Document and Entity Information
Document and Entity Information | 12 Months Ended |
Mar. 31, 2020shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Trading Symbol | TARO |
Entity Registrant Name | TARO PHARMACEUTICAL INDUSTRIES LTD |
Entity Central Index Key | 0000906338 |
Current Fiscal Year End Date | --03-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Interactive Data Current | Yes |
Title of 12(b) Security | Ordinary Shares, NIS 0.0001 nominal |
Security Exchange Name | NYSE |
Entity File Number | 001-35463 |
Entity Incorporation, State or Country Code | L3 |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Address, Address Line One | 14 Hakitor Street |
Entity Address, City or Town | Haifa Bay |
Entity Address, Postal Zip Code | 2624761 |
Entity Address, Country | IL |
Document Accounting Standard | U.S. GAAP |
Ordinary Shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 38,258,077 |
Founders' Shares [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 2,600 |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, Address Line One | 3 Skyline Drive |
Entity Address, City or Town | Hawthorne |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10532 |
Contact Personnel Name | Daphne Huang |
City Area Code | 914 |
Local Phone Number | 345-9000 |
Contact Personnel Fax Number | 914-345-6169 |
Contact Personnel Email Address | Daphne.Huang@Taro.com |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 513,354 | $ 567,451 |
Marketable securities | 595,383 | 481,883 |
Accounts receivable and other: | ||
Trade, net | 235,221 | 237,945 |
Other receivables and prepaid expenses | 35,567 | 47,362 |
Inventories | 153,073 | 148,079 |
TOTAL CURRENT ASSETS | 1,532,598 | 1,482,720 |
LONG-TERM MARKETABLE SECURITIES | 459,639 | 304,322 |
PROPERTY, PLANT AND EQUIPMENT, NET | 209,961 | 206,242 |
DEFERRED INCOME TAXES | 106,693 | 110,974 |
OTHER ASSETS | 32,361 | 31,068 |
TOTAL ASSETS | 2,341,252 | 2,135,326 |
Accounts payable: | ||
Trade payables | 28,858 | 35,060 |
Other current liabilities | 193,873 | 181,761 |
TOTAL CURRENT LIABILITIES | 222,731 | 216,821 |
LONG-TERM LIABILITIES: | ||
Deferred income taxes | 3,395 | 2,985 |
Other long-term liabilities | 5,367 | 4,398 |
TOTAL LONG-TERM LIABILITIES | 8,762 | 7,383 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
TOTAL LIABILITIES | 231,493 | 224,204 |
Taro shareholders' equity: | ||
Ordinary shares of NIS 0.0001 par value: Authorized at March 31, 2020 and March 31, 2019: 200,000,000 shares; Issued at March 31, 2020 and March 31, 2019: 45,116,262 shares Outstanding at March 31, 2020 and March 31, 2019: 38,258,077 and 38,538,796 shares, respectively | 679 | 679 |
Founders’ shares of NIS 0.00001 par value: Authorized, issued and outstanding at March 31, 2020 and March 31, 2019: 2,600 shares | 1 | 1 |
Additional paid-in capital | 262,445 | 262,445 |
Accumulated other comprehensive loss, net of taxes | (163,037) | (144,108) |
Treasury stock at March 31, 2020 and March 31, 2019: 6,858,185 and 6,577,466 shares, respectively | (721,494) | (694,510) |
Accumulated earnings | 2,725,270 | 2,481,029 |
Taro shareholders' equity | 2,103,864 | 1,905,536 |
Non-controlling interest | 5,895 | 5,586 |
TOTAL SHAREHOLDERS’ EQUITY | 2,109,759 | 1,911,122 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 2,341,252 | $ 2,135,326 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2020 | Mar. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 |
Ordinary shares, shares issued | 45,116,262 | 45,116,262 |
Ordinary shares, shares outstanding | 38,258,077 | 38,538,796 |
Founders' stock, par value | $ 0.00001 | $ 0.00001 |
Founders' stock, shares authorized | 2,600 | 2,600 |
Founders' stock, shares issued | 2,600 | 2,600 |
Founders' stock, shares outstanding | 2,600 | 2,600 |
Treasury stock, shares | 6,858,185 | 6,577,466 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | |||
Sales, net | $ 644,769 | $ 669,893 | $ 661,913 |
Cost of sales | 245,044 | 224,169 | 198,405 |
Gross profit | 399,725 | 445,724 | 463,508 |
Operating expenses: | |||
Research and development | 59,777 | 63,238 | 70,418 |
Selling, marketing, general and administrative | 93,413 | 89,971 | 88,196 |
Settlements and loss contingencies | (3,678) | 1,884 | |
Total operating expenses | 153,190 | 149,531 | 160,498 |
Operating income | 246,535 | 296,193 | 303,010 |
Financial (income) expense, net | (48,482) | (58,851) | 12,531 |
Other gain, net | 3,018 | 1,810 | 1,889 |
Income before income taxes | 298,035 | 356,854 | 292,368 |
Tax expense | 53,485 | 74,732 | 81,954 |
Income from continuing operations | 244,550 | 282,122 | 210,414 |
Net loss from discontinued operations attributable to Taro | (335) | ||
Net income | 244,550 | 282,122 | 210,079 |
Net income (loss) attributable to non-controlling interest | 309 | 345 | (1,071) |
Net income attributable to Taro | 244,241 | 281,777 | 211,150 |
Net income from continuing operations attributable to Taro | 244,241 | 281,777 | 211,485 |
Net loss from discontinued operations attributable to Taro | (335) | ||
Net income attributable to Taro | $ 244,241 | $ 281,777 | $ 211,150 |
Net income per ordinary share from continuing operations attributable to Taro: | |||
Basic and Diluted | $ 6.35 | $ 7.23 | $ 5.27 |
Net loss per ordinary share from discontinued operations attributable to Taro: | |||
Basic and Diluted | (0.01) | ||
Net income per ordinary share attributable to Taro: | |||
Basic and Diluted | $ 6.35 | $ 7.23 | $ 5.26 |
Weighted-average number of ordinary shares used to compute net income per share: | |||
Basic and Diluted | 38,460,056 | 38,990,058 | 40,155,087 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income attributable to Taro | $ 244,241 | $ 281,777 | $ 211,150 |
Other comprehensive (loss) income: | |||
Change in unrealized (loss) gain from marketable securities | (16,415) | 11,919 | 1,917 |
Change in unrealized loss from hedging instruments | (2,513) | ||
Foreign currency translation adjustments | (1) | (45,742) | 35,931 |
Total other comprehensive (loss) income attributable to Taro | (18,929) | (33,823) | 37,848 |
Total comprehensive income attributable to Taro | $ 225,312 | $ 247,954 | $ 248,998 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Share Capital | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Shares [Member] | Retained Earnings [Member] | Total Taro Shareholders' Equity [Member] | Non-controlling Interest [Member] |
Balance at Mar. 31, 2017 | $ 2,073,806 | $ 680 | $ 262,445 | $ (148,133) | $ (498,675) | $ 2,451,177 | $ 2,067,494 | $ 6,312 |
Balance, shares at Mar. 31, 2017 | 40,513,000 | |||||||
Repurchase of treasury stock | $ (111,334) | (111,334) | (111,334) | |||||
Repurchase of treasury stock, shares | (1,085,694) | (1,085,000) | ||||||
Comprehensive (loss) income, net of tax | $ 37,848 | 37,848 | 37,848 | |||||
Net income | 210,079 | 211,150 | 211,150 | (1,071) | ||||
Balance at Mar. 31, 2018 | 2,210,399 | $ 680 | 262,445 | (110,285) | (610,009) | 2,662,327 | 2,205,158 | 5,241 |
Balance, shares at Mar. 31, 2018 | 39,428,000 | |||||||
Repurchase of treasury stock | $ (84,501) | (84,501) | (84,501) | |||||
Repurchase of treasury stock, shares | (888,719) | (889,000) | ||||||
Comprehensive (loss) income, net of tax | $ (33,823) | (33,823) | (33,823) | |||||
Dividend paid | (500,000) | (500,000) | (500,000) | |||||
Cumulative-effect adjustment for income taxes resulting from intra-entity transfers | 36,925 | 36,925 | 36,925 | |||||
Net income | 282,122 | 281,777 | 281,777 | 345 | ||||
Balance at Mar. 31, 2019 | 1,911,122 | $ 680 | 262,445 | (144,108) | (694,510) | 2,481,029 | 1,905,536 | 5,586 |
Balance, shares at Mar. 31, 2019 | 38,539,000 | |||||||
Repurchase of treasury stock | $ (26,984) | (26,984) | (26,984) | |||||
Repurchase of treasury stock, shares | (280,719) | (281,000) | ||||||
Comprehensive (loss) income, net of tax | $ (18,929) | (18,929) | (18,929) | |||||
Net income | 244,550 | 244,241 | 244,241 | 309 | ||||
Balance at Mar. 31, 2020 | $ 2,109,759 | $ 680 | $ 262,445 | $ (163,037) | $ (721,494) | $ 2,725,270 | $ 2,103,864 | $ 5,895 |
Balance, shares at Mar. 31, 2020 | 38,258,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 244,550 | $ 282,122 | $ 210,079 |
Adjustments required to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 21,383 | 18,597 | 16,496 |
Realized loss on sale of long-lived assets and marketable securities | 28 | 27 | 275 |
Change in derivative instruments, net | (2,649) | 3,115 | (893) |
Effect of exchange differences on intercompany balances | (2,517) | 9,467 | |
Foreign exchange effect of marketable securities and bank deposits | (11,600) | (27,016) | 25,503 |
Deferred income taxes, net | 7,584 | 12,262 | 56,007 |
Decrease (increase) in trade receivables, net | 2,724 | (32,088) | (2,297) |
Decrease in other receivables, prepaid expenses and other | 1,247 | 675 | 2,020 |
Increase in inventories, net | (4,994) | (5,515) | (1,978) |
Decrease in income tax receivables | 10,890 | 73,581 | 10,624 |
(Decrease) increase in trade payables | (6,202) | 9,881 | 9,049 |
Increase (decrease) in other accounts payable and accrued expenses | 1,423 | (5,683) | (12,012) |
Increase (decrease) in income tax payables | 5,561 | (3,669) | 2,027 |
Loss (income) from marketable securities, net | 1,660 | (63) | (678) |
Net cash provided by operating activities | 271,605 | 323,709 | 323,689 |
Cash flows from investing activities: | |||
Purchase of property, plant and equipment | (26,631) | (26,992) | (26,886) |
Investment in other intangible assets | (1,783) | (3,666) | (2,650) |
Proceeds from short-term bank deposits, net | 225,503 | 161,032 | |
Proceeds from long-term deposits and other assets | 70,685 | 396,281 | |
Investment in marketable securities | (1,222,190) | (1,165,685) | (1,140,853) |
Proceeds from marketable securities | 952,421 | 1,157,317 | 370,363 |
Proceeds from (investment in) sale of long-lived assets | 21 | (26) | 1,075 |
Net cash (used in) provided by investing activities | (298,162) | 257,136 | (241,638) |
Cash flows from financing activities: | |||
Repurchase of treasury stock | (26,984) | (88,849) | (106,986) |
Dividends paid | (500,000) | ||
Net cash used in financing activities | (26,984) | (588,849) | (106,986) |
Effect of exchange rate changes on cash and cash equivalents | (556) | (1,156) | 1,147 |
Decrease in cash and cash equivalents | (54,097) | (9,160) | (23,788) |
Cash and cash equivalents at the beginning of the period | 567,451 | 576,611 | 600,399 |
Cash and cash equivalents at the end of the period | 513,354 | 567,451 | 576,611 |
Cash paid during the year for: | |||
Income taxes | 54,536 | 71,096 | 55,051 |
Cash received during the year for: | |||
Income taxes | 24,331 | 69,436 | 36,668 |
Non-cash investing transactions: | |||
Purchase of property, plant and equipment included in accounts payable | 1,477 | 4,740 | 2,281 |
Non-cash financing transactions: | |||
Purchase of treasury stock | 4,348 | ||
Purchase of marketable securities | $ 9,159 | $ 2,003 | $ 3,491 |
General
General | 12 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
General | NOTE 1: — GENERAL Taro Pharmaceutical Industries Ltd. (the “Company” or “Taro”) is an Israeli corporation, which operates in Israel and elsewhere through its Israeli, North American, and European subsidiaries (the “Group”). The principal business activities of the Group are the production, research, development and marketing of pharmaceutical products. As of March 22, 2012, the Company’s ordinary shares are traded on the New York Stock Exchange (the “NYSE”), under the symbol “TARO.” As used herein, the terms “we,” “us,” “our,” “Taro” and the “Company” mean Taro Pharmaceutical Industries Ltd. and its subsidiaries, unless otherwise indicated. The activities of the Group in North America are performed by Taro Pharmaceuticals Inc. (“Taro Canada”), Taro Pharmaceuticals North America, Inc. (“TNA”) and Taro Pharmaceuticals U.S.A., Inc. (“Taro U.S.A.”). Taro International Ltd. in Israel is engaged in the pharmaceutical activities of the Group outside North America. The Group manufactures generic and proprietary drug products in facilities located in Israel and Canada, and manufactures bulk active pharmaceutical ingredients in its Israel facility. The Group’s research and development facilities are located in Israel and Canada. The majority of the Group’s sales are in North America, primarily in the U.S.A. In North America, the Company sells and distributes its products principally to drug industry wholesalers, drug store chains and mass merchandisers. In Israel, the Group sells and distributes its products principally to healthcare institutions, drug store chains, and private pharmacies. In the generic pharmaceutical industry, selling prices and related profit margins tend to decrease as products mature due to increased competition from other generic pharmaceutical manufacturers as they gain approval from the U.S. Food and Drug Administration (the “FDA”), the Canadian Health Products and Food Branch Inspectorate, and the Israeli and other Ministries of Health (“Government Agencies”) to manufacture equivalent products. The Group’s future operating results are dependent on, among other things, its ability to introduce new products and maintain its approvals to market existing drugs. While non-compliance with Government Agencies’ regulations can result in refusal to allow country entry, seizure, fines or injunctive actions to prevent the sale of products, no material actions against the Group or its products have recently occurred. The Group believes that it is in material compliance with all Government Agencies’ regulations. While the majority of the Company’s products are either synthesized by the Company itself or are derived from multiple source materials, some raw materials and certain products are currently obtained from single suppliers. The Company does not believe that any interruption of supply from a single supplier would have a material adverse effect on the Company’s results of operations and financial position. To date, the Group has not experienced difficulties in obtaining raw materials or other materials. Sun Pharmaceutical Industries Ltd. (“Sun”), the Company’s majority shareholder, owns, or controls as of March 31, 2020, 29,497,813, or 77.1%, of the Company’s ordinary shares, and with the Company’s founders’ shares, 84.7% of the vote attributable to the share equity of the Company. On October 1, 2015, Taro entered into a share purchase Agreement with EPIRUS Biopharmaceuticals, Inc. (“EPIRUS”) for all of the shares of Zalicus Pharmaceuticals Ltd. (“Zalicus”), including its product candidate Z944 and certain related assets, a novel, oral, T-type calcium channel modulator in development for the treatment of pain. As a result of the acquisition, Taro paid CAD $5,000 in cash and a non-interest bearing, limited recourse promissory note in the amount of CAD $5,000 with a maturity date of July 1, 2017. In July 2017, Taro elected not to repay the promissory note and the Z944 assets were transferred back to EPIRUS. On November 23, 2016, the Company announced that its Board of Directors authorized a $250,000 repurchase of ordinary shares, which was completed on January 11, 2019. Under the program, the Company bought back 2,493,378 of its ordinary shares in open market transactions, in accordance with a 10b5-1 program, at an average price of $100.28 per share. On November 5, 2018, the Company announced that its Board of Directors declared a $500,000 special cash dividend on Taro ordinary shares. The special dividend of $12.86 per share was paid on December 28, 2018, to shareholders of record at the close of business on December 11, 2018. On November 4, 2019, the Company announced that its Board of Directors approved a $300 million share repurchase of ordinary shares. On November 15, 2019, the Company commenced a modified “Dutch auction” tender offer to repurchase up to $225 million in value of its ordinary shares. In accordance with the terms and conditions of the tender offer, which expired on December 16, 2019, the Company accepted for payment 280,719 ordinary shares at the final purchase price of $91.00 per share. In December 2019, COVID-19, a disease caused by a strain of coronavirus, was first reported, and later declared a pandemic by the World Health Organization in March 2020, spreading globally. It has affected Israel and Canada, where most of our manufacturing takes place, and spread throughout each state in the United States, our largest market. The COVID-19 pandemic has disrupted global supply chains, created significant volatility of global financial markets and impacted negatively the global economy. Additionally, it has impacted our business and may materially affect our operations, including manufacturing, supply chain, pre-commercial launch and clinical trial activities should the pandemic persist. Countries, states and local governments instituting measures to reduce the spread of COVID-19 have impacted our operations with significant disruptions, uncertainty and economic volatility, higher costs, and capital expenditures. Such measures include quarantines, government restrictions on movement, business closures and suspensions, canceled events and activities, self-isolation, and other voluntary and/or mandated changes in behavior. Our offices are or have been operating under work from home protocols, and our manufacturing and distribution facilities have instituted policies and procedures to protect our employees and operations, including social distancing, the supply and use of personal protective equipment, split shifts and health assessments. We have incurred increased costs to put in place additional protection for the health and safety of our employees within our offices and facilities. We had and, in some instances, continue to have to suspend in-person activities of our field employees because of restrictions on meetings instituted by our customers. These protocols, policies, procedures, and suspension of activities have affected our business operations. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2: — SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements are prepared according to U.S. GAAP. a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions. Management believes that the estimates, judgements and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgements and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most critical estimates are used in its determination of its sales incentives reserves, inventory reserves, income taxes, fixed assets, intangible assets, derivative instruments and contingencies. b. Financial statements in U.S. dollars (“USD”): A majority of the revenue of the Company and certain of its subsidiaries is generated in USD. In addition, a substantial portion of the costs of the Company and these subsidiaries is incurred in USD. Management believes that the USD is the primary currency of the economic environment in which the Company and these subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the USD, requiring re-measurement from the local currency into USD for each of these entities. All exchange gains and losses resulting from the re-measurement are reflected in the Consolidated Statements of Operations as financial income or expense, as appropriate. Prior to April 1, 2019, the functional currency of the Company’s Canadian subsidiary was the Canadian dollar (“CAD”). Accordingly, the financial statements of the Canadian subsidiary were translated into USD. All balance sheet accounts were translated using the exchange rates in effect at the balance sheet date. Amounts recorded in the Consolidated Statements of Operations were translated using the average exchange rate prevailing during the year. The resulting translation adjustments were reported as a component of shareholders’ equity under accumulated other comprehensive income. Effective as of the Company’s fiscal year beginning April 1, 2019, Taro Canada’s functional currency became the USD. FASB ASC Topic 830, “Functional Currency Matters,” requires a change in functional currency to be reported as of the date it is determined there has been a change , and it is generally accepted practice that the change is made at the start of the most recent period that approximates the date of the change . Management determined it would enact this change effective on April 1, 2019. While the change was based on a factual assessment, the determination of the date of the change required management’s judgement given the change in the primary economic and business environment , in which Taro Canada operates , ha ve evolved over time . As part of management’s functional currency assessment, changes in economic facts and circumstances were considered. This included analysis o f changes in : management of operations, process, and in the composition of cash and marketable securities balances. The Company has centralized different functions, including treasury and investment portfolio measurement, which resulted in a stronger focus on the USD currency for Taro Canada. Additionally, as budgeting has also been centralized for the Company, Taro Canada has implemented budgeting in USD, whereas this was previously performed in CAD. Taro Canada’s cash inflows consist primarily of USD cash balances and less of CAD, as also reflected in the budget. The transfer of significant intangible assets to Taro Canada , as a result of winding down of T NA , has reduced the relevance of the foreign currency position on the balance sheet of Taro Canada. The company decided to focus Taro Canada's sales market as the US market, with the majority of all sales to the US denominated in US D. T his was followed by centralizing budgets and facilitating effective netting and hedging activities. Assuming current business operating model stays constant, m anagement believes that the USD cash balances will continue to increase, while CAD cash balances will continue to produce a net outflow. Management re-evaluated all indicators established in ASC 830-10-55-5 to determine the functional currency of Taro Canada. Such indicators include i) cash flow, ii) sales price, iii) sales market, iv) expense, v) financing and vi) intercompany transactions and arrangements. Management determined that the cash flow indicators and the sales market indicators were most relevant to Taro Canada operations and its primary economic environment. At the time of the assessment adopted on April 1, 2019, cash flows generated by Taro Canada that relate to its individual assets and liabilities now directly affect the Company’s cash flows and are readily available for remittance to the Company. The majority of cash flow from Taro Canada’s operations is denominated in USD, with the sales market for Taro Canada’s products now mostly in the U.S. Approximately 75% of Taro Canada’s revenue is to the U.S. market, with over 80% of Taro Canada’s plant production, in terms of units, being produced for the US market. Significant asset and liability line items on Taro Canada’s balance sheet are comprised almost solely (greater than 90%) of USD denominated transactions. Furthermore, most of Taro Canada’s generated cash flows are now invested in USD based cash and cash equivalents or marketable securities. Since such investments are short-term, cash is readily available for remittance to other Taro entities. Thus, the USD is the primary currency from which Taro Canada generates and accumulates cash. When considering all relevant facts together, management concluded that the USD best reflects the currency of the primary economic environment in which Taro Canada currently operates. Therefore, USD is the functional currency as a result of the change in the most significant economic facts and circumstances from cash flow and sales market indicators, as well as intra-entity transactions and arrangements, which are material to Taro Canada. As a result, the Company adopted USD as the functional currency for Taro Canada effective April 1, 2019. The change was accounted for prospectively from the date of the change in accordance with FASB ASC Topic 830, “Foreign Currency Matters.” The following table summarizes the impact on both consolidated net income and other comprehensive income (loss) utilizing USD as the functional currency of Taro Canada as of March 31, 2020, compared to the related impact if the functional currency of Taro Canada would have remained CAD (excluding FX from transactions denominated in CAD recorded in the respective period): USD as Functional Currency (in USD)* CAD as Functional Currency (in USD)** (Unaudited Pro Forma) Financial (income) expense, net - attributed to foreign translation gain $ (14,838 ) $ (46,667 ) Other comprehensive loss - attributed to foreign currency translation adjustments $ (1 ) $ (92,959 ) *Based on consolidated amounts of the Group. Includes Taro Canada amounts reported in USD with USD as functional currency. **Based on unaudited pro forma consolidated amounts of the Group. Includes Taro Canada unaudited pro forma amounts reported in USD with CAD as functional currency. c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation and non-controlling interest is included in shareholders’ equity. Sun, through its wholly owned subsidiary, Taro Development Corporation (“TDC”) owns 3.1% of the shares that have economic rights and has 50.0% of the voting rights in Taro U.S.A.; with the Company owning the remaining shares and voting rights. In 1993, TDC signed an agreement with the Company to vote all of its shares in Taro U.S.A. in all elections of directors of Taro U.S.A. as the Company shall instruct. In May 2020, TDC renewed its commitment to the Company. TDC may terminate the agreement upon one year written notice and no such notice of termination has been provided. TDC is a minority shareholder in the Company by way of its ownership of Taro U.S.A. shares that have economic rights. d. Cash and cash equivalents: Cash equivalents are highly-liquid investments that are readily convertible into cash. Short-term bank deposits: Bank deposits with maturities of more than three months, but less than one year, are included in short-term deposits. Such deposits are stated at cost which approximates market value. The Company does not have any short-term deposits at March 31, 2020, or 2019. e. Marketable securities: Marketable securities, consisting of both debt securities and equity securities, are comprised primarily of corporations bonds, sovereign bonds, U.S. Treasuries, certificates of deposit, preferred stock and commercial paper. The marketable debt securities were designated as available-for-sale (“AFS”). Accordingly, these securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income, a separate component of shareholders’ equity. The equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in consolidated statements of operation. Realized gains and losses on the sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest and dividends on securities are included in financial income, net. