27. EMPLOYEE BENEFITS EXPENSE
`
`(Refer note 52)
`
`Salaries and Wages
`Contribution to Provident and Other Funds
`
`Retirement Benefits Expense [Refer note 39 (ii)]
`Expenses on Employees Stock Options / Stock Appreciation Rights (Refer notes 37 & 38)
`Staff Welfare Expenses
`
`Above includes Share of Joint Venture — jointly controlled entity
`
`28. FINANCE COSTS
`
`Interest on Borrowings
`Other Borrowing Costs (includes bank charges, etc.)
`Interest on Income Tax
`
`Total
`
`Total
`
`29. OTHER EXPENSES
`
`Processing Charges
`Stores and Spares Consumed
`Repairs and Maintenance:
`— Buildings
`— Plant and Machinery
`— Others
`Rent
`
`Rates and Taxes
`Net of provision of earlier year adjusted ? 5.0 million (previous year ? nil)]
`nsurance
`
`Power and Fuel
`Contract Labour Charges
`Excise Duty (net) (Refer note 49)
`Selling and Promotion Expenses
`Commission, Brokerage and Discount
`Inc uding cash discount of ? 8.4 million (previous year ? 7.3 million)]
`Ereigh and Forwarding
`_ease Rent and Hire Charges [Refer note 36(a)]
`Dos age and Telephone Expenses
`Travellng and Conveyance
`_egal and Professional Charges
`Ne o recoveries of ? 330.2 million (previous year ? 79.3 million)]
`Donations (Refer note 52)
`Clin'ca and Analytical Charges
`_oss on sale /write—off of Fixed Assets (net)
`3ad Trade Receivables/Advances / Deposits written off
`Ne o provision of earlier years adjusted ? 33.4 million (previous year ? nil)]
`mpairhent of Assets
`Provision for Doubtful Trade Receivables /Advances / Deposits
`Excess of carrying cost over fair value of Current Investments
`Directors Sitting Fees
`Exchange Rate Difference on Translation (net)
`iscellaneous Expenses
`
`Above includes Share of Joint Venture — jointly controlled entity
`
`136 | Lupin Limited
`
`For the Current
`Year ended
`31.03.2015
`? in million
`
`For the Previous
`Year ended
`31.03.2014
`? in million
`
`14,144.7
`1,394.7
`
`211.5
`676.8
`1,045.7
`17,473.4
`
`17.4
`
`55.9
`42.2
`—
`98.1
`
`1,154.5
`3,646.5
`
`314.8
`753.0
`953.1
`360.7
`
`1,092.0
`
`421.8
`
`3,628.1
`1,055.6
`137.2
`5,654.9
`1,234.7
`
`1,465.2
`725.4
`334.3
`1,948.0
`3,115.0
`
`173.8
`1,682.0
`43.1
`54.3
`
`—
`1.8
`2.5
`2.1
`1,237.1
`1,268.9
`32,460.4
`
`74.1
`
`12,322.5
`1,074.3
`
`137.2
`211.0
`901.5
`14,646.5
`
`—
`
`85.1
`167.5
`13.9
`266.5
`
`1,204.9
`2,787.3
`
`237.4
`702.4
`722.1
`333.1
`
`776.3
`
`401.9
`
`3,342.9
`848.1
`163.9
`5,057.1
`1,230.9
`
`1,464.6
`638.9
`327.1
`1,722.2
`3,841.8
`
`230.0
`1,311.0
`I 19.4
`8.9
`
`429.0
`273.7
`—
`2.7
`482.1
`1,357.8
`30,017.5
`
`—
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 137 of 212)
`
`

`
`30. The Consolidated Financial Statements present the consolidated accounts of Lupin L'mited ("the Company") and its following
`subsidiaries ("the Group ") and its jointly controlled entity:
`ame of Subsidiaries / Jointly controlled entity
`
`Country of
`Incorporation
`USA
`Japan
`Japan
`
`Proportion of Ownership Interest
`As at 31.03.2015
`As at 31.03.2014
`100%@
`100%@
`100%—-
`100%—-
`100%*
`100%*
`
`_up'n Pharmaceuticals, Inc.
`yowa Pharmaceutical Industry Co., Limited
`yowa CritiCare Co., Limited
`(forherly I'rom 3harmaceutical Co., Limited)
`-Ior”nosan Pharha GmbH
`3ha ma Dynamcs (Proprietary) Limited
`_up'n Australia Pty Limited
`_up'n Holdings B.V.
`_up'n Atlantis I-oldings SA
`ulticare Pharmaceuticals Philippines Inc.
`_up'n (Eu ope) _imited
`_up'n 3harma Canada Limited
`_up'n -Iealthcare Limited
`Gener'c I-ealth 3ty Limited
`3ellwether Pharha Pty Limited
`ax Pharha Pty Limited (upto 17 December 2014)
`_upin
`exico S.A. de C.V.
`_upin 3hi ippines Inc.
`Gener'c I-ealth SDN. BHD.
