MIRA
INFORM REPORT
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Report Date : |
27.11.2012 |
IDENTIFICATION DETAILS
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Name : |
DR. REDDY’S LABORATORIES LIMITED |
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Registered
Office : |
8-2-337, Road No. 3, Banjara Hills, |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Date of
Incorporation : |
24.02.1984 |
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Com. Reg. No.: |
01-004507 |
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Capital
Investment / Paid-up Capital : |
Rs. 849.170 Millions |
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CIN No.: [Company Identification
No.] |
L85195AP1984PLC004507 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
HYDD00080D |
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Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchanges. |
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Line of Business
: |
Manufacturers and
Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits. |
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No. of Employees
: |
10,000
(Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
Aa (78) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 268000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old, well – established and a reputed company engaged in
manufacturing and marketing of pharmaceuticals. The company manufacturers
wide range of pharmaceuticals products in The company can be considered good for normal business dealings under
usual trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30, 2012
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Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
INDIAN ECONOMIC OVERVIEW
India is developing into an open-market economy, yet traces
of its past autarkic policies remain. Economic liberalization, including
industrial deregulation, privatization of state-owned enterprises, and reduced
controls on foreign trade and investment, began in the early 1990s and has
served to accelerate the country's growth, which has averaged more than 7% per
year since 1997. India's diverse economy encompasses traditional village
farming, modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Slightly more than half of the work force is in
agriculture, but services are the major source of economic growth, accounting
for more than half of India's output, with only one-third of its labor force.
India has capitalized on its large educated English-speaking population to
become a major exporter of information technology services and software
workers. In 2010, the Indian economy rebounded robustly from the global
financial crisis - in large part because of strong domestic demand - and growth
exceeded 8% year-on-year in real terms. However, India's economic growth in
2011 slowed because of persistently high inflation and interest rates and
little progress on economic reforms. High international crude prices have
exacerbated the government's fuel subsidy expenditures contributing to a higher
fiscal deficit, and a worsening current account deficit. Little economic reform
took place in 2011 largely due to corruption scandals that have slowed legislative
work. India's medium-term growth outlook is positive due to a young population
and corresponding low dependency ratio, healthy savings and investment rates,
and increasing integration into the global economy. India has many long-term
challenges that it has not yet fully addressed, including widespread poverty,
inadequate physical and social infrastructure, limited non-agricultural
employment opportunities, scarce access to quality basic and higher education,
and accommodating rural-to-urban migration.
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Source
: CIA |
EXTERNAL AGENCY RATING
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Rating Agency Name |
ICRA |
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Rating |
Long Term Bank facilities : AA+ |
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Rating Explanation |
High degree of safety and very low credit
risk |
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Date |
2012 |
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Rating Agency Name |
ICRA |
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Rating |
Short Term Bank limits : A1+ |
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Rating Explanation |
Very strong degree of safety and lowest
credit risk |
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Date |
2012 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
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Registered
/Corporate Office/ Active Pharmaceutical Ingredients : |
8-2-337, Road No. 3, Banjara Hills, |
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Tel. No.: |
91-40-49002900 |
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Fax No.: |
91-40-49002999 |
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E-Mail : |
ssrinivasan@drreddys.com
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Website : |
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Custom
Pharmaceuticals Services : |
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Tel No.: |
91-40-44658888 |
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Fax No.: |
91-40-44658699 |
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E-Mail : |
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Branded Finished
Dosages / Business Development : |
Greenlands, Ameerpet, Hyderabad – 500016, Andhra Pradesh, India |
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Tel No.: |
91-40-49048400 |
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Fax No.: |
91-40-23731955 |
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Finished Dosage - Generics: ( |
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Tel. No.: |
1-908-203-4900 |
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Fax No.: |
1-908-203-4940 |
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Finished Dosage - Generics: ( |
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Tel. No.: |
0044 1753 5125 00 |
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Fax No.: |
0044 1753 6966 77 |
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Dr. Reddy’s
Foundation: |
6-3-655/12,
Somajiguda, |
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Tel. No.: |
91-40-65343424/
23304199/ 1868 |
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Fax No.: |
91-40-23301085 |
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E-Mail : |
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Website : |
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Facility
Locations in India |
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CHEMICAL
TECH-OPS (CTO) : |
· Plot Nos. 137, 138 and 146, IDA Bollarum, Jinnaram Mandal, Medak District - 502320, Andhra Pradesh, India · Plot No. 75B, 105, 110 and 111, IDA Bollarum, Jinnaram Mandal, Medak District - 502320, Andhra Pradesh, India · Plot Nos. 116, 116A and 126C and SY No. 157, IDA Bollarum, Jinnaram Mandal, Medak District - 502320, Andhra Pradesh, India · Plot No. 9/A, 9/B, 22A, 22B and 22C, Phase III, IDA Jeedimetla Ranga Reddy District – 500055, Andhra Pradesh, India · CTO – V Peddadevulapally, Tripuraram Mandal, Nalgonda District – 508207, · CTO – VI IDA Pydibheemavaram, Ransthal
Mandal, Srikakulam District – 532409, Andhra Pradesh, India · CTO – IX IDA
Pydibheemavaram, Ransthal Mandal, Srikakularrf District - 532409, Andhra
Pradesh, India FORMULATIONS TECH-OPS (FTO) ·
I – Plot No. 146,
IDA Bollaram Jinnaram Mandal, Medak District – 502320, Andhra Pradesh, India ·
II- Survey No. 42/
45/ 46 and 54, Bachupally Quthbullapur Mandal, Ranga Reddy District – 500123,
Andhra Pradesh, India ·
III – S Y No. 41,
Bachupally Quthbullapur Mandal, Ranga Reddy District – 500123, Andhra
Pradesh, India ·
IV – Ward – F, Block
– 4, Adavipolam, Yanam, Pondicherry – 533465, Tamilnadu, India ·
V – Khol, Nalagarh Solan, Nalagarh Road Baddi,
Himachal Pradesh – 173205, Andhra Pradesh, India ·
VI – Plot No P1-P9, Phase III Duvvada, VSEZ,
Visakapatanam – 530046, Andhra Pradesh, India ·
VII - Village Mauja
Thana, Nalagarh Baddi Road, Baddi, District Solan, Himachal Pradesh – 173205,
Andhra Pradesh, India BIOLOGICS ·
Survey No. 41, Bachupally Quthbullapur Mandal,
Ranga Reddy District – 500043, Boitech/Critical Care/Diagnostics ·
Survey No.47, Bachupally Quthbullapur Mandal,
Ranga Reddy District – 500043, Custom Chemical Services/Discovery
Research ·
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Facility
Locations Outside India : |
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Kunshan Rotam
Reddy Pharmaceutical Company Limited No.258, Huang Pu
Jiang (M) Road, Kunshan Development Zone, Jiangsu Province P. R. China Pin: 215
300 Industrias
Quimicas Falcon de Mexico S.A. de C.V. Carretera
Federal Cuernavaca-Cuautla KM 4.5 CIVAC, Jiutepec, Morelos Mexico 62578 Dr. Reddy’s
