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Dr Reddys Laboratories
BSE: 500124|NSE: DRREDDY|ISIN: INE089A01023|SECTOR: Pharmaceuticals
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« Mar 14
Notes to Accounts Year End : Mar '15
(A) Terms / rights attached to equity shares
 
 The Company has only one class of equity shares having a par value of Rs.
 5 per share. Each holder of equity shares is entitled to one vote per
 share.  The Company declares and pays dividends in Indian rupees.
 During the year ended 31 March 2015, the amount of per share dividend
 recognized as distributions to equity shareholders is Rs. 20 (previous
 year: ''18). The dividend proposed by the Board of Directors is subject
 to the approval of the shareholders in the ensuing Annual General
 Meeting. In the event of liquidation, the equity shareholders are
 eligible to receive the remaining assets of the Company after
 distribution of all preferential amounts, in proportion to their
 shareholding.
 
 (b) Details of shareholders holding more than 5% shares in the Company
 
 (c) 585,454 (previous year: 651,674) stock options are outstanding and
 are to be issued by the Company upon exercise of the same in accordance
 with the terms of exercise under the Dr. Reddy''s Employees Stock
 Option Plan 2002 and 98,350 (previous year: 97,463) stock options are
 outstanding and are to be issued by the Company upon exercise of the
 same in accordance with the terms of exercise under the Dr. Reddy''s
 Employees ADR Stock Option Plan 2007. (Refer note 2.30)
 
 (d) Represents 200 (previous year: 200) equity shares of Rs. 5/- each,
 amount paid-up Rs. 500/- (rounded off in millions in the note above)
 forfeited due to non-payment of allotment money.
 
 (e) The foreign currency translation reserve comprises exchange
 difference on loans and advances that in substance form part of net
 investment in Industrias Quimicas Falcon de Mexico S.A. de C.V.
 (Mexico), a non-integral foreign operation as defined in AS 11
 (Revised) on The Effects of Changes in Foreign Exchange Rates. These
 exchange differences will be recognised in the statement of profit and
 loss in the event of disposal of such net investments.
 
 (f) Credit of dividend distribution tax pertains to the availment of
 dividend distribution tax paid by Aurigene Discovery Technologies
 Limited, a subsidiary company on payment of dividend to the Company.
 
 (g) Finance lease obligations are towards lease rentals payable for the
 vehicles leased by the Company. Lease rentals are paid in monthly
 instalment, with the last instalment due in April 2017.
 
 (h) Sales tax deferment loan is repayable in 5 instalments, with the
 last instalment due on 31 March 2019.
 
 (i) External Commercial Borrowings of USD 150 million carrying interest
 rate of LIBOR plus 125 bps and is repayable in five equal quarterly
 instalments ending in February 2019. As part of the loan arrangement,
 the Company is required to comply with certain financial covenants and
 the Company was in compliance with such covenants as at 31 March 2015
 and 31 March 2014.
 
 (j) Packing credit loans for the current year comprised of USD and EUR
 denominated loans carrying interest rates of LIBOR plus 7.5 - 40 bps
 and RUB denominated loans carrying fixed interest rate of 9.80% -
 22.30%, and are repayable within 3 to 12 months from the date of
 drawdown. Packing Credit loans for the previous year comprised of USD
 and EUR denominated loans carrying interest rates of LIBOR plus 20 - 85
 bps, RUB denominated loans carrying interest rate of Moscow Prime
 Offered Rate plus 60 bps, RUB denominated loans carrying fixed interest
 rate of 7.20% - 7.75% per annum and INR denominated loans carrying
 fixed interest rate of 9.50% - 10%, and are repayable within 1 to 6
 months from the date of drawdown.
 
 (k) Other short term borrowing comprises of INR denominated loan
 carrying fixed interest rate of 10.00% and is repayable in April 2015.
 
 (l) Unclaimed amounts are transferred to Investor Protection and
 Education Fund after seven years from the due date.
 
 (m) The principal amount remaining unpaid as at 31 March 2015 in
 respect of enterprises covered under the Micro, Small and Medium
 Enterprises Development Act, 2006 (MSMDA) is Rs. 79 (previous year: Rs.
 97). The interest amount computed based on the provisions under Section
 16 of the MSMDA of Rs. 0.09 (previous year: Rs. 0.03) is remaining unpaid
 as of 31 March 2015. The interest amount of Rs. 0.03 that remained unpaid
 as at 31 March 2014 was paid fully during the current year.
 
 (n) The amount of interest due and payable for the period of delay in
 making payment (which have been paid but beyond the appointed day
 during the year) but without adding the interest specified under this
 Act is Rs. Nil (previous year: Rs. Nil).
 
 (o) The list of undertakings covered under MSMDA was determined by the
 Company on the basis of information available with the Company and has
 been relied upon by the auditors.
 
 (p) In respect of shares of State Bank of India, the share certificates
 were misplaced during transfer/lost in transit. The Company has
 initiated necessary legal action at the appropriate courts.
 
 (q) Shares held in Kunshan Rotam Reddy Pharmaceutical Co. Limited,
 China and Biomed Russia Limited, Russia are not denominated in number
 of shares as per the laws of the respective countries.
 
 (r) Rounded off in millions in the note above.
 
 CONTINGENT LIABILITIES AND COMMITMENTS
 
 PARTICULARS
                                                As at 31st     As at 31st 
                                                March  2015    March  2015
                        
 (A) Contingent liabilities:
 
 Guarantees:
 
 (a) Issued by the Company on behalf of 
 subsidiaries, associates and joint ventures         10,419       13,836
 Claims against the Company not acknowledged 
 as debts in respect of:
 
 (a) Income tax matters, under dispute (refer 
 note V below)                                        1,181        1,264
 
 (b) Excise matters (including service tax), 
 under dispute (refer note ''i'' below)                   402          633
 
 (c) Sales tax matters, under dispute (refer 
 note ''j'' below)                                        317          319
 
 (d) DPCO matters
 
 The Company is contesting various demands for payment to the credit of
 the Drug Prices Equalisation Account under Drugs (Price Control) Order,
 1995 for few of its products, including norfloxacin. Based on its best
 estimate, the Company has made a provision for the potential liability
 related to the overcharged amount including the interest thereon and
 believes that the possibility of any liability that may arise on
 account of penalty on this demand is not probable. In the event the
 Company is unsuccessful in its litigation in the Supreme Court, it will
 be required to remit the sale proceeds in excess of the notified
 selling prices to the Government of India with interest and including
 penalties, if any, which amounts are not readily ascertainable.
 
