Part-2 - Subsi Financials FY18 PDF

SUBSIDIARY COMPANIES FINANCIALS
2017-18
PART- B Good Health
Can’t Wait
Sl. No. Name of the Subsidiary Page No.
1 Aurigene Discovery Technologies (Malaysia) SDN BHD 1
2 Aurigene Discovery Technologies Inc. 15
3 Aurigene Discovery Technologies Limited 26
4 beta Institut gemeinnützige GmbH 97
5 betapharm Arzneimittel GmbH 115
6 Cheminor Investments Limited 156
7 Chirotech Technology Limited 184
8 DRANU LLC 206
9 DRL Impex Limited 217
10 Dr. Reddy’s Bio-Sciences Limited 250
11 Dr. Reddy’s Farmaceutica Do Brasil Ltda. 283
12 Dr. Reddy’s Laboratories (Australia) Pty. Limited 297
13 Dr. Reddy’s Laboratories (Canada) Inc. 311
14 Dr. Reddy's Laboratories Chile SPA., Chile 325
15 Dr. Reddy’s Laboratories (EU) Limited 339
16 Dr. Reddy’s Laboratories Inc. 364
17 Dr. Reddy’s Laboratories International SA 417
18 Dr. Reddy’s Laboratories Japan KK 431
19 Dr Reddy’s Laboratories Kazakhstan LLP 444
20 Dr. Reddy’s Laboratories LLC 458
21 Dr. Reddy’s Laboratories Louisiana LLC 480
22 Dr. Reddy’s Laboratories Malaysia Sdn. Bhd. 512
23 Dr. Reddy’s Laboratories New York, Inc. 526
24 Dr. Reddy’s Laboratories (Proprietary) Limited 554
25 Dr. Reddy’s Laboratories Romania SRL 569
26 Dr. Reddy’s Laboratories SA 581
27 Dr. Reddy’s Laboratories SAS 592
28 Dr. Reddy's Laboratories Taiwan Ltd. 606
29 Dr. Reddy’s Laboratories Tennessee, LLC 618
30 Dr. Reddy’s Laboratories (UK) Limited 650
31 Dr. Reddy's Research and Development B.V. (formerly Octoplus BV) 666
32 Dr. Reddy’s Singapore PTE. LTD. 702
33 Dr. Reddy’s Srl 715
34 Dr. Reddy’s New Zealand Limited 737
35 Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd, China 752
36 Dr. Reddy's Venezuela, C.A. 766
37 Eurobridge Consulting B.V. 780
38 Idea2Enterprises (India) Private Limited 792
39 Imperial Credit Private Limited 821
40 Industrias Quimicas Falcon de Mexico, S.A. de CV 850
41 Kunshan Rotam Reddy Pharmaceutical Company Limited 896
42 Lacock Holdings Limited 916
43 OOO Dr. Reddy's Laboratories Limited 936
44 OOO DRS LLC 976
45 Promius Pharma LLC 989
46 Reddy Antilles N.V. 1024
47 Reddy Holding GmbH 1035
48 Reddy Netherlands B.V. 1057
49 Reddy Pharma Iberia SA 1069
50 Reddy Pharma Italia S.p.A 1093
51 Reddy Pharma SAS 1107
52 Regkinetics Services Limited (formerly Dr. Reddy’s Pharma SEZ Limited ) 1121
Dr. Reddy's Laboratories Ltd, Basel
Report of the Statutory Auditor

on the Financial Statements
to the General Meeting of Shareholders
Financial Statements 2017
KPMG AG
Basel, 19 April 2018
581
KPMG AG
Audit
Viaduktstrasse 42 PO Box 3456 Telephone +41 58 249 91 91
CH-4002 Basel CH-4002 Basel Fax +41 58 249 91 23
Internet www.kpmg.ch
Report of the Statutory Auditor to the General Meeting of Shareholders of
Report of the Statutory Auditor on the Financial Statements
As statutory auditor, we have audited the accompanying financial statements of Dr. Reddy’s
Laboratories Ltd, which comprise the balance sheet, income statement and notes for the year
ended 31 December 2017.
Board of Directors’ Responsibility

The board of directors is responsible for the preparation of the financial statements in accordance
with the requirements of Swiss law and the company’s articles of incorporation. This
responsibility includes designing, implementing and maintaining an internal control system
relevant to the preparation of financial statements that are free from material misstatement,
whether due to fraud or error. The board of directors is further responsible for selecting and
applying appropriate accounting policies and making accounting estimates that are reasonable in
the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers the internal control
system relevant to the entity’s preparation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control system. An audit also includes
evaluating the appropriateness of the accounting policies used and the reasonableness of
accounting estimates made, as well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements for the year ended 31 December 2017 comply with Swiss
law and the company’s articles of incorporation.
© 2018 KPMG AG is a subsidiary of KPMG Holding AG, which is a member of the Member of EXPERTsuisse
KPMG network of independent firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss legal entity. All rights reserved.
582
Dr. Reddy's Laboratories Ltd, Base
Report of the Statutory Auditor
on the Financial Statements
to the General Meeting of Shareholders
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight
Act (AOA) and independence (article 728 CO) and that there are no circumstances incompatible
with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we
confirm that an internal control system exists, which has been designed for the preparation of
financial statements according to the instructions of the board of directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss
law and the company’s articles of incorporation. We recommend that the financial statements
submitted to you be approved.
KPMG AG
Martin Rohrbach Norman Dittes

Licensed Audit Expert Licensed Audit Expert
Auditor in Charge
Basel, 19 April 2018
Enclosures:
- Financial statements (balance sheet, income statement and notes)
- Proposed appropriation of available earnings
2
583
Dr Reddy's Laboratories Ltd, Basel 1
Balance Sheet as of Notes 31st Dec 2017 31st Dec 2016 31st Dec 2017 31st Dec 2016
USD USD CHF CHF

ASSETS
Current assets
Cash and cash equivalents 408'796 27'272'804 398'361 27'718'823

Trade accounts receivable
- from third parties 15'619'538 14'508'453 15'220'850 14'745'724
- from entities in which the entity holds a participation 84'068'100 55'009'952 81'922'262 55'909'585
Other short-term receivables
- from third parties 8'356'952 4'618'892 8'143'640 4'694'430
- from entities in which the entity holds a participation 37'572'330 118'162'363 36'613'297 120'094'790
Inventories and non-invoiced services 2.1 13'341'952 7'944'080 13'001'398 8'073'998
Prepaid expenses and accrued income 94'217 154'707 91'812 157'237
159'461'885 227'671'251 155'391'620 231'394'587
Non-current assets
Financial assets 189'845 697'594 184'999 709'001

Investments 2.3 389'468'649 381'150'098 379'527'461 387'383'427
Property, plant and equipment
- Other equipment 20'101 20'196 19'588 20'527
Intangible assets 2.2 487'283'447 484'787'452 474'845'537 492'715'666
876'962'042 866'655'340 854'577'585 880'828'621
1'036'423'927 1'094'326'591 1'009'969'205 1'112'223'208
584
Balance Sheet as of Notes 31st Dec 2017 31st Dec 2016 31st Dec 2017 31st Dec 2016
USD USD CHF CHF

LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term liabilities
Trade accounts payable

- to third parties 3'689'399 5'926'036 3'595'227 6'022'950
- to holders of participations and governing bodies 29'754'263 45'486'555 28'994'786 46'230'442
- to entities in which the entity holds a participation 11'399'348 2'370'925 11'108'380 2'409'699
- Other Group Companies 1'206'434 732'957 1'175'640 744'943
Short-term interest-bearing liabilities 2.5 38'500'000 395'000'000 37'517'288 401'459'830
Other short-term liabilities
- to third parties 7'136'559 5'702'890 6'954'398 5'796'155
- to holders of participations and governing bodies 523'623 2'476'338 510'258 2'516'836
- to entities in which the entity holds a participation 66'640'974 16'275'493 64'939'963 16'541'663
Accrued expenses and deferred income 25'930'440 22'864'926 25'268'565 23'238'858
184'781'040 496'836'120 180'064'505 504'961'376
Long-term liabilities
Long-term interest-bearing liabilities 2.5 250'000'000 - 243'618'750 -
250'000'000 - 243'618'750 -
434'781'040 496'836'120 423'683'255 504'961'376
Shareholders' equity
Share capital 108'339'522 108'339'522 105'640'410 105'640'410

Legal capital reserves
- Reserves from capital contributions 127'077'219 127'077'219 123'911'286 123'911'286
Legal retained earnings
- General legal retained earnings 17'359'485 17'359'485 16'927'000 16'927'000
Available earnings
- Retained earning brought forward 344'714'245 351'245'684 360'783'136 342'494'938
- Profit or loss for the year 4'152'416 (6'531'439) 4'046'425 (6'638'254)
- Foreign exchange translation difference (25'022'307) 24'926'452
601'642'887 597'490'471 586'285'950 3'607'261'832
1'036'423'927 1'094'326'591 1'009'969'205 1'112'223'208
585
Income statement Notes 2017 2016 2017 2016
USD USD CHF CHF
Revenue from sale of goods and services 240'642'470 151'186'491 234'500'072 153'658'995
Other operating income 2'070 721 2'017 733
Total operating income 240'644'540 151'187'212 234'502'089 153'659'728
Raw materials and supplies -137'738'246 -87'540'633 -134'222'479 -88'972'273

Personnel expenses -4'079'969 -3'303'784 -3'975'828 -3'357'814
Other operating expenses -32'107'774 -15'803'801 -31'288'223 -16'062'256
R&D Expenses -36'711'929 -34'676'364 -35'774'857 -35'243'461
Depreciation and impairment losses on property, plant and equipment -18'246 -25'986 -17'780 -26'411
Amortization on intangible assets -16'098'614 -11'765'289 -15'687'696 -11'957'698
Total operating expenses -226'754'778 -153'115'857 -220'966'863 -155'619'913
Operating result 13'889'762 -1'928'645 13'535'226 -1'960'186
Financial income 1'168'569 1'372'091 1'138'742 1'394'530

Financial expenses -10'195'508 -6'419'798 -9'935'268 -6'524'787
Profit or loss for the year before taxes 4'862'823 -6'976'352 4'738'700 -7'090'442
Direct taxes -710'407 444'912 -692'274 452'188
Profit or loss for the year 4'152'416 -6'531'440 4'046'426 -6'638'254
586
Dr Reddy's Laboratories Ltd, Basel 1.016354
Notes
1 Principles
1.1 General aspects
These financial statements were prepared according to the provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the
Swiss Code of Obligations). Where not prescribed by law, the significant accounting and valuation principles applied are described below. It
should be noted that to ensure the company’s going concern, the company’s financial statements may be influenced by the creation and release of
hidden reserves.
1.2 Inventories and non-invoiced services
Inventories and non-invoiced services are recorded at acquisition or manufacturing costs: If the net realizable value at the balance sheet date is
lower than acquisition or manufacturing costs, net realizable values are used. Acquisition costs are calculated using the weighted average cost
method, manufacturing costs using standard costs.
1.3 Securities and financial assets
Securities with a short-term holding period are valued at their quoted market price as at the balancesheet date. A valuation adjustment reserve has
not been accounted for. Financial assets include securities with a long-term holding period that have no quoted market price or no other
observable market price. Financial assets are valued at their acquisition cost adjusted for impairment losses.
1.4 Property, plant and equipment
Property, plant and equipment (PPE) is valued at acquisition or manufacturing costs less accumulated depreciation and impairment losses. With
the exception of land, PPE is depreciated using the straightline method. As soon as there are indicators that book values may be overstated, these
are reviewed and, if necessary, adjusted.
1.5 Intangible Assets
Intangible assets are capitalized if they meet the following conditions

cumulatively at the date of recognition:
• the intangible assets are identifiable and controlled by the entity;
• the intangible assets will generate a measurable benefit for the entity for more than one year;
• the expenses incurred in the creation of the intangible assets can be separately recognized and measured;
• it is likely that the resources required to complete and market or use the intangible assets for the entity’s own purposes are available or will be
made available.
Intangible assets are amortized using the straight-line method. As soon there are indicators that book values may be overstated, these are
reviewed and, if necessary, adjusted.
1.6 Revenue from sale of goods and services
Sales are recognized when risks and rewards are transferred to the client or a service has been provided. Normally, this is the case upon delivery
of the goods.
1.7 Leases
Leasing and rental contracts are recognized based on legal ownership. Therefore, any leasing or rental expenses are recognized as expenses in the
period they are incurred; however, the leased or rented objects themselves are not recognized in the balance sheet.
587
Notes
2 Disclosure on balance sheet and income statement items Dec 2017 Dec 2017 Dec 2016 Dec 2016
USD CHF USD CHF
2.1 Inventories and non-invoiced services
Raw materials 11'607'811 11'311'521 4'750'000 4'827'682

Finished goods 1'734'141 1'689'877 3'194'080 3'246'316
13'341'952 13'001'398 7'944'080 8'073'998
2.2 Intangible assets
Product related Intangibles 62'660'275 61'060'872 59'196'083 60'164'176

Marketing rights Intangibles 69'698 70'838
Technical Knowhow Intangibles 8'424'535 8'209'498 12'917'642 13'128'897
Others 416'198'637 405'575'167 412'604'029 419'351'755
487'283'447 474'845'537 484'787'452 492'715'666
During the year, the Company amended the existing agreement with EISAI Co Ltd, by entering into a binding term sheet for upfront payment of
USD 13.5 Mn and subsequent milestone payment of USD 6.5 Mn in future years and non-reimbursement of CMC development costs. In 2018
the company signed amended agreement with EISAI Co Ltd to incorporate binding term sheet terms.
During the year the Company entered into a Supply & Distribution Agreement with Belcher Pharmacueticals and acquired marketing rights for
the product Cefixime Powder and paid Milestone payments of USD 3 Mn.
During the year the Company entered into a Development & Supply Agreeement with Cerovene Inc for development of Pyrimethamine tablets
and paid a milestone payment of USD 1 Mn.
588
Dr. Reddy's Laboratories Ltd, Basel 0.974475
Notes
2.3 Investments in subsidiaries
Capital Capital Share in Capital and
31.12.2017 31.12.2017 31.12.2016 31.12.2016 31.12.2017 31.12.2016
Company Domicile
USD CHF USD CHF
Dr. Reddy's Laboratories Inc. United States of America 188'040'326 183'240'597 188'040'326 191'115'537 100% 100%
Dr. Reddy's Laboratories EU United Kingdom 19'093'998 18'606'624 19'093'998 19'406'261 100% 100%
Dr. Reddy's New Zealand Ltd New Zealand 1 1 1 1 100% 100%
Dr. Reddy's Laboratories International SA Switzerland 5'230'305 5'096'801 5'230'305 5'315'841 100% 100%
Dr. Reddy's Laboratories, Romania SRL Romania 551'620 537'540 551'620 560'641 99.99% 99.99%
Dr. Reddy's Laboratories Venezuela CA Venezuela CA 888'553 865'873 888'553 903'084 100% 100%
Dr. Reddy's Laboratories Ukraine LLC Ukraine LLC 1'360'503 1'325'776 1'360'503 1'382'753 99.99% 99.99%
Reddy Netherlands BV The Netherlands 51'476'837 50'162'891 51'476'837 52'318'689 100% 100%
Dr. Reddy's Laboratories New York, Inc United States of America 42'155'356 41'079'338 42'155'356 42'844'768 90% 90%
Dr.Reddy's Singapore Pte Ltd Singapore 375'705 366'115 375'705 381'849 100% 100%
Dr. Reddy's Laboratories Canada Inc Canada 3'098'868 3'019'769 3'098'868 3'149'547 100% 100%
Dr. Reddy's Laboratories Proprietary Ltd South Africa 15'694'784 15'294'175 15'694'784 15'951'456 100% 100%
OOO Dr. Reddy's Laboratories Russia 42'501'426 41'416'577 42'501'426 43'196'494 99.99% 99.99%
Reddy Holdings GmbH Germany 33'936 33'070 33'936 34'491 100% 100%
Lacock Holdings Ltd Cyprus 3'333'458 3'248'371 3'333'458 3'387'973 100% 100%
Dr. Reddy's Laboratories (Australia) Pty

Australia 5'526'976 5'385'900 5'526'976 5'617'364 100% 100%
Limited
Dr Reddy's Laboratories SAS Columbia 738'235 719'392 738'235 750'308 100% 100%
Dr Reddy's Laboratories Japan, KK Japan 421'470 410'712 217'783 221'345 100% 100%
Reddy Pharma SAS France 2'269'003 2'211'087 831'428 845'025 100% 100%
Dr. Reddy’s Laboratories Kazakhstan

Kazaksthan 1'217'497 1'186'420 100%
Limited Liability
Dr. Reddy’s (WUXI) Pharmaceutical Co.

China 1'000'000 974'475 100%
Ltd
Dr. Reddy’s Laboratories Chile SPA. Chile 500'000 487'238 100%
Dr.Reddy's Laboratories Malaysia SD Malaysia 500'000 487'238 100%
Reddy Pharma Iberia S.A Spain 3'459'792 3'371'481 100%
Total investments in subsidiaries 389'468'649 379'527'461 381'150'098 387'383'427
On 20 Jan 2017 & on 3 May 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 1,217,497 in Dr Reddy's Laboratories, Kazakhsthan
towards 100% of shares.
On 9 Feb 2017, 6 Jun 2017, 8 Aug 2017, 21 Sep 2017 & 30 Nov 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 1,437,575 in Reddy
Pharma SAS, France towards 100% shares.
On 7 Apr 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 203,687 in Dr Reddy's Laboratories, Japan towards 100% shares.
On 11 Jul 2017, on 2 Aug 2017, & on 11 Oct 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 1,000,000 in Dr Reddy's Laboratories,
China towards 100% of shares.
On 26 Jul 2017 & on 12 Sep 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 500,000 in Dr Reddy's Laboratories, Chile towards 100%
of shares.
On 21 Sep 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 500,000 in Dr Reddy's Laboratories, Malaysia towards 100% of shares.
On 18 Oct 2017, Dr. Reddy's Laboratories SA has invested an amount of USD 3,459,792 in Reddy Iberia, Spain towards 100% of shares purchased from
Dr Reddy's Laboratories, India.
589
Notes
2.4 Share capital and reserves from capital contributions
As at 31 Dec, the share capital consists of 105,640,410 registered shares at a par value of CHF 1.00 each.
2.5 Interest-bearing liabilities
During the year the company restructured its USD short-term loan agreements with third party financial institutions for conversion into long-term
loans. The outstanding balance is USD 288.5m (31 Dec 2016: USD 395.0m).
3 Other information
3.1 Full-time equivalents
The annual average number of full-time equivalents for the reporting year, as well as the previous year, did not exceed 50.
3.2 Audit Fees
Audit services 43'176 42'074 37'253 37'862

Other services 323 328
43'176 42'074 37'576 38'191
3.3 Relevant currency for the business
In accordance with Article 958a para. 4 CO the company converted the balance sheet, income statements and financials within the notes for
presentation purposes from the relevant currency for the business into the presentation currency. The general foreign currency rate applied was
0.974475 USD/CHF. The equity was translated with a historical foreign currency rate of 0.97508 USD/CHF. The resulting translation difference
is presented in the retained earnings.
3.4 Guarantees
In the ordinary course of business, the Company gives credit or performance guarantees to Banks or third parties. Based on the existing
guarantee agreements payments by Dr. Reddy’s Laboratories Ltd. would be triggered in case the financial obligations could not be fulfilled. The
nominal amount outstanding at 31 December 2017 was USD 5.9 Mn. (2016: USD Nil).
590
Proposed Appropriation of Available Earnings Dec 2017 Dec 2016 Dec 2017 Dec 2016
USD USD CHF CHF
Retained earnings brought forward 344'714'245 351'245'684 360'783'136 342'494'938

Profit or (loss) for the year 4'152'416 -6'531'439 4'046'425 -6'638'254
Foreign exchange translation difference -25'022'307 24'926'452
Available earnings 348'866'661 344'714'245 339'807'254 360'783'136
The Board of Directors proposes to the General

Meeting of Shareholders the following appropriation
of available earnings:
Transfer to the general legal reserve 208'317 203'000

To be carried forward 348'658'344 344'714'245 339'604'254 360'783'136
348'866'661 344'714'245 339'807'254 360'783'136
591
Independent Auditors’ Report
To the Members of Dr. Reddy's Laboratories SAS
We have audited the accompanying financial statements of Dr. Reddy's Laboratories SAS a
company incorporated and administered outside India, which comprises the Balance sheet as at
31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income) for the
year ended on that date annexed thereto, the Cash Flow Statement, the Statement of Changes in
Equity for the year then ended and a summary of significant accounting policies and other
explanatory information.
Management’s Responsibility for the Financial Statements

The financial statements are prepared for the limited purpose of complying with the provisions of
Section 136 of the Companies Act, 2013. The Company’s Board of Directors is responsible, in
accordance with the requirement of and only for the purpose of Section 136 of the Companies Act,
2013, for the matters with respect to the preparation of these financial statements that give a true
and fair view of the financial position, financial performance and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended only to the extent applicable and relevant to a company
incorporated outside India.
This responsibility also includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of these financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
The Management of the Company is further responsible for ensuring that the financial statements,
as far as possible, are in accordance with the requirement of Section 136 of the Companies Act,
2013.
The audit is limited and only to express an opinion on the financial statements, prepared only to
comply with the requirements and for the purpose of sec.136 of the Companies Act, 2013, whether
they give a true and fair view of, as the case may be, state of affairs etc. It is not an audit in
accordance with the provisions of the statutes of the country in which it was established and
operated as may be applicable to the company.
Our responsibility is to express an opinion on these financial statements based on our audit carried
out for the limited purpose of complying with Section 136. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered Accountants of India specified
under Section 143(10) of the Act, only to the extent applicable and relevant to a company
592
This report is based on our examination of the accompanying financial statements and other
relevant records and information considered necessary for the purposes of issuing this report and
the information and explanations provided to us by the Management.
Opinion
In our opinion and to the best of our information and according to the explanations given to us,
the financial statements give the information required by the Act, to the extent applicable and
relevant to a company incorporated outside India, in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2018;
(b) in the case of the Statement of Profit and Loss (including Other Comprehensive Income), of
the Profit for the year ended on that date;
(C) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date; and
(d) in the case of Statement of Changes in Equity, of the Changes in Equity for the year ended on
that date.
For M/s A Ramachandra Rao & Co

Chartered Accountants
ICAI FRN 02857S
PSRVV Surya Rao

Partner
Membership No. 202367
Place: Hyderabad
Date: 18 May 2018
593
Dr. Reddy's Laboratories SAS
Balance Sheet
(All amounts in Indian Rupees thousands, except share data and where otherwise stated)
As at As at
Particulars Note 31 March 2018 31 March 2017
ASSETS
Non-current assets
Property, plant and equipment 2.1 2,593 3,575
Financial assets
Other financial assets 2.2 B 169 162
Deferred tax assets, net 2.19 3,103 -
Tax assets, net 11,797 907
17,662 4,644
Current assets
Inventories 2.4 56,319 73,615
Financial assets
Trade receivables 2.2 A 147,649 37,970
Cash and cash equivalents 2.2 C 29,022 19,042
Other current assets 2.3 507 854
233,497 131,481
Total assets 251,159 136,125
EQUITY AND LIABILITIES

Equity
Equity share capital 2.5 49,231 49,231
Other equity (4,821) (51,453)
44,410 (2,222)
Liabilities
Non-current liabilities
Financial Liabilities
Borrowings 2.6 A 74,115 47,749
74,115 47,749
Current liabilities
Trade payables 2.6 C 118,770 84,657
Other financial liabilities 2.6 B 11,519 4,188
Provisions 2.7 192 185
Other current liabilities 2.8 2,153 1,568
132,634 90,598
Total equity and liabilities 251,159 136,125
The accompanying notes are an integral part of financial statements.
As per our report of even date attached
For A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Dr. Reddy's Laboratories SAS
ICAI Firm registration number: 002857S
PSRVV Surya Rao Avinash Mishra

Partner Legal Representative
Membership No.: 9750
Place: Hyderabad
Date: 18 May 2018
594
Statement of Profit and Loss
For the year ended For the year ended

Income
Sales 2.9 296,797 62,773
Total revenue from operations 296,797 62,773
Other income 2.10 10,460 1,602
Total income 307,257 64,375
Expenses
Cost of materials consumed 133,953 93,846
(Increase) / decrease in inventories of finished goods, work-in-
progress and stock-in-trade 2.11 17,296 (73,615)
Employee benefits expense 2.12 60,711 43,225
Depreciation expense 2.13 1,414 1,220
Finance costs 2.14 1,667 769
Selling and other expenses 2.15 44,543 22,769
Total expenses 259,584 88,214
Profit / loss before tax 47,673 (23,839)

Tax expense
Current tax 4,076 55
Deferred tax (3,035) -
Profit / loss for the year 46,632 (23,894)
Other comprehensive income (OCI) - -

Total comprehensive profit / loss for the year 46,632 (23,894)
Earnings per share:

Basic earnings per share of COP 100,000/- each 2,137.81 (1,095.40)
Diluted earnings per share of COP 100,000/- each 2,137.81 (1,095.40)

Place: Hyderabad
Date: 18 May 2018
595
Statement of Cash Flow
Particulars For the year ended For the year ended

31 March 2018 31 March 2017
Cash flows from / (used in) operating activities
Profit / (Loss) before tax 47,673 (23,839)
Adjustments:
Depreciation expense 1,414 1,220
Foreign exchange loss / (gain), net 443 (827)
Finance costs 1,667 769
Allowances for credit losses, net 2,533 -
Changes in operating assets and liabilities:
Trade receivables (104,291) (38,174)
Inventories 17,296 (73,615)
Trade payables 27,292 85,112
Other assets and liabilities, net 4,914 1,834
Cash generated from / (used in) operations (1,059) (47,520)
Income tax paid, net (11,445) -
Net cash from / (used in) operating activities (12,504) (47,520)
Cash flows from / (used in) investing activities

Purchase of property, plant and equipment (432) (1,194)
Net cash used in investing activities (432) (1,194)
Cash flows from / (used in) financing activities

Proceeds from issue of equity shares - 1
Proceeds from long-term loans and borrowings, net 21,481 23,174
Net cash from / (used in) financing activities 21,481 23,175
Net increase / (decrease) in cash and cash equivalents 8,545 (25,539)

Effect of exchange rate changes on cash and cash equivalents 1,435 867
Cash and cash equivalents at the beginning of the year (Refer note 2.2C) 19,042 43,714
Cash and cash equivalents at the end of the year (Refer note 2.2 C) 29,022 19,042


Place: Hyderabad
Date: 18 May 2018
596
Statement of Changes in Equity
Other components of equity

Particulars Equity share capital Reserves and surplus Total equity
Retained earnings
Balance as at 1 April 2017 49,231 (51,453) (2,222)
Profit for the year - 46,632 46,632
Balance as at 31 March 2018 49,231 (4,821) 44,410

Retained earnings
Balance as at 1 April 2016 49,230 (27,559) 21,671
Issue of equity shares 1 - 1
Loss for the year - (23,894) (23,894)
Balance as at 31 March 2017 49,231 (51,453) (2,222)
The accompanying notes are an integral part of financial statements
for and on behalf of the Board of Directors of

For A Ramachandra Rao & Co. Dr. Reddy's Laboratories SAS

Place: Hyderabad
Date: 18 May 2018
597
Note 1 Description of the Company and significant accounting policies

1.1 Description of the Company
Dr. Reddy's Laboratories SAS (" the Company") incorporated in Colombia , is a 100% subsidiary of Dr. Reddy's Laboratories SA.
1.2 Basis of preparation of financial statements

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies
(Indian Accounting Standards) Rules, 2015 and as amended from time to time.
1.3 Use of estimates and judgments

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised
and in any future periods affected.
1.4 Significant accounting policies
a) Current and non-current classification

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the
Companies Act, 2013 and Ind AS 1, Presentation of financial statements.
Assets:
An asset is classified as current when it satisfies any of the following criteria:
a) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within twelve months after the reporting date; or
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
Liabilities:
A liability is classified as current when it satisfies any of the following criteria:
a) it is expected to be settled in the Company’s normal operating cycle;
c) it is due to be settled within twelve months after the reporting date; or
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at
the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax assets
and liabilities are always disclosed as non-current.
b) Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial
recognition during the period or in previous financial statements are recognised in the statement of profit and loss in the period in which they arise
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash
flows had occurred at the measurement date.
c) Revenue
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated
costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured
reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts and
allowances. Revenue includes shipping and handling costs billed to the customer.
Services
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as the underlying services are performed.
Upfront non-refundable payments received under these arrangements are deferred and recognised as revenue over the expected period over which the related services are
expected to be performed.
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over the
term of the contract. Some of these arrangements include certain performance obligations by the Company. Revenue from such arrangements is recognised in the period in
which the Company completes all its performance obligations.
d) Interest income and dividend

Interest income primarily comprises of interest from term deposits with banks. Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the
financial asset. Interest income is included in other income in the statement of profit and loss.
Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend.
598
Note 1 Description of the Company and significant accounting policies (continued)
e) Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:
• the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit;
• differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising upon the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred
tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
f) Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which
includes all stock options granted to employees.
g) Property, plant and equipment

Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are
directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset
to a working condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are
capitalised as part of the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets
that necessarily take a substantial period of time to get ready for their intended use or sale.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and
equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property,
plant and equipment and are recognised in the statement of profit and loss.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit and
loss as incurred.
Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless the exchange transaction lacks commercial
substance or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of
the asset given up.
Depreciation
Depreciation is recognised in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
Leasehold improvements are depreciated over the period of the lease agreement or the useful life, whichever is shorter.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the change(s) are accounted
for as a change in an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors .
The estimated useful lives are as follows:
Buildings
- Factory and administrative buildings
- Ancillary structures
Plant and machinery
Furniture, fixtures and office equipment
Vehicles
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class of assets, based on the technical
evaluation and assessment, the Company believes that the useful lives adopted by it best represent the period over which an asset is expected to be available for use.
Accordingly, for these assets, the useful lives estimated by the Company are different from those prescribed in the Schedule.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other non-current assets.
The cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
h) Inventories
Inventories consist of raw materials, stores and spares, work-in-progress and finished goods and are measured at the lower of cost and net realisable value. The cost of all
categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and
other costs incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of
overheads based on normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials,
engineering spares (such as machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as
indirect materials in the manufacturing process.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory include estimated shelf life, planned
product discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of these factors impact the Company’s
business and markets. The Company considers all these factors and adjusts the inventory provision to reflect its actual experience on a periodic basis.
599
i) Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution plans
The Company’s contributions to defined contribution plans are charged to the statement of profit and loss as and when the services are received from the employees.
j) Provisions, contingent liabilities and contingent assets

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.
Restructuring
A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has
been announced publicly. Future operating costs are not provided.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its
obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
Reimbursement rights
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such reimbursements
are recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.
Contingent liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.
Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic
benefits will arise, the asset and related income are recognised in the period in which the change occurs.
k) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
All financial assets are recognised at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to
the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the Companny commits to purchase or sell the asset.
Impairment of trade receivables
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables or any
contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
For this purpose, the Company follows ‘simplified approach’ for recognition of impairment loss allowance on the trade receivable balances. The application of simplified
approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based
on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.
Financial liabilities
Financial liabilities are classified,as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments
l) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value. For this purpose, “short-term” means investments having maturity of three months or less from the date of
investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents for
the purpose of the statement of cash flows.
m) Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using effective interest method, less provision for impairment.
n) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and
are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially ate fair value and subsequently
measured at amortised cost using the effective interest method.
600
Note 2 Notes to the financial statements
Gross carrying value Accumulated depreciation Net carrying value

Particulars As at As at As at As at As at
Additions Disposals For the year Disposals
1 April 2017 31 March 2018 1 April 2017 31 March 2018 31 March 2018
Furniture, fixtures and office equipment 3,124 432 - 3,556 877 895 - 1,772 1,784
Vehicles 2,028 - - 2,028 700 519 - 1,219 809
Total 5,152 432 - 5,584 1,577 1,414 - 2,991 2,593
Previous Year 3,958 1,194 - 5,152 357 1,220 - 1,577 3,575
601
Note 2 Notes to the financial statements (continued)
2.2 Financial assets

2.2 A. Trade receivables
As at As at
31 March 2018 31 March 2017
Unsecured, considered good 147,649 37,970
Unsecured, considered doubtful 2,748 -
150,397 37,970
Less: Allowance for credit loss (2,748) -
147,649 37,970
2.2 B. Other non-current financial assets

As at As at
31 March 2018 31 March 2017
Unsecured, considered good
Security deposits 169 162
169 162
2.2 C. Cash and cash equivalents

As at As at
31 March 2018 31 March 2017
Balances with banks:
- In current accounts 28,998 19,042
Cash on hand 24 -
29,022 19,042
2.3 Other current assets

As at As at
31 March 2018 31 March 2017
Others 507 854
507 854
2.4 Inventories
As at As at
31 March 2018 31 March 2017
Finished goods 56,319 73,615
56,319 73,615
602
2.5 Share capital

As at As at
31 March 2018 31 March 2017
Authorised share capital
1,000,000 equity shares of COP 100,000/- each (31 March 2017: 1,000,000) 2,256,957 2,256,957
Issued equity capital

21,813 equity shares of COP 100,000/- each (31 March 2017: 21,813) 49,231 49,231
Subscribed and fully paid-up

21,813 equity shares of COP 100,000/- each (31 March 2017: 21,813) 49,231 49,231
49,231 49,231
(a) Reconciliation of the equity shares outstanding is set out below:

31 March 2018 31 March 2017
Particulars
No. of equity No. of equity
Amount Amount
shares shares
Number of shares outstanding at the beginning of the year 21,813 49,231 21,812 49,230
Add: Equity shares issued during the year - - 1 1
Number of shares outstanding at the end of the year 21,813 49,231 21,813 49,231
(b) Terms / rights attached to the equity shares
The Company has only one class of equity shares having a par value of COP 100,000 per share. Each holder of equity shares is entitled to one vote per share.
(c) Details of shareholders holding more than 5% shares in the Company

As at As at
31 March 2018 31 March 2017
Particulars
No. of equity % holding in No. of equity % holding in
shares held the class shares held the class
Dr. Reddy's Laboratories SA 21,813 100.00 21,813 100.00
2.6 Financial Liabilities

2.6 A. Non-current borrowings
As at As at
31 March 2018 31 March 2017
Unsecured
Long-term loans from related parties 74,115 47,749
74,115 47,749
2.6 B. Other current financial liabilities

As at As at
31 March 2018 31 March 2017
Accrued expenses 11,519 4,188
11,519 4,188
2.6 C. Trade payables

As at As at
31 March 2018 31 March 2017
118,770 84,657
2.7 Current provisions

As at As at
31 March 2018 31 March 2017
Provision for employee benefits
Compensated absences 192 185
192 185
2.8 Other current liabilities

As at As at
31 March 2018 31 March 2017
Salary and bonus payable 1,617 842
Due to statutory authorities 536 455
Others - 271
2,153 1,568
603
2.9 Sales
31 March 2018 31 March 2017
Sales 296,797 62,773
296,797 62,773
2.10 Other income

31 March 2018 31 March 2017
Foreign exchange gain, net 10,460 1,602
10,460 1,602
2.11 Changes in inventories of finished goods, work-in-progress and stock-in-trade

31 March 2018 31 March 2017
Opening
Finished goods 73,615 73,615 - -
Closing
Finished goods 56,319 56,319 73,615 73,615
17,296 (73,615)
2.12 Employee benefits expense

31 March 2018 31 March 2017
Salaries, wages and bonus 45,439 31,381
Contribution to provident and other funds 8,836 6,238
Staff welfare expenses 6,436 5,606
60,711 43,225
2.13 Depreciation expense

31 March 2018 31 March 2017
Depreciation of property, plant and equipment 1,414 1,220
1,414 1,220
2.14 Finance costs

31 March 2018 31 March 2017
Interest on long-term borrowings 1,667 769
1,667 769
2.15 Selling and other expenses

31 March 2018 31 March 2017
Other selling expenses 10,911 6,102
Legal and professional 2,983 3,578
Travel and conveyance 9,195 3,331
Rent 2,751 2,540
Rates and taxes 86 -
Communication 681 459
Allowance for credit loss, net 2,533 -
Other general expenses 15,403 6,759
44,543 22,769
604
2.16 Going Concern

The accounts have been prepared on Going Concern basis, despite having accumulated losses, as the company is supported by its parent company in its activities and
financial affairs.
2.17 Related parties

a) The following is a summary of related party transactions
Particulars
31 March 2018 31 March 2017
Interest expense to holding company or other group companies:
Dr. Reddy's Laboratories SA 1,667 769
b ) The Company had the following amounts due from / to related parties
As at As at
Particulars
31 March 2018 31 March 2017
Due to holding company and other group companies(included in non-current borrowings):
Dr. Reddy's Laboratories SA 74,115 47,749
Due from holding company and other group companies(included in trade payables and other
liabilities):
Dr. Reddy's Laboratories Limited 72,416 68,944
2.18 Income taxes

a. Current Taxes
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
b. Deferred Taxes
Deferred tax asset, net included in the balance sheet comprises the following:
As at As at
Particulars
31 March 2018 31 March 2017
Inventory 2,498 -
Trade receivables 605 -
Deferred tax asset, net 3,103 -
2.19 Provisions, contingent liabilities and contingent assets

Contingent liabilities and the crystallisation of these liabilities are dependent upon the outcome of court cases / arbitration / out of court settlement, disposal of appeals,
the amount being called up, terms of contractual obligation, development and raising of demand by concerned parties, respectively. The Company has made adequate
provisions, wherever required, in compliance with Ind AS 37 prescribed by the ICAI. Those contingent liabilities have arisen in the normal course of business and may
not crystallise on the Company and may not have any material impact on the revenue.
2.20 Recent accounting pronouncements

Ind AS 115, 'Revenue from Contracts with Customers'
In March 2018, the Ministry of Corporate Affairs (“MCA”) has notified Ind AS 115, 'Revenue from Contracts with Customers', which is effective for accounting periods
beginning on or after 1 April 2018. This comprehensive new standard will supersede existing revenue recognition guidance, and requires an entity to recognise revenue to
depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed
comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements.
Ind AS 115 is effective for annual reporting periods beginning on or after 1 April 2018.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of Ind AS 115 is not expected to have a
significant impact on the Company’s recognition of revenues from product sales, service income and license fee.

Place: Hyderabad
Date: 18 May 2018
605
To the Members of Dr. Reddy's Laboratories Taiwan Limited

We have audited the accompanying financial statements of Dr. Reddy's Laboratories Taiwan
Limited, a company incorporated and administered outside India, which comprises the Balance
sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive
Income) for the year ended on that date annexed thereto, the Cash Flow Statement, the Statement
of Changes in Equity for the year then ended and a summary of significant accounting policies
and other explanatory information.

free from material misstatement, whether due to fraud or error
2013.
606
Opinion
the Loss for the year ended on that date;
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
607
Dr. Reddy's Laboratories Taiwan Limited
Balance Sheet
As at
Particulars Note 31 March 2018
ASSETS
Current assets
Financial assets
Cash and cash equivalents 2.1 12,539
Other current assets 2.2 290
12,829
Total assets 12,829

Equity
Equity share capital 2.3 13,409
Other equity (600)
12,809
Liabilities
Current liabilities
Other financial liabilities 2.4 20
20
Total equity and liabilities 12,829
For A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Dr. Reddy's Laboratories Taiwan Limited
PSRVV Surya Rao M V Narasimham Sameer Natu

Partner Director Director
Place: Hyderabad
Date: 18 May 2018
608
For the period ended

23 February 2018 to
Particulars
Note 31 March 2018
Total income -
Expenses
Selling and other expenses 2.5 600
Total expenses 600
Loss before tax (600)

Tax expense
Current tax -
Deferred tax -
Loss for the period (600)
Other comprehensive income (OCI) -

Total comprehensive loss for the period (600)

Place: Hyderabad
Date: 18 May 2018
609
Particulars For the period ended

23 February 2018 to
31 March 2018
Loss before tax (600)
Adjustments:
Foreign exchange loss, net (30)
Other assets and liabilities, net (270)
Cash generated used in operations (900)
Income tax paid, net -
Net cash used in operating activities (900)

Net cash used in investing activities -

Proceeds from issue of equity shares 13,409
Net cash from financing activities 13,409
Net increase / (decrease) in cash and cash equivalents 12,509

Effect of exchange rate changes on cash and cash equivalents 30
Cash and cash equivalents at the beginning of the period (Refer note 2.2C) -
Cash and cash equivalents at the end of the period (Refer note 2.2 C) 12,539


Place: Hyderabad
Date: 18 May 2018
610

Retained earnings
Balance as at 23 February 2018 - - -
Issue of equity shares 13,409 - 13,409
Profit for the period - (600) (600)
Balance as at 31 March 2018 13,409 (600) 12,809

For A Ramachandra Rao & Co. Dr. Reddy's Laboratories Taiwan Limited

Place: Hyderabad
Date: 18 May 2018
611

Dr. Reddy's Laboratories Taiwan Limited (" the Company") incorporated on 23 February 2018 in Taiwan , is a 100% subsidiary of Dr. Reddy's Laboratories SA.

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian
Accounting Standards) Rules, 2015 and as amended from time to time.

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in
any future periods affected.

Assets:
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the
option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax assets and
liabilities are always disclosed as non-current.

denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured based on
historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition
during the period or in previous financial statements are recognised in the statement of profit and loss in the period in which they arise
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash flows
had occurred at the measurement date.
c) Revenue
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. Revenue
from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts and allowances. Revenue
includes shipping and handling costs billed to the customer.
Services
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as the underlying services are performed. Upfront non-
refundable payments received under these arrangements are deferred and recognised as revenue over the expected period over which the related services are expected to be
performed.
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over the term
of the contract. Some of these arrangements include certain performance obligations by the Company. Revenue from such arrangements is recognised in the period in which the
Company completes all its performance obligations.

discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial
asset. Interest income is included in other income in the statement of profit and loss.
612
e) Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively
enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all
stock options granted to employees.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly
attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to a working
condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised as part of the
cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use or sale.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant
and equipment and are recognised in the statement of profit and loss.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit and loss as incurred.
Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless the exchange transaction lacks commercial substance
or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of the asset given up.
Depreciation
Depreciation is recognised in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated
over the shorter of the lease term and their useful lives. Land is not depreciated.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the change(s) are accounted for as a
change in an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors .
Years
Buildings
- Factory and administrative buildings 20 to 30
- Ancillary structures 3 to 15
Plant and machinery 3 to 15
Furniture, fixtures and office equipment 3 to 10
Vehicles 4 to 5
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class of assets, based on the technical evaluation
and assessment, the Company believes that the useful lives adopted by it best represent the period over which an asset is expected to be available for use. Accordingly, for these
assets, the useful lives estimated by the Company are different from those prescribed in the Schedule.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other non-current assets. The cost
of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
h) Inventories
categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based on
normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering spares (such as
machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as indirect materials in the manufacturing
process.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory include estimated shelf life, planned product
discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of these factors impact the Company’s business and markets.
The Company considers all these factors and adjusts the inventory provision to reflect its actual experience on a periodic basis.
613
i) Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or
constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Cash settled share-based payments
The fair value of the amount payable to employees in respect of share-based payment transactions which are settled in cash is recognised as an expense, with a corresponding
increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is re-measured at each reporting date and at the
settlement date based on the fair value of the share-based payment transaction. Any changes in the liability are recognised in the statement of profit and loss.
j) Provisions, contingent liabilities and contingent assets

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow
of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Restructuring
A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been
announced publicly. Future operating costs are not provided.
Onerous contracts
obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing
with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such reimbursements are
recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where
there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits
will arise, the asset and related income are recognised in the period in which the change occurs.
k) Financial instruments
Financial assets
All financial assets are recognised at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place
(regular way trades) are recognised on the trade date, i.e., the date that the Companny commits to purchase or sell the asset.
For this purpose, the Company follows ‘simplified approach’ for recognition of impairment loss allowance on the trade receivable balances. The application of simplified approach
does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its
historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are analysed.
Financial liabilities are classified,as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate.
l) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible into known amounts of cash and which
are subject to insignificant risk of changes in value. For this purpose, “short-term” means investments having maturity of three months or less from the date of investment. Bank
overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents for the purpose of the
statement of cash flows.
m) Trade receivables
n) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are
presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially ate fair value and subsequently measured at
amortised cost using the effective interest method.
614
Financial assets
2.1 Cash and cash equivalents
As at
31 March 2018
- In current accounts 12,539
12,539

As at
31 March 2018
Others 290
290
2.3 Share capital

As at
31 March 2018
TWD 6,000,000 * 13,409

TWD 6,000,000 * 13,409

TWD 6,000,000 * 13,409
13,409
* No concept of nature and number of shares in this company.
Details of shareholders holding more than 5% shares in the Company

As at
31 March 2018
Particulars
Amount in % holding in
TWD ('000) the class
Dr. Reddy's Laboratories SA 13,409 100.00
2.4 Other current financial liabilities

As at
31 March 2018
Accrued expenses 20
20
615

23 February 2018 to
31 March 2018
Legal and professional 20
Rent 88
Foreign exchange loss, net 1
Other general expenses 491
600
2.6 Going Concern

The accounts have been prepared on Going Concern basis.
616
2.7 Income taxes

a. Current Taxes
The Company is not liable to pay any current taxes on account of current year losses, brought forward losses and unabsorbed depreciation.
b. Deferred Taxes
The deferred tax liability has not been provided during the year as there is no liability arising out of any timing difference.


beginning on or after 1 April 2018. This comprehensive new standard will supersede existing revenue recognition guidance, and requires an entity to recognise revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed
2.10 The Company is incorporated on 23 February 2018 and accordingly the comparitive figures are not presented.