`_upin
`iddle East FZ—LLC
`_upin GmbH (from 15 August 2013)
`_upin nc. (from 27 June 2013)
`_upin Zarmaceutica do Brasil LTDA
`(formerly Farma World Importacao e Exportacao De
`edicamentos LTDA — EPP) (from 17 December 2013)
`
`Germany
`South Africa
`Australia
`Netherlands
`Switzerland
`Philippines
`UK
`Canada
`India
`Australia
`Australia
`Australia
`Mexico
`Philippines
`Malaysia
`UAE
`Switzerland
`USA
`Brazil
`
`100%—-
`100%—-
`100%
`100%
`100%
`51%—-
`100%
`100%—-
`100%
`100%—-
`100%#
`100%#
`100%—-
`100%—-
`100%—-
`100%
`100%**
`100%**
`100%+
`
`100%**
`100%**
`45%***
`
`100%—-
`60%—-
`100%
`100%
`100%
`51%—-
`100%
`100%—-
`100%
`91 .04%—-
`91 .04%#
`91 .04%#
`100%—-
`100%—-
`100%—-
`100%
`100%**
`100%**
`100%+
`
`100%**
`—
`—
`
`anomi B.V. (from 30 January 2014)
`_aboratorios Grin S.A. de C.V., (from 30 September 2014)
`YL Biologics Ltd., (from 23 April 2014)
`
`Netherlands
`Mexico
`Japan
`
`@ 97% interest held through Lupin Inc., USA from 31 December 2014 (80% from 31 March 2014).
`
`+ Ownership interest held through Lupin Holdings B.V., Netherlands.
`
`* Wholly owned subsidiary of Kyowa Pharmaceutical Industry Co., Limited, Japan.
`
`# Wholly owned subsidiaries of Generic Health Pty Limited, Australia.
`
`** Wholly owned subsidiaries of Lupin Atlantis Holdings SA, Switzerland.
`
`*** Jointly Controlled Entity of Lupin Atlantis Holdings SA, Switzerland (with Yoshindo Inc. having 55% share of interest).
`
`The consolidated financial statements include the results of the aforesaid subsidiaries and there are no other bodies corporate
`/entities, where the Company holds more than 50% of the share capital or where the Company can control the composition
`of the Board of Directors / Governing Bodies of such entities, where the holding may be less than 50%.
`
`31. Commitments:
`
`a)
`
`Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances,
`Tangible assets ? 2459.7 million (previous year ? 2084.0 million) and Intangible assets ? 65.2 million (previous year
`?56.1 million).
`
`b) Commitments for research activities amounting to ? 839.9 million (net of advances) (previous year ? 1028.9 million).
`
`c) Other commitments — Non—cancellable operating and finance leases (Refer note 36).
`
`d) There are no capital commitments at the jointly controlled entity of the Group as at the year end.
`
`e)
`
`The Group is committed to operationally, technically and financially support the operations of its subsidiaries.
`
`Annual Report 2015 | 137
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 138 of 212)
`
`

`
`32. Contingent Liabilities:
`
`a)
`
`Income tax demands / matters on account of deductions / disallowances or earlier
`
`As at 31.03.2015 As at 31.03.2014
`? in million
`? in million
`826.4
`173.2
`
`377.0
`
`355.5
`
`years, pending for appeals R 49.7 million (previous year ?49.7 million) consequent to
`department preferring appeals against the orders of the Appellate Authorities passed
`note 15
`in favour of the Company]. Amount paid there against and included unde
`"Long—Term Loans and Advances" ? 55.4 million (previous year ? 26.3 million).
`Excise duty, Service tax and Sales tax demands for input tax credit disa lowances
`and demand for additional Entry Tax arising from dispute on applicable rate are in
`appeals and pending decisions. Amount paid there against and included under note
`llion) and
`21 ”Short—”erm Loans and Advances" ? 28.5 million (previous year ?30.4 m"
`ear ? nil).
`under note 15 "Long Term Loans and Advances" ? 2.5 million (previous y
`(amount
`Claims aga'nst the Company not acknowledged as debts [excluding interes
`unascertained) in respect of a claim] for transfer charges of land, octroi d
`body tax, employee claims, power, trade marks, pricing, indemnity, stamp
`price repor ed under Medicaid for one subsidiary. Amount paid there agains
`admitting iability and included under note 21 "Short—Term Loans and Advances"
`? 12.3 million (previous year ? 12.6 million).
`Counter guarantee given to GIDC in connection with repayment of loan sanctioned by
`a financial 'nstitution to a company, jointly promoted by an Association of Industries
`(of which, he Company is a member) and GIDC.
`During the year, the Company received a notice from the European Commission for alleged breach of the EU Antitrust Rules,
`whereby it has sought to levy a fine of Euro 40.0 Million (? 2687.6 million) on the Company in respect of an agreement entered
`into by the Company with Laboratories Servior, France, for sale of certain patent applications and IPs for the product Perindopril
`which the European Commission considered as anti—competitive. The Company, based on facts of the matter and legal advice
`received does not agree with the said notice / demand and is of the view that it has a strong case to defend itself. Accordingly,
`the Company has filed an appeal before the European General Court. A bank guarantee of Euro 40.0 million has been furnished
`to European Commission.