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities results in the value of the investments being below the cost basis of such securities and when such decline is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in financial income, net in the Consolidated Statements of Operations and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. ASU No. 2016-13 , “Financial Instruments—Credit Losses (Topic 326) ” will be effective for the Company’s fiscal year beginning April 1, 2020. In accordance with ASC 326-30, AFS debt securities will be impaired if its fair value is below its amortized cost basis. Under the new guidance, the impairment model no longer allows consideration of the length of time during which the fair value has been less than its amortized cost when determine whether a credit loss exists. During the years ended March 31, 2020, 2019 and 2018, the Company did not own or sell any marketable securities previously impaired. The Company adopted ASU No. 2016-01, “ Financial Instruments-Overall (Subtopic 825-10). f. Allowance for doubtful accounts: The allowance for doubtful accounts is calculated primarily with respect to specific balances, for which, in the opinion of management, collection of such balances is doubtful. The allowance, in the opinion of management, is sufficient to cover probable uncollectible balances. g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory reserves are provided to cover risks arising from slow-moving items, short-dated inventory, excess inventory or obsolescence. Changes in these provisions are charged to cost of sales. Cost is determined as follows: Raw and packaging materials – weighted-average cost basis. Finished goods and work in progress – weighted-average production costs including materials, labor and direct and indirect manufacturing expenses. Purchased products for commercial purposes – weighted-average cost basis. h. Taxes: (1) Deferred income taxes: Deferred income taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of temporary differences between the financial accounting and tax basis of assets and liabilities under the applicable tax laws, and on tax rates anticipated to be in effect when the deferred taxes are expected to be paid or realized. A valuation allowance is provided if, based upon the weight of available evidence, it is “more likely than not” that a portion of the deferred tax assets will not be realized. For the years ended March 31, 2020 and 2019, in accordance with the required updates in ASU No. 2015-17, all deferred tax liabilities and assets are classified as non-current. (2) Tax contingencies: The Company follows a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. In addition, the Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions under the provision for income taxes. A liability for unrecognized tax benefits was recorded in accordance with ASC 740 amounting to $25,258 and $28,188 as of March 31, 2020 and 2019, respectively. (3) Income taxes: Income taxes are accounted for in accordance with the use of the liability method, whereby deferred tax asset and liability account balances are determined for temporary differences between the financial reporting and tax basis of assets and liabilities, and for carryforward losses and credits. Deferred taxes are measured using tax rates and laws that will be in effect when the differences are expected to reverse. In certain cases management determined that it was more likely than not that the Company will not benefit from the deferred tax assets in subsidiaries, and a valuation allowance was provided against the deferred tax assets carried by such subsidiaries. In future years, if it is more likely than not that the subsidiary will be in a position to utilize its deferred tax asset, the valuation allowance for such assets will be modified. i. Property, plant and equipment: (1) Property, plant and equipment is stated at cost, net of accumulated depreciation. Payroll and other costs that are direct incremental costs necessary to bring an asset to the condition of its intended use incurred during the construction and validation period of property, plant and equipment are capitalized to the cost of such assets. (2) Depreciation is calculated utilizing the straight-line method over the estimated useful lives of the assets, from the date the assets are ready for their intended use, at the following annual rates: % Building 2.5 - 10 Machinery and equipment 5 - 10 Motor vehicles 20 Furniture, fixtures, office 6 Leasehold improvements are depreciated using the straight-line method over the shorter of their useful lives or the terms of the leases (generally 5-10 years). (3) Certain costs incurred for computer software developed or obtained for internal use is required to be capitalized. As of March 31, 2020 and 2019, the Group capitalized $13,912 and $7,854 of software costs, respectively. Software costs are amortized using the straight-line method over their estimated useful life (generally 3 - 5 years). j. Lease of land from Israel Land Administration: The Company leases several parcels of land from the Israel Land Administration (“ILA”). The lease period of the industrial parcels ends between 2018 and 2060. The Company has the right to extend the lease agreement ending 2018 for an additional period of 49 years and is currently in the process of extending the lease agreement. The ILA lease agreements are standard agreements covering substantial portions of the land of Israel. The standard agreements call for a Lease Period of 49 years, with an option for one additional Lease Period (i.e., total of 98 years). A majority of the Company’s leases are in the beginning of the second 49 year period, and the remaining leases still in the first 49 year period have the option for the one additional lease period. The ownership of the land is not transferred at the end of the lease period, however, in certain conditions the lessee may purchase the land from the ILA. The expectation, based on practice and accumulated experience is that the renewal price would be substantially below fair market value. Since such leases do not qualify as a capital lease, they are being accounted for as operating leases. The prepaid lease amount is included in long-term receivables and other assets and amortized over the term of the lease. As of April 1, 2019, the Company commenced lease accounting in accordance with ASU 2016-02, “ Leases (Topic 842) k. Goodwill: The goodwill of the Company is not amortized, but rather is subject to an annual impairment test (or more frequently if impairment indicators arise). The Company operates in one operating segment, comprising its only reporting unit. The goodwill impairment tests are conducted in two steps. In the first step, if it is determined that the net book value of the reporting unit exceeds its fair value, the Company would then perform the second step of the impairment test. This requires the allocation of the reporting unit’s fair value of all of its assets and liabilities in a manner similar to an acquisition cost allocation, with any residual fair value being allocated to goodwill. The implied fair value of the goodwill is then compared to the carrying value to determine impairment, if any. The Company determined the fair value using the market approach, which is based on the market capitalization by using the share price of the Company on the NYSE and an appropriate control premium. As of March 31, 2020, the market capitalization of the Company was significantly higher than the net book value, therefore there was no need to continue to step two. Taro determined the goodwill was not impaired as of March 31, 2020 and 2019. l. Contingencies: The Company may be involved in various patent, product liability, consumer, commercial or environmental claims, government investigations, and other legal proceedings that arise from time to time in the ordinary course of business. Except for income tax contingencies, the Company records accruals for these types of contingencies to the extent that the Company concludes their occurrence is probable and that the related liabilities are estimable. The Company records anticipated recoveries under existing insurance contracts that are virtually certain of occurring and at the gross amount that is expected to be collected. m . Intangible assets and deferred charges and long-lived assets: Intangible assets and deferred charges: Acquired intangible assets and product rights to be held and used are amortized over their useful life of a weighted-average amortization period of between 5 to 20 years Long-lived assets: The Group’s long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment exists when the carrying amount of the asset exceeds the aggregate future undiscounted cash flows expected to be generated by the asset. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the asset. During the years ended March 31, 2020 and 2019, the Company did not record any impairment charge. n. Comprehensive income: The comprehensive income statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income relates to unrealized gains and losses on available for sale securities and foreign currency translation adjustments. o . Treasury shares: The Company repurchases its ordinary shares from time to time on the open market and holds such shares as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders’ equity. During the years ended March 31, 2020, 2019 and 2018, the Company repurchased 280,719 shares, 888,719 shares, and 1,085,694 shares, respectively. On November 15, 2019, the Company commenced a modified “Dutch auction” tender offer to repurchase up to $225.0 million in value of its ordinary shares. In accordance with the terms and conditions of the tender offer, which expired on December 16, 2019, the Company accepted for payment 280,719 ordinary shares at the final purchase price of $91.00 per share. When treasury stock is reissued, the Company charges the excess of the purchase cost, including related share-based compensation expenses, over their issuance price (loss) to retained earnings. The purchase cost is calculated based on the specific identification method. The Company did not reissue treasury shares during the three years ended March 31, 2020. In cases where the purchase cost is lower than the re-issuance price, the Company credits the difference to additional paid-in capital. p . Revenue recognition: The Company adopted the new accounting standard ASC 606, “ Revenue from Contracts with Customers When the Company recognizes and records revenue from the sale of its pharmaceutical products, the Company, in the same financial reporting period, records an estimate of various future deductions related to the sale. This has the effect of reducing the amount of reported product sales. These deductions include the Company’s estimates, which may require significant judgement of chargebacks, product returns, rebates and other sales deductions. Chargebacks result from pricing arrangements the Company has with end-user customers establishing contract prices which are lower than the wholesalers’ acquisition costs or invoice prices. When these customers buy the Company’s products from their wholesaler of choice, the wholesaler issues a credit memo (chargeback) to the Company for the difference between the invoice price and the end-user contract price. Chargeback reserves are estimated using current wholesaler inventory data and historical data. Product returns result from agreements allowing the Company’s customers to return unsold inventory that is expired or close to expiration and such returns are deducted from revenue. Product return reserves are calculated using the average lag period between sales and product expiry, historical product returns experience, and specific return exposures to estimate the potential obligation for returns of inventory in the distribution channel. Rebates result from contractual agreements with the Company’s customers and are earned based on the Company’s direct sales to customers or the Company’s customers’ sales to third parties. Rebate reserves from the Company’s direct sales to customers and the Company’s customers’ sales to third parties are estimated using historical and contractual data. The Company generally offers discounts to its customers for payments within a certain period of time. Cash discount reserves are calculated by multiplying the specified discount percentage by the outstanding receivable at the end of each period. Reserves for returns, Medicaid and indirect rebates are included in current liabilities. All other sales deductions allowances are recorded as accounts receivable reserves. The reserve for returns is included in current liabilities as substantially all of these returns will not be realized until after the year-end accounts receivable balances are settled. Medicaid and indirect rebates are included in current liabilities because the Company does not have direct customer relationships with any of the payees. The Company offers incentives to certain resellers and retailers through various marketing programs where the Company agrees to reimburse them for advertising costs incurred to include the Company’s products. The Company accounts for these in accordance with FASB ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) q. Research and development: Research and development expenses are charged to expense as incurred. Payments made for research and development services prior to the services being rendered are recorded as prepaid expenses on our Consolidated Balance Sheet and expensed as provided. r. Royalty-bearing grants: Royalty-bearing grants from the government of Israel through the National Technological Innovation Authority (the “Authority”) (formerly operating as Office of the Chief Scientist of the Ministry of Economy of the State of Israel ) for funding approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred. The Company did not earn any grants during the years ended March 31, 2020, 2019 and 2018. s . Advertising expenses: The Group expenses advertising costs as incurred. Product samples are recorded within prepaid expenses on the Consolidated Balance Sheet and recorded within advertising expenses when provided to potential customers. Advertising expenses were $4,902, $6,527, and $9,913 for the years ended March 31, 2020, 2019 and 2018, respectively. t. Sales and other taxes collected and remitted to governmental authorities: The Company collects various taxes from customers and remits them to governmental authorities. These taxes are recorded on a net basis and therefore do not impact the Statement of Operations. u. Basic and diluted net income per ordinary share attributable to Taro: Basic net income per ordinary share is calculated based on the weighted-average number of ordinary shares outstanding during each year. Diluted net income per ordinary share is calculated based on the weighted-average number of ordinary shares outstanding during each year, plus potential dilutive ordinary shares considered outstanding during the year (except where anti-dilutive). v . Freight and distribution costs: The Company’s accounting policy is to classify shipping and handling costs as a part of sales and marketing expense. Freight, distribution costs, and distribution warehousing costs related to shipping and handling to customers, primarily through the use of common carriers or external distribution services amounted to $11,954, $13,187, and $12,170 for the years ended March 31, 2020, 2019 and 2018, respectively. w. Concentrations of credit risk: Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. Cash and cash equivalents and bank deposits are principally invested in major banks in Israel, the United States and Canada. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Group’s cash and cash equivalents are financially sound and that low credit risk therefore exists with respect to these financial instruments. These deposits may be redeemed upon demand and, therefore, bear minimal risk. The Group’s trade accounts receivables are mainly derived from sales to customers in the United States, Canada, Europe and Israel. At March 31, 2020, two different customers represented approximately 39.2% and 19.6% of the Company’s trade accounts receivable. The Group has adopted credit policies and standards intended to mitigate inherent risk while accommodating sales growth. The Group performs ongoing credit evaluations of its customers’ financial condition when deemed necessary, but does not require collateral for its customers’ accounts receivable. x. Fair value of financial instruments: The carrying amount of cash and cash equivalents, trade and other receivables, trade payables and other payables approximate their fair value, due to the short-term maturities of these instruments. As of March 31, 2020 and 2019, the Company did not have any amounts outstanding under borrowing arrangements. The fair value of currency and interest rate contracts is determined by discounting to the present all future cash flows of the currencies to be exchanged at interest rates prevailing in the market for the period the currency exchanges are due and expressing the results in USD at the current spot foreign currency exchange rate. y. Accounting for derivatives: The Company recognizes all of its derivative instruments as either assets or liabilities at fair value, in the Consolidated Balance Sheet. The accounting for changes (i.e., gains or losses) in the fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. For derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivatives which qualify as a fair value hedge, changes in fair value are reported with the carrying amount of the hedged asset or liability with cash flows reported on the Consolidated Statement of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. For derivatives that qualify as a cash flow hedge, the effective portion of these derivatives’ fair value is initially reported as a component of other comprehensive income with cash flows reported on the Consolidated Statement of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. The designation is based upon the nature of the exposure being hedged. At March 31, 2020, and 2019, the Company had derivative instruments designated as hedging instruments. At March 31, 2018, no derivative instruments were designated as hedging instruments. As of October 1, 2018, the Company commenced hedging accounting for Israel in accordance with ASU No. 2017-12, “Derivatives and Hedging (Topic 815) According to ASU 2017-12, for purposes of assessing whether the qualifying criteria for the critical terms match method are met for a group of forecasted transactions, an entity may assume that the hedging derivative matures at the same time as the forecasted transactions if both the derivative maturity and the forecasted transactions occur within the same 31-day period or fiscal month. The company elected to deem the time criterion as qualified according to the 31-day period method. The company is aware that if any of the critical terms cease to exist or if the counterparty credit rating becomes significant, then the critical terms method cannot be continued. In such a case the company will use a "long haul method" in order to assess the hedge effectiveness or will discontinue the hedging relationship. The effective portion of the designated value is reported under a hedging reserve in other comprehensive income during the hedge period. Once the hedged item affects P&L, the hedging reserve value is reclassified to the same item. The ineffective portion, if any, is reported in P&L. For derivative instruments not designated as hedging instruments for accounting purposes, the gain or loss is recognized in financial income, net in the Consolidated Statement of Operations during the period of change with the cash flows reported on the Consolidated Statements of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. See Note 10. z. Fair value measurements: There is a fair value hie |
Marketable Securities
Marketable Securities | 12 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | NOTE 3: — MARKETABLE SECURITIES a. Marketable securities: March 31, 2020 2019 Short-term marketable securities $ 595,383 $ 481,883 Long-term marketable securities 459,639 304,322 $ 1,055,022 $ 786,205 b. The following is a summary of both short-term and long-term marketable securities by type: March 31, 2020 2019 Amortized Cost Gross Unrealized Gain (Loss) through Other Comprehensive Income Gross Unrealized Gain (Loss) through Profit & Loss Market Value Amortized Cost Gross Unrealized Gain (Loss) through Other Comprehensive Income Gross Unrealized Gain (Loss) through Profit & Loss Market Value Marketable securities: Bonds $ 686,365 $ (6,305 ) $ — $ 680,060 $ 464,443 $ 1,145 $ — $ 465,588 Government securities 271,004 2,438 — 273,442 118,659 13 — 118,672 Commercial paper 45,329 (21 ) — 45,308 60,692 — — 60,692 Preferred stock - debt instrument 6,195 (1,129 ) — 5,066 750 (7 ) — 743 Preferred stock - equity instrument 7,099 — (1,098 ) 6,001 750 — 12 762 Other securities 45,405 (260 ) — 45,145 139,687 61 — 139,748 Total marketable securities $ 1,061,397 $ (5,277 ) $ (1,098 ) $ 1,055,022 $ 784,981 $ 1,212 $ 12 $ 786,205 At March 31, 2020 and 2019, the gross unrealized gain excludes $2,502 and $14,655 of other comprehensive income relating to marketable securities for foreign exchange gain, respectively. As of March 31, 2020 c. The estimated fair value of marketable securities as of March 31, 2020 and 2019, by contractual maturity, are as follows: March 31, 2020 2019 Amortized Market Amortized Market Cost Value Cost Value Available-for-sale marketable securities: Matures in less than five years $ 1,044,537 $ 1,040,549 $ 783,481 $ 784,700 Matures in more than five years 9,761 8,472 750 743 1,054,298 1,049,021 784,231 785,443 Investment at fair value through Profit & Loss 7,099 6,001 750 762 $ 1,061,397 $ 1,055,022 $ 784,981 $ 786,205 |
Accounts Receivable and Other
Accounts Receivable and Other | 12 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Accounts Receivable and Other | NOTE 4: — ACCOUNTS RECEIVABLE AND OTHER a. Trade, net: The following table summarizes the impact of accounts receivable reserves and allowance for doubtful accounts on the gross trade accounts receivable balances at each balance sheet date: March 31, 2020 2019 Trade accounts receivable, gross $ 410,403 $ 461,365 Reserves for sales deductions: Chargebacks (104,552 ) (109,763 ) Other sales deductions (50,844 ) (78,508 ) Customer rebates (17,012 ) (34,757 ) Allowance for doubtful accounts (2,774 ) (392 ) Trade accounts receivable, net $ 235,221 $ 237,945 b. Other receivables and prepaid expenses: March 31, 2020 2019 Government authorities $ 16,257 $ 28,857 Due from related parties 7,839 8,987 Prepaid expenses 6,638 7,075 Advances to suppliers 1,868 1,062 Interest receivable 760 825 Other 2,205 556 $ 35,567 $ 47,362 |
Sales Incentives