Place: Hyderabad
Date: 18 May 2018
617
618
619
DR. REDDY’S LABORATORIES TENNESSEE LLC
Financial Statements
March 31, 2018 and March 31, 2017
620
STATEMENT OF FINANCIAL POSITION
(All amounts in U.S. Dollars, except share and per share data and where otherwise stated)
As of As of
PARTICULARS Note March 31, 2018 March 31, 2017
ASSETS
Current assets
Cash and cash equivalents 9 34,943 60,662
Inventories 7 805,195 673,803
Other current assets 8 16,176,103 7,524,902
Total current assets 17,016,241 8,259,367
Non-current assets
Property, plant and equipment 6 5,495,001 5,775,672
Deferred tax assets 16 1,270,348 744,193
Other non-current assets 8 1,975 1,975
Total non-current assets 6,767,324 6,521,840
Total assets 23,783,565 14,781,207
LIABILITIES AND EQUITY

Current liabilities
Trade and other payables 11 98,832 56,411
Loans and Borrowings 15 37,539,146 31,442,981
Other current liabilities 12 2,072,706 1,815,724
Total current liabilities 39,710,684 33,315,116
Total liabilities 39,710,684 33,315,116

Equity
Share capital 10 25,000,000 25,000,000
Retained Earnings (41,063,552) (43,642,189)
Share based payment reserve 136,433 108,280
Total equity (15,927,119) (18,533,909)
Total liabilities and equity 23,783,565 14,781,207
The accompanying notes form an integral part of these financial statements.
621
INCOME STATEMENT
For the year ended

Revenue 14 3,604,191 4,196,295

Cost of revenues 8,711,799 15,014,306
Gross (loss) / profit (5,107,608) (10,818,011)
Selling, general and administrative expenses 1,286,507 1,589,732
Other (income)/expense, net 13 (349) 13,795
Total operating expenses 1,286,158 1,603,527
(Loss) / profit before income tax (6,393,766) (12,421,538)
Tax (benefit) / expense (8,972,403) (5,413,549)
(Loss) / profit for the year 2,578,637 (7,007,989)
622
STATEMENT OF COMPREHENSIVE INCOME
PARTICULARS March 31, 2018 March 31, 2017

Other comprehensive income
Items that will not be reclassified to profit or loss: - -
Total items that will not be reclassified to profit or loss - -
Items that may be reclassified subsequently to profit or loss: - -
Total items that may be reclassified subsequently to profit or loss - -
Other comprehensive (loss) / profit for the year, net of income tax
Total comprehensive (loss) / profit for the year 2,578,637 (7,007,989)
623
STATEMENT OF CHANGES IN EQUITY
Share based
Particulars Share Capital Retained earnings Total
payment
Balance as of April 01, 2016 (A) 25,000,000 83,480 (36,634,200) (11,550,720)

Total Comprehensive income
(Loss)/Profit for the period - - (7,007,989) (7,007,989)
Foreign currency translation adjustments - - - -
Total Comprehensive income (B) - - (7,007,989) (7,007,989)
Transactions with owners of the Company
Contributions and distributions
Share based payment expense - 24,800 - 24,800
Total contributions and distributions - 24,800 - 24,800
Total transactions with owners of the
- 24,800 - 24,800
Company ( C)
Balance as of March 31,2017 [(A)+(B)+( C)] 25,000,000 108,280 (43,642,189) (18,533,909)

(Loss)/Profit for the period - - 2,578,637 2,578,637
Total Comprehensive income (B) - - 2,578,637 2,578,637
Dividend paid - - - -
- 28,153 - 28,153
Company ( C)
624
STATEMENT OF CASH FLOWS
For the year ended

Particulars
March 31, 2018 March 31, 2017
Cash flows from/(used in) operating activities:
(Loss)/profit for the year 2,578,637 (7,007,989)
Adjustments for:
Depreciation and amortization 509,754 1,120,408
Loss on sale of property, plant and equipment - 13,683
Impairment loss on tangible assets - 5,090,000
Share based payment expense 28,153 24,800
Inventory write down 336,825 2,918,639
Income tax expense / (benefit) (8,972,403) (5,413,549)
Inventories (468,217) (2,811,428)
Other assets (204,952) 110,839
Trade payables 47,065 (412,838)
Other liabilities 256,982 447,898
Net cash from operating activities (5,888,156) (5,919,537)
Cash flows from/(used in) investing activities:

Purchase of property, plant and equipment (233,728) (343,056)
Proceeds from sale of property, plant and equipment - -
Net cash used in investing activities (233,728) (343,056)
Cash flows from/(used in) financing activities:

Proceeds from loans and borrowings from parent company, net 6,096,165 6,233,094
Net cash used in financing activities 6,096,165 6,233,094
Net decrease in cash and cash equivalents (25,719) (29,499)

Cash and cash equivalents at the beginning of the year 60,662 90,161
Cash and cash equivalents at the end of the year 34,943 60,662
625
NOTES TO THE FINANCIAL STATEMENTS
1. Reporting entity
In March 2011, the Company acquired from GlaxoSmithKline plc and Glaxo Group Limited (collectively, “GSK”) a penicillin based antibiotics
manufacturing site in Bristol, Tennessee, U.S.A., the product rights for GSK’s Augmentin® and Amoxil® brands of oral penicillin-based antibiotics
in the United States (GSK retained the existing rights for these brands outside the United States), certain raw materials and finished goods inventory
associated with Augmentin®, and rights to receive certain transitional services from GSK. The acquisition enabled the Company to enter the U.S. oral
antibiotics market with a comprehensive product filing and a dedicated manufacturing site.
2. Basis of preparation of financial statements

a. Statement of compliance
These financial statements as at and for the year ended March 31, 2018 have been prepared in accordance with the International Financial Reporting
Standards and its interpretations (“IFRS”) issued by the International Accounting Standards Board (“IASB”).
These financial statements were authorized for issuance by the Company’s Board of Directors on May 21, 2018.
b. Basis of measurement
These financial statements have been prepared on the historical cost convention and on an accrual basis.
c. Going Concern
The Company’s financial statement for the year ended March 31, 2018 and March 31, 2017 have been prepared on a going concern basis which
assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.
As of March 31, 2018 and 2017 the Company had working capital deficit of USD 22,694,443 and USD 25,055,749 respectively. The Company had
incurred profits and losses of USD 2,578,637 and USD 7,007,989 and had negative cash flow from operations of USD 5,888,156 and USD 5,919,537
for the year ended March 31 2018 and March 31, 2017 respectively. Dr. Reddy’s Laboratories Inc. (the 'Holding Company') has undertaken to provide
such financial support as necessary, to enable the Company to meet the operational requirements as they arise and to meet it's liabilities as and when
they fall due. The management expects that there will be significant increase in the operations of the Company that will lead to improved cash flow and
long term sustainability.
Based on these factors, inspite of the incurred losses and negative cash flows from operations in the Company, the financial statements are prepared
with going concern assumption.
d. Functional currency
The Company’s operations are self-contained and integrated within the respective countries/regions (i.e., United States of America), the functional
currency has been determined to be the local currency of that country (i.e., U.S. Dollar).
e. Use of estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the
following notes:
• Note 2(c) — Going Concern;
• Note 2(d) — Functional currency;
• Note 3(a) and 17 — Financial instruments;
• Note 3(b) — Useful life of property, plant and equipment;
• Note 3(c) — Useful life of intangible assets;
• Note 3(d) — Valuation of inventories;
• Note 3(e) — Provisions;
• Note 3(g) —Income tax
• Note 3(h) —Share based payment transactions
626
3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements:
a. Financial instruments
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments, AFS financial assets, as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
· Financial assets at fair value through profit or loss
· Loans and receivables
· Held-to-maturity investments
· AFS financial assets
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at
fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the
near term. The Company has not designated any financial assets at fair value through profit or loss. Financial assets at fair value through profit or loss
are carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair
value) or finance income (positive net changes in fair value) in the income statement.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated
by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs for loans and in
cost of revenues or other operating expenses for receivables.
This category generally applies to trade and other receivables.
627
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed
from the Company’s statement of financial position) when:
· The rights to receive cash flows from the asset have expired
Or
· The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to
what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the
rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An
impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the
estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include
indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable
decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are
individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence
of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with
similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is
discounted at the financial asset’s original EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in the income statement. Interest
income (recorded as finance income in the income statement) continues to be accrued on the reduced carrying amount using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment loss. Loans, together with the associated allowance are written off when
there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the
amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously
recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to
finance costs in the income statement.

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as
appropriate.
628
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IAS
39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the income statement.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if
the criteria in IAS 39 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss.
Loans and borrowings

This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the income statement. This category generally applies to interest-bearing loans and borrowings.
629
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the income statement.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
b. Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other
costs directly attributable to bringing the asset to a working condition for its intended use. Borrowing costs that are directly attributable to the
construction or production of a qualifying asset are capitalized as part of the cost of that asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying
amount of property, plant and equipment and are recognized net within “other (income/expense, net)” in income statement.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are
recognized in income statement as incurred.
Depreciation
Depreciation is recognized in income statement on a straight line basis over the estimated useful lives of property, plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives. The depreciation expenses is included in the costs of the functions using the
asset. Land is not depreciated.
Leasehold improvements are depreciated over period of the lease agreement or the useful life, whichever is shorter.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the
change(s) are accounted for as a change in an accounting estimate in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates
and Errors. The estimated useful lives are as follows:
Buildings
- Factory and administrative buildings 25 - 50 years
- Ancillary structures 3 - 15 years
Plant and equipment 3 - 15 years
Furniture, fixtures and office equipment 4 - 10 years
Vehicles 4 - 5 years
Computer equipment 3 - 5 years
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant and
equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
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c. Goodwill and other Intangible assets

Goodwill
Goodwill represents the excess of consideration transferred, together with the amount of non-controlling interest in the acquiree, over the fair value of
the Company’s share of identifiable net assets acquired. Goodwill is measured at cost less accumulated impairment losses. In respect of equity
accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss on such an
investment is not allocated to any asset, including goodwill, that forms part of the carrying value of the equity accounted investee.
Other intangible assets
Other intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortization and
accumulated impairment losses.
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate.
Research and development
Expenditures on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognized in
the income statement when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes. Development
expenditures are capitalized only if:
• development costs can be measured reliably;
• the product or process is technically and commercially feasible;
• future economic benefits are probable; and
• the Company intends to and has sufficient resources to complete development and to use or sell the asset.
The expenditures to be capitalized include the cost of materials and other costs directly attributable to preparing the asset for its intended use. Other
development expenditures are recognized in the income statement as incurred.
Payments to third parties that generally take the form of up-front payments and milestones for in-licensed products, compounds and intellectual
property are capitalized. The Company’s criteria for capitalization of such assets are consistent with the guidance given in paragraph 25 of
International Accounting Standard 38 (“IAS 38”) (i.e., receipt of economic benefits out of the separately purchased transaction is considered to be
probable).
Acquired research and development intangible assets which are under development, are recognized as In-Process Research and Development assets
(“IPR&D”). IPR&D assets are not amortized, but evaluated for potential impairment on an annual basis or when there are indications that the carrying
value may not be recoverable. Any impairment charge on such IPR&D assets is recorded in the income statement under “Research and Development
expenses”.
Intangible assets relating to products in development, other intangible assets not available for use and intangible assets having indefinite useful life are
subject to impairment testing at each reporting date. All other intangible assets are tested for impairment when there are indications that the carrying
value may not be recoverable. All impairment losses are recognized immediately in the income statement.
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Amortization
Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets or on any other basis that
reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Intangible assets that are not available for
use are amortized from the date they are available for use.

Trademarks 3 - 12 years
Product related intangibles 5 - 15 years
Customer-related intangibles 1 -11 years
Other intangibles 3 - 15 years
The amortization period and the amortization method for intangible assets with a finite useful life are reviewed at each reporting date.
De-recognition of intangible assets
Intangible assets are de-recognized either on their disposal or where no future economic benefits are expected from their use. Losses arising on such de-
recognition are recorded in the income statement, and are measured as the difference between the net disposal proceeds, if any, and the carrying
amount of respective intangible assets as on the date of de-recognition.
d. Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net realizable
value. The cost of all categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the
inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of finished
goods and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. Stores and spares consists of packing
materials, engineering spares (such as machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating
machines or consumed as indirect materials in the manufacturing process.Net realizable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory includes estimated
shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of
these factors impact the Company’s business and markets. The Company considers all these factors and adjusts the inventory provision to reflect its
actual experience on a periodic basis.
e. Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Restructuring
A provision for restructuring is recognized when the Company has approved a detailed and formal restructuring plan, and the restructuring either has
commenced or has been announced publicly. Future operating costs are not provided.
Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any
impairment loss on the assets associated with that contract.
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Expected reimbursements for expenditures required to settle a provision are recognized only when receipt of such reimbursements is virtually certain.
Such reimbursements are recognized as a separate asset in the statement of financial position, with a corresponding credit to the specific expense for
which the provision has been made.
f. Revenue
Sale of goods
Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably,there is no continuing management involvement with the goods
and the amount of revenue can be measured reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or
receivable, net of returns, sales tax and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the
customer.
Profit share revenues
The Company from time to time enters into marketing arrangements with certain business partners for the sale of its products in certain markets. Under
such arrangements, the Company sells its products to the business partners at a non-refundable base purchase price agreed upon in the arrangement and
is also entitled to a profit share which is over and above the base purchase price. The profit share is typically dependent on the business partner’s
ultimate net sale proceeds or net profits, subject to any reductions or adjustments that are required by the terms of the arrangement. Such arrangements
typically require the business partner to provide confirmation of units sold and net sales or net profit computations for the products covered under the
arrangement.
Revenue in an amount equal to the base purchase price is recognized in these transactions upon delivery of products to the business partners. An
additional amount representing the profit share component is recognized as revenue in the period which corresponds to the ultimate sales of the
products made by business partners only when the collectability of the profit share becomes probable and a reliable measurement of the profit share is
available otherwise, recognition is deferred to a subsequent period pending satisfaction of such collectability and measurability requirements. In
measuring the amount of profit share revenue to be recognized for each period, the Company uses all available information and evidence, including
any confirmations from the business partner of the profit share amount owed to the Company, to the extent made available before the date the
Company’s Board of Directors authorizes the issuance of its financial statements for the applicable period.
Milestone payments and out licensing arrangements
Revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front payment on
inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement.
Non-refundable up-front license fees received in connection with product out-licensing agreements are deferred and recognized over the period in
which the Company has continuing performance obligations. Milestone payments which are contingent on achieving certain clinical milestones are
recognized as revenues either on achievement of such milestones, if the milestones are considered substantive, or over the period the Company has
continuing performance obligations, if the milestones are not considered substantive. If milestone payments are creditable against future royalty
payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid.
g. Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognized in the income statement except to the extent that it relates to
items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to
the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference
can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realized.
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h. Share-based payment transactions
The grant date fair value of options granted to employees is recognized as an employee expense, with a corresponding increase in equity. The expense
is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in equity recognized in
connection with share based payment transaction is presented as a separate component in equity under “share based payment reserve”. The amount
recognized as an expense is adjusted to reflect the actual number of stock options that vest.
i. Current versus non-current classification
The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when
Expected to be realised or intended to sold or consumed in the normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period
Or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:

It is expected to be settled in the normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period
Or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
j. Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the
Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can
be estimated reliably.
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k. Recent accounting pronouncements

Standards issued but not yet effective and not early adopted by the Company
IFRS 9, Financial instruments
In July 2014, the IASB issued the final version of IFRS 9, “Financial instruments”. IFRS 9 significantly differs from IAS 39, “Financial Instruments:
Recognition and Measurement”, and includes a logical model for classification and measurement, a single, forward-looking “expected loss”
impairment model and a substantially-reformed approach to hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1,
2018, with early application permitted.
Type of instrument Classification under IAS 39 Classification under IFRS 9
All equity investments within the scope of IFRS 9 are

measured at fair value. Equity instruments which are held
for trading and contingent consideration recognized by an
acquirer in a business combination to which IFRS 3
applies are classified as FVTPL. For all other equity
instruments, the Company may make an irrevocable
election to present subsequent changes in the fair value in
OCI. The Company may make such election on an
instrument-by-instrument basis. The classification shall be
made on initial recognition and will be irrevocable.
Classified as available-for-sale
Investments in equity instruments financial assets, with fair value
differences recognized in the OCI. If the Company decides to classify an equity instrument as
at fair value through other comprehensive income
(“FVTOCI”), then all fair value changes on the
instrument, excluding dividends, are recognized in the
OCI. There will be no recycling of the amounts from OCI
to the income statement, even on sale of the investment.
However, the Company may transfer the cumulative gain
or loss within equity.
Equity instruments included within the FVTPL category

are measured at fair value, with all changes recognized in
the income statement.
IFRS 15, Revenue from Contracts with Customers.
In May 2014, the IASB issued IFRS 15, “Revenue from Contracts with Customers”. This comprehensive new standard will supersede existing
revenue recognition guidance, and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new
standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed
comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. IFRS 15
is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.
The Company adopted IFRS 15 effective April 1, 2018, using the modified retrospective method. The adoption of IFRS 15 does
not have any significant impact on the Company’s recognition of revenues from product sales, service income and license fee.
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IFRS 16, Leases
In January 2016, the IASB issued a new standard, IFRS 16, “Leases”. The new standard brings most leases on-balance sheet for lessees under a single
model, eliminating the distinction between operating and finance leases. Lessor accounting, however, remains largely unchanged and the distinction
between operating and finance leases is retained. IFRS 16 supersedes IAS 17, “Leases”, and related interpretations and is effective for annual reporting
periods beginning on or after January 1, 2019. Earlier adoption of IFRS 16 is permitted if IFRS 15, “Revenue from Contracts with Customers”, has
also been applied.
Upon adoption, a portion of the annual operating lease expense, which is currently fully recognized as functional expense, will be recognized as
finance expense. Further, a portion of the annual lease payments recognized in the cash flow statement as reduction of lease liability will be
recognized as outflow from financing activities, which are currently fully recognized as an outflow from operating activities.
IFRIC 22, Foreign Currency Transactions and Advance Consideration
In December 2016, the IASB issued IFRIC Interpretation 22, “Foreign Currency Transactions and Advance Consideration,” which addresses the
exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency. IFRIC Interpretation 22 is effective for
annual reporting periods beginning on or after January 1, 2018. The Company believes that the adoption of IFRIC 22 will not have a material impact
on its financial statements.
IFRIC 23, Uncertainty over Income Tax
On June 7, 2017, the IFRS Interpretations Committee issued IFRIC 23, which clarifies how the recognition and measurement requirements of IAS 12
“Income taxes”, are applied where there is uncertainty over income tax treatments.
IFRIC 23 explains how to recognize and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment.
An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over whether that treatment will be accepted by the
applicable tax authority. For example, a decision to claim a deduction for a specific expense or not to include a specific item of income in a tax return
is an uncertain tax treatment if its acceptability is uncertain under applicable tax law. The interpretation provides specific guidance in several areas
where previously IAS 12 was silent. IFRIC 23 applies to all aspects of income tax accounting where there is an uncertainty regarding the treatment of
an item, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates.
The interpretation is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted. An entity can, on initial
application, elect to apply this interpretation either:
• retrospectively applying IAS 8, if possible without the use of hindsight; or
• retrospectively, with the cumulative effect of initially applying the interpretation recognized at the date of initial application as an adjustment to the
opening balance of retained earnings (or other component of equity, as appropriate).
The Company is in the process of evaluating the impact of IFRIC 23 on the financial statements and the period of adoption.
4. Fair Values Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either:
In the principal market for the asset or liability
Or
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in
its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
636
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy, as explained above.
5. Capital management
For the purposes of the Company’s capital management, capital includes issued capital and all other equity reserves. The primary objective of the
Company’s capital management is to maximise shareholder value. The Company manages it’s capital structure and makes adjustments in the light of
changes in economic environment and the requirements of the financial covenants. The Company monitors capital using gearing ratio, which is total
debt divided by total capital plus debt.
The capital gearing ratio as on 31 March 2018 and 31 March 2017 was 174% and 244%, respectively.
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6. Property plant and equipment: The following is a summary of the change in carrying value of property, plant and equipment.
Plant & Furniture &
Particulars Land Buildings Office equipment Total
Machinery fixtures
Gross Carrying Value
Balance as at April 1, 2016 1,250,000 10,026,365 5,723,755 61,000 604,058 17,665,178
Additions - - 112,272 - 356,246 468,518
Disposals - - 82,550 - - 82,550
Balance as at March 31, 2017 1,250,000 10,026,365 5,753,477 61,000 960,304 18,051,146
Balance as at April 1, 2017 1,250,000 10,026,365 5,753,477 61,000 960,304 18,051,146
Additions - - 51,728 - 4,386 56,114
Disposals - - 30,800 - 75,229 106,029
Balance as at March 31, 2018 1,250,000 10,026,365 5,774,405 61,000 889,461 18,001,231
Accumulated Depreciation
Balance as at April 1, 2016 - 2,570,389 3,069,082 61,000 581,878 6,282,349
Depreciation during the year - 547,439 516,122 - 56,847 1,120,408
Disposals - - 68,867 - - 68,867
Impairment 585,560 3,236,289 1,047,985 - 150,644 5,020,478
Balance as at March 31, 2017 585,560 6,354,117 4,564,322 61,000 789,369 12,354,368
Balance as at April 1, 2017 585,560 6,354,117 4,564,322 61,000 789,369 12,354,368
Depreciation during the year - 224,865 211,077 - 73,812 509,754
Disposals - - 30,800 - 75,229 106,029
Balance as at March 31, 2018 585,560 6,578,982 4,744,599 61,000 787,952 12,758,093
Net Carrying Value
As at April 01, 2016 1,250,000 7,455,977 2,654,674 - 22,180 11,382,831
Add:-Capital Work in Progress 276,126
Total at April 01, 2016 11,658,957
As at March 31, 2017 664,440 3,672,249 1,189,158 - 170,935 5,696,782
Total at March 31, 2017 5,775,672
As at March 31, 2018 664,440 3,447,383 1,029,806 - 101,509 5,243,138
Total at March 31, 2018 5,495,001
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Capital commitment: As of March 31, 2018 and 2017 the company had capital commitments of USD 161,761 and USD 313,576 under agreements for purchase
of property plant and equipment. The amount is net of capital advances paid in respect of such agreements.
Impairment of assets:-
Consequent to the significant decline in the expected cash flows of some of the products, the Company, following the guidance available under IAS 36
"Impairment of assets", estimated the recoverable amount of various items of Property, plant and equipment and assessed that the recoverable amount of such
items of Property, plant and equipment is lower than their carrying cost. Accordingly, an amount of USD 5,090,000 (including USD 69,522 towards capital-work-
in-progress) was recorded as impairment during the year ended March 31, 2017. The said impairment charge was recorded under "cost of revenues".
The recoverable amounts of the above cash generating units have been assessed using a value-in-use model. Key assumptions upon which the Company has based
its determinations of value-in-use include:
a) Estimated cash flows for the remaining useful life, based on management’s budgets.
b) The terminal value is considered to be zero.
c) The post-tax discount rates used are based on the Company’s weighted average cost of capital. The post-tax discount rates used was 6.68%. The pre –tax
discount rate was 9.02%.
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7. Inventories
Inventories consist of the following:
As of
March 31, 2018 March 31, 2017
Raw materials 526,243 417,897
Packing materials, stores and spares 99,480 76,504
Work-In-Progress - 122,792
Total Inventories 805,195 673,803
During the years ended March 31, 2018 and 2017, the Company recorded inventory write-downs of USD 336,825 and
USD 2,918,639 respectively. These adjustments are included as part of cost of revenues in the income statement.
Cost of revenues for the years ended March 31, 2018 and 2017 includes raw materials, consumables and changes in
finished goods and work in progress recognized in the income statement USD 1,121,141 and USD 1,241,313 respectively.
Cost of revenues for the years ended March 31, 2018 and 2017, includes other expenditures recognized in the income
statement of USD 7,590,658 and USD 13,772,993 respectively
8. Other Assets
Other assets consist of the following:
As of
March 31, 2018 March 31, 2017
Current
Due from related parties 15,977,075 7,390,280
Prepaid expenses 199,028 134,622
Other assets - -
16,176,103 7,524,902
Non-current
Deposits and other assets – non current 1,975 1,975
1,975 1,975
9. Cash and cash equivalents

Cash and cash equivalents consist of the following:
As of
March 31, 2018 March 31, 2017
Current
Cash balances - -
Balances with banks 34,943 60662
Cash and cash equivalents on the statements of financial position 34,943 60,662
Cash and cash equivalents in the statement of cash flow 34,943 60,662
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10. Share Capital

As of
March 31, 2018 March 31, 2017
Fully paid up capital 25,000,000 25,000,000
As at April 01 25,000,000 25,000,000
Add: Additional paid up share capital - -
As at March 31 25,000,000 25,000,000
The Company presently has only one class of equity shares. For all matters submitted to vote in a shareholders meeting of
the Company, every holder of an equity share, as reflected in the records of the Company on the date of the shareholders
meeting shall have one vote in respect of each share held.
11. Trade and other payables

Trade and other payables consist of the following:
As of
March 31, 2018 March 31, 2017
Due to related parties - 2,862
Others trade payables 17,528 9,617
Capital creditors 1,882 6,526
Creditors for expenses 79,422 37,406
98,832 56,411
12. Other Liabilities

Other liabilities consist of the following:
As of
March 31, 2018 March 31, 2017
Current Liabilities
Accrued expenses 1,653,308 1,410,551
Other Current Liabilities 18,369 5,173
Other liabilities – inter unit 401,029 400,000
2,072,706 1,815,724
13. Other (income)/expense, net

Other (income)/ expense, net consist of the following:
For the year ended
March 31, 2018 March 31, 2017
Net Loss on disposal of property, plant and equipment - 13,683
Others (349) 112
(349) 13,795
14. Revenue
Revenue consists of the following:
March 31, 2018 March 31, 2017
Sales to related parties (Note 15) 1,177,049 2,065,618
Service income (Note 15) 2,427,142 2,130,677
3,604,191 4,196,295
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15. Related parties

The Company has entered into transactions with the following related parties:
(a) Dr. Reddy’s Laboratories Limited (“ Ultimate Parent company”)
(b) Dr. Reddy’s Laboratories Inc (“ Parent company”)
(c) Dr. Reddy's Laboratories Lousiana, LLC (“Company under common control”)
(d) Promius Pharma LLC (“Company under common control”)
The following is a summary of significant related party transactions:
For the year ended

Particulars
March 31, 2018 March 31, 2017
Loan from:
Dr. Reddy’s Laboratories Inc. 6,096,165 6,233,094
Sales to:
Services to:
Profit share from Dr. Reddy’s Laboratories Inc. 2,427,142 2,130,677
Reimbursement of Expenses from:
Dr. Reddy's Laboratories Lousiana, LLC 1,029 -
The Company has the following amounts due from related parties (included in other current assets):
As of
Particulars
March 31, 2018 March 31, 2017
Total amounts due from related parties 15,977,075 7,390,280
The Company has the following amounts due to related parties (Included in Current liabilities):
As of
Particulars
March 31, 2018 March 31, 2017
Dr. Reddy's Laboratories Inc. (refer note a) 37,539,146 31,442,981
Promius Pharma LLC 400,000 400,000
Dr. Reddy’s Laboratories Limited - 2,862
Dr. Reddy's Laboratories Lousiana, LLC 1,029 -
Total amounts due to related parties 37,940,175 31,845,843
Note a:
Represents loans and borrowings received from group companies. Refer to Note 2(c) for details. These borrowings are
repayable on demand and hence presented as current liability in the financial statements.
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16. Income taxes
a. Income tax (expense)/benefit recognized in the income statement
Income tax (expense)/benefit recognized in the income statement consist of the following:
Particulars Years ended March 31
2018 2017
Current taxes (expense)
Current taxes (expense)/ benefit 14,531,881 906,532
Current tax effect of net operation losses carry back (6,085,632) -
8,446,249 906,532
Deferred taxes (expense)/benefit
Deferred taxes (expense)/benefit 1,674,734 4,507,017
Impact on account of change in enacted tax rate (1,148,580) -
526,154 4,507,017
Total income tax benefit in income statement 8,972,403 5,413,549
b. Income tax (expense)/benefit recognized directly in equity

There were no income tax expenses / benefits recognized directly in equity for the year ended March 31, 2018 and 2017.
c. Reconciliation of effective tax rate

Particulars For the year ended March 31
2018 2017
Loss before income taxes (6,393,766) (12,421,538)
Enacted tax rate in US 33.71% 37.37%
Computed expected tax benefit 2,155,364 4,641,680
Effect of change in tax laws and rate (1,148,580) -

Expenses not deductible for tax purposes (68,733) -
Effect of permanent differences (476,712) -
Others - -
Effect on account of tax allocation from the consolidated tax benefit/ (expense) of
Parent Company viz., Dr. Reddy’s Laboratories Inc., based on parent-down 8,511,064 771,869
approach
Income tax benefit/ (expense) 8,972,403 5,413,549
Effective tax rate -140.33% -43.58%
(1) There are certain income-tax related legal proceedings that are pending against the Company. Potential liabilities, if
any, have been adequately provided for, and the Company does not currently estimate any material incremental tax liability
in respect of these matters.
(2) The Company’s weighted average effective tax rates for the years ended 31 March 2018 and 31 March 2017 were
(140.33)% and (43.58)%, respectively. The effective tax rate for the year ended 31 March 2018 was higher compared to the
year ended 31 March 2017 primarily on account of re-measurement of deferred tax assets and liabilities of the Company
pursuant to the enactment of The Tax Cuts and Jobs Act of 2017 in the United States on 22 December 2017. This has
resulted in a impact of USD (1,148,580) for the year ended 31 March 2018, primarily on account of a reduction in the
federal income tax rate from 35% to 21%
643
d. Unrecognized deferred tax assets and liabilities

During the financial year ending March 31, 2018 and 2017, the Company does not have any unrecognized deferred tax
assets.
e. Deferred tax assets and liabilities
The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description of
the items that created these differences is given below:
2018 2017
Deferred tax assets/(liabilities):
Property plant and equipment 2,653,616 31,350
Operating loss carry forward (6,085,632) 6,085,632
Accounts receivable 1,924,306 126,315
R&D credit (234,238) 234,238
Other current assets (348,119) 138,664
Stock based compensation/ equity (259,820) 108,899
Intangibles (620,285) 10,268
Other current liabilities 3,496,326 (2,228,349)
Net deferred tax asset/(liabilities) 526,154 4,507,017
In assessing the realizability of the deferred income tax assets, management considers whether some portion or all of the
deferred income tax assets will not be realized. The ultimate realization of the deferred income tax assets and tax loss carry
forwards is dependent upon the generation of future taxable income during the periods in which the temporary differences
become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable
income and tax planning strategy in making this assessment.
Based on the level of historical taxable income and projections of future taxable income over the periods in which the
deferred tax assets are deductible, management believes that the Company will realize the benefits of those recognized
deductible differences and tax loss carry forwards. The amount of deferred tax assets considered realizable, however, could
be reduced in the near term if estimates of future taxable income are reduced. Periods in which the deferred tax assets are
deductible, management believes that the Company will realize the benefits of those recognized deductible differences and
tax loss carry forwards.
f. Movement in temporary differences during the years ended March 31, 2018 and 2017:
The details of movement in deferred tax assets and liabilities are summarised below:
As at As at
Movement
March 31, 2017 March 31, 2018
Deferred tax assets/(liabilities)
Property, plant and equipment and intangibles (1,057,279) 2,033,331 976,052
Accounts receivable (1,894,480) 1,924,306 29,826
Stock based compensation 263,656 (259,820) 3,836
Other current assets 454,481 (348,119) 106,362
R and D credit 234,238 (234,238) -
Other current liabilities (3,342,055) 3,496,326 154,272
Operating losses carried forward 6,085,632 (6,085,632) -
Net deferred tax assets/(liabilities) 744,193 526,154 1,270,348
As at As at
Movement
March 31, 2016 March 31, 2017
Property , plant and equipment and intangibles (1,098,897) 41,618 (1,057,279)
Accounts receivable (2,020,795) 126,315 (1,894,480)
Stock based compensation 154,757 108,899 263,656
Other current assets 315,817 138,664 454,481
R&D credit - 234,238 234,238
Other current liabilities (1,113,706) (2,228,349) (3,342,055)
644
Operating losses carried forward - 6,085,632 6,085,632

Net deferred tax assets/(liabilities) (3,762,824) 4,507,017 744,193
645
17. Financial Instruments
Financial Instruments by category
The carrying value and fair value of the financial instruments by each category as at March 31, 2018 were as follows:
Loans and Trade and other Total Carrying

Particulars Note Total fair value
Receivables payables Value
Assets:
Cash and cash equivalents 9 34,943 - 34,943 34,943
Other assets* 8 15,977,075 - 15,977,075 15,977,075
Total 16,012,018 - 16,012,018 16,012,018
Liabilities:
Trade and other payables 11 - 98,832 98,832 98,832
Loans and borrowings 15 - 37,539,146 37,539,146 37,539,146
Other liabilities and provisions# 12 - 1,946,055 1,946,055 1,946,055
Total - 39,584,033 39,584,033 39,584,033

Assets:
Other assets* 8 7,390,280 - 7,390,280 7,390,280
Total 7,450,942 - 7,450,942 7,450,942
Liabilities:
Trade and other payables 11 - 56,411 56,411 56,411
Other liabilities and provisions# 12 - 1,815,724 1,815,724 1,815,724
Total - 33,315,116 33,315,116 33,315,116
* Other assets that are not financial assets (such as prepaid expenses, advances paid and certain other receivables) of USD 199,028
and USD 134,622 as of March 31, 2018 and 2017, respectively, are not included.
* Other liabilities that are not financial liabilities (such as vacation accruals) of USD 126,651 as of March 31, 2018 are not included.
Fair value hierarchy
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices).
Level 3 — Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
646
18. Financial risk management
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary
risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company’s risk management
assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and
controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed
regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors is responsible for overseeing Company’s
risk assessment and management policies and processes.
a. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Company’s receivables from customers and investment securities. Credit risk is managed through
credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit
terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of
incurred losses in respect of trade and other receivables and investments.
Trade and other receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the
customer, including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment.
Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to
which the Company grants credit terms in the normal course of business.
Financial assets that are neither past due nor impaired
None of the Company’s cash equivalents, including time deposits with banks, were past due or impaired as at March 31, 2018.
Financial assets that are past due but not impaired
The Company does not have any trade receivables as on the reporting date.
b. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity
risk by raising additional funds from parent company or from group companies to meet the financial obligations.
As of March 31, 2018 and 2017 the Company had working capital deficit of USD 22,694,442 and USD 25,055,749 respectively.
The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2018:
Particulars 2019 2020 2021 2022 Thereafter Total
Trade and other payables 98,832 - - - - 98,832
Loans and borrowings 37,539,146 - - - - 37,539,146
Other liabilities and provisions 1,946,055 - - - - 1,946,055
Total 39,584,033 - - - - 39,584,033
Trade and other payables 56,411 - - - - 56,411
Total 33,315,116 - - - - 33,315,116
647
c. Market risk
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other
market changes that affect market risk-sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments
including foreign currency receivables and payables and short term/or long-term debt. The Company is exposed to market risk primarily related
to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a
function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.
Foreign exchange risk
The Company’s exchange risk arises from its foreign operations, foreign currency revenues and expenses. A significant portion of the
Company’s revenues are in reporting currency, USD. As a result, the Company is not exposed to significant foreign currency risk.
Commodity rate risk
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active pharmaceutical
ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices
may fluctuate significantly over short periods of time. The prices of the Company’s raw materials generally fluctuate in line with commodity
cycles, although the prices of raw materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost
of raw materials forms the largest portion of the Company’s operating expenses. Commodity price risk exposure is evaluated and managed
through operating procedures and sourcing policies. The Company has historically not entered into any derivative financial instruments or
futures contracts to hedge exposure to fluctuations in commodity prices.
648
19. Nature of Expense
The following table shows the expenses by nature:

Particulars For the year ended March 31, 2018
Selling, general and Research and

Cost of revenue Total
administrative expenses Development
Employee benefits 4,340,089 272,277 - 4,612,366

Depreciation and amortization 509,754 - - 509,754
4,849,843 272,277 - 5,122,120

Employee benefits 4,416,749 360,500 - 4,777,249
Depreciation and amortization 1,120,408 - - 1,120,408
5,537,157 360,500 - 5,897,657
20. Employee benefits
The Company's employees participate in Dr. Reddy's Laboratories 401 (k) defined contribution retirement plan. The
Company's contribution is discretionary and is determined by its Board of Directors on an annual basis. The contribution
made by the Company for the year ended March 31, 2018 and 2017 was USD 211,616 and USD 213,907 respectively.
21. Subsequent Events

There are no significant events that occurred after the balance sheet date.
649
To the Members of Dr. Reddy’s Laboratories (UK) Limited
We have audited the accompanying financial statements of Dr. Reddy’s Laboratories (UK)
Limited a company incorporated and administered outside India, which comprises the Balance
sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive
Income) for the year ended on that date annexed thereto, the Cash Flow Statement, the Statement
of Changes in Equity for the year then ended and a summary of significant accounting policies

2013.
650
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
651
Dr. Reddy’s Laboratories (UK) Limited
Balance Sheet
(All amounts in Indian Rupees lakhs, except share data and where otherwise stated)
As at As at
ASSETS
Non-current assets
Capital work-in-progress 294 170
Other intangible assets 2.2 486 409
Deferred tax assets, net 2.19 243 213
2,671 2,061
Current assets
Inventories 2.5 2,465 7,026
Financial assets
Trade receivables 2.3 A 6,665 10,889
Cash and cash equivalents 2.3 B 870 2,160
Loans 2.3 C 17,997 9,109
Other financial assets 2.3 D 186 -
28,703 29,373
Total assets 31,374 31,434

Equity
Equity share capital 2.6 1 1
Other equity 24,409 16,532
24,410 16,533
Liabilities
Borrowings 2.7 A 2 2
Other non-current liabilities 2.9 A 267 101
269 103
Current liabilities
Trade payables 2.7 C 4,454 11,110
Liabilities for current tax, net 638 386
Other current liabilities 2.9 B 441 1,170
6,695 14,798
For A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Dr. Reddy’s Laboratories (UK) Limited
PSRVV Surya Rao M V Narasimham Subir Kohli

Place: Hyderabad
Date: 18 May 2018
652

Income
Sales 2.9 33,918 31,852
License fees and service income 120 206
Other operating income 14 616
Total revenue from operations 34,052 32,674
Other income 2.10 566 147
Total income 34,618 32,821
Expenses
Purchase of traded goods 6,150 7,705
progress and stock-in-trade 2.11 4,497 (2,865)
Depreciation and amortisation expense 2.13 202 290
Profit before tax 9,112 2,209

Tax expense
Current tax 1,236 823
Deferred tax (1) (17)
Profit for the year 7,877 1,403

Total comprehensive profit for the year 7,877 1,403
Earnings per share:

Basic earnings per share of GBP 1/- each 787,700 140,300
Diluted earnings per share of GBP 1/- each 787,700 140,300

Place: Hyderabad
Date: 18 May 2018
653

Other reserves Retained earnings
Balance as at 1 April 2017 1 286 16,246 16,533
Balance as at 31 March 2018 1 286 24,123 24,410

Retained earnings
Balance as at 1 April 2016 1 286 14,843 15,130
Balance as at 31 March 2017 1 286 16,246 16,533

For A Ramachandra Rao & Co. Dr. Reddy’s Laboratories (UK) Limited

Place: Hyderabad
Date: 18 May 2018
654

31 March 2018 31 March 2017
Adjustments:
Depreciation and amortisation expense 202 290
Foreign exchange loss / (gain), net (2,093) 1,413
Finance income (329) (147)
Allowance for sales returns 100 (67)
Provision for inventory obsolescence 822 1,406
Allowances for doubtful advances, net 8 -
Trade receivables 5,572 (5,557)
Inventories 3,739 (4,331)
Trade payables (7,467) 8,864
Other assets and liabilities, net (2,664) 401
Cash generated from operations 7,002 4,481
Income tax paid, net (1,087) (962)
Net cash from / (used in) operating activities 5,915 3,519

Purchase of property, plant and equipment (602) (156)
Purchase of intangible assets (142) (356)
Finance income received 2 -
Loans and advances repaid by/(given to) holding company and other group companies,net (6,669) (9,608)
Redemption of/(Investment made in) fixed deposits( having original maturity more than 3 months) - 8,324

Net cash from / (used in) financing activities - -
Net increase / (decrease) in cash and cash equivalents (1,496) 1,723

Effect of exchange rate changes on cash and cash equivalents 206 (227)
Cash and cash equivalents at the beginning of the year (Refer note 2.2C) 2,160 664
Cash and cash equivalents at the end of the year (Refer note 2.2 C) 870 2,160


Place: Hyderabad
Date: 18 May 2018
655

Dr. Reddy’s Laboratories (UK) Limited (" the Company") incorporated in the United Kingdom , is a 100% subsidiary of Dr. Reddy's Laboratories(EU) Limited.



Assets:
Liabilities:

c) Revenue
Sale of goods
Services
performed.
License fee

656
e) Income tax


Depreciation
Years
Buildings
Vehicles 4 to 5
h) Other intangible assets

Other intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.
Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in the specific asset to which they relate.
Intangible assets relating to products in development, other intangible assets not available for use and intangible assets having indefinite useful life are subject to impairment testing
at each reporting date. All other intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable. All impairment losses are
recognised immediately in the statement of profit and loss.
Amortisation
Amortisation is recognised in the statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets or on any other basis that reflects the
pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Intangible assets that are not available for use are amortised from the date they are
available for use.
657
i) Inventories
process.
j) Employee benefits
k) Provisions, contingent liabilities and contingent assets

Restructuring
Onerous contracts
Contingent assets
l) Financial instruments
Financial assets
recognition.
m) Cash and cash equivalents

n) Trade receivables
o) Trade and other payables

658

Land 152 - - 152 - - - - 152
Building 1,773 249 - 2,022 680 34 714 1,308
Plant and Machinery 2,233 228 - 2,461 2,233 80 - 2,313 148
Lease hold improvements 173 - - 173 173 - - 173 -
Furniture, fixtures and office equipment 525 39 - 564 501 23 - 524 40
Total 4,856 516 - 5,372 3,587 137 - 3,724 1,648
Previous year 4,713 143 - 4,856 3,325 262 - 3,587 1,269
2.2 Intangibles assets
Gross carrying value Accumulated amortisation Net carrying value

Intangibles 1,038 142 - 1,180 629 65 - 694 486
Total 1,038 142 - 1,180 629 65 - 694 486
Previous year 682 356 - 1,038 601 28 - 629 409
659

As at As at
31 March 2018 31 March 2017
Unsecured, considered good 6,665 10,889
Unsecured, considered doubtful 13 82
6,678 10,971
Less: Allowance for credit loss (13) (82)
6,665 10,889
2.3 B. Cash and cash equivalents

As at As at
31 March 2018 31 March 2017
- In current accounts 408 176
- Deposit accounts (original maturity less than 3 months) 461 1,983
Cash on hand 1 1
870 2,160
2.3 C. Loans
As at As at
31 March 2018 31 March 2017
Loans and advances given to holding company and other group companies 17,997 9,109
17,997 9,109
2.3 D. Other financial assets

As at As at
31 March 2018 31 March 2017
Other receivables from holding company and other group companies 186 -
186 -

As at As at
31 March 2018 31 March 2017
Prepaid expenses 42 36
Others 478 153
520 189
2.5 Inventories
As at As at
31 March 2018 31 March 2017
Work-in-progress 68 133
Finished goods 650 3,432
Stock-in-trade 1,553 3,203
Stores, spares and packing materials 194 258
2,465 7,026
660
2.6 Share capital

As at As at
31 March 2018 31 March 2017
1,000 equity shares of GBP 1/- each (31 March 2017: 1,000) 1 1


1 1

31 March 2018 31 March 2017
Particulars
Amount Amount
shares shares
Number of shares outstanding at the beginning of the year 1,000 1 1,000 1
Add: Equity shares issued during the year - - - -
Number of shares outstanding at the end of the year 1,000 1 1,000 1

The Company has only one class of equity shares having a par value of GBP 1 per share. Each holder of equity shares is entitled to one vote per share.

As at As at
31 March 2018 31 March 2017
Particulars
Dr. Reddy’s Laboratories (EU) Limited 1,000 100.00 1,000 100.00

As at As at
31 March 2018 31 March 2017
Unsecured
Long-term loans from related parties 2 2
2 2

As at As at
31 March 2018 31 March 2017
Due to capital creditors 15 -
Accrued expenses 977 2,088
Other payable to holding company and other group companies 12 8
Others 15 -
1,019 2,096
2.7 C. Trade payables

As at As at
31 March 2018 31 March 2017
4,454 11,110
661

2.8 Current provisions
As at As at
31 March 2018 31 March 2017
Allowance for sales returns 143 36
143 36
2.9 Other liabilities

As at As at
31 March 2018 31 March 2017
A. Non-current liabilities
Deferred revenue 267 101
267 101
B. Current liabilities
Salary and bonus payable 242 207
Advance from customers 35 18
Deferred revenue - 32
Others 29 30
441 1,170
662
2.10 Sales
31 March 2018 31 March 2017
Sales 33,918 31,852
33,918 31,852
2.11 Other operating income

31 March 2018 31 March 2017
Scrap sales 2 1
Miscellaneous income 12 615
14 616
2.12 Other income

31 March 2018 31 March 2017
Interest income 2 117
Interest income on loan to subsidiaries 327 30
Foreign exchange gain, net 237 -
566 147

31 March 2018 31 March 2017
Opening
Stock-in-trade 3,203 6,768 734 3,903
Closing
Finished goods 650 3,432
Stock-in-trade 1,553 2,271 3,203 6,768
4,497 (2,865)

31 March 2018 31 March 2017
Staff welfare expenses 69 75
2,843 3,001
2.15 Depreciation and amortisation expense

31 March 2018 31 March 2017
Depreciation of property, plant and equipment 137 262
Amortisation of intangible assets 65 28
202 290

31 March 2018 31 March 2017
Consumption of stores, spares and other materials - 8
Advertisements 4 5
Carriage outward 350 381
Other selling expenses 654 722
Legal and professional 980 2,055
Power and fuel 45 48
Repairs and maintenance
Buildings - 33
Plant and machinery 76 109
Others 187 174
Insurance 68 75
Travel and conveyance 163 213
Rent 14 28
Rates and taxes 831 1,970
Communication 66 73
Foreign exchange loss, net - 15
Allwoances for doubtful advances, net 8 2
Other general expenses 575 647
4,021 6,558
663
2.17 Going Concern


Particulars
31 March 2018 31 March 2017
Sales and services rendered to holding company and other group companies:
betapharm Arzneimittel GmbH 137 96
Dr. Reddy’s Laboratories SA 14 135
Dr. Reddy’s SRL 1,601 263
Reddy Pharma Iberia SA 385 258
Reddy Pharma SAS 99 82
Purchases and services from holding company and other group companies:
Dr. Reddy’s Laboratories Limited 4,689 12,266
Dr. Reddy’s Laboratories SA 140 -
Dr. Reddy’s Laboratories (EU) Limited 68
Industrias Quimicas Falcon de Mexico SA de CV 293 141
Reimbursement of expenses to holding company and other group companies:

Dr. Reddy’s Laboratories (EU) Limited 68 -
Chirotech Technology Limited - 1
Interest income from holding company and other group companies:

Dr. Reddy's Laboratories SA 327 30
As at As at
Particulars
31 March 2018 31 March 2017
Due from holding company and other group companies(included in trade receivables):
Reddy Pharma Iberia SA 723 232
betapharm Arzneimittel GmbH 33 58
Dr. Reddy’s SRL 1,548 259
Reddy Pharma SAS 204 81
Dr. Reddy’s Laboratories SA 15 132
Due from holding company and other group companies(included in loans and other current financial assets):
Dr. Reddy's Laboratories Limited 79 -

Dr. Reddy’s Laboratories (EU) Limited 2 2
Due to holding company and other group companies(included in trade payables and other liabilities):
Chirotech Technology Limited 9 8
Dr. Reddy’s Laboratories (EU) Limited 3 -
Dr. Reddy's Laboratories SA 144 -
2.18 Income taxes

a. Current Taxes
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
b. Deferred Taxes
Deferred tax asset, net included in the balance sheet comprises the following:
As at As at
Particulars
31 March 2018 31 March 2017
Property, plant and equipment 207 184
Trade receivables 19 14
Current liabilities and provisions 17 15
Deferred tax asset, net 243 213

664


Place: Hyderabad
Date: 18 May 2018
665
666
667
668
669
670
671
672
673
674
675
676
677
678
679
680
681
682
683
684
685
686
687
688
689
690
691
692
693
694
695
696
697
698
699
700
701
To the Members of Dr. Reddy’s Singapore PTE. LTD.
We have audited the accompanying financial statements of Dr. Reddy’s Singapore PTE. LTD. a
2013.
702
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
703
Dr. Reddy’s Singapore PTE. LTD.
Balance Sheet
As at As at
Note 31 March 2018 31 March 2017
ASSETS
Non current assets

Deferred tax assets (net) 1,652 1,539
Other Financial assets 2.1 100 93
1,752 1,632
Current assets
Financial assets
Trade receivables 2.2 34,777 34,647
Cash and cash equivalents 2.3 4,547 5,339
Total current assets 39,324 39,986

Equity
Other equity
Retained earnings 15,655 15,793
Total equity 40,524 40,662
Current liabilities
Other current financial liabilities 2.5 552 638
Liabilities for current tax (net) - 318
Total Liabilities 552 956
Significant accounting policies 1


for and on behalf of the Board of Directors of Dr. Reddy’s Singapore PTE. LTD.
for A Ramachandra Rao & Co.
ICAI FRN : 002857S
PSRVV Surya Rao Saumen Chakraborty

Partner Director
Satish Reddy
Place: Hyderabad Director
Date: 18 May 2018
704

Revenue from operations

Service Income - 35,354
Other Income 546 -
Total Income 546 35,354
Expenses
Other expenses 2.6 933 33,509
Total expense 933 33,509
Profit before tax (387) 1,845
Income tax expense/(benefit) 2.7 (249) 234
Profit for the year (138) 1,611
Earnings per share:

Basic earnings per share of SGD 1 each (0.28) 13.39
Diluted earnings per share of SGD 1 each (0.28) 13.39


for and on behalf of the Board of Directors of Dr. Reddy’s Singapore PTE. LTD.
ICAI FRN : 002857S

Partner Director
Satish Reddy
Date: 18 May 2018
705
Cash Flow Statement

31 March 2018 31 March 2017
Operating activities
Profit before taxation (387) 1,845
Adjustments to reconcile profit before tax to net cash flows:
Net foreign exchange differences (2,853) 2,427
Operating cash flows before working capital changes (3,240) 4,272
Working capital adjustments:

Other assets & liabilities,net (103) 830
Trade and other receivables and prepayments 2,309 (9,065)
(1,034) (3,963)
Income tax paid (91) (213)
Net cash flows from operating activities (1,125) (4,176)
Net cash flows used in investing activities - -

Net cash flows from/ (used in) financing activities - -
Net increase / (decrease) in cash and cash equivalents (1,125) (4,176)

Effect of foreign exchange gain/(loss) on cash and cash equivalents 333 (402)
Notes to the cash flow statement:

Cash and bank balances at the end of the year 4,547 5,339

for A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Dr. Reddy’s Singapore PTE. LTD.
ICAI FRN : 002857S

Partner Director
Place: Hyderabad Satish Reddy

Date: 18 May 2018 Director
706
2.5 Total equity
Share Capital Reserves and Surplus
Particulars Total Equity

Shares Amount Retained Earnings
Balance as of 1 April 2016 500,000 24,869 14,182 39,051
Profit / (Loss) for the period - - 1,611 1,611
Balance as of 31 March 2017 500,000 24,869 15,793 40,662
Profit / (Loss) for the period - - (138) (138)
Balance as of 31 March 2018 500,000 24,869 15,655 40,524
for A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Dr. Reddy’s Singapore PTE. LTD.
ICAI FRN : 002857S

Partner Director
Place: Hyderabad Satish Reddy

Date: 18 May 2018 Director
707
Significant Accounting Policies & Notes to financial statements
Note 1: Significant Accounting Policies & Notes to Accounts:

Description of the Company
Dr. Reddy's Singapore PTE. LTD. (" the Company") incorporated in Singapore , is a 100% subsidiary of Dr. Reddy's Laboratories SA.
Basis of preparation of financial statements :

Use of estimates and judgments
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised
and in any future periods affected.
Revenue
Sale of goods
reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts
and allowances. Revenue includes shipping and handling costs billed to the customer.
Services Income
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over
the term of the contract. Some of these arrangements include certain performance obligations by the Company. Revenue from such arrangements is recognised in the
period in which the Company completes all its performance obligations.
Interest income and dividend

Interest income primarily comprises of interest from term deposits with banks. Interest income is recorded using the effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount
of the financial asset. Interest income is included in other income in the statement of profit and loss.
Earnings per share
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit
or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which
includes all stock options granted to employees.
Current and non-current classification

Assets:
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that
could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax
assets and liabilities are always disclosed as non-current.
708
Financial instruments
Financial assets :
the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset.
Financial liabilities:
Financial liabilities are classified, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial
instruments.
Income tax
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or
liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; differences relating to investments in subsidiaries and
jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and taxable temporary differences arising upon the initial
recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net realizable value. The cost of all
other costs incurred in bringing them to their existing location and condition. In the case of finished goods and work in progress, cost includes an appropriate share of
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
Foreign currencies
Foreign currency transactions
denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or
on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are
recognised in the statement of profit and loss in the period in which they arise.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those
cash flows had occurred at the measurement date.
709

directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset
to a working condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are
capitalised as part of the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period of time to get ready for their intended use or sale.
equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised in the statement of profit and loss.
embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit
and loss as incurred.
substance or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of
the asset given up.
Depreciation
depreciated over the shorter of the lease term and their useful lives. The depreciation expense is included in the costs of the functions using the asset. Land is not subject to
depreciation.
Depreciation methods, useful lives and residual values are reviewed at each reporting date. The estimated useful lives are as follows:
Buildings
Plant and machinery 3 - 15 years
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant and equipment not ready to use
before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Provisions, contingent liabilities and contingent assets

used, the increase in the provision due to the passage of time is recognised as finance cost.
Restructuring
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting
its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such
reimbursements are recognised as a separate asset in the statement of financial position, with a corresponding credit to the specific expense for which the provision has
been made.
Contingent assets
710
Cash and cash equivalents

investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents for
the purpose of the statement of cash flows.
Trade receivables
Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured
and are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially ate fair value and
subsequently measured at amortised cost using the effective interest method.
711
1.1 Going Concern

1.2 Related Party Transactions
a. The company has the following related party transactions:
For the year ended For the year ended 31

Particulars
31 March 2018 March 2017
Sales and services rendered to holding company or other group companies:
Dr. Reddy's Laboratories SA - 35,354
b. The company has the following amounts due from/to related parties :
As at As at
Particulars
31 March 2018 31 March 2017
Due from holding company and other group companies(included in trade
receivables):
1.3 Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities and the crystallisation of these liabilities are dependent upon the outcome of court cases / arbitration / out of
court settlement, disposal of appeals, the amount being called up, terms of contractual obligation, development and raising of demand
by concerned parties, respectively. The Company has made adequate provisions, wherever required, in compliance with Ind AS 37
prescribed by the ICAI. Those contingent liabilities have arisen in the normal course of business and may not crystallise on the
Company and may not have any material impact on the revenue.