`
`6378.7
`
`6223.2
`
`local
`uty,
`duty and
`twithout
`
`7.5
`
`There are no contingent liabilities at the jointly controlled entity of the Group as at the year end.
`
`is determinable only on receipt of judgement / decisions pending with the
`if any,
`Future cash outflows in respect of the above,
`relevant authorities. The Group does not expect the outcome of the matters stated above to have a material adverse impact on the
`Group's financial condition, results of operations or cash flows.
`
`The Group does not envisage any likely reimbursements in respect of the above.
`
`The Company and its subsidiaries are involved in various legal proceedings, including product liability related claims, employment
`claims and other regulatory matters relating to conduct of its business. The Group carries product liability insurance policy with an
`amount it believes is sufficient for its needs. In respect of other claims, the Group believes, these claims do not constitute material
`litigation matters and with its meritorious defenses, the ultimate disposition of these matters will not have material adverse effect
`on its Consolidated Financial Statements.
`
`33. Pre—operative expenses pending capitalisation included in Capital Work—In—Progress (Refer note 12) represent direct attributable
`expenditure for setting up of plants prior to the date of commencement of commercial production. The same will be capitalised
`on completion of projects and commencement of commercial operations. The details of the pre—operative expenses are:
`Particulars
`2014-15
`2013-14
`? in million
`? in million
`
`Opening balance
`Incurred during the current year:
`Salaries, allowances and contribution to funds
`Legal and Professional Charges
`Travelling and Conveyance
`Others
`Total
`
`Less : Capitalised during the year
`Closing balance
`
`138 | Lupin Limited
`
`182.2
`
`65.7
`6.3
`13.0
`16.3
`101.3
`
`42.5
`241.0
`
`222.6
`
`11.2
`0.3
`1.6
`4.4
`17.5
`
`57.9
`182.2
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 139 of 212)
`
`

`
`34. Segment Reporting:
`i)
`Primary segment:
`The Group operates exclusively in the Pharmaceutical business segment which is the only reportable business segment.
`
`ii)
`
`Secondary segment data:
`
`Particulars
`Revenue by Geographical Segment
`Carrying amount of Segment Assets
`Capital Expenditure
`
`Particulars
`Revenue by Geographical Segment
`Carrying amount of Segment Assets
`Capital Expenditure
`
`India
`33848.9
`69236.1
`5035.7
`
`India
`28641.0
`50246.9
`3389.0
`
`USA
`54747.3
`18283.0
`578.6
`
`USA
`48299.9
`16406.6
`137.5
`
`Japan
`13269.0
`17075.6
`1504.3
`
`Japan
`12997.9
`16932.3
`808.3
`
`(Current year ? in million)
`Others
`Total
`25834.9
`127700.1
`25635.9
`130230.6
`12558.5
`19677.1
`
`(Previous year ? in million)
`Others
`Total
`22926.9
`112865.7
`16755.0
`100340.8
`1357.2
`5692.0
`
`a)
`
`The segment revenue in geographical segments considered for disclosure is as follows:
`
`i) Revenue within India includes sales to customers located within India and other operating income earned in India.
`
`ii) Revenue outside India includes sales to customers located outside India and other operating income outside India.
`
`b)
`
`Segment revenue comprises:
`
`Particulars
`Sales (net of excise duty)
`Other Operating Income
`Total Revenue
`
`Particulars
`Sales (net of excise duty)
`Other Operating Income
`Total Revenue
`
`India
`33586.2
`262.7
`33848.9
`
`India
`27999.2
`641.8
`28641.0
`
`USA
`54601.3
`146.0
`54747.3
`
`USA
`48091.2
`208.7
`48299.9
`
`Japan
`13239.0
`30.0
`13269.0
`
`Japan
`12954.7
`43.2
`12997.9
`
`(Current year ? in million)
`Others
`Total
`24570.6
`125997.1
`1264.3
`1703.0
`25834.9
`127700.1
`
`(Previous year ? in million)
`Others
`Total
`21821.3
`110866.4
`1105.6
`1999.3
`22926.9
`112865.7
`
`35. Basic and Diluted Earnings per Share is calculated as under:
`Particulars
`
`Net Profit after minority interest attributable to equity shareholders (? in million)
`Weighted average number of Equity Shares:
`— Basic
`
`Add: Effect of dilutive issue of employees stock options (ESOPs)
`— converted during the year and ESOPs outstanding as at the year end
`— Diluted
`
`Earnings per Share (in ?)