Sales Incentives | 12 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Sales Incentives | NOTE 5: — SALES INCENTIVES When the Company recognizes and records revenue from the sale of its pharmaceutical products, it records an estimate in the same financial reporting period for product returns, chargebacks, rebates and other sales deductions, which are reflected as reductions of the related gross revenue. The Company regularly monitors customer inventory information at its three largest wholesale customers to assess whether any excess product inventory levels may exist. The Company reviews this information together with historical product and customer experience, third-party prescription data, industry and regulatory changes and other relevant information and revises its estimates as necessary. The Company’s estimates of inventory in the distribution channel are based on inventory information reported to it by its major wholesale customers, historical shipment and return information from its accounting records, and third-party data on prescriptions filled. The Company’s estimates are subject to inherent limitations pertaining to reliance on third-party information. The Company considers all information available subsequent to the balance sheet date, but before the issuance of the financial statements, that provides additional evidence with respect to conditions existing at the balance sheet date and adjusts the reserves accordingly. Product returns: Consistent with industry practice, the Company generally offers its customers the right to return inventory within three to six months prior to product expiration and up to 12 months thereafter (the “return period”). Product returns are identified by their manufacturing lot number. Because the Company manufactures in bulk, lot sizes are generally large and, therefore, shipments of a particular lot may occur over a one-to-six month period. As a result, although the Company cannot associate a product return with the actual shipment in which such lot was included, the Company can reasonably estimate the period (in months) over which the entire lot was shipped and sold. The Company uses this information to estimate the average time period between lot shipment (and sale) and return for each product, which the Company refers to as the “return lag.” The shelf life of most of the Company’s products ranges between 18-36 months. Because returns of expired products are heavily concentrated during the return period, and given the Company’s historical data, it is able to reasonably estimate return lags for each of its products. These return lags are periodically reviewed and updated, as necessary, to reflect the Company’s best knowledge of facts and circumstances. Using sales and return data (including return lags), the Company determines a return rate to estimate its returns reserve. The Company supplements this calculation with additional information including customer and product specific channel inventory levels, competitive developments, external market factors, the Company’s planned introductions of similar new products and other qualitative factors in evaluating the reasonableness of the returns reserve. The Company continuously monitors factors that could affect its estimates and revises the reserves as necessary. The Company’s estimates of expected future returns are subject to change based on unforeseen events and uncertainties. The Company monitors the levels of inventory in its distribution channels to assess the adequacy of the product returns reserve and to identify potential excess inventory on hand that could have an impact on its revenue recognition. The Company does not ship products to its wholesalers when it appears they have an excess of inventory on hand, based on demand and other relevant factors, for that particular product. Additionally, as a general practice, the Company does not ship products that have less than 12 months until expiration (i.e., “short-dated sales”). Chargebacks: The Company has arrangements with certain customers that allow them to buy its products directly from its wholesalers at specific prices. Typically, these price arrangements are lower than the wholesalers’ acquisition costs or invoice prices. In exchange for servicing these third party contracts, the Company’s wholesalers can submit a “chargeback” claim to the Company for the difference between the price sold to the third party and the price at which they purchased the product from us. The Company generally pays chargebacks on generic products, whereas branded proprietary products are typically not eligible for chargeback claims. The Company considers many factors in establishing its chargeback reserves including inventory information from its largest wholesale customers and the completeness of their reports, estimates of Taro inventory held by smaller wholesalers and distributors, processing time lags, contract and non-contract sales trends, average historical contract pricing, actual price changes, actual chargeback claims received from the wholesalers, Taro sales to the wholesalers and other relevant factors. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in pricing, and changes in estimated wholesaler inventory. The Company reviews the methodology utilized in estimating the reserve for chargebacks in connection with analyzing its product returns reserve each quarter and makes revisions as considered necessary to reasonably estimate its potential future obligation. Rebates and other deductions: The Company offers its customers various rebates and other deductions based primarily on their volume of purchases of its products. Chain wholesaler rebates are rebates that certain chain customers claim for the difference in price between what the chain customer paid a wholesaler for a product purchase and what the chain customer would have paid if such customer had purchased the same product directly from the Company. Cash discounts, which are offered to the Company’s customers, are generally 2% of the gross sales price, and provide the Company’s customers an incentive for paying within a specified time period after receipt of invoice. Medicaid rebates are earned by states based on the amount of the Company’s products dispensed under the Medicaid plan. Billbacks are special promotions or discounts provided over a specific time period to a defined customer base and for a defined product group. Distribution allowances are a fixed percentage of gross purchases for inventory shipped to a national distribution facility that the Company pays to its top wholesalers on a monthly basis. Administration fees are paid to certain wholesalers, buying groups, and other customers for stocking the Company’s products and managing contracts and servicing other customers. Shelf-stock adjustments, which are customary in the generic pharmaceutical industry, are based on customers’ existing levels of inventory and the decrease in the market price of the related product. When market prices for the Company’s products decline, the Company may, depending on its contractual arrangements, elect to provide shelf-stock adjustments and thereby allow its customers with existing inventories to compete at the lower product price. The Company uses these shelf-stock adjustments to support its market position and to promote customer loyalty. The Company establishes reserves for rebates and other various sales deductions based on contractual terms and customer purchasing activity, tracking and analysis of rebate programs, processing time lags, the level of inventory in the distribution channel and other relevant information. Based on the Company’s historical experience, substantially all claims for rebates and other sales deductions are received within 24 months. As discussed above, the Company believes it has the experience and information necessary to reasonably estimate the amounts of reserves for its sales incentives programs. Several of the assumptions used by the Company for certain estimates are based on information received from third parties, such as wholesale customer inventory levels, market data, and other factors beyond the Company’s control. The most critical estimates in determining these reserves, and the ones therefore that would have the largest impact if these estimates were not accurate, are related to contract sales volumes, average contract price, customer inventories and return volumes. The Company regularly reviews the information related to these estimates and adjusts its reserves accordingly, if and when actual experience differs from previous estimates. Use of estimates in reserves: The Company believes that its reserves, allowances and accruals for items that are deducted from gross revenue are reasonable and appropriate based on current facts and circumstances. Changes in actual experience or changes in other qualitative factors could cause the Company’s allowances and accruals to fluctuate, particularly with newly launched or acquired products. The Company regularly reviews the rates and amounts in its reserve estimates. If future estimated rates and amounts are significantly greater than those reflected in the Company’s recorded reserves, the resulting adjustments to those reserves would decrease the Company’s reported net revenue; conversely, if actual product returns, rebates and chargebacks are significantly less than those reflected in the Company’s recorded reserves, the resulting adjustments to those reserves would increase the Company’s reported net revenue. If the Company were to change its assumptions and estimates, its reserves would change, impacting the net revenue that the Company reports. The Company regularly reviews the information related to these estimates and adjusts its reserves accordingly, if and when actual experience differs from previous estimates. The following tables summarize the activities for sales deductions and product returns for the years ended March 31, 2020, 2019, and 2018: For the year ended March 31, 2020 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (109,763 ) $ (1,104,946 ) $ 1,110,157 $ (104,552 ) Rebates and Other (113,657 ) (305,098 ) 348,125 (70,630 ) Total $ (223,420 ) $ (1,410,044 ) $ 1,458,282 $ (175,182 ) Current Liabilities Returns $ (63,818 ) $ (37,258 ) $ 39,670 $ (61,406 ) Other (2) (33,497 ) (77,537 ) 69,472 (41,562 ) Total $ (97,315 ) $ (114,795 ) $ 109,142 $ (102,968 ) For the year ended March 31, 2019 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (116,632 ) $ (1,086,800 ) $ 1,093,669 $ (109,763 ) Rebates and Other (133,221 ) (377,568 ) 397,132 (113,657 ) Total $ (249,853 ) $ (1,464,368 ) $ 1,490,801 $ (223,420 ) Current Liabilities Returns $ (70,865 ) $ (38,247 ) $ 45,294 $ (63,818 ) Other (2) (40,968 ) (64,405 ) 71,876 (33,497 ) Total $ (111,833 ) $ (102,652 ) $ 117,170 $ (97,315 ) For the year ended March 31, 2018 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (112,071 ) $ (1,107,353 ) $ 1,102,792 $ (116,632 ) Rebates and Other (193,255 ) (432,060 ) 492,094 (133,221 ) Total $ (305,326 ) $ (1,539,413 ) $ 1,594,886 $ (249,853 ) Current Liabilities Returns $ (82,494 ) $ (49,265 ) $ 60,894 $ (70,865 ) Other (2) (43,370 ) (60,677 ) 63,079 (40,968 ) Total $ (125,864 ) $ (109,942 ) $ 123,973 $ (111,833 ) (1) Includes immaterial amounts of reversals of provisions recorded for prior years’ sales. (2) Includes Medicaid, indirect rebates, and amounts due to customers. |
Inventories
Inventories | 12 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 6: — INVENTORIES March 31, 2020 2019 Finished goods $ 63,686 $ 65,558 Raw and packaging materials 49,970 44,979 Work in progress 34,084 32,593 Other 5,333 4,949 $ 153,073 $ 148,079 As of March 31, 2020 and 2019, reserves recorded against inventories for slow-moving, short-dated, excess and obsolete inventory totaled $28,902 and $26,026, respectively. As of March 31, 2020 and 2019, there were no pledges of inventory. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | NOTE 7: — PROPERTY, PLANT AND EQUIPMENT a. Composition of assets grouped by major classifications are as follows: March 31, 2020 2019 Cost: Land $ 7,628 $ 7,628 Buildings 187,570 183,496 Leasehold improvements 3,383 2,291 Machinery and equipment 212,480 200,375 Computer software and equipment 39,156 33,789 Motor vehicles 80 215 Furniture, fixtures and office equipment 15,047 14,900 465,344 442,694 Accumulated depreciation and impairment charges: Buildings $ 78,150 $ 71,279 Leasehold improvements 1,847 1,689 Machinery and equipment 144,437 135,801 Computer software and equipment 20,857 18,294 Motor vehicles 80 215 Furniture, fixtures and office equipment 10,012 9,174 255,383 236,452 Depreciated cost $ 209,961 $ 206,242 b. Depreciation expenses were $19,161, $17,017, and $14,727 for the years ended March 31, 2020, 2019 and 2018, respectively. c. Cost of property, plant and equipment includes capitalized interest expense, capitalized direct incremental costs (such as payroll and related expenses) and other internal costs incurred in order to bring the assets to their intended use in the amount of $15,333 d. Cost of computer equipment includes capitalized development costs of computer software developed for internal use in the amount of $13,912 and $7,854 as of March 31, 2020 and 2019, respectively. e . Asset disposals were $279 and $12,707 for the years ended March 31, 2020 and 2019, respectively, mainly relating to the write-off of fully depreciated computer equipment, software and production equipment. |
Intangible Assets and Deferred
Intangible Assets and Deferred Costs | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Deferred Costs | NOTE 8: — INTANGIBLE ASSETS AND DEFERRED COSTS a. Composition: March 31, 2020 2019 Cost: Product and distribution rights $ 85,174 $ 83,391 85,174 83,391 Accumulated amortization: Product and distribution rights 76,762 74,539 76,762 74,539 $ 8,412 $ 8,852 b. Amortization expenses related to product and distribution rights were $2,222 , $1,580 and $1,769 for the years ended March 31, 2020 , 2019 and 2018 , respectively. c. As of March 31, 2020, the estimated amortization expense of product and distribution rights for 2021 to 2025 is as follows: 2021—$1,834; 2022—$1,845; 2023—$1,710; 2024—$311; 2025—$577. d. The weighted-average amortization period for product rights is approximately 5 years. e. During the years ended March 31, 2020 and 2019, the Company did not record any impairment charge. |
Other Assets
Other Assets | 12 Months Ended |
Mar. 31, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Assets | NOTE 9: — OTHER ASSETS March 31, 2020 2019 Prepayment $ 13,250 $ 13,480 Intangible assets and deferred costs, net (2) 8,412 8,852 Goodwill (3) 7,191 7,191 Right-of-use (ROU) assets (4) 2,195 — Severance pay fund (5) 1,187 1,350 Other 126 195 $ 32,361 $ 31,068 (1) The ILA lease agreements are standard agreements covering substantial portions of the land of Israel. The standard agreements call for a Lease Period of 49 years, with an option for one additional Lease Period (i.e., total of 98 years). A majority of the Company’s leases are in the beginning of the second 49 year period, and the remaining leases still in the first 49 year period have the option for the one additional lease period. This amount was prepaid. See Note 2.j. (2) See Note 8. (3) See Note 2.k. (4) As of April 1, 2019, the Company commenced lease accounting in accordance with ASU 2016-02, “Leases (Topic 842).” The Company currently has leased offices, warehouse space and equipment under operating leases for periods through 2023. See Note 2.bb. and Note 13. ( 5 ) Under Israeli law, the Company is required to make severance or pension payments to dismissed employees and to employees terminating employment under certain other circumstances. Deposits are made with a pension fund or other insurance plans to secure pension and severance rights for the employees in Israel. These amounts represent the balance of the deposits in those funds (including profits) that will be used to cover the Company’s severance obligations. See Note 12.b. Taro U.S.A. maintains defined contribution retirement savings plans covering substantially all of their employees. Taro Canada maintains a Registered Retirement Savings Plan (“RRSP”). Under the plans, contributions are based on specific percentages of pay and are subject to statutory limits. The Company’s matching contribution to the plans was $1,133, $1,254 and $1,195 for the years ended March 31, 2020, 2019 and 2018, respectively. Years ended March 31, 2020 2019 2017 Pension, retirement savings and severance expenses $ 6,654 $ 5,924 $ 6,058 |
Derivative Instruments and Fina
Derivative Instruments and Financial Risk Management | 12 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Financial Risk Management | NOTE 10: — DERIVATIVE INSTRUMENTS AND FINANCIAL RISK MANAGEMENT The Company’s operations are exposed to market risks from changes in interest rates and currency exchange rates. Exposure to these risks is managed through normal operating and financing activities and, when appropriate, through derivative instruments. Currency exchange rates: The Company manages its exposure to debt obligations denominated in currencies other than its functional currency by opportunistically using cross-currency hedges to convert its foreign currency payments into its functional currency. The following table sets forth the annual rate of inflation, the devaluation (appreciation) rate of the NIS and the CAD against the U.S. dollar and the exchange rates between the U.S. dollar and each of the NIS and the CAD at the end of the year indicated: Rate of Devaluation (Appreciation) Rate of Exchange of Rate of Inflation Against U.S. Dollar U.S. Dollar Period ended Israel (1) Canada (2) Israel (1) Canada (2) Israel (1) Canada (2) 3/31/2020 0.00 % 0.89 % (1.65 %) 6.02 % 3.57 1.41 3/31/2019 1.40 % 1.88 % 3.42 % 3.10 % 3.63 1.33 (1) Per Bank of Israel. (2) Per J.P. Morgan Chase. In April 2016, the Company began entering into separate forward contracts to purchase the NIS and the CAD on a monthly basis at agreed upon spot rates to hedge the variability of cash flows in U.S. dollars due to changes in the respective exchange rates. At March 31, 2020 March 31, 2020, 2019, and 2018 The forward contracts to purchase the CAD are for a total amount of $40,024, at a weighted-average forward rate of CAD 1.31 per U.S. dollar, which are settled in sixteen (16) monthly installments of approximately $2,453 for nine (9) months, $3,999 for three (3) months, $1,708 for three (3) months, and $826 for one (1) months. The Company recorded a net (loss) gain of ($629), $2,545 and $2,068, for the years ended March 31, 2020, 2019, and 2018 There is no collateral for these hedges. At March 31, 2020, the Company had derivative instruments designated as hedging instruments, which have been accounted for in accordance with ASU No. 2017-12, “Derivatives and Hedging (Topic 815) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 11: — FAIR VALUE MEASUREMENTS FASB ASC Topic 820 defines fair value as the price that would be received for an asset or paid to transfer a liability, from a selling party’s perspective, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets and liabilities. Active market means a market in which transactions for assets or liabilities occur with “sufficient frequency” and volume to provide pricing information on an ongoing unadjusted basis. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets primarily include derivative instruments. The Level 2 asset values are determined using valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider counterparty credit risk in the assessment of fair value. Level 3: Significant unobservable inputs that are not corroborated by market data. The Company has no Level 3 assets or liabilities. The fair value of the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2020 and 2019 were as follows: March 31, 2020 March 31, 2019 Quoted Market Price s Identical Assets Significant Other Observable Inputs Quoted Market Price s Identical Assets Significant Other Observable Inputs (Level 1) (Level 2) (Level 1) (Level 2) Assets Short-term marketable securities * $ 595,383 $ — $ 481,883 $ — Long-term marketable securities * 448,572 — 302,817 — Long-term debt instruments * 5,066 — 743 — Long-term equity instruments * 6,001 — 762 — Forward contracts — 35 — — $ 1,055,022 $ 35 $ 786,205 $ — Liabilities Forward contracts $ — $ (4,667 ) $ — $ (4,063 ) $ — $ (4,667 ) $ — $ (4,063 ) *Refer to Note 3 for additional details on marketable securities. |
Other Liabilities
Other Liabilities | 12 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | NOTE 12: — OTHER LIABILITIES a. Other current liabilities: March 31, 2020 2019 Returns reserve $ 61,406 $ 63,818 Medicaid and indirect rebates 37,110 31,947 Accrued income taxes 22,511 16,950 Employees and payroll accruals 20,195 21,057 Accrued expenses 15,616 16,308 Marketable securities 9,168 2,005 Royalties 8,523 863 Due to customers 4,452 1,550 Derivative instruments 3,811 3,769 Legal and audit fees 2,743 2,253 Lease liability 1,514 — Suppliers of property, plant and equipment 1,418 4,654 Settlements and loss contingencies 961 1,841 Deferred revenue 237 9,439 Other 4,208 5,307 $ 193,873 $ 181,761 b. Other long-term liabilities: March 31, 2020 2019 Deferred revenue $ 1,347 $ 1,572 Accrued severance pay 1,278 1,345 Other 2,742 1,481 $ 5,367 $ 4,398 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 12 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | NOTE 13: — COMMITMENTS AND CONTINGENT LIABILITIES a. Companies of the Group have leased offices, warehouse space and equipment under operating leases for periods through 2023. The minimum annual rental payments, under non-cancelable lease agreements, are as follows: March 31, 2020 3/31/2021 $ 1,664 3/31/2022 767 3/31/2023 235 $ 2,666 Total rent expenses were $1,875, $2,905 and $2,966 for the years ended March 31, 2020, 2019 and 2018, respectively. Effective April 1, 2019, the Company adopted ASU 2016-02, using the modified retrospective method. The adoption of ASU 2016-02 does not have a material impact on our financial position or results of operations. Prior period amounts were not adjusted and continue to be reported in accordance with ASC 840. b. Royalty commitments: The Company is committed to pay royalties at the rate of 3.0% to 3.5% to the government of Israel through the Authority on proceeds from the sale of products in which the government participates in the research and development by way of grants. The obligation to pay these royalties is contingent on actual sales of the products and, in the absence of such sales, no payment is required. The commitment is on a product by product basis, in an amount not exceeding the total of the grants received by the Company, including interest accrued thereon, and is linked to the U.S. dollar. Grants are subject to interest at a rate of LIBOR (cost of borrowing funds in U.S. dollars). As of March 31, 2020 and 2019, the aggregate contingent liability to the Authority was $12,950 and $12,697, respectively. Royalty payments to the Authority were $0, $89 and $100 for the years ended March 31, 2020, 2019 and 2018, respectively. c. Legal proceedings: From time to time, we are a party to routine litigation incidental to our business, including patent litigation resulting from our use of the patent challenge procedures set forth in the Hatch Waxman Act, product liability litigations, and employment litigations, none of which, individually or in the aggregate, are expected to have a material effect on our financial position or profitability. Other litigation, as disclosed herein, may have a material adverse effect on our financial position or profitability. The Company records a provision in its financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is estimable. Because litigation outcomes and contingencies are unpredictable, and because excessive verdicts can occur, these assessments involve complex judgments about future events and can rely heavily on estimates and assumptions. 1. Legal actions commenced by the Company: Company’s lawsuit related to tax assessment: In February 2017, after consulting with its tax advisors, the Company filed an appeal pursuant to Section 153 of the Income Tax Ordinance (New Version), 1961 in the Haifa District Court. The appeal challenged the Israel Tax Authority’s (“ITA”) tax assessment for the period of January 1, 2010 through March 31, 2014 in the amount of $40,782 (before interest, linkage and penalties), and denial of an unutilized capital loss in an amount of $74,551 that had been claimed by the Company. In March 2018, the Company reached a settlement with the ITA, under which the Company paid a reduced tax assessment of $15,000, and the Company was permitted to record the unutilized capital loss, transfer intellectual property from TNA 2. On September 8, 2016, Taro U.S.A. received a grand jury subpoena from the United States Department of Justice, Antitrust Division, seeking documents relating to corporate and employee records, generic pharmaceutical products and pricing, communications with competitors and others regarding the sale of generic pharmaceutical products, and certain other related matters. Taro U.S.A. is in the process of responding to the grand jury subpoena. Certain current and former officers and employees of Taro U.S.A.’s commercial team have also received related subpoenas. On February 4, 2020, a former member of Taro U.S.A.’s commercial team was indicted for alleged violations of U.S. antitrust laws. The Company, Taro U.S.A. and, with respect to a complaint brought by U.S. State Attorneys General (“AG”) and a complaint brought by putative classes of indirect reseller plaintiffs (“IRPs”), a former member of Taro U.S.A.’s commercial team have been named as defendants in numerous putative class action lawsuits and additional lawsuits brought by and/or on behalf of purchasers and payors of several generic pharmaceutical products. The lawsuits allege that the Company, Taro U.S.A., and/or, in the AG and IRP complaints, the concerned individual, have conspired with competitors to fix prices, rig bids, or allocate customers with respect to Taro U.S.A. products, and also allege an industry-wide conspiracy as to nearly all generic pharmaceutical products. Each of these cases has been transferred to the United States District Court for the Eastern District of Pennsylvania for coordinated proceedings under the caption In re: Generic Drug Pricing Antitrust Litigation, MDL No. 2724. The Court had sequenced the lawsuits into separate groups for purposes of briefing motions to dismiss. Defendants filed motions to dismiss complaints in the first group. On October 16, 2018, the Court denied the motions with respect to the federal law claims. On February 15, 2019, the Court granted in part and denied in part the motions with respect to the state law claims. Certain cases are proceeding in discovery. On May 10, 2018, Taro U.S.A. received a Civil Investigative Demand from the United States Department of Justice pursuant to the False Claims Act seeking information relating to corporate and employee records, generic pharmaceutical products and pricing, communications and/or agreements with competitors and others regarding the sale of generic pharmaceutical products, and certain other related matters. Taro U.S.A. is in the process of responding to the Civil Investigative Demand. The Company and two of its former officers are named as defendants in a putative shareholder class action entitled Speakes v. Taro Pharmaceutical Industries, Ltd., filed October 25, 2016, which is now pending in the United States District Court for the Southern District of New York and asserts claims under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) against all defendants and Section 20(a) of the Exchange Act against the individual defendants. It generally alleges that the defendants made material misstatements and omissions in connection with an alleged conspiracy to fix drug prices. On September 24, 2018, the Court granted in part and denied in part the Company’s motion to dismiss. The case is proceeding with limited discovery. 3. Other matters: In April 2019, the Company entered into a conditional settlement with the Israeli Ministry of Environmental Protection (the “MoEP”) and submitted it to the Haifa Magistrate’s Court, which approved the settlement in July 2019. The conditional settlement concerns one current and one former employees’ and the Company's non-compliance with the performance obligations of periodic sampling of emissions from the facility's stacks between 2010 and 2013 as instructed by the Company's business license and the Israeli business license law. In the settlement, the Company and the concerned individuals undertook to refrain from repeating the described violations for a term of one year commencing on July 2019 and to conditional fines to be imposed in case these violations are repeated. In exchange, the MoEP agreed to a non-conviction by the court. In July 2019, the Company received a motion to approve a class action against 30 companies located in Haifa Bay, Israel, including the Company. The claimant, a civil association in Haifa Bay, claims that the industrial activity of the 30 companies allegedly caused higher percentages of lung cancer among Haifa Bay residents compared to the average in Israel. At this stage, the claimant seeks to receive district court approval for the motion to approve a class action. The 30 companies have filed a preliminary response to the court in which they have moved the court to dismiss the motion in light of the requirements of Israeli Class Action Law. d. Other: Payments to pharmacies for Medicaid-covered outpatient prescription drugs are set by the states. For many multiple source drugs with respect to which FDA has rated at least three drugs as therapeutically equivalent, the amount that states may reimburse pharmacies in the aggregate is subject to a Federal upper limit (FUL) ceiling price. Health care reform legislation enacted in March 2010 changed the methodology by which the Centers for Medicare & Medicaid Services (CMS) calculates the FULs so that the FUL is based on no less than 175 percent of the weighted-average of the monthly average manufacturer prices (AMPs) reported to the government by manufacturers of each of the therapeutically equivalent multiple source drugs. In addition, under the Medicaid Drug Rebate Program, manufacturers are required, as a condition of Federal payment for their drugs under Medicaid and Medicare Part B, to pay rebates to state Medicaid programs on drugs dispensed to Medicaid beneficiaries in the state. The amount of the rebate is calculated for non-innovator multiple source drugs as 13 percent of AMP and for innovator drugs as the lower of 23.1 percent of AMP or AMP minus the best price of the drug. Both innovator and non-innovator drugs are also subject to an additional rebate if price increases exceed the rate of inflation. Before implementation of the new FUL methodology on April 1, 2016, CMS used average wholesale price (“AWP”) or Wholesale Acquisition Cost (“WAC”) in the calculation of FULs. States have also historically used AWP or WAC in setting Medicaid reimbursement rates for drugs. Effective April 1, 2017, states are now required to use actual acquisition cost as the basis of reimbursement. Many of the legislative changes noted above stemmed from civil lawsuits being brought by states against pharmaceutical manufacturers in which there were allegations that the defendants overstated AWPs or WACs, which were used by state agencies to calculate drug reimbursements to healthcare providers. The Collective Bargaining Agreement dated April 6, 2011, as amended and extended by the collective bargaining dated January 5, 2017, among Taro Israel, the Histadrut Trade Union and Taro Israel’s Employees Committee on behalf of Taro’s Israeli employees ended December 31, 2019 (the “Collective Bargaining Agreement”). The Collective Bargaining Agreement has a term of three years and automatically renews for one-year |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Mar. 31, 2020 | |
