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You Are Here : Markets  |  Equity   |   Company Profile  |   Reports
Cipla Ltd(Industry :   Pharmaceuticals - Indian - Bulk Drugs & Formln)
 
BSE Code:500087NSE Symbol: CIPLAP/E  (TTM): 27.39
ISIN Demat:INE059A01026Div Yield %:0.42EPS   (TTM) :17.4
Book Value (Rs):153.4381213Market Cap (RsCr):38291.77Face Value (Rs) :2
  Change Company 

(1) Significant Accounting Policies

A. Basis of Preparation

The financial statements have been prepared and presented under the historical cost convention on an accrual basis of accounting and in accordance with Generally Accepted Accounting Principles (GAAP) in India. GAAP comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 ("Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 and guidelines issued by Securities and Exchange Board of India (SEBI).

B. Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognised prospectively in the current and future periods.

C. Operating Cycle

All assets and liabilities have been classified as current or non-current as per Company's normal operating cycle and other criteria set out in Schedule III of the Act.

D. Fixed Assets

Tangible assets are stated at the cost of acquisition and includes amount added on revaluation, less accumulated depreciation. Government grants, other subsidies and impairment losses, if any. Cost of tangible assets comprises purchase price, non-refundable taxes, levies and any directly attributable cost of bringing the asset to its working condition for the intended use. Where several fixed assets are acquired for a consolidated price, the consideration is apportioned to fixed assets on fair value basis.

Capital work-in-progress includes cost of fixed assets that are not ready for their intended use.

Intangible assets are stated at the cost of acquisition, less accumulated amortisation and impairment losses, if any. Cost of intangible assets comprises purchase price, non-refundable taxes, levies and any directly attributable cost of making the asset ready for its intended use.

E. 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.

F. Depreciation and Amortisation

Depreciation on tangible fixed assets is provided on the Straight Line Method over the useful life of assets as prescribed under part C of Schedule II of the Act.

In case of assets whose useful life is already exhausted as on 1st April 2014, the carrying value, net of residual value and deferred tax has been adjusted in retained earnings in accordance with the requirements of Schedule II of the Act.

Depreciation is calculated on a pro-rata basis from the date of installation till the date the assets are sold or disposed.

Cost of leasehold land including premium is amortised over the primary period of lease.

Intangible assets are amortised on a systematic basis over the best estimate of their useful lives, commencing from the date the asset is available to the Company for its use.

The Management estimates the useful lives for the various intangible assets as follows:

Category Years
Software 3 to 6
Goodwill and Marketing Intangibles - Acquired 5

G. 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, 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 average basis.

During the year, the Company has implemented Enterprise Resource Planning software enabling inventorisation of stores, spares and consumables. This has now enabled the Company to include in the inventory, in the Balance Sheet from thisyear, sub-category of stores, spares and consumables amounting to '27.22 crore. The amount of profit before tax for the year, stands increased commensurately.

H. Investments

Long term investments are carried at cost, less provision for diminution (other than temporary) in value. Current investments are carried at lower of cost and fair value.

Investment property is carried at cost, less depreciation computed in a manner prescribed for Fixed Assets.

I. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.

Foreign currency monetary assets and liabilities and forward contracts are restated at year end exchange rates. Exchange differences arising on the settlement of foreign currency monetary items or on reporting Company's foreign currency monetary items at rates different from those at which they were initially recorded during the year or reported in the previous financial statements, are recognised as income or expense in the year in which they arise.

Non-monetary foreign currency items are carried at the rates prevailing on the date of the transaction.

In respect of forward contracts, the premium or discount on these contracts is recognised as income or expenditure over the period of the contract. Any profit or loss arising on cancellation or renewal of such contracts is recognised as income or expense of the year.

Foreign branches are identified as integral foreign operations. All transactions are translated at rates prevailing on the date of transaction. Monetary assets and liabilities of the branch are restated at the year end rates.

J. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date.

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.

Contingent Assets are neither recognised nor disclosed in the financial statements.

K. Revenue Recognition

Revenue is recognised to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognised when significant risks and rewards of ownership of the goods have been passed to the buyer, which ordinarily coincides with despatch of goods to customers. Revenues are recorded at invoice value net of excise duty, sales tax, returns and trade discounts.

Revenue from rendering of services are recognised on completion of services.

Benefits on account of entitlement of export incentives are recognised as and when the right to receive is established.

Technical Know-how and Licensing Fees are recognised as and when the right to receive such income is established as per terms and conditions of relevant agreement.

Interest income is recognised using the time proportionate method, based on rates implicit in the transaction.

Dividend income is recognised when the right to receive is established.

L. Employee Benefits

Liability on account of shortterm 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 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, leave encashment and provident fund are determined on the basis of actuarial valuation made by an independent actuary as at the Balance Sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Periodic contributions towards post retirement defined benefit plan such as provident fund administered through an Employees' Provident Fund Trust are charged to the Statement of Profit and Loss.

M. Employee Stock Option Schemes

In accordance with the SEBI regulations, the compensation cost of stock options granted to employees is calculated based on intrinsic value method, i.e. the excess of the market price of shares immediately prior to dates of grant over the exercise price to be paid by the option holders. The compensation cost is amortised to the Statement of Profit and Loss over the vesting period of the stock option.

N. Income Tax

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the provisions of local Income Tax Laws as applicable to the financial year.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income of the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted as at the Balance Sheet date.

The Company offsets, on a year-on-year basis, the current tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

O. Impairment of Assets

At each Balance Sheet date, the Company assesses whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such assets is reduced to its estimated recoverable amount and the amount of such impairment loss is charged to the Statement of Profit and Loss. If, at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

P. Research and Development

Revenue expenditure on Research and Development is recognised as expense in the year in which it is incurred.

Capital expenditure on Research and Development is shown as addition to Fixed Assets.

Q. Expenditure on Regulatory Approvals

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

R. Government Grants and Subsidies

Capital subsidy/Government grants are recognised when there is a reasonable assurance that all relevant conditions will be complied with and it is reasonably certain that the ultimate collection will be made.

Capital subsidy/Government grants related to specific fixed assets are shown as deduction from the gross value of the asset concerned in arriving at its book value. The grant/subsidy is thus recognised in the Statement of Profit and Loss over the useful life of such fixed assets byway of a reduced depreciation charge.

S. Leases

Where the Company is a Lessee

Lease rentals on assets taken on operating lease are recognised as expense in the Statement of Profit and Loss on straight line basis over the lease term in accordance with the lease agreement.

Where the Company is a Lessor

Lease rentals on assets given on operating lease are recognised as income in the Statement of Profit and Loss on straight line basis in accordance with the lease agreement.

T. 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 are to be issued on the conversion of all the dilutive potential equity shares into equity shares.

Rs in crore
2015 2014
(2) Share Capital
Authorised
87,50,00,000 Equity Shares of Rs 2 each (Previous year 87,50,00,000 Equity Shares of Rs 2 each) 175.00 175.00
175.00 175.00
Issued
80,39,63,835 Equity Shares of Rs 2 each (Previousyear80,39,24,752 EquityShares of Rs 2 each) 160.79 160.78
160.79 160.78
Subscribed & Paid-up
80,29,60,440 Equity Shares of Rs 2 each fully paid (Previous year 80,29,21,357 Equity Shares of Rs 2 each fully paid) 160.59 160.58
160.59 160.58

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

Particulars 2015 2014
Equity Shares at the beginning of the year 80,29,21,357 80,29,21,357
Add: Equity Shares issued on exercise of employee stock options 39,083 -
Equity Shares at the end of the year 80,29,60,440 80,29,21,357

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

2015

2014

Number of shares % Holding Number of shares % Holding
Dr. Y. K. Hamied 12,48,27,750 15.55 12,48,27,750 15.55
Mrs. Farida Hamied 4,19,14,937 5.22 4,19,14,937 5.22
Mrs. Sophie Ahmed 4,59,82,000 5.73 4,59,82,000 5.73
Life Insurance Corporation of India 4,42,13,904 5.51 5,24,97,490 6.54

• Terms and Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs 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 43 for number of stock options against which equity shares are to be issued by the Company upon vesting and exercise of those stock options by the option holders as per the relevant scheme(s).