`— Basic
`— Diluted
`
`2014-2015
`
`2013-2014
`
`24032.4
`
`18363.7
`
`448868014
`
`447982156
`
`2846900
`
`2262690
`
`451714914
`
`450244846
`
`53.54
`53.20
`
`40.99
`40.79
`
`36. a) The Group procures equipments, vehicles and office premises under operating leases. The initial tenure of the lease is
`generally between 12 months to 60 months. The lease rentals recognised in the Consolidated Statement of Profit and Loss
`(Refer note 29) for the year are ?626.3 million (previous year ? 550.3 million). The future minimum lease payments and
`payment profile of non—cancellable operating leases are as under:
`Particulars
`
`2014-2015
`? in million
`
`2013-2014
`? in million
`
`Not later than one year
`Later than one year but not later than five years
`Later than five years
`
`517.2
`845.3
`229.3
`1591.8
`
`460.0
`878.9
`129.7
`1468.6
`
`Total
`
`Annual Report 2015 | 139
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 140 of 212)
`
`

`
`b) Subsidiary companies in Japan and South Africa have future obligations under finance lease for procurement of Plant and
`Equipment and Vehicles which are payable as under:
`
`(? in million)
`
`Particulars
`
`2014-2015
`
`Present Value of
`minimum lease payment
`10.0
`
`Not later than one year
`
`Later than one year but not later than
`five years
`
`Later than five years
`
`Total
`
`Previous year figures are given in bracket.
`
`(25.6)
`
`1.0
`(11.3)
`
`(_)
`
`11.0
`(36.9)
`
`Future Interest Cost Minimum lease payment
`
`0.6
`
`(1.0)
`
`0.1 I
`(0.5)
`
`(_)
`
`0.7
`(1.5)
`
`10.6
`
`(26.6)
`
`1.1
`(11.8)
`
`(_)
`
`11.7
`(38.4)
`
`37. Employees Stock Option Plans:
`a)
`The Group implemented "Lupin Employees Stock Option Plan 2003" (ESOP 2003), "Lupin Employees Stock Option Plan
`2005" (ESOP 2005), "Lupin Subsidiary Companies Employees Stock Option Plan 2005" (SESOP 2005), "Lupin Employees
`Stock Option Plan 2011" (ESOP 2011), "Lupin Subsidiary Companies Employees Stock Option Plan 2011" (SESOP 2011)
`in earlieryears,' and "Lupin Employees Stock Option Plan 2014" (ESOP 2014) and "Lupin Subsidiary Companies Employees
`Stock Option Plan 2014" (SESOP 2014) in the current year, as approved by the Shareholders of the Company and the
`Remuneration/Compensation / Nomination and Remuneration Committee of the Board of Directors. Details of the options
`granted during the year under the plans are as under:
`
`Lupin Employees Stock Option Plan
`Grant Date
`
`August 14, 2014
`
`November 20, 2014
`
`Lupin Employees Stock Option Plan
`Grant Date
`
`August 14, 2014
`
`November 20, 2014
`
`Lupin Employees Stock Option Plan
`Grant Date
`
`May 26, 2014
`
`August 14, 2014
`
`140 | Lupin Limited
`
`2003 (ESOP 2003):
`
`No. of Options
`39250
`39250
`39250
`39250
`157000
`4000
`4000
`
`2005 (ESOP 2005):
`
`No. of Options
`9125
`9125
`9125
`9125
`36500
`4000
`4000
`
`2011 (ESOP 2011):
`
`No. of Options
`125
`125
`125
`125
`500
`155563
`155563
`155562
`155562
`622250
`
`Exercise Price ?
`1164.80
`1164.80
`1164.80
`1164.80
`
`Vesting Period
`14.08.2014 to 14.08.2015
`14.08.2014 to 14.08.2016
`14.08.2014 to 14.08.2017
`14.08.2014 to 14.08.2018
`
`724.68
`
`20.11.2014to 20.11.2015
`
`Exercise Price ?
`1164.80
`1164.80
`1164.80
`1164.80
`
`Vesting Period
`14.08.2014to 14.08.2015
`14.08.2014to 14.08.2016
`14.08.2014to 14.08.2017
`14.08.2014to 14.08.2018
`
`724.68
`
`20.11.2014to 20.11.2015
`
`Exercise Price ?
`923.85
`923.85
`923.85
`923.85
`
`Vesting Period
`26.05.2014to 26.05.2015
`26.05.2014to 26.05.2016
`26.05.2014to 26.05.2017
`26.05.2014to 26.05.2018
`
`1164.80
`1164.80
`1164.80
`1164.80
`
`14.08.2014to 14.08.2015
`14.08.2014to 14.08.2016
`14.08.2014to 14.08.2017
`14.08.2014to 14.08.2018
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 141 of 212)
`
`

`
`Grant Date
`
`October08, 2014
`
`November 20, 2014
`
`No. of Options
`1125
`1125
`
`1125
`1125
`4500
`42000
`42000
`
`Exercise Price ?
