1. Differences in operations ACTAVIS | DRL | * Selling, General and Administrative expensesThe SGA expenses have risen as a percentage of the Net Revenues of Actavis in 2012 by 55%. The number of employees have gone up from 6686 to 17700 (refer Employees sub-topic in Page 22 of 2011 and 2012 10K reports) through these acquisitions and this has significantly contributed to the increase in the Administrative expenses of the organization. | * Selling, General and Administrative expensesThough SGA expense has significantly risen in 2012 when compared to the rise in 2011, the amount spent on selling, general and administrative activities has steadily reduced in proportion to the net revenue of the organization each year.This increase was primarily on account of the following: * increased personnel costs, due to annual raises and new recruitments; * higher distribution costs, due to increases in sales volumes and freight cost increases; and * impact of depreciation of the Indian rupee against multiple currencies in the markets in which we operate.(Refer Pg 72 in 2012 20F Application) | * Research and DevelopmentActavis has more than doubled its investment in R&D within the organization over the years since 2009 (Pg 5). From 2011 alone Actavis’s internal investment has risen by 36%. Close to 7% of the Net revenue is maintained as R&D expense every year. | * Research and DevelopmentResearch and development expenses increased by 17% during 2012. Research and development expenditures accounted for 6% of the total revenues during 2012 as compared to 7% during the 2011. Approximately 70% of the research and development expenses in 2012 were spent towards the development of bio-equivalent generic products and the other 30% was dedicated to innovative and biologics research. (Refer Pg 72 in 2012 20F Application) | * Interest
