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lisinopril lupin

Spine has to adjusted by the printer at his end
2010
the science and art of Lupin
GO!
give me six hours to
chop down a tree and
I will spend the first
four sharpening
the axe
Abraham Lincoln
LUPIN LIMITED
Corporate Office
Laxmi Towers, 'B' Wing, Bandra Kurla Complex
Bandra (East), Mumbai 400 051
Tel: + 91 22 6640 2222
Fax: + 91 22 6640 2130
Registered Office
159, C.S.T. Road, Kalina
Santacruz (East), Mumbai 400 098
Tel: + 91 22 6640 2323
Fax: + 91 22 2652 8806
Email
[email protected]
[email protected]
Website
www.lupinworld.com
1968
Lupin founded by Dr Desh Bandhu Gupta
1980
Lupin commissions formulation plant and R&D centre at Aurangabad
Ethambutol API production started
1992
Injectable Cephalosporins plant commissioned at Mandideep
Fermentation plant set up at Tarapur
1993
Lupin goes public and is listed on major Indian stock exchanges
1997
Three Lupin plants (Mandideep, Tarapur and Ankleshwar) receive
US FDA approval
2001
Lupin Research Park (global R&D hub) commissioned at Pune
2004
Branded business starts in the US with the launch of Suprax®
2005
Generic business launched in the US with five products
2007
Lupin acquires Kyowa Pharmaceutical Industry Company, Japan
2008
Lupin makes acquisitions in Germany, Australia, South Africa and
the Philippines
2009
Lupin becomes 8 largest generic company in the US (by Rx's)
Enters Primary Care space in the US with the acquisition of Antara®
Makes it to the Top 5 in the Indian pharmaceutical market
th
GO!
chairman's message
Lupin is at the tipping
point between its
heritage and its destiny
02
GO!
My Dear Shareowners
Every business strives to create value and achieve success. This however has many interpretations. Some
view it purely financially, others in terms of market share or ability to survive a hostile economic
environment. Over 40 years of operations have taught us many lessons but what remains sacrosanct at
Lupin is the balance between vision and execution, between dreams and hard work, between financial and
human capital. This defines the culture of our company, which we refer to as the science and art of Lupin.
This year's annual report showcases our performance as a billion dollar company. But for me this heralds the
beginning of a new journey, not just a milestone to reflect upon.
As expected, our robust vertically integrated business model is unlocking increasingly higher revenues and
margins and strong sustainable growth. We are outperforming our peers in every global market and therapy
segment we are present in. We have established new beachheads in Europe, Africa and other important
regions like Japan and Australia and we continue to explore and enter new territories to extend our global
footprint. The triad of the US, Europe and Japan shall continue driving our major growth. In addition, our plan is
to develop Lupin's onshore presence in all major pharmerging markets which by 2018 are expected to become
equal to the US and Japan put together.
Our prime focus has always been to consistently exceed customer expectations in terms of quality, value and
service, which is the mantra of our business strategy. Underpinned by years of commitment to each of our
markets and now our investment into proprietary Research & Development, the stage is set for our next phase
of growth as a major global player.
I believe that Lupin is at the 'tipping point' between its heritage and its destiny. We have earned our rights of
passage into the major international arena and our determination and commitment to continue to
outperform has never been stronger.
It is the behaviour of our leadership team and our people, their passion and shared wisdom that defines Lupin.
Together, we have created a business democracy, where entrepreneurship can flourish within a corporate
environment. Where dreams are embraced, unraveled and turned into realities through diligence, discipline
and a strong work ethic.
Against the backdrop of a more realistic and confident world economy, I am sure that we have the assets and
momentum for an exceptional future. When I review our journey so far and look at the road ahead, our
achievements and milestones seem just the preparation for the next chapter in our story. We can say that Lupin
is now truly ready to GO!
With Best Wishes
Dr Desh Bandhu Gupta
Founder and Chairman
Lupin Limited
03
LUPIN Annual Report 2010
LUPIN 2010
Lupin Research Park, Pune
04
GO!
contents
06
08
10
14
20
24
30
05
Financial Highlights
Corporate Information
Managing Director's Review
US & Europe
India
Rest of the World
Active Pharmaceutical Ingredients
34
42
44
48
50
52
54
Research & Development
Human Resources
Financial Commentary
Corporate Social Obligation
Welcome to the Future
Five Year Financial Summary
Reports and Accounts
LUPIN 2010
47,678
Sales (Gross)
anything worth
doing is worth
doing 100%
(INR million)
38,238
27,730
17,503
20,717
Konosuke Matsushita
FY 06
Revenue Composition
(%)
FY 07
FY 08
FY 09
FY 10
EBIDTA
(INR million)
9,981
16
7,439
6,423
API
4,913
Domestic Formulations
28
Emerging Markets
Formulations
Advanced Markets
Formulations
49
2,977
FY 06
FY 07
FY 08
FY 09
FY 10
7
Profit Before Tax
8,357
(INR million)
Consolidated Net Profit
(INR million)
6,816
6,060
5,402
5,015
4,075
4,083
3,086
2,255
FY 06
1,730
FY 07
FY 08
FY 09
FY 10
FY 06
FY 07
FY 08
FY 09
FY 10
06
GO!
financial highlights
Market Break Down
% Contribution
Emerging Markets
Advanced Markets
Exports
(INR million)
5,562
API
Formulations
22
23
35
47
50
78
77
65
53
50
FY 06
FY 07
FY 08
FY 09
FY 10
5,047
5,260
4,938
5,555
3,051
5,094
FY 06
10,032
FY 07
19,654
FY 08
26,405
FY 09
FY 10
Business Mix
Geographic Break Down
% Contribution
% Contribution
Domestic
Exports - Advanced Markets
Exports - Emerging Markets
Formulation
API
48
52
FY 06
39
61
FY 07
30
70
FY 08
19
81
FY 09
27
25
20
18
17
22
23
35
47
50
51
52
45
35
33
FY 06
FY 07
FY 08
FY 09
FY 10
16
84
FY 10
楶楤敮
Earning Per Share (Basic)
(INR)
79.18
%
135
60.84
125
50.01
100
37.79
65
21.12
FY 06
07
50
FY 07
FY 08
FY 09
FY 10
FY 06
FY 07
FY 08
FY 09
FY 10
directors
Dr Desh Bandhu Gupta, Chairman
Dr Kamal K Sharma, Managing Director
Mrs M D Gupta, Executive Director
Ms Vinita Gupta
Mr Nilesh Gupta, Executive Director
Mr K V Kamath, Additional Director
Dr Vijay Kelkar, Additional Director
Mr Richard Zahn, Additional Director
Mr R A Shah
Dr K U Mada
Mr D K Contractor
Mr Sunil Nair (up to May 5, 2010)
Lupin Manufacturing Plant, Indore
08
GO!
corporate information
Dr. Desh Bandhu Gupta
SENIOR MANAGEMENT TEAM
COMPANY SECRETARY &
COMPLIANCE OFFICER
Chairman
Mr. R. V. Satam
SOLICITORS
Crawford Bayley & Co.
Dr. Kamal K. Sharma
BANKERS
Managing Director
Ms. Vinita Gupta
Group President &
CEO - Lupin Pharmaceuticals Inc., USA
Mr. Nilesh Gupta
Group President & Executive Director
AUDITORS
Deloitte Haskins & Sells
Chartered Accountants
Mr. Shakti Chakraborty
Group President - India Region Formulations
Mr. Satish Khanna
Group President - API
Mr. Vinod Dhawan
President - AAMLA & Business Development
Mr. Harish Narula
President - Corporate Development & CIS
AUDIT COMMITTEE
Dr. K. U. Mada
Chairman
Mr. D. K. Contractor
Dr. Kamal K. Sharma
Mr. Naresh Gupta
Central Bank of India
Bank of Baroda
State Bank of India
Citibank N.A.
ICICI Bank Limited
The Hongkong and Shanghai
Banking Corporation Limited
Standard Chartered Bank
The Royal Bank of Scotland N.V.
Kotak Mahindra Bank Limited
HDFC Bank Limited
President - API & Global TB
Dr. Rajender Kamboj
President - Novel Drug Discovery & Development
Dr. Ninad Deshpanday
President - Pharma Research & Development
Mr. Ramesh Swaminathan
President - Finance & Planning
Mr. Divakar Kaza
INVESTORS' GRIEVANCES
COMMITTEE
Chairman
Dr. K. U. Mada
REGISTERED OFFICE
159, C.S.T. Road,
Kalina, Santacruz (East),
Mumbai - 400 098.
Tel:+ 91 22 6640 2323
Fax:+ 91 22 2652 8806
President - Human Resources Development
Dr. Dhananjay Bakhle
Executive Vice President - Medical Research
Mr. Debabrata Chakravorty
REMUNERATION/
COMPENSATION COMMITTEE
Executive Vice President - Supply Planning &
Strategic Sourcing
Dr. K. U. Mada
Mr. Alok Ghosh
Chairman
Executive Vice President - Global Dosage Pharma
Manufacturing and Quality Assurance
Mr. R. A. Shah
Mr. Sunil Makharia
Executive Vice President - Finance
CORPORATE OFFICE
Laxmi Towers, 'B' Wing,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051.
Tel: + 91 22 6640 2222
Fax: + 91 22 6640 2130
www.lupinworld.com
Mr. Andrew Macaulay
Executive Vice President - Lupin (Europe) Ltd.
Dr. Sofia Mumtaz
Executive Vice President - IPMG
EMAIL
[email protected]
FORWARD-LOOKING STATEMENT
In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects
and take informed investment decisions. This report and other statements - written and oral that we periodically make,
contain forward-looking statements that set out anticipated results based on the management's plans and assumptions.
We have tried, wherever possible, to identify such statements by using words such as 'anticipate', 'estimate', 'expects',
'projects', 'intends', 'plans', 'believes' and words of similar substance in connection with any discussion of future
performance.
We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in
assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known
or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Readers should bear this in mind.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information,
future events or otherwise.
09
managing director's review
at the heart of Lupin's
growth story are our people.
We outperform in the
marketplace through the
'outbehavior' of our teams
across the world.
Dr Kamal K Sharma
Managing Director
10
unleashing the power within
Dear Shareholders
As expected, this has been a strong year for the
Company - one which ushers in a new era in Lupin's
story. For the past 5 years we have been carefully
putting in place the strategic foundations for a robust
and, what I believe will be, remarkable future journey.
Over the years, we have targeted and invested in the
higher value segments of the pharmaceutical value
chain, which now would result in increased
momentum, consistent growth and better financial
performance. We have transformed our Company
into one of the highest growth major players in all the
markets and product segments we operate in, across
the globe.
In FY 2010, net sales grew by 26% to INR 47,405
million (USD 1.1 billion) up from INR 37,759 the
previous year. EBITDA margins increased to 21.1%
from 19.7% in FY 2009 and net profits grew at 36% to
INR 6,816 million (USD 152 million) compared to INR
5,015 million in FY 2009. Standing on the shoulders of
our past performance record, these results deliver
some of the best growth numbers in the industry 29% CAGR in Gross Sales; 45% CAGR in EBITDA and
49% CAGR in Net Profits for the last 6 years. A
performance that we are determined to maintain or
exceed in the years to come.
The momentum behind Lupin's growth is driven
across the spectrum of an engineered market
expansion, differentiated product portfolio, higher
investments in research and development and
embedded stringent quality and compliance
standards - all underpinned by financial prudence
GROSS SALES
47,678
CAGR : 29%
and careful planning. We have a strong, truly worldclass leadership team in place and an
entrepreneurial, democratic and transparent
culture that empowers all our people worldwide to
excel and defines 'how we do things at Lupin'.
MARKET EXPANSION
Our international business continues to grow and
increased by 29% in FY 2010 to INR 31,966 million
from INR 24,701 million in FY 2009. It is also
heartening to know that Formulations today
contribute 84% of our overall revenues with the rest
coming from API's.
Advanced Markets
US & Europe
We recorded a stellar performance in the Advanced
Markets of US & Europe. These markets contributed
a healthy 38% of total revenues at INR 17,893
million, up from INR 12,916 million in FY 2009.
Lupin's Generic and Brand business also recorded
high growth during the financial year. We have
emerged as the 8th largest and the fastest growing
amongst the Top 10 generic players (by
prescriptions) in the US - the first Indian company to
reach this milestone. FY 2010 saw Lupin expanding
its US branded portfolio with the acquisition of
AllerNazeTM, an Intra-Nasal Steroid and Antara®, an
anti-cholestrol drug. The US branded business
contributed 37% of the overall US revenues with a
turnover of USD 127 million, growing by 72% during
FY 2010 as compared to USD 74 mn in FY 2009.
EBIDTA
PAT
CAGR : 45%
9,981
6,816
CAGR : 49%
38,238
7,439
17,503
5,015
6,423
27,730
4,083
3,086
4,913
20,717
1,730
2,977
13,123
918
1,568
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
INR million
11
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
INR million
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
INR million
Lupin is the only Indian Pharma company with a
significant Branded presence in the US market.
Formulation sales to the three most developed
pharmaceutical markets in the world (US, Europe and
Japan) were up by 34% during FY 2010 and stood at
49% of the Company's Gross Sales.
Japan
Kyowa, the Company's subsidiary in Japan posted
robust net sales of INR 5,341 million, growing 21%
over the last fiscal. It now contributes 11% of Lupin's
revenues. Kyowa launched 6 products and filed
applications for another 8 during FY 2010.
Australia and New Zealand
The Company continued its focus on this important
strategic region. FY 2010 saw the cumulative MAA
filings go up to 27 of which 22 stand approved till date.
Emerging Markets
India
India forms a key part of Lupin's overall growth and is
a very important market for us. The India Region
Formulations contributed 28% of our Gross Sales at
INR 13,502 million during FY 2010 as against INR
11,412 million, up 18% over the previous year.
This growth was driven by strong performance and
increasing market share in the CVS, Diabetes, CNS,
Asthma and Gastro therapy segments. The India
Region Formulations brand business continues to
outpace the industry growing by over 21% during FY
2010 (Net of Excise).
South Africa
Lupin recorded revenues of INR 1,328 million from
Pharma Dynamics, our subsidiary in South Africa, up
57% from FY 2009 with clear leadership in the
cardiovascular segment. Pharma Dynamics is now
ranked No. 6 amongst the generic pharmaceutical
companies in South Africa and is the fastest growing
of the Top 10 players.
Philippines
In March 2009, the Company acquired a majority
stake in Multicare Pharmaceuticals Philippines, Inc.
A premium branded generics company with a strong
position in women's health and the childcare
segment, Multicare has now emerged as the 10th
largest and the fastest growing generic company in
the Philippines (IMS Feb, 2010).
DIFFERENTIATED PRODUCT PORTFOLIO
Moving up the value chain in the pharmaceutical
universe has helped us deliver superior margins and our
track record of establishing leadership in both generic
and branded formulations is evident given our strong
market position in all markets of direct operations.
12
GO!
In addition to being the 8th largest Generic player in
the US in terms of prescriptions, 13 out of our 26
generic products now rank No. 1 by market share and
25 out of these 26 products are in the Top 3.
RESEARCH AND DEVELOPMENT
We recognized very early in Lupin that focused long-term
investment in new areas of research would form the
backbone of the Company's future business performance
and profitability. FY 2010 total expenditure on R&D
amounted to INR 4,119 million, 8.7% of Net Sales as against
INR 2,669 million in FY 2009. We reported a record number
of filings in FY 2010 - 37 ANDA's and 19 DMF's with the US
FDA, in addition to 11 MAA's with European Authorities. We
also out-licensed one of our drug delivery system based
products to Salix Pharmaceuticals for the US market.
In addition to the ramp-up in our established areas of
Generic product research and Advanced Drug
Delivery Systems, we completed the restructuring of
the Novel Drug Discovery and Development program
in FY 2010. Our biotechnology research program has
also made rapid strides this year.
QUALITY AND COMPLIANCE STANDARDS
In the year, Lupin received official communication
from the US FDA on the satisfactory resolution of the
Warning Letter issued earlier to the Mandideep site.
The US FDA also inspected two new sites of the
Company at Aurangabad (Liquids) & Indore (Oral
Solids and Oral Contraceptives). Both inspections
were found acceptable. All our plants catering to
Advanced Markets were inspected last year and were
found to be in good shape.
FINANCIAL PRUDENCE TO ENHANCE
EARNINGS
Despite a 26% increase in net sales, Net Operating
Working Capital increased only by 4.3% from INR 11,388
million as of 31st March, 2009 to INR 11,869 million as of
31st March 2010, reflecting further optimisation in our
Working Capital management. Material cost reduced
by 1% of Net Sales, personnel cost remained constant
at 12% of Net Sales and Selling, General and
Administrative costs increased marginally to 28% of
Net Sales from 27% during FY 2009.
The Debt Equity Ratio improved to 0.44 from 0.62
and all outstanding FCCBs were redeemed or
converted into shares during FY 2010.
OUR PEOPLE
At the heart of Lupin's growth story are our people. I
am very proud of their passion and commitment to
the Company, its dreams and aspirations. Our
leadership group stands apart in the Industry,
preparing us for the challenges and opportunities of
the future. Each member has a key role to play in
engineering our destiny. It gives me great pleasure
to introduce our leadership team in the following
chapters. They will contour the major growth
engines of Lupin and tell you in more detail what to
expect from us going forward.
Yours Sincerely
Dr Kamal K Sharma
Managing Director
Lupin Limited
13
US & Europe
Lupin has clearly broken
away from the rest to
emerge as the 8th largest
and the fastest growing Top
10 Generic Business in the
US (in Rx's) - the only Indian
pharma major to ever
achieve this feat
Ms Vinita Gupta
Group President & CEO
Lupin Pharmaceuticals Inc., USA
14
the growth leader
16,497
11,894
7,205
2,240
FY 06
3,553
FY 07
FY 08
FY 09
What has been unique about Lupin, is its ability to
increase and build on existing market shares for
most of the 26 marketed products in the US on the
back of flawless execution and excellent
relationships with trade partners, all serviced by an
agile and responsive supply chain. The Company
continues to record the highest per product
revenues amongst its Indian peers.
FY 10
US
Riding high on the momentum built up in our
Branded Business and sustained, consistent growth
in Generics, Lupin's Formulations business in the US
emerged as the key growth driver for the Company,
recording sales of INR 16,497 million during FY 2010
as compared to INR 11,894 million in FY 2009, up 39%.
US Generics
The Company's Generics business reported growth of
16% in the US, up from USD 187 million in FY 2009 to
USD 217 million in FY 2010. Today, Lupin is the 8th
largest Generic player in the US in terms of
prescriptions. The Company is also the fastest
growing Top 10 generic player in the US for the
second year running, growing at 51% by
prescriptions (IMS Health). The Company now has 26
generic products in the US out of which are 13 are
15
market leaders, ranked No. 1 by market share. Lupin
holds the Top 3 positions in terms of market share
for 25 of the 26 marketed products (IMS Health).
The Company received 7 approvals from the US FDA
during FY 2010, out of which 3 were tentative
approvals. The approvals received in the year were
Levofloxacin Tablets, Ethambutol Tablets,
Memantine Tablets, Perindopril Tablets,
Amlodipine and Benazepril Capsules, Imipramine
Tablets and Eszopiclone Tablets.
Top Ten US Generic Drug Manufacturers Market Share
by Prescription (Total Rxs)
Manufacturer
Teva
Mylan
Watson
Sandoz
Qualitest
Greenstone
Apotex
Lupin
Malinckdrodt
Actavis-Purepac
Total Rxs
634,415
331,562
251,970
218,891
109,802
102,316
99,841
92,757
90,824
73,524
2009
% Change
1.70%
11.90%
6.40%
10.90%
11.30%
24.80%
4.80%
51.10%
-4.90%
-10%
% Share
25.20%
13.60%
10.30%
9.00%
4.50%
4.20%
4.10%
3.80%
3.70%
3.00%
Source: IMS Data
US & Europe | India | ROW | API | R&D | HR | Financial Commentary | CSO
US Formulations Revenue
(INR million)
the Company now has 26
generic products in the US
out of which 13 are market
leaders. Lupin also holds
Top 3 positions for 25 of
these 26 products
MD& A
Lupin's Advanced Markets business in US and Europe
continued its upward growth momentum during the
year with total sales of INR 18,570 million, up from INR
13,567 million during the previous fiscal, a growth of
37%. The Company's Formulations sales in the US
market grew to INR 16,497 million during FY 2010, up
from INR 11,894 million during the previous year. The
Company continues to register impressive growth in
the European Market where Formulations sales grew
36%, to INR 1,395 million for FY 2010 up from
INR 1,023 million during FY 2009.
Lupin's branded business contributed 37% of the overall US revenues
with a turnover of USD 127 million, growing by 72% during FY 2010
Delivering value by Leveraging Intellectual
Property
FY 2010 was marked with several examples where the
Company was able to leverage its intellectual property
capabilities into driving organisation growth. During
the year, the Company settled all ongoing litigation
with Novartis on Lotrel (Benazepril/Amlodipine)
capsules and then launched the product in the US
Market. The Company also settled all litigation relating
to Memantine tablets, Lupin's generic version of Forest
Laboratories Inc.'s Alzheimer disease treatment
"Namenda®" Tablets. In addition, the Company sold its
first-to-file ANDA on Antara® (Fenofibrate) Tablets to
Dr. Reddy's before buying the brand for the US. Lupin
and Natco Limited have an alliance to jointly
commercialise generic equivalents of Shire's
FOSRENOL® (Lanthanum Carbonate) Tablets. Natco is
one of the first-to-files on the product.
Indian peers but also emerged as one of the Top 10
ANDA filers globally. The cumulative number of ANDA
filings now stands at 127, with 40 approvals to date.
Lupin has 55 Para IV Filings with the US FDA, out of which
24 were filed during FY 2010. The cumulative first-to-file
and exclusive opportunities now stand at 12.
On the Drug Delivery front, in FY 2010 Lupin and Salix
entered into an agreement under which the two
companies will collaborate in the development and
commercialisation of Lupin's extended release
Rifaximin product for the US market. Lupin will also
supply Rifaximin API to Salix. Salix made a USD 5
million up-front payment to Lupin and the alliance also
envisages typical milestone and royalty payments.
Quality and Regulatory Compliance
During FY 2010, the Company filed 37 Abbreviated New
Drug Applications (ANDAs) with the United States Food
and Drug Administration. Lupin not only clocked in one
of the highest number of ANDA filings amongst its
FY 2010 was a landmark year for Lupin on the Quality
and Regulatory Compliance front. We were able to
successfully resolve the Warning Letter issued to our
Mandideep site in under 8 months. Earlier in the year,
the UK MHRA and the Australian TGA had also
conducted a joint inspection of the Mandideep
ANDA Pipeline
DMF Pipeline
127
104
85
74
90
60
62
46
51
36
FY 06
FY 07
FY 08
FY 09
FY 10
FY 06
FY 07
FY 08
FY 09
FY 10
16
US BRANDED
Lupin's Branded business contributed 37% of the
overall US revenues with a turnover of USD 127 million,
growing by 72% during FY 2010 as compared to USD
74 million during the last fiscal.
The Company's experience, sound market
understanding and effective marketing strategies are
reflected in the success of our flagship brand,
Suprax®. During FY 2010, Suprax® continued its
upward growth trajectory. The Suprax basket now
encompasses Suprax® (Cefixime) for Oral Suspension
100mg/5ml, 200mg/5ml and Suprax® 400mg
Tablets. The Company has strengthened its portfolio
of offerings by value-added line extensions and will
continue to invest in developing new products and
product line extensions using its proprietary
controlled release and taste making platforms.
In FY 2010, Lupin ramped - up its US sales force
from 60 to 150 representatives, given the addition
FY 2010 saw Lupin expanding its branded portfolio
by acquiring the worldwide rights for the intra-nasal
steroid (INS) product, AllerNaze™ (triamcinolone)
Nasal Spray, 50mcg, from Collegium Pharmaceutical,
Inc. The US FDA has already approved AllerNaze™, an
aqueous based intranasal steroid indicated for the
once daily treatment of nasal symptoms associated
with both seasonal allergic rhinitis (SAR) and
perennial allergic rhinitis (PAR) in adults and children
above 12 years of age and older. AllerNaze™ offers a
quality intranasal steroid option to physicians as they
deal with adherence and compliance issues when
treating allergic rhinitis. The intranasal steroid
market generated USD 2.5 billion in annual sales in
the United States alone (IMS).
During the year, the Company made its second
branded acquisition by obtaining US rights for
17
Lupin's Goa and Tarapur facilities were also
inspected in 2009 and found to be acceptable. The
US FDA also inspected Lupin's Aurangabad (Liquids)
& Indore (Oral Solids and Oral Contraceptives) sites.
Both inspections were found acceptable and these
inspections bring the Company a step closer to
launching Liquids and Oral Contraceptives in the US
market. With these recent inspections, all Lupin's
facilities catering to Advanced Markets have now
been inspected in the past year and have been found
to be in good shape and in line with the expectations
of regulators across the world.
Antara® (Fenofibrate Capsules 43 mg and 130 mg)
from Oscient Pharmaceuticals under the procedures of
the US Bankruptcy Court. Antara® recorded net sales of
USD 70 million for 2008 (IMS Dec '08). Antara® has strong
brand equity with primary care physicians and is
prescribed for treatment of hypercholesterolemia (high
blood cholesterol) and hyper-triglyceridemia (high
triglycerides). In the US Fenofibrate products market,
at around USD 1.9 billion, Antara® has 4.5% share of
the market and grew 20 % in revenue in the past year.
MD& A
facility and had found it acceptable. Clearing the
Warning Letter in such a short timeframe is even
more commendable in the current heightened
regulatory environment and is strong testimony of
how the Company has kept pace and stayed ahead of
the regulatory curve.
of Antara® and soon to come AllerNazeTM to its
Branded portfolio. The ramp-up helps create a
specialty sales force that now addresses both
Pediatricians and Primary Care Physicians with a
complete portfolio of products.
During FY 2010, the Company's Formulations business
in Europe recorded a growth of 36%. Additionally,
during the year, Lupin filed as many as 11 MAAs and 3
EDMFs and COSs across Europe. The total cumulative
finished product filings within the EU stands at 65, with
31 total approvals.
EUROPE
Lupin has developed a solid foundation to grow its
Formulations business in the European markets with
a robust product pipeline. Having built its presence
across select EU markets through a blend of direct-tomarket initiatives, acquisitions and strategic
partnerships, the Company is today well placed to
address the unique demands of the fragmented and
diverse EU market.
Germany
Lupin made strategic inroads into the German
Market by acquiring Hormosan Pharma GmbH
(Hormosan), a German Generics company,
specialized in the supply of pharmaceutical
products. Hormosan enjoys a strong brand
identity in Germany, especially in the CNS area.
With the change to a substitution-driven market,
18
GO!
Lupin's direct-to-market initiative has worked well in
the UK, which is evident from the success of the
Company's flagship brand, Lisinopril that commands a
market share in excess of 15%. Lupin is now looking at
introducing several new value-added products. The
Company has a strong pipeline of 22 filings in the UK
and received approvals for Valsartan Tablets and
Perindopril + Indapamide tablets during FY 2010.
19
Having built successful partnerships over the past
year, Lupin continues to make inroads into the
French market with its Cefpodoxime Proxetil
tablets, accounting for over 72% market share. The
Company also launched Cefpodoxime Proxetil
Suspension in FY 2010.
Overall, Lupin is well on its way to grow its direct-tomarket business as well as its partnered business in
Europe. In addition to UK, Germany and France, the
Company is also focused on building its position in
the markets of Italy, Spain, Portugal, Poland, Czech
Republic, Hungary and Turkey.
UK
France
MD& A
the Company has completely realigned its focus
and is now geared towards capitalising on the
right Generic opportunities. Hormosan registered
a growth of over 100% during FY 2010.
India
Lupin today is the fastest
growing amongst the Top 5
Indian pharma companies.
We are now poised to go for
leadership
Shakti Chakraborty
Group President - India Region Formulations
20
revving our engines
formidable player in important chronic therapies
like Cardiology, Central Nervous System (CNS),
further enhanced its market shares across multiple
Diabetology, Anti-Asthma, Anti-Infective, Gastro
therapy segments. During FY 2010, Lupin's domestic
Intestinal and Oncology. Lupin's smart, lean
formulations business outpaced and outperformed
business model coupled with sharp marketing
strategies is reflected by its success in the
domestic market.
million during FY 2009, a growth of 18%. Spurred by
gains made this year, Lupin has today emerged as the
In FY 2010, Lupin expanded its product portfolio
fastest growing among the top 5 in the IPM, with an
with the introduction of a mix of branded and
overall market share of 2.75% (ORG IMS Mar 2010).
value added generics into the market place. The
Company also added new therapy areas such as
Nephrology and Osteoarthritis as it went about
Domestic Formulations (Sales)
building market share in other existing segments.
(INR million)
13,502
The Company's growth rates in some of the major
therapeutic segments remain the best in the
11,412
9,496
industry. In the Anti-Asthma segment. The
7,530
6,064
Company's diabetics business also recorded an
impressive growth of over 44%, outperforming the
market growth rate of 24%.
FY 06
FY 07
FY 08
FY 09
FY 10
Top Ten Lupin Brands
PRODUCTS
RANKING
TONACT
THERAPEUTIC
SEGMENT
CVS
GLUCONORM
ANTI DIABETIC
2
RABLET
3
GASTRO INTESTINAL
2
IRF Therapeutic Contribution (%)
12%
CVS
Anti Tb
10%
21%
Anti Asthma
RCINEX
ANTI TB
1
Antibiotics
GI
AKT
ANTI TB
1
Anti Diabetic
RAMISTAR
CVS
2
CNS
CLOPITAB
CVS
3
L-CIN
LEVOFLOXACIN
1
ODOXIL
ANTI -INFECTIVE
1
DOXCEF
CEFPODOXIME SOLIDS
7
Nsaids
Others
Generics (Incl. Inst.)
2%
5%
11%
6%
9%
6%
18%
(ORG IMS Mar 10)
GROWTH DRIVERS
Focus on Chronic Therapy Segments
The Company's sales and marketing efforts, with
Over the years, Lupin has transitioned its therapy
sharp product and therapy focus has helped Lupin
focus from primarily acute treatment to lifestyle
build brands that are market leaders. 6 Lupin
segments and chronic therapies. Lupin is now a
products find a place amongst the Top 300 in the
21
Marketing Strategy & Execution
the Indian Pharmaceutical Market (IPM) and recorded
sales of INR 13,502 million as compared to INR 11,412
MD& A
In FY 2010, Lupin's India Region Formulations
business continued its outstanding growth and
Therapeutic
Segments
CVS
Anti Tb
Anti Asthma
Anti Infective
GI
CNS
Anti Diabetic
Market Growth
Rate (%)
20
-2
21
15
17
20
24
Lupin Growth
Rate (%)
20
7
34
15
20
36
44
(ORG IMS Mar 10)
industry. During FY 2010, Lupin continued to witness
growth across all key business divisions and therapy
segments. Some of these segments are:
Lupin Femina
The Lupin Femina division was launched in FY 2009
to spearhead the Company's entry into the
women's health care segment. Lupin Femina
registered a dynamic growth of 134% and launched
seven new brands during FY 2010. Lupin Femina
also launched two in-licensed products in the
Gynaecology segment during the year, namely
Faa-20 and Luprolide.
Endeavour
This multi-specialty division is responsible for the
Anti-infective and Cephalosporin business for Lupin.
Lupin Respira
It focuses on acute therapy areas with a product
The Company's entry into Anti-Asthma, Allergy and
portfolio comprising Antibiotics, Pain management,
Respiratory Tract Infections and COPD medicine is
Gastrointestinal and Anti-Osteoporosis products.
spearheaded by the Lupin Respira division. With
Lupin grew at an outstanding rate of 20% in the GI
eight new brands launched in FY 2010, it continues to
space in FY 2010. Lupin's Anti-infective business in
garner market share in the Indian Anti-Asthma
India grew by 15% in the same timeframe. Endeavour
market, registering a growth of 34% in FY 2010 as
made a strategic entry into the anti-arthritic segment
against the market growth of 21%.
with the launch of its first in-licensed brand Hyalgan
for Osteoarthritis. Hyalgan is a research product of
Pinnacle CVS
Fidia, Italy.
Lupin's specialised division that focuses on the
Cardiac market continued to post strong results
Maxter
growing at 20% in FY 2010 commanding a 5.2%
One of the youngest divisions within Lupin's India
share of the overall Indian Cardiac market. The
formulations business it focuses on the Critical Care
division also launched a neutraceutical in the year,
segment as well as making inroads into the field of
Harty (Resveratrol). Five new brands were launched
Wound Management. Some of Maxter's products like
during FY 2010.
Tazar and Merotrol are market leaders in their
categories. Maxter is the fastest growing player in the
Lupin Diabetes Care
critical-care segment with special focus on high-end
The Diabetes Care division posted yet another year of
injectables as well as other life-saving medicines and
exemplary growth garnering 3.3% market share of the
products. The division recorded a growth rate of 11%
overall Indian diabetes market. In FY 2010, the
in FY 2010.
Company's Diabetes business grew at 44% as against
the Industry growth rate of around 24%. Lupin is
Lupin CVN
ranked 8th overall in the (Oral+Insulin) diabetic market
The year witnessed the launch of Lupin CVN, Lupin's
growing at twice the market rate. The division
Super Speciality Division catering to the nephrology
launched two new brands during FY 2010.
segment. Already 7 of 11 Lupin CVN brands feature
22
GO!
LUPIN WITHIN THE MEDICAL COMMUNITY
during FY 2010. Novastat was relaunched and has
Lupin has always focused on working with the
achieved the 7th position in its first year.
medical fraternity by creating knowledge sharing
platforms to keep them abreast of the latest
technological advances and breakthroughs.
With the Indian CNS market growing at about 20%,
FY 2010 marks the 5th year of the acclaimed
Mindvision has driven Lupin's entry into the neuro-
International Symposium on Diabetes (ISD), a
psychiatry segment. One of the fastest growing
platform created by Lupin in association with
divisions of Lupin's India Region Formulations,
faculty from the JOSLIN Diabetes Centre, USA. ISD
Mindvision registered a growth of 41% in FY 2010
continues to be the largest platform for Indian
and including the oncology division recorded a
doctors to exchange and share thoughts with
growth of 46%.
renowned Diabetologists from the Joslin Diabetes
Centre. The event is attended by up to 5,000
Lupin
doctors from across India. The Symposium clearly
The Lupin division continues to lead the pack in the
highlights Lupin's endeavor in keeping doctors
anti-TB segment, as well as maintain its presence in the
abreast of the latest developments and practices in
cardiovascular, diabetic, asthma and CNS space. The
medical science.
Lupin division now commands 46% market share in a
INR 2,920 million anti-TB market and grew by 7%
Lupin was the first to enable Indian doctors to tap
during FY 2010.
into the vast knowledge resource of Global medical
institutions such as the European Neurological
IN-LICENSING
Partnerships and in-licensing arrangements are
Society (ENS) and the American College of
Cardiology (ACC).
integral to the Company's India Region Formulations
growth strategy. Successful in-licensing deals have
During FY 2010 Lupin also collaborated with the
enabled Lupin to emerge as the 'first-to-market' for
Federation of Obstetric and Gynaecological
several important products. Recognising the
Societies of India (FOGSI), by initiated the 'Nanhi
importance of in-licensing to its growth objectives,
Kali' program that champions the cause of 'Save
the Company has set up a dedicated team to identify
the Girl Child'. The initiative focuses on
and pursue novel and potential in-licensing
empowering the underprivileged girl child by
opportunities.
meeting their basic education needs. Lupin and
FOGSI are also working towards evolving an
In the last few years, the Company has introduced 19
Online "e-FOGSI data registry system" - a first of its
in-licensed products and of these, 6 products were first
kind initiative wherein the Indian medical
of their kind to be introduced into the Indian market.
fraternity would offer gynaecologists a platform
During FY 2010, five in-licensed products were
to archive, maintain and access clinical data, for
launched covering the Gynaecology, Anti-Arthritic,
better patient management as well as to facilitate
Anti-Asthmatic and the Anti-Phrombotics segments.
peer interaction.
23
Mindvision and Oncology
MD& A
within the Top 3 in ORG IMS with 5 new brands launched
rest of the world
Lupin has emerged as the
fastest growing Top 10
Generic player in the
markets of Japan, South
Africa and the Philippines
Vinod Dhawan
President - AAMLA and Business Development
24
gathering momentum
Lupin's AAMLA Business division covers the markets
Finished Dosages Filings (Rest of World)
of Japan, Australia, South East Asia, Africa, Middle
557
East, and Latin America. It is the youngest and one of
the fastest growing SBUs of the Company.
344
FY 07
FY 08
243
During FY 2010, Lupin's business from these markets
accounted for 16% of our total consolidated
revenues. Ex-India operations along with our
FY 06
FY 09
FY 10
subsidiaries Kyowa - Japan, Pharma Dynamics - South
Africa and Multicare - Philippines, recorded revenues
of INR 7,741 million, a growth of 32% from the
previous year. With 67 product filings across various
resulting in success across key geographies,
markets, the Company looks forward to further
specifically in advanced markets such as Japan and
extend its reach into promising new markets and
Australia as well as the emerging markets of South
niche segments therein with the introduction of new
Africa and South East Asia.
value added products.
Lupin's current formulations business within these
FY 2010 was a year of integration and consolidation
markets addresses chronic therapies and lifestyle
in these markets where Lupin focused on creating
segments like Cardiovascular, Paediatric, Central
and achieving synergies between Lupin India and its
Nervous System, Gastro Intestinal and Women's
Health as well as Anti-Infectives, Anti-Asthma, and
Anti-TB treatments. In a span of four years, our
ROW Sales
(INR million)
achievements in the AAMLA geographies have
7,741
5,861
already helped build strong foundations for the
sustainable future growth of the Company.
1,788
329
478
FY 06
FY 07
JAPAN
Valued at USD 75 billion, Japan is the second largest
FY 08
FY 09
FY 10
pharmaceutical market in the world. Almost 100%
of Japanese citizens are covered through National
subsidiaries. The Company started filing DMF's of in-
Health Insurance, funded by the Japanese
house API's for Japan, sourced 18 new products for
Government. To reduce the healthcare expenditure
the Philippines and negotiated better sourcing rates
burden, the Government has introduced a series of
for its products in South Africa. The division also
reforms that would expand Generic penetration to
introduced value added, differentiated and novel
30% of the overall Japanese pharmaceutical market
products in multiple therapy areas across various
by 2012 with an estimated market size of USD 6.5
countries. These concerted efforts are already
billion. The Government is also offering financial
25
321
MD& A
490
incentives to hospitals, pharmacies, patients and
other stakeholders to encourage the use and
adoption of Generics. This has created unique
opportunities for growth of Generic players and
makes Japan one of the most attractive Generic
markets in the world.
Kyowa, Lupin's 100 % subsidiary in Japan is
focused on tapping into this emerging
opportunity and has identified Neurology,
Cardiovascular, Gastroenterology and Respiratory
segments as core therapeutic areas of focus for
drug development and marketing. Kyowa is
amongst the fastest growing generic
APIs have been identified as a key area for synergy
pharmaceutical companies in Japan. Today, it
between Lupin and Kyowa and the Company has
markets over 200 products through its 75 strong
started developing and filing the APIs required by
sales and marketing team. Kyowa is one of the
Kyowa. The Company filed and recieved approvals
largest generic players in the Neurology segment
for 2 Drug Master Files for the Japanese market
with 95 products and covers 94% of psychiatry
during FY 2010. The supply of these APIs to Kyowa
hospitals in Japan.
would commence shortly and would help Kyowa
achieve significant savings and better margins. The
For FY 2010, Kyowa reported consolidated sales of
Company is already working on augmenting the
JP¥ 10.4 billion (INR 5,341 million) contributing to
pipeline of APIs from India and many more DMFs
11% of Lupin's consolidated revenues, a growth of
will be filed in the next few years.
9% over the previous fiscal. Kyowa's conscious drive
for cost optimisation through API prices has
To support its growth plan and increased demand,
resulted in improvement in gross margins by 4%.
Kyowa plans to enhance its manufacturing
capacity, improve machine productivity and reduce
In FY 2010, Kyowa launched 6 new products and
utility costs for its manufacturing facility in Japan.
filed applications for an additional 8 products. With
a view to augment product filings and optimise
SOUTH AFRICA
R&D costs, Lupin has also started developing
The South African pharmaceutical market is
products in India for Kyowa. The Company is also
valued at about USD 2.5 billion and recorded a
exploring In-licensing arrangements and strategic
growth of 13% in FY 2010. Compulsory Generics
alliances with various Japanese, European and
substitution implemented by the legislation and
Indian companies to introduce new products into
the emergence of National Health Insurance for
the Japanese market.
South African citizens is slated to further spur
26
sales personnel, MultiCare has created significant
years will also set the pace for the creation of
brand equity and a commendable franchise with
additional growth opportunities.
the medical fraternity in the Philippines, which is
further augmented by strong distribution alliances.
For FY 2010, Pharma Dynamics recorded revenues
For FY 2010, MultiCare recorded revenues of PHP
growth of 34% over the previous fiscal. The growth
328 million (INR 328 million). More importantly,
was achieved by a planned focus on growing
Multicare Pharmaceuticals emerged as the 10th
market shares in key therapy segments such as
largest and the fastest growing Top 10 generic
Cardiovascular (CVS) and the OTC segments.
pharma company in the Philippines.
Pharma Dynamics remains the fastest growing Top
10 Generics player in the South African Market and
AUSTRALIA
is the 6th largest Generic company in the country.
With an estimated size of USD 11 billion and a
growth rate of around 7%, the Australian market
Lupin plans to improve the consolidated entity's
presents a significant opportunity for Lupin. The
profitability and margins through backward
Australian Generics industry accounts for
integration and backending production into our
around 10% of the total market. Top selling
manufacturing facilities in India as well as supporting
medicines expected to go off patent are
Pharma Dynamics in terms of patent issues, regular
opening avenues for new business
reliable supplies and overall process optimisation
opportunities. Also, there is active generic
and control.
substitution by pharmacists and one in every
four prescriptions presented to pharmacists in
PHILIPPINES
Australia is now filled with Generic medicines.
The Philippines market is valued at about USD 2.7
billion. Lupin's subsidiary, MultiCare Pharmaceuticals
An ageing Australian population, an expanding
is a premium branded generics company with a
OTC market combined with almost all citizens
strong position in the women's health and childcare
being covered by the National Health
segments. With force strength of 165 highly trained
Insurance further make this an interesting
generic market. It is estimated that over half of
the Top 100 selling prescription medicines in
Australia are expected to come off patent in the
next 4 years.