`1368.05
`1368.05
`
`1368.05
`1368.05
`
`Vesting Period
`08.10.2014to 08.10.2015
`08.10.2014to 08.10.2016
`
`08.10.2014to 08.10.2017
`08.10.2014to 08.10.2018
`
`724.68
`
`20.11.2014to 20.11.2015
`
`Lupin Subsidiary Companies Employees Stock Option Plan 2011 (SESOP 2011):
`
`Grant Date
`
`April 02, 2014
`
`May 13, 2014
`
`July 02, 2014
`
`August 05, 2014
`
`August 14, 2014
`
`November11, 2014
`
`November 20, 2014
`
`February 11, 2015
`
`No. of Options
`7500
`7500
`
`Exercise Price ?
`945.10
`945.10
`
`7500
`7500
`30000
`6250
`6250
`
`6250
`6250
`25000
`3000
`3000
`
`3000
`3000
`12000
`10050
`10050
`
`10050
`10050
`40200
`63678
`63678
`
`63677
`63677
`254710
`8225
`8225
`
`8225
`8225
`32900
`6675
`6675
`
`6675
`6675
`26700
`6925
`6925
`
`6925
`6925
`27700
`
`945.10
`945.10
`
`959.05
`959.05
`
`959.05
`959.05
`
`049.55
`049.55
`
`049.55
`049.55
`
`77.60
`77.60
`
`77.60
`77.60
`
`64.80
`64.80
`
`64.80
`64.80
`
`130.95
`130.95
`
`130.95
`130.95
`
`149.35
`149.35
`
`149.35
`149.35
`
`562.95
`562.95
`
`562.95
`562.95
`
`Lupin Employees Stock Option Plan 2014 (ESOP 2014):
`Grant Date
`No. of Options
`59900
`59900
`
`Exercise Price ?
`2.00
`2.00
`
`November 20, 2014
`
`January 27, 2015
`
`59899
`59899
`239598
`5106
`5106
`
`5106
`5106
`20424
`
`2.00
`2.00
`
`2.00
`2.00
`
`2.00
`2.00
`
`Vesting Period
`02.04.20 1 o02.04.20 5
`02.04.20 1 o02.04.20 6
`
`02.04.20 1 o02.04.20 7
`02.04.20 1 o02.04.20 8
`
`13.05.20 1 013.0520 5
`13.05.20 1 013.0520 6
`
`13.05.20 1 013.0520 7
`13.05.20 1 013.0520 8
`
`02.07.20 1 o02.07.20 5
`02.07.20 1 o02.07.20 6
`
`02.07.20 1 o02.07.20 7
`02.07.20 1 o02.07.20 8
`
`05.08.20 1 o05.08.20 5
`05.08.20 1 o05.08.20 6
`
`05.08.20 1 o05.08.20 7
`05.08.20 1 o05.08.20 8
`
`14.08.20 1 014.0820 5
`14.08.20 1 014.0820 6
`
`14.08.20 1 014.0820 7
`14.08.20 1 014.0820 8
`
`11.11.20 1 o11.11.20 5
`11.11.20 1 o11.11.20 6
`
`11.11.20 1 011.1120 7
`11.11.20 1 o11.11.20 8
`
`20.11.20 1 o20.11.20 5
`20.11.20 1 o20.11.20 6
`
`20.11.20 1 o20.11.20 7
`20.11.20 1 o20.11.20 8
`
`11.02.20 5 011.0220 6
`11.02.20 5 011.0220 7
`
`11.02.20 5 011.0220 8
`11.02.20 5 011.0220 9
`
`Vesting Period
`20.11.2014to 20.11.20 5
`20.11.2014to 20.11.20 6
`
`20.1 1 .2014 to 20.11.20 7
`20.11.2014to 20.11.20 8
`
`27.01.2015to 27.01.20 6
`27.01.2015to 27.01.20 7
`
`27.01.2015to 27.01.20 8
`27.01.2015to 27.01.20 9
`
`Annual Report 20 5 | 141
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 142 of 212)
`
`

`
`The options are granted at an exercise price, which is in accordance with the relevant SEBI guidelines in force, at the time
`of such grants. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of
`? 2 each. The options have vesting periods as stated above in accordance with the vesting schedule as per the said plans
`with an exercise period of ten years from the respective grant dates.
`
`The particulars of the options granted and lapsed under the Schemes are as below:
`Particulars
`
`Lupin Employees Stock Option Plan 2003 (ESOP 2003):
`Options outstanding as at the beginning of the year
`Add: Options granted during the year
`Less: Options lapsed during the year
`Less: Options exercised during the year
`Options outstanding as at the year end
`
`Year Ended
`31.03.2015
`Nos.
`
`Year Ended
`31.03.2014
`Nos.
`
`539389
`161000
`14000
`343389
`343000
`
`763615
`50000
`—
`274226
`539389
`
`During the year, the Company terminated the offering of fresh grants under the above plan resulting in termination of 745
`options which were not granted upto the date of termination. Options already granted under the said plan would continue
`to be in force in terms of their grant.