Laboratories (UK) Limited 6, Riverview
Road, Beverly, East Yorkshire HU 17 OLD, United Kingdom Dr. Reddy’s
Laboratories (EU) Limited Steanard Lane,
Mirfield, West Yorkshire, WF 14,8HZ. United Kingdom Chirotech
Technology Limited 410 Cambridge
Science Park Milton Road, Cambridge CB4 0PE, United Kingdom Dr. Reddy’s
Laboratories Louisiana LLC 8800 Line
Avenue, Shreveport, Louisiana 71106. USA Dr. Reddy’s
Laboratories Tennessee LLC P.O. Box 9002,
201 Industrial Drive Bristol, TN 37621- 9002. USA Dr. Reddy’s
Laboratories New York Inc. 1974 Route 145,
Middleburgh, New York 12122, USA |
DIRECTORS
AS ON 31.03.2012
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Name
: |
Dr. K Anji Reddy |
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Designation : |
Chairman |
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Name
: |
Mr. G V Prasad |
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Designation : |
Vice-Chairman
and Chief Executive Officer |
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Date of Birth/
Age : |
52 Years |
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Qualification
: |
B.Sc. (Chem. Eng.), M.S. (Indl. Admn.) |
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Name
: |
Mr. Satish Reddy |
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Designation : |
Managing Director and Chief Operating
Officer |
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Date of Birth/
Age : |
45 Years |
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Qualification
: |
B. Tech., M.S. (Medicinal Chemistry) |
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Name : |
Dr. Omkar Goswami |
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Designation : |
Independent Director |
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Date of Appointment : |
21.07.2008 |
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Name : |
Mr. Ravi Bhoothalingam |
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Designation : |
Independent Director |
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Date of Appointment : |
30.10.2000 |
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Name : |
Mr. Anupam Puri |
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Designation : |
Independent Director |
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Date of Appointment : |
04.06.2002 |
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Name : |
Mr. J P Moreau |
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Designation : |
Independent Director |
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Date of Appointment : |
18.05.2007 |
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Name : |
Mrs. Kalpana Morparia |
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Designation : |
Independent Director |
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Date of Appointment : |
05.06.2007 |
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Name : |
Mr. Bruce L A Carter |
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Designation : |
Independent Director |
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Date of Appointment : |
21.07.2008 |
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Name : |
Dr. Ashok Sekhar Ganguly |
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Designation : |
Independent Director |
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Name
: |
Mr. Sridar Iyengar |
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Designation : |
Independent Director |
KEY EXECUTIVES
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Name
: |
Mr. Sandeep Poddar |
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Designation : |
Company Secretary |
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Name
: |
Mr. Abhijit Mukherjee |
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Designation : |
President Global Generics |
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Date of Birth/
Age : |
54 Years |
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Qualification
: |
B. Tech. (Chem.) |
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Name
: |
Dr. Amit Biswas |
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Designation : |
Executive
Vice-President Integrated Product Development |
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Date of Birth/
Age : |
52 Years |
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Qualification
: |
B. Tech.
(Chem.), Masters (Polymer Science), PH.D. |
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Name
: |
Mr. Amit Patel |
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Designation : |
Executive
Vice-President North America Generics |
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Date of Birth/
Age : |
37 Years |
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Qualification
: |
B.S., B.A.S., MBA |
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Name
: |
Dr. Cartikeya Reddy |
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Designation : |
Senior
Vice-President Biologics |
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Date of Birth/
Age : |
42 Years |
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Qualification
: |
B. Tech., M.S., PH.D. |
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Name
: |
M V Ramana |
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Designation : |
Senior Vice-President
Emerging Markets, Global Generics |
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Date of Birth/
Age : |
44 Years |
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Qualification
: |
MBA |
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Name
: |
Dr. R Ananthanarayanan |
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Designation : |
President Pharmaceutical Services and
Active Ingredients |
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Date of Birth/
Age : |
47 Years |
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Qualification
: |
B. Pharm., PH.D. |
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Name
: |
Dr. Raghav Chari |
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Designation : |
Senior Vice President, Proprietory Products
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Date of Birth/
Age : |
42 Years |
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Qualification
: |
M.S. (Physics),
PH.D. |
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Name
: |
Samiran Das |
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Designation : |
Executive
Vice-President FTO and GGPM |
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Date of Birth/
Age : |
52 Years |
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Qualification
: |
B. Tech. (Mech.) |
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Name
: |
Mr. Saumen Chakraborthy |
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Designation : |
Executive
Vice-President FTO and GGPM |
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Date of Birth/
Age : |
51 Years |
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Qualification
: |
B.SC. (H), MBA -
IIM |
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Name
: |
Mr. Umang Vohar |
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Designation : |
Executive
Vice-President and Chief Financial Officer |
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Date of Birth/
Age : |
41 Years |
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Qualification
: |
B.E., MBA |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 30.09.2012
|
Category
of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(A) Shareholding of Promoter and Promoter Group |
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3688528 |
2.61 |
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39729284 |
28.16 |
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|
43417812 |
30.77 |
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Total shareholding of Promoter and Promoter Group (A) |
43417812 |
30.77 |
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(B) Public Shareholding |
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|
11749417 |
8.33 |
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|
182380 |
0.13 |
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|
13931872 |
9.88 |
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|
41637892 |
29.51 |
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|
67501561 |
47.85 |
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|
13295867 |
9.42 |
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|
12901846 |
9.14 |
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|
1051622 |
0.75 |
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|
2913080 |
2.06 |
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|
404247 |
0.29 |
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|
2504533 |
1.78 |
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Foreign Nationals |
4300 |
0.00 |
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|
30162415 |
21.38 |
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Total Public shareholding (B) |
97663976 |
69.23 |
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Total (A)+(B) |
141081788 |
100.00 |
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© Shares held by Custodians and against which Depository Receipts have
been issued |
0 |
0.00 |
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|
0 |
0.00 |
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|
28752207 |
0.00 |
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|
28752207 |
0.00 |
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Total (A)+(B)+(C) |
169833995 |
0.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal share
capital up to Rs.0.100 millionBUSINESS DETAILS
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Line of Business : |
Manufacturers and
Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
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Class
of Goods |
Unit |
Installed Capacity |
Actual Production |
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Formulations |
Million Units |
6363 |
4759 |
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Active Pharmaceutical ingredients and
intermediates [API] |
Tones |
4087 |
3560 |
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Generics |
Million Units |
11727 |
6656 |
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Biotechnology – on single shift basis |
Grams |
-- |
13426 |
Notes:
- In terms of press Note no 4 (1994 series) dated October 25, 1994 issued by the department of Industrial Development, Ministry of Industry, Government of India and Notification no. S.O. 137 (E) dated March 01, 1999 issued by the Department of Industrial Policy and Promotion, Ministry of Industry, Government of India, Industrial licencing has been abolished in respect of bulk drugs and formulations. Hence there are no registered / Licenced capacities for these bulk drugs and formulations.
- Installed capacities are as certified by Management and have not been verified by the auditors as this is a technical matter.
- Actual production of Formulations includes 118 million units (previous year: 292 million units) produced on loan licensing basis from outside parties.
- Actual production of API includes 443 tones (previous year: 822 tones) produced on loan licensing basis from outside parties.
GENERAL INFORMATION
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No. of Employees : |
10,000
(Approximately) |
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Bankers : |
Ø Allahabad Bank, Industrial Finance Branch, Secunderabad, Andhra Pradesh, India Ø Bank of Baroda, Khairatabad Branch, Hyderabad, Andhra Pradesh, India Ø Canara Bank, Basheer Bagh, Hyderabad, Andhra Pradesh, India Ø Canara Bank, India Ø Citi Bank Ø Hyderabad, Andhra Pradesh, India Ø Global Trust Bank, Secunderabad, Andhra Pradesh, India Ø HDFC Bank, Hyderabad, Andhra Pradesh, India Ø The Hongkong and Shanghai Banking Corporation Limited, Hyderabad, Andhra Pradesh, India Ø State Bank of Hyderabad, Overseas Branch, Hyderabad, Andhra Pradesh, India Ø State Bank of India, Industrial Finance Branch, Hyderabad, Andhra Pradesh, India Ø State Bank of Mysore, Industrial Finance Branch, Hyderabad, Andhra Pradesh, India Ø Standard Chartered Grindlays Bank Limited, Hyderabad, Andhra Pradesh, India Ø Andhra Bank, Balanagar Branch, Hyderabad – 500016, Andhra Pradesh, India |
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Facilities : |
Note: Bonus debentures
are redeemable at the end of 36 months from the initial date of issuance (24 March
2011). The interest is payable at the end of 12, 24 and 36 months from the
initial date of issuance. (refer note 2.40) Sales tax deferment loan is repayable in 10 instalments, with the last
instalment due on 31 March 2019. Packing Credit
loans for the current year comprised of Foreign Currency Packing Credit loans
carrying interest rates