 (e) Fuel surcharge adjustment
 
 The Andhra Pradesh Electricity Regulatory Commission (the APERC) has
 passed various orders approving the levy of Fuel Surcharge Adjustment
 (FSA) charges for the period from 1 April 2008 to 31 March 2013 by
 power distribution companies from all the consumers of electricity in
 the state of Andhra Pradesh, India. The Company filed separate writs
 petitions before the High Court of Andhra Pradesh (the High Court)
 challenging and questioning the validity and legality of this levy of
 FSA charges by the APERC for various periods.
 
 The Company, after taking into account all of the available information
 and legal provisions, has recorded an amount of Rs. 215 as the potential
 liability towards FSA charges. The total amount approved by APERC for
 collection by the power distribution companies from the Company in
 respect of FSA charges for the period from 1 April 2008 to 31 March
 2013 is approximately Rs. 473. As of 31 March 2015, the Company has paid,
 under protest, an amount of Rs. 349 demanded by the power distribution
 companies as part of monthly electricity bills. The Company remains
 exposed to additional financial liability should the orders passed by
 the APERC be upheld by the Courts.
 
 (f) Land pollution
 
 The Indian Council for Environmental Legal Action filed a writ in 1989
 under Article 32 of the Constitution of India against the Union of
 India and others in the Supreme Court of India for the safety of people
 living in the Patancheru and Bollarum areas of Medak district of the
 then existing undivided state of Andhra Pradesh. The Company has been
 named in the list of polluting industries. In 1996, the Andhra Pradesh
 District Judge proposed that the polluting industries compensate
 farmers in the Patancheru, Bollarum and Jeedimetla areas for
 discharging effluents which damaged the farmers'' agricultural land. The
 compensation was fixed at Rs. 0.0013 per acre for dry land and Rs. 0.0017
 per acre for wet land. Accordingly, the Company has paid a total
 compensation of Rs. 3. The Company believes that the possibility of
 additional liability is remote. The Andhra Pradesh High Court disposed
 of the writ petition on 12 February 2013 and transferred the case to
 the National Green Tribunal (NGT), Chennai, India. The interim orders
 passed in the writ petitions will continue until the matter is decided
 by the NGT.
 
 (g) Water pollution and air pollution
 
 During the year ended 31 March 2012, the Company, along with 14 other
 companies, received a notice from the Andhra Pradesh Pollution Control
 Board (APP Control Board) to show cause as to why action should not
 be initiated against them for violations under the Indian Water
 Pollution Act and the Indian Air Pollution Act. Furthermore, the APP
 Control Board issued orders to the Company to (i) stop production of
 all new products at the Company''s manufacturing facilities in
 Hyderabad, India without obtaining a Consent for Establishment, (ii)
 cease manufacturing products at such facilities in excess of certain
 quantities specified by the APP Control Board and (iii) furnish a bank
 guarantee to assure compliance with the APP Control Board''s orders.
 
 The Company appealed the APP Control Board orders to the Andhra Pradesh
 Pollution Appellate Board (the APP Appellate Board). The APP
 Appellate Board, on the basis of a report of a fact-finding advisory
 committee, recommended to the Andhra Pradesh Government to allow
 expansion of units fully equipped with Zero-Liquid Discharge (ZLD)
 facilities and otherwise found no fault with the Company (on certain
 conditions). The APP Appellate Board''s decision was challenged by one
 of the petitioners in the National Green Tribunal and the matter is
 currently pending before it.
 
 Separately, the Andhra Pradesh Government, following recommendations of
 the APP Appellate Board, published a notification in July 2013 that
 allowed expansion of production of all types of existing bulk drug and
 bulk drug intermediate manufacturing units subject to the installation
 of ZLD facilities and the outcome of cases pending in the National
 Green Tribunal. Importantly, the notification directed pollution load
 of industrial units to be assessed at the point of discharge (if any)
 as opposed to point of generation.
 
 In September 2013, the Ministry of Environment and Forests, based on
 the revised Comprehensive Environment Pollution Index issued a
 notification that re-imposed a moratorium on expansion of industries in
 certain areas where some of the Company''s manufacturing facilities are
 located. This notification overrides the Andhra Pradesh Government''s
 notification that conditionally permitted expansion.
 
 (h) Assessable value of products supplied by a vendor to the Company
 
 During the year ended 31 March 2003, the Central Excise Authorities of
 India (the Central Excise Authorities) issued a demand notice to a
 vendor of the Company regarding the assessable value of products
 supplied by this vendor to the Company. The Company has been named as a
 co-defendant in this demand notice. The Central Excise Authorities
 demanded payment of Rs. 176 from the vendor, including penalties of Rs. 90.
 Through the same notice, the Central Excise Authorities issued a
 penalty claim of Rs. 70 against the Company. During the year ended 31
 March 2005, the Central Excise Authorities issued an additional notice
 to this vendor demanding Rs. 226 from the vendor, including a penalty of
 Rs. 51. Through the same notice, the Central Excise Authorities issued a
 penalty claim of Rs. 7 against the Company. Furthermore, during the year
 ended 31 March 2006, the Central Excise Authorities issued an
 additional notice to this vendor demanding Rs. 34. The Company filed
 appeals against these notices with the Customs, Excise and Service Tax
 Appellate Tribunal (the CESTAT). In October 2006, the CESTAT passed
 an order in favour of the Company setting aside all of the above demand
 notices. In July 2007, the Central Excise Authorities appealed against
 CESTAT''s order in the Supreme Court of India, New Delhi. The matter is
 pending in the Supreme Court of India, New Delhi.
 
