -
Breathe Free Lanka Private Ltd. 99.11 114.31
1061.39 1046.16
N. Sale of Assets
Goldencross Pharma Pvt. Ltd. 1.49 0.51
Medispray Laboratories Pvt. Ltd. - 0.03
Cipla Health Ltd. 1.27 16.14
Cipla Medpro South Africa (Pty) Ltd. - 0.34
2.76 17.02
O. Purchase of Assets
Medispray Laboratories Pvt. Ltd. 0.03 -
0.03 -

 

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
P. Processing Charges Received
Meditab Specialities Pvt. Ltd. 1.99 1.23
Medispray Laboratories Pvt. Ltd. 5.83 5.55
7.82 6.78
Q. Service Charges Paid:
Cipla BioTec Pvt. Ltd. 0.05 1.37
Cipla (EU) Ltd. 54.42 62.77
Cipla (UK) Ltd. 2.02 3.23
Cipla Australia Pty. Ltd. 11.87 11.64
Cipla Ilac Ticaret Anonim Sirketi 1.16 0.86
Cipla USA Inc. 31.71 81.53
Cipla Kenya Ltd. 6.38 6.67
Cipla Malaysia Sdn. Bhd. 9.51 5.47
Cipla Europe NV 70.76 258.22
Cipla Canada Inc. (0.01) 1.64
Cipla Pharma Nigeria Ltd. 0.002 1.69
Quality Chemicals Ltd. 0.13 -
Hamied Foundation 2.49 1.76
190.49 436.85
R. Service Charges Received
Cipla BioTec Pvt. Ltd. 3.81 2.55
Cipla Health Ltd. - 0.80
Saba Investment Ltd. 0.27 -
Cipla Quality Chemical Industries Ltd. 17.96 16.30
22.04 19.65
S. Donations Given
Cipla Foundation 16.50 12.08
Hamied Foundation 1.64 0.36
Cipla Cancer & Aids Foundation 5.16 -
23.30 12.44
T. Rent Received
Cipla BioTec Pvt. Ltd. 1.72 1.52
Dr. Y. K. Hamied 0.005 0.005
1.72 1.52
U. Reimbursement of operating/other expenses
Meditab Specialities Pvt. Ltd. 0.45 0.77
Cipla BioTec Pvt. Ltd. - 0.10
Medispray Laboratories Pvt. Ltd. 0.11 0.17
0.56 1.04

 

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
V. Reimbursement received of operating/other expenses
Goldencross Pharma Pvt. Ltd. 0.35 0.01
Meditab Specialities Pvt. Ltd. 0.24 0.003
Jay Precision Pharmaceuticals Pvt. Ltd 0.62 0.30
Cipla Health Ltd. 13.04 38.09
Cipla (EU) Ltd. 0.26 5.69
Cipla (UK) Ltd. 0.06 0.65
Cipla Medpro South Africa (Pty) Ltd. 3.52 (0.53)
Cipla Quality Chemical Industries Ltd. 0.42 1.29
Cipla USA Inc. (5.14) (0.88)
Medispray Laboratories Pvt. Ltd. 0.57 0.004
Cipla BioTec Pvt. Ltd. 0.23 0.13
Sitec Labs Pvt. Ltd. - 0.10
Cipla Europe NV (1.86) (3.24)
Invagen Pharmaceuticals Inc. 0.96 -
Cipla Holding B.V. 0.13 0.28
13.40 41.89
W. Royalty received
Cipla Health Ltd. 2.44 0.10
2.44 0.10
X. Dividend received
Saba Investment Ltd. 5.80 -
Cipla (Mauritius) Ltd. 5.50 -
Meditab Specialities Pvt. Ltd. - 60.92
11.30 60.92
Y. Guarantee given on behalf of subsidiary Company
Cipla (EU) Ltd. 1530.46 3644.03
Invagen Pharmaceuticals Inc. 2275.26 -
3805.72 3644.03

 

1 26,781
2 7,152
3 9,000
4 36,773
5 20,040

Note 46: Employee Stock Option Schemes

The Company has implemented "ESOS 2013", "ESOS 2013 - A" and "ESOS 2013 - B" as approved by the Shareholders on 8th April, 2013, 22nd August, 2013 and 22nd August, 2013 respectively. Details of the Options granted during the year under the Scheme(s) are as given below:

Scheme Details Grant date No. of Options Granted Exercise Price () per Option Vesting period Exercise Period
ESOS 2013 - A 28-Apr-16 27,702 2.00 2 years 5 years from Vesting date
ESOS 2013 - A 11-Aug-16 20,280 2.00 2 years 5 years from Vesting date
ESOS 2013 - A 09-Nov-16 587,970 2.00 2 years 5 years from Vesting date

The options are granted at an exercise price, which is in accordance with the relevant SEBI guidelines in force, at the time of such grants. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of 2 each.

