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Directors Report of Lupin Ltd.

Mar 31, 2016

The Directors have pleasure in presenting their report on the business and operations of your Company for the year ended March 31, 2016.

Financial Results

(Rs. in million)

Standalone Consolidated

2015-16 2014-15 2015-16 2014-15

Sales (Gross) 109139.8 97050.5 138055.3 126932.2

Profit before interest, depreciation and tax 42259.4 35538.8 39411.5 38593.4

Less: Interest and finance charges 147.8 49.0 446.2 98.1

Less: Depreciation and amortisation 3056.1 3367.9 4635.0 4347.0

Profit before tax 39055.5 32121.9 34330.3 34148.3

Less: Provision for taxation (including deferred tax) 10204.8 8148.4 11535.8 9704.0

Net Profit before Minority Interest 28850.7 23973.5 22794.5 24444.3

Less: Minority Interest - - 87.6 411.9

Net Profit 28850.7 23973.5 22706.9 24032.4

Add: Surplus brought forward from previous year 65951.2 46646.6 63764.5 44401.0

Amount available for Appropriation 94801.9 70620.1 86471.4 68433.4 Appropriations:

Depreciation adjustment on transition to Schedule II of the - 610.8 - 610.8 Companies Act, 2013

Add: Profit on disposal of partial investment in a subsidiary - - 43.7 -

Proposed final dividend on Equity Shares 3379.4 3371.2 3379.4 3371.2

Dividend on Equity Shares for previous year 3.0 0.5 3.0 0.5

Corporate Tax on dividend 688.6 686.4 688.6 686.4

Balance carried to Balance Sheet 90730.9 65951.2 82444.1 63764.5

94801.9 70620.1 86471.4 68436.7

Performance Review

Your Company scaled new heights with consolidated sales clocking Rs. 138055.3 million as against Rs. 126932.2 million of the previous year, higher by about 9%. International markets accounted for 73% of sales. Profit before interest, depreciation and tax was Rs. 39411.5 million. Profit before tax was Rs. 34330.3 million. After providing for taxes and minority interest, net profit was Rs. 22706.9 million. Earnings per share was Rs. 50.45.

Dividend

Your Directors are pleased to recommend dividend at Rs. 7.50 per equity share of Rs. 2/- each, absorbing an amount of Rs. 3379.4 million. Corporate tax on the proposed dividend was Rs. 688.0 million and Rs. 0.6 million on dividend for the previous year.

Share Capital

As approved by the Members at the 33rd Annual General Meeting (AGM) of the Company held on July 23, 2015, the Authorised Share Capital of the Company was increased from Rs. 1,000,000,000 (Rupees One Thousand million) divided into 500,000,000 (Five Hundred million) Equity Shares of Rs. 2/- each to Rs. 2,000,000,000 (Rupees Two Thousand million) divided into 1,000,000,000 (One Thousand million) Equity Shares of Rs. 2/- each.

During the year, the paid-up equity share capital of the Company rose by Rs. 2.2 million consequent to the allotment of 1,094,634 equity shares of Rs. 2/- each to eligible employees on exercise of stock options under the ''Lupin Employees Stock Option Plan 2003'', ''Lupin Employees Stock Option Plan 2005'', ''Lupin Subsidiary Companies Employees Stock Option Plan 2005'', ''Lupin Employees Stock Option Plan 2011'', ''Lupin Subsidiary Companies Employees Stock Option Plan 2011'' and ''Lupin Employees Stock Option Plan 2014.''

Credit Rating

ICRA Limited (ICRA) has assigned the rating "ICRA A1 " (pronounced ''ICRA A one Plus'') for the Company''s short-term credit facilities of Rs. 13100 million, indicating very strong degree of safety regarding timely payment of financial obligations and "ICRA AAA" (pronounced ''ICRA triple A'') for long-term credit facilities of Rs. 1900 million, indicating highest degree of safety regarding timely servicing of financial obligations. The outlook on the long-term rating is ''Stable''.

ICRA has assigned the rating "ICRA AAA" to the Company''s Non-Convertible Debenture programme of Rs. 1000 million, indicating highest degree of safety regarding timely servicing of financial obligations. The outlook on the rating is ''Stable''.

Indian Accounting Standards (IND AS) - IFRS Converged Standards

The Ministry of Corporate Affairs, vide notification dated February 16, 2015, notified the Companies (Indian Accounting Standard Rules), 2015, in pursuance of which, the Company, its subsidiaries and the joint venture shall adopt IND AS with effect from April 1, 2016, with comparatives for the year ended March 31, 2016. The implementation of IND AS is a major change and the Company has planned smooth transition to IND AS. The first IND AS financial results shall be published for the quarter ending June 30, 2016.

Acquisitions

In pursuit of achieving inorganic growth and with a view to accelerate progress by expanding presence across select geographies, your Company made the following acquisitions: -

a) The entire shareholding in Gavis Pharmaceuticals, LLC, USA, Novel Laboratories, Inc., USA, VGS Holdings, Inc., USA, Edison Therapeutics, LLC, USA and Novel Clinical Research (India) Private Limited, India (collectively referred as Gavis), was acquired through Lupin Inc., USA, wholly-owned subsidiary of the Company. The transaction was closed on March 8, 2016, thereby making Gavis, a wholly-owned subsidiary of the Company. Gavis has an impressive portfolio of niche products with limited competition and high barriers to entry. It is a market leader in colonoscopy preparations with over 40% share and a strong pipeline of controlled substances. Gavis has a deep pipeline of several products under development for oral/liquids, dermatology, injectables, opthalamics, nasal and MDI and has capability to produce tablets, capsules, controlled release product, dry powder suspension, nasal spray and liquid solutions.

b) The entire shareholding in Medquimica Industrial Farmaceutica LTDA, Brazil (formerly known as Medquimica Industria Farmaceutica S.A., Brazil) (Medquimica) was acquired through Lupin Farmaceutica do Brasil LTDA, Brazil, a wholly-owned subsidiary of the Company on June 24, 2015. Medquimica, one of the fastest growing broad based pharmaceutical companies in Brazil, is engaged in the development, manufacturing and commercialization of OTC products, branded generics and generics, which are sold through push and pull models. Medquimica is a trusted brand with an established distribution network of medium and small distributors and presence across drug stores. It has a sound manufacturing facility with critical ANVISA-handling skills and experience and requisite approvals are in place. As part of restructuring operations, Lupin Farmaceutica do Brasil LTDA, Brazil, merged with Medquimica and the entire shareholding of Medquimica is now held by Lupin Atlantis Holdings SA, Switzerland, wholly-owned subsidiary of the Company.

Subsidiary Companies/Joint Venture

As on March 31, 2016, the Company had 30 subsidiaries and a joint venture.

On December 7, 2015, Lupin Atlantis Holdings SA, Switzerland and Lupin Holdings B. V., Netherlands, wholly-owned subsidiaries of the Company, jointly incorporated Lupin Pharma LLC, Russia, as a distribution company.

On March 8, 2016, Lupin Inc., USA, wholly-owned subsidiary of the Company, incorporated Lupin Research Inc., USA, for carrying out R&D activities.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 (''Act'') and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of each subsidiary and the joint venture are given in Form AOC - 1 as Annexure ''A'' to this Report.

The Company has framed a policy for determining material subsidiaries, which has been hosted on the Company''s website (web link: http://www.lupin.com/pdf/Policy_for_determining_material_subsidiaries.pdf).

Management Discussion and Analysis

In compliance with Regulation 34(3) read with Schedule V(B) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), Management Discussion and Analysis forms part of this Annual Report.

Corporate Governance Report

In compliance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, a Report on Corporate Governance forms part of this Annual Report. The Auditors'' certificate certifying compliance with the conditions of corporate governance as prescribed under Schedule V(E) of the Listing Regulations is annexed to the Corporate Governance Report.

Business Responsibility Report

In compliance with Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility Report forms part of this Annual Report.

Corporate Social Responsibility (CSR)

The Company is one of the pioneers in the CSR field having been engaged in social welfare activities for over 30 years. It has been implementing its CSR activities mainly through the Lupin Human Welfare and Research Foundation (LHWRF). LHWRF has a well-set implementation mechanism at the grass-root level, with an objective of transforming rural lives. LHWRF reaches out to 2.8 million living in 3,500 villages.

During the year, a programme was also undertaken to detect Tuberculosis and create awareness in the slum areas of Mumbai. Various CSR activities/initiatives were taken up at select centres with district development oriented approach for rural development in the backward areas as also at Company''s plant locations.

The Company undertakes the following CSR activities: -

- Economic and Social Development and Natural Resource Management;

- Rural Infrastructure development at various locations (including areas near the plant locations of the Company);

- Learn and Earn programs with a view to provide opportunities and monetary support to needy students, particularly in small towns and rural areas to enable them to pursue higher studies;

- Rural Industry and Skill Development; and

- Women Health, Empowerment and Education.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 (''the Act'') read with Companies (Corporate Social Responsibility Policy) Rules, 2014, during the year, the Company ought to have spent Rs. 541.5 million on CSR activities. Of this a sum of Rs. 205.1 million was spent.