In a move to consolidate its position, Lupin
increased its stake in Generic Health Pty. Ltd. to
49.9% in FY 2010 from erstwhile 36.6%. With its
wide range of quality generic prescription and
27
of ZAR 218 million (INR 1,328 million) registering a
MD& A
market growth. Patent expiries in the forthcoming
OTC products, Generic Health presents a strategic
THE ROAD AHEAD
fit to Lupin's growth aspirations in Australia. Lupin
In a bid to scale greater heights in the next few years,
is in the process of augmenting Generic Health's
AAMLA has a focused approach to establish on-shore
Hospital segment by adding a complete range of
presence in promising emerging markets and
hospital products. The Hospital segment market
geographies by way of planned organic growth,
size is currently about USD 50 million.
acquisitions or by forging strategic alliances and
partnerships. Brazil and Mexico have been identified
During FY 2010, Lupin received approvals for 2
as two of the emerging markets for an onshore
dossiers and filed an additional 2 dossiers through its
presence. The Brazilian market is valued at around
100% subsidiary, Lupin Australia. Patent expiries in
USD 15.4 billion and grew at 15% (IMS Dec 2009). The
the forthcoming years will set the pace for additional
market presents attractive opportunities in high
growth opportunities. Going forward, Lupin is
growth, specialty segments like gynaecology,
planning to leverage its intellectual property as well as
cardiology, Oral Contraceptives and biotechnology.
introduce value-added generic initiatives into the
The Mexican Pharma market is currently pegged at
Australian market.
M$ 140 billion (USD 11.4 billion).
28
GO!
CIS
The growing CIS pharmaceutical market with an
estimated size of USD 17 billion represents a great
opportunity. An ageing population, changing
lifestyles, steadily rising incomes and increased
Government spending in health-care are all
indicators that back Lupin's decision to expand its
presence in this region. In particular, Russia and
Ukraine are of prime interest.
Lupin's presence in the region is marked by both a
Direct-to-Market as well as a Local Partnership
strategy. Local partnerships have been established
keeping in mind their future potential and crossfunctional synergies.
The CIS business has been built around offering
differentiated products with a long term view of
creating strong niches from product mix,
comprising Value Added Generics, Branded
Generics and the Company's Branded Business.
Bearing in mind changing market dynamics, Lupin is
putting added emphasis on brand building
exercises for its products such as IXIME, Dr. KASHEL,
SOFTOVAC, RIBAVIN, ONE-BE and GATISPAN. The
Company's Branded Business recorded a healthy
growth rate and brands such as IXIME and Dr.
KASHEL are fast gaining market share.
Lupin plans to continue the strengthening of its
presence in the CIS region by filing the right
products, increasing its field force, forging strategic
trade relationships and enhancing its distributor
networks. The Company is looking forward to
building new brands from its filings in the region,
which shall be key drivers for value creation in the
years to come.
29
Harish Narula
President - Corporate Development and CIS
MD& A
the Company is building
brands that will be key
drivers for value creation
active pharmaceutical ingredients
the success of the visible
comes from the invisible.
Our proficiency in creating
the building blocks of
medicines has allowed us to
go places in the global
pharmaceutical marketplace
Satish Khanna
Group President - API
30
fueling growth
TOWARDS GLOBAL LEADERSHIP
API Sales Therapeutic Contribution
The global Active Pharmaceutical Ingredients (API)
India. While India has fewer API players than China, it
Others
is more prolific than its counterpart in the API industry
Anti TB Family
Cardio Vascular
Cephalosporins
the best manufacturer of generic formulations
worldwide. Lupin is one of the select few API players
3%
19%
from India that have made an indelible mark on the
global stage. Lupin is also amongst one of the very
few pharmaceutical companies globally that are
9% YOY. This was achieved by focus on improving
strong players on both fronts of the pharmaceutical
operational efficiencies with a careful and
business - APIs and Formulations. This makes Lupin a
meticulous product selection strategy.
truly formidable, fully-integrated global
pharmaceutical company.
By maintaining cost leadership and competitiveness
in its chosen therapeutic domains, Lupin's API
In FY 2010, the Company's API business generated
business has been ensuring the profitability and
INR 7,772 million in revenues, representing growth of
growth of the Company's Formulation business in
31
largely because of India's Quality and credentials as
34%
44%
MD& A
space is driven by the two Asian giants China and
addition to being a top API supplier globally.
Product Market
Attaining global scale of operations has been the
Ethambutol
underlying principle governing Lupin's API
business model. Being a first mover in specialty
products and adding the requisite size and scale
into manufacturing new APIs, the Company creates
a formidable position for its products in the highly
competitive Advanced Markets.
Global Ranking
1
Rifampicin
1
Pyrazinamide
2
7 ADCA and Family
1
7 ACCA and Family
1
Lisinopril
1
SABA/SABAM
2
Lovastatin
3
Rifabutin
1
Today, the Company has established global
through efficient productivity and prudent
leadership position for its APIs and holds a firm
procurement planning.
grip in the Cephalosporins, Cardiovascular and
Anti-TB space.
The compounding growth in captive consumption
from Lupin's fast expanding Formulations business
Despite the on-going price volatility on PenG, one of
has added a continual thrust to the volumes
the vital inputs for the building blocks of oral
produced by the API division. Lupin expects its
Cephalosporins, the Company protected its margins
Formulations business to thrive on the back of
32
GO!
efficiencies stemming from its in-house APIs and
Intermediates. Over the years and more importantly
API output has grown significantly in both volume
and value.
Rifampicin, Pyrazinamide and Ethambutol, as well as in
Cephalosporins such as Cephalexin, Cefaclor and their
Intermediates. In FY 2010, the Company continued to
Naresh Gupta
President - API and Global TB
record significant growth in the 7-ADCA and 7-ACCA
family of products.
The Company is a key supplier of anti-TB formulations
to the Global Drug Facility (GDF) and maintained its
premier position in the Anti-TB space during the
current fiscal.
THE ROAD AHEAD
In a bid to chart greater heights in times to come, the
Company has developed a focused marketing
strategy for its APIs by establishing on-shore
presence in select geographies. In the near future, it
plans to launch several new API products along with
P2P (Principal-to-Principal) finished products. To
tap into the lucrative Chinese market, Lupin is
exploring strategic joint venture opportunities.
Through the introduction of new products and
further ramp - up of its capacities, the Company
looks forward to an even more efficient utilisation of
its API manufacturing facilities. This will ensure that
the API division continues to be a long term growth
driver for the Company.
33
Lupin continues to enjoy global market leadership in
MD& A
in the financial year under review, the Company's
Lupin expects its
Formulations business to
thrive on the back of
efficiencies stemming from
its in-house APIs and
Intermediates
research and development
FY 2010 was a landmark year for Research and
Lupin's Research and Development covers the
Development at Lupin. Lupin's Research program not
following broad areas:
only witnessed heightened activity but also gathered
momentum across the entire R&D value chain, be it
p
Generics Research
Intellectual Property Management, Generics Research,
−
Process Research
Advanced Drug Delivery Systems Research, the newly
−
Pharmaceutical Research
recast Novel Drug Discovery and Development
p
Advanced Drug Delivery Systems (ADDS)
Research
p
Intellectual Property Management
Program or the Company's Biotechnology Research.
The state-of-the-art Lupin Research Park at Pune,
Lupin's global R&D hub, was the epicenter of all these
rapid changes as the Group went about creating new
infrastructure and launching new development
initiatives and programs. Lupin Research Park today
p
Novel Drug Discovery and Development (NDDD)
p
Biotechnology Research
In FY 2010, the Company's Research Program was firing
on all cylinders. The Group filed an unprecedented 37
ANDAs, 19 DMFs and 11 European applications. The
Company also licensed out its drug delivery technology
Scientific Pool - LRP (%)
based Rifaximin product to Salix Pharmaceuticals for
13%
the US. The Company also completed the restructuring
and staffing of its Novel Drug Discovery and
14%
M.Sc
51%
M.Pharm's /M.tech's
Lupin Research to the next level.
Ph.D/ MBBS
MBA & Others
Development Program. We are now truly set to take
22%
GENERICS RESEARCH
Lupin's Generic Research Program develops APIs and
Pharmaceutical Products for US, Europe, Japan and
houses a pool of over 800 scientists, compared to 550
other Advanced Markets. The Program comprises
research scientists last year. During FY 2010, the
Process Research, Pharmaceutical Research,
Company invested 8.7% of its net sales for R&D and
Analytical support and Bio-clinical Research.
related spends, amounting to INR 4,119 million.
PROCESS RESEARCH
Lupin is well known for its research and manufacturing
Research & Development Spend
4119
capabilities for developing and producing costeffective and reliable APIs. The Company has built
2669
strong capabilities for developing cost-effective, non-
2038
infringing, safe and eco-conscious technologies for
1421
the synthesis of APIs. The Company's Process Research
capabilities have helped build a robust vertically
integrated model for complex and difficult-toFY 07
FY 08
FY 09
FY 10
develop ingredients.
34
firing on all cylinders
MD& A
the tone has been set for
a truly world-class R&D
program to propel the
company to its rightful
destiny as a global
pharma major
Nilesh Gupta,
Group President & Executive Director
35
this year we have not only
become the benchmark for
the industry in terms of the
number and quality of filings
but have also gone a step
ahead by successfully outlicensing one of our drug
delivery products
Cumulative DMF Filings
104
85
74
60
46
FY 06
FY 07
FY 08
FY 09
FY 10
FY 2010 was a record year for the Company's generics
process research program.
During the year, the
Company filed 19 US DMF filings taking the cumulative
Dr Ninad Deshpanday
President - Pharma Research and Development
total to 104 DMF filings and 118 EDMFs/COSs, featuring
several unique and complex APIs.
PHARMACEUTICAL RESEARCH
The last three years have been landmark years for
Lupin in the generic pharmaceutical research space.
In FY 2010, Lupin's Pharmaceutical Research Group
filed 37 Abbreviated New Drug Applications (ANDAs)
with the United States Food and Drug
Administration. Lupin not only registered one of the
highest number of ANDA filings amongst its Indian
peers but also emerged as one of the Top 10 ANDA
filers globally. The cumulative number of ANDA
filings now stands at 127, with 40 approvals,
including 6 tentative approvals granted by the US
FDA to date. The total cumulative filings within the
EU stands at 65, with 31 total approvals.
Cumulative ANDA Filings
127
90
51
62
36
FY 06
FY 07
FY 08
FY 09
FY 10
36

p
FY 2010 saw the addition of development in new
Furthermore, the cumulative first-to-file and
Taste Masking Technologies
Improved Bioavailability through Solubilisation
and Nano-particle technology
As part of its current strategy, the Company aims to
license its ADDS products to innovator companies
ADVANCED DRUG DELIVERY SYSTEMS
whilst also developing niche brands for itself.
The Advanced Drug Delivery Systems (ADDS)
initiative has emerged as a key growth driver within
ANALYTICAL RESEARCH
the Company's R&D program. Over the last 5 years,
The Analytical Research Group ensures that all
Lupin has made strategic investments towards
processes and products transferred to Lupin's
strengthening its ADDS research capabilities.
plants meet regulatory requirements and
expectations through the development and
FY 2010 was a landmark year primarily because
validation of the right testing methods. LRP houses
Lupin successfully out-licensed its proprietary drug
a sophisticated analytical facility supporting both
delivery technology based Rifaximin product to
Process Research and Pharmaceutical Research. The
Salix Pharmaceuticals for the US Market.
facility is also equipped to study physical properties
such as polymorphism in both, API and drug
Lupin and Salix entered into an agreement under
products, using Powder X-ray Diffraction, Solid
which the two companies will collaborate in the
State NMR and Differential Scanning Calorimetry.
development and commercialisation of an extended
Additionally, isolation/synthesis and
release product incorporating Rifaximin and utilizing
characterisation of impurities in APIs and drug
Lupin's proprietary bioadhesive technology. Lupin
products is conducted with the latest LC/MS-MS
and Salix have also entered into an exclusive
systems and automated preparative HPLC
agreement for supply of Rifaximin Active
techniques and instrumentation.
Pharmaceutical Ingredient (API). Salix made a USD 5
million up-front payment to Lupin and will make
additional regulatory milestone payments.
Furthermore, Salix will pay royalties on net sales of
the bioadhesive Rifaximin product to Lupin.
LUPIN BIORESEARCH CENTER
Lupin Bioresearch Center (LBC) was started in early
2009 and has both Clinical and Bioanalytical
capabilities. LBC successfully completed 31 full
studies in FY 2010. This independent center in
This alliance further validates Lupin's growing
capabilities in the drug delivery space. The Company
now has a host of drug delivery platforms that have
already been developed. These include:
p
Bioadhesive Extended Release
p
Laser-Drilled Extended Release
37
Pashan, Pune, houses 2 clinics with a total of 56
beds, a bioanalytical lab with 7 state-of-the-art
LC/MS-MS systems and its own clinical chemistry
lab amongst several other capabilities.
LBC conducts important bioequivalence testing
exclusively for Lupin's generic products prior to
exclusive opportunities now stand at 12.
Matrix/Coated Extended Release
MD& A
therapeutic areas such as Ophthalmics, not to

p
mention the Company expanding the number of

p
filings for Oral Contraceptives to 23 ANDAs to date.
the filing of ANDAs or other regulated market
In FY 2010, Lupin also sold its first-to-file ANDA for the
filings. LBC also manages out-sourced Bio-
generic version of Antara® (Fenofibrate tablets) to Dr.
Equivalence studies, clinical end-point studies as
Reddy's before acquiring the brand Antara® from
well as the studies for the Company's ADDS
Oscient Pharmaceuticals in the US.
initiatives.
The Company's IP group is also responsible for
INTELLECTUAL PROPERTY MANAGEMENT
protecting the intellectual wealth generated by the
Lupin's Intellectual Property Group identifies new
Company's research in addition to leading patent
therapy areas and products for the Company's
challenges across the globe.
research to develop. Working in conjunction with the
research teams, marketing as well as external agencies
During the year, the Company demonstrated its
it puts in place a well-differentiated, high-value
capabilities on the Intellectual Property front by
product pipeline, with a strong accent on controlled
successfully settling all ongoing litigation with Novartis
release, exclusive and unique first-to-file filings.
on Lotrel® (Benazepril/Amlodipine) capsules and then
launching the product in the American Market. The
During FY 2010, the Company filed a record 37 New
Company successfully litigated and settled all
Drug Applications (ANDAs), with as many as 4 first-to-
ongoing litigation relating to Memantine tablets,
file opportunities with the US. The Company had 4 first-
Lupin's generic version of Forest Laboratories Inc.'s
to-files for the generic versions of Glumetza®, Lo
Alzheimer disease treatment “Namenda®” Tablets.
Seasonique®, Ciprofloxacin® and Ranexa®. Lupin has 55
Namenda® tablets had US sales of USD 949 million in
Para IV Filings with the US FDA so far, out of which 24
2009 (IMS Data).
were filed during FY 2010. Furthermore, the cumulative
first-to-file and exclusive opportunities now stand at 12.
Lupin and Natco Limited, established an alliance to
jointly commercialise generic equivalents of Shire plc's
FOSRENOL® (Lanthanum Carbonate) tablets. Natco is
one of the first-to-files on the product. FOSRENOL®
tablets achieved sales of USD 131 million (IMS Data).
During the course of the year, Lupin filed 26
Formulation patents, 84 API/Process patents and
14 NCE patents. It also received approval for 4
Formulation patents and more importantly 31 NCE
patents.
Patents filed
777
API/Process
323
Pending
251
Granted
72
NCE
225
Pending
165
Formulation
229
Granted
60
Pending
205
Granted
24
38
NOVEL DRUG DISCOVERY AND
DEVELOPMENT
Novel Drug Discovery and Development (NDDD)
space is to discover, develop, out-license and
areas with significant unmet medical need.
Having made its mark in the Generics space, the
Dr Rajender Kamboj
President - Novel Drug Discovery and Development
Company has consistently invested in NDDD over
the last few years to make a similar impact in this
field. The Company is in the process of creating
new molecular entities for accelerated
development in identified markets globally.
These novel products would utilise Lupin's newly
acquired strengths in drug discovery and
development complemented by Lupin's drug
delivery expertise. A slew of such exclusive
products will provide the bridge for the
Company's transition from a generic powerhouse
to an innovative drug discovery and
development organisation.
During FY 2010, the Company completed its
overhaul of the NDDD setup. Lupin has now built
very sophisticated infrastructure, has acquired
cutting-edge technologies and has built the right
pool of talented scientists with the necessary skillsets to make this endeavor a success. It has
identified molecular targets from which 9 new
research programs have been initiated.
In FY 2010, the Company created a new Medicinal
Research facility at Hinjewadi, in Pune. It also initiated the
validation of its new biology facility at Lupin Research
Park, where highly sophisticated robotic 'FLIPR'
Functional Assaying machines and High Throughput
Screening (HTS) capacities were also commissioned.
39
commercialise novel drugs that address disease
MD& A
The essence and the soul of Lupin's vision in the
our goal is to be worldclass in any of the
therapy and target areas
that we work in
The NDDD Research group is committed to creating
innovative new drug molecules that will change the
way dozens of diseases have been treated so far.
Working with a targeted drug design approach with
proven biological mechanisms that alter disease
processes will be a sure-fire recipe for success in this
otherwise high-risk, capital intensive field.
Committee (IBSC) for research on recombinant DNA.
Furthermore, this facility has also been accredited as
a Biotech Centre by the Bioinformatic Centre of the
University of Pune. Today, Lupin has 7 proteins in
different stages of development.
In FY 2010, the Company commissioned cGMP
facilities for microbial as well as mammalian
BIOTECHNOLOGY RESEARCH
cultures. The Company has also filed 5 patents for
The vision of the Biotechnology Research group
the technologies developed in-house and
based out of Pune is to develop and commercialise
published 6 research articles last year. Lupin is now
Bio-Similars and New Biological Entities for the
looking to launch its first Biological in the Indian
Company. Lupin's state-of-the-art Biotech
market in 2011. It is also exploring collaborative
research & manufacturing facility has already been
opportunities in the field of new biological
approved by the Institutional Bio Safety
formulations and New Biological Entities.
40
GO!
quality & regulatory compliance
Regulatory Compliance as a true enabler and the
Pharmacovigilance Cell. Pharmacovigilance
critical differentiator between a market leader and
involves the monitoring of the safety profile of
the rest - the mainstay of long-term competitiveness.
medicinal products from clinical trials to the pre-
Over the years, we have built and nurtured an
marketing period, when the drug is introduced to
environment around deep respect for quality and
the general population and thereafter - it continues
compliance, in line with global best practices. We
throughout the life cycle of the product. The aim of
believe that quality not only has to be embedded in
Pharmacovigilance is to protect and safeguard
the product but into the very way an employee thinks
public health by identifying, evaluating and
and works. This instills and engineers quality and
minimising safety issues to ensure that the overall
compliance into the culture of the organisation.
benefits of medicines far outweigh the risks.
Today, this culture is ingrained in the Lupin Brand
DNA and embraced by all Lupin personnel.
A dedicated global QC team spread across all
manufacturing locations, globally, is engaged in
FY 2010 was a landmark year for Lupin in terms of
driving the quality philosophy of the organisation and
Quality and Compliance. Lupin received official
assuring that global standards of good manufacturing
communication from the US FDA on the satisfactory
are implemented in the best manner at every Lupin
resolution of the Warning Letter issued earlier to its
facility. The team also develops and implements the
Mandideep site. The facility was re-inspected in
Quality Policy and Guidelines for key systems and
November 2009 and the company was able to
processes within the company. Corporate Quality
satisfactorily address all of the concerns related to the
Assurance is enforced and supported by a team of over
Warning Letter and the site compliance status was
700 personnel comprising the quality and regulatory
found to be acceptable. Earlier in the year, the UK
functions at all Lupin sites and they are responsible for
MHRA and the Australian TGA conducted a joint
ensuring quality and compliance to regulatory
inspection of the Mandideep facility and found it
requirements globally.
acceptable as well.
The US FDA also inspected two new sites of the
Company at Aurangabad (Liquids) & Indore (Oral
Solids and Oral Contraceptives). Both inspections
were found acceptable and these inspections bring
the company a step closer to launching Liquids and
Oral Contraceptives in the US.
In addition, the
Company's Tarapur and Goa facilities were inspected
by the US FDA in 2009 and found acceptable. Goa was
re-inspected in early 2010 by the US FDA and again
found to be compliant. Lupin's API plant at Tarapur
was also audited by the UK MHRA and found to be
compliant with cGMP.
41
2010 also saw the introduction of Lupin's Global
MD& A
At Lupin, we have always identified Quality and
human resources
employee development
and engagement is at the
core of our consistent
business growth
Divakar Kaza
President - Human Resources Development
42
GO!
nurturing innovation
At the very heart of Lupin and our phenomenal
MANAGING DIVERSITY
growth story is our biggest asset - Our People.
Managing a diverse workforce is no longer a choice
company and the alignment of their aspirations and
dreams to our shared vision. Our growth and successes
not only comply but lead in areas of processes and
human relations to unleash and harness innovation at
every level within the organisation. It is the behavior of
our leadership team and our people, their shared
wisdom, which has gone into creating the business
democracy that is Lupin - a Company where
entrepreneurship and innovation thrive.
As a closely knit team of over 10,500 employees
globally, we have outperformed the Industry over the
last 6 years. It is against this backdrop that the Human
Resources function assumes a strategic and critical
role. HR has gone beyond traditional employee
engagement programs to ensure that Lupin not
only nurtures talent and leadership internally, but
also develops platforms that help identify potential
talent by creating opportunities to learn, perform
and succeed.
NURTURING LEADERSHIP
Through customised training programs, Lupin has
today ensured the creation of a reservoir of leaders.
During the last financial year, Learning and
Development was focused on creating world-class
developmental opportunities and provided inputs for
the largest ever number of employees across locations,
levels, functions and geographies. Team capabilities
were also strengthened through collective experiencebased training programs. Our strategic tie-ups with
multiculturalism is needed to manage diversity
effectively. Lupin realises that managing diversity
means acknowledging people's differences and
recognising differences as valuable. This
enhances good management practices by
preventing discrimination and promoting
inclusiveness. It stems from an understanding
that we all operate on a single stage. The goal
has been to create a workplace that truly values
diversity: a workplace built around the core
values of meritocracy and innovation.
There has been a visible rise in the number of
women professionals in core areas of the Company
such as R&D, Regulatory and Quality Compliance.
The Company has also set up management and
leadership programs to help promote talent within
the women workforce of the organisation. Today,
around 18% of Lupin's worldwide workforce are
women, one of the highest in the generic
pharmaceutical industry, up from 6% in 2004.
The agenda now is to enhance mindsets that
enable our people to consistently think global
and act local. Structured, well designed induction
programs aimed at mentoring new employees for
their effective settling-in and assimilation of our
corporate values are in place. These programs
ensure that every employee is not only clear
about their role and expected contribution but
also aligned to the overall corporate growth
objectives.
leading management institutes such as IIM
Today, HR has become a critical catalyst for
Ahmedabad, NMIMS Mumbai and leading technology
continuous transformation during a phase of
institutions such as the Birla Institute of Technology and
rapid growth and transition; shaping not only
Science (BITS Pilani), University of Pune and Manipal
processes, people and mindsets, but creating a
University helped our employees pursue their academic
culture that typifies Lupin and unleashes
interests concurrently while working at Lupin.
innovation at every level within the organisation.
43
are met equally by even greater steps to ensure that we
but an imperative. In an age of cultural pluralism,
MD& A
We are proud of their passion and commitment to the
financial commentary
robust financial
performance and a strong
Balance Sheet give us the
confidence to go for even
bigger opportunities as we
move ahead
Ramesh Swaminathan
President - Finance & Planning
44
stable and on-course
and Lupin is today the 8 th Largest and fastest
consolidated revenues to INR 47,678 million in
growing Top 10 generic pharmaceutical players
FY 2010 from INR 38,238 million in FY 2009. The
in the US market, not to mention the largest
Company also generated INR 6,816 million in net
Indian generic player.
profits, an increase of 36% over the previous year's
All the subsidiaries of the Company be they in Japan,
Europe and the Rest of the World markets clocked
The growth in profits was an outcome of expanding
impressive sales and contributed to the Company's
market share in key markets globally and achieving a
overall growth. The Company's overall sales outside
better revenue mix out of our focus on niche difficult-
India grew by 29% during FY 2010, and now make
to-make products and entry into new high barrier
up 67% of the company's gross sales.
therapy areas. Furthermore, the Company also
improved upon its profitability indices because of
Lupin's India Region Formulations business
continued focus on achieving cost leadership derived
continues to operate as a well-oiled machine and
from Lupin's vertically integrated business model and
registered a commendable net sales growth of 18%.
its API strengths.
The Indian Region Formulation business accounted
for 28 % of the Company's total sales.
These factors contributed towards the growth in
Earnings before Interest, Depreciation, Tax and
EXPANDING GLOBAL FOOTPRINT
Amortisation (EBIDTA) by 34%, from INR 7,439 million
The company continues to grow in all markets of
in the previous year to INR 9,981 million. During the
direct onshore operations. Pharma Dynamics in
year, EBIDTA rose to 21% of net sales.
South Africa clocked in INR 1,328 million in revenues
for the year.
ROBUST GROWTH ACROSS KEY MARKETS
Lupin Pharmaceuticals Inc. (LPI), the Company's
Kyowa in Japan has already been well integrated into
subsidiary in the US, continues to chart out robust
the Lupin system. The Japanese subsidiary posted
growth in both the Brand as well as the Generics
robust net sales of INR 5,341million in FY 2010, and
business with overall Formulation sales rising to
now contributes 11% of Lupin's total revenues.
INR 16,542 million recording a growth of 32% in
INR terms over the previous year. The bygone
R&D SPEND
fiscal was an exciting year for LPI with the
Lupin has consistently invested 6-7% of its overall
Company adding two valuable brand assets to its
net sales into its research and development efforts.
portfolio; AllerNaze® that we acquired from
The expenditure on R&D during the year stood at
Collegium and the Antara® acquisition from
INR 4.1 billion, 8.7% of the Company's net sales. In
Oscient. Existing sales for the AeroChamber Plus®
addition to ramping up our existing research areas,
line of products and our flagship brand, Suprax®
significant investments were made into revamping
continued to grow well during FY 2010. Lupin's
the Company's Novel Drug Discovery and
Generic business recorded even stronger growth
Development program.
45
profit of INR 5,015 million.
MD& A
The Company recorded a growth of 25% in
HEALTHY CASH FLOWS & EFFECTIVE
RESOURCE PLANNING
capabilities on an on-going basis to meet current
and future growth.
Despite spending on brand acquisitions in the US and
capacity expansions in most of our facilities in
DIVIDENDS AND TAXATION
addition to creating several new plants during the
The Company recorded Earnings per Share of INR
year, the cash flow position of the Company remains
79.18 during FY 2010, up 30% from the previous
healthy. Thanks to judicious financial planning, the
year. The Board recommended a dividend of 135%,
ability of the Company to raise credit remains
an aggregate amount of INR 1,400 million, inclusive
unparalleled. Lupin's short-term debt program
of tax on Dividend. This record step-up in the
continues to receive the highest rating from ICRA. In
dividend rate is a strong indicator of the confidence
fact, subsequent to the global financial meltdown,
that the Board of Directors have in the financial
Lupin's FCCB bonds were amongst the few that
strength of the Company.
continued to be quoted well above par, and all the
residual bonds have been already redeemed or
The Company has implemented several tax saving
converted into shares.
initiatives to optimise its taxation in various parts of
the world. In the Indian context, the aggregate tax
On the working capital front, there was tremendous
obligations of the Company were lower as compared
optimisation. The Net Working Capital increased by
to the previous year due to higher turnovers from Tax
only 4%, whilst the sales of the Company increased by
exempt production zones. The effective tax rate for
25%. The working capital optimisation exercise that
the consolidated financials for FY 2010 was 16%.
we have currently undertaken will yield even greater
results in the days to come.
The Company has increased its reserves and
surplus by INR 11,369 million to INR 24,789 million
Overall interest payments were INR 385 million for FY
during FY 2010.
2010, reflecting an average cost of borrowing of 4%
for the year. The total debt at the year-end stood at
INTERNAL CONTROL SYSTEMS
INR 11,399 million and the Debt Equity Ratio
The Company has in place sound internal control
improved to 0.44 as on 31st March 2010 from 0.62 as
systems commensurate to its size, scale of business
on 31st March 2009.
and complexity of operations. Clearly defined
policies, procedures and inbuilt checks and controls,
CAPITAL EXPENDITURE
supplement the internal control procedures. A well
During FY 2010, the Company invested INR 4,433
established and empowered system of internal
million on capital expenditure. The Company has
audits and control procedures independently
set up multiple new API plants and a new ophtal
reviews the financial and operational controls and
formulation facility. We have also expanded
reports deviations, if any, and further enables course
capacities at most of our formulation and API
correction, as and when required. The Company is
plants as well as at our research facility in Pune.
constantly engaged in practicing the best financial
The Company would continue to make
and operational control systems, as per international
investments into building fresh capacities and
practices and standards.
46
GO!
Khimji Kunverji and Co., are engaged as the internal
the need to enter into certain markets which are
auditors who submit their reports to the Audit
of strategic interest. The acquisitions have been
Committee of the Board, which reviews the same and
carried through in such a way that there were no
provides guidance on measures to be initiated to
disruptions to extant managements. All our
further enhance the efficiency and effectiveness of
acquisitions were well evaluated and deliberated
this vital control system.
internally and were prudent in terms of outlays.
INFORMATION TECHNOLOGY
The Drug Price Control Order (DPCO) continues to
During FY 2010, Lupin invested in upgrading its SAP
challenge the entire Indian Pharmaceutical
and Business Intelligence platforms. With the new
Industry. However, over the years, Lupin's basket
upgraded Enterprise Resource Planning system in
of products and the chosen markets and
place, the Company is well equipped to leverage its
segments it operates in, have meant that DPCO
existing technology investments to ensure
directives are becoming increasingly less material
operational and transactional control and
to the overall business of the Company.
compliance, across the organisation. The new
systems are expected to create a global,
The volatility in PenG prices, a key raw material
standardised, scalable and flexible platform for
input to APIs, is a recurring phenomenon
Lupin's global supply chain program and would help
stemming from the vagaries in the supply and
achieve operational efficiencies to support the
demand positions with primarily Chinese
Company's growth objectives globally.
manufacturers. These situations tend to be
short term in nature, nevertheless contribute
RISKS CONCERNS & THREATS
to the volatility in the price movement of this
Over the years, the Company has consciously adopted
key input. Over the years, the Company has
prudent risk management measures and practices to
gained experience and expertise in dealing
mitigate environmental, operational and business
with such volatility and mitigating its impact
risks. The Company believes that it has the requisite
on the business.
competencies to handle varied risks and is continually
evolving proactive strategies to counter them.
It has been seen recently that regulatory authorities
globally are becoming more vigilant on
Price erosion within the global generic markets is one
pharmaceutical players with respect to compliance
of the key threats faced by all generic players. Due to
to standards and regulations. Lupin believes in
its vertically integrated model, in which the
being compliant in all respects at all times. The
Company's strengths in API and Intermediates play a
Company takes all its compliance requirements
crucial role in maintaining the competitive position of
extremely seriously and maintains rigorous systems
its Formulation products, and our focus on value
to withstand scrutiny at all times. Lupin is
added products, Lupin is well positioned to thrive in a
committed to doing whatever is necessary to meet
highly competitive environment, consistently
and exceed norms laid by global regulatory
gaining market share and enjoying quality earnings.
authorities.
47
Lupin's acquisition philosophy is predicated on
MD& A
The reputed firm of Chartered Accountants M/s
corporate social obligation
be the change
you want to see
in the world
Mahatma Gandhi
We truly believe that it is our obligation to do all we
uplifting people and families below the poverty line
can to enrich the communities that we live in. Over
as well as women empowerment. Today, as many as
the years, The Lupin Human Welfare & Research
56,000 families are covered under the aegis of the
Foundation (LHWRF) has been successful in creating
Foundation through agriculture, animal husbandry
and undertaking well-planned sustainable and
and the rural industry activities of LHWRF.
integrated rural development programs - social and
economic initiatives that continue to touch and
ECONOMIC DEVELOPMENT
transform the lives of over two millions rural folk in
LHWRF's principal focus is on creating employment
over 2,200 villages spread across 4 states in India -
and employability by imparting skills and creating
Rajasthan, Madhya Pradesh, Maharashtra and
Uttarakhand. The Foundation through its work has
emerged as a social and economic catalyst
empowering rural communities.
programs that would create job opportunities specifically for the youth and women. During FY
2010, the Foundation worked on strengthening
areas like agriculture and animal husbandry by
The Foundation continues to work on enriching the
working on programs that would yield higher output
lives of the poorest of the poor. Our focus is on
and offer value addition to help improve the overall
48
GO!
empowering communities
slum and rural areas. The Foundation is planning
Foundation also emphasised on promoting
100% coverage to ensure that all children are fully
secondary occupations such as the local cottage
immunized and vaccinated in these areas.
industry, handicrafts and services sector by creating
The foundation has always believed that creating
introducing better technologies and best practices
the right infrastructure is the key to progress and
with a view to improve quality and market
prosperity. LHWRF programs were focused on
acceptability for these products in new markets.
building internal roads and basic sanitation
facilities in various districts in Rajasthan. It also
SOCIAL DEVELOPMENT
focused on strengthening and revamping formal
LHWRF has always aimed at the development of
education and community centers and training
proper social, cultural, scientific and spiritual
and production centers in various States.
attitudes amidst the rural community. The endeavor
is to instill an urge to not only work but be
THE NEXT STEPS
responsible for their own development in villagers,
LHWRF has always believed that any business has a
especially women, children, the youth and older
direct social obligation to the community and
people. Significant social development initiatives
society it exists and works with, and its role cannot
undertaken during 2010 were in the areas of Health,
remain restricted to returns to stockholders or its
Women Empowerment, Infrastructure Development
customers. After 22 years of having served rural
and Renewable Energy. The Foundation aims to
communities, LHWRF today is not only focused on
continue bringing qualitative and quantitative
bringing the benefits of a knowledge-based
improvement in the health services across areas that
economy to the poor and the needy but it stands
are bereft of medical facilities. LHWRF has been
for ensuring better Public health services and for
working on establishing health centers and mobile
creating scalable and replicable programs that
health units to provide medical care to the poor
would ensure Education and Employability for
populace, targeting women and children residing in
rural India.
49
fairs and promoting them. It also worked on
MD& A
economic realisation of the rural communities. The
welcome to the future
50
GO!
billion is the new zero
Your Company has achieved several benchmarks this year. Not just in terms of revenues but in
improved product development, market entries and in our research initiatives. Importantly there
is a groundswell of continued and passionate commitment from our people across the business
units and around the world.
As current mentors of the organisation, we must also ensure that our pace and successes are met
equally by ever greater steps to ensure that we not only comply but lead in areas of human
relations, safety, technology, innovation and corporate responsibility or, as we say at Lupin, our
obligations to the communities who touch our lives directly or indirectly.
We have carefully planned, innovated and engineered a future that will take Lupin across new
thresholds to higher milestones. At the same time we are recalibrating our already high standards
of performance, corporate governance and responsibility. So, Lupin is resetting the achievements
of the past as the “new Zero”. We're proud to have been born in India, but we live in the knowledge
that we now operate on a global stage as a transnational company and must be ready to take our
place as a responsible global pharmaceutical major.
Thank you for being a part of the Lupin story. We welcome your correspondence on any issue as
we develop and prepare for the future of Lupin. It's going to be a great journey.
With Kind Regards and Best Wishes
Dr Desh Bandhu Gupta
Founder & Chairman
[email protected]
51
Dr Kamal K Sharma
Managing Director
[email protected]
five year financial summary
CONSOLIDATED BALANCE SHEET
As at March 31,
(INR million)
2006
2007
2008
2009
2010
401.4
803.4
820.8
828.2
889.4
5,831.4
7,929.7
11,976.0
13,420.0
24,788.9
6,232.8
8,733.1
12,796.8
14,248.2
25,678.3
94.5
142.5
254.9
SOURCES OF FUNDS
Shareholders' funds
Equity Share Capital
Reserves and Surplus
Minority Interest
[31.03.2007 Rs.27/-]
15.8
Loan Funds
Secured Loans
4,409.5
3,911.2
7,080.6
7,569.2
8,722.4
Unsecured Loans
4,839.5
4,736.4
4,948.2
4,663.5
2,676.1
9,249.0
8,647.6
12,028.8
12,232.7
11,398.5
956.1
1,027.2
1,248.0
1,387.2
1,630.4
16,453.7
18,407.9
26,168.1
28,010.6
38,962.1
Gross Block
8,561.3
9,527.9
14,858.8
18,200.3
22,937.1
Less : Depreciation and Amortisation
2,095.6
2,382.1
4,697.5
6,188.3
7,072.2
Net Block
6,465.7
7,145.8
10,161.3
12,012.0
15,864.9
252.1
825.5
963.8
2,239.7
3,578.7
6,717.8
7,971.3
11,125.1
14,251.7
19,443.6
-
-
1,872.3
3,173.7
3,196.8
Investments
28.0
28.0
58.2
215.6
264.3
Deferred Tax Assets (net)
17.1
1.3
141.2
222.8
195.4
Inventories
3,429.1
4,298.1
7,893.4
9,571.6
9,714.9
Sundry Debtors
3,111.6
4,038.5
7,439.0
9,179.7
11,265.7
Cash and Bank Balances
4,774.2
3,844.5
2,741.8
777.7
2,015.3
Loans and Advances
1,999.6
2,448.2
2,367.0
2,779.7
4,758.6
13,314.5
14,629.3
20,441.2
22,308.7
27,754.5
3,146.9
3,515.2
6,018.8
10,334.8
9,649.4
476.8
706.8
1,451.1
1,827.1
2,243.1
3,623.7
4,222.0
7,469.9
12,161.9
11,892.5
9,690.8
10,407.3
12,971.3
10,146.8
15,862.0
16,453.7
18,407.9
26,168.1
28,010.6
38,962.1
Deferred Tax Liabilities (net)
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Capital Work-in-Progress
Goodwill on Consolidation
Current Assets, Loans & Advances
Less: Current Liabilities & Provisions
Current Liabilities
Provisions
Net Current Assets
TOTAL
52
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended March 31,
(INR million)
2006
2007
2008
2009
2010
17,503.4
20,716.5
27,730.1
38,237.8
47,678.4
549.4
579.4
666.4
479.0
273.2
16,954.0
20,137.1
27,063.7
37,758.8
47,405.2
669.0
1,733.2
1,853.2
907.6
1,302.7
Other Income
72.0
257.3
211.3
46.1
142.0
Total Income
17,695.0
22,127.6
29,128.2
38,712.5
48,849.9
Cost of Materials
8,259.2
9,320.8
11,638.0
16,043.1
19,694.2
Personnel Expenses
1,689.6
2,199.9
3,076.0
4,871.3
5,871.5
Manufacturing and Other Expenses
4,769.6
5,694.1
7,991.2
10,359.2
13,303.3
14,718.4
17,214.8
22,705.2
31,273.6
38,869.0
2,976.6
4,912.8
6,423.0
7,438.9
9,980.9
Interest and Finance Charges
312.8
372.2
373.5
498.6
384.9
Depreciation and Amortisation
408.8
466.1
647.4
879.9
1,239.1
2,255.0
4,074.5
5,402.1
6,060.4
8,356.9
Current Tax
402.6
779.6
1,022.6
727.0
1,109.8
Deferred Tax
28.0
128.5
180.6
106.2
250.4
Fringe Benefit Tax
90.7
80.0
114.8
149.8
-
1,733.7
3,086.4
4,084.1
5,077.4
6,996.7
3.8
0.8
1.3
28.6
111.6
-
-
0.3
33.4
68.8
1,729.9
3,085.6
4,082.5
5,015.4
6,816.3
INCOME
Sales (Gross)
Less : Excise Duty
Sales (Net)
Other Operating Income
EXPENDITURE
Total Expenses
Profit before Interest,
Depreciation and Tax
Profit before Tax
Net Profit before Minority Interest
and Share of Loss in Associates
Minority Interest
Share of Loss in Associates
Net Profit
Note : Figures for the previous years have been suitably regrouped to make them comparable.
53
LUPIN 2010
reports & financials
55
Directors' Report
65
Corporate Governance Report
82
Auditors' Certificate on Corporate Governance
83
Auditors' Report
86
Financial Statements
123 Auditors' Report on Consolidated Financial Statements
124 Consolidated Financial Statements
166 Section 212
167 Financial Information of Subsidiary Companies
54
Directors' Report
To the Members
Your Directors have pleasure in presenting their report on the business and operations of your Company for
the year ended March 31, 2010.
Financial results
Sales (Gross)
Profit before interest, depreciation and tax
Less: Interest and finance charges
Less: Depreciation and amortisation
Profit before tax
Less: Provision for taxation (including wealth tax, deferred
tax and fringe benefit tax)
Net Profit before Minority Interest and Share of loss in Associates
Less: Minority Interest and Share of loss in Associates
Net Profit
Add: Surplus brought forward from previous year
Amount available for Appropriation
Appropriations:
Transfer to General Reserve
Dividend on Ordinary Shares by an Overseas Subsidiary
Proposed dividend on Equity Shares
Dividend on Equity Shares for previous year
Corporate tax on dividend
Balance carried to Balance Sheet
(Rs. in million)
Standalone
2009-10
2008-09
36660.6
29419.4
8186.1
5792.5
283.8
415.2
815.7
663.5
7086.6
4713.8
Consolidated
2009-10
2008-09
47678.4
38237.8
9981.0
7438.9
384.9
498.6
1239.2
879.9
8356.9
6060.4
597.3
6489.3
6368.5
12857.8
544.1
4169.7
4910.1
9079.8
1360.2
6996.7
180.4
6816.3
6688.6
13504.9
983.0
5077.4
62.0
5015.4
4407.8
9423.2
1500.0
1200.7
10.8
201.2
9945.1
12857.8
1500.0
1035.3
0.1
175.9
6368.5
9079.8
1500.0
36.6
1224.7
10.8
211.0
10521.8
13504.9
1500.0
21.2
1035.3
0.1
178.0
6688.6
9423.2
Performance Review
Your Company scaled newer heights and benchmarks in terms of sales and profits for the year ended March 31,
2010. Consolidated sales at Rs.47678.4 mn., grew by 25% over Rs.38237.8 mn. of the previous year.
International markets accounted for 67% of the revenues. Net Profit at Rs.6816.3 mn. as against Rs.5015.4 mn.,
registered a growth of 36%. Earning per share was higher at Rs.79.18 as compared with Rs.60.84 for the
previous year.