of LIBOR plus 100 -150 bps or fixed rate of 2.21%-3.06% per
annum and are repayable within 1 to 6 months from the date of drawdown.
Packing Credit loans for the previous year comprised of Foreign Currency Packing
Credit loans carrying interest rates of LIBOR plus 52 - 80 bps or fixed rate
of interest of 1.120% - 2.085% per annum and are repayable within 1 to 6 months
from the date of drawdown. Further, previous year loans included a Rupee
packing credit loan taken from State Bank of India carrying interest rate of 8.75% per
annum with a term of 6 months. Bank overdraft
is Nil for current year. Bank overdraft in the previous year was on current accounts
with various banks carrying interest rates of 10.50% to 12.00% per annum. |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
BSR and Company Chartered Accountants |
|
Address : |
Hyderabad, Andhra Pradesh, India |
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Subsidiaries including step down subsidiaries : |
Ø DRL Investments
Limited, India; Ø Reddy
Pharmaceuticals Hong Kong Limited, Hong Kong; Ø OOO Alfa, Russia
(formerly OOO JV Reddy Biomed Limited); Ø Reddy Antilles
N.V., Netherlands; Ø Reddy Netherlands
BV, Netherlands; Ø Reddy US
Therapeutics Inc., USA; Ø Dr. Reddy’s
Laboratories Inc., USA; Ø Reddy Cheminor
S.A., France; Ø Dr. Reddy’s
Farmaceutica Do Brasil Ltda., Brazil; Ø Cheminor
Investments Limited, India; Ø Aurigene
Discovery Technologies Limited, India; Ø Aurigene
Discovery Technologies Inc., USA; Ø Dr. Reddy’s
Laboratories (EU) Limited, UK; Ø Dr. Reddy’s
Laboratories (UK) Limited, UK; Ø Dr. Reddy’s
Laboratories (Proprietary) Limited, South Africa; Ø OOO Dr. Reddy’s
Laboratories Limited, Russia; Ø Promius Pharma
LLC (formerly Reddy Pharmaceuticals LLC, USA); Ø Dr. Reddy’s
Bio-sciences Limited, India; Ø Globe
Enterprises (a partnership firm in India) (dissolved on 1 July 2010); Ø Trigenesis
Therapeutics Inc., USA; Ø Industrias
Quimicas Falcon de Mexico, SA.de.C.V., Mexico; Ø Betapharm
Arzneimittel GmbH, Germany; Ø Beta Healthcare
Solutions GmbH, Germany; Ø Beta Institute
Fur Sozialmedizinische Forschung und Entwicklung GmbH, Germany; Ø Reddy Holding
GmbH, Germany; Ø Lacock Holdings
Limited, Cyprus; Ø Reddy Pharma
Iberia SA, Spain; Ø Reddy Pharma
Italia SPA, Italy; Ø Dr. Reddy’s
Laboratories (Australia) Pty. Limited, Australia; Ø Dr. Reddy’s
Laboratories SA, Switzerland; Ø Eurobridge
Consulting B.V., Netherlands; Ø OOO DRS LLC,
Russia; Ø Aurigene
Discovery Technologies (Malaysia) Sdn Bhd; Ø Dr. Reddy’s New
Zealand Limited, New Zealand (formerly Affordable Health Care Limited); Ø Dr. Reddy’s
Laboratories ILAC TICARET Limited SIRKETI, Turkey; Ø Dr. Reddy’s SRL,
Italy (formerly Jet Generici SRL); Ø Dr. Reddy’s
Laboratories Lousiana LLC, USA; Ø Chirotech Technology
Limited, UK; Ø Dr. Reddy’s
Pharma SEZ Limited, India; Ø Dr. Reddy’s
Laboratories International SA, Switzerland; Ø Idea2Enterprises
(India) Private Limited, India (from 30 June 2010); Ø Dr. Reddy’s
Laboratories Romania SRL, Romania (from 7 June 2010); Ø I-Ven Pharma
Capital Limited, India (from 6 October 2010); Ø Dr. Reddy’s
Laboratories Tennessee, LLC, USA (from 7 October 2010); Ø Dr. Reddy’s
Venezuela, C.A., Venezuela (from 20 October 2010); Ø Macred India
Private Limited, India (till 18 July 2010); Ø Dr. Reddy’s Laboratories
(Canada) Inc, Canada (from 11 June 2010) Ø Dr. Reddy’s
Laboratories New York, Inc, USA (from 24 May 2011); and Ø Dr. Reddy’s
Laboratories, LLC Ukraine (from 11 May 2011) |
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Associates : |
Ø APR LLC, USA
(till 8 July 2011) Ø Macred India Private
Limited, India (from 19 July 2010 till 24 February 2012) |
|
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|
Joint venture : |
Ø Kunshan Rotam
Reddy Pharmaceutical Company Limited (“Reddy Kunshan”), China Ø Dr. Reddy’s
Research Foundation (“Research Foundation”) Ø Dr. Reddy’s
Holdings Limited Ø Institute of
Life Sciences Ø Ecologic
Technologies Limited |
|
|
|
|
Others : |
Ø Green Park
Hotels and Resorts Limited (formerly Diana Hotels Limited) Ø Dr. Reddy’s
Foundation for Human and Social development Ø S R Enterprises Ø K K Enterprises Ø A.R. Life Sciences
Private Limited |
CAPITAL STRUCTURE
AS ON 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
240,000,000 |
Equity Shares |
Rs. 5/- each |
Rs. 1200.000 Millions |
|
|
|
|
|
Issued :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
169,560,546 |
Equity Shares |
Rs. 5/- each |
Rs. 848.000
Millions |
|
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|
|
|
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
169,560,346 |
Equity Shares |
Rs. 5/- each |
Rs. 848.000
Millions |
|
|
|
|
|
(a) Reconciliation of the equity shares outstanding is set out below:
|
Particulars |
31.03.2012 |
|
|
|
Number of shares |
Amount |
|
Number of shares outstanding at the beginning of the year |
169,252,732 |
846.000 |
|
Add : Share issued during the year |
307,614 |
2.000 |
|
Number of shares
outstanding at the end of the year |
169,560,346 |
848.000 |
(b) Terms/rights
attached to equity shares
The company has only
one class of equity shares having a par value of ` 5/- per share. Each holder
of equity shares is entitled to one vote per share. The company declares and
pays dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing Annual
General Meeting. During the year ended 31 March 2012, the amount of per share
dividend recognized as distributions to equity shareholders is Rs. 13.75 (31
March 2011: Rs. 11.25).
(c) Details of shareholders holding more than 5% shares in the company
|
Particulars |
31.03.2012 |
|
|
|
Number of shares |
% of equity
shares held |
|
Dr. Reddy’s Holdings Limited |
39,729,284 |
23.43 |
|
Life Insurance Corporation of India and its associates |
11,439,458 |
6.75 |
(d) 654,156
(previous year : 718,161) stock options are outstanding to be issued by the
Company on exercise of the vested stock options in accordance with the terms of
exercise under the “Dr. Reddy’s Employees Stock Option Plan, 2002” and 117,899
(previous year : 124,559) stock options are outstanding to be issued by the
Company on exercise of the vested stock options in accordance with the terms of
exercise under the “Dr. Reddy’s Employees ADR Stock Option Plan 2007”.
(e) 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.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
848.000 |
846.000 |
844.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
66330.000 |
59356.000 |
58302.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
67178.000 |
60202.000 |
59146.000 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
5.000 |
3.000 |
8.000 |
|
|
2] Unsecured Loans |
15329.000 |
14438.000 |
5624.000 |
|
|
TOTAL BORROWING |
15334.000 |
14441.000 |
5632.000 |
|
|
DEFERRED TAX LIABILITIES |
200.000 |
1008.000 |
750.000 |
|
|
|
|
|
|
|
|
TOTAL |
82712.000 |
75651.000 |
65528.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
18968.000 |
16910.000 |
13156.000 |
|
|
Capital work-in-progress |
6176.000 |
5460.000 |
7454.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
24777.000 |
24620.000 |
25551.000 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
13267.000
|
10632.000 |
8974.000
|
|
|
Sundry Debtors |
19435.000
|
17705.000 |
10605.000
|
|
|
Cash & Bank Balances |
8490.000
|
662.000 |
3680.000
|
|
|
Other Current Assets |
677.000
|
1750.000 |
0.000
|
|
|
Loans & Advances |
11616.000
|
14895.000 |
13001.000
|
|
Total
Current Assets |
53485.000
|
45644.000 |
36260.000 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
7334.000
|
8069.000 |
11943.000
|
|
|
Other Current Liabilities |
9907.000
|
5949.000 |
2532.000
|
|
|
Provisions |
3453.000
|
2965.000 |
2418.000
|
|
Total
Current Liabilities |
20694.000
|
16983.000 |
16893.000 |
|
|
Net Current Assets |
32791.000
|
28661.000 |
19367.000
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
82712.000 |
75651.000 |
65528.000 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
67397.000 |
53045.000 |
44011.000 |
|
|
|
Other Income |
818.000 |
1196.000 |
3235.000 |
|
|
|
TOTAL (A) |
68215.000 |
54241.000 |
47246.000 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Cost of material consumed (including packing material consumed) |
17386.000 |
13351.000 |
|
|
|
|
Purchase of stock-in-trade (traded goods) |
3076.000 |
3310.000 |
|
|
|
|
Changes in inventories of finished goods, work-in-progress and stock-in-trade |
(1048.000) |
(790.000) |
|
|
|
|
Conversion charges |
505.000 |
276.000 |
|
|
|
|
Excise duty |
534.000 |
617.000 |
|
|
|
|
Employee benefits expense |
8661.000 |
7274.000 |
|
|
|
|
Research and development |
5813.000 |
5128.000 |
|
|
|
|
Other expenses |
15124.000 |
11467.000 |
|
|
|
|
Provision for
other than temporary diminution in the value of long-term investments |
1925.000 |
557.000 |
|
|
|
|
TOTAL (B) |
51976.000 |
41190.000 |
34063.000 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
16239.000 |
13051.000 |
13183.000 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
636.000 |
53.000 |
111.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
15603.000 |
12998.000 |
13072.000 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
3011.000 |
2479.000 |
2224.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
12592.000 |
10519.000 |
10848.000 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
3468.000 |
1585.000 |
2387.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
9124.000 |
8934.000 |
8461.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
31397.000 |
25541.000 |
20391.000 |
|
|
|
|
|
|
|
|
|
Less |
ADJUSTMENT ON
ACCOUNT OF MERGER OF PERLECAN PHARMA PRIVATE LIMITED |
0.000 |
0.000 |
248.000 |
|
|
|
|
|
|
|
|
|
Add |
TRANSFER FROM
GENERAL RESERVE |
0.000 |
5972.000 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
912.000 |
893.000 |
846.000 |
|
|
|
Proposed
dividend on equity shares |
2331.000 |
1904.000 |
1900.000 |
|
|
|
Tax on proposed
dividend |
378.000 |
309.000 |
316.000 |
|
|
|
Dividend of
previous years (including tax) |
3.000 |
4.000 |
1.000 |
|
|
|
Debenture
Redemption Reserve |
848.000 |
19.000 |
0.0000 |
|
|
|
Issuance of
Bonus Debentures as per scheme |
0.000 |
5078.000 |
0.000 |
|
|
|
Dividend
Distribution Tax on distribution as per scheme |
0.000 |
843.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
36049.000 |
31397.000 |
25541.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export on FOB Basis |
48405.000 |
36718.000 |
30138.000 |
|
|
|
Interest on loan
to subsidiaries |
249.000 |
336.000 |
351.000 |
|
|
|
Service income
and license fees |
581.000 |
310.000 |
1111.000 |
|
|
|
Royalty income |
53.000 |
13.000 |
10.000 |
|
|
|
Guarantee
Commission |
79.000 |
24.000 |
0.000 |
|
|
|
Others |
0.000 |
76.000 |
4.000 |
|
|
TOTAL EARNINGS |
49367.000 |
37477.000 |
31614.000 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
6914.000 |
5337.000 |
4864.000 |
|
|
|
Capital Equipments |
2285.000 |
2773.000 |
1107.000 |
|
|
TOTAL IMPORTS |
9199.000 |
8110.000 |
5971.000 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic
|
53.83 |
52.82 |
50.15 |
|
|
|
Diluted
|
53.56 |
52.51 |
50.15 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2012 |
30.09.2012 |
|
|
1st Quarter |
2nd Quarter |
|
Sales Turnover |
18045.400 |
21085.500 |
|
Total Expenditure |
15265.300 |
16787.500 |
|
PBIDT (Excl
OI) |
2780.100 |
4298.000 |
|
Other Income |
304.000 |
1638.900 |
|
Operating
Profit |
3084.100 |
5936.900 |
|
Interest |
172.200 |
150.400 |
|
Exceptional
Items |
0 |
0 |
|
PBDT |
2911.900 |
5786.500 |
|
Depreciation |
731.200 |
760.300 |
|
Profit
Before Tax |
2180.700 |
5026.200 |
|
Tax |
404.100 |
1395.900 |
|
Provision and Contingencies |
0 |
0 |
|
Reported PAT |
1776.600 |
3630.300 |
|
Extraordinary Items |
0 |
0 |
|
Prior Period Expenses |
0 |
0 |
|
Other Adjustments |
0 |
0 |
|
Net Profit |
1776.600 |
3630.300 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
PAT / Total Income |
(%) |
13.38 |
16.47
|
17.91
|
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
18.68 |
19.83
|
24.65
|
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
17.38 |
16.82
|
21.95
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19 |
0.17
|
0.18
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.54 |
0.52
|
0.38
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.58 |
2.69
|
2.15
|
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
Yes |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
-- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm
/ promoter involved in |
-- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
-- |
|
26] |
Buyer visit details |
-- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
Yes |
|
30] |
Major Shareholders, if
available |
Yes |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
No |
|
34] |
External Agency Rating,
if available |
Yes |
MANAGEMENT DISCUSSION AND ANALYSIS
Incorporated in 1984,
Dr. Reddy’s Laboratories Limited (‘Dr. Reddy’s’ or ‘the Company’) is a global
pharmaceutical major with its presence in over 25 countries.