2015 2014
(3) Reserves and Surplus
Capital Reserve 0.08 0.08
Securities Premium Reserve
As per last Balance Sheet 1428.96 1428.96
Add: Additions during the year on ESOS excercised 1.63 -
Balance at the end of the year 1430.59 1428.96
Revaluation Reserve 8.97 8.97
Employee Stock Options Outstanding
Employee Stock Options Outstanding
As per last Balance Sheet 92.05 -
Add: Options Granted during the year (net of cancellations) 56.57 92.05
Less: Exercised during the year 1.63 -
Balance at the end of the year (a) 146.99 92.05
Deferred Employee Stock Option Cost
As per last Balance Sheet 70.40 -
Add: Options Granted during the year 56.57 92.05
Less: Amortisations during the year 50.88 21.65
Balance at the end of the year (b) 76.09 70.40
Net Balance at the end of the year (a-b) 70.90 21.65
General Reserve
As per last Balance Sheet 3141.43 3001.43
Add: Transferred from the Statement of Profit and Loss - 140.00
Balance at the end of the year 3141.43 3141.43
Surplus in the Statement of Profit and Loss
As per last Balance Sheet 5329.97 4269.50
Add: Profit for the year 1181.09 1388.34
Less: Adjustment of Depreciation [Refer Note 1(F)] 40.19 -
6470.87 5657.84
Less: Appropriations
Transferred to General Reserve - 140.00
Proposed Dividend 160.59 160.58
Tax on Dividend 32.69 27.29
Balance at the end of the year 6277.59 5329.97
10929.56 9931.06

 

2015 2014
(4) Long Term Borrowings
Unsecured
Deferred Payment Liability - Sales Tax Deferral Loan 0.41 0.43
0.41 0.43
Sales tax deferral loan is interest free and repayable in 3 equal instalments from the 10th year
(5) Deferred Tax Liabilities
Deferred Tax Liabilities arising on account of
Differences between book and tax depreciation 330.59 311.20
330.59 311.20
(6) Other Long Term Liabilities
Security Deposits 40.00 30.00
40.00 30.00
(7) Long Term Provisions
Provision for Employee Benefits
Leave Encashment (Note 25) 101.93 73.99
Others
Payable for Acquisition of Business (Note 41) 50.00 -
151.93 73.99

 

Rs in crore
2015 2014
(8) Short Term Borrowings
Loans Repayable on demand
Secured
Cash Credit from Banks (Secured by hypothecation of trade receivables and inventories) 0.67

-

Unsecured
Packing Credit from Banks 1156.25 876.91
Buyers' Credit from Banks 223.28 -
1380.20 876.91
(9) Trade Payables
Micro, Small and Medium Enterprises 2.72 7.28
Others 1493.88 955.28
1496.60 962.56

The information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. Amounts due as at 31st March 2015 in respect of enterprises covered under the 'Micro, Small and Medium Enterprises Development Act, 2006' is Rs 2.72 crore (Previous year Rs 7.28 crore). 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 this Act is Nil (Previous year Nil).

2015 2014
10 Other Current Liabilities
Current maturities of Long Term Debt - Sales Tax Deferral Loan 0.01 0.06
Unclaimed Dividend* 13.29 15.87
Statutory Dues 40.18 42.94
Dues to Employees 83.35 89.17
Creditors for Capital Expenditure 61.93 44.35
Unclaimed Preference Share Capital 0.01 0.01
Security Deposits 2.20 1.97
Book Overdraft 46.89 38.94
Advance from Customers 103.89 99.85
Interest Payable 0.67 0.04
352.42 333.20

* There are no amounts due and outstanding to be credited to Investor Education & Protection Fund.

Rs in crore
2015 2014
11 Short Term Provisions
Provision for Employee Benefits
Leave Encashment (Note 25) 16.36 13.26
Gratuity (Note 25) 57.58 36.69
Others
Provision for Bonus 5.42 6.25
Proposed Dividend 160.59 160.58
Tax on Proposed Dividend 32.69 27.29
Payable for Acquisition of Business (Note 41) 76.88 -
349.52 244.07

12 Fixed Assets

GROSS BLOCK

DEPRECIATION/AMORTISATION

NET BLOCK

Tangible Assets As at 01.04.14 Additions Deletions/ Adjustments As at 31.03.15 Upto 31.03.14 Adjustment in retained earnings For the year 2014-15 Deletions/ Adjustments Upto 31.03.15 As at 31.03.15 As at 31.03.14
Freehold Land 32.73 - - 32.73 - - - - - 32.73 32.73
Leasehold Land 75.36 1.04 - 76.40 13.07 - 1.70 - 14.77 61.63 62.29
Plant and Equipments 3491.99 274.46 17.80 3748.65 1554.36 41.11 336.41 11.51 1920.37 1828.28 1937.63
Office Equipments 82.81 12.68 0.19 95.30 16.32 14.72 22.13 0.16 53.01 42.29 66.49
Furniture and Fixtures 124.53 11.54 0.34 135.73 48.70 2.13 18.91 0.19 69.55 66.18 75.83
Buildings and Flats 1573.08 148.71 9.37 1712.42 233.51 2.75 43.75 0.89 279.12 1433.30 1339.57
Vehicles 9.26 0.45 0.60 9.11 4.21 0.15 1.17 0.34 5.19 3.92 5.05
Total 5389.76 448.88 28.30 5810.34 1870.17 60.86 424.07 13.09 2342.01 3468.33 3519.59
Previous year 4983.81 434.15 28.20 5389.76 1565.52 - 323.25 18.60 1870.17

 

Intangible Assets As at 01.04.14 Additions Deletions/ Adjustments As at 31.03.15 Upto 31.03.14 Adjustment in retained earnings For the year 2014-15 Deletions/ Adjustments Upto 31.03.15 As at 31.03.15 As at 31.03.14
Goodwill - 8.83 - 8.83 - - 0.29 - 0.29 8.54 -
Marketing Intangibles - 25.10 - 25.10 - - 0.83 - 0.83 24.27 -
Software 4.96 96.73 0.88 100.81 0.36 - 8.01 0.04 8.33 92.48 4.60
Total 4.96 130.66 0.88 134.74 0.36 - 9.13 0.04 9.45 125.29 4.60
Previous year - 4.96 - 4.96 - - 0.36 - 0.36

Notes:

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

ii. The above additions to fixed assets during the year includes Rs 121.11 crore (Previous year Rs 5.58 crore) used for Research and Development.

iii. Freehold Land at Mumbai Central and Vikhroli, were revalued on 16th March 1985 and was again revalued on 21st March 1990 along with Freehold Land at Bengaluru which stood at Rs 9.07 crore on the basis of valuation report of approved valuers resulting in increase in book value by Rs 8.97 crore.

2015 2014
13 Non-Current Investments
Trade Investments
Investments in Equity Instruments (Unquoted)
Investment in Subsidiaries
15 (Previous year 15) Equity Shares of Cipla FZE of AED 10,00,000 each, fully paid 18.69 18.69
45,966 (Previous year 45,966) Equity Shares of Goldencross Pharma Pvt. Ltd. of Rs 10 each, fully paid 191.12 191.12
61,53,382 (Previous year 60,00,072) Equity shares of Meditab Specialities Pvt. Ltd. of Rs 1 each, fully paid 155.72 133.72
2,15,50,001 (Previous year 15,50,001) Ordinary Shares of Cipla (Mauritius) Ltd. of USD 1 each, fully paid 129.42 8.08
35,30,000 (Previous year Nil) Shares of Cipla (EU) Ltd. of GBP 1 each, fully paid 37.76 -
45,07,40,684 (Previous year 45,07,40,684) Ordinary Shares of Cipla Medpro South Africa (Proprietary) Ltd. of 0.1 Cent each, fully paid 2756.74 2756.74
2,15,367 (Previous year 62,700) Shares of Cipla Holding B.V. of EUR 100 each, fully paid 172.69 53.07
10,00,00,000 (Previous year 1,70,48,597) Equity Shares of Mabpharm Pvt. Ltd. of Rs 10 each, fully paid* 105.81 51.74
1,35,15,000 (Previous year Nil) Shares of Saba Investment Ltd. of USD 1 each, fully paid 257.69 -
24,06,000 (Previous year Nil) Shares of Jay Precision Pharmaceuticals Pvt. Ltd. of Rs 10 each, fully paid 96.24 -
Investment in Associates 87,33,333 (Previous year 87,33,333) Ordinary Shares of Biomab Holding Ltd. of USD 1 each, fully paid 114.78 114.78
Investment in Joint Venture Nil (Previous year 1) Ordinary Share of Aspen-Cipla Australia Pty Ltd. of AUD 1, fully paid - Nil (Previous year '51.97) 0.00
Other Investments
Investments in Equity Instruments (Unquoted) 1,000 (Previous year 1,000) Equity Shares of The Saraswat Co-operative Bank Ltd. of Rs 10 each, fully paid '10000 (Previous year '10000) 0.00 0.00
Investments in Government and Trust securities National Savings Certificates '41000 (Previous year'40000) 0.00 0.00
Investment property (at cost less accumulated depreciation)
Cost of Building given on Operating Lease 0.52 0.52
Less: Accumulated Depreciation 0.19 0.18
Net Block 0.33 0.34
4036.99 3328.28