With a view to further support the poor and marginalised sections of the society, the Company would be accelerating its pace of CSR spend. The Company has set up a Charitable Trust known as ''Lupin Foundation'', with a purpose of setting-up deeper sustainable projects like hospitals, educational institutions which will substantially enhance its CSR spend.

Details of CSR activities are given in Annexure ''B'' to this Report. The policy on CSR as approved by the Board has been hosted on the Company''s website www.lupin.com.

Directors'' Responsibility Statement

In compliance with the provisions of Section 134(3)(c) read with Section134(5) of the Act, your Directors confirm: -

i) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year March 31, 2016 and of the profit of the Company for that year;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual financial statements have been prepared on a going concern basis;

v) that they had laid down proper internal financial controls and that the same are adequate and were operating effectively; and

vi) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors

Pursuant to the provisions of Section 152 of the Act, Mr. Nilesh Gupta, Managing Director, retires by rotation at the forthcoming AGM and is eligible for re-appointment.

Mr. Ramesh Swaminathan, Chief Financial Officer & Executive Director and Mr. Jean-Luc Belingard, an Independent Director, who were appointed as Additional Directors, w.e.f. October 27, 2015, hold office up to the date of the forthcoming AGM. Notices along with requisite deposits under Section 160(1) of the Act, have been received from certain members proposing their names for appointment as Directors.

The Company has received declarations from all the Independent Directors that they meet the criteria of independence prescribed by Section 149(6) of the Act.

During the year, five Board meetings were held on May 13, 2015, June 22, 2015, July 23, 2015, October 27, 2015 and February 5, 2016, the details of which are given in the Corporate Governance Report forming part of the Annual Report.

Board Evaluation

Pursuant to the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rules, 2014, the Board carried out an annual evaluation of its own performance and that of its Committees and individual directors. The performance of the Board and Committees were evaluated by the Board after seeking inputs from all the directors on the basis of the prescribed criteria, such as the composition and structure of the Board, quality of deliberations, effectiveness of the procedures adopted by the Board, participation at the Board and Committee meetings, governance reviews etc. The performance of individual Directors was evaluated on the basis of criteria like transparency, analytical abilities, qualifications, leadership qualities, experience, participation in the long-term strategic planning and responsibilities shouldered.

Audit Committee

The Audit Committee comprises Dr. K. U. Mada, Chairman, and Mr. Dileep C. Choksi, independent directors, and Dr. Kamal K. Sharma, Vice Chairman of the Company. The functions performed by the Audit Committee, particulars of meetings held and attendance thereat is given in the Corporate Governance Report which forms part of the Annual Report.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a Policy relating to the remuneration of directors, key managerial personnel and other employees. The Policy includes criteria for determining qualifications, positive attributes and independence of a director. The functions of the Nomination and Remuneration Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

Related Party Transactions

All transactions entered into by the Company with related parties during the financial year were in the ordinary course of business and on an arm''s length pricing basis. No transaction with any related party was in conflict with the interest of the Company. The Company did not enter into any related party transaction with its Key Managerial Personnel. Material related party transactions were entered into by the Company only with its subsidiaries. In terms of the provisions of Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC - 2, as Annexure ''C'' to this Report. The policy on Related Party Transactions as approved by the Board has been hosted on the Company''s website www.lupin.com and web link for which is http://www.lupin.com/pdf/POLICY-RELATED_PARTY_TRANSACTIONS.pdf

Risk Management

Services of Ernst & Young LLP were engaged for framing, monitoring and implementing the risk management plan of the Company. The said firm is in the process of reviewing the existing risk management process and structure including roles and responsibilities, risk rating criteria for assessing impact and the likelihood of risks and effectiveness of mitigation plans. The process includes documentation of risk prioritization and obtaining the Management''s assessments on ''risks that matter'' and assessing mitigation readiness for the ''risks that matter''. The Risk Management Committee constituted by the Board, pursuant to Regulation 21 of the Listing Regulations, monitors and reviews the risk management plan. The details of the Committee and its terms of reference are set out in the Corporate Governance Report. The functions of the Risk Management Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

Particulars of loans/guarantees/investments/securities

Particulars of loans, guarantees, investments and securities pursuant to the provisions of Section 186 of the Act are given in the notes to the Financial Statements forming part of the Annual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''D'' to this Report.

Human Resources

There has been a steady rise in the ranking of the Company on a pan-industry basis in the surveys jointly conducted by ''Great Places to Work Institute'' and ''The Economic Times''. The Company has been consistently ranked No. 1 or 2 in the Pharmaceutical and Biotech sector and it has also featured in the Golden List of India''s Top 50 companies to work for. The Company was ranked 15th best company to work for in Asia by the survey conducted by the ''Great Places to Work Institute''. Aon Hewitt, in collaboration with Business World magazine, through a detailed process, ranks the top 25 companies across all sectors/industries. There is no ranking among these companies. The Company has featured in the coveted list.

The Company''s endeavor has been to provide its employees the best value proposition and experience. It meaningfully engages them to deliver their best, which ultimately results in superior business performance and building a competitive work environment. With a view to enthuse a vibrant work culture, the Company instituted various employee-friendly policies and manpower development programs across all levels, which ensured that employees remain motivated and invigorated.

Employees Stock Options

Pursuant to the provisions of the Securities and Exchange Board of India (Share-Based Employee Benefits) Regulations, 2014, the details of stock options during the year ended March 31, 2016 are given in Annexure ''E'' to this Report.

Vigil Mechanism/Whistleblower Policy

In order to promote a culture of honesty and fairness in its operations and in compliance with the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Company has instituted P.L.E.D.G.E. (Preparing Lupin Employees to Demonstrate Governance and Ethical Conduct). The P.L.E.D.G.E. initiative encompasses three important policies viz. Code of Conduct, Whistleblower Policy and Prevention of Workplace Harassment. The Whistleblower Policy provides an opportunity to the directors and all employees of the Company to raise concerns about unethical and improper practices or any suspected wrongdoings in relation to the Company. The details of Code of Conduct, Whistleblower Policy and Prevention of Workplace Harassment Policy are stated in the Corporate Governance Report, which forms part of the Annual Report. Whistleblower Policy has been hosted on the Company''s website www.lupin.com. The Policies on Code of Conduct and Prevention of Workplace Harassment are on the Lupin Intranet.

Particulars of Employees

Particulars of remuneration required to be furnished in terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure ''F'' to this Report.

Auditors

At the 32nd AGM, the Members had appointed Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018), as Statutory Auditors of the Company, for a period of two years from the conclusion of the 32nd AGM till the conclusion of the forthcoming AGM. In view of completion of the prescribed term of Deloitte Haskins & Sells LLP, on the recommendation of the Audit Committee, the Board of Directors, appointed BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), as the Statutory Auditors of the Company, for a period of five years from conclusion of the 34th AGM till the conclusion of 39th AGM of the Company, subject to ratification by Members at every AGM.

Pursuant to the provisions of Section 139(1) and Section 141 of the Act, the Company has received a Certificate from BSR & Co. LLP, certifying that if they are appointed as Auditors, their appointment would be as per the conditions prescribed by the said Sections.

The Board records its sincere appreciation of the valuable services rendered by Deloitte Haskins & Sells LLP during its long association with the Company.

Internal Audit

Ernst & Young LLP and KPMG are the Internal Auditors of the Company for the domestic and international operations respectively.

The Company appointed local Chartered Accountants firms as Internal Auditors to conduct audit of Carrying & Forwarding Agents and Central Warehouses located in various parts of the country.

Cost Auditors

The cost audit records maintained by the Company are required to be audited pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014. On the recommendation of the Audit Committee, Mr. S. D. Shenoy, practising Cost Accountant (FCMA, Membership No.8318), was appointed to conduct cost audit for the year ended March 31, 2016.

Pursuant to Section 148(6) of the Act and Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014, the Cost Audit Report, in Form CRA-4 (in XBRL mode), for the year ended March 31, 2015, under the head ''Drugs and Pharmaceuticals Industry'' was filed with the Central Government on October 16, 2015, well within the prescribed time.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Ms. Neena Bhatia, Company Secretary in Practice, was appointed to undertake the Secretarial Audit of the Company for the year ended March 31, 2016. There is no qualification in the Secretarial Audit Report which is given in Annexure ''G'' to this Report.

Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Act and the Rules made thereunder, extract of the Annual Return in prescribed Form MGT-9 is given in Annexure ''H'' to this Report.