In March 2018, the Ministry of Corporate Affairs (“MCA”) has notified Ind AS 115, 'Revenue from Contracts with Customers',
which is effective for accounting periods beginning on or after 1 April 2018. This comprehensive new standard will supersede
existing revenue recognition guidance, and requires an entity to recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that
were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for
multiple-element arrangements.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of Ind AS
115 is not expected to have a significant impact on the Company’s recognition of revenues from product sales, service income and
license fee.
712
Notes to Financial Statements
Financial Assets
As at As at
31 March 2018 31 March 2017
2.1 : Other financial assets
Security Deposits 100 93
100 93
As at As at
31 March 2018 31 March 2017
2.2 : Trade receivables
Unsecured,considered good
Receivables from holding company and other group companies 34,777 34,647
34,777 34,647
As at As at
31 March 2018 31 March 2017
2.3 : Cash and cash equivalents
- On current accounts 4,547 5,339
4,547 5,339
713
Notes to the Financial Statements
2.4 : Share capital

As at As at
31 March 2018 31 March 2017
Authorised Share Capital
500,000 (previous year : 500,000) equity shares of SGD 1 each

24,869 24,869
500,000 (previous year : 500,000) equity shares of SGD 1 each

24,869 24,869
500,000 (previous year : 500,000) equity shares of SGD 1 each 24,869 24,869
24,869 24,869

Particulars As at As at
31 March 2018 31 March 2017
Amount Amount
shares shares
Add:Shares issued during the year - - - -

The company has only one class of equity shares having a par value of SGD 1 per share. Each holder of equity shares is entitled to one vote
per share.

As at As at
31 March 2018 31 March 2017
Particulars
Dr. Reddy's Laboratories SA 500,000 100% 500,000 100%
2.5 : Other financial liabilities

As at As at
31 March 2018 31 March 2017
Other current financial liabilities
Accrued expenses 552 638
552 638

31 March 2018 31 March 2017
2.6 : Other expenses
Foreign exchange loss,net - 1,751
Legal and professional 911 31,705
933 33,509

31 March 2018 31 March 2017
2.7 : Tax expense
Current tax (gain)/expense (249) 234
(249) 234
714
Dr Reddy’s S.r.l.
Independent Auditor’s Report

on the
Statutory Financial Statements
as at
March 31, 2018
715
Piazza Velasca, 5
20122 Milano | Italy
T. +39.02.87070700
F. +39.02.87070719
Independent Auditor’s Report
To the Board of Directors of the Company

Dr Reddy’s S.r.l.
Report on the statutory financial statements
Opinion
We have audited the statutory financial statements of the Company Dr Reddy’s S.r.l. (the Company),
which comprise the balance sheet as at 31 March 2018, and the income statement for the year then
ended and the notes to the financial statements.
In our opinion, the statutory financial statements give a true and fair view of the financial position of the
Company at 31 March 2018, and of its financial performance for the year then ended in accordance with
the Italian laws and regulations that govern their preparation.
Elements at the basis of the opinion

We conducted our audit in accordance with International Standards on Auditing (ISA Italy). Our
responsibilities under those standards are further described in the “Audit Company’s responsibilities for
the audit of the statutory financial statements” section of this report. We are independent from the
Company, in accordance with the rules and principles of ethics and independence applicable in Italian
law to the auditing of financial statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Responsibilities of the directors for the statutory financial statements

The directors are responsible for the preparation of these statutory financial statements that give a true
and fair view in accordance with the Italian laws and regulations that govern their preparation and, as
provided by the law, for such internal control as they determines is necessary to enable the preparation
of financial statements that are free from material misstatements due to fraud or unintentional acts or
events.
The directors are responsible for assessing the capacity of the Company to continue operating as a going
concern entity and, in preparing the statutory financial statements, for the appropriateness of using the
going concern basis of accounting, and for the adequate disclosure in this regard. The directors use the
going concern basis of accounting in preparing the statutory financial statements unless they either
intends to liquidate the Company Dr Reddy’s S.r.l. or to cease operations, or have no realistic
alternatives but to do so.
Audit Company’s responsibilities for the audit of the statutory financial statements
The objectives of our audit are to obtain reasonable assurance about whether the statutory financial
statements as a whole are free from material misstatements, due to fraud or unintentional acts or events,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high-level
assurance, but is not a guarantee that an audit conducted in accordance with the International Standards
on Auditing (ISA Italy) will always detect a material misstatement, when it exists. Misstatements can
Milano – Roma – Brescia – Cagliari – Ancona – Pescara – Varese - Bologna
AUDIREVI S.p.A. Società di revisione e organizzazione contabile – Sede Legale: Piazza Velasca,5 – 20122
Milano Cod. Fiscale 05953410585 - P.I. 12034710157 – www.audirevi.it
Capitale Sociale Euro 100.000 - REA Milano 1523066 – Registro Dei Revisori Contabili GU 60/2000
Albo Speciale Delle Società di Revisione con Delibera CONSOB n. 10819 Del 16/07/1997
716
arise from fraud or unintentional acts or events and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions taken by the users on
the basis of the these statutory financial statements.
As part of an audit in accordance with International Standards on Auditing (ISA Italia), we exercise
professional judgment and maintain professional skepticism throughout the entire audit process. We
also:
• Identify and assess the risks of material misstatement of the statutory financial statements,
whether due to fraud or unintentional acts or events. Design and perform audit procedures
responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from unintentional acts or events, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of the internal control;
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances and but not for the purpose of expressing an
opinion on the effectiveness of Company’s internal control;
• Evaluate the appropriateness of accounting policies used and the reasonableness of the accounting
estimates and related disclosures made by the directors;
• Reach a conclusion on appropriateness of the going concern basis of accounting used by directors
and, based on the obtained evidence, on the possible existence of significant uncertainty
concerning events or circumstances that may arise significant doubts over the capacity of the
Company to continue operating as a going concern entity. In case of a significant uncertainty, we
have to call the reader’s attention in the auditor’s report to the related information in the financial
statements or, if that information is inadequate, to consider this circumstance in expressing our
opinion. Our conclusions are based on the audit evidence obtained up to the date of this audit
report. Nevertheless, subsequent events or circumstances may cause the Company to cease
operations as a going concern entity;
• Evaluate the overall presentation, structure and content of the statutory financial statements as a
whole, including the disclosures, and whether the statutory financial statements represent the
underlying transactions and events in a manner that achieves fair presentation;
We have communicated with the persons in charge of governance activities that have been identified at
an appropriate level in accordance with the requirements of the ISA Italy, among other matters,
regarding the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
Milan, 7 May 2018
Signed:
Audirevi S.p.A.
Davide Borsani
Partner
717
718
719
720
721
722
723
724
725
726
727
728
729
730
731
732
733
734
735
736
To the Members of Dr. Reddy's New Zealand Limited
We have audited the accompanying financial statements of Dr. Reddy's New Zealand Limited a

2013.
737
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
738
Dr. Reddy's New Zealand Limited
Balance Sheet
As at As at
ASSETS
Non current assets

Property, plant and equipment 2.1 - 52
Tax assets, net 2.2 1,030 1,820
Total non current assets 1,030 1,872
Current assets
Inventories 2.3 7,961 15,408
Financial assets
Trade receivables 2.4 14,233 12,738
Other current assets 2.6 1,706 1,269

Equity
Other equity
Retained earnings (45,184) (53,060)
Share premium 105,028 105,028
Total equity 60,172 52,296
Current liabilities
Trade payables 2.8 10,559 13,888
Other current financial liabilities 2.9 4,780 5,022
Other current liabilities 2.11 784 212
Total Liabilities 16,375 19,363


for and on behalf of the Board of Directors of Dr. Reddy's New Zealand Limited
ICAI FRN : 002857S
PSRVV Surya Rao M V Narasimham

Partner Director
Satish Reddy
Date: 18 May 2018 739

Revenue from operations 2.12 78,867 90,942

Other Income 2.13 2,731 450
Total Income 81,598 91,392
Expenses
Cost of raw material and components consumed 52,825 51,496
Depreciation and amortisation expense 2.15 53 74
Other expenses 2.16 13,608 23,550
Total expense 73,722 86,011
Income tax expense - -
Profit for the year 7,876 5,381
Earnings per share

Basic - Par value NZD 1 per share 787.60 538.10
Diluted - Par value NZD 1 per share 787.60 538.10


ICAI FRN : 002857S

Partner Director
Satish Reddy
Date: 18 May 2018
740
Cash Flow Statement

31 March 2018 31 March 2017
Profit before taxation 7,876 5,381
Interest Income (570) (450)
Net foreign exchange differences (2,147) 906
Operating cash flows before working capital changes 5,212 5,911

Trade and other receivables (878) 3,299
Inventories 7,447 4,437
Trade and other payables (3,753) (8,288)
Other assets & liabilities,net 730 (3,424)
8,758 1,935
Income tax paid (28) -
Net cash flows from operating activities 8,730 1,935
Net cash flows used in investing activities

Purchase of tangible and intangible assets - (23)
Interest received 570 450
570 427
Net increase / (decrease) in cash and cash equivalents 9,300 2,362

Effect of foreign exchange loss on cash and cash equivalents 1,945 (672)


ICAI FRN : 002857S

Partner Director
Satish Reddy
Date: 18 May 2018
741
Total equity

Shares Amount Retained Earnings Share Premium
Balance as of 1 April 2016 10,000 328 (58,441) 105,028 46,915
Profit / (Loss) for the period - - 5,381 - 5,381
Balance as of 31 March 2017 10,000 328 (53,060) 105,028 52,296
Profit / (Loss) for the period - - 7,876 - 7,876
Balance as of 31 March 2018 10,000 328 (45,184) 105,028 60,172

ICAI FRN : 002857S

Partner Director
Satish Reddy
Date: 18 May 2018
742

Dr. Reddy's New Zealand Limited (" the Company") incorporated in New Zealand , is a 100% subsidiary of Dr. Reddy's Laboratories SA.
Basis of preparation of financial statements

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”)
notified under the Companies (Indian Accounting Standards) Rules, 2015 and as amended from time to time.

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimates are revised and in any future periods affected.
Revenue
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration
is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with
the goods and the amount of revenue can be measured reliably. Revenue from the sale of goods is measured at the fair value of the
consideration received or receivable, net of returns, sales tax and applicable trade discounts and allowances. Revenue includes shipping and
handling costs billed to the customer.
Services Income
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as the
underlying services are performed. Upfront non-refundable payments received under these arrangements are deferred and recognised as
revenue over the expected period over which the related services are expected to be performed.
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements
is generally recognised over the term of the contract. Some of these arrangements include certain performance obligations by the Company.
Revenue from such arrangements is recognised in the period in which the Company completes all its performance obligations.
Interest income primarily comprises of interest from term deposits with banks. Interest income is recorded using the effective interest rate
(EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying amount of the financial asset. Interest income is included in other income in the statement of
profit and loss.
Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders
approve the dividend.
Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the
period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set
out in the Schedule III to the Companies Act, 2013 and Ind AS 1, Presentation of financial statements.
Assets:
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting date.
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as
non-current. Deferred tax assets and liabilities are always disclosed as non-current.
743
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another
entity.
Financial assets
All financial assets are recognised at fair value plus, in the case of financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the company commits to purchase or sell the asset.
Financial liabilities are classified, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee
contracts and derivative financial instruments.
Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to the
extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on
the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit; differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future; and taxable temporary differences arising upon the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary
difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net
realizable value. The cost of all categories of inventories is based on the weighted average method. Cost includes expenditures incurred in
acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition.
In the case of finished goods and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.
Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering spares
(such as machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or
consumed as indirect materials in the manufacturing process.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory include
estimated shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of competitive new products, to
the extent each of these factors impact the Company’s business and markets. The Company considers all these factors and adjusts the
inventory provision to reflect its actual experience on a periodic basis.
744
Foreign currencies
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the
exchange rate at that date. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial
statements are recognised in the statement of profit and loss in the period in which they arise.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance
could have been settled if those cash flows had occurred at the measurement date.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost
includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of
materials and other costs directly attributable to bringing the asset to a working condition for its intended use. General and specific
borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised as part of the cost of that
asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
components) of property, plant and equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment and are recognised in the statement of profit and loss.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that
the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs
and maintenance are recognised in the statement of profit and loss as incurred.
Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless the exchange
transaction lacks commercial substance or the fair value of either the asset received or asset given up is not reliably measurable, in which
case the asset exchanged is recorded at the carrying amount of the asset given up.
Depreciation
Depreciation is recognised in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant and
equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. The depreciation expense is included in the
costs of the functions using the asset. Land is not subject to depreciation.
Buildings
Plant and machinery 3 - 15 years
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class of
assets, based on the technical evaluation and assessment, the Company believes that the useful lives adopted by it best represent the period
over which an asset is expected to be available for use. Accordingly, for these assets, the useful lives estimated by the Company are different
from those prescribed in the Schedule.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant
and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of
money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to
the passage of time is recognised as finance cost.
Restructuring
A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuring
either has commenced or has been announced publicly. Future operating costs are not provided.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company
recognises any impairment loss on the assets associated with that contract.
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is
virtually certain. Such reimbursements are recognised as a separate asset in the statement of financial position, with a corresponding credit to
the specific expense for which the provision has been made.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually
certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.
745

Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk of changes in value. For this purpose, “short-term” means
investments having maturity of three months or less from the date of investment. Bank overdrafts that are repayable on demand and form an
integral part of our cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash
flows.
Intangible Assets
Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and
accumulated impairment losses.Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in
the specific asset to which they relate.Intangible assets relating to products in development, intangible assets not available for use and
intangible assets having indefinite useful life are subject to impairment testing at each reporting date. All intangible assets are tested for
impairment when there are indications that the carrying value may not be recoverable. All impairment losses are recognised immediately in
the statement of profit and loss.
Amortisation:
Amortisation is recognised in the statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets or on
any other basis that reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Intangible
assets that are not available for use are amortised from the date they are available for use.
Intangible assets are de-recognised either on their disposal or where no future economic benefits are expected from their use. Losses arising
on such de-recognition are recorded in the statement of profit and loss, and are measured as the difference between the net disposal
proceeds, if any, and the carrying amount of respective intangible assets as on the date of de-recognition.
Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if
the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.
The Company’s contributions to defined contribution plans are charged to the statement of profit and loss as and when the services are
received from the employees.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using effective interest method, less
provision for impairment.

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid.
The amounts are unsecured and are presented as current liabilities unless payment is not due within twelve months after the reporting period.
They are recognised initially ate fair value and subsequently measured at amortised cost using the effective interest method.
746
1.1 Going Concern

The accounts have been prepared on Going Concern basis, despite having the accumulated losses, as the company is supported by
its parent company in its activities and financial affairs.

Particulars
Purchases and services from holding company or other group companies:
Dr. Reddy's Laboratories (Australia) Pty Limited 4,571 1,186
As at As at
Particulars
31 March 2018 31 March 2017
Due to holding company and other group companies(included in trade payables):

court settlement, disposal of appeals, the amount being called up, terms of contractual obligation, development and raising of
demand by concerned parties, respectively. The Company has made adequate provisions, wherever required, in compliance with
Ind AS 37 prescribed by the ICAI. Those contingent liabilities have arisen in the normal course of business and may not crystallise
on the Company and may not have any material impact on the revenue.

were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for
multiple-element arrangements.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of Ind AS
115 is not expected to have a significant impact on the Company’s recognition of revenues from product sales, service income and
license fee.
747
Note 2: Notes to financial statements (continued)
2.5 : Property, plant and equipment
Gross Block Depreciation / Amortization Net Block

As at As at As at For the As at As at As at
Description 01.04.2017 Additions Disposals 31.03.2018 01.04.2017 year Disposals 31.03.2018 31.03.2018 31.03.2017
Furniture and fixtures 755 - - 755 702 53 - 755 - 52

Total tangible assets (A) 755 - - 755 702 53 - 755 - 52
Previous Year 731 24 - 755 628 74 - 702 52
748
Other Assets
As at As at
31 March 2018 31 March 2017
2.2 : Tax assets, net
Advance income taxes 1,030 1,820
1,030 1,820
As at As at
31 March 2018 31 March 2017
2.3 : Inventories
Stock-in-trade (goods acquired for trading) 7,961 15,408
7,961 15,408
Financial Assets
As at As at
2.4 : Trade receivables 31 March 2018 31 March 2017
(Unsecured,considered good)
Receivable from Others 14,233 12,738
14,233 12,738
As at As at
31 March 2018 31 March 2017
Cash on hand 20 19
51,617 40,372
As at As at
31 March 2018 31 March 2017
Other Assets
2.6 : Other Assets

Advances to employees 24 23
Prepaid expenses - 340
Balances with statutory authorities 735 -
Other current assets 947 906
1,706 1,269
749
2.7 : Share capital

As at As at
31 March 2018 31 March 2017
10,000 (previous year :10,000) shares of NZD 1 each 328 328


328 328

As at As at
Particulars
31 March 2018 31 March 2017
Shares issued during the year - - - -
(b) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of NZD 1 per share. Each holder of equity shares is entitled to
one vote per share.

As at As at
31 March 2018 31 March 2017
Particulars
No. of equity % of equity No. of equity % of equity
shares shares shares shares
Dr. Reddy’s Laboratories SA 10,000 100% 10,000 100%
As at As at
31 March 2018 31 March 2017
2.8 : Trade Payables
Payables to holding company and other group companies 10,559 8,420
Payables to others - 5,468
10,559 13,888
As at As at
31 March 2018 31 March 2017
Other current liabilities 755 19
4,780 5,022
As at As at
31 March 2018 31 March 2017
2.10 : Provisions
Compensated absences 252 241
252 241
Other Liabilities
As at As at
31 March 2018 31 March 2017
2.11 : Other Current Liabilities
784 212
750

31 March 2018 31 March 2017
2.12 : Revenue from operations
Sales 78,867 90,942
78,867 90,942

31 March 2018 31 March 2017
2.13 : Other income
Interest income
On fixed deposits 570 450
Foreign exchange gain, net 2,161 -
2,731 450

31 March 2018 31 March 2017
2.14 : Employee benefits expense
Contribution to provident and other funds 176 380
7,236 10,891

31 March 2018 31 March 2017
2.15 : Depreciation and amortisation expense
53 74

31 March 2018 31 March 2017
Selling expenses 9,063 15,029
Travelling and conveyance 526 420
Foreign exchange loss, net - 992
13,608 23,550
751
To the Members of Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd, China
We have audited the accompanying financial statements of Dr. Reddy’s (WUXI) Pharmaceutical
Co. Ltd, China a company incorporated and administered outside India, which comprises the
Balance sheet as at 31 March 2018, the Statement of Profit and Loss (including Other
Comprehensive Income) for the year ended on that date annexed thereto, the Cash Flow
Statement, the Statement of Changes in Equity for the year then ended and a summary of
significant accounting policies and other explanatory information.

2013.
752
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
753
Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd, China
Balance Sheet
As at
Note 31 March 2018
ASSETS
Non current assets

Property,plant and equipment 2.1 22,466
Financial assets
Other assets 2.3 A 90
22,556
Current assets
Financial assets
Cash and cash equivalents 2.2 3,471
Other assets 2.3 B 7,343
Other current assets 2.4 9,732
Total current assets 20,547
Total assets 43,103

Equity
Equity share capital 2.5 64,626
Other equity
Retained earnings (57,904)
Total equity 6,722
Current liabilities
Trade payables 2.6 10,171
Other liabilities 2.7 8,779
Other current liabilities 2.8 17,431
Total Liabilities 36,381
Total equity and liabilities 43,103


for and on behalf of the Board of Directors of Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd.
ICAI FRN : 002857S
M V Narasimham
Director
PSRVV Surya Rao
Partner
Membership No. 202367 Saumen Chakraborty
Director
Place: Hyderabad
Date: 18 May 2018
754

2 June 2017 to
Note 31 March 2018
Continuing operations
Other income 2.9 9

Total Income 9
Expenses
Employee benefit expense 2.10 11,476
Depreciation and amortisation expense 2.1 1,482
Selling and other expenses 2.11 44,955
Total expense 57,913
Loss before tax (57,904)
Income tax expense -
Loss for the year (57,904)


ICAI FRN : 002857S
M V Narasimham
Director
PSRVV Surya Rao
Partner
Director
Place: Hyderabad
Date: 18 May 2018
755
Cash Flow Statement

2 June 2017 to
31 March 2018
Loss before taxation (57,904)

Depreciation and amortisation expense 1,482
Finance income (9)
Net foreign exchange differences (191)
Operating cash flows before working capital changes (56,622)

Trade payables 9,588
Other assets and liabilities 9,003
(38,031)
Income tax paid -
Net cash flows from operating activities (38,031)

Purchase of tangible assets,net (23,948)
Finance income received 9
(23,939)
Net cash flows from/ (used in) financing activities

Proceeds from issuance of share capital 64,626
64,626
Net increase / (decrease) in cash and cash equivalents 2,656

Cash and cash equivalents at the beginning of the year -
Effect of foreign exchange differences on cash and cash equivalents 815
Cash and cash equivalents at the end of the year 3,471

Cash and cash equivalents at the end of the year 3,471
Cash and bank balances at the end of the year 3,471

ICAI FRN : 002857S
M V Narasimham
Director
PSRVV Surya Rao
Partner
Director
Place: Hyderabad
Date: 18 May 2018
756
2.3 Total equity
Share Capital Reserves and surplus

Amount Retained Earnings
Balance as of 1 April 2017 - - -
Shares issued during the year 64,626 - 64,626

Profit for the period - (57,904) (57,904)
Balance as of 31 March 2018 64,626 (57,904) 6,722

ICAI FRN : 002857S
M V Narasimham
Director
PSRVV Surya Rao
Partner
Director
Place: Hyderabad
Date: 18 May 2018
757

Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd. (" the Company") incorporated in China , is a 100% subsidiary of Dr. Reddy's Laboratories SA.



Assets:
Liabilities:

Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at exchange rates at the dates of the transactions. Monetary
assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that
are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in
a foreign currency are translated using the exchange rates at the date when the fair value was measured.
Revenue
Sale of goods
Services
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as the underlying services are performed. Upfront
non-refundable payments received under these arrangements are deferred and recognised as revenue over the expected period over which the related services are expected to be
performed.
License fee

758
Income tax

condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised as part of
the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a
Depreciation
Years
Buildings
Vehicles 4 to 5
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other non-current assets. The
cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
Inventories
categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and other
costs incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads based
on normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering spares (such as
process.
759
Employee benefits

of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the
Restructuring
Onerous contracts
Contingent assets
Financial assets
acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market
place (regular way trades) are recognised on the trade date, i.e., the date that the Companny commits to purchase or sell the asset.
approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from
its initial recognition.
Financial liabilities are classified,as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in
an effective hedge, as appropriate.

Trade receivables

760
Note 1 Description of the Company and significant accounting policies(continued)
1.5 Going Concern


For the year ended
Particulars
31 March 2018
Purchases and services rendered from holding company or other group companies:
Dr. Reddy's Laboratories Limited 9,714
b. The company has the following amounts due to/from related parties:
As at
Particulars
31 March 2018
Due to holding company and other group companies(included in other current financial liabilities):
Dr. Reddy's Laboratories Limited 9,876
1.7 Taxation
a. Current Taxes
The Company is not liable to pay any current taxes on account of current year losses.
b. Deferred Taxes

Contingent liabilities and the crystallisation of these liabilities are dependent upon the outcome of court cases / arbitration /
out of court settlement, disposal of appeals, the amount being called up, terms of contractual obligation, development and
raising of demand by concerned parties, respectively. The Company has made adequate provisions, wherever required, in
compliance with Ind AS 37 prescribed by the ICAI. Those contingent liabilities have arisen in the normal course of business
and may not crystallise on the Company and may not have any material impact on the revenue.
1.9 The company is incorporated on 2 June 2017 under the laws of China , is a 100% subsidiary of Dr. Reddy's Laboratories
SA.Accordingly comparitive figures are not presented.

In March 2018, the Ministry of Corporate Affairs (“MCA”) has notified Ind AS 115, 'Revenue from Contracts with
Customers', which is effective for accounting periods beginning on or after 1 April 2018. This comprehensive new standard
will supersede existing revenue recognition guidance, and requires an entity to recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled
in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide
guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract
modifications) and improve guidance for multiple-element arrangements.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of
Ind AS 115 is not expected to have a significant impact on the Company’s recognition of revenues from product sales, service
income and license fee.
761
Gross Block Depreciation Net Block

As at As at As at As at As at As at
Description 1 April 2017 31 March 2018 1 April 2017 31 March 2018 31 March 2018 31 March 2017
Plant and machinery - 17,693 - 17,693 - 1,037 - 1,037 16,656

Furniture and fixtures - 3,022 - 3,022 - 40 - 40 2,982 -
Vehicles - 3,233 - 3,233 - 405 - 405 2,828
Total - 23,948 - 23,948 - 1,482 - 1,482 22,466 -
Previous year - - - - - - - - - -
762
Note 2: Notes to the financial statements
Financial Assets
2.2 : Cash and cash equivalents As at
31 March 2018

- On current accounts 3,471
Cash and cash equivalents 3,471
2.3 : Other financial assets

As at
31 March 2018
2.3 A Non current assets
Security deposits 90
90
2.3 B Current assets

Claims receivables 7,343
7,343
Other Assets As at
31 March 2018
2.4 : Other current assets
Other current assets 9,732
9,732
763
2.5 : Share capital

As at
31 March 2018
US$ 1,000,000 (31 March 2017: Nil)* 64,626

US$ 1,000,000 (31 March 2017: Nil)* 64,626

US$ 1,000,000 (31 March 2017: Nil)* 64,626
64,626
* No concept of nature and number of shares in this Company.

As at
31 March 2018
Particulars
Amount in % holding in
US$ ('000) the class
Dr. Reddy's Laboratories SA 1,000 100%
As at
31 March 2018
2.6 : Trade payables
Trade payables 295
Payables to holding and other group companies 9,876
10,171
As at
31 March 2018
Accrued expenses 8,098
Other liabilities 681
8,779
Other liabilities
As at
31 March 2018
2.8 : Other current liabilities
Advance from customers 16,579
Salary and bonus payable 852
17,431
764

For the period
2 June 2017 to
31 March 2018
2.9 : Other income
Interest income 9
9
For the period

2 June 2017 to
31 March 2018
2.10 : Employee benefit expenses
Salaries,wages and bonus 10,574
Staff welfare expenses 902
11,476
For the period

2 June 2017 to
2.11 : Selling and other expenses
31 March 2018
Foreign exchange loss,net 695
Legal and professional 1,879
Travel expenses 2,025
Rent expense 847
Other general expenses 39,509
44,955
765
To the Members of Dr. Reddy's Venezuela, C.A.
We have audited the accompanying financial statements of Dr. Reddy's Venezuela, C.A. a

2013.
766
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
767
Dr. Reddy's Venezuela, C.A.
Balance Sheet
As at As at
ASSETS
Non current assets

Property, plant and equipment 2.1 54 -
Tax assets, net - 9
Total non current assets 54 9
Current assets
Financial assets
Cash and cash equivalents 2.2 75 568
Loans 2.3 1,297 1,288

Equity
Other equity
Total equity (41,398) (40,289)
Non current liabilities

Borrowings 2.6 6,110 5,712
Current liabilities
Trade payables 2.7 36,351 36,015


for and on behalf of the Board of Directors of Dr. Reddy's Venezuela, C.A.
ICAI FRN : 002857S
PSRVV Surya Rao Joga Rao KVSNHR

Partner Finance Manager
Place: Hyderabad
Date: 18 May 2018
768

Revenue from operations 2.10 - 169

Other Income 2.11 23 967
Total Income 23 1,136
Expenses
Cost of materials consumed 1 146
Employee benefits expense 2.12 255 992
Finance Cost 2.13 141 147
Depreciation and amortisation expense 2.14 4 -
Other expenses 2.15 731 42
Profit / (Loss) before tax (1,109) (191)
Profit / (Loss) for the year (1,109) (191)
Earnings per share

Basic - Par value VEF 430 per share (104.30) (424,241.09)
Diluted - Par value VEF 430 per share (104.30) (424,241.09)


ICAI FRN : 002857S

Place: Hyderabad
Date: 18 May 2018
769
Cash Flow Statement

31 March 2018 31 March 2017
(Loss) / Profit before taxation (1,109) (191)
Depreciation and amortisation expense 4 -
Finance income - (19)
Allowance for sales returns - 3
Loss on disposal of property, plant and equipment (23) -
Finance costs 141 147
Provision for inventory obsolescence - 69
Allowances for credit losses, net - 1
Net foreign exchange differences 506 551
Operating cash flows before working capital changes (481) 561

Trade and other receivables and prepayments - 61
Trade and other payables 390 (2,127)
Inventories - 80
Other assets & liabilities,net (376) (196)
(467) (1,621)
Income tax paid - -
Net cash flows from operating activities (467) (1,621)

Proceeds from sale of property, plant and equipment 23 -
Purchase of property, plant and equipment (55) -
Interest received - 19
(32) 19

Proceeds from long term borrowings,net 226 1,891
Interest paid - (147)
226 1,744
Net increase / (decrease) in cash and cash equivalents (273) 142

Cash and cash equivalents at the beginning of the year 568 1,238
Effect of foreign exchange loss on cash and cash equivalents (220) (812)
Cash and cash equivalents at the end of the year 75 568

Cash and cash equivalents at the end of the year 75 568
Cash and bank balances at the end of the year 75 568

ICAI FRN : 002857S

Place: Hyderabad
Date: 18 May 2018
770
Total equity

Balance as of 1 April 2016 10,633 583 (40,681) (40,098)

Profit / (Loss) for the period - - (191) (191)
Balance as of 31 March 2017 10,633 583 (40,872) (40,289)

Profit / (Loss) for the period - - (1,109) (1,109)
Balance as of 31 March 2018 10,633 583 (41,981) (41,398)

ICAI FRN : 002857S
A Ramachandra Rao Joga Rao KVSNHR

Membership No. 9750
Place: Hyderabad
Date: 18 May 2018
771

Dr. Reddy's Venezuela, C.A. (" the Company") incorporated in Venezuela , is a 100% subsidiary of Dr. Reddy's Laboratories SA.


Revenue
Sale of goods
Services Income
non-refundable payments received under these arrangements are deferred and recognised as revenue over the expected period over which the related services are expected to be
performed.
License fee
Earnings per share

Assets:
Liabilities:
Financial assets
place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset.
Financial liabilities are classified, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial
instruments.
772
Income tax
purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting nor taxable profit; differences relating to investments in subsidiaries and jointly controlled entities
to the extent that it is probable that they will not reverse in the foreseeable future; and taxable temporary differences arising upon the initial recognition of goodwill. Deferred tax
is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied
by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net realizable value. The cost of all
costs incurred in bringing them to their existing location and condition. In the case of finished goods and work in progress, cost includes an appropriate share of overheads based
on normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering spares (such as
process.
Foreign currencies
denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured based
on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or on translating monetary
items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in the statement of profit
and loss in the period in which they arise.
condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are capitalised as part of
the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a
Depreciation
over the shorter of the lease term and their useful lives. The depreciation expense is included in the costs of the functions using the asset. Land is not subject to depreciation.
Buildings
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant and equipment not ready to use before
such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
773

provision due to the passage of time is recognised as finance cost.
Restructuring
Onerous contracts
recognised as a separate asset in the statement of financial position, with a corresponding credit to the specific expense for which the provision has been made.
Contingent assets
Employee benefits

Trade receivables

774
1.1 Going Concern

The accounts have been prepared on Going Concern basis, despite having accumulated losses, as the company is supported by its parent
company in its activities and financial affairs.
a. The company has the following transactions with related parties :
Particulars
31 March 2018 31 March 2017
Interest paid/payable to holding company/other group companies:

Dr. Reddy's Laboratories SA 141 147
b. The company has the following amounts due/from related parties:

As at As at
Particulars
31 March 2018 31 March 2017
Due to holding company and other group companies(included in trade payables and
borrowings):
1.3 Taxation
a. Current Taxes
b. Deferred Taxes

Contingent liabilities and the crystallisation of these liabilities are dependent upon the outcome of court cases / arbitration / out of court
settlement, disposal of appeals, the amount being called up, terms of contractual obligation, development and raising of demand by concerned
parties, respectively. The Company has made adequate provisions, wherever required, in compliance with Ind AS 37 prescribed by the ICAI.
Those contingent liabilities have arisen in the normal course of business and may not crystallise on the Company and may not have any material
impact on the revenue.

In March 2018, the Ministry of Corporate Affairs (“MCA”) has notified Ind AS 115, 'Revenue from Contracts with Customers', which is
effective for accounting periods beginning on or after 1 April 2018. This comprehensive new standard will supersede existing revenue
recognition guidance, and requires an entity to recognise revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also will
result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for
example, service revenue and contract modifications) and improve guidance for multiple-element arrangements.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of Ind AS 115 is not
expected to have a significant impact on the Company’s recognition of revenues from product sales, service income and license fee.
775
Note 2: Notes to financial statements (continued)
Gross Block Depreciation / Amortization Net Block

Particulars 01.04.2017 Additions Disposals 31.03.2018 01.04.2017 year Disposals 31.03.2018 31.03.2018 31.03.2017
Leasehold improvments 252 - - 252 252 - - 252 - -
Office equipment and Furniture
& Fixtures 1,038 - - 1,038 1,038 - - 1,038 - -
Vehicles 12 58 12 58 12 4 12 4 54
Total 1,302 58 12 1,348 1,302 4 12 1,294 54 -
776
Other Assets
Financial Assets
As at As at
31 March 2018 31 March 2017
- On current accounts 75 185
Cash on hand - 383
75 568
As at As at
31 March 2018 31 March 2017
2.3 : Loans and Advances
Other advances 1,297 1,288
1,297 1,288
Other Assets As at As at
31 March 2018 31 March 2017
2.4 : Other current assets
Other current assets 1 44
Advances to employees - 11
13 70
777
2.5 : Share capital

As at As at
31 March 2018 31 March 2017
10,633 (previous year : 10,633) shares of VEF 430 each 583 583

10,633 (previous year : 10,633) shares of VEF 430 each 583 583
583 583
* No concept of authorised share capital in this company.

As at As at
Particulars
31 March 2018 31 March 2017
No. of shares Amount No. of shares Amount
(b) Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of VEF 430 per share. Each holder of equity shares is entitled
to one vote per share.

As at As at
31 March 2018 31 March 2017
Particulars
No. of equity % of equity No. of equity % of equity
shares shares shares shares
As at As at
31 March 2018 31 March 2017
2.6 : Non-current Borrowings
From other parties
Long term borrowings from holding company and other group companies 6,110 5,712
6,110 5,712
As at As at
31 March 2018 31 March 2017
2.7 : Trade Payables
Payables to holding company and other group companies 34,898 34,724
Payables to others 1,453 1,291
36,351 36,015
As at As at
31 March 2018 31 March 2017
2.8 : Other current financial liabilities
Capital Creditors 350 347
360 448
Other Liabilities
2.9 : Other Current Liabilities

Salary & Bonus Payable 3 14
Provision for staff benefit schemes 11 20
15 49
778

31 March 2018 31 March 2017
2.10 : Revenue from operations
Sales - 169
Service Income - -
- 169

31 March 2018 31 March 2017
2.11 : Other income
Interest income
On fixed deposits - 19
Foreign exchange gain,net - 948
Profit on sale of property, plant and equipment 23 -
23 967

31 March 2018 31 March 2017
2.12 : Employee benefits expense
Salaries, wages and bonus 188 932
Contribution to provident and other funds 67 60
255 992
For the year For the year ended

31 March 2018 31 March 2017
2.13 : Finance costs
Interest on borrowings from holding company and other group companies 141 147
141 147

31 March 2018 31 March 2017
2.14 : Depreciation and amortisation expense
Depreciation of Property,plant and equipment 4 -
4 -

31 March 2018 31 March 2017
Legal and professional 38 39
Travelling and conveyance 14 36
Rates and taxes - 4
Rent 62 183
Insurance 2 2
Other general expenses 36 (222)
Foreign exchange loss, net 579 -
731 42
779
To the Members of Euro Bridge Consulting B.V.
We have audited the accompanying financial statements of Euro Bridge Consulting B.V. a

2013.
780
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
781
Euro Bridge Consulting B.V.
Balance Sheet
As at As at
ASSETS
Non Current assets

Other Intangible assets 2.1 2,240,894 -
Financial assets
Investments 2.2 152,052 152,052
2,392,946 152,052
Current assets
Financial assets
Total assets 2,395,764 153,853

Equity
Other equity
Share premium 474,574 134,614
Total equity 490,545 153,684

Borrowings 2.5 1,904,607 -
1,904,607 -
Current liabilities
Trade payables 2.6 61 -
Total Liabilities 612 169
Total equity and liabilities 2,395,764 153,853


for and on behalf of the Board of Directors of Euro Bridge Consulting B.V.
ICAI FRN : 002857S
PSRVV Surya Rao Rudolf Verrijk Roger Friedrichs

Place: Hyderabad
Date: 18 May 2018
782

Foreign exchange gain,net 257 -

Total Income 257 -
Expenses
Loss before tax (3,099) (3,308)
Loss for the year (3,099) (3,308)
Earnings per share:

Basic earnings per share of EURO 10 each (55.14) (58.86)
Diluted earnings per share of EURO 10 each (55.14) (58.86)



ICAI FRN : 002857S

Place: Hyderabad
Date: 18 May 2018
783
Cash Flow Statement

31 March 2018 31 March 2017
Loss before taxation (3,099) (3,308)

Net foreign exchange differences 39,861 82
Operating cash flows before working capital changes 36,762 (3,226)

Trade payables 233 -
Other assets and liabilities, net (36,293) (553)
702 (3,779)
Income tax paid
Net cash flows from operating activities 702 (3,779)
Net cash flows used in investing activities - -

Proceeds from increase in share premium - 6,326
Proceeds from / (Repayment of) long term borrowings,net - (1,681)
- 4,645
Net increase / (decrease) in cash and cash equivalents 702 866

Effect of foreign exchange loss on cash and cash equivalents 315 (134)


ICAI FRN : 002857S

Place: Hyderabad
Date: 18 May 2018
784
Total equity

Shares Amount Share Premium Retained Earnings
Balance as of 1 April 2017 56,200 36,985 134,614 (17,915) 153,684
Increase in share premium during the year - - 339,960 - 339,960

Loss for the period - - - (3,099) (3,099)
Balance as of 31 March 2018 56,200 36,985 474,574 (21,014) 490,545

Shares Amount Share Premium Retained Earnings
Balance as of 1 April 2016 56,200 36,985 128,288 (14,607) 150,666
Increase in share premium during the year - - 4,149 -

Loss for the period - - 2,177 (3,308) 3,018
Balance as of 31 March 2017 56,200 36,985 134,614 (17,915) 153,684

ICAI FRN : 002857S

Place: Hyderabad
Date: 18 May 2018
785

Euro Bridge Consulting B.V. (" the Company") incorporated in Netherlands , is a 100% subsidiary of Dr. Reddy's Research & Development B.V.


Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and
in any future periods affected.

Assets:
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at
the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax assets
and liabilities are always disclosed as non-current.

Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-
monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are
measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash
flows had occurred at the measurement date.
Revenue
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs
and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods and the amount of revenue can be measured reliably.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts and
allowances. Revenue includes shipping and handling costs billed to the customer.
Services
non-refundable payments received under these arrangements are deferred and recognised as revenue over the expected period over which the related services are expected to
be performed.
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over the
term of the contract. Some of these arrangements include certain performance obligations by the Company. Revenue from such arrangements is recognised in the period in
which the Company completes all its performance obligations.

discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the
financial asset. Interest income is included in other income in the statement of profit and loss.
786

Income tax
substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred
tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Earnings per share


directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to
a working condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset are
capitalised as part of the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets
equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property,
plant and equipment and are recognised in the statement of profit and loss.
embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit and
loss as incurred.
substance or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of the
asset given up.
Depreciation
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the change(s) are accounted for
as a change in an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors .
Years
Buildings
Vehicles 4 to 5
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other non-current assets. The
cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.

Other intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment
losses.
Intangible assets relating to products in development, other intangible assets not available for use and intangible assets having indefinite useful life are subject to impairment
testing at each reporting date. All other intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable. All impairment
losses are recognised immediately in the statement of profit and loss.
Amortisation
pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Intangible assets that are not available for use are amortised from the date
they are available for use.
787

Inventories
costs incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of overheads
based on normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering spares
(such as machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as indirect materials in the
manufacturing process.
discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of these factors impact the Company’s business and
markets. The Company considers all these factors and adjusts the inventory provision to reflect its actual experience on a periodic basis.
Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Restructuring
Onerous contracts
obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such reimbursements
are recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.
Contingent assets
Financial assets
place (regular way trades) are recognised on the trade date, i.e., the date that the Companny commits to purchase or sell the asset.
Investments in subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is
assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries , the difference between net disposal proceeds and the carrying
amounts are recognised in the statement of profit and loss.
approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on
its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.
Financial liabilities are classified,as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.

investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
Trade receivables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and
are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
788
1.5 Going Concern

The accounts have been prepared on Going Concern basis, despite incurring losses, as the company is supported by its parent
The company has the following amounts due from/to related parties :
As at As at
Particulars
31 March 2018 31 March 2017
Due to holding company and other group companies(included in financial
liabilities -borrowings):
Dr. Reddy's Research & Development B.V. 1,904,607 -
1.7 Taxation
a. Current Taxes
The Company is not liable to pay any current taxes on account of current year losses, brought forward losses and unabsorbed
depreciation.
b. Deferred Taxes

Ind AS 37 prescribed by the ICAI. Those contingent liabilities have arisen in the normal course of business and may not
crystallise on the Company and may not have any material impact on the revenue.
1.9 The company, incorporated under the laws of Netherlands, is a 100% subsidiary of Dr. Reddy's Research & Development B.V.

were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance
for multiple-element arrangements.
The Company intends to adopt Ind AS 115 effective 1 April 2018, using the modified retrospective method. The adoption of Ind
AS 115 is not expected to have a significant impact on the Company’s recognition of revenues from product sales, service income
and license fee.
789
2.1 : Other intangible assets
Gross Block Amortisation Net Block
Description 01.4.2017 Additions Disposals 31.03.2018 01.4.2017 year Disposals 31.03.2018 31.03.2018 31.03.2017
Product related intangibles 2,240,894 - 2,240,894 - - - - 2,240,894 -

- -
Total intangible assets - 2,240,894 - 2,240,894 - - - - 2,240,894 -
Previous Year - - - - - - - - -
790
Financial Assets
Investments carried at cost As at As at

31 March 2018 31 March 2017
2.2: Investments in subsidiary companies
OOO DRS LLC* 152,052 152,052
152,052 152,052
*Shares held in OOO DRS LLC are not denominated in number of shares as per the laws of the country.
2.3 : Cash and cash equivalents As at As at

31 March 2018 31 March 2017
Cash and cash equivalents 2,818 1,801
2.4 : Share capital As at As at

31 March 2018 31 March 2017
100,000 (Previous year : 100,000) equity shares of Euro 10 each 55,863 55,863


36,985 41,134

31 March 2018 31 March 2017
Amount Amount
shares shares

The company has only one class of equity shares having a par value of Euro 10 per share. Each holder of equity shares is entitled to one vote
per share.

