Dr Reddys Laboratories
BSE: 500124 | NSE: DRREDDY | ISIN: INE089A01023 | Pharmaceuticals
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Mar '08 |
The Directors are pleased to present the 24th Annual Report for the
year ended 31 March 2008.
FINANCIAL HIGHlIGHTS
Table 1 gives the fnancial highlights of the Company in the fnancial
year 2007–08 as compared to previous fnancial year on Indian GAAP
standalone basis.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 3.75 per
equity share of Rs. 5.00 for the fnancial year 2007–08. The dividend,
if approved at the ensuing Annual General Meeting, will be paid to
those shareholders whose name appears on the register of members of the
Company as on 12 July 2008.
The dividend would be tax-free in the hands of the shareholders.
EMPlOYEE STOCK OPTION SCHEMES
Pursuant to the provisions of Guideline 12 of the Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme), Guidelines, 1999, as amended, the details of
stock options as on 31 March 2008 under the “Dr. Reddy’s Employees
Stock Option Scheme, 2002” and the “Dr. Reddy’s Employees ADR Stock
Option Scheme, 2007” are set out in the Annexure –1 to the Directors’
Report.
Your Directors proposed to amend further, the Dr. Reddy’s Employees
Stock Option Scheme, 2002” and the “Dr. Reddy’s Employees ADR Stock
Option Scheme, 2007 in view of the Finance Ministry’s move on levying
the Fringe Beneft Tax (FBT) on the employee stock options (ESOPs) under
the Income Tax Act, 1961 and also proposed to remove the grades /
designations prescribed under the existing Clause 9 (a) of Dr. Reddy’s
Employees Stock Option Scheme 2002 pursuant to the changes in the work
levels in the Organisation structure of the Company and proposed for
necessary amendment in the said clause of the scheme of the stock
options respectively.
SHARE CAPITAL
The paid up Share Capital of your Company increased by Rs. 1,302,830 in
the fnancial year ended 31 March 2008, due to allotment of 260,566
equity shares on exercise of Stock Options by the eligible employees
under Dr. Reddy’s Employees Stock Option Scheme, 2002.
CORPORATE GOVERNANCE AND ADDITIONAL INFORMATION TO SHAREHOlDERS
A detailed report on the Corporate Governance system and practices of
the Company are given in a separate section in this annual report.
Detailed information for the shareholders is given in Additional
Shareholders’ Information section.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis is provided in the annual
report.
SUBSIDIARY COMPANIES
The Company had 34 subsidiary companies as on 31 March 2008. The
members may refer to the Statement under Section 212 of the Companies
Act, 1956 and information on the fnancials of subsidiaries appended to
the above Statement under Section 212 of the Companies Act, 1956 in
this Annual Report for further information on these subsidiaries.
The Ministry of Company Affairs vide its letter No. 47/310/2008-CL-III
dated 19 May 2008 granted approval to the Company for not attaching the
fnancials of subsidiary companies to the fnancials of the Company for
the fnancial year 2007–08.
The members, if they desire, may write to Company Secretary at Dr.
Reddy’s Laboratories Ltd., 7-1-27, Ameerpet, Hyderabad – 500 016 to
obtain a copy Of the fnancials of the subsidiary companies.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956, your Directors
confrm as under:
1. In preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
2. We have 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
the Company at the end of the fnancial year 2007–08 and of proft of the
Company for that period;
TablE 1 Financial Highlights for the Financial Year Ended 31 March (
RS. IN THOUSA NDS )
2008 2007
Income 35,850,075 40,843,048
gross proft 7,460,889 14,993,466
Depreciation 1,619,862 1,335,009
Proft before tax 5,841,027 13,658,457
Taxation Current tax (1,088,808) (1,889,864)
Net proft for the year 4,752,219 11,768,593
Add: Proft and loss brought forward 13,036,395 3,196,508
TOTAL AVAILABLE FOR APPROPRIATIONS 17,788,614 14,965,101
APPROPRIATIONS
Proposed dividend on equity shares 630,648 629,671 Tax on proposed
dividend 107,179 107,013 Dividend of previous year 604 242 Transfer to
general reserve 475,222 1,176,859 Balance carried forward 16,574,961
13,051,316
3. We have taken proper and suffcient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
4. We have prepared the annual accounts on an on going concern basis.
FIXED DEPOSITS
Your Company has not accepted any fxed deposits under Section 58A of
the Companies Act, 1956 and hence no amount of principal or interest
was outstanding as of the Balance Sheet date.
DIRECTORS
Mr. Anupam Puri, Mr. P N Devarajan and Dr. Krishna G Palepu retire by
rotation at the ensuing Annual General Meeting scheduled on 22 July
2008. Mr. P N Devarajan expressed his unwillingness to be reappointed
and ceased to be the Director of the Company effective 20 May 2008. The
other retiring Directors are eligible for re-appointment. The brief
profles of Mr. Anupam Puri and Dr. Krishna G Palepu are given in the
Corporate Governance section for the reference of members.
The Board placed a record of their deep appreciation of the services
rendered by Mr. P N Devarajan during his tenure of offce.
AUDITORS
The Statutory Auditors of the Company BSR & Co., Chartered Accountants,
retire at the ensuing Annual General Meeting and have confrmed their
eligibility and willingness to accept offce of Statutory Auditors, if
reappointed. The Audit Committee and the Board of Directors recommend
BSR & Co. as Statutory Auditors of the Company for the fnancial year
2008–09 for shareholders approval.
COST AUDIT
Pursuant to Section 233B of the Companies Act, 1956, the Central
Government has prescribed Cost Audit of the Company’s Bulk Drugs
Division and Formulations Division.
Subject to the approval of the Central Government, the Board has
appointed Sagar& Associates as Cost Auditors of the Company for the
fnancial year 2007–08. The Cost Audit is under process and the Company
will submit the Cost Auditors’ report to the Central Government in
time.
PARTICULARS OF EMPlOYEES
Pursuant to the provisions of Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure – 2 to the Directors’ Report.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENTS, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
The particulars as prescribed under Section 217(1)(e) of the Companies
Act, 1956, read with the Companies (Disclosure of particulars in the
report of Board of Directors) Rules, 1988 are set out in the Annexure –
3 to the Directors’ Report.
ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation for
signifcant contribution made by the employees through their dedication,
hard work and commitment and the trust reposed on us by the medical
fraternity and the patients.
We also acknowledge the support and wise counsel extended to us by the
analysts, bankers, government agencies, shareholders and investors at
large. We look forward to having the same support in our endeavour to
help people lead healthier lives.
FOR DR. REDDY’S LABORATORIES LIMITED
DR. K ANJI REDDY
CHAIRMAN
Date 20 May 2008
Place Hyderabad
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