Acknowledgements

Your Directors commend the commitment, dedication, contributions and hard work of all employees of the Company across the globe. They express their deep gratitude to the various departments of the Central and State governments, banks, financial institutions, customers, medical professionals, business associates, analysts, members, suppliers and distributors for their whole-hearted and continuous support. For and on behalf of the Board of Directors

Dr. Desh Bandhu Gupta

Chairman

(DIN: 00209378)

Mumbai, May 19, 2016


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their report on the business and operations of your Company for the year ended March 31, 2015. Financial Results

(Rs. in million) Standalone Consolidated

2014-15 2013-14 2014-15 2013-14

Sales (Gross) 97050.5 88576.6 126932.2 111671.2

Profit before interest, depreciation and tax 35538.8 33277.1 38593.4 31192.7

Less: Interest and finance charges 49.0 209.9 98.1 266.5

Less: Depreciation and amortisation 3367.9 1676.3 4347.0 2609.7

Profit before tax 32121.9 31390.9 34148.3 28316.5

Less: Provision for taxation (including deferred tax) 8148.4 8148.7 9704.0 9621.5

Net Profit before Minority Interest 23973.5 23242.2 24444.3 18695.0

Less: Minority Interest - - 411.9 331.3

Net Profit 23973.5 23242.2 24032.4 18363.7

Add: Surplus brought forward from previous year 46646.6 28539.2 44401.0 31172.1

Amount available for Appropriation 70620.1 51781.4 68433.4 49535.8

Appropriations:

Depreciation adjustment on transition to Schedule II of the 610.8 - 610.8 - Companies Act, 2013

Transfer to General Reserve - 2500.0 - 2500.0

Interim Dividend on Equity Shares - 1345.0 - 1345.0

Proposed final dividend on Equity Shares 3371.2 1345.1 3371.2 1345.1

Dividend on Equity Shares for previous year 0.5 1.1 0.5 1.1

Reversal of Corporate Tax on Final Dividend for previous years - (304.2) - (304.2)

(In terms of Section 115-O/ 115BBD of the Income Tax Act, 1961)

Corporate Tax on dividend 686.4 247.8 686.4 247.8

Balance carried to Balance Sheet 65951.2 46646.6 63764.5 44401.0

70620.1 51781.4 68436.7 49535.8

Performance Review

Your Company touched new heights in terms of sales and profits for the year ended March 31, 2015. Consolidated sales clocked Rs.126932.2 million as against Rs. 111671.2 million of the previous year, higher by 13.7%. International markets accounted for 73% of sales. Profit before interest, depreciation and tax increased by 23.7% at Rs. 38593.4 million as against Rs. 31192.7 million in the previous year. Profit before tax was Rs. 34148.3 million, higher by 20.6% over the previous year. After providing for taxes and minority interest, net profit was Rs. 24032.4 million, higher by 30.9% over the previous year. Earnings per share was Rs. 53.54.

Dividend

Your Directors are pleased to recommend dividend at Rs. 7.50 per equity share of Rs. 2/- each, absorbing an amount of Rs. 3371.2 million. Corporate tax on the proposed dividend was Rs. 686.3 million and Rs. 0.1 million on dividend for the previous year.

Share Capital

During the year, the paid-up equity share capital of your Company rose by Rs.2.2 million consequent to the allotment of 1,112,531 equity shares of Rs. 2/- each to eligible employees on exercise of stock options under the ''Lupin Employees Stock Option Plan 2003'', ''Lupin Employees Stock Option Plan 2005'', ''Lupin Subsidiary Companies Employees Stock Option Plan 2005'', ''Lupin Employees Stock Option Plan 2011'' and ''Lupin Subsidiary Companies Employees Stock Option Plan 2011''.

Credit Rating

ICRA Limited (ICRA) had assigned the rating "ICRA A1 " (pronounced ''ICRA A one Plus'') for the Company''s short-term credit facilities of Rs.13100 million and "ICRA AA " (pronounced ''ICRA double A Plus'') for long-term credit facilities of C 1900 million. During the year, ICRA upgraded the rating of long-term credit facilities from "ICRA AA " to "ICRA AAA" (pronounced ''ICRA triple A''), indicating the highest degree of safety regarding timely servicing of financial obligations. The outlook on the long-term rating is ''Stable''. ICRA affirmed the rating of "ICRA A1 " for short-term credit facilities which is the highest rating.

ICRA had assigned the rating "ICRA AA " to the Company''s Non- Convertible Debenture programme of C1000 million. ICRA also upgraded the same from ''ICRA AA '' to ''ICRA AAA'', indicating the highest degree of safety regarding timely servicing of financial obligations. The outlook on the rating is ''Stable''.

Acquisitions

In its strategy to pursue inorganic growth for further accelerating its progress and expanding its presence in select geographies, the following acquisitions were made: -

Lupin acquired the entire shareholding of Laboratorios Grin, S.A. de C.V., Mexico, (''Lab Grin''), a 60-year old company specializing in opthalmics. Lab Grin was ranked 4th in the opthalmics segment in the Mexican market, commanding 11% market share with a CAGR of 10%. It has superior brand recognition, an outstanding reputation with the medical community, a state-of-the-art manufacturing facility, highly regarded management team and attractive profit margins. The acquisition would add value in the opthalmic pharmaceutical and opthalmic vision care segments.

The Company held 60% stake in Pharma Dynamics (Proprietary) Ltd., South Africa (Pharma Dynamics), a subsidiary of the Company. The balance 40% was held by the ''Anley Group'' which had a ''Put Option'' to sell its stake to the Company. The minority shareholders exercised their ''Put Option'' and accordingly, Pharma Dynamics has become a wholly-owned subsidiary of the Company as on March 31, 2015. Payment under ''Put Option'' is based on the audited financials as on March 31, 2015, reconciliation of the EBIDTA and net cash as also subject to due diligence. This acquisition represents significant foreign investment into South Africa and is a major vote of confidence in the business. It would add additional global muscle to the operations of Pharma Dynamics and support the next phase of growth for the Company.

Subsidiary Companies/Joint Venture

As on March 31, 2015, the Company had 23 subsidiaries and a joint venture.

On April 23, 2014, the Company through its wholly-owned subsidiary entered into a joint venture, YL Biologics Ltd., Japan, with Yoshindo Inc., Japan, for clinical development of Biosimilars. Max Pharma Pty Ltd., Australia, was liquidated on December 17, 2014.

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of each subsidiary and a joint venture is given in Form AOC - 1 as Annexure ''A'' to this Report.

The Company has framed a policy for determining material subsidiaries, which has been uploaded on the Company''s website (web link: http://www.lupin.com/pdf/Policy_for_ determining_material_subsidiaries.pdf).

Management Discussion and Analysis

A detailed Management Discussion and Analysis forms part of this Annual Report.

Corporate Governance

A Report on Corporate Governance forms part of this Annual Report. The Auditors'' certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is also annexed to this Report.

Business Responsibility Report

In compliance with Clause 55 of the Listing Agreement, the

Business Responsibility Report forms part of this Annual Report.

Corporate Social Responsibility

Long before the Corporate Social Responsibility (CSR) concept formally came into vogue, the Company, through its CSR arm, Lupin Human Welfare and Research Foundation (LHWRF), has been promoting numerous sustainable rural development programmes across chosen geographies with a view to improve the human development indices. LHWRF which was set up in 1988 has collaborated with various institutions, governments, individuals, visionaries and domain experts on multiple projects to ensure growth and progress of the rural poor.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, during the year, the Company ought to have spent H 396 million on CSR activities. The actual spend was H126 million. The Company broadly undertakes the following CSR activities: -

- Rural development activities at various locations (including local areas near the plants of the Company);

- Learn and Earn programme which is aimed at providing opportunity to worthy students who are not financially capable of pursuing their graduation; and

- TB detection.

The Board is committed to help the poorest of the poor and the marginalised sections of the society at large and has plans to increase CSR expenses especially in the areas of TB detection, medical camps, etc. The Company also intends to undertake deeper and sustainable long-term projects such as Hospitals or Universities or similar institutions which shall increase its CSR spend manifold in the coming years.

Details of CSR activities are given in Annexure ''B'' to this Report. The policy on CSR as approved by the Board has been uploaded on the Company''s website www.lupin.com.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 (Act), your Directors confirm: -

i) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanations relating to material departures;

ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year March 31, 2015 and of the profit of your Company for that year;

iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the annual financial statements have been prepared on a going concern basis;

v) that they had laid down proper internal financial controls and that the same are adequate and were operating effectively; and

vi) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors

The Company, led by the Board of Directors and a strong senior management team, is poised to enter higher orbits of growth. In this direction, the Board at its meeting held on May 13, 2015, re-appointed Dr. Desh Bandhu Gupta, Chairman, for a period of five years, effective January 1, 2016, Dr. Kamal K. Sharma, Vice Chairman, for a period of two years, effective September 29, 2015 and Mrs. M. D. Gupta, Executive Director, for a period of five years, effective January 1, 2016, on such terms and conditions as may be finalised and subject to approvals of the Members and such approvals as may be necessary.