The Company’s purpose is to provide affordable and innovative medicines for healthier lives, which it does through:
· Pharmaceutical Services and Active Ingredients (PSAI), comprising of Active Pharmaceutical Ingredients (API) and Custom Pharmaceuticals Services (CPS).
· Global Generics (GG) businesses, which includes branded and unbranded prescription and overthe- counter (OTC) pharmaceutical products.
· Proprietary Products (PP), comprising of Biosimilars, Differentiated Formulations and New Chemical Entities (NCEs).
Strong growth across key businesses of:
· North America (68% growth over FY2011) driven by new launches and volume expansion in key existing products.
· Russia (23% growth over FY 2011) driven by volume expansion in existing products.
· Pharmaceutical Services and Active Ingredients (PSAI) (21% growth over FY2011) driven by new launches.
KEY HIGHLIGHTS FOR FY2012
1. Fastest Indian pharmaceutical company to cross USD 2
billion in revenue.
Dr. Reddy’s became the fastest Indian pharmaceutical company to cross USD 2 billion in sales, which it did within four years of crossing the USD 1 billion milestone.
2. Revenues were up 30% and profits up by 45%(1) over
previous year.
This was driven by:
Blockbuster launch of the generic drug, olanzapine, in the US under a 180-day marketing exclusivity. Dr. Reddy’s along with its marketing partner launched olanzapine 20 mg tablets, the generic version of the brand Zyprexa® under a 180-day marketing exclusivity. Olanzapine is used to treat schizophrenia and bipolar disorder. Annual sales of Zyprexa® were approximately USD 3.2 billion in the US as of September 2011 (Source: IMS sales). This product has contributed around USD 100 million to the Company’s revenues for FY2012.
3. Limited Competition generics were key differentiators
and contributed 32% of US sales.
Successful launches of limited competition generics has allowed the Company to increasingly focus on market segments with relatively high entry barriers and limited competition — thus providing avenues of sustainable growth. Four of Dr. Reddy’s top five products in the US are such: tacrolimus, lansoprazole, omeprazole Mg (over-the-counter) and fondaparinux. The combined revenue from our basket of limited competition products in FY2012 crossed a milestone of USD 200 million and represented around 10% of the Company’s overall revenue.
4. Over-the-counter (OTC) pharmaceutical portfolio
becoming a key part of the Company’s diversification strategy.
OTC pharmaceutical products represent interesting and often profitable adjacencies in some markets. In FY2012, sales from the Company’s OTC portfolio across markets grew by 75% and have crossed a significant milestone of USD 200 million. Today, it represents almost 10% of Dr. Reddy’s total revenues.
· North America: Since the launch of its first OTC product in FY2009, the Company has successfully brought in a variety of newer OTC products to the market. At present it has a US OTC portfolio of 11 products including omeprazole Mg, fexofenadine and ranitidine. Revenue in North America operations from OTC products in FY2012 was over USD 100 million with a growth of 120% over the previous year.
· Russia and CIS: The Company has seen consistently robust performance over the years and has built a strong OTC portfolio over the last four years. Some key OTC products include Cetrine, Senade, and Nise Gel. The OTC contribution to total Russia and CIS revenues have increased from less than 10% in FY2008 to about 30% in FY2012, representing a growth of 33% over FY2011.
5. Laying the foundation for the future.
This comprises three elements:
· Strengthening biosimilars portfolio: Biosimilars are approved similar versions of innovator biopharmaceutical products following patent and exclusivity expiry of the innovator product. The current biosimilars portfolio of Dr. Reddy’s comprises (i) filgrastim, (ii) pegfilgrastim, (iii) rituximab and (iv) darbepoetin alfa, with commercial presence in 13 countries among emerging markets. Additionally, filings in 20 new countries await approval, and progress is being made in pursuing the regulated markets. The Company’s global biosimilars sale for FY2012 was USD 26 million or a growth of 45% over FY2011. Revenues from biosimilars have shown a CAGR of 39% from FY2008.
· Foray into the Japanese generics market: Japan is the world’s second largest pharmaceutical market, estimated to be USD 97 billion as per IMS research agency. The generics market is characterized by low penetration — only 23% of Japanese prescription drug sales by volume comprise generics, versus 70% in the US. Dr. Reddy’s has been working with its partner, Fujifilm, for developing, manufacturing and promoting generic drugs in Japan. The new joint venture has 51% stake owned by Fujifilm, and 49% by Dr. Reddy’s. The plans are to design products that fit the specific requirements of the Japanese market, and thus deliver high quality generic drugs. It intends to launch its first products in Japan in the next three to four years.
· Continuing focus on research and development (R&D): Investments in R&D in FY2012 grew by 17% to approximately USD 125 million, or 6% of sales. About two-thirds were spent towards generics development, and the balance one-third was dedicated to innovator and biologics research.
DR. REDDY’S MARKET PERFORMANCE
GLOBAL GENERICS
Global Generics revenue increased by 32% during FY2012 over the previous year.
North America
In FY2012, North America generics revenue increased by 68% over the previous year, to Rs. 31,889 million. This growth was largely driven by new product launches such as fondaparinux, olanzapine, ziprasidone and market share expansion in existing products such as tacrolimus, omeprazole mg OTC and lansoprazole. During the year, the Company launched 16 new products including the Company’s opportunity for first-tofile launches of olanzapine (generic version of the brand Zyprexa®) and ziprasidone (generic version of the brand Geodon®). The product olanzapine contributed around USD 100 million in revenues for FY2012.
In FY2012, the OTC portfolio crossed USD 100 million and recorded a growth of 120%. About a third of the North America revenues were contributed by our limited competition basket of products and the same crossed a significant milestone of USD 200 million.
Russia and other CIS countries
Revenues in Russia and CIS countries grew by 22% to Rs. 13,260 million in FY2012 over the previous year. The growth in Russia was 23% over previous year largely driven by volume increase in key brands such as Cetrine, Keterol and Senade. Table 2 gives the data of the company’s key brands in Russia. Dr. Reddy’s secondary sales growth in Russia of 21% continues to outperform the industry growth of 17% (Pharmexpert data for MAT March 2012). Consequently, the Company’s rank has improved from 15th in FY2011 to 13th in FY2012.
During the year, the Company launched 14 new products. OTC sales which accounted for 29% of the overall Russian portfolio in FY2012 grew by 39% over the previous year.
Europe
Revenues from Europe region fell by 2% to Rs. 8,259 million. This was on account of a 7% decline in Germany, largely due to the pricing challenges resulting from the continuing shift of the German generic pharmaceutical market moving onwards a tender (i.e., competitive bidding) based supply model. However, the decline was partially offset by launch of new products which were outside the scope of tender business. The rest of Europe showed a growth of 8% in revenue, largely driven by the out licensing of products.
India
Revenues in India grew by 11% during FY2012 to Rs. 12,931 million. The growth was primarily on account of volume increase across brands and new product launches.
The Company’s focus according to therapeutic areas (TAs) is on gastro-intestinal, cardiovascular, diabetes, oncology, pain management and dermatology. In FY2012, the top five therapeutical segments (excluding pain management) grew at 16%. In FY2012, Dr. Reddy’s forayed into the OTC segment with the launch of Velocit (women healthcare) and Nise Gel (pain management).
Rest of the World (RoW)
Revenues from RoW markets increased by 16% to Rs. 3,904 million in FY2012. This was largely contributed by South Africa, Australia and other south Asian markets, offset by muted growth in Venezuela which was impacted by currency devaluation.
PHARMACEUTICAL
SERVICES AND ACTIVE INGREDIENTS (PSAI)
In FY2012, revenues from the PSAI segment grew by 21% to reach Rs. 23,812 million.