* During the year, the Company acquired an additional 75% stake in Mabpharm Pvt. Ltd. ("Mabpharm"). Consequent to the acquisition of aforesaid additional stake Mabpharm has become a wholly owned subsidiary of the Company.

Aggregate amount of unquoted investments '4036.66 crore

(Previous year '3327.94 crore)

Mode of valuation - Refer Note 1(H)

2015 2014
14 Long Term Loans and Advances
Secured, Considered Good
Capital Advances# 4.74 1.58
Unsecured, Considered Good
Capital Advances* 98.12 114.65
Security Deposits 31.00 36.29
Loans to Subsidiaries (Includes amount referred to in Note 39) Advance Taxes and TDS (Net of Provision for Tax '1610.34 crore; 259.15 234.15
Previous year '1291.20 crore) 138.04 108.42
VAT Receivable 45.51 39.37
Other Loans and Advances 0.15 0.84
576.71 535.30

# Secured against Bank Guarantees

* Includes '55.74 crore (Previous year '55.74 crore) paid to wholly owned subsidiary - Meditab Specialities Pvt. Ltd.

Rs in crore
2015 2014
15 Other Non-Current Assets
Fixed Deposits as Margin Money (with maturity more than 12 months) 3.89 0.33
Capital Subsidy Receivable 61.24 61.24
65.13 61.57

 

No. of units 2015 No. of units 2014
16 Current Investments
Investment in Mutual Funds (Unquoted)
Baroda Pioneer Mutual Fund "Baroda Pioneer Liquid Fund" - Plan B - Growth 2,80,546 45.00 1,46,096 21.45
Birla Sun Life Mutual Fund "Birla Sun Life Cash Plus" - Growth - Direct Plan 20,05,213 45.00 19,63,835 40.33
Franklin Templeton Mutual Fund "Templeton India Treasury Management Account" - Super Institutional Plan - Direct - Growth 2,39,539 50.00 81,114 15.50
HDFC Mutual Fund "HDFC Cash Management Fund" - Savings Plan - Direct Plan - Growth Option 85,62,289 25.00 - -
ICICI Prudential Mutual Fund "ICICI Prudential Money Market Fund" - Direct Plan - Growth

-

- 5,64,290 10.00
Indiabulls Mutual Fund "Indiabulls Liquid Fund" - Direct Plan Growth

-

- 1,71,883 21.41
JP Morgan Mutual Fund "JP Morgan India Liquid Fund" - Direct Plan - Growth

-

- 1,20,64,636 20.05
Peerless Mutual Fund "Peerless Liquid Fund" - Direct Plan Growth

-

- 2,13,97,244 30.05
Principal Mutual Fund "Principal Cash Management Fund" - Direct Plan - Growth Option 3,30,868 45.00 - -
Reliance Mutual Fund "Reliance Liquidity Fund" - Direct Growth Plan 2,11,177 44.50 1,03,852 20.04
Religare Invesco Mutual Fund "Religare Invesco Liquid Fund" - Direct Plan Growth

-

- 1,13,465 20.00
SBI Mutual Fund "SBI Magnum Insta Cash Fund" - Direct Plan - Growth 92,339 28.51 1,41,139 40.02
Sundaram BNP Paribas Mutual Fund "Sundaram Money Fund" - Direct Plan - Growth 1,73,22,750 51.10 - -
Taurus Mutual Fund "Taurus Liquid Fund" - Direct Plan - Super Institutional Growth 3,30,391 50.00 1,44,481 20.00
384.11 258.85

Aggregate amount of unquoted investments '384.11 crore (Previous year '258.85 crore)

Mode of valuation - Refer Note 1(H)

2015 2014
17 Inventories (Refer Note - 24c)
Raw Materials and Packing Materials (including Stock-in-transit Rs 109.54 crore; Previous year'151.61 crore) 1470.28 1068.51
Work-in-Process (including Stock-in-transit of Rs 20.66 crore; of Previous year Rs 12.00 crore) 874.31 641.69
Finished Goods (including Stock-in-transit of Rs 65.34 crore; Previous year Rs 88.62 crore) 668.41 571.21
Stock-in-Trade (including Stock-in-transit of Rs 6.71 crore;Previous year Rs 20.33 crore) 248.98 229.75
Stores, Spares and Consumables 27.22 -
3289.20 2511.16

Mode of valuation - Refer Note 1(G)

Rs in crore
2015 2014
18 Trade Receivables
Unsecured, Considered Good
Outstanding over Six Months from date they were due for payment 163.53 68.65
Others 1895.38 1659.45
Unsecured, Considered Doubtful
Outstanding over Six Months from date they were due for payment 64.13 57.79
Less: Allowance for Doubtful Debts 64.13 57.79
- -
2058.91 1728.10

 

2015 2014
19 Cash and Bank Balances
Cash and Cash Equivalents
Balances with Banks (including money in transit) 63.14 28.11
Cash on Hand 1.20 1.46
Other Bank Balances
Balance earmarked for Unclaimed Dividend 13.29 15.87
Fixed Deposits as Margin Money (maturity less than 12 months) 5.13 0.60
82.76 46.04

 

Rs in crore
2015 2014
20 Short Term Loans and Advances
Unsecured (Considered good unless otherwise stated)
Inter Corporate Loans
Considered Good 0.80 0.80
Considered Doubtful 2.25 2.25
3.05 3.05
Less: Allowance for Doubtful Loans 2.25 2.25
0.80 0.80
Interest Accrued on Inter Corporate Loans
Considered Good 0.36 0.36
Considered Doubtful 0.46 0.46
0.82 0.82
Less: Allowance for Doubtful Interest 0.46 0.46
0.36 0.36
Share Application Money- Pending Allotment 12.69

-

Balances with Statutory/Revenue Authorities 366.73 350.06
Others*
Considered Good 209.38 164.34
Considered Doubtful - 4.59
209.38 168.93
Less: Allowance for Doubtful Advances - 4.59
209.38 164.34
589.96 515.56

* Includes advances to sundry creditors, employee loans and prepaid expenses

2015 2014
21 Other Current Assets
Export Incentives Receivable 144.79 35.02
Other Current Assets* 8.93 3.24
153.72 38.26
* Pertains to receivables from subsidiaries
22 Revenue from Operations
Sale of Products 9776.23 9210.68
Rendering of Services 55.65 40.89
Other Operating Revenue
Export Incentives 159.48 47.62
Technical Know-how and Licensing Fees 163.81 202.52
Scrap Sales 46.90 39.12
Others 22.65 15.19
10224.72 9556.02

• Details of Products sold

Rs in crore
2015 2014
Manufactured Goods
Bulk Drugs 844.33 965.90
Tablets and Capsules 5130.41 4870.22
Liquids 273.54 271.81
Creams 168.91 146.57
Aerosols/lnhalation Devices 1033.56 952.01
Injections/Sterile Solutions 957.51 874.76
Others 85.79 72.67
8494.05 8153.94
Stock-in-Trade
Bulk Drugs 96.95 96.03
Tablets and Capsules 626.06 516.70
Liquids 233.53 171.06
Creams 67.24 50.30
Aerosols/lnhalation Devices 63.57 47.94
Injections/Sterile Solutions 162.41 122.47
Others 32.42 52.24
1282.18 1056.74
9776.23 9210.68