 (i) Distribution of input service tax credits
 
 The Central Excise Authorities have issued various show cause notices
 to the Company objecting to the Company''s methodology of distributing
 input service tax credits claimed for one of the Company''s facilities.
 The below table shows the details of such show cause notices and the
 consequential actions on and status of the same.
 
 The Company believes that the possibility of any liability that may
 arise on account of the alleged inappropriate distribution of input
 service tax credits is not probable.
 
 (j) Value Added Tax (VAT'''') matter
 
 The Company received various show cause notices from the Government of
 Telangana''s Commercial Taxes Department objecting to the Company''s
 methodology of calculation of VAT input credit. The below table shows
 the details of each of such show cause notices and the consequential
 actions on and status of the same.
 
 The Company believes that the possibility of any liability that may
 arise on account of the allegedly inappropriate claims to VAT credits
 is not probable.
 
 Additionally, the Company is in receipt of various show cause notices
 from the Indian Sales Tax authorities. The disputed amount is Rs. 43. The
 Company has responded to such show cause notices and believes that the
 chances of any liability arising from such notices are less than
 probable. Accordingly, no provision is made in the Company''s financial
 statements as at 31 March 2015.
 
 (k) Direct tax matter
 
 During the year ended 31 March 2014, the Indian Income Tax authorities
 disallowed for tax purposes certain business transactions entered into
 by the parent company with its wholly-owned subsidiaries. The
 associated tax impact is Rs. 570. The Company believes that such business
 transactions are allowed for tax deduction under Indian Income Tax laws
 and has accordingly filed an appeal with the Income Tax Appellate
 Authorities. The Company further believes that the probability of
 succeeding in this matter is more likely than not and therefore no
 provision was made in the Company''s financial statements as of 31 March
 2015.
 
 Additionally, the Company is contesting various other disallowances by
 the Indian Income Tax authorities. The associated tax impact is Rs. 611.
 The Company believes that the chances of an unfavorable outcome in each
 of such disallowances are less than probable and accordingly, no
 provision is made in the Company''s financial statements as of 31 March
 2015.
 
 (l) Additionally, the Company is involved in other disputes, lawsuits,
 claims, governmental and/or regulatory inspections, inquiries,
 investigations and proceedings, including patent and commercial matters
 that arise from time to time in the ordinary course of business. Except
 as discussed above, the Company does not believe that there are any
 such contingent liabilities that are expected to have any material
 adverse effect on its financial statements.
 
 (B) Commitments:
 
 Estimated amount of contracts remaining to be executed on capital
 account and not provided
 
 a. List of all subsidiaries and joint ventures:
 
 Subsidiaries including step down subsidiaries
 
 1. Aurigene Discovery Technologies (Malaysia) SDN BHD, Malaysia;
 
 2. Aurigene Discovery Technologies Inc., USA;
 
 3. Aurigene Discovery Technologies Limited, India;
 
 4. beta Institut gemeinnutzige GmbH, Germany;
 
 5. betapharm Arzneimittel GmbH, Germany;
 