As at As at
31 March 2018 31 March 2017
Particulars
No. of equity % holding in No. of equity % holding in the
shares held the class shares held class
Reddy Antilles N.V. - - 56,200 100%

Dr. Reddy's Research & Development B.V. 56,200 100% - -
2.5 : Borrowings As at As at
Non-current Borrowings 31 March 2018 31 March 2017
From other parties
Long term borrowings from holding company and other group companies 1,904,607 -
1,904,607 -
2.6 : Trade payables As at As at

31 March 2018 31 March 2017
Trade payables 61 -
61 -
2.7 : Other financial liabilities As at As at

31 March 2018 31 March 2017
551 169
2.8 : Selling and other expenses For the year ended For the year ended
31 March 2018 31 March 2017
Foreign exchnage loss,net - 135
3,356 3,308
791
Board’s Report
Dear Members,
Your Directors present the 18th Board’s Report of the Company for the year ended 31 March
2018.
Financial Highlights
The following table gives the financial highlights of the Company for the financial year 2017-
18 as compared to previous financial year:
(Rs. in thousands)
Particulars 31 March 2018 31 March 2017
Profit/(Loss) for the period after taxation (10) 35

Balance brought forward (14,149) (14,184)
Balance carried forward to Balance Sheet (14,159) (14,149)
State of Company's Affairs

The Company did not have any operations during the year.
Dividend
Your Directors do not recommend any dividend for the financial year ending March 31, 2018.
Transfer to reserves
No amount is proposed to be transferred to any reserves during the year under the review.
Share Capital
During the year under review, there was no change in the Share Capital of the Company.
Fixed Deposits
The Company has not accepted any deposits covered under Chapter V of the Companies Act,
2013. Hence the relevant disclosure or reporting provisions are not applicable to the Company.
792
Material Changes and Commitments Affecting the Financial Position of the Company
No material changes and commitments affecting the financial position of the Company, has
occurred between the end of the financial year of the Company to which the financial
statements relate and the date of this report.
Subsidiaries and Associates
The Company is a subsidiary of Dr. Reddy’s Laboratories Limited. DRL Impex Limited is a
wholly owned subsidiary of the Company.
Pursuant to Section 129(3) of the Companies Act, 2013 and Rule 6 of the Companies
(Accounts) Rules, 2014, where a company has one or more subsidiaries or associate companies,
it shall, in addition to financial statements, prepare a consolidated financial statement of the
company and of all the subsidiaries and associate companies in the same form and manner as
that of its own and in accordance with applicable accounting standards, which shall also be laid
before the annual general meeting of the company along with the laying of its financial
statement.
However the Ministry of Corporate Affairs vide its circulars dated July 27, 2016 has clarified
that the provisions pertaining to manner of consolidation of accounts shall not be applicable if
a) the members have been intimated in writing for not presenting the financial statements and
the members do not object to the same; and
b) ultimate holding company files the consolidated financial statements with the Registrar
which are in compliance with the applicable accounting standards.
The Company has/shall comply with the said circular. Therefore the relevant provisions
regarding manner of consolidation of accounts are not applicable to the Company.
A statement containing the salient features of the financial statement of its subsidiaries in
prescribed Form AOC-1 is attached as “Annexure – I” to the Board’s Report.
Particulars of Loans, Guarantees or Investments
Details of loans, gukarantees and investments covered under Section 186 of the Companies
Act, 2013 form part of the notes to financial statements provided in this Annual Report.
Number of Board meetings
The Company’s Board met 4 times during the year on 10.05.2018, 26.07.2017, 27.10.2017 and
23.01.2018.
Board of Directors
Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. G V Prasad, retires by
rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. Your
Directors recommend his re-appointment for approval at the ensuing Annual General Meeting.
Brief profile of Mr. G V Prasad is given in the notice convening the 18th AGM of the Company.
793
Secretarial Standards
The Directors state that applicable Secretarial Standards i.e SS-1 and SS-2, relating to
‘Meeting of the Board of Directors’ and ‘General Meetings’, respectively, have been duly
followed by the Company.
Directors’ Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, your Directors state that:
1. applicable accounting standards have been followed in the preparation of the annual
accounts;
2. accounting policies have been selected and applied consistently. Reasonable and prudent
judgments and estimates were made, so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year 2017-18 and of the profit and loss of the Company
for that period;
3. proper and sufficient care has been taken to maintain adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. annual accounts have been prepared on a going concern basis; and
5. proper systems have been devised to ensure compliance with the provisions of all applicable
laws and these systems were adequate and operating effectively.
Risk Management and Adequacy of Internal Financial Controls with Reference to
The Company is guided by the holding company, Dr. Reddy's Laboratories Limited's (DRL)
policies. Accordingly, the philosophies, policies or procedures relating to internal controls over
Financial Accounting, Risk Management and Compliance of DRL are applicable to the
Company as well. Identified key risks and internal control matters pertaining to the Company,
if any, are reviewed by the DRL's Internal Audit and Risk Management teams, discussed with
management and suitably updated to DRL's Board.
Related Party Transactions
In accordance with Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the
Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by
the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as
“Annexure II”.
The details of related party disclosures form part of the notes to the financial statements
provided in this Annual Report.
Statutory Auditors
The Statutory Auditors of the Company M/s. A. Ramachandra Rao & Co., Chartered
Accountants, retire at the ensuing 18th Annual General Meeting. They have confirmed their
794
eligibility to act as Statutory Auditors under Section 141 of the Companies Act, 2013 and Rule
4 of the Companies (Audit and Auditors) Rules, 2014, if re-appointed.
The Board of Directors recommend the re-appointment of M/s. A. Ramachandra Rao & Co.,
Chartered Accountants as Statutory Auditors of the Company for the financial year 2017-18
for shareholder’s approval.
Board's response on auditor's qualification, reservation or adverse remark or disclaimer
made
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in
their report. During the year, there were no instances of frauds reported by auditors under
section 143(12) of the Companies Act, 2013.
Significant and Material Orders passed by the Court/Regulators
During the year under review, there were no significant and/or material orders, passed by any
Court or Regulators or Tribunal which may impact the going concern status or the Company’s
operations in future.
Particulars of Employees
None of the employees of the Company draw salary more than the amount as specified under
the provisions of Section 197(12) of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time
to time. Hence the relevant provisions are not applicable to your Company.
Conservation of energy, Technology Absorption, Foreign exchange earnings and outgo
Since the Company did not have any operations during the year, the particulars as prescribed
under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts)
Rules, 2014 relating to conservation of energy, research and development, technology
absorption, foreign exchange earnings and outgo are not applicable to your Company.
Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 are attached as
“Annexure III” to this Report.
Acknowledgement
Your directors place on record their sincere appreciation for support and co-operation extended
by all the concerned to the Company during the year.
For and on behalf of the Board of Directors
Sd/- Sd/-
Date: May 11, 2018 K Satish Reddy M V Narasimham
Place: Hyderabad Director Director
795
Annexure-I
Form AOC-1
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies/joint
ventures
Part “A”: Subsidiaries

(Rs. in thousands)
Sl. No. Particulars Details
1. Name of the subsidiary DRL Impex Limited
2. Date since when the subsidiary was acquired 14.09.2016
3. Reporting period for the subsidiary concerned, if NA
different from the holding company’s reporting
period
4. Reporting currency and Exchange rate as on the last INR
date of the relevant Financial year in the case of
foreign subsidiaries
5. Share capital Rs. 760,000
6. Reserves & surplus Rs. (761,893)
7. Total assets Rs. 14,139
8. Total Liabilities Rs. 14,139
9. Investments -
10. Turnover -
11. Profit before taxation Rs. (57)
12. Provision for taxation -
13. Profit after taxation Rs. (57)
14. Proposed Dividend 0
15. Extent of shareholding (in %) 100%
There was no subsidiary which is yet to commence the operations. Further, none of the subsidiary have been
liquidated or sold during the year.
Part “B”: Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and
Joint Ventures : NIL
Sd/- Sd/-
796
Annexure- II
FORM NO. AOC – 2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/arrangements entered into by the company with
related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including
certain arm’s length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm’s length basis:
(a) Name(s) of the related party and nature of

relationship
(b) Nature of contracts/arrangements/transactions
(c) Duration of the contracts/arrangements/
transactions
(d) Salient terms of the contracts or arrangements or
transactions including the value, if any
Not Applicable
(e) Justification for entering into such contracts or
arrangements or transactions
(f) Date(s) of approval by the Board
(g) Amount paid as advances, if any
(h) Date on which the special resolution was passed
in general meeting as required under first
proviso to Section 188
2. Details of material contracts or arrangement or transactions at arm’s length basis:
(a) Names(s) of the related party and nature of Dr. Reddy’s Laboratories Limited –
relationship Holding Company
(b) Nature of contracts/arrangements/ transactions Dues to holding company (included in other
current liabilities)
(c) Duration of the contracts/arrangements Ongoing.
transactions
(d) Salient terms of the contracts or arrangements or Refer Note 2.7 of the Notes to Financial
transactions including the value, if any Statements.
(e) Date(s) of approval by the Board, if any -
(f) Amount paid as advances, if any -
Sd/- Sd/-
797
ANNEXURE - III
FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN
As on the financial year ended on 31 March, 2018
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and
Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
Sl. Particulars Details
No.
i) CIN U72200TG2000PTC034473
ii) Registration Date May 22, 2000
iii) Name of the Company Idea2Enterprises (India) Private Limited
iv) Category/Sub-Category of the Company Limited by Shares
v) Address of the Registered office and contact 7-1-27, Ameerpet, Hyderabad, Telangana-500016
details
vi) Whether listed company Yes/No No
vii) Name, Address and Contact details of Registrar NA
and Transfer Agent, if any
II. PRINCIPAL BUSINESS ACTIVITES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the company are given below:
Sr. Name and Description of NIC Code of the product/ % to total turnover of the
no. main products/services service company
NA
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. Name of the Address of the CIN/GLN Holding/ % of Applica
no. Company Company Subsidiary shares ble
/ Associate held* Section
1 Dr. Reddy's 8-2-337, Road no. 3, L85195TG1984PLC004507 Holding 99.996 2(46)
Laboratories Limited Banjara Hills,
Hyderabad-500 034
2 DRL Impex Limited 7-1-27, Ameerpet, U65990TG2000PLC034675 Subsidiary 100 2(87)(ii)
Hyderabad,
Telangana-500016
* Represents aggregate % of shares held by the Company.
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of No. of shares held at the beginning of the year No. of shares held at the end of the year %
Shareholders Demat Physical Total % of Demat Physical Total % of change
total total during
share shares the year
s
A. PROMOTERS
(1) Indian
a) Individual/HUF 0 0 0 0 0 0 0 0 0
b) Central Govt. 0 0 0 0 0 0 0 0 0
c) State Govt(s). 0 0 0 0 0 0 0 0 0
d) Bodies Corp. 0 2,499,826 2,499,826 100 0 2,499,826 2,499,826 100 0
e) Banks/FI 0 0 0 0 0 0 0 0 0
f) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(1) 0 2,499,826 2,499,826 100 0 2,499,826 2,499,826 100 0
(2) Foreign
a) NRIs-Individuals 0 0 0 0 0 0 0 0 0
b) Other-Individuals 0 0 0 0 0 0 0 0 0
c) Bodies Corp. 0 0 0 0 0 0 0 0 0
d) Banks/FI 0 0 0 0 0 0 0 0 0
e) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(2) 0 0 0 0 0 0 0 0 0
Total shareholding 0 2,499,826 2,499,826 100 0 2,499,826 2,499,826 100 0
of Promoter
(A)=(A)(1)+(A)(2)
798
B. PUBLIC
SHAREHOLDING
(1) Institutions
a) Mutual funds/UTI 0 0 0 0 0 0 0 0 0
b) Banks/FI 0 0 0 0 0 0 0 0 0
c) Central Govt. 0 0 0 0 0 0 0 0 0
d) State Govt(s). 0 0 0 0 0 0 0 0 0
e) Venture Capital 0 0 0 0 0 0 0 0 0
Funds
f) Insurance 0 0 0 0 0 0 0 0 0
Companies
g) FIIs 0 0 0 0 0 0 0 0 0
h) Foreign Venture 0 0 0 0 0 0 0 0 0
Capital funds
i) Others (specify) 0 0 0 0 0 0 0 0 0
Sub-total (B)(1) 0 0 0 0 0 0 0 0 0
(2) Non-Institutions
a) Bodies Corp 0 0 0 0 0 0 0 0 0
i) Indian 0 0 0 0 0 0 0 0 0
ii) Overseas 0 0 0 0 0 0 0 0 0
b) Individuals 0 0 0 0 0 0 0 0 0
i) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital upto
Rs.1 lakh
ii) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital in
excess of Rs.1 lakh
c) Others (specify)
c-i) Trust 0 0 0 0 0 0 0 0 0
c-ii) Clearing 0 0 0 0 0 0 0 0 0
Member
c-iii) NRIs 0 0 0 0 0 0 0 0 0
c-iv) Foreign 0 0 0 0 0 0 0 0 0
Nationals
Sub-total (B)(2) 0 0 0 0 0 0 0 0 0
Total Public 0 0 0 0 0 0 0 0 0
Shareholding
(B)=(B)(1)+ (B)(2)
C. SHARES HELD 0 0 0 0 0 0 0 0 0
BY CUSTODIAN
FOR GDRS &
ADRS
Grand Total 0 2,499,826 2,499,826 (*) 100 0 2,499,826 2,499,826 (*) 100 0
(A+B+C)
(*) Out of 2,499,826 equity shares, 10 equity share held by Mr. K Satish Reddy as nominee shareholder on behalf of Dr.
Reddy's Laboratories Limited, Holding Company and 100 shares are held by Dr. Reddy’s Bio-Sciences Limited (Wholly
owned subsidiary of Dr. Reddy's Laboratories Limited)
ii) Shareholding of Promoters

Sr. Category of No. of shares held at the No. of shares held at the end of the %
no. Shareholders beginning of the year year change
No. of % of % of Shares No. of % of % of Shares during
Shares total Pledged / Shares total Pledged / the
shares of encumbered shares of encumbered year
the to total the to total
company shares* company shares*
1 Dr. Reddy's 2,499,726 99.996 0 2,499,726 99.996 0 0.00
Laboratories
Limited
2 Dr. Reddy’s Bio 100 0.004 0 100 0.004 0 0.00
Sciences Limited
2,499,826 100 0 2,499,826 100 0 0
799
iii) Change in Promoters’ Shareholding
Shareholding at the beginning of the Cumulative Shareholding during

year the year
No. of Shares % of total shares No. of Shares % of total shares
of the company of the company
At the beginning of the year 2,499,826 100 2,499,826 100
Date wise Increase / Decrease in No Change
Promoters Shareholding during the
year specifying the reasons for
increase/ decrease (e.g. allotment/
transfer/bonus/sweat equity etc)
At the End of the year 2,499,826 100 2,499,826 100
iv) Shareholding pattern of top ten Shareholders (other than Directors, Promoters and holders of GDRs and
ADRs)
Name Shareholding at the beginning of Shareholding at the end of the year
the year
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
NIL
v) Shareholding of Directors and Key Managerial personnel

Sr. Name Date Shareholding at the Increase / Reason Cumulative
no. beginning of the (Decrease) in Shareholding
year Shareholding, during the year
No. of % of total if any No. of % of total
Shares shares of Shares shares of
(*) the the
company company
A. DIRECTORS
1 Mr. G V Prasad 01.04.2017 0 0 0 0 0 0
(Director) 31.03.2018 0 0 0 0 0 0
2 Mr. K Satish 01.04.2017 10 0 0 0 10 0
Reddy * 31.03.2018 10 0 0 0 10 0
(Director)
3 Mr. M V 01.04.2017 0 0 0 0 0 0
Narasimham
(Director) 31.03.2018 0 0 0 0 0 0
B. KEY MANAGEMENT PERSONNEL (KMPs)
Nil
* Held as Nominee shareholder of the Dr. Reddy's Laboratories Limited, Holding Company.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment – NIL
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A) Remuneration of Managing Director, Whole-time Director and/or Manager – Not applicable
B) Remuneration of other directors – No remuneration was paid to directors.
C) Remuneration of Key Managerial Personnel other than MD/WTD/Manager – Not applicable
800
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES – There were no
penalties/punishments/compounding of offences during the year.
Sd/- Sd/-
K Satish Reddy M V Narasimham
Director Director
801
To
Members
Idea2 Enterprises ( India ) Private Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Idea2 Enterprises ( India ) Private
Limited, which comprise the Balance Sheet as at 31st March 2018, and the Statement of Profit and Loss (including
Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year
then ended, and a summary of the significant accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true
and fair view of the state of affairs (financial position), profit or loss (financial performance including other
comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting
principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under
section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which
are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind
AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the
standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant
to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in
order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made
by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial
statements.
802
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
standalone Ind AS financial statements give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India including the
Ind AS, of the state of affairs (financial position) of the Company as at 31 st March, 2018, and its loss (financial
performance including other comprehensive income), its cash flows and the changes in equity for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government
in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in
Equity dealt with by this Report are in agreement with the books of account
e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March 2018 taken on record
by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a
director in terms of Section 164(2) of the Act.
f) As required under clause (i), a separate report on the internal financial controls is annexed in Annexure-B
herewith.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to
the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position
803
ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund.

Firm Regn No. 002857S
P S R V V Surya Rao
Partner
Hyderabad
Date: 11th May 2018
804
ANNEXURE TO THE AUDITORS’ REPORT
(Idea2 Enterprises ( India ) Private Limited)
(Of even date referred to in Para 1 of our Report)
(i) a) The Company has maintained proper records showing full particulars including quantitative details
and situation of fixed assets.
b) All the Fixed Assets have not been physically verified by the management during the year but there
is a regular program of verification which, in our opinion, is reasonable having regard to the size of the
Company and nature of its assets and, to the best of our knowledge, no material discrepancies were
noticed on such verification;
c) Based on the information given to us, the title deeds of the properties are held in the name of the
Company.
(ii) As explained and information given to us, the company does not have any inventory and hence para
3(ii) of the Order is not applicable to the Company for the period under audit.
(iii) Based on the information provided to us, the Company has not granted any loans, secured or unsecured
to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained
under section 189 of the Companies Act, 2013 hence, in our opinion, the Clause 3(iii)(a), 3(iii)(b) and
3(iii)(c) are not applicable to the Company for the year.
(iv) Based on the information provided to us, the Company has not given any loan, guarantee, nor provided
any security in connection with a loan and not acquired any security during the year and hence, in our
opinion, the clause 3(iv) is not applicable to the Company during the year.
(v) Based on the information provided to us, the Company has not accepted any deposits during the year
and hence, in our opinion, the Clause 3(v) is not applicable to the Company for the year.
(vi) Based on the explanations given to us, the Company is not required to maintain cost Records under
Section 148 of the Companies Act, 2013 and hence the clause 3(vi) of the order is not applicable to the
Company for the period under audit.
(vii) (a) According to the records of the Company, the Company is regular in depositing the undisputed
statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess with the appropriate authorities;
According to the information and explanations given to us, no undisputed amounts payable in respect
of Provident Fund, Employees’ State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Duty of
Customs, Duty of Excise, Value added tax and other material statutory dues were in arrears as at 31
March 2018 for a period of more than six months from the date they became payable
(b) According to the information and explanations given to us, there are no dues of VAT, income tax,
customs duty, excise duty, service tax, cess to be deposited on account of any dispute and hence, clause
3(vii)(b) of the Order is not applicable to the Company during the year.
Since the Central Government has not issued any notification as to the rate at which the cess is to be
paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.
(viii) Based on the information provided and explanation given to us, the Company has not taken any loans
from Banks / Financial Institutions / Government / due to Debenture Holders and hence clause 3(viii)
of the Order is not applicable to the Company for the period under audit.
805
(ix) According to the information and explanations given to us, the Company has not raised any monies by
way of IPO / further public offer not has taken any term loans and hence clause 3(ix) of the Order is not
applicable to the Company for the period under audit.
(x) In our opinion and according to the information provided and explanations offered to us, no fraud on
or by the Company has been noticed or reported during the year.
(xi) In our opinion, the provisions of section 197 read with Schedule V to the Companies Act,2013 the
Company has not paid any managerial remuneration during the year and hence clause 3(xi) of the Order
is not applicable to the Company for the period under audit.
(xii) Based on the explanations given to us, in our opinion, the Company is not a Nidhi Company as per
section 406 of the Companies Act,2013 and hence clause 3(xii) is not applicable to the Company.
(xiii) Based on the information provided and explanation given to us, in our opinion, all transactions with the
related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable
and the details have been disclosed in the Financial Statements etc., as required by the applicable
accounting standards;
(xiv) The Company has not made any preferential allotment of shares during the year and during the year
under review and hence, clause 3(xiv) is not applicable to the Company during the year.
(xv) As per the information given to us, the Company has not entered into any non-cash transactions with
directors or persons connected with them during the year under review and so, clause 3(xv) is not
applicable to the Company during the year.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act,
1934 and so, clause (xvi) is not applicable to this Company.

P S R V V Surya Rao
Partner
Hyderabad
Date: 11th May 2018
806
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF
Idea2 Enterprises ( India ) Private Limited [Re : Clause 2(f) of the independent auditors report]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Idea2 Enterprises ( India ) Private
Limited, as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the
Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on,
the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed
under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial
controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered
Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting was established and maintained and if such controls operated effectively in all
material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the
internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial controls over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the Company’s internal financial controls system over financial
reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A Company's internal financial control
over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
807
the Company are being made only in accordance with authorisations of management and directors of the
Company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the Company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control over financial reporting may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were operating effectively as at
March 31, 2018, based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Place : Hyderabad For M/s A Ramachandra Rao & Co

Date: Chartered Accountants
ICAI Firm Regn No. 002857S
P S R V V Surya Rao
Partner
Membership No.202367
808
809
810
811
812
813
814
815
816
817
818
819
820
IMPERIAL CREDIT PRIVATE LIMITED
CIN – U06519WB1991PTC052604
2nd Floor, BA-38, Sector-I, Salt Lake City, Kolkata -700064, West Bengal
Phone # 4900 2145, Email: shares@drreddys.com
Board's Report
Dear Members,
2018.
31 March 31 March
Particulars 2018 (in Rs.) 2017 (in Rs.)
Total Revenue 13,30,845 16,76,486

Profit Before Tax 12,37,159 7,70,437
Profit After Tax 10,71,567 6,07,437
Company's Affairs
The Company’s net revenue for the year was Rs. 13.31 Lakhs as against 16.76 Lakhs in
previous year. The profit before tax (PBT) is Rs. 12.37 Lakhs as against Rs. 7.7 Lakhs in
previous year. The Profit for the year increased to Rs. 10.72 Lakhs from Rs. 6.07 Lakhs in
previous year.
Dividend
Your Directors do not recommend any dividend for the financial year ending 31 March 2018.
The Company has transferred an amount of Rs. 2,14,313/- amounting to twenty per cent of net
profit of FY 2017-18 to Reserve Fund pursuant to Section 45-IC of Reserve Bank of India Act,
1934.
Share Capital
The authorised share capital of the Company is Rs. 1,50,00,000 (Rupees One Crore Fifty Lakhs
only) divided into 1,50,000 (One Lakh Fifty Thousand) equity shares of Rs. 100/- per equity
share.
The paid up share capital of the Company is Rs. 1,23,00,000/- (One Crore Twenty Three Lakhs)
divided in 1,23,000 equity shares of Rs. 100/- per equity share.
821
Fixed Deposits
No material change and commitments affecting the financial position of the Company, has
occurred between the end of the financial year of the Company to which the financial
statements relate and the date of this report.
The Company has not made any Loans, Guarantees and Investments under section 186 of the
Companies Act. 2013 during the year under review.
The Company’s Board met four times during the year on: a) 10.05.2017; b) 26.07.2017; c)
27.10.2017 and d) 23.01.2018.
Board of Directors:
Mr. K Ganesh has resigned as Director of the Company with effect from 27 October 2017.
The Board of Directors on 27 October 2017, appointed Mr. Sandeep Poddar, as an Additional
Director of the Company. The Board recommends appointment of Mr. Sandeep Poddar as
Director, liable to retire by rotation, at the forthcoming AGM of the Company.
Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. Sujit Kumar Mahato,
retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-
appointment. Your Directors recommend his re-appointment for approval at the ensuing
Annual General Meeting.
Brief profile of Mr. Sandeep Poddar and Mr. Sujit Kumar Mahato is given in the notice
convening 27th Annual General Meeting, for reference of shareholders.
The Directors state that applicable Secretarial Standards i.e SS-1 and SS-2, relating to
‘Meeting of the Board of Directors’ and ‘General Meetings’, respectively, have been duly
accounts;
the Company at the end of the financial year 2017-18 and of the loss of the Company for that
period;
822
5. proper systems have been devised to ensure compliance with the provisions of all applicable
laws and these systems were adequate and operating effectively.
Board’s response on auditor’s qualification, reservation or adverse remark or disclaimer
made
section 143(12) of the Companies Act, 2013.
During the year under review, there were no significant and/or material orders, passed by any
Court or Regulators or Tribunal which may impact the going concern status or the Company’s
operations in future.
Statutory Auditors
The Statutory Auditors of the Company, M/s. A. Ramachandra Rao & Co., Chartered
Accountants, retire at the ensuing 27th Annual General Meeting.
The Board of Directors, have proposed re-appointment of M/s. A. Ramachandra Rao & Co.,
Chartered Accountants as Statutory Auditors till the conclusion of the 28th AGM.
Company as well. Identified key risks and internal control matters pertaining to your Company,
During the year under review, the Company has not entered into contract or arrangement falling
under the ambit of Section 188 of the Companies Act, 2013. Hence disclosure of particulars of
contracts or arrangements with related parties in Form AOC-2 is not applicable.
823
Conservation of energy, Technology Absorption, Foreign exchange earnings and outgo
The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013, read with
the Companies (Accounts) Rules, 1988 relating to conservation of energy, research and
development, technology absorption, foreign exchange earnings and outgo are not applicable
to your Company.
“Annexure I” to this Report.
Acknowledgement
Sd/- Sd/-
Date: May 11, 2018 Sujit Kumar Mahato Kiran Yanamandra
824
ANNEXURE I
FORM NO. MGT-9

No.
i) CIN U06510WB1991PTC052604
ii) Registration Date August 6, 1991
iii) Name of the Company Imperial Credit Private Limited
iv) Category/Sub-Category of the Company Private Company / Limited by Shares
v) Address of the Registered office and contact 2nd Floor, BA-38, Sector -1, Salt Lake, Kolkata,
details West Bengal - 700064

Sr. Name and Description of NIC Code of the product/ % to total turnover of the
1 Financial and Insurance K65 100%
Services

Sr. Name of the Address of the CIN/GLN Holding/ % of Applica
no. Company Company Subsidiary shares ble
/ Associate held* Section
1 Dr. Reddy’s 8-2-337, Road No: 3, L85195TG1984PLC004507 Holding 100 2(46)
Hyderabad – 500034
Shareholders Demat Physical Total % of Demat Physical Total % of change
total total during
shares shares the year
A. PROMOTERS
(1) Indian
b) Central Govt. 0 0 0 0 0 0 0 0 0
c) State Govt(s). 0 0 0 0 0 0 0 0 0
d) Bodies Corp. 0 123,000 123,000 100 0 123,000 123,000 100 0
e) Banks/FI 0 0 0 0 0 0 0 0 0
f) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(1) 0 123,000 123,000 100 0 123,000 123,000 100 0
(2) Foreign
c) Bodies Corp. 0 0 0 0 0 0 0 0 0
d) Banks/FI 0 0 0 0 0 0 0 0 0
e) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(2) 0 0 0 0 0 0 0 0 0
Total shareholding 0 123,000 123,000 100 0 123,000 123,000 100 0
of Promoter
(A)=(A)(1)+(A)(2)
B. PUBLIC
SHAREHOLDING
(1) Institutions 825
b) Banks/FI 0 0 0 0 0 0 0 0 0
c) Central Govt. 0 0 0 0 0 0 0 0 0
d) State Govt(s). 0 0 0 0 0 0 0 0 0
Funds
f) Insurance 0 0 0 0 0 0 0 0 0
Companies
g) FIIs 0 0 0 0 0 0 0 0 0
Capital funds
i) Others (specify) 0 0 0 0 0 0 0 0 0
Sub-total (B)(1) 0 0 0 0 0 0 0 0 0
a) Bodies Corp 0 0 0 0 0 0 0 0 0
i) Indian 0 0 0 0 0 0 0 0 0
ii) Overseas 0 0 0 0 0 0 0 0 0
b) Individuals 0 0 0 0 0 0 0 0 0
i) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital upto
Rs.1 lakh
ii) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital in
excess of Rs.1 lakh
c) Others (specify)
c-i) Trust 0 0 0 0 0 0 0 0 0
c-ii) Clearing 0 0 0 0 0 0 0 0 0
Member
c-iii) NRIs 0 0 0 0 0 0 0 0 0
c-iv) Foreign 0 0 0 0 0 0 0 0 0
Nationals
Sub-total (B)(2) 0 0 0 0 0 0 0 0 0
Total Public 0 0 0 0 0 0 0 0 0
Shareholding
(B)=(B)(1)+ (B)(2)
C. SHARES HELD 0 0 0 0 0 0 0 0 0
BY CUSTODIAN
FOR GDRS &
ADRS
Grand Total 0 123,000 123,000 100 0 123,000 123,000* 100 100
(A+B+C)
(*) Out of 123,000 equity shares, 10 equity shares are held by 1 individual as nominee shareholders on behalf of Dr.
Reddy’s Laboratories Limited, Holding Company.

Sr. Name of No. of shares held at the beginning No. of shares held at the end of % change
no. Shareholders of the year the year during the
No. of % of % of Shares No. of % of total % of year
Shares total Pledged / Shares shares of Shares
shares of encumbered the Pledged
the to total company /
company shares* encumbe
red to
total
shares*
1 Dr. Reddy's 123,000 100% - 123,000 100% - Nil
Laboratories
Limited
(*) Out of 123,000 equity shares, 10 equity shares are held by 1 individual as nominee shareholders on behalf of Dr.
Reddy’s Laboratories Limited, Holding Company.
826
Shareholding at the beginning of the Cumulative Shareholding during

year the year
No. of Shares % of total shares No. of Shares % of total shares
of the company of the company
At the beginning of the year 123,000 100% 123,000 100%
Date wise Increase / Decrease in No Change
Promoters Shareholding during the
year specifying the reasons for
increase/ decrease (e.g. allotment/
transfer/bonus/sweat equity etc)
At the End of the year 123,000 100% 123,000 100%
ADRs)
Shareholding at the beginning of Shareholding at the end of the
Name the year year
No. of shares % of total No. of shares % of total
shares of the shares of the
company company
NIL

Sr. Name Date Shareholding at Increase Reason Cumulative Shareholding
no. the beginning of / during the year
the year (Decreas
No. of % of total e) in No. of % of total
Shares shares of Sharehol Shares shares of the
(*) the ding, if company
company any
A. DIRECTORS
1 Sujit Kumar 01.04.2017 0 0 0 0 0 0
31.03.2018 0 0 0 0 0 0
2 Sandeep 27.10.2017 0 0 0 - 0 0
Poddar# 31.03.2018 0 0 0 - 0 0
3 Kiran 01.04.2017 0 0 Transfer 0 0
Yanamandra 11.05.2017 0 0 10 (as 10 0
31.03.2018 10 0 nominee of 10 0
Dr.
Reddy’s
Laboratori
es Limited)
4 K Ganesh* 01.04.2017 0 0 0 - 0 0
11.05.2017 10 0 10 Transfer 0 0
27.10.2017 0 0 0 - 0 0
B. KEY MANAGEMENT PERSONNEL (KMPs) – Nil
# Appointed with effect from October 27, 2017 * Resigned with effect from October 27, 2017
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment - NIL

C) Remuneration of Key Managerial Personnel other than MD/WTD/Manager – NA
827
Sd/- Sd/-
Date: May 11, 2018 Sujit Kumar Mahato Kiran Yanamandra
828
829
830
831
832
833
834
835
836
837
838
839
840
841
842
843
844
845
846
847
848
849
INDUSTRIAS QUÍMICAS FALCON DE MÉXICO, S.A. DE C.V.
Financial statements
As of December 31, 2017 and 2016 with report from independent auditors
850
Financial statements
On December 3, 2017 and 2016
Content:
Report of independent auditors
Financial statements:
State of Financial Situation
Comprehensive income statements

Statements of changes in stockholders' equity
Cash flow statements
Notes to the financial statements
851
[logo EY]
REPORT OF INDEPENDENT AUDITORS
To the Shareholders Assembly of

Industrias Químicas Falcon de México S.A. de C.V.
Opinion
We have audited the accompanying financial statements of Industrias Químicas Falcón de México, S. A de
C.V. (hereinafter "the Company"), which includes the statement of financial position as of December 31,
2017, the statement of comprehensive income, the statement of changes in stockholders' equity and the
statement of cash flows for the year ending in said date, as well as the explanatory notes of the financial
statements that include a summary of the significant accounting policies.
In our opinion, the accompanying financial statements fairly present, in all material aspects, the financial
position of Industrias Químicas Falcón de México, S. A de C.V. as of December 31, 2017, as well as its
results and cash flows for the year ended on that date, in accordance with the Mexican Financial Reporting
Standards.
Paragraph of emphasis
The financial statements of Industrias Químicas Falcón de México, S.A de C.V. for the year ended
December 31, 2016, which are presented only for comparative purposes, were audited by another Public
Accountant who issued his opinion without qualifications or limitations on March 20, 2017; consequently, I
do not express any opinion about them.
Basis of opinion
We have carried out our audit in accordance with International Standards on Auditing (NIA). Our
responsibilities in accordance with these standards are described later in the "Auditor's Responsibilities in
relation to the Audit of Financial Statements" section of our report. We are independent of the Company in
accordance with the "Code of Ethics for Accounting Professionals of the International Ethics Standards
Board for Accountants" ("IESBA Code of Ethics") together with the ethical requirements that are applicable
to our audit of the financial statements in Mexico by the "Code of Professional Ethics of the Mexican Institute
of Public Accountants" ("Code of Ethics of the IMCP") and we have fulfilled the other responsibilities of
ethics in accordance with those requirements and with the Code of Ethics of the IESBA.
We believe that the audit evidence we have obtained provides a sufficient and adequate basis for our
opinion.
852
Responsibilities of the Administration and those responsible for the governance of the Company in
relation to the financial statements
The Administration is responsible for the preparation and reasonable presentation of the accompanying
financial statements in accordance with the Mexican Financial Reporting Standards, and for the internal
control that the Administration considers necessary to allow the preparation of financial statements free of
material deviation, due to fraud or error.
In the preparation of the financial statements, Management is responsible for evaluating the Company's
ability to continue as a going concern, revealing, as appropriate, the issues related to the ongoing business
and using the ongoing business accounting base. except if the Administration intends to liquidate the
Company or cease its operations, or there is no other realistic alternative.
Those responsible for the governance of the Company are responsible for the supervision of the Company's
financial reporting process.
Auditor's responsibilities in relation to the audit of the financial statements.
Our objectives are to obtain reasonable assurance that the financial statements as a whole are free of
material deviation, due to fraud or error, and issue an audit report that contains our opinion. Reasonable
security is a high degree of security, but does not guarantee that an audit conducted in accordance with the
NIA always detects a material deviation when it exists. Deviations may be due to fraud or error and are
considered material if, individually or in aggregate form, it can reasonably be expected to influence the
economic decisions that users make based on the financial statements.
As part of an audit of compliance with the ISA, we apply our professional judgment and maintain an attitude
of professional skepticism throughout the audit. As well:
• We identify and evaluate the risks of material deviation in the financial statements, due to fraud or error,
design and apply audit procedures to respond to such risks and obtain sufficient and adequate audit
evidence to provide a basis for our opinion. The risk of not detecting a material deviation due to fraud
is higher than in the case of a material deviation due to error, since the fraud may involve collusion,
forgery, deliberate omissions, intentionally erroneous statements or circumvention of internal control.
• We obtain knowledge of the internal control relevant to the audit in order to design audit procedures
that are appropriate to the circumstances and not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control.
• We evaluate the adequacy of the accounting policies applied and the reasonableness of the
accounting estimates and the corresponding information revealed by the Administration.
853
• We conclude on the adequacy of the use, by the Administration, of the accounting base of ongoing
business and, based on the audit evidence obtained, we conclude on whether or not there is a material
uncertainty related to events or conditions that can generate significant doubts about the ability of the
Company to continue as a going concern. If we conclude that there is material uncertainty, we are
required to draw attention in our audit report to the corresponding information disclosed in the financial
statements or, if such disclosures are not adequate, that we express an amended opinion. Our
conclusions are based on the audit evidence obtained to date from our audit report. However, future
events or conditions may cause the Company to stop operating as a going concern.
• We evaluate the global presentation, structure and content of the financial statements, including the
disclosed information, and whether the financial statements represent the underlying transformations
and events in a manner that achieves reasonable presentation.
We communicate to the heads of the government of the Company, among other matters, the scope and
timing of the planned audit and the significant findings of the audit, as well as any significant deficiency of
internal control that we identified during the course of the audit.
We also provide those responsible for the governance of the Company with a statement that we have
complied with the applicable ethical requirements regarding independence and communicated with them
about all relationships and other matters that can reasonably be expected to affect our independence and,
where appropriate, the corresponding safeguards
Mancera, S.C.
Member of
Ernest & Young Global Limited
C.P.C. Yazmin Espinosa Moscosa

Mexico, City
April 30, 2018.
854

(Amounts in thousands of Mexican pesos)
As of December 31,
2017 2016
Assets:
Current assets:
Cash $ 11,971 $ 4,687
Customers (net of estimated for doubtful accounts by $ 62 in 2017 and 231,881 101,410
$ 47 in 2016)
Related parties (Note 3) 90,714 211,410
Taxes to be recovered (Note 4) 49,965 41,647
Inventories, net (Note 5) 261,436 298,001
Pre-payments (Note 6) 37,585 24,636
Other accounts receivable 443 17,000
Non-current assets
Properties, plant and equipment, net (Note 7) 314,713 276,578
Deferred income taxes (Note 13) 59,324 55,594
Employee participation in profit, deferred (Note 11) 21,024 19,474
Total non-current assets 395,061 351,646
Total assets 1,079,056 1,050,,650
Liabilities and stockholders' equity

Short-term liability:
Suppliers 64,999 97,413
Direct benefits to employees (Note 11) 10,356 14,465
Contributions payable 15,207 15,257
Provisions (Note 8) 24,892 22,188
Related parties (Note 3) 689,989 665,783
Total short-term liabilities 805,443 815,106
Long-term liabilities:
Net liabilities for defined benefits to employees (Note 10) 56,761 52,222
Total long-term liability 56,761 52,222
Total liabilities 862,204 867,328
Accounting capital
Social capital (Note 12)
Accumulated results 150,299 150,299
Other integrated records (Note 12) 68,600 37,230
Total stock capital ( 2,047) ( 4,207)
Total liabilities and stockholders' equity 216,852 183,322
$ 1,079,056 $ 1,050,650
The accompanying notes are part of these financial statements.
855

For the years ended

December 31,
2017 2016
Net sales (Note 14) $ 1,040,767 1,044,007
Other income (Note 14) 4,616 3,173
Total income 1,045,383 1,047,180
Cost of goods sold (Note 15) 736,249 816,856
Gross profit 309,134 230,324
Operating costs 188,954 118,779
Utility operation 120,180 115,545
Comprehensive result of financing:

Interest expenses, net ( 41,119) ( 41,805)
(Lost) exchange profit, net ( 26,303) 43,946
Comprehensive financing result, net ( 67,422) 2,141
Profit before income tax 52,758 113,686
Income taxes (Note 13)

On tax basis 25,118 29,569
Deferred ( 3,730) 514
Income taxes 21,388 30,083
Net profit
Other comprehensive income (Note 12) 31,370 83,603
Comprehensive result of the fiscal year 2,160 ( 4,207)
Net sales (Note 14) $ 33,530 $ 79,397
856
Balances of change in stockholders' equity

For the years ended December 31, 2017 and 2016
Accumulated Other Total

Social results comprehensive stockholders'
capital income equity
Balances as of December 31, 2015 $ 150,299 $ ( 46,373) - $ $ 103,926
Comprehensive income - 83,603 ( 4,207) 79,396

Balances as of December 31, 2016 150,299 37,230 ( 4,207) 183,322
Comprehensive income 31,370 2,160 33,530
Balances as of December 31, 2017 $ 150,299 $ 68,600 $ ( 2,047) $ 216,852
857
Cash flow balances
For the years ended

December 31, 2017 and
2016
Operation activities 2017 2016
Profit before income taxes $ 52,758 $ 113,686
Items in results that did not affect cash:
Net cost of the period for employee benefits (Note 10) 8,601 10,177
Payments for employee benefits (Note 10) ( 1,902) ( 8,593)
Employee participation in deferred income (Note 11) ( 1,549) ( 26)
Items related to investment activities:
Depreciation of properties, plant and equipment (Note 7) 24,983 28,411
Favorable interests ( 1,006) ( 436)
Gain from sale of properties, plan and equipment ( 289) ( 68)
Item related to financing activities
Interest expense 42,125 42,241
Sum 123,721 185,392
Changes in operating assets and liabilities
Customers ( 130,471) 62,939
Related parties ( 145,116) ( 116,254)
Taxes to recover ( 8,319) ( 11,765)
Inventories 36,565 ( 61,755)
Prepayments ( 12,949) 4,790
Other accounts receivable 16,557 ( 16,443)
Suppliers, direct benefits to employees and provisions ( 33,820) 7,453
Income taxes ( 25,118) ( 45,673)
Contributions payable ( 50) ( 1,979)
Net cash flows used in operating activities ( 12,489) ( 178,687)
Investment activities:
Acquisitions of properties, plant and equipment ( 63,507) ( 22,174)
Resources coming from the sale of properties, plant and equipment 678 1,641)
Interest received 1,006 436
Net cash flows used in investment activities ( 61,823) ( 20,097)
Excess cash to be applied in (to obtain from) financing activities 49,409 ( 13,392)
Financing activities
Interest paid ( 42,125) ( 42,214)
Net cash flows used in financing activities ( 42,125) ( 42,241)
Increase (decrease) in cash and cash equivalents 7,284 ( 55,633)

Cash and cash equivalents at the beginning of the period 4,687 60,320
Cash and cash equivalents at the end of the period $ 11,971 (4,687)
858
Notes to the financial statements

as of December 31, 2017 and 2016
(Amounts in thousands of Mexican pesos, except where another denomination is indicated)
1. Operations and summary of the main accounting policies
Chemical Industries Falcon de México, S.A. of C.V. (hereinafter "the Company") was incorporated under
Mexican law on July 22, 2005 and is domiciled at Carretera Federal Cuernavaca -Cuautla Km 4.5, Civac
Industrial Zone, CP 62578, Jiutepec, Mor. Mexico The Company is a subsidiary of Dr. Reddy 's Laboratories
Limited, located in India, with whom he carries out some of the operations described in Note 3.
The main activity of the Company consists in the manufacture, distribution and commercialization of all kinds
of products and articles related to the chemical and pharmaceutical industry.
The period of operations of the Company and the fiscal year, comprise from January 1 to December 31.
The issuance of the financial statements and the corresponding notes was authorized by the Director of
Finance, Mr. Kumar Govind on April 30, 2018. These financial statements must be approved at a later date
by the Board of Directors, and the Shareholders Assembly. . These bodies have the power to modify the
financial statements. Subsequent events were considered until this date.
2. Significant accounting policies applied
a) Compliance or with Mexican Financial Information Standards
The financial statements as of December 31, 2017 and 2016 have been prepared in accordance with
Mexican Financial Reporting Standards (NIF).
b) Bases of preparation
The financial statements have been prepared based on the historical cost, except for the non-monetary
items that were acquired or recognized in the financial statements before December 31, 2007. These non-
monetary items include the effects of inflation since their initial recognition. in the financial statements and
until December 31, 2007.
As of January 1, 2008, the Mexican economy is in a non-inflationary environment, in accordance with NIF
B-10 "Effects of inflation." Therefore, as of December 31, 2017 and 2016, it is maintained a non-inflationary
environment, because the accumulated inflation of the last three years is below 26% (annual average of
8%).
859
The percentages of annual and accumulated inflation of the last three fiscal years determined through the
National Index of Consumer Prices published by the National Institute of Geography and Statistics (INEGI),
are shown below:
As of December 31, Year inflation rate Accumulated inflation rate

2017 6.77% 12.71%
2016 3.36% 9.87%
2015 2.13% 10.52%
According to Mexican Financial Reporting Standards, c corresponds to a non-inflationary economic

environment, which requires that the preparation of financial statements be continued on the historical cost
basis.
c) Functional and report currency
The aforementioned financial statements are presented in Mexican peso report currency, which is equal to
the recording currency and its functional currency.
For purposes of disclosure in the notes to the financial statements, when reference is made to pesos or "$",
it is about thousands of Mexican pesos, when reference is made to thousands of dollars, it is about dollars
of the United States of America.
d) Recognized income
The Company recognizes its income using the International Accounting Standard 18 "Revenue from
ordinary activities" issued by the International Accounting Standards Board (NICB). applied in a
supplementary manner since the incorporation of the Company, since there is no income rule in the NIF.
Revenues are recognized once all and each of the following conditions are met:
(i) The Company has transferred to customers the risks and benefits derived from the property
of the products.
(ii) The Company does not retain ownership, nor does it retain effective control over the goods sold.
(iii) The amount of revenue can be measured reliably
(iv) It is probable that the Company will receive the economic benefits associated with the transaction,
and
(v) The costs incurred, or incurred, in connection with the transaction can be reliably measured
860
Revenues are valued at the fair value of the consideration received, excluding discounts, rebates
and taxes.
Generally significant risks and benefits are transferred to customers when they receive and accept
the goods that were shipped to them.
e) Use of estimates
The preparation of the financial statements requires, in accordance with the NIF, the use of estimates in the
valuation of some of its lines. The Company based its estimates on the information available when they
were formulated. However, existing circumstances and hypotheses about future events may be altered due
to changes in the market or circumstances beyond the control of the Company. These changes are reflected
in the hypotheses when they occur.
The key assumptions used as of December 31, 2017 and 2016, in the determination of estimates that involve
uncertainty and that may have a significant risk of causing adjustments of relative importance to the carrying
amount of the assets and liabilities during the following fiscal year, They are the following:
Impairment of the value of non-financial assets
Impairment exists when the carrying amount of an asset or a cash-generating unit exceeds its recoverable
amount, which is the fair value less costs to sell, or its value in use, whichever is greater. The calculation of
fair value less costs to sell is based on information available on similar sales transactions, made under
conditions between independent parties for similar goods, or at observable market prices, less the
incremental costs of disposal of the asset. The calculation of the use value is based on a discounted cash
flow model. Cash flows arise from the budget for the next five years or more considering that the growth
rates should not be for more than five years and do not include the restructuring activities to which the
Company has not yet committed, nor the investments significant future that will increase the performance
of the asset or the cash generating unit that is being tested. The recoverable amount is very sensitive to the
discount rate used for the discounted cash flow model, and to future fund income expected at the growth
rate used for extrapolation purposes.
Other disclosures regarding the impairment of non-financial assets of the Company are included:
- Properties, plant and equipment in Note 7
861
Payment transactions based on stockholding
The Company measures the cost of transactions that can be settled with equity instruments by reference to
the fair value of the equity instruments at the grant date. The estimation of the fair value of stock-based
payment transactions requires the determination of the most appropriate valuation model that depends on
the conditions of the plan. This estimate also requires determining which are the most appropriate positions
for the valuation model, including the expected duration for fiscal year of stock options, volatility and dividend
yield, and making assumptions about them.
Defined benefits for employees (post-employment)
The net cost of the defined benefit plans and the present value of the corresponding obligations are
determined by actuarial valuations. Actuarial valuations involve several assumptions. These include the
determination of the discount rate, future wage increases, mortality, disability and turnover rates, among
other financial and demographic assumptions. Due to the complexity of the valuation, the underlying
assumptions and their long-term nature, defined benefit obligations are very sensitive to changes in these
assumptions. All assumptions are subject to review at each closing date of the reporting period.
When determining the corresponding discount rate, the administration considers the interest rate of the
negotiable obligations in the respective currency, using as reference the market rate of the high quality
corporate bonds in absolute terms in a deep market or otherwise using as a reference the government bond
rate. In the case of corporate bonds, the underlying bonds are subject to a quality review and those that
have an excessive credit differential are eliminated from the sample of bonds on which the discount rate is
based, since they do not represent government bonds. high quality. As of December 31, 2017 and 2016,
the Company used a consistent use of a government bond rate to discount the defined benefits to long-term
employees, as it is considered to best reflect the present value of its obligations according to the
characteristics of the population and the estimated date of future payment of benefits.
The mortality rate is based on the most updated tables in the country.
Future salary increases are based on the expected future inflation rates in the country considering an
expected profit growth rate.
Note 10 shows more details regarding the assumptions used.
862
f) Cash and cash equivalents
Cash and cash equivalents are mainly represented by balances in legal tender and foreign currency in cash
and bank deposits. Cash and cash equivalents held in foreign currencies are translated using the exchange
rate of the closing date of the financial statements. The effects of these conversions are recognized in the
statement of comprehensive income as they are accrued. At the date of the financial statements, the interest
earned and the profit or loss on valuation are included in the results for the year, as part of the financing
result.
q) Accounts receivable and other accounts receivable
The accounts receivable represent exigible rights originated by sales, services rendered or any other similar
concept.
Considering its availability, accounts receivable are classified in the short and long term. Short-term
accounts receivable are considered to be those whose availability is immediate within a period no greater
than one year after the balance sheet date (or in the normal business cycle of the business in the case that
this cycle exceeds these periods, otherwise, they are considered as long-term receivables.
The other accounts receivable represent amounts that originate from transactions other than those for which
the entity was incorporated, such as (sales of fixed assets, taxes paid in excess), which are expected to be
collected within a period of no more than one year. after the balance sheet date (or in the normal cycle of
business operations in the case that this cycle exceeds this period), appearing in the short-term asset.
Accounts receivable (and other accounts receivable) are recognized at their realizable value, modified
according to the accounting accrual postulate, including estimates for unrecoverable or difficult collection.
h) Estimate for doubtful accounts
The Company has a policy of establishing an allowance for doubtful accounts to cover the balances of
accounts receivable older than one year, taking into account the historical experience and the specific
identification of balances.
In the case of accounts receivable with related parties, their collection is evaluated annually by examining
the financial position and the market in which each of the related parties operate
863
i) Inventories
Inventories are valued at their cost or net realizable value, the lowest.
The cost of the inventories includes all the purchase and production costs that were incurred to give them
their current location and condition and are valued in the following way:
- Raw material: at acquisition cost according to the formula of average costs.