Federal Home Loan Banks [Abstract] | |
Shareholders' Equity | NOTE 14: — SHAREHOLDERS’ EQUITY a. Pertinent rights and privileges of ordinary shares: 1. 100% of the rights to profits are allocated to the ordinary shares. 2. 100% of the dissolution rights are allocated to the ordinary shares. 3. Two-thirds of the voting power of all of the Company’s shares is allocated to the ordinary shares. b. Founders’ shares: One-third of the voting power of all of the Company’s shares is allocated to the founders’ shares. c. Stock option plans: The Company’s 1999 Stock Incentive Plan (“1999 plan”) provided for the issuance of incentive stock options, non-qualified stock options, or stock appreciation rights to key employees and associates of the Group. As of March 31, 2020, 2019 and 2018, no options were outstanding. No further options in respect of the 1999 plan are available for future grants. There were no options exercised in the years ended March 31, 2020, 2019 and 2018, respectively. d. Net income per share: Year ended March 31, 2020 Year ended March 31, 2019 Year ended March 31, 2018 Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Basic and diluted EPS $ 244,241 38,460,056 $ 6.35 $ 281,777 38,990,058 $ 7.23 $ 211,150 40,155,087 $ 5.26 e. As of March 31, 2020, the accumulated other comprehensive income comprised of loss from foreign currency translation adjustments and hedge accounting of $160,583, and unrealized loss from available for sale securities of $2,454. As of March 31, 2019, the accumulated other comprehensive income comprised of loss from foreign currency translation adjustments and hedge accounting of $158,069, and unrealized gain from available for sale securities of $13,961. Unrealized gains (losses) on marketable securities reclassified out of accumulated other comprehensive income to financial income (expense) on the income statement were $420, ($1,003) and ($86) during the years ended March 31, 2020, 2019, and 2018, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 15: — INCOME TAXES a. Corporate income tax rate in Israel: Taxable income of Israeli companies is subject to Corporate income tax at the rate of 23.0%, 23.0% and 24.0% for the years ended March 31, 2020, 2019 and 2018, respectively. b. Tax benefits under the Law for the Encouragement of Industry (Taxes), 1969: The Company is an “industrial company” as defined by this law and, as such, is entitled to certain income tax benefits, mainly increased depreciation rates in respect of machinery and equipment (as prescribed by regulations published under the Inflationary Adjustments Law) and the right to claim public issuance expenses, amortization of acquired patents and other intangible property rights as deductions for tax purposes. c. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (“the Investments Law”): Various production and development facilities of the Company have been granted “Approved Enterprise” and “Benefited Enterprise” status, which provides certain benefits, including tax exemptions and reduced tax rates for a defined period. The benefits available to an Approved Enterprise and Benefited Enterprise relate only to taxable income attributable to the specific investment program and are conditioned upon terms stipulated in the Investments Law and the related regulations and the criteria set forth in the applicable certificate of approval (for an Approved Enterprise). If the Company does not fulfill these conditions, in whole or in part, the benefits can be cancelled and the Company may be required to pay additional tax to refund the benefits, in an amount linked to the Israeli consumer price index plus interest. The Company qualifies as a foreign investors’ company, or FIC. FICs are entitled to further reductions in the tax rate normally applicable to Approved or Benefited Enterprises, depending on the level of foreign ownership. The tax rate ranges between 10% (when foreign ownership is 90% or more) to 25% (when the foreign ownership is below 49%). The Company has two active plans, one Approved Enterprises under the Alternative Benefits Program (Plan 5) and one Benefited Enterprise (Plan 6), granting us a package of benefits, subject to compliance with applicable requirements. Under Plan 5 (benefit period starting 2007), the Company was entitled to an exemption from corporate income tax on undistributed profits for a period of two years following implementation of such plan and to a reduced tax rate of 10% to 25% (depending on the level of foreign investment) for eight additional years thereafter. With respect to Plan 5, given the high level of investments in such plan, we met the conditions to qualify as a "High Level Foreign Investment Company" which entitled Plan 5 to an additional 5 years of benefits, subject to receipt of approval from the Israeli Investment Center (“IIC,” now called the "Authority for Investments and Development of the Economy and Industry"). On November 5, 2019, we received the approval from the IIC regarding the 5 year extension of Plan 5, subject to meeting certain pre-agreed additional conditions that will be examine by the IIC at the end of the extension period. Under Plan 6 (benefit period starting 2010), the Company was entitled to an exemption from corporate income tax on undistributed profits for a period of two years and a reduced tax rate of 10% to 25% (depending on the level of foreign investment) for eight additional years thereafter. The entitlement to these benefits is conditional upon the Company fulfilling the requirements of the Investments Law, regulations published thereunder and the certificate of approval for the specific investments in the case of Approved Enterprises. In the event of failure to comply with these requirements, the benefits may be reduced or canceled and the Company may be required to refund the amount of the benefits it received, in whole or in part, including linkage and interest. As of March 31, 2020, management believes that the Company complied with all of the aforementioned requirements. If the Company pays a dividend, the source of which is income derived from the Approved and/or Benefited Enterprises during the tax exempt period, the Company will be subject to corporate tax at the rate ordinarily applicable to the Approved/Benefited Enterprise from which it was exempt, on the gross amount of such dividend. The Company has decided not to declare dividends out of such tax-exempt income. Accordingly, no deferred income taxes have been provided on income attributable to the Company’s Approved and/or Benefited Enterprises. Dividends paid by a company, the source of which is income derived from the Approved Enterprise accrued during the benefits period, are generally subject to withholding tax at a rate of 15% (which is withheld and paid by or on behalf of the company paying the dividend), and such withholding tax may be reduced by an applicable treaty if such dividends were paid during the benefits period or at any time up to 12 years thereafter. The 12-year limitation does not apply to a FIC. For the years ended March 31, 2020 and 2019, income not eligible for Approved and/or Benefited Enterprise benefits is taxed at the regular corporate income tax rate. d. The New Incentives Regime—Amendment 68 to the Investment Law Under Amendment 68 to the Investment Law (“Amendment 68”), upon an irrevocable election made by a company, a uniform corporate tax rate will apply to all qualifying industrial income of such company (an “Industrial Company”), as opposed to the previous law’s incentives, which were limited to income from Approved/Benefited Enterprises during the benefits period. Under the law, when the election is made, the uniform tax rate for 2014 and onwards will be 9% in areas in Israel designated as Development Zone A (decreased to 7.5% as of January 1, 2017) and 16% elsewhere in Israel. The decrease of the uniform tax rate to 7.5% was effective for the reporting periods starting April 1, 2017. The profits of these Industrial Companies will be freely distributable as dividends, subject to withholding tax of 20% or lower, under an applicable tax treaty. Certain “Special Preferred Enterprise” that meet more stringent criteria (significant investment, R&D or employment thresholds), and will enjoy further reduced tax rates of 5% in Zone A and 8% elsewhere. In order to be classified as a “Special Preferred Enterprise,” the approval of three governmental authorities in Israel is required. We did not elect to apply for Amendment 68 in tax year 2019 or 2018. The Company currently continues to apply the pre Amendment 68 regime, however, may still decide in the future to make the above-mentioned election. e. The New Technological Enterprise Incentives Regime – 2017 Amendment to the Investment Law Amendment 73 to the Investment Law (“the 2017 Amendment”), was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment is based on the OECD guidelines published as part of the Base Erosion and Profit Shifting (BEPS) project and introduced the incentive regimes of “Preferred Technological Enterprise” and of "Special Preferred Technological Enterprise", as described below. These new regimes are in addition to the other existing post Amendment 68 tax incentives regimes under the Investment Law. The new incentives regime will apply to "Preferred Technological Enterprises" that meet the “Preferred Enterprise” requirements and certain additional conditions, including all of the following: 1. The Enterprise’s average R&D expenses in the three years prior to the current tax year must be greater than or equal to 7%, in average, of the Enterprise-owning company’s total revenue or exceed NIS 75 million (approximately $21,000) per year; 2. A company must also satisfy one of the following conditions: • at least 20% of the workforce (or at least 200 employees) are employees of which salaries are fully allocated to R&D expenses • a venture capital investment of an amount approximately equivalent to at least $2.2 million was previously made in the company and the company did not change its field of business after the investment; or • growth in sales or workforce by an average of 25% in the three years preceding the tax year in comparison to the prior tax year. A "Special Preferred Technological Enterprise" is an enterprise that meets conditions 1 and 2 above, and in addition is a part of a group of companies that have total annual consolidated revenues above NIS 10 billion (approximately $2.6 billion). Preferred Technological Enterprises will be subject to a corporate tax rate of 7.5% for operations in Development Zone A or 12% for operations outside of Development Zone A with respect to the portion of their income derived from certain types of proprietary IP as defined within the Investment Law and which were generally developed in Israel, while Special Preferred Technological Enterprises will be subject to 6% with respect to income related to such IP. The withholding tax on dividends from these enterprises will be 4% for dividends paid to a foreign company and the distributing company is held by foreign companies at a rate of at least 90%. For other dividend distributions, the withholding tax rate shall be 20% (or a lower rate under a tax treaty, if applicable). The Company continues to apply the pre Amendment 68 regime. f. Measurement of taxable income under the Income Tax (Inflationary Adjustments) Law, 1985 of Israel: With respect to the Israeli entity, commencing in taxable year 2003, the Company elected to measure its taxable income and file its tax returns in U.S. dollars in keeping with Israeli Income Tax Regulations, 1986 (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income). Such an election was binding to the Company for three years. Accordingly, commencing taxable year 2003, results for tax purposes are measured in U.S. Dollar terms. After the initial three-year term, the Company must make the election on an annual basis. Through taxable year 2019, the Company has consistently elected, for tax purposes, to measure its earnings in U.S. dollars. g. Income from continuing and discontinued operations before income taxes is comprised of the following: Year ended March 31, 2020 2019 2018 Domestic (Israel) $ 99,182 $ 184,410 $ 91,485 Foreign (North America, the Cayman Islands, Ireland and the U.K.) 198,853 172,444 200,548 Income from continuing and discontinued operations before taxes $ 298,035 $ 356,854 $ 292,033 h. Taxes on income are comprised of the following: Year ended March 31, 2020 2019 2018 Current taxes $ 55,895 $ 60,203 $ 27,687 Prior years' benefits (9,995 ) (2,980 ) (1,830 ) Deferred income taxes 7,585 17,509 56,097 $ 53,485 $ 74,732 $ 81,954 Domestic (Israel) $ 4,177 $ 33,183 $ 17,373 Foreign (North America) 49,308 41,549 64,581 $ 53,485 $ 74,732 $ 81,954 Included within current and deferred income tax expense are benefits relating to research and development tax credits at Taro Canada of $664, $867 and $1,091 for the years ended March 31, 2020, 2019 and 2018, respectively. Taro Canada uses the “flow-through” method and therefore records the benefits in earnings in the period the tax credits are utilized. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. Fiscal year filers, such as Taro U.S.A., recognize a partial reduction in the U.S. corporate tax rate for their year ending after January 1, 2018, and thereafter recognize the full reduction in the U.S. corporate tax rate. For the year ending March 31, 2018, Taro U.S.A. was subject to a 31.5% federal tax rate and for subsequent years Taro U.S.A. is subject to a 21% federal tax rate. On March 27, 2020 the U.S. enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) which, among other provisions, allows U.S. corporations to carry existing losses back to the preceding five years. The Company expects to receive a benefit due to the increased value of its losses when carried back to preceding years in which the U.S. federal corporate income tax rate was 35% versus the current 21%. i. Reconciliation of the statutory tax rate of the parent company in Israel to the effective consolidated tax rate: Year ended March 31, 2020 2019 2018 Statutory tax rate (in Israel) 23.0% 23.0% 24.0% (Decrease) increase in effective tax rate due to: Tax benefits from reduced tax rates under benefit programs and other (4.1%) (6.2%) (7.8%) Utilization of net operating losses — (0.4%) (2.5%) Different tax rates applicable to non-Israeli subsidiaries 1.3% 0.8% (2.3%) Uncertain tax positions, net (0.6%) 3.4% (3.3%) FX on tax payments 0.4% (0.3%) — Taxes from prior years (0.8%) 0.6% 5.7% Net operating loss carryback (1) (1.3%) — — Change in Federal corporate income tax rate — — 14.2% Effective consolidated tax rate 17.9% 20.9% 28.0% (1) Net operating loss carryback is attributed to the CARES Act which was enacted in the U.S. on March 27, 2020. The CARES Act, among other provisions, allows U.S. corporations to carry existing losses back to the preceding five years. The Company expects to receive a benefit due to the increased value of its losses when carried back to preceding years in which the U.S. federal corporate income tax rate was 35% versus the current 21%. j. Current taxes are calculated at the following combined federal and local rates: Year ended March 31, 2020 2019 2018 On Israeli operations (not including “Approved Enterprise”) 23.0% 23.0% 24.0% On U.S. operations * 21.2% 21.2% 31.7% On Canadian operations * 25.0% 25.0% 25.0% On U.K. discontinued operations * * * 20.0% On Ireland discontinued operations * * * 12.5% * The U.S. and Canadian subsidiaries are taxed on the basis of the tax laws prevailing in their countries of residence. The Canadian subsidiary qualifies for research and development tax credits and manufacturing and processing credits, thereby reducing its effective tax rate. Since the U.K. and Ireland operations are classified as discontinued operations, there is no current tax. k. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and carryforward losses. March 31, 2020 2019 Deferred tax assets: Operating loss carryforward $ 548 $ 4,383 Capital loss carryforward 17,749 18,301 Deferred revenue 24,765 19,726 Property, plant, and equipment 1,440 1,440 Intangible assets 36,612 41,420 Accrued expenses 45,756 50,742 Bad debt allowance 583 83 Hedge accounting 792 84 Marketable securities 262 — Other, net 8,506 7,448 Total deferred tax assets 137,013 143,627 Valuation allowance for deferred tax assets (23,338 ) (24,652 ) Net deferred tax assets 113,675 118,975 Deferred tax liabilities: Property, plant, and equipment (10,178 ) (8,803 ) Marketable securities — (1,924 ) Other, net (199 ) (259 ) Total deferred tax liabilities (10,377 ) (10,986 ) Net deferred tax assets $ 103,298 $ 107,989 Domestic $ 4,224 $ 5,684 Foreign 99,074 102,305 $ 103,298 $ 107,989 The deferred income taxes are presented on the Consolidated Balance Sheets as follows: March 31, 2020 2019 Among non-current assets $ 106,693 $ 110,974 Among long-term liabilities (3,395 ) (2,985 ) $ 103,298 $ 107,989 l . Carryforward tax losses: 1. The Company: As of March 31, 2020, the Company has $77,169 carryforward capital losses. Please refer to Note 13.c. and Note 15.p. for additional information relating to Israel’s carryforward capital losses. 2. Canadian subsidiary: As of March 31, 2020, this subsidiary has no carryforward losses. 3. U.S. subsidiary As of March 31, 2020, this subsidiary has deferred losses of $28,473. This subsidiary intends to carry the entire loss back to previous years. m. The Company’s Board of Directors has determined that its U.S. subsidiary will not pay any dividends as long as such payment will result in any tax expense for the Company. n. At March 31, 2020, deferred income taxes were not provided for on a cumulative total of $1,587,378 of the undistributed earnings of Taro Canada, which are not taxable provided earnings remain undistributed. Taro Canada may not pay any dividend as long as such dividend will result in the current 25% tax expense for the Company. o. Foreign withholding taxes have been accrued as necessary by the Company and its subsidiaries. p. Federal tax assessments: The Company completed its tax assessments with the Israeli tax authorities for years through 2014. In February 2017, after consulting with its tax advisors, the Company filed an appeal pursuant to Section 153 of the Income Tax Ordinance (New Version), 1961 in the Haifa District Court. The appeal challenged the ITA’s tax assessment for the period of January 1, 2010 through March 31, 2014 in the amount of $40,782 (before interest, linkage and penalties), and denial of an unutilized capital loss in an amount of $74,551 that had been claimed by the Company. The Company is under examination by the Israeli tax authorities for the years 2015 through 2017. The Company may be subject to examination by the Israeli tax authorities for the years 2015 and onward. The Company believes that its tax provision is adequate to satisfy any assessments resulting from examination to the years. In March 2018, the Company reached a settlement with the Israel Tax authority (“ITA”), under which the Company is obligated to pay a reduced tax assessment of $15,000, and the Company was permitted to record the unutilized capital loss, transfer intellectual property from TNA Taro U.S.A. completed its tax assessments with the U.S. tax authorities for the years through March 31, 2015. The period in which Taro U.S.A.’s tax return for the year ending March 31, 2016 may be examined has expired and this year is no longer subject to federal audit. Taro Canada completed its tax assessments with the Canadian tax authorities for the years through 2011. The Company’s tax provision was materially adequate to satisfy these assessments. The Company is under examination by the Canada tax authorities for the year ended March 31, 201 5 through the short period end ed March 15, 2017 . Taro Canada remains subject to examination by the Canadian tax authorities for periods after March 15, 2017 according to the statute of limitations. The Company believes that its tax provision is adequate to satisfy any assessments resulting from examinations related to these years . q. Uncertain tax positions: The Company adopted FASB ASC Section 740-10-25, “ Income Taxes-Overall-Recognition Year ended March 31, 2020 2019 2018 Unrecognized tax exposure at beginning of year $ 28,188 $ 16,810 $ 23,457 Increases as a result of positions taken in prior period 382 1,689 — Decreases as a result of positions taken in prior period (7,913 ) (128 ) (15,506 ) Increases as a result of positions taken in current period 4,601 9,817 8,859 Unrecognized tax exposure at end of year $ 25,258 $ 28,188 $ 16,810 The The total amount of unrecognized tax benefits, which would impact the effective tax rate if recognized, was $25,258 and $28,188 at March 31, 2020 and 2019, respectively. |
Selected Statements of Income D
Selected Statements of Income Data | 12 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Selected Statements of Income Data | NOTE 16: — SELECTED STATEMENTS OF INCOME DATA Year ended March 31, 2020 2019 2018 Sales, net $ 644,769 $ 669,893 $ 661,913 Selling, marketing, general and administrative expenses: Selling and marketing $ 31,754 $ 39,495 $ 33,724 Advertising 4,902 6,527 9,913 General and administrative * 56,757 43,949 44,559 Settlements and loss contingencies — (3,678 ) 1,884 $ 93,413 $ 86,293 $ 90,080 * Including provision for doubtful accounts $ 2,382 $ 144 $ (124 ) Financial (income) expenses: Interest and exchange differences on long-term liabilities $ 725 $ 256 $ 304 Income in respect of deposits (11,714 ) (14,107 ) (13,367 ) Interest from marketable securities (22,655 ) (19,691 ) (6,871 ) Foreign currency transaction gains (14,838 ) (25,309 ) 32,465 $ (48,482 ) $ (58,851 ) $ 12,531 |
Segment Information