`
`Lupin Employees Stock Option Plan 2005 (ESOP 2005):
`Options outstanding as at the beginning of the year
`Add: Options granted during the year
`Less: Options lapsed during the year
`Less: Options exercised during the year
`Options outstanding as at the year end
`
`494529
`40500
`6750
`82975
`445304
`
`751920
`—
`4875
`252516
`494529
`
`During the year, the Company terminated the offering of fresh grants under the above plan resulting in termination of
`4200 options which were not granted upto the date of termination. Options already granted under the said plan would
`continue to be in force in terms of their grant.
`
`Lupin Subsidiary Companies Employees Stock Option Plan 2005 (SESOP 2005):
`Options outstanding as at the beginning of the year
`Add: Options granted during the year
`Less: Options lapsed during the year
`Less: Options exercised during the year
`Options outstanding as at the year end
`
`364133
`—
`220
`130377
`233536
`
`430119
`—
`—
`65986
`364133
`
`During the year, the Company terminated the offering of fresh grants under the above plan resulting in termination of
`7190 options which were not granted upto the date of termination. Options already granted under the said plan would
`continue to be in force in terms of their grant.
`
`Lupin Employees Stock Option Plan 2011 (ESOP 2011):
`Options outstanding as a
`he beginning of the year
`Add: Options granted du ing the year
`Less: Options lapsed during the year
`Less: Options exercised dur'ng the year
`Options outstanding as a
`he year end
`
`Lupin Subsidiary Companies Employees Stock Option Plan 2011 (SESOP 2011):
`Options outstanding as a
`he beginning of the year
`Add: Options granted du ing the year
`Less: Options lapsed during the year
`Less: Options exercised dur'ng the year
`Options outstanding as a
`he year end
`
`2737539
`669250
`159664
`538774
`2708351
`
`429033
`449210
`61283
`17016
`799944
`
`2259047
`946250
`219062
`248696
`2737539
`
`306780
`185090
`57950
`4887
`429033
`
`142 | Lupin Limited
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 143 of 212)
`
`

`
`Particulars
`
`Lupin Employees Stock Option Plan 2014 (ESOP 2014):
`Options outstanding as at the beginning of the year
`Add: Options granted during the year
`Less: Options lapsed during the year
`Less: Options exercised during the year
`Options outstanding as at the year end
`
`Year Ended
`31.03.2015
`Nos.
`
`Year Ended
`31.03.2014
`Nos.
`
`—
`260022
`5783
`—
`254239
`
`—
`—
`—
`—
`—
`
`The Group has followed the intrinsic value based method of accounting for stock options granted after April 1, 2005 based
`on Guidance Note on Accounting for Employee Share—based Payments, issued by the Institute of Chartered Accountants of
`India (ICAI). Had the compensation cost for the Group's stock based compensation plans been determined in the manner
`consistent with the fairvalue approach as described in the said Guidance Note, the Group's net income would be lower by
`?444.7 million (previous year ? 291.5 million) and earnings per share as reported would be as indicated below:
`Particulars
`Year Ended
`Year Ended
`31.03.2015
`31.03.2014
`? in million
`? in million
`
`Net profit as reported
`Less: Tota stock—based employee compensation expense determined
`under fairvalue based method
`
`Add: Tota stock—based employee compensation expense determined
`under intrinsic value based method
`
`Adjusted net profit
`Basic earn'ngs per share
`— As reported (in ?)*
`— Adjus ed
`(in ?)
`Diluted ea nings per share
`— As reported (in ?)*
`— Adjus ed
`(in ?)
`* Refer no e 35
`
`24032.4
`501.4
`
`18363.7
`310.9
`
`56.7
`
`19.4
`
`23587.7
`
`18072.2
`
`53.54
`52.55
`
`53.20
`52.22
`
`40.99
`40.34
`
`40.79
`40.14
`
`The fairva ue of each op ion granted during the year is estimated on he date of grant based on the following assumptions:
`Particulars
`Grant Date
`Dividend Yield
`Expected life
`Risk Free interest
`Volatility (%)
`(%)
`(years)
`rate (%)
`0.70
`6.25
`8.72
`0.70
`5.50
`8.23
`
`30.32
`26.93
`
`ESOP 2003 Plan
`
`August 14, 2014
`November 20, 2014
`
`ESOP 2005 Plan
`
`ESOP 2011 Plan
`
`SESOP 2011 Plan
`
`ESOP 2014 Plan
`
`August 14, 2014
`November 20, 2014
`
`May 26, 2014
`August 14, 2014
`October 08, 2014
`November 20, 2014
`
`April 02, 2014
`May 13, 2014
`July 02, 2014
`August 05, 2014
`August 14, 2014
`November 11, 2014
`November 20, 2014
`
`February 11, 2015
`November 20, 2014
`January 27, 2015
`
`0.70
`0.70
`
`0.70
`0.70
`0.70
`0.70
`
`0.70
`0.70
`0.70
`0.70
`0.70
`0.70
`0.70
`
`0.70
`0.70
`0.70
`
`6.25
`5.50
`
`6.25
`6.25
`6.25
`5.50
`
`6.25
`6.25
`6.25
`6.25
`6.25
`6.25
`6.25
`
`6.25
`6.25
`6.25
`
`8.72
`8.23
`
`8.65
`8.72
`8.55
`8.23
`
`9.07
`8.84
`8.66
`8.69
`8.72
`8.25
`8.23
`
`7.75
`8.23
`7.75
`
`30.32
`26.93
`
`30.96
`30.32
`29.95
`26.93
`
`31.71
`31.05
`30.59
`30.37
`30.32
`29.52
`29.31
`
`28.56
`29.31
`28.61
`
`Annual Report 2015 | 143
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 144 of 212)
`
`

`
`38. Stock Appreciation Rights:
`During the years 2011-12 and 2012-13, the Company has granted Stock Appreciation Rights ("SARs”) to certain eligible
`employees in accordance with Lupin Employees Stock Appreciation Rights Scheme 2011 (”LESARs 2011") approved by the
`Board of Directors (Board) at their Board Meeting held on September 13, 2011. Under the scheme, eligible employees are
`entitled to receive appreciation in value of shares on completion of the vesting period.