Weighted average Share price for options exercised during the year:

Particulars ESOS - 2013 ESOS - 2013 - A ESOS - 2013 - B
Weighted average Share price 563.50 530.20 -

Stock Option activity under the Scheme(s) for the year ended As at 31st March, 2017 is set out below:

ESOS 2013

Particulars No. of options Weighted Average Exercise Price () per Option Range of Exercise Price () per Option Weighted Average remaining Contractual life (Years)
Outstanding at the beginning of the year 1,000,000 197.50 197.50 5.22
Granted during the year - - - -
Forfeited/Cancelled during the year 400,000 197.50 197.50 -
Exercised during the year 600,000 197.50 197.50 -
Outstanding at the end of the year - - - -
Exercisable at the end of the year - - - -

ESOS 2013 - A

Particulars No. of options Weighted Average Exercise Price () per Option Range of Exercise Price () per Option Weighted Average remaining Contractual life (Years)
Outstanding at the beginning of the year 1,978,450 2.00 2.00 5.58
Granted during the year 635,952 2.00 2.00 -
Forfeited/Cancelled during the year 381,981 2.00 2.00 -
Exercised during the year 531,378 2.00 2.00 -
Outstanding at the end of the year 1,701,043 2.00 2.00 5.36
Exercisable at the end of the year 514,889 2.00 2.00 17.57

ESOS 2013 - B

Particulars No. of options Weighted Average Exercise Price () per Option Range of Exercise Price () per Option Weighted Average remaining Contractual life (Years)
Outstanding at the beginning of the year - - - -
Granted during the year - - - -
Forfeited/Cancelled during the year - - - -
Exercised during the year - - - -
Outstanding at the end of the year - - - -
Exercisable at the end of the year - - - -

The Black Scholes valuation model has been used for computing weighted average fair value considering the following inputs:

Particulars ESOS - 2013 ESOS - 2013 - A ESOS - 2013 - B
Expected Dividend Yield (%) 0.37%
Expected Volatility 24.83%
No Options
Risk-free interest rate 6.64% No Options
Weighted average Share Price () Granted during the year 535.07 Granted during the year
Exercise price () 2.00
Expected life of options granted in years 4.50
Weighted average fair value of Options () 524.73

The effect of share-based payment transactions on the entity's Profit or Loss for the period and earnings per share is presented below:

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Profit after Tax as reported 974.94 1462.30
ESOS cost 22.18 32.41
Earnings per share
Basic 12.13 18.21
Diluted 12.11 18.16

Note 47: Segment Information

In accordance with Ind AS-108 "Operating Segments", segment information has been given in the Consolidated Financial Statements of Cipla Ltd., and therefore, no separate disclosure on segment information is given in these financial statements.

Note 48: Details of Loans given, Investments made and Guarantees given covered under Section 186(4) of the Companies Act, 2013 a) Loans and Advances in the nature of Loans given to Subsidiaries and Associates

in Crore
Name of the Company Nature As at 31st March, 2017 Maximum balance during the year As at 31st March, 2016 Maximum balance during the year As at 1st April, 2015 Maximum balance during the year
1 Meditab Specialities Pvt. Ltd. Subsidiary 179.95 179.95 161.39 161.39 144.74 163.19
2 Cipla BioTec Pvt. Ltd. Subsidiary - - - - - 12.22
3 Jay Precision Pharmaceuticals Subsidiary 3.25 25.00 25.00 35.00 35.00 35.00
Pvt. Ltd.
4 Cipla Health Ltd. Subsidiary - 0.50 0.50 0.50 - -

b) Loans given to Others

in Crore
Name of the Company As at As at 31st March, 2017 As at As at 31st March, 2016 As at 1st April, 2015
1 Bakul Pharma Pvt. Ltd. - - 0.80
2 U&I System Design Ltd.* 2.25 2.25 2.25
* The loan is considered doubtful and has been fully provided for.

Notes: i. All the above loans have been given for business purposes. ii. The loans and advances shown above, fall under the category of ‘Non-current Financial Assets' and are re-payable within 3 to 6 years except Current Loans and Advances to Bakul Pharma Pvt. Ltd. and Cipla Health Ltd. iii. Loans given to employees as per the Company's policy are not considered. c) Investments made are given under the respective heads.

d) Corporate Guarantees given by the Company in respect of Loans and Interest Rate Swaps As at 31st March, 2017

in Crore
Name of the Company As at As at 31st March, 2017 As at As at 31st March, 2016 As at 1st April, 2015
Cipla (EU) Ltd. 1530.46 3644.03 -
Invagen Pharmaceuticals Inc. 2275.26 - -

 