Segment Information | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 17: — SEGMENT INFORMATION a. Geographic Area Information: The Group operates in one industry segment, which produces, researches, develops and markets pharmaceutical products. Management organizes the Company’s operations based on geographic segments, which are presented below in accordance with FASB ASC Paragraph 280-10-50-1, “ Segment Reporting – Overall – Disclosure – Operating Segments.” Israel Canada U.S.A. Other Consolidated Year ended March 31, 2020 and as of March 31, 2020: Sales * $ 42,817 $ 97,997 $ 495,673 $ 8,282 $ 644,769 Long-lived assets ** $ 123,679 $ 63,506 $ 38,379 $ — $ 225,564 Year ended March 31, 2019 and as of March 31, 2019: Sales * $ 40,050 $ 83,970 $ 537,111 $ 8,762 $ 669,893 Long-lived assets ** $ 123,698 $ 59,108 $ 39,479 $ — $ 222,285 Year ended March 31, 2018 and as of March 31, 2018: Sales * $ 38,223 $ 67,226 $ 549,174 $ 7,290 $ 661,913 Long-lived assets ** $ 114,145 $ 56,629 $ 37,246 $ — $ 208,020 * Based on customer’s location, including sales to unaffiliated customers and Sun. ** Includes property, plant and equipment, net; goodwill and intangible assets, net. b. For the year ended March 31, 2020, the Company had net sales to two different U.S. customers of 13.0% and 11.5% of consolidated net sales. For the year ended March 31, 2019, the Company had net sales to two different customers of 12.1% and 11.0% of consolidated net sales. For the year ended March 31, 2018, the Company had net sales to three different customers of 15.3%, 11.5% and 11.4% of consolidated net sales. c. Sales by therapeutic category, as a percentage of total net sales for the years ended March 31, 2020, 2019 and 2018, were as follows: Year ended March 31, Category 2020 2019 2018 Dermatological and topical 63 % 61 % 65 % Neuropsychiatric 17 % 18 % 17 % Cardiovascular 6 % 7 % 6 % Anti-inflammatory 3 % 3 % 4 % Other 11 % 11 % 8 % Total 100 % 100 % 100 % |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 18: — DISCONTINUED OPERATIONS a. During 2010, the Company’s management decided to sell its Irish facility, which was sold in July 2017 for $946. The results of operations of the Irish facility were classified as discontinued operations in the Consolidated Statements of Operations. The subsidiary was dissolved as of January 2018. b. The following is the detail of discontinued operations: Year ended March 2020 2019 2018 Sales, net $ — $ — $ — Cost of sales — — (103 ) Gross loss — — (103 ) Operating expenses: Research and development — — (30 ) Selling, marketing, general and administrative — — (169 ) Operating loss — — (302 ) Financial income, net — — 113 Other loss, net — — (146 ) Loss before income taxes — — (335 ) Net loss from discontinued operations $ — $ — $ (335 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 19: — RELATED PARTY TRANSACTIONS In addition to Sun controlling 84.7% of the voting power in the Company as of March 31, 2020, the Company has substantial relationships with Sun. Certain Taro Board members are also members of various Sun entities board of directors, including Taro’s Chairman, Dilip Shanghvi who is also Managing Director of Sun Pharma’s board of directors. In addition, certain Taro officers and executives are also executives of Sun. Arrangements with Sun Since 2013, in the ordinary course of business, Taro has entered into various commercial transactions, including product distribution and logistics, manufacturing and service agreements, with Sun. The Company reviews each of these transactions and believes that the terms of these transactions are comparable to those offered by or that could be obtained from unrelated third parties. Pursuant to Israeli requirements, all material transactions were presented to the Audit Committee, which determined that each such transaction was not considered extraordinary, as defined in the Israeli Companies Law and therefore did not require shareholder approval. The Audit Committee further determined the approval requirements for the different types of transactions. Sun and Taro renewed a services arrangement (the “Services Agreement”) effective April 1, 2019, that allows the companies to share the services of certain employees of the respective companies involved in certain North American management and operations functions in North America in The companies are required to maintain records (the “Service Reports”) of the costs associated with the provision of the services under the Services Agreement, and allocate such costs between the companies, based upon the approved allocation methodologies for each Service Area. The Services Agreement requires our Audit Committee to review the Service Reports on a semi-annual basis and, the Services Agreement, as a whole, on an annual basis to determine its efficacy and whether it is in the Company’s best interests. Each of the employees providing services under the Services Agreement is required to sign a written acknowledgment of his/her receipt of, and agreement to be bound by (a) the confidentiality and non-disclosure agreement between Sun and Taro, and (b) guidelines for consideration in the performance of such services, including the identification of p otential conflicts of interest. In April 2017, the Board of Directors approved for Taro to negotiate an agreement with Sun whereby Taro's U.S. branded products team advertised and promoted a combined portfolio of Taro and Sun corticosteroid products. The agreement between Taro U.S.A., and Sun went into effect on May 1, 2017. Under this agreement, Sun sold its products to customers and paid Taro a percentage of the net sales for Taro's promotional services. Taro discontinued the promotion of its U.S. branded products effective March 31, 2019, and terminated the corticosteroid agreement. In May 2018, Taro Canada signed an agreement with Sun’s affiliate Ranbaxy Pharmaceuticals Canada Inc., now Sun Pharma Canada Inc., under which Taro Canada acts as the exclusive distributor for a portfolio of Sun and Ranbaxy, Inc. products in Canada. Under this agreement, Taro Canada purchases and controls inventory; additionally, Sun and Ranbaxy Inc. pay Taro Canada a sales and distribution fee. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 20: — SUBSEQUENT EVENTS Subsequent to March 31, 2020, the Company received final approvals from the FDA for four additional ANDAs: Clocortolone Pivalate Cream USP, 0.1% and Mupirocin Cream USP, 2% in April 2020; Ivermectin Lotion, 0.5% in May 2020; and Betamethasone Dipropionate Spray, 0.05% in June 2020 The Company currently has a total of twenty-one ANDAs awaiting FDA approval, including five tentative approvals. In June 2020, the Company along with an additional pharmaceutical manufacturer were named as part of a proceeding in Israel seeking approval for a proposed class action relating to the alleged sale of opioid products in Israel. In June 2020, Taro U.S.A. and former members of its commercial team were named as defendants in a lawsuit brought by U.S. State Attorney Generals. The lawsuit alleges Taro U.S.A. and the concerned individuals conspired with competitors in violation of antitrust laws with respect to Taro U.S.A. products and engaged in an industry-wide conspiracy. In addition, in June 2020, Taro U.S.A. and Taro Pharmaceuticals Inc. were named as defendants in a proposed class action in Canada. The lawsuit alleges that the Taro entities conspired with competitors in violation of antitrust laws with respect to the Taro entities’ products. |
Schedule II_ - Valuation and Qu
Schedule II: - Valuation and Qualifying Accounts | 12 Months Ended |
Mar. 31, 2020 | |
Valuation And Qualifying Accounts [Abstract] | |
Schedule II: - Valuation and Qualifying Accounts | SCHEDULE II: — VALUATION AND QUALIFYING ACCOUNTS Schedules have been omitted as the required information is provided elsewhere in these financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of estimates | a. Use of estimates: The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgements and assumptions. Management believes that the estimates, judgements and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgements and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company’s most critical estimates are used in its determination of its sales incentives reserves, inventory reserves, income taxes, fixed assets, intangible assets, derivative instruments and contingencies. |
Financial statements in U.S. dollars | b. Financial statements in U.S. dollars (“USD”): A majority of the revenue of the Company and certain of its subsidiaries is generated in USD. In addition, a substantial portion of the costs of the Company and these subsidiaries is incurred in USD. Management believes that the USD is the primary currency of the economic environment in which the Company and these subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the USD, requiring re-measurement from the local currency into USD for each of these entities. All exchange gains and losses resulting from the re-measurement are reflected in the Consolidated Statements of Operations as financial income or expense, as appropriate. Prior to April 1, 2019, the functional currency of the Company’s Canadian subsidiary was the Canadian dollar (“CAD”). Accordingly, the financial statements of the Canadian subsidiary were translated into USD. All balance sheet accounts were translated using the exchange rates in effect at the balance sheet date. Amounts recorded in the Consolidated Statements of Operations were translated using the average exchange rate prevailing during the year. The resulting translation adjustments were reported as a component of shareholders’ equity under accumulated other comprehensive income. Effective as of the Company’s fiscal year beginning April 1, 2019, Taro Canada’s functional currency became the USD. FASB ASC Topic 830, “Functional Currency Matters,” requires a change in functional currency to be reported as of the date it is determined there has been a change , and it is generally accepted practice that the change is made at the start of the most recent period that approximates the date of the change . Management determined it would enact this change effective on April 1, 2019. While the change was based on a factual assessment, the determination of the date of the change required management’s judgement given the change in the primary economic and business environment , in which Taro Canada operates , ha ve evolved over time . As part of management’s functional currency assessment, changes in economic facts and circumstances were considered. This included analysis o f changes in : management of operations, process, and in the composition of cash and marketable securities balances. The Company has centralized different functions, including treasury and investment portfolio measurement, which resulted in a stronger focus on the USD currency for Taro Canada. Additionally, as budgeting has also been centralized for the Company, Taro Canada has implemented budgeting in USD, whereas this was previously performed in CAD. Taro Canada’s cash inflows consist primarily of USD cash balances and less of CAD, as also reflected in the budget. The transfer of significant intangible assets to Taro Canada , as a result of winding down of T NA , has reduced the relevance of the foreign currency position on the balance sheet of Taro Canada. The company decided to focus Taro Canada's sales market as the US market, with the majority of all sales to the US denominated in US D. T his was followed by centralizing budgets and facilitating effective netting and hedging activities. Assuming current business operating model stays constant, m anagement believes that the USD cash balances will continue to increase, while CAD cash balances will continue to produce a net outflow. Management re-evaluated all indicators established in ASC 830-10-55-5 to determine the functional currency of Taro Canada. Such indicators include i) cash flow, ii) sales price, iii) sales market, iv) expense, v) financing and vi) intercompany transactions and arrangements. Management determined that the cash flow indicators and the sales market indicators were most relevant to Taro Canada operations and its primary economic environment. At the time of the assessment adopted on April 1, 2019, cash flows generated by Taro Canada that relate to its individual assets and liabilities now directly affect the Company’s cash flows and are readily available for remittance to the Company. The majority of cash flow from Taro Canada’s operations is denominated in USD, with the sales market for Taro Canada’s products now mostly in the U.S. Approximately 75% of Taro Canada’s revenue is to the U.S. market, with over 80% of Taro Canada’s plant production, in terms of units, being produced for the US market. Significant asset and liability line items on Taro Canada’s balance sheet are comprised almost solely (greater than 90%) of USD denominated transactions. Furthermore, most of Taro Canada’s generated cash flows are now invested in USD based cash and cash equivalents or marketable securities. Since such investments are short-term, cash is readily available for remittance to other Taro entities. Thus, the USD is the primary currency from which Taro Canada generates and accumulates cash. When considering all relevant facts together, management concluded that the USD best reflects the currency of the primary economic environment in which Taro Canada currently operates. Therefore, USD is the functional currency as a result of the change in the most significant economic facts and circumstances from cash flow and sales market indicators, as well as intra-entity transactions and arrangements, which are material to Taro Canada. As a result, the Company adopted USD as the functional currency for Taro Canada effective April 1, 2019. The change was accounted for prospectively from the date of the change in accordance with FASB ASC Topic 830, “Foreign Currency Matters.” The following table summarizes the impact on both consolidated net income and other comprehensive income (loss) utilizing USD as the functional currency of Taro Canada as of March 31, 2020, compared to the related impact if the functional currency of Taro Canada would have remained CAD (excluding FX from transactions denominated in CAD recorded in the respective period): USD as Functional Currency (in USD)* CAD as Functional Currency (in USD)** (Unaudited Pro Forma) Financial (income) expense, net - attributed to foreign translation gain $ (14,838 ) $ (46,667 ) Other comprehensive loss - attributed to foreign currency translation adjustments $ (1 ) $ (92,959 ) *Based on consolidated amounts of the Group. Includes Taro Canada amounts reported in USD with USD as functional currency. **Based on unaudited pro forma consolidated amounts of the Group. Includes Taro Canada unaudited pro forma amounts reported in USD with CAD as functional currency. |
Principles of consolidation | c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances have been eliminated in consolidation and non-controlling interest is included in shareholders’ equity. Sun, through its wholly owned subsidiary, Taro Development Corporation (“TDC”) owns 3.1% of the shares that have economic rights and has 50.0% of the voting rights in Taro U.S.A.; with the Company owning the remaining shares and voting rights. In 1993, TDC signed an agreement with the Company to vote all of its shares in Taro U.S.A. in all elections of directors of Taro U.S.A. as the Company shall instruct. In May 2020, TDC renewed its commitment to the Company. TDC may terminate the agreement upon one year written notice and no such notice of termination has been provided. TDC is a minority shareholder in the Company by way of its ownership of Taro U.S.A. shares that have economic rights. |
Cash and cash equivalents | d. Cash and cash equivalents: Cash equivalents are highly-liquid investments that are readily convertible into cash. Short-term bank deposits: Bank deposits with maturities of more than three months, but less than one year, are included in short-term deposits. Such deposits are stated at cost which approximates market value. The Company does not have any short-term deposits at March 31, 2020, or 2019. |
Marketable securities | e. Marketable securities: Marketable securities, consisting of both debt securities and equity securities, are comprised primarily of corporations bonds, sovereign bonds, U.S. Treasuries, certificates of deposit, preferred stock and commercial paper. The marketable debt securities were designated as available-for-sale (“AFS”). Accordingly, these securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income, a separate component of shareholders’ equity. The equity securities with readily determinable fair values are carried at fair value, with changes in fair value reported in consolidated statements of operation. Realized gains and losses on the sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together with interest and dividends on securities are included in financial income, net. The Company recognizes an impairment charge when a decline in the fair value of its investments in debt securities results in the value of the investments being below the cost basis of such securities and when such decline is judged to be other-than-temporary. Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. For securities that are deemed other-than-temporarily impaired, the amount of impairment is recognized in financial income, net in the Consolidated Statements of Operations and is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. ASU No. 2016-13 , “Financial Instruments—Credit Losses (Topic 326) ” will be effective for the Company’s fiscal year beginning April 1, 2020. In accordance with ASC 326-30, AFS debt securities will be impaired if its fair value is below its amortized cost basis. Under the new guidance, the impairment model no longer allows consideration of the length of time during which the fair value has been less than its amortized cost when determine whether a credit loss exists. During the years ended March 31, 2020, 2019 and 2018, the Company did not own or sell any marketable securities previously impaired. The Company adopted ASU No. 2016-01, “ Financial Instruments-Overall (Subtopic 825-10). |
Allowance for doubtful accounts | f. Allowance for doubtful accounts: The allowance for doubtful accounts is calculated primarily with respect to specific balances, for which, in the opinion of management, collection of such balances is doubtful. The allowance, in the opinion of management, is sufficient to cover probable uncollectible balances. |
Inventories | g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory reserves are provided to cover risks arising from slow-moving items, short-dated inventory, excess inventory or obsolescence. Changes in these provisions are charged to cost of sales. Cost is determined as follows: Raw and packaging materials – weighted-average cost basis. Finished goods and work in progress – weighted-average production costs including materials, labor and direct and indirect manufacturing expenses. Purchased products for commercial purposes – weighted-average cost basis. |
Taxes | h. Taxes: (1) Deferred income taxes: Deferred income taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of temporary differences between the financial accounting and tax basis of assets and liabilities under the applicable tax laws, and on tax rates anticipated to be in effect when the deferred taxes are expected to be paid or realized. A valuation allowance is provided if, based upon the weight of available evidence, it is “more likely than not” that a portion of the deferred tax assets will not be realized. For the years ended March 31, 2020 and 2019, in accordance with the required updates in ASU No. 2015-17, all deferred tax liabilities and assets are classified as non-current. (2) Tax contingencies: The Company follows a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. In addition, the Company classifies interest and penalties recognized in the financial statements relating to uncertain tax positions under the provision for income taxes. A liability for unrecognized tax benefits was recorded in accordance with ASC 740 amounting to $25,258 and $28,188 as of March 31, 2020 and 2019, respectively. (3) Income taxes: Income taxes are accounted for in accordance with the use of the liability method, whereby deferred tax asset and liability account balances are determined for temporary differences between the financial reporting and tax basis of assets and liabilities, and for carryforward losses and credits. Deferred taxes are measured using tax rates and laws that will be in effect when the differences are expected to reverse. In certain cases management determined that it was more likely than not that the Company will not benefit from the deferred tax assets in subsidiaries, and a valuation allowance was provided against the deferred tax assets carried by such subsidiaries. In future years, if it is more likely than not that the subsidiary will be in a position to utilize its deferred tax asset, the valuation allowance for such assets will be modified. |
Property, plant and equipment | i. Property, plant and equipment: (1) Property, plant and equipment is stated at cost, net of accumulated depreciation. Payroll and other costs that are direct incremental costs necessary to bring an asset to the condition of its intended use incurred during the construction and validation period of property, plant and equipment are capitalized to the cost of such assets. (2) Depreciation is calculated utilizing the straight-line method over the estimated useful lives of the assets, from the date the assets are ready for their intended use, at the following annual rates: % Building 2.5 - 10 Machinery and equipment 5 - 10 Motor vehicles 20 Furniture, fixtures, office 6 Leasehold improvements are depreciated using the straight-line method over the shorter of their useful lives or the terms of the leases (generally 5-10 years). (3) Certain costs incurred for computer software developed or obtained for internal use is required to be capitalized. As of March 31, 2020 and 2019, the Group capitalized $13,912 and $7,854 of software costs, respectively. Software costs are amortized using the straight-line method over their estimated useful life (generally 3 - 5 years). |
Lease of land from Israel Land Administration | j. Lease of land from Israel Land Administration: The Company leases several parcels of land from the Israel Land Administration (“ILA”). The lease period of the industrial parcels ends between 2018 and 2060. The Company has the right to extend the lease agreement ending 2018 for an additional period of 49 years and is currently in the process of extending the lease agreement. The ILA lease agreements are standard agreements covering substantial portions of the land of Israel. The standard agreements call for a Lease Period of 49 years, with an option for one additional Lease Period (i.e., total of 98 years). A majority of the Company’s leases are in the beginning of the second 49 year period, and the remaining leases still in the first 49 year period have the option for the one additional lease period. The ownership of the land is not transferred at the end of the lease period, however, in certain conditions the lessee may purchase the land from the ILA. The expectation, based on practice and accumulated experience is that the renewal price would be substantially below fair market value. Since such leases do not qualify as a capital lease, they are being accounted for as operating leases. The prepaid lease amount is included in long-term receivables and other assets and amortized over the term of the lease. As of April 1, 2019, the Company commenced lease accounting in accordance with ASU 2016-02, “ Leases (Topic 842) |
Goodwill | k. Goodwill: The goodwill of the Company is not amortized, but rather is subject to an annual impairment test (or more frequently if impairment indicators arise). The Company operates in one operating segment, comprising its only reporting unit. The goodwill impairment tests are conducted in two steps. In the first step, if it is determined that the net book value of the reporting unit exceeds its fair value, the Company would then perform the second step of the impairment test. This requires the allocation of the reporting unit’s fair value of all of its assets and liabilities in a manner similar to an acquisition cost allocation, with any residual fair value being allocated to goodwill. The implied fair value of the goodwill is then compared to the carrying value to determine impairment, if any. The Company determined the fair value using the market approach, which is based on the market capitalization by using the share price of the Company on the NYSE and an appropriate control premium. As of March 31, 2020, the market capitalization of the Company was significantly higher than the net book value, therefore there was no need to continue to step two. Taro determined the goodwill was not impaired as of March 31, 2020 and 2019. |
Contingencies | l. Contingencies: The Company may be involved in various patent, product liability, consumer, commercial or environmental claims, government investigations, and other legal proceedings that arise from time to time in the ordinary course of business. Except for income tax contingencies, the Company records accruals for these types of contingencies to the extent that the Company concludes their occurrence is probable and that the related liabilities are estimable. The Company records anticipated recoveries under existing insurance contracts that are virtually certain of occurring and at the gross amount that is expected to be collected. |
Intangible assets and deferred charges and long-lived assets | m . Intangible assets and deferred charges and long-lived assets: Intangible assets and deferred charges: Acquired intangible assets and product rights to be held and used are amortized over their useful life of a weighted-average amortization period of between 5 to 20 years Long-lived assets: The Group’s long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment exists when the carrying amount of the asset exceeds the aggregate future undiscounted cash flows expected to be generated by the asset. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the asset. During the years ended March 31, 2020 and 2019, the Company did not record any impairment charge. |
Comprehensive income | n. Comprehensive income: The comprehensive income statement establishes standards for the reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income generally represents all changes in shareholders’ equity during the period except those resulting from investments by, or distributions to, shareholders. The Company determined that its items of other comprehensive income relates to unrealized gains and losses on available for sale securities and foreign currency translation adjustments. |