• Earnings in Foreign Exchange

2015 2014
F.O.B. Value of Exports 4736.33 4947.96
Technical Know-how and Licensing Fees 156.82 187.39
Others - Service fees, etc. 17.25 14.53
4910.40 5149.88

 

Rs in crore
2015 2014
23 Other Income
Interest
Bank Deposits 0.50 0.77
Others 5.48 13.15
Dividend on Current Investment 21.00 71.41
Net Gain on Sale of Current Investment 45.07 8.01
Insurance Claims 6.48 2.64
Rent 3.07 2.70
Sundry Balances Written Back 6.83 24.38
Miscellaneous Receipts 19.65 17.36
Net Gain on Foreign Currency Transaction and Translation 39.83 139.86
147.91 280.28
243 Cost of Materials Consumed
Consumption of Raw and Packing Materials
Opening Stock 1068.51 1058.84
Add: Purchases 3828.51 3155.01
4897.02 4213.85
Less: Closing Stock 1470.28 1068.51
3426.74 3145.34
3426.74 3145.34

• Break-up of Materials Consumed

Class of Goods 2015 2014
Semi Finished Goods 1567.24 1367.62
Raw Material 942.06 963.98
Packing Material 891.11 857.01
Others 127.84 94.04
3528.25 3282.65
Less: Recoverable Duties (included in the above cost) 101.51 137.31
Total Consumption (Net of Cenvat) 3426.74 3145.34

• Consumption of Raw and Packing Materials/Spares and Components

Class of Goods

2015

2014

Value % Value %
Purchased Indigenously 2004.38 57 1537.46 47
Imported 1523.87 43 1745.19 53
3528.25 100 3282.65 100
Less: Recoverable Duties (included in the above Cost) 101.51 137.31
Total Consumption (Net of Cenvat) 3426.74 3145.34

 

2015 2014
24b Purchases of Stock-in-Trade
Bulk Drugs 72.65 104.93
Tablets and Capsules 405.08 345.27
Liquids 166.31 144.09
Creams 48.06 32.86
Aerosols/lnhalation Devices 51.79 34.42
Injections/Sterile Solutions 144.13 96.04
Others 15.39 15.79
903.41 773.40

 

2015 2014
24C Changes in Inventories of Finished Goods, Work-in-Process and Stock-in-Trade
Opening Stock
Work-in-Process 641.69 563.52
Finished Goods 571.21 513.84
Stock-in-Trade 229.75 207.17
1442.65 1284.53
Less: Closing Stock
Work-in-Process 874.31 641.69
Finished Goods 668.41 571.21
Stock-in-Trade 248.98 229.75
1791.70 1442.65
(349.05) (158.12)

• Break-up of Inventory

Rs in crore
2015 2014
Work-in-Process
Formulations 320.97 169.16
Bulk Drugs 553.34 472.53
874.31 641.69
Finished Goods
Bulk Drugs 25.21 12.77
Tablets and Capsules 419.73 337.46
Liquids 18.28 22.15
Creams 21.41 19.83
Aerosols/lnhalation Devices 64.79 62.25
Injections/Sterile Solutions 115.21 107.65
Others 3.78 9.10
668.41 571.21
Stock-in-Trade
Bulk Drugs 10.45 16.83
Tablets and Capsules 118.91 108.78
Liquids 36.60 43.83
Creams 11.37 7.72
Aerosols/lnhalation Devices 9.49 4.38
Injections/Sterile Solutions 57.35 37.40
Others 4.81 10.81
248.98 229.75

 

2015 2014
25 Employee Benefits Expense
Salaries and Wages 1259.01 1075.12
Contribution to Provident and Other Funds 63.74 54.60
Staff Gratuity 25.80 21.38
Expense on Employee Stock Option Schemes (Note 43) 39.44 18.41
Staff Welfare Expenses 117.59 115.24
1505.58 1284.75

• 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 term 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 the revised AS-15 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

The Company has two schemes for long term benefits namely. Provident Fund and Gratuity:

• The Provident Fund plan, a funded scheme is operated by the Company's Provident Fund, which is recognised by the income tax authorities and administered through trustees/appropriate authorities. The Guidance Note on implementing the revised AS-15, "Employee Benefits (revised 2005)" issued by Accounting Standards Board (ASB) states benefit involving employer established provident funds, which require interest shortfalls to be recompensed, are to be considered as defined benefit plans. Accordingly, the Company has considered the provident fund as defined benefit plan.

• 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.

The 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

2015 2014
Employees' Pension Scheme 21.21 13.15
Provident Fund 41.05 40.01
62.26 53.16

ii. Charge towards leave encashment to the Statement of Profit and Loss amounts to '57.28 crore (Previous year '51.01 crore).

c. Disclosures for defined benefit plans based on actuarial reports as on 31st March 2015

2015 2014
Gratuity (Funded Plan) Gratuity (Funded Plan)
i. Change in defined benefit obligation
Opening defined benefit obligation 74.43 59.39
Interest cost 6.92 4.90
Current service cost 16.23 9.80
Actuarial (gain)/loss on obligations 6.42 3.86
Benefits paid (4.64) (3.52)
Liability at the end of the year 99.36 74.43
ii. Change in fair value of assets
Opening fair value of plan assets 41.23 33.74
Expected return on plan assets 3.83 2.78
Actuarial gain/(loss) (0.16) (1.77)
Contributions by employer 5.00 10.00
Transfer of plan assets - -
Assets transferred out/divestments (3.48) -
Benefits paid (4.64) (3.52)
Closing fair value of plan assets 41.78 41.23
iii. Amount recognised in Balance Sheet
Present value of obligations as at year end (99.36) (74.43)
Direct Obligations - (3.48)
Fair value of plan assets as at year end 41.78 41.23
Net asset/(liability) recognised (57.58) (36.68)
iv. Expenses recognised in Statement of Profit and Loss
Current service cost 16.23 9.80
Interest on defined benefit obligation 6.92 4.90
Expected return on plan assets (3.83) (2.78)
Net actuarial (gain)/loss recognised in the current year 6.58 5.63
Direct Payments - 0.35
Direct Obligations - 3.48
Transfer of plan assets - -
Total expense recognised in Statement of Profit and Loss 25.90 21.38

 

2015 2014
Gratuity (Funded Plan) Gratuity (Funded Plan)
v. Actual return on plan assets
Expected return on plan assets 3.83 2.78
Actuarial gain/(loss) on plan assets (0.16) (1.77)
Actual return on plan assets 3.67 1.01
vi. Asset information
Insurer managed funds 100% 100%
vii. Experience adjustments
Defined benefit obligation 99.36 74.43
Plan assets (41.78) (41.23)
Deficit/(Surplus) 57.58 33.20
Experience adjustment on plan liabilities - (gain)/loss (0.53) 3.95
Experience adjustment on plan assets - (gain)/loss 0.16 1.77
viii. Expected employer's contribution for the next year 45.10 40.36

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 2015 2014
Discounted rate (per annum) 8.01% 9.30%
Expected rate of return on plan assets 8.01% 9.30%
Expected rate of future salary increase 5.00% p.a.* 5.00%

* for the next 5 years, and 4.00% p.a. thereafter

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 and previous four periods are as follows:

2015 2014 2013 2012 2011
Gratuity
Defined benefit obligation 99.36 74.43 59.39 46.52 33.23
Plan assets (41.78) (41.23) (33.74) (29.03) (26.36)
(Surplus)/Deficit 57.58 33.20 25.65 17.49 6.87
Experience adjustment on plan liabilities - (gain)/loss (0.53) 3.95 0.20 11.22 9.36
Experience adjustment on plan assets - (gain)/loss 0.16 1.77 (1.23) (0.21) 0.56

d. The following table sets out the status of the provident fund plan and the amounts recognised in the group's financial statements as on 31st March 2015