The growth was led by sale of active ingredients to generic customers and a strong recovery of customer orders in the services segment.
Geographical revenue from this segment is as under:
· Revenue from Europe grew by 20% to Rs. 8,424 million in FY2012, largely on account of major new product launches of ibandronate sodium and escitalopram, and higher sales from existing products.
· Revenue from North America increased by 35% to Rs. 4,272 million—largely on account of new product launch of ziprasidone and higher sales from clopidogrel.
· Revenue from India and RoW increased by 18% to Rs. 11,116 million.
OUTLOOK
The Company believes that its focus on profitable growth and targeting a leadership position in Global Generics and PSAI will create significant value in the near term. It is addressing the need for infrastructure and capacity increases to meet future growth.
In Global Generics, improving depth through portfolio expansion, consistent delivery of limited competition products and supply chain excellence should lead to a leadership position in key markets.
In the PSAI segment, the objective is to be the partner of choice by creating compelling value for customers through leveraging IP, technology and cost leadership. In Proprietary Products, the aim is to create a viable business by calibrating investments to produce a self sustainable model.
The Company expects a positive outlook for the next year. The largest increment of growth is expected to be contributed by the North America generics business. It also expects continued momentum from its key emerging markets.
In a dynamic business environment, the Company’s base business model in pharmaceuticals is exposed to considerable volatility, both upwards and downwards. While the upsides create non-linear value for the organization, there is a conscious attempt to protect it against the downsides.
BOARD OF DIRECTORS
DR. K ANJI REDDY
Chairman is the Founder-Chairman of Dr. Reddy’s. He served in the state-owned Indian Drugs and Pharmaceuticals Limited from 1969 to 1975; he was Founder-Managing Director of Uniloids Limited from 1976 to 1980 and Standard Organics Limited from 1980 to 1984, before founding Dr. Reddy’s in 1984. Under Dr. Reddy’s leadership, the Company became a pioneer in the Indian pharmaceutical industry. It turned the Indian bulk drug industry from import-dependent in the mid-80s to selfreliant in the mid-90s and, finally, into the exportoriented industry that it is today.
Dr. Reddy’s was the first Company to initiate drug discovery research in India in 1993 and has led the industry in turning from ‘immitators’ into innovators.
Dr. Reddy is a recipient of the ‘Padma Shri’ and the ‘Padma Bhushan’, two of India’s prestigious civilian honours. He holds a Bachelor of Science degree in Pharmaceuticals and Fine Chemicals from Bombay University and a Ph.D. in Chemical Engineering from National Chemical Laboratory, Pune, India.
MR. G V PRASAD
Vice-Chairman and
Chief Executive Officer joined the Board in 1986 and leads the core team that drives the growth and performance
of Dr. Reddy’s. He has been
Vice-Chairman & CEO of Dr.
Reddy’s since 2001, when Cheminor Drugs Limited,
the company of which he was then Managing
Director, merged with Dr Reddy’s. Prasad
has played a key role in the evolution of
Dr. Reddy’s from a mid-sized pharmaceutical
company into a globally respected pharmaceutical major. He is widely credited as the architect of Dr. Reddy’s successful global generics
strategy.
He is dedicated to building the innovation side of the business and drives the sustainability agenda at Dr. Reddy’s. He nurtured new lines of business, helped to build a high-talent organization, and was instrumental in introducing best-in-class practices in corporate governance. Prasad holds a degree in Chemical Engineering from the Illinois Institute of Technology, Chicago, USA and a Masters in Industrial Administration from Purdue University, USA.
MR. SATISH REDDY
Managing Director and
Chief Operating Officer joined Dr. Reddy’s in 1993 as Executive Director. He played an instrumental role in the
Company’s transition from a bulk
drugs manufacturer to a global
player in the branded generics space by spearheading
the Company’s entry into emerging markets.
Satish steers Dr. Reddy’s Pharmaceutical
Services and Active Ingredients (PSAI) and Global Generics businesses, two of the Company’s core revenue generating streams. In 1997, he was appointed Managing Director. In the mid-90s, as the Company prepared for its global
foray, Satish anchored the establishment of key systems and initiatives that positioned Dr. Reddy’s for rapid expansion and helped build the
Company’s brand and corporate
identity. He focused on translating Dr.
Reddy’s strategy into action to drive its growth and performance globally. Satish
graduated in Chemical Engineering from
Osmania University, Hyderabad, and holds
a Masters in Medicinal Chemistry from Purdue University, USA.
DR. OMKAR GOSWAMI
Independent Director joined
the Company’s Board in 2000. Since April
2004, he has been the Founder and Chairman of CERG Advisory Private Limited, a consulting and advisory firm. He taught and
researched economics for 18 years at
Oxford, Delhi School of Economics, Harvard,
Tufts, Jawaharlal Nehru University, Rutgers
University and the Indian Statistical Institute, New Delhi. In March 1997, he moved away from formal academics to become the Editor of Business India, one of the country’s most prestigious business magazines. From August 1998 up to March 2004, Dr. Goswami served as Chief Economist of the Confederation of Indian Industry – the premier apex industry
organization of India. He also holds directorship
in Infosys Limited, Crompton Greaves Limited,
IDFC Limited, Ambuja Cements Limited, Cairn
India Limited, DSP Black Rock Investment
Managers Private Limited, Godrej Consumer Products Limited, Max New York Life Insurance Company Limited, Max India Limited and Avantha Power and Infrastructure Limited.
A professional economist, Dr. Goswami did his Masters in Economics from the Delhi School of Economics and his D.Phil (Ph.D.) from Oxford University.
MR. RAVI
BHOOTHALINGAM
Independent Director joined
the Company’s Board in 2000. Mr.
Bhoothalingam has served as the President of The Oberoi Group and was responsible for the group’s worldwide
operations. He has also served as Head
of Personnel at British American Tobacco (BAT) Plc, as Managing Director of Vazir Sultan Tobacco (VST) Industries Limited and as a
Director of ITC Limited. He also
holds directorship in Sona Koyo Steering
Systems Limited.
Mr. Bhoothalingam holds a Bachelor of Science degree in Physics from St. Stephens College, Delhi and a Master’s degree in Experimental Psychology from Gonville and Caius College, Cambridge University.
MR. ANUPAM PURI
Independent Director joined
the Company’s Board in 2002. From 1970 to
2000, Mr. Anupam Puri was with McKinsey & Company, a leading management consultancy firm. He worked globally with corporate clients in several industries on strategy and
organizational issues, and also
served several governments and multilateral
institutions on public policy.
Mr. Puri spearheaded the development of McKinsey’s India practice, oversaw the Asian and Latin American offices, and was an elected member of the Board. He is currently a management consultant. He also holds directorship in Mahindra & Mahindra Limited, Tech Mahindra Limited, Mumbai Mantra Media Limited and Dr. Reddy’s Laboratories Inc, USA.
Mr. Puri holds an M. Phil. in Economics from Nuffield College, Oxford University, UK, an MA in Economics from Balliol College, Oxford University, and a BA in Economics from Delhi University, India.
DR. J P MOREAU
Independent Director joined
the Company’s Board in 2007. He founded Biomeasure
Incorporated based near Boston and has
been its President and CEO. Prior to that he was working as Executive Vice-President and Chief Scientific Officer of the IPSEN Group
and wasresponsible for the group’s discovery and innovation with facilities in Paris, London, Barcelona and Boston. He was Vice-President,
Research from April 1994 and has
been a member of the Executive Committee
of IPSEN Group since that date. He has published
over 50 articles in scientific journals and
is named as an inventor of more than 30 patents.
He is a regular speaker at scientific conferences and a member of Nitto Denko Scientific Advisory Board. Dr. Moreau was also responsible for establishing Kinerton Limited in Ireland in March 1989, a wholesale manufacturer of therapeutic peptides. Dr. Moreau also holds directorship in Mulleris Therapeutics Inc. USA. Dr. Moreau has a degree in Chemistry from the University of Orleans and a D.Sc. in Biochemistry. He\ has also conducted post-doctorate research at the École Polytechnique.
MS. KALPANA MORPARIA
Independent Director joined the Company’s Board in 2007. She is the Chief Executive Officer of J.P. Morgan, India, where she leads their Business Groups (investment banking, asset management, treasury services and principal investment management) & Service Groups (global research, finance, technology and operations). She is also a member of J.P. Morgan’s global strategy team headquartered in New York and the J.P. Morgan Asia Pacific Executive Committee.
Prior to becoming CEO of J.P. Morgan India, Ms. Morparia served as Vice Chair on the Boards of ICICI Group. She joined the ICICI Group in 1975 and was the Joint Managing Director of ICICI Group from 2001 to 2007. She was named one of `The 50 Most Powerful Women’ in `International Business’ by Fortune magazine in 2008; one of the 25 most powerful women in Indian business by Business Today, a leading Indian business journal, in 2004, 2005, 2006 and 2008; and one of ‘The 100 most Powerful Women’ by Forbes magazine in 2006. She also holds directorship in Bennett, Coleman & Co. Limited, CMC Limited and Philip Morris International Inc., USA. She is also a member of the Governing Board of Bharti Foundation. A graduate in law from Bombay University,
Ms. Morparia has served on several committees constituted by the Government of India.