Dividend
Your Directors are pleased to recommend dividend of Rs.13.50 per equity share of Rs.10/- each, absorbing an
amount of Rs.1400.1 mn., inclusive of tax on dividend.
Share Capital
During the year, the paid-up equity share capital of your Company rose by Rs. 61.2 mn. consequent to: a)
allotment of 5816742 equity shares of Rs.10/- each upon conversion of Foreign Currency Convertible
Bonds aggregating US $ 71.3 mn. and
b) allotment of 307541 equity shares of Rs.10/- each to eligible employees under the 'Lupin Employees Stock
Option Plan 2003', 'Lupin Employees Stock Option Plan 2005' and 'Lupin Subsidiary Employees Stock
Option Plan 2005'.
55
Sub-division of Shares
The Board of Directors is pleased to recommend the sub-division of one share of the face value of Rs.10/- each
into five shares of the face value of Rs.2/- each, subject to approval of shareholders at the forthcoming Annual
General Meeting.
Foreign Currency Convertible Bonds (FCCBs)
Of the FCCBs of US $ 100 mn. issued by the Company in January 2006, Bonds aggregating US $ 98.6 mn. were
converted (including Bonds of US $ 71.3 mn. during the year) at a pre-determined price of Rs.567.04 per share
in accordance with the terms of the issue. The balance FCCBs for US $ 1.4 mn. were redeemed during the year.
There are no Bonds outstanding as on March 31, 2010.
Credit Rating
ICRA Limited reaffirmed its “A1+” (pronounced A one plus) rating for your Company's short-term debt
(including Commercial Paper) programme of Rs.2500 mn. This rating is the highest-credit-quality rating
assigned by ICRA for such borrowings.
ICRA Limited assigned “LAA+” (pronounced “L Double A Plus”) rating for your Company's Non Convertible
Debenture programme of Rs.5000 mn. This rating is the high-credit-quality rating assigned by ICRA for
long-term debt instruments.
Management Discussion & Analysis
A detailed Management Discussion and Analysis forms part of this Annual Report.
Subsidiary Companies
As on March 31, 2010, the Company had 14 subsidiaries.
During the year, Lupin (Europe) Ltd., U.K. and Lupin Pharma Canada Ltd., Canada were incorporated on June 5,
2009 and June 18, 2009 respectively. Lupin Holdings B.V., the Netherlands transferred its holdings in Max
Pharma Pty Ltd., Australia, a wholly-owned subsidiary of the Company to Generic Health Pty. Ltd., Australia, an
associate of the Company upon which Max Pharma Pty Ltd. ceased to be a subsidiary of the Company w.e.f.
May 31, 2009.
Statements pursuant to Section 212 (1)(e) of the Companies Act, 1956 and relating to performance/financials
of the subsidiary companies form part of this Annual Report.
Amalgamation
With a view to achieving synergies of operations, optimum utilisation of resources and control costs, the Board
of Directors decided to amalgamate Novodigm Ltd., Lupin Pharmacare Ltd. and Lupin Herbal Ltd. (whollyowned subsidiaries of the Company) with Lupin Limited w.e.f. April 1, 2009 i.e. 'the Appointed Date'.
The Hon'ble High Court of Judicature at Bombay, by its Order dated January 8, 2010, sanctioned the scheme of
amalgamation between Lupin Pharmacare Ltd. and Lupin Herbal Ltd. with the Company subject to the order
to be passed by the High Court of Gujarat sanctioning the scheme of amalgamation between Novodigm Ltd.
and the Company. The order of the Gujarat High Court is awaited pending which, the standalone accounts of
the Company for the year ended March 31, 2010 do not include financials of Novodigm Ltd., Lupin Pharmacare
Ltd. and Lupin Herbal Ltd.
Corporate Governance
Report on Corporate Governance forms an integral part of this Annual Report. The Auditors' certificate
certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement
is also annexed to this Report.
Directors' Responsibility Statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 (Act), your Directors confirm that:
i)
in the preparation of the annual accounts, the applicable accounting standards had been followed along
with proper explanation relating to material departures;
56
ii)
the Directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state
of affairs of your Company at the end of the financial year ended March 31, 2010 and of the profit of your
Company for that year;
iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing
and detecting fraud and other irregularities; and
iv) the Directors had prepared the annual accounts on a 'going concern' basis.
Directors
Mr. K. V. Kamath, Dr. Vijay Kelkar and Mr. Richard Zahn, who were appointed as Additional Directors
w.e.f. January 29, 2010, hold office up to the date of the forthcoming Annual General Meeting. Notices have
been received from certain shareholders proposing their names for appointment as directors.
Due to professional commitments, Mr. Marc Desaedeleer and Mr. Sunil Nair resigned from the directorship of
the Company w.e.f. January 29, 2010 and May 5, 2010 respectively. The Board records its sincere appreciation
for the valuable contributions made by Mr. Marc Desaedeleer and Mr. Sunil Nair during their tenure as directors
of the Company.
Dr. Kamal K. Sharma and Mr. D. K. Contractor retire by rotation at the forthcoming Annual General Meeting and
are eligible for re-appointment.
Conservation of Energy,Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as prescribed by Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure
of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo are given in Annexure 'A'.
Fixed Deposits
Your Company has not accepted any fixed deposit during the year under review. No deposit was outstanding
as on March 31, 2010. As on March 31, 2010, 106 deposits aggregating Rs.1.18 mn. were lying unclaimed with
the Company, of which four deposits aggregating Rs.20,000/- have since been claimed. Reminders are
continuously sent to the depositors concerned to claim repayment of their matured deposits.
Auditors
The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit
Committee and the Board recommend the re-appointment of M/s. Deloitte Haskins & Sells, Chartered
Accountants, as Statutory Auditors of your Company.
M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, are the Internal Auditors of the Company.
Cost Auditors
Pursuant to the provisions of Section 233B of the Companies Act, 1956 and with the prior approval of the
Central Government, Mr. S. D. Shenoy and Mr. D. H. Zaveri, practising Cost Accountants, were appointed to
conduct audit of cost records of Bulk Drugs and Finished Dosages respectively. Cost Audit Reports would be
submitted to the Central Government within the prescribed time.
Employees Stock Option Plans
Pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, the details of stock options granted by the Company as
on March 31, 2010 under 'Lupin Employees Stock Option Plan 2003', 'Lupin Employees Stock Option Plan 2005'
and 'Lupin Subsidiary Companies Employees Stock Option Plan 2005' are set out in Annexure 'B' forming part
of this Report.
57
Human Resources
Your Company remains committed and focused on its most valuable resource viz. people. The Company
believes that people play a pivotal role in driving performance and has effectively empowered them. In
pursuance of the Company's commitment to retain and develop best available talents, several programmes
are conducted at various levels on a regular basis. Employee relations continued to be cordial and harmonious
at all levels and in all the units of the Company.
Particulars of Employees
Particulars of employees required to be furnished pursuant to the provisions of Section 217(2A) of the
Companies Act, 1956 (Act), read with Companies (Particulars of Employees) (Amendment) Rules, 2002, are
given as an annexure to this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Act, the
Report and Accounts are being sent to all the members excluding the aforesaid annexure. Members, who are
interested in the said information, may write to the Company Secretary at the registered office of the Company.
Acknowledgements
Your Directors wish to express their gratitude to the Central and State governments, investors, analysts,
financial institutions, banks, business associates and customers, the medical profession, distributors and
suppliers for their whole-hearted support. Your Directors commend all employees of your Company for their
continued dedication, significant contributions, hard work and commitment.
For and on behalf of the Board of Directors
Chairman
Mumbai, May 5, 2010
58
Annexure 'A' to the Directors' Report
Pursuant to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
A. CONSERVATION OF ENERGY
a) Energy conservation measures taken:
i)
Installed Plate Heat Exchanger for saving consumption of furnace oil in the Boiler.
ii)
Consumption of diesel was brought down by providing 20KVA DG power on power staggering days.
iii)
Timer set for ETP blower thereby reducing number of hours of operation.
iv)
Resized header and network correction for optimum chilled water distribution.
v)
Replaced existing chilled water pumps with pumps consuming less power.
vi)
Installed Trane Chiller with 60KVAR capacitor.
vii)
Replaced existing condenser pumps with new ones.
viii) Installed additional capacitors at load end.
ix)
Use of State Electricity Board power instead of Diesel Generated power.
x)
Installed an additional multiple effect evaporator to evaporate waste water and use the same in
the plant.
xi)
Replaced HPSV lamps with CFL ones.
xii)
Installed economiser on waste heat recovery boiler.
xiii) Installed two stage efficient vaccum pumps.
xiv) Installed aerodynamically designed FRP fan at cooling tower.
b) Additional investments and proposals:
i)
Install condensing economizer to recover thermal energy from boiler and CPP exhaust flue gases.
ii)
Install Captive power plant jacket heat recovery system.
iii)
Review insulation effectiveness on hot and cold surfaces.
iv)
Monitor and review the operation of ventilation blowers.
v)
Replace desiccant air dryer with refrigerated air dryer.
vi)
Regroup and resize cooling water pumps and decentralise chilled brine system to reduce piping
losses.
vii)
Steam header grouping.
viii) Installed VFD for air compressor motors.
ix)
Improve condensate recovery for water as well as fuel consumption.
c) Impact of measures in (a) & (b):
i)
Reduction in overall energy cost.
ii)
Reduced fuel water and power consumption.
iii)
Optimal consumption of resources resulting in overall efficiency improvement
iv)
Boiler efficiency improved.
d) Total energy consumption and energy consumption per unit of production:
Details are given in Form A
59
FORM 'A'
(See Rule 2)
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
A. POWER & FUEL CONSUMPTION
1. Electricity
a) Purchased Units
Total amount
Rate/unit (KWH)
b) Own Generation
i) Through Diesel Generator (HSD)
Units
Units per litre of diesel oil
Cost/unit (KWH)
ii) Through Generator (furnace oil)
Units
Units per litre of furnace oil
Cost/unit (KWH)
iii) Through Generator (gas)
Units
Units per M3 of Natural gas
Cost/unit (KWH)
2. Coal
3. i) Furnace oil (Boiler)
Quantity
Total amount
Rate/unit (KL)
ii) Furnace oil (Power Plant)
Quantity
Total amount
Rate/unit (KL)
4. Natural gas
Quantity
Total amount
Rate/unit (Cu. mt.)
Year ended
March 31, 2010
Year ended
March 31, 2009
Thousand KWH
Rs. in Mn.
Rs.
138496
732.6
5.3
108106
560.1
5.2
Thousand KWH
KWH
Rs.
4737
3.1
12.2
4353
3.1
11.4
Thousand KWH
KWH
Rs.
8205
4.3
4.3
18914
4.1
4.8
Thousand KWH
KWH
Rs.
21235
3.5
4.7
14601
3.3
4.2
Nil
Nil
KL
Rs. in Mn.
Rs.
13270
294.5
22196
14024
333.5
23780
KL
Rs. in Mn.
Rs.
1991
35.6
17862
4661
91.2
19563
Cu. mts.
Rs. in Mn.
Rs.
12221028
166.6
13.6
9005477
96.8
10.8
B. CONSUMPTI0N PER UNIT OF PRODUCTION:
The Company manufactures APls and several drug formulations of different pack sizes. It is therefore,
impractical to apportion the consumption and cost of utilities to each product.
NOTE:
There are no specific standards, as the consumption per unit depends upon the product mix. Variations in
consumption are due to different product mix.
60
B.
TECHNOLOGY ABSORPTION:
e) Efforts made in technology absorption as per Form B are given below:
FORM 'B'
(See Rule 2)
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTI0N
Research and Development (R & D)
1) Specific areas in which R&D was carried out by the Company:
The state-of-the-art Research Park at Pune was at the epicentre of the Company's R&D initiatives which
focussed broadly on Generics Research comprising Process and Formulations Research, Advanced Drug
Delivery Systems (ADDS), Novel Drug Discovery and Development (NDDD) and Biotechnology
Research. It was a prolific year for generics process research programmes wherein focus was on process
and formulations research. The ADDS program emerged as a key growth driver and area of strategic
focus within the overall R&D program. With significant investments being channelised towards
strengthening its ADDS research capabilities, different drug delivery platforms were developed.
Bio-adhesive and gastro retentive technologies were deployed in building unique products, based on
which, differentiated extended release products are currently in advanced stages of development.
There was a strong accent on controlled release and exclusive, unique first-to-file niche filings. The
Company's state-of-the-art Biotech research & manufacturing facility has been approved by the
Institutional Bio Safety Committee for research on recombinant DNA and also accredited as a Biotech
Centre by the Bioinformatic Centre of the University of Pune. Lupin BioResearch Center's (LBC)
state-of-the-art cGCP and cGLP facilities for Bio-Availability and Bio-Equivalence (BA/BE) clinical studies
spread over 23500 square feet with a capacity of 56 beds, became fully operational. The said facility
carries out Pilot and Pivotal BE studies for generics as also investigations for new products and ADDS
programmes. LBC also carries out BA and Clinical end-point studies, including inspections, DCGI, DSIR
and NABL pre-assessments. Necessary infrastructure was built and pre-requisite technologies and
skill-sets acquired. Targets were identified; research programs initiated and back-up programs
evaluated for prospective research areas. The medicinal chemistry facility was activated which would
ascertain the rationale, feasibility, IP commercial potentials for clearly defining milestones and
decisions. Validation process for the new biology facility was initiated where; highly sophisticated
robotic Functional Assaying machines and High Throughput Screening capacities were commissioned.
2) Benefits derived as a result of the above R&D:
The Company emerged as one of the top 10 ANDA filers in the US market. During the year, the Company
filed 19 US DMFs taking the cumulative total to 104 and 4 EDMFs/AU DMFs, featuring several unique
and complex APIs such as Prostaglandins for Oral Contraceptives. The formulations research group filed
37 Abbreviated New Drug Applications (ANDAs) with the USFDA and received 7 approvals, out of which,
3 were tentative approval. The cumulative number of ANDA filings stands at 127, with 40 approvals,
including 6 tentative approvals till date. The total cumulative filings within the EU stands at 65, with 31
approvals till date. Filings were made in new therapeutic areas such as Opthalmics and Dermatology in
addition to expanding the number of filings for Oral Contraceptives to 22 ANDAs till date. The
cumulative first-to-file and exclusive opportunities now stand at 12. The Company successfully outlicensed its Bio-adhesive Technology platform to Salix Pharmaceuticals, a US major, for use with
Rifaximin. This validates the investment that the Company made in the ADDS program over the years as
also it's growing capabilities in the drug delivery space. The Company filed 26 Formulations patents,
84 API/Process patents and 14 NCE patents. Approvals were received for 4 Formulations patents and
31 NCE patents. The Company has filed 5 patents for the technologies developed by bio-technology
research and published 6 research articles. The Company has a pipeline of 4 Investigational New
Drugs for addressing Migraine, Psoriasis and Tuberculosis and the same remain in various phases of
clinical development.
3) Future plan of action:
Efforts are being directed towards developing, discovering and commercialising novel drugs to address
disease areas with significant unmet medical need. The Company plans to launch its first Biological in
the Indian market and is exploring collaborative opportunities in the field of new biological
formulations and biological entities. The Company aims to license its ADDS products to innovator
companies whilst also developing niche brands for itself. Plans are afoot to commission cGMP facilities
for microbial as well as mammalian suites.
61
4)
Expenditure on R&D (Consolidated):
a.
b.
c.
d.
Capital
Recurring (excluding depreciation of Rs.132.0 Mn.)
Total
Total R&D expenditure as a percentage of net sales
Rs. 681 . 0 Mn.
Rs. 3438 . 1 Mn.
Rs. 4119 . 1 Mn.
8 .7%
Technology absorption, adaptation and innovation:
i)
Efforts in brief, made towards technology absorption, adaptation and innovation:
The Innovation Cell and the Intellectual Property Management Group work in conjunction to
identify well differentiated new therapy areas and the creation of a value based product pipeline
involving complex technologies. As the Company continues to explore new areas of research, it
would continue to focus on adopting and integrating latest innovations and technologies to
ensure that it becomes a knowledge-based, technology driven research organisation designed to
emerge as a global Pharma major.
ii) Benefits derived as a result of the above efforts:
The Company witnessed heightened activity as momentum gathered across the entire value
chain with development of cost-effective products, specifically for the advanced markets of US
and Europe.
iii) Imported technology:
During the year, the Company did not import any specific technology. The Company developed
technology through efforts of its in-house Research and Development.
C.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
f)
Information regarding exports activities and related matters is covered elsewhere in this Annual Report.
g) Earnings in foreign exchange was equivalent to Rs.21531.9 Mn. and expenditure Rs.7881.8 Mn.
Chairman
Mumbai, May 5, 2010
62
Annexure 'B' to the Directors' Report
DETAILS OF STOCK OPTIONS AS ON MARCH 31, 2010
In terms of Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999 (“the SEBI Guidelines”) the particulars of options on March
31, 2010 are as under :
No.
a)
Description
Options granted during the year
b)
The pricing formula
c)
Options vested during the year
d)
Options exercised during the year
e)
Total number of shares arising as result of
exercise of options
f)
Options lapsed during the year
g)
Variation of terms of options
h)
Money realised by exercise of options
i)
Total no. of options in force
j)
Employee-wise details of options granted to
i. Senior Managerial Personnel
ii. Employees to whom options granted
amounting to 5% or more, of the total
options granted during the year.
iii. Employees to whom options equal to or
exceeding 1% of the issued capital have
been granted during the year.
63
Details
151000 options under ESOP 2003
l
38000 options under ESOP 2005
l
75350 options under SESOP 2005
Each option is convertible into one equity share of nominal
value of Rs.10/- each.
l
Exercise price for 254350 options is the market price of
the shares, as defined under the SEBI Guidelines.
l
Exercise price for 10000 options is 50% of the market
price of the shares, as defined under the SEBI Guidelines.
l 206551 options under ESOP 2003
l 26080 options under SESOP 2005
l 204024 shares under ESOP 2003
l 99267 shares under ESOP 2005
l 4250 shares under SESOP 2005
Lapsed on account of resignation of employees:
There has been no variation in terms of the options granted
during the year, from those approved by the shareholders.
l Rs.59,522,162 under ESOP 2003
l Rs.46,109,696 under ESOP 2005
l Rs.1,844,394 under SESOP 2005
l
1.
2.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Nil
Dr. Kamal K. Sharma 10000
Dr. Dhananjay Bakhle 12000
Dr. Dhananjay Bakhle 12000
Mr. Meneleo Hernandez 8000
Dr. Kamal K. Sharma 10000
Mr. Lalit Singal
6500
Mr. Arun Khedkar
6500
Mr. Amit Kumar Jain
5000
Mr. Amit Trivedi
5000
Mr. Krishna Mohan B
5000
Mr. William Gileza
7750
Mr. Tony Amato
10000
Mr. Larry Weaver
4400
Ms. Melody Sies
4000
Dr. Karl Roberts
9900
Ms. Ursula Lockl
7900
Mr. Watanbe Kenji
10000
Mr. Ryo Akai
6500
Mr. Yoshiro Mukai
6500
Mr. Hiroshi Kobayashi 4000
options under ESOP 2005
options under ESOP 2003
options
Under
options
ESOP 2003
options
options
options
Under
options
ESOP 2005
options
options
options
options
options
options
options
Under
options
SESOP 2005
options
options
options
options
No.
k)
l)
m)
n)
Description
Diluted earnings per share (EPS) pursuant to issue
of shares on exercise of options and conversion
of FCCBs during the year and ESOPs
outstanding as on 31.03.2010, calculated in
accordance with Accounting Standard (AS) 20
'Earnings per share'
Where the company has calculated the employee
compensation cost using the intrinsic value of
the stock options, the difference between the
employee compensation cost so computed and
the employee compensation cost that shall have
been recognized if it had used the fair value of
the options, shall be disclosed. The impact of this
difference on profits and on EPS of the company.
Weighted average exercise prices and weighted
average fair values of options disclosed separately
for options whose exercise price either equals or
exceeds or is less than the market price of the stock
Details
Rs.74.08
Adjusted EPS:
- Basic Rs. : 74.77
- Diluted Rs. : 73.48
Weighted average exercise price of options granted during
the year whose :a. Exercise price equals market price: Rs.1149.70
b. Exercise price is greater than market price: N.A.
c. Exercise price is less than the market price: Rs. 614.08
Weighted average fair value of options granted during
the year whose :a. Exercise price equals market price: Rs.534.81
b. Exercise price is greater than market price: N.A.
c. Exercise price is less than the market price: Rs.794.41
Description of the method and significant assumptions used during the year to estimate the fair values of the
options, including the following weighted average information :
l Fair value calculated by using Black-Scholes option pricing formula.
l Stock price: The closing price on NSE as on the date of grant has been considered for valuing the
options granted.
l Volatility: The historical volatility of the stock till the date of grant has been considered to calculate the
fair value of the options.
l Risk free rate of return: The risk free interest rate on the date of grant considered for the calculation is
the interest rate applicable for a maturity equal to the expected life of the options based on the zero
coupon yield curve for Government Securities.
l Time to Maturity: Time to Maturity / Expected Life of option is the period for which the Company expects
the options to be live. The minimum life of a stock option is the minimum period before which the options
cannot be exercised and the maximum life is the period after which the options cannot be exercised.
l Expected dividend yield: Expected dividend yield has been calculated as an average of dividend yields
for the four financial year preceding the date of the grant.
Variables
Plan
Weighted Average Information
ESOP 2003
ESOP 2003
ESOP 2005
ESOP 2005
SESOP 2005
22.09.09
29.01.10
29.05.09
04.11.09
22.09.09
Risk free rate (%)
7.14
7.49
6.66
7.08
7.14
Expected life (years)
6.45
6.45
6.45
5.50
6.45
40.95
39.87
41.83
38.79
40.95
Grant date
Volatility (%)
Dividend yield (%)
Stock price (NSE closing rate) Rs.
Option Fair Value Rs.
1.29
1.29
1.29
1.29
1.29
1070.10
1422.65
836.15
1258.75
1070.10
497.76
673.26
389.31
794.41
497.76
64
Corporate Governance Report
1
Company's Philosophy on Corporate Governance:
Corporate Governance is a continuous journey for sustained value creation and it is an upward moving target. In
its pursuit of growth, excellence and commitment to values, corporate governance forms an integral part of the
Company's philosophy. The Company believes that good governance goes beyond working results and
financial propriety and is a pre-requisite for attaining and further gaining excellence in performance. While
carving a niche in the global corporate world, the Company stays committed to good corporate governance by
aligning its actions and leveraging all its resources to optimize shareholder value on a long-term basis. In its
mission to be an exemplary corporate citizen, your Company aims at creating an ethical culture by instilling and
ensuring commitments of the highest order. While the management team comprises competent professionals,
the Company is being vastly benefitted by the invaluable inputs provided by its non-executive directors. The
Company has implemented all mandatory and a few non-mandatory requirements of Clause 49 of the Listing
Agreement. Non-mandatory requirements viz. formation of Remuneration / Compensation Committee and
formulation of a Whistle Blower Policy have been implemented. Codes of conduct have been adopted by
directors and senior management personnel and they are posted on the website of the Company
(www.lupinworld.com). All board members and senior management personnel have affirmed compliance with
the respective codes for the year ended March 31, 2010.
The Company has formulated a Whistle Blower Policy for its employees as also its subsidiaries. In terms of this
Policy, employees are free to raise their concerns regarding unethical behaviour, fraudulent business
conduct or violation of the Company's Code of Conduct and Workplace Ethics Policy. Employees, who raise
concerns in accordance with the provisions of the Whistle Blower Policy, are provided with adequate
safeguards against victimization and unfair treatment. A committee called the 'Office of the Ombudsperson'
comprising two senior executives of the Company with global responsibilities and an Executive Director has
been constituted to review and take necessary action on the complaints received. The applicability and
mechanism of the said Policy has been communicated to all employees and has also been posted on the
Company's intranet.
Sound systems of internal checks and balances are in place across the Company and they are regularly
evaluated and updated. The Company has a comprehensive risk management policy wherein key risks are
identified after organizing interactive sessions, workshops and conducting interviews at various levels
across different locations. Key risk elements are discussed at top management meetings wherein, risks are
rated and assessed in terms of their implications, probability of occurence and its consequences on the
Company's business. The system evaluates significant risk exposure, accesses actions by management in
mitigating the risk and compliance with all applicable laws in conformity with business processes.
A detailed Management Discussion and Analysis report forms part of this Annual Report.
2
Board of Directors:
The strength of the Board as on March 31, 2010 was twelve, of which, three are executive promoter directors, one is a non-executive promoter director, one is an executive director and seven are
independent directors. The requisite particulars are given below: Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Name of the director
Dr. Desh Bandhu Gupta, Chairman
Dr. Kamal K. Sharma, Managing Director
Mrs. M. D. Gupta, Executive Director
Mr. Nilesh Gupta, Executive Director
Mr. Marc Desaedeleer (up to 29.01.2010)
Ms. Vinita Gupta
Mr. K. V. Kamath (w.e.f. 29.01.2010)
Dr. Vijay Kelkar (w.e.f. 29.01.2010)
Dr. K. U. Mada
Mr. Sunil Nair (up to 05.05.2010)
Mr. R. A. Shah
Mr. Richard Zahn (w.e.f. 29.01.2010)
Whether
No. of Board
Promoter/ Meetings during
the year
Executive/
Independent Held Attended
P. & E.D.
E.D.
P. & E.D.
P. & E.D.
I. N-E.D.
I. N-E.D.
P. & N-E.D.
I. N-E.D.
I. N-E.D.
I. N-E.D.
I. N-E.D.
I. N-E.D.
I. N-E.D.
5
5
5
5
5
4
5
1
1
5
5
5
1
5
5
5
5
5
2
1
1
5
5
1
Attendance
at the last
AGM
Yes
Yes
Yes
Yes
Yes
No
Yes
N.A.
N.A.
Yes
No
Yes
N.A.
Number of
Member/
directorships
chairman of
of other
committees other
companies than the Company
7
7
7
7
7
7
2
3
6
3
1
22
1
2/1/1
1/5/2
10/5
-
Notes:
a) P. & E.D.: Promoter & Executive Director; E.D.: Executive Director; I. N-E.D.: Independent Non-Executive Director;
P. & N-E.D.: Promoter & Non-Executive Director.
b) In the case of Mr. R. A. Shah, directorships include a foreign company, private limited company and six Alternate
directorships of public limited companies.
c) Mrs. M. D. Gupta is the wife of Dr. Desh Bandhu Gupta, Ms. Vinita Gupta their daughter and Mr. Nilesh Gupta their son.
65
Board Meetings
The Board of Directors plays a key role in ensuring good corporate governance. The Board approves and
reviews business strategies and directs management activities. It oversees performance so as to ensure
adherence to the best practices of corporate governance. Board members express their opinions and
bring up matters for discussion at Board meetings. Board meeting dates are finalised in consultation with
all directors. Agenda papers are accompanied by comprehensive notes providing detailed information so
as to enable the Board to discharge its responsibilities effectively and take informed decisions. Minutes of
the meeting of the Board are circulated in advance to all Directors and confirmed at the subsequent Board
meeting. Copies of signed minutes of the various Committees of the Board as also Board meetings of
subsidiary companies are tabled at Board meetings.
Details of Board Meetings
Board meetings are held at least once in every quarter and the time gap between two meetings is not more
than four months. During the year, five Board Meetings were held on May 13, 2009, July 29, 2009,
September 22, 2009, October 26, 2009 and January 29, 2010.
Remuneration to Executive Directors
Particulars of Remuneration
Dr. Desh Bandhu Gupta,
Chairman
Fixed Component:
Salary
Benefits/Allowances
Provident Fund/Superannuation
Variable Component:
Performance-Linked Incentive
Commission [Note (b)]
Stock Options
Total:
Remuneration during 2009-10 (Rs. million)
Dr. Kamal K. Sharma,
Mrs. M. D. Gupta,
Managing Director
Executive Director
Mr. Nilesh Gupta,
Executive Director
15.36
3.11
2.59
34.72
0.51
4.32
1.92
0.33
0.32
19.73
0.40
3.44
70.00
91.06
19.67
4.75
63.97
2.57
9.18
32.75
Remuneration to Non - Executive Directors
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Mr. Marc Desaedeleer (up to 29.01.2010)
Ms. Vinita Gupta
Mr. K. V. Kamath (w.e.f. 29.01.2010)
Dr. Vijay Kelkar (w.e.f. 29.01.2010)
Dr. K. U. Mada
Mr. Sunil Nair
Mr. R. A. Shah
Mr. Richard Zahn (w.e.f. 29.01.2010)
No. of equity
shares held
2660
Nil
10320
Nil
Nil
600
Nil
3000
Nil
Remuneration paid in 2009-10 (Rs. million)
Sitting fees
Commission
Total
[Note (c)]
0.27
0.04
0.02
0.02
0.30
0.14
0.02
0.50
1.00
1.00
-
0.77
0.04
0.02
0.02
1.30
1.14
0.02
Notes:
a) Dr. Desh Bandhu Gupta, Chairman, Dr. Kamal K. Sharma, Managing Director, Mrs. M. D. Gupta, Executive Director and Mr. Nilesh Gupta, Executive
Director, are in whole-time employment of the Company and their employment is contractual in nature. While Dr. Gupta and Mrs. Gupta hold office
up to December 31, 2010, Dr. Sharma holds office up to September 28, 2012 and Mr. Nilesh Gupta holds office up to October 7, 2013.
b) Dr. Desh Bandhu Gupta is entitled to a commission @ 1% of the net profit, calculated in accordance with the provisions of Sections 349 and 350 of
the Companies Act, 1956, provided the net profit is not less than Rs.500 million in the relevant accounting year. Accordingly, the commission
payable to Dr. Gupta for the year 2009-10 works out to Rs.70 million which has been provided. The same would be paid after approval of the
accounts at the ensuing Annual General Meeting.
c) At the 23rd Annual General Meeting held on July 28, 2005, members had approved payment of commission to non-executive directors, not
exceeding in the aggregate 0.25% p.a. of the Company's net profit, provided that the aggregate of commission payable to all of them together shall
not exceed Rs. five million per year. The Board is authorised to decide upon the eligibility criteria and the quantum of commission payable to each
non-executive director. Commission to non-executive directors as mentioned above, is for the year 2008-09 which was paid in 2009-10. An amount
of Rs. five million has been provided towards commission payable to non-executive directors for the year 2009-10.
d) On November 4, 2009, 10,000 options were granted to Dr. Kamal K. Sharma at an exercise price of Rs.614.08 (being 50% of the market price) under
the "Lupin Employees Stock Option Plan 2005". The vesting period of the options is 12 months and the same are exercisable within ten years from
the date of the grant.
e) During the year, Crawford Bayley & Co., Solicitors & Advocates, of which Mr. R. A. Shah, non-executive director, is a senior partner, was paid professional
fees aggregating Rs.0.45 million, which constitute less than one percent of the total revenues of the said firm and an insignificant fraction of the
Company's turnover. The Board of Directors is of the view and has also taken a legal opinion on the subject, confirming that the said firm does not have a
material association with the Company and payment of the fees is not material enough to impinge on the independence of Mr. Shah.
66
Brief profiles, other directorships and committee memberships etc. of directors seeking re-appointment
/ appointment at the 28th Annual General Meeting: Dr. Kamal K. Sharma
Dr. Kamal K. Sharma is a chemical engineer from the Indian Institute of Technology (lIT), Kanpur with a
post-graduate diploma in industrial management from Jamnalal Bajaj Institute of Management Studies,
Mumbai and a Ph.D. in Economics from lIT, Mumbai. He has also completed an advanced management
programme from Harvard Business School, Boston. Dr. Sharma has vast industry experience spanning
more than three decades and has held a range of senior management positions in the fields of projects,
operations, corporate development and general management in pharma and chemical industries.
List of other directorships
Faisa Financial Pvt. Ltd., Director
Templetree Properties Pvt. Ltd., Director
Lupin Pharmacare Ltd., Director
Kyowa Pharmaceutical Industry Co., Ltd., Japan, Director
Generic Health Pty. Ltd., Australia, Director
Pharma Dynamics (Proprietary) Ltd., South Africa, Director
Amel Touhoku, Japan, Director
Chairman/member of the committees of the board
of the companies on which he is a director
-
Mr. D. K. Contractor is a commerce graduate from Mumbai University and a certified Associate and Fellow
of the Indian Institute of Bankers. He held several senior positions in the Central Bank of India and retired as
its Executive Director. Mr. Contractor has vast experience of over 40 years in the areas of banking, finance
and administration.
Jai Corp Ltd., Director
Mazda Ltd., Director
Tufropes Pvt. Ltd., Director
The Victoria Mills Ltd., Director
Zoroastrian Co-operative Bank Ltd., Director
Advisory & Analytics India Pvt. Ltd., Director
IL&FS Trust Company Ltd., Director
Jai Corp Ltd., Member of Audit Committee
IL&FS Trust Company Ltd., Member of Audit Committee
Mr. K.V. Kamath
Mr. K. Vaman Kamath is the non-executive Chairman of the Board of Directors of ICICI Bank Limited, India's
second largest bank. Mr. Kamath has a degree in mechanical engineering and did his management studies
at the Indian Institute of Management, Ahmedabad. He started his career in 1971 at ICICI, an Indian
financial institution that founded ICICI Bank and merged with it in 2002. In 1988, he moved to the Asian
Development Bank and spent several years in South-East Asia before returning to ICICI as its Managing
Director & CEO in 1996. Under his leadership, the ICICI Group transformed itself into a diversified,
technology-driven financial services group that has leadership positions across banking, insurance and
asset management in India, and an international presence. He retired as Managing Director & CEO in April
2009, and took up his present position. Mr. Kamath was conferred with the Padma Bhushan, one of India's
highest civilian honours, in 2008. He has received widespread recognition internationally and in India,
including being named "Businessman of the Year" by Forbes Asia and "Business Leader of the Year" by
The Economic Times, India in 2007 and CNBC's "Asian Business Leader of the Year" in 2001. Mr. Kamath was
the President of the Confederation of Indian Industry for the year 2008-09. He is also an independent
Director on the Board of Directors of Infosys Technologies Limited and Schlumberger Limited. He has
been a co-chair of the World Economic Forum's Annual Meeting in Davos and is a member of the Board of
the Institute of International Finance.
67
ICICI Bank Ltd., Chairman
Infosys Technologies Ltd., Director
Institute for International Finance Inc., Member-Board of Directors
Institute for International Finance Inc. - Chairman of the
Audit Committee.
Dr.Vijay Kelkar
Dr. Vijay Kelkar holds an M.S. from the University of Minnesota and Ph.D. from the University of
California. He held senior positions in the Government of India and was Chairman/Member of several
high-powered Committees, Councils, Task Forces, Working Groups, set up by different ministries and
Departments of the Government of India. He was Finance Secretary, Government of India, during
1998 -1999, Executive Director for India, Sri Lanka, Bangladesh and Bhutan on the IMF, Washington,
D.C., from 1999 to 2002 and Advisor to the Minister of Finance, Government of India, in the rank of a
Minister of State from 2002 to 2004.
Dr. Kelkar delivered lectures at the Universities of California, Pennsylvania, Vanderbilt, Harvard and
Cornell in the US and was visiting Professor at the South Asia Institute, Heidelberg University, West
Germany and the Center for Economic Development and Administration, Government of Nepal. He was
a senior faculty member of the Administrative Staff College of India, Hyderabad, and Instructor Microeconomics, University of California, and U.S.A. Dr. Kelkar has authored several books, publications
and journals on micro and macroeconomics, functioning of Indian public sector undertakings, trade
policies and reforms in India.
Dr. Kelkar was an Independent Director on the Board of the Company during the period October 19, 2005
to December 31, 2007. On his appointment as Chairman of the 13th Finance Commission, Dr. Kelkar
relinquished his directorship w.e.f. December 31, 2007.
Tata Consultancy Services Ltd., Director
JSW Steel Ltd., Director
National Stock Exchange of India Ltd., Chairman
Roche Scientific Company India Pvt. Ltd., Director
Green Infra Ltd., Chairman
J. M. Financial Ltd., Director
J. M. Financial Ltd., Member of Audit Committee
Mr. Richard Zahn
Mr. Richard is a B. S. (Business Administration) with Honors, Kansas State Teachers College, Kansas. He had
completed Executive Education with Amos Tuck School, Dartmouth University, Harvard/MIT Program on
Negotiation, The Wharton School, University of Pennsylvania and National Association of Corporate
Directors - Certificate of Director Education.
Mr. Richard is the Managing Partner of HMJ Global Partners, a corporate governance and not-for-profit
public policy advisory group. With more than 30 years of experience in the biotechnology and
pharmaceutical industries, he is an established leader and strategist in healthcare research and
development, marketing management, managed care, and human resources. He is widely recognized as
an insightful speaker on economic and policy issues.
Mr. Richard was President of Schering Laboratories, U.S., Director, Schering Corporation and Corporate
Vice President of Schering-Plough Corporation, a global research-based company engaged in the
discovery, development, manufacturing and marketing of pharmaceutical, biotechnology and healthcare
prescription pharmaceutical marketing arm for Schering-Plough. Mr. Richard spent 20 years at Johnson &
Johnson. Mr. Richard has focused his efforts on world economic development and public policy. He has
received several awards for his devoted work towards various organizations and charities with particular
focus on health care and minority issues.
68
3
Audit Committee:
The Audit Committee comprises Dr. K. U. Mada (Chairman) and Mr. D. K. Contractor, independent
directors, and Dr. Kamal K. Sharma, Managing Director. Dr. K. U. Mada is an eminent economist and
development banker. Mr. D. K. Contractor retired as Executive Director, Central Bank of India. All the
members of the Audit Committee are financially literate. Mr. R. V. Satam, Company Secretary &
Compliance Officer, acts as the Secretary of the Committee. The head of finance, representatives of
accounts, statutory auditors, internal auditors and cost auditors attend meetings of the Audit Committee.
The Audit Committee addresses matters pertaining to adequacy of internal controls, reliability of financial
statements, adequacy of provisions for liabilities and appropriateness of audit tests and checks. Emphasis
is on proper disclosures and compliance with all relevant statues.
The Chairman of the Committee attended the last Annual General Meeting of the Company held on
July 29, 2009.
The Committee performs the functions spelt out in Clause 49 of the Listing Agreement and Section 292A
of the Companies Act, 1956. The matters deliberated upon by the Committee include: a)
Overseeing and reviewing the financial reporting process and dissemination of financial information.
b) Recommending to the Board, the appointment/re-appointment of statutory auditors and fixation of
audit fees as also approving payments for any other services.
c)
Reviewing with the management the quarterly and annual financial statements before submission to
the Board for approval with particular reference to: i)
matters required to be included in the Directors' Responsibility Statement in terms of Clause
(2AA) of Section 217 of the Companies Act, 1956;
ii)
changes, if any, in accounting policies and practices and reasons for the same;
iii) major accounting entries involving estimates based on the exercise of judgment by management;
iv) significant adjustments made in the financial statements arising out of audit findings;
v)
compliance with listing and other legal requirements relating to financial statements;
vi) disclosure of related party transactions; and
vii) qualifications in the draft audit report, if any.
d) Reviewing the financial statements of subsidiary companies as also the consolidated financial
statements including investments made by the subsidiary companies.
e)
Reviewing with the management, the performance of statutory and internal auditors and adequacy
of the internal control systems.
f)
Reviewing the adequacy of the internal audit function, including the structure of the internal audit
department, its staffing, reporting structure and frequency of audits.
g) Discussing with internal auditors, significant findings and follow-up thereon and reviewing findings
of internal auditors and reporting them to the Board.
h) Discussion with statutory auditors before the audit commences about the nature and scope of audit
as also post-audit discussion to ascertain areas of concern.
i)
Look into the reasons for any defaults in the payment to depositors, debenture holders, members (in
case of non-payment of declared dividends) and creditors.
j)
Review the functioning of the Whistle Blower mechanism.
k)
Review and discuss with the management the status and implications of major legal cases and matters.
l)
Carrying out such functions as may be mentioned in the terms of reference of the Audit Committee.
In addition, the Committee reviews the management discussion and analysis report and management letters.
69
Details of Audit Committee Meetings
During the year, six meetings of the Audit Committee were held on May 13, 2009, July 29, 2009, September
22, 2009, October 26, 2009, January 29, 2010 and March 23, 2010 and the attendance was as follows: Sl. No.
Held
a)
b)
c)
4
Dr. K. U. Mada, Chairman
Dr. Kamal K. Sharma
6
6
6
No. of Meetings
Attended
6
6
1
Investors' Grievances Committee:
The Investors' Grievances Committee comprises Mr. D. K. Contractor (Chairman) and Dr. K. U. Mada,
independent directors. Mr. R. V. Satam, Company Secretary & Compliance Officer, acts as the Secretary of
the Committee. Meetings of the Investors' Grievances Committee are attended by the finance head and
head of Investors' Services Department.
The Committee evaluates multifaceted activities viz. dematerialization and transfer of shares,
disbursement of dividend, depository operations, management of employees stock option plans, transfer
of unclaimed amounts to Investor Education & Protection Fund and regulatory compliances etc. to ensure
that the highest standards of service levels are maintained.
It encourages team members to provide prompt and qualitative services and expeditious redressal of
investors' grievances.
The Company received and resolved 45 complaints from shareholders during the year. As on March 31,
2010, no complaints remained pending/un-attended. During the year, no share transfers/ complaints
remained pending for over 30 days.
Details of the Investors' Grievances Committee Meetings
During the year, two meetings of the Investors' Grievances Committee were held on September 22, 2009
and March 23, 2010 and the attendance was as under:Sl. No.
Held
a)
b)
5
Mr. D. K. Contractor, Chairman
Dr. K. U. Mada
2
2
No. of Meetings
Attended
2
2
Remuneration/Compensation Committee:
The Remuneration/Compensation Committee comprises Dr. K. U. Mada (Chairman) and Mr. R. A. Shah,
independent directors. The Committee inter alia performs functions spelt out in Clause 49 of the Listing
Agreement and Schedule XIII of the Companies Act, 1956. The Committee reviews and recommends to
the Board, the remuneration payable to executive directors. The Company follows a market-linked
remuneration policy. The Committee determines and recommends remuneration after evaluating
criteria viz. position, experience, expertise, leadership qualities, responsibilities shouldered by the
individual as also the volume of Company's business and profits earned by it. To attract, reward and
retain talented and qualified personnel as also to create a sense of belonging among them, the
Company had formulated employees stock option plans. The Committee approves grant of stock
options to employees of the Company and its subsidiaries and performs such functions as may be
required under various stock option plans.