- Finished and in process products: to the cost of the materials, direct labor, as well as the indirect
expenses of production, excluding the financial costs.
The net realization value is the estimated sale price in the normal course of business less the disposal costs
and, if applicable, the estimated termination costs.
The Company recognizes losses due to deterioration in the value of the inventories, when there are losses
derived from firm sales commitments with respect to the inventory quantities that it maintains. When the net
realizable value of the inventories is lower than its net book value, the Company recognizes an impairment
loss, which is recorded in the cost of sales for the period in which it is presented
j) Pre-payments
The pre-payments mainly include advances for the purchase of inventories, maintenance of machinery and
software and services that are received after the date of the statement of financial position and during the
normal course of operations, and are presented in the short or long term. term in response to the
classification of the destination loss.
Pre-payments are initially recognized as an asset for the amount paid at the time it is made, provided that
the associated future economic benefits are estimated to flow to the Company.
The number of prepayments in foreign currency is recognized considering the exchange rate of the date of
the transaction, without subsequently being modified by exchange rate fluctuations in the corresponding
foreign currency of the prices of goods and services related to such pre-payments.
Once the good or service is received, the Company recognizes the amount related to pre-payments as an
asset, in the item to which the acquired good corresponds, or as an expense of the period, depending on
whether or not it has the certainty of that the acquired good will generate a future economic benefit.
864
The Company periodically assesses the ability of the advance payments to lose their capacity to generate
future economic benefits, as well as the recoverability thereof, the amount that is considered non-
recoverable is recognized as an impairment loss in the result of the period in the that this happens. The
impairment loss is reversed when new expectations arise of recovering the advance payments previously
affected by an impairment loss; provided that these expectations are permanent or definitive, reversing the
impairment recognized in previous periods, affecting the statement of comprehensive income of the current
period.
k) Properties, plant and equipment
The properties, plant and equipment are recorded at their acquisition value and until December 31, 2007,
they were updated using factors derived from the INPC.
In the case of assets that require a substantial period to be in conditions of use, the cost of acquisition
(construction) includes: the cost of acquisition and the capitalization of the integral result of financing
incurred during the acquisition period (construction and installation) thereof.
The acquisition value of the property, plant and equipment includes the costs that were initially incurred to
be acquired or constructed, as well as those incurred later to replace them or increase their potential service.
If a batch of machinery and equipment is composed of various components with different estimated useful
lives, the important individual components are depreciated over their individual useful lives. Repair and
maintenance costs are recognized in the income statement as incurred.
The depreciation of property, plant and equipment is determined on the value resulting from the acquisition
cost less the residual value of said properties, plant and equipment using the straight-line method, based
on useful lives, estimated by the Management of the Company. The annual rates of depreciation of property,
plant and equipment are mentioned below:
Rates
Buildings 2.50% to 10.00%
Machinery and laboratory equipment 6.67% to 20.00%
Furniture and office equipment 10.00% to 25.00%
Transportation equipment 12.50% to 25.00%
Computer equipment 16.67% to 33.33%
The properties, plant and equipment are written off at the time of their sale or when they are not expected
to obtain future economic benefits due to their use or sale. Any gain or loss at the time of recognition of the
asset (calculated as the difference between the net income from the sale of the asset and its book value),
is included in the comprehensive income statement when the asset is derecognized.
865
The Company evaluates the net book value of property, plant and equipment, to determine the existence of
indications that said value exceeds its recovery value. The recovery value represents the amount of potential
net income that is reasonably expected to be obtained as a result of the use or realization of said assets. If
it is determined that the net book value exceeds the recovery value, the Company records the necessary
estimates, recognizing the effect on the results of the period.
The impairment loss is reversed when the circumstances that previously gave rise to the loss cease to exist
and there is clear evidence of an increase in the net book value of impaired property, plant and equipment.
The amount of the impairment loss is reversed, decreasing the depreciation of the period in which the
reversal occurs.
As of December 31, 2017 and December 20, there were no indications of impairment.
I) Liabilities, provisions, contingent liabilities and commitments
Provisions liabilities are recognized when (i) there is a present obligation (legal or assumed) as a result of
a past event, (ii) it is probable (there is a greater possibility that it occurs than does not occur) that the
outflow of resources is required economic as a means to settle such obligation, and (iii) the obligation can
be reasonably estimated.
When the effect of the value of money over time is significant, the amount of the provision is the present
value of the disbursements that are expected to be necessary to settle the obligation. The discount rate
applied in these cases is before taxes, and reflects the market conditions at the balance sheet date and, if
applicable. the specific risk of the corresponding liability. In these cases, the increase in the provision is
recognized as an interest expense.
These provisions have been recorded under the best estimate made by the Administration.
See Note 8.
Provisions for contingent liabilities are recognized only when the outflow of resources is probable for their
extinction. Likewise, the commitments are only recognized when they generate a loss.
The Company recognizes a contingent asset at the time the gain is realized.
Advances received from customers in foreign currency are recognized at the exchange rate of the date of
the transaction, without subsequently being modified by exchange rate fluctuations. Advances from
customers are classified as short-term liabilities and are applied as the sale of the products or the provision
of services covered with it.
866
m) Net liabilities for employee benefits
The net obligation of the Company in relation to direct long-term benefits (except for deferred PTU see
subsection (j) Income taxes and employee participation in profit) and that the Company is expected to pay
after twelve Months of the date of the most recent statement of financial position presented is the amount
of future benefits that employees have obtained in exchange for their service in the current and previous
fiscal years. This benefit is discounted to determine its present value. Remediation is recognized in income
in the period in which it accrues.
Termination benefits
A liability for termination benefits and a cost or expense is recognized when the Company has no realistic
alternative other than to face the payments or cannot withdraw the offer of those benefits, or when it
complies with the conditions to recognize the costs of a restructuring. , The thing that happens first. If they
are not expected to be settled within 12 months after the end of the year, then they are discounted.
Post-employment benefits
Deferred benefits plans
The net obligation of the Company corresponding to the defined benefit plans for pension plans, seniority
premium, legal compensation benefits, is calculated separately for each plan, estimating the amount of
future benefits that employees have earned in the current exercise and in previous years, discounting said
amount and deducting the same, the fair value of the assets of the plan.
The calculation of obligations for defined benefit plans is performed annually by actuaries, using the
projected unit credit method.
When the calculation results from a possible asset for the Company, the recognized asset is limited to the
present value of the economic benefits available in the form of future reimbursements of the plan or
reductions in future contributions to the plan. To calculate the present value of the economic benefits, any
minimum financing requirement should be considered.
The labor cost of the current service, which represents the cost of the period of employee benefits for having
completed one more year of working life based on the benefit plans, is recognized in operating costs and
expenses. The Company determines the net interest expense on the net defined benefit liability for the
period, multiplying the discount rate used to measure the benefit obligation defined by the net liability defined
at the beginning of the annual reporting period, taking into account the changes in net liabilities for defined
benefits during the period as a result of estimates of contributions and benefit payments. Net interest is
recognized within the "Comprehensive net financial result".
867
Modifications to the plans that affect the cost of past services are recognized in the results immediately in
the year in which the modification occurs, without the possibility of deferral in subsequent years. Likewise,
the effects of liquidation or reduction of obligations in the period, which significantly reduce the cost of future
services and / or significantly reduce the population subject to the benefits, respectively, are recognized in
the results of the period.
The remediation activities before actuarial gains and losses, resulting from differences between projected
and actual actuarial hypotheses at the end of the period, are recognized in the period in which they are
incurred as part of the ORI within the stockholders' equity in the results of the period.
n) Employee participation in profit (PTU)
The expenses for PTU, both caused and deferred, are presented within the item of costs or expenses in the
comprehensive income statement.
Deferred employee profit sharing is recognized under the asset and liability method. Under this method, all
differences between the accounting and tax values of the assets and liabilities must be determined, to which
the 10% rate is applied. The assets for deferred PTU are periodically evaluated, creating, where appropriate,
an estimate of those amounts for which there is no high probability of recovery.
The deferred PTU identified with other comprehensive items that have not been identified as realized, is
presented in the stockholders' equity and reclassified to the results of the year as they are made. See Note
11.
o) Foreign exchange fluctuations
Transactions in foreign currency are initially recorded at the exchange rate applicable at the date of
execution. Assets and liabilities in foreign currency are valued at the exchange rate on the date of the
statement of financial position. The exchange differences between the date of celebration and those of its
collection or payment, as well as those derived from the conversion of the balances denominated in foreign
currency at the date of the financial statements, are applied to the results, except for those fluctuations
generated by Financing in foreign currency that was destined for the construction of fixed assets and in
which the integral result of financing (RIF) is capitalized during the construction of the same.
Note 9 shows the position in foreign currencies at the end of each fiscal year and the exchange rates used
in the conversion of these balances.
p) Payments based on shares
Payments based on shares to personnel are recognized at the fair value of the options granted. It is the
policy to assign the executive staff with a seniority of at least 1 year.
868
In case the agreement was in cash, the amount will be paid in the four year period equal to 25% per year.
q) Integral Result
The integral result is the sum of the net profit or loss, the other comprehensive income (ORI) and the
participation in the ORI of other entities. The other comprehensive income represents income, costs and
expenses accrued, and which are pending realization, which is foreseen in the medium term, and its value
may vary due to changes in the fair value of the assets or liabilities that gave rise to them. , so it is possible
that they may not be carried out in part or in its entirety; they consist, among others, of gains or losses on
hedging derivative instruments, net losses on assets available for sale and remediation activities of net
liability (assets) for defined benefits.
r) Income taxes
Tax caused
The income tax caused in the year is presented as a short-term liability net of the advances made during
the same. The tax caused is recognized as an expense in the results of the period, except to the extent that
it arose from a transaction or event that is recognized outside of the result of the period, either in other
comprehensive income or directly in an item of stockholders' equity.
Deferred tax
The Company determines deferred income taxes based on the asset and liability method. Under this
method, all the differences between the accounting and fiscal values are determined, to which the income
tax rate (ISR), in force at the balance sheet date, or that rate enacted and established in the tax provisions
at that date and which will be in effect at the time when it is estimated that the assets and liabilities for
deferred taxes will be recovered or liquidated, respectively.
Deferred income tax assets are periodically evaluated by creating, where appropriate, an estimate of those
amounts for which there is no high probability of recovery.
s) Presentation of the statement of comprehensive income
The Company chose to present the comprehensive result in a single statement that presents in a single
document all the items that make up the net profit or loss, as well as the Other Comprehensive Results
(ORI) and is called the "Comprehensive Income Statement”.
869
Because the Company is an industrial company, the costs and expenses shown in the statements of
comprehensive income are presented according to their function, which has the fundamental characteristic
of separating the cost of sales from the other costs and expenses since this classification allows to evaluate
properly the margins of gross and operative profit.
The presentation of operating income is not required, however this is presented as it is an important indicator
in the evaluation of the Company's performance, because such information is a common practice in the
sector to which the Company belongs.
t) Stockholders' equity
The movements in the share capital, the legal reserve, the accumulated profits (losses) are recognized as
of January 1, 2008, at their historical cost; the movements made prior to January 1, 2008 considering their
values updated by the respective inflation.
Contributions for future capital increases of the Company that comply with the requirements of NIF C-11
"Stockholders 'equity" (which have a formal commitment from the shareholders' meeting, a fixed number of
shares for the exchange in an amount Fixed contribution, among others Contributions for future capital
increases that do not meet these requirements are recognized as liabilities in the statement of financial
position.
u) Financial risk management objectives and policies
Sales made to related parties represent 35% and 39% in 2017 and 2016, respectively, of the Company's
net sales.
The Company's main financial liabilities include loans, accounts payable to suppliers and other accounts
payable. The main objective of these financial liabilities is to finance the operations of the Company and
provide guarantees to support its operations. The Company's main financial assets include accounts
receivable from customers and other accounts receivable, as well as cash and short-term deposits derived
directly from its operations.
The Company is exposed to (i) market risk (which includes risks of interest rates and risk of fluctuation in
the exchange rates of foreign currency (ii) credit risk and (iii) liquidity risk.
870
(i) Market risks
- Interest rate risk, due to variations in the market interest rate that affect the value of the debt
contracted.
- Exchange rate risk, due to changes in the currency market that affect the value are denominated
cash, accounts receivable, related parties, suppliers and other accounts payable.
-
- Risk of price of general goods (commodities) energy, because some fuels (such as gas, electricity)
used by the company represent an important input to carry out its operation.
The Company is exposed to market risks arising from changes in exchange rate fluctuations due to changes
in the foreign exchange market that affect the value of cash, accounts receivable, related parties and
suppliers. As of December 31, 2017 and 2016, the Company has not contracted hedging instruments
against foreign exchange risks.
As of December 31, 2017 and 2016, the Company had monetary assets and liabilities denominated in US
dollars updated at the Interbank Change rate are included in Note 9.
(ii) Credit risk
Credit risk, due to the failure of a counterparty to comply (customer, supplier, related party or financial entity).
The Company is exposed to the credit risk of its operating activities (mainly commercial accounts receivable)
and of its financing activities, including deposits in banks and financial institutions and foreign exchange
transactions.
The financial instruments that could potentially cause credit risk concentrations are cash and cash
equivalents and accounts receivable from customers.
The Company's policy is designed not to limit its exposure to a single financial institution, so its cash is held
with different financial institutions.
The Company periodically evaluates the financial conditions of its customers and does not consider that
there is a significant risk of loss. It is considered that the provision of doubtful accounts adequately covers
your possible credit risk, which represents a calculation of the losses incurred due to the deterioration of
your accounts receivable.
871
(iii) Liquidity risk
Liquidity risk, due to adverse situations in the debt or capital markets that hinder or prevent the coverage of
the financial needs necessary to adequately execute its operation.
Concentration of risk
Concentrations arise when many counterparts engage in similar commercial activities, or activities in the
same geographical region, or have economic characteristics that would cause their ability to comply with
contractual obligations to be similarly affected due to changes in economic, political or economic
conditions. of another type. The concentrations show the relative sensitivity of the Company's performance
to the changes that affect a particular industry.
In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific
guidelines focused on maintaining a diversified portfolio. The identified credit risk concentrations are
controlled and managed as appropriate. The Company carries out selective hedging activities to manage the
concentrations of risk both at the industry level and at the level of its relationships.
The credit risk in accounts receivable is diversified, due to the customer base and its geographical
dispersion. Continuous evaluations of customers' credit conditions are carried out and no collateral is
required to guarantee their recovery. In the event that collection cycles deteriorate significantly, the results
could be adversely affected.
v) Capital management
For capital management purposes of the Company, the capital includes the issued capital. The main
objective of the management of the Company's capital is to maximize the value for the shareholders and
guarantee the capacity of the Company as a going concern.
The Company's capital management activities, among other purposes, seek to ensure that the Company
complies with the financial agreements related to its loans and credits subject to the payment of interest,
which include requirements with respect to the capital structure of the Company. In the current period, the
Company has not breached the financial agreements of any of its loans and credits subject to interest
payments.
w) Contingencies
Major liabilities or losses related to contingencies are recognized when it is probable that their effects
materialize and there are reasonable elements for their quantification. If these reasonable elements do not
exist, their disclosure is included qualitatively in the notes to the financial statements. Income, profits or
contingent assets are recognized until the moment when there is certainty of their realization.
872
x) New accounting pronouncements
Improvements to NIF 2018
The modifications that generate accounting changes in valuation, presentation or disclosure in the financial
statements are the following:
(i) NIF B-2, Statement of cash flow
The requirement was included for entities to provide disclosures in the notes to the financial statements
about the relevant changes in the liabilities considered as part of financing activities, whether or not they
required the use of cash or cash equivalents. It is indicated, preferably, the requirement to include a
reconciliation of the initial and final balances of said items, in addition to the required disclosures.
The provisions of this Improvement will be effective as of January 1, 2018, allowing early application for the
year 2017.
During 2017, the Company has carried out an evaluation of the requirements for the adoption of this
improvement and no significant effects are identified to comply with the required disclosures as of 2018.
(ii) NIF B-10, Effects of inflation
The requirement to include in the notes to the financial statements (whether re-expressed or not) was
included, in addition to the percentage of accumulated inflation for the three previous fiscal years and the
percentage of inflation that served as a basis to describe the economic environment in the one that operated
the entity in the current fiscal year, as inflationary or non-inflationary, as appropriate; The following
percentages:
• Accumulated percentage of three years that includes the two previous years and that of the period
to which the financial statements refer, which will serve as a basis for rating the economic
environment in which the entity will operate in the following year.
• Percentage referred to in the financial statements.
The provisions of this Improvement will become effective as of January 1, 2018, allowing its early application
for 2017.
The adoption of these improvements had no effect on the Company's financial statements and the required
disclosures are shown in note 1b.
873
(iii) NIF C-6, Property, plant and equipment and NIF C-8, Intangible assets
The basis on which the depreciation or amortization of an asset is made is modified; being now that said
method must reflect the pattern on the basis of which the future economic benefits of the asset
component subject to depreciation or amortization are expected to be consumed, and not obtained by
the entity.
It is established that a depreciation or amortization method based on the amount of income associated
with the use of said assets is not appropriate, since said amount of income may be affected by factors
other than the pattern of consumption of economic benefits of assets. However, unlike NIF C-6, NIF C-
8 allows the use of an income-based method, in specific situations.
The provisions of these Improvements will become effective as of January 1, 2018.
Below is a brief description of the most relevant aspects of the pronouncements that will come
into force as of January 1, 2018, which allow their early application, as explained as follows:
(i) NIF C-3, accounts receivable
In 2013 the NIF C-3 "Accounts receivable" ("NIF C-3") was approved unanimously by the Issuer Council
of the ClNlF.
The main accounting changes established by NIF C-3 are:
a) Specific, that accounts receivable that are based on a contract represent a financial instrument. Some
of the accounts receivable, generated by a legal or fiscal provision, may have certain characteristics of
a financial instrument, such as generating interest, but they are not financial instruments in themselves.
b) The allowance for doubtful accounts for commercial accounts receivable is recognized from the
moment in which the income is accrued, based on expected credit losses, presented in the statement
of comprehensive income in an expense item or separately when it is significant.
c) Since the initial recognition of an account receivable, the value of money over time should be
considered. If the effect of the present value of the account receivable is important in consideration of
its term, it must be adjusted based on said present value. It is considered that the effect of the present
value is material when the collection of the account receivable is agreed, totally or partially, for a term
greater than one year, since it is presumed that there is a financing operation.
874
d) NIF C-3, requires presenting an analysis of the change between the initial balance and the end of the
uncollectibility estimate for each period presented.
This NIF enters into force for fiscal years beginning on or after January 1, 2018. Its early application is
allowed as of January 1, 2016, provided it is done together with the application of NIF C-20, Financial
Instruments. to collect principal and interest.
During 2017, the Company has carried out a detailed evaluation of the impacts of the financial instrument
standards. This evaluation is based on the information currently available and may be subject to changes
for additional information that is available during 2018. In general, the Company does not expect large
changes in its financial condition or net equity.
(ii) NIF C-9, Provisions, contingencies and commitments
In 2014 the NIF C-9 "Provisions, Contingencies and Commitments" ("NIF C-9") was approved unanimously
by the Issuer's Board of ClNlF.
NIF C-9, Provisions, contingencies and commitments, replaces Bulletin C-9, Liabilities, provisions,
contingent assets and liabilities and commitments. Among the main changes of NIF C-9 in relation to Bulletin
C-9 are:
a) the accounting treatment of financial liabilities was reduced from the scope of NIF C-9, by issuing NIF C-
19, Financial instruments payable, and
b) the definition of liabilities was adjusted, eliminating the qualification of virtually unavoidable and included
the probable term decrease of economic resources.
This NIF enters into force for financial years beginning on January 1 of Z018. Its early application is permitted
as of January 1, 2014, as long as it is done together with the application of NIF C-19, Financing instruments
payable.
During 2017, the Company has made an impact assessment based on the information currently available
and may be subject to changes for additional information that is available during 2018. In general, the
Company does not expect large changes in its statement of financial position. in net stockholders' equity.
(v) NIF D-1, Revenue from contracts with customers and NIF D-2, Costs from contracts with
customers
NIF D-1, income from contracts with customers. One of the most important changes resulting from the
entry into force of this NIF will be to give greater consistency in the recognition of income through the
elimination of the application of the supplementary regulations International Accounting Standard (NIC) 18,
Revenue from Ordinary Activities , and its interpretations, which resulted in a diversity of application in
practice.
875
It is identified that the following aspects of the new income recognition model may result in the most
significant and important changes for some entities:
a) transfer of control, previous regulations required the recognition of income for goods when there was a
transfer of risks and benefits and, for services, when the service was provided;
b identification of the obligations to be fulfilled in a contract, the previous regulations included few
requirements and only mentioned that the income could be recognized for "separately identifiable
components" in a single transaction, without providing guidance on how to determine that it is a "separately
identifiable components";
c) allocation of the amount of the transaction between the obligations to be fulfilled Based on the
independent sale prices, previously, there were no general requirements in the NIIF to assign the
consideration to the various obligations;
d) introduction of the concept of conditional cash receivable, is that account receivable is subject to other
risks, for example, that of fulfilling another obligation of the same contract:
e) recognition of collection rights, they are generated when an entity can have an unconditional right to the
consideration before it has satisfied an obligation to comply. In accordance with the previous regulations,
they were disclosed but these collection rights were not recognized. In these cases, the entity may only
recognize the income until the transfer of control over the goods or services; Y
f) valuation of income, the previous regulations required the recognition of income derived from the transfer
of goods and services at the fair value of the consideration received or to be received, but there was no
guidance on how to apply said principle. This NIF establishes requirements and guidance on how to value
the variable consideration and other aspects such as the recognition of important financing components,
the consideration other than cash and the consideration payable to a customer (for example, a credit that
the customer can apply against the customer). amounts owed to an entity).
NIF D-1, eliminates the supplementary application of NIC 18, Income from Ordinary Activities, and its
interpretations.
NIF D-1 "Revenue from contracts with customers" ("NIF D-1") and NIF D-2 "Costs from contracts with
customers" ("NIF D-2"), were approved unanimously by the Issuing Board of the ClNlF in 2015 and enter
into force for fiscal years beginning on or after January 1, 2018. NIF D-1 establishes a new five-step model
that applies to the accounting of income from contracts with customers. In accordance with NIF D-1 the
income is recognized for an amount that reflects the consideration that an entity expects to be entitled to
receive in exchange for transferring goods or services to a customer.
876
This new norm will repeal all the previous norms related to the recognition of income. A total retrospective
or partial retrospective application is required for the exercises that begin on January 1, 2018 or later. The
Company plans to adopt the new standard on the effective date required using the total retroactive method.
During 2017, the Company carried out an evaluation of the effects due to the adoption of NIF D-1 and D-2
standards, not identifying material effects in the adoption of said standards.
NIF D-2, Costs for contracts with customers. The main change of this standard with respect to Bulletin D-7,
Contracts for the construction and manufacture of certain capital goods, is the separation of the rule
regarding the recognition of income from contracts with customers of the standard corresponding to the
recognition of costs. for contracts with customers.
Additionally, the scope of Bulletin D-7 was extended, since it referred exclusively to costs related to
construction and manufacturing contracts for certain capital goods, now costs related to all types of contracts
with customers are contemplated.
This NIF D-2, together with NIF D-1, Revenue from contracts with customers, repeals the DT Bulletin,
Contracts for the construction and manufacture of certain capital goods, lNlF 14, Contracts for construction,
sale and provision of services related to real estate, except in relation to the recognition of assets and
liabilities in this type of contracts, which is within the scope of other NIFs.
(ix) NIF B-17, Determination of fair value
In 2016, it was approved unanimously by the Issuer Board of CINIF, NIF B-17 "Determination of fair value"
("NIF B-17").
This NIF was issued for the purpose of defining the concept of fair value, establishing the determination of
fair value in a single regulatory framework and standardizing the corresponding disclosures.
The NIF defines the fair value as the exit price that would be received for selling a paid asset to transfer a
liability in an orderly transaction between market participants at the valuation date, that is, a current value
based on an exit price. This definition emphasizes that fair value is a market-based determination, and not
a specific value of an asset or a liability for the entity.
NIF B-17 explains that a fair value determination requires an entity to consider the particular asset or liability
that is being valued for a non-monetary asset; the greater and better use of the asset. and, if the asset is
used in combination with other assets or on an independent basis, the market in which an orderly transaction
would take place for the asset or liability, and the appropriate valuation technique (s) for the determination
of fair value.
877
This NIF applies when other NIFs require or allow valuations at fair value and / or disclosures about certain
fair value measurements. It also explains how to determine and disclose fair value. Other specific rules
establish when you should make this determination and disclosure of fair value.
During 2017, the Company has carried out a detailed evaluation of the impacts of the financial instrument
standards. Said evaluation is based on the information currently available and may be subject to changes
for additional information that is available during 2018. In general, the Company does not expect large
changes in its statement of financial position or in the net stockholders' equity.
The modifications that generate accounting changes in valuation, presentation or disclosure in the financial
statements are the following:
(i) NIF B-13, Events after the date of the financial statements
In cases where a long-term liability is due immediately because the Company has breached any condition
of the credit agreement as of the date of the financial statements, NIF B-13 required the reclassification of
the long-term liability as a liability Short term as of the date of the financial statements, even if during the
subsequent period the creditor has agreed not to make the payment due as a consequence of the breach.
Based on certain suggestions received by the ClNlF, changes were made to NIF B-13 to allow, if during the
subsequent period (lapse between the date of the financial statements and the date on which they are
authorized for issuance to third parties ) a debtor entity obtains an agreement to maintain long-term
payments for a contracted liability With long-term payment conditions and in which it has fallen into default,
keep the classification of such liabilities as a long-term item as of the date of payment. financial statements.
Supported by the economic substance postulate, ClNlF considered that it is appropriate to maintain the
classification of a heading as long-term as of the date of the financial statements, when it is a financial asset
or a financial liability that: a) has been hired on the basis of long-term payment or collection; and b) even
though the debtor was in default at the date of the financial statements. during the subsequent period, it
obtains an agreement to maintain its collection or payment on a long-term basis. NIF B-13 was also
amended in accordance with this criterion, as well as NIF B-6, Financial position side, NIF C-19, financial
instrument payable, and NIF C-20, Financial instruments receivable principal. and interest, which also refer
to this topic.
878
It is considered that the new approach of NIF B-13 is more appropriate, and even, it is convergent with what
is established in the US GAAP. This change represents a new difference with the International Financial
Reporting Standards (NIIF), which is classifies as Type "B", that is, it is a difference in which the ClNlF
considers that, for their elimination, it is the NIIF that should change.
The provisions of these Improvements will be effective as of January 1, 2017, with early application
permitted on January 1, 2016.
The adoption of these improvements had no effect on the Company's financial statements.
(iii) NIF C-4, Inventories
NIT C-4, in paragraph 60.1, requires disclosure of the amount of inventories received in consignment,
administration or for maquila. Based on a certain suggestion received by the ClNIF, it amended NIF C-4 to
require the disclosure of the commitments made in relation to said inventories; for example, the obligation
to return temporarily imported inventories. Additionally, NIF C-6, Property, plant and equipment was
modified to require disclosures about the machinery and equipment received and temporarily maintained to
carry out maquila work or for demonstration and on which it is committed to return them.
The provisions of these Improvements will be effective as of January 1, 2017.
(iv) NIF C-1 1, Stockholders' equity
NIF C-11 did not refer to the accounting treatment of the registration expenses on a stock exchange of
shares of an entity that at the date of registration was already owned by investors and for which the issuing
entity had already received the funds. corresponding funds. With this registration the entity is allowed to
have its shares traded on the stock exchange, expanding its financing options.
Therefore, the NFIF amended NIF C-11 to establish that the registration expenses mentioned in the previous
paragraph must be recognized by an entity in its net profit or loss at the time of its accrual, considering that
there was no transaction of capital.
On the other hand, NIF C-11 established that any expense incurred in repurchasing repurchased shares
should affect results, an issue that ClNlF considers to be inconsistent with the treatment that, in general, the
NIF itself establishes for registration costs. and issuance of shares, which must be recognized as a reduction
of the capital issued and placed. For this reason, the ClNlF modified the NIF, establishing the latter treatment
for both cases. The proposed change is convergent with international regulations, specifically with NIC-32,
Financial Instruments: Presentation.
879
The provisions of these Improvements will be effective as of January 1, 2017.
(v) NIF D-3, Benefits to employees
a) Discount rate of liabilities for employee benefits
NIF D-3, in its paragraph 45.5.9 established: "The interest rate used to discount post-employment benefit
obligations (funded or not funded) must be determined using the market rate of high corporate bonds as
reference. quality in absolute terms in a deep market and, failing that, it must take as reference the market
rate of bonds issued by the government ... "
Based on certain comments received, the ClNlF amended NIF D-3 to allow the optional use of the
government bond rate or the corporate bond rate.
In its analysis, the ClNlF points out that NIF D-3 requires in said paragraph 45.5.9 the use of the mentioned
rates for the determination of the present value (VP) of long-term liabilities because they are rates that
normally do not have Credit risk or this is very low and, therefore, it is considered that both represent the
value of money over time. Under this argument, the ClNlF concluded that the information determined with
any of the two rates mentioned above should be reliable and, consequently, useful.
The provisions of these Improvements come into force as of January 1, 2017, allowing early application.
b) Treatment or remediation of the PNBD or AND
NIF D-3, in paragraph 45.4.4 c) stated: "when comparing the final PNBD or ANBD of subsection D with the
expectation of the PNBD or ANBD of subsection a), the resulting differences shall be recognized as
remediation activities of the PNBD or ANBD in Other Integral Result (ORI), considering the provisions of
section 45.7 ".
The ClNlF amended NIF D-3 to allow the remediation activities mentioned in paragraph 45.4.4 to be
recognized, optionally, either in the ORI as established or directly in the net profit or loss at the date of its
determination.
The ClNlF considered that this change provides a more practical management of the remediation activities.
880
The provisions of these Improvements come into force as of January 1, 2017, allowing early application.
The accounting effects of this Standard in the financial statements are described in Note 10.
The amendments that generated accounting changes in valuation, presentation or disclosure in the financial
statements and that came into force as of January 1, 2016, are as follows:
(i) NIF C-1, Cash and elective equivalents, and NIF B-2, States of elective flows
NIF C-1, Cash and cash equivalents and NIF B-2 were amended, It is cash flow sides, to specify that the
definition of cash: considers the foreign currency and to specify in the definition of cash equivalents: that
these correspond to investments that are maintained to meet short-term commitments. The term
investments available at sight was also changed by highly liquid financial instruments, since they are
considered to be clearer. These modifications were made with the purpose that the definitions are in the
same sense as those established by the International Accounting Standard (NIC) 7, Statement of Cash
Flows.
Regarding the valuation of cash and cash equivalents, some amendments were made to NIF C-1, Cash
and cash equivalents, to specify that cash and cash equivalents, being also financial instruments, should
be valued at their value reasonable in its initial recognition and high liquidity instruments should be valued
in accordance with the financial instruments standard.
Following is the most relevant of NIF D-3 and lNlF 21 that came into force as of January 1, 2016, but
that allowed early application, as of January 1, 2015:
(i) NIF D-3, Benefits to employees
ClNl F issued a new NIF D-3, Employee Benefits, which replaces NIF D-3 Employee Benefits issued in
2008, the main changes considered in the new NIF are:
a) Corridor approach or fluctuation band: The corridor or fluctuation band approach for the treatment of the
Plan's Profits and Losses was eliminated in the recognition of post-employment benefits, that is, its deferral
is no longer allowed and they must be recognized immediately in the provision as they accrue; although its
recognition will be directly as remediation activities in the ORI, it requires its subsequent recycling to the
utility or net loss.
881
b) Assets of the Plan (AP) ceiling: the new NIF D-3 establishes a ceiling for the PAs, by means of determining
a maximum obligation of post-employment benefits.
c) Modifications to the Plan (IVI P), Reductions to Personnel (PP) and gains or losses due to anticipated
liquidations of obligations (LAO): the new NIF requires its immediate recognition in results of the period,
d) Discount rate: the discount rate and the assumptions used to reflect the present values of the obligations
must be in accordance with the economic environment in which the entity operates. It is established that the
discount rate of Defined Benefit Obligations (OBD) is based on rates of high quality corporate bonds in
absolute terms in a deep market and, failing that, in government bonds using a long-term return curve, Y
e) Termination benefits: In the case of payments for separation or separation, the new NIF requires an
analysis to determine if this type of payment qualifies as benefits for termination or post-employment
benefits, since it depends on this the time of its accounting recognition.
(ii) INIF 21, Recognition of payments for separation of employees
The objective of lNlF 21, Recognition of payments for separation of employees, is to clarify the accounting
treatment that should be applied to separation payments in accordance with the provisions of the new NIF
D-3, Employee Benefits, which It will be valid as of January 1, 2016 but it allows its application to be applied
as of January 1, 2015.
lNlF 21, specifies that the entity must evaluate whether or not preexisting conditions exist, to define whether
the separation payment corresponds to a benefit for termination or a post-employment benefit, even when
the separation is voluntary or involuntary.
For the aforementioned purposes in accordance with the new NIF D-3, when there is a separation payment,
either by involuntary dismissal or voluntary resignation whose payment practices create pre-existing
conditions, it qualifies as a post-employment benefit, for which a provision based on probability should be
recognized and a reclassification of the provision of termination benefits for causes other than the
restructuring that was recognized in accordance with NIF D-3 effective until December 31, 2015, should be
made to the benefit post-employment.
3. Related parties
The companies mentioned in this note are considered as affiliates since the shareholders of said companies
are also shareholders of the Company
882
a) The balance sheets with related parties as of December 31, 2018 and 2016 are integrated as follows:
2017 2016
Receivable:
Dr. Reddy's Laboratories, Inc (affiliated) $ 58,582 $ 196,510
Dr. Reddy's Laboratories, S.A. (affiliated) 23,722 15,113
Dr. Reddy's Laboratories (UK) (affiliated) 7,247 -
Dr. Reddy's Laboratories (UE) (affiliated) 1,163 -
$ 90,714 $ 211,623
Receivable:
Dr. Reddy's Laboratories (UE) (controller) (i) $ 689,989 $ 665,783
As of December 31, 2017 and 2016, the balances receivable from related parties are made up of balances
of current accounts, without interest, payable in cash within a term of 30, 45 and 180 days for which there
are no guarantees.
Balances with related parties are considered recoverable. Therefore, for the years ended December 31,
2017 and 2016, there was no expense derived from the uncollectibility of balances with related parties.
As of December 31, 2017 and 2016, the balances payable to related parties correspond to current account
balances without interest (except for the loan mentioned below), payable in cash within 180 days for which
they do not there are guarantees.
b) The following contracts with related parties are held:
i. As of December 31, 2017 and 2016, the Company maintains a loan with the controlling Company
for $ 467,986 with interest of 9% per year, which are in pesos and without specific maturity, which
were assigned in full to the liability.
c) Transactions performed with related parties, during fiscal years ended December 31, 201T and 2016, are
shown below
Inventory sales 2017 2016

Dr. Reddy's Laboratories, Inc (affiliated) $ 147,862 $ 289,372
Dr. Reddy's Laboratories, S.A. (affiliated) 170,979 66,180
Dr. Reddy's Laboratories (UK) (affiliated) 8,286 6.543
Dr. Reddy's Laboratories (UE) (affiliated) 1,641 1,356
38,607 20,005
$ 367,375 $ 383,456
883
Inventory purchases
Dr. Reddy's Laboratories (UE) (controller) $ 325,687 $ 358,47
Interest expense
Dr. Reddy's Laboratories (UE) (controller) $ 42,126 $ 42,241
4. Taxes to be recovered
As of December 3, 2017 and 2016, this item is integrated as follows:
2017 2016
Value-added tax (VAT) to be recovered $ 43,105 $ 38,316
Income Tax (ISR) to be recovered 6,860 3,331
Total $ 49,965 $ 41,647
5. Inventories
As of December 31, 2017 and 2016 inventories are integrated as:
2017 2016
Finished products $ 48,604 $ 129,420
Production in-process 151,386 97,381
Raw Materials 65,730 104,492
Materials and spare parts 40,796 40,665
306,516 371,958
Goods in transit 2,574 2,166
309,090 374,124
Estimation due to obsolescence ( 47,654) ( 76,123)
Inventories, net $ (261,436 $ 298,001
The amount recognized in the results corresponding to the estimate of obsolescence in the years of 2017
and 2016 was $ 26,199 and $ (11,162), respectively.
The variation in the balance of inventories, between the years ended December 31, 2017 and 2016, is
mainly due to inventory destructions during the year 2017 for $ 45,644.
The period of realization of inventories is 126 days
884
6. Pre-payments
Pre- payments were effected for the acquisition of:
2017 2016
Pre-payments to machinery and equipment $ 34,259 1,683
suppliers
Pre-payments to raw material suppliers 687 20,955
Pre-payments to service providers 804 816
Pre-paid insurance 1,214 561
Predial 621 621
$ 37,585 $ 24,636
7. Properties, plant and equipment
As of December 31, 2017 and 2016, properties, plant and equipment are integrated as follows:
2017 2016
Buildings $ 46,128 $ 46,128
Machinery and laboratory equipment 346,694 340,628
Furniture and office equipment 13,785 13,714
Computer equipment 7,934 7,736
Transportation equipment 7,215 7,048
421,756 415,254
Accumulated depreciation ( 273,639) ( 250,728)
148,117 164,526
Lands 92,356 92,356
Constructions in-process 74,240 19,696
$ 314,713 $ 276,578
The total depreciation for the years 2017 and 2016 was recorded in results for an amount of $ 24,983 and
$ 28,411, respectively; which was recorded under operating expenses.
The constructions in process mainly include the following projects:

• In 2017, it corresponds to the Abiraterone project and purified water system, for amounts of $ 36,361
and $ 5,801 respectively, which are estimated to be completed during the second half of 2018, as
well as the distribution control system, for an amount of $ 7,322, which is estimated to be completed
during the first semester of 2019.
• In 2016, it corresponded to the project to update the bay for Trenbolona for $ 6,285, for the quality
control department of Abiraterona 86 Kg - 180 Kg for $ 4,612 and the laboratory equipment 2 for $
2, 222. These projects continued in 2017
885
8. Provisions
As of December 31, 2017 and 2016, the provisions are integrated as follows:
2017 2016
Bayer customer provision $ 5,309 $ 9,175
Provision contractors 3,883 1,081
Provision of services (natural gas, electricity, 2,989 2,836
water, etc.)
Goods in transit 2,578 706
Freightage 1,591 925
Repair provision for the earthquake 1,247 -
Other expenses 7,295 7,465
$ 24,892 $ 22,188
9. Balances in foreign currency
As of December 31, 2017 and 2016, the financial statements include monetary rights and obligations
denominated in dollars (US $) of the United States of America (USA), as follows:
Amounts in thousands of dollars

Current assets 2017 2016
Cash US $ 502 95
Customers 11,796 4,836
Related parties 5,751 10,708
Total 18,049 15,639
Current liabilities
Suppliers US$ ( 1,660) US$ ( 3,007)
Net monetary position active US$ 16,389 US$ 12,632
The exchange rates used to convert the previous amounts to national currency as of December 31, 2017
and 2016, were as follows:
Exchange rate
Country of origin Currency 2017 2016
EE.UU. Dollar $ 19.74 $ 20.66
As of April 30, 2018, date of issuance of the financial statements, the exchange rate is $ 18.8644 per dollar.
886
10. Net liabilities for defined benefits to employees
The Company has a defined benefit plan that covers its personnel, which are based on the years of service
and the amount of employee compensation. The Company's policy to fund the pension plan is to contribute
the maximum deductible amount for the income tax according to the projected unit credit method.
The accounting changes resulting from the initial application of NIF D-3 "Benefit to employees" were not
recognized retrospectively, affecting the financial statements as of December 31, 2015, the retrospective
changes that the Company did not record were immaterial.
During the 2017 and 2016 periods, the termination benefits paid were 51,902 and 58,593, respectively.
The cost, obligations and other elements of the pension plans, seniority premiums and compensation at the
end of the employment relationship other than restructuring, mentioned in Note 3i), were determined based
on calculations prepared by independent actuaries. As of December 31, 2017 and 2016, the components
of the net cost of the period, defined benefit obligations and plan assets are integrated as follows:
2017
Pension Seniority Termination Total
plan bonus benefits
Integration of the net cost of the 2017 period:
Current service labor cost (CLSA) $ 3,187 $ 237 $ 480 $ 3,904
Net interest on net liabilities for defined benefits $3,982 124 263 4,369
(PNBD)
Recycling of remediation activities of the PNBD 338 82 ( 92) 328
Net cost for the period 2017 $ 7,507 $ 443 $ 651 $ 8,601
2016
plan bonus benefits
Integration of the net cost of the 2017 period:
Current service labor cost (CLSA) $ 3,292 $ 242 $ 500 $ 4,034
-
Net interest on net liabilities for defined benefits 4,026 143 247 4,416
(PNBD)
Recycling of remediation activities of the PNBD 1,140 122 - 1,262
Loss on early settlement of obligations 465 - - 465
Net cost for the period 2016 $ 8,923 $ 507 $ 747 $ 10,177
887
b) The changes in the net liability for defined benefits are integrated as follows:
2017
plan bonus benefits
Net liabilities for defined benefits (PNBD):
PNBD as of January 1, 2016 $ 51,950 $ 1,858 $ 3,731 $ 57,539
Current service labor cost 3,757 252 500 4,499
Net interest on PNBD 4,026 143 247 4.416
Benefits paid ( 8,229) ( 364) - ( 8,593)
ORI recognized gains ( 4,384) ( 303) ( 952) 5,639
PNBD as of December 31, 2016 47,120 1,576 3,526 52,222
Current service labor cost 3,187 237 480 3,904
Net interest on PNBD 3,982 124 263 4,369
Benefits paid ( 1,254) ( 130) ( 518) ( 1,902)
ORI recognized gains ( 1,403) ( 58) ( 371) ( 1,832)
PNBD as of December 31, 2017 $ 51,632 $ 1,749 $ 3,380 $ 56,761
c) The net liability for defined benefits is integrated as follows
2017
plan bonus benefits
Provisions for:
Obligation for defined benefits (OBD) $ 66,911 $ 4,877 $ 3,380 $ 75,168
Plan assets (AP) ( 15,279) ( 3,128) - ( 18,407)
Net liabilities for defined benefits $ 51,632 1,749 $ 3,380 $ 56,761
2016
plan bonus benefits
Provisions for:
Obligation for defined benefits (OBD) $ 61,087 $ 4,435 3,526 $ 69,048
Plan assets (AP) ( 13,967) ( 2,859) ( 16,826)
Net liabilities for defined benefits $ 47,120 $ 1,576 3,526 $ 52,222
888
d) The other comprehensive income as of December 31, 2017 is included as follows:
2017
plan bonus benefits
Balance of other comprehensive income (ORI) as $ 4,313 $ 845 ( 951) $ 4,207
of January 1, 2017
Recycling of ORI in Results Period actuarial gains ( 338) ( 82) 92 ( 328)
Balance of other comprehensive income (ORI) as ( 1,403) ( 58) ( 371) ( 1,832)
of December 31, 2017
$ 2,572 $ 705 ( 1,230) $ 2,047
The significant assumptions used in the actuarial study, in absolute terms, are shown below:
2017 2016
Real discount rate used to reflect the present value of the 9.00% 8.75%
obligations
Real rate of increase in future salary levels 4.50% 4.50%
Expected rate of return on plan assets 9.00% 8.75%
Remaining average working life of workers, in which the items 14.72 years 14.11 years
pending amortization are amortized
The assets of the plan are in a trust and are managed by a committee appointed by the Company.
e) The following shows each of the main classes of Plan assets (AP), according to their nature and risk:
2017 2016
Debt instruments $ 9,175,900 $ 8,784,803
Variable capital instruments 9,231,279 8,041,572
Total plan assets $ 18,407,179 $ 16,826,375
The actual return on plan assets for the years ended December 31, 2017 and 2016 was $ 1,581 and $
1,408, corresponding to the expected return on plan assets and actuarial gain / loss, respectively.
As of December 31, 2017 and 2016, approximately 50% of the plan assets are invested in demand deposits
in financial institutions of the country, at market interest rates and the remaining 50% in investments in the
capital market, through investment funds that have a diversified portfolio of shares of companies listed on
the Mexican Stock Exchange.
889
11. Direct benefits to short-term employees
a) Direct benefits in the short term:
As of December 31, 2017 and 2016, the Company has recognized cumulative provisions related to direct
short-term benefits, which are:
2017 2016
PTU payable $ 8,530 $ 10,011
Others 1,826 4,454
$ 10,356 $ 14,465
b) Obligations for Participation of Workers in Profit (PTU)
The PTU for the fiscal years of 2017 and 2016, is integrated as follows:
2017 2016
Caused PTU $ 8,530 $ 10,011
Deferred PTU ( 1,549) ( 26)
Total PTU $ 6,981 $ 9,985
c) Deferred PTU
As of December 31, 2017 and 2016, this item is composed as follows
2017 2016
Deferred tax assets: $ 4,866 $ 6,509
Deferred tax assets: 1,503 480
Provisions and other accounts payable 5,255 5,222
Benefits for employees 9,662 7,463
Properties, plant and equipment 21,286 19,674
Liabilities for deferred taxes

Prepayments 263 200
Active for deferred PTU, net $ 21,023 $ 19,474
The PTU caused is presented in the operating expenses and the deferred PTU in the other income in the
statement of comprehensive income:
890
12. Accounting capital
a) The share capital at par value on December 3, 2017 and 2016 is integrated as follows:
Number of shares Nominal amount

Fixed capital (Series A) 50,000 $ 50,000
Variable capital (Series B) 140,476,270 140,476,270
140,526,270
Supplement for update 9,772,730
Total $ 150,299,000
b) In accordance with the General Law of Commercial Companies, the Company must separate from the
net profit of each year at least 5% to increase the legal reserve until it reaches 20% of the share capital.
c) Beginning with fiscal year 1999 and up to fiscal year 2001, the Income Tax Law allowed the option to
defer payment of a portion of the Income Tax due during those years. The deferral of this tax and the relative
profits are controlled through the "reinvested net income tax account" (CUFINRE).
Profits that are distributed in excess of the balances of the CUFINRE and CUFIN accounts (net tax profit
account), will be subject to corporate ISR payment at the rate in effect at the time of distribution. The
payment of said tax may be credited against the ISR.
Dividends paid to individuals and legal entities resident abroad on profits generated as of December 2014,
are subject to a withholding of an additional tax of 10%.
d) As of December 31, 2017 and 2016, the other comprehensive income is included as follows:
2017 2016
Benefits to employees $ ( 2,047) $ ( 4,2017)
Deferred tax 614 1,683
$ ( 1,433) $ (2,524)
As of December 31, 2017 and 2016, the effect of the deferred tax was not recognized
13. Income taxes
a) Income Tax (ISR)
For fiscal year 2017 and 2016, according to the Income Tax Law (ISR), the ISR rate is 30%
The ISR for the period is calculated by applying the rate on the fiscal result.
891
The LISR establishes Criteria and limits for the application of some deductions, such as: the deduction of
payments that in turn are exempt income for workers, the contributions for the creation or increase of
reserves to pension funds, the contributions to the Institute Mexican Social Security in charge of the worker
that are paid by the employer; as well as the possible non-deductibility of payments made to related parties
in case of non-compliance with certain requirements.
b) Employee participation in profit (PTU)
The LISR establishes that the basis for the determination of the PTU of the fiscal year is the fiscal utility that
is determined for the calculation of the ISR of the fiscal year, considering certain adjustments considered
by the LISR itself.
c) As of December 31, 2017 and 2016, the income tax charged to income is included as follows:
2017 2016
Caused income tax caused $ 25,118 $ 29,569
Deferred income tax ( 3,730) 514
Total income tax $ 21,388 $ 30,083
The deferred taxes shown in the statements of financial position are composed of:
2017 2016
Deferred tax assets:
Reserve for obsolescence $ 14,598 $ 19,526
Provisions and other accounts payable 4,513 1,447
PTU payable 2,559 3,003
Employee benefits 15,766 15,667
Properties, plant and equipment 28,987 22,392
66,423 62,035
Deferred tax liabilities:
Pre-payments 792 599
Deferred PTU 6,307 5,842
7,099 6,441
Net, deferred tax asset $ 59,324 $ 55,594
To evaluate the recovery of deferred assets, the Administration considers the probability that part or all of
them will not recover. The final realization of the deferred assets depends on the generation of taxable
income in the periods in which the temporary differences are deductible. In carrying out this evaluation,
Administration considers the expected reversal of deferred liabilities, projected taxable income and planning
strategies.
892
d) Below is a reconciliation between the tax rate established by law and the effective rate of ISR recognized
by the Company
2017 2018
Profit before income taxes $ 52,758 $ 113,686
Approved statutory rate of income tax 30% 30%
ISR on accounting profit 15,827 34,106
More (less):
Effect of fiscal inflation, net 6,137 2,114
Non-deductible expenses 3,002 3,546
Differences of D-3 - ( 5,850)
Others ( 3,565) ( 3,833)
Total lSR $ 21,388 30,083
Effective rate 41% 26%
e) Tax balances
As of December 31, 2017, the following fiscal balances are available
2017
Capital Account of Contribution $ 226,970
Previous Net Fiscal Profit Account of 2014 189,043
Net Tax Profit Account after 2014 129,284
14. Analysis of net sales and other income
As of December 31, 2017 and 2016, an analysis of the nature of net sales and other income shown in the
statement of comprehensive results is shown:
2017 2016
Sale of products to related parties $ 367,375 $ 384,127
Sale of products to third parties 639,356 639,732
Marketing of products 34,036 20,148
Net sales 1,040,767 1,044,007
Revenue from the sale of raw material 2,710 2,441

Deferred PTU 1,549 26
Others 357 706
Other income 4,616 3,173
Total income $ 1,045,383 1,047,180
893
15. Analysis of cost of sales and operating expenses
As of December 31, 2017 and 2016, an analysis of the nature of the cost of sales and operating expenses
shown in the comprehensive income statement is shown:
Sales cost Operating costs

2017 2016 2017 2016
Cost of materials sold $ 553,858 $ 615,867 $ - $ -
Other expenses 26,055 29,077 75,198 48,421
Fuels and energy 40,891 48,322 10,671 4,390
Wages, salaries and benefits 48,477 57,203 65,176 29,763
External service expenses 31,110 24,134 5,938 2,910
Maintenance 14,489 15,984 13,331 14,195
Depreciation and amortization 12,870 15,725 12,113 12,687
Insurance and Finance 1,675 2,535 4,821 4,411
PTU 6,824 8,009 1,706 2,002
Total $ 736,249 816,856 $ 188,954 $ 118,779
16. Contingencies
As of December 31, 2017, the Company has the following contingencies:
a) The Company is involved in several lawsuits and claims, derived from the normal course of its operations,
which are expected not to have a material effect on its financial position and future operating results.
b) In accordance with current tax legislation, the authorities have the power to review up to five fiscal years
prior to the last income tax return filed.
The Company is involved in three nullity claims for the audit of fiscal years of transactions between related
parties of the Income Tax Law (LISR) for the years of 2006, 2007 and 2008 with an amount plus a distribution
additional benefits to workers of $ 86,629, $ 52,355 and $ 59,367, respectively, derived from the resolutions
of the tax credit and resolution to the appeal for revocation. The Company and its legal advisors consider
that they have the possibility of obtaining favorable resolutions in all cases.
In reference to the three cases mentioned above, claims for annulment were filed on March 24, 2017, April
21, 2017 and April 25, 2017, respectively, all of the aforementioned before the Federal Court of
Administrative Justice, through which Both the decision determining the tax credit and the resolution of the
appeal for revocation of each case issued by the Tax Administration Service (SAT) were challenged.
894
c) In accordance with the Income Tax Law, companies that carry out transactions with related parties are
subject to limitations and fiscal obligations, in terms of determining agreed prices, since these should be
comparable to those that would be used with or between independent parties in comparable operations.
In the event that the tax authorities review the prices and reject the amounts determined, they could demand,
in addition to the collection of the corresponding tax and accessories (update and surcharges), fines on the
omitted contributions, which could be up to 100% about the updated amount of contributions.
d) On December 1, 2012, the reforms to the Federal Labor Law entered into force, which may have an
implication within the financial situation of the Company, which can range from a disclosure in the financial
statements to the recognition of an additional liability for workers' participation in the utility or for another
liability related to the provision of employee services. As of December 31, 2017, the Company's
management evaluated the impact of these reforms on its financial information and concluded that they are
not impacted at the close of fiscal year 2017. However, this situation could change in the future, so that the
administration will continue to evaluate the impacts of said reform.
17. Subsequent events
As of the date of issuance of these financial statements, the Company filed an application for summary
judgment for the three cases mentioned, for which no resolution of the court has been obtained
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To the Members of OOO DRS LLC Limited
We have audited the accompanying financial statements of OOO DRS LLC Limited a company
incorporated and administered outside India, which comprises the Balance sheet as at 31 March
2018, the Statement of Profit and Loss (including Other Comprehensive Income) for the year ended
on that date annexed thereto, the Cash Flow Statement, the Statement of Changes in Equity for the
year then ended and a summary of significant accounting policies and other explanatory
information.

