Good Health Can’t Wait.

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Good Health Can’t Wait. Dr. Reddy’s Laboratories Limited NOTES TO FINANCIAL STATEMENTS (All amounts in Indian Rupees millions, except share data and where otherwise stated) 2.36: FINANCIAL RISK MANAGEMENT (CONTINUED) The following table analyzes foreign currency risk from non derivative financial instruments as at 31 March2015: (All figures in equivalent Rupees millions) PARTICULARS U.S. DOLLARS EURO ROUBLES OTHERS (1) TOTAL Assets: Cash and bank balances 47 - 38 151 236 Trade receivables 35,181 934 5,758 2,957 44,830 Loans and advances and other current assets 274 14 2 91 381 Total 35,502 948 5,798 3,199 45,447 Liabilities: Trade payables 1,841 952 - 272 3,065 Long term borrowings 9,389 - - - 9,389 Short term borrowings 14,875 2,116 3,866 - 20,857 Other liabilities and provisions 3,820 146 1,248 278 5,492 Total 29,925 3,214 5,114 550 38,803 (1) Others include currencies such as British pounds sterling, Australian dollars, Mexican pesos, South African rand, Venezuelan bolivars, etc. The following table analyzes foreign currency risk from non derivative financial instruments as at 31 March 2014: (All figures in equivalent Rupees millions) PARTICULARS U.S. DOLLARS EURO ROUBLES OTHERS (1) TOTAL Assets: Cash and bank balances 88 13 43 273 417 Trade receivables 29,710 914 9,910 2,209 42,743 Loans and advances and other current assets 732 553 14 2,274 3,573 Total 30,530 1,480 9,967 4,756 46,733 Liabilities: Trade payables 1,453 1,435 - 256 3,144 Long term borrowings 9,000 - - - 9,000 Short term borrowings 7,519 1,282 6,179 - 14,980 Other liabilities and provisions 2,084 564 1,759 278 4,685 Total 20,056 3,281 7,938 534 31,809 (1) Others include currencies such as British pounds sterling, Australian dollars, Mexican pesos, South African rand, Venezuelan bolivars, etc. For the year ended 31 March 2015 and 2014, every 10% depreciation/appreciation in the exchange rate between the Indian rupee and the respective currencies in the above mentioned financial assets/liabilities would affect the Company’s net profit by approximately ` 664 and ` 1,492 respectively, from such financial assets/liabilities. Interest rate risk As of 31 March 2015, the Company had foreign currency loans of ` 26,366 carrying a floating interest rate of LIBOR plus 7.5 - 125 bps whereas as of 31 March 2014, the Company had foreign currency loans of ` 17,219 carrying a floating interest rate of LIBOR plus 20-179 bps and ` 846 carrying a floating interest rate of Moscow Prime Offered Rate plus 60 bps. These loans expose the Company to risk of changes in interest rates. The Company’s treasury department monitors the interest rate movement and manages the interest rate risk based on its policies, which include entering into interest rate swaps as considered necessary. An increase or decrease of 10%in the floating interest rate component applicable to its loans and borrowings would affect the Company’s net profit by approximately`4 and`10 for the year ended 31March2015 and 31March2014, respectively. The Company’s investments in fixed deposits with banks and short term liquid mutual funds are for short durations, and therefore do not expose the Company to significant interest rates risk. 156
Standalone Financial Statements Annual Report 2014 - 15 NOTES TO FINANCIAL STATEMENTS (All amounts in Indian Rupees millions, except share data and where otherwise stated) 2.36: FINANCIAL RISK MANAGEMENT (CONTINUED) Commodity rate risk Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices may fluctuate significantly over short periods of time. The prices of the Company’s raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of the Company’s operating expenses. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. The Company has historically not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices. 2.37: EMPLOYEE BENEFIT PLANS 2.37.1 Gratuity Plan In accordance with applicable Indian laws, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. Effective 1 September 1999, the Company established the Dr. Reddy’s Laboratories Gratuity Fund (the “Gratuity Fund”). Liabilities in respect of the Gratuity Plan are determined by an actuarial valuation, based upon which the Company makes contributions to the Gratuity Fund. Amounts contributed to the Gratuity Fund are primarily invested in Indian government bonds and corporate debt securities. A portion of the fund is also invested in Indian equities. The following table set out the status of the aforesaid funded gratuity plan as required under AS-15 (Revised): Reconciliation of the present value of the defined benefit obligation PARTICULARS FOR THE YEAR ENDED 31 MARCH 2015 FOR THE YEAR ENDED 31 MARCH 2014 Opening defined benefit obligation 1,040 875 Current service cost 136 116 Interest cost 99 74 Actuarial losses / (gains) 45 45 Benefits paid (84) (70) Closing defined benefit obligation 1,236 1,040 Change in the fair value of assets PARTICULARS FOR THE YEAR ENDED 31 MARCH 2015 FOR THE YEAR ENDED 31 MARCH 2014 Opening fair value of plan assets 908 707 Expected return on plan assets 80 56 Actuarial gains / (losses) 43 14 Contributions by employer 210 201 Benefits paid (84) (70) Closing fair value of plan assets 1,157 908 Amount recognized in the balance sheet PARTICULARS AS AT 31 MARCH 2015 AS AT 31 MARCH 2014 Present value of funded obligations 1,236 1,040 Fair value of plan assets (1,157) (908) Net Liability 79 132 157
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ANNUAL REPORT 2014-15 Good Health C
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Our Brand We are in the business of
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Corporate Overview Annual Report 20
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Notice Annual Report 2014 - 15 NOTI
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E-Voting Annual Report 2014 - 15 IN
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Dr. Reddy’s Laboratories Limited
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The future belongs, not to those wh
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