Dr. Gupta has displayed leadership of exceptionally high order and provided the Company, the benefit of his insight into the pharmaceutical industry, business acumen and vast experience. Under his stewardship, the Company has grown exponentially and is poised to seek newer heights in the years to come. Dr. Sharma has effectively led the team and as Vice Chairman, is involved in setting vision of the Company, building strategy and mentoring the management team. Mrs. Gupta is one of the promoters of the Company with intimate knowledge of the working of the Company, wide business experience and expertise.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, (''Act'') Ms. Vinita Gupta, Director, retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment.

Pursuant to the provisions of Sections 149, 152 read with Schedule IV of the Act and Rules made thereunder, Dr. Vijay Kelkar, Mr. R. A. Shah, Mr. Richard Zahn, Dr. K. U. Mada and Mr. Dileep C. Choksi are being appointed as Independent Directors of the Company for a fresh term of five years by passing Special Resolutions. Dr. Kelkar, Mr. Shah, Mr. Zahn, Dr. Mada and Mr. Choksi have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

During the year, four Board meetings were held viz. on May 7, 2014, July 30, 2014, October 28, 2014 and February 3, 2015, the details of which are given in the Corporate Governance Report.

Board Evaluation

In compliance with the provisions of Section 134(3)(p) of the Companies Act, 2013, the Board carried out an annual evaluation of its own performance and individual directors. It also evaluated the performance of the Audit, Nomination & Remuneration, Stakeholders Relationship and Corporate Social Responsibility Committees. The evaluation inter alia covered different aspects viz. composition of the Board and its Committees, qualifications, experience, expertise, leadership qualities, attendance at the meetings, contribution, responsibilities shouldered etc. In compliance with Clause 49(1)(D)(2)(i) of the Listing Agreement, the Board monitors and reviews the Board evaluation framework.

Audit Committee

The Audit Committee comprises Dr. K. U. Mada, Chairman and Mr. Dileep C. Choksi, independent directors, and Dr. Kamal K. Sharma, Vice Chairman of the Company. The functions performed by the Audit Committee and the particulars of meetings held and attendance thereat are given in the Corporate Governance Report.

Nomination and Remuneration Policy

The Company has a Nomination and Remuneration Policy. In compliance with the provisions of Sections 134(3)(e) and 178 of the Companies Act, 2013 and Clauses 49(II)(B) (5) and 49(IV)(B) of the Listing Agreement, the Nomination & Remuneration Committee:

i) has formulated criteria for determining qualifications, positive attributes and independence of a director;

ii) identifies persons who are qualified to become directors or may be appointed in Senior Management in accordance with criteria laid down and recommend to the Board their appointment and removal;

iii) recommends to the Board, Policy relating to remuneration for directors, KMP and other employees;

iv) has formulated the evaluation criteria for performance evaluation of independent directors and the Board;

v) carries out evaluation of every director''s performance and the Board; and

vi) devises a policy on Board diversity.

Related Party Transactions

All related party transactions entered into during the financial year were on an arm''s length basis and in the ordinary course of business. No related party transaction was in conflict with the interest of the Company. Material related party transactions were entered into by the Company only with its subsidiaries. No materially significant related party transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC-2, as Annexure ''C'' to this Report. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website www.lupin.com and web link for which is http://www.lupin.com/pdf/POLICY- RELATED_PARTY_TRANSACTIONS.pdf.

Risk Management

In terms of Clause 49(VI) of the Listing Agreement, the Board constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report. Ernst & Young LLP were appointed to assist the Company in implementing the Risk Management framework in a formal manner.

We are pleased to inform you that your Company has been awarded ''Firm of the Year'' in the pharmaceutical sector at the India Risk Management awards by ICICI Lombard and CNBC - TV18.

Particulars of loans/guarantees/investments/securities

Pursuant to the provisions of Section 134(3)(g) of the Companies Act, 2013 (Act), particulars of loans/guarantees/ investments/securities given under Section 186 of the Act are given in the notes to the Financial Statements forming part of the Annual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''D'' to this Report.

Human Resources

Human Resources are invaluable assets of the Company. In the survey conducted by ''Great Place to Work®'' and ''The Economic Times'', for four years in a row, your Company has been rated amongst the TOP TWO ''Best Companies to Work for in the Biotechnology and Pharmaceutical Sector''. It also achieved the distinction of being included in the list of India''s TOP 50 Best Companies to Work for across all industries for the last two years. This recognition is a true testimony of superior people practices, pride of the employees as also overall employee orientation. The Company firmly believes that people are its most valued resource and their efficiency plays a key role in achieving set goals and building a competitive work environment. The Company regularly conducts several programmes across various levels which include development programmes and employee-friendly policies, in order to attract, retain and develop best available talents.

Employees Stock Options

Pursuant to the provisions of the Securities and Exchange Board of India (Share-Based Employee Benefits) Regulations, 2014, the details of stock options granted by the Company during the year ended March 31, 2015 are given in Annexure ''E'' to this Report.

Vigil Mechanism/Whistleblower Policy

In compliance with the provisions of Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49(II)(F) of the Listing Agreement, your Company has in place a ''Whistleblower Policy,'' which provides an opportunity to the directors and employees to raise concerns about unethical and improper practices or any other wrongful conduct in or in relation to the Company. The details of the Whistleblower Policy are stated in the Corporate Governance Report and the said Policy has been uploaded on the Company''s website www.lupin.com.

Particulars of Employees

Particulars of employees required to be furnished pursuant to

the provisions of Section 197 of the Companies Act, 2013 (Act), read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given as an Annexure to this Report. However, pursuant to the provisions of Section 136 of the Act, the Report and Accounts are being sent to all the Members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company.

The statement of particulars of appointment and remuneration of managerial personnel pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure ''F'' to this Report.

Auditors

At the 32nd Annual General Meeting (AGM), the Members appointed Deloitte Haskins & Sells LLP, Chartered Accountants, as Statutory Auditors of the Company, for a period of two years till the conclusion of the 34th AGM, subject to ratification by the Members at the 33rd AGM.

Pursuant to the provisions of Sections 139(1) and 141 of the Companies Act, 2013 (Act), the Company has received a Certificate from Deloitte Haskins & Sells LLP, certifying that if they are appointed as Auditors, their appointment would be as per the conditions prescribed by the said Sections.

Pursuant to the provisions of Section 139 of the Act read with Rule 6 of the Companies (Audit and Auditors) Rules, 2014, the Members will ratify the appointment of Deloitte Haskins & Sells LLP, as Statutory Auditors of the Company, from the conclusion of the 33rd AGM till the conclusion of the 34th AGM or any adjournment thereof.

Internal Audit

Ernst & Young LLP, Mumbai, are the Internal Auditors of the Company. During the year, the Company appointed KPMG to conduct internal audit of a few of its international subsidiaries.

The Company has also appointed local Chartered Accountants firms as Internal Auditors to conduct audit of Carrying & Forwarding Agents and Central Warehouses.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Mr. S. D. Shenoy, practising Cost

Accountant (FCMA, Membership No.8318), to audit the cost accounts of the Company for the financial year 2015 -16 on a remuneration of H 500,000/- plus applicable taxes and out of pocket expenses. In terms of Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the Members. Accordingly, a Resolution seeking ratification by the Members for the remuneration payable to Mr. Shenoy has been included in the Notice convening the 33rd Annual General Meeting.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, the Cost Audit Report (in XBRL mode) for ''Pharmaceutical Products'' and ''Prepared Food Products'', for the year ended March 31, 2014, was filed with the Central Government on September 24, 2014, well within the prescribed time.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Ms. Neena Bhatia, Company Secretary in Practice, to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is given in Annexure ''G” to this Report. There is no qualification in the said Report.

Extract of Annual Return

Pursuant to the provisions of Section 92 (3) of the Companies Act, 2013, extract of the Annual Return in Form MGT-9 is given in Annexure ''H'' to this Report.

Acknowledgements

Your Directors commend all employees of the Company for their hard work, continued dedication, commitment and significant contributions. Your Directors also wish to express their gratitude to the Central and State governments, members, analysts, banks, financial institutions, business associates, customers, medical professionals, distributors and suppliers, for their continued and whole-hearted support.

For and on behalf of the Board of Directors

Dr. Desh Bandhu Gupta Chairman

Mumbai, May 13, 2015


Mar 31, 2014

THE Directors have pleasure in presenting their report on the business and operations of your Company for the year ended March 31, 2014.