`
`The Scheme is administered through the Lupin Employees Benefit Trust (the "Trust") as settled by the Company. The Trust is
`administered by an independent Trustee. At the end of the vesting period of 3 years, the equity shares will be sold in the market
`by the Trust and the appreciation on the same (if any) will be distributed to the said employees, subject to vesting conditions.
`
`The Company has been submitting required details with stock exchanges in terms of the circulars issued by SEBI in this regard.
`During the year SEBI vide its circular no. CIR/CFD/POLICYCELL/3/2014 dated June 27, 2014 has extended the timelines for
`alignment of the Scheme till the new regulations are notified, continuing the prohibition on acquiring securities from the
`secondary market.
`
`The new regulation viz: Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (‘the
`Regulation’) was notified on October 28, 2014, pursuant to which the existing schemes are to be aligned within one year of
`the effective date of the Regulation. During the year, the Trust has distributed the benefits of SARs to the eligible employees in
`terms of LESARs 2011 and has not acquired any shares from the secondary market.
`
`As approved by the Board, the Company had, prior to the SEBI circular no. CIR/CFD/DIL/3/2013 dated January 17, 2013
`advanced an interest free loan to the Trust during the years 2011-12 and 2012-13 to acquire appropriate number of Equity
`Shares of the Company from the market on the grant date of SARs and the loan outstanding as at the balance sheet date
`aggregating to ? nil (previous year ? 258.0 million) is included under "Long-Term Loans and Advances” (Refer note 15) and
`? 251.3 million (previous year ? 218.9 million) is included under ”Short-Term Loans and Advances" (Refer note 21).
`
`The particulars of the SARs assigned, lapsed and redeemed under the Scheme are as below:
`Particulars
`Year Ended
`31.03.2015
`
`Lupin Employees Stock Appreciation Rights Scheme 2011:
`SARs outstanding as at the beginning of the year
`Less: SARs lapsed during the year
`Less: SARs redeemed during the year
`SARs outstanding as at the year end
`
`843396
`13873
`420931
`408592
`
`Year Ended
`31.03.2014
`
`860098
`16702
`-
`843396
`
`The related compensation cost for outstanding SARs and in case of redeemed SARs upto the date of redemption amounting to
`?620.1 million (previous year? 191.6 million) has been recognized as Employee Benefits Expense and the corresponding credit
`is included under "Reserves and Surplus" as Employee Stock Appreciation Rights Outstanding.
`In respect of SARs redeemed
`during the year, the corresponding amount of ?379.0 million (previous year ? nil) has been transferred from Employee Stock
`Appreciation Rights Outstanding to General Reserve. Had the compensation cost for the Company's stock based compensation
`plans been determined in the manner consistent with the fairvalue approach as described in the Guidance Note on Accounting
`for Employee Share-based Payments issued by |CA|, the Group's net income would be higher by ? 587.3 million (previous year
`by ?110.3 million) and earnings per share as reported would be as indicated below:
`Particulars
`
`Year Ended
`31.03.2015
`? in million
`
`Year Ended
`31.03.2014
`? in million
`
`Net profit as repo ted
`Less: Tota stock-based employee compensation expense determined under fair
`value based hethod
`
`Add: Tota stock-based employee compensation expense determined under
`intrinsic value based method
`
`Adjusted net proft
`Basic earn'ngs per share
`- As reported ("n ?)*
`- Adjus ed
`("n ?)
`Diluted ea nings per share
`- As reported ("n €')*
`- Adjus ed
`("n ?)
`* Refer no e 35
`
`144 | Lupin Limited
`
`24032.4
`32.8
`
`620.1
`
`18363.7
`81.3
`
`191.6
`
`24619.7
`
`18474.0
`
`53.54
`54.85
`
`53.20
`54.50
`
`40.99
`41.24
`
`40.79
`41.03
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 145 of 212)
`
`

`
`39. Post Employment Benefits:
`(i) Defined Contribution Plans:
`
`The Group makes contributions towards provident fund, superannuation fund and other retirement benefits to a defined
`contribution retirement benefit plan for qualifying employees. Under the plan, the Group is required to contribute a
`specified percentage of payroll cost to the retirement benefit plan to fund the benefits.