Treasury shares | o . Treasury shares: The Company repurchases its ordinary shares from time to time on the open market and holds such shares as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders’ equity. During the years ended March 31, 2020, 2019 and 2018, the Company repurchased 280,719 shares, 888,719 shares, and 1,085,694 shares, respectively. On November 15, 2019, the Company commenced a modified “Dutch auction” tender offer to repurchase up to $225.0 million in value of its ordinary shares. In accordance with the terms and conditions of the tender offer, which expired on December 16, 2019, the Company accepted for payment 280,719 ordinary shares at the final purchase price of $91.00 per share. When treasury stock is reissued, the Company charges the excess of the purchase cost, including related share-based compensation expenses, over their issuance price (loss) to retained earnings. The purchase cost is calculated based on the specific identification method. The Company did not reissue treasury shares during the three years ended March 31, 2020. In cases where the purchase cost is lower than the re-issuance price, the Company credits the difference to additional paid-in capital. |
Revenue recognition | p . Revenue recognition: The Company adopted the new accounting standard ASC 606, “ Revenue from Contracts with Customers When the Company recognizes and records revenue from the sale of its pharmaceutical products, the Company, in the same financial reporting period, records an estimate of various future deductions related to the sale. This has the effect of reducing the amount of reported product sales. These deductions include the Company’s estimates, which may require significant judgement of chargebacks, product returns, rebates and other sales deductions. Chargebacks result from pricing arrangements the Company has with end-user customers establishing contract prices which are lower than the wholesalers’ acquisition costs or invoice prices. When these customers buy the Company’s products from their wholesaler of choice, the wholesaler issues a credit memo (chargeback) to the Company for the difference between the invoice price and the end-user contract price. Chargeback reserves are estimated using current wholesaler inventory data and historical data. Product returns result from agreements allowing the Company’s customers to return unsold inventory that is expired or close to expiration and such returns are deducted from revenue. Product return reserves are calculated using the average lag period between sales and product expiry, historical product returns experience, and specific return exposures to estimate the potential obligation for returns of inventory in the distribution channel. Rebates result from contractual agreements with the Company’s customers and are earned based on the Company’s direct sales to customers or the Company’s customers’ sales to third parties. Rebate reserves from the Company’s direct sales to customers and the Company’s customers’ sales to third parties are estimated using historical and contractual data. The Company generally offers discounts to its customers for payments within a certain period of time. Cash discount reserves are calculated by multiplying the specified discount percentage by the outstanding receivable at the end of each period. Reserves for returns, Medicaid and indirect rebates are included in current liabilities. All other sales deductions allowances are recorded as accounts receivable reserves. The reserve for returns is included in current liabilities as substantially all of these returns will not be realized until after the year-end accounts receivable balances are settled. Medicaid and indirect rebates are included in current liabilities because the Company does not have direct customer relationships with any of the payees. The Company offers incentives to certain resellers and retailers through various marketing programs where the Company agrees to reimburse them for advertising costs incurred to include the Company’s products. The Company accounts for these in accordance with FASB ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) |
Research and development | q. Research and development: Research and development expenses are charged to expense as incurred. Payments made for research and development services prior to the services being rendered are recorded as prepaid expenses on our Consolidated Balance Sheet and expensed as provided. |
Royalty-bearing grants | r. Royalty-bearing grants: Royalty-bearing grants from the government of Israel through the National Technological Innovation Authority (the “Authority”) (formerly operating as Office of the Chief Scientist of the Ministry of Economy of the State of Israel ) for funding approved research and development projects are recognized at the time the Company is entitled to such grants, on the basis of the related costs incurred. The Company did not earn any grants during the years ended March 31, 2020, 2019 and 2018. |
Advertising expenses | s . Advertising expenses: The Group expenses advertising costs as incurred. Product samples are recorded within prepaid expenses on the Consolidated Balance Sheet and recorded within advertising expenses when provided to potential customers. Advertising expenses were $4,902, $6,527, and $9,913 for the years ended March 31, 2020, 2019 and 2018, respectively. |
Sales and other taxes collected and remitted to governmental authorities | t. Sales and other taxes collected and remitted to governmental authorities: The Company collects various taxes from customers and remits them to governmental authorities. These taxes are recorded on a net basis and therefore do not impact the Statement of Operations. |
Basic and diluted net income per share attributable to Taro | u. Basic and diluted net income per ordinary share attributable to Taro: Basic net income per ordinary share is calculated based on the weighted-average number of ordinary shares outstanding during each year. Diluted net income per ordinary share is calculated based on the weighted-average number of ordinary shares outstanding during each year, plus potential dilutive ordinary shares considered outstanding during the year (except where anti-dilutive). |
Freight and distribution costs | v . Freight and distribution costs: The Company’s accounting policy is to classify shipping and handling costs as a part of sales and marketing expense. Freight, distribution costs, and distribution warehousing costs related to shipping and handling to customers, primarily through the use of common carriers or external distribution services amounted to $11,954, $13,187, and $12,170 for the years ended March 31, 2020, 2019 and 2018, respectively. |
Concentrations of credit risk | w. Concentrations of credit risk: Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents, and trade receivables. Cash and cash equivalents and bank deposits are principally invested in major banks in Israel, the United States and Canada. Such deposits in the United States may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Group’s cash and cash equivalents are financially sound and that low credit risk therefore exists with respect to these financial instruments. These deposits may be redeemed upon demand and, therefore, bear minimal risk. The Group’s trade accounts receivables are mainly derived from sales to customers in the United States, Canada, Europe and Israel. At March 31, 2020, two different customers represented approximately 39.2% and 19.6% of the Company’s trade accounts receivable. The Group has adopted credit policies and standards intended to mitigate inherent risk while accommodating sales growth. The Group performs ongoing credit evaluations of its customers’ financial condition when deemed necessary, but does not require collateral for its customers’ accounts receivable. |
Fair value of financial instruments | x. Fair value of financial instruments: The carrying amount of cash and cash equivalents, trade and other receivables, trade payables and other payables approximate their fair value, due to the short-term maturities of these instruments. As of March 31, 2020 and 2019, the Company did not have any amounts outstanding under borrowing arrangements. The fair value of currency and interest rate contracts is determined by discounting to the present all future cash flows of the currencies to be exchanged at interest rates prevailing in the market for the period the currency exchanges are due and expressing the results in USD at the current spot foreign currency exchange rate. |
Accounting for derivatives | y. Accounting for derivatives: The Company recognizes all of its derivative instruments as either assets or liabilities at fair value, in the Consolidated Balance Sheet. The accounting for changes (i.e., gains or losses) in the fair value of a derivative instrument depends on whether the instrument has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. For derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivatives which qualify as a fair value hedge, changes in fair value are reported with the carrying amount of the hedged asset or liability with cash flows reported on the Consolidated Statement of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. For derivatives that qualify as a cash flow hedge, the effective portion of these derivatives’ fair value is initially reported as a component of other comprehensive income with cash flows reported on the Consolidated Statement of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. The designation is based upon the nature of the exposure being hedged. At March 31, 2020, and 2019, the Company had derivative instruments designated as hedging instruments. At March 31, 2018, no derivative instruments were designated as hedging instruments. As of October 1, 2018, the Company commenced hedging accounting for Israel in accordance with ASU No. 2017-12, “Derivatives and Hedging (Topic 815) According to ASU 2017-12, for purposes of assessing whether the qualifying criteria for the critical terms match method are met for a group of forecasted transactions, an entity may assume that the hedging derivative matures at the same time as the forecasted transactions if both the derivative maturity and the forecasted transactions occur within the same 31-day period or fiscal month. The company elected to deem the time criterion as qualified according to the 31-day period method. The company is aware that if any of the critical terms cease to exist or if the counterparty credit rating becomes significant, then the critical terms method cannot be continued. In such a case the company will use a "long haul method" in order to assess the hedge effectiveness or will discontinue the hedging relationship. The effective portion of the designated value is reported under a hedging reserve in other comprehensive income during the hedge period. Once the hedged item affects P&L, the hedging reserve value is reclassified to the same item. The ineffective portion, if any, is reported in P&L. For derivative instruments not designated as hedging instruments for accounting purposes, the gain or loss is recognized in financial income, net in the Consolidated Statement of Operations during the period of change with the cash flows reported on the Consolidated Statements of Cash Flows consistent with the classification of cash flows from the underlying items being hedged. See Note 10. |
Fair value measurements | z. Fair value measurements: There is a fair value hierarchy that distinguishes between assumptions based on market data obtained from independent sources (observable inputs) and those based on an entity’s own assumptions (unobservable inputs). Additional disclosure about fair value measurements is also required. |
Discontinued operations | aa. Discontinued operations: When a component of an entity has been disposed of or is classified as held for sale, the results of its operations, including the gain or loss on the disposed component, should be classified as discontinued operations and the assets and liabilities of such component should be classified as assets and liabilities attributed to discontinued operations; that is, provided the operations, assets and liabilities of the component have been eliminated from the Company’s Consolidated Statements of Operations and the Company will no longer have any significant continuing involvement in the operations of the component. |
Impact of recently adopted accounting standards | bb. Impact of recently adopted accounting standards: In June 2018, the FASB issued, ASU No. 2018-07, “ Compensation—Stock Compensation (Topic 718) In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) In July 2018, the FASB issued ASU No. 2018-10, “ Codification Improvements to Topic 842, Leases .” The updated guidance focuses on codification improvements to Topic 842, as part of the FASB improvement project. Impact of recently issued accounting standards not yet adopted: In August 2018, the FASB issued ASU No. 2018-14, “ Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) In August 2018, the FASB issued ASU No. 2018-13, “ Fair Value Measurement (Topic 820) does not currently anticipate In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles—Goodwill and Other (Topic 35 In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326).” |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Impact on Net Income and Other Comprehensive Income (Loss) | The following table summarizes the impact on both consolidated net income and other comprehensive income (loss) utilizing USD as the functional currency of Taro Canada as of March 31, 2020, compared to the related impact if the functional currency of Taro Canada would have remained CAD (excluding FX from transactions denominated in CAD recorded in the respective period): USD as Functional Currency (in USD)* CAD as Functional Currency (in USD)** (Unaudited Pro Forma) Financial (income) expense, net - attributed to foreign translation gain $ (14,838 ) $ (46,667 ) Other comprehensive loss - attributed to foreign currency translation adjustments $ (1 ) $ (92,959 ) *Based on consolidated amounts of the Group. Includes Taro Canada amounts reported in USD with USD as functional currency. **Based on unaudited pro forma consolidated amounts of the Group. Includes Taro Canada unaudited pro forma amounts reported in USD with CAD as functional currency. |
Schedule of annual depreciation rates of property, plant and equipment | % Building 2.5 - 10 Machinery and equipment 5 - 10 Motor vehicles 20 Furniture, fixtures, office 6 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Marketable Securities | a. Marketable securities: March 31, 2020 2019 Short-term marketable securities $ 595,383 $ 481,883 Long-term marketable securities 459,639 304,322 $ 1,055,022 $ 786,205 |
Summary of Both Short-Term and Long-Term Marketable Securities | b. The following is a summary of both short-term and long-term marketable securities by type: March 31, 2020 2019 Amortized Cost Gross Unrealized Gain (Loss) through Other Comprehensive Income Gross Unrealized Gain (Loss) through Profit & Loss Market Value Amortized Cost Gross Unrealized Gain (Loss) through Other Comprehensive Income Gross Unrealized Gain (Loss) through Profit & Loss Market Value Marketable securities: Bonds $ 686,365 $ (6,305 ) $ — $ 680,060 $ 464,443 $ 1,145 $ — $ 465,588 Government securities 271,004 2,438 — 273,442 118,659 13 — 118,672 Commercial paper 45,329 (21 ) — 45,308 60,692 — — 60,692 Preferred stock - debt instrument 6,195 (1,129 ) — 5,066 750 (7 ) — 743 Preferred stock - equity instrument 7,099 — (1,098 ) 6,001 750 — 12 762 Other securities 45,405 (260 ) — 45,145 139,687 61 — 139,748 Total marketable securities $ 1,061,397 $ (5,277 ) $ (1,098 ) $ 1,055,022 $ 784,981 $ 1,212 $ 12 $ 786,205 |
Estimated Fair Value of Marketable Securities by Contractual Maturity | The estimated fair value of marketable securities as of March 31, 2020 and 2019, by contractual maturity, are as follows: March 31, 2020 2019 Amortized Market Amortized Market Cost Value Cost Value Available-for-sale marketable securities: Matures in less than five years $ 1,044,537 $ 1,040,549 $ 783,481 $ 784,700 Matures in more than five years 9,761 8,472 750 743 1,054,298 1,049,021 784,231 785,443 Investment at fair value through Profit & Loss 7,099 6,001 750 762 $ 1,061,397 $ 1,055,022 $ 784,981 $ 786,205 |
Accounts Receivable and Other (
Accounts Receivable and Other (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Components of Trade Accounts Receivable, Net | The following table summarizes the impact of accounts receivable reserves and allowance for doubtful accounts on the gross trade accounts receivable balances at each balance sheet date: March 31, 2020 2019 Trade accounts receivable, gross $ 410,403 $ 461,365 Reserves for sales deductions: Chargebacks (104,552 ) (109,763 ) Other sales deductions (50,844 ) (78,508 ) Customer rebates (17,012 ) (34,757 ) Allowance for doubtful accounts (2,774 ) (392 ) Trade accounts receivable, net $ 235,221 $ 237,945 |
Components of Other Receivables and Prepaid Expenses | b. Other receivables and prepaid expenses: March 31, 2020 2019 Government authorities $ 16,257 $ 28,857 Due from related parties 7,839 8,987 Prepaid expenses 6,638 7,075 Advances to suppliers 1,868 1,062 Interest receivable 760 825 Other 2,205 556 $ 35,567 $ 47,362 |
Sales Incentives (Tables)
Sales Incentives (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Sales Deductions and Product Returns | The following tables summarize the activities for sales deductions and product returns for the years ended March 31, 2020, 2019, and 2018: For the year ended March 31, 2020 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (109,763 ) $ (1,104,946 ) $ 1,110,157 $ (104,552 ) Rebates and Other (113,657 ) (305,098 ) 348,125 (70,630 ) Total $ (223,420 ) $ (1,410,044 ) $ 1,458,282 $ (175,182 ) Current Liabilities Returns $ (63,818 ) $ (37,258 ) $ 39,670 $ (61,406 ) Other (2) (33,497 ) (77,537 ) 69,472 (41,562 ) Total $ (97,315 ) $ (114,795 ) $ 109,142 $ (102,968 ) For the year ended March 31, 2019 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (116,632 ) $ (1,086,800 ) $ 1,093,669 $ (109,763 ) Rebates and Other (133,221 ) (377,568 ) 397,132 (113,657 ) Total $ (249,853 ) $ (1,464,368 ) $ 1,490,801 $ (223,420 ) Current Liabilities Returns $ (70,865 ) $ (38,247 ) $ 45,294 $ (63,818 ) Other (2) (40,968 ) (64,405 ) 71,876 (33,497 ) Total $ (111,833 ) $ (102,652 ) $ 117,170 $ (97,315 ) For the year ended March 31, 2018 Beginning balance Provision recorded for current period sales (1) Credits processed / Payments Ending balance Accounts Receivable Reserves Chargebacks $ (112,071 ) $ (1,107,353 ) $ 1,102,792 $ (116,632 ) Rebates and Other (193,255 ) (432,060 ) 492,094 (133,221 ) Total $ (305,326 ) $ (1,539,413 ) $ 1,594,886 $ (249,853 ) Current Liabilities Returns $ (82,494 ) $ (49,265 ) $ 60,894 $ (70,865 ) Other (2) (43,370 ) (60,677 ) 63,079 (40,968 ) Total $ (125,864 ) $ (109,942 ) $ 123,973 $ (111,833 ) (1) Includes immaterial amounts of reversals of provisions recorded for prior years’ sales. (2) Includes Medicaid, indirect rebates, and amounts due to customers. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | March 31, 2020 2019 Finished goods $ 63,686 $ 65,558 Raw and packaging materials 49,970 44,979 Work in progress 34,084 32,593 Other 5,333 4,949 $ 153,073 $ 148,079 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Composition of Assets Grouped by Major Classifications | a. Composition of assets grouped by major classifications are as follows: March 31, 2020 2019 Cost: Land $ 7,628 $ 7,628 Buildings 187,570 183,496 Leasehold improvements 3,383 2,291 Machinery and equipment 212,480 200,375 Computer software and equipment 39,156 33,789 Motor vehicles 80 215 Furniture, fixtures and office equipment 15,047 14,900 465,344 442,694 Accumulated depreciation and impairment charges: Buildings $ 78,150 $ 71,279 Leasehold improvements 1,847 1,689 Machinery and equipment 144,437 135,801 Computer software and equipment 20,857 18,294 Motor vehicles 80 215 Furniture, fixtures and office equipment 10,012 9,174 255,383 236,452 Depreciated cost $ 209,961 $ 206,242 |
Intangible Assets and Deferre_2
Intangible Assets and Deferred Costs (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Deferred Costs | March 31, 2020 2019 Cost: Product and distribution rights $ 85,174 $ 83,391 85,174 83,391 Accumulated amortization: Product and distribution rights 76,762 74,539 76,762 74,539 $ 8,412 $ 8,852 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | March 31, 2020 2019 Prepayment $ 13,250 $ 13,480 Intangible assets and deferred costs, net (2) 8,412 8,852 Goodwill (3) 7,191 7,191 Right-of-use (ROU) assets (4) 2,195 — Severance pay fund (5) 1,187 1,350 Other 126 195 $ 32,361 $ 31,068 (1) The ILA lease agreements are standard agreements covering substantial portions of the land of Israel. The standard agreements call for a Lease Period of 49 years, with an option for one additional Lease Period (i.e., total of 98 years). A majority of the Company’s leases are in the beginning of the second 49 year period, and the remaining leases still in the first 49 year period have the option for the one additional lease period. This amount was prepaid. See Note 2.j. (2) See Note 8. (3) See Note 2.k. (4) As of April 1, 2019, the Company commenced lease accounting in accordance with ASU 2016-02, “Leases (Topic 842).” The Company currently has leased offices, warehouse space and equipment under operating leases for periods through 2023. See Note 2.bb. and Note 13. ( 5 ) Under Israeli law, the Company is required to make severance or pension payments to dismissed employees and to employees terminating employment under certain other circumstances. Deposits are made with a pension fund or other insurance plans to secure pension and severance rights for the employees in Israel. These amounts represent the balance of the deposits in those funds (including profits) that will be used to cover the Company’s severance obligations. See Note 12.b. |
Pension, Retirement Savings and Severance Expenses | The Company’s matching contribution to the plans was $1,133, $1,254 and $1,195 for the years ended March 31, 2020, 2019 and 2018, respectively. Years ended March 31, 2020 2019 2017 Pension, retirement savings and severance expenses $ 6,654 $ 5,924 $ 6,058 |
Derivative Instruments and Fi_2
Derivative Instruments and Financial Risk Management (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Rate of Inflation, Rate of Devaluation (Appreciation) Against U.S. Dollar and Rate of Exchange of U.S. Dollar | The following table sets forth the annual rate of inflation, the devaluation (appreciation) rate of the NIS and the CAD against the U.S. dollar and the exchange rates between the U.S. dollar and each of the NIS and the CAD at the end of the year indicated: Rate of Devaluation (Appreciation) Rate of Exchange of Rate of Inflation Against U.S. Dollar U.S. Dollar Period ended Israel (1) Canada (2) Israel (1) Canada (2) Israel (1) Canada (2) 3/31/2020 0.00 % 0.89 % (1.65 %) 6.02 % 3.57 1.41 3/31/2019 1.40 % 1.88 % 3.42 % 3.10 % 3.63 1.33 (1) Per Bank of Israel. (2) Per J.P. Morgan Chase. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets Measured at Fair Value on Recurring Basis | The fair value of the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2020 and 2019 were as follows: March 31, 2020 March 31, 2019 Quoted Market Price s Identical Assets Significant Other Observable Inputs Quoted Market Price s Identical Assets Significant Other Observable Inputs (Level 1) (Level 2) (Level 1) (Level 2) Assets Short-term marketable securities * $ 595,383 $ — $ 481,883 $ — Long-term marketable securities * 448,572 — 302,817 — Long-term debt instruments * 5,066 — 743 — Long-term equity instruments * 6,001 — 762 — Forward contracts — 35 — — $ 1,055,022 $ 35 $ 786,205 $ — Liabilities Forward contracts $ — $ (4,667 ) $ — $ (4,063 ) $ — $ (4,667 ) $ — $ (4,063 ) *Refer to Note 3 for additional details on marketable securities. |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | a. Other current liabilities: March 31, 2020 2019 Returns reserve $ 61,406 $ 63,818 Medicaid and indirect rebates 37,110 31,947 Accrued income taxes 22,511 16,950 Employees and payroll accruals 20,195 21,057 Accrued expenses 15,616 16,308 Marketable securities 9,168 2,005 Royalties 8,523 863 Due to customers 4,452 1,550 Derivative instruments 3,811 3,769 Legal and audit fees 2,743 2,253 Lease liability 1,514 — Suppliers of property, plant and equipment 1,418 4,654 Settlements and loss contingencies 961 1,841 Deferred revenue 237 9,439 Other 4,208 5,307 $ 193,873 $ 181,761 |
Schedule of Other Long-Term Liabilities | b. Other long-term liabilities: March 31, 2020 2019 Deferred revenue $ 1,347 $ 1,572 Accrued severance pay 1,278 1,345 Other 2,742 1,481 $ 5,367 $ 4,398 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Minimum Annual Rental Payments, under Non-Cancelable Lease Agreements | a. Companies of the Group have leased offices, warehouse space and equipment under operating leases for periods through 2023. The minimum annual rental payments, under non-cancelable lease agreements, are as follows: March 31, 2020 3/31/2021 $ 1,664 3/31/2022 767 3/31/2023 235 $ 2,666 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Federal Home Loan Banks [Abstract] | |
Summary of Net Income Per Share | Net income per share: Year ended March 31, 2020 Year ended March 31, 2019 Year ended March 31, 2018 Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Net income attributable to Taro (numerator) Shares (denominator) Per Share Amount Basic and diluted EPS $ 244,241 38,460,056 $ 6.35 $ 281,777 38,990,058 $ 7.23 $ 211,150 40,155,087 $ 5.26 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income from Continuing and Discontinued Operations Before Income Taxes | g. Income from continuing and discontinued operations before income taxes is comprised of the following: Year ended March 31, 2020 2019 2018 Domestic (Israel) $ 99,182 $ 184,410 $ 91,485 Foreign (North America, the Cayman Islands, Ireland and the U.K.) 198,853 172,444 200,548 Income from continuing and discontinued operations before taxes $ 298,035 $ 356,854 $ 292,033 |
Components of Taxes on Income | h. Taxes on income are comprised of the following: Year ended March 31, 2020 2019 2018 Current taxes $ 55,895 $ 60,203 $ 27,687 Prior years' benefits (9,995 ) (2,980 ) (1,830 ) Deferred income taxes 7,585 17,509 56,097 $ 53,485 $ 74,732 $ 81,954 Domestic (Israel) $ 4,177 $ 33,183 $ 17,373 Foreign (North America) 49,308 41,549 64,581 $ 53,485 $ 74,732 $ 81,954 |