Financial Results

(Rs.in million)

Standalone Consolidated 2013-14 2012-13 2013-14 2012-13

Sales (Gross) 88576.6 70723.9 111671.2 95235.3

Profit before interest, depreciation and tax 33277.1 19072.3 31192.7 22977.4

Less: Interest and finance charges 209.9 332.8 266.5 409.5

Less: Depreciation and amortisation 1676.3 1501.4 2609.7 3321.9

Profit before tax 31390.9 17238.1 28316.5 19246.0

Less: Provision for taxation (including deferred tax) 8148.7 4633.8 9621.5 5841.6

Net Profit before Minority Interest 23242.2 12604.3 18695.0 13404.4

Less: Minority Interest 331.3 262.8

Net Profit 23242.2 12604.3 18363.7 13141.6

Add: Surplus brought forward from previous year 28539.2 19530.2 31172.1 21345.2

Amount available for Appropriation 51781.4 32134.5 49535.8 34486.8 Appropriations:

Transfer to General Reserve 2500.0 1500.0 2500.0 1500.0

Add: Transfer from Minority Interest 280.6

Interim Dividend on Equity Shares 1345.0 1345.0

Proposed final dividend on Equity Shares 1345.1 1790.1 1345.1 1790.1

Dividend on Equity Shares for previous year 1.1 0.9 1.1 0.9

Reversal of Corporate Tax on Final Dividend for previous years (304.2) (304.2)

(In terms of Section 115-0/115BBD of the Income Tax Act, 1961)

Corporate Tax on dividend 247.8 304.3 247.8 304.3

Balance carried to Balance Sheet 46646.6 28539.2 44401 31172.1

51781.4 32134.5 49535.8 34486.8

Performance Review

During the year, your Company''s turnover crossed Rs. 111 billion, with Consolidated Gross Sales clocking Rs. 111671.2 million as againstRs. 95235.3 million of the previous year, higher by 17%. International markets accounted for 74% of sales. Profit before interest, depreciation and tax increased by 36% at Rs. 31192.7 million as against Rs. 22977.4 million in the previous year. Profit before tax was Rs. 28316.5 million, higher by 47% over the previous year. After providing for taxes and minority interest, net profit was Rs. 18363.7 million, higher by 40% over the previous year. Earnings per share was Rs. 40.99.

Dividend

Your Directors are pleased to recommend final dividend at Rs.3/- per equity share of Rs.2/- each, for the year ended March 31, 2014, subject to the approval of the members at the ensuing Annual General Meeting. At its meeting held on February 3, 2014, the Board of Directors declared interim dividend of Rs.3/- per equity share of Rs.2/- each, which was paid on February 21, 2014. Thus, the total dividend for the year shall be 300% i.e. Rs. 6/- per equity share (as against 200% last year) amounting to Rs. 2690.1 million.

Share Capital

During the year, the paid-up equity share capital of your Company rose by H 1.7 million consequent to the allotment of 846311 equity shares of H 2/- each to eligible employees under the ''Lupin Employees Stock Option Plan 2003'', ''Lupin Employees Stock Option Plan 2005'', ''Lupin Subsidiary Companies Employees Stock Option Plan 2005'', ''Lupin Employees Stock Option Plan 2011'' and ''Lupin Subsidiary Companies Employees Stock Option Plan 2011''.

Credit Rating

ICRA Limited reaffirmed its "[ICRA] A1 " (pronounced "ICRA A one plus") rating for your Company''s working capital lines of H 15000 million from banks indicating a very strong degree of safety for timely payment of financial obligations. Of this limit, H 1900 million was assigned a long-term rating of "[ICRA] AA " (pronounced "ICRA double A plus") indicating a high degree of safety and the outlook was revised from ''Stable'' to ''Positive''.

The Company also enjoys "[ICRA] AA " rating for non-convertible debentures (NCDs) of H 1000 million, indicating a high degree of safety for timely servicing of financial obligations for long-term debt instruments and the outlook was been revised from ''Stable'' to ''Positive''. The Company did not issue any long-term NCDs during the year.

Acquisitions

In its strategy to pursue inorganic growth for further accelerating its progress and expanding its presence in select geographies, your Company made the following acquisitions through Lupin Atlantis Holdings SA, Switzerland, wholly-owned subsidiary: -

a) the entire shareholding of Laboratorios Grin, S.A. DE C.V., Mexico, (''Lab Grin''). Lab Grin, a 60 year old company specializing in Opthalmics. It is ranked 4th in the Opthalmics segment in the Mexican market, commanding 11% market share with a CAGR of 10%. Lab Grin has superior brand recognition and an outstanding reputation with the medical community. It has state-of-the-art manufacturing facility, a highly regarded management team and attractive profitability margins. The Company believes that the acquisition would add value in the opthalmic pharmaceutical and opthalmic vision care segments. The deal is subject to compliance to certain conditions which were yet to be fulfilled as on date.

(b) the entire shareholding of Nanomi B.V., the Netherlands, (''Nanomi'') to make significant in-roads into the niche area of complex injectables. Nanomi has patented technology platforms to develop complex injectable products and a rich talent pool of scientists who would be backed by the Company''s global R&D and manufacturing teams.

Lupin Holdings B.V., Netherlands, wholly-owned subsidiary of the Company, acquired the entire shareholding of Farma World Importacao e Exportacao de Medicamentos LTDA - EPP, Brazil (''Farma World''). The objective of Farma World is to import and export finished dosages, API, R&D consulting and participate in investments in Brazil and abroad.

Subsidiary Companies

As on March 31, 2014, the Company had 23 subsidiaries. Lupin Inc., U.S.A. and Lupin GmbH, Switzerland, wholly-owned subsidiaries, were incorporated on June 27, 2013 and August 15, 2013 respectively.

Financials of subsidiaries are disclosed in the Consolidated Financial Statements which form part of this Annual Report. Statement pursuant to the provisions of Section 212(1)(e) of the Companies Act, 1956 also forms part of this Annual Report.

Management Discussion and Analysis

A detailed Management Discussion and Analysis forms part of this

Annual Report.

Corporate Governance

Report on Corporate Governance forms part of this Annual Report. The Auditors'' certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is also annexed to this Report.

Business Responsibility Report

In compliance with Clause 55 of the Listing Agreement, the Business

Responsibility Report forms part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year ended March 31, 2014 and of the profit of your Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

iv) the Directors had prepared the annual accounts on a ''going concern'' basis.

Directors

Pursuant to the provisions of Section 152 of the Companies Act, 2013, (''Act''), Dr. Kamal K. Sharma, Vice Chairman, retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment. Pursuant to the provisions of Section 149 of the Act, Dr. Vijay Kelkar, Mr. Richard Zahn, Mr. R. A. Shah, Dr. K. U. Mada and Mr. Dileep C. Choksi are being appointed as independent directors for a period of one year at the forthcoming Annual General Meeting till the conclusion of the next Annual General Meeting.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''A''.

Fixed Deposits

Your Company has not accepted any fixed deposit during the year. During the year, seven deposits aggregating H 63,000/- lying unclaimed with the Company were transferred to the Investor Education and Protection Fund, pursuant to the relevant guidelines. No deposit was outstanding or lying unclaimed with the Company, as on March 31, 2014.

Auditors

Statutory Auditors of the Company, Deloitte Haskins & Sells LLP, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting. They will be completing 10 consecutive years as Statutory Auditors of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013, read with Rule 6 of the Companies (Audit and Auditors) Rules 2014, they will be re-appointed for a period of two years from the conclusion of the Thirty-Second Annual General Meeting till the conclusion of the Thirty-Fourth Annual General Meeting. The Audit Committee and the Board of Directors recommend their re-appointment as Statutory Auditors of your Company.

Ernst & Young LLP, Mumbai, are the Internal Auditors of the Company.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956, in terms of General Circular No.15/2011 dated April 11, 2011 and with the approval of the Central Government, Mr. S. D. Shenoy (Fellow Membership No.8318), practising Cost Accountant, was appointed as Cost Auditor to conduct audit of cost records for the year ended March 31, 2014. Cost Audit Report would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, the Cost Audit Report for Bulk Drugs and Formulations, for the year ended March 31, 2013 was filed with the Central Government on

September 27, 2013, in the Extensible Business Reporting Language (XBRL) mode.

Employees Stock Options

Pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the details of stock options granted by the Company during the year are set out in Annexure ''B'' forming part of this Report.

Human Resources

Your Company was ranked 2nd amongst ''India''s Best Companies to Work for - 2013'' in the Biotech and Pharma Sector, by the ''Great Places to Work Institute®'' and ''The Economic Times'', in their annual cross-industry study called Best Companies to Work for. The Company continues to be in the Top 2 for the third year in a row. This recognition is a true testimony of superior people practices, pride of the employees as also overall employee orientation. The Company firmly believes that people are its most valued resource and their efficiency plays a key role in achieving set goals and building a competitive work environment. The Company regularly conducts several programs across various levels which include development programs and employee-friendly policies, in order to attract, retain and develop best available talents.

Particulars of Employees

Particulars of employees required to be furnished pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 (Act), read with Companies (Particulars of Employees) Amendment Rules, 2011, are given as an annexure to this Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company.

Acknowledgements

Your Directors commend all employees of your Company for their hard work, continued dedication, commitment and significant contributions. Your Directors wish to express their gratitude to the Central and State governments, members, analysts, banks, financial institutions, business associates, customers, medical professionals, distributors and suppliers, for their continued whole-hearted support.