 6. Cheminor Investments Limited, India;
 
 7. Chienna B.V., Netherlands;
 
 8. Chirotech Technology Limited, UK;
 
 9. Dr. Reddy''s Bio-sciences Limited, India;
 
 10. Dr. Reddy''s Farmaceutica Do Brasil Ltda., Brazil;
 
 11. Dr. Reddy''s Laboratories (Australia) Pty. Limited, Australia;
 
 12. Dr. Reddy''s Laboratories (EU) Limited, UK;
 
 13. Dr. Reddy''s Laboratories (Proprietary) Limited, South Africa;
 
 14. Dr. Reddy''s Laboratories Inc., USA;
 
 15. Dr. Reddy''s Laboratories International SA, Switzerland;
 
 16. Dr. Reddy''s Laboratories Lousiana LLC, USA;
 
 17. Dr. Reddy''s Laboratories Romania SRL, Romania;
 
 18. Dr. Reddy''s Laboratories SA, Switzerland;
 
 19. Dr. Reddy''s Laboratories SAS, Colombia (from 4 November 2014);
 
 20. Dr. Reddy''s New Zealand Limited, New Zealand;
 
 21. Dr. Reddy''s Pharma SEZ Limited, India;
 
 22. Dr. Reddy''s Singapore PTE Limited, Singapore (from 22 October
 2013);
 
 23. Dr. Reddy''s Srl, Italy;
 
 24. Dr. Reddy''s Laboratories (UK) Limited, UK;
 
 25. Dr. Reddy''s Laboratories Canada Inc., Canada (from 29 August 2013);
 
 26. Dr. Reddy''s Laboratories LLC, Ukraine;
 
 27. Dr. Reddy''s Laboratories New York, Inc., USA;
 
 28. Dr. Reddy''s Laboratories Tennessee LLC, USA ;
 
 29. Dr. Reddy''s Venezuela C.A., Venezuela;
 
 30. DRL Impex Limited, India;
 
 31. Eurobridge Consulting B.V., Netherlands;
 
 32. Idea2Enterprises (India) Private Limited, India;
 
 33. Industrias Quimicas Falcon de Mexico S.A. de C.V., Mexico;
 
 34. I-Ven Pharma Capital Limited, India (till 20 November 2014);
 
 35. Lacock Holdings Limited, Cyprus;
 
 36. OctoPlus B.V., Netherlands (formerly OctoPlus N.V.);
 
 37. OctoPlus Development B.V., Netherlands;
 
 38. OctoPlus PolyActive Sciences B.V., Netherlands;
 
 39. OctoPlus Sciences B.V., Netherlands;
 
 40. OctoPlus Technologies B.V., Netherlands;
 
 41. OctoShare B.V., Netherlands;
 
 42. OOO Dr. Reddy''s Laboratories Limited, Russia;
 
 43. OOO DRS LLC, Russia;
 
 44. Promius Pharma LLC, USA;
 
 45. Reddy Antilles N.V., Netherlands;
 
 46. Reddy Cheminor S.A., France (under liquidation);
 
 47. Reddy Holding GmbH, Germany;
 
 48. Reddy Netherlands B.V., Netherlands;
 
 49. Reddy Pharma Iberia SA, Spain;
 
 50. Reddy Pharma Italia S.p.A, Italy;
 
 51. Reddy Specialities GmbH, Germany; and
 
 52. Reddy US Therapeutics Inc., USA (till 3 July 2013).
 
 Joint ventures
 
 - Kunshan Rotam Reddy Pharmaceutical Company Limited (Reddy
 Kunshan), China
 
 - DRANU LLC, USA
 
 - DRSS Solar Power Private Limited, India
 
 Enterprise over which the Company exercises joint control with other
 joint venture partners and holds 51.33% of equity shares
 
 Enterprise over which the Company''s step down subsidiary exercises
 joint control with other joint venture partner and holds 50% of equity
 shares
 
 Enterprise over which the Company exercises joint control with other
 joint venture partners and holds 26% of equity shares
 
 b. List of other related parties with whom transactions have taken
 place during the current and/or previous year:
 
 - Dr. Reddy''s Institute of Life Sciences
 
 - Ecologic Chemicals Limited
 
 - Stamlo Hotels Private Limited
 
 - Green Park Hotels and Resorts Limited
 
 - K Samrajyam
 
 - G Anuradha
 
 - Deepti Reddy
 
 - G Mallika Reddy
 
 - G V Sanjana Reddy
 
 - Dr. Reddy''s Foundation
 
 - Pudami Educational Society
 
 Enterprise over which whole-time directors have significant influence
 
 Enterprise controlled by whole-time directors
 
 Enterprise controlled by whole-time directors
 
 Enterprise controlled by relative of a whole-time director
 
 Mother of Chairman
 
 Spouse of Chief Executive Officer
 
 Spouse of Chairman
 
 Daughter of Chief Executive Officer
 
 Daughter of Chief Executive Officer
 
 Enterprise over which whole-time directors and their relatives have
 significant influence 
 
 Enterprise over which whole-time directors and their relatives have 
 significant influence
 
 c. List of Key Management Personnel* of the Company
 
 - K Satish Reddy (whole-time director);
 
 - G V Prasad (whole-time director);
 
 - Abhijit Mukherjee;
 
 - Alok Sonig;
 
 - Dr. Amit Biswas;
 
 - Dr. R Ananthanarayanan (till 30 November 2014);
 
 - Dr. Cartikeya Reddy;
 
 - Dr. Chandrasekhar Sripada;
 
 - Dr. Raghav Chari;
 
 - Dr. KVS Ram Rao;
 
 - M V Ramana;
 
 - Samiran Das;
 
 - Sandeep Poddar;
 
 - Saumen Chakraborty; and
 
 - Umang Vohra.
 
 * In accordance with the provisions of AS 18 Related Party
 Disclosures and the Companies Act, 2013, members of the Company''s
 Management Council and Company Secretary are considered as Key
 Management Personnel.
 
 Equity held in subsidiaries, associates and joint venture has been
 disclosed under Non current investments (Note 2.8). Loans and
 advances to subsidiaries, joint venture and associates have been
 disclosed under Long term loans and advances (Note 2.9). Other
 receivables from subsidiaries, associates and joint venture have been
 disclosed under Other current assets (Note 2.15).
 
 INTEREST IN JOINT VENTURE
 
 The Company has 51.33 percent interest in Kunshan Rotam Reddy
 Pharmaceutical Co. Limited (KRRP), a joint venture in China. KRRP is
 engaged in manufacturing and marketing of active pharmaceutical
 ingredients and intermediates and formulations in China. The
 contractual arrangement between shareholders of KRRP indicates joint
 control as the minority shareholders, along with the Company, have
 significant participating rights such that they jointly control the
 financial and operating policies of KRRP in the ordinary course of
 business .
 
 The aggregate amount of assets, liabilities, income and expenses
 related to the Company''s share in KRRP are given below:
 
 Dr. Reddy''s Employees Stock Option Plan-2002 (the DRL 2002 Plan):
 
 The Company instituted the DRL 2002 Plan for all eligible employees in
 pursuance of the special resolution approved by the shareholders in the
 Annual General Meeting held on 24 September 2001. The DRL 2002 Plan
 covers all employees of DRL and its subsidiaries and directors
 (excluding promoter directors) of DRL and its subsidiaries
 (collectively, eligible employees). Under the Scheme, the Nomination,
 Governance and Compensation Committee of the Board (''the Committee'')
 shall administer the Scheme and grant stock options to eligible
 directors and employees of the Company and its subsidiaries.  The
 Committee shall determine the employees eligible for receiving the
 options, the number of options to be granted, the exercise price, the
 vesting period and the exercise period. The vesting period is
 determined for the options issued on the date of the grant. The options
 issued under the DRL 2002 Plan vest in periods ranging between one and
 four years and generally have a maximum contractual term of five years.
 
 The DRL 2002 Plan, as amended at annual general meetings of
 shareholders held on 28 July 2004 and on 27 July 2005, provides for
 stock option grants in two categories:
 
 Category A: 300,000 stock options out of the total of 2,295,478
 reserved for grant of options having an exercise price equal to the
 fair market value of the underlying equity shares on the date of grant;
 and
 
 Category B: 1,995,478 stock options out of the total of 2,295,478
 reserved for grant of options having an exercise price equal to the par
 value of the underlying equity shares (i.e., '' 5 per option).
 