Details of the Remuneration/Compensation Committee Meetings
During the year, four meetings of the Remuneration/Compensation Committee were held on September
22, 2009, October 26, 2009, December 17, 2009 and January 29, 2010 and the attendance was as under: Sl. No.
Held
a)
b)
Dr. K. U. Mada, Chairman
Mr. R. A. Shah
4
4
No. of Meetings
Attended
4
4
The Committee passed by circulation two resolutions dated May 29, 2009 and November 4, 2009.
70
6
General Body Meetings:
Details of the last three Annual General Meetings: Year
Day, Date and Time
Location
No. of Special Resolutions passed
2006 - 07
Thursday, July 19, 2007
at 2.30 p.m.
-
2007 - 08
Tuesday, July 22, 2008
at 2.30 p.m.
2008 - 09
Wednesday, July 29 2009
at 2.30 p.m.
Birla Matushri Sabhagar
(Bombay Hospital Trust),
19, Marine Lines,
Mumbai - 400 020
Rang Sharda Natyamandir,
Bandra Reclamation,
Bandra (West),
Mumbai - 400 050
Rang Sharda Natyamandir,
Bandra Reclamation,
Bandra (West),
Mumbai - 400 050
-
One
No business was required to be transacted through postal ballot at the above meetings. Similarly, no
business is required to be transacted through postal ballot at the forthcoming Annual General Meeting.
7
Disclosure on materially significant related party transactions:
During the year under review, there have been no materially significant related party transactions,
monetary dealings or relationships between the Company and its promoters, directors, management
or their relatives, subsidiaries etc. which may have potential conflict with the interests of the Company
at large. Statements of transactions in summary form with related parties in the ordinary course
of business were placed at meetings of the Audit Committee. The Audit Committee reviewed statements
of related party transactions submitted by the management. The Register of Contracts contains
details of transactions in which Directors are interested and the same is placed before meetings of the
Board. During the year under review, Crawford Bayley & Co., Solicitors & Advocates of which Mr. R. A. Shah,
non-executive director, is a senior partner was paid Rs.0.45 million towards professional fees. Apart
from payment of sitting fees, commission and professional fees (if any), there is no pecuniary transaction
with the non-executive directors. In compliance with Accounting Standard AS 18, details of related
party transactions are disclosed in the notes to accounts. The Company has complied with the
requirements of Stock Exchanges, SEBI and other statutory authorities on all matters relating to capital
markets during the last three years and they have not imposed any penalties on, or passed any strictures
against the Company.
8
Means of communication:
Quarterly and annual financial results of the Company are communicated to the stock exchanges
immediately after the Board approves them and thereafter, they are published in prominent English (The
Economic Times, all editions) and Marathi (Maharashtra Times, Mumbai edition) newspapers. The results
are also posted on the Company's website viz. www.lupinworld.com and on the Electronic Data
Information Filing and Retrieval (EDIFAR) website maintained by the National Informatics Centre, as
required by SEBI. The website also displays official news releases and presentations made to institutional
investors and analysts. Disclosures pursuant to various clauses of the Listing Agreement are promptly
communicated to the stock exchanges.
9
General Members' information:
X INVESTORS' SERVICES DEPARTMENT - AT THE SERVICE OF THE ESTEEMED INVESTORS
Expeditious redressal of investor queries and highest standards of regulatory compliances are the
thrust areas of the Investors' Services Department (ISD). Accent and focus of ISD is towards innovative
and proactive services. The Department is committed through its proficient and experienced team to
render services commensurate to the expectations and needs of the esteemed shareholders. It has,
over the years, fine-tuned its service delivery mechanism to attain its objectives.
71
The department deals with the various matters relating to:
<
<
<
<
<
<
<
<
<
<
<
<
<
<
<
Transfer and transmission of shares
Dematerialisation of shares
Regulatory compliances
Redressal of investor grievances
Issuance of duplicate share certificates
Execution of corporate actions and other depository operations
Compliances pursuant to SEBI (Prohibition of Insider Trading) Regulations
Disbursement of dividend and reminders to claim the unpaid dividends
Allotment of shares under ESOPs and upon conversion of FCCBs
Liaisoning with stock exchanges, regulatory bodies, including the Reserve Bank of India
Listing of shares with stock exchanges
ESOP management - including liaisoning with local and overseas employees
Continual updation of share-related data on the Company's official website
Transfer of unclaimed amount to Investor Education and Protection Fund (IEPF)
Management of postal ballots etc.
The ISD is dedicated to its investors and can be approached for any query or assistance through letter,
telephone, fax, email or in-person at the Registered Office of the Company, located at:
<
159, C.S.T. Road, Kalina, Santacruz (East), Mumbai - 400 098, India.
Tel: +91 22 6640 2323 (Ext: 2402/3)
Fax: +91 22 2652 8806
Exclusive email id for investor grievances
Pursuant to Clause 47 (f) of the Listing Agreement, the following email id has been exclusively
designated for communicating investor grievances:
Email: [email protected]
For the convenience of investors, a link has also been established to the Department through the
Company's website, www.lupinworld.com/contact.htm#investor
<
Person in-charge of the Department: Mr. Pradeep Bhagwat, General Manager - Investors' Services.
X ANNUAL GENERAL MEETING
The 28th Annual General Meeting will be held at 2.30 p.m. on Wednesday, July 28, 2010, at Rang Sharda
Natyamandir, Bandra Reclamation, Bandra (West), Mumbai - 400 050.
X FINANCIAL CALENDAR
First quarter results
Second quarter results
Third quarter results
Annual results
Annual General Meeting
:
:
:
:
:
July 2010
October 2010
January 2011
April/May 2011
July/August 2011
X BOOK CLOSURE
The Register of Members and the Share Transfer Register will remain closed from Wednesday, July 21,
2010 to Wednesday, July 28, 2010, both days inclusive.
Dividend for the year ended March 31, 2010, if declared, at the Annual General Meeting, shall be paid to:
a) beneficial owners at the end of business day on Tuesday, July 20, 2010 as per lists furnished by NSDL
and CDSL in respect of shares held in electronic form; and
b) persons whose names appear on the Register of Members as at the end of the business day on
Tuesday, July 20, 2010 in respect of shares held in physical form.
72
X DIVIDEND PAYMENT DATE
Dividend, if declared, shall be paid within three days from the date of the Annual General Meeting.
Dividend shall be remitted through National Electronic Clearing Service (NECS), wherever bank details
including MICR no. are available with the Company, and in other cases, through warrants payable at par.
X SHARES LISTED AT
The equity shares of the Company are listed on:
Bombay Stock Exchange Limited (BSE)
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai Samachar Marg,
Mumbai - 400 001.
National Stock Exchange of India Limited (NSE)
Exchange Plaza,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400 051.
Annual Listing fees for the year 2010-11 have been paid to stock exchanges. The Company has also
paid the Annual Custodial fees to both the depositories.
X STOCK CODES
The stock codes of the Company are:
BSE 500257
NSE LUPIN
X INTERNATIONAL SECURITIES IDENTIFICATION NUMBER (ISIN)
ISIN is a unique identification number allotted to dematerialised scrip. The ISIN has to be quoted in
each transaction relating to dematerialized shares of the Company. The ISIN of the equity shares of the
Company is INE 326A 01029.
X CORPORATE IDENTITY NUMBER (CIN)
CIN of the Company, allotted by the Ministry of Corporate Affairs, Government of India:
L24100MH1983PLC029442
X MARKET PRICE DATA
Equity shares of the Company are traded in A group and are also available for trading in Futures &
Options (F & O) segment of the NSE.
The market-price data covering the period April 2009 to March 2010 is given below:
BSE
MONTH
APR-2009
MAY-2009
JUN-2009
JUL-2009
AUG-2009
SEP-2009
OCT-2009
NOV-2009
DEC-2009
JAN-2010
FEB-2010
MAR-2010
73
(Rs.)
HIGH
748.00
905.00
901.00
991.90
1055.20
1190.00
1314.00
1400.25
1564.00
1494.00
1624.00
1673.70
DATE
28.04.09
20.05.09
25.06.09
24.07.09
26.08.09
25.09.09
14.10.09
27.11.09
31.12.09
04.01.10
02.02.10
23.03.10
NSE
(Rs.)
LOW
630.00
703.60
803.00
754.90
918.30
950.00
1125.00
1216.10
1353.00
1310.00
1419.00
1495.00
DATE
08.04.09
13.05.09
01.06.09
08.07.09
04.08.09
03.09.09
05.10.09
03.11.09
01.12.09
22.01.10
01.02.10
02.03.10
(Rs.)
HIGH
748.00
906.00
905.00
989.95
1059.00
1188.40
1309.95
1402.20
1554.70
1494.80
1609.90
1710.00
DATE
28.04.09
20.05.09
25.06.09
24.07.09
26.08.09
29.09.09
12.10.09
27.11.09
18.12.09
04.01.10
15.02.10
15.03.10
(Rs.)
LOW
621.05
715.00
792.15
767.90
903.05
935.40
1129.00
1196.00
1371.00
1310.10
1425.00
1496.10
DATE
08.04.09
04.05.09
02.06.09
09.07.09
31.08.09
09.09.09
01.10.09
04.11.09
02.12.09
22.01.10
01.02.10
03.03.10
X TRADING VOLUMES
The number of shares traded at BSE and NSE were:
Month
APR - 2009
MAY- 2009
JUN - 2009
JUL - 2009
AUG - 2009
SEP - 2009
OCT - 2009
NOV - 2009
DEC - 2009
JAN - 2010
FEB - 2010
MAR - 2010
TOTAL:
BSE
702327
2274188
386590
831405
1735737
782758
946888
832755
857185
671368
931438
503060
11455699
NSE
2028990
3825857
2680036
3661627
3638195
3239285
6373561
3618417
5207120
4078308
3805543
3259606
45416545
Total
2731317
6100045
3066626
4493032
5373932
4022043
7320449
4451172
6064305
4749676
4736981
3762666
56872244
X PERFORMANCE IN COMPARISON WITH BROAD BASED INDICES
Lupin share price compared with BSE Sensex and NSE S&P CNX Nifty (Month-end closing)
BSE
Month
APR - 2009
MAY - 2009
JUN - 2009
JUL - 2009
AUG - 2009
SEP - 2009
OCT - 2009
NOV - 2009
DEC - 2009
JAN - 2010
FEB - 2010
MAR - 2010
Lupin share price
(Rs.)
717.05
833.85
817.10
945.90
1015.15
1136.85
1226.25
1374.45
1490.30
1420.45
1497.65
1624.55
Sensex
11403.25
14625.25
14493.84
15670.31
15666.64
17126.84
15896.28
16926.22
17464.81
16357.96
16429.55
17527.77
NSE
Lupin share price
(Rs.)
718.55
836.15
816.20
950.40
1015.15
1135.00
1229.95
1375.30
1474.10
1422.65
1500.70
1627.35
S&P CNX Nifty
3473.95
4448.95
4291.10
4636.45
4662.10
5083.95
4711.70
5032.70
5201.05
4882.05
4922.30
5249.10
X EVOLUTION OF CAPITAL
Equity shares in the Company of face value of Rs.10/- each have been issued as under:
Year of issue
2001 - 02
2006 - 07
2007 - 08
2008 - 09
2009 - 10
Allotment of shares
upon amalgamation *
under ESOP (Pre - Bonus)
as bonus (in the ratio of 1:1)
under ESOP (Post - Bonus)
upon conversion of FCCB
under ESOP
under ESOP
under ESOP
No. of shares
40141134
11360
40152494
39576
1656100
80231
571069
167586
307541
5816742
Cumulative total
40141134
40152494
80304988
80344564
82000664
82080895
82651964
82819550
83127091
88943833
* Amalgamation of Lupin Laboratories Limited with Lupin Chemicals Limited whose name was changed to Lupin Limited.
74
X SHARE TRANSFER SYSTEM
The equity shares of the Company are being traded compulsorily in demat form and they are
transferable only through depository system. The activities related to transfer of shares in physical
form are carried out by the Investors' Services Department of the Company and placed before the
Share Transfer Committee for its approval.
The Board has constituted a Share Transfer Committee comprising Dr. Desh Bandhu Gupta, or in his
absence, Dr. Kamal K. Sharma as Chairman of the Committee. Mrs. M. D. Gupta and Mr. D. K.
Contractor are the members. The Committee met 23 times during the year and approved transfer of
13290 equity shares.
In terms of Clause 47 (c) of the Listing Agreement, every six months, a qualified Practising Company
Secretary undertakes audit of the share transfer related activities carried out by the Investors' Services
Department and issues a compliance certificate, which is submitted to the stock exchanges.
X ALLOTMENT COMMITTEE
The Board has delegated powers to the Allotment Committee of Directors to allot the shares of the
Company. Dr. Desh Bandhu Gupta, or in his absence, Dr. Kamal K. Sharma is Chairman of the
Committee. Mrs. M. D. Gupta is a member.
During the year 17 meetings of the Allotment Committee were held. The Committee approved
allotment of 307541 shares to the employees, upon exercising the options granted under Lupin
Employees Stock Option Plans and 5816742 shares upon conversion of Foreign Currency
Convertible Bonds.
Executives of the Company are authorised by the Allotment Committee to comply with postallotment formalities, including execution of corporate actions to credit the shares into demat
account of the allottees through depositories and listing them with the stock exchanges.
X SHAREHOLDING PROFILE AS ON MARCH 31, 2010
i. Distribution of Shareholding
Shareholding range
(No. of shares)
1 - 500
501 - 1000
1001 - 2000
2001 - 3000
3001 - 4000
4001 - 5000
5001 - 10000
10001 and above
Total:
Shareholders
Numbers
44447
571
301
126
82
57
114
332
46030
%
96.56
1.24
0.65
0.27
0.18
0.12
0.25
0.72
100.00
Shareholding
Numbers
2785317
437633
436453
311690
295475
264356
850880
83562029
88943833
%
3.13
0.49
0.49
0.35
0.34
0.30
0.96
93.95
100.00
ii. Shareholding Pattern
Category
Promoters
Mutual Funds
Insurance Cos./ Banks/ Financial Institutions
Foreign Institutional Investors (FIIs)
Foreign Bodies / Banks
Non Residents
Public
Total:
75
No. of shares
41931508
11626948
9285682
15401679
569355
132904
9995757
88943833
%
47.14
13.07
10.44
17.32
0.64
0.15
11.24
100.00
iii. Shareholding Profile
Mode
Shareholding
Shareholders
Demat
(nos.)
88139102
32935
%
99.10
71.55
Physical
(nos.)
804731
13095
%
0.90
28.45
Total
(nos.)
88943833
46030
iv. Geographical presence of shareholders as on March 31, 2010
State
Shareholders
Nos.
1851
649
120
2807
5289
680
208
2393
553
1235
19159
322
235
816
1629
2027
439
2559
2549
510
46030
Andhra Pradesh
Bihar
Chhattisgarh
Delhi
Gujarat
Haryana
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
North Eastern States
Orissa
Punjab
Rajasthan
Tamilnadu
Uttarakhand
Uttar Pradesh
West Bengal
Others
Total:
%
4.02
1.41
0.26
6.10
11.49
1.48
0.45
5.20
1.20
2.68
41.62
0.71
0.51
1.77
3.54
4.40
0.95
5.56
5.54
1.11
100.00
X DIVIDEND PROFILE
Financial year
Book closure/Record date
Dividend
Date of
declared
declaration
2008 - 09
22.07.09 - 29.07.09
125 %
29.07.2009
2007 - 08
15.07.08 - 22.07.08
100 %
22.07.2008
2006 - 07
12.07.07 - 19.07.07
50 % *
19.07.2007
2005 - 06
11.07.06 - 12.07.06
65 %
25.07.2006
2004 - 05
19.07.05 - 20.07.05
65 %
28.07.2005
2003 - 04
15.07.04 - 16.07.04
65 %
29.07.2004
2002 - 03
17.07.03 - 18.07.03
50 %
06.08.2003
2001 - 02 (Final)
20.08.02 - 21.08.02
25 %
02.09.2002
2001 - 02 (Interim)
07.02.02
25 %
17.01.2002
2000 - 01
13.09.01 - 14.09.01
35 %
25.09.2001
* On enhanced share capital consequent to Bonus Issue in the ratio of 1:1
Date of payment
30.07.2009
23.07.2008
20.07.2007
26.07.2006
29.07.2005
30.07.2004
07.08.2003
03.09.2002
15.02.2002
26.09.2001
X DEMATERIALISATION OF SHARES AND LIQUIDITY
The Company's scrip forms part of compulsory dematerialized segment for all the investors. To
facilitate easy access of the dematerialized system to the investors, your company has established
direct connectivity with both the depositories i.e. National Securities Depository Limited (NSDL)
76
and Central Depository Services (India) Limited (CDSL). As on March 31, 2010, 99.10% of the share
capital of the Company was held in dematerialised form.
With a view to expedite dematerialisation of Company's shares, requests received from depository
participants for dematerialisation are being regularly monitored. During the year, the Company has
electronically confirmed demat requests in respect of 109414 equity shares.
X CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
In accordance with the provisions of the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 1992, the Company has established system and instituted a comprehensive
Code of Conduct for prevention of insider trading in shares of the Company.
The Code restricts the Directors, Auditors and other specified employees of the Company to deal in the
shares of the Company on the basis of any unpublished price sensitive information available to them
by virtue of their position in the Company.
Your Company maintains the highest ethical standards by diligently complying with the SEBI
guidelines in respect of insiders' stock trading; which is subjected to certain restrictions, such as 'not
dealing in shares during trading window closures', 'seeking pre-clearance of trade' etc., as envisaged in
the Code. Besides, the Company obtains periodic disclosure reports from the persons concerned.
The Code has been disseminated through the Company's intranet which is easy to access and also
increases awareness.
X SECRETARIAL AUDIT FOR RECONCILIATION OF CAPITAL
As stipulated by Securities and Exchange Board of India (SEBI), a qualified practicing Company
Secretary carries out Secretarial Audit to reconcile the total admitted capital with National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued
and listed capital. This audit is carried out every quarter.
The Secretarial Audit, inter alia, confirms that the total listed and paid-up capital is in agreement with
the aggregate of the total no. of shares in dematerialized form and in physical form. Details of changes
in share capital of the Company during the quarter are also covered in the audit report. The audit
report is submitted to the stock exchanges and is also placed before the meetings of the Board of
Directors and the Investors' Grievances Committee.
X EMPLOYEES STOCK OPTION PLANS (ESOPs)
During the year, the Company granted 151000 options under 'Lupin Employees Stock Option Plan 2003',
38000 options under 'Lupin Employees Stock Option Plan 2005' and 75350 options under 'Lupin
Subsidiary Companies Employees Stock Option Plan 2005 ' to employees in five separate grants.
Plans were implemented according to the provisions of SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, with an exercise period of 10 years from the date of
each grant. Each option is convertible into one fully paid-up equity share of the face value of Rs.10/- each.
In accordance with the terms of the respective stock option plan and other applicable provisions, the
Company allotted 307541 shares during the year to those employees who exercised options vested in
them; the relevant details are given below:
77
Sl. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Date of allotment
April 28, 2009
May 27, 2009
June 19, 2009
July 13, 2009
August 10, 2009
August 25, 2009
September 08, 2009
September 22, 2009
October 08, 2009
October 21, 2009
November 05, 2009
November 30, 2009
December 18, 2009
January 05, 2010
January 22, 2010
February 17, 2010
March 22, 2010
Total:
No. of shares
8400
6120
18125
71445
15565
32798
8389
9080
10335
3050
2620
34210
18838
30460
15617
9364
13125
307541
The Company has obtained necessary approvals for grant of options and allotment of shares. The
allotted shares have been listed on BSE and NSE.
X CONVERSION OF FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
Your Company had issued FCCBs aggregating US $ 100 million in January 2006. In terms of the
Offering Memorandum, the FCCBs were convertible into equity shares at a conversion price of
Rs.567.04 per share.
The Company has issued total 8043911 equity shares upon conversion of FCCBs, as under:
Year
No. of FCCBs
Value of FCCBs
US $ in Mn.
No. of shares allotted
upon conversion
2007-08
203
20.30
1656100
2008-09
70
7.00
571069
2009-10
713
71.30
5816742
The following are particulars of shares allotted during the year 2009-10:
Sl. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Date of allotment
June 19, 2009
July 13, 2009
August 10, 2009
August 25, 2009
September 08, 2009
September 22, 2009
October 08, 2009
October 21, 2009
November 05, 2009
November 30, 2009
Total:
No. of shares
293691
465012
660809
293692
856604
611860
726073
1027924
677125
203952
5816742
The Company has complied with necessary formalities in this regard and listed the said shares on BSE
and NSE.
78
X STATUS OF UNCLAIMED DIVIDENDS
Year of dividend
1993-94 {LCL}
1993-94 {LLL} (Interim)
1993-94 {LLL}(Final)
Date of
dividend
08.12.1994
09.08.1994
20.12.1994
Status of unclaimed
dividend
Transferred to General
Revenue a/c of
Central Government.
1994-95 (LLL)
1995-96 (LLL)
1996-97 (LLL)
1997-98 (LLL)
1997-98 (LCL)
1998-99 (LLL)
1998-99 (LCL)
1999-2000 (LLL)
1999-2000 (LCL)
2000-01
2001-02 (Interim)
2001-02 (Final)
01.02.1996
01.02.1997
02.02.1998
05.01.1999
19.01.1999
03.01.2000
04.01.2000
22.05.2000
08.11.2000
26.09.2001
15.02.2002
03.09.2002
Transferred to Investor
Education & Protection
Fund (IEPF).
Entitlement
Amount can be claimed from The
Registrar of Companies, Maharashtra,
C.G.O. Bldg, 2nd Floor, C.B.D. Belapur,
Navi Mumbai - 400 614.
Amount cannot be claimed as
per the relevant provisions.
With a view to safeguard interests of the shareholders, the Company initiates proactive and
innovative steps like sending personalised reminders to the shareholders of the Company to
claim their unpaid dividend, before it becomes necessary to transfer them to the Investor
Education & Protection Fund (IEPF).
Unclaimed dividends for the year 2002 - 03 onwards will be transferred to the IEPF, as required; the
details are given below:
Year
2002 - 03
2003 - 04
2004 - 05
2005 - 06
2006 - 07
2007 - 08
2008 - 09
Date of Declaration
06.08.2003
29.07.2004
28.07.2005
25.07.2006
19.07.2007
22.07.2008
29.07.2009
Due date for transfer to IEPF
11.09.2010
03.09.2011
02.09.2012
30.08.2013
24.08.2014
27.08.2015
03.09.2016
Shareholders are advised to confirm with their records and claim the amount well before the due date,
if not encashed earlier.
X OUTSTANDING GDRs/ADRs/WARRANTS/CONVERTIBLE INSTRUMENTS
In January 2006, the Company had issued Foreign Currency Convertible Bonds (FCCBs) aggregating
US $ 100 million. There are no Bonds outstanding as on March 31, 2010.
The Company had granted stock options to its employees and those in its subsidiaries under the
employee stock option plans. The Company shall be allotting equity shares from time to time, upon
the employees exercising the options vested in them pursuant to the provisions of SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the terms and
conditions of the respective employee stock option plan.
There are no outstanding warrants. Further, the Company has not issued any GDR/ADR.
79
X
PLANT LOCATIONS
The Company's plants are located at:
v) A 28/1, MIDC Area,
Chikalthana, Aurangabad,
Maharashtra - 431 001.
vi) B-15, Phase I-A,
Verna Industrial Area,
Verna Salcette,
Goa - 403 722.
vii) Export Promotion
Industrial Park,
SIDCO Industrial Complex,
Kartholi, Bari Brahmana,
Jammu - 181 133.
viii) Gat No. 1156
Village Ghotawade,
Taluka Mulshi, Dist. Pune,
i) T-142, MIDC Industrial Estate,
Tarapur Industrial Area,
Boisar, Dist. Thane,
ii) 198-202, New Industrial Area II,
Mandideep, Dist. Raisen,
Madhya Pradesh - 462 046.
iii) 211, New Industrial Area II,
Mandideep, Dist. Raisen,
iv) 124, GIDC Industrial Estate,
Ankleshwar,
Gujarat - 393 002.
X
R & D CENTRES
i)
X
ix) Novodigm Limited,
Block 21, Village Dabhasa,
Taluka: Padra,
District: Vadodara
Gujarat - 391 440.
x) Lupin Pharmacare Limited,
Plot No.2, Phase - II,
Special Economic Zone,
Pithampur, Dist. Dhar,
xi) Kyowa Pharmaceutical
Industry Co. Ltd.,
11-1 Techno Park, Sanda,
Hyogo 669 - 1339,
Japan.
ii)
Lupin Research Park
Survey Nos. 46A/47A,
Nande Village,
Mulshi Taluka, Dist. Pune,
Lupin Bioresearch Centre
iii) Kyowa Pharmaceutical
S No 1462\2\1b, Sai Trinity Complex,
Industry Co. Ltd.,
Wing A, Above Cosmos Bank,
6-7-2 Yurinokidai, Sanda,
Pashan Sus Road, Pashan, Pune,
Hyogo 669 - 1324,
Japan.
CONTACT PERSONS FOR ENQUIRIES
Financial matters
: Mr. Sunil Makharia, email: [email protected]
Secretarial matters
: Mr. Rajvardhan V. Satam, email: [email protected]
Investors related matters : Mr. Pradeep Bhagwat, email: [email protected]
X
ADDRESS FOR CORRESPONDENCE
Members may address their queries/communications to:
Registered Office/Investors' Services Department:
159, C.S.T. Road, Kalina, Santacruz (East), Mumbai - 400 098, India.
Tel: +91 22 6640 2323 Ext: 2402/2403
Fax: +91 22 2652 8806.
Chairman
Mumbai, May 5, 2010
80
DECLARATION PURSUANT TO CLAUSE 49 I (D) (II) OF THE LISTING AGREEMENT
In accordance with Clause 49 I(D)(ii) of the Listing Agreement with the Stock Exchanges, I hereby declare that the
Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct as
applicable to them for the year ended March 31, 2010.
For LUPIN LIMITED
DR. KAMAL K. SHARMA
MANAGING DIRECTOR
Mumbai, May 5, 2010
81
Auditors' Certificate on Corporate Governance
To,
The Members of Lupin Limited
We have examined the compliance of conditions of Corporate Governance by Lupin Limited, for the year ended on
March 31, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with the stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination
was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of
the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to explanations given to us, we certify that the
Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing
Agreement.
We state that no investor grievance is pending for a period exceeding one month against the Company, based on the
records maintained by Investors Services Department and as certified by the Compliance Officer of the Company.
We further state that such compliance is neither an assurance as to the future validity of the Company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Deloitte Haskins & Sells
(Registration No. 1173664)
M. S. Dharmadhikari
Partner
Membership No. 30802
Place: Mumbai
Date: May 5, 2010
82
Auditors' Report
To The Members of Lupin Limited
1.
We have audited the attached Balance Sheet of Lupin Limited ("the Company") as at 31st March, 2010, the
Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date,
both annexed thereto. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by the management, as well
as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3.
As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in
terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4.
Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:
(a) we have obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books;
(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report
are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with
by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to the explanations given to us, the
said accounts give the information required by the Companies Act, 1956 in the manner so required
and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that
date and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.
5.
On the basis of the written representations received from the Directors as on 31st March, 2010 taken on
record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being
appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.
(Registration No 117366W)
Place: Mumbai
Dated: May 5, 2010
83
M. S. Dharmadhikari
Partner
Annexure to the Auditors' Report
(Referred to in paragraph 3 of our report of even date)
(i)
(ii)
Having regard to the nature of the Company's business/activities, clauses (iii), (x), (xii), (xiii), (xiv) and (xx) of
CARO are not applicable.
In respect of its fixed assets :
(a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the management in accordance with a regular
programme of verification which, in our opinion, provides for physical verification of all the fixed assets at
reasonable intervals. According to the information and explanation given to us, no material discrepancies
were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the
fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status
of the Company.
(iii)
In respect of its inventory:
(a) As explained to us, the inventories were physically verified during the year by the management at
reasonable intervals.
(b) In our opinion and according to the information and explanation given to us, the procedures of physical
verification of inventories followed by the management were reasonable and adequate in relation to the
size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained
proper records of its inventories and no material discrepancies were noticed on physical verification.
(iv)
In our opinion and according to the information and explanations given to us, having regard to the
explanations that some of the items purchased are of special nature and suitable alternative sources are not
readily available for obtaining comparable quotations, there is an adequate internal control system
commensurate with the size of the Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not
observed any major weakness in such internal control system.
(v)
In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the
Companies Act, 1956, to the best of our knowledge and belief and according to the information and
explanations given to us:
(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the
Register maintained under the said Section have been so entered.
(b) Where each of such transaction is in excess of Rs 5 lakhs in respect of any party during the year, have been
made at prices which are reasonable having regard to the prevailing market prices at the relevant time,
where such prices are available.
(vi)
According to the information and explanations given to us, the Company has not accepted any deposit from
the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of
Sections 58A & 58AA or any other relevant provisions of the Companies Act, 1956.
(vii)
In our opinion, the internal audit functions carried out during the year by firm of Chartered Accountants appointed
by the management have been commensurate with the size of the Company and the nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by
the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act,
1956 in respect of the manufacture of bulk drugs and formulations and are of the opinion that prima facie the
prescribed accounts and records have been made and maintained. We have, however, not made a detailed
examination of the records with a view to determining whether they are accurate or complete.
(ix)
According to the information and explanations given to us in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the
appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise
Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six
months from the date they became payable.
84
(c) Details of dues of Sales Tax and Excise Duty which have not been deposited as on 31st March, 2010 on
account of disputes are given below:
Name of the Statute
Nature of
the Dues
Central Excise Act, 1944 Excise duty
Central and various
States' Sales Tax Acts
Sales tax
Forum where Dispute
is pending
Customs, Excise and Service Tax
Appellate Tribunal (CESTAT)
Period to which
the amounts relate
1997-2009
Amount involved
(Rs. in Millions)
132.0
Commissioner of Central Excise
(Appeals)
1998-2009
0.7
Commissioner of Sales Tax (Appeals)
1992-2003
16.7
Joint Commissioner of Sales Tax
(Appeals)
2002-2009
6.3
Deputy Commissioner of Sales Tax
(Appeals)
1998-2006
1.9
Sales Tax Tribunal
1992-2003
3.7
Appellate Commissioner of
Commercial taxes
2005-2006
0.6
High Court, Jabalpur
2001-2006
14.9
(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted
in the repayment of dues to banks, financial institutions and debenture holders.
(xi) In our opinion and according to the information and explanations given to us, the terms and conditions of the
guarantees given by the Company for loans taken by others from banks and financial institutions are not prima
facie prejudicial to the interests of the Company.
(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied
for the purposes for which they were obtained.
(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of
the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for longterm investment.
(xiv) The Company has not made any preferential allotment of shares to parties and companies covered in the
Register maintained under Section 301 of the Companies Act, 1956 and hence, the question of whether the
price at which shares have been issued is prejudicial to the interest of the Company does not arise.
(xv) According to the information and explanations given to us, during the period covered by our audit report, the
Company had issued short term MIBOR linked secured debentures, which have been repaid prior to creation of
security in favour of the debenture holders.
(xvi) To the best of our knowledge and according to the information and explanations given to us, no fraud by the
Company and no material fraud on the Company has been noticed or reported during the year.
(Registration No 117366W)
Place: Mumbai
Dated: May 5, 2010
85
M. S. Dharmadhikari
Partner
Balance Sheet
As at March 31, 2010
Schedules
I.
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
SOURCES OF FUNDS
Shareholders' Funds
Share Capital
1
2
889.4
24,416.1
25,305.5
828.2
12,924.8
13,753.0
Loan Funds
Secured Loans
Unsecured Loans
3
4
7,040.0
2,028.1
9,068.1
1,582.5
5,651.2
3,797.9
9,449.1
1,347.3
35,956.1
24,549.4
16,165.2
4,251.3
11,913.9
1,408.3
13,322.2
7,240.7
13,313.7
3,557.5
9,756.2
1,163.1
10,919.3
4,738.7
7,137.0
9,165.9
374.2
6,466.0
23,143.1
7,158.8
7,090.6
121.3
3,666.4
18,037.1
6,081.8
1,668.1
7,749.9
15,393.2
35,956.1
7,721.8
1,423.9
9,145.7
8,891.4
24,549.4
Deferred Tax Liabilities (net)
[Refer note no.5 of Schedule 18(B)]
TOTAL
II. APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation and Amortisation
Net Block
Capital Work in Progress
5
Investments
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Loans and Advances
6
7
8
9
10
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
11
Net Current Assets
Significant Accounting Policies and Notes to Accounts
TOTAL
18
In terms of our report attached
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
R. V. Satam
Company Secretary
86
Profit and Loss Account
For the year ended March 31, 2010
Schedules
INCOME
Sales (Gross)
Less: Excise Duty
Sales (Net)
Other Income
12
13
EXPENDITURE
Cost of Materials
Personnel Expenses
14
15
16
17
Profit before Tax
Provision for Taxation
- Current Tax (including Wealth Tax)
Less: MAT Credit Entitlement
- Deferred Tax
- Fringe Benefit Tax
Net Profit after Tax
Add : Surplus brought forward from previous year
Amount Available for Appropriation
APPROPRIATIONS
- Transfer to General Reserve
- Proposed Dividend on Equity Shares
- Dividend on Equity Shares for previous year
- Corporate Tax on Dividend
Balance Carried to Balance Sheet
Earnings Per Share (in Rs.) [Refer note no.12 of Schedule 18 (B)]
- Basic
- Diluted
Face Value of Equity Shares (in Rs.)
Current
Year ended
31.03.2010
Rs. in million
Previous
Year ended
31.03.2009
Rs. in million
36,660.6
259.7
36,400.9
684.2
41.0
37,126.1
29,419.4
433.8
28,985.6
685.7
38.3
29,709.6
14,927.7
3,765.5
10,246.8
283.8
815.7
30,039.5
7,086.6
12,418.5
3,344.7
8,153.9
415.2
663.5
24,995.8
4,713.8
1,161.2
(794.4)
230.5
6,489.3
6,368.5
12,857.8
502.6
(222.9)
115.2
149.2
4,169.7
4,910.1
9,079.8
1,500.0
1,200.7
10.8
201.2
9,945.1
12,857.8
1,500.0
1,035.3
0.1
175.9
6,368.5
9,079.8
75.38
74.08
10.00
50.58
50.07
10.00
18
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
87
R. V. Satam
Company Secretary
Cash Flow Statement
A. Cash Flow from Operating Activities
Net Profit before Tax
Adjustments for:
Loss on sale/discard of Fixed Assets (net)
Profit on sale of Current Investments - Non Trade
Interest on Long Term Investments - Non Trade
Interest on Fixed Deposits with Banks
Dividend on Long Term Investment - Trade
[31.03.2010 Rs. 4,410/- , 31.03.2009 Rs. 33,820/-]
Dividend on Current Investments - Non Trade
Provision for Doubtful Debts
Employee share based payment cost
Exchange (gain) / loss on revaluation of foreign currency loans
Provision for Diminution in value of Long Term investments written back
Operating Profit before Working Capital Changes
Adjustments for:
Trade and other Receivables
Inventories
Trade Payables
Cash Generated from Operations
Direct Taxes paid (net)
Fringe Benefit Tax paid
Net Cash Generated from Operating Activities
B. Cash Flow from Investing Activities
Additions to Fixed Assets / Capital Work-in-Progress
Sale of Fixed Assets
Purchase of Investments in Subsidiaries
Purchase of Investments in others
Sale of Investments
Loans and Advances to Subsidiary Companies
[31.03.2010 Rs. 4,410/- , 31.03.2009 Rs. 33,820/-]
Net Cash Used in Investing Activities
C. Cash Flow from Financing Activities
Proceeds from Borrowings (net)
Repayment of Foreign Currency Convertible Bonds
Premium on repayment of Foreign Currency Convertible Bonds
Issue of Equity Shares (ESOPs)
Securities Premium Received (ESOPs)
Interest and Finance Charges paid (net)
Dividend paid
Corporate Dividend Tax paid
Net Cash Generated / (used in) from Financing Activities
Net increase / (decrease) in Cash and Cash equivalents
Cash and Cash equivalents as at the beginning of the year
Cash and Cash equivalents as at the end of the year
Current
Year ended
31.03.2010
Rs. in million
Previous
Year ended
31.03.2009
Rs. in million
7,086.6
4,713.8
815.7
74.2
283.8
(1.0)
663.5
32.5
(0.4)
415.2
(0.2)
(30.2)
16.5
4.7
(257.1)
8,023.4
(1.7)
23.5
0.7
42.9
(0.5)
5,859.1
(2,519.8)
21.8
847.0
6,372.4
(1,049.5)
2.8
5,325.7
(772.6)
(900.3)
578.0
4,764.2
(474.4)
(151.6)
4,138.2
(3,321.1)
14.7
(2,502.0)
(1,033.7)
-
(2,239.7)
4.1
(1,834.4)
(1,330.0)
1,351.5
(905.9)
0.2
1.0
(6,841.1)
1.7
30.2
(4,922.3)
3,238.4
(64.7)
(12.6)
3.0
104.4
(278.1)
(1,044.4)
(177.7)
1,768.3
252.9
121.3
374.2
72.8
1.7
51.9
(412.6)
(819.8)
(139.4)
(1,245.4)
(2,029.5)
2,150.8
121.3
88
Notes :
1.
Cash and Cash equivalents include cash and bank balances in current accounts and in deposit accounts
(refer Schedule 9 of the Balance Sheet).
2.
Rs. 5.4 million (previous year Rs. 2.9 million) being deposits under lien lodged with banks as margin money
not readily available to the Company.
3.
The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the
Accounting Standard 3 (AS-3) "Cash Flow Statement".
4.
Previous year figures have been regrouped wherever necessary.
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
89
R. V. Satam
Company Secretary
Schedules Forming Part of the Balance Sheet
SCHEDULE 1 - SHARE CAPITAL
Authorised
100,000,000 (previous year 100,000,000) Equity Shares of Rs 10/- each
TOTAL
Issued, Subscribed and Paid-up
88,943,833 (previous year 82,819,550) Equity Shares of Rs 10/- each
fully paid-up
TOTAL
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1,000.0
1,000.0
1,000.0
1,000.0
889.4
889.4
828.2
828.2
Notes:
Of the above Equity Sharesi)
37,311,048 (previous year 37,311,048) Equity Shares of Rs. 10/- each were allotted as fully paid-up without payment
being received in cash, pursuant to the Scheme of Amalgamation with erstwhile Lupin Laboratories Limited.
ii)
40,152,494 (previous year 40,152,494) Equity shares of Rs 10/- each have been allotted as fully paid-up bonus shares by
way of capitalisation of General Reserve.
iii) 606,294 (previous year 298,753) Equity Shares of Rs. 10/- each, fully paid-up have been allotted pursuant to Lupin
Employees Stock Option Plans. [Refer note no.14(a) of Schedule 18(B)].
Particulars of options on unissued share capital [Refer note no.14(a) of Schedule 18(B)].
iv) 8,043,911 (previous year 2,227,169) Equity Shares of Rs. 10/- each, fully paid - up have been allotted on conversion of
Foreign Currency Convertible Bonds in accordance with the terms of the issue. [Refer note no.19 of Schedule 18(B)].
90
SCHEDULE 2 - RESERVES AND SURPLUS
Capital Reserve
- Investment Subsidies from Central Government
Balance as per last Balance Sheet
- Investment Subsidies from State Government
- On restructuring of capital of the Company under the Scheme
of Amalgamation
Capital Redemption Reserve
Securities Premium Account
Add: Received during the year*
Less: Premium on redemption of Foreign Currency Convertible
Bonds (net of tax of Rs. 6.5 million, previous year Rs. nil)
[Refer note no. 19 of Schedule 18(B)]
General Reserve
Add: Transferred from Profit and Loss Account
Amalgamation Reserve
Cash Flow Hedge Reserve
Add: Credited / (Debited) during the year (net) (net of tax of
Rs. 4.8 million, previous year Rs. nil) [Refer note no. 17 of Schedule 18(B)]
Employees Stock Options Outstanding
Balance at the beginning of the year
Add: Options granted during the year
Balance at the end of the year (A)
Deferred Employees Stock Options Cost
Less: Amortisation during the year
Balance at the end of the year (B)
(A-B)
Surplus in Profit and Loss Account
TOTAL
*
91
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1.0
1.0
8.2
8.2
254.7
263.9
254.7
263.9
126.5
126.5
1,731.5
3,344.6
12.6
1,361.5
370.0
-
5,063.5
1,731.5
7,015.4
1,500.0
8,515.4
5,515.4
1,500.0
7,015.4
317.9
317.9
(2,899.6)
3,078.0
(145.6)
(2,754.0)
178.4
(2,899.6)
2.9
6.1
9.0
2.9
2.9
2.2
6.1
4.7
3.6
5.4
2.9
0.7
2.2
0.7
9,945.1
24,416.1
6,368.5
12,924.8
Represents amount received on allotment of 307,541 ( previous year 167,586) Equity Shares of Rs. 10/- each,
pursuant to "Lupin Employees Stock Option Plans" and 5,816,742 ( previous year 571,069) Equity Shares of
Rs. 10/- each on conversion of Foreign Currency Convertible Bonds in accordance with the terms of the issue.
[Refer notes no.14(a) and 19 of Schedule 18(B)].
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
7,040.0
5,651.2
7,040.0
5,651.2
SCHEDULE 3 - SECURED LOANS
Working Capital Loans from Banks
TOTAL
Notes :
1. Working Capital Loans from Banks comprise of Cash Credit, Short Term Loans, Packing Credit, Post Shipment Credit,
Bills Discounted and Overseas Import Credit and are secured by hypothecation of inventories and book debts and
moveable current assets at godowns, depots, in course of transit or on high seas and a second charge on immovable
properties and movable assets of the Company both present and future situated at (a) Aurangabad, Pune and
Tarapur in Maharashtra, (b) Ankleshwar in Gujarat, ( c) Mandideep in Madhya Pradesh, (d) Verna in Goa and (e) Bari
Brahmana in Jammu and Kashmir.
2.
Working Capital Loans from Banks include foreign currency loans of Rs. 5,212.3 million (previous year Rs. 2,928.4 million).
SCHEDULE 4 - UNSECURED LOANS
Foreign Currency Convertible Bonds
[Refer note no.19 of Schedule 18(B)].