For and on behalf of the Board of Directors

Dr. Desh Bandhu Gupta

Chairman

Mumbai, May 7, 2014


Mar 31, 2013

The Directors have pleasure in presenting their report on the business and operations of your Company for the year ended March 31, 2013.

Financial Results

(Rs. in million)

Standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Sales (Gross) 70723.9 53579.1 95235.3 70017.2

Profit before interest, depreciation and tax 19072.3 11653.5 22978.1 14590.6

Less: Interest and finance charges 332.8 286.8 410.2 354.7

Less: Depreciation and amortisation 1501.4 1319.6 3321.9 2275.2

Profit before tax 17238.1 10047.1 19246.0 11960.7

Less: Provision for taxation (including deferred tax) 4633.8 2003.4 5841.6 3085.6

Net Profit before Minority Interest - - 13404.4 8875.1

Less: Minority Interest - - 262.8 198.6

Net Profit 12604.3 8043.7 13141.6 8676.5

Add: Surplus brought forward from previous year 19530.2 14647.9 21345.2 15946.1

Amount available for Appropriation 32134.5 22691.6 34486.8 24622.6

Appropriations:

Transfer to General Reserve 1500.0 1500.0 1500.0 1500.0

Add: Transfer from Minority Interest - - 280.6 -

Dividend on Equity Shares by an overseas subsidiary - - - 93.4

Proposed dividend on Equity Shares 1790.1 1429.2 1790.1 1429.2

Dividend on Equity Shares for previous year 0.9 0.3 0.9 0.3

Corporate tax on dividend 304.3 231.9 304.3 254.5

Balance carried to Balance Sheet 28539.2 19530.2 31172.1 21345.2

32134.5 22691.6 34486.8 24622.6

Performance Review

Your Company scaled newer heights and benchmarks in terms of sales and profits for the year ended March 31, 2013. Consolidated sales at H 95235.3 million grew by 36% over H 70017.2 million of the previous year. International markets accounted for 72% of sales. Profit before interest, depreciation and tax increased by 57% at H 22978.1 million as against H 14590.6 million in the previous year. Profit before tax was H 19246.0 million, higher by 61% over the previous year. After providing for taxes and minority interest, net profit was H 13141.6 million, higher by 51% over the previous year. Earning per share was H 29.39.

Dividend

Your Directors are pleased to recommend dividend at H 4/- per equity share of H 2/- each, absorbing an amount of H 1790.1 million. The corporate tax on proposed dividend aggregates H 304.3 million.

Share Capital

During the year, the paid-up equity share capital of your Company rose by H 1.8 million consequent to allotment of 887812 equity shares of H 2/- each to eligible employees under the ''Lupin Employees Stock Option Plan 2003'', ''Lupin Employees Stock Option Plan 2005'', ''Lupin Subsidiary Employees Stock Option Plan 2005'' and ''Lupin Employees Stock Option Plan 2011.''

Credit Rating

ICRA Limited reaffirmed its "[ICRA] A1 " (pronounced "ICRA A one plus") rating for your Company''s working capital lines of H 15000 million from banks indicating a very strong degree of safety for timely payment of financial obligations. Of this limit, H 1900 million was assigned a long-term rating of "[ICRA] AA " (pronounced "ICRA double A plus") indicating a high degree of safety for timely servicing of financial obligations.

The Company also enjoys "[ICRA] AA " rating for non- convertible debentures (NCDs) of H 1000 million, indicating a high degree of safety for timely servicing of financial obligations for long-term debt instruments. The Company did not issue any long-term NCDs during the year.

Subsidiary Companies

As on March 31, 2013, the Company had 19 subsidiaries. Lupin Middle East FZ-LLC, Dubai, wholly-owned subsidiary was incorporated on June 13, 2012. Since there was not much operation in Amel Touhoku, Japan, wholly-owned subsidiary of the Company, it was wound-up w.e.f. February 28, 2013. Financials of subsidiary companies are disclosed in the Consolidated Financial Statements which form part of this Annual Report. Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 forms part of this Annual Report.

Management Discussion and Analysis

A detailed Management Discussion and Analysis forms part of this Annual Report.

Corporate Governance

Report on Corporate Governance forms an integral part of this Annual Report. The Auditors'' certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is also annexed to this Report.

Business Responsibility Report

Pursuant to Clause 55 of the Listing Agreement with the Stock Exchanges, Business Responsibility Report forms part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year ended March 31, 2013 and of the profit of your Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

iv) the Directors had prepared the annual accounts on a ''going concern'' basis.

Directors

Dr. Kamal K. Sharma was re-appointed as Managing Director of the Company for a period of three years effective September 29, 2012 or other mutually agreed capacity. His re-appointment was approved by members; vide an ordinary resolution passed by postal ballot, the result of which was declared on December 13, 2012.

The Company, led by a strong senior management team, is poised to enter higher orbits of growth. In this direction, the Board of Directors at its meeting held on May 8, 2013 approved the elevation of Dr. Kamal K. Sharma as Vice Chairman, Ms. Vinita Gupta as Chief Executive Officer and Mr. Nilesh Gupta as Managing Director, effective September 1, 2013, on such terms and conditions as may be finalised and subject to necessary approvals as may be required.

Dr. Sharma has effectively led the team and as Vice Chairman, he would be involved in setting vision of the Company, building strategy and mentoring the management team. Ms. Vinita has built a strong presence in the US market which is the largest market of the Company. Mr. Nilesh Gupta has ably led the Company''s research and supply chain functions. Mr. Dileep C. Choksi, who was appointed as an Additional Director w.e.f. October 23, 2012, holds office up to the date of the forthcoming Annual General Meeting. Notices have been received from certain members proposing his name for appointment as a director.

Mr. D. K. Contractor stepped down from the directorship of the Company w.e.f. October 23, 2012 on health grounds. The Board records its sincere appreciation of the valuable contribution rendered by Mr. Contractor during his tenure as a director of the Company.

Dr. Kamal K. Sharma, Ms. Vinita Gupta and Mr. Nilesh Gupta retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ''A''.

Fixed Deposits

Your Company has not accepted any fixed deposit during the year. No deposit was outstanding as on March 31, 2013. Seven deposits aggregating H 63,000/- were lying unclaimed with the Company, as on March 31, 2013, none of which, have since been claimed. Reminders have been sent to the concerned depositors to claim repayment of their matured deposits.

Auditors

Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board of Directors recommend their re-appointment as Statutory Auditors of your Company.

M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, were the Internal Auditors of the Company during the year.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956, in terms of General Circular No.15/2011 dated April 11, 2011 and with the approval of the Central Government, Mr. S. D. Shenoy (Fellow Membership No.8318), practising Cost Accountant, was appointed to conduct audit of cost records of Bulk Drugs and Formulations for the year ended March 31, 2013. Cost Audit Report would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011 and in terms of Circulars issued by the Cost Audit Branch of the Ministry of Corporate Affairs from time to time, the Cost Audit Report for Bulk Drugs and Formulations, for the year ended March 31, 2012 was filed with the Central Government on December 27, 2012, in the Extensible Business Reporting Language (XBRL) mode. The last date of filing the Cost Audit Report was February 28, 2013.

Employees Stock Appreciation Rights / Stock Options

During the year, ''Lupin Employees Benefit Trust'', of which, ''Barclays Wealth Trustees (India) Private Limited'' are independent trustee, acquired 446154 fully paid-up equity shares of the face value of H 2/- each under ''Lupin Employees Stock Appreciation Rights Scheme 2011''.

Pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the details of stock options granted by the Company during the year under ''Lupin Employees Stock Option Plan 2005'', ''Lupin Employees Stock Option Plan 2011'' and ''Lupin Subsidiary Companies Employees Stock Option Plan 2011''are set out in Annexure ''B'' forming part of this Report.

Human Resources

The Company was ranked as ''India''s Best Company to Work for - 2012'' in the Biotech and Pharma Sector, by the ''Great Places to Work Institute®'' and The Economic Times, in their annual cross-industry study called Best Companies to Work for. This recognition is a true testimony and a joyous reflection of the pride of employees, superior people practices and overall employee orientation. The Company firmly believes that employees are the most vital assets and key differentiators of business success. In order to enhance the efficiency and effectiveness, the Company instituted several people-friendly policies and people-development programs, across all levels, to enthuse a vibrant work culture and ensure that the workforce remains invigorated and motivated.

Particulars of Employees

Particulars of employees required to be furnished pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 (Act), read with Companies (Particulars of Employees) Amendment Rules, 2011, are given as an annexure to this Report. However, pursuant to the provisions of Section 219(1) (b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company.

Acknowledgements

Your Directors commend the commitment, hardwork, dedication and contributions of employees across the Company. They express gratitude to the various departments of Central and State governments, banks, financial institutions, customers, medical professionals, distributors, business associates, suppliers, shareholders and analysts, for their continued support.