 The fair market value of a share on each grant date falling under
 Category A above is defined as the average closing price (after
 adjustment of Bonus issue) for 30 days prior to the grant, in the stock
 exchange where there was highest trading volume during that period.
 Notwithstanding the foregoing, the Committee may, after getting the
 approval of the shareholders in the Annual General Meeting, grant
 options with a per share exercise price other than fair market value
 and par value of the equity shares.
 
 After the issue of bonus shares by the Company in August 2006, the DRL
 2002 Plan provides for stock options granted in the above two
 categories as follows:
 
 In the case of termination of employment, all unvested options would
 stand cancelled. Options that have vested but have not been exercised
 can be exercised within the time prescribed under each option agreement
 by the Committee or if no time limit is prescribed, within three months
 of the date of employment termination, failing which they would stand
 cancelled.
 
 The term of the DRL 2002 Plan was extended for a period of 10 years
 with effect from 29 January 2012 by the shareholders at the Company''s
 Annual General Meeting held on 20 July 2012.
 
 During the year ended 31 March 2015, the Company has issued 230,840
 Category B options to eligible employees under the DRL 2002 Plan. The
 vesting period for the options granted varies from 12 to 48 months.
 
 The date of grant, number of options granted, exercise price fixed by
 the Committee for respective options and the market price of the shares
 of the Company on the day prior to the date of grant are given below:
 
 Dr. Reddy''s Employees ADR Stock Option Plan-2007 (the DRL 2007 Plan):
 
 The Company instituted the DRL 2007 Plan for all eligible employees in
 pursuance of the special resolution approved by the shareholders in the
 Annual General Meeting held on 27 July 2005. The DRL 2007 Plan came
 into effect on approval of the Board of Directors on 22 January 2007.
 The DRL 2007 Plan covers all employees of DRL and its subsidiaries and
 directors (excluding promoter directors) of DRL and its subsidiaries
 (collectively, eligible employees). Under the DRL 2007 Plan, the
 Nomination, Governance and Compensation Committee of the Board (the
 ''Committee'') shall administer the DRL 2007 Plan and grant stock options
 to eligible employees of the Company and its subsidiaries. The
 Nomination, Governance and Compensation Committee shall determine the
 employees eligible for receiving the options, the number of options to
 be granted, the exercise price, the vesting period and the exercise
 period. The vesting period is determined for all options issued on the
 date of the grant. The options issued under the DRL 2007 Plan vest in
 periods ranging between one and four years and generally have a maximum
 contractual term of five years.
 
 The Committee may, after obtaining the approval of the shareholders in
 the Annual General Meeting, grant options with a per share exercise
 price other than fair market value and par value of the equity shares.
 
 During the year ended 31 March 2015, the Company has issued 45,796
 Category B options to eligible employees under the DRL 2007 Plan. The
 vesting period for the options granted varies from 12 to 48 months.
 
 The date of grant, number of options granted, exercise price fixed by
 the Committee for respective options and the market price of the shares
 of the Company on the day prior to the date of grant is given below:
 
 The Company has not granted any options under Category A of the DRL
 2007 Plan.
 
 The Company has followed intrinsic method of accounting based on which
 a compensation expense of Rs.519 (previous year: Rs. 472) has been
 recognized in the statement of profit and loss.
 
 Ihedges of foreign currency risk and derivative financial instruments
 
 The Company is exposed to exchange rate risk which arises from its
 foreign exchange revenues and expenses, primarily in U.S. dollars,
 British pounds sterling, Russian roubles and Euros, and foreign
 currency debt in U.S. dollars, Russian roubles and Euros.
 
 The Company uses forward contracts, option contracts and swap contracts
 (derivatives) to mitigate its risk of changes in foreign currency
 exchange rates.  Further, the Company also uses non derivative
 financial instruments as part of its foreign currency exposure risk
 mitigation strategy.
 
 In respect of the aforesaid foreign exchange derivative contracts, the
 Company has recorded, as part of foreign exchange gains and losses, a
 net gain of Rs. 1,040 and a net loss of Rs. 297 for the years ended 31
 March 2015 and 2014, respectively.
 
 Hedges of highly probable forecasted transactions
 
 The Company classifies its derivative contracts that hedge foreign
 currency risk associated with highly probable forecasted transactions
 as cash flow hedges and measures them at fair value. The effective
 portion of such cash flow hedges is recorded as part of reserves and
 surplus within the Company''s hedging reserve, and re-classified in
 the statement of profit and loss as revenue in the period corresponding
 to the occurrence of the forecasted transactions. The ineffective
 portion is immediately recorded in the statement of profit and loss.
 
 The Company also designates certain non derivative financial
 liabilities, such as foreign currency borrowings from banks, as hedging
 instruments for the hedge of foreign currency risk associated with
 highly probable forecasted transactions and, accordingly, applies cash
 flow hedge accounting for such relationships. Re-measurement gain/loss
 on such non derivative financial liabilities is recorded as part of
 reserves and surplus within the Company''s hedging reserve, and
 re-classified in the statement of profit and loss as revenue in the
 period corresponding to the occurrence of the forecasted transactions.
 
 In respect of the aforesaid hedges of highly probable forecasted
 transactions, the Company has recorded, in reserves and surplus, a net
 gain of Rs. 51 and a net loss of Rs. 407 for the years ended 31 March 2015
 and 2014, respectively. The Company also recorded, as part of revenue,
 a net gain of Rs. 810 and a net loss of Rs. 946 during the years ended 31
 March 2015 and 2014, respectively.
 
 The net carrying amount of the Company''s hedging reserve was a gain
 of Rs. 46 as at 31 March 2015, as compared to a loss of Rs. 5 as at 31
 March 2014.
 