Foreign Currency Term Loans from Bank
Other Loans
a) Sales Tax Deferment Loan - Government of Maharashtra
b) Loans from Council for Scientific and Industrial Research, Department of
Science and Technology, Government of India
TOTAL
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
-
3,363.1
634.2
960.9
-
63.0
370.0
64.8
370.0
2,028.1
3,797.9
Notes :
1. Working Capital Loans from Banks include foreign currency loans of Rs. 634.2 million (previous year Rs. nil).
2.
Unsecured Loans (other than working capital loans) include Rs. 64.9 million (previous year Rs. 0.2 million) repayable
within one year.
92
93
24.5
166.4
648.2
2,083.9
99.9
13.9
25.5
3,062.3
1,825.6
58.1
13,313.7
11,550.5
210.8
62.4
2.0
205.8
1.9
1.1
Additions Deductions
As at
April 01,
2009
46.3
148.7
3,123.8
9,654.8
254.9
27.1
Gross Block
1,163.1
10,919.3
1.5
9,756.2
Additions to Fixed Assets include items of fixed assets aggregating Rs. 720.4 million (previous year Rs. 440.8 million) located at Research and Development Centres of the Company.
22.3
11,913.9
9,756.2
1,408.3
13,322.2
As at
March 31,
2009
46.3
132.6
2,588.2
6,805.3
162.4
19.9
3.
61.3
4,251.3
3,557.5
As at
March 31,
2010
70.8
295.8
3,127.3
8,131.2
236.2
30.3
Capital Work-in-Progress includes capital advances paid, machinery under installation / in transit and construction and erection materials (including those lying with contractors) and preoperative expenses [Refer note no. 4 of Schedule 18(B)].
121.9
25.8
0.3
120.2
0.7
0.7
Up to
March 31,
2010
19.3*
642.7
3,401.7
116.7
9.6
2.
4.7
815.7
663.5
3.2
107.4
672.4
24.9
3.1
For the
Year Deductions
Net Block
Cost of Buildings include cost of shares in co-operative societies of Rs. 1,000/- (previous year Rs. 1,000/-).
Notes :
56.6
3,557.5
2,919.8
Up to
March 31,
2009
16.1
535.6
2,849.5
92.5
7.2
(Rs. in million)
1.
83.6
16,165.2
13,313.7
As at
March 31,
2010
70.8
315.1
3,770.0
11,532.9
352.9
39.9
* Amounts written off in respect of leasehold land for the period of lease which has expired.
Freehold Land
Leasehold Land
Buildings
Plant, Machinery and Equipments
Furniture and Fixtures
Vehicles
Intangible Assets :
Computer Software-Acquired
TOTAL
Previous year
TOTAL
Particulars
SCHEDULE 5 - FIXED ASSETS
SCHEDULE 6 - INVESTMENTS
Long Term Investments
(At cost/carrying amount unless otherwise stated)
1. In Government Securities- Unquoted (Non Trade)
National Saving Certificates
(31.03.2010 Rs. 6,000/-, 31.03.2009 Rs. 6,000/-)
[Deposited with Government Authority 31.03.2010
Rs. 6,000/-, 31.03.2009 Rs. 6,000/-]
2. In Shares
a) In Subsidiary Companies - Unquoted
(Trade) In Equity/Ordinary shares
- Novodigm Ltd.
(Including 6 shares held by nominees)
- Lupin Holdings B. V., Netherlands
[Refer note no. 3 of Schedule 18(B)].
- Lupin Pharmacare Ltd.
- Lupin Herbal Ltd.
- Lupin Pharmaceuticals Inc., USA
- Lupin Australia Pty Ltd., Australia
- Lupin Europe Ltd., UK
Number
Face
Value
2,384,783
(2,384,783)
105,579
(70,224)
1,050,000
(1,050,000)
50,000
(50,000)
300,000
(300,000)
500,000
(500,000)
251,000
(-)
Rs.
10
Euro
1000
Rs.
10
Rs.
10
USD
1
AUD
1
GBP
1
As at
31.03.2010
Rs. in million Rs. in million
372.9
372.9
6,705.5
4,223.5
100.5
100.5
0.5
0.5
13.8
13.8
16.9
16.9
20.0
7,230.1
b)
Others - Unquoted (Trade)
In Equity shares
- Biotech Consortium India Ltd.
- Bharuch Enviro Infrastructure Ltd.
(31.03.2010 - Rs. 44,100/-, 31.03.2009
Rs. 44,100/-)
- Bharuch Eco-Acqua Infrastructure Ltd.
- Tarapur Environment Protection Society
As at
31.03.2009
Rs. in million
4,728.1
50,000
(50,000)
4,410
(4,410)
Rs.
10
Rs.
10
0.5
0.5
924,675
(924,675)
9,248
(9,248)
TOTAL
Rs.
10
Rs.
100
9.2
9.2
0.9
10.6
7,240.7
0.9
10.6
4,738.7
Note :
All the Investments in shares are fully paid up.
94
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
TOTAL
2,307.3
449.1
1,728.8
2,492.9
158.9
7,137.0
2,371.4
384.6
1,833.8
2,407.7
161.3
7,158.8
TOTAL
151.5
70.0
221.5
9,014.4
9,235.9
70.0
9,165.9
257.8
53.5
311.3
6,832.8
7,144.1
53.5
7,090.6
47.1
39.6
312.6
0.3
8.9
45.8
0.3
27.7
5.3
7.9
374.2
121.3
SCHEDULE 7 - INVENTORIES
Stock-in-trade
- Raw Materials
- Packing Materials
- Work-in-Process
- Finished Goods (including Traded Goods)
Consumable Stores, Spares and Fuel
SCHEDULE 8 - SUNDRY DEBTORS
(Unsecured)
Debts outstanding for a period exceeding six months
- Considered Good
- Considered Doubtful
Other Debts Considered Good
Less: Provision for Doubtful Debts
Note :
Sundry Debtors include debts due from subsidiary companies Rs. 5,476.6 million
(previous year Rs. 3,784.0 million).
SCHEDULE 9 - CASH AND BANK BALANCES
Cash in hand [including Cheques on hand of Rs. 44.2 million
(previous year Rs. 36.7 million)]
Bank Balances
- With Scheduled Banks
In Current Accounts (including remittances in transit)
In Exchange Earners Foreign Currency Account
In Deposit Accounts [including Margin Deposits Rs. 5.4 million
(previous year Rs. 2.9 million)
- With Others
In Current Accounts
[See note (ii) below]
TOTAL
Notes :
i)
The Bank balances in deposit accounts include interest accrued on fixed deposits amounting to Rs. 0.4 million
(previous year Rs. 1.0 million).
ii) Bank balances include balances with non scheduled banks as under :
(Rs. in million)
Maximum balance
Name of the Bank
Country
As at
As at
during the year ended
31.03.2010
31.03.2009
31.03.2010
31.03.2009
Bank of Foreign Trade - Vneshtorg Bank US$ A/c
Russia
1.5
1.2
2.6
3.6
Bank of Foreign Trade - Vneshtorg Bank Rouble A/c Russia
1.5
0.3
1.9
2.4
Texaka Bank-Tenge A/c
Kazakhstan
0.1
0.7
0.7
1.3
Texaka Bank-US$ A/c
Kazakhstan
0.5
0.8
1.4
Ukreximbank UAH (31.03.2010 Rs. 35,632/-)
Ukraine
0.3
2.6
1.6
Ukreximbank US$ (31.03.2010 Rs.15,047/-)
Ukraine
0.2
2.6
2.5
Citibank N.A.
UK
4.1
13.5
14.0
Citibank, Shanghai
China
1.4
0.9
1.6
1.1
Shanghai Bank, Shanghai
China
0.2
0.1
(31.03.2010 Rs. 809/-, 31.03.2009 Rs. 29,010/-)
National Bank - Uzbekistan US$ A/c
Uzbekistan
0.3
0.2
0.3
0.5
Standard Chartered Bank-US$ A/c
Vietnam
0.3
(31.03.2010 Rs. 2,055/-)
Standard Chartered Bank-VND A/c
Vietnam
0.1
-
95
SCHEDULE 10 - LOANS AND ADVANCES
Unsecured, considered good unless otherwise stated
Loans and Advances to Subsidiary Companies
Advances recoverable in cash or in kind or for value to be received
- Considered Good (refer note below)
Less: Provision for Doubtful Advances
Note:
Includes fair value of foreign exchange forward contracts Rs. 672.2 million
(previous year Rs. nil)
Deposits
Balances with Customs and Excise Authorities
Advance payment of Income Tax (net of Provision)
Advance payment of Fringe Benefit Tax (net of Provision)
MAT Credit Entitlement
TOTAL
SCHEDULE 11 - CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Acceptances
Sundry Creditors
- Total outstanding dues of Micro Enterprises and Small Enterprises
- Total outstanding dues of creditors other than Micro Enterprises and
Small Enterprises
[includes Rs. 551.8 million (previous year Rs. 419.7 million) due to
Subsidiary Companies]
Other Liabilities (refer note below)
Interest Accrued but not due on loans
Unclaimed Dividend *
Unclaimed Matured Fixed Deposits *
Unclaimed Interest Warrants *
* There are no amounts due and outstanding to be credited to Investor
Education and Protection Fund.
Note:
Other Liabilities includes fair value of foreign exchange forward and
currency option contracts Rs. 535.4 million (previous year Rs. 2,959.3 million).
Provisions
For Gratuity
For Compensated Absences
For Taxation (including Wealth Tax) ( net of Advance Tax)
For Proposed Dividend on Equity Shares
For Corporate Tax on Dividend
TOTAL
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
2,259.3
1,225.6
2,753.4
6.5
2,759.9
6.5
2,753.4
1,657.9
6.5
1,664.4
6.5
1,657.9
405.0
15.2
4.5
4.8
1,023.8
6,466.0
392.6
23.4
136.4
7.6
222.9
3,666.4
902.8
414.1
88.3
64.1
4,323.6
4,125.7
701.0
52.1
11.1
1.9
1.0
3,058.5
45.9
9.4
2.7
1.4
6,081.8
7,721.8
31.1
215.3
21.6
1,200.7
199.4
1,668.1
7,749.9
21.4
156.6
34.7
1,035.3
175.9
1,423.9
9,145.7
96
Schedules Forming Part of the Profit and Loss Account
SCHEDULE 12 - OTHER OPERATING INCOME
Export Benefits and Other Incentives
Income from Research Services
Income from Product Registration Services (Dossiers)
Insurance Claims
Compensation Received
Credit balances written back
Exchange Rate Difference (net)
Miscellaneous Income
TOTAL
SCHEDULE 13 - OTHER INCOME
Profit on Sale of Current Investments - Non Trade
Dividend on Long Term Investments - Trade
[31.03.2010 Rs. 4,410/- , 31.03.2009 Rs. 33,820/-]
[Tax Deducted at Source Rs. 0.1 million (previous year Rs. 0.9 million)]
Other Interest (including interest on income tax refunds)
[Tax Deducted at Source Rs. 0.6 million (previous year Rs. 0.6 million)]
Provision for diminution in value of Long Term Investments written back
TOTAL
SCHEDULE 14 - COST OF MATERIALS
Raw Materials Consumed
Packing Materials Consumed
Purchase of Traded Goods
Opening Stock :
Finished Goods (including Traded Goods)
Work - in - Process
Closing Stock :
Finished Goods (including Traded Goods)
Work - in - Process
Decrease/(Increase) in Stock of Finished Goods (including Traded Goods)
and Work-in-Process
TOTAL
SCHEDULE 15 - PERSONNEL EXPENSES
Salaries, Wages and Bonus
Contribution to Provident , Gratuity and Other Funds
Welfare Expenses
TOTAL
97
Current
Year Ended
31.03.2010
Rs. in million
Previous
Year Ended
31.03.2009
Rs. in million
249.4
251.0
78.6
8.9
51.8
44.5
684.2
345.8
94.0
79.3
12.0
0.7
4.1
113.4
36.4
685.7
-
0.4
1.0
1.7
0.2
30.2
40.0
5.3
41.0
0.5
38.3
9,533.2
1,312.2
4,062.5
8,016.0
1,182.5
3,474.6
2,407.7
1,833.8
4,241.5
2,487.6
1,499.3
3,986.9
2,492.9
1,728.8
4,221.7
2,407.7
1,833.8
4,241.5
19.8
14,927.7
(254.6)
12,418.5
3,260.8
284.5
220.2
3,765.5
2,928.2
236.0
180.5
3,344.7
SCHEDULE 16 - MANUFACTURING AND OTHER EXPENSES
Processing Charges
Consumable Stores and Spares
Repairs and Maintenance :
- Buildings
- Plant and Machinery
- Others
Rent
Rates and Taxes
Insurance
Power and Fuel
Contract Labour Charges
Excise Duty (net)
Selling and Promotion Expenses
Commission, Brokerage and Discount
[Including cash discount of Rs. 5.5 million (previous year Rs. 4.8 million)]
Freight and Forwarding
Lease Rent and Hire Charges
Postage and Telephone Expenses
Travelling and Conveyance
Legal and Professional Charges
[Net of recoveries of Rs. 143.6 million (previous year Rs. 152.2 million)]
Donations
Clinical and Analytical Charges
Loss on Sale/Discard of Fixed Assets (net)
Bad Debts written off
Directors Sitting Fees
Miscellaneous Expenses
(includes Printing and Stationery, Vehicle Expenses,
Product Registration Fees, Audit Fees, etc.)
TOTAL
SCHEDULE 17 - INTEREST AND FINANCE CHARGES
Interest on Debentures
Interest on Fixed Loans
Others
TOTAL
Current
Year Ended
31.03.2010
Rs. in million
Previous
Year Ended
31.03.2009
Rs. in million
227.3
1,059.8
202.4
843.1
132.1
210.0
175.7
182.8
67.7
118.6
1,416.8
258.1
79.0
2,746.7
560.7
90.8
169.7
120.8
160.7
54.7
116.3
1,238.3
206.4
(5.9)
2,179.2
505.5
282.3
83.8
108.9
582.1
638.2
257.0
84.7
100.7
476.8
378.4
100.1
456.1
74.2
6.2
16.5
0.8
213.2
449.1
52.3
448.8
32.5
17.8
23.5
0.7
398.7
10,246.8
8,153.9
35.5
33.5
214.8
283.8
12.5
13.4
389.3
415.2
98
Schedules Forming Part of the Accounts
SCHEDULE 18 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF
THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
A) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation of Financial Statements:
The financial statements are prepared under the historical cost convention in accordance with the generally
accepted accounting principles in India, the provisions of the Companies Act, 1956 and the applicable
accounting standards.
b) Use of Estimates:
The preparation of financial statements requires estimates and assumptions that affect the reported
amount of Assets and Liabilities on the date of the financial statements and the reported amount of
Revenues and Expenses during the reporting period. Differences between the actual results and the
estimates are recognised in the period in which the same are known/materialised.
c) Fixed Assets:
Fixed Assets are recorded and stated at cost, net of cenvat, less accumulated depreciation and accumulated
impairment losses, if any. Cost includes directly attributable cost of bringing the assets to their working
conditions for their intended use.
d) Intangible Assets:
Intangible Assets are recognised only if it is probable that the future economic benefits that are attributable
to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The Intangible
Assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated
impairment losses, if any.
e) Foreign Currency Transactions / Translation:
i) Transactions in foreign currency are recorded at the original rate of exchange in force at the time
transactions are effected.
ii) Exchange difference arising on settlements during the year of short term monetary items denominated
in foreign currency; and exchange difference arising on the reporting of short term monetary items
denominated in foreign currency which are outstanding at the year end using the exchange rates
prevailing at the balance sheet date, are recognized in the Profit and Loss Account.
iii) In terms of the Notification relating to AS 11 issued by the Ministry of Corporate Affairs in March 2009:
a) The exchange difference arising on reporting of the "Long Term Foreign Currency Monetary Items"
at the rates different from those at which they were initially recorded during the period or reported
in the previous financial statements and the exchange difference on settlement of such items, in so
far as such items relate to the acquisition of a depreciable capital asset, are added or deducted as the
case may be, from the cost of the respective asset and depreciated over the balance life of those
assets and
b) In other cases, these are accumulated in a "Foreign Currency Monetary Item Translation Difference
Account" and amortised over the balance period of such long term asset/liability but not beyond
31st March, 2011.
iv) In case of forward exchange contracts entered into to hedge the foreign currency exposure in respect of
short term monetary items, the difference between the exchange rate on the date of such contracts and
the year end rate is recognized in the Profit and Loss Account. Any profit/loss arising on cancellation of
forward exchange contract is recognized as income or expense of the year. Premium/discount arising
on such forward exchange contracts is amortised as income/expense over the life of contract.
v) Foreign offices/branches:
In respect of the foreign offices/branches, which are integral foreign operations, all revenues and
expenses during the year are reported at average rate. Monetary assets and liabilities are restated at
the year end exchange rate. Non monetary assets and liabilities are stated at the rate prevailing on
the date of the transaction. Net gain/loss on foreign currency translation is recognised in the Profit
and Loss Account.
f)
99
Derivative instruments and hedge accounting:
Forward and Option Contracts, in the nature of highly probable forecast transactions, entered into by the
Company for hedging the risks of foreign currency exposure are accounted based on recognition and
THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT (CONTD.)
measurement principles stated in Accounting Standard 30 (AS 30) "Financial Instruments: Recognition and
Measurements".The amount removed from the Cash Flow Hedge Reserve, on the occurrence of the hedged
transaction, is included in the Profit and Loss Account, against the related hedged item.
g) Investments:
Long term investments are stated at cost which includes expenses directly incurred on acquisition of
investments. Investments in equity/ordinary shares in foreign currency are stated at cost by converting at
exchange rate prevailing at the time of acquisition. Provision for diminution in the value of long term
investments is made only if such decline is other than temporary. Current investments are carried at cost or
fair value, whichever is lower.
h) Inventories:
Stock-in-trade and stock of consumable stores, spares and furnace oil are valued at lower of cost and net
realisable value. Cost is computed based on moving weighted average in respect of all procured materials
and traded finished goods and includes appropriate share of utilities and other overheads in respect of
Work-in-Process and finished goods. Cost also includes all charges incurred for bringing the inventories to
their present location and condition.
i)
Revenue recognition:
i) Revenue from sale of goods is recognised when the significant risks and rewards in respect of ownership
of products are transferred by the Company.
ii) Revenue (including in respect of insurance or other claims, interest, etc.) is recognised when it is
reasonable to expect that the ultimate collection will be made.
iii) Revenue from product sales is stated net of returns, sales tax/VAT and applicable trade discounts
and allowances.
iv) Income from research and product registration (dossiers) services and sale of patent rights is recognised
as revenue when earned in accordance with the terms of the relevant agreements.
v) Dividend from investment is recognised as revenue when right to receive the payments is established.
vi) Interest income is recognised on time proportionate basis.
j)
Export Benefits:
Export benefits available under prevalent schemes are accrued in the year in which the goods are exported
and are accounted to the extent considered receivable.
k) Excise Duty:
Excise duty is accounted on the basis of payments made in respect of goods cleared and provision is made
for goods lying in bonded warehouses.
l)
Depreciation and Amortisation:
Depreciation on fixed assets is provided on straight line basis in the manner and at the rates prescribed in
Schedule XIV to the Companies Act, 1956, except for the following Fixed Assets and Intangible Assets which
are depreciated/amortized over their useful life (being lower than the life considering the rates prescribed
in Schedule XIV to the Companies Act, 1956) as determined by the management on the basis of technical
evaluation, etc.
Assets
Captive Power Plant at Tarapur
Certain assets provided to employees
Leasehold Land
Intangible Assets (Computer Software)
Estimated useful life
15 years
3 years
Over the period of lease
6 years
m) Employee Benefits:
a) Post Employment Benefits and Other Long Term Benefits:
i) Defined Contribution Plan:
Company's contribution for the year paid/payable to defined contribution retirement benefit
schemes are charged to Profit and Loss Account.
100
ii) Defined Benefit and Other Long Term Benefit Plans:
Company's liabilities towards defined benefit plans and other long term benefits viz. gratuity and
compensated absences expected to occur after twelve months, are determined using the Projected
Unit Credit Method. Actuarial valuations under the Projected Unit Credit Method are carried out at
the Balance Sheet date. Actuarial gains and losses are recognised in the Profit and Loss Account in
the period of occurrence of such gains and losses. Past service cost is recognised immediately to the
extent benefits are vested, otherwise it is amortised on straight-line basis over the remaining
average period until the benefits become vested.
The retirement benefit obligation recognised in the balance sheet represents the present value of
the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the
fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost,
plus the present value of available refunds and reductions in future contributions to the scheme.
b) Short Term Employee Benefits:
Short term employee benefits expected to be paid in exchange for the services rendered by employees
are recognised undiscounted during the period employee renders services. These benefits include
performance incentives.
c) Employee Termination Benefits Costs:
Compensation to employees who have opted for retirement under the Voluntary Retirement
Scheme of the Company is charged to the Profit and Loss Account in the year of exercise of option by
the employees.
n) Taxes on Income:
Income taxes are accounted for in accordance with Accounting Standard 22 (AS 22) “Accounting for Taxes
on Income”. Tax expense comprises both Current Tax and Deferred Tax. Current tax is measured at the
amount expected to be paid or recovered from the tax authorities using the applicable tax rates.
Minimum Alternate Tax (MAT) credit entitlement is recognized as an asset by crediting the Profit and Loss
Account and disclosing an equivalent amount as an asset under 'Loans and Advances' in accordance with
guidance note on “Accounting for Credit Available in respect of Minimum Alternate Tax under the Income
Tax Act, 1961” issued by the Institute of Chartered Accountants of India.
Deferred tax assets and liabilities are recognised for future tax consequence attributable to timing
differences between taxable income and accounting income that are measured at relevant enacted tax
rates. At each balance sheet date the company reassesses unrecognised deferred tax assets, to the extent
they become reasonably certain or virtually certain of realisation, as the case may be.
o) Fringe Benefit Tax:
Fringe benefit tax was recognised in accordance with the relevant provisions of the Income Tax Act, 1961
and the Guidance note on Fringe Benefit Tax issued by the Institute of Chartered Accountants of India.
p) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor
are classified as operating lease. Lease payments under operating leases are recognised as expenses on
accrual basis in accordance with the respective lease agreements.
q) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognised when there is a
present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the Notes to Accounts. Contingent Assets are
neither recognised nor disclosed in the financial statements.
r)
101
Borrowing Costs:
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of
the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get
ready for its intended use. All other borrowing costs are charged to revenue.
s)
Stock based Compensation:
The compensation cost of stock options granted to employees is measured by the intrinsic value method,
i.e. the difference between the market price of the Company's shares on the date of the grant of options and
the exercise price to be paid by the option holders. The compensation cost, if any is amortised uniformly
over the vesting period of the options.
t)
Government Grants:
Government grants are accounted when there is reasonable assurance that the enterprise will comply with
the conditions attached to them and it is reasonably certain that the ultimate collection will be made.
Capital grants relating to specific fixed assets are reduced from the gross value of the respective fixed assets.
Revenue grants are recognised in the Profit and Loss Account.
u) Research and Development:
Revenue expenditure incurred on research and development is charged to the respective heads in the
Profit and Loss Account, in the year it is incurred and capital expenditure there on is included in the
respective heads under Fixed Assets.
v) Impairment of Assets:
An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An
impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
102
B) NOTES TO ACCOUNTS
1. Estimated amount of contracts remaining to be executed on capital account and not provided for, net of
advances, Rs. 525.2 million (previous year Rs. 680.0 million).
2. Contingent Liabilities:
(Rs. in million)
a) Income tax demands/matters in respect of earlier years, pending in
appeals [including Rs. 90.3 million (previous year Rs. Nil) consequent to
department preferring appeals against the orders of the Appellate
Authorities passed in favour of the company].
Amount paid thereagainst and included under Schedule 10 “Advances
recoverable in cash or in kind” Rs. 17.5 million (previous year Rs. 38.0
million).
As at
31.03.2010
107.8
As at
31.03.2009
46.9
b) Excise duty, Service tax and Sales tax demands disputed in appeals and
pending decisions. Amount paid thereagainst and included under
Schedule 10 Rs. 17.9 million (previous year Rs. 13.8 million).
194.7
118.3
c) Claims against the Company not acknowledged as debts [excluding
interest (amount unascertained) in respect of a claim].
Amount paid thereagainst without admitting liability and included
under Schedule 10 Rs. 76.5 million (previous year Rs. 64.2 million).
258.5
298.9
d) Counter guarantee given to GIDC in connection with loan sanctioned by
a financial institution to a company, jointly promoted by an Association
of Industries (of which, the Company is a member) and GIDC.
7.5
7.5
e) Guarantees given in respect of standby letter of credit issued by
the Company's bankers in connection with the credit facilities to
its subsidiaries aggregating Rs. 181.6 million (previous year
Rs. 239.0 million).
151.2
164.8
f)
Letter of comfort issued by the Company towards the credit facilities
sanctioned by the bankers of subsidiary companies aggregating
Rs.620.4 million (previous year Rs. 425.3 million).
254.8
246.2
g) Corporate guarantee given in respect of credit facility sanctioned by
the bankers of subsidiary companies aggregating Rs. 40.5 million
(previous year Rs. Nil).
27.7
-
135.0
-
h) Other corporate guarantee given.
3. During the year, the Company through its wholly owned subsidiary Lupin Holdings B.V., Netherlands
(LHBV), acquired/subscribed to the equity stake of the following:
i)
Additional Investment in Lupin Atlantis Holdings SA, Switzerland (100% subsidiary of the Company) at a
total cost of Rs. 2349.2 million.
ii) Additional Investment in Generic Health Pty Ltd., Australia (Associate) at a total cost of Rs. 122.2 million.
iii) 100% equity stake of Lupin Pharma Canada Ltd., Canada at a total cost of Rs. 125.3 million.
The above acquisitions/subscriptions are based on the net assets values, the future projected revenues,
operating profits and cash flows, etc. of the investee companies.
103
4. Pre-operative expenses, included in Capital Work-in-Progress (Schedule 5) represent the expenses incurred
for projects, which are yet to be commissioned. The details of the pre-operative expenses are:
(Rs. in million)
Particulars
Opening balance
Incurred during the current year:
Salaries, allowances and contribution to funds
Professional fees
Travelling expenses
Others
Total
Less : Capitalised during the year
Closing balance
2009-2010
13.5
2008-2009
9.0
22.9
0.1
1.7
9.6
47.8
35.1
12.7
19.6
0.5
3.4
2.1
34.6
21.1
13.5
5. The Deferred Tax Assets/ (Liabilities) arising out of significant timing differences are as under:
Particulars
Deferred Tax Liabilities:
Depreciation
Other timing difference
Deferred Tax Assets:
Provision for doubtful debts and advances
FCCB issue expenses
VRS Compensation
Other timing differences
Net Deferred Tax Liabilities
6.
(Rs. in million)
As at
31.03.2010
As at
31.03.2009
(1769.6)
(4.8)
(1514.0)
-
25.4
87.7
78.8
(1582.5)
20.3
6.0
100.0
40.4
(1347.3)
Segment Reporting:
The Company has presented data relating to its segments based on its consolidated financial statements,
which are presented in the same Annual Report. Accordingly, in terms of the provisions of Accounting
Standard 17 (AS 17) "Segment Reporting", no disclosures related to segments are presented in its
standalone financial statements.
7. Additional information pursuant to the Provisions of Paragraphs 3, 4C, and 4D of Part II of Schedule VI to the
Companies Act, 1956.
a) Consumption of Raw Materials:
Item
DL2 (RECEMIC)
PEN G
Others
TOTAL
Unit
M.T.
M.T.
2009-2010
Quantity
(Rs. in million)
1418.4
774.6
4397.9
1692.6
7066.0
9533.2
2008-2009
Quantity
(Rs. in million)
1226.9
615.4
3485.4
1763.4
5637.2
8016.0
b) Value of Imported and Indigenous consumption:
i) Consumption of Raw Materials:
Imported
Indigenous
TOTAL
2009-2010
%
(Rs. in million)
44.7
4264.2
55.3
5269.0
100.0
9533.2
2008-2009
%
(Rs. in million)
53.0
4251.9
47.0
3764.1
100.0
8016.0
104
ii) Consumption of Stores and Spares:
Imported
Indigenous
TOTAL
2009-2010
%
(Rs. in million)
7.3
77.8
92.7
982.0
100.0
1059.8
2008-2009
%
(Rs. in million)
7.4
62.2
92.6
780.9
100.0
843.1
c) CIF Value of Imports:
i)
ii)
iii)
iv)
v)
(Rs. in million)
Capital Goods
Raw Materials
Packing Materials
Consumable, Stores and Spares
TOTAL
2009-2010
519.9
4456.3
307.0
164.3
199.4
5646.9
2008-2009
504.3
4557.3
205.6
126.4
142.6
5536.2
d) Expenditure in Foreign currencies (subject to deduction of tax where applicable) on account of:
(Rs. in million)
i) Interest
ii) Travelling
iii) Commission
iv) Selling and Promotion expenses
v) Clinical and Analytical charges
vi) Legal and Professional charges (net of recoveries)
vii) Personnel Expenses
viii) Others
TOTAL
2009-2010
33.3
33.6
179.7
1235.2
31.5
494.7
101.5
125.4
2234.9
e) Earnings in Foreign Exchange on account of:
2008-2009
54.8
33.3
143.1
896.0
60.8
219.4
152.5
205.1
1765.0
(Rs. in million)
i) FOB value of Exports
ii) Deemed Exports
iii) Reimbursement of freight and insurance on Exports
iv) Income from Research Services
v) Income from Product Registration Services (Dossiers)
vi) Interest on Bank Fixed Deposits
vii) Compensation received
viii) Others
TOTAL
2009-2010
20787.2
218.3
143.9
251.0
78.6
51.8
1.1
21531.9
2008-2009
15821.2
327.5
129.8
94.0
79.3
26.4
1.0
16479.2
8. Remittance in Foreign currency on account of dividend:
The Company has paid dividend in respect of shares held by Non-Resident Shareholders on repatriation
basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited
to Non Resident External A/c (NRE A/c). The exact amount of dividend remitted in foreign currency cannot
be ascertained. The total amount remittable in this respect is given below:
Year to which the dividend relates
Number of non-resident shareholders
Number of shares held by them
Amount of dividend (Rs. in million)
2008-2009
429
12137680
151.7
105
2007-2008
357
14159940
141.6
9. a) Managerial Remuneration:
(Rs. in million)
Particulars
Salary and Allowances
Contribution to Provident and Other Funds
Perquisites
Commission to Whole time Director
Commission to Non Executive Directors
Sitting fees to Non Executive Directors
TOTAL
2009-2010
101.1
10.7
8.5
70.0
5.0
0.8
196.1
2008-2009
70.1
7.2
2.6
47.3
2.5
0.7
130.4
Notes:
(i) Above amount does not include remuneration paid by a wholly owned foreign subsidiary company to a
director aggregating Rs. 89.3 million (previous year Rs.68.7 million).
ii) Remuneration for the current year includes increased remuneration of the Managing Director and an
Executive Director w.e.f. 1st July 2009 in accordance with the Shareholder's resolutions.
iii) The provision for gratuity and compensated absences is made on the basis of actuarial valuation for all
the employees of the Company, including for the managerial personnel. Proportionate amount of
gratuity and compensated absences is not included in the above disclosure, since the exact amount is
not ascertainable.
b) Computation of Net Profit under Section 349 of the Companies Act, 1956 and commission payable to
Whole-time Director/ Non Executive Directors:
(Rs. in million)
Particulars
Profit before tax
Add :
i) Loss on sale/discard of fixed assets (net)
ii) Provision for doubtful debts
iii) Directors remuneration
Less:
Provision for diminution in value of long term investments written back
Net Profit as per Section 349/350
Commission (as approved and restricted by the Board of Directors.
Refer note no. 21)
- To Executive Chairman (Whole-time Director)
- To Non Executive Directors
2009-2010
7086.6
2008-2009
4713.8
74.2
16.5
196.1
32.5
23.5
130.4
7373.4
0.5
4899.7
70.0
5.0
47.3
2.5
10. Auditors' Remuneration:
A) Payment to Auditors:
a) As Audit Fees
b) As adviser or in any other capacity of, in respect of:
Taxation matters
c) In any other manner:
for other services such as quarterly limited reviews, audit of
consolidated financial statements, certificates, etc.
d) Reimbursement of out-of-pocket expenses (2009-10 Rs. 38,247/-)
(2008-09 Rs. 19,936/-)
TOTAL
B) Cost Audit Fees
* Excluding service tax
(Rs. in million)
2009-2010*
2008-2009*
3.5
3.5
4.0
2.0
3.9
2.6
11.4
0.2
8.1
0.2
106
11. The Company procures on lease, equipments, vehicles and office premises under operating leases. These
rentals recognised in the Profit and Loss Account for the year are Rs. 46.7 million (previous year Rs. 40.0 million).
The future minimum lease payments and payment profile of non cancellable operating leases are as under:
(Rs. in million)
Not later than one year
Later than one year but not later than five years
Later than five years
TOTAL
2009-2010
39.4
37.5
76.9
12. Basic and Diluted Earnings per Share is calculated as under:
Profit attributable to Equity Shareholders
Weighted average number of Equity Shares :
- Basic
Add: Effect of dilutive issue of FCCBs, employees stock options (ESOPs), converted during the year and ESOPs outstanding as on 31.03.2010
- Diluted
Earnings per Share (in Rs.)
- Basic
- Diluted
2008-2009
32.4
22.3
0.1
54.8
(Rs. in million)
2009-2010
6489.3
2008-2009
4169.7
86083153
82442414
1513952
87597105
836054
83278468
75.38
74.08
50.58
50.07
13. Details of loans and advances in the nature of loans as per the requirements under clause 32 of the Listing
Agreement with Stock Exchanges :
(Rs. in million)
Name of the company
Nature of relationship
Amount outstanding
Maximum amount
as at March 31, 2010
outstanding
during the year
Novodigm Limited
Wholly-owned subsidiary
200.0
(175.0)
200.0
(175.0)
Lupin Pharmacare Limited
Wholly-owned subsidiary
2059.3
(1030.7)
2059.3
(1030.7)
Notes:
i) The above loans are interest free, long term, repayable on demand.
ii) The loans to employees as per the Company's policy and security deposits paid towards premises taken
on leave and license/lease basis, against business conducting agreements, have not been considered.
iii) There are no investments by loanees in the shares of the Parent Company and/or the subsidiary
companies.
iv) Previous year figures are given in brackets.
14. Employees Stock Option Plans:
a) The Company implemented “Lupin Employees Stock Option Plan 2003” (ESOP 2003), “Lupin Employees
Stock Option Plan 2005” (ESOP 2005) and “Lupin Subsidiary Companies Employees Stock Option Plan
2005” (SESOP 2005) as approved in earlier years by the Shareholders of the Company and the
Remuneration/Compensation Committee of the Board of Directors. Details of the options granted
during the year under the plans are as under:
107
Lupin Employees Stock Option Plan 2003:
Grant Date
September 22, 2009
January 29, 2010
No of Options
12000
12000
28000
28000
80000
10650
10650
24850
24850
71000
Exercise price
Rs.
1089.15
1089.15
1089.15
1089.15
Vesting Period
22.09.2009 to 31.12.2010
22.09.2009 to 31.12.2011
22.09.2009 to 31.12.2012
22.09.2009 to 31.12.2013
1404.00
1404.00
1404.00
1404.00
29.01.2010 to 30.06.2011
29.01.2010 to 30.06.2012
29.01.2010 to 30.06.2013
29.01.2010 to 30.06.2014
Exercise price
Rs.
840.85
840.85
840.85
840.85
Vesting Period
29.05.2009 to 30.06.2010
29.05.2009 to 30.06.2011
29.05.2009 to 30.06.2012
29.05.2009 to 30.06.2013
614.08
04.11.2009 to 03.11.2010
Grant Date
May 29, 2009
November 04, 2009
No of Options
4200
4200
9800
9800
28000
10000
10000
Lupin Subsidiary Companies Employees Stock Option Plan 2005:
Grant Date
September 22, 2009
No of Options
11302
11303
26372
26373
75350
Exercise price
Rs.
1089.15
1089.15
1089.15
1089.15
Vesting Period
22.09.2009 to 31.12.2010
22.09.2009 to 31.12.2011
22.09.2009 to 31.12.2012
22.09.2009 to 31.12.2013
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 Rs.10/- each. The options have vesting periods as stated above in
accordance with the vesting schedule as per the said plans with an exercise period of ten years from the
respective grant dates.
The particulars of the options granted and lapsed under the Schemes are as below:
Particulars
Options outstanding as at the beginning of the year
Less: Options lapsed during the year
Less: Options exercised during the year
Options outstanding as at the year end
Year Ended
March 31, 2010
Nos.
361445
151000
204024
308421
Year Ended
March 31, 2009
Nos.
483411
25000
16490
130476
361445
108
Particulars
Year Ended
March 31, 2010
Nos.
522019
38000
23850
99267
436902
Year Ended
March 31, 2009
Nos.
524120
87320
52311
37110
522019
Year Ended
March 31, 2010
Nos.
95600
75350
14850
4250
151850
Year Ended
March 31, 2009
Nos.
96350
750
95600
Particulars
b) The Company has followed the intrinsic value based method of accounting for stock options granted
after April 1, 2005 based on Guidance Note on Accounting for Employee Share-based Payments, issued
by the Institute of Chartered Accountants of India. Had the compensation cost for the Company's stock
based compensation plans been determined in the manner consistent with the fair value approach as
described in the said Guidance Note, the Company's net income would be lower by Rs. 52.5 million
(previous year Rs. 57.8 million) and earnings per share as reported would be lower as indicated below:
Particulars
Net profit as reported
Less: Total stock-based employee compensation expense
determined under fair value based method
Add: Total stock-based employee compensation expense
determined under intrinsic value based method
Adjusted net profit
Basic earnings per share
- As reported (in Rs.)
- Adjusted (in Rs.)
Diluted earnings per share
- Adjusted (in Rs.)
109
Year Ended
March 31, 2010
(Rs. in million)
Year Ended
March 31, 2009
6489.3
4169.7
57.2
58.5
4.7
6436.8
0.7
4111.9
75.38
74.77
50.58
49.88
74.08
73.48
50.07
49.38
The fair value of each option granted during the year is estimated on the date of grant based on the
following assumptions:
Particulars
Dividend yield (%)
Risk free interest rate (%)
Volatility (%)
Grant dated
September 22,
2009 from
ESOP 2003 plan
Grant dated
January 29,
2010 from
ESOP 2003 plan
Grant dated
May 29,
2009 from
ESOP 2005 plan
Grant dated
September 22,
2009 from
ESOP 2005 plan
Grant dated
November 4,
2009 from
ESOP 2005 plan
1.29
6.45
7.14
40.95
1.29
6.45
7.49
39.87
1.29
6.45
6.66
41.83
1.29
6.45
7.14
40.95
1.29
5.5
7.08
38.79
15. Post Employment Benefits:
(i) Defined Contribution Plans:
The Company makes contributions towards provident fund and superannuation fund to a defined
contribution retirement benefit plan for qualifying employees. The superannuation fund is administered
by the Life Insurance Corporation of India (LIC). Under the plan, the Company is required to contribute a
specified percentage of payroll cost to the retirement benefit plan to fund the benefits.
The provident fund plan is operated by the “Lupin Ltd Employees Provident Fund Trust” (the “Trust”).
Eligible employees receive benefits from the said Provident Fund Trust. Both the employees and the
Company make monthly contributions to the Provident Fund Plan equal to a specified percentage of the
covered employee's salary. The minimum interest rate payable by the Trust to the beneficiaries every year
is being notified by the Government. The Company has an obligation to make good the short fall, if any,
between the return from the investments of the trust and the notified interest rate.
The Guidance Note on Implementing Accounting Standard 15 (AS -15), Employee benefits (revised 2005)
issued by Accounting Standards Board (ASB) states that benefit plans involving employer established
provident funds, which require interest shortfalls to be recompensed are to be considered as defined
benefit plans. Pending the issuance of the guidance note from the Actuarial Society of India, the
Company's actuary has expressed an inability to reliably measure provident fund liabilities. Accordingly,
the Company is unable to exhibit the related information.
The Company recognised Rs. 99.7 million (Previous year Rs. 78.5 million) for provident fund contributions
and Rs. 71.9 million (previous year Rs. 54.9 million) for superannuation contribution in the Profit and Loss
Account.
(ii) Defined Benefit Plan:
The Company makes annual contributions to the Lupin Limited Employees' Group Gratuity cum Life
Assurance Scheme administered by the LIC, a funded defined benefit plan for qualifying employees. The
scheme provides for payment to vested employees as under:
a) On normal retirement/ early retirement/ withdrawal/resignation:
As per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
b) On death in service:
As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.
The most recent actuarial valuation of plan assets and the present value of the defined benefit
obligation for gratuity were carried out as at March 31, 2010 by the LIC. The present value of the
defined benefit obligations and the related current service cost and past service cost, were measured
using the Projected Unit Credit Method.
110
The following table sets out the status of the gratuity plan and the amounts recognised in the Company's
financial statements as at the Balance Sheet date.
(Rs. in million)
Sr.
No.