For and on behalf of the Board of Directors

Dr. Desh Bandhu Gupta

Chairman

Mumbai, May 8, 2013


Mar 31, 2012

The Directors have pleasure in presenting their report on the business and operations of your Company for the year ended March 31, 2012.

Financial Results

(Rs in million)

Standalone Consolidated 2011-12 2010-11 2011-12 2010-11

Sales (Gross) 53579.1 44616.0 70017.2 57421.7

Profit before interest, depreciation and tax 11653.5 9755.3 14590.6 12000.3

Less: Interest and finance charges 286.8 275.7 354.7 344.8

Less: Depreciation and amortisation 1319.6 1042.8 2275.2 1711.8

Profit before tax 10047.1 8436.8 11960.7 9943.7

Less: Provision for taxation (including deferred tax) 2003.4 337.0 3085.6 1149.8

Net Profit before Minority Interest and Share of loss in Associate - - 8875.1 8793.9

Less: Minority Interest and Share of loss in Associate - - 198.6 168.4

Net Profit 8043.7 8099.8 8676.5 8625.5

Add: Surplus brought forward from previous year 14647.9 9945.1 15946.1 10521.8

Less: Adjustment on account of amalgamation of subsidiaries - 338.9 - 43.6

Amount available for Appropriation 22691.6 17706.0 24622.6 19103.7

Appropriations:

Transfer to General Reserve 1500.0 1500.0 1500.0 1500.0

Dividend on Equity Shares by an overseas subsidiary - - 93.4 80.6

Proposed dividend on Equity Shares 1429.2 1338.6 1429.2 1338.6

Dividend on Equity Shares for previous year 0.3 2.0 0.3 2.0

Corporate tax on dividend 231.9 217.5 254.5 236.4

Balance carried to Balance Sheet 19530.2 14647.9 21345.2 15946.1

22691.6 17706.0 24622.6 19103.7

Performance Review

During the year, your Company's turnover crossed Rs 70,000 million, with Consolidated Gross Sales clocking Rs 70017.2 million as against Rs 57421.7 million of the previous year, higher by 22%. International markets accounted for 69% of sales. Profit before interest, depreciation and tax also increased by 22% at Rs 14590.6 million as against Rs 12000.3 million in the previous year. The Company achieved PBT of Rs 11960.7 million, higher by 20%. After providing for taxes and minority interest, the net profit was at Rs 8676.5 million. Provision for tax was higher mainly on account of withdrawal of Income tax benefits for EOU units, effective April 1, 2011. Earning per share was Rs 19.43.

Dividend

Your Directors are pleased to recommend dividend at Rs 3.20 per equity share of Rs 2/- each, absorbing an amount ofRs 1429.2 million. The corporate tax on proposed dividend aggregates Rs 231.9 million.

Share Capital

During the year, the paid-up equity share capital of your Company rose by Rs 0.9 million consequent to allotment of 440492 equity shares of Rs 2/- each to eligible employees under the 'Lupin Employees Stock Option Plan 2003', 'Lupin Employees Stock Option Plan 2005' and 'Lupin Subsidiary Employees Stock Option Plan 2005'.

Credit Rating

ICRA Limited reaffirmed its "A1 " (pronounced "A one plus") rating for your Company's working capital lines of Rs 11000 million from banks. This rating is the highest-credit-quality rating by ICRA for such borrowings.

The Company also enjoys "LAA " (pronounced "L double A plus") rating from ICRA for non-convertible debentures (NCDs) of Rs 1000 million. This rating is the high-credit-quality rating for long-term debt instruments. However during the year, the Company has not issued any long-term NCDs.

Acquisition

In its strategy to pursue inorganic growth for further accelerating its progress and expanding its presence in select geographies, your Company's wholly-owned subsidiary Kyowa Pharmaceutical Industry Co., Ltd., Japan acquired 99.99% stake in I'rom Pharmaceutical Co., Ltd., (IP), Japan. IP specialises in manufacturing and marketing of infusion and other injectable pharmaceutical products. It is one of the few companies in Japan with bag (Infusion) manufacturing infrastructure with support from major wholesalers and relationship with Innovator companies. The Company believes that acquisition of IP would help focussing on in-house products and upgrading marketing and sales functions in the important market of Japan.

Subsidiary Companies

As on March 31, 2012, the Company had 19 subsidiaries. Generic Health SDN. BHD., Malaysia, wholly - owned subsidiary was incorporated on May 18, 2011. Since there was no operation in Generic Health Inc., U.S.A., the said company was wound up with effect from October 4, 2011.

Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 forms part of this Annual Report. Information pertaining to performance/financials of subsidiary companies is disclosed in the Consolidated Financial Statements.

Management Discussion & Analysis

A detailed Management Discussion and Analysis forms part of this Annual Report.

Corporate Governance

Report on Corporate Governance forms an integral part of this Annual Report. The Auditors' certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement is also annexed to this Report.

Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 (Act), your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year ended March 31, 2012 and of the profit of your Company for that year;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

iv) the Directors had prepared the annual accounts on a 'going concern' basis.

Directors

Due to professional commitments, Mr. K. V. Kamath chose to step down from the directorship of the Company w.e.f. November 9, 2011. The Board records its sincere appreciation of the valuable contribution and learned advice rendered by Mr. Kamath during his tenure as a director of the Company.

Dr. Vijay Kelkar, Mr. Richard Zahn and Mr. R. A. Shah retire by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure 'A'.

Fixed Deposits

Your Company has not accepted any fixed deposit during the year under review and no deposit was outstanding as on March 31, 2012. As on March 31, 2012, 50 deposits aggregating Rs 0.5 million were lying unclaimed with the Company, of which three deposits aggregating Rs 31,000/- have since been claimed. Reminders are continuously sent to the depositors concerned to claim repayment of their matured deposits.

Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board recommend the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of your Company.

M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai, are the Internal Auditors of the Company.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and in terms of General Circular No.15/2011 dated April 11, 2011 and with the prior approval of the Central Government, Mr. S. D. Shenoy (Fellow Membership No.8318) practising Cost Accountant, was appointed to conduct audit of cost records of Bulk Drugs and Formulations for the year ended March 31, 2012. Cost audit reports would be submitted to the Central Government within the prescribed time.

Pursuant to Rule 5 of the Companies (Cost Audit Report) Rules, 2011, cost audit reports for Bulk Drugs and Formulations for the year ended March 31, 2011 were filed with the Central Government on September 27, 2011.

Employees Stock Appreciation Rights/Stock Options

During the year, 'Lupin Employees Stock Appreciation Rights Scheme 2011' ('LESAR') was introduced for senior executives of the Company with an object to attract, retain and motivate talent in the Company as also to enable them to participate in the long-term growth and financial success of the Company. 'Lupin Employees Benefit Trust' was formed and 'Barclays Wealth Trustees (India) Private Limited' were appointed as independent trustee for implementing the said Scheme. Under LESAR, eligible employees are entitled to receive appreciation in value of shares of the Company upon completion of vesting period of three years. During the year, the Trust acquired 463425 shares under the Scheme.

During the year, the Company also introduced 'Lupin Employees Stock Option Plan 2011' and 'Lupin Subsidiary Companies Employees Stock Option Plan 2011' for grant of stock options to eligible employees as approved by the Remuneration Committee. Pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the details of stock options granted by the Company during the year under different plans are set out in Annexure 'B' forming part of this Report.

Human Resources

Your Company firmly believes that people are its most valued resource and their efficiency plays a key role in achieving defined goals and building a competitive work environment. In its pursuit to attract, retain and develop best available talents, several programmes are regularly conducted at various levels across the Company. Employee relations continued to be cordial and harmonious across all levels and all the units of the Company.

Particulars of Employees

Particulars of employees required to be furnished pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 (Act), read with Companies (Particulars of Employees) Amendment Rules, 2011, are given as an annexure to this Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the aforesaid Annexure. Members, who are interested in the information, may write to the Company Secretary at the registered office of the Company.

Acknowledgements

Your Directors express their gratitude to the various departments of the central and state governments, customers, business associates, medical professionals, suppliers, distributors, shareholders, analysts, banks and financial institutions for their continued support as also to all employees of the Company for their efforts, commitment, dedication and contributions.

For and on behalf of the Board of Directors

Dr. Desh Bandhu Gupta

Chairman

Mumbai, May 10, 2012


Mar 31, 2010

The Directors have pleasure in presenting their report on the business and operations of your Company for theyearendedMarch31,2010.