Particulars No. of Shares
Meditab Specialities Pvt. Ltd. has made the following investments in its subsidiaries
a. Meditab Holdings Ltd. 4,46,20,100
b.Medispray Laboratories Pvt. Ltd. 51,020
c. Sitec Labs Pvt. Ltd. 10,000
Meditab Specialities Pvt. Ltd. has made the following investments in its associates
aStempeutics Research Pvt. Ltd. 2,05,02,525
Meditab Holdings Ltd. has made the following investments in its subsidiaries
a. Cipla Quality Chemical Industries Ltd. 1,86,42,99,646

Note 49:

A. Fair Value Measurement

The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Fair value of cash and current deposits, trade and other current receivables, trade payables, other current liabilities, current loans from banks and other financial institutions approximate their carrying amounts largely due to the current maturities of these instruments.

Financial Instruments with fixed and variable interest rates are evaluated by the company based on parameters such as interest rate and individual credit worthiness of the counterparties. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

Fair Value Hierarchy

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 – Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The carrying value and fair value of financial instruments by categories as of As at 31st March, 2017 were as follows:

in Crore
Particulars As at 31st March, 2017 Level 1 Level 2 Level 3
Financial assets at amortised cost:
Investments (Refer Note 5 ) 3647.71 3647.71
Loans (Refer Note 6 & 15) 225.28 225.28
Trade Receivables (Refer Note 12) 1938.79 1938.79
Cash and Cash Equivalents (Refer Note 13) 44.60 44.60
Bank balance other than cash and cash equivalents 13.86 13.86
(Refer Note 14)
Other Financial Assets (Refer Note 7 & 16) 263.95 263.95
Total 6134.19
Financial assets at fair value through Profit and Loss: -
Investments (Refer Note 11) 638.18 638.18
Financial assets at fair value through other
Comprehensive Income:
Investments (Refer Note 5) - -
Financial liabilities at amortised cost:
Borrowings (Refer Note 20) 324.33 324.33
Other financial liabilities (Refer Note 21 & 25) 500.66 500.66
Trade payables (Refer Note 24) 1298.21 1298.21
Total 2123.20
Financial liabilities at fair value through Statement of
-
Profit and Loss:

The carrying value and fair value of financial instruments by categories as of As at 31st March, 2016 were as follows:

in Crore
Particulars As at 31st March, 2016 Fair Value
Level 1 Level 2 Level 3
Financial Assets at Amortised Cost:
Investments (Refer Note 5) 3716.26 3716.26
Loans (Refer Note 6 & 15) 230.29 230.29
Trade Receivables (Refer Note 12) 1896.41 1896.41
Cash and Cash Equivalents (Refer Note 13) 39.76 39.76
Bank balance other than cash and cash equivalents (Refer Note 14) 13.25 13.25
Other Financial Assets (Refer Note 7 & 16) 65.77 65.77
Total 5961.74
Financial assets at fair value through Profit and Loss:
Investments (Refer Note 11) 539.52 506.94 32.58
Financial assets at fair value through other Comprehensive
Income:
Investments (Refer Note 5) - -
Financial liabilities at amortised cost:
Borrowings (Refer Note 20) 1131.81 1131.81
Other financial liabilities (Refer Note 21 & 25) 526.14 526.13
Trade payables (Refer Note 24) 990.84 990.84
Total 2648.79
Financial liabilities at fair value through Statement of Profit and
-
Loss:

The carrying value and fair value of financial instruments by categories as of 1st April, 2015 were as follows:

in Crore
As at Fair Value
Particulars
1st April, 2015 Level 1 Level 2 Level 3
Financial Assets at Amortised Cost:
Investments (Refer Note 5 ) 3320.65 3320.65
Loans (Refer Note 6 & 15) 223.06 223.06
Trade Receivables (Refer Note 12) 2019.89 2019.89
Cash and Cash Equivalents (Refer Note 13) 64.34 64.34
Bank balance other than cash and cash equivalents (Refer Note 14) 18.42 18.42
Other Financial Assets (Refer Note 7 & 16) 99.38 99.38
Total 5745.74
Financial assets at fair value through Profit and Loss:
Investments (Refer Note 11) 384.46 376.03 8.43
Financial assets at fair value through other Comprehensive
Income:
Investments (Refer Note 5 ) 114.78 114.78
Financial liabilities at amortised cost:
Borrowings (Refer Note 20) 1380.61 1380.61
Other financial liabilities (Refer Note 21 & 25) 420.63 420.63
Trade payables (Refer Note 24) 1382.23 1382.23
Total 3183.47
Financial Liabilities at Fair Value through Statement of Profit and
-
Loss:

B. Financial Risk Management Objectives and Policies

The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effect s on its financial performance.

The Company's financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and financial assets includes trade receivables and other receivables etc. that arise from its operation.

The Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel. The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has Different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.

The Company has instituted a self governed Risk Management framework based on identification of potential risk areas, evaluation of risk intensity, and clear- cut risk mitigation policies, plans and procedures both at the enterprise and operating levels. The framework seeks to facilitate a common organisational understanding of the exposure to various risks and uncertainties at an early stage, followed by timely and effect ive mitigation. The Audit Committee of the Board reviews the risk management framework at periodic intervals. Our risk management procedures ensure that the management controls various business related risks through means of a properly defined framework.

Market risk

The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales and services and purchases from overseas suppliers in various foreign currencies. Market Risk is the risk that changes in market prices such as foreign exchange rates will effect groups income or value of its holding financial assets/ instruments.

The Company also holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the Rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company's operations are adversely affect ed as the Rupee appreciates/ depreciates against US dollar (USD), Euro (EUR), South African Rand (ZAR) and British Pound (GBP).

(a) Foreign Exchange Derivatives and Exposures outstanding at the year end

in Crore

Nature of Instrument Currency Cross Currency As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Forward contracts - Sold USD INR 428.01 238.52 799.43
Forward contracts - Sold ZAR INR 221.93 233.81 225.99
Forward contracts - Sold EUR INR 38.11 - -
Forward contracts - Bought USD INR - 205.00 535.78
Unhedged Foreign Exchange Exposures:
Receivables 1105.61 1354.91 782.52
Payables 517.51 634.55 548.06
Current Borrowings 324.25 917.63 843.75

Note: The Company uses forward contracts/derivatives for hedging purposes and/or reducing interest costs.

(b) Foreign Currency Risk from Financial Instruments as of:

in Crore
As at 31st March, 2017
Particulars USD EUR GBP Other Currency Total
Trade Receivables 925.96 183.47 (5.23) 1.41 1105.61
Payables (416.80) (68.20) (5.02) (27.49) (517.51)
Borrowings (324.25) - - - (324.25)
Net Assets/(Liabilities) 184.91 115.27 (10.25) (26.08) 263.85
in Crore
As at 31st March, 2016
Particulars
USD EUR GBP Other Currency Total
Trade Receivables 925.87 304.40 9.53 115.12 1354.92
Payables (477.00) (117.54) (0.46) (39.55) (634.55)
Borrowings (917.63) (917.63)
Net Assets/(Liabilities) (468.76) 186.86 9.07 75.57 (197.26)
in Crore
As at 1st April, 2015
Particulars
USD EUR GBP Other Currency Total
Trade Receivables 386.83 193.81 26.21 175.67 782.52
Payables (335.02) (163.55) (49.49) (548.06)
Borrowings (843.75) (843.75)
Net Assets/(Liabilities) (791.94) 30.26 26.21 126.18 (609.29)

Sensitivity Analysis

A reasonably possible change in foreign exchange rates by 2% would have increased/ (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables in particular interest rates remain constant.

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016 For the year ended 1st April, 2015
Movement in Exchange Rate
USD INR 2% 2% 2%
Euro INR 2% 2% 2%
GBP INR 2% 2% 2%
Impact on Profit/Loss
USD INR 3.70 (9.38) (15.84)
Euro INR 2.31 3.74 0.61
GBP INR (0.21) 0.02 0.05

Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Exposure to interest rate risk

Company's interest rate risk arises from borrowings.3 The Company adopts a policy of ensuring that maximum of its interest rate risk exposure is at a fixed rate. The interest rate profile of the Company's interest-bearing financial instruments as reported to the management of the Company is as follows.

The Company's interest-bearing financial instruments is reported as below:

in Crore
Particulars As at As at 31st March, 2017 As at As at 31st March, 2016 As at 1st April, 2015
Fixed Rate Instruments
Financial Assets 3.78 1.34 5.13
Financial Liabilities - - -
Variable Rate Instruments - - -
Financial Assets - - -
Financial Liabilities 324.26 1131.68 1380.20

Cash Flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 50 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Impact on Profit / Loss
Increase (1.62) (5.66)
Decrease 1.62 5.66

The risk estimates provided assume a parallel shift of 50 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Credit Risk

Credit risk refers to the risk of default on its obligation by the customer / counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is carrying value of respective financial assets.

Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by each business segment through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The group uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as default risk of industry, credit default swap quotes, credit ratings from international credit rating agencies and historical experience for customers.

Credit risk on cash and cash equivalents is limited as we generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, quoted bonds issued by government and quasi government organisations and certificates of deposit which are funds deposited at a bank for a specified time period.