I)
II)
III)
IV)
V)
VI
VII)
111
Particulars
Reconciliation in present value of obligations (PVO)
- defined benefit obligation :
Current Service Cost
Interest Cost
Actuarial loss
Benefits paid
PVO at the beginning of the year
PVO at end of the year
Change in fair value of plan assets :
Expected return on plan assets
Actuarial gain/(loss)
Contributions by the employer
Benefits paid
Fair value of plan assets at beginning of the year
Fair value of plan assets at end of the year
Reconciliation of PVO and fair value of plan assets:
PVO at end of year
Fair Value of planned assets at end of year
Funded status
Unrecognised actuarial gain/ (loss)
Net liability recognised in the balance sheet
Net cost for the year ended March 31,2010 :
Current Service cost
Interest cost
Expected return on Plan assets
Actuarial losses
Net cost
Category of assets as at March 31, 2010:
Insurer Managed Funds (100%) (Fund is Managed by
LIC of India as per IRDA guidelines, category-wise
composition of the Plan assets is not available)
Actual return on the plan assets
Assumption used in accounting for the gratuity plan:
Discount rate (%)
Salary escalation rate (%)
Expected rate of return on plan assets (%)
Gratuity (Funded)
As on 31.03.2010
As on 31.03.2009
20.5
14.9
34.0
(11.6)
186.5
244.3
17.3
14.6
22.5
(50.2)
182.3
186.5
18.0
41.8
(11.6)
165.1
213.3
15.6
21.4
(50.2)
178.3
165.1
244.3
213.3
(31.0)
(31.0)
186.5
165.1
(21.4)
(21.4)
20.5
14.9
(18.0)
34.0
51.4
17.3
14.6
(15.6)
22.5
38.8
213.3
165.1
18.0
15.6
8.0
6.0
9.5
8.0
5.0
9.1
16. The Company enters into Forward Exchange Contracts for hedge purpose and not intended for trading or
speculation purposes, to establish the amount of currency in Indian Rupees required or available at the
settlement date of certain payables and receivables. The following were the outstanding Forward Exchange
Contracts entered into by the Company:
Currency
US $
Buy or Sell
Cross Currency
Buy
Indian Rupees
Amount in US$
March 31, 2010
March 31, 2009
27494783
The year end foreign currency exposures that have not been hedged by a derivative instrument or
otherwise are as below:
a. Amount receivable in foreign currency on account of the following:
Particulars
As on 31.03.2010
As on 31.03.2009
Rs. in
million
Amount in
Foreign
Currency
97.5
3.5
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
2373756
50.5
1437692
AUD
77650
15.2
298900
ACUD
368.3
6083897
292.3
4327571
EURO
80.1
1176617
34.8
479513
GBP
7211.4
160611202
5520.1
108835007
US $
-
-
Rs. 6673/-
200
SGD
0.5
15565040
0.7
20873608
UZS
-
-
19.9
297452
EURO
38.0
845475
153.6
3028461
US$
1.5
1014909
0.4
261537
RUB
0.1
333320
0.8
2498750
KZT
-
-
15.3
210537
GBP
1.5
234405
1.2
160840
RMB
0.2
32731
0.3
47087
UAH
0.2
64450467
-
-
VND
Export of goods
Other receivable
112
b. Amount payble in foreign currency on account of the following:
Particulars
As on 31.03.2010
As on 31.03.2009
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
919.3
31.8
14.5
3.7
0.3
0.1
Rs. 2665/4.8
0.2
0.2
20473490
466704
239424
90884
667311
2174
83
435374922
4302
115265
470.1
5.2
3.6
1.4
Rs. 16683/0.1
-
9268942
71002
103595
30713
500
18440
-
US $
GBP
EURO
AUD
JPY
CHF
SGD
HKD
AZM
CAD
RUB
6807.4
-
151611475
-
1063.8
480.3
20974017
932950000
US $
JPY
0.7
-
15916
-
3.8
2.3
74620
4479828
US $
JPY
699.6
1.8
0.7
0.2
0.2
0.6
0.2
29.2
0.1
0.8
Rs. 43076/0.1
0.2
15581397
1176911
10236
709673
8118064
12768
32680
481951
10211726
17829
6557
1550
101607000
439.3
2.3
15.2
0.6
Rs.6931
2.0
0.3
14.5
0.5
0.9
0.2
0.2
-
8660726
1578283
210228
1736900
193598
38701
56151
214213
37536255
25347
5285
12017
-
US $
RUB
GBP
KZT
UZS
ACUD
UAH
EURO
AZM
AUD
CHF
SAR
RMB
CAD
VND
Import of goods and services
Secured and Unsecured loans payable
Interest accrued and not due on
Secured and Unsecured loans
Other payables
17. Derivative Financial Instruments:
The Company enters into forward and option contracts in order to hedge and manage its foreign currency
exposures towards future export earnings. Such derivative contracts (including contracts for a period
extending beyond the financial year 2010-11) which are in the nature of highly probable forecast
transactions are entered into by the Company for hedging purposes only, and are accordingly classified as
cash flow hedges.
113
The category wise break-up there of is as under:
Particulars
Forward contracts
Option contracts
As at
31.03.2010
Amount US$
in million
As at
31.03.2009
Amount US$
in million
423.5
72.0
373.8
114.0
The Company, based on the Announcement of The Institute of Chartered Accountants of India
“Accounting for Derivatives” has accounted for derivative forward and option contracts at fair values,
considering the principles of recognition and measurement stated in Accounting Standard 30 (AS-30)
“Financial instruments: Recognition and Measurement” and the accounting policy followed by the
Company in this respect.
The changes in the fair value of the derivative instruments during the year ended 31st March 2010
aggregating Rs. 3078.0 million (previous year Rs. 2754.0 million debited) designated as effective have
been credited to the Cash Flow Hedge Reserve Account and Rs. 13.3 million is credited (previous year Rs.
34.0 million debited) to the Profit and Loss Account, being the ineffective portion thereof.
18. The aggregate amount of revenue expenditure incurred during the year on Research and Development and
shown in the respective heads of account is Rs. 2738.3 million (previous year Rs. 1905.0 million).
19. During the year, in accordance with the terms of issue, Foreign Currency Convertible Bonds aggregating US
$ 71.3 million (aggregate to date US $ 98.6 million) were converted into 5,816,742 equity shares (aggregate
to date 8,043,911 equity shares) of Rs. 10/- each, fully paid-up, at a predetermined price of Rs. 567.04 per
share, resulting in an increase in the paid-up share capital by Rs. 58.2 million (aggregate to date Rs. 80.4
million) and securities premium by Rs. 3240.1 million (aggregate to date Rs. 4480.7 million). Balance FCCBs
aggregating US $ 1.4 million were redeemed during the year and the redemption premium of Rs. 12.6
million (net of tax of Rs. 6.5 million) is adjusted against securities premium account. There were no Bonds
outstanding as on March 31, 2010.
20. The information regarding Micro Enterprises 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.
Amount due to Micro Enterprises and Small Enterprises as on March 31, 2010 is Rs. 88.3 million, interest
Rs. nil (previous year Rs. 64.1 million, interest Rs. nil), interest paid during the year Rs. nil (previous year Rs. nil).
21. a) Lupin Pharmacare Limited, Lupin Herbal Limited and Novodigm Limited (wholly owned subsidiaries of
the Company) had filed petitions before the Honourable High Courts of Mumbai and Gujarat for
amalgamation with the Company, the appointed date being April 1, 2009.
b) Vide its order dated January 8, 2010, the High Court of Mumbai sanctioned the scheme of amalgamation
between Lupin Pharmacare Ltd., Lupin Herbal Ltd. and the Company subject to the order to be passed
by the High Court of Gujarat sanctioning the scheme of amalgamation between Novodigm Ltd. and the
Company. The order of the Gujarat High Court is awaited pending which, the results of these
subsidiaries have not been considered in these financial statements of the Company.
c) Based on the audited accounts of the aforesaid wholly-owned subsidiary companies, aggregate net loss
for the year ended March 31, 2010 is Rs. 280.5 million. While calculating commission payable to
Executive Chairman, this has been considered on a conservative basis.
114
22. Details of capacities, production, turnover and stocks :
A) Details of licenced and installed capacities:
Installed
Installed
Classification
Unit
31.03.2010
31.03.2009
Formulations :
Tablets
No. in million
9646.0
5534.3
Liquids
Kilo-litres
3840.0
3225.0
Capsules
No. in million
2033.0
1402.5
Injections:
- Liquids
Kilo-litres
42.0
42.0
- Vials
No. in million
12.0
12.0
Creams and Powder
M. T.
312.0
312.0
Inhalers
No. in million
4.3
3.6
Bulk Drugs, Intermediates
and Chemicals
M. T.
4856.7
4677.4
Notes :
i) In terms of Press Note No.4 (1994 series) dated October 25, 1994 issued by the Department of Industrial
Development, Ministry of Industry, Government of India and Notification no. S.O.137(E) dated March
01,1999 issued by the Department of Industrial Policy & Promotion, Ministry of Industry, Government of
India, industrial licencing has been abolished in respect of bulk drugs and formulations. Hence, there is no
registered / licenced capacities for these bulk drugs and formulations.
ii) Installed capacities, being a technical matter, are as certified by the management and relied upon by the auditors.
B) Details of production and purchases of finished goods:
Production
Year ended Year ended
31.03.2010 31.03.2009
Quantity
Quantity
(Value Rs. in million)
Purchase of goods
Year ended
Year ended
31.03.2010
31.03.2009
Quantity
Value
Quantity Value
Classification
Unit
A) Formulations :
Tablets
No. in million
7783.6
5912.9
2241.7
1834.6
1732.6 1529.9
Liquids
Kilo-litres
2078.1
1381.0
5220.2
542.2
4917.7 481.4
Capsules
No. in million
1013.2
808.2
432.8
513.3
398.0 493.9
Injections:
- Liquids
Kilo-litres
88.2
92.5
87.2
99.3
65.7
90.5
- Vials
No. in million
28.0
27.5
24.4
918.2
18.8 738.0
Creams and
Powder
M. T.
406.8
371.1
552.2
115.9
496.8 135.1
Inhalers
No. in million
2.5
1.9 312000 Nos.
6.5 13000 Nos.
0.3
B) Bulk Drugs,
M.T.
2605.4
2113.8
Intermediates
and Chemicals
C) Others
32.5
5.5
TOTAL
4062.5
3474.6
Notes:
i) Production includes goods manufactured for replacement and on loan licence basis by other parties but
excludes manufactured on job work basis for other parties and manufactured for research and
development activities.
ii) Production consists of saleable bulk drugs and intermediates. It excludes bulk drugs consumed for
manufacture of formulations.
iii) Production/Purchases of formulations includes samples.
115
C) Details of Turnover:
Classification
A) Formulations :
Tablets
Liquids
Capsules
Injections:
- Liquids
- Vials
Creams and Powder
Inhalers
B) Bulk Drugs, Intermediates
and Chemicals
C) Others
TOTAL
Unit
Year ended 31.03.2010
Quantity
Value
Year ended 31.03.2009
Quantity
Value
No. in million
Kilo-litres
No. in million
9615.6
6722.8
1358.4
15761.8
5227.4
4919.0
7513.4
5827.0
1237.0
12237.8
3821.2
3825.0
Kilo-litres
No. in million
M. T.
No. in million
M. T.
167.2
44.3
853.4
1.9
2524.3
246.1
2280.3
366.0
282.8
7536.7
161.9
39.9
792.1
1.5
2178.3
244.7
1853.9
372.4
232.8
6754.7
40.5
36660.6
76.9
29419.4
Notes :
i) Above excludes items distributed under free schemes and samples.
ii) Turnover is net of trade discounts
D) Details of Stock:
Classification
Unit
A) Formulation :
Tablets
No. in million
Liquids
Kilo-litres
Capsules
No. in million
Injections:
- Liquids
Kilo-litres
-
No. in million
Vials
Creams and Powder
M. T.
Inhalers
No. in million
B) Bulk Drugs Intermediates
and Chemicals
C) Others
TOTAL
M. T.
Opening Stock
Quantity
Value
01.04.2009
01.04.2009
Closing Stock
Quantity
Value
31.03.2010 31.03.2010
560.9
(538.5)
784.1
(574.0)
122.8
(181.5)
658.7
(648.4)
156.0
(126.3)
171.3
(326.2)
866.7
(560.9)
995.9
(784.1)
160.7
(122.8)
816.1
(658.7)
213.7
(156.0)
208.2
(171.3)
24.3
(37.1)
7.8
(8.6)
171.7
(144.4)
0.5
(0.5)
167.4
(233.3)
19.2
(25.4)
220.7
(222.3)
56.1
(55.3)
24.1
(38.2)
1086.1
(1013.6)
15.5
(31.9)
2407.7
(2487.6)
26.3
(24.3)
7.1
(7.8)
206.1
(171.7)
0.5
(0.5)
166.3
(167.4)
25.1
(19.2)
260.8
(220.7)
52.7
(56.1)
31.7
(24.1)
864.4
(1086.1)
20.3
(15.5)
2493.0
(2407.7)
Notes :
i) Opening and Closing stock of formulations includes quantity of samples.
ii) Figures in brackets are for previous year.
116
23. Related Party Disclosures, as required by AS-18 are given below :
A. Relationships Category I : Subsidiaries and Associates of the Company :
Subsidiaries :
Kyowa Pharmaceutical Industry Co, Ltd., Japan
Amel Touhoku, Japan
Novodigm Ltd., India
Max Pharma Pty. Ltd., Australia (upto 31st May, 2009)
Lupin Pharmacare Ltd., India
Lupin Australia Pty Ltd., Australia
Lupin Holdings B.V., Netherlands
Lupin Herbal Ltd., India
Lupin Atlantis Holdings SA, Switzerland
Hormosan Pharma GmbH, Germany (from 25th July 2008)
Pharma Dynamics(Proprietary) Ltd., South Africa
Multicare Pharmaceuticals Philippines Inc., Philippines (from 26th March 2009)
Lupin (Europe) Ltd., UK (from 5th June 2009)
Lupin Pharma Canada Ltd., Canada (from 18th June 2009)
Associates :
Generic Health Pty Ltd., Australia (from 20th August 2008)
Shinko Yakuhin, Japan (upto 10th March 2010)
Category II: Key Management Personnel
Dr. D. B. Gupta
Chairman
Dr. K. K. Sharma
Managing Director
Mrs. M. D. Gupta
Executive Director
Mr. Nilesh Gupta
Executive Director (from 8th October 2008)
Category III: Others (Relatives of Key Management Personnel and Entities in which the Key
Management Personnel have control or significant influence)
Mrs. Vinita Gupta
Mr. Nilesh Gupta (upto 7th October 2008)
Dr. Anuja Gupta
Mrs. Kavita Gupta Sabharwal
Dr. Richa Gupta
Mrs. Pushpa Khandelwal
Adhyatma Investments Pvt. Limited
Bharat Steel Fabrication and Engineering Works
Concept Pharmaceuticals Limited
D. B. Gupta (HUF)
Enzal Chemicals (India) Limited
Lupin Human Welfare and Research Foundation
Lupin International Pvt. Limited
Lupin Investments Pvt. Limited
Lupin Marketing Pvt. Limited
Matashree Gomati Devi Jana Seva Nidhi
Novamed Pharmaceuticals Pvt. Limited
Polynova Industries Limited
Pranik Landmark Associates (upto 3rd March 2010)
Rahas Investments Pvt. Limited
S N Pharma
Synchem Chemicals (I) Pvt. Limited
Zyma Laboratories Limited
117
B.
Transactions with the related parties.
Sr. Transactions
No.
1
Sale of Goods
2
3
Miscellaneous income on account
of sale of by-products
Rent Expenses
4
Business Conducting Expenses
5
Agency Commission Expenses
6
Expenses Recovered/Rent Received
7
Remuneration Paid
8
Purchase of Goods/Materials
9
Investments during the year
10
Donations Paid
11
Dividend Paid
12
Services Received
13
Loans/Advances given
14
15
Expenses Reimbursed
16
Sale of other assets
17
Guarantees given against standby
Letter of Credit issued by Company's
bankers to the bankers of wholly
owned subsidiary companies.
Letter of Comfort issued by the
Company to the bankers of
subsidiary companies.
Corporate guarantee issued by
the Company to the bankers of
wholly owned subsidiary companies.
18
19
(Rs. in million unless other wise stated)
Subsidiaries
Associates
13,288.6
(9,788.4)
(-)
(-)
(-)
(-)
37.1
(5.5)
(-)
224.9
(231.2)
2,502.0
(1,834.4)
(-)
(-)
994.7
(646.1)
1,053.6
(905.9)
11.2
(3.6)
61.8
(47.3)
21.7
(-)
57.4
(239.0)
44.6
(33.9)
(-)
(-)
(-)
15.2
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
(-)
2.6
(-)
(-)
(-)
Key
Management
Personnel
(-)
(-)
(-)
(-)
(-)
(-)
190.3
(127.2)
(-)
(-)
(-)
15.9
(11.7)
(-)
(-)
(-)
(-)
(-)
(-)
Others
Total
195.1
(425.3)
(-)
(-)
(-)
195.1
(425.3)
40.5
(-)
(-)
(-)
(-)
40.5
(-)
13.6
13,346.8
(3.2)
(9,825.5)
(2.9)
(2.9)
103.6
103.6
(98.7)
(98.7)
Rs.6,000/- Rs.6,000/(Rs.6,000/-) (Rs.6,000/-)
20.1
35.3
(14.5)
(14.5)
1.6
38.7
(2.0)
(7.5)
190.3
(10.2)
(137.4)
31.2
256.1
(31.8)
(263.0)
2,502.0
(-)
(1,834.4)
35.0
35.0
(21.7)
(21.7)
509.5
525.4
(408.9)
(420.6)
994.7
(-)
(646.1)
1,053.6
(-)
(905.9)
9.0
20.2
(-)
(3.6)
11.6
76.0
(11.0)
(58.3)
21.7
(-)
(-)
57.4
(-)
(239.0)
118
Out of the above items transactions in excess of 10% of the total related party transactions are as under :
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
12
119
Transactions
Sale of Goods
Novodigm Ltd.
Lupin Pharmacare Ltd.
Concept Pharmaceuticals Ltd.
Lupin (Europe) Ltd., UK
Sales of by products
Synchem Chemicals (I) Pvt. Ltd.
Sales of other assets
Lupin (Europe) Ltd., UK
Rent Expenses
Lupin Investments Pvt. Ltd.
Bharat Steel Fabrications and
Engineering Works
Generic Health Pty Ltd., Australia
S N Pharma
Expenses Recovered / Rent Received
Novodigm Ltd.
Lupin Atlantis Holding SA
Polynova Industries Ltd.
Pranik Landmark Associates
Remunerations Paid
Dr. D. B. Gupta
Dr. K. K. Sharma
Mr. Nilesh Gupta
Mr. Nilesh Gupta
Purchase of Goods/ Material
Enzal Chemicals (India) Ltd.
Novodigm Ltd.
Lupin Holdings B. V.
Donations Paid
Lupin Human Welfare and
Research Foundation
Related party
relation
For the year
ended 31.03.2010
For the year
ended 31.03.2009
Subsidiary Company
13,051.9
9,636.7
Subsidiary Company
Subsidiary Company
Others
Subsidiary Company
0.3
8.3
9.0
2.6
2.5
1.1
-
Others
-
2.9
Subsidiary Company
21.7
-
Others
83.0
78.9
Others
11.9
11.3
Others
Rs.6,000/-
Rs.6,000/-
Associate
Others
15.2
20.1
14.5
Subsidiary Company
Subsidiary Company
Others
Others
4.4
29.7
1.0
0.6
2.5
0.8
1.2
Key Management Personnel
Others
91.1
64.0
32.8
-
66.7
43.6
14.4
10.2
Others
Subsidiary Company
31.2
221.5
31.8
231.2
Subsidiary Company
2,482.0
1,834.4
Others
32.3
19.2
Sr.
No.
13
14
15
16
17
18
19
Transactions
Dividend Paid
Lupin Marketing Pvt. Ltd.
Rahas Investments Pvt. Ltd.
Visiomed (I) Pvt. Ltd.
Zyma Laboratories Ltd.
Services Received
Lupin Pharmaceuticals Inc.,USA
Lupin Europe Ltd., UK
Expenses Reimbursed
Lupin Australia Pty Ltd.
Novodigm Ltd.
Loan and advance given
Novodigm Ltd.
bankers to the bankers of wholly
owned subsidiary companies
Max Pharma Pty Ltd.
Hormosan Pharma GmbH
Novodigm Ltd.
Multicare Pharmaceuticals, Philippines
Corporate guarantee issued by the
Hormosan Pharma GmbH
Lupin Europe Ltd., UK
Related party
relation
For the year
ended 31.03.2010
For the year
ended 31.03.2009
Others
Others
Others
Others
101.0
114.2
108.8
137.4
80.8
91.4
87.0
109.9
Subsidiary Company
Subsidiary Company
849.6
144.7
645.9
-
Subsidiary Company
Subsidiary Company
Subsidiary Company
Others
13.8
28.1
13.0
11.0
29.8
17.5
10.0
Subsidiary Company
Subsidiary Company
1,028.6
-
851.0
35.0
Subsidiary Company
Subsidiary Company
(70.2)
12.8
70.2
168.8
Subsidiary Company
Subsidiary Company
95.7
99.4
425.3
-
Subsidiary Company
Subsidiary Company
30.3
10.2
-
120
C. Balances due from/to the related parties.
Sr.
No.
Transactions
Subsidiaries
Associates
1
Investments
2
4
Deposit paid under Leave and Licence
arrangement for Office Premises
Deposit given for Business
Conducting Arrangement
Debtors
5
Creditors
6
Commission Payable
7
Expenses payable
8
Expenses receivable
9
Loans and advances
10
bankers to the bankers of
Corporate guarantee issued by the
7,230.1
(4,728.1)
(-)
(-)
5,476.6
(3,784.0)
551.8
(416.0)
(-)
3.3
(3.6)
29.7
(-)
2,259.3
(1,225.6)
181.6
(239.0)
3
11
12
Others
Total
(-)
(-)
(-)
32.6
(9.9)
5.4
(-)
(-)
(-)
(-)
(-)
(-)
Key
Management
Personnel
(-)
(-)
(-)
(-)
(-)
70.0
(47.3)
(-)
(-)
(-)
(-)
(-)
71.7
(71.7)
180.0
(180.0)
10.5
(-)
3.7
(1.8)
(1.1)
(-)
(-)
(-)
(-)
7,230.1
(4,728.1)
71.7
(71.7)
180.0
(180.0)
5,519.7
(3,793.9)
560.9
(417.8)
70.0
(48.4)
3.3
(3.6)
29.7
(-)
2,259.3
(1,225.6)
181.6
(239.0)
620.4
(425.3)
(-)
(-)
(-)
620.4
(425.3)
40.5
(-)
(-)
(-)
(-)
40.5
(-)
Notes:
i)
Figures in brackets are for previous year.
ii) Related party relationship is as identified by the Company and relied upon by the Auditors.
24. Excise duty (Schedule 16) includes Rs. 22.0 million being net impact of the excise duty provision on opening and
closing stock.
25. Previous year figures have been regrouped wherever necessary to correspond with the figures of the current year.
Signatures to Schedule 1 to 18
For Lupin Limited
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
R. V. Satam
Company Secretary
121
Balance Sheet Abstract and Company's
General Business Profile
(Submitted in terms of part IV of Schedule VI of the Companies Act, 1956)
(a) Registration Details
Registration No./ CIN No.
L24100MH1983PLC029442
Balance Sheet Date
State Code
11
61,243
31.03.2010
(b) Capital Raised during the Year (Amount in Rupees Thousands)
Public Issue
NIL
Rights Issue
Bonus Issue
NIL
Private Placement
(ESOPs & FCCB)
NIL
(c) Position of Mobilisation and Deployment of funds (Amount in Rupees Thousands)
Total Liabilities
43,706,130
Total Assets
43,706,130
889,438
24,416,011
Deferred Tax
1,582,534
Secured Loans
7,040,027
Unsecured Loans
2,028,014
Sources of Funds
Paid-Up Capital
Application of Funds
Net Fixed Assets
13,322,248
Investments
7,240,839
Net Current Assets
15,392,937
Misc Expenditure
-
Total Expenditure
30,039,546
7,086,612
Profit After Tax
6,489,274
75.38
Equity Dividend Rate %
135
Accumulated Losses
-
(d) Performance of Company (Amount in Rupees Thousands)
Turnover
36,400,830
Profit Before Tax
Earning per Equity Share in Rs.(Basic)
(e) Generic Names of Three Principal Products of Company
(As per monetary terms)
Product Description
Item Code No.(As per ITC Code)
i) Cefixime
30049099
ii) Lisinopril
30049071
iii)Cefaclor
29419090
For Lupin Limited
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
R. V. Satam
Company Secretary
122
Auditors' Report
To the Board of Directors of Lupin Limited
1.
We have audited the attached Consolidated Balance Sheet of Lupin Limited ("the Company"), and its
subsidiaries, (the Company and its subsidiaries constitute "the Group") as at 31st March, 2010, the
Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Group for the year
ended on that date, both annexed thereto. The Consolidated Financial Statements include investments in
associates accounted on the equity method in accordance with Accounting Standard 23 (Accounting for
Investments in Associates in Consolidated Financial Statements) as notified under the Companies
(Accounting Standards) Rules, 2006. These financial statements are the responsibility of the Company's
management and have been prepared on the basis of the separate financial statements and other
information regarding components. Our responsibility is to express an opinion on these Consolidated
Financial Statements based on our audit.
2.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by the management, as well
as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3.
We did not audit the financial statements of 8 subsidiaries, whose financial statements reflect total assets
of Rs. 7520.2 million as at 31st March, 2010, total revenues of Rs. 7823.7 million and net cash inflows
amounting to Rs. 228.6 million for the year ended on that date as considered in the Consolidated Financial
Statements. These financial statements have been audited by other auditors whose reports have been
furnished to us and our opinion in so far as it relates to the amounts included in respect of these
subsidiaries is based solely on the reports of the other auditors.
4.
We report that the Consolidated Financial Statements have been prepared by the Company in accordance
with the requirements of Accounting Standard 21 (Consolidated Financial Statements), Accounting
Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) as notified
under the Companies (Accounting Standards) Rules, 2006.
5.
Based on our audit and on consideration of the separate audit reports on the individual financial
statements of the Company, and the aforesaid subsidiaries and associates, and to the best of our
information and according to the explanations given to us, in our opinion, the Consolidated Financial
Statements give a true and fair view in conformity with the accounting principles generally accepted
in India:
(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2010;
(ii) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on
that date and
(iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended
on that date.
(Registration No. 117366W)
Place : Mumbai
Dated: May 5, 2010
123
M. S. Dharmadhikari
Partner
Consolidated Balance Sheet
As at March 31, 2010
Schedules
I.
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
SOURCES OF FUNDS
Shareholders' Funds
Share Capital
1
2
Minority Interest
Loan Funds
Secured Loans
Unsecured Loans
889.4
24,788.9
25,678.3
254.9
828.2
13,420.0
14,248.2
142.5
3
4
8,722.4
2,676.1
11,398.5
1,630.4
7,569.2
4,663.5
12,232.7
1,387.2
TOTAL
38,962.1
28,010.6
22,937.1
7,072.2
15,864.9
3,578.7
19,443.6
3,196.8
18,200.3
6,188.3
12,012.0
2,239.7
14,251.7
3,173.7
6
264.3
195.4
215.6
222.8
7
8
9
10
9,714.9
11,265.7
2,015.3
4,758.6
27,754.5
9,571.6
9,179.7
777.7
2,779.7
22,308.7
9,649.4
2,243.1
11,892.5
15,862.0
38,962.1
10,334.8
1,827.1
12,161.9
10,146.8
28,010.6
Deferred Tax Liabilities (Net)
[Refer note no. 5 (ii) (a) of Schedule 18(B)]
II. APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation and Amortisation
Net Block
Goodwill On Consolidation
[Refer note no.16 (b) of Schedule 18(B)]
Investments
Deferred Tax Assets (Net)
[Refer note no. 5 (ii) (b) of Schedule 18(B)]
Current Assets, Loans and Advances
Inventories
Sundry Debtors
Loans and Advances
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
5
11
Net Current Assets
TOTAL
18
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
R. V. Satam
Company Secretary
124
Consolidated Profit and Loss Account
Schedules
INCOME
Sales (Gross)
Less : Excise Duty
Sales (Net)
Other Income
12
13
EXPENDITURE
Cost of Materials
14
Personnel Expenses
15
16
17
(Refer note no. 5 of Schedule 5)
Profit before Tax
Provision for Taxation
- Current Tax (including Wealth Tax)
Less: MAT Credit Entitlement
- Deferred Tax
- Fringe Benefit Tax
Net Profit before Minority Interest and Share of Loss in Associates
Less : Minority Interest
Less : Share of Loss in Associates
Net Profit
Add : Surplus brought forward from previous year
Amount Available for Appropriation
APPROPRIATIONS
- Transfer to General Reserve
- Dividend on Ordinary Shares by an Overseas Subsidiary
- Proposed Dividend on Equity Shares
- Dividend on Equity Shares for previous year
- Corporate Tax on Dividend
Balance Carried to Balance Sheet
Earnings Per Share (in Rs.) [Refer note no. 7 of Schedule 18(B)]
- Basic
- Diluted
Face value of Equity Shares (in Rs.)
Current
Year ended
31.03.2010
Rs. in million
Previous
Year ended
31.03.2009
Rs. in million
47,678.4
273.2
47,405.2
1,302.7
142.0
48,849.9
38,237.8
479.0
37,758.8
907.6
46.1
38,712.5
19,694.2
5,871.5
13,303.3
384.9
1,239.1
40,493.0
8,356.9
16,043.1
4,871.3
10,359.2
498.6
879.9
32,652.1
6,060.4
1,905.0
(795.2)
250.4
6,996.7
111.6
68.8
6,816.3
6,688.6
13,504.9
955.4
(228.4)
106.2
149.8
5,077.4
28.6
33.4
5,015.4
4,407.8
9,423.2
1,500.0
36.6
1,224.7
10.8
211.0
10,521.8
13,504.9
1,500.0
21.2
1,035.3
0.1
178.0
6,688.6
9,423.2
79.18
77.81
10.00
60.84
60.22
10.00
18
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
125
R. V. Satam
Company Secretary
Consolidated Cash Flow Statement
A. Cash Flow from Operating Activities
Net Profit before Tax and Minority Interest and Share of Loss in Associates
Adjustments for:
Loss on sale/discard of Fixed Assets (net)
Profit on sale of Current Investments - Non trade
Profit on sale of Long Term Investments - Trade
Interest on Deposits with Banks
[31.03.2010 Rs. 4,410/- , 31.03.2009 Rs. 33,820/-]
Dividend on Long Term Investments - Non Trade
Provision for doubtful debts
Employee share based payment cost
Profit on sale of Subsidiary [Refer note no. 22 of Schedule 18(B)]
Provision for Diminution in value of Long Term Investments
Provision for Diminution in value of Long Term Investments written back
Exchange difference on transactions / translation (net)
Net unrealised exchange difference during the year (Refer note 1 below)
Operating Profit before Working Capital Changes
Adjustments for:
Trade and other Receivables
Inventories
Trade Payables
Cash Generated from Operations
Direct Taxes paid (net)
Fringe Benefit Tax paid
Net Cash Generated from Operating Activities
B. Cash Flow from Investing Activities
Additions to Fixed Assets/Capital Work-in-Progress/Intangible Assets
Purchase of Investments
Sale of Investments
Loans given to an associate
Consideration for acquisition of subsidiary companies
[31.03.2010 Rs. 4,410/- , 31.03.2009 Rs. 33,820/-]
Net Cash used in Investing Activities
Current
Year ended
31.03.2010
Rs. in million
Previous
Year ended
31.03.2009
Rs. in million
8,356.9
6,060.4
1,239.1
86.1
384.9
(1.8)
(2.7)
879.9
37.3
498.6
(0.4)
(0.2)
(37.1)
(0.8)
34.0
4.7
(90.9)
(252.2)
42.9
9,800.2
(0.6)
(1.7)
24.1
0.7
1.5
(0.5)
29.2
11.3
7,502.5
(3,113.4)
(279.7)
2,026.9
8,434.0
(1,672.4)
2.5
6,764.1
(2,012.2)
(1,283.4)
1,556.7
5,763.6
(916.1)
(152.1)
4,695.4
(6,708.5)
16.8
(29.3)
2.0
(83.8)
-
(3,399.1)
12.1
(1,534.3)
1,351.5
(1,566.0)
0.2
0.8
2.7
(6,799.3)
0.6
1.7
37.1
(5,096.2)
126
Current
Year ended
31.03.2010
Rs. in million
C. Cash Flow from Financing Activities
Proceeds from / (Repayments) of Borrowings (net)
Repayments of Foreign Currency Convertible Bonds
Premium on repayment of Foreign Currency Convertible Bonds
Issue of Equity Shares (ESOPs)
Securities Premium Received (net) (ESOPs)
Interest and finance charges paid (net)
Dividend paid
Corporate Dividend Tax paid
Net Cash Generated / (used in) from Financing Activities
Net increase / (decrease) in Cash and Cash Equivalents
Cash and Cash equivalents as at the beginning of the year
Cash and Cash equivalents taken over of subsidiary companies
on acquisition
Cash and Cash equivalents transferred on sale of investment in
subsidiary company [Refer note no. 22 of Schedule 18(B)]
Cash and Cash equivalents as at the end of the year
Previous
Year ended
31.03.2009
Rs. in million
2,972.7
(64.7)
(12.6)
3.0
104.4
(379.2)
(1,081.0)
(181.3)
1,361.3
1,326.1
680.8
(246.4)
1.7
51.9
(496.1)
(841.0)
(141.6)
(1,671.5)
(2,072.3)
2,706.6
-
46.5
(24.6)
1,982.3
680.8
Notes :
1. Cash and Cash equivalents include
Cash and Bank Balances (Refer Schedule 9)
2,015.3
777.7
Unrealised (gain) on foreign currency cash and cash equivalents
(33.0)
(96.9)
Total Cash and Cash equivalents
1,982.3
680.8
Net unrealised exchange difference during the year debited to
Profit and Loss Account
42.9
11.3
2. Rs. 6.7 million (previous year Rs. 3.8 million) being deposits under lien lodged with banks as margin money
not readily available to the Company.
3. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting
Standard 3 (AS-3), "Cash Flow Statement".
4. Previous year figures have been regrouped wherever necessary.
For Lupin Limited
M. S. Dharmadhikari
Partner
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
127
R. V. Satam
Company Secretary
Schedules Forming Part of the
Consolidated Balance Sheet
SCHEDULE 1 - SHARE CAPITAL
Authorised :
100,000,000 (previous year 100,000,000) Equity Shares of Rs. 10/- each
TOTAL
Issued, Subscribed and Paid-up
88,943,833 (previous year 82,819,550) Equity Shares of Rs. 10/- each
fully paid-up
TOTAL
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1,000.0
1,000.0
1,000.0
1,000.0
889.4
889.4
828.2
828.2
Notes :
Of the above equity sharesi) 37,311,048 (previous year 37,311,048) Equity Shares of Rs. 10/- each were allotted as fully paid-up without
payment being received in cash, pursuant to the Scheme of Amalgamation with erstwhile Lupin
Laboratories Limited.
ii) 40,152,494 (previous year 40,152,494) Equity shares of Rs. 10/- each have been allotted as fully paid-up bonus
shares by way of capitalisation of General Reserve.
iii) 606,294 (previous year 298,753) Equity Shares of Rs. 10/- each, fully paid-up have been allotted pursuant to Lupin
Employees Stock Option Plans. [Refer note no. 10 (a) of Schedule 18(B)].
Particulars of options on unissued share capital [Refer note no. 10(a) of Schedule 18(B)].
iv) 8,043,911 (previous year 2,227,169) Equity Shares of Rs. 10/- each, fully paid-up have been allotted on conversion
of Foreign Currency Convertible Bonds in accordance with the terms of the issue.
[Refer note no. 15 of Schedule 18(B)].
128
SCHEDULE 2 - RESERVES AND SURPLUS
Capital Reserve
- Investment Subsidies from Central Government
- Investment Subsidies from State Government
- On restructuring of capital of the Company under the Scheme
of Amalgamation
Capital Redemption Reserve
Securities Premium Account
Add: Received during the year*
Less: Premium on redemption of Foreign Currency Convertible
Bonds (net of tax of Rs. 6.5 million, previous year Rs. nil)
General Reserve
Add: Transferred from Profit and Loss Account
Amalgamation Reserve
Cash Flow Hedge Reserve
Add: Credited / (Debited) during the year (net)
(net of tax of Rs. 4.8 million, previous year Rs. nil)
(Refer note no. 13 (i) of Schedule 18(B))
Foreign Currency Translation Reserve
Less: (Debited)/Credited during the year (net)
[Refer note no. 17 (a) of Schedule 18 (B)]
Balance at the end of the year (A)
Deferred Employees Stock Options Cost
Less: Amortisation during the year
Balance at the end of the year (B)
(A-B)
Surplus in Profit and Loss Account
TOTAL
*
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1.0
1.0
8.2
8.2
254.7
263.9
254.7
263.9
126.5
126.5
1,731.4
3,344.6
12.6
1,361.4
370.0
-
5,063.4
1,731.4
7,015.4
1,500.0
8,515.4
5,515.4
1,500.0
7,015.4
317.9
317.9
(2,911.6)
3,087.4
(145.6)
(2,766.0)
175.8
(2,911.6)
187.2
(388.4)
(201.2)
128.7
58.5
187.2
2.9
6.1
9.0
2.9
2.9
2.2
6.1
4.7
3.6
5.4
2.9
0.7
2.2
0.7
10,521.8
24,788.9
6,688.6
13,420.0
Represents amount received on allotment of 307,541 (previous year 167,586) Equity Shares of Rs. 10/- each, pursuant to
"Lupin Employees Stock Option Plans" and 5,816,742 (previous year 571,069) Equity Shares of Rs. 10/- each on
conversion of Foreign Currency Convertible Bonds in accordance with the terms of the issue. [Refer notes no. 10 (a) and
15 of Schedule 18(B)].
129
Notes
SCHEDULE 3 - SECURED LOANS
Term Loans
From Banks
- Foreign Currency Loans
- Rupee Loans
Vehicle Loans
Finance Lease Obligations
[Refer Note no. 9 (b) of Schedule 18(B)]
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1,164.4
22.4
1,186.8
7,404.9
130.7
8,722.4
1,444.9
27.3
1,472.2
1.4
6,000.7
94.9
7,569.2
1
2
3
4
TOTAL
Notes :
1.
a.
2.
3.
4.
5.
Term loans of a subsidiary company located at Japan aggregating Rs. 1,089.5 million (previous year Rs. 1,334.1 million) are secured by first legal /
equitable mortgage on immovable assets of the said subsidiary.
b.
Term loans from Banks of an Indian subsidiary company aggregating Rs. 33.8 million (previous year Rs. 61.5 million) are secured by hypothecation of
Fixed Assets and Equitable mortgage on Factory Land and Building of the said subsidiary at Dabhasha and are further secured by letter of comfort
provided by the Company.
c.
Term loans of a subsidiary company located at Germany aggregating Rs. 63.5 million (Previous year Rs. 76.6 million) are secured against mortgage
of immovable property of the said subsidiary.
Vehicle loans were secured by charge on the concerned vehicles purchased by the subsidiary company.
Working capital loans from Banks comprises of :
a.
Cash Credit, Short Term Loans, Packing Credit, Post Shipment Credit, Bills Discounted and Overseas Import Credit availed by the Company
aggregating Rs. 7,040.0 million (previous year Rs. 5,651.2 million) and are secured by hypothecation of inventories and book debts and movable
current assets at godowns, depots, in course of transit or on high seas and a second charge on immovable properties and movable assets of the
Company both present and future situated at (a) Aurangabad, Pune and Tarapur in Maharashtra, (b) Ankleshwar in Gujarat, ( c) Mandideep in
Madhya Pradesh, (d) Verna in Goa and (e) Bari Brahmana in Jammu and Kashmir.
b.
Rs.199.2 million (previous year Rs184.7 million) being Cash Credit, Packing Credit and Post Shipment Credit availed by an Indian subsidiary
company are secured by hypothecation of inventories and book debts of the said subsidiary.
c.
Rs. nil (previous year Rs. 32.0 million ) being working capital loans availed by a subsidiary company located at Australia comprises of multiple
advance and overdraft facilities which were secured by Fixed and Floating charge over all assets of the said subsidiary and were further guaranteed
by the Company by way of standby letter of credit issued by the Company's bankers.
d.
Rs. 14.5 million (previous year Rs. nil) being working capital loans availed by a subsidiary company located at Philippines are secured by way of charge
against receivables from a distributor, pledge of finished goods and by letter of comfort from the Company.
e.
Rs. 151.2 million (previous year Rs. 132.8 million) being cash credit facility availed by a subsidiary company located at Germany is guaranteed by the
Company by way of standby letter of credit issued by the Company's bankers under working capital facility and it is secured as detailed in note 3 (a) above.
Finance lease obligations to Financial Institutions represent present value of minimum lease rentals payable and are secured by hypothecation of
concerned plant, machinery and equipments and vehicles.
Working Capital Loans from Banks include Foreign Currency Loans of Rs. 5,378.0 million (previous year Rs. 3,093.2 million).
SCHEDULE 4 - UNSECURED LOANS
Bonds
Foreign Currency Term Loans from Banks
Foreign Currency Convertible Bonds
[Refer Note no. 15 of Schedule 18(B)]
Working Capital Loans from Banks (Refer note 1 below)
Other Loans:
a) Sales Tax Deferment Loan - Government of Maharashtra
b) Loans from Council for Scientific and Industrial Research,
Department of Science and Technology, Government of India
TOTAL
Notes :
1. Working Capital Loans from Banks include Foreign currency loans of
Rs. 645.4 million (previous year Rs. nil)
2. Amounts due within a year
a) Bonds
b) Term Loans from Banks
c) Other loans (Sales Tax Deferment Loan - Government of Maharashtra)
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
423.2
1,174.5
-
368.7
496.9
3,363.1
645.4
-
63.0
370.0
64.8
370.0
2,676.1
4,663.5
240.5
241.2
2.0
111.2
267.4
0.2
130
131
Vehicles
TOTAL
TOTAL
14,858.8
-
487.5
-
2,213.3
5,476.2
1.4
59.2
1,919.7
-
39.9
-
31.2
110.8
2,401.2
721.9
166.4
24.5
18,200.3
22,937.1
40.9
135.6
2,091.6
10.1
136.4
-
73.9
434.3
14,108.2
4,740.6
401.5
764.0
As at
March 31,
2010
-
4,697.5
6,188.3
17.7
11.4
220.3
8.8
89.7
10.0
26.5
147.0
4,603.5
1,032.6
20.8
-
263.6
-
-
-
-
-
-
-
-
-
-
-
-
883.4
1,243.1
8.3
16.0
200.5
0.5
12.3
-
7.4
30.3
828.1
133.6
6.1
-
(343.8)
359.2
(9.2)
1.7
26.1
0.1
2.7
10.0
17.3
4.2
268.5
37.8
-
-
For the Deductions/
Year Adjustments
Up to Additions on
March 31, acquistion of
2009
subsidiary
companies
6,188.3
7,072.2
35.2
25.7
394.7
9.2
99.3
-
16.6
173.1
5,163.1
1,128.4
26.9*
-
Upto
March 31,
2010
19,443.6
3,578.7
12,012.0
15,864.9
5.7
109.9
1,696.9
0.9
37.1
-
57.3
261.2
8,945.1
3,612.2
374.6
764.0
As at
March 31,
2010
(Rs.in million)
14,251.7
2,239.7
12,012.0
24.0
74.2
145.4
1.3
10.3
-
25.9
182.0
7,493.9
3,051.4
214.3
789.3
As at
March 31,
2009
Net Block
(Rs. in million)
Note no. 4 (Contd.)