DR. BRUCE L A CARTER
Independent Director joined
the Company’s Board in 2008. He was the Chairman
of the Board and Chief Executive Officer
of ZymoGenetics, Inc. USA. Dr. Carter was appointed Chairman of the Board of ZymoGenetics in April 2005. From April 1998 to January 2009, he served as Chief Executive Officer of
ZymoGenetics. Dr. Carter first joined ZymoGenetics in 1986 as Vice President of Research and Development. In 1988,
Novo Nordisk acquired ZymoGenetics
and, in 1994, Dr. Carter was promoted
to Corporate Executive Vice President and
Chief Scientific Officer for Novo Nordisk A/S, the then parent company of ZymoGenetics. Dr. Carter led the negotiations that established
ZymoGenetics as an independent company from Novo Nordisk in 2000. Dr. Carter held various positions of increasing responsibility at G.D. Searle &
Co. Limited from 1982 to 1986 and
was a Lecturer at Trinity College, University
of Dublin from 1975 to 1982. Dr. Carter is
Executive Chairman of Immune Design Corp. USA, and also holds directorship in QLT Inc., Canada, TB Alliance, USA, and Xencor, USA. Dr. Carter received a B.Sc. with
Honors in Botany from the University
of Nottingham, England, and a Ph.D.
in Microbiology from Queen Elizabeth College, University of London.
DR. ASHOK SEKHAR
GANGULY
Independent Director joined
the Company’s Board in 2009. He is currently the Chairman of ABP Private Limited (Ananda Bazar Patrika Group) and was a Director on
the Central Board of Reserve Bank of
India, from 2001 to 2009. Dr.
Ganguly is a member of the Prime Minister’s
Council on Trade and Industry as well as the Investment Commission and the India-USA CEO Council, set up by the Prime
Minister of India and the President of the
US. He is also a member of the National Knowledge Commission to the Prime Minister of India. Dr. Ganguly was the Chairman of Hindustan Lever Limited from 1980 to 1990, and member
of the Unilever Board from 1990 to 1997 with responsibility for world-wide research and technology.
He also holds directorship in Mahindra & Mahindra and Wipro Limited and serves as a member of Advisory Board of Diageo India Pvt. Limited. He is a recipient of the ‘Padma Bhushan’ as well as ‘Padma Vibhushan’, two of India’s prestigious civilian honours. At present, he serves as a member of the Rajya Sabha, the upper house of the Parliament of India.
MR. SRIDAR IYENGAR
Independent Director joined
the Company’s Board in 2011. He is an independent
mentor investor in early stage startups and
companies. For more than 35 years, he has
worked in the UK, US and India with a large number of companies, advising them on strategy and other issues. Mr. Iyengar is the former President of
Foundation for Democratic Reforms in
India, a US-based nonprofit organization.
He is also an advisor to several venture
and private equity funds in India. Earlier,
Mr. Iyengar was a senior partner with KPMG
in the US and UK and served for three years
as the Chairman and CEO of KPMG’s operations in India.
Mr. Iyengar also holds directorship in Infosys Limited, Infosys BPO Limited, ICICI Bank Limited, Rediff.com Limited, Mahindra Holidays and Resorts India Limited, CL Educate Limited, ICICI Prudential Life Insurance Company Limited, Cleartrip Travel Services Private Limited, AverQ Inc., Kovair Software Inc., Rediff Holdings Inc., Cleartrip Inc., iYogi Limited, TiE Silicon Valley Inc. and American India Foundation. He holds a Bachelor of Commerce with Honors degree from the University of Calcutta and is a Fellow of the Institute of Chartered Accountants in England and Wales.
STATEMENT OF UNAUDITED STANDALONE RESULTS FOR THE QUARTER AND HALF YEAR
ENDED 30 SEPTEMBER 2012
|
Particular |
For the Quarter
Ended |
Half Year Ended |
|
|
|
30.09.2012 (Unaudited) |
30.06.2012 (Unaudited) |
30.09.2012 (Unaudited) |
|
Income from Operations |
|
|
|
|
Net Sales/Income from Operations |
20412.900 |
17475.500 |
37888.400 |
|
License fees and service income |
488.200 |
364.600 |
852.800 |
|
Other Operating Income |
184.400 |
205.300 |
389.700 |
|
Total Income from operations
(net) |
21085.500 |
18045.400 |
39130.900 |
|
|
|
|
|
|
Expenses |
|
|
|
|
(a) Cost of materials consumed |
5734.500 |
5052.800 |
10787.300 |
|
(b) Purchase of stock-in-trade |
970.600 |
900.300 |
1870.900 |
|
(c) Changes in inventories of finished goods,
work-in-progress and stock-in-trade |
|
(714.000) |
(1052.400) |
|
(d) Research and development expenses |
1675.400 |
1402.500 |
3077.900 |
|
(e) Employee benefit expenses |
2871.900 |
2609.500 |
5481.400 |
|
(f) Selling Expenses |
1942.000 |
1957.300 |
3899.300 |
|
(g) Provision for decline in the value of long
term investment |
221.900 |
0.000 |
221.900 |
|
(h) Other Expenses |
3709.600 |
4056.900 |
6559.600 |
|
(i) Depreciation and amortization expenses |
760.300 |
731.200 |
1491.500 |
|
Total Expenses |
17547.800 |
15996.500 |
32337.400 |
|
Profit from Operations
before Other Income, Finance costs and Exceptional item |
3537.700 |
2048.900 |
6793.500 |
|
Other Income |
1638.900 |
304.000 |
736.000 |
|
Profit/ Loss from
Ordinary Activities before Finance costs and Exceptional item |
5176.600 |
2352.900 |
7529.500 |
|
Finance costs |
150.400 |
172.200 |
322.600 |
|
Profit/ Loss from Ordinary
Activities before Exceptional item |
5026.200 |
2180.700 |
7206.900 |
|
Exceptional
item |
-- |
-- |
-- |
|
Profit/ Loss from Ordinary Activities
before tax |
5026.200 |
2180.700 |
7206.900 |
|
Tax Expenses |
1395.900 |
404.100 |
1800.000 |
|
Net Profit/ Loss from Ordinary Activities
after tax |
3630.300 |
1776.600 |
5406.900 |
|
Extraordinary
Items |
-- |
-- |
-- |
|
Net Profit for the period |
3630.300 |
1776.600 |
5406.900 |
|
Paid- up
Equity Share Capital (Face value
of the share – Rs. 10) |
849.200 |
849.000 |
849.200 |
|
Paid
up debt capital |
|
|
17669.400 |
|
Reserves
excluding revaluation reserves as per balance sheet of Previous Accounting
Year |
|
|
|
|
Debenture
redemption reserve |
|
|
1290.200 |
|
Earnings per share
(before extraordinary items) (of Rs. 10/-
each) (not annualized) -
Basic |
21.38 |
10.47 |
31.86 |
|
- Diluted |
21.27 |
10.41 |
31.69 |
|
Earnings per
share (after extraordinary items) (of Rs. 10/-
each) (not annualized) - Basic |
21.38 |
10.47 |
31.86 |
|
- Diluted |
21.27 |
10.41 |
31.69 |
|
|
|
|
|
|
a)
Debt equity ratio |
|
|
0.071 |
|
b)
Debt service coverage ratio |
|
|
0.648 |
|
c)
Interest service coverage ratio |
|
|
17.797 |
|
|
|
|
|
|
PARTICULARS OF SHAREHOLDING |
|
|
|
|
1. Public
shareholding |
|
|
|
|
Number of
Shares |
97,663,976 |
97,877,295 |
97,663,976 |
|
Percentage of Shareholding |
57.51 |
57.64 |
57.51 |
|
2. Promoters
and promoter group shareholding |
|
|
|
|
a)
Pledged/Encumbered |
|
|
|
|
- Number of Shares |
-- |
-- |
-- |
|
- Percentage of Shares (as a % of the Total Shareholding
of promoter and promoter group) |
-- |
-- |
-- |
|
- Percentage of Shares (as a % of the Total Share Capital
of the Company) |
-- |
-- |
-- |
|
|
|
|
|
|
Non - encumbered |
|
|
|
|
- Number of
Shares |
43,417,812 |
43,417,812 |
43,417,812 |
|
- Percentage
of Shares (as a % of
the total shareholding of promoter and promoter
group) |
100.00 |
100.00 |
100.00 |
|
- Percentage
of Shares (as a % of the
total share capital of the company) |
25.56 |
25.57 |
25.56 |
|
|
Particulars |
Quarter Ended 31st
March 2012 |
|
B |
Investor
complaints |
|
|
|
Pending at the beginning of the quarter |
Nil |
|
|
Received during the quarter |
4 |
|
|
Disposed of during the quarter |
4 |
|
|
Remaining unresolved at the end of the quarter |
Nil |
SEGMENT – WISE
REVENUE, RESULTS AND CAPITAL EMPLOYED
(Rs. In Millions)
|
Particulars |
Quarter Ended |
Half Year ended |
|
|
|
30.09.2012 |
30.06.2012 |
30.09.2012 |
|
|
Unaudited |
Unaudited |
Unaudited |
|
1. Segment Revenue |
|
|
|
|
a. Pharmaceutical Services and Active Ingredients |
7355.600 |
5701.900 |
13107.200 |
|
b. Global Generics |
14729.400 |
13390.100 |
28443.400 |
|
c. Proprietary Products |
9.300 |
277.900 |
278.900 |
|
Total |
22094.300 |
19369.900 |
41829.500 |
|
Less: Inter – segment revenue |
1341.100 |
1310.000 |
2651.100 |
|
Add: Other unallocable Income |
1971.200 |
289.500 |
688.500 |
|
Total income |
22724.400 |
18349.400 |
39866.900 |
|
|
|
|
|
|
2. Segment Results |
|
|
|
|
Profit/ (loss) before tax and interest |
|
|
|
|
a. Pharmaceutical Services and Active Ingredients |
966.200 |
603.900 |
1570.100 |
|
b. Global Generics |
4342.700 |
3536.900 |
7879.600 |
|
c. Proprietary Products |
(370.800) |
(151.400) |
(522.200) |
|
Total |
4938.100 |
3989.400 |
8927.500 |
|
Less: Finance Costs |
150.400 |
172.200 |
322.600 |
|
Other un-allocable expenditure |
(238.500) |
1636.500 |
1398.000 |
|
Total Profit Before Tax |
5026.200 |
2180.700 |
7206.900 |
|
|
|
|
|
|
3. Capital Employed |
|
|
|
|
(Segment Assets – Segment Liabilities) |
|
|
|
|
a. Pharmaceutical Services and Active Ingredients |
22254.200 |
20886.600 |
22254.200 |
|
b. Global Generics |
34179.100 |
29926.200 |
34179.100 |
|
c. Proprietary Products |
(129.600) |
(173.600) |
(129.600) |
|
d. Unallocated |
16895.000 |
17311.300 |
16895.000 |
|
Total |
731.987 |
67950.500 |
73198.700 |
STATEMENT OF ASSETS AND
LIABILITIES
(Rs. in Millions)
|
Particulars |
30.09.2012 |
|
|
A. EQUITY AND LIABILITIES |
Unaudited |
|
|
1.