2013.
976
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
977
OOO DRS LLC Limited
Balance Sheet
As at As at
ASSETS
Non-current assets
Capital work-in-progress 6,815 6,815
212,681 212,797
Current assets
Financial assets
Cash and cash equivalents 2.2 542 626
12,243 12,500
Total assets 224,924 225,297

Equity
Other equity 85,047 88,587
114,567 118,107
Liabilities
Borrowings 2.5 A 82,006 77,900
82,006 77,900
Current liabilities
28,351 29,290
For A Ramachandra Rao & Co. for and on behalf of the Board of Directors of OOO DRS LLC Limited
PSRVV Surya Rao Anna Kuzmina

Partner Director
Place: Hyderabad
Date: 18 May 2018
978
OOO DRS LLC Limited

Income
Other income 2.7 1,347 -
Total income 1,347 -
Expenses
Depreciation expense 2.8 116 109
Finance costs 2.9 2,796 2,293

Tax expense
Current tax - -
Deferred tax - -

Total comprehensive loss for the year (3,540) (17,539)

Partner Director
Place: Hyderabad
Date: 18 May 2018
979
OOO DRS LLC Limited

Securities premium Retained earnings
Balance as at 1 April 2017 29,520 122,532 (33,945) 118,107
Loss for the year - - (3,540) (3,540)
Balance as at 31 March 2018 29,520 122,532 (37,485) 114,567

Securities premium Retained earnings
Balance as at 1 April 2016 29,520 122,532 (16,406) 135,646
Loss for the year - - (17,539) (17,539)
Balance as at 31 March 2017 29,520 122,532 (33,945) 118,107

For A Ramachandra Rao & Co. OOO DRS LLC Limited

Partner Director
Place: Hyderabad
Date: 18 May 2018
980
OOO DRS LLC Limited

31 March 2018 31 March 2017
Adjustments:
Foreign exchange loss / (gain), net (1,339) 13,172
Finance costs 2,796 2,293
Other assets and liabilities, net (504) 364
Cash generated from operations (2,471) (1,601)
Income tax paid, net - -
Net cash from / (used in) operating activities (2,471) (1,601)

Net cash used in investing activities - -

Proceeds from long-term loans and borrowings, net 2,394 2,068
Net cash from / (used in) financing activities 2,394 2,068
Net increase / (decrease) in cash and cash equivalents (77) 467

Effect of exchange rate changes on cash and cash equivalents (7) 52
Cash and cash equivalents at the beginning of the year (Refer note 2.2) 626 107
Cash and cash equivalents at the end of the year (Refer note 2.2) 542 626


Partner Director
Place: Hyderabad
Date: 18 May 2018
981
OOO DRS LLC Limited

OOO DRS LLC Limited (" the Company") incorporated in Russia , is a 100% subsidiary of Eurobridge consulting B.V.



Assets:
Liabilities:

c) Revenue
Sale of goods
Services
performed.
License fee

982
OOO DRS LLC Limited
e) Income tax
f) Property, plant and equipment

Depreciation
Years
Buildings
Vehicles 4 to 5
g) Inventories
process.
983
OOO DRS LLC Limited
h) Employee benefits
i) Provisions, contingent liabilities and contingent assets

Restructuring
Onerous contracts
Contingent assets
j) Financial instruments
Financial assets
recognition.
k) Cash and cash equivalents

l) Trade receivables
m) Trade and other payables

984
OOO DRS LLC Limited

Land 205,449 - - 205,449 - - - - 205,449
Buildings 3,822 - - 3,822 3,289 116 - 3,405 417
Total 209,271 - - 209,271 3,289 116 - 3,405 205,866
Previous Year 209,271 - - 209,271 3,180 109 - 3,289 205,982
985
OOO DRS LLC Limited
2.2 Cash and cash equivalents

As at As at
31 March 2018 31 March 2017
- In current accounts 542 626
542 626

As at As at
31 March 2018 31 March 2017
Balances with statutory authorities 161 161
Others 11,540 11,713
11,701 11,874
2.4 Share capital

As at As at
31 March 2018 31 March 2017
RUB 18,420,000 (31 March 2017: RUB 18,420,000)* 29,520 29,520

RUB 18,420,000 (31 March 2017: RUB 18,420,000)* 29,520 29,520

RUB 18,420,000 (31 March 2017: RUB 18,420,000)* 29,520 29,520
29,520 29,520
* No concept of nature and number of shares in this Company.
(a) Details of shareholders holding more than 5% shares in the Company

As at As at
31 March 2018 31 March 2017
Particulars
Amount in RUB % holding in Amount in % holding in
('000) the class RUB ('000) the class
Euro Bridge Consulting B.V. 18,420 100.00 18,420 100.00

As at As at
31 March 2018 31 March 2017
Unsecured
Long-term loans from related parties 82,006 77,900
82,006 77,900

As at As at
31 March 2018 31 March 2017
Others 28,202 28,630
28,202 28,630

As at As at
31 March 2018 31 March 2017
149 660
986
OOO DRS LLC Limited
2.7 Other income

31 March 2018 31 March 2017
Foreign exchange gain, net 1,347 -
1,347 -

31 March 2018 31 March 2017
116 109
2.9 Finance costs

31 March 2018 31 March 2017
Interest on long-term borrowings 2,796 2,293
2,796 2,293

31 March 2018 31 March 2017
Legal and professional 718 781
Rates and taxes 1,254 1,211
Foreign exchange loss, net - 13,143
1,975 15,137
2.11 Going Concern


Particulars
31 March 2018 31 March 2017
Interest expense to holding company or other group companies:
OOO Dr. Reddys's Laboratories Limited 2,796 2,293
As at As at
Particulars
31 March 2018 31 March 2017
OOO Dr. Reddys's Laboratories Limited 59,656 55,212
Reddy Antilles N.V. 22,350 22,688
2.13 Income taxes

a. Current Taxes
b. Deferred Taxes

987
OOO DRS LLC Limited


Partner Director
Place: Hyderabad
Date: 18 May 2018
988
989
990
PROMIUS PHARMA LLC
March 31, 2018 and March 31, 2017
991
PROMIUS PHARMA LLC
STATEMENT OF FINANCIAL POSITION
As of As of
ASSETS
Current assets
Cash and cash equivalents 10 303,266 87,726
Trade and other receivables 8 9,072,558 9,077,991
Inventories 7 1,382,382 494,756
Current tax assets 21,998 37,138
Other current assets 9 63,466,372 37,823,921
Total current assets 74,246,576 47,521,532
Non-current assets
Property, plant and equipment 5 57,083 3,343
Other intangible assets 6 5,547,210 10,827,296
Deferred tax assets 20 5,913,393 5,913,474
Other non-current assets 9 1,900,000 1,907,089
Total non-current assets 13,417,686 18,651,202
Total assets 87,664,262 66,172,734
LIABILITIES AND EQUITY

Current liabilities
Trade and other payables 13 2,038,924 11,552,522
Loans and Borrowings 19 182,461,093 169,701,922
Provisions 12 5,450,335 5,518,777
Other current liabilities 14 12,322,794 8,605,563
Total current liabilities 202,273,146 195,378,784
Non-Current liabilities
Deferred tax liabilities 20
Other non-current liabilities 14 - 450,902
- 450,902
Total liabilities 202,273,146 195,829,686
Equity
Share capital 11 38,760,000 38,760,000
Retained Earnings (154,105,112) (169,014,921)
Other components of equity 736,228 597,969
Total equity (114,608,884) (129,656,952)
Total liabilities and equity 87,664,262 66,172,734
992
PROMIUS PHARMA LLC
INCOME STATEMENT
For the year ended

Revenue 17 61,546,157 24,800,035

Cost of revenues 6,446,611 4,449,930
Gross (loss) / profit 55,099,546 20,350,105
Selling, general and administrative expenses 62,406,119 57,525,106
Research and development expenses 4,191,041 14,178,904
Other (income)/expense, net 15 (302,731) (3,591,588)
Total operating expenses 66,294,429 68,112,422
Results from operating activities (11,194,883) (47,762,317)
Finance (income)/ expense 16 460,035 396,839
(Loss) / profit before income tax (11,654,918) (48,159,156)
Tax (benefit) / expense (26,564,728) (21,785,172)
993
PROMIUS PHARMA LLC
STATEMENT OF COMPREHENSIVE INCOME
PARTICULARS March 31, 2018 March 31, 2017

Other comprehensive income
Items that will not be reclassified to profit or loss: - -
Total items that will not be reclassified to profit or loss - -
Items that may be reclassified subsequently to profit or loss: - -
Total items that may be reclassified subsequently to profit or loss - -
Other comprehensive (loss) / profit for the year, net of income tax
Total comprehensive (loss) / profit for the year 14,909,810 (26,373,984)
994
PROMIUS PHARMA LLC
STATEMENT OF CHANGES IN EQUITY
Share based payment

Particulars Share Capital reserve Retained earnings Total

(Loss)/Profit for the period - - (26,373,984) (26,373,984)
Total Comprehensive income (B) - - (26,373,984) (26,373,984)
- 36,368 - 36,368
Company ( C)

(Loss)/Profit for the period - - 14,909,810 14,909,810
Total Comprehensive income (B) - - 14,909,810 14,909,810
- 138,258 - 138,258
Company ( C)
995
PROMIUS PHARMA LLC
STATEMENT OF CASH FLOWS
For the year ended

Particulars
March 31, 2018 March 31, 2017
Cash flows from/(used in) operating activities:
(Loss)/profit for the year 14,909,810 (26,373,984)
Adjustments for:
Income tax expense / (benefit) (26,564,728) (21,785,172)
Depreciation and amortization 5,280,550 6,203,773
Impairment loss on other intangible assets - 400,000
Inventory write down 265,803 2,014,630
Allowances for sale returns 2,504,595 5,077,365
Share based payment expense 138,258 36,368
Trade receivables 5,433 (7,334,968)
Inventories (1,153,429) (2,110,232)
Trade payables (9,527,490) 9,919,435
Other assets and other liabilities 1,186,703 (15,925,454)
Net cash from operating activities (12,503,319) (49,515,310)
Cash flows from/(used in) investing activities:

Purchase of on property, plant and equipment (40,312) (1,012,395)
Purchase of other intangible assets (400,000)
Net cash used in investing activities (40,312) (1,412,395)
Cash flows from/(used in) financing activities:

Proceeds from loans and borrowings from parent company, net 12,759,171 50,949,784
Net cash from financing activities 12,759,171 50,949,784
Net increase in cash and cash equivalents 215,540 22,079

996
PROMIUS PHARMA LLC
1. Reporting entity
Promius Pharma LLC is the subsidiary of Dr. Reddys Laboratories Inc. focusing on U.S. Specialty Business, which is engaged in the development and
sales of branded specialty products in the therapeutic areas of dermatology and neurology.
The Company has a portfolio of in-licensed patented dermatology and neurology products. It also has an internal pipeline of dermatology products that
are in different stages of development. Company’s current portfolio contains innovative products for the treatment of seborrheic dermatitis, acne and
steroid responsive dermatoses, migraine. It has commercialized six products: Scytera™, which is foam for the treatment of psoriasis; Promiseb™, which
is a cream for the treatment for seborrheic dermatitis; ClodermR (clocortolone pivalate 0.1%), which is a cream used for treating dermatological
inflammation, TrianexR, which is a cream for the treatment of the inflammatory and pruritic manifestations of corticosteroid responsive dermatoses,
Zembrace, which is neurology product used for patients suffering from acute episodes of migraine and Sernivo which is used to treat mild to moderate
plaque psoriasis.
2. Basis of preparation of financial statements

a. Statement of compliance
These financial statements as at and for the year ended March 31, 2018 have been prepared in accordance with the International Financial Reporting
Standards and its interpretations (“IFRS”) issued by the International Accounting Standards Board (“IASB”).
These financial statements were authorized for issuance by the Company’s Board of Directors on May 21, 2018.
b. Basis of measurement
These financial statements have been prepared on the historical cost convention and on an accrual basis.
c. Functional currency
The Company’s operations are self-contained and integrated within the respective countries/regions (i.e., United States of America), the functional
currency has been determined to be the local currency of that country (i.e., U.S. Dollar).
All amounts included in the financial statements are reported in US dollar, (presentation currency). The assets and liabilities of the Company are
translated into U.S. Dollar, at the rate of exchange prevailing at the balance sheet date.
d. Use of estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the
following notes:
 Note 2 (e) — Going concern

 Note 2 (c) & 3 (a) — Assessment of functional currency for foreign operations;
 Note 3(b) and 22 — Financial instruments;
 Note 3(e) — Useful life of property plant and equipment;
 Note 3(f) — Useful life of intangible assets;
 Note 3(h) — Valuation of inventories;
 Note 3(i) — Provisions;
 Note 3(j) — Sales returns, rebates and charge back provisions;
 Note 3(l) — Evaluation of recoverability of deferred tax assets;
 Note 3(m) — Share-based payment transactions;
e. Going Concern
The Company’s financial statement for the year ended March 31, 2018 and March 31, 2017 have been prepared on a going concern basis which assumes
that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.
As of March 31, 2018 and 2017 the Company had working capital deficit of USD 128,026,570 and USD 147,857,252 respectively. The Company had a
profit and incurred losses of USD 14,909,810 and USD 26,373,984 and had negative cash flow from operations of USD 12,503,319 and USD 49,515,310 for
the year ended March 31 2018 and March 31, 2017 respectively. Dr. Reddy’s Laboratories Inc. (the 'Holding Company') has undertaken to provide such
financial support as necessary, to enable the Company to meet the operational requirements as they arise and to meet it's liabilities as and when they
fall due. The management expects that there will be significant increase in the operations of the Company that will lead to improved cash flow and long
term sustainability.
Based on these factors, inspite of the incurred losses and negative cash flows from operations in the Company, the financial statements are prepared
with going concern assumption.
997
PROMIUS PHARMA LLC
3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements:
a. Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at exchange rates at the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the
exchange rate at that date.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous financial statements are recognized in the income statement in the period in which they
arise.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have
been settled if those cash flows had occurred at the measurement date.
b. Financial instruments
Financial assets
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments, AFS financial assets as appropriate. All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
For purposes of subsequent measurement, financial assets are classified in four categories:
 Financial assets at fair value through profit or loss
 Loans and receivables
 Held-to-maturity investments
 AFS financial assets
Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair
value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near
term. The Company has not designated any financial assets at fair value through profit or loss. Financial assets at fair value through profit or loss are
carried in the statement of financial position at fair value with net changes in fair value presented as finance costs (negative net changes in fair value) or
finance income (positive net changes in fair value) in the income statement.
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial
measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated
by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the income statement. The losses arising from impairment are recognised in the income statement in finance costs for loans and in
cost of revenues or other operating expenses for receivables.
This category generally applies to trade and other receivables. For more information on receivables, refer to Note 8.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed
from the Company’s statement of financial position) when:
 The rights to receive cash flows from the asset have expired
Or
998
PROMIUS PHARMA LLC
 The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to
what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of its continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the
rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets

Aside from this note, other disclosures relating to impairment of financial assets (trade receivables) are included in Note 6.
The Company assesses, at each reporting date, whether there is objective evidence that a financial asset or a group of financial assets is impaired. An
impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the
estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include
indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in
the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are
individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar
credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an
impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is
discounted at the financial asset’s original EIR.
The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognised in the income statement. Interest income
(recorded as finance income in the income statement) continues to be accrued on the reduced carrying amount using the rate of interest used to discount
the future cash flows for the purpose of measuring the impairment loss. Loans, together with the associated allowance are written off when there is no
realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of
the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised
impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to finance costs in
the income statement.

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction
costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
999
PROMIUS PHARMA LLC
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IAS
39. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the income statement.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the
criteria in IAS 39 are satisfied. The Company has not designated any financial liability as at fair value through profit or loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the income statement.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
1,000
PROMIUS PHARMA LLC
c. Current versus non-current classification
The Company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when
it is:
 Expected to be realised or intended to sold or consumed in the normal operating cycle
 Held primarily for the purpose of trading
 Expected to be realised within twelve months after the reporting period
Or
 Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:

 It is expected to be settled in the normal operating cycle
 It is held primarily for the purpose of trading
 It is due to be settled within twelve months after the reporting period
Or
 There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
d. Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and stock options are recognized as a
deduction from equity, net of any tax effects.
e. Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs
directly attributable to bringing the asset to a working condition for its intended use. Borrowing costs that are directly attributable to the construction or
production of a qualifying asset are capitalized as part of the cost of that asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying
amount of property, plant and equipment and are recognized net within “other (income/expense, net)” in income statement.
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future
economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are
recognized in income statement as incurred.
Depreciation
Depreciation is recognized in income statement on a straight line basis over the estimated useful lives of property, plant and equipment. Leased assets
are depreciated over the shorter of the lease term and their useful lives. The depreciation expenses is included in the costs of the functions using the
asset. Land is not depreciated.
Leasehold improvements are depreciated over period of the lease agreement or the useful life, whichever is shorter.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the
change(s) are accounted for as a change in an accounting estimate in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and
Errors.
1,001
PROMIUS PHARMA LLC
Buildings
Computer equipment 3 - 5 years
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant and
equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
f. Goodwill and other Intangible assets

Goodwill
Goodwill represents the excess of consideration transferred, together with the amount of non-controlling interest in the acquiree, over the fair value of
the Company’s share of identifiable net assets acquired. Goodwill is measured at cost less accumulated impairment losses. In respect of equity
accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss on such an
investment is not allocated to any asset, including goodwill, that forms part of the carrying value of the equity accounted investee.
Other intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortization and
accumulated impairment losses.
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate.
Research and development

Expenditures on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognized in
the income statement when incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes. Development
expenditures are capitalized only if:
• development costs can be measured reliably;
• the product or process is technically and commercially feasible;
• future economic benefits are probable; and
• the Company intends to and has sufficient resources to complete development and to use or sell the asset.
The expenditures to be capitalized include the cost of materials and other costs directly attributable to preparing the asset for its intended use. Other
development expenditures are recognized in the income statement as incurred.
Payments to third parties that generally take the form of up-front payments and milestones for in-licensed products, compounds and intellectual
property are capitalized. The Company’s criteria for capitalization of such assets are consistent with the guidance given in paragraph 25 of International
Accounting Standard 38 (“IAS 38”) (i.e., receipt of economic benefits out of the separately purchased transaction is considered to be probable).
Acquired research and development intangible assets which are under development, are recognized as In-Process Research and Development assets
(“IPR&D”). IPR&D assets are not amortized, but evaluated for potential impairment on an annual basis or when there are indications that the carrying
value may not be recoverable. Any impairment charge on such IPR&D assets is recorded in the income statement under “Research and Development
expenses”.
Intangible assets relating to products in development, other intangible assets not available for use and intangible assets having indefinite useful life are
subject to impairment testing at each reporting date. All other intangible assets are tested for impairment when there are indications that the carrying
value may not be recoverable. All impairment losses are recognized immediately in the income statement.
Amortization
Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets or on any other basis that
reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the entity.
1,002
PROMIUS PHARMA LLC
Intangible assets that are not available for use are amortized from the date they are available for use.

Trademarks 3 - 12 years
Product related intangibles 5 - 15 years
Customer-related intangibles 1 -11 years
Other intangibles 3 - 15 years
The amortization period and the amortization method for intangible assets with a finite useful life are reviewed at each reporting date.

Intangible assets are de-recognized either on their disposal or where no future economic benefits are expected from their use. Losses arising on such de-
recognition are recorded in the income statement, and are measured as the difference between the net disposal proceeds, if any, and the carrying
amount of respective intangible assets as on the date of de-recognition.
g. Leases
At the inception of a lease, the lease arrangement is classified as either a finance lease or an operating lease, based on the substance of the lease
arrangement. A lease that transfers substantially all the risks and rewards incidental to ownership to the lessee is classified as a finance lease. All other
leases are classified as operating leases.
Finance leases
A finance lease is recognized as an asset and a liability at the commencement of the lease, at the lower of the fair value of the asset and the present value
of the minimum lease payments. Initial direct costs, if any, are also capitalized and, subsequent to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the
finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
Operating leases
Other leases are operating leases, and the leased assets are not recognized on the Company’s statements of financial position. Payments made under
operating leases are recognized in income statement on a straight-line basis over the term of the lease unless the payments to the lessor are structured to
increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.
Operating lease incentives received from the landlord are recognized as a reduction of rental expense on a straight line basis over the lease term.
h. Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net realizable
value. The cost of all categories of inventories is based on the weighted average method. Cost includes expenditures incurred in acquiring the
inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of finished
goods and work in progress, cost includes an appropriate share of overheads based on normal operating capacity. Stores and spares consists of packing
materials.Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory includes estimated
shelf life, planned product discontinuances, price changes, ageing of inventory and introduction of competitive new products, to the extent each of these
factors impact the Company’s business and markets. The Company considers all these factors and adjusts the inventory provision to reflect its actual
experience on a periodic basis.
i. Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Restructuring
A provision for restructuring is recognized when the Company has approved a detailed and formal restructuring plan, and the restructuring either has
commenced or has been announced publicly. Future operating costs are not provided.
1,003
PROMIUS PHARMA LLC
Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any
impairment loss on the assets associated with that contract.
Expected reimbursements for expenditures required to settle a provision are recognized only when receipt of such reimbursements is virtually certain.
Such reimbursements are recognized as a separate asset in the statement of financial position, with a corresponding credit to the specific expense for
which the provision has been made.
j. Revenue
Sale of goods
Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods
and the amount of revenue can be measured reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or
receivable, net of returns, sales tax and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer.
Profit share revenues

The Company from time to time enters into marketing arrangements with certain business partners for the sale of its products in certain markets. Under
such arrangements, the Company sells its products to the business partners at a non-refundable base purchase price agreed upon in the arrangement
and is also entitled to a profit share which is over and above the base purchase price. The profit share is typically dependent on the business partner’s
ultimate net sale proceeds or net profits, subject to any reductions or adjustments that are required by the terms of the arrangement. Such arrangements
typically require the business partner to provide confirmation of units sold and net sales or net profit computations for the products covered under the
arrangement.
Revenue in an amount equal to the base purchase price is recognized in these transactions upon delivery of products to the business partners. An
additional amount representing the profit share component is recognized as revenue in the period which corresponds to the ultimate sales of the
products made by business partners only when the collectability of the profit share becomes probable and a reliable measurement of the profit share is
available otherwise, recognition is deferred to a subsequent period pending satisfaction of such collectability and measurability requirements. In
measuring the amount of profit share revenue to be recognized for each period, the Company uses all available information and evidence, including any
confirmations from the business partner of the profit share amount owed to the Company, to the extent made available before the date the Company’s
Board of Directors authorizes the issuance of its financial statements for the applicable period.
Milestone payments and out licensing arrangements

Revenues include amounts derived from product out-licensing agreements. These arrangements typically consist of an initial up-front payment on
inception of the license and subsequent payments dependent on achieving certain milestones in accordance with the terms prescribed in the agreement.
Non-refundable up-front license fees received in connection with product out-licensing agreements are deferred and recognized over the period in
which the Company has continuing performance obligations. Milestone payments which are contingent on achieving certain clinical milestones are
recognized as revenues either on achievement of such milestones, if the milestones are considered substantive, or over the period the Company has
continuing performance obligations, if the milestones are not considered substantive. If milestone payments are creditable against future royalty
payments, the milestones are deferred and released over the period in which the royalties are anticipated to be paid.
Provision for chargeback, rebates and discounts

Provisions for chargeback, rebates, discounts and medicaid payments are estimated and provided for in the year of sales and recorded as reduction of
revenue. A chargeback claim is a claim made by the wholesaler for the difference between the price at which the product is initially invoiced to the
wholesaler and the net price at which it is agreed to be procured from the Company. Provisions for such chargebacks are accrued and estimated based
on historical average chargeback rate actually claimed over a period of time, current contract prices with wholesalers/other customers and estimated
inventory holding by the wholesaler.
Shelf stock adjustments

Shelf stock adjustments are credits issued to customers to reflect decreases in the selling price of products sold by the Company, and are accrued when
the prices of certain products decline as a result of increased competition upon the expiration of limited competition or exclusivity periods. These credits
are customary in the pharmaceutical industry, and are intended to reduce the customer inventory cost to better reflect the current market prices. The
determination to grant a shelf stock adjustment to a customer is based on the terms of the applicable contract, which may or may not specifically limit
the age of the stock on which a credit would be offered.
Sales Returns
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PROMIUS PHARMA LLC
The Company accounts for sales returns accrual by recording an allowance for sales returns concurrent with the recognition of revenue at the time of a
product sale. This allowance is based on the Company’s estimate of expected sales returns. The Company deals in various products and operates in
various markets. Accordingly, the estimate of sales returns is determined primarily by the Company’s historical experience in the markets in which the
Company operates. With respect to established products, the Company considers its historical experience of sales returns, levels of inventory in the
distribution channel, estimated shelf life, product discontinuances, price changes of competitive products, and the introduction of competitive new
products, to the extent each of these factors impact the Company’s business and markets. With respect to new products introduced by the Company,
such products have historically been either extensions of an existing line of product where the Company has historical experience or in therapeutic
categories where established products exist and are sold either by the Company or the Company’s competitors.
Services
Revenue from services rendered, which primarily relate to contract research, is recognized in profit or loss statement as the underlying services are
performed. Upfront non-refundable payments received under these arrangements are deferred and recognized as revenue over the expected period
over which the related services are expected to be performed.
Interest income
For all financial instruments measured at amortised cost and interest-bearing financial assets classified as AFS, interest income is recorded using the
effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument
or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in finance income in the income
statement.
k. Employee benefits
l. Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognized in the income statement except to the extent that it relates to
items recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to
the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can
be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realized.
m. Share-based payment transactions
Equity settled share based payments The grant date fair value of options granted to employees is recognized as an employee expense, with a corresponding
increase in equity. The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The
increase in equity recognized in connection with share based payment transaction is presented as a separate component in equity under “share based
payment reserve”. The amount recognized as an expense is adjusted to reflect the actual number of stock options that vest.
n. Recent accounting pronouncements

Standards issued but not yet effective and not early adopted by the Company
IFRIC 22, Foreign currency Transactions and Advance consideration

In December 2016, the IASB issued IFRIC Interpretation 22, “Foreign Currency Transactions and Advance Consideration,” which addresses the
exchange rate to use in transactions that involve advance consideration paid or received in a foreign currency. IFRIC Interpretation 22 is effective for
annual reporting periods beginning on or after January 1, 2018. The Company believes that the adoption of IFRIC 22 will not have a material impact on
its financial statements.
IFRIC 23, Uncertainty over Income Tax treatments

On June 7, 2017, the IFRS Interpretations Committee issued IFRIC 23, which clarifies how the recognition and measurement requirements of IAS 12
“Income taxes”, are applied where there is uncertainty over income tax treatments.
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PROMIUS PHARMA LLC
IFRIC 23 explains how to recognize and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment.
An uncertain tax treatment is any tax treatment applied by an entity where there is uncertainty over whether that treatment will be accepted by the
applicable tax authority. For example, a decision to claim a deduction for a specific expense or not to include a specific item of income in a tax return is
an uncertain tax treatment if its acceptability is uncertain under applicable tax law. The interpretation provides specific guidance in several areas where
previously IAS 12 was silent. IFRIC 23 applies to all aspects of income tax accounting where there is an uncertainty regarding the treatment of an item,
including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates.
The interpretation is effective for annual periods beginning on or after January 1, 2019. Earlier application is permitted. An entity can, on initial
application, elect to apply this interpretation either:
• retrospectively applying IAS 8, if possible without the use of hindsight; or
• retrospectively, with the cumulative effect of initially applying the interpretation recognized at the date of initial application as an adjustment to the
opening balance of retained earnings (or other component of equity, as appropriate).
The Company is in the process of evaluating the impact of IFRIC 23 on the financial statements and the period of adoption.
IFRS 9, Financial instruments

In July 2014, the IASB issued the final version of IFRS 9, “Financial instruments”. IFRS 9 significantly differs from IAS 39, “Financial Instruments:
Recognition and Measurement”, and includes a logical model for classification and measurement, a single, forward-looking “expected loss” impairment
model and a substantially-reformed approach to hedge accounting. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with
early application permitted.
Detailed below is a summary of the impact of IFRS 9 on the classifications of investments and the financial statements of the Company:
Classifica
Type of
tion
instrume Classification under IFRS 9
under
nt
IAS 39
Classified
as
available-
for-sale
financial
Investme
assets, Classified as debt instruments at fair value through profit and loss
nts in
with fair (“FVTPL”), with all the fair value changes on subsequent remeasurement
mutual
value recognized in the standalone income statement.
funds
difference
s
recognize
d in the
OCI.
All equity investments within the scope of IFRS 9 are measured at fair value.
Equity instruments which are held for trading and contingent consideration
Classified
recognized by an acquirer in a business combination to which IFRS 3 applies
as
are classified as FVTPL. For all other equity instruments, the Company may
available-
make an irrevocable election to present subsequent changes in the fair value
for-sale
in OCI. The Company may make such election on an instrument-by-
Investme financial
instrument basis. The classification shall be made on initial recognition and
nts in assets,
will be irrevocable.
equity with fair
If the Company decides to classify an equity instrument as at fair value
instrume value
through other comprehensive income (“FVTOCI”), then all fair value changes
nts difference
on the instrument, excluding dividends, are recognized in the OCI. There will
s
be no recycling of the amounts from OCI to the standalone income statement,
recognize
even on sale of the investment. However, the Company may transfer the
d in the
cumulative gain or loss within equity.
OCI.
Equity instruments included within the FVTPL category are measured at fair
value, with all changes recognized in the standalone income statement.
IFRS 15, Revenue from Contracts with Customers.
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PROMIUS PHARMA LLC
In May 2014, the IASB issued IFRS 15, “Revenue from Contracts with Customers”. This comprehensive new standard will
supersede existing revenue recognition guidance, and requires an entity to recognize revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were
not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for
multiple-element arrangements. IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2018, with early
adoption permitted.
The Company adopted IFRS 15 effective April 1, 2018, using the modified retrospective method. The adoption of IFRS 15 does
not have any significant impact on the Company’s recognition of revenues from product sales, service income and license fee.
IFRS 16, Leases
In January 2016, the IASB issued a new standard, IFRS 16, “Leases”. The new standard brings most leases on-balance sheet for lessees under a single
model, eliminating the distinction between operating and finance leases. Lessor accounting, however, remains largely unchanged and the distinction
between operating and finance leases is retained. IFRS 16 supersedes IAS 17, “Leases”, and related interpretations and is effective for periods beginning
on or after January 1, 2019. Earlier adoption of IFRS 16 is permitted if IFRS 15, “Revenue from Contracts with Customers”, has also been applied.
The Company is currently in the process of evaluating the impact of this new accounting standard on its financial statements.
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PROMIUS PHARMA LLC
4. Fair values measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
either:
 In the principal market for the asset or liability
Or
 In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
 Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
 Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
 Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks
of the asset or liability and the level of the fair value hierarchy, as explained above.
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PROMIUS PHARMA LLC
5. Property plant and equipment: The following is a summary of the change in carrying value of property, plant and
equipment.
Particulars Office equipment Computers Leased Assets Total
Gross Carrying Value
Balance as at April 1, 2016 3,613 355,136 69,741 428,490
Additions - - - -
Disposals - - - -
Balance as at March 31, 2017 3,613 355,136 69,741 428,490
Additions - 3,343 - 3,343
Disposals - - - -
Accumulated Depreciation
Depreciation during the year 353 - - 353
Disposals - - - -
Depreciation during the year - 464 - 464
Disposals - - - -
Net Carrying Value
As at April 01, 2016 353 - - 353
Total at April 01, 2016 2,470
As at March 31, 2017 - - - -
Total at March 31, 2017 3,343
As at March 31, 2018 - 2,879 - 2,879
Total at March 31, 2018 57,083
1,009
PROMIUS PHARMA LLC
6. Other intangible assets

The following is a summary of changes in carrying value of other intangible assets:
Patents & Trade Product related

Particulars Total
Marks intangibles
Gross carrying value

Balance as at April 1, 2016 153,450 48,531,231 48,684,681
Additions - 400,000 400,000
De–recognitions* - (3,833,984) (3,833,984)
Balance as at March 31, 2017 153,450 45,097,247 45,250,697

Additions - - -
De–recognitions - - -
Amortisation/Impairment Loss
Amortisation during the period - 6,203,419 6,203,419
Impairment loss - 400,000 400,000
De–recognitions* - (3,833,984) (3,833,984)

Amortisation during the period - 5,280,086 5,280,086
Impairment loss - - -
De–recognitions - - -
Net carrying amount

As at April 01, 2016 - 17,030,715 17,030,715
As at March 31, 2017 - 10,827,296 10,827,296
As at March 31, 2018 - 5,547,210 5,547,210
*During the year ended March 31, 2017, the Company de-recognised certain intangible assets which
were fully amortized and from which no future economic benefits were expected, either from use or from
their disposal.
Impairment loss recorded for the year ended March 31, 2017
As a result of the company’s decision to discontinue further development of certain in- process research
and development (IP R&D), an amount of USD 400,000 was recorded as impairment loss for the year
ended March 31, 2017 under research and development expenses in income statement. IP R&D assets
are included in Product related intangibles.
1,010
PROMIUS PHARMA LLC
7. Inventories
Inventories consist of the following:
As of
March 31, 2018 March 31, 2017
Finished goods 1,382,382 494,756
Total Inventories 1,382,382 494,756
During the years ended March 31, 2018 and 2017, the Company recorded inventory write-downs of USD 265,803 and USD
2,014,630 respectively. These adjustments are included as part of cost of revenues in the income statement.
Cost of revenues for the years ended March 31, 2018 and 2017 includes raw materials, consumables and changes in finished
goods and work in progress recognized in the income statement USD 4,275,248 and USD 3,594,469 respectively. Cost of
Revenues for the years ended March 31, 2018 and 2017, includes other expenditures recognized in the income statement of
USD 2,171,363 and USD 855,461 respectively.
8. Trade and Other receivables

As of
March 31, 2018 March 31, 2017
Trade and other receivables, net of chargebacks and rebates 9,072,558 9,077,991
Less: Allowance for doubtful trade receivables - -
Trade and other receivables, net 9,072,558 9,077,991
9. Other Assets
Other assets consist of the following:
As of
March 31, 2018 March 31, 2017
Current
Due from related parties (Note 19) 61,331,528 35,130,908
Other assets 1,691,460 2,243,745
63,466,372 37,823,921
Current
Deposits and other assets – non current 1,900,000 1,907,089
1,900,000 1,907,089
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PROMIUS PHARMA LLC
10. Cash and cash equivalents
Cash and cash equivalents consist of the following:
As of
March 31, 2018 March 31, 2017
Current
Cash balances - -
Balances with banks 303,266 87,726
Cash and cash equivalents on the statements of financial position 303,266 87,726
Cash and cash equivalents in the statement of cash flow 303,266 87,726
11. Share Capital

As of
March 31, 2018 March 31, 2017
Fully paid up capital 38,760,000 38,760,000
As at April 01 38,760,000 38,760,000
Add: Additional paid up share capital - -
As at March 31 38,760,000 38,760,000
The Company presently has only one class of equity shares. For all matters submitted to vote in a shareholders meeting of the
Company, every holder of an equity share, as reflected in the records of the Company on the date of the shareholders meeting
shall have one vote in respect of each share held.
12. Provisions
Provisions consist of the following:

As of
March 31, 2018 March 31, 2017
Sales returns 5,450,335 5,518,777
As at March 31 5,450,335 5,518,777
The details of changes in provisions during the year ended March 31 2018 March 31, 2017 are as follows:
Particulars March 31, 2018 March 31, 2017

Balance as at April 01 (5,518,777) (4,397,156)
Provision made during the year 2,504,595 5,077,365
Credits and payments during the year 2,573,037 3,955,744
Balance as at March 31 (5,450,335) (5,518,777)
13. Trade and other payables

Trade and other payables consist of the following:
As of
March 31, 2018 March 31, 2017
Due to related parties - -
Others trade payables 1,049,428 104,708
Capital creditors 13,892 -
Creditors for expenses 975,604 11,447,814
2,038,924 11,552,522
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PROMIUS PHARMA LLC
14. Other Liabilities
Other liabilities consist of the following:
As of
March 31, 2018 March 31, 2017
Current Liabilities
Accrued expenses 7,238,483 7,578,644
Other Current Liabilities 5,084,311 1,026,919
12,322,794 8,605,563
Non-current Liabilities
Others - 450,902
- 450,902
15. Other (income)/expense, net

Other (income)/ expense, net consist of the following:
For the year ended
March 31, 2018 March 31, 2017
Loss on sale of property, plant and equipment, net - -
Others (302,731) (3,591,588)
(302,731) (3,591,588)
16. Finance (income)/ expense

Finance (income)/ expense consist of the following:
For the year ended
March 31, 2018 March 31, 2017
Foreign exchange loss 8,859 33,910
460,035 396,839
17. Revenue
Revenue consists of the following:
March 31, 2018 March 31, 2017
Sales to third parties 37,402,128 24,318,839
Sales to related parties - 73,905
Licence Fees 22,500,000 -
Service income (Note 19) 1,644,029 407,291
61,546,157 24,800,035
1,013
PROMIUS PHARMA LLC
18. Operating leases

The Company leases offices, residential facilities and vehicles under operating lease agreements that are renewable
on a periodic basis at the option of both the lessor and the lessee. Some of these leases include rent escalation clauses. Rental
expense under these leases was USD 1,203,449 Nil and USD 22,199 for the years ended March 31, 2018 and March 31, 2017
respectively.
The schedule of future minimum rental payments in respect of non-cancellable operating leases is set out below:
For the year ended

Particulars
March 31, 2018 March 31, 2017
Less than one year - 22,199
Between one and five years - -
More than five years - -
- 22,199
19. Related parties

The Company has entered into transactions with the following related parties:
(a) Dr. Reddy’s Laboratories Limited(“Ultimate Parent Company ”)

(b) Dr. Reddy's Laboratories Inc. (“Parent company”)
(c) Dr. Reddy's Laboratories (Australia) Pty. Limited (“Company under common control”)
(d) Aurigene Discovery Technologies Limited (“Company under common control”)
(e) Dr. Reddy's Laboratories Tennessee, LLC(“Company under common control”)
(f) Dr. Reddy's Laboratories Louisiana LLC (“Company under common control”)
(g) Dr. Reddy's Laboratories SA (“Company under common control”)
The following is a summary of significant related party transactions:
For the year ended

Particulars
March 31, 2018 March 31, 2017
Loan from:
Sales to:
Sales to Dr. Reddy’s Laboratories (Australia) Pty. Limited 73,905
Service income from:

Profit share from Dr. Reddy’s Laboratories Inc. 1,644,029 407,291
Dr. Reddy’s Laboratories Limited 3,553,400
Expenses Reimbursements
Aurigene Discovery Technologies Limited 14,275
Dr. Reddy’s Laboratories (Australia) Pty. Limited 57,820
The Company has the following amounts due from related parties (included in trade receivables and other current
assets):
As of
Particulars
March 31, 2018 March 31, 2017
Dr. Reddy’s Laboratories Limited 2,500,016 2,500,016
Dr. Reddy's Laboratories Inc. 58,198,727 31,178,430
Aurigene Discovery Technologies Limited - 14,275
Dr. Reddy's Laboratories Tennessee, LLC 400,000 400,000
Dr. Reddy's Laboratories Louisiana LLC - 1,000,000
Total amounts due from related parties 61,331,528 35,130,908
1,014
PROMIUS PHARMA LLC
The Company has the following amounts due to related parties (Included in Current liabilities):
As of
Particulars
March 31, 2018 March 31, 2017
Dr. Reddy’s Laboratories Limited
Dr. Reddy's Laboratories Inc. (refer note a) 182,345,684 169,701,922
Dr. Reddy's Laboratories (Australia) Pty. Limited 115,409 -
Total amounts due to related parties 182,461,093 169,701,922
Note a:
Represents loans and borrowings received from group companies. Refer to Note 2(e) for details. These borrowings
are repayable on demand and hence presented as current liability in the financial statements.
1,015
PROMIUS PHARMA LLC
20. Income taxes
a. Income tax (expense)/benefit recognized in the income statement
Income tax (expense)/benefit recognized in the income statement consist of the following:
Particulars Years ended March 31
2018 2017
Current taxes (expense)/ benefit
Current taxes (expense)/ benefit 51,054,574 3,648,058
Current tax effect of net operation losses carry back (24,489,765) -
26,564,809 3,648,058
Deferred taxes (expense)/benefit
Deferred taxes (expense)/benefit 2,936,576 18,137,114
Impact on account of change in enacted tax rate (2,936,657)
(81) 18,137,114
Total income tax benefit in income statement 26,564,728 21,785,172
b. Income tax (expense)/benefit recognized directly in equity

There were no income tax expenses / benefits recognized directly in equity for the year ended March 31, 2018 and 2017.
c. Reconciliation of effective tax rate

Particulars For the year ended March 31
2018 2017
Loss before income taxes (11,654,918) (48,159,156)
Enacted tax rate in US 33.71% 37.37%
Computed expected tax benefit 3,928,919 17,996,113
Effect of change in tax laws and rate (2,936,657) -

Expenses not deductible for tax purposes 374,784 -
Effect of permanent differences (702,787) -
Others 83,503 -
Effect on account of tax allocation from the consolidated tax benefit/ (expense) of Parent
25,816,965 3,789,059
Company viz., Dr. Reddy’s Laboratories Inc., based on parent-down approach
Income tax benefit 26,564,727 21,785,172
Effective tax rate -227.93% -45.24%
(1) There are certain income-tax related legal proceedings that are pending against the Company. Potential liabilities, if any, have been
adequately provided for, and the Company does not currently estimate any material incremental tax liability in respect of these matters.
(2) The Company’s weighted average effective tax rates for the years ended 31 March 2018 and 31 March 2017 were (227.93)% and
(45.24)%, respectively. The effective tax rate for the year ended 31 March 2018 was higher compared to the year ended 31 March 2017
primarily on account of re-measurement of deferred tax assets and liabilities of the Company pursuant to the enactment of The Tax Cuts
and Jobs Act of 2017 in the United States on 22 December 2017. This has resulted in impact of USD (2,936,657) for the year ended 31
March 2018, primarily on account of a reduction in the federal income tax rate from 35% to 21%.
d. Unrecognized deferred tax assets and liabilities
During the financial year ending March 31, 2018 and 2017, the Company does not have any unrecognized deferred tax assets.
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PROMIUS PHARMA LLC
e. Deferred tax assets and liabilities
The tax effects of significant temporary differences that resulted in deferred tax assets and liabilities and a description of the items that
created these differences is given below:
2018 2017
Deferred tax assets/(liabilities):
Property plant and equipment 5,628,480 126,160
Operating loss carry forward (24,489,765) 24,489,765
Stock based compensation/ equity (1,064,644) 438,230
Accounts receivable 8,294,767 508,314
R&D credit (942,620) 942,620
Other current assets (1,648,196) 558,012
Intangibles - 41,322
Other current liabilities 14,221,897 (8,967,309)
Net deferred tax asset/(liabilities) (81) 18,137,114
In assessing the realizability of the deferred income tax assets, management considers whether some portion or all of the deferred income
tax assets will not be realized. The ultimate realization of the deferred income tax assets and tax loss carry forwards is dependent upon the
generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the
scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategy in making this assessment.
Based on the level of historical taxable income and projections of future taxable income over the periods in which the deferred tax assets
are deductible, management believes that the Company will realize the benefits of those recognized deductible differences and tax loss
carry forwards. The amount of deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future
taxable income are reduced. Periods in which the deferred tax assets are deductible, management believes that the Company will realize the
benefits of those recognized deductible differences and tax loss carry forwards.
f. Movement in temporary differences during the years ended March 31, 2018 and 2017:
The details of movement in deferred tax assets and liabilities are summarised below:
As at As at
Movement
March 31, 2017 March 31, 2018
Property, plant and equipment and intangibles (1,196,016) 5,628,480 4,432,464
Accounts receivable (6,965,529) 8,294,767 1,329,238
Stock based compensation 1,081,768 (1,064,644) 17,124
Other current assets 1,782,742 (1,648,196) 134,546
R and D credit 942,620 (942,620) -
Other current liabilities (14,221,876) 14,221,897 21
Operating losses carried forward 24,489,765 (24,489,765) -
Net deferred tax assets/(liabilities) 5,913,474 (81) 5,913,393
As at As at
Movement
March 31, 2016 March 31, 2017
Property, plant and equipment and intangibles (1,363,498) 167,482 (1,196,016)
Accounts receivable (7,473,843) 508,314 (6,965,529)
Stock based compensation 643,538 438,230 1,081,768
Other current assets 1,224,730 558,012 1,782,742
R and D credit - 942,620 942,620
Other current liabilities (5,254,568) (8,967,309) (14,221,876)
Operating losses carried forward - 24,489,765 24,489,765
Net deferred tax assets/(liabilities) (12,223,641) 18,137,114 5,913,474
1,017
PROMIUS PHARMA LLC
21. Employee stock incentive plan
Dr. Reddy’s Employees ADR Stock Option Plan 2007 (the “DRL 2007 Plan”):
Dr. Reddy’s Laboratories Limited, (“Ultimate Parent Company”) instituted the DRL 2007 Plan for all eligible employees in pursuance of the
special resolution approved by the shareholders in the Annual General Meeting held on July 27, 2005. The DRL 2007 Plan came into effect on
approval of the Board of Directors on January 22, 2007. The DRL 2007 Plan covers all employees and directors (excluding promoter directors) of
the Company. The Committee of the parent Company administers the DRL 2007 Plan and grants stock options to eligible employees. The
Committee determines which eligible employees will receive options, the number of options to be granted, the exercise price, the vesting period
and the exercise period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2007
Plan vest in periods ranging between one and four years and generally have a maximum contractual term of five years.
The DRL 2007 Plan provides for option grants in two categories:
Category A: Stock options reserved for grant having an exercise price equal to the fair market value of the underlying equity shares on the date of
grant; and
Category B: Stock options reserved for grant having an exercise price equal to the par value of the underlying equity shares (i.e., USD
0.12 per option).
Stock option activity under the DRL 2007 Plan for the two categories of options during the years ended March 31, 2018 and 2017 is as follows:
Category A — Fair Market Value Options: There were no options granted under this category as of March 31, 2018 and March 31, 2017.
Category B – Par Value Options Fiscal Year ended March 31, 2018
Weighted average
Weighted- remaining
Shares arising out average exercise contractual life
of options Exercise price price (months)
Outstanding at the beginning of the year ....... 5,650 USD 0.12 USD 0.12 68
Granted during the year ................................. 6,244 USD 0.12 USD 0.12 90
Expired/ Forfeited during the year (720) USD 0.12 USD 0.12 -
Exercised during the year .............................. (989) USD 0.12 USD 0.12 -
Outstanding at the end of the year ................. 10,185 USD 0.12 USD 0.12 72
Exercisable / vested at the end of the year ..... 1,506 USD 0.12 USD 0.12 43
Category B – Par Value Options Fiscal Year ended March 31, 2017
Weighted average
Weighted- remaining
Shares arising out average exercise contractual life
of options Exercise price price (months)
Outstanding at the beginning of the year ....... 7,900 USD 0.12 USD 0.12 70
Granted during the year ................................. 2,964 USD 0.12 USD 0.12 90
Expired/ Forfeited during the year (948) USD 0.12 USD 0.12 -
Exercised during the year .............................. (4,266) USD 0.12 USD 0.12 -
Outstanding at the end of the year ................. 5,650 USD 0.12 USD 0.12 68
Exercisable / vested at the end of the year ..... 850 USD 0.12 USD 0.12 39
The weighted average grant date fair value of par value options granted under category B of the DRL 2007 plan during the years ended March 31,
2018 and March 31, 2017 was USD 39.37 and USD 50.36 respectively.
The aggregate intrinsic value of options exercised under the DRL 2007 Plan during the year ended March 31, 2018 and 2017 was USD 35,179
and USD 47,023, respectively. As of March 31, 2018, options outstanding under the DRL 2007 Plan had an aggregate intrinsic value of USD
324,349 and options exercisable under the DRL 2007 Plan had an aggregate intrinsic value of USD 47,960.
1,018
PROMIUS PHARMA LLC
The fair value of stock options granted under the DRL 2007 Plan has been measured using the Black-Scholes-Merton model at the date of the
grant.
The Black-Scholes-Merton model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates.
In respect of par value options, the expected term of an option (or “option life) is estimated based on the vesting term, contractual term, as well as
expected exercise behavior of the employees receiving the option. In respect of Fair Market Value options, the option life is estimated based on
the simplified method. Expected volatility of the option is based on historical volatility, during a period equivalent to the option life, of the
observed market prices of the Company’s publicly traded equity shares. Dividend yield of the options is based on recent dividend activity. Risk-
free interest rates are based on the Indian government securities yield in effect at the time of the grant. These assumptions reflect management’s
best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside of Company’s control.
As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been materially impacted.
Further, if management uses different assumptions in future periods, stock based compensation expense could be materially impacted in future
years.
The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton model with the following assumptions:
Grants made on
May 11, 2017 July 26, 2016