2015 2014
Provident Fund (Funded Plan) Provident Fund (Funded Plan)
i. Change in defined benefit obligation
Opening defined benefit obligation 392.12 283.12
Interest cost 36.65 26.71
Current service cost 40.89 40.48
Past service cost - -
Employee Contribution 71.22 60.03
Liability transferred in 8.44 7.50
Actuarial (gain)/loss on obligations - -
Benefits paid (32.95) (25.72)
Liability at the end of the year 516.37 392.12
ii. Change in fair value of assets
Opening fair value of plan assets 397.84 287.57
Expected return on plan assets 36.65 26.71
Actuarial gain/(loss) 2.33 1.26
Contributions by employer 112.20 100.52
Transfer of plan assets 8.44 7.50
Benefits paid (32.95) (25.72)
Closing fair value of plan assets 524.51 397.84
iii. Amount recognised in Balance Sheet
Present value of obligations as at year end (516.37) (392.12)
Fair value of plan assets as at year end 524.51 397.84
Funded status (8.14) (5.72)
Unrecognised actuarial gain/(loss) - -
Net asset/(liability) recognised - -
iv. Expenses recognised in Statement of Profit and Loss
Current service cost 40.89 40.48
Past service cost - -
Interest cost 36.65 26.71
Interest on defined benefit obligation - -
Expected return on plan assets (36.65) (26.71)
Net actuarial (gain)/loss recognised in the current year - -
Transfer of plan assets - -
Total expense recognised in Statement of Profit and Loss 40.89 40.48
v. Actual return on plan assets
Expected return on plan assets 36.65 26.71
Actuarial gain/(loss) on plan assets (2.33) (1.26)
Actual return on plan assets 34.32 25.45

 

2015 2014
Provident Fund (Funded Plan) Provident Fund (Funded Plan)
vi. Asset information
Investment in PSU bonds 259.39 188.90
Investment in Government Securities 210.89 157.55
Bank Special deposit 15.58 15.58
Investment in other securities 27.05 24.23
Private Sector Bonds 11.10 11.08
Equity/lnsurer Managed Funds/Mutual Funds 0.50 0.50
Total Assets at the end of the year 524.51 397.84
vii. Principal Actuarial assumptions used
Discounted rate (per annum) 8.01% 9.30%
Expected rate of return on plan assets (per annum) 8.75% 8.75%
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%
viii. Experience adjustments
Defined benefit obligation 516.37 392.12
Plan assets (524.51) (397.84)
Deficit/(Surplus) (8.14) (5.72)
Experience adjustment on plan liabilities - (gain)/loss - -
Experience adjustment on plan assets - (gain)/loss * for the next 5 years, & 4.00% p.a. thereafter 2.33 1.26

 

Rs in crore
2015 2014
26 Finance Costs
Interest Expense 39.32 37.83
Other Borrowing Costs 1.04 15.38
Applicable Loss on Foreign Currency Transaction and Translation 95.69 74.65
136.05 127.86

 

2015 2014
27 Depreciation and Amortisation Expense
Depreciation on Tangible Assets 424.07 323.25
Amortisation of Intangible Assets 9.13 0.36
433.20 323.61
28 Other Expenses
Manufacturing Expenses 349.64 250.31
Stores and Spares 84.22 84.05
Power and Fuel Repairs and Maintenance 198.19 191.84
Machinery 51.01 51.37
Buildings 28.50 29.92
Travelling Expenses 278.25 264.39
Sales Promotion Expenses 229.90 199.62
Commission on Sales 214.21 234.12
Rates and Taxes 35.04 39.45
Freight and Forwarding 197.46 165.47
Rent 46.78 44.09
Insurance 19.81 16.49
Payment to Auditors
Audit Fees 0.67 0.67
Taxation Matters 0.22 0.05
For Other Services 0.21 0.30
Professional Fees 330.53 344.55
Postage and Telephone Expenses 22.08 21.74
Directors' Sitting Fees 0.14 0.08
Contractual Services 120.91 88.64
Corporate Social Responsibility Expenditure (Note 44) 12.79 9.98
Charitable Donations 0.09 -
Bad Debts, provision for doubtful debts and advances (Net) 10.23 27.54
Loss on sale/discard of fixed assets (Net) 8.01 6.95
Research - Clinical Trials, Samples and Grants 128.06 94.36
Miscellaneous Expenses 316.84 256.02
2683.79 2422.00

 

2015 2014
29 Research and Development Expenditure
The amount of expenditure as shown in the respective heads of account is as under:
Capital Expenditure 130.10 5.58
Revenue Expenditure Charged to the Statement of Profit and Loss
Materials Consumed 127.61 72.88
Employee Benefits Expenses 197.64 148.95
Power and Fuel 27.70 21.38
Repairs and Maintenance 28.70 24.23
Manufacturing Expenses 23.95 21.82
Professional Fees 74.09 46.38
Depreciation 76.48 39.29
Research - Clinical Trials, Samples and Grants 74.95 62.92
Printing and Stationery 1.92 1.73
Travelling Expenses 13.58 8.97
Other Research and Development Expenses 67.42 63.38
714.04 511.93
844.14 517.51
Amount eligible for weighted deduction under section 35(2AB) of the Income Tax Act,1961
Capital Expenditure 39.93 4.95
Revenue Expenditure
Employee Benefit Expense 128.25 70.35
Raw Materials and Consumables 127.61 72.88
Research - Clinical Trials and Grants 75.16 62.92
Other Expenditure 158.99 86.17
490.01 292.32
529.94 297.27

 

2015 2014
(30 Net Difference in foreign exchange (debited)/credited to the Statement of Profit and Loss (55.86) 65.21
(55.86) 65.21

 

2015 2014
31 Value of Imports on C.I.F. basis
Raw Materials and Packing Materials 1515.43 1330.64
Components and Spare Parts 23.73 30.70
Capital Goods 123.75 64.71
1662.91 1426.05
32 Expenditure in Foreign Currency
Legal and Professional charges 397.01 239.82
Interest 0.74 1.67
Commission 75.51 131.15
Other Matters - Travelling, Registration fees etc. 112.17 95.61
585.43 468.25

33 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 28.

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 benefits of ownership of the leased asset and hence classified as operating lease. Lease income on such operating lease is recognised in Statement of Profit and Loss under 'Rent' in Note 23.

34 Foreign Exchange Derivatives and Exposures outstanding at the year end

Rs in crore
Nature of Instrument Currency Cross Currency 2015 2014
Forward contracts - Sold USD INR 799.43 1261.14
Forward contracts - Sold ZAR INR 225.99 -
Forward contracts - Bought USD INR 535.78 826.83
Unhedged foreign exchange exposures
Receivables 782.52 311.72
Payables 548.06 452.70
Short Term Borrowings 843.75 -

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

35 Segment Information

In accordance with AS-17, "Segment Reporting", segment information has been given in the Consolidated Financial Statements ofCipla Ltd., and therefore, no separate disclosure on segment information is given in these financial statements.

2015 2014
35 Contingent Liabilities and Commitments (to the extent not provided for)
Contingent Liabilities
Claims against the Company not acknowledged as debt 15.85 4.82
Guarantees 126.95 152.38
Letters of Credit 49.30 9.32
Refund of Technical Know-how and Licensing Fees on account of non-compliance of certain obligations as per respective agreements 2.95
Income Tax on account of disallowances/additions 108.42 100.29
Excise Duty/Service Tax on account of valuation/cenvat credit 108.47 80.93
Sales Tax on account of credit/classification 5.66 5.46
414.65 356.15
Commitments
Estimated amount of contracts unexecuted on Capital Account 367.10 200.88
Other Commitments 978.61 644.33
1345.71 845.21
1760.36 1201.36

37 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 Rs 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.

38 In 2003, the Company received notice of demand from the National Pharmaceutical Pricing Authority, Government of India on account of alleged overcharging in respect of certain drugs under the Drugs (Price Control) Order, 1995. This was contested before the jurisdictional High Courts in Mumbai, Karnataka and Allahabad wherein it was held in favour of the Company. The orders of Hon'ble High Court of Allahabad and Bombay were challenged before the Hon'ble Supreme Court of India by the Government. Although in the challenge to the decision of the Hon'ble Bombay High Court, the Hon'ble Supreme Court of India restored the matter to the Hon'ble Bombay High Court in August 2003 for interpreting the Drug Policy on the basis of directions and principles laid down by them and the same was pending, in the challenge to the Hon'ble High Court of Allahabad's order, in February 2013, the Hon'ble Supreme Court of India transferred the Bombay High Court petition also before itself for a final hearing on both the matters. In an earlier order, the Hon'ble Supreme Court has already restrained the Government from taking any coercive action against the Company. The Company has been legally advised that on the basis of these orders there is no probability of demand crystallising. Hence no provision is considered necessary in respect of notice of demand received by the Company up to date aggregating to '1768.51 crore.