Shareholders Funds |
|
|
|
a] Share Capital |
849.200 |
|
|
b] Reserves and Surplus |
72349.500 |
|
|
Sub-total – Shareholders’
funds |
73198.700 |
|
|
|
|
|
|
2. Non-current
Liabilities |
|
|
|
a] Long term Borrowings |
5170.200 |
|
|
b] Deferred Tax Liabilities |
763.200 |
|
|
c] Other Long term liabilities |
44.000 |
|
|
d] Long term provisions |
200.200 |
|
|
Sub-total - Non-current
Liabilities |
6177.600 |
|
|
|
|
|
|
3. Current Liabilities |
|
|
|
a] Short term Borrowings |
12591.800 |
|
|
b] Trade Payables |
7673.600 |
|
|
c] Other Current Liabilities |
8950.000 |
|
|
d] Short Term Provision |
544.800 |
|
|
Sub-total - Current Liabilities |
29760.200 |
|
|
TOTAL - EQUITY
AND LIABILITIES |
109136.500 |
|
|
|
|
|
|
B ASSETS |
|
|
|
1. Non-current assets |
|
|
|
a] Fixed assets |
26648.100 |
|
|
b] Non-current investment |
22687.000 |
|
|
c] long Term loans and Advances |
5152.200 |
|
|
Sub-total – Non- current assets |
54487.300 |
|
|
|
|
|
|
2.
CURRENT ASSETS |
|
|
|
|
Current Investments |
1970.000
|
|
|
Inventories |
15058.000
|
|
|
Trade Receivables |
21912.500
|
|
|
Cash & Bank Balances |
7172.300
|
|
|
Short Term loans and advances |
6667.400
|
|
|
Other Current Assets |
1869.000
|
|
Sub-total – Current Assets |
54649.200
|
|
|
|
|
|
|
TOTAL - ASSETS |
109136.500 |
|
3. Ratios have been computed as follows:
a) Debt Equity Ratio = Debt / Net Worth
[ Debt: Long Term Borrowings (Current and
Noncurrent portion) ]
[ Net Worth: Share Capital + Reserves &
Surplus ]
b) Debt Service Coverage Ratio = Earnings
before interest and tax / (Interest expense during the period + Principal
repayment for all the loan funds during the period)
c) Interest Service Coverage Ratio = Earnings
before interest and tax / Interest expense during the period [ Earnings before
interest and tax: Profit from ordinary activities before tax + Interest
expense]
4. Consequent to the decline in expected
cash flows of some of the products forming part of product related intangibles
pertaining to Company's Global Generics segment, the Company assessed the
recoverability of money advanced to one of its subsidiaries which had funded
the acquisition of such product related intangibles. Accordingly, the Company
has created a provision for doubtful advances of Rs. 774.600 Millions and
recorded the same as part of other expenditure during the quarter ended 30
September 2012.
5. Following the Company’s decision to
discontinue its research and development on terbinafine nail lacquer, the
Company assessed the recoverability of money invested in its subsidiary,
Trigenesis Therapeutics Inc. and has created a provision of Rs. 221.900
Millions for diminution in the value of long term investments.
6. The figures of the earlier periods have
been re-grouped to be in confirmity with the new format prescribed under Clause
41 of the listing agreement.
7. The results for the quarter and half
year ended 30 September 2012 have been subjected to a 'Limited Review' by the Statutory
Auditors of the Company. An unqualified report has been issued by them thereon.
CONTINGENT LIABILITIES
(Rs. in millions)
|
i) Commitments /
contingent liabilities: |
31.03.2012 |
31.03.2011 |
|
(a) Guarantees issued by banks |
154.000 |
119.000 |
|
(b) Guarantees issued by the Company on behalf of subsidiaries,
associates and joint venture |
17039.000 |
11070.000 |
|
(c) Letters of credit outstanding |
714.000 |
437.000 |
|
(d) Contingent consideration payable in respect of subsidiaries acquired |
0.000 |
12.000 |
|
|
|
|
|
ii) Claims
against the Company not acknowledged as debts in respect of: |
|
|
|
(a) Income tax matters, pending decisions on various appeals made by
the Company and by the Department |
432.000 |
431.000 |
|
(b) Excise matters (including service tax), under dispute |
250.000 |
127.000 |
|
(c) Custom matters, under dispute |
0.000 |
97.000 |
|
(d) Sales tax matters, under dispute |
237.000 |
170.000 |
|
(e) The company has
received demand for payment to the credit of the Drug Prices Equalisation
Account under Drugs (Price Control) Order, 1995 for few of its products which
are being contested. based on its best estimate, the Company has made a
provision in its books of accounts towards the potential liability related to
the principal and interest amount demanded under the aforesaid order and
believes that possibility of any liability that may arise on account of
penalty on this demand is remote. |
||
|
iii) Estimated amount
of contracts remaining to be executed on capital account and not provided for
(net of advances) |
2231.000 |
3365.000 |
|
iv) Commitment
under Export Promotion Capital Goods (EPCG) scheme |
3982.000 |
9054.000 |
|
v) The Company
is also involved in other lawsuits, claims, investigations and proceedings,
including patent and commercial matters, which arise in the ordinary course
of business. However, there are no material claims on such cases. |
||
FIXED ASSETS:
Tangible assets:
Ø Land – Freehold
Ø Building
Ø Plant and Machinery
Ø Electrical Equipment
Ø Laboratory Equipment
Ø Furniture and fixture
Ø Office Equipment
Ø Vehicles
Intangible assets:
Ø Customer contracts
Ø Technical know how
Ø Non-compete fees
Ø
Copyrights and patents
WEBSITE DETAILS:
OVERVIEW
Dr. Reddy’s began as an API manufacturer in 1984, producing high-quality APIs to first the Indian, and later, the international markets. In 1987, they started their formulations operations and, after becoming a force to reckon with in the Indian formulations market, went international in 1991.
Today, their value proposition to their customers derives from an optimal operating system in which operations, product development and marketing and sales are fully integrated. Operations and the supply chain are aligned to ensure high availability, pull based replenishment of products at the retail level and superior inventory turns to their customers. This advantage is combined with a highly effective prescription generation detailing effort.
A field force of over 2700 motivated and knowledgeable representatives supported by an integrated network of back-end services and armed with handheld devices for quick information access add value to every customer call and interaction.
Dr. Reddy’s - India today is more than a 200 million dollar venture with presence in almost all major therapeutic areas. Their finished dosage business in India started in 1986 with launch of Norilet (norfloxacin). Their market penetration through nearly 3000 sales force who connect to more than 3,00,000 doctors on a regular basis has yielded them reaching all corners of the country and providing affordable and innovative medicines in all major therapeutic areas like gastro-intestinal, oncology, pain management, cardiovascular, dermatology, diabetes, etc. Eight of their brands feature in the top-300 brands in India that include drugs like Stamlo, Reditux, Omez and Ketorol.
Alongside the presence of end-to-end pharmaceutical capabilities within the organization helps them cater customer and patient needs much more effectively. Medicines like for any other geography, they manufacture at their USFDA approved finished dosage facility with utmost importance on quality and efficacy of the drugs.
Recently they have deepened our focus into the rural markets in India to ensure the expansion of their reach. In this initiative they have collaborated with their CSR wing, Dr. Reddy’s Foundation to help them reach the millions who are still away from effective treatment and availability of the right medicines. Apart from manufacturing and distribution of medicines they also provide patient care through their various initiatives like Sparsh, Life at the Doorstep, etc. (where patients are given free treatment and medicines), and educate and create awareness among healthcare professionals through DRFHE to cater to the millions who are in need of proper treatment across the country.
PRESS RELEASE
Dr. Reddy’s announces the Launch of SILDENAFIL
TABLETS
Hyderabad, India, November 19, 2012
Dr. Reddy’s Laboratories (NYSE: RDY) announced today that it has launched Sildenafil Tablets (20 mg), a bioequivalent generic version of REVATIO® (Sildenafil) Tablets in the US market on November 16, 2012, following the approval by the United States Food and Drug Administration (USFDA) of Dr. Reddy’s ANDA for Sildenafil Tablets.