Expected volatility 31.08% 29.88%
Exercise price Rs.5.00 Rs.5.00
Option life 2.5 Years 2.5 Years
Risk-free interest rate 6.69% 6.91%
Expected dividends 0.77% 0.60%
Grant date share price Rs.2,594.00 Rs.3,319.65
For the years ended March 31, 2018 and 2017 an amount of USD 138,258 and USD 36,368 respectively, has been recorded as employee share-
based payment expense under all employee stock incentive plans with a corresponding credit to the Additional paid in capital, disclosed as part of
stock holders’ equity, representing capital contribution by Dr. Reddy’s Laboratories Limited, the ultimate parent company. As of March 31, 2018,
there was approximately USD 137,054 of total unrecognized compensation cost related to unvested stock options. This cost is expected to be
recognized over a weighted-average period of 1.97 years.
22. Financial Instruments
Financial Instruments by category

Assets:
Trade and other receivables 8 9,072,558 - 9,072,558 9,072,558
Other assets* 9 61,331,528 - 61,331,528 61,331,528
Total 70,707,352 - 70,707,352 70,707,352
Liabilities:
Trade and other payables 13 - 2,038,924 2,038,924 2,038,924
Other liabilities and provisions 12 &14 - 17,406,483 17,406,483 17,406,483
Total - 201,906,500 201,906,500 201,906,500
1,019
PROMIUS PHARMA LLC

Assets:
Trade and other receivables 8 9,077,991 - 9,077,991 9,077,991
Other assets* 9 37,374,653 - 37,374,653 37,374,653
Total 46,540,370 - 46,540,370 46,540,370
Liabilities:
Trade and other payables 13 - 11,552,522 11,552,522 11,552,522
Other liabilities and provisions 12 &14 - 14,575,242 14,575,242 14,575,242
Total - 195,829,686 195,829,686 195,829,686
* Other assets that are not financial assets (such as receivables from statutory authorities, prepaid expenses, advances paid and certain other
receivables) of USD 4,034,844 and USD 449,268 as of March 31, 2018 and 2017, respectively, are not included.
* Other liabilities that are not financial liabilities (such as provision for employee benefits) of USD 366,646 and USD Nil as of March 31, 2018
and 2017, respectively, are not included.
Fair value hierarchy
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e., derived from prices).
Level 3 — Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
1,020
PROMIUS PHARMA LLC
23. Financial risk management
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk
management focus is to minimize potential adverse effects of market risk on its financial performance. The Company’s risk management assessment
and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to
monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes
in market conditions and the Company’s activities. The Board of Directors is responsible for overseeing Company’s risk assessment and management
policies and processes.
a. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
and arises principally from the Company’s receivables from customers and investment securities. Credit risk is managed through credit approvals,
establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal
course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect
of trade and other receivables and investments.
Trade and other receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer,
including the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. Credit risk is
managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company
grants credit terms in the normal course of business.
Financial assets that are past due but not impaired
The Company’s credit period for customers generally ranges from 20 – 180 days. The aging of trade receivables that are past due, net of allowance for
doubtful receivables, is given below:
Year ended
Period (in days) March 31, March 31,
2018 2017
00-90 853,141 -
90-180 11,409 -
More than 180 75,184 -
Total 939,734 -
See Note 9 for the activity in the allowance for impairment of trade account receivables. Other than trade receivables, the Company has no class of
financial assets that is past due but not impaired.
b. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by
raising additional funds from parent company or from group companies to meet the financial obligations.
As of March 31, 2018 and 2017 the Company had working capital deficit of USD 128,026,569 and USD 147,857,252 respectively. Based on the
projected cash flows and available lines of credit, the Company has sufficient resources to meet the capital expenditure needs and working capital
requirements over the course of the next 12 months.
Trade and other payables 2,038,924 - - - - 2,038,924
Total 201,906,500 - - - - 201,906,500
Trade and other payables 11,552,522 - - - - 11,552,522
Other liabilities and provisions 14,124,340 450,902 - - - 14,575,242
Total 195,378,784 450,902 - - - 195,829,686
1,021
PROMIUS PHARMA LLC
c. Market risk
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument.
The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes
that affect market risk-sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency
receivables and payables and short term/or long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk,
interest rate risk and the market value of its investments. Thus, the Company’s exposure to market risk is a function of investing and borrowing
activities and revenue generating and operating activities in foreign currencies.
Foreign exchange risk
The Company’s exchange risk arises from its foreign operations, foreign currency revenues and expenses. A significant portion of the Company’s
revenues are in reporting currency, USD. As a result, the Company is not exposed to significant foreign currency risk.
The following table analyse foreign currency risk from financial instruments as at March 31, 2018 and March 31, 2017:
Particulars INR AUD Euro GBP Total

Liabilities: (in USD)
Trade payables - - 80,096 - 80,096
Other Liabilities & Provisions - 115,409 - - 115,409
Total - 115,409 80,096 - 195,505
Particulars INR AUD Euro GBP Total

Liabilities: (in USD)
Trade payables - - - - -
Other Liabilities & Provisions - - 30,105 2,473 32,578
Total - - 30,105 2,473 32,578
For the year ended March 31, 2018 and 2018, every 10% depreciation/appreciation in the exchange rate between the U.S. Dollar and the respective
currencies for the above mentioned financial liabilities would affect the Company’s net profit by approximately USD 19,551 and USD 3,258
respectively.
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 derivative financial instruments or futures contracts to hedge
exposure to fluctuations in commodity prices.
1,022
PROMIUS PHARMA LLC
24. Nature of Expense
The following table shows the expenses by nature:

Employee benefits 7,539 22,876,064 671,603 23,555,206
Depreciation and amortization - 5,280,550 - 5,280,550
7,539 28,156,614 671,603 28,835,756

Employee benefits 18,372 15,260,393 1,624,099 16,902,864
Depreciation and amortization - 5,280,440 923,333 6,203,773
18,372 20,540,833 2,547,432 23,106,637
25. Employee benefits
The Company's employees participate in Dr. Reddy's Laboratories 401 (k) defined contribution retirement plan. The Company's
contribution is discretionary and is determined by its Board of Directors on an annual basis. The contribution made by the
Company for the year ended March 31, 2018 and 2017 was USD 683,687 and USD 570,239 respectively.
26. Subsequent events
There are no significant events that occurred after the balance sheet date.
1,023
To the Members of Reddy Antilles N.V.
We have audited the accompanying financial statements of Reddy Antilles N.V. a company
information.

2013.
1,024
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
1,025
Reddy Antilles N.V.
Balance Sheet
As at As at
ASSETS
Non current assets

Financial assets
Investments 2.1 - 171,263
Loans 2.2 88,128 44,481
88,128 215,744
Current assets
Financial assets
Cash and cash equivalents 2.3 456 1,485
Loans 2.2 - 891

Equity
Other equity
Total equity (263,845) (133,689)

Borrowings 2.6 338,586 336,899
338,586 336,899
Current liabilities
Other current financial liabilities 2.7 18,925 16,733
Liabilities for current tax, net 33 33


for and on behalf of the Board of Directors of Reddy Antilles N.V.
ICAI FRN : 002857S
PSRVV Surya Rao Satish Reddy

Partner Director
Place: Hyderabad
Date: 18 May 2018 1,026
Reddy Antilles N.V.

Other Income - 11,518

Total Income - 11,518
Expenses
Other expenses 2.8 130,156 1,554
Profit/(Loss) before tax (130,156) 9,964
Profit/(Loss) for the year (130,156) 9,964
Earnings per share:

Basic - Par value USD 1 per share (115.01) 8.80
Diluted - Par value USD 1 per share (115.01) 8.80


ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,027
Reddy Antilles N.V.
Cash Flow Statement

31 March 2018 31 March 2017
Profit/(loss) before taxation (130,156) 9,964
Loss on sale of investments 125,614 -
Net foreign exchange differences 960 (6,641)
Operating cash flows before working capital changes (3,582) 3,323

Other assets & liabilities,net (2,943) (972)
(6,525) 2,351
Income tax paid - -
Net cash flows from operating activities (6,525) 2,351

Purchase of investments in subsidiaries - (6,320)
Loans and advances repaid by wholly owned subsidiaries and other group companies 5,497 2,929
5,497 (3,391)
Net increase / (decrease) in cash and cash equivalents (1,028) (1,040)

Effect of foreign exchange gain on cash and cash equivalents (1) (20)
Cash and cash equivalents at the end of the year 456 1,485

Cash and cash equivalents at the end of the year 456 1,485
Cash and bank balances at the end of the year 456 1,485

ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,028
Reddy Antilles N.V.
2.4 Total equity
For the year ended 31 March, 2018

Balance as of 1 April 2016 1,131,646 52,279 (195,932) (143,653)
Profit/(Loss) for the period - - 9,964 9,964
Balance as of 31 March 2017 1,131,646 52,279 (185,968) (133,689)
Profit/(Loss) for the period (130,156) (130,156)
Balance as of 31 March 2018 1,131,646 52,279 (316,124) (263,845)
for A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Reddy Antilles N.V.
ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,029
Reddy Antilles N.V.

Reddy Antilles N.V. (" the Company") incorporated in the Netherlands, is a 100% subsidiary of Dr.Reddy's Laboratories Limited.

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and as
amended from time to time.

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Revenue
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably,
there is no continuing management involvement with the goods and the amount of revenue can be measured reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of
returns, sales tax and applicable trade discounts and allowances. Revenue includes shipping and handling costs billed to the customer.
Services Income
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of profit and loss as the underlying services are performed. Upfront non-refundable payments received under these
arrangements are deferred and recognised as revenue over the expected period over which the related services are expected to be performed.
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over the term of the contract. Some of these arrangements
include certain performance obligations by the Company. Revenue from such arrangements is recognised in the period in which the Company completes all its performance obligations.
Interest income primarily comprises of interest from term deposits with banks. Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. Interest income is included in other income in the statement of profit and loss.
Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the
effects of all dilutive potential ordinary shares, which includes all stock options granted to employees.

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1, Presentation of
financial statements.
Assets:
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement
by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax assets and liabilities are always disclosed as non-current.
Financial assets
All financial assets are recognised at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales
of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the company commits to
purchase or sell the asset.
Financial liabilities are classified, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Investments in Subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its
recoverable amount. On disposal of investments in subsidiaries , the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1 April 2015.
Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement of profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised
in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit;
differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future; and taxable temporary differences arising upon the initial
recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
1,030
Reddy Antilles N.V.
Inventories
Inventories consist of raw materials, stores and spares, work in progress and finished goods and are measured at the lower of cost and net realizable value. The cost of all categories of inventories is based on the weighted average
method. Cost includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of finished goods and work in
progress, cost includes an appropriate share of overheads based on normal operating capacity. Stores and spares, that do not qualify to be recognised as property, plant and equipment, consists of packing materials, engineering
spares (such as machinery spare parts) and consumables (such as lubricants, cotton waste and oils), which are used in operating machines or consumed as indirect materials in the manufacturing process.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable inventory include estimated shelf life, planned product discontinuances, price changes, ageing of inventory
and introduction of competitive new products, to the extent each of these factors impact the Company’s business and markets. The Company considers all these factors and adjusts the inventory provision to reflect its actual
experience on a periodic basis.
Foreign currencies
Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date
are translated into the functional currency at the exchange rate at that date. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. Exchange differences arising on the settlement of monetary items or
on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in the statement of profit and loss in the period in
which they arise.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those cash flows had occurred at the measurement date.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to a working condition for its intended use. General and specific borrowing costs that are directly attributable to
the construction or production of a qualifying asset are capitalised as part of the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised in the statement
of profit and loss.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its
cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit and loss as incurred.
Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair value, unless the exchange transaction lacks commercial substance or the fair value of either the asset received or
asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of the asset given up.
Depreciation
Depreciation is recognised in the statement of profit and loss on a straight line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their
useful lives. The depreciation expense is included in the costs of the functions using the asset. Land is not subject to depreciation.
Buildings
Schedule II to the Companies Act, 2013 (“Schedule”) prescribes the useful lives for various classes of tangible assets. For certain class of assets, based on the technical evaluation and assessment, the Company believes that the
useful lives adopted by it best represent the period over which an asset is expected to be available for use. Accordingly, for these assets, the useful lives estimated by the Company are different from those prescribed in the
Schedule.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date and the cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-
progress. Assets not ready for use are not depreciated.
Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.
Restructuring
A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating costs are not
provided.
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is
measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss
on the assets associated with that contract.
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such reimbursements are recognised as a separate asset in the statement of
financial position, with a corresponding credit to the specific expense for which the provision has been made.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation
in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are
recognised in the period in which the change occurs.

Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in
value. For this purpose, “short-term” means investments having maturity of three months or less from the date of investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are
included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Trade receivables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are presented as current liabilities unless payment is not
due within twelve months after the reporting period. They are recognised initially ate fair value and subsequently measured at amortised cost using the effective interest method.
1,031
Reddy Antilles N.V.
1.1 Going Concern

The accounts have been prepared on Going Concern basis, as the company is supported by its parent company in its activities and
financial affairs.
The company has the following amounts due from/to related parties :
As at As at
Particulars
31 March 2018 31 March 2017
Due from holding company and other group companies(included in loans and
advances):
Reddy Netherlands B.V. 16,773 21,793
OOO DRS LLC 22,350 22,688
Dr. Reddy's Research and development B.V. 48,997 -
Eurobridge Consulting B.V. 9 -
Due to holding company and other group companies(included in non current

borrowings and current financial liabilities):
1.3 Taxation
a. Current Taxes
The Company is not liable to pay any current taxes on account of current year losses, brought forward losses and unabsorbed
depreciation.
b. Deferred Taxes


and license fee.
1,032
Reddy Antilles N.V.
Financial Assets
As at As at
Investments carried at cost 31 March 2018 31 March 2017
2.1 : Investments in subsidiary companies
Equity shares (fully paid up)
NIL( 31 March 2017: 82,000) ordinary shares of EURO 10 each of Eurobridge Consulting B.V. - 171,263
- 171,263
*The shares held in Eurobridge Consulting B.V. have been transferred to Dr. Reddy's Research and development B.V. during the year ended 31 March 2018.
As at As at
31 March 2018 31 March 2017
Loans and advances to wholly owned subsidiaries & other group companies 88,128 44,481
Other advances - 891
88,128 45,372
Current - 891
Non Current 88,128 44,481
88,128 45,372
As at As at
31 March 2018 31 March 2017
- On current accounts 456 1,485
456 1,485
As at As at
31 March 2018 31 March 2017
2.4 : Other assets
Other Current assets
Others 5,049 1,789
5,115 1,856
1,033
Reddy Antilles N.V.
2.5 : Share capital

As at As at
31 March 2018 31 March 2017
1,131,646 shares (previous year : 1,131,646) of USD 1 each 52,279 52,279


52,279 52,279

31 March 2018 31 March 2017
Amount Amount
shares shares
Number of shares outstanding at the beginning of the year 1,131,646 52,279 1,131,646 52,279
Number of shares outstanding at the end of the year 1,131,646 52,279 1,131,646 52,279

The company has only one class of equity shares having a par value of USD 1 per share. Each holder of equity shares is entitled to one vote per
share.

As at As at
31 March 2018 31 March 2017
Particulars
No. of equity % holding in the No. of equity % holding in the
shares held class shares held class
Dr. Reddy's Laboratories Limited 1,131,646 100% 1,131,646 100%
2.6 : Borrowings
As at As at
Non-current Borrowings 31 March 2018 31 March 2017
From other parties

Long term borrowings from holding company 338,586 336,899
338,586 336,899

As at As at
31 March 2018 31 March 2017
Other liabilities - 201
Due to holding company and other group companies 18,925 16,532
18,925 16,733

31 March 2018 31 March 2017
Foreign exchange loss,net 2,955 -
Loss on sale of investments 125,614 -
130,156 1,554
1,034

Reddy Holding GmbH,
Augsburg
Report on the voluntary audit of the
annual financial statements as at March 31, 2018

Auditor
Tax advisor
Bernhard Hall
Ravenspurgerstrasse 41
86150 Augsburg
1,035

Contents Page
Directory of Annexes 3
List of abbreviations 3

A. Audit mandate 4
B. Basic determinations 4

Opinion on the assessment of the Management Board 4
C. Object, nature and scope of the audit 5
D. Findings and notes on accounting 7

I. Regularity of accounting 7
1. Accounting records and other audited documents 7
2. Annual financial statements 7
II. Overall presentation of the annual financial statements 8
1. Determinations of the overall presentation of the annual financial statements 8
2. Significant valuation policies and changes to those policies 8
3. Measures influencing individual items 8
4. Classifications and notes 9
E. Presentation of the audit opinion and final remarks 11

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Directory of Annexes
Annex 1 Balance sheet as at March 31, 2018
Annex 2 Income statement for fiscal 2017/18
Annex 3 Income statement for fiscal 2017/18
Annex 4 Audit opinion
General Terms and Conditions for Auditors and Auditing Companies dated January 1, 2017

List of abbreviations
€ euro
Company Reddy Holding GmbH
HGB Handelsgesetzbuch (German Commercial Code)
HR Commercial register
IDW Institut der Wirtschaftsprüfer in Deutschland e. V., Düsseldorf
IDW PS 400 IDW Auditing Standard “Principles for the proper issuing of audit opinions for statu‐
tory audits”
IDW PS 450 IDW Auditing Standard “Principles of proper reporting for statutory audits”
ICS Internal control system
AS Auditing standard
T€ Thousands of euros
PY Prior year

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A. Audit mandate
The Management Board of Reddy Holding GmbH, Augsburg, Germany – hereinafter also referred to
as “Reddy Holding” or “Company” – has commissioned me to audit the annual financial statements
as at March 31, 2018, including the underlying accounting practices, for compliance with profession‐
al principles, and to report on the results of my audit in writing.
The auditing mandate was issued to me by the Management Board on March 23, 2018.
The Company is to be classified as a small company in accordance with the criteria set out in section
267, para. 1 HGB and is therefore not subject to audit pursuant to section 316 et seq. HGB. However,
a voluntary audit of the financial statements is to be carried out.
I confirm, in accordance with section 321, para. 4a HGB, that I have observed the applicable rules on
independence in carrying out my audit of the financial statements.
In the following report, which was prepared in accordance with the principles of proper reporting for
audits of financial statements (IDW PS 450), I report on the nature, extent and results of my audit.
In Section B, the report provides in advance my opinion on the Management Board’s assessment.
The audit procedure and audit results are described in detail in Sections C and D. The unqualified
audit opinion issued on the basis of the audit is set forth in Section E.
I have attached the audited financial statements, consisting of the balance sheet (Annex 1), the in‐
come statement (Annex 2) and the notes to the financial statements (Annex 3) to my report.
The “General Terms and Conditions for Auditors and Auditing Companies dated January 1, 2017”
that have been agreed upon and that are annexed to this report form the basis for the execution of
the mandate and my responsibility, including in relation to third parties.

B. Basic determinations
Opinion on the assessment of the Management Board
In principle, the CEO must assess the economic situation of the Company in the management re‐
port. Small capital companies are not under a legal obligation to draw up a management report. Nor
has the Management Board voluntarily prepared a management report. Consequently, as a statuto‐
ry auditor, I do not have any obligation to comment on the assessment of the Company’s situation
by the legal representatives, as would otherwise be expressed in the management report.

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C. Object, nature and scope of the audit
The object of the audit included the accounting and annual financial statements as at March 31, 2018
(Annexes 1 to 3), and compliance with the relevant legal requirements regarding the accounting and
the supplementary provisions of the articles of association.
Verification of compliance with other legal provisions only falls within the scope of the statutory
audit to the extent that these other provisions normally impact the annual financial statements. In
this respect, a review of the nature and appropriateness of the insurance coverage, in particular
whether all risks were taken into account and sufficiently insured, was not included in my audit
mandate.
The Management Board of the Company is responsible for the accounting and the preparation of
the financial statements as well as the information provided to me. My task is to assess the docu‐
ments submitted by the Management Board and the information provided in the context of my au‐
dit.
I conducted the audit work in the offices of the Company in Augsburg and at my office in Augsburg
in April and May 2018. The audit report was then finalized. In preparation for the final audit, I carried
out a preliminary audit in March 2018, during which the internal control system (ICS) was also audit‐
ed.
The starting point for my audit was the annual financial statements prepared by the Company as at
March 31, 2018. The annual financial statements as at March 31, 2017, were adopted as such by the
shareholders’ resolution of April 27, 2017.
I used the accounting records, the receipts and the files and documents of the Company as audit
documents.
All information, explanations and documentary evidence requested by me have been willingly pro‐
vided by the Management Board and the employees appointed to provide information. In addition
to this, the Management Board has confirmed to me in the declaration of completeness that is
standard for the profession that the accounts and the annual financial statements to be audited in‐
corporate all assets, obligations, risks and accruals that are subject to accounting, including all ex‐
penses and income, that all necessary information has been provided and that all existing contin‐
gent liabilities have been disclosed to me. There were no significant events that occurred after the
end of the fiscal year according to the information in the notes and none became known to me dur‐
ing my audit.
I conducted my audit of the financial statements in accordance with section 316 et seq. HGB and the
generally accepted standards in Germany for the audit of financial statements set out by the IDW.
Accordingly, I have planned and performed my audit with an orientation towards problems – but
without any special focus on auditing for embezzlement – in such a way that irregularities and statu‐
tory violations materially affecting the presentation of the Company’s net assets, financial position
and results of operations in the annual financial statements in accordance with standard accounting
practices could have been detected with reasonable assurance.
The audit included assessing the accounting principles used and significant estimates made by the
Company’s Management Board, as well as evaluating the overall presentation of the annual financial
statements.
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The audit was based on planning of the audit focal areas, taking into account my preliminary as‐
sessment of the Company’s situation and an assessment of the effectiveness of the accounting‐
related internal control system (risk‐oriented audit approach). The assessment was based in particu‐
lar on findings related to the legal and economic framework conditions. Industry risks, corporate
strategy and the resulting business risks are known from discussions with the Management Board
and employees of the Company.
The risk areas identified in the audit planning resulted in the following focal areas of the audit:
 Audit of liabilities to financial institutions;
 Valuation of the shares of betapharm Arzneimittel GmbH;
 Valuation of tax provisions.
On the basis of a provisional assessment of the internal control system (ICS), I have followed the
principles of materiality and economic efficiency when defining the further audit procedures. The
audit of the structure of the ICS was intended to ensure, in particular, the rules governing the regu‐
larity and reliability of the Company’s accounts, the continued existence of the Company and the
preservation of existing assets, including preventing or exposing asset misappropriation.
Both the analytical audit procedures and the individual case studies were therefore carried out on
the basis of selected samples, taking into account the importance of the audit areas, the organiza‐
tion of the accounting and the findings of the audit of the ICS. The samples were consciously select‐
ed in such a way as to take account of the economic importance of the individual items in the annual
financial statements and to enable adequate auditing for compliance with statutory accounting re‐
quirements.
To audit the Company’s assets and liabilities, I have obtained, among other things, a confirmation
from the bank with which the Company has business relations.

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1,040

D. Findings and notes on accounting

I. Regularity of accounting
1. Accounting records and other audited documents
The accounting (financial and asset accounting records) as well as the preparation of the annual
financial statements of the Company are carried out by employees of the Company. The Company
uses the programs of SAP in this process. Payroll accounting has been outsourced to an external
service provider.
The accounting‐related internal control system set up by the Company provides rules for the organi‐
zation and control of work processes that are appropriate to the business purpose and scope. The
accounting procedures did not undergo any significant organizational changes during the reporting
period.
The organization of the accounting records system and the accounting‐related internal control sys‐
tem make possible the complete, accurate, timely and orderly recording and booking of business
transactions. The chart of accounts is adequately structured, and the document system is clearly
organized. The books were appropriately opened with the figures from the previous year’s balance
sheet and were altogether kept properly during the entire fiscal year.
The information obtained from the other audited documents resulted in the proper presentation in
the accounting records and the annual financial statements.
Overall, it can be stated that the accounting records and the other audited documents comply with
legal requirements, including the principles of proper accounting and the supplementary provisions
of the articles of association. The audit revealed no issues.

2. Annual financial statements
The present annual financial statements as at March 31, 2018, were drawn up in accordance with the
provisions of German commercial law and the supplementary provisions of the articles of associa‐
tion. Partial use was made of the size‐dependent simplifications for the preparation of annual finan‐
cial statements.
The balance sheet and income statement are properly derived from the accounting records and oth‐
er documents that were audited. The classification of the balance sheet is based on the provisions of
section 266, para. 2 and 3 HGB. The income statement was prepared in accordance with section 275,
para. 2 HGB using the total cost (nature of expense) method. If there are optional presentation
methods in the balance sheet or the income statement, the corresponding disclosures are largely
made in the notes.
The accounting and valuation methods applied to the balance sheet and the income statement are
adequately explained in the notes prepared by the Company. All individual disclosures required by
law as well as the optional disclosures on the balance sheet and the income statement, which are
included in the notes, are completely and accurately presented.
7 of 12
1,041

The annual financial statements thus comply with legal requirements, including the principles of
proper accounting and the supplementary provisions of the articles of association. The audit re‐
vealed no issues.

II. Overall presentation of the annual financial statements
1. Determinations of the overall presentation of the annual financial statements
Based on the findings of my audit, the annual financial statements as a whole, i.e. as an overall
presentation of the annual financial statements – as determined by the combination of the balance
sheet, the income statement and the notes to the financial statements – give a true and fair view of
the Company’s net assets, financial position and results of operations in accordance with the princi‐
ples of proper accounting.
2. Significant valuation policies and changes to those policies
The following accounting and valuation methods were used in preparing the annual financial state‐
ments of the Company:
 Accounting and valuation are carried out under the assumption of continuation of the business
activities
The accounting and valuation policies were unchanged from the prior year. In addition, please see
the explanations in the notes to the financial statements.

3. Measures influencing individual items
The findings of my audit did not reveal any reportable facts resulting from substantive measures in
the audit period with a significant impact on the overall presentation of the annual financial state‐
ments.

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4. Classifications and notes
The main items in the balance sheet and the income statement are broken down and explained be‐
low.
Increase in overall performance and decline in net income
The overall performance is as follows:
2017/18 2016/17 Change

T€ % T€ % T€ %
Sales revenues 1,918 91.9 1,918 1.0 0 0.0

Other operating income 169 8.1 187,318 99.0 ‐187,149 ‐99.9
Overall performance 2,087 100.0 189,236 100.0 ‐187,149 ‐98.9
Sales revenues include the management fee for the Company’s services that are provided to subsidi‐
aries. The Company provides services in the areas of finance, accounting, information technology,
human resources, legal advice, administration and management.
Other operating income is mainly attributable to income from other accounting periods due to the
release of other provisions (€132,000; prior year: €318,000). In the prior year, it also included income
from the write‐up of shares in betapharm Arzneimittel GmbH amounting to €187,000,000.
The reconciliation of the overall performance to net income is shown below.
2017/18 2016/17 Change

T€ % T€ % T€ %
Overall performance 2,087 100.0 189,236 100.0 ‐187,149 ‐98.9

Personnel expense ‐1,222 ‐58.5 ‐1,499 ‐0.8 277 18.5
Other operating expenses ‐459 ‐22.0 ‐519 ‐0.3 60 11.6
Income from profit transfers 14,721 > 100.0 47,085 > 100.0 ‐32,364 ‐68.7
Net interest ‐580 ‐27.8 ‐1,078 ‐0.6 498 46.2
Tax expense ‐3,373 > ‐100.0 ‐10,372 > ‐100.0 6,999 67.5
Net income 11,174 > 100.0 222,853 > 100.0 ‐211,679 ‐95.0
The net income for the year is significantly influenced by the profit transfer of betapharm Arzneimit‐
tel GmbH. Fiscal unity exists with this subsidiary, which means that the income from the profit trans‐
fer is taxable at the level of Reddy Holding. Personnel expense and other operating expenses include
the administrative costs relating to the administration of the shareholding.
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1,043

Increase in balance sheet total
The decrease in the balance sheet total to €187,974,000 results from the repayment of liabilities. The
financial resources required for this came mainly from incoming payments from affiliated companies
settling their commitments to Reddy Holding GmbH and from cash inflows from the annual profit.
March 31, 2018 March 31, 2017 Change

T€ % T€ % T€ %
Equity 111,508 59.3 100,334 46.4 11,174 11.1

Provisions 13,916 7.4 14,394 6.7 ‐478 ‐3.3
Liabilities 62,550 33.3 101,412 46.9 ‐38,862 ‐38.3
Balance sheet total 187,974 100.0 216,140 100.0 ‐28,166 ‐13.0
Increase in equity ratio
The equity ratio was increased this year. As a result, the Company’s assets are mainly financed by
equity. The provisions relate primarily to the tax provisions. The vast majority of the liabilities are
attributable to liabilities to financial institutions, to Dr. Reddy’s Laboratories, Switzerland, and to
betapharm Arzneimittel GmbH.
March 31, 2018 March 31, 2017 Change

T€ % T€ % T€ %
Fixed assets 187,100 99.5 187,100 86.6 0 0.0

Receivables, cash 874 0.5 29,040 13.4 ‐28,166 ‐97.0
Negative equity 0 0.0 0 0.0 0 0.0
Balance sheet total 187,974 100.0 216,140 100.0 ‐28,166 ‐13.0
The fixed assets relate to the 100% stake in betapharm Arzneimittel GmbH amounting to
€187,000,000 and the 100% stake in beta Institut gGmbH amounting to €100,000.

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E. Presentation of the audit opinion and final remarks
After the conclusion of my audit, I have issued the following unqualified audit opinion on the annual
financial statements as at March 31, 2018 (Annexes 1 to 3) of Reddy Holding GmbH, Augsburg, Ger‐
many, dated May 14, 2018, which is reproduced here:
“Audit opinion
I have audited the annual financial statements consisting of the balance sheet, income statement
and notes, including the accounting records of Reddy Holding GmbH for the fiscal year from April 1,
2017, to March 31, 2018. The accounting methods and preparation of the annual financial state‐
ments under German commercial law and the supplementary provisions of the articles of associa‐
tion are the responsibility of the legal representatives of the Company. My responsibility is to ex‐
press an opinion on the annual financial statements including the accounting records based on my
audit.
I conducted my audit of the annual financial statements in accordance with section 317 HGB and
generally accepted standards in Germany for the audit of financial statements set out by the Insti‐
tute of Public Auditors in Germany (IDW). Those standards require that I plan and perform the audit
such that misstatements materially affecting the presentation of the net assets, financial position
and results of operations in the annual financial statements in accordance with standard accounting
practices are detected with reasonable assurance. Knowledge of the business activities and the eco‐
nomic and legal environment of the Company and expectations as to possible misstatements are
taken into account in the determination of audit procedures. The effectiveness of the accounting‐
related internal control system and the evidence supporting the disclosures in the accounting rec‐
ords and annual financial statements are examined primarily on a test basis within the framework of
the audit. The audit includes assessing the accounting principles used and significant estimates
made by the Company’s legal representatives, as well as evaluating the overall presentation of the
annual financial statements. I believe that my audit provides a reasonable basis for my opinion.
My audit has not led to any reservations.
In my opinion, based on the findings of my audit, the annual financial statements comply with legal
requirements and the supplementary provisions of the articles of association and give a true and fair
view of the Company’s net assets, financial position and results of operations in accordance with
standard accounting practices.”

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1,045

I make the above audit report concerning Reddy Holding GmbH in accordance with the legal provi‐
sions and the principles of proper reporting for audits of financial statements.
Any use of the above‐mentioned audit opinion outside this audit report requires my prior consent. In
the event of publications or dissemination of the financial statements in a form deviating from the
confirmed version (including translation into other languages), it is first necessary to obtain my opin‐
ion again if my opinion is cited or reference is made to my audit; please see section 328 HGB.
Augsburg, May 14, 2018
Auditor

12 of 12
1,046

ANNEXES

1,047
Reddy Holding GmbH, Augsburg
Assets
Notes March 31, 2018 March 31, 2017
EUR EUR
A. Fixed assets
I. Financial assets
Shares in affiliated companies 187,100,000.00 187,100,000.00
187,100,000.00 187,100,000.00
B. Current assets
I. Receivables and other assets II.1
1. Receivables from affiliated
companies II.2+3 422,902.10 29,002,719.38
2. Other receivables and
assets 322,876.82 4,674.78
745,778.92 29,007,394.16
II. Cash and bank balances 128,483.07 33,040.11
874,261.99 29,040,434.27
Total assets 187,974,261.99 216,140,434.27
1,048

Liabilities
Notes March 31, 2018 March 31, 2017
EUR EUR
A. Equity
I. Subscribed capital 27,000.00 27,000.00

II. Capital reserve 300,000,000.00 300,000,000.00
III. Loss carry-forward -199,693,228.33 -422,546,626.80
IV. Net income 11,173,979.14 222,853,398.47
111,507,750.81 100,333,771.67
B. Provisions
1. Provision for taxes 13,461,791.71 13,809,401.08

2. Other provisions 454,031.68 585,213.86
13,915,823.39 14,394,614.94
C. Liabilities II.4
1. Liabilities to financial institutions 42,058,590.00 0
2. Trade payables 2,787.64 139,934.11
3. Liabilities to affiliated companies II.5 20,474,136.40 99,559,807.90
4. Other liabilities II.6 15,173.75 1,712,305.65
62,550,687.79 101,412,047.66
Total liabilities 187,974,261.99 216,140,434.27
1,049

Reddy Holding GmbH, Augsburg
Income statement for the period

from April 1, 2017 to March 31, 2018
Notes 2017/2018 2016/2017

EUR EUR
1. Sales revenues 1,918,000.08 1,918,000.00

2. Other operating income 168,734.15 187,318,445.04
2,086,734.23 189,236,445.04
3. Personnel expense
a) Wages and salaries -1,052,304.39 -1,298,634.33
b) Social security payments -169,395.92 -200,494.74
4. Other operating expenses -459,439.77 -518,580.78
5. Income from profit transfers 14,721,499.29 47,084,682.59
6. Other interest and similar income 0.00 0.00
7. Interest and similar expenses II.7 -580,170.77 -1,077,792.98
8. Taxes on income -3,382,197.22 -10,371,972.09
9. Other taxes 9,253.69 -254.24
10. Net income 11,173,979.14 222,853,398.47
1,050

for fiscal year 2017/2018
I. General comments on accounting and valuation methods

The accounting and valuation methods used are explained below.
I.1 Financial assets are recognized at cost. In addition, impairment charges for
expected permanent impairment were made in the past in order to recognize
them at the lower value attributable to them at the balance sheet date. If the
reasons for an impairment no longer exist, the lower fair value may no
longer be retained. Accordingly, a write-up was recognized in fiscal
2016/17.
I.2 Receivables and other assets are recognized at nominal value, taking into
consideration all identifiable risks.
I.3 Cash balances at financial institutions are recognized at nominal value.
I.4 Equity capital is recognized at nominal value.
I.5 Other provisions are recognized at the settlement amounts deemed

necessary on the basis of a reasonable commercial assessment and taking
into consideration all identifiable risks.
I.6 Liabilities are recognized at their settlement amount.
II. Notes to the balance sheet and income statement
II.1 All receivables are due within one year.
1,051

II.2 Receivables from affiliated companies mainly comprise entitlements to profit
transfer from a subsidiary.
II.3 Fiscal unity exists with the subsidiary betapharm Arzneimittel GmbH. Tax
provisions include the expected tax liabilities of the last three fiscal years.
II.4 The liabilities total €62,550,688 (prior year: €101,412,048). These include
€20,550,688 that are due within a year (prior year: €101,412,048) and
€42,000,000 that are due within between one and five years (prior year: €0).
There are no liabilities with a remaining term of more than five years.
II.5 Liabilities to affiliated companies include liabilities to shareholders in the

amount of €12,272,373 (prior year: €98,749,722).
II.6 Other liabilities include tax liabilities in the amount of €12,121 (prior year:
€1,711,481).
II.7 Interest expenditure includes interest paid to affiliated companies in the

amount of €220,515 (prior year: €1,065,551).
III. Other notes
III.1 Reddy Holding GmbH with head office in Augsburg, Germany, is registered
with the Augsburg District Court under HRB 21913. The Company is
classified as a small capital company under section 267, para. 1 HGB.
III.2 Dr. Reddy’s Laboratories Limited, Hyderabad, India, prepares the

consolidated financial statements for the largest and smallest scope of
consolidation.
III.3 Reddy Holding GmbH is incorporated in the consolidated financial

statements of Dr. Reddy’s Laboratories Limited. Reddy Holding GmbH is
exempt from the preparation of consolidated financial statements and a group
management report and avails itself of this simplification provision. The
exempting consolidated financial statements and the exempting group
management report have been prepared in accordance with the international
accounting standards referred to in section 315a, para. 1 HGB. The relevant
accounting, valuation and consolidation methods in the exempting
consolidated financial statements differ only immaterially from those in
German law.
1,052

III.4 An average of 14 (prior year 17) employees were employed during the
fiscal year.
III.5 There were no significant events that occurred after the end of the fiscal
year and were not taken into account in either the income statement or the

balance sheet.
Dr. Clemens J. Troche

CEO

1,053

Annex 4

Audit opinion

I have audited the annual financial statements consisting of the balance sheet, income statement
and notes, including the accounting records of Reddy Holding GmbH, Augsburg, for the fiscal year
from April 1, 2017, to March 31, 2018. The accounting methods and preparation of the annual
financial statements under German commercial law and the supplementary provisions of the articles
of association are the responsibility of the legal representatives of the Company. My responsibility is
to express an opinion on the annual financial statements including the accounting records based on
my audit.
I conducted my audit of the annual financial statements in accordance with section 317 HGB and
generally accepted standards in Germany for the audit of financial statements set out by the
Institute of Public Auditors in Germany (IDW). Those standards require that I plan and perform the
audit such that misstatements materially affecting the presentation of the net assets, financial
position and results of operations in the annual financial statements in accordance with standard
accounting practices are detected with reasonable assurance. Knowledge of the business activities
and the economic and legal environment of the Company and expectations as to possible
misstatements are taken into account in the determination of audit procedures. The effectiveness of
the accounting‐related internal control system and the evidence supporting the disclosures in the
accounting records and annual financial statements are examined primarily on a test basis within
the framework of the audit. The audit includes assessing the accounting principles used and
significant estimates made by the Company's legal representatives, as well as evaluating the overall
presentation of the annual financial statements. I believe that my audit provides a reasonable basis
for my opinion.
My audit has not led to any reservations.
In my opinion, based on the findings of my audit, the annual financial statements comply with legal
requirements and the supplementary provisions of the articles of association and give a true and fair
view of the Company's net assets, financial position and results of operations in accordance with
standard accounting practices.

Auditor

Any use of the above‐mentioned audit opinion outside this audit report requires my prior consent. In the event of publications or
dissemination of the annual financial statements and/or management report in a form deviating from the confirmed version (including
translation into other languages), it is first necessary to obtain my opinion again if my opinion is cited or reference is made to my audit;
please see section 328 HGB.
1,054
General Conditions of Contract
for
Auditors and Auditing Companies
dated January 1, 2017
1. Scope 7. Rectification of defects
(1) The Conditions of Contract apply to agreements between auditors or (1) In the event of any defects, the client is entitled to require the auditors to
auditing companies (hereinafter collectively referred to as “auditors”) and their rectify these. It may only reduce the fee or withdraw from the agreement if the
clients relating to audits, tax advice, consultations on economic affairs and auditors fail, neglect, unjustifiably refuse or are unable to rectify the defect; if
other engagements, unless otherwise expressly agreed in writing or the order was not placed by a consumer, the client may only withdraw from
prescribed by law. the agreement due to defect if the service provided is of no interest to it
because the auditors failed, neglected, unjustifiably refused or were unable to
(2) Third parties may only derive claims from the agreement between the rectify the defect. Point 9 also applies in respect of any compensation claims.
auditors and the client if this is expressly agreed or otherwise provided for in
the statutory regulations. In respect of such claims, these Conditions of (2) The claim for rectification of defects must be made immediately by the
Contract also apply to such third parties. client in writing. Claims pursuant to the first paragraph not arising from
intentional tort cease to be enforceable one year after the commencement of
the statutory time limit for enforcement.
2. Scope and execution of contract
(3) Obvious inaccuracies such as typing errors, miscalculations and formal
(1) The subject of the contract is the service agreed rather than any specific
defects included in a professional statement (report, expert opinion and the
economic success. The contract shall be executed in accordance with the
like) by the auditors may at all times be corrected by the auditors including
principles of proper professional conduct. The auditors shall not take over any
with effect against third parties. Inaccuracies that could put into question the
management tasks as part of their services. The auditors are not responsible
results contained in the auditors’ professional statement entitle the auditors to
for the use or implementation of the results of their services. The auditors are
withdraw such statements, including with effect against third parties. In the
entitled to avail of the services of experts to execute the contract.
cases noted the auditors should first hear the client, if possible.
(2) The application of foreign law requires express written agreement –
except for business checks.
8. Duty of confidentiality vis-à-vis third parties, data protection
(3) If the material or legal situation changes after the final professional
statement has been issued, the auditors are not required to draw the client’s (1) Under the provisions of the law (section 323, para. 1 of the German
attention to such changes or to the consequences thereof. Commercial Code [HGB], section 43 of the Auditors’ Code [WPO], section
203 of the German Penal Code [StGB]), the auditors are obliged to treat as
confidential all facts and circumstances entrusted to them or of which they
3. Client’s duty to cooperate
become aware in the course of their professional activities, unless the client
(1) The client must ensure that the auditors are given all documentation and releases them from this obligation.
other information necessary to execute the contract in good time and made
(2) The auditors shall observe the national and European data protection
aware of all procedures and circumstances that could have a material impact
regulations when processing personal data.
on the execution of the contract. The same applies for documentation and
other information, procedures and circumstances that come to light only while
the auditors are carrying out their activities. The client shall put the auditors in
touch with the appropriate people. 9. Liability
(2) At the auditors’ request, the client must confirm in a written statement (1) The statutory limitations of liability, particularly the liability limitation under
drafted by the auditors that the documentation and records submitted and the section 323, para. 2 HGB apply to legally prescribed auditors’ services,
information and explanations provided are complete. particularly audits.
(2) If no statutory liability limitation applies and there is no liability limitation

4. Safeguarding independence under a specific contract, the auditors’ liability for compensation claims of all
types, with the exception of damages arising from injury to life, body or
(1) The client must refrain from doing anything that could jeopardize the health, and damages substantiating the manufacturer’s obligation to
independence of the auditors’ employees. This applies for the duration of the indemnify under section 1 of the Product Liability Act (ProdHaftG), is limited
contractual relationship and in particular to offers of employment and offers to to €4 million in cases of gross negligence under section 54a, para. 1(2) WPO.
undertake engagements on their own account.
(3) The auditors may also assert pleas and defenses arising from the
(2) If the execution of the contract adversely affects the auditors’ contractual relationship with the client against third parties.
independence, their affiliated companies, their network companies or other
associated companies to which the independence provisions apply to the (4) If several claimants derive claims relating to negligent breach of duty by
same extent as to the auditors in other contractual relations, the auditors are the auditors from the contractual relationship with the auditors, the maximum
entitled to terminate the contract on an exceptional basis. amount mentioned in para. 2 shall apply to the relevant claims of all
claimants.
5. Reporting and verbal information (5) A single case of damage as defined in para. 2 is also defined as the same
damage caused by multiple breaches of duty. The single case of damage
Insofar as the auditors present results in writing in the course of executing the
includes all consequences of a breach of duty regardless of whether
contract, only this written description is decisive. Drafts of written descriptions
damages occurred in one or more consecutive years. In this respect,
are not binding. Unless otherwise agreed, verbal statements and information
repeated acts or omissions based on the same or a similar error shall be
provided by the auditors are only binding if confirmed in writing. Any
deemed a single breach of duty if the matters concerned are legally or
statements and information provided by the auditors outside the scope of the
commercially related. In this case, the maximum claim that can be asserted
contract assigned are always non-binding.
against the auditors is €5 million. The limitation to five times the minimum
amount insured does not apply to compulsory audits prescribed by law.
6. Disclosure of professional statements made by the auditors
(6) A claim for damages shall lapse if legal action is not taken within six
(1) The disclosure of professional statements made by the auditors (work
months subsequent to the written rejection of the indemnification and the
products or extracts from work products – whether the draft or final version)
client was informed of this consequence. This does not apply to claims for
or information on the auditors’ activity on behalf of the client requires the
compensation attributable to intentional conduct or to culpable injury to life,
auditors’ written consent unless the client is obliged to make such disclosures
body or health and to damages substantiating the manufacturer’s obligation
or provide such information by law or administrative order.
to indemnify under section 1 ProdHaftG. The right to assert the defense of
(2) Use of the auditors’ professional statements and information on the limitation remains unaffected.
auditors’ activities on behalf of the client for commercial purposes is not
permitted.
1,055
10. Supplementary provisions for audit assignments special security requirements such as e-mail encryption, the client shall
inform the auditors accordingly in writing.
(1) If the client subsequently changes the financial statements or
management report audited by the auditors and given an audit opinion, it may
not continue to use this audit opinion.
13. Remuneration
If the auditors have not issued an audit opinion, a reference to the audit
(1) As well as their claim for fees or charges, the auditors are also entitled to
conducted by the auditors in the management report or in any other place
reimbursement of their expenses; sales tax shall be charged in addition. They
intended for the general public is permitted only with written consent of the
may request reasonable advance payments on remuneration and
auditors and using the wording authorized by them.
reimbursement and make the provision of their services dependent on full
(2) If the auditors revoke the audit opinion, it may no longer be used. If the satisfaction of their requirements. Multiple clients awarding engagements are
client has already used the audit opinion, it must announce its revocation at jointly and severally liable.
the auditors’ request.
(2) If the client is not a consumer, an offset against claims of the auditors for
(3) The client is entitled to five copies of the report. Additional copies will be remuneration and reimbursement is permitted only with undisputed claims or
invoiced separately. claims established with legal effect.
11. Supplementary provisions for assistance in tax matters

14. Dispute resolution
(1) When advising on individual tax issues as well as when providing
continuous tax advice, the auditors are entitled to assume that the facts The auditors are not willing to take part in dispute resolution procedures
provided by the client – especially numerical disclosures – are accurate and before a consumer arbitration board as defined in section 2 of the Consumer
complete. This also applies to bookkeeping engagements. However, they Dispute Resolution Act (Verbraucherstreitbeilegungsgesetz).
must inform the client of any inaccuracies they identify.
(2) The tax consultancy engagement does not include actions required to
meet deadlines unless the auditors have explicitly taken on this task. In this
15. Applicable law
case, the client must provide the auditors with all key documentation required
to meet deadlines, in particular tax assessment notices in good time to German law shall apply exclusively to the contract, its execution and any
ensure that they have sufficient time to process the information. claims arising therefrom.
(3) Unless otherwise agreed in writing, the current tax advice includes the
following activities occurring during the contract term:
a) preparing annual tax returns for income tax, corporate income tax and
trade tax, as well as net worth tax returns based on the annual financial
statements and other statements and information required for tax
purposes to be submitted by the client
b) checking tax assessment notices in relation to the taxes mentioned
under a)
c) negotiating with the financial authorities in connection with the tax

returns and notices mentioned under a) and b)
d) participating in external tax audits and assessing the results of tax

audits with respect to the taxes mentioned under a)
e) participating in appeals and complaint procedures with respect to the
taxes mentioned under a).
In performing the above-mentioned tasks, the auditors shall take account of

published case law and administrative opinions.
(4) If the auditors receive a flat fee for ongoing tax advice, the activities
mentioned under para. 3(d) and (e) shall be charged separately unless
otherwise agreed.
(5) Where the auditors are also tax advisers and where the Ordinance on
Remuneration for Tax Advisers (Steuerberatervergütungsverordnung) applies
when assessing the remuneration, a higher or lower amount than that
stipulated by law may be agreed in writing.
(6) The processing of specific individual issues relating to income tax, trade
tax, assessed valuation and net worth tax as well as the processing of all
matters relating to sales tax, payroll tax, other taxes and duties shall be done
on the basis of a specific contract. This also applies to
a) processing non-recurring matters pertaining to tax, e.g. inheritance tax,

capital transfer tax, land transfer tax,
b) providing cooperation and representation in financial and
administrative court proceedings and in penal fiscal proceedings,
c) providing consultation and expert opinions in matters pertaining to the
restructuring, capital increase and decrease, and reorganization of a
company, entry and retirement of a shareholder, sale, liquidation and the
like, and
d) providing support in the fulfillment of publication and documentation
obligations.
(7) Where the preparation of the annual sales tax return is undertaken as an
additional activity, this does not include checking any special accounting
prerequisites or ascertaining whether all potential legal sales tax reductions
have been claimed. No liability is accepted regarding the completeness of the
documentation submitted in order to receive tax deductions.
12. Electronic communication
Communication between the auditors and the client may also take place via
e-mail. If the client does not wish to use e-mail communication or imposes
1,056
To the Members of Reddy Netherlands B.V.
We have audited the accompanying financial statements of Reddy Netherlands B.V. a company
information.