Financial results (Rs. in million)

Standalone Consolidated

2009-10 2008-09 2009-10 2008-09

Sales (Gross) 36660.6 29419.4 47678.4 38237.8

Profit before interest, depreciation and tax 8186.1 5792.5 9981.0 7438.9

Less: Interest and finance charges 283.8 415.2 384.9 498.6

Less: Depreciation and amortisation 815.7 663.5 1239.2 879.9

Profit before tax 7086.6 4713.8 8356.9 6060.4

Less: Provision for taxation (including wealth tax, deferred tax and fringe benefit tax) 597.3 544.1 1360.2 983.0

Net Profit before Minority Interest and Share of loss in Associates - - 6996.7 5077.4

Less: Minority Interest and Share of loss in Associates - - 180.4 62.0

Net Profit 6489.3 4169.7 6816.3 5015.4

Add: Surplus brought forward from previous year 6368.5 4910.1 6688.6 4407.8

Amount available for Appropriation 12857.8 9079.8 13504.9 9423.2

Appropriations:

Transfer to General Reserve 1500.0 1500.0 1500.0 1500.0

Dividend on Ordinary Shares by an Overseas Subsidiary - - 36.6 21.2

Proposed dividend on Equity Shares 1200.7 1035.3 1224.7 1035.3

Dividend on Equity Shares for previous year 10.8 0.1 10.8 0.1

Corporate tax on dividend 201.2 175.9 211.0 178.0

Balance carried to Balance Sheet 9945.1 6368.5 10521.8 6688.6

12857.8 9079.8 13504.9 9423.2

Performance Review

YourCompanyscalednewerheightsandbenchmarksintermsofsalesand profits fbrtheyearendedMarch31, 2010. Consolidated sales at Rs.47678.4 mn., grew by 25% over Rs.38237.8 mn. of the previous year. International markets accounted for 67% of the revenues. Net Profit at Rs.6816.3 mn. as against Rs.5015.4 mn., registered a growth of 36%. Earning per share was higher at Rs.79.18 as compared with Rs.60.84 for the previousyear.

Dividend

Your Directors are pleased to recommend dividend of Rs.13.50 per equity share of Rs.10/- each, absorbing an amount ofRs.1400.1 mn.,inclusiveoftaxondividend.

Share Capital

During theyear,thepaid-upequity share capital ofyour Company rose by Rs.61.2mn.consequentto:-

a) allotment of 5816742 equity shares of Rs.10V- each upon conversion of Foreign Currency Convertible BondsaggregatingUS$71.3mn.and

b) allotmentof307541equitysharesofRs.10/-eachtoeligibleemployeesunderthe lupin Employees Stock Option Plan 2003, lupin Employees Stock Option Plan 2005 and lupin Subsidiary Employees Stock Option Plan 2005.

Sub-division of Shares

The Board of Directors is pleased to recommend the sub-division of one share of the face value of Rs.10/- each into five shares of the face value of Rs.2/- each, subject to approval of shareholders at the forthcoming Annual General Meeting.

Foreign Currency Convertible Bonds (FCCBs)

Of the FCCBs of US $ 100 mn. issued by the Company in January 2006, Bonds aggregating US $ 98.6 mn. were converted (including Bonds of US $ 71.3 mn. during the year) at a pre-determined price of Rs.567.04 per share in accordance with the terms of the issue. The balance FCCBs for US $ 1.4 mn. were redeemed during the year. There are no Bonds outstanding as on March 31,2010.

Credit Rating

ICRA Limited reaffirmed its "A1+" (pronounced A one plus) rating for your Companys short-term debt (including Commercial Paper) programme of Rs.2500 mn. This rating is the highest-credit-quality rating assigned by ICRAforsuch borrowings.

ICRA Limited assigned "LAA+" (pronounced "L Double A Plus") rating for your Companys Non Convertible Debenture programme of Rs.5000 mn. This rating is the high-credit-quality rating assigned by ICRA for long-term debt instruments.

Management Discussion & Analysis

AdetailedManagementDiscussionandAnalysisforms part ofthis Annual Report.

Subsidiary Companies

As on March 31,2010, the Company had 14 subsidiaries.

During the year, Lupin (Europe) Ltd., U.K. and Lupin Pharma Canada Ltd., Canada were incorporated on June 5, 2009 and June 18, 2009 respectively. Lupin Holdings B.V., the Netherlands transferred its holdings in Max Pharma Pty Ltd., Australia, a wholly-owned subsidiary of the Company to Generic Health Pty. Ltd., Australia, an associate of the Company upon which Max Pharma Pty Ltd. ceased to be a subsidiary of the Company w.e.f. May 31,2009.

Statements pursuant to Section 212 (1 )(e) of the Companies Act, 1956 and relating to performance/financials ofthesubsidiarycompaniesform part ofthis Annual Report.

Amalgamation

With a view to achieving synergies of operations, optimum utilisation of resources and control costs, the Board of Directors decided to amalgamate Novodigm Ltd., Lupin Pharmacare Ltd. and Lupin Herbal Ltd. (wholly- owned subsidiaries of the Company) with Lupin Limited w.e.f. April 1,2009 i.e. the Appointed Date.

The Honble High Court of Judicature at Bombay, by its Order dated January 8,2010, sanctioned the scheme of amalgamation between Lupin Pharmacare Ltd. and Lupin Herbal Ltd. with the Company subject to the order to be passed by the High Court of Gujarat sanctioning the scheme of amalgamation between Novodigm Ltd. and the Company. The order of the Gujarat High Court is awaited pending which, the standalone accounts of the Company for theyear ended March 31,2010 do not include financials of Novodigm Ltd., Lupin Pharmacare Ltd.and Lupin Herbal Ltd.

Corporate Governance

Report on Corporate Governance forms an integral part of this Annual Report. The Auditors certificate certifying compliance with the conditions of Corporate Governance under Clause 49 of the Listing Agreement isalsoannexedtothisReport.

DirectorsResponsibilityStatement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956 (Act),your Directors confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with properexplanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year ended March 31,2010 and of the profit of your Companyforthatyear;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions ofthe Act forsafeguardingtheassetsofyourCompanyandfor preventing and detecting fraud and other irregularities;and

iv) the Directors had prepared the annual accounts on a going concern basis.

Directors

Mr. K. V. Kamath, Dr. Vijay Kelkar and Mr. Richard Zahn, who were appointed as Additional Directors w.e.f. January 29, 2010, hold office up to the date ofthe forthcoming Annual General Meeting. Notices have been received from certain shareholders proposing their names forappointment as directors.

Due to professional commitments, Mr. Marc Desaedeleer and Mr. Sunil Nair resigned from the directorship of the Company w.e.f. January 29,2010 and May 5,2010 respectively. The Board records its sincere appreciation for the valuable contributions made by Mr.MarcDesaedeleer and Mr.Sunil Nair during their tenure as directors ofthe Company.

Dr. Kamal K. Sharma and Mr. D. K. Contractor retire by rotation at the forthcoming Annual General Meeting and areeligibleforre-appointment.

Conservation of Energy,Technology Absorptionand Foreign Exchange Earnings and Outgo

The particulars as prescribed by Section 217(1 )(e) ofthe Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure A.

Fixed Deposits

Your Company has not accepted any fixed deposit during the year under review. No deposit was outstanding as on March 31,2010. As on March 31,2010,106 deposits aggregating Rs.1.18 mn. were lying unclaimed with the Company, of which four deposits aggregating Rs.20,000/- have since been claimed. Reminders are continuously sent to the depositors concerned to claim repayment of the irmatured deposits.

Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board recommend the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants,asStatutory Auditors of your Company.

M/s. KhimjiKunverji& Co., Chartered Accountants, Mumbai, are the Internal Auditors ofthe Company.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956 and with the prior approval of the Central Government, Mr. S. D. Shenoy and Mr. D. H. Zaveri, practising Cost Accountants, were appointed to conduct audit of cost records of Bulk Drugs and Finished Dosages respectively. Cost Audit Reports would be submitted to theCentralGovernmentwithin the prescribed time.

Employees StockOption Plans

Pursuant to the provisions ofthe Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the details of stock options granted by the Company as on March 31,2010 under lupin Employees StockOption Plan 2003, lupin Employees StockOption Plan 2005 and lupin Subsidiary Companies Employees Stock Option Plan 2005 are set out in Annexure B forming part of this Report.

Human Resources

Your Company remains committed and focused on its most valuable resource viz. people. The Company believes that people play a pivotal role in driving performance and has effectively empowered them. In pursuance of the Companys commitment to retain and develop best available talents, several programmes are conducted at various levels on a regular basis. Employee relations continued to be cordial and harmonious at all levels and in all the units of the Company.

ParticularsofEmployees

Particulars of employees required to be furnished pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 (Act), read with Companies (Particulars of Employees) (Amendment) Rules, 2002, are given as an annexure to this Report. However, as per the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are being sent to all the members excluding the aforesaid annexure. Members, who are interestedinthesaidinformation,maywritetotheCompanySecretaryatthe registered office of the Company.

Acknowledgements

Your Directors wish to express their gratitude to the Central and State governments, investors, analysts, financial institutions, banks, business associates and customers, the medical profession, distributors and suppliers for their whole-hearted support. Your Directors commend all employees of your Company for their continued dedication, significant contributions, hard workand commitment.

For and on behalf of the Board of Directors

Dr. DeshBandhu Gupta Chairman

Mumbai,May 5,2010

 
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