39 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

Sr. No. Name of the Company Nature As at 31st March 2015 Maximum balance during the year As at 31st March 2014 Maximum balance during the year
1. Goldencross Pharma Pvt. Ltd. Subsidiary

-

-

26.75
2. Meditab Specialities Pvt. Ltd. Subsidiary 224.15 242.60 234.15 234.15
3. Mabpharm Pvt. Ltd. Subsidiary - 12.22 - -
4. Jay Precision Pharmaceuticals Pvt. Ltd. Subsidiary 35.00 35.00 -

-

b) Loans given to Other Body Corporates

Sr. No. Name of the Company As at 31st March 2015 Maximum balance during the year As at 31st March 2014 Maximum balance during the year
1. Bakul Pharma Pvt. Ltd. 0.80 0.80 0.80 0.80
2. U&l System Design Ltd.* 2.25 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 Rs Long Term Loans & Advances' and are repayable within 3 to 6 years except Short Term Loans and Advances to Bakul Pharma Pvt. Ltd.

iii. All the above Loans and Advances are interest bearing except for an amount of Rs 224.15 crore given to Meditab Specialities Pvt. Ltd.

iv. Loans given to employees as per the Company's policy are not considered.

c) Investments made are given under the respective heads.

d) The Company has not given any guarantee or provided any security in connection with a loan to any other body corporate or person.

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
a. Stempeutics Research Pvt. Ltd.# 1,84,23,578
Meditab Holdings Ltd. has made the following investments in its subsidiaries
a. Meditab Pharmaceuticals South Africa (Pty) Ltd. 1,00,000
b. Cipla Quality Chemical Industries Ltd. 46,60,749

* Loan outstanding Rs 41 crore (Previous year Rs 41 crore) and interest free. Maximum loan outstanding Rs 41 crore (Previous year Rs 41 crore)

# Loan outstanding Nil (Previous year Rs 2.94 crore) bearing interest @ 8.25% p.a. Maximum loan outstanding '2.94 crore (Previous year Rs 2.94 crore).

40 Related Party Disclosures

i. As per AS-18, "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, associate companies and joint venture:

Sr. No. 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. Mabpharm Pvt. Ltd.*

8. Cipla (EU) Ltd.

9. Saba Investment Ltd.

10. Jay Precision Pharmaceuticals Pvt. Ltd.#

Subsidiaries (held indirectly)

11. Cipla (UK) Ltd.

12. Cipla Australia Pty. Ltd.

13. Medispray Laboratories Pvt. Ltd.

14. Sitec Labs Pvt. Ltd.

15. Four M Propack Pvt. Ltd.

16. Meditab Holdings Ltd.

17. Meditab Specialities New Zealand Ltd.

18. Meditab Pharmaceuticals South Africa Proprietary Ltd.

19. Cipla ilag Ticaret Anonim irketi

Sr. No. Name of the Company

20. Cipla USA Inc.

21. Cipla Kenya Ltd.

22. Cipla Malaysia Sdn. Bhd.

23. Cipla Europe NV

24. Cipla Quality Chemical Industries Ltd.

25. Cipla Croatia d.o.o. (Formerly known as Celeris d.o.o.)

26. Inyanga Trading 386 Proprietary Ltd.

27. Xeragen Laboratories Proprietary Ltd.

28. Galilee Marketing Proprietary Ltd.

29. Cipla Medpro Manufacturing Proprietary Ltd.

30. Cipla Medpro Holdings Proprietary Ltd.

31. Cipla Nutrition Proprietary Ltd.

32. Cipla Health Care Proprietary Ltd.

33. Cipla-Medpro Distribution Centre Proprietary Ltd.

34. Cipla-Medpro Proprietary Ltd.

35. Medpro Pharmaceutica Proprietary Ltd.

36. Cipla Life Sciences Proprietary Ltd.

37. Cipla Personal Care Proprietary Ltd.

38. Cipla Vet Proprietary Ltd.

39. Cipla Agrimed Proprietary Ltd.

40. Cipla Dibcare Proprietary Ltd.

41. Cipla Medpro Botswana Proprietary Ltd.

42. Med Man Care Proprietary Ltd.

43. Medpro Pharmaceutica Africa Proprietary Ltd.

44. Cape to Cairo Exports Proprietary Ltd.

45. Cipla Medpro ARV Proprietary Ltd.

46. Cipla Medpro Cardio Respiratory Proprietary Ltd.

47. Cipla Medpro Research and Development Proprietary Ltd.

48. Gardian Cipla Proprietary Ltd.

49. Medpro Gen Proprietary Ltd.

50. Medpro Holdings Proprietary Ltd.

51. Medpro-On-Line Proprietary Ltd.

52. Smith and Couzin Proprietary Ltd.

53. Breathe Free Lanka (Private) Ltd.

54. Cipla Canada Inc.

55. Medica Pharmaceutical Industries Company Ltd.

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

57. Cipla Pharma Lanka (Private) Ltd.

58. Cipla Pharma Nigeria Ltd.

Associates

59. Stempeutics Research Pvt. Ltd.

60. Biomab Holding Ltd.

61. Jiangsu Cdymax Pharmaceuticals Co. Ltd.

62. Mabpharm Pvt. Ltd.**

Joint Venture

63. Aspen-Cipla Australia Pty. Ltd.

* With effect from 24th July 2014

# With effect from 26th February 2015

Upto 30th March 2015

** Upto 16th July 2014

b. Key Management Personnel

1. Mr. Subhanu Saxena - Managing Director and Global Chief Executive Officer

2. Mr. S. Radhakrishnan - Whole-time Director

3. Mr. Rajesh Garg - Executive Director and Global Chief Financial Officer

c. Entities over which Key Management Personnel are able to exercise significant influence 1. Cipla Foundation

ii. Transactions during the year with related parties:

Particulars

Subsidiaries

Associates/Joint Venture

Key Management Personnel including transactions with relatives of Key Management Personnel

Entities over which Key Management Personnel exercise significant influence

Total

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Interest received 0.34 0.67 - - - - - - 0.34 0.67
Loans repaid 30.67 34.65 - - - - - - 30.67 34.65
Investment in Equity 708.72 57.19 - - - - - - 708.72 57.19
Loans given 55.67 117.57 - - - - - - 55.67 117.57
Remuneration - - - - 21.98 36.10 - - 21.98 36.10
Purchase of Goods 303.50 287.21 - - - - - 66.44 303.50 353.65
Processing charges paid 65.42 22.16 - - - - - 23.47 65.42 45.63
Testing and Analysis charges paid 62.45 48.00 - - - - - - 62.45 48.00
Freight charges paid 0.99 1.57 - - - - - - 0.99 1.57
Sale of Goods 830.54 549.44 - 28.34 - - - 30.17 830.54 607.95
Sale of Fixed Assets 1.42 1.90 - - - - - 1.17 1.42 3.07
Purchase of Fixed Assets 0.06 0.01 - - - - - 0.04 0.06 0.05
Processing charges received 3.64 2.40 - - - - - 0.71 3.64 3.11
Service charges paid 158.60 167.94 - 0.00* - - - 1.82 158.60 169.76
Service charges received 14.34 - - 13.62 - - - - 14.34 13.62
Donations given - - - - - - 9.28 9.59 9.28 9.59
Rent paid - - - - - - - 0.40 - 0.40
Rent received 3.00 - - 2.95 - 0.00 - - 3.00 2.95
Reimbursement of operating/other expenses 0.46 0.04 - - - - - 0.47 0.46 0.51
Reimbursement received of operating/other expenses 13.22 8.03 - 0.08 - - - 0.03 13.22 8.14
Balances at end of the year
Outstanding Payables 46.21 52.51 0.02 0.02 - - - 19.93 46.23 72.46
Outstanding Receivables 874.82 619.43 - 14.39 - - - 10.12 874.82 643.94