Ageing of Trade Receivable
in Crore
Particulars Days
0-180 180-365 Above 365
As on As at 31st March, 2017 1231.76 44.53 113.02
As on As at 31st March, 2016 1241.53 75.73 94.75
As on 1st April, 2015 1276.45 57.99 105.54

Liquidity Risk

The Company's principle sources of liquidity are cash and cash equivalents, current investments and the cash flow that is generated from operations. The Company believes that the working capital is su3cient to meet its current requirements. Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding.

The table below provides details regarding the contractual maturities of significant financial liabilities as of 31st March,2017:

Particulars As at As at 31st March, 2017 Total Less than 1 year 1-2 years 2-5 years Above 5 years
Borrowings 324.33 324.33 324.33 0.07 - -
Trade Payables 1298.21 1298.21 1298.21 - - -
Other Financial Liabilities 500.66 500.66 455.60 - - 45.06

The table below provides details regarding the contractual maturities of significant financial liabilities as of 31stMarch, 2016:

Particulars As at 31st March, 2016 Total Less than 1 year 1-2 years 2-5 years Above 5 years
Borrowings 1131.81 1131.81 1131.68 0.13 - -
Trade Payables 990.84 990.84 990.84 - - -
Other Financial Liabilities 526.13 526.13 484.02 2.11 - 40.00

Note 50. Corporate Social Responsibility (CSR) Expenditure

The Company has incurred a total expenditure of 28.25 crore, which is being debited to the profit and loss account for the year ended As at 31st March, 2017

in Crore
Nature of Expenses Schedule in the Financial Statements For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Donation to the Trusts Set for CSR purposes Others expenses (Note 36) 26.80 19.50
Administrative expenses incurred in connection with supervising the projects handled by the trusts Others expenses (Note 36) 1.45 0.98
Total 28.25 20.48

The CSR committee constituted by the Board of Directors of the Company under Section 135 of the Act supervises all the expenditure incurred for CSR purposes. The Company makes contribution to two trusts being set up to execute and manage the projects being undertaken as directed and monitored by the CSR committee.

Following is the information regarding projects undertaken and expenses incurred on CSR activities during the year ended As at 31st March, 2017:

i.33333 Gross amount required to be spent by the Company during the year - 33.38 crore (As at 31st March, 2016 35.80 crore).

ii.33333Amount spent during the year (by way of contribution to the trusts and projects undertaken).

in Crore
For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Amount spent during the year In cash Yet to be paid in cash Total In cash Yet to be paid in cash Total
Construction/Acquisition of Any Asset 5.07 - 5.07 2.15 - 2.15
On Purposes Other Than Above 21.81 - 21.81 17.34 - 17.34
Administrative Expenses 1.37 - 1.37 0.98 - 0.98
28.25 - 28.25 20.47 - 20.47

Note 51

A. Risk Management

The Company's objectives when managing capital are to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares or sell new assets to reduce debt.

Net Debt = Total Borrowings less Cash and Cash Equivalents including Current Investments. Total ‘Equity' is as shown in the Balance Sheet.

in Crore
Particulars As at 31st March, 2017 As at 31st March, 2016 1st April, 2015
Net Debt (358.38) 552.60 931.82
Total Equity 12800.51 11985.88 10679.71
Net Debt to Equity Ratio (3%) 5% 9%

B. Dividend

in Crore
Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Dividend on Equity Shares paid during the year
Final Dividend for FY 2016-17 [ 2.00 (FY 2015-16 2.00) per Equity Share of 193.58 180.92
2.00 each] including Tax on Dividend
Total 193.58 180.92

Proposed Dividend:

The Board of Directors at its meeting held on 25th May, 2017 have recommended a payment of final dividend of 2.00 per equity share of the face value of 2 each for the financial year ended As at 31st March, 2017. The same amounts to 193.66 crore including dividend distribution tax.

The above is subject to approval at the ensuing Annual General Meeting of the Company and hence is not recognised as a liability.

Note 52: Earnings Per Share (EPS)

Particulars For the year ended As at 31st March, 2017 For the year ended As at 31st March, 2016
Profit after Tax as per Statement of Profit and Loss ( in Crore) 974.94 1462.30
Basic Weighted Average No. of Shares Outstanding 803,979,037 803,140,466
Basic Earnings Per Share 12.13 18.21
ESOSs Outstanding 1,338,647 2,278,511
Weighted Average Number of Equity Share Adjusted for the effect of Dilution 805,317,684 805,418,977
Diluted Earnings Per Share 12.11 18.16

Note 53: First time adoption of Indian Accounting Standards

The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate A3airs with effect from 1st April, 2016,with a transition date of 1st April, 2015. Ind AS 101 ‘First-time Adoption of Indian Accounting Standards' requires that all Ind AS standards and interpretations that are issued and effect ive for the first Ind AS financial statements which is for the year ended As at 31st March, 2017 for the company, be applied retrospectively and consistently for all financial years presented.

