Form 6-K - Dr. Reddy's

More documents

Recommendations

Info

ITEM 2. OPERATING AND FINANCIAL REVIEW Three months ended June 30, 2008 compared to the three months ended June 30, 2007 The following discussion and analysis should be read in conjunction with the consolidated financial statements, the related cash flow statements and notes, and the Operating and Financial Review and Prospects included in our Annual Report on Form 20-F for the fiscal year ended March 31, 2008, on file with the SEC (our “Form 20-F”) and the unaudited condensed consolidated interim financial statements contained in this Report on Form 6-K and the related cash flow statement and notes (collectively, the “Financial Statements”). During this year we have decided to adopt IFRS and its interpretations issued by the IASB as the accounting principles for our filings with the SEC. An explanation of how the transition to IFRS has affected the reported financial position and financial performance of the Company is provided in Note 4 of the Financial Statements. This Note includes reconciliations of equity, profit or loss and cash flows for comparative periods under Previous GAAP to those reported for those periods under IFRS. This discussion contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words “anticipate”, “believe”, “estimate”, “intend”, “will” and “expect” and other similar expressions as they relate to us or our business are intended to identify such forward-looking statements. We undertake no obligation to publicly update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Factors that could cause or contribute to such differences include those described under the heading “Risk Factors” in our Form 20-F. Readers are cautioned not to place reliance on these forward-looking statements that speak only as of their dates. The Chief Operating Decision Maker (“CODM”) evaluates our performance and allocates resources based on an analysis of various performance indicators by operating segments. The operating segments reviewed by the CODM with effect from April 1, 2008 are as follows: Pharmaceutical Services and Active Ingredients (“PSAI”); Global Generics; and Proprietary Products. Pharmaceutical Services and Active Ingredients. This segment includes active pharmaceutical ingredients and intermediaries, also known as active pharmaceutical products or bulk drugs, which are the principal ingredients for finished pharmaceutical products. Active pharmaceutical ingredients and intermediaries become finished pharmaceutical products when the dosages are fixed in a form ready for human consumption, such as a tablet, capsule or liquid, using additional inactive ingredients. This segment also includes contract research services and the manufacture and sale of active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. Global Generics. This segment consists of finished pharmaceutical products ready for consumption by the patient, marketed under a brand name or as generic finished dosages with therapeutic equivalence to branded formulations. Proprietary Products. This segment involves the discovery of new chemical entities for subsequent commercialization and out-licensing. It also involves our specialty pharmaceuticals business, which is positioning to launch its sales and marketing operations for in-licensed and codeveloped dermatology products. Accordingly, disclosures relating to the previous period have been reclassified/regrouped to conform to the current period presentation. The explanations below have been suitably modified in line with such changes. 45
The following table sets forth, for the periods indicated, our consolidated revenues and gross profits by segment: (Rs. in millions) Three months ended June 30, 2008 Three months ended June 30, 2007 Gross Gross Revenues Gross profit % to Revenues Gross profit % to Revenues % to total profit revenues Revenues % to total profit revenues Pharmaceutical Services and Active Ingredients Rs. 4,613.3 30.7% Rs.1,499.2 32.5% Rs. 3,634.3 30.3% Rs.1,244.3 34.2% Global Generics 10,286.9 68.4% 5,941.8 57.8% 8,228.2 68.7% 4,878.3 59.3% Proprietary Products 38.5 0.2% 30.8 80.0% 52.5 0.4% 33.1 63.1% Others 99.1 0.7% 22.5 22.7% 68.1 0.6% (86.9) (127.8%) Total Rs.15,037.8 100.0% Rs.7,494.3 49.8% Rs.11,983.1 100.0% Rs.6,068.8 50.6% The following table sets forth, for the periods indicated, financial data as percentages of total revenues and the increase (or decrease) by item as a percentage of the amount over the comparable period in the previous year. Percentage of Sales Percentage Three months ended June 30, Increase/(Decrease) 2008 2007 Revenues 100.0% 100.0% 25.5% Gross profit 49.8% 50.6% 23.5% Selling, general and administrative expenses 33.8% 29.9% 42.0% Research and development expenses 7.0% 6.7% 30.2% Other expense/(income), net 1.6% (0.7)% 391.6% Results from operating activities 7.4% 14.7% (36.6)% Finance income, net 0.5% 1.3% (51.4)% Profit before income taxes 7.9% 16.0% (37.7)% Income tax expense (0.6)% (2.7)% (73.9)% Profit for the period 7.4% 13.3% (30.4)% 46
Page 1 and 2: SECURITIES AND EXCHANGE COMMISSION
Page 3 and 4: TABLE OF CONTENTS ITEM 1. FINANCIAL
Page 5 and 6: DR. REDDY’S LABORATORIES LIMITED
Page 7 and 8: [Continued from table on page 6, fi
Page 9 and 10: 1. Reporting Entity DR. REDDY’S L
Page 30 and 31: 6. Business combinations DR. REDDY
Page 32 and 33: 7. Financial instruments DR. REDDY
Page 34 and 35: 11. Other intangible assets DR. RED
Page 40 and 41: 19. Loans and borrowings (continued
Page 42 and 43: 20. Related parties (continued) DR.
Page 44 and 45: 21. Contingencies (continued) DR. R
Page 48 and 49: Statement on Changes in Profit Figu
Page 50 and 51: decrease was partially offset by an
Page 52 and 53: Income tax expense Income tax expen
Page 54 and 55: ITEM 4. RECENT DEVELOPMENTS In July
Page 56 and 57: In August 2008, Allgemeinen Ortskra
Page 58 and 59: SIGNATURES Pursuant to the requirem

Form 6-K - Dr. Reddy's

Create successful ePaper yourself

Delete template?

Save as template?