 The table below summarises the periods when the forecasted cash flows
 associated with hedging instruments that are classified as cash flow
 hedges, are expected to occur:
 
 HEDGES OF FOREIGN CURRENCY RISK AND DERIVATIVE FINANCIAL INSTRUMENTS
 
 Hedges of recognised assets and liabilities
 
 Changes in the fair value of derivative contracts that economically
 hedge monetary assets and liabilities in foreign currencies and for
 which no hedge accounting is applied are recognised in the statement of
 profit and loss. The changes in fair value of such derivative contracts
 as well as the foreign exchange gains and losses relating to the
 monetary items are recognised as part of foreign exchange gains and
 losses.
 
 Outstanding derivative contracts
 
 The following are the details of the notional amount of outstanding
 foreign exchange derivative contracts:
 
 As at 31 March 2015
 
 Derivative financial instruments valuation
 
 The Company enters into derivative financial instruments with various
 counterparties, principally financial institutions and banks.
 Derivatives valued using valuation techniques with market observable
 inputs are mainly interest rate swaps, foreign exchange forward
 contracts and foreign exchange option contracts. The most frequently
 applied valuation techniques include forward pricing, swap models and
 Black Scholes models (for option valuation), using present value
 calculations.
 
 The Company had a net asset of Rs. 279 as of 31 March 2015 as compared to
 a net asset of Rs. 432 as of 31 March 2014 towards these derivative
 financial instruments.
 
 Un-hedgedsignificant foreign currency exposure
 
 The year-end significant foreign currency exposures that have not been
 hedged by a derivative instrument or otherwise are given below:
 
 Un-hedqed significant foreign currency exposure as at 31st March 2015
 
 The Company''s activities expose it to a variety of financial risks,
 including market risk, credit risk and liquidity risk. The Company''s
 primary risk management focus is to minimize potential adverse effects
 of market risk on its financial performance. The Company''s risk
 management assessment and policies and processes are established to
 identify and analyze the risks faced by the Company, to set appropriate
 risk limits and controls, and to monitor such risks and compliance with
 the same. Risk assessment and management policies and processes are
 reviewed regularly to reflect changes in market conditions and the
 Company''s activities. The Board of Directors and the Audit Committee
 are responsible for overseeing Company''s financial risk assessment and
 management policies and processes.
 
 a. Credit risk
 
 Credit risk is the risk of financial loss to the Company if a customer
 or counterparty to a financial instrument fails to meet its contractual
 obligations, and arises principally from the Company''s receivables from
 customers. Credit risk is managed through credit approvals,
 establishing credit limits and continuously monitoring the credit
 worthiness of customers to which the Company grants credit terms in the
 normal course of business. The Company establishes an allowance for
 doubtful debts and impairment that represents its estimate of incurred
 losses in respect of trade and other receivables.
 
 Trade receivables
 
 The Company''s exposure to credit risk is influenced mainly by the
 individual characteristics of each customer. The demographics of the
 customer, including the default risk of the industry and country, in
 which the customer operates, also has an influence on credit risk
 assessment. As at 31 March 2015 and 31 March 2014, the maximum exposure
 to credit risk in relation to trade receivables is Rs. 47,117 and Rs.
 45,615, respectively (net of allowances).
 
 Trade receivables include foreign currency receivables of USD 37
 million (amounting to Rs. 2,333) from Dr. ReddyRs.s Venezuela, C.A., a
 wholly owned subsidiary of the Company in Venezuela. During the year
 ended 31 March 2015, the Venezuelan economy was adversely impacted by a
 significant decline in crude oil prices, leading to higher inflation
 rates and significantly delayed approvals for import payments. Further,
 Venezuelan government has introduced multi-tiered exchange rate system
 for different category of imports.
 
 As of 31 March 2015, the exchange rates in all the three aforesaid
 tiers are as follows:
 
 - CENCOEX preferential rate - 6.3 VEF per USD;
 
 - SICAD rate - 12 VEF per USD; and
 
 - SIMADI rate - approximately 193 VEF per USD.
 
 As per the existing laws in Venezuela, payments towards the importation
 of pharmaceutical products qualify for the CENCOEX preferential rate of
 6.3 VEF per USD, and the Company''s Venezuelan subsidiary has been
 receiving approvals at such preferential rate. Accordingly, no
 provision for bad and doubtful debts is recorded during the year ended
 31 March 2015 in respect of these outstanding trade receivables.
 
 Trade receivables that are neither past due nor impaired
 
 Trade receivables amounting to Rs. 28,687 and Rs. 30,673 were neither past
 due nor impaired as at 31 March 2015 and 31 March 2014 respectively.
 
 Trade receivables that are past due but not impaired
 
 The Company''s credit period for customers generally ranges from 20 -
 180 days. The age analysis of the trade receivables has been considered
 from the due date of the invoice. The ageing of trade receivables that
 are past due but not impaired is given below:
 
 b. Liquidity risk
 
 Liquidity risk is the risk that the Company will not be able to meet
 its financial obligations as they become due. The Company manages its
 liquidity risk by ensuring, as far as possible, that it will always
 have sufficient liquidity to meet its liabilities when due, under both
 normal and stressed conditions, without incurring unacceptable losses
 or risk to the Company''s reputation.
 
 As at 31 March 2015 and 2014, the Company had unutilized credit limits
 from banks of Rs. 10,438 and Rs. 13,565, respectively.
 
 As at 31 March 2015, the Company had working capital (i.e. current
 assets less current liabilities) of Rs. 57,247 including cash and bank
 balances of Rs. 9,014 and current investments of Rs. 21,022. As at 31 March
 2014, the Company had working capital of Rs. 47,936 including cash and
 bank balances of Rs. 6,651 and current investments of Rs. 10,664.
 
 The table below provides details regarding the contractual maturities
 of significant financial liabilities (other than finance leases which
 have been disclosed in Note 2.45).
 