*'25000

'20040

Disclosures in respect of related party transactions during the year:

2015 2014
A. Interest received
Goldencross Pharma Pvt. Ltd. - 0.67
Jay Precision Pharmaceuticals Pvt. Ltd. 0.02 -
Meditab Specialities Pvt. Ltd. 0.19 -
Mabpharm Pvt. Ltd. 0.13 -
0.34 0.67
B. Loans Repaid
Goldencross Pharma Pvt. Ltd. - 26.75
Meditab Specialities Pvt. Ltd. 18.45 7.90
Mabpharm Pvt. Ltd. 12.22 -
30.67 34.65
C. Investment in Equity
Cipla (Mauritius) Ltd. 121.34 4.12
Cipla Holding B.V. 119.62 53.07
Mabpharm Pvt. Ltd. 54.07 -
Cipla (EU) Ltd. 37.76 -
Saba Investment Ltd. 257.69 -
Meditab Specialities Pvt. Ltd. 22.00 -
Jay Precision Pharmaceuticals Pvt. Ltd. 96.24 -
708.72 57.19
D. Loans given
Jay Precision Pharmaceuticals Pvt. Ltd. 35.00 -
Meditab Specialities Pvt. Ltd. 8.45 117.57
Mabpharm Pvt. Ltd. 12.22 -
55.67 117.57
E. Remuneration
Dr. Y. K. Hamied5 - 2.00
Mr. M. K. Hamied4 - 6.88
Mr. S. Radhakrishnan 3.69 3.67
Mr. Kamil Hamied5 - 0.96
Ms. Samina Vaziralli5 - 0.90
Mr. Subhanu Saxena 13.31 21.69
Mr. Rajesh Garg 4.98 -
21.98 36.10
F. Purchase of Goods
Goldencross Pharma Pvt. Ltd. 237.18 252.07
Medispray Laboratories Pvt. Ltd. 33.49 13.11
Meditab Specialities Pvt. Ltd. 0.24 0.73
Four M Propack Pvt. Ltd. 10.41 7.89
Okasa Pharma Pvt. Ltd.6 - 44.38
Okasa Pvt. Ltd.6 - 22.06

 

2015 2014
Cipla Medpro Manufacturing Proprietary Ltd. - 12.34
Cipla Medpro South Africa Proprietary Ltd. 0.42 -
Sitec Labs Pvt. Ltd. 0.31 1.07
Jay Precision Pharmaceuticals Pvt. Ltd 9.59 -
Cipla Quality Chemical Industries Ltd. 11.86 -
303.50 353.65
G. Processing charges paid
Goldencross Pharma Pvt. Ltd. 9.11 3.23
Medispray Laboratories Pvt. Ltd. 19.51 5.42
Meditab Specialities Pvt. Ltd. 36.80 13.51
Okasa Pharma Pvt. Ltd.6 - 8.73
Okasa Pvt. Ltd.6 - 14.74
65.42 45.63
H. Testing and Analysis charges paid
Sitec Labs Pvt. Ltd. 62.45 48.00
62.45 48.00
I. Freight charges paid
Four M Propack Pvt. Ltd. - 0.37
Meditab Specialities Pvt. Ltd. 0.49 0.74
Goldencross Pharma Pvt. Ltd. 0.50 0.46
0.99 1.57
J. Sale of Goods
Goldencross Pharma Pvt. Ltd. 2.16 2.06
Meditab Specialities Pvt. Ltd. 6.62 2.77
Four M Propack Pvt. Ltd. - 0.001
Medispray Laboratories Pvt. Ltd. 16.31 12.82
Okasa Pharma Pvt. Ltd.6 - 27.64
Okasa Pvt. Ltd.6 - 2.53
Cipla Quality Chemical Industries Ltd. 11.21 28.34
Sitec Labs Pvt. Ltd. 0.02 0.01
Cipla (EU) Ltd. 95.34 3.52
Cipla Agrimed Proprietary Ltd. 5.57 0.54
Cipla Life Sciences Proprietary Ltd. 41.68 17.78
Cipla Vet Proprietary Ltd. 5.33 2.57
Cipla Medpro South Africa Proprietary Ltd. 511.95 507.37
Medpro Pharmaceutica Proprietary Ltd. 7.76 -
Cipla Australia Pty Ltd. 0.85 -
Cipla USA Inc. 36.60 -
Saba Investment Ltd. 31.77 -
Breathe Free Lanka (Private) Ltd. 57.37 -
830.54 607.95

 

2015 2014
K. Sale of Fixed Assets
Meditab Specialities Pvt. Ltd. 0.08 0.79
Goldencross Pharma Pvt. Ltd. - 0.69
Okasa Pharma Pvt. Ltd.6 - 1.00
Okasa Pvt. Ltd.6 - 0.17
Four M Propack Pvt. Ltd. - 0.04
Medispray Laboratories Pvt. Ltd. 0.01 0.22
Sitec Labs Pvt. Ltd. 1.33 0.16
1.42 3.07
L. Purchase of Fixed Assets
Meditab Specialities Pvt. Ltd. 0.05 0.01
Okasa Pharma Pvt. Ltd.6 - 0.04
Medispray Laboratories Pvt. Ltd. 0.01 -
0.06 0.05
M. Processing charges received
Meditab Specialities Pvt. Ltd. 0.91 0.38
Medispray Laboratories Pvt. Ltd. 2.73 2.02
Okasa Pharma Pvt. Ltd.6 - 0.45
Okasa Pvt. Ltd.6 - 0.26
3.64 3.11
N. Service charges paid
Mabpharm Pvt. Ltd. 0.65 0.002
Cipla (EU) Ltd. 40.23 49.99
Cipla (UK) Ltd. 8.76 65.71
Cipla Australia Pty Ltd. 10.56 13.30
Cipla ilag Ticaret Anonim irketi 0.82 1.02
Cipla USA Inc. 33.99 31.38
Cipla Kenya Ltd. 4.68 1.51
Cipla Malaysia Sdn. Bhd. 3.80 5.03
Cipla Europe NV 52.24 -
Cipla Canada Inc. 2.87 -
Hamied Foundation - 1.82
158.60 169.76
O. Service charges received
Mabpharm Pvt. Ltd. 1.70 1.64
Cipla Quality Chemical Industries Ltd. 12.64 11.98
14.34 13.62
P. Donations given
Cipla Foundation7 9.28 7.27
Cipla Cancer and AIDS Foundation6 - 2.32
9.28 9.59

 

2015 2014
Q. Rent paid
Okasa Pvt.Ltd.6 - 0.40
- 0.40
R. Rent received
Dr. Y.K. Hamied5 - 0.003
Mabpharm Pvt. Ltd. 3.00 2.95
3.00 2.95
S. Reimbursement of Operating/Other Expenses
Meditab Specialities Pvt. Ltd. 0.28 0.02
Okasa Pharma Pvt. Ltd.6 - 0.37
Okasa Pvt. Ltd.6 - 0.10
Medispray Laboratories Pvt. Ltd. 0.18 0.02
0.46 0.51
T. Reimbursement received of Operating/Other Expenses
Goldencross Pharma Pvt. Ltd. 0.01 0.15
Meditab Specialities Pvt. Ltd. 0.01 0.02
Okasa Pharma Pvt. Ltd.6 - 0.03
Okasa Pvt. Ltd.6 0.28 -
Cipla (EU) Ltd. 0.39 0.41
Cipla Australia Pty. Ltd. - 0.11
Cipla (UK) Ltd. - 1.12
Cipla Agrimed Proprietary Ltd. - 0.01
Cipla Life Sciences Proprietary Ltd. - 0.26
Cipla Vet Proprietary Ltd. - 0.10
Cipla Medpro South Africa Proprietary Ltd. 2.12 4.51
Cipla Quality Chemical Industries Ltd. 1.07 0.04
Cipla USA Inc. 4.91 1.29
Four M Propack Pvt. Ltd. - 0.01
Medispray Laboratories Pvt. Ltd. 0.01 0.04
Mabpharm Pvt. Ltd. 0.04 0.04
Sitec Labs Pvt. Ltd. 0.01 -
Cipla Europe NV 4.21 -
Cipla Holding BV 0.16 -
13.22 8.14
U. Outstanding Payables
Goldencross Pharma Pvt. Ltd. 16.08 23.21
Four M Propack Pvt. Ltd. 1.06 0.55
Sitec Labs Pvt. Ltd. 12.33 7.55
Okasa Pharma Pvt. Ltd.6 - 19.93
Cipla (UK) Ltd. 6.51 4.87
Cipla Australia Pty. Ltd. 1.58 0.69
Cipla ilag Ticaret Anonim irketi 0.15 0.07