Reconciliation of Statutory Tax Rate of Parent Company to Effective Consolidated Tax Rate | i. Reconciliation of the statutory tax rate of the parent company in Israel to the effective consolidated tax rate: Year ended March 31, 2020 2019 2018 Statutory tax rate (in Israel) 23.0% 23.0% 24.0% (Decrease) increase in effective tax rate due to: Tax benefits from reduced tax rates under benefit programs and other (4.1%) (6.2%) (7.8%) Utilization of net operating losses — (0.4%) (2.5%) Different tax rates applicable to non-Israeli subsidiaries 1.3% 0.8% (2.3%) Uncertain tax positions, net (0.6%) 3.4% (3.3%) FX on tax payments 0.4% (0.3%) — Taxes from prior years (0.8%) 0.6% 5.7% Net operating loss carryback (1) (1.3%) — — Change in Federal corporate income tax rate — — 14.2% Effective consolidated tax rate 17.9% 20.9% 28.0% (1) Net operating loss carryback is attributed to the CARES Act which was enacted in the U.S. on March 27, 2020. The CARES Act, among other provisions, allows U.S. corporations to carry existing losses back to the preceding five years. The Company expects to receive a benefit due to the increased value of its losses when carried back to preceding years in which the U.S. federal corporate income tax rate was 35% versus the current 21%. |
Components of Current Taxes | j. Current taxes are calculated at the following combined federal and local rates: Year ended March 31, 2020 2019 2018 On Israeli operations (not including “Approved Enterprise”) 23.0% 23.0% 24.0% On U.S. operations * 21.2% 21.2% 31.7% On Canadian operations * 25.0% 25.0% 25.0% On U.K. discontinued operations * * * 20.0% On Ireland discontinued operations * * * 12.5% * The U.S. and Canadian subsidiaries are taxed on the basis of the tax laws prevailing in their countries of residence. The Canadian subsidiary qualifies for research and development tax credits and manufacturing and processing credits, thereby reducing its effective tax rate. Since the U.K. and Ireland operations are classified as discontinued operations, there is no current tax. |
Schedule of Deferred Income Taxes | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and carryforward losses. March 31, 2020 2019 Deferred tax assets: Operating loss carryforward $ 548 $ 4,383 Capital loss carryforward 17,749 18,301 Deferred revenue 24,765 19,726 Property, plant, and equipment 1,440 1,440 Intangible assets 36,612 41,420 Accrued expenses 45,756 50,742 Bad debt allowance 583 83 Hedge accounting 792 84 Marketable securities 262 — Other, net 8,506 7,448 Total deferred tax assets 137,013 143,627 Valuation allowance for deferred tax assets (23,338 ) (24,652 ) Net deferred tax assets 113,675 118,975 Deferred tax liabilities: Property, plant, and equipment (10,178 ) (8,803 ) Marketable securities — (1,924 ) Other, net (199 ) (259 ) Total deferred tax liabilities (10,377 ) (10,986 ) Net deferred tax assets $ 103,298 $ 107,989 Domestic $ 4,224 $ 5,684 Foreign 99,074 102,305 $ 103,298 $ 107,989 |
Schedule of Deferred Income Taxes Presented on the Consolidated Balance Sheets | The deferred income taxes are presented on the Consolidated Balance Sheets as follows: March 31, 2020 2019 Among non-current assets $ 106,693 $ 110,974 Among long-term liabilities (3,395 ) (2,985 ) $ 103,298 $ 107,989 |
Schedule of Uncertain Tax Positions | The Company adopted FASB ASC Section 740-10-25, “ Income Taxes-Overall-Recognition Year ended March 31, 2020 2019 2018 Unrecognized tax exposure at beginning of year $ 28,188 $ 16,810 $ 23,457 Increases as a result of positions taken in prior period 382 1,689 — Decreases as a result of positions taken in prior period (7,913 ) (128 ) (15,506 ) Increases as a result of positions taken in current period 4,601 9,817 8,859 Unrecognized tax exposure at end of year $ 25,258 $ 28,188 $ 16,810 |
Selected Statements of Income_2
Selected Statements of Income Data (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Text Block [Abstract] | |
Schedule of Selected Statements of Income Data | Year ended March 31, 2020 2019 2018 Sales, net $ 644,769 $ 669,893 $ 661,913 Selling, marketing, general and administrative expenses: Selling and marketing $ 31,754 $ 39,495 $ 33,724 Advertising 4,902 6,527 9,913 General and administrative * 56,757 43,949 44,559 Settlements and loss contingencies — (3,678 ) 1,884 $ 93,413 $ 86,293 $ 90,080 * Including provision for doubtful accounts $ 2,382 $ 144 $ (124 ) Financial (income) expenses: Interest and exchange differences on long-term liabilities $ 725 $ 256 $ 304 Income in respect of deposits (11,714 ) (14,107 ) (13,367 ) Interest from marketable securities (22,655 ) (19,691 ) (6,871 ) Foreign currency transaction gains (14,838 ) (25,309 ) 32,465 $ (48,482 ) $ (58,851 ) $ 12,531 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Geographic Area Information | a. Geographic Area Information: Israel Canada U.S.A. Other Consolidated Year ended March 31, 2020 and as of March 31, 2020: Sales * $ 42,817 $ 97,997 $ 495,673 $ 8,282 $ 644,769 Long-lived assets ** $ 123,679 $ 63,506 $ 38,379 $ — $ 225,564 Year ended March 31, 2019 and as of March 31, 2019: Sales * $ 40,050 $ 83,970 $ 537,111 $ 8,762 $ 669,893 Long-lived assets ** $ 123,698 $ 59,108 $ 39,479 $ — $ 222,285 Year ended March 31, 2018 and as of March 31, 2018: Sales * $ 38,223 $ 67,226 $ 549,174 $ 7,290 $ 661,913 Long-lived assets ** $ 114,145 $ 56,629 $ 37,246 $ — $ 208,020 * Based on customer’s location, including sales to unaffiliated customers and Sun. ** Includes property, plant and equipment, net; goodwill and intangible assets, net. |
Schedule of Sales by Therapeutic Category | c. Sales by therapeutic category, as a percentage of total net sales for the years ended March 31, 2020, 2019 and 2018, were as follows: Year ended March 31, Category 2020 2019 2018 Dermatological and topical 63 % 61 % 65 % Neuropsychiatric 17 % 18 % 17 % Cardiovascular 6 % 7 % 6 % Anti-inflammatory 3 % 3 % 4 % Other 11 % 11 % 8 % Total 100 % 100 % 100 % |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | b. The following is the detail of discontinued operations: Year ended March 2020 2019 2018 Sales, net $ — $ — $ — Cost of sales — — (103 ) Gross loss — — (103 ) Operating expenses: Research and development — — (30 ) Selling, marketing, general and administrative — — (169 ) Operating loss — — (302 ) Financial income, net — — 113 Other loss, net — — (146 ) Loss before income taxes — — (335 ) Net loss from discontinued operations $ — $ — $ (335 ) |
General - Additional Informatio
General - Additional Information (Detail) $ / shares in Units, $ in Thousands | Nov. 15, 2019USD ($)$ / sharesshares | Nov. 05, 2018USD ($)$ / shares | Nov. 23, 2016USD ($) | Oct. 01, 2015CAD ($) | Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($)shares | Mar. 31, 2018shares | Jan. 11, 2019$ / sharesshares | Nov. 04, 2019shares |
General [Line Items] | |||||||||
Shares purchase program, authorized amount | $ 250,000,000 | ||||||||
Shares repurchase program expiration date | Dec. 16, 2019 | Jan. 11, 2019 | |||||||
Treasury stock, shares repurchased | shares | 280,719 | 280,719 | 888,719 | 1,085,694 | 2,493,378 | ||||
Treasury stock, average price per share | $ / shares | $ 91 | $ 100.28 | |||||||
Special cash dividend declared date | Nov. 5, 2018 | ||||||||
Special cash dividend declared on ordinary shares | $ 500,000,000 | ||||||||
Special cash dividend paid per share on ordinary shares | $ / shares | $ 12.86 | ||||||||
Date of special cash dividend paid on ordinary shares | Dec. 28, 2018 | ||||||||
Special cash dividend to stareholders of record date on ordinary shares | Dec. 11, 2018 | ||||||||
Shares authorized to purchase under stock repurchase program | shares | 300,000,000 | ||||||||
Treasury stock, aggregate purchase price | $ 721,494,000 | $ 694,510,000 | |||||||
Maximum [Member] | |||||||||
General [Line Items] | |||||||||
Treasury stock, aggregate purchase price | $ 225,000,000 | ||||||||
Zalicus Pharmaceuticals [Member] | |||||||||
General [Line Items] | |||||||||
Purchase price of acquisition in cash | $ 5,000 | ||||||||
Purchase price to be paid in the form of promissory note | $ 5,000 | ||||||||
Promissory notes maturity date | Jul. 1, 2017 | ||||||||
Sun Pharmaceutical Industries Ltd. [Member] | |||||||||
General [Line Items] | |||||||||
Number of ordinary shares owned by majority share holder | shares | 29,497,813 | ||||||||
Percentage of ordinary shares owned by majority share holder | 77.10% | ||||||||
Vote attributable to share equity | 84.70% |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) | Nov. 15, 2019USD ($)$ / sharesshares | Nov. 23, 2016 | Mar. 31, 2020USD ($)Segmentshares | Mar. 31, 2019USD ($)shares | Mar. 31, 2018USD ($)Derivativeshares | Jan. 11, 2019$ / sharesshares | Mar. 31, 2020USD ($)shares | Mar. 31, 2017USD ($) |
Significant Accounting Policies [Line Items] | ||||||||
Percentage of shares having economic rights owned by Sun | 3.10% | 3.10% | ||||||
Percentage of shares having voting rights owned by Sun | 50.00% | 50.00% | ||||||
Marketable securities previously impaired owned or sold | $ 0 | $ 0 | $ 0 | |||||
Unrecognized tax benefits | $ 25,258,000 | 28,188,000 | $ 16,810,000 | $ 25,258,000 | $ 23,457,000 | |||
Lease agreements for an additional period | 49 years | |||||||
Lease agreements total period | 98 years | 98 years | ||||||
Number of operating segments | Segment | 1 | |||||||
Long-lived assets impairment loss | $ 0 | $ 0 | ||||||
Treasury stock, shares repurchased | shares | 280,719 | 280,719 | 888,719 | 1,085,694 | 2,493,378 | |||
Treasury stock, aggregate purchase price | $ 721,494,000 | $ 694,510,000 | $ 721,494,000 | |||||
Shares repurchase program expiration date | Dec. 16, 2019 | Jan. 11, 2019 | ||||||
Treasury stock, average price per share | $ / shares | $ 91 | $ 100.28 | ||||||
Treasury shares reissued | shares | 0 | |||||||
Royalty-bearing grants earned | 644,769,000 | 669,893,000 | $ 661,913,000 | |||||
Advertising expenses | 4,902,000 | 6,527,000 | 9,913,000 | |||||
Shipping and handling costs | 245,044,000 | 224,169,000 | $ 198,405,000 | |||||
Amounts outstanding under borrowing arrangements | $ 0 | 0 | $ 0 | |||||
Designated as Hedging Instrument [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of derivative instruments | Derivative | 0 | |||||||
Trade Accounts Receivable [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of customers | two | |||||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of customers represent trade accounts receivable | 39.20% | |||||||
Trade Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of customers represent trade accounts receivable | 19.60% | |||||||
Royalty [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Royalty-bearing grants earned | $ 0 | 0 | $ 0 | |||||
Shipping and Handling [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Shipping and handling costs | 11,954,000 | 13,187,000 | 12,170,000 | |||||
Software and Software Development Costs [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Capitalized software cost | $ 13,912,000 | 7,854,000 | ||||||
Minimum [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Tax benefit percentage | 50.00% | |||||||
Lease period | 2018 | |||||||
Acquired intangible assets weighted-average useful life | 5 years | |||||||
Weighted average amortization period | 5 years | |||||||
Minimum [Member] | Leasehold Improvements [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 5 years | |||||||
Minimum [Member] | Software and Software Development Costs [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 3 years | |||||||
Maximum [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Lease period | 2060 | |||||||
Acquired intangible assets weighted-average useful life | 20 years | |||||||
Weighted average amortization period | 20 years | |||||||
Treasury stock, aggregate purchase price | $ 225,000,000 | |||||||
Maximum [Member] | Leasehold Improvements [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 10 years | |||||||
Maximum [Member] | Software and Software Development Costs [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Estimated useful lives | 5 years | |||||||
USD [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of assets and liabilities denominated transactions | 90.00% | |||||||
U.S. [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of revenue | 75.00% | |||||||
Royalty-bearing grants earned | $ 495,673,000 | $ 537,111,000 | $ 549,174,000 | |||||
Canada [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Percentage of units produced in production plant | 80.00% |
Significant Accounting Polici_5
Significant Accounting Policies - Impact on Net Income and Other Comprehensive Income (Loss) (Detail) $ in Thousands | 12 Months Ended |
Mar. 31, 2020USD ($) | |
USD [Member] | |
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items] | |
Financial (income) expense, net - attributed to foreign translation gain | $ (14,838) |
Other comprehensive loss - attributed to foreign currency translation adjustments | (1) |
Canadian Dollars [Member] | |
Financial Statement Line Items With Differences In Reported Amount And Reporting Currency Denominated Amounts [Line Items] | |
Financial (income) expense, net - attributed to foreign translation gain | (46,667) |
Other comprehensive loss - attributed to foreign currency translation adjustments | $ (92,959) |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Annual Depreciation Rates of Property, Plant and Equipment (Detail) | Mar. 31, 2020 |
Motor Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 20.00% |
Minimum [Member] | Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 2.50% |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 5.00% |
Minimum [Member] | Furniture, Fixtures, Office Equipment, Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 6.00% |
Maximum [Member] | Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 10.00% |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 10.00% |
Maximum [Member] | Furniture, Fixtures, Office Equipment, Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Depreciation of assets at annual rates | 33.00% |
Marketable Securities - Schedul
Marketable Securities - Schedule of Marketable Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Investments Debt And Equity Securities [Abstract] | ||
Marketable securities | $ 595,383 | $ 481,883 |
Long-term marketable securities | 459,639 | 304,322 |
Marketable securities | $ 1,055,022 | $ 786,205 |
Marketable Securities - Summary
Marketable Securities - Summary of Both Short-Term and Long-Term Marketable Securities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 1,061,397 | $ 784,981 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | (5,277) | 1,212 |
Gross Unrealized Gain (Loss) through Profit & Loss | (1,098) | 12 |
Market Value | 1,055,022 | 786,205 |
Bonds [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 686,365 | 464,443 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | (6,305) | 1,145 |
Market Value | 680,060 | 465,588 |
Government Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 271,004 | 118,659 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | 2,438 | 13 |
Market Value | 273,442 | 118,672 |
Commercial Paper [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 45,329 | 60,692 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | (21) | |
Market Value | 45,308 | 60,692 |
Preferred Stock Debt Instrument [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 6,195 | 750 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | (1,129) | (7) |
Market Value | 5,066 | 743 |
Preferred Stock Equity Instrument [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 7,099 | 750 |
Gross Unrealized Gain (Loss) through Profit & Loss | (1,098) | 12 |
Market Value | 6,001 | 762 |
Other Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 45,405 | 139,687 |
Gross Unrealized Gain (Loss) through Other Comprehensive Income | (260) | 61 |
Market Value | $ 45,145 | $ 139,748 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Other than temporary impairment charges | $ 0 | |
Available-for-sale Securities [Member] | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Other comprehensive income relating to marketable securities for foreign exchange gain | $ 2,502,000 | $ 14,655,000 |
Marketable Securities - Estimat
Marketable Securities - Estimated Fair Value of Marketable Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Investments Debt And Equity Securities [Abstract] | ||
Available-for-sale securities, Amortized cost, Matures in less than five years | $ 1,044,537 | $ 783,481 |
Available-for-sale securities, Amortized cost, Matures in more than five years | 9,761 | 750 |
Available-for-sale securities, Amortized Cost | 1,054,298 | 784,231 |
Investment at fair value through Profit & Loss | 7,099 | 750 |
Debt securities, Available-for-sale, Amortized Cost | 1,061,397 | 784,981 |
Available-for-sale securities, Market Value, Matures in less than five years | 1,040,549 | 784,700 |
Available-for-sale securities, Market Value, Matures in more than five years | 8,472 | 743 |
Available-for-sale marketable securities, Market Value | 1,049,021 | 785,443 |
Investment at fair value through Profit & Loss | 6,001 | 762 |
Debt securities, available-for-sale, Market Value | $ 1,055,022 | $ 786,205 |
Accounts Receivable and Other -
Accounts Receivable and Other - Components of Trade Accounts Receivable, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Receivables [Abstract] | ||
Trade accounts receivable, gross | $ 410,403 | $ 461,365 |
Reserves for sales deductions: | ||
Chargebacks | (104,552) | (109,763) |
Other sales deductions | (50,844) | (78,508) |
Customer rebates | (17,012) | (34,757) |
Allowance for doubtful accounts | (2,774) | (392) |
Trade accounts receivable, net | $ 235,221 | $ 237,945 |
Accounts Receivable and Other_2
Accounts Receivable and Other - Components of Other Receivables and Prepaid Expenses (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Receivables [Abstract] | ||
Government authorities | $ 16,257 | $ 28,857 |
Due from related parties | 7,839 | 8,987 |
Prepaid expenses | 6,638 | 7,075 |
Advances to suppliers | 1,868 | 1,062 |
Interest receivable | 760 | 825 |
Other | 2,205 | 556 |
Other receivables and prepaid expenses | $ 35,567 | $ 47,362 |
Sales Incentives - Additional I
Sales Incentives - Additional Information (Detail) | 12 Months Ended |
Mar. 31, 2020Customer | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Largest wholesale customers | 3 |
Period of return of inventory subsequent to product expiration | 12 months |
Product shipment description | the Company does not ship products that have less than 12 months until expiration (i.e., “short-dated sales”) |
Maximum period for products not to be shipped | 12 months |
Cash discount | 2.00% |
Rebate and other sales deduction receivable period | 24 months |
Minimum [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Period of return of inventory | 3 months |
Shelf life of products | 18 months |
Lot shipment period | 1 month |
Maximum [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Period of return of inventory | 6 months |
Shelf life of products | 36 months |
Lot shipment period | 6 months |
Sales Incentives - Sales Deduct
Sales Incentives - Sales Deductions and Product Returns (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Accounts Receivable Reserves [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | $ (223,420) | $ (249,853) | $ (305,326) | |
Provision recorded for current period sales | [1] | (1,410,044) | (1,464,368) | (1,539,413) |
Credits processed/Payments | 1,458,282 | 1,490,801 | 1,594,886 | |
Ending balance | (175,182) | (223,420) | (249,853) | |
Accounts Receivable Reserves [Member] | Chargebacks [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | (109,763) | (116,632) | (112,071) | |
Provision recorded for current period sales | [1] | (1,104,946) | (1,086,800) | (1,107,353) |
Credits processed/Payments | 1,110,157 | 1,093,669 | 1,102,792 | |
Ending balance | (104,552) | (109,763) | (116,632) | |
Accounts Receivable Reserves [Member] | Rebates and Other [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | (113,657) | (133,221) | (193,255) | |
Provision recorded for current period sales | [1] | (305,098) | (377,568) | (432,060) |
Credits processed/Payments | 348,125 | 397,132 | 492,094 | |
Ending balance | (70,630) | (113,657) | (133,221) | |
Current Liabilities [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | (97,315) | (111,833) | (125,864) | |
Provision recorded for current period sales | [1] | (114,795) | (102,652) | (109,942) |
Credits processed/Payments | 109,142 | 117,170 | 123,973 | |
Ending balance | (102,968) | (97,315) | (111,833) | |
Current Liabilities [Member] | Returns [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | (63,818) | (70,865) | (82,494) | |
Provision recorded for current period sales | [1] | (37,258) | (38,247) | (49,265) |
Credits processed/Payments | 39,670 | 45,294 | 60,894 | |
Ending balance | (61,406) | (63,818) | (70,865) | |
Current Liabilities [Member] | Other [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning balance | [2] | (33,497) | (40,968) | (43,370) |
Provision recorded for current period sales | [1],[2] | (77,537) | (64,405) | (60,677) |
Credits processed/Payments | [2] | 69,472 | 71,876 | 63,079 |
Ending balance | [2] | $ (41,562) | $ (33,497) | $ (40,968) |
[1] | Includes immaterial amounts of reversals of provisions recorded for prior years’ sales. | |||
[2] | Includes Medicaid, indirect rebates, and amounts due to customers. |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 63,686 | $ 65,558 |
Raw and packaging materials | 49,970 | 44,979 |
Work in progress | 34,084 | 32,593 |
Other | 5,333 | 4,949 |
Inventories | $ 153,073 | $ 148,079 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Mar. 31, 2020 | Mar. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Reserves recorded against inventories | $ 28,902,000 | $ 26,026,000 |
Inventory pledges outstanding | $ 0 | $ 0 |
Property, Plant and Equipment -
Property, Plant and Equipment - Composition of Assets Grouped by Major Classifications (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Cost: | ||
Cost of property, plant and equipment | $ 465,344 | $ 442,694 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 255,383 | 236,452 |
Depreciated cost | 209,961 | 206,242 |
Land [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 7,628 | 7,628 |
Buildings [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 187,570 | 183,496 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 78,150 | 71,279 |
Leasehold Improvements [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 3,383 | 2,291 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 1,847 | 1,689 |
Machinery and Equipment [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 212,480 | 200,375 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 144,437 | 135,801 |
Computer Software and Equipment [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 39,156 | 33,789 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 20,857 | 18,294 |
Motor Vehicles [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 80 | 215 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | 80 | 215 |
Furniture, Fixtures and Office Equipment [Member] | ||
Cost: | ||
Cost of property, plant and equipment | 15,047 | 14,900 |
Accumulated depreciation and impairment charges: | ||
Accumulated depreciation and impairment charges | $ 10,012 | $ 9,174 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expenses | $ 19,161,000 | $ 17,017,000 | $ 14,727,000 |
Capitalized interest, incremental and other internal costs | 15,333,000 | 15,333,000 | |
Additional capitalized interest and other costs | 0 | 0 | |
Software and Software Development Costs [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized development costs of computer software | 13,912,000 | 7,854,000 | |
Computer Equipment, Software and Production Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset disposals relating to depreciated production equipment | $ 279,000 | $ 12,707,000 |
Intangible Assets and Deferre_3
Intangible Assets and Deferred Costs - Schedule of Intangible Assets and Deferred Costs (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Cost: | ||
Product and distribution rights, cost | $ 85,174 | $ 83,391 |
Intangible assets and deferred costs, cost | 85,174 | 83,391 |
Accumulated amortization: | ||
Product and distribution rights, accumulated amortization | 76,762 | 74,539 |
Intangible assets and deferred costs, accumulated amortization | 76,762 | 74,539 |
Intangible assets and deferred costs, net | $ 8,412 | $ 8,852 |
Intangible Assets and Deferre_4
Intangible Assets and Deferred Costs - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment charge | $ 0 | $ 0 | |
Product and Distribution Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expenses | 2,222,000 | $ 1,580,000 | $ 1,769,000 |
Estimated amortization expense, 2021 | 1,834,000 | ||
Estimated amortization expense, 2022 | 1,845,000 | ||
Estimated amortization expense, 2023 | 1,710,000 | ||
Estimated amortization expense, 2024 | 311,000 | ||
Estimated amortization expense, 2025 | $ 577,000 | ||
Product Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period | 5 years |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepayment of land leased from ILA | $ 13,250 | $ 13,480 |
Intangible assets and deferred costs, net | 8,412 | 8,852 |
Goodwill | 7,191 | 7,191 |
Right-of-use (ROU) assets | 2,195 | |
Severance pay fund | 1,187 | 1,350 |
Other | 126 | 195 |
Other assets | $ 32,361 | $ 31,068 |
Other Assets - Schedule of Ot_2
Other Assets - Schedule of Other Assets (Parenthetical) (Detail) | 12 Months Ended |
Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Lease agreements for an additional period | 49 years |
Lease agreements total period | 98 years |
ASU 2016-02 [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Lease period | 2023 |
Other Assets - Additional Infor
Other Assets - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Receivables [Abstract] | |||
Contribution to defined retirement savings plan | $ 1,133 | $ 1,254 | $ 1,195 |
Other Assets - Pension, Retirem
Other Assets - Pension, Retirement Savings and Severance Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2017 | |
Pension And Other Postretirement Benefit Expense [Abstract] | |||
Pension, retirement savings and severance expenses | $ 6,654 | $ 5,924 | $ 6,058 |