`
`The Group recognised ?454.4 million (previous year ?360.4 million) for superannuation contribution and other retirement
`benefit contributions in the Consolidated Statement of Profit and Loss.
`
`The contributions payable to these plans by the Group are at rates specified in the rules of the schemes.
`
`The Company recognised ? 147.5 million (previous year?92.5 million) for provident fund contributions in the Consolidated
`Statement of Profit and Loss.
`
`(ii) Defined Benefit Plan:
`a) The Company
`
`A) The Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the
`LIC of India, a funded defined benefit plan for qualifying employees. The scheme provides for payment as under:
`
`i)
`
`On normal retirement / early retirement/withdrawal / resignation:
`As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
`
`ii) On death in service:
`
`As per the provisions of the Payment of Gratuity Act, 1972 without any vesting period.
`
`In addition to the above mentioned scheme, the Company also pays additional gratuity as an ex—gratia and the
`said amount is provided as non—funded liability based on actuarial valuation.
`
`The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for
`gratuity were carried out as at March 31, 2015. The present value of the defined benefit obligations and the
`related current service cost and past service cost, were measured using the Projected Unit Credit Method.
`
`Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity
`plan and the amounts recognised in the Group's financial statements as at balance sheet date:
`
`Particulars
`
`Sr.
`No.
`
`Gratuity (Funded)
`
`Gratuity (Unfunded)
`
`As on
`31.03.2015
`? in million
`
`As on
`31.03.2014
`? in million
`
`As on
`31.03.2015
`? in million
`
`As on
`31.03.2014
`? in million
`
`I)
`
`Reconciliation in present value of obligations
`(‘PVO’) — defined benefit obligation:
`Current service cost
`3ast service cost
`nterest cost
`
`Actuarial loss / (gain)
`3enefits paid
`3V0 at the beginning of the year
`3V0 at the end of the year
`II) Change in fair value of plan assets:
`Expected return on plan assets
`Actuarial gain/(loss)
`Contributions by the employer
`3enefits paid
`‘air value of plan assets at the beginning of
`he year
`‘air value of plan assets at the end of the year
`III) Reconciliation of PVO and fair value of
`plan assets:
`3V0 at end of the year
`‘air Value of plan assets at the end of the year
`‘unded status
`
`136.2
`—
`57.5
`
`75.1
`(52.8)
`652.4
`868.4
`
`54.2
`2.0
`76.5
`(52.8)
`580.9
`
`102.6
`—
`45.4
`
`(27.0)
`(63.5)
`594.9
`652.4
`
`45.3
`4.2
`125.5
`(63.5)
`469.4
`
`660.8
`
`580.9
`
`92.3
`—
`39.7
`
`10.2
`—
`431.8
`574.0
`
`—
`—
`—
`—
`—
`
`—
`
`70.8
`—
`29.0
`
`(28.3)
`—
`360.3
`431.8
`
`—
`—
`—
`—
`—
`
`—
`
`868.4
`660.8
`(207.6)
`
`652.4
`580.9
`(71.5)
`
`574.0
`—
`(574.0)
`
`431.8
`—
`(431.8)
`
`Annual Report 2015 | 145
`
`Janssen Ex. 2002
`
`Lupin Ltd. v. Janssen Sciences Ireland UC
`|PR2015-01030
`
`(Page 146 of 212)
`
`

`
`Particulars
`
`Sr.
`No.
`
`Jnrecognised actuarial gain/(loss)
`et liability recognised in the balance sheet
`IV) Net cost for the year:
`Current service cost
`Past service cost
`nterest cost
`
`Expected return on plan assets
`Actuarial losses/(gain)
`Total expense recognised in the Statement of
`Profit and Loss (Refer note 27)
`
`V) Category of assets as at the end of the year:
`nsurer Managed Funds (100%)
`(Fund is Managed by LIC as per IRDA
`guidelines, category—wise composition of the
`plan assets is not available)
`VI) Actual return on the plan assets:
`VII) Assumptions used in accounting for the
`gratuity plan:
`Discount rate (%)
`
`Salary escalation rate (%)
`Expected rate of return on plan assets (%)
`VIII) Estimate of amount of contribution in
`immediate next year
`
`Gratuity (Funded)
`
`Gratuity (Unfunded)
`
`As on
`31.03.2015
`? in million
`
`As on
`31.03.2014
`? in million
`
`As on
`31.03.2015
`? in million
`
`As on
`31.03.2014
`? in million
`
`—
`(207.6)
`
`136.2
`—
`57.5
`
`(54.2)
`73.1
`212.6
`
`—
`(71.5)
`
`102.6
`—
`45.4
`
`(45.3)
`(31.2)
`71.5
`
`—
`(574.