 

2015 2014
Cipla Kenya Ltd. 0.34 0.53
Cipla USA Inc. - 2.49
Cipla Medpro Manufacturing Proprietary Ltd. 0.04 12.04
Cipla Malaysia Sdn. Bhd. 0.30 0.51
Cipla Canada Inc. 2.86 -
Cipla (Mauritius) Ltd. 2.81 -
Meditab Holdings Ltd. 2.15 -
Stempeutics Research Pvt. Ltd. 0.02 0.02
46.23 72.46
V. Outstanding Receivables
Al-Jabal For Drugs and Medical Appliances Company Ltd. 39.03 -
Meditab Specialities Pvt. Ltd. 268.74 287.48
Medispray Laboratories Pvt. Ltd. 10.44 6.06
Jay Precision Pharmaceuticals Pvt. Ltd. 19.07 -
Okasa Pvt. Ltd.6 - 10.12
Mabpharm Pvt. Ltd. 0.01 9.18
Cipla Quality Chemical Industries Ltd. 3.77 5.21
Cipla (EU) Ltd. 76.74 0.63
Cipla Agrimed Proprietary Ltd. 4.82 0.53
Cipla Life Sciences Proprietary Ltd. 30.13 14.24
Cipla Vet Proprietary Ltd. 1.68 1.66
Cipla Medpro South Africa Proprietary Ltd. 259.96 305.94
Cipla Medpro Manufacturing Proprietary Ltd. 0.08 -
Cipla USA Inc. 59.53 -
Cipla Pharma Lanka (Pvt.) Ltd. 96.45 -
Cipla Europe NV 4.21 -
Cipla Holding B.V. 0.16 -
Cipla Croatia d.o.o. - 2.89
874.82 643.94

1 '19459.21

2'25000

3 '20040

4 Non-Executive Vice-Chairman effective 1st April 2014

5 Relatives of Non-Executive Vice-Chairman effective 1st April 2014

6 Entities on which Non-Executive Chairman or Non-Executive Vice-Chairman have significant influence

7 Entity on which Whole-time Director has significant influence

41 During the year, the Company acquired 51% stake in Saba Investment Ltd., UAE, which in turn holds 99% stake in two entities in Yemen. Accordingly the Company's effective stake in the Yemen entities is 50.49%.

As per the share purchase agreement, a provision of USD 20.3 million (equivalent to '126.88 crore) has been accounted for and given effect in these financial statements towards additional consideration to be paid on achievement of agreed milestones.

42 Basic and Diluted Earnings per share has been computed as under

2015 2014
Profit for the Year (Rs in crore) 1181.09 1388.34
Basic Weighted Average No. of Shares Outstanding 80,29,29,709 80,29,21,357
Basic Earnings per share Rs 14.71 Rs 17.29
ESOSs outstanding 26,58,008 11,58,193
Diluted Weighted Average No. of Shares Outstanding 80,55,87,717 80,40,79,550
Diluted Earnings per share '14.66 '17.27
Face value per share '2.00 '2.00

43 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 O per option Vesting period Exercise Period
ESOS 2013 - A 08-Sep-14 95,248 2.00 1 to 2 years 5 years from Vesting date
ESOS 2013 - A 31-Oct-14 9,22,230 2.00 1 to 2 years 5 years from Vesting date
ESOS 2013 - A 11-Feb-15 43,495 2.00 1 to 2 years 5 years from Vesting date
ESOS 2013 - A 11-Feb-15 18,131 2.00 1 to 2 years 5 years from Vesting date
ESOS 2013 - A 11-Feb-15 522 2.00 1 to 2 years 5 years from Vesting date

The options are granted at an exercise price, which is in accordance with the relevant SEBI regulations 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 Rs 2 each.

Stock Option activity under the Scheme(s) for the year ended 31st March 2015 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 10,00,000 197.50 197.50 7.23
Granted during the year - - - -
Forfeited/Cancelled during the year - - - -
Exercised during the year - - - -
Outstanding at the end of the year 10,00,000 197.50 197.50 6.23
Exercisable at the end of the year - - - -

ESOS 2013 - A

Particulars No. of options Weighted Average Exercise Price ( Rs ) per option Range of Exercise Price ( Rs ) per option Weighted Average remaining Contractual life (years)
Outstanding at the beginning of the year 14,71,797 2.00 2.00 6.36
Granted during the year 10,79,626 - - -
Forfeited/Cancelled during the year 2,81,313 - - -
Exercised during the year 39,083 - - -
Outstanding at the end of the year 22,31,027 2.00 2.00 5.98
Exercisable at the end of the year 2,18,014 2.00 2.00 4.76

ESOS 2013 - B

Particulars No. of options Weighted Average Exercise Price ( Rs ) per option Range of Exercise Price ( Rs ) per option Weighted Average remaining Contractual life (years)
Outstanding at the beginning of the year 5,22,194 220.78 220.78 7.67
Granted during the year - - - -
Forfeited/Cancelled during the year - - - -
Exercised during the year - - - -
Outstanding at the end of the year 5,22,194 220.78 220.78 6.67
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

No Options Granted during the Year

0.31%

No Options Granted during the Year

Expected volatility 23.80%
Risk-free interest rate 8.34%
Weighted average share price ( Rs ) 641.78
Exercise price ( Rs ) 2.00
Expected life of options granted in years 4.50
Weighted average fair value of options ( Rs ) 631.48

The stock-based compensation cost calculated as per the intrinsic value method for the period 1st April 2014 to 31st March 2015 is '39.45 crore (excluding '11.45 crore pertaining to options granted to employees of subsidiary companies and step-down subsidiary companies). If the stock-based compensation cost was calculated as per the fair value method prescribed by SEBI, the total cost to be recognised in the financial statements for the period 1st April 2014 to 31st March 2015 would be '42.74 crore. The effect of adopting the fair value method on the net income and earnings per share is presented below:

Particulars 2015 2014
Profit after tax as reported 1181.09 1388.34
Add: ESOS cost using intrinsic value method 39.45 18.40
Less: ESOS cost using fair value method 42.74 21.26
Adjusted profit after tax 1177.80 1385.48
Earnings per share
Basic
As reported Rs 14.71 Rs 17.29
Adjusted Rs 14.67 Rs 17.26
Diluted
As reported Rs 14.66 Rs 17.27
Adjusted Rs 14.62 Rs 17.23

44 Corporate Social Responsibility (CSR) Expenditure

The Company has incurred a total expenditure of Rs 13.43 crore, which is being debited to the profit and loss account for the year ended 31st March 2015.

Nature of expenses Schedule in the financial statements Amount (Rs in crore)
Donation to the trusts set for CSR purposes Other expenses (Note 28) 12.79
Administrative expenses incurred in connection with supervising the projects handled by the trusts Salaries and wages (Note 25) 0.64
Total 13.43

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 2 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 31st March 2015:

i. Gross amount required to be spent by the Company during the year - '34.86 crore

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

Particulars Amount paid in cash Amount yet to be paid in cash Total amount
Construction of asset 4.58 - 4.58
Other projects 8.21 - 8.21
Administrative expenses 0.64 - 0.64
Total 13.43 - 13.43

45 Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

As per our report of even date
For V. Sankar Aiyar & Co., For R.G.N. Price & Co., Subhanu Saxena Rajesh Garg
Chartered Accountants Chartered Accountants Managing Director and Executive Director and
Firm Reg. No. 109208W Firm Reg. No. 002785S Global Chief Executive Officer Global Chief Financial Officer
V. Mohan R. Rangarajan Mital Sanghvi
Partner Partner Company Secretary
Membership No. 17748 Membership No. 41883
Mumbai, 29th May 2015 Mumbai, 29th May 2015

   

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