2009-10
2008-09
Particulars
Gross Block Depreciation
Gross Block Depreciation
Free Hold Land
49.8
(153.0)
Buildings
59.6
36.6
(155.0)
(81.9)
145.5
112.2
(435.7)
(334.3)
3.5
3.5
(9.6)
(8.4)
Vehicles
1.0
0.9
(0.4)
(0.4)
Intangible Assets
-Goodwill
1.1
0.4
-Computer software
3.4
2.5
(7.5)
(5.3)
-Trademark and Licences
#
0.1
(6.2)
(5.8)
-Dossiers/Marketing rights
186.1
24.6
(40.9)
(34.6)
under finance lease
11.4
2.6
(8.9)
(1.2)
Total
460.3
183.0
(816.1)
(471.5)
# Rs. 2,591/5. Depreciation for the year includes Rs. 4.0 million (previous year Rs. 3.5 million) being depreciation
capitalised. [Refer Note no. 4(b) in Schedule 18(B)]
(640.7)
739.4
2.2
9.2
193.8
-
3.5
10.0
9.7
5.5
390.4
65.3
-
49.8
Additions Deductions/
Adjustments
Gross Block
Amounts written off in respect of leasehold land for the period of lease which
has expired.
Notes :
1. Cost of Buildings includes cost of shares in co-operative societies of Rs. 1,000/(previous year Rs. 1,000/-).
2. Capital work-in-progress includes capital advances paid, machinery under
installation/in transit and construction and erection materials (including those
lying with contractors) Manufacturing Knowhow/Product Marketing Rights and
pre-operative expenses. [ Refer Note no. 4 (a) and (b) in Schedule 18(B)]
3. Additions to Fixed Assets include items of fixed assets aggregating Rs. 741.9
million (previous year Rs. 458.1 million) located at Research and Development
centres of the Company.
4. Adjustments from the Gross Block and Depreciation and Amortisation includes
adjustments on account of exchange loss / (gain) (net) on translation into INR
in respect of the non-integral foreign operations of the group.
*
Previous Year
18,200.3
85.6
41.7
Plant , Machinery and Equipment
-
10.1
-
365.7
B) Assets Under Finance Lease
-
100.0
10.0
52.4
329.0
- Dossiers and Marketing Rights
- Trademarks and Licences
- Computer softwares
- Goodwill
Intangible Assets - Acquired :
Vehicles
-
-
12,097.4
4,084.0
Plant , Machinery and Equipments
Buildings
-
789.3
235.1
Lease Hold Land
-
As at Additions on
April 01, acquisition of
2009
subsidiary
companies
Free Hold Land
A) Owned Assets
Particulars
SCHEDULE 5 - FIXED ASSETS
SCHEDULE 6 - INVESTMENTS
(At cost / carrying amount unless otherwise stated)
Long Term Investments
1. In Government Securities - Unquoted (Non Trade)
National Savings Certificates
(31.03.2010 Rs. 16,000/- , 31.03.2009 Rs. 16,000/- )
[Deposited with Government Authorities
31.03.2010 Rs. 16,000/- , 31.03.2009 Rs. 16,000/-]
2. In Shares
a) In Associate Companies - Unquoted (Trade)
- Shinko Yakuhin, Japan
Number
Face
Value
As at
31.03.2010
(92)
JPY
50,000
-
Less: Share of loss
As at
31.03.2009
Rs. in million
2.1
-
- Generic Health Pty Ltd. Australia
[Refer note no. 24 Schedule 18(B)]
Less: Share of loss
30,199,214
(18,667,967)
AUD
1
326.6
102.2
224.4
b) In Others - Unquoted (Trade)
- Biotech Consortium India Ltd.
- Bharuch Enviro Infrastructure Ltd.
(31.03.2010 Rs. 44,100/- , 31.03.2009 Rs. 44,100/-)
- Bharuch Eco-Acqua Infrastructure Ltd.
- Tarapur Environment Protection Society
- Enviro Infrastructure Co. Ltd.
- Japan Medical Products Exporter's
Association, Japan
(31.03.2010 Rs. 24,045/- , 31.03.2009 Rs. 25,745/-)
- The Pharmaceuticals and Medical
Devices Agency, Japan
- Osaka Fire Mutual Aid Association, Japan
(31.03.2010 Rs. 481/- , 31.03.2009 Rs. 515/-)
- Frankfurter Volksbank EG Bank
(31.03.2010 Rs. 30,270/- , 31.03.2009 Rs. 33,770/-)
- Philippines Long Distance Telephone Company
(31.03.2010 Rs. 15,896/- , 31.03.2009 Rs. 16,800/-)
50,000
(50,000)
4,410
(4,410)
924,675
(924,675)
9,248
(9,248)
100,000
(100,000)
Rs.
10
Rs.
10
Rs.
10
Rs.
10
Rs.
10
10
(10)
30
(30)
JPY
5,000
JPY
10,000
10
(10)
10
(10)
200
(200)
JPY
100
Euro
50
PHP
1
- Senshu Ikeda Holdings (Refer note 2 below)
- Ikeda Bank, Japan (Refer note 2 below)
- Mizuho Financial Group, Japan
- Towa Pharmaceutical, Japan
12,820
(12,820)
38,480
(Nil)
Nil
(2,080)
5,250
(5,250)
24,200
(24,200)
33.4
171.1
0.5
0.5
9.2
9.2
0.9
0.9
1.0
1.0
0.1
0.1
11.7
c) In Others - Quoted (Non Trade)
- Mitsubishi UFJ Finance Group, Japan
2.1
204.5
11.7
19.0
20.4
6.7
-
-
7.1
5.8
6.2
19.2
20.6
132
Number
- Risona Holdings, Japan
Face
Value
4,100
(4,100)
As at
31.03.2010
10.0
60.7
32.5
Less: Provision for diminution in
value of investments
65.0
33.5
28.2
3. In Bonds
- DWS Top 50
- Lingohr-Systematik
- Allianz-dit BRIC
- First Private Europa
(35.39)
(62.94)
(23.43)
(82.59)
EURO
104.23
EURO
88.65
EURO
157.49
EURO
67.56
As at
31.03.2009
Rs. in million
10.7
31.5
-
0.3
-
0.4
-
0.2
-
0.4
264.3
1.3
215.6
: Aggregate Cost/Carrying Value
28.2
: Aggregate Market/Repurchase Value of Shares/Bonds
28.2
b) Unquoted Investments : Aggregate Cost/Carrying Value
236.1
2) 38,480 shares of Senshu Ikeda Holdings were received in exchange of 2,080 shares of Ikeda Bank.
3) All the Investments in shares/bonds are fully paid up.
32.8
32.2
182.8
TOTAL
Notes :1) a) Quoted Investments
SCHEDULE 7 - INVENTORIES
Stock-in-trade
- Raw and Packing Materials
- Work-in-Process
- Finished Goods (including Traded Goods)
Consumable Stores, Spares and Fuel
TOTAL
SCHEDULE 8 - SUNDRY DEBTORS
(Unsecured)
Debts outstanding for a period exceeding six months
- Considered Good
Other Debts
- Considered Good
Less: Provision for Doubtful Debts
TOTAL
133
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
3,089.3
2,062.4
4,390.6
172.6
9,714.9
3,141.6
2,147.6
4,113.1
169.3
9,571.6
260.9
110.8
371.7
591.6
78.8
670.4
11,004.8
0.3
11,005.1
11,376.8
111.1
11,265.7
8,588.1
0.4
8,588.5
9,258.9
79.2
9,179.7
SCHEDULE 9 - CASH AND BANK BALANCES
Cash in hand [including Cheques on hand of Rs. 44.2 million
(previous year Rs. 36.7 million)]
Bank Balances :
- With Scheduled Banks
In Current Accounts (including remittances in transit)
In Exchange Earners Foreign Currency Account
In Deposit Accounts [including Margin Deposits Rs. 6.7 million
(previous year Rs. 3.8 million)].
- With others
In Current Account
In Deposit Accounts
TOTAL
Note :
The bank balances in deposit accounts include interest accrued on fixed
deposits amounting to Rs. 2.6 million (previous year Rs. 1.3 million)
SCHEDULE 10 - LOANS AND ADVANCES
Unsecured, considered good unless otherwise stated
Loan to an associate company
Advances recoverable in cash or in kind or for value to be received
- Considered Good
Less: Provision for Doubtful Advances
Note:
Includes fair value of foreign exchange forward contracts
Rs. 672.2 million (previous year Rs. nil)
Deposits
Balances with Customs and Excise Authorities
Advance payment of Income Tax (net of Provision)
Advance payment of Fringe Benefit Tax (net of Provision)
MAT Credit Entitlement
TOTAL
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
51.2
41.4
312.8
0.3
10.5
49.7
0.3
28.6
1,061.6
578.9
2,015.3
527.6
130.1
777.7
83.8
-
3,142.0
6.5
3,148.5
6.5
3,142.0
1,835.4
6.5
1,841.9
6.5
1,835.4
472.6
19.0
6.2
4.8
1,030.2
4,758.6
480.1
27.2
201.3
7.3
228.4
2,779.7
134
SCHEDULE 11 - CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Acceptances
Sundry Creditors
- Total outstanding dues of Micro Enterprises and Small Enterprises
- Total outstanding dues of creditors other than Micro Enterprises
and Small Enterprises
Other Liabilities (Refer note below)
Interest Accrued but not due on loans
Unclaimed Dividend *
Unclaimed Matured Fixed Deposits *
Unclaimed Interest Warrants *
* There are no amounts due and outstanding to be credited to
Investor Education and Protection Fund
As at
31.03.2010
Rs. in million
As at
31.03.2009
Rs. in million
1,733.0
1,265.1
88.5
65.8
6,999.7
762.1
52.1
11.1
1.9
1.0
5,771.6
3,172.9
45.9
9.4
2.7
1.4
9,649.4
10,334.8
33.2
88.0
251.3
381.3
1,224.7
205.5
59.1
2,243.1
11,892.5
23.0
53.4
194.3
332.2
1,035.3
175.9
13.0
1,827.1
12,161.9
Note :
Other Liabilities includes fair value of foreign exchange forward,
currency option and interest rate swap contracts Rs. 538.0 million
Provisions
For Gratuity
For Other Retirement Benefits
For Compensated Absences
For Taxation (including Wealth Tax) (net of Advance Tax)
For Proposed Dividend on Equity Shares
For Corporate Tax on Dividend
For Other Provisions [Refer note no. 20 of schedule 18(B)]
TOTAL
135
Schedules Forming Part of the
Consolidated Profit and Loss Account
Current
Year Ended
31.03.2010
Rs. in million
Previous
Year Ended
31.03.2009
Rs. in million
249.4
251.0
80.1
332.4
41.0
58.1
12.6
209.1
69.0
1,302.7
345.8
111.8
79.3
212.6
12.0
2.1
4.1
79.4
60.5
907.6
-
0.4
0.8
2.7
0.6
1.7
0.2
37.1
45.8
5.6
90.9
1.8
142.0
0.5
46.1
12,484.7
7,306.0
6,260.7
10,838.5
5,875.3
5,303.0
107.6
11.8
6,453.0
287.0
6,260.7
(96.5)
(670.7)
TOTAL
19,694.2
16,043.1
TOTAL
5,099.1
488.1
284.3
5,871.5
4,267.2
382.0
222.1
4,871.3
SCHEDULE 12 - OTHER OPERATING INCOME
Export Benefits and other Incentives
Income from Research Services
Income from Product Registration Services (Dossiers)
Service Charges
Insurance Claims
Compensation Received
Credit balances written back
Exchange Rate Difference on translation (net)
Miscellaneous Income
TOTAL
SCHEDULE 13 - OTHER INCOME
Profit on Sale of Current Investments - Non Trade
Dividend on Long Term Investments - Trade
[31.03.2010 - Rs. 4,410/- ; 31.03.2009 Rs. 33,820/-]
[Tax Deducted at Source Rs. 0.1 million (previous year - Rs. 1.0 million)]
Other Interest (net) (including interest on income tax refunds)
[Tax Deducted at Source Rs. 0.7 million (previous year - Rs. 0.6 million)]
Profit on Sale of investments in subsidiary
Profit on Sale of Long Term Investments - Trade
Provision for diminution in value of Investments written back
TOTAL
SCHEDULE 14 - COST OF MATERIALS
Raw and Packing Materials Consumed
Opening stock of Finished Goods (including Traded Goods)
and Work-in-Process
Add: Stock Acquired alongwith acquisition of Marketing Right
Add: Stock Acquired on Acquisition of subsidiaries
Less: Stock transferred on sale of subsidiary
Less: Closing stock of Finished Goods (including Traded Goods)
and Work-in-Process
Increase in Stock of Finished Goods (including Traded Goods)
and Work-in-Process
SCHEDULE 15 - PERSONNEL EXPENSES
Salaries, Wages and Bonus
Contribution to Gratuity, Provident and Other Funds
Welfare Expenses
136
SCHEDULE 16 - MANUFACTURING AND OTHER EXPENSES
Processing Charges
Consumable Stores and Spares
Repairs and Maintenance:
- Buildings
- Plant and Machinery
- Others
Rent
Rates and Taxes
Insurance
Power and Fuel
Contract Labour Charges
Excise Duty (net)
Selling and Promotion Expenses
Commission, Brokerage and Discounts
[Including cash discount of Rs. 5.5 million (previous year Rs. 4.8 million)]
Freight and Forwarding
Postage and Telephone Expenses
Travelling and Conveyance
Legal and Professional Charges
[Net of recoveries of Rs. 143.6 million (previous year Rs. 152.2 million)].
Donations
Clinical and Analytical Charges
Loss on Sale/Discard of Fixed Assets (net)
Bad Debts/Advances written off
Provision for diminution in value of long term investment
Directors Sitting Fees
Exchange Rate Difference on translation (net)
(includes Printing and Stationery, Vehicle Expenses,
Product Registration Fees, Audit Fees, etc.)
TOTAL
SCHEDULE 17 - INTEREST AND FINANCE CHARGES
Interest on Debentures
Interest on Fixed Loans
Others
TOTAL
137
Current
Year Ended
31.03.2010
Rs. in million
Previous
Year Ended
31.03.2009
Rs. in million
524.4
1,094.2
372.0
898.6
144.6
305.1
223.0
266.3
114.8
181.8
1,546.6
287.5
77.6
3,042.7
774.1
94.5
234.7
126.6
213.9
69.9
136.5
1,391.1
224.8
(2.2)
2,278.1
656.5
652.9
140.1
157.7
842.7
847.2
610.2
110.4
134.8
629.1
494.2
100.4
863.7
86.1
6.9
34.0
1.2
152.1
835.6
52.6
662.2
37.3
18.1
24.1
1.5
0.7
257.2
631.8
13,303.3
10,359.2
35.5
83.1
266.3
384.9
12.5
73.2
412.9
498.6
Schedules Forming Part of the Consolidated Accounts
SCHEDULE 18 - SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS
A) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation of Financial Statements:
i) The financial statements of the subsidiaries and associates used in the consolidation are drawn upto the
same reporting date as that of the Company, namely March 31, 2010.
ii) The accompanying financial statements have been prepared under historical cost convention and on
accrual basis of accounting, in accordance with the generally accepted accounting principles in India
and provisions of the Companies Act, 1956.
b) Principles of Consolidation:
i) The financial statements of the Company and its subsidiaries have been consolidated in accordance
with the Accounting Standard 21 (AS-21) "Consolidated Financial Statements", on line-by-line basis by
adding together the book value of like items of assets, liabilities, income and expenses, after fully
eliminating intra-group balances, intra-group transactions and the unrealized profits/losses.
ii) The financial statements of the Company and its subsidiaries have been consolidated using uniform
accounting policies for like transactions and other events in similar circumstances.
iii) The excess of cost to the Company of its investment in the subsidiaries, on the acquisition dates over and
above the Company's share of equity in the subsidiaries, is recognised in the financial statements as
Goodwill on Consolidation and carried forward in the accounts [Refer note no. 16 of Schedule 18(B)]. The
said Goodwill is not amortised, however, it is tested for impairment at each Balance Sheet date and the
impairment loss, if any is provided for.
iv) Minority Interest in the net assets of the consolidated subsidiaries consist of :
a) The amount of equity attributable to minorities as at the date on which the investment in a
subsidiary is made and,
b) The Minorities share of movements in equity since the date the parent-subsidiaries relationship came
in existence. The losses applicable to the minority in excess of the minority interest in the equity of the
subsidiary and further losses applicable to the minority, are adjusted against the majority interest
except to the extent that the minority has a binding obligation to and is able to make good the losses. If
the subsidiaries subsequently reports profit, all such profits are allocated to the majority interest until
the minority's share of losses previously absorbed by the majority has been recovered.
c) Minority Interest is presented separately from the liabilities or assets and the equity of the
shareholders in the consolidated Balance Sheet. Minority Interest in the income or loss of the
Company is separately presented.
v) In case of associates, where the Company directly or indirectly through subsidiaries holds more than 20% of
equity, investments in associates are accounted for using equity method in accordance with Accounting
Standard 23 (AS-23) "Accounting for Investment in Associates in Consolidated Financial Statements".
vi) The Company accounts for its share in the change in the net assets of the associates, post acquisition,
after eliminating unrealized profit and losses resulting from transactions between the Company and its
associates, through its profit and loss account to the extent such change is attributable to the associates'
profit and loss account and through its reserves for the balance.
vii) The difference between the cost of investment in the associates and the share of net assets at the time of
acquisition of share in the associates is identified as Goodwill or Capital Reserve, as the case may be, and
included in the carrying amount of investment in the associates, and so disclosed. [Refer note no. 16 of
Schedule 18(B)]
viii)The difference between the proceeds from sale/disposal of investment in a subsidiary and the carrying
amount of assets less liabilities as of the date of sale/disposal is recognised in the consolidated
statement of profit and loss account as the profit or loss on sale/disposal of investment in subsidiary.
c) Use of Estimates:
The preparation of financial statements in conformity with the generally accepted accounting principles
require, estimates and assumptions to be made that affect the reported amounts of Assets and Liabilities on
the date of the financial statements and the reported amounts of Revenues and Expenses during the
reporting period. Differences between the actual results and estimates are recognised in the period in
which the results are known/materialised.
138
CONSOLIDATED FINANCIAL STATEMENTS (CONTD.)
d) Fixed Assets:
Fixed Assets are stated at cost net of cenvat, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes directly attributable cost of bringing the assets to their working conditions for
their intended use.
e) Intangible Assets:
Intangible Assets are recognised only if it is probable that the future economic benefits that are attributable
to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The Intangible
Assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated
impairment losses, if any.
f)
Foreign Currency Transactions / Translation:
i) Transactions in foreign currency are recorded at the original rate of exchange in force at the time
transactions are effected.
ii) Exchange difference arising on settlements during the year of short term monetary items denominated
in foreign currency; and exchange difference arising on the reporting of short term monetary items
denominated in foreign currency which are outstanding at the year-end using the exchange rates
prevailing at the balance sheet date, are recognized in the Profit and Loss Account.
iii) In terms of the Notification relating to AS 11 issued by the Ministry of Corporate Affairs in March 2009:
a) The exchange difference arising on reporting of the "Long Term Foreign Currency Monetary
Items" at the rates different from those at which they were initially recorded during the period or
reported in the previous financial statements and the exchange difference on settlement of such
items, in so far as such items relate to the acquisition of a depreciable capital asset, are added or
deducted as the case may be, from the cost of the respective asset and depreciated over the
balance life of those assets and
b) In other cases, these are accumulated in a "Foreign Currency Monetary Item Translation Difference
Account" and amortised over the balance period of such long term asset/liability but not beyond
31st March, 2011.
iv) In case of forward exchange contracts entered into to hedge the foreign currency exposure in respect of
short term monetary items, the difference between the exchange rate on the date of such contracts and
the year end rate is recognized in the Profit and Loss Account. Any profit/loss arising on cancellation of
forward exchange contract is recognized as income or expense of the year. Premium/discount arising on
such forward exchange contracts is amortised as income/expense over the life of contract.
v) Foreign offices/branches:
In respect of the foreign offices/branches of the Company, which are integral foreign operations, all
revenues and expenses (except depreciation) during the year are reported at average rate. Monetary
assets and liabilities are restated at the year-end exchange rate. Non monetary assets and liabilities are
stated at the rate prevailing on the date of the transaction. Net gain/loss on foreign currency translation
is recognised in the Profit and Loss Account.
vi) Foreign Subsidiaries:
In case of foreign subsidiaries, the local accounts are maintained in their local currency. The financial
statements of the subsidiaries, whose operations are integral foreign operations for the Company, have
been translated to Indian Rupees on the following basis:
i) All income and expenses are translated at the average rate of exchange prevailing during the year.
ii) Monetary assets and liabilities are translated at the closing rate on the Balance Sheet date.
iii) Non monetary assets and liabilities are translated at historical rates.
iv) The resulting exchange difference is accounted in 'Exchange Rate Difference on Translation
Account' and is charged/credited to the Profit and Loss Account.
The financial statements of subsidiaries, whose operations are non integral foreign operations for the
Company, have been translated to Indian Rupees on the following basis:
i) All income and expenses are translated at the average rate of exchange prevailing during the year.
ii) Monetary and non monetary assets and liabilities are translated at the closing rate on the Balance Sheet date.
iii) The resulting exchange difference is accounted in 'Foreign Currency Translation Reserve' and
carried in the Balance Sheet.
139
g) Derivative Instruments and Hedge Accounting:
Forward and Option Contracts in the nature of highly probable forecast transactions and contracts for
interest rate swaps entered into for hedging the risk of foreign currency exposure and interest related
risk in respect of variable rate debts respectively are accounted based on recognition and
measurement principles stated in Accounting Standard 30 (AS-30) "Financial Instruments: Recognition
and Measurements". The amount removed from the Cash Flow Hedge Reserve, on the occurrence of the
hedged transaction, is included in the Profit and Loss Account, against the related hedged item.
h) Investments:
Long-term investments are stated at cost which includes expenses directly incurred on acquisition of
investments. Investments in equity/ordinary shares in foreign currency are stated at cost by converting at
exchange rate prevailing at the time of acquisition. Provision for diminution in the value of long term
investments is made only if such decline is other than temporary. Current investments are carried at cost or
fair value, whichever is lower.
i)
Inventories:
Stock-in-trade and Stock of consumable stores, spares and furnace oil are valued at lower of cost and net
realisable value.
In case of the Company, the Indian subsidiary companies and a subsidiary company at Germany, the cost is
computed based on moving weighted average in respect of all procured materials and traded finished goods and
includes appropriate share of utilities and other overheads in respect of Work-in-Process and Finished Goods.
In case of other subsidiaries, cost of finished goods including traded goods, raw materials, supplies and
others are computed by using the first in first out method. Cost also includes all charges incurred for
bringing the inventories to their present location and condition.
j)
Revenue Recognition:
i) Revenue from sale of goods is recognised when the significant risks and rewards in respect of ownership
of products are transferred by the Company.
ii) Revenue (including in respect of insurance or other claims, interest etc.) is recognised when it is
reasonable to expect that the ultimate collection will be made.
iii) Revenue from product sales is stated net of returns, sales tax/VAT and applicable trade discounts
and allowances.
iv) Income from research and product registration (dossiers) services and sale of patent rights is recognised
as revenue when earned in accordance with the terms of the relevant agreements.
v) Dividend from investment is recognised as revenue when right to receive the payments is established.
vi) Interest income is recognised on time proportion basis.
vii) Revenue from service charges is recognized on rendering of the related services in accordance with the
terms of the agreement.
k) Export Benefits:
Export benefits available under prevalent schemes are accrued in the year in which the goods are exported
and are accounted to the extent considered receivable.
l)
Excise Duty:
Excise duty is accounted on the basis of payments made in respect of goods cleared and provision is made
for goods lying in bonded warehouses.
m) Depreciation and Amortisation:
Depreciation on fixed assets is provided on straight line basis in the manner and at the rates prescribed in
Schedule XIV to the Companies Act, 1956, except for the following Fixed Assets and Intangible Assets which
are depreciated/amortised over their useful life (being lower than the life considering the rates prescribed
in Schedule XIV to the Companies Act, 1956) as determined by the Management on the basis of technical
evaluation.
140
i)
The Company
Assets
Captive Power Plant at Tarapur
Certain assets provided to employees
Leasehold Land
Intangible Assets (Computer Softwares)
15 years
3 years
Over the period of lease
6 years
ii) Subsidiaries at Japan
Assets
Buildings*
Attached facilities*
Tools
Vehicles **
Intangibles (on straight line method)
Marketing Rights
Computer Softwares
Trademark and Licences
7 to 38 years
3 to 18 years
4 - 8 years
5 years
4 to 15 years
5 years
5 years
5 years
10 years
*
**
For assets acquired from April 1, 1998, straight line method is followed.
Vehicles are depreciated over a period of 2-3 years on straight line basis by Amel Touhoku, 100% step down subsidiary of
the Company.
*** For all other assets, depreciation is provided on written down value method.
iii) Subsidiary at USA
Assets
Computers
Furniture and Fittings
Office and Other Equipment
3 years
5 years
7 years
iv) Subsidiary at Australia
Assets
Vehicles
8 years
v) Subsidiary at South Africa
Assets
Vehicles
Office Equipments
Computers
Computer Softwares
Trade Marks
Dossiers/Marketing Rights
*
141
5 years
5 years
6 years
5 years
3 years
2 years
10 years
10 -20 years *
Considering product life cycle, market demand for products, expected usage and future economic benefits to the
Company.
vi) Subsidiary at Germany
Assets
Buildings
Computers
Vehicles
Computer Softwares
Marketing Rights
10 - 50 years
5 - 15 years
5 - 13 years
3 - 5 years
5 years
1 - 5 years
3 - 10 years
vii) Subsidiary at Philippines
Assets
Leasehold improvements
Vehicles
Warehouse Equipments
Computer Softwares
Marketing Rights
2 years
5 years
5 years
3 years
3 years
10 years
viii) Subsidiary at Switzerland
Assets
Computer
Marketing Right
3 years
5 years
n) Employee Benefits :
a) Post Employment Benefits and Other Long Term Benefits:
i) Defined Contribution Plan:
Contribution for the year paid/payable to defined contribution retirement benefit schemes are
charged to Profit and Loss Account.
ii) Defined Benefit and Other Long Term Benefit Plans:
Liabilities towards defined benefit plans and other long term benefits viz. gratuity and compensated
absences expected to occur after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are carried out at the balance
sheet date. Actuarial gains and losses are recognised in the Profit and Loss Account in the period of
occurrence of such gains and losses. Past service cost is recognised immediately to the extent
benefits are vested, otherwise it is amortised on straight-line basis over the remaining average
period until the benefits become vested.
The retirement benefit obligation recognised in the Balance Sheet represents the present value of the
defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the
present value of available refunds and reductions in future contributions to the scheme.
b) Short-Term Employee Benefits:
Short-term employee benefits expected to be paid in exchange for the services rendered by employees
are recognised undiscounted during the period employee renders services. These benefits include
performance incentives.
c) Employee Termination Benefits Costs:
Compensation to employees who have opted for retirement under the Voluntary Retirement Scheme of
the Company is charged to the Profit and Loss Account in the year of exercise of option by the employees.
o) Taxes on Income:
Income Taxes are accounted for in accordance with Accounting Standard 22 (AS- 22) "Accounting for Taxes
on Income". Tax expense comprises both Current Tax and Deferred Tax. Current tax is measured at the
amount expected to be paid or recovered from the tax authorities using the applicable tax rates.
142
Minimum Alternate Tax (MAT) credit entitlement is recognized as an asset by crediting the Profit and Loss
Account and disclosing an equivalent amount as an asset under 'Loans and Advances' in accordance with
guidance note on "Accounting for Credit Available in respect of Minimum Alternate Tax under the Income
Tax Act, 1961" issued by the Institute of Chartered Accountants of India.
Deferred Tax assets and liabilities are recognised for future tax consequence attributable to timing differences
between taxable income and accounting income that are measured at relevant enacted or substantively
enacted tax rates. At each Balance Sheet date the Company reassesses unrecognised deferred tax assets, to the
extent they become reasonably certain or virtually certain of realisation, as the case may be.
The deferred tax assets and deferred tax liabilities are off set if i) there exists a legally enforceable right to set off the assets against liabilities representing current tax and
ii) the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same
governing taxation laws.
p) Fringe Benefit Tax:
Fringe Benefit Tax was recognised by the Company and Indian subsidiaries in accordance with the relevant
provision of the Income Tax Act, 1961 and the Guidance Note on Fringe Benefits Tax issued by The Institute
of Chartered Accountants of India.
q) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor
are classified as operating lease. Lease payments under operating leases are recognised as expenses on
accrual basis in accordance with the respective lease agreements.
r) Finance Leases:
Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are
classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair
value or the present value of minimum lease payments and a liability is created for an equivalent amount.
The rent obligations net of interest charges are reflected as secured loans.
s) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognised when there is a
present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the Notes to Accounts. Contingent Assets are
neither recognised nor disclosed in the financial statements.
t) Borrowing Costs:
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalised as part of
the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get
ready for its intended use. All other borrowing costs are charged to revenue.
u) Stock based Compensation:
The compensation cost of stock options granted to employees is measured by the intrinsic value method,
i.e. the difference between the market price of the Company's shares on the date of the grant of options and
the exercise price to be paid by the option holders. The compensation cost if any, is amortised uniformly
over the vesting period of the options.
v) Government Grants:
Government grants are accounted when there is reasonable assurance that the enterprise will comply with
the conditions attached to them and it is reasonably certain that the ultimate collection will be made.
Capital grants relating to specific fixed assets are reduced from the gross value of the respective fixed assets.
Revenue grants are recognised in the Profit and Loss Account.
w) Research and Development :
Revenue Expenditure incurred on research and development is charged to the respective heads in the
Profit and Loss Account, in the year it is incurred and Capital Expenditure there on is included in the
respective heads under Fixed Assets.
x) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An
impairment loss is charged to Profit and Loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
143
B) NOTES TO CONSOLIDATED ACCOUNTS
1. The Consolidated Financial Statements present the consolidated accounts of Lupin Limited ("the
Company") and the following subsidiaries and associates:
Name of Entities
Subsidiaries
Lupin Pharmaceuticals Inc.
Kyowa Pharmaceutical Industry Co., Ltd.
Amel Touhoku
Novodigm Ltd.
Hormosan Pharma GmbH. (from 25th July, 2008)
Pharma Dynamics (Proprietary) Ltd. (from 1st March, 2008)
Max Pharma Pty Ltd. (upto 31st May 2009)
Lupin Australia Pty. Ltd.
Lupin Holdings B. V.
Lupin Herbal Ltd.
Lupin Atlantis Holdings SA
Multicare Pharmaceuticals Philippines, Inc. (from 26th March, 2009)
Lupin (Europe) Ltd. (from 5th June 2009)
Lupin Pharma Canada Ltd. (from 18th June 2009)
Associates
Generic Health Pty Ltd.
Shinko Yakuhin (upto 10th March 2010)
Country of
Incorporation
U.S.A
Japan
Japan
India
Germany
South Africa
Australia
India
Australia
Netherlands
India
Switzerland
Philippines
United Kingdom
Canada
Australia
Japan
Proportion of
Ownership
Interest
100%
100%*
100%**
100%
100%*
60%*
100%*
100%
100%
100%
100%
100%*
51%*
100%
100%*
49.9%*
25.9%***
*
Ownership interest held through Lupin Holdings B.V. Netherlands.
** Wholly owned subsidiary of Kyowa Pharmaceutical Industry Co., Ltd., Japan.
*** Ownership interest held through Kyowa Pharmaceutical Industry Co., Ltd., Japan.
The consolidated accounts thus include the results of the aforesaid subsidiaries and associates and there are no
other body corporate/entities, where the Company holds more than 50% of the share capital or where the
Company can control the composition of the Board of Directors/Governing Bodies of such Companies/Entities,
where the holding may be less than 50%.
2. Estimated amount of contracts remaining to be executed on capital account and not provided for, net of
advances, Rs. 907.1 Million (previous year Rs. 1147.5 Million).
144
3. Contingent Liabilities:
(Rs. in million)
As at
31.03.2010
As at
31.03.2009
Income tax demands/matters in respect of earlier years,
pending in appeals [including Rs. 90.3 million (previous year
Rs. nil ) consequent to department preferring appeals against
the orders of the Appellate Authorities passed in favour of the
Company]. Amount paid thereagainst and included under
Schedule 10 "Advances recoverable in cash or in kind" Rs. 17.5
million (previous year Rs. 38.0 million).
107.8
46.9
b) Excise duty, Sales tax, Service tax demands disputed in appeals
and pending decisions. Amount paid thereagainst and
included under Schedule 10 Rs. 18.9 million (previous year
Rs. 14.8 million).
197.1
120.8
259.2
299.1
7.5
7.5
135.0
-
-
5.4
a)
c)
Claims against the Company not acknowledged as debts
(excluding interest (amount unascertained) in respect of a
claim) Amount paid thereagainst without admitting liability
and included under Schedule 10 Rs. 76.5 million (previous year
Rs. 64.2 million).
d) Counter guarantee given to GIDC in connection with loan
sanctioned by a financial institution to a Company, jointly
promoted by an Association of Industries (of which, the
Company is a member) and GIDC.
e)
Corporate guarantee given
f)
Other matters
4. a) Pre-operative expenses, included in Capital Work in Progress (Schedule 5) represent the expenses
incurred for projects, which are yet to be commissioned. The details of the pre-operative expenses are:
(Rs. in million)
Particulars
Opening balance
Incurred during the current year :
Salaries, allowances and contribution to funds
Professional fees
Travelling expenses
Others
Total
Less : Capitalised during the year
Closing balance
2009-2010
13.5
2008-2009
9.0
22.9
0.1
1.7
9.6
47.8
35.1
12.7
19.6
0.5
3.4
2.1
34.6
21.1
13.5
145
b) One of the Indian subsidiary is setting up a plant in a Special Economic Zone at Pithampur, Indore,
Madhya Pradesh.
i) The expenditure incurred during the construction period and directly attributable to the project is
classified as "Project Development Expenditure". Such expenses will be apportioned to the cost of
the respective fixed assets on commissioning of the plant. Necessary details as per part II of Schedule
VI of the Companies Act, 1956 have been disclosed below:
Project Development Expenditure (included under Capital Work-in-Progress):
Particulars
Opening Balance
Payments to and Provisions for Employees
- Salaries, Wages and Bonus
- Contribution to Provident Fund, Gratuity Fund and Other Funds, etc.
- Employee Welfare and Other Amenities
Rent
Rates and Taxes (31.03.2009 Rs. 2500/-)
Insurance
Printing and Stationery (31.03.2010 Rs. 26,879/-)
License and Registration
Maintenance Charges
Travelling and Conveyance Expenses
Legal and Professional Fees
Depreciation
Power and Fuel
Closing Balance
(Rs. in million)
2009-2010
55.4
2008-2009
8.7
2.6
0.2
0.3
4.8
5.7
0.2
0.8
0.6
0.3
13.5
0.9
0.3
6.0
1.3
3.6
3.5
4.3
5.7
55.4
1.5
0.1
0.9
4.0
4.7
3.5
78.0
ii) Research and Development expenditure debited to Profit and Loss Account aggregating Rs. 233.1
million (previous year Rs. 85 million) included in the various expenditure heads in the Profit and Loss
account being costs incurred by the said subsidiary company on various stability testing, test runs
and experimental production of exhibit batches of various products which the company may
manufacture on successful commissioning of the plant for commercial production and upon
obtaining necessary regulatory approvals.
5. (i) The current tax in respect of foreign subsidiaries has been computed considering the applicable tax laws and tax
rates of the respective countries, as certified by the local tax consultants/local management of the said subsidiary.
(ii) The Deferred Tax Assets/ Liabilities arising out of significant timing differences are as under:
a) Break-up of net deferred tax liabilities :
i) Company and an Indian subsidiary :
Particulars
Depreciation
Provision for doubtful debts and advances
FCCB issue expenses
VRS Compensation
Net Deferred Tax Liabilities
(Rs. in million)
As at
31.03.2010
As at
31.03.2009
(1822.5)
(4.8)
(1556.5)
-
25.4
87.7
84.1
(1630.1)
20.3
6.0
100.0
43.0
(1387.2)
146
ii) Pharma Dynamics (Proprietary) Ltd., South Africa
(Rs. in million)
Particulars
Prepaid Expenses
Provision for Expenses
Provision for Obsolete Inventory
Net Deferred Tax (Liabilities) / Assets
Ast at
31.03.2010
As at
31.03.2009
(0.4)
(3.2)
-
0.4
1.5
1.4
(0.3)
1.8
0.1
1.9
Total deferred tax liabilities (Net) as referred in (i) to (ii) above aggregate to Rs. 1630.4 million
b) Break-up of net deferred tax assets:
i) Lupin Pharmaceutical Inc., USA
(Rs. in million)
Particulars
Depreciation
Prepaid Expenses
Provision for Price Differential
Provision for Sales Return
Net Deferred Tax Assets
Ast at
31.03.2010
As at
31.03.2009
(1.1)
(9.1)
(0.8)
(11.9)
4.9
43.6
0.6
38.9
4.5
31.0
13.4
6.3
42.5
ii) Kyowa Pharmaceutical Industry Co., Ltd., Japan
Particulars
Provision for Bonus
Provision for Compensated absences
Provision for Retirement Benefits
(Rs. in million)
Ast at
31.03.2010
As at
31.03.2009
23.8
5.1
26.2
93.9
149.0
23.5
9.8
29.0
52.5
55.2
170.0
iii) Multicare Pharmaceuticals Philippines Inc., Philippines
(Rs. in million)
Particulars
Provision for doubtful debts
Provision for Retirement Benefits
147
Ast at
31.03.2010
As at
31.03.2009
2.6
4.4
0.5
7.5
2.8
5.5
0.1
8.4
Total deferred tax assets (Net) as referred in (i) to (iii) above aggregate to Rs. 195.4 million
c) On the basis of current tax computation as referred to in note 5(i) above, there are no timing differences
and hence no deferred tax assets/liabilities in respect of the other subsidiaries.
6. Segment Reporting :
i) Primary segment :
The Company is exclusively in the Pharmaceutical business segment and has only one reportable
business segment.
ii) Secondary segment data:
(Rs. in million)
India
Particulars
Revenue by Geographical Segment
Carrying amount of Segment Assets
Capital Expenditure
Outside India
2009-2010 2008-2009
15604.4
26637.4
4520.5
13142.0
23134.7
3252.8
Total
2009-2010 2008-2009
33103.5
22716.3
2294.7
25524.4
16162.4
1761.8
2009-2010
2008-2009
48707.9
49353.7
6815.2
38666.4
39297.1
5014.6
Notes :
a) The segment revenue in geographical segments considered for disclosure is as follows :
- Revenue within India includes sales to customers located within India and other operating income
earned in India.
- Revenue outside India includes sales to customers located outside India and other operating income
outside India.
b) Segment revenue comprises:
(Rs. in million)
India
Particulars
Sales (net of excise duty)
Total Revenue
2009-2010
15438.7
165.7
15604.4
Outside India
2008-2009 2009-2010
13057.7
84.3
13142.0
31966.5
1137.0
33103.5
Total
2008-2009
24701.1
823.3
25524.4
2009-2010 2008-2009
47405.2
1302.7
48707.9
37758.8
907.6
38666.4
7. Basic and Diluted Earnings per Share is calculated as under:
(Rs. in million)
Net Profit after minority interest and share of loss in associates,
attributable to equity share holders
Weighted average number of Equity Shares :
- Basic
Add: Effect of dilutive issue of FCCBs, employees stock options
(ESOPs) - converted during the year and ESOPs
outstanding as on 31.03.2010
- Diluted
Earnings per Share (in Rs.)
- Basic
- Diluted
2009-2010
2008-2009
6816.3
5015.4
86083153
82442414
1513952
87597105
836054
83278468
79.18
77.81
60.84
60.22
148
8. Managerial Remuneration:
(Rs. in million)
Particulars
Salary and Allowances
Contribution to Provident and Other Funds
Perquisites
Commission to Whole time Director
Commission to Non Executive Directors
Sitting fees to Non Executive Directors
TOTAL
2009-2010
101.1
10.7
8.5
70.0
5.0
0.8
196.1
2008-2009
70.1
7.2
2.6
47.3
2.5
0.7
130.4
Notes :
i) Above amount does not include remuneration of Rs. 175.8 million (previous year Rs. 131.5 million) paid
by the subsidiary companies to its directors.
ii) Remuneration for the current year includes increased remuneration of the Managing Director and an
Executive Director of the Company w.e.f. 1st July 2009 in accordance with the Shareholder's resolutions.
iii) The provision for gratuity and compensated absences is made on the basis of actuarial valuation, for all
the employees of the Company, including for the managerial personnel. Proportionate amount of
gratuity and compensated absences is not included in the above disclosure, since the exact amount is
not ascertainable.
9. a) The Company procures on lease equipments, vehicles and office premises under operating leases.
These rentals recognised in the Profit and Loss Account for the year are Rs. 119.1 million (previous year
Rs. 59.6 million). The future minimum lease payments and payment profile of non cancellable operating
leases are as under:
(Rs. in million)
TOTAL
2009-2010
108.5
213.6
8.3
330.4
2008-2009
77.7
102.0
7.8
187.5
b) Subsidiary companies at Japan, South Africa and Philippines have future obligations under finance
lease for procurement of Plant, Machinery, Equipments and Vehicles which are payable as under:
(Rs. in million)
TOTAL
2009-2010
Present Value
Future Minimum
of minimum Interest
lease
lease payment
cost payment
28.8
4.3
33.1
(20.0)
(4.2)
(24.2)
93.5
8.3
101.8
(62.0)
(5.7)
(67.7)
8.4
0.4
8.8
(12.9)
(0.3)
(13.2)
130.7
13.0
143.7
(94.9)
(10.2)
(105.1)
Note:
Previous year figures are given in bracket.
149
10. Employees Stock Option Plans:
a) The Company implemented "Lupin Employees Stock Option Plan 2003" (ESOP 2003), "Lupin Employees
Stock Option Plan 2005" (ESOP 2005) and "Lupin Subsidiary Companies Employees Stock Option Plan
2005" (SESOP 2005) as approved in earlier years by the Shareholders of the Company and the
Remuneration/Compensation Committee of the Board of Directors. Details of the options granted
during the year under the plans are as under:
Grant Date
September 22, 2009
January 29, 2010
No. of Options
12000
12000
28000
28000
80000
10650
10650
24850
24850
71000
Exercise price
Rs.