Consequently, in preparing these Ind AS financial statements, the Company has availed certain exemptions and complied with the mandatory exceptions provided in Ind AS 101, as explained below. The resulting Difference of, 410.44 crore, in the carrying values of the assets and liabilities as at the transition date and 353.41 crore As at 31st March, 2016 between the Ind AS and Previous GAAP have been recognised directly in other equity.

1. Exemptions and Exceptions availed:

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

(a) Deemed Cost

The Company has opted para D7 AA and accordingly considered the carrying value of property, plant and equipments, Intangible assets and Investment Properties as deemed cost as at transition date.

(b) Designation of previously recognised Financial Instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.3

The Company has elected to apply this exemption for its investment in equity instruments.

(c) De-recognition of Financial Assets and Liabilities

The Company has elected to apply de-recognition requirements for financial assets and liabilities under Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

(d) Classification and measurement of Financial Assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist on the date of transition to Ind AS.

(e) Estimates

Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS except as a part of transition where following estimates were required by Ind AS and not required by Previous GAAP Impairment of financial assets based on expected credit loss model.

2. Reconciliation between previous GAAP and Ind AS

i) Effect of Ind AS adoption on the Balance Sheet as at 1st April, 2015 Previous GAAP* Effect of transition of Ind AS Ind AS
ASSETS
Non-Current Assets
Property, Plant and Equipment 3468.33 (18.52) 3449.81
Capital Work-in-Progress 339.00 - 339.00
Investment Properties 0.33 - 0.33
Intangible Assets 125.29 0.29 125.58
Intangible Assets under Development 21.71 - 21.71
Financial Assets
Investments 4036.66 (601.23) 3435.43
Loans 290.15 (79.41) 210.74
Other Financial Assets 81.28 (28.17) 53.11
Current Tax Assets (net) 138.04 - 138.04
Other Non-Current Assets 148.52 41.23 189.75
8649.31 (685.81) 7963.50
Current Assets
Inventories 3289.20 - 3289.20
Financial Assets
Investments 384.11 0.35 384.46
Trade Receivables 2042.78 (22.89) 2019.89
Cash and Cash Equivalents 64.34 - 64.34
Bank Balance other than Cash and Cash Equivalents 18.42 - 18.42
Loans 12.32 - 12.32
Other Financial Assets 24.56 21.71 46.27
Other Current Assets 706.78 - 706.78
6542.51 (0.83) 6541.68
15191.82 (686.64) 14505.18
EQUITY AND LIABILITIES
Equity
Share Capital 160.59 - 160.59
Other Equity 10929.56 (410.44) 10519.12
11090.15 (410.44) 10679.71
Non-current Liabilities
Financial Liabilities
Borrowings 0.41 - 0.41
Other Financial Liabilities 90.00 (13.91) 76.09
Provisions 101.93 - 101.93
Deferred Tax Liabilities (net) 330.59 (216.06) 114.53
Other Non-current Liabilities - 81.16 81.16
522.93 (148.81) 374.12
Current Liabilities
Financial Liabilities
Borrowings 1380.20 - 1380.20
Trade Payables 1382.23 - 1382.23
Other Financial Liabilities 352.02 (7.48) 344.54
Other Current Liabilities 191.63 7.38 199.01
Provisions 272.67 (127.30) 145.37
3578.75 (127.40) 3451.35
4101.68 (276.21) 3825.47
15191.83 (686.65) 14505.18

* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purposes of this note.

2. Reconciliation between previous GAAP and Ind AS

ii) Effect of Ind AS adoption on the Balance Sheet As at 31st March, 2016 Previous GAAP* Effect of transition of Ind AS Ind AS
ASSETS
Non-current Assets
Property, Plant and Equipment 3724.44 (22.16) 3702.28
Capital Work-in-Progress 512.81 - 512.81
Investment Properties 0.33 - 0.33
Intangible Assets 121.78 2.05 123.83
Intangible Assets Under Development 37.91 - 37.91
Financial Assets
Investments 4317.48 (601.22) 3716.26
Loans 282.13 (62.76) 219.37
Other Financial Assets 68.20 (28.16) 40.04
Current Tax Assets (net) 172.03 - 172.03
Other Non-current Assets 207.07 39.75 246.82
9444.18 (672.50) 8771.68
Current Assets
Inventories 2918.47 - 2918.47
Financial Assets
Investments 539.00 0.52 539.52
Trade Receivables 1900.85 (4.44) 1896.41
Cash and Cash Equivalents 39.76 - 39.76
Bank Balance other than Cash and Cash Equivalents 13.25 - 13.25
Loans 10.92 - 10.92
Other Financial Assets 20.30 5.43 25.73
Other Current Assets 1023.46 (0.15) 1023.31
6466.01 1.36 6467.37
15910.19 (671.14) 15239.05
EQUITY AND LIABILITIES
Equity
Share Capital 160.68 - 160.68
Other Equity 12178.61 (353.41) 11825.20
12339.29 (353.41) 11985.88
Non-current Liabilities
Financial Liabilities
Borrowings 0.13 - 0.13
Other Financial Liabilities 42.12 - 42.12
Provisions 132.00 - 132.00
Deferred Tax Liabilities (net) 315.45 (279.60) 35.85
Other Non-current Liabilities - 88.60 88.60
489.70 (191.00) 298.70
Current Liabilities
Financial Liabilities
Borrowings 1131.68 - 1131.68
Trade Payables 990.84 - 990.84
Other Financial Liabilities 491.83 (7.81) 484.02
Other Current Liabilities 90.25 8.46 98.71
Provisions 376.60 (127.38) 249.22
3081.20 (126.73) 2954.47
3570.90 (317.73) 3253.17
15910.19 (671.14) 15239.05

* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purposes of this note.

2. Reconciliation between previous GAAP and Ind AS

iii) Effect of Ind AS adoption on the Statement of Profit and Loss for the year ended As at 31st March, 2016 Previous GAAP* Effect of transition of Ind AS Ind AS
Revenue from Operations
Revenue from Sale of Products 11887.35 (58.61) 11828.74
Other Operating Income 298.88 (9.90) 288.98
12186.23 (68.51) 12117.72
Other Income 259.14 21.16 280.30
12445.37 (47.35) 12398.02
Expenditure
Cost of Materials Consumed 3633.34 - 3633.34
Purchases of stock-in-trade 1037.56 - 1037.56
Changes in Inventories of Finished Goods, 228.35 - 228.35
Work-in-Progress and Stock-in-Trade
Employee Benefits Expenses 1789.65 (11.09) 1778.56
Finance Costs 132.52 14.55 147.07
Depreciation, Impairment and Amortisation Expenses 440.81 1.88 442.69
Other Expenses 3443.61 (57.13) 3386.48
Impairment of Investment - - -
10705.84 (51.79) 10654.05
Profit Before Tax 1739.53 4.44 1743.97
Tax expenses
Current Tax (net) 356.64 - 356.64
Deferred Tax Charge/(credit) (15.14) (59.83) (74.97)
Profit for the Year 1398.03 64.27 1462.30
Other Comprehensive Income/(Loss)
(i) Items that will not be reclassified to Statement of - (10.71) (10.71)
Profit and Loss
(ii) Income tax relating to items that will not be reclassified statement of Profit and Loss - 3.71 3.71
Other Comprehensive Profit/(Loss) for the Year - (7.00) (7.00)
Total Comprehensive Income for the period 1398.03 57.27 1455.30

2. Reconciliation between previous GAAP and Ind AS iv). Reconciliation of total comprehensive income for the year ended As at 31st March, 2016

in Crore
Nature of Adjustments As at 31st March, 2016
Net Profit / (Loss) as per Previous GAAP 1398.03
Actuarial (gain)/Loss reclassified to Other Comprehensive Income 10.71
Deferment of Revenue Recognition on Customer Contracts (9.90)
Discounting of Contingent Consideration on Acquisition (14.55)
Deferred Tax adjustments on Ind AS adjustment 59.83
Impact on account of measuring Intercompany Loans at Amortised Cost 16.65
Others 1.53
Net Profit before OCI as per Ind AS 1462.30

v). Reconciliation of equity As at 31st March, 2016 and 1st April, 2015

in Crore
Nature of Adjustments 1st April, 2015 As at 31st March, 2016
Equity as per previous GAAP 11090.15 12339.29
Dividend and Tax there on 193.29 193.38
Difference in Measurement of Employee Share based Payments on Account (0.25) (0.14)
of Fair Value
Unwinding of discounted contingent consideration relating to acquisition (9.61) (23.16)
Impact of Interest free/Concessional Loan given to Subsidiaries 28.09 44.74
Impact of Government Grant Accounting (15.09) (18.83)
Fair Valuation of Investments in Subsidiary (632.50) (632.50)
Acquisition-related Costs Expensed (45.29) (45.29)
Deferment of Revenue Recognition on Customer Contracts (78.90) (88.80)
Deferred Tax impact of Ind AS adjustment 144.55 208.09
Others 5.27 9.10
Total Effect of Transition to Ind AS (410.44) (353.41)
Equity as per Ind AS 10679.71 11985.88

3. Notes to first time adoption of Ind AS:

a. Property, Plant and Equipment

With respect of clarification dated 17th April, 2017 issued by Ind AS Transition Facilitation Group, the Company has recognised the amount of unamortised deferred income as at the date of transition and the carrying amount of the property, plant and equipment as at the date of transition has been increased by the amount of government grant deducted as per previous GAAP (net of cumulative depreciation impact). The Difference between the unamortised deferred income and increase in the carrying amount of PPE has been recognised in retained earnings as at the date of transition.

Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be received and the Group companies will comply with all attached conditions. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to Profit and Loss on a straight-line basis over the expected lives of related assets and presented within other income. On the assessment of lease agreement at the time of transition to Ind AS, the Company has regroup prepaid portion of operating leases from leasehold and to other non-current assets. b. Interest free loans to subsidiaries

The Company has recorded the equity component of interest free loans given to subsidiaries in Non-current investments.

c. Investment

Under the previous GAAP, investments in equity instruments of subsidiaries were classified as long-term investments and were carried at cost less provision for other than temporary decline in the value of such investments. Ind AS, allow first-time adopters to use a ‘deemed cost' of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries in the separate financial statements. The Company has elected to measure investment amounting to 2713.55 crore in Cipla Medpro South Africa (Proprietary) Ltd at fair value as of the transition date. The resulting fair value changes of these investments amounting to 632.46 crore have been recognised in retained earnings as at the date of transition. This decreased the retained earnings by

632.46 crore as at 1st April, 2015.

Pursuant to Para 53 of Ind AS 103, the Group has charged o3 acquisition-related costs in the periods in which the costs are incurred and the services are received.

Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings.

d. Proposed Dividend:

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. As a result, liability for dividend is a non—adjusting event. Accordingly, the liability for proposed dividend as at 1st April, 2015 included under provisions in the previous GAAP has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased by an equivalent amount

e. Forward Contracts

Under the previous GAAP the premium or discount arising at the inception of forward exchange contracts entered into to hedge an existing asset/liability, was amortised as expense or income over the life of the contract. Under the Ind AS 109, Forward Contracts are carried at fair value and the resultant gains and losses are recorded in the Statement of Profit and Loss.

f. Re-measurements of Post Employment Benefit Obligation

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit and loss. Under the previous GAAP, these re-measurements were forming part of the Statement of Profit and Loss for the year.

g. Retained Earnings

Retained earnings as at 1st April, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

h. Deferred Tax

Deferred tax under Ind AS has been recognized for temporary Differences between tax base and the book base of the relevant assets and liabilities. Under IGAAP the deferred tax was accounted based on timing Differences impacting the profit or loss for the period. Deferred Tax on aforesaid Ind AS adjustments has been created for both periods - as on As at 31st March, 2016 and 1st April, 2015.

i. Contingent consideration

During the year 2014-15, Cipla Limited has acquired 51% stake in a pharmaceuticals manufacturing and distribution business in Yemen (in turn owned by a UAE based parent company).

The business acquisition was completed by entering into share purchase agreement for cash consideration of USD 21 million and contingent consideration of up to USD 20.3 million. The payment of contingent consideration was dependent upon the achievement of certain revenue targets over a period of two years.

During the year ended 1st April, 2015, an assessment of the probability of Yemen entity achieving the required revenue was conducted by the Cipla. The assessment was based on actual and projected revenue and it was estimated that the liability will become due, hence the provision was created in the books of Cipla for such contingent consideration.

Group has created provision for payables for acquisition of business by debiting the investments. Out of the total amount payable 50 crore is Long term provision payable in year 2016-2017 and remaining 76.88 is part of short term provision payable in 2015-2016.

Adjustments include impact of discounting the deferred and contingent consideration payable for acquisition under Ind AS.

j. Effect of Ind AS adoption on Statement of Cash Flow for the year ended As at 31st March, 2016:

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities.

Consequently, Ind AS adoption has no impact on the net cash flow for the year ended As at 31st March, 2016 as compared with the previous GAAP.

k. Revenue from Operations & Excise Duty:

Under previous GAAP, revenue from sale of goods was presented net of excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as part of other expenses. This has resulted in an increase in the revenue from operations and expenses for the year ended As at 31st March, 2016. The total comprehensive income for the year ended and equity As at 31st March, 2016 has remained unchanged.

l. Other Operating Income:

Upfront fees received on development and distribution was recognised in IGAAP. As per Ind AS 18 same has been deferred and recognised over the period of contract.

Note 54:

Details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016 is provided in table below:

Particulars SBNs Other denomination Total
Closing cash in hand as on 8th November, 2016 0.72 0.68 1.40
(+) Permitted receipts 0.01 0.45 0.46
(-) Permitted payments 0.01 0.21 0.22
(-) Amount deposited in Banks 0.72 - 0.72
Closing cash in hand as on 30th December, 2016 - 0.92 0.92

Note 55:

Authorisation of Financial Statements

The financial statements for the year ended As at 31st March, 2017 were approved by the Board of Directors on 25th May, 2017.

   

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