DRIVIN G ROWTH - Dr. Reddy's

62
management discussion
and analysis
PROVISIONS
PROVISIONS CONSIST of provision for
proposed dividend at Rs. 191.3 million as
on March 31, 2002 compared to Rs. 126.4
million as at March 31, 2001. Provisions
also include provisions for gratuity and
leave encashment for employees.
DEFERRED TAX LIABILITY
THE COMPANY HAS adopted AS 22 –
Accounting for Taxes on Income with effect
from April 1, 2001 and has a deferred tax
liability (net) amounting to Rs. 434.9
million as at March 31, 2002.
Table 7
|
Summarised Profit and Loss
Account
RS. MILLION
2001-02 2000-01 GROWTH RATE
Gross Sales 15,578 9,841 58%
Income from services 79
License fees 344
Operating income 16,001 9,841 63%
Other income 515 175
Total income 16,516 10,016 65%
Expenditure 11,202 7,410 51%
EBITDA 5,314 2,606 104%
Depreciation & Amortization 497 447
Interest & Finance charges 109 403
PBT 4,708 1,756 168%
Provision for taxation 111 311
a) Current tax 395 311
b) Deferred tax (284) –
PAT 4,597 1,445 218%
EPS (in Rs.) 60.41 22.83 165%
MISCELLANEOUS EXPENDITURE (to
the extent not written off or adjusted)
THE COMPANY HAS changed the
accounting policy on treatment of
expenditure incurred on product
development, market development etc.
collectively referred to as “development
expenditure”. Such development
expenditure, hitherto written-off over the
estimated period over which the benefit was
expected to accrue, is now written-off fully in
the year it is incurred. The management
believes that the change in the accounting
policy would result in a more appropriate
presentation of the results of the Company.
Accordingly, a sum of Rs. 931 million, being
the expenditure not written-off as at April 1,
2001 has been written-off during the year.
PROFIT AND LOSS ACCOUNT
AS THE TABLE SHOWS, sales
increased by 58 per cent to Rs. 15,578
million in 2001-02.
Total operating income of Dr. Reddy’s grew
by 63 per cent to Rs. 16,001 million in 2001-
02; and total income rose by 65 per cent to
Rs. 16,516 million.
Other operational income of Rs. 423
million constituted (i) Rs. 344 million from
drug discovery — up-front payment of
Rs. 236 million (US$ 5 million) from Novartis
for DRF-4158 plus milestone payment of
DR. REDDY’S LABORATORIES LTD. | MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2001-2002