Derivative Instruments and Fi_3
Derivative Instruments and Financial Risk Management - Summary of Rate of Inflation, Rate of Devaluation (Appreciation) Against U.S. Dollar and Rate of Exchange of U.S. Dollar (Detail) | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Israel [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Rate of Inflation | 0.00% | 1.40% |
Rate of Devaluation (Appreciation) Against U.S. Dollar | (1.65%) | 3.42% |
Rate of Exchange of U.S. Dollar | 3.57 | 3.63 |
Canada [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Rate of Inflation | 0.89% | 1.88% |
Rate of Devaluation (Appreciation) Against U.S. Dollar | 6.02% | 3.10% |
Rate of Exchange of U.S. Dollar | 1.41 | 1.33 |
Derivative Instruments and Fi_4
Derivative Instruments and Financial Risk Management - Additional Information (Detail) - Forward Contracts [Member] $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020USD ($)Payment₪ / $$ / $ | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Israeli Shekel [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | $ 49,000 | ||
Weighted-average forward exchange rate | ₪ / $ | 3.44 | ||
Number of installment payments | Payment | 17 | ||
(Loss) gain on derivative instruments | $ 178 | $ (2,530) | $ 97 |
Canadian Dollars [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | $ 40,024 | ||
Weighted-average forward exchange rate | $ / $ | 1.31 | ||
Number of installment payments | Payment | 16 | ||
(Loss) gain on derivative instruments | $ (629) | $ 2,545 | $ 2,068 |
Ten Months Purchase Period [Member] | Israeli Shekel [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 3,250 | ||
Six Month Purchase Period [Member] | Israeli Shekel [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 2,000 | ||
One Month Purchase Period [Member] | Israeli Shekel [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 4,500 | ||
One Month Purchase Period [Member] | Canadian Dollars [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 826 | ||
Nine Months Purchase Period [Member] | Canadian Dollars [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 2,453 | ||
Three Month Purchase Period [Member] | Canadian Dollars [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | 3,999 | ||
Three Month Purchase Period [Member] | Canadian Dollars [Member] | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Forward contracts purchase amount | $ 1,708 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Assets Measured at Fair Value on Recurring Basis (Detail) - Fair Value Measurement on a Recurring Basis [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Quoted Market Prices of Identical Assets (Level1) [Member] | ||
Assets | ||
Fair value of assets | $ 1,055,022 | $ 786,205 |
Quoted Market Prices of Identical Assets (Level1) [Member] | Short-term Marketable Securities [Member] | ||
Assets | ||
Fair value of assets | 595,383 | 481,883 |
Quoted Market Prices of Identical Assets (Level1) [Member] | Long-term Marketable Securities [Member] | ||
Assets | ||
Fair value of assets | 448,572 | 302,817 |
Quoted Market Prices of Identical Assets (Level1) [Member] | Long-term Debt Instruments [Member] | ||
Assets | ||
Fair value of assets | 5,066 | 743 |
Quoted Market Prices of Identical Assets (Level1) [Member] | Long-term Equity Instruments [Member] | ||
Assets | ||
Fair value of assets | 6,001 | 762 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets | ||
Fair value of assets | 35 | |
Liabilities | ||
Fair value of liabilities | (4,667) | (4,063) |
Significant Other Observable Inputs (Level 2) [Member] | Forward Contracts [Member] | ||
Assets | ||
Fair value of assets | 35 | |
Liabilities | ||
Fair value of liabilities | $ (4,667) | $ (4,063) |
Other Liabilities - Schedule of
Other Liabilities - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Returns reserve | $ 61,406 | $ 63,818 |
Medicaid and indirect rebates | 37,110 | 31,947 |
Accrued income taxes | 22,511 | 16,950 |
Employees and payroll accruals | 20,195 | 21,057 |
Accrued expenses | 15,616 | 16,308 |
Marketable securities | 9,168 | 2,005 |
Royalties | 8,523 | 863 |
Due to customers | 4,452 | 1,550 |
Derivative instruments | 3,811 | 3,769 |
Legal and audit fees | 2,743 | $ 2,253 |
Lease liability | $ 1,514 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherCurrentLiabilitiesMember | us-gaap:OtherCurrentLiabilitiesMember |
Suppliers of property, plant and equipment | $ 1,418 | $ 4,654 |
Settlements and loss contingencies | 961 | 1,841 |
Deferred revenue | 237 | 9,439 |
Other | 4,208 | 5,307 |
Other current liabilities | $ 193,873 | $ 181,761 |
Other Liabilities - Schedule _2
Other Liabilities - Schedule of Other Long-Term Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Deferred revenue | $ 1,347 | $ 1,572 |
Accrued severance pay | 1,278 | 1,345 |
Other | 2,742 | 1,481 |
Other long-term liabilities | $ 5,367 | $ 4,398 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Schedule of Minimum Annual Rental Payments, under Non-Cancelable Lease Agreements (Detail) $ in Thousands | Mar. 31, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
3/31/2021 | $ 1,664 |
3/31/2022 | 767 |
3/31/2023 | 235 |
Total minimum annual rental payments, under non-cancelable lease agreements | $ 2,666 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2019Company | Mar. 31, 2018USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Commitments And Contingent Liabilities [Line Items] | |||||
Rent expenses | $ 1,875 | $ 2,905 | $ 2,966 | ||
Aggregate contingent liability to the authority | 12,950 | 12,697 | |||
Royalty payments to the authority | $ 0 | $ 89 | $ 100 | ||
Number of companies against class action | Company | 30 | ||||
Percentage of rebate amount calculated for non-innovator multiple source drugs from average manufacturer price | 13.00% | ||||
Collective Bargaining Arrangements [Member] | |||||
Commitments And Contingent Liabilities [Line Items] | |||||
Employees Committee Agreement term | 3 years | ||||
Employees Committee Agreement renewal term | 1 year | ||||
Israel Tax Authority | |||||
Commitments And Contingent Liabilities [Line Items] | |||||
Tax assessment amount (before interest, linkage and penalties) | $ 40,782 | ||||
Unutilized capital loss amount | $ 74,551 | ||||
Settlement with ITA to paid reduced tax assessment | $ 15,000 | ||||
Minimum [Member] | |||||
Commitments And Contingent Liabilities [Line Items] | |||||
Percentage of royalty payments to the government of Israel | 3.00% | ||||
Percent of the weighted-average of the average manufacturer prices | 175.00% | ||||
Maximum [Member] | |||||
Commitments And Contingent Liabilities [Line Items] | |||||
Percentage of royalty payments to the government of Israel | 3.50% | ||||
Percentage of rebate amount calculated for innovator drugs from average manufacturer price | 23.10% |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Shareholders Equity [Line Items] | |||
Percentage of the rights to profits allocated to ordinary shares | 100.00% | ||
Percentage of the dissolution rights allocated to ordinary shares | 100.00% | ||
Option exercised | 0 | 0 | 0 |
Loss from foreign currency translation adjustments and hedge accounting | $ (160,583) | $ (158,069) | |
Unrealized (loss) gain from available for sale securities | (2,454) | 13,961 | |
Unrealized gain (losses) on marketable securities | $ 420 | $ (1,003) | $ (86) |
1999 Stock Incentive Plan [Member] | |||
Shareholders Equity [Line Items] | |||
Number of shares outstanding | 0 | 0 | 0 |
Ordinary Shares [Member] | |||
Shareholders Equity [Line Items] | |||
Description of voting power allocated to the founders' shares | Two-thirds of the voting power of all of the Company’s shares is allocated to the ordinary shares. | ||
Founders' Shares [Member] | |||
Shareholders Equity [Line Items] | |||
Description of voting power allocated to the founders' shares | One-third of the voting power of all of the Company’s shares is allocated to the founders’ shares. |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Net Income Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | |||
Net income attributable to Taro | $ 244,241 | $ 281,777 | $ 211,150 |
Basic and diluted weighted average number of common shares outstanding | 38,460,056 | 38,990,058 | 40,155,087 |
Basic and diluted EPS | $ 6.35 | $ 7.23 | $ 5.26 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | Apr. 01, 2017 | Jan. 01, 2017USD ($)Employee | Jan. 01, 2017ILS (₪)Employee | Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017 | Mar. 31, 2020USD ($)PlanEnterprise | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) |
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Applicable corporate income tax rate | 23.00% | 23.00% | 24.00% | |||||||
Number of active plans | Plan | 2 | |||||||||
Dividends subject to withholding tax rate | 15.00% | |||||||||
Uniform tax rate | 21.00% | 35.00% | 23.00% | 23.00% | 24.00% | |||||
Tax benefits relating to research and development tax credits | $ 1,091,000 | $ 1,091,000 | $ 664,000 | $ 867,000 | $ 1,091,000 | |||||
CARES act of 2020 operating loss carry-back period | 5 years | |||||||||
Deferred income taxes of undistributed earnings | $ 1,587,378,000 | |||||||||
Current taxes | 17.90% | 20.90% | 28.00% | |||||||
Amount of interest and linkage to consumer price index recognized on the consolidated statement of operations | $ 1,224,000 | $ 323,000 | $ 427,000 | |||||||
Amount of interest and linkage to consumer price index recognized on the consolidated balance sheets | 2,548,000 | 1,324,000 | ||||||||
Amount of unrecognized tax benefits | 16,810,000 | $ 16,810,000 | $ 25,258,000 | $ 28,188,000 | $ 16,810,000 | $ 23,457,000 | ||||
Dividend [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Current taxes | 25.00% | |||||||||
Taro USA [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Uniform tax rate | 31.50% | |||||||||
Canadian Operations [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Carryforward losses | $ 0 | |||||||||
U.S. Operations [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Carryback losses | 28,473,000 | |||||||||
Israel Tax Authority | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Tax assessment amount (before interest, linkage and penalties) | 40,782,000 | |||||||||
Unutilized capital loss amount | $ 74,551,000 | |||||||||
Settlement with ITA to pay reduced tax assessment | 15,000,000 | |||||||||
Industrial Company [Member] | Israel Designated as Development Zone A [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Uniform tax rate | 7.50% | 9.00% | ||||||||
Industrial Company [Member] | Elsewhere in Israel [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Uniform tax rate | 16.00% | |||||||||
Special Preferred Enterprise [Member] | Israel Designated as Development Zone A [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Uniform tax rate | 5.00% | |||||||||
Special Preferred Enterprise [Member] | Elsewhere in Israel [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Uniform tax rate | 8.00% | |||||||||
Preferred Technological Enterprises [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Three years average growth in sales or workforce, percentage | 25.00% | 25.00% | ||||||||
Preferred Technological Enterprises [Member] | Israel Designated as Development Zone A [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Percentage of corporate tax rate | 7.50% | 7.50% | ||||||||
Preferred Technological Enterprises [Member] | Elsewhere in Israel [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Percentage of corporate tax rate | 12.00% | 12.00% | ||||||||
Special Preferred Technological Enterprise | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Dividends subject to withholding tax rate | 4.00% | 4.00% | ||||||||
Percentage of corporate tax rate | 6.00% | 6.00% | ||||||||
Dividend withholding tax rate for other than foreign parent, percentage | 20.00% | 20.00% | ||||||||
Alternative Benefits Programs (Plan 3-4 and 5) [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Number of approved enterprises | Enterprise | 1 | |||||||||
Plan 6 [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Number of benefited enterprise | Enterprise | 1 | |||||||||
Corporate tax exemption period | 2 years | |||||||||
Additional corporate tax exemption period | 8 years | |||||||||
Plan Two | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Corporate tax exemption period | 2 years | |||||||||
Additional corporate tax exemption period | 8 years | |||||||||
Additional income tax exemption period for high level of investments | 5 years | |||||||||
Israel [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Current taxes | 23.00% | 23.00% | 24.00% | |||||||
Israel [Member] | Capital Losses Carryforward [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Carryforward losses | $ 77,169,000 | |||||||||
Federal Tax [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Income tax assessment description | In February 2017, after consulting with its tax advisors, the Company filed an appeal pursuant to Section 153 of the Income Tax Ordinance (New Version), 1961 in the Haifa District Court. The appeal challenged the ITA’s tax assessment for the period of January 1, 2010 through March 31, 2014 in the amount of $40,782 (before interest, linkage and penalties), and denial of an unutilized capital loss in an amount of $74,551 that had been claimed by the Company. The Company is under examination by the Israeli tax authorities for the years 2015 through 2017. The Company may be subject to examination by the Israeli tax authorities for the years 2015 and onward. The Company believes that its tax provision is adequate to satisfy any assessments resulting from examination to the years. | |||||||||
Federal Tax [Member] | Israel Tax Authority | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Tax assessment amount (before interest, linkage and penalties) | $ 40,782,000 | |||||||||
Unutilized capital loss amount | $ 74,551,000 | |||||||||
Settlement with ITA to pay reduced tax assessment | $ 15,000,000 | |||||||||
Federal Tax [Member] | Israel Tax Authority | Earliest Tax Year [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Year under examination | 2015 | |||||||||
Federal Tax [Member] | Israel Tax Authority | Latest Tax Year [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Year under examination | 2017 | |||||||||
Minimum [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 10.00% | |||||||||
Minimum [Member] | Preferred Technological Enterprises [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Average R&D expenses percentage on revenue | 7.00% | 7.00% | ||||||||
Amount of average R&D expenses on revenue | $ 21,000,000 | ₪ 75,000,000 | ||||||||
Percentage of overall workforce allocated to R&D | 20.00% | 20.00% | ||||||||
Number of employees, allocated to R&D | Employee | 200 | 200 | ||||||||
Venture capital investment previously made by the company | $ 2,200,000 | |||||||||
Minimum [Member] | Special Preferred Technological Enterprise | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Annual consolidated revenues | $ 2,600,000,000 | ₪ 10,000,000,000 | ||||||||
Percentage of foreign parent company holding shares for withholding tax dividend distributions | 90.00% | 90.00% | ||||||||
Minimum [Member] | Plan 6 [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 10.00% | |||||||||
Minimum [Member] | Plan Two | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 10.00% | |||||||||
Minimum [Member] | Foreign (North America, the Cayman Islands, Ireland and the U.K.) [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Foreign ownership percentage | 90.00% | |||||||||
Maximum [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 25.00% | |||||||||
Dividends subject to withholding tax rate | 20.00% | |||||||||
Maximum [Member] | Plan 6 [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 25.00% | |||||||||
Maximum [Member] | Plan Two | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Reduction in tax rates | 25.00% | |||||||||
Maximum [Member] | Foreign (North America, the Cayman Islands, Ireland and the U.K.) [Member] | ||||||||||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | ||||||||||
Foreign ownership percentage | 49.00% |
Income Taxes - Income from Cont
Income Taxes - Income from Continuing and Discontinued Operations Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | |||
Income from continuing and discontinued operations before taxes | $ 298,035 | $ 356,854 | $ 292,033 |
Domestic (Israel) [Member] | |||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | |||
Income from continuing and discontinued operations before taxes | 99,182 | 184,410 | 91,485 |
Foreign (North America, the Cayman Islands, Ireland and the U.K.) [Member] | |||
Schedule Of Components Of Income Loss Before Income Taxes [Line Items] | |||
Income from continuing and discontinued operations before taxes | $ 198,853 | $ 172,444 | $ 200,548 |
Income Taxes - Components of Ta
Income Taxes - Components of Taxes on Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | $ 55,895 | $ 60,203 | $ 27,687 |
Prior years' benefits | (9,995) | (2,980) | (1,830) |
Deferred income taxes | 7,585 | 17,509 | 56,097 |
Tax expense | 53,485 | 74,732 | 81,954 |
Tax expense alternative | |||
Domestic (Israel) | 4,177 | 33,183 | 17,373 |
Foreign (North America) | 49,308 | 41,549 | 64,581 |
Tax expense | $ 53,485 | $ 74,732 | $ 81,954 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate of Parent Company to Effective Consolidated Tax Rate (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
Statutory tax rate (in Israel) | 21.00% | 35.00% | 23.00% | 23.00% | 24.00% |
(Decrease) increase in effective tax rate due to: | |||||
Tax benefits from reduced tax rates under benefit programs and other | (4.10%) | (6.20%) | (7.80%) | ||
Utilization of net operating losses | (0.40%) | (2.50%) | |||
Different tax rates applicable to non-Israeli subsidiaries | 1.30% | 0.80% | (2.30%) | ||
Uncertain tax positions, net | (0.60%) | 3.40% | (3.30%) | ||
FX on tax payments | 0.40% | (0.30%) | |||
Taxes from prior years | (0.80%) | 0.60% | 5.70% | ||
Net operating loss carryback | (1.30%) | ||||
Change in Federal corporate income tax rate | 14.20% | ||||
Effective consolidated tax rate | 17.90% | 20.90% | 28.00% |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Statutory Tax Rate of Parent Company to Effective Consolidated Tax Rate (Parenthetical) (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||
CARES act of 2020 operating loss carry-back period | 5 years | ||||
Uniform tax rate | 21.00% | 35.00% | 23.00% | 23.00% | 24.00% |
Income Taxes - Components of Cu
Income Taxes - Components of Current Taxes (Detail) | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 17.90% | 20.90% | 28.00% |
Israel [Member] | |||
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 23.00% | 23.00% | 24.00% |
U.S. [Member] | |||
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 21.20% | 21.20% | 31.70% |
Canada [Member] | |||
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 25.00% | 25.00% | 25.00% |
U.K. [Member] | |||
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 20.00% | ||
Ireland [Member] | |||
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |||
Current taxes | 12.50% |
Income Taxes - Components of _2
Income Taxes - Components of Current Taxes (Parenthetical) (Detail) | 12 Months Ended |
Mar. 31, 2020 | |
U.K. [Member] | |
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |
Current taxes for operations | 0.00% |
Ireland [Member] | |
Schedule Of Effective Income Tax Rate Reconciliation [Line Items] | |
Current taxes for operations | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Taxes (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Deferred tax assets: | ||
Operating loss carryforward | $ 548 | $ 4,383 |
Capital loss carryforward | 17,749 | 18,301 |
Deferred revenue | 24,765 | 19,726 |
Property, plant, and equipment | 1,440 | 1,440 |
Intangible assets | 36,612 | 41,420 |
Accrued expenses | 45,756 | 50,742 |
Bad debt allowance | 583 | 83 |
Hedge accounting | 792 | 84 |
Marketable securities | 262 | |
Other, net | 8,506 | 7,448 |
Total deferred tax assets | 137,013 | 143,627 |
Valuation allowance for deferred tax assets | (23,338) | (24,652) |
Net deferred tax assets | 113,675 | 118,975 |
Deferred tax liabilities: | ||
Property, plant, and equipment | (10,178) | (8,803) |
Marketable securities | (1,924) | |
Other, net | (199) | (259) |
Total deferred tax liabilities | (10,377) | (10,986) |
Net deferred tax assets | 103,298 | 107,989 |
Net deferred tax assets alternative | ||
Domestic | 4,224 | 5,684 |
Foreign | 99,074 | 102,305 |
Net deferred tax assets | $ 103,298 | $ 107,989 |
Income Taxes - Schedule of De_2
Income Taxes - Schedule of Deferred Income Taxes Presented on the Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Mar. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Among non-current assets | $ 106,693 | $ 110,974 |
Among long-term liabilities | (3,395) | (2,985) |
Net deferred tax assets | $ 103,298 | $ 107,989 |
Income Taxes - Schedule of Unce
Income Taxes - Schedule of Uncertain Tax Positions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax exposure at beginning of year | $ 28,188 | $ 16,810 | $ 23,457 |
Increases as a result of positions taken in prior period | 382 | 1,689 | |
Decreases as a result of positions taken in prior period | (7,913) | (128) | (15,506) |
Increases as a result of positions taken in current period | 4,601 | 9,817 | 8,859 |
Unrecognized tax exposure at end of year | $ 25,258 | $ 28,188 | $ 16,810 |
Selected Statements of Income_3
Selected Statements of Income Data - Schedule of Selected Statements of Income Data (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | |||
Sales, net | $ 644,769 | $ 669,893 | $ 661,913 |
Selling, marketing, general and administrative expenses: | |||
Selling and marketing | 31,754 | 39,495 | 33,724 |
Advertising | 4,902 | 6,527 | 9,913 |
General and administrative | 56,757 | 43,949 | 44,559 |
Settlements and loss contingencies | (3,678) | 1,884 | |
Total selling, marketing, general and administrative expenses | 93,413 | 86,293 | 90,080 |
Financial (income) expenses: | |||
Interest and exchange differences on long-term liabilities | 725 | 256 | 304 |
Income in respect of deposits | (11,714) | (14,107) | (13,367) |
Interest from marketable securities | (22,655) | (19,691) | (6,871) |
Foreign currency transaction gains | (14,838) | (25,309) | 32,465 |
Total financial (income) expenses | $ (48,482) | $ (58,851) | $ 12,531 |
Selected Statements of Income_4
Selected Statements of Income Data - Schedule of Selected Statements of Income Data (Parenthetical) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | |||
Provision (recovery) of doubtful accounts | $ 2,382 | $ 144 | $ (124) |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended | ||
Mar. 31, 2020SegmentCustomer | Mar. 31, 2019Customer | Mar. 31, 2018Customer | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | Segment | 1 | ||
Number of major customers | Customer | 2 | 2 | 3 |
Customer One [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales to customers | 13.00% | 12.10% | 15.30% |
Customer Two [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales to customers | 11.50% | 11.00% | 11.50% |
Customer Three [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales to customers | 11.40% |
Segment Information - Schedule
Segment Information - Schedule of Geographic Area Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | $ 644,769 | $ 669,893 | $ 661,913 |
Long-lived assets | 225,564 | 222,285 | 208,020 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 42,817 | 40,050 | 38,223 |
Long-lived assets | 123,679 | 123,698 | 114,145 |
Canada [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 97,997 | 83,970 | 67,226 |
Long-lived assets | 63,506 | 59,108 | 56,629 |
U.S.A. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | 495,673 | 537,111 | 549,174 |
Long-lived assets | 38,379 | 39,479 | 37,246 |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Sales | $ 8,282 | $ 8,762 | $ 7,290 |
Segment Information - Schedul_2
Segment Information - Schedule of Sales by Therapeutic Category (Detail) - Sales Revenue, Net [Member] - Product Concentration Risk [Member] | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 100.00% | 100.00% | 100.00% |
Dermatological and Topical [Member] | |||
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 63.00% | 61.00% | 65.00% |
Neuropsychiatric [Member] | |||
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 17.00% | 18.00% | 17.00% |
Cardiovascular [Member] | |||
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 6.00% | 7.00% | 6.00% |
Anti-Inflammatory [Member] | |||
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 3.00% | 3.00% | 4.00% |
Other [Member] | |||
Schedule Of Sales Revenue By Business Segment [Line Items] | |||
Net sales | 11.00% | 11.00% | 8.00% |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) $ in Thousands | Jul. 31, 2017USD ($) |
Discontinued Operations And Disposal Groups [Abstract] | |
Disposal consideration from sale of discontinued operations | $ 946 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |||
Sales, net | $ 0 | $ 0 | $ 0 |
Cost of sales | (103) | ||
Gross loss | (103) | ||
Operating expenses: | |||
Research and development | (30) | ||
Selling, marketing, general and administrative | (169) | ||
Operating loss | (302) | ||
Financial income, net | 113 | ||
Other loss, net | (146) | ||
Loss before income taxes | (335) | ||
Net loss from discontinued operations | $ (335) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Sun Pharmaceutical Industries Ltd. [Member] | 12 Months Ended |
Mar. 31, 2020 | |
Related Party Transaction [Line Items] | |
Voting interest | 84.70% |
Agreement effective date | May 1, 2017 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Application | Jun. 18, 2020 | Apr. 01, 2020 |
Subsequent Event [Line Items] | ||
Additional abbreviated new drug application, description | the Company received final approvals from the FDA for four additional ANDAs:Clocortolone Pivalate Cream USP, 0.1% and Mupirocin Cream USP, 2% in April 2020; Ivermectin Lotion, 0.5% in May 2020; and Betamethasone Dipropionate Spray, 0.05% in June 2020. | |
Number of ANDAs application awaiting for FDA approval | 21 |