 Financial guarantees
 
 Financial guarantees disclosed in Note 2.25 have been provided as
 corporate guarantees to financial institutions and banks that have
 extended credits and other financial assistance to the Company''s
 subsidiaries. In this regard, the Company does not foresee any
 significant credit risk exposure.
 
 c. Market risk
 
 Market risk is the risk of loss of future earnings or fair values or
 future cash flows that may result from a change in the price of a
 financial instrument. The value of a financial instrument may change as
 a result of changes in the interest rates, foreign currency exchange
 rates and other market changes that affect market risk-sensitive
 instruments. Market risk is attributable to all market risk-sensitive
 financial instruments including foreign currency receivables and
 payables and long term debt. The Company is exposed to market risk
 primarily related to foreign exchange rate risk, interest rate risk and
 the market value of its investments. Thus, the Company''s exposure to
 market risk is a function of investing and borrowing activities and
 revenue generating and operating activities in foreign currencies.
 
 Foreign exchange risk
 
 The Company''s exchange risk arises from its foreign operations, foreign
 currency revenues and expenses, (primarily in U.S. dollars, British
 pounds sterling, Roubles and Euros) and foreign currency borrowings (in
 U.S. dollars, Euros and Roubles). A significant portion of the
 Company''s revenues are in these foreign currencies, while a significant
 portion of its costs are in Indian rupees. As a result, if the value of
 the Indian rupee appreciates relative to these foreign currencies, the
 Company''s financial performance gets adversely impacted. The exchange
 rate between the Indian rupee and these foreign currencies has changed
 substantially in recent periods and may continue to fluctuate
 substantially in the future. Consequently, the Company uses derivative
 financial instruments, such as foreign exchange forward contracts,
 option contracts and swap contracts, to mitigate the risk of changes in
 foreign currency exchange rates in respect of its highly probable
 forecasted transactions and recognized assets and liabilities.
 
 The details in respect of the outstanding derivative contracts are
 given in Note 2.35 above.
 
 In respect of the Company''s derivative contracts, a 10%
 decrease/increase in the respective exchange rates of each of the
 currencies underlying such contracts would have resulted in an
 approximately Rs. 1,308/(631) increase/(decrease) in the Company''s
 hedging reserve and an approximately Rs. 1,460/ (1,604)
 increase/(decrease) in the Company''s net profit as at 31 March 2015.
 
 In respect of the Company''s derivative contracts, a 10%
 decrease/increase in the respective exchange rates of each of the
 currencies underlying such contracts would have resulted in an
 approximately Rs. 1,254/(945) increase/(decrease) in the Company''s
 hedging reserve and an approximately Rs. 2,745/ (2,892)
 increase/(decrease) in the Company''s net profit as at 31 March 2014.
 
 (1) Others include currencies such as British pounds sterling,
 Australian dollars, Mexican pesos, South African rand, Venezuelan
 bolivars, etc.
 
 For the year ended 31 March 2015 and 2014, every 10%
 depreciation/appreciation in the exchange rate between the Indian rupee
 and the respective currencies in the above mentioned financial
 assets/liabilities would affect the Company''s net profit by
 approximately Rs. 664 and Rs. 1,492 respectively, from such financial
 assets/liabilities.
 
 Interest rate risk
 
 As of 31 March 2015, the Company had foreign currency loans of Rs. 26,366
 carrying a floating interest rate of LIBOR plus 7.5 - 125 bps whereas
 as of 31 March 2014, the Company had foreign currency loans of Rs. 17,219
 carrying a floating interest rate of LIBOR plus 20-179 bps and Rs. 846
 carrying a floating interest rate of Moscow Prime Offered Rate plus 60
 bps. These loans expose the Company to risk of changes in interest
 rates. The Company''s treasury department monitors the interest rate
 movement and manages the interest rate risk based on its policies,
 which include entering into interest rate swaps as considered
 necessary. An increase or decrease of 10% in the floating interest rate
 component applicable to its loans and borrowings would affect the
 Company''s net profit by approximately Rs. 4 and Rs. 10 for the year ended
 31 March 2015 and 31 March 2014, respectively.
 
 The Company''s investments in fixed deposits with banks and short term
 liquid mutual funds are for short durations, and therefore do not
 expose the Company to significant interest rates risk.
 
 Commodity rate risk
 
 Exposure to market risk with respect to commodity prices primarily
 arises from the Company''s purchases and sales of active pharmaceutical
 ingredients, including the raw material components for such active
 pharmaceutical ingredients. These are commodity products, whose prices
 may fluctuate significantly over short periods of time. The prices of
 the Company''s raw materials generally fluctuate in line with commodity
 cycles, although the prices of raw materials used in the Company''s
 active pharmaceutical ingredients business are generally more volatile.
 Cost of raw materials forms the largest portion of the Company''s
 operating expenses. Commodity price risk exposure is evaluated and
 managed through operating procedures and sourcing policies. The Company
 has historically not entered into any material derivative contracts to
 hedge exposure to fluctuations in commodity prices.
 
 EMPLOYEE BENEFIT PLANS
 
 2.37.1 Gratuity Plan
 
 In accordance with applicable Indian laws, the Company provides for a
 lump sum payment to eligible employees, at retirement or termination of
 employment based on the last drawn salary and years of employment with
 the Company. Effective 1 September 1999, the Company established the
 Dr.  Reddy''s Laboratories Gratuity Fund (the Gratuity Fund).
 Liabilities in respect of the Gratuity Plan are determined by an
 actuarial valuation, based upon which the Company makes contributions
 to the Gratuity Fund. Amounts contributed to the Gratuity Fund are
 primarily invested in Indian government bonds and corporate debt
 securities. A portion of the fund is also invested in Indian equities.
 
 The following table set out the status of the aforesaid funded gratuity
 plan as required under AS-15 (Revised):
 
 Discount rate: The discount rate is based on the prevailing market
 yields of Indian government securities as at the balance sheet date for
 the estimated term of the obligations.
 
 Expected rate of return on plan assets: This is based on the
 expectation of the average long-term rate of return expected on
 investments of the fund during the estimated term of the obligations.
 
 Salary escalation rate: The estimate of future salary increases
 considered takes into account the inflation, seniority, promotion and
 other relevant factors.
 