The REVATIO® brand had U.S. sales of approximately $338.67 Million for the most recent twelve months ending September 2012 according to IMS Health*.
Dr. Reddy’s Sildenafil Tablets in 20 mg are available in 90 count bottle sizes.
Disclaimer
This press release includes forward-looking statements, as defined in the U.S.
Private Securities Litigation Reform Act of 1995. We have based these forward-looking
statements on our current expectations and projections about future events.
Such statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially. Such factors
include, but are not limited to, changes in local and global economic
conditions, our ability to successfully implement our strategy, the market
acceptance of and demand for our products, our growth and expansion,
technological change and our exposure to market risks. By their nature, these
expectations and projections are only estimates and could be materially
different from actual results in the future.
About Dr. Reddy’s
Dr. Reddy’s Laboratories Limited (NYSE: RDY) is an integrated global
pharmaceutical company, committed to providing affordable and innovative
medicines for healthier lives. Through its three businesses - Pharmaceutical
Services and Active Ingredients, Global Generics and Proprietary Products – Dr.
Reddy’s offers a portfolio of products and services including APIs, custom
pharmaceutical services, generics, biosimilars, differentiated formulations and
NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology,
oncology, pain management, anti-infective and pediatrics. Major markets include
India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New
Zealand.
Dr. Reddy’s Laboratories to request AFM approval for Offer Memorandum in connection with its Offer for OctoPlus N.V.
Hyderabad/Leiden, 16 November 2012 – On 22 October 2012,
Dr. Reddy's (NYSE: RDY) and OctoPlus (Euronext Amsterdam: OCTO) jointly announced that they have reached conditional agreement in connection with an intended public offer by Dr. Reddy’s, or a wholly owned subsidiary of Dr. Reddy’s, for all issued and outstanding ordinary shares in the capital of OctoPlus at an offer price of € 0.52 (cum dividend) in cash (the "Offer Price") for each OctoPlus share (the "Offer").
Dr. Reddy’s and OctoPlus hereby announce that preparations for the Offer,
including preparations in respect of the offer memorandum for the Offer (the
"Offer Memorandum") and obtaining approval from the Netherlands
Authority for the Financial Markets (the "AFM") for the Offer
Memorandum, are proceeding as planned.
Update indicative timetable
Dr. Reddy’s intends to submit a draft of the Offer Memorandum for approval to
the AFM as soon as reasonably practicable following this press release in the
coming days. Once the Offer Memorandum is approved by the AFM, the Offer will
be made by making the Offer Memorandum publicly available. It is currently
expected that the Offer will be launched mid December 2012. If launched, the
Offer period will run for at least eight weeks and no more than ten weeks,
after which the Offer may, if the Offer conditions are fulfilled or waived, be
declared unconditional or the Offer may be extended. Subject to the Offer
conditions, if and when the Offer is declared unconditional, there may be a
post-closing acceptance period of two weeks. Closing of the transaction is
expected to occur in Q1 2013.
The extraordinary meeting of shareholders of OctoPlus pursuant to Section 18 Paragraph 1 of the Dutch Public Takeover Decree (Besluit openbare biedingen Wft) in which the Offer will be discussed and certain governance related resolutions will be proposed to be adopted will, depending on the exact date of launch of the Offer, take place around the end of January 2013. OctoPlus intends to combine the extraordinary general meeting of shareholders of OctoPlus pursuant to Section 2:108a of the Dutch Civil Code (Burgerlijk Wetboek) referred to in the joint press release of Dr. Reddy’s and OctoPlus of 22 October 2012 with the aforementioned extraordinary general meeting of shareholders.
Further irrevocable undertakings
In addition to the irrevocable undertakings announced in the joint press
release of Dr. Reddy’s and OctoPlus of 22 October 2012, Mr. J.J.M. Holthuis
(the founder of OctoPlus) and his holding company Sodoro B.V. and N.V. Fagus
have signed irrevocable undertakings to support and accept the Offer, subject
to customary conditions. The combined shareholding of these parties represents
8.1% of the issued and outstanding ordinary shares in OctoPlus.
The combined shareholding of all shareholders who have signed irrevocable undertakings with Dr. Reddy’s (the “Committed Shareholders”) represents 57.5% of the issued and outstanding shares in OctoPlus. The Committed Shareholders shall tender their Shares against the Offer Price and against the terms and conditions of the Offer as set out in the Offer Memorandum. The Committed Shareholders have not received any information in connection with the Offer that will not be included in the Offer Memorandum.
In addition, as announced in the joint press release of Dr. Reddy’s and OctoPlus of 22 October 2012, the individual members of the Executive Board and Supervisory Board of OctoPlus holding together 1.1% of the issued and outstanding shares in OctoPlus have also agreed to an irrevocable undertaking to tender their shares under the Offer.
Company profile Dr. Reddy’s
Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) is an integrated global
pharmaceutical company, committed to providing affordable and innovative
medicines for healthier lives. Over the last fiscal year the company generated
revenues of over $2.0 billion. Through its three businesses – Pharmaceutical
Services and Active Ingredients, Global Generics and Proprietary Products – Dr.
Reddy’s offers a portfolio of products and services including APIs, custom
pharmaceutical services, generics, biosimilars, differentiated formulations and
NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology,
oncology, pain management, anti-infective and pediatrics. Major markets include
India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New
Zealand.
Company profile OctoPlus
OctoPlus is a specialty pharmaceutical company focused on the development and
manufacture of improved injectable pharmaceuticals based on proprietary drug delivery
technologies that exhibit fewer side effects, improved patient convenience and
a better efficacy/safety balance than existing therapies.
OctoPlus also focuses on the development of long-acting, controlled release versions of known protein therapeutics, peptides and small molecules, including specialty generics. OctoPlus is a leading European provider of advanced drug formulation and clinical scale manufacturing services to the pharmaceutical and biotechnology industries, with a focus on difficult-to formulate active pharmaceutical ingredients.
Restrictions
This announcement is for information purposes only and does not constitute an
offer or an invitation to acquire or dispose of any securities or investment
advice or an inducement to enter into investment activity. This announcement
does not constitute an offer to sell or issue or the solicitation of an offer
to buy or acquire the securities of Dr. Reddy’s or OctoPlus in any
jurisdiction. The distribution of this press release may, in some countries, be
restricted by law or regulation. Accordingly, persons who come into possession
of this document should inform themselves of and observe these restrictions. To
the fullest extent permitted by applicable law, Dr. Reddy’s and OctoPlus
disclaim any responsibility or liability for the violation of any such
restrictions by any person. Any failure to comply with these restrictions may
constitute a violation of the securities laws of that jurisdiction. Neither Dr.
Reddy’s, nor OctoPlus, nor any of their advisors assumes any responsibility for
any violation by any person of any of these restrictions. Any OctoPlus
shareholder who is in any doubt as to his position should consult an
appropriate professional advisor without delay. This announcement is not to be published
or distributed in or to Canada and Japan.
Notice to US holders of OctoPlus Shares
The Offer will be made for the securities of a Dutch company and is subject to
Dutch disclosure requirements, which are different from those of the United
States. Some of the financial information included in this announcement has
been prepared in accordance with International Financial Reporting Standards
and thus may not be comparable to financial information of US companies or
companies whose financial statements are prepared in accordance with generally
accepted accounting principles in the United States. The Offer will be made in
the United States pursuant to the applicable US tender offer rules and
otherwise in accordance with the requirements of the Dutch Public Takeover
Decree. Accordingly, the Offer will be subject to disclosure and other
procedural requirements, including with respect to withdrawal rights, offer
timetable, settlement procedures and timing of payments, that are different
from those applicable under US domestic tender offer procedures and law.
The receipt of cash pursuant to the Offer by a US holder of OctoPlus shares may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of OctoPlus shares is urged to consult his independent professional advisor immediately regarding the tax consequences of acceptance of the offer.
It may be difficult for US holders of OctoPlus shares to enforce their rights and claims arising out of the US federal securities laws, since OctoPlus is located in a country other than the United States, and some or all of its officers and directors may be residents of a country other than the United States. US holders of OctoPlus shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court’s judgment.
In accordance with normal Dutch practice and pursuant to Rule 14e-5(b) of the Securities Exchange Act of 1934, Dr. Reddy's or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, OctoPlus shares outside of the United States, other than pursuant to the Offer, before or during the period in which the Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the Netherlands, will be reported to the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financiële Markten) and disclosed in the offer memorandum or by press release.
Forward Looking Statements
This press release may include "forward-looking statements" and
language indicating trends, such as "anticipated" and
"expected." Although Dr. Reddy's and OctoPlus believe that the
assumptions upon which the irrespective financial information and their
respective forward-looking statements are based are reasonable, they can give
no assurance that these assumptions will prove to be correct. Neither Dr.
Reddy's nor OctoPlus, nor any of their advisors accepts any responsibility for
any financial information contained in this press release relating to the
business or operations or results or financial condition of the other or their
respective groups.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No exist to suggest that subject is or was
the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record exists
to suggest that any director or indirect owners, controlling shareholders,
director, officer or employee of the company is a government official or a
family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 55.69 |
|
|
1 |
Rs. 89.20 |
|
Euro |
1 |
Rs. 72.10 |
INFORMATION DETAILS
|
Report Prepared
by : |
BVA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
78 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.