Good Health Can’t Wait.

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Good Health Can’t Wait. Dr. Reddy’s Laboratories Limited EMPLOYEES STOCK OPTION SCHEMES SL. NO. DESCRIPTION DR. REDDY’S EMPLOYEES STOCK OPTION SCHEME, 2002 3. Members of the Company further approved the amendment in Dr. Reddy’s Employees Stock Option Scheme, 2002, at the Annual General Meeting held on 22 July 2008, to exercise the right to recover from the relevant employees, the fringe benefit tax, in respect of options granted to or vested or exercised by the eligible employees under provisions of the Income Tax Act, 1961. Further, pursuant to changes in the work levels in the organization structure of the Company, the Members of the Company approved removing the grades and designations prescribed in the scheme. The Government of India has abolished fringe benefit tax through the Finance Act 2009. Under this Act the fringe benefit tax payable by the employer as a result of share based payments would be replaced by an income tax payable by the employees as a “perquisite” (as defined in the Indian Income Tax Act, 1961) based on the value of the underlying share as on the date of exercise of the options. Consequent to this abolishment and in furtherance of the resolution passed by the Company on 22 July 2008, management resolved to absorb the consequent perquisite tax for the options granted on or prior to 18 May 2008. DETAILS DR. REDDY’S EMPLOYEES ADR STOCK OPTION SCHEME, 2007 8 Total Money realized by exercise of options ` 169,713,774 ` 1,733,790 9 Total number of options in force 585,454 98,350 10 Employee-wise details of options granted during the year to: (i) Senior managerial Personnel (ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year (iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant: NAME EXERCISE PRICE NO. OF OPTIONS NAME EXERCISE PRICE NO. OF OPTIONS Mr. Abhijit Mukherjee Par Value 5,000 Dr. Raghav Chari Par Value 3,500 Mr. Saumen Chakraborty Par Value 3,500 Mr. Umang Vohra Par Value 3,500 Dr. Cartikeya Reddy Par Value 3,500 Dr. R Ananthanaryanan* Par Value 2,800 Mr. M V Ramana Par Value 3,500 Mr. Samiran Das Par Value 3,000 Dr. Amit Biswas Par Value 2,800 Dr. K V S Ram Rao Par Value 2,500 Mr. Alok Sonig Par Value 3,200 Dr. Chandrasekhar Sripada Par Value 2,500 None None None None 96
Statutory Reports • Board’s Report Annual Report 2014 - 15 EMPLOYEES STOCK OPTION SCHEMES SL. NO. DESCRIPTION 11 Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’ DR. REDDY’S EMPLOYEES STOCK OPTION SCHEME, 2002 DETAILS ` 98.18 DR. REDDY’S EMPLOYEES ADR STOCK OPTION SCHEME, 2007 12 The difference between the employee compensation cost computed under Intrinsic Value Method and the employee compensation cost that shall have been recognized if the Company had used the Fair Value Methods and its impact on profits and on EPS of the Company The employee Compensation Cost on account of ESOP in the financial year 2014-15 based on Intrinsic Value Method is ` 519 million. Had the Company used the Fair Value Method, the ESOP cost in the financial year would have been ` 498 million, which would have a consequential impact on profit. However, there would not have been any significant adverse effect on the Profit and EPS, on using fair value method of accounting. 13 Weighted-average exercise prices and weighted-average fair values of options for options whose exercise price either equals or exceeds or is less than the market price of the stock Weighted average exercise price and weighted average fair value of the outstanding Fair Market Value options as on 31 March 2015 was ` Nil. Weighted average exercise price and weighted average fair value of the outstanding Par Value options as on 31 March 2015 was ` 5 and ` 1,980 respectively. 14 Description of the method and significant assumptions used during the year to estimate the fair values of options: (i) Risk-free interest rate 8.35% - 8.57% (ii) Expected life 12 months to 48 months (iii) Expected volatility 21.17% - 26.44% (iv) Expected dividends 0.67% - 0.78% (v) The price of the underlying share in market at the time of option grant The Company has opted Intrinsic Value Method for accounting of Compensation Cost arising out of ESOP. However for disclosures in para 12 above the following assumptions have been used: ` 2,360.18 * Dr. R. Ananthanaryanan was in service till 30 November 2014. K Satish Reddy Chairman ANNEXURE - VI Information in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (i) The ratio of remuneration of each director to the median remuneration of the employees of the Company, the percentage increase in remuneration of each director, CEO, CFO and CS, for FY2015 and comparison of the remuneration of each Key Managerial Personnel (KMP) against the performance of the Company: NAME DESIGNATION RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF EMPLOYEES % INCREASE IN REMUNERATION DURING FY2015 COMPARISON OF THE REMUNERATION OF EACH KMPs (1) AGAINST THE PERFORMANCE OF THE COMPANY Mr. Satish Reddy (2) Chairman 271 -16% Compared to FY2014, the revenue in FY2015 Mr. G V Prasad (2) Co-Chairman and CEO 363 18% grew by 4% and EBITDA decreased by 10% Dr. Omkar Goswami Independent Director 26 2% Mr. Ravi Bhoothalingam Independent Director 28 6% Mr. Anupam Puri Independent Director 31 -5% Dr. J P Moreau Independent Director 27 -2% Ms. Kalpana Morparia Independent Director 29 13% 97
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ANNUAL REPORT 2014-15 Good Health C
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Our Brand We are in the business of
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Corporate Overview Annual Report 20
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Notice Annual Report 2014 - 15 NOTI
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E-Voting Annual Report 2014 - 15 IN
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Dr. Reddy’s Laboratories Limited
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The future belongs, not to those wh
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