 EMPLOYEE BENEFIT PLANS
 
 Provident fund benefits
 
 Certain categories of employees of the Company receive benefits from a
 provident fund, a defined contribution plan. Both the employee and
 employer each make monthly contributions to a government administered
 fund equal to 12% of the covered employee''s qualifying salary. The
 Company has no further obligations under the plan beyond its monthly
 contributions. The Company contributed Rs. 471 and Rs. 391to the provident
 fund plan during the year ended 31 March 2015 and 2014 respectively.
 
 Superannuation benefits
 
 Certain categories of employees of the Company participate in
 superannuation, a defined contribution plan administered by the Life
 Insurance Corporation of India. The Company makes annual contributions
 based on a specified percentage of each covered employee''s salary. The
 Company has no further obligations under the plan beyond its annual
 contributions. The Company contributed Rs. 68 and Rs. 62 to the
 superannuation plan during the year ended 31 March 2015 and 2014
 respectively.
 
 Compensated leave of absence
 
 The Company provides for accumulation of compensated absences by
 certain categories of its employees. These employees can carry forward
 a portion of the unutilized compensated absences and utilize it in
 future periods or receive cash in lieu thereof as per Company policy.
 The Company records an obligation for compensated absences in the
 period in which the employee renders the services that increases this
 entitlement. The total liability recorded by the Company towards this
 benefit was Rs. 542 and Rs. 412 as at 31 March 2015 and 2014 respectively.
 
 Long term incentive plan
 
 Certain senior management employees of the Company participate in a
 long term incentive plan which is aimed at rewarding the individual,
 based on performance of such individual, there business unit/function
 and the Company as a whole, with significantly higher rewards for
 superior performances.  The total liability recorded by the Company
 towards this plan was Rs. 188 as of 31 March 2015.
 
 DIVIDEND REMITTANCE IN FOREIGN CURRENCY
 
 The Company does not make any direct remittances of dividends in
 foreign currencies to American Depository Receipts (ADRs) holders. The
 Company remits the equivalent of the dividends payable to the ADR
 holders in Indian Rupees to the custodian, which is the registered
 shareholder on record for all owners of the Company''s ADRs. The
 custodian purchases the foreign currencies and remits it to the
 depository bank which inturn remits the dividends to the ADR holders.
 
 BONUS DEBENTURES
 
 The Company had, on 24 March 2011, allotted 1,015,516,392, 9.25%
 unsecured, non-convertible, redeemable bonus debentures aggregating to
 Rs. 5,078.  The interest was payable at the end of 12, 24 and 36 months
 from the initial date of issuance. The bonus debentures were redeemable
 at the end of 36 months from the initial date of issuance. These
 debentures were listed on the Bombay Stock Exchange Limited and
 National Stock Exchange of India Limited.
 
 As per the requirements of the Companies Act, 1956, the Company created
 a Debenture Redemption Reserve aggregating to Rs. 2,539 as at 24 March
 2014.
 
 On 24 March 2014, the Company redeemed these debentures at par value of
 Rs. 5,078. Accordingly, the amount of Rs. 2,539 representing balance in
 Debenture Redemption Reserve was transferred to General Reserve upon
 redemption of debentures.
 
 PROVISION FOR OTHER THAN TEMPORARY DIMINUTION IN THE VALUE OF LONG TERM
 INVESTMENTS
 
 For the year ended 31 March 2014 Investment in Reddy Pharma Iberia SA.
 
 During the year ended 31 March 2013, the Company had advanced a sum of
 Rs. 245 towards investment in Reddy Pharma Iberia SA. As the shares were
 not alloted by the end of such year, the said amount was classified as
 Advance towards Investment within long term loans and advances.
 Further, the advance was provided for as not recoverable and recorded
 as other expenditure. During the year ended 31 March 2014, shares were
 issued to the Company and accordingly the earlier provision for advance
 was reclassified as provision for permanent diminution in the value of
 investments with an equivalent reversal in other expenditure.
 
 ASSET PURCHASE AGREEMENT WITH ECOLOGIC CHEMICALS LIMITED
 
 During the year ended 31 March 2014, the Company had entered into an
 asset purchase agreement with Ecologic Chemicals Limited (Ecologic),
 where in two directors of the Company have equity interests. The
 Company had paid Rs. 1,264 excluding taxes and duties for purchase of
 fixed and current assets.  The consideration was arrived at based on
 valuation from independent valuers. The acquisition of these assets
 would help augment the Company''s manufacturing capacity in meeting the
 future business requirements of its PSAI segment.
 
 The acquisition was accounted for as a purchase of assets. The total
 purchase consideration had been allocated to the acquired assets as of
 13 September 2013 based on a fair valuation carried out by the
 Company''s management as tabulated below:
 
 ACQUISITION OF SELECT ESTABLISHED BRAND PORTFOLIO OF UCB
 
 On 1 April 2015, the Company entered into a definitive agreement with
 UCB India Private Limited and other UCB group companies (together
 referred to as UCB) to acquire a select portfolio of established
 products business in the territories of India, Nepal, Sri Lanka and
 Maldives. The said business was acquired on a slump sale basis. The
 transaction includes approximately 350 employees engaged in operations
 of the India Business. The acquisition is expected to strengthen the
 Company''s presence in the areas of Dermatology, Respiratory and
 Pediatrics. The total purchase consideration was Rs. 8,000.  The
 acquisition is expected to be closed in the first quarter of the
 financial year 2015-16.
 
 OPERATING LEASE
 
 The Company has taken offices and vehicles under operating lease
 agreements. Total expense recognised in statement of profit and loss on
 account of operating leases during the year amounts to Rs. 277 (previous
 year: Rs. 380).
 
 The total future minimum lease payments under non cancellable leases
 are as follows:
 
 COMPARATIVE FIGURES
 
 Previous year''s figures have been regrouped / reclassified wherever
 necessary, to conform to current year''s classification.
 
Source : Dion Global Solutions Limited
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