1,089.15
1,089.15
1,089.15
1,089.15
Vesting Period
22.09.2009 to 31.12.2010
22.09.2009 to 31.12.2011
22.09.2009 to 31.12.2012
22.09.2009 to 31.12.2013
1,404.00
1,404.00
1,404.00
1,404.00
29.01.2010 to 30.06.2011
29.01.2010 to 30.06.2012
29.01.2010 to 30.06.2013
29.01.2010 to 30.06.2014
Exercise price
Rs.
840.85
840.85
840.85
840.85
Vesting Period
29.05.2009 to 30.06.2010
29.05.2009 to 30.06.2011
29.05.2009 to 30.06.2012
29.05.2009 to 30.06.2013
614.08
04.11.2009 to 03.11.2010
Grant Date
May 29, 2009
November 04, 2009
No. of Options
4200
4200
9800
9800
28000
10000
10000
Grant Date
September 22, 2009
No. of Options
11302
11303
26372
26373
75350
Exercise price
Rs.
1,089.15
1,089.15
1,089.15
1,089.15
Vesting Period
22.09.2009 to 31.12.2010
22.09.2009 to 31.12.2011
22.09.2009 to 31.12.2012
22.09.2009 to 31.12.2013
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 Rs. 10/- each. The options have vesting periods as stated above in accordance with the
vesting schedule as per the said plans with an exercise period of ten years from the respective grant dates.
The particulars of the options granted and lapsed under the Schemes are as below:
Particulars
Year Ended
March 31, 2010
Nos.
361445
151000
204024
308421
Year Ended
March 31, 2009
Nos.
483411
25000
16490
130476
361445
150
Particulars
Year Ended
March 31, 2010
Nos.
522019
38000
23850
99267
436902
Year Ended
March 31, 2009
Nos.
524120
87320
52311
37110
522019
Year Ended
March 31, 2010
Nos.
95600
75350
14850
4250
151850
Year Ended
March 31, 2009
Nos.
96350
750
95600
Particulars
b) The Company has followed the intrinsic value based method of accounting for stock options granted
after April 1, 2005 based on Guidance Note on Accounting for Employee Share-based Payments, issued
by the Institute of Chartered Accountants of India. Had the compensation cost for the Company's stock
based compensation plans been determined in the manner consistent with the fair value approach as
described in the said Guidance Note, the Company's net income would be lower by Rs. 52.5 million
(previous year Rs. 57.8 million) and earnings per share as reported would be lower as indicated below:
(Rs. in million)
Particulars
Net profit as reported
Less: Total stock-based employee compensation expense
determined under fair value based method
Add: Total stock-based employee compensation expense
determined under intrinsic value based method
Adjusted net profit
Basic earnings per share
- Adjusted (in Rs.)
Diluted earnings per share
- Adjusted (in Rs.)
151
Year Ended
March 31, 2010
6816.3
Year Ended
March 31, 2009
5015.4
57.2
58.5
4.7
6763.8
0.7
4957.6
79.18
78.57
60.84
60.13
77.81
77.21
60.22
59.53
The fair value of each option granted during the year is estimated on the date of grant based on the
following assumptions:
Grant dated
Grant dated
Grant dated
Grant dated
September 22,
January 29,
May 29, September 22,
2009 from
2010 from
2009 from
2009 from
ESOP 2003 plan ESOP 2003 plan ESOP 2005 plan ESOP 2005 plan
Particulars
Dividend yield (%)
Risk free interest rate (%)
Volatility (%)
1.29
6.45
7.14
40.95
1.29
6.45
7.49
39.87
1.29
6.45
6.66
41.83
1.29
6.45
7.14
40.95
Grant dated
November 4,
2009 from
ESOP 2005 plan
1.29
5.5
7.08
38.79
11. Post Employment Benefits:
(i) Defined Contribution Plans:
The Company and Indian subsidiaries makes contributions towards provident fund and
superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The
superannuation fund is administered by the Life Insurance Corporation of India (LIC). Under the plan,
they are required to contribute a specified percentage of payroll cost to the retirement benefit plan to
fund the benefits.
The provident fund plan of the Company and Indian subsidiaries, except Novodigm Ltd, are operated by
the "Lupin Ltd Employees Provident Fund Trust" (the "Trust"). The provident fund plan of Novodigm Ltd,
is operated by the Government administered Employees Provident Fund. Eligible employees receive
benefits from the said Provident Fund. Both the employees and the employers make monthly
contributions to the Provident Fund Plans equal to a specified percentage of the covered employee's
salary. The minimum interest rate payable by the Trust to the beneficiaries every year is being notified by
the Government. The Companies have obligation to make good the short fall, if any, between the return
from the investments of the trust and the notified interest rate.
The Guidance note on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting
Standards Board (ASB) states that benefit plans involving employer established provident funds, which
require interest shortfalls to be recompensed are to be considered as defined benefit plans. Pending the
issuance of the guidance note from the Actuarial Society of India, the Company's actuaries have
expressed an inability to reliably measure provident fund liabilities. Accordingly, the Company is unable
to exhibit the related information.
The Company and subsidiaries recognised Rs. 385.5 million (previous year Rs. 323.3 million) for
provident fund contributions, superannuation contribution and social security in the Profit and Loss
Account.
(ii) Defined Benefit Plan:
a) Company and Indian subsidiaries:
The Company and the Indian subsidiaries make annual contributions to the Group Gratuity cum Life
Assurance Scheme administered by the LIC, a funded defined benefit plan for qualifying employees.
The scheme provides for payments to vested employees as under:
a) On normal retirement/early retirement/withdrawal/resignation:
As per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
b) On death in service:
As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.
The most recent actuarial valuation of plan assets and the present value of the defined benefit
obligation for gratuity were carried out as at March 31, 2010 by the LIC and an actuary. The
present value of the defined benefit obligations and the related current service cost and past
service cost, were measured using the Projected Unit Credit Method.
152
The following table sets out the status of the gratuity plan and the amounts recognised in the Company's
financial statements as at the Balance Sheet date:
(Rs. in million)
Sr.
No.
I)
II)
III)
IV)
V)
VI)
VII)
Particulars
- defined benefit obligation:
Current service cost
Interest cost
Actuarial loss
Benefits paid
Past service cost
Change in fair value of plan assets:
Actuarial gain
Benefits paid
PVO at end of year
Funded status
Unrecognised actuarial gain/(loss)
Net cost for the year ended March 31, 2010:
Current service cost
Interest cost
Actuarial loss
Net cost
Insurer Managed Funds (100%)
(Fund is Managed by LIC of India as per IRDA
guidelines, category wise composition of the Plan
Assets is not available)
Discount rate (%)
Gratuity (Funded)
As on 31.03.2010
As on 31.03.2009
22.4
15.3
34.3
(11.9)
193.1
253.2
18.5
15.1
23.9
(51.1)
186.7
193.1
18.5
43.3
(11.9)
170.1
220.0
16.0
1.9
23.2
(51.1)
180.1
170.1
253.2
220.0
(33.2)
(33.2)
193.1
170.1
(23.0)
(23.0)
22.4
15.3
(18.5)
34.3
53.5
18.5
15.1
(16.0)
22.0
39.6
220.0
170.1
18.5
16.0
8.0
6.0
9.5
7.0 to 8.0
5.0 to 7.0
9.0 to 9.1
b) Kyowa Pharmaceutical Industry Co., Ltd., Japan
The Company's subsidiary at Japan has retirement and pension plans to cover all its employees. The plans
consist of a defined benefit pension plan and a lump sum payment plan.
Under the plans, employees are entitled to benefits based on level of salaries, length of service and certain
other factors at the time of retirement or termination.
The Company makes annual contributions to a private bank to fund defined benefit pension plan for
qualifying employees.
153
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for
retirement benefits, for all employees other than directors, were carried out as at March 31, 2010. The present
value of the defined benefit obligations and the related current service cost and past service cost, were
measured using the Projected Unit Credit Method.
Retirement allowances for directors are provided for liability of the amount that would be required if all
directors retired at the balance sheet date.
The following table sets out the status of the retirement plan and the amounts recognised in the Company's
financial statements as at March 31, 2010.
(Rs. in million)
Sr. No.
Particulars
Lump sum
Retirement
Benefits
(non funded)
Pension
Benefits
(funded)
As on 31.03.2010
I)
II)
III)
IV)
V)
VI)
VII)
- defined benefit obligation:
Interest Cost
Actuarial loss/(gain)
Benefits paid
Past service cost
Foreign exchange translation difference
Change in fair value of plan assets:
Actuarial loss / (gain)
Benefits paid
PVO at end of year
Funded status
Unrecognised actuarial gain/(loss)
Net asset/(liability) recognised in the balance sheet
Net cost for the year ended March 31,2010:
Interest cost
Actuarial (gain) / losses
Net cost
Funds managed by private bank (100%) (Category-wise
composition of the Plan Assets are not available)
Actual return on the plan assets:
Discount rate (%)
Lump sum
Retirement
Benefits
(non funded)
Pension
Benefits
(funded)
As on 31.03.2009
9.5
1.2
5.2
(9.2)
(4.6)
62.3
64.4
2.7
0.6
0.3
(0.9)
(2.5)
34.2
34.4
8.4
0.9
(2.7)
(4.0)
13.4
46.3
62.3
2.3
0.5
(0.3)
(0.7)
7.3
25.1
34.2
-
1.2
5.2
5.5
(0.9)
(3.6)
43.1
50.5
-
1.1
(12.0)
4.9
(0.7)
10.3
39.5
43.1
64.4
(64.4)
(64.4)
34.4
50.5
16.1
16.1
62.3
(62.3)
(62.3)
34.2
43.1
8.9
8.9
9.5
1.2
5.2
15.9
2.7
0.6
(1.2)
(4.9)
(2.8)
8.4
0.9
(2.7)
6.6
2.3
0.5
(1.1)
11.7
13.4
-
50.5
-
43.1
-
1.2
-
1.1
1.9
0
-
1.9
0
2.5
1.9
0
-
1.9
0
2.5
Notes:
1) Liability of lump sum retirement benefit as above along with liability for retirement benefits of directors
Rs. 15.9 million (previous year Rs. 18.5 million) is shown under provisions.
2) Net Assets under pension plan are shown under Loans and Advances.
154
c) Multicare Pharmaceuticals Philippines Inc., Philippines
The Company's subsidiary at Philippines makes annual contributions to a private bank to fund defined
benefit plan for qualifying employees.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for
retirement benefit were carried out as at March 31, 2010. The present value of the defined benefit obligations
and the related current service cost and past service cost, were measured using the Projected Unit Credit
Method.
The following table sets out the status of the retirement plan and the amounts recognised in the Company's
financial statements as at March 31, 2010
(Rs. in million)
Sr. No.
Particulars
I)
Reconciliation in present value of obligations (PVO) - defined benefit obligation :
Interest Cost
Actuarial loss
Benefits paid
Past service cost
Change in fair value of plan assets :
Actuarial gain
Benefits paid
PVO at end of year
Funded status
Unrecognised actuarial loss
Net cost for the year ended March 31,2010 :
Interest cost
Actuarial (gain) / losses
Net cost
Investment in government securities
Investment in common trust fund
Investment in other securities and debt instruments
Investment in loans and bill discounts
Bank savings deposit
Discount rate (%)
Retirement
Benefits (funded)
As on 31.03.2010
II)
III)
IV)
V)
VI)
VII)
155
0.5
0.4
4.5
(0.1)
(0.4)
8.5
13.4
0.2
0.6
3.0
(0.1)
(0.3)
4.6
8.0
13.4
8.0
(5.4)
(2.3)
(7.7)
0.5
0.4
(0.2)
0.7
66%
26%
6%
1%
1%
0.2
9.28
6
6.5
12. The Company has entered into Forward Exchange Contracts for hedge purpose and not intended for
trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available
at the settlement date of certain payables and receivables. The following are the outstanding Forward
Exchange Contracts entered into by the Company:
Currency
US $
Buy or Sell
Cross Currency
Buy
Indian Rupees
Amount in US $
March 31, 2010
March 31, 2009
27494783
The year-end foreign currency exposures that have not been hedged by a derivative instrument or
otherwise are as below:
a. Amount receivable in foreign currency on account of the following:
Particulars
As on 31.03.2010
As on 31.03.2009
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
89.3
3.5
321.1
1945.2
2174691
77650
5303652
43324692
48.4
15.2
303.0
34.8
6399.9
1377314
298900
4485971
479513
126181786
AUD
ACUD
EURO
GBP
US $
0.5
8.3
1.5
0.1
1.5
0.2
0.2
15565040
183936
1014909
333320
234405
32731
64450467
Rs.6673/0.7
153.6
0.4
0.8
15.3
1.2
0.3
-
200
20873608
3028461
261537
2498750
210537
160840
47087
-
SGD
UZS
US$
RUB
KZT
GBP
RMB
UAH
VND
Export of goods
Other receivable
156
b. Amount payable in foreign currency on account of the following:
Particulars
As on 31.03.2010
As on 31.03.2009
Rs. in
million
Amount in
Foreign
Currency
Rs. in
million
Amount in
Foreign
Currency
1007.3
3.6
115.5
0.1
Rs. 2665/0.3
3.7
4.8
0.2
0.2
22377164
52611
1850063
2174
83
667311
90884
435374922
115265
4302
2835.7
5.2
83.4
1.4
Rs. 16683/1.2
0.1
-
55585558
71002
912127
30713
500
2400000
18440
-
US $
GBP
EURO
CHF
SGD
JPY
HKD
AUD
AZM
RUB
CAD
6818.8
-
151864975
-
1098.1
480.3
21649517
932950000
US $
JPY
0.7
-
15916
-
3.8
2.3
74620
4479828
US $
JPY
418.1
1.8
0.7
0.2
0.2
0.6
0.2
29.2
0.1
Rs. 43076/0.8
Rs. 33470/0.2
0.1
9281180
1176911
10236
709673
8118064
12768
32680
481951
10211726
6557
17829
5120
101607000
1550
153.7
2.3
15.2
0.6
Rs. 6931/2.0
0.3
16.6
0.5
1.4
1.0
0.2
-
3024716
1578283
210228
1736900
193598
38701
56151
252710
37536255
38765
23800
12017
-
US $
RUB
GBP
KZT
UZS
ACUD
UAH
EURO
AZM
RMB
AUD
CHF
SAR
BWP
VND
CAD
Foreign
Currency
Import of goods and services
Secured and Unsecured loans payable
Interest accrued and not due on
Secured and Unsecured loans
Other payables
13. Derivative Financial Instruments:
i) The Company has entered into forward and option contracts in order to hedge and manage its
foreign currency exposures towards future export earnings. Such derivative contracts (including
contracts for a period extending beyond the financial year 2010-11) which are in the nature of highly
probable forecast transactions are entered into for hedging purposes only, and are accordingly
classified as cash flow hedges.
ii) The subsidiary located at Japan has entered into interest rate swap agreements as a means of hedging
interest rates related risks in respect of variable rate debts.
157
The category wise break-up there of is as under :
Particulars
Forward contracts
Option Contracts
Interest rate swap contracts
Foreign
Currency
As at
31.03.2010
Amounts
in million
As at
31.03.2009
Amounts
in million
USD
USD
JPY
423.5
72.0
211.6
378.3
114.0
405.5
The Company and the subsidiary companies based on the Announcement of The Institute of Chartered
Accountants of India "Accounting for Derivatives" has accounted for derivative forward and option
contracts and interest rate swap contracts at fair values, considering the principles of recognition and
measurement stated in Accounting Standard (AS-30) "Financial Instruments: Recognition and
measurement" and the accounting policy followed by the Company in this respect.
The changes in the fair value of the derivative instruments during the year ended 31st March 2010,
aggregating Rs. 3087.4 million (previous year Rs. 2766.0 million debited) designated as effective have
been credited to the Cash Flow Hedge Reserve Account and Rs. 13.3 million is credited (previous year
Rs. 34.0 million debited) to the Profit and Loss Account , being the ineffective portion thereof.
14. The aggregate amount of revenue expenditure incurred by the Company and subsidiary companies during
the year on Research and Development and shown in the respective heads of account is Rs. 3570.1 million
15. During the year, in accordance with the terms of issue, Foreign Currency Convertible Bonds aggregating
US $ 71.3 million (aggregate to date US $ 98.6 million) were converted into 5,816,742 equity shares
(aggregate to date 8,043,911 equity shares) of Rs. 10/- each, fully paid-up, at a predetermined price of
Rs. 567.04 per share, resulting in an increase in the paid-up share capital by Rs. 58.2 million (aggregate to
date Rs. 80.4 million) and securities premium by Rs. 3240.1 million (aggregate to date Rs. 4480.7 million).
Balance FCCBs aggregating US $ 1.4 million were redeemed during the year and the redemption premium
of Rs. 12.6 million (net of tax of Rs. 6.5 million) is adjusted against securities premium account. There were no
Bonds outstanding as on March 31, 2010.
16. a) During the year, the Company through its wholly owned subsidiary Lupin Holdings B.V., Netherlands
(LHBV), acquired/subscribed to the equity stake of the following:
i) Additional Investment in Lupin Atlantis Holdings SA, Switzerland (100% subsidiary of the Company)
at a total cost of Rs. 2349.2 million.
ii) Additional Investment in Generic Health Pty Ltd., Australia (Associate) (GH) at a total cost of Rs. 122.2 million.
iii) 100% equity stake of Lupin Pharma Canada Ltd., Canada at a total cost of Rs. 125.3 million.
The above acquisitions/subscriptions are based on the net assets values, the future projected revenues,
operating profits and cash flows, etc. of the investee companies.
b) Goodwill on consolidation comprises of:
(Rs. in million)
Goodwill in respect of
Kyowa Pharmaceuticals Industry Co., Ltd., Japan
Novodigm Ltd., India
Hormosan Pharma GmbH, Germany
Pharma Dynamics (Proprietary) Ltd., South Africa
Multicare Pharmaceuticals Philippines Inc., Philippines
TOTAL
As on
31.03.2010
As on
31.03.2009
1828.3
218.2
230.1
732.5
187.7
3196.8
1695.7
218.2
250.7
799.0
210.1
3173.7
158
c) Details of Investments in an Associate :
Name of
Associate
Investment in
Ordinary Shares
(Nos.)
Generic Health Pty Ltd,
Australia
30199214
(18667967)
Cost of
Investments
in ordinary
shares
326.6
(204.5)
(Rs. in million)
Amount of
Goodwill at
the time of
acquisition
243.6
(157.2)
Share in
Carrying
accumulated
amount of
Loss of
Investments
Associate at the year end
102.2
224.4
(33.4)
(171.1)
Figures in bracket are for previous year
17.
a) Foreign Currency Translation Reserve (Schedule 2) represents the net exchange difference on
translation of the financial statements of foreign subsidiaries located at Japan, Australia, Germany,
South Africa, Philippines, Switzerland and Canada from their local currency to the Indian currency.
Such operations are considered as 'non integral' to the Company. Consequently, in accordance with
the Accounting Standard (AS-11) 'The Effects of Changes in Foreign Exchange Rates (Revised 2003)',
the exchange loss on translation of Rs. 388.4 million (previous year gain of Rs. 58.5 million) during the
year is debited/credited to such reserve instead of to the Profit and Loss Account.
b) The subsidiary at Switzerland commenced its trading operations during the year and based on its
methods of operations, financing models and relationship to its ultimate holding company, has reclassified its operations as 'non-integral operations', which were hitherto classified as 'integral
operations'. Accordingly, the said subsidiary has applied the translation procedures in accordance
with the Accounting Standard (AS-11) 'The Effects of Changes in Foreign Exchange Rates (Revised
2003)' applicable for non-integral foreign operations and the resulting net exchange difference is
accumulated in the Foreign Currency Translation Reserve (refer schedule 2). Consequently, the net
profit after tax for the year and the shareholders funds as at the year-end are higher by
Rs. 371.9 million.
18. Minority interest represents the minority's share in equity of the subsidiaries as below:
(Rs. in million)
Max Pharma Pty. Ltd., Australia
- Share in Equity Capital
- Share in Reserves and Surplus (Refer note no. 22 below)
Pharma Dynamics (Proprietary) Ltd., South Africa
- Share in Reserves and Surplus
Multicare Pharmaceuticals Philippines Inc., Philippines
- Share in Reserves and Surplus
TOTAL
As on
31.03.2010
As on
31.03.2009
-
10.8
(9.7)
1.1
0.2
207.3
207.5
0.2
100.9
101.1
13.2
34.2
47.4
254.9
13.2
27.1
40.3
142.5
19. The information regarding Micro Enterprises 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.
Amount due to vendors under Micro Enterprises and Small Enterprises for the year ended March 31, 2010 is
Rs. 88.5 million, interest paid during the year and outstanding at the year end Rs. nil (previous year Rs. 65.8
million, interest Rs. nil).
159
20. Disclosures as required by Accounting Standard 29 (AS-29) "Provisions, Contingent Liabilities and
Contingent Assets"
a) Lupin Pharmaceuticals Inc, USA
Particulars
Opening balance
Additions
Utilisation
Reversal
Closing balance
(Rs. in million)
Provision for Price Differential
(refer note below)
As at
March 31,2010
13.0
82.0
81.0
14.0
As at
March 31,2009
99.9
542.2
627.6
1.5
13.0
Note:
The subsidiary company at USA, in accordance with the terms of agreements/understanding with the
customers, offers differential price due to reduction in the market prices of products launched. Accordingly,
the said subsidiary company has made a provision for price differential based on historical data and future
market price trend expected. Actual outflow is expected in future.
b) Lupin Atlantis Holdings SA, Switzerland
In accordance with the terms of 'Asset Purchase Agreement' entered into with the vendor, with respect
to purchase of Marketing Right, the subsidiary company located at Switzerland has made provision of
Rs. 45.1 million on best estimate basis with regard to assumed liabilities on which actual outflow of
resources is expected in future.
21. a) During the year, the subsidiary company located at Netherlands, acquired certain assets
(Manufacturing Knowhow/ Product Marketing Rights, etc.), in accordance with the terms of Agreement
entered into by the Company. Subsequently these assets were assigned to the another subsidiary
located at Switzerland.
b) The subsidiary at Switzerland is in the process of carrying out the activities necessary for product
availability, which are at an advanced stage. Pending completion of such activities, the cost of such
assets referred to in (a) above of Rs. 345.7 million (including directly attributable pre-operative cost legal and professional fees of Rs. 8.4 million) is included under capital work in progress (Schedule 5) as at
the year end.
22. The Company through its wholly owned subsidiary at Netherlands was holding 2,000,000 ordinary shares of
AUD 1 each in a subsidiary company - Max Pharma Pty Limited (Max) representing 87.5% stake therein.
During the year the Company purchased the balance stake in that subsidiary through its wholly owned
subsidiary at Netherlands. Consequently, Max became a wholly owned subsidiary company of the
Company.
At the beginning of the year, the Company through its wholly owned subsidiary at Netherlands was holding
18,667,967 shares of Euro 3,163,683, Rs. 204.5 million in an associate company - Generic Health Pty Ltd.,
Australia (GH) representing 36.65% stake in that company. With a view to gain the benefit of synergies,
better market penetration and saving in overhead costs, the Company decided to consolidate the
operations of Max and GH. To achieve such consolidation, the Company sold its entire investment in Max to
GH for a consideration primarily comprising of 9,500,000 shares of Euro 1,579,146, Rs. 96.5 million in GH.
The Company through its wholly owned subsidiary at Netherlands further acquired 2,031,247 shares from
other shareholders as a result of which the aggregate holding of the Company in GH has increased to
49.91% at the year end.
23. a) Lupin Pharmacare Limited, Lupin Herbal Limited and Novodigm Limited (wholly owned subsidiaries of
the Company) had filed petitions before the Honourable High Courts of Mumbai and Gujarat for
amalgamation with the Company, the appointed date being April 1, 2009.
b) Vide its order dated January 8, 2010, the High Court of Mumbai sanctioned the scheme of amalgamation
between Lupin Pharmacare Ltd., Lupin Herbal Ltd. and the Company subject to the order to be passed
160
by the High Court of Gujarat sanctioning the scheme of amalgamation between Novodigm Ltd and the
Company. The order of the Gujarat High Court is awaited.
24. (a) The Company through it's wholly owned subsidiary at Netherlands holds 100% equity stake at cost Euro
4,704,449, Rs. 310.7 million in Hormosan Pharma GmbH, Germany (Hormosan). The goodwill on
consolidation of the said subsidiary is Rs. 230.1 million as at the year end. The said subsidiary continued
to incur losses during the year and has negative net worth at the end of the year. However, considering
the financial support from the Company and Hormosan's projections/plans for introducing many new
products (including products from the Company) in the German Market in the near future, a growth in
the turnover is expected, which will result in improvement in net worth, over a period of time.
(b) As stated in note 22 above, the Company through its wholly owned subsidiary at Netherlands has
increased its stake in GH to 49.91%. The aggregate cost of the investment in this associate amounts to
Rs. 326.6 million. In addition the wholly owned subsidiary at Netherlands has also given interest bearing
loan of Rs. 83.8 million to GH. Further debts due from the said associate aggregate Rs. 32.6 million as at
the year end. During the year, GH has incurred losses resulting into further erosion of its net worth. GH
has plans to introduce the products including the products from the Company in the market in near
future. As a result of this it is expected that its turnover would increase leading to profitability and
improvement in networth over a period of time.
Based on these and considering that these investments are held as strategic long term investments, in
the opinion of the management, the diminution in the value of the aforesaid investments is considered
temporary and the loan/debts are considered good of recovery and there is no impairment in the value
of goodwill. Accordingly, no provision is considered necessary, in respect thereof.
25. Excise duty (Schedule 16) includes Rs. 19.8 million being net impact of the excise duty provision on opening
and closing stock.
26. In terms of the Share Sale agreement dated September 16, 2008 between the Company and the
distribution shareholders, a subsidiary located at South Africa has declared a dividend relating to the
post acquisition period. Such dividend amounting to Rs. 36.6 million (previous year Rs. 21.2 million) was
paid before March 31, 2010.
27. Related Party Disclosures, as required by AS-18 are given below :
A. Relationships Category I : Associates of the Company
Generic Health Pty Ltd., Australia (from August 20, 2008)
Shinko Yakuhin, Japan (upto March 10, 2010)
Category II: Key Management Personnel
Dr. D. B. Gupta
Dr. K. K. Sharma
Mrs. M. D. Gupta
Mr. Nilesh Gupta
Mrs. Vinita Gupta
Chairman
Managing Director
Executive Director
Executive Director (from October 8, 2008)
Group President and CEO of Lupin Pharmaceuticals Inc.,USA
Category III: Others (Relatives of Key Management Personnel and Entities in which the Key Management Personnel have control or significant influence)
Dr. Anuja Gupta
Mrs. Kavita Gupta Sabharwal
Mr. Nilesh Gupta (upto October 7, 2008)
Dr. Richa Gupta
Mrs. Pushpa Khandelwal
Adhyatma Investments Pvt. Limited
Bharat Steel Fabrication and Engineering Works
Concept Pharmaceuticals Limited
D. B. Gupta (HUF)
Enzal Chemicals (India) Limited
161
Lupin Human Welfare and Research Foundation
Lupin International Pvt. Limited
Lupin Investments Pvt. Limited
Lupin Marketing Pvt. Limited
Matashree Gomati Devi Jan Seva Nidhi
Novamed Pharmaceuticals Pvt Limited
Polynova Industries Limited
Pranik Landmark Associates (upto 3rd March 2010)
Rahas Investments Pvt. Limited
S N Pharma
Synchem Chemicals (I) Pvt. Limited
Zyma Laboratories Limited
B.
Transactions with the related parties.
Sr. Transactions
No.
1
Sale of Goods
2
3
Miscellaneous Income on account of
sale of by-products
Rent Expenses
4
5
6
7
Remuneration Paid
8
Purchase of Goods/Materials
9
Donations Paid
10
Dividend Paid
11
Expenses Reimbursed
12
13
14
Loan given during the year
15
Interest income received
Associates
131.3
(101.7)
(-)
(-)
(-)
15.2
(-)
(-)
(-)
(-)
(-)
(-)
2.6
(-)
(-)
99.7
(-)
92.9
(-)
2.9
(-)
Key
Management
Personnel
(-)
(-)
(-)
(-)
(-)
(-)
279.6
(195.9)
(-)
(-)
16.0
(11.7)
(-)
(-)
(-)
(-)
(-)
Others
Total
13.6
144.9
(3.2)
(104.9)
(2.9)
(2.9)
103.6
103.6
(98.7)
(98.7)
Rs. 6,000/- Rs. 6,000/(Rs. 6,000/-) (Rs. 6,000/-)
20.1
35.3
(14.5)
(14.5)
1.6
1.6
(2.0)
(2.0)
279.6
(10.2)
(206.1)
31.2
31.2
(31.9)
(31.9)
35.0
35.0
(21.7)
(21.7)
509.4
525.4
(408.9)
(420.6)
11.6
14.2
(11.0)
(11.0)
9.0
9.0
(-)
(-)
99.7
(-)
(-)
92.9
(-)
(-)
2.9
(-)
(-)
162
Out of the above items transactions in excess of 10% of the total related party transactions are as under :
Sr.
No.
1
2
3
4
5
6
7
8
9
10
11
163
Transactions
Sales of Goods
Shinko Yakuhin, Japan
Miscellaneous Income on account
of sale of by-products
Rent Expenses
Lupin Investments Pvt. Ltd.
Bharat Steel Fabrications and
Engineering Works
S N Pharma
Polynova Industries Ltd.
Pranik Landmark Associates
Remunerations Paid
Dr. D. B. Gupta
Dr. K. K. Sharma
Mrs. Vinita Gupta
Mr. Nilesh Gupta
Mr. Nilesh Gupta
Purchase of Goods/ Material
Donations Paid
Lupin Human Welfare and
Research Foundation
Dividend Paid
Lupin Marketing Pvt. Ltd.
Rahas Investments Pvt. Ltd.
Visiomed (I) Pvt. Ltd.
Expenses Reimbursed
Related party
relation
For the year
ended 31.03.2010
For the year
ended 31.03.2009
Associate
Associate
Others
Others
Others
44.6
86.7
-
33.9
67.8
0.2
3.0
Others
-
2.9
Others
Others
83.0
11.9
78.9
11.3
Others
Others
-
8.0
0.4
Others
Rs. 6,000/-
Rs. 6,000/-
Associate
Others
15.2
20.1
14.5
Others
Others
1.0
0.6
0.8
1.2
Others
91.1
64.0
89.3
32.8
-
66.7
43.6
68.7
14.4
10.2
Others
31.2
31.9
Others
32.3
19.2
Others
Others
Others
Others
101.0
114.2
108.8
137.4
80.8
91.4
87.0
109.9
Associate
Others
2.6
11.0
10.0
Sr.
No.
12
13
14
15
C.
Transactions
Loan given during the year
Interest income received
3
Deposits given under Leave and Licence
arrangement for Office Premises
Deposit given for Business Conducting
Arrangement
Debtors
4
Creditors
5
Commission Payable
6
Expenses Payable
7
Loan given
2
For the year
ended 31.03.2010
For the year
ended 31.03.2009
Others
9.0
-
Associate
99.7
-
Associate
92.9
-
Associate
2.9
-
Balances due from/to the related parties
Sr. Transactions
No.
1
Related party
relation
(Rs. in million)
Associates
(-)
(-)
32.6
(59.4)
5.4
(-)
(-)
(-)
83.8
(-)
Key
Management
Personnel
(-)
(-)
(-)
(-)
70.0
(47.3)
(-)
(-)
Others
Total
71.7
(71.7)
180.0
(180.0)
10.5
(-)
3.7
(1.8)
(0.8)
(0.1)
(-)
71.7
(71.7)
180.0
(180.0)
43.1
(59.4)
9.1
(1.8)
70.0
(48.1)
(0.1)
83.8
(-)
Notes:
i) Figures in brackets are for previous year.
ii) Related party relationship is as identified by the Company and relied upon by the Auditors.
164
28. The Consolidated Financial Statement includes results of operations of two new subsidiaries incorporated during
the year and the results of operations for the entire 12 months of two subsidiaries acquired during previous year.
Accordingly, the current year figures are not strictly comparable with those of the previous year. Previous year
figures have been regrouped wherever necessary to correspond with the figures of the current year.
Signatures to Schedule 1 to 18
For Lupin Limited
Chairman
Dr. Kamal K. Sharma
Managing Director
M. D. Gupta
Executive Director
Nilesh Gupta
Executive Director
D. K. Contractor
Director
Vinita Gupta
Director
K. V. Kamath
Director
Dr. Vijay Kelkar
Director
Dr. K. U. Mada
Director
Sunil Nair
Director
R. A. Shah
Director
Richard Zahn
Director
Place : Mumbai
Dated : May 5, 2010
R.V. Satam
Company Secretary
165
166
01.03.2008
25.07.2008
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
Year ended
31.03.2010
From 05.06.2009
to 31.03.2010
From 18.06.2009
to 31.03.2010
From 01.04.2009
to 31.05.2009
Kyowa Pharmaceutical Industry Co., Ltd.,
Japan
Novodigm Ltd.,
India
Lupin Pharmacare Ltd.,
India
Lupin Australia Pty Ltd.,
Australia
Lupin Holdings B.V.,
Netherlands
Pharma Dynamics (Proprietary) Ltd.,
South Africa
Hormosan Pharma GmbH,
Germany
Multicare Pharmaceuticals Philippines, Inc.,
Philippines
Lupin Herbal Ltd.,
India
Lupin Atlantis Holdings SA,
Switzerland
Amel Touhoku,
Japan
Lupin (Europe) Ltd.,
U.K.
Lupin Pharma Canada Ltd.,
Canada
Max Pharma Pty Ltd.,
Australia
2,885,714 Ordinary Shares of the face value of AU $ 1
each (Note 5)
280,000,100 Common Shares. (Face Value of
100 Common Shares is Canadian $ 1) (Note 4)
2,51,000 Ordinary Shares of GBP 1 each
300 Ordinary Shares of the face value of JPY 10000
each (Note 3)
2,486 Shares of the face value of CHF 1000 each
(Note 1)
50,000 Equity Shares of the face value of Rs.10/each (including 6 shares held by nominees)
1,308,150 Shares of the face value of
PHP Peso 10 each (Note 1)
9 Ordinary Shares (Notes 1 and 2)
60,000 Ordinary Shares of the face value of
South African Rand 1 each (Note 1)
105,579 Equity Shares of the face value of
Euro 1000 each
500,000 Equity Shares of the face value of
AU $ 1 each
1,050,000 Equity Shares of the face value of
Rs.10/- each (including 6 shares held by nominees)
2,384,783 Equity Shares of the face value of
Rs.10/- each (including 6 shares held by nominees)
196,000 Ordinary Shares of the face value of
JPY 500 each (Note 1)
300,000 Shares of the face value of US $ 1 each
a) Number of shares held
Mumbai, May 5, 2010
(Rs.12.1 Mn.)
(Rs.4.1 Mn.)
(Rs.6.5 Mn.)
(Rs.0.6 Mn.)
Rs.1755.8 Mn.
(Rs.0.02 Mn.)
Rs.8.5 Mn.
(Rs.127.2 Mn.)
Rs.155.2 Mn.
Rs.44.3 Mn.
Rs.3.1 Mn.
(Rs.284.7 Mn.)
(Rs.3.4 Mn.)
Rs.454.9 Mn.
Rs.184.9 Mn.
Current
year/period
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Current
year/period
Nil
N.A.
N.A.
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Previous
years/periods
Net aggregate amount of the
subsidiary company's profit /
(loss) dealt with in the holding
Company's accounts
Dr. Desh Bandhu Gupta Dr. Kamal K. Sharma
Chairman
Managing Director
(Rs.78.9 Mn.)
N.A.
N.A.
Rs.2.1 Mn.
(Rs.2.2 Mn.)
(Rs.0.1 Mn.)
Rs.1.5 Mn.
(Rs.85.6 Mn.)
Rs. 49.3 Mn.
(Rs.10.8 Mn.)
Rs.0.9 Mn.
(Rs.86.8 Mn.)
Rs.87.0 Mn.
Rs.633.2 Mn.
Rs.632.1 Mn.
Previous
years/periods
Net aggregate amount of the
subsidiary company's profit /
(loss) not dealt with in the
holding Company's accounts
R. V. Satam
Company Secretary
100%
100%
100%
100%
100%
100%
51%
100%
60%
100%
100%
100%
100%
100%
100%
b) Extent of
holding
Extent of Interest of the holding Company in the Capital
and Reserves of the subsidiary company at the end of the
financial year/period of the subsidiary company
Notes:
1. Shares are held by Lupin Holdings B.V., Netherlands, a wholly-owned subsidiary of the Company.
2. One Share of Euro 68800, one Share of Euro 8400, one Share of Euro 16300 and six Shares of Euro 4900 each.
3. Shares are held by Kyowa Pharmaceutical Industry Co., Ltd., Japan, a wholly-owned subsidiary of the Company.
4. Lupin Holdings B.V., Netherlands, holds 280,000,000 Shares and Lupin Atlantis Holdings SA, Switzerland, holds 100 Shares.
5. Shares were held by Lupin Holdings B.V., Netherlands, which were transferred to Generic Health Pty Ltd., Australia, an associate of the Company.
21.09.2006
18.06.2009
05.06.2009
18.10.2007
05.06.2007
12.08.2004
26.03.2009
30.03.2007
01.12.2004
10.01.2007
26.09.2007
18.10.2007
30.06.2003
Year ended
31.03.2010
Lupin Pharmaceuticals Inc.,
USA
Date from
which it
became
subsidiary
Financial
year/period
of the subsidiary
company
Name of the
subsidiary company
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
RELATING TO SUBSIDIARY COMPANIES
167
Investment (Other
184.9
-
Profit/(Loss) after Tax
Proposed dividend
Lupin Amel Touhoku,
Atlantis
Japan
Holdings SA,
Switzerland
Lupin
(Europe)
Ltd.,U.K.
-
454.9
250.5
705.4
5,281.2
28.4
5530.8
3,558.6
1,967.1
33.5
Rs. in million
-
(3.5)
7.7
4.2
470.6
1.0
820.7
583.5
214.4
23.8
Rs. in million
-
(284.7)
(284.7)
-
-
1,902.4
2,173.4
(281.5)
10.5
Rs. in million
-
3.1
3.1
0.4
-
22.6
1.7
4.0
16.9
Rs. in million
-
44.3
-
44.3
37.0
326.6
6,549.7
137.3
33.5
6,705.5
Rs. in million
61.0
258.6
95.5
354.1
1,327.6
-
642.8
255.0
387.3
0.5
Rs. in million
-
(127.2)
(0.1)
(127.3)
426.4
329.4
458.6
(137.3)
8.1
Rs. in million
-
16.7
8.1
24.8
327.6
208.2
111.5
69.8
26.9
Rs. in million
Rupees
-
(19,651)
10,000
(9,651)
-
-
829,853
446,322
(116,469)
500,000
-
1,755.9
166.5
1,922.4
2,808.8
-
4,497.8
763.6
1,381.7
2,352.5
Rs. in million
-
(0.6)
0.5
(0.1)
173.2
-
60.7
58.8
0.9
1.0
Rs. in million
-
(6.5)
3.1
(3.4)
76.9
-
109.0
95.5
(6.5)
20.0
Rs. in million
-
(4.1)
-
(4.1)
-
-
127.8
7.9
(5.4)
125.3
Rs. in million
-
(12.1)
-
(12.1)
2.9
-
39.2
37.4
(101.9)
103.7
Rs. in million
6. Full accounts of the aforesaid subsidiaries are available for inspection at the Registered Office of the Company and on request will be sent to members free of cost.
5. In compliance with Clause 32 of the Listing Agreement, audited consolidated financial statements form part of this Annual Report.
4. The negative figures of Reserves in case of few subsidiaries are net impact of accumulated losses.
3. Provision for Tax in Lupin Australia Pty Ltd., Australia is Rs. 15,592/- and Lupin Pharmacare Ltd., India is (Rs. 19,975/-)
2. Investment (other than in subsidiaries) in Multicare Pharmaceuticals Philippines Inc., Philippines is Rs. 15,896/- and in Hormosan Pharma GmbH, Germany is Rs. 30,270/-
1. The Ministry of Corporate Affairs has exempted the Company from attaching to its Balance Sheet, certain information specified in Section 212(1) except that mentioned in Section 212(1)(e) of the said Act, pertaining to
Notes:
415.9
231.0
Provision for Tax
16,542.0
Profit/(Loss)
before Tax
Turnover (Net)
-
9071.9
9902.7
Total Liabilities
Total Assets
817.0
Reserves
Rs. in million
13.8
than in subsidiaries)
Lupin
Herbal Ltd.,
India
From
April 1,2009 to
May 31, 2009
Hormosan
Multicare
Pharma Pharmaceuticals
GmbH,
Philippines
Germany Inc., Philippines
Year ended
Year ended
Year ended
Year ended
Year ended
Year ended
Year ended
Year ended
From
Year ended
Year ended
Year ended
Year ended
From
March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 March 31, 2010 June 5, 2009 to June 18, 2009 to
March 31, 2010 March 31, 2010
Capital
The financial year/
period ended on
Lupin
Pharma
Holdings B.V.,
Dynamics
Netherlands (Proprietary) Ltd.,
South Africa
Max Pharma
Pty Ltd.,
Australia
Lupin Lupin Australia
Pharmacare
(Pty) Ltd.,
Ltd., India
Australia
Lupin Pharma
Canada Ltd.,
Canada
Kyowa Novodigm Ltd.,
Lupin
Name of the
India
subsidiary company Pharmaceuticals Pharmaceutical
Industry
Inc., USA
Co., Ltd., Japan
(As per the exemption letter of the Ministry of Corporate Affairs, Government of India)
INFORMATION ON THE FINANCIALS OF THE SUBSIDIARY COMPANIES
FOR THE YEAR ENDED MARCH 31, 2010
Notes
168
Notes
169
Notes
170
give me six hours to
chop down a tree and
I will spend the first
four sharpening
the axe
Abraham Lincoln
LUPIN LIMITED
Corporate Office
Laxmi Towers, 'B' Wing, Bandra Kurla Complex
Bandra (East), Mumbai 400 051
Tel: + 91 22 6640 2222
Fax: + 91 22 6640 2130
Registered Office
159, C.S.T. Road, Kalina
Santacruz (East), Mumbai 400 098
Tel: + 91 22 6640 2323
Fax: + 91 22 2652 8806
Email
[email protected]
[email protected]
Website
www.lupinworld.com
2010
GO!

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