2013.
1,057
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
1,058
Reddy Netherlands B.V.
Balance Sheet
As at As at
ASSETS
Non current assets

Financial assets
Investments 2.1 1,958,211 1,958,211
Loans 2.2 911,634 781,381
2,869,845 2,739,592
Current assets
Financial assets
Other current assets 2.4 1,232 434
Total assets 2,873,524 2,742,350

Equity
Other equity
Share premium 3,013,156 3,013,156
Total equity 2,856,712 2,719,759

Borrowings 2.6 16,812 21,793
16,812 21,793
Current liabilities
Other current financial liabilities 2.7 - 798
Total Liabilities - 798
Total equity and liabilities 2,873,524 2,742,350


for and on behalf of the Board of Directors of Reddy Netherlands B.V.
ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,059

Other income 2.8 141,952 10,386

Total Income 141,952 10,386
Expenses
Profit/(loss) before tax 137,192 (63,439)
Income tax (benefit)/expense 2.10 239 (25,451)
Profit/(loss) for the year 136,953 (37,988)
Earnings per share:

Basic - Par value EUR 50 per share 42,797.81 (11,871.25)
Diluted - Par value EUR 50 per share 42,797.81 (11,871.25)


ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,060
Cash Flow Statement

31 March 2018 31 March 2017
Profit/(loss) before taxation 137,192 (63,439)
Interest Income (10,838) (10,374)
Net foreign exchange differences (127,294) 66,260
Operating cash flows before working capital changes (940) (7,553)

Increase/(Decrease) in other assets & liabilities,net (1,696) (2,669)
(2,637) (10,222)
Income tax paid - -
Net cash flows from operating activities (2,637) (10,222)
Loans and advances received/(repaid) by wholly owned subsidiaries and other

10,400 7,356
group companies,net of interest
10,400 7,356

Proceeds from/(repayment of) long term borrowings,net (7,992) -
(7,992) -
Net increase / (decrease) in cash and cash equivalents (229) (2,866)

Effect of foreign exchange gain/(loss) on cash and cash equivalents 352 (287)


ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,061

Particulars Share Total Equity
premium
Balance as of 1 April 2017 3,200 6,626 3,013,156 (300,023) 2,719,759
Profit for the period - - - 136,953 136,953
Balance as of 31 March 2018 3,200 6,626 3,013,156 (163,070) 2,856,712

Particulars Share Total Equity
premium
Balance as of 1 April 2016 3,200 6,626 3,013,156 (262,035) 2,757,747
Loss for the period - - - (37,988) (37,988)
Balance as of 31 March 2017 3,200 6,626 3,013,156 (300,023) 2,719,759

ICAI FRN : 002857S

Partner Director
Place: Hyderabad
Date: 18 May 2018
1,062

Reddy Netherlands B.V. (" the Company") incorporated in Netherlands , is a 100% subsidiary of Dr. Reddy's Laboratories SA.

The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (“Ind AS”) notified under the
Companies (Indian Accounting Standards) Rules, 2015 and as amended from time to time.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are
revised and in any future periods affected.

Assets:
Liabilities:
d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could,
at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
Current assets/ liabilities include the current portion of non-current assets/ liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax
assets and liabilities are always disclosed as non-current.

Transactions in foreign currencies are translated to the respective functional currencies of entities within the Company at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate at that date. Non-
monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that
are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
When several exchange rates are available, the rate used is that at which the future cash flows represented by the transaction or balance could have been settled if those
cash flows had occurred at the measurement date.
Revenue
Sale of goods
reliably. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, sales tax and applicable trade discounts
and allowances. Revenue includes shipping and handling costs billed to the customer.
Services
License fee
The Company enters into certain dossier sales, licensing and supply arrangements with various parties. Income from licensing arrangements is generally recognised over
the term of the contract. Some of these arrangements include certain performance obligations by the Company. Revenue from such arrangements is recognised in the
period in which the Company completes all its performance obligations.

Interest income primarily comprises of interest advances given to related parties. Interest income is recorded using the effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount
of the financial asset. Interest income is included in other income in the statement of profit and loss.
1,063
Income tax
recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:
substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Earnings per share

ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares,
which includes all stock options granted to employees.

directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and other costs directly attributable to bringing the
asset to a working condition for its intended use. General and specific borrowing costs that are directly attributable to the construction or production of a qualifying asset
are capitalised as part of the cost of that asset during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period of time to get ready for their intended use or sale.
equipment.
Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment and are recognised in the statement of profit and loss.
embodied within the part will flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit
and loss as incurred.
substance or the fair value of either the asset received or asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount
of the asset given up.
Depreciation
Depreciation methods, useful lives and residual values are reviewed at each reporting date and, if expectations differ from previous estimates, the change(s) are
accounted for as a change in an accounting estimate in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors .
Years
Buildings
Vehicles 4 to 5
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is disclosed as capital advances under other non-current
assets. The cost of property, plant and equipment not ready to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not
depreciated.
Inventories
other costs incurred in bringing them to their existing location and condition. In the case of finished goods and work-in-progress, cost includes an appropriate share of
1,064
Employee benefits

Restructuring
Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting
its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
Expected reimbursements for expenditures required to settle a provision are recognised only when receipt of such reimbursements is virtually certain. Such
reimbursements are recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for which the provision has been made.
Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.
Financial assets
the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in
the market place (regular way trades) are recognised on the trade date, i.e., the date that the Companny commits to purchase or sell the asset.
Investments in subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries , the difference between net disposal proceeds
and the carrying amounts are recognised in the statement of profit and loss.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the trade receivables or
any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based
on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the
historical observed default rates are updated and changes in the forward-looking estimates are analysed.
Financial liabilities are classified,as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging

Cash and cash equivalents consist of cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible into known amounts of cash
and which are subject to insignificant risk of changes in value. For this purpose, “short-term” means investments having maturity of three months or less from the date of
investment. Bank overdrafts that are repayable on demand and form an integral part of our cash management are included as a component of cash and cash equivalents
for the purpose of the statement of cash flows.
Trade receivables

These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured
and are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially ate fair value and
subsequently measured at amortised cost using the effective interest method.
1,065
1.1 Going Concern

The accounts have been prepared on Going Concern basis despite accumulated losses, as the Company is supposed by its parent

Particulars
Interest income from holding company and other group companies:
Dr. Reddy's Research and development B.V.(formerly OctoPlus B.V.) 10,838 10,374
As at As at
Particulars
31 March 2018 31 March 2017
Due from holding company and other group companies(included in loans and
advances):
Dr. Reddy's Research and development B.V.(formerly OctoPlus B.V.) 911,634 781,381
Due to holding company and other group companies(included in non current

borrowings):
Reddy Antilles N.V. 16,812 21,793


and license fee.
1,066
A. Financial Assets
As at As at
Investments carried at cost 31 March 2018 31 March 2017
2.1 : Investment in Subsidiaries
52,673,974 (Previous year : 52,673,974) shares of Euro 0.12 each of Dr. Reddy's
1,958,211 1,958,211
Research and Development B.V.
1,958,211 1,958,211
As at As at
31 March 2018 31 March 2017
Loans and advances to wholly owned subsidiaries & other group companies 911,634 781,381
911,634 781,381
As at As at
31 March 2018 31 March 2017
Cash and cash equivalents 2,447 2,324
B. Other Assets
As at As at
31 March 2018 31 March 2017
2.4 : Other assets
Balances with statutory agencies 209 214
Others 786 -
1,232 434
1,067
2.5 : Share capital

As at As at
31 March 2018 31 March 2017
3,200 (31 March 2017: 3,200) shares of Euro 50 each 6,626 6,626


6,626 6,626

31 March 2018 31 March 2017
Amount Amount
shares shares

The company has only one class of equity shares having a par value of Euro 50 per share. Each holder of equity shares is entitled to one vote per share.

As at As at
Particulars No. of equity % holding in No. of equity % holding in the
shares held the class shares held class
2.6 : Borrowings As at As at
31 March 2018 31 March 2017
Long term borrowings from holding and other group companies 16,812 21,793
16,812 21,793

As at As at
31 March 2018 31 March 2017
Current
Accrued expenses - 798
- 798

31 March 2018 31 March 2017
2.8 : Other income
Interest Income 10,838 10,374
Foreign exchange gain,net 131,087 -
Other operating revenue 27 12
141,952 10,386

31 March 2018 31 March 2017
2.9 : Selling and other expenses
Foreign exchange loss,net - 68,712
4,760 73,825

31 March 2018 31 March 2017
2.10 : Tax expense
Current tax (benefit)/expense 239 (25,451)
239 (25,451)
1,068
INDEPENDENT AUDIT REPORT
* * * *
REDDY PHARMA IBERIA, S.A.U.
(Single Shareholder Company)
Abridged statutory accounts for the year
ending 31 March 2018
1,069
ANNUAL ABRIDGED AUDIT OF ACCOUNTS ISSUED BY AN INDEPENDENT AUDITOR
To the Sole Shareholder of:

Opinion
We have audited the abridged statutory accounts of REDDY PHARMA IBERIA, S.A.U. (the
Company), which include the abridged balance sheet as of March 31, 2018, the abridged
profit and loss account, the statement of changes in equity and the abridged memorandum
corresponding to the year ending on that date.
In our opinion, the accompanying abridged statutory accounts express, in all material
respects, a true and fair view of the Company's equity and financial position as of March 31,
2017, as well as the results for the year ending on that date, in accordance with the regulatory
framework of financial information that results from application (which is identified in Note
2 of the report) and, in particular, with the accounting principles and criteria contained
therein.
Basis of the opinion
We have carried out our audit in accordance with all current regulations governing statutory
auditing activity in Spain. Our responsibilities in accordance with these standards are
described further on in the Auditor's Responsibilities section regarding the auditing of the
statutory accounts contained in our report.
We are independent of the Company in accordance with all ethical requirements which are
applicable to our auditing of statutory accounts in Spain, including those of independence, as
required by regulations governing the activity of account auditing. In this sense, we have not
provided services other than those of account auditing, nor have any situations or
circumstances occurred that, in accordance with the provisions of the aforementioned
regulatory regulations, may have affected independence required to such extent that it might
have been compromised.
We believe that the audit evidence we have obtained provides a sufficient and adequate basis
for our opinion.
Material uncertainty related to the Going Concern principle
We call attention to Note 10 of the abridged statutory accounts where it is indicated that at
March 31, 2018, the Company has been in a state of dissolution, in accordance with the
provisions contained in Article No 363.1.d of Royal Legislative Decree 1/2010 of 2 July, as
the company is currently in such a state that its losses have reduced net assets to less than half
the total share capital.
Therefore, in compliance with Article 365 of the aforementioned regulatory text, the Board
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1,070
of Directors must inform the Sole Shareholder within a maximum period of 2 months from
the date the statutory accounts are prepared, agreeing to adopt the measures necessary to
restore its equity balance, based on the commitment of the parent company to send sufficient
funds in the next financial year or to reduce share capital to offset accumulated losses, with
the objective of ensuring that the amount of the Net Equity represents at least 50.01% of
share capital, as required by current commercial legislation.
These facts or conditions indicate the existence of a material uncertainty that may potentially
generate significant doubts about the Company's ability to continue as a going concern. Our
opinion has not been altered with regard to this question.
Most relevant aspects of the audit.
The most relevant aspects of the audit are those that have been identified as the most
significant material misstatement risks in our audit of the abridged statutory accounts for the
current period, in accordance with our own professional judgment. These risks have been
addressed within the context of our audit of the abridged statutory accounts overall, and in
the formulation of our opinion on them, and we choose not to express a separate opinion with
regard to those risks.
With the exception of the issue outlined in the section Material Uncertainty related to the
Going Concern principle, we have determined that there are no additional significant risks
indicated in the audit that should be reported in our report.
Responsibilities of administrators with regard to the abridged statutory accounts.
The administrators are responsible for formulating the attached abridged statutory accounts
so that they express a true and accurate image of the Company’s assets, financial situation,
and income, in accordance with the regulatory framework for financial information
applicable to the entity in the country of Spain, and for any internal oversight that they may
consider necessary to facilitate the preparation of the abridged statutory accounts free of any
material impropriety that may arise as a result of fraud or error.
In the preparation of the abridged statutory accounts, the directors are responsible for
accurately assessing the Company's ability to continue as a functioning business, disclosing,
as applicable, any issues related to the going concern principle, and using the going concern
accounting principle, except in cases where the administrators intend to liquidate the
company or to cease operations, or in circumstances where there is no other realistic
alternative.
Responsibilities of the auditor with regard to the abridged statutory accounts.
Our objectives are to obtain reasonable assurance that the abridged statutory accounts are, as
a whole, free from any material misstatement resulting from to fraud or error, and to issue an
audit report containing our opinion.
Reasonable assurance is a high degree of certainty, but does not guarantee that an audit
conducted in accordance with current regulatory regulations related to auditing in Spain will
never fail to detect a material error when it exists. Any inaccuracies may be a result of either
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1,071
fraud or error, and are considered to be material if, either individually or in conjunction, can
reasonably be expected to influence any economic decisions that may be made based on the
abridged statutory accounts.
In the performance of an audit in accordance with the regulatory rules for auditing accounts
in Spain, we apply our professional judgment and maintain an attitude of professional
skepticism throughout the conduct of the audit. Furthermore:
 We identify and evaluate risks of material misstatements in abridged statutory accounts,

resulting from either fraud or error, and we design and apply auditing procedures
intended to respond to such risks and to obtain sufficient and adequate auditing evidence
that we use to provide a basis for our opinion. The risk of failing to detect a material
misstatement resulting from fraud is higher than in cases of material misstatement due to
error, as such fraud may involve collusion, falsification, deliberate omissions,
intentionally erroneous statements, or circumvention of internal oversight.
 We seek to obtain information from internal oversight procedures that is relevant to the
audit in order to design audit procedures that are appropriate to the circumstances, and
not for the purpose of expressing an opinion on the effectiveness of the entity's internal
oversight procedures.
 We evaluate whether or not the accounting policies applied are suitable, as well as the
reasonableness of accounting estimates and any other corresponding information
disclosed by the administrators.
 We make conclusions on whether the use, by the administrators, of the going concern
accounting principle of the company is adequate and, based on the audit evidence
obtained, we make conclusions on whether or not there is any material uncertainty
related to events or conditions that might generate significant doubts regarding the ability
of the Company to continue as a going concern. If we conclude that any material
uncertainty exists, we are required to include mention in our audit reports of the
corresponding information disclosed in the statutory accounts or, if such disclosures are
not adequate, those which we express in an amended opinion. Our conclusions are based
on the auditing evidence obtained to date from our audit report. However, future events
or conditions may cause the Company to cease to operate as a functioning business.
We evaluate the overall presentation, structure, and content of the statutory accounts,
including the disclosed information, and whether the statutory accounts represent the
underlying transactions and events in a way that manages to express the true image.
We communicated with the entity's administrators regarding the scope and timing of the
planned audit and the significant findings of the audit, among other matters, and with regard
to any significant internal control deficiencies that we identified during the performance of
the audit. Among the significant risks that have been reported to the entity's directors, we
determine the ones that have been of the greatest significance in the audit of the statutory
accounts of the current period and that are, consequently, the risks considered most
significant.
We describe these risks in our audit report, except in cases where legal or regulatory
-4-
1,072
provisions prohibit public disclosure of a particular matter.
VAHN Y CIA AUDITORES, S.L.

(Registered in the Official Register of
Accounting Auditors under no. SO535)
Luis Marigomez Rodriguez

ROAC 21,424
4 May 2018
-5-
1,073
REPORT FOR FINANCIAL
YEAR ENDING
31 MARCH 2018
1 1,074
ABRIDGED BALANCE SHEET AS OF 31 MARCH 2018 AND 2017
(Expressed in Euros)
ASSET Note 31/03/2018 31/03/2017
NON-CURRENT ASSETS 99,188.17 4,909.34

Intangible asset 6 92,306.58 -
Tangible fixed assets 5 2,531.26 2,713.34
Long-term financial investments 4,350.33 2,196.00
Other financial assets 4,350.33 2,196.00
CURRENT ASSETS 958,334.30 985,017.48

Stock 7 695,174.66 353,464.26
Trade and other receivables 8 131,855.46 58,567.76
Trade Receivables for Sales and Services 85,231.20 58,030.68
Other receivables 500.00 0.00
Other receivables from Public Administrations 46,124.26 537.08
Short-term financial investments 8 28,983.76 -
Cash and cash equivalents 102,320.42 572,985.46
Treasury 102,320.42 572,985.46
TOTAL ASSETS 1,057,522.25 989,926.82
NET WORTH AND LIABILITIES Note 31/03/2018 31/03/2017
NET WORTH 31,620.96 573,369.97

Equity 10 31,620.96 573,369.97
Capital 10 9,066,000.00 9,066,000.00
Subscribed capital 9,066,000.00 9,066,000.00
Reserves 10 (50,487.53) (50,487.53)
Legal and statutory (50,487.53) (50,487.53)
Results from previous years 10 (8,442,142.50) (8,288,103.98)
Financial Year Results 3 (541,749.01) (154,038.52)
CURRENT LIABILITIES 1,025,901.29 416,556.85

Trade and other debts 9 1,025,901.29 416,556.85
Providers 75,995.37 38,213.73
Providers, group and associated companies 894,129.79 335,106.01
Other creditors 30,506.67 23,000.00
Other debts to Public Administrations 25,269.46 20,237.11
TOTAL NET WORTH AND LIABILITIES 1,057,522.25 989,926.82
2 1,075
ABRIDGED PROFIT AND LOSS ACCOUNT FOR THE YEARS ENDED 31 MARCH 2018 AND
2017
Note 31/03/2018 31/03/2017
ONGOING OPERATIONS
Net revenues 12 329,454.52 217,290.81
Sales 329,454.52 8,700.68
Supply of services - 208,590.13
Supplies 12 (217,313.60) (12,421.75)

Change in inventory (217,313.60) (12,421.75)
Staff costs 12 (316,625.84) (222,602.07)

Wages, salaries and similar expenses (258,985.92) (184,001.21)
Social security payable by the company (45,891.67) (38,600.86)
Other company expenses (11,748.25) --
Other operating costs 12 (335,682.64) (135,335.72)
Depreciation of fixed assets 5 and 12 1,581.06 (966.72)
OPERATING REVENUE (541,748.62) (154,035.45)
Financial income 8.67 (3.07)

From tradable securities and other financial instruments 8.67 (3.07)
From third parties 8.67 (3.07)
Financial Liabilities (9.06) -
FINANCIAL RESULT (0.39) (3.07)
RESULT BEFORE TAXES (541,749.01) (154,038.52)

Tax on profits
INCOME PREV. FINANCIAL YEAR ONGOING OPERATIONS (541,749.01) (154,038.52)
FINANCIAL YEAR INCOME 3 (541,749.01) (154,038.52)
3 1,076
STATEMENT OF CHANGES IN EQUITY AS OF 31 MARCH 2018 AND 2017
A) ABRIDGED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Year ended 31 March
Note 2018 2017

Result of the profit and loss account 3 (541,749.01) (154,038.52)
Revenues and expenses recognised directly in equity - -

Total revenues and expenses recognised directly in equity - -
Total transfers to the profit and loss account - -
- -
TOTAL RECOGNISED INCOME AND EXPENSE (541,749.01) (154,038.52)
B) ABRIDGED STATEMENT OF CHANGES IN EQUITY

Results from
Subscrib Financial
Reserves previous TOTAL
ed capital Year
years
Results
(Note 10) (Note 10) (Note 10) (Note 3)
BALANCE AS OF 31 MARCH 2016 9,066,000.00 (50,487.53) (8,319,266.88) 31,162.91 727,408.50
Total recognised income and expense - - - (154,038.52) (154,038.52)
Other changes in equity - - 31,162.91 (31,162.91) -
BALANCE AS OF 31 MARCH 2017 9,066,000.00 (50,487.53) (8,288,103.97) (154,038.52) 573,369.97
Total recognised income and expense - - - (541,749.01) (541,749.01)
Other changes in equity - - (154,038.52) 154,038.52 -
BALANCE AS OF 31 MARCH 2018 9,066,000.00 (50,487.53) (8,442,142.50) (541,749.01) 31,620.96
4 1,077
REDDY PHARMA IBERIA, S.A. SOLE SHAREHOLDER
REPORT OF THE ABRIDGED STATUTORY ACCOUNTS FOR THE FINANCIAL

YEAR ENDED 31 MARCH 2018
1. BUSINESS ACTIVITY
REDDY PHARMA IBERIA, S.A.U, was constituted as a limited company on 18 May

2006. It has currently maintains its registered office address in Barcelona, Avenida
de Josep Tarradellas, 38, which was previously in Madrid, Avd. de Aragón, 330,
Edificio [Building] 5, 3 planta [floor].
Its corporate purpose is:
 The manufacture, sale, marketing, intermediation, import and export of all

nature of chemical products, medicines, pharmaceuticals, insecticides,
biopharmaceuticals, foodstuffs, dyestuffs and colourants, whether as raw
materials, intermediate products or finished products, as well as dermocosmetic
products and all types of equipment, instruments and accessories, surgical,
medical, dental and scientific, diagnostic and diagnostic reagent equipment, aids
and accessories for health care, health care products and instruments, as well as
healthcare research and development including diagnostic systems.
 Research and development in relation to the products mentioned in the

preceding paragraph, including without limitation the carrying out of clinical
trials for the development of new products and for the development and
maintenance of test centres and laboratories for use by themselves or others.
The Company is considered a Sole-Shareholder Company and is registered in the

Barcelona Mercantile Register as such, specifying the identity of its Sole
Shareholder. The Company is part of the group of companies headed by its Sole
Shareholder, Dr. Reddy's Laboratories Limited based in India, and its Sole
Shareholder is Dr. Reddy’s Laboratories SA, with headquarters in Basel
(Switzerland).
Given the activities to which the company is dedicated, it does not have liabilities,
expenses, assets, nor provisions and contingencies of an environmental nature that
could be significant in relation to the equity, the financial position and the results
thereof. For this reason, specific environmental information breakdowns are not
included in these notes.
5 1,078
2. BASIS FOR PRESENTATION OF THE STATUTORY ACCOUNTS
2.1. Fair presentation
The annual accounts have been prepared in accordance with the Plan General de
Contabilidad (General Accounting Plan) approved by Royal Decree 1514/2007 of 16
November, modified by Royal Decree 1159/2010 of 17 September, and its most
recent amendments, as well as other current commercial legislation.
These statutory accounts have been obtained from the accounting records of the
Company, held for the purpose of management control, which serve to update the
mandatory official accounting books, in accordance with current commercial and
tax legislation, in order to show the true equity, financial position and results of the
Company. These statutory accounts, obtained from such books and which have
been formulated by the Board of Directors, will be submitted for approval by the
General Meeting of Shareholders.
The amounts stated in the documents comprising these accounts (the balance
sheet, profit and loss account, statement of changes in equity and memorandum)
are expressed in Euros.
2.2. Accounting principles
The Company has applied the current legal provisions regarding accounting in order
to show a true and fair view of the Company's equity, financial position and results,
thus no non-mandatory accounting principles have been applied.
2.3. Critical aspects of the valuation and estimation of uncertainty
The Company has prepared its financial statements in accordance with the principle
of a company in operation, and at the end of the year, subject to dissolution. In
order that there is no significant risk that may involve significant changes in the
value of assets or liabilities in the following year, it is financed by the sole
shareholder.
2.4. Comparison of information
The Company presents its statutory accounts for the year ended 31 March 2018 in
accordance with the structure established in the General Accounting Plan. Likewise,
the amounts for the preceding year are shown with the same balance sheet and
profit and loss account structure, in accordance with current legislation.
In compliance with the conditions established in articles 257, 258 and 261 of Royal
Legislative Decree 1/2010 of 2 July, approving the Ley de Sociedades de Capital
(Capital Companies Act), the administrators present the Statutory Accounts in
abridged form.
6 1,079
2.5. Grouping of items
There is no breakdown of items that have been grouped in the Balance Sheet, the
Profit and Loss Account or in the Statement of Changes in Shareholders' Equity.
2.6. Elements included in several items
There are no equity items of a similar nature whose amount is recorded in two or
more items of the Balance Sheet.
2.7. Changes in accounting criteria
No adjustments have been made for changes in accounting criteria during the year.
2.8. Error correction
No correction adjustments were made during the period.
3. APPLICATION OF RESULTS
The proposal of distribution of profits formulated by the Board of Directors of the

Company, for approval by the General Meeting of Shareholders, is the following:
BASIS OF DISTRIBUTION Euros

Balance of the profit and loss account (541,749.01)
TOTAL (541,749.01)
APPLICATION
Income from previous financial years 541,749.01
TOTAL 541,749.01
4. VALUATION RULES
The valuation rules used by the Company in the preparation of its statutory
accounts for the year ended 31 March 2018, in accordance with those established
by the General Accounting Plan, were as follows:
7 1,080
4.1. Tangible fixed assets
The assets included in tangible fixed assets are valued at their purchase price, which
includes any additional expenses incurred until the asset is placed into operation;
financial expenses are not included.
Repairs that do not extend the useful life as well as maintenance expenses are
charged directly to the profit and loss account. The costs of extension or
improvement that give rise to a longer duration of the asset are capitalised as a
greater value of that asset.
The annual depreciation allowance is calculated by the straight-line method based
on the estimated useful life of the different assets, which is detailed as follows:
Data processing equipment ................................... 25%
Tangible fixed assets are depreciated from the month following acquisition.
4.2. Intangible asset
The criteria contained in the regulations relating to tangible fixed assets are to be
applied to intangible assets.
For the initial recognition of an intangible asset, it is necessary that, in addition to
complying with the definition of an asset and the accounting criteria or recognition
contained in the Conceptual Accounting Framework, it must also meet the
identifiability criterion, which implies that the asset fulfil one of the following two
requirements:
a) It is separable [from the entity]
b) Arise from legal or contractual rights.
4.3. Share capital
Ordinary shares are classified as equity. There is no other type of shares.

Expenses directly attributable to the issuance or acquisition of new shares will be
recorded in equity as a deduction from the amount of those shares.
If the company acquires or sells its own shares, the amount paid or received for the
shares is recognised directly in equity. No loss or profit is recognised in the income
for the year resulting from the purchase, sale, issue or depreciation of its own
equity instruments.
4.4. Financial instruments
Debits and credits arising from trade operations of the company, for both debtors
and creditors, are recorded at their nominal value and are classified short or long
term according to maturity, depending on whether they are less or more than one
year respectively.
Financial investments are recorded at acquisition cost, reduced, if applicable, by the

amount necessary to recognise permanent impairments, comparing them with
market value at the closing date.
9 1,081
Classification of current and non-current debts. In the accompanying balance sheet,
debts are classified according to their maturities, i.e. current debts are those with
maturities of twelve months or less and non-current debts are those maturing after
that period..
4.5. Foreign currency transactions

The translation into Euros of debits and credits expressed in foreign currency is
carried out at the exchange rate prevailing at the time of the corresponding
transaction, being valued at the end of the year in accordance with the exchange
rate prevailing at that time.
Unrealised gains and losses arising from exchange rate fluctuations between the
transaction accounting date and the year-end date are recorded in the income
statement.
4.6. Tax on profits

The income tax expense for the year is calculated on the basis of the economic
result before taxes, increased or decreased by permanent and temporary
differences as appropriate, obtaining the tax result, which is the taxable income,
and reduced for the bonuses and deductions applied in the quota excluding the
retentions and payments on account.
The company has generated a negative taxable income, no expense has been
recorded for corporate income tax. In accordance with the principle of prudence,
the tax credit is not recorded.
4.7. Income and expenses

Income and expenses are recognised on an accrual basis, that is, on the basis of the
actual flow of goods and services they represent and regardless of when the
monetary or financial flow derived from them occurs.
However, following the criteria of prudence, the company only records the profits
made at year-end, while foreseeable risks and possible losses arising from the year
or the previous one are accounted for as soon as they are known.
4.8. Staff costs

Staff costs are recorded at their gross amount.
4.9. Transactions between related parties

Transactions with related parties correspond to normal trade operations and are
recorded as such and do not accrue interest.
1 1,082
0
5. TANGIBLE FIXED ASSETS
The detail and composition of the items that make up the Tangible Fixed Assets at
the close of the years ended 31 March 2018 are as follows:
Acco Name Balance Deposits Withdra Balanc

unt Nº 31/03/2017 wals / e
217 Data processing equipment 3,875.48 1,398.98 Charge
0.00 31/03/18
5,274.46
Total 3,875.48 1,398.98 0.00 5,274.46
Information based on amortization by element classes is as follows:
Account Name Balance Depreciati Withdraw Balanc

No. 31/03/2017 on due to al e
amortisation charges 31/03/18
2817 Data processing equipment (1,162.14) 1,581.06 0.00 (2,743.20)
Total (1,162.14) 1,581.06 0.00 (2,743.20)
The net book value as of 31 March 2018 is 2,531.36 EUR (2,713.34 EUR as of 31
March 2017)
6. INTANGIBLE ASSET
The detail and composition of the items that make up the Intangible Fixed Assets at
the close of the years ended 31 March 2018 and 2016 are as follows:
Acco Name Balance Deposits Withdra Balanc

unt 31/03/2017 wals / e
No. 209 Advances for intangible assets 0.00 92,306.58 Charge
0.00 31/03/18
92,306.58
Total 0.00 92,306.58 0.00 92,306.58
Corresponds to the royalties for the licenses for the sale of drugs, which will be
amortised when they begin distribution according to the time frame stipulated in the
agreement.
7. STOCK
The detail of stock as of 31 March is as follows:
Balance Balance
Account Name 31/03/2017
31/03/2018
No.
3000 Commercial stocks 695,174.44 353,464.26
Total 695,174.44 353,464.26
10 1,083
8. FINANCIAL ASSETS
The breakdown of these categories at 31 March is as follows:
CLASSE LONG-TERM FINANCIAL INSTRUMENTS SHORT-TERM FINANCIAL INSTRUMENTS TOTAL

S
DEBT SECURITIES OTHER DEBT SECURITIES OTHER
EQUITY EQUITY
CREDIT CREDIT
INSTRUMENTS INSTRUMENTS
DERIVATIV DERIVATIV
ES ES
FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17
Fair value assets with changes in P & L 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments held until maturity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Loans and receivables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 119,065.29 60,226.68 90,081.53 60,226.68
I. Long-term financial investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,350.33 2,196.00 4,350.33 2,196.00
II. Trade and other receivables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 85,731.20 58,030.68 85,731.20 58,030.68
III. Short-term financial investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 28,983.76 0.00 28,983.76 0.00
IV. Short-term accruals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Assets available for sale 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Hedging derivatives 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 119,065.29 60,226.68 119,065.29 60,226.68
10 1,084
9. FINANCIAL LIABILITIES
The breakdown of this rubric at 31 March 2018 is as follows:
CLASSES LONG-TERM FINANCIAL INSTRUMENTS SHORT-TERM FINANCIAL INSTRUMENTS TOTAL
DEBTS WITH CREDIT DEBENTURES AND DEBTS WITH CREDIT DEBENTURES AND
OTHER DERIVATIVES OTHER DERIVATIVES
INSTITUTIONS OTHER MARKETABLE INSTITUTIONS OTHER MARKETABLE
SECURITIES SECURITIES
CATEGORIES FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17 FY 17-18 FY 16-17
Debits and payables 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,025,901.29 416,556.85 1,025,901.29 416,556.85
I. Short-term provisions 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
II. Short-term debts 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
III. Short-term debts with group companies and
associates 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IV. Providers 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
V. Providers, group and associated companies 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 894,129.79 335,106.01 894,129.79 335,106.01
VI. Various creditors 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 75,995.37 38,213.73 75,995.37 38,213.73
VII. Staff (remuneration pending payment) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 30,506.67 23,000.00 30,506.67 23,000.00
VIII. Current tax liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IX. Other debts to Public Administrations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 25,269.46 20,237.11 25,269.46 20,237.11
Fair value assets with changes in P & L
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,025,901.29 416,556.85 1,025,901.29 416,556.85
11 1,085
10. EQUITY
The balances and movements of equity during the year ended 31 March were as
follows:
Euros Capital Reserves Results Result

previous Financial
Subscribed Total
financial years year
Balance as at 31/03/2017 9,066,000.00 (50,487.53) (8,288,103.98) (154,038.52) 573,369.97
Capital Increase - - - - -
Results from previous years - - (154,038.52) 154,038.52 -
Result FY 2017(2018) - - - (541,749.01) (541,749.01)
Balance as at 31/03/2018 9,066,000.00 (50,487.53) (8,442,142.50) (541,749.01) 31,620.96
As of 31 March 2018 the Company is in a state of dissolution, in accordance with

art. Nº 363.1.d of Royal Legislative Decree 1/2010 of 2 July, whereby a company is in
such a state when losses reduce the net assets to less than half the capital stock.
Also, it is necessary to consider art. 327 of Royal Legislative Decree 1/2010 of 2 July,
which says that the company must obligatorily reduce capital when the losses have
reduced the equity below two thirds of the capital figure and a corporate year has
passed without having recovered the net equity.
For these reasons, in compliance with art. 365 of the aforementioned regulatory
body, the Board of Directors must convene a General Meeting of Shareholders
within a maximum period of 2 months from the date the accounts are prepared,
agreeing to adopt the measures necessary to restore its equity balance, based on
the commitment of the parent company to send sufficient funds in the next
financial year or to reduce share capital to offset accumulated losses, with the
objective of ensuring that the amount of the Net Equity represents at least 50.01%
of share capital, as required by current commercial legislation. The Board of
Directors will propose the reduction and expansion of capital necessary to restore
the balance of assets in the coming months to the Sole Shareholder.
The subscribed share capital at 31 March 2014 consisted of nine million and sixty-six
thousand shares (9,066,000) with nominal value of one (1) Euro each, accumulative
and indivisible. The share capital is fully disbursed.
At the time of incorporation on 18 May 2006, the subscribed share capital consisted
of sixty thousand one hundred and ten shares (60,110) with nominal value of one
(1) Euro each, accumulative and indivisible.
On the same date, it was decided to increase the share capital in the amount of two
million five hundred and forty-nine thousand eight hundred and ninety (2,549,890)
Euros, reaching the amount of 2,610,000 Euros, through the issuance of 2,549,890
new shares with nominal value of one (1) Euro each, accumulative and indivisible.
12 1,086
Subsequently, in a deed dated 15 September 2006, the sole shareholder exercised
their power to perform a new capital increase by issuing one million nine hundred
and fifty-six thousand (1,956,000) shares, with nominal value of one (1) Euro each,
numbered consecutively, accumulative and indivisible
On 13 February 2007, the sole shareholder agreed to perform a new capital increase
by issuing one million (1,000,000) shares with nominal value of one (1) Euro each,
numbered consecutively, accumulative and indivisible.
Finally, on 18 March 2013, the sole shareholder decided to carry out a new capital
increase by issuing three million five hundred thousand (3,500,000) shares with
nominal value of one (1) Euro each, of the same class and series as the pre-existing
ones and numbered consecutively.
11. PUBLIC ADMINISTRATIONS AND FISCAL POSITION
11.1. Public Administrations
The breakdown of the balances related to tax assets and liabilities at the end of the
year ended 31 March as follows:
Balance Balance
31/03/2018 31/03/2018
1. Other debts to Public Administrations 25,195.94 20,237.11

a) Personal Income Tax payable to Tax Office 19,561.33 16,109.43
b) Payable to Social Security 5,634.61 4,127.68
2. Other receivables from Public Administrations 46,124.26 537.08

a) Value Added Tax receivable from Tax Office 46,124.26 537.08
11.2. Fiscal Position
According to the legal provisions in force, tax settlements can not be considered
definitive until they have been inspected by the tax authorities or once the statute
of limitations, which is currently established at four years, has has elapsed. The
Company is open for inspection with regard to the last four financial years for and
all taxes applicable to it. In the opinion of the Company's directors, as well as that of
its tax advisors, there are no significant tax contingencies that might arise, in the
event of inspection, deriving from potential conflicting interpretations of the tax
regulations applicable to the operations carried out by the Company.
13 1,087
Corporate income tax is calculated on the basis of the economic or accounting
result obtained by application of generally accepted accounting principles,
increased or decreased by permanent and temporary differences as appropriate,
obtaining the fiscal position or taxable income. For Financial Year 2017-18, the
accounting result does not coincide with the taxable income.
Reconciliation between the accounting profit and the taxable income as of 2017(18
[sic] will be as follows:
31/03/2018 31/03/2017
Accounting profit before tax (541,749.01) (154,038.52)
Corrections to profit and loss account result
7,902.26 14,640.31
Increases 30,902.26 23,241.37
Decreases (23,000.00) (8,601.37)
Taxable income before offset for negative taxable
income (533,846.75) (139,398.21)
Taxable income offset for negative taxable

- -
income from previous years
Taxable income for the year (533,846.75) (139,398.21)
At the end of the year ended 31 March 2018, the Company has negative taxable
income pending compensation in the amount of 8,723,936.86 Euros, detailed as
follows:
Financial year Negative taxable income pending

compensation
2006 53,129.45
2007 2,370,736.64
2008 2,787,415.66
2009 2,505,410.38
2017 139,398.21
2018 533,846.75
TOTAL 8,389,937.08
In accordance with the changes introduced by Law 27/2014 of 27 November on

Corporate Income Tax, there is no time limit for the compensation of negative
taxable income that has been subject to liquidation or self-assessment. Likewise, a
general quantitative limit of compensation is established for fiscal years beginning
on or after 1 January 2016, which amounts to 60% of the previous taxable income,
and in any case may compensate a minimum of one million Euros.
14 1,088
12. INCOME AND EXPENSES
The composition of certain rubrics and movements during the year ended 31 March
were as follows:
Details of the profit and loss account Financial year 2017- FY 2016 -17
1. Income 329,454.52 217,290.81

a) Sale of goods 329,454.52 8,700.68
b) Provision of services - 208,590.13
2. Consumption of goods 217,313.60 12,421.75

a) Purchases, net of returns and any discount: - 12,421.75
( domestic - 12,421.75
b) Stock variations 217,313.60 -
4. Social expenses 316,625.84 222,602.07

a) wages and salaries 258,985.92 208,702.07
b) Social Security payable by the company 45,891.67 13,900.00
d) Other social expenses 11,748.25 -
5. Other operating costs 335,682.64 135,335.72

b) Other operating costs 335,682.64 135,335.72
6. Depreciation of fixed assets 1,581.06 966.72
13. PROVISIONS AND CONTINGENCIES
No provisions are recognised in the balance at 31 March 2018.
14. TRANSACTIONS WITH RELATED PARTIES
The company does not own, directly or indirectly, interests in other companies.
In the fiscal year between 1 April 2017 and 31 March 2018, the company received
invoices from the Company Dr. Reddy's Laboratories Limited (UK) for the provision
of services or purchases of goods amounting to 949,487.07 EUR ( 365,885.91 EUR in
the previous year), leaving an outstanding balance of 894,129.79 EUR as of 31
March 2018 (335,106.01 EUR as of 31 March 2017).
Likewise, the Company has not paid any amount to its sole shareholder, the Swiss
company Dr. Reddy's Laboratories SA (Switzerland), or to the Groups parent
company, Dr. Reddy's Laboratories Limited (India) for the year ending 31 March
2018.
Furthermore, during the year ended 31 March 2018, the members of the
management body have not received any remuneration.
15 1,089
There are no obligations with members of the management body in matters of
pensions, life insurance premiums, advances or credits, or for any other concept.
The management body of the company does not have any matters on which to
report in relation to what is established in articles 229 and 230 of the Capital
Companies Act, nor do they maintain positions of responsibility in companies within
the same sector, except in those within the group.
15. ENVIRONMENTAL INFORMATION
As of 31 March 2018, there are no assets dedicated to the protection and

improvement of the environment, nor have expenses of this nature been incurred
during the year. Likewise, during the year ended 31 March 2018 no environmental
subsidies have been received.
The management body estimates that there are no significant contingencies related
to the protection and improvement of the environment, and does not consider it
necessary to record any provision for environmental risks and expenses at 31 March
2018.
16. INFORMATION ON GREENHOUSE GAS EMISSION RIGHTS
In compliance with the changes resulting from the new general accounting plan and
the ministerial order of 28 January 2009 (BOE, 10 February 2009) and Resolution of
6 April 2010 (BOE 84 of 7 April 2010), regarding theissue of greenhouse gas
emission allowances, it is expressly stated that there are no items of an
environmental nature, in particular greenhouse gas emission rights.
17. OTHER INFORMATION
The average number of persons employed during the year, expressed by categories,
is as follows:
Average number of persons employed during the year

by category Financial year FY 2016 -17
Other executive personnel 4 3
TOTAL AVERAGE EMPLOYEES 4 3
The Company has not hired disabled individuals at a level equal to or greater than
33% at 31 March 2018 and 2017.
16 1,090
18. INFORMATION ON DEFERRED PAYMENTS TO PROVIDERS
Below is the information required by the Third Additional Provision of Law 15/2010
of 5 July (modified through the second final provision of Law 31/2014 of 3
December) prepared in accordance with the ICAC (Institute of Accounting and
Account Audits) Resolution of 29 January 2016, on the information to be included in
the statutory accounts in relation to the average period of payment to providers in
commercial operations.
Financial year Financial year

2017-18 Days2016 -17
Average period of payment to providers 30 30
According to the ICAC Resolution, the calculation of the average period of payment
to providers has taken into account the commercial operations corresponding to
the delivery of goods or services rendered from the date of entry into force of Law
31/2014 of 3 December.
The following are considered suppliers, for the exclusive purpose of providing the
information provided in this Resolution, to commercial creditors for debts with
providers of goods or services, included in the items “Providers”, “Various creditors”
and “Providers, Group and associated companies” of the current liability of the
accompanying abridged balance sheet.
"Average period of payment to providers" means the period that elapses from the
delivery of the goods or the provision of the services by the supplier and the
material payment of the transaction.
19. EVENTS OCCURRING AFTER CLOSURE
The Directors are not aware of any events occurring after 31 March 2018 and up to
the date of preparation of these Statutory Accounts that could significantly affect
said accounts or should be stated therein to provide adequate understanding.
17 1,091
FORMULATION OF THE ABRIDGED STATUTORY ACCOUNTS FOR THE FISCAL YEAR
2018
The Board of Directors of the Company "REDDY PHARMA IBERIA, S.A.U.", on 2 May
2018, signs the Statutory Accounts for the year ended 31 March 2018.
Signature: Clemens Troche

President
Signature: Sameer Sudhakar

Natu
President
Signature: Subir Kohli

Director
Signature: Antonio
Anguera Vila
Director
18 1,092
1,093
1,094
1,095
1,096
1,097
1,098
1,099
1,100
1,101
1,102
1,103
1,104
1,105
1,106
To the Members of Reddy Pharma SAS
We have audited the accompanying financial statements of Reddy Pharma SAS, a company
information.
2013.
1,107
Opinion
that date.

ICAI FRN 02857S
PSRVV Surya Rao

Partner
Place: Hyderabad
Date: 18 May 2018
1,108
Reddy Pharma SAS
Balance Sheet
As at As at
ASSETS
Non-current assets
Property, plant and equipment 2.1 A 4,187 5,547
Other intangible assets 2.1 B 17,983 -
Financial assets
Other financial assets 2.2 B 1,084 -
23,254 5,547
Current assets
Inventories 2.4 7,684 8,102
Financial assets
Trade receivables 2.2 A 8,662 -
Cash and cash equivalents 2.2 C 9,524 10,314
32,057 22,756

Equity
Other equity (153,439) (59,552)
13,601 12,526
Liabilities
Current liabilities
Trade payables 2.6 B 27,251 9,268
Other financial liabilities 2.6 A 8,282 4,255
Other current liabilities 2.7 6,177 2,254
41,710 15,777
For A Ramachandra Rao & Co. for and on behalf of the Board of Directors of Reddy Pharma SAS
PSRVV Surya Rao Subhir Kohli Sameer Natu

Place: Hyderabad
Date: 18 May 2018
1,109
Reddy Pharma SAS

Income
Sales 2.8 9,024 -
Total revenue from operations 9,024 -
Total income 9,024 -
Expenses
progress and stock-in-trade 2.9 418 (8,102)
Depreciation expense 2.11 1,499 561
Loss before tax (93,887) (40,685)

Tax expense
Current tax - -
Deferred tax - -

Total comprehensive loss for the year (93,887) (40,685)
Earnings per share:

Basic earnings per share of EUR 1/- each (58.18) (40.69)
Diluted earnings per share of EUR 1/- each (58.18) (40.69)

Place: Hyderabad
Date: 18 May 2018
1,110
Reddy Pharma SAS

Retained earnings
Profit for the year - (93,887) (93,887)

Retained earnings
Loss for the year - (40,685) (40,685)

For A Ramachandra Rao & Co. Reddy Pharma SAS

Place: Hyderabad
Date: 18 May 2018
1,111
Reddy Pharma SAS

31 March 2018 31 March 2017
Loss before tax (93,887) (40,685)
Adjustments:
Depreciation expense 1,499 561
Foreign exchange loss, net 1,487 410
Trade receivables (8,464) -
Inventories 418 (8,102)
Other assets and liabilities, net 4,003 (2,220)
Cash generated used in operations (79,697) (41,189)
Income tax paid, net - -
Net cash used in operating activities (79,697) (41,189)

Purchase of property, plant and equipment (139) (6,011)
Purchase of intangible assets (17,983) -

Proceeds from issue of equity shares 94,962 36,022
Net cash from financing activities 94,962 36,022
Net decrease in cash and cash equivalents (2,857) (11,178)

Effect of exchange rate changes on cash and cash equivalents 2,067 (1,228)
Cash and cash equivalents at the beginning of the year (Refer note 2.2C) 10,314 22,720
Cash and cash equivalents at the end of the year (Refer note 2.2 C) 9,524 10,314


Place: Hyderabad
Date: 18 May 2018
1,112
Reddy Pharma SAS

Reddy Pharma SAS (" the Company") incorporated in France , is a 100% subsidiary of Dr. Reddy's Laboratories SA.



Assets:
Liabilities:

c) Revenue
Sale of goods
Services
performed.
License fee

1,113
Reddy Pharma SAS
e) Income tax


Depreciation
Years
Buildings
Vehicles 4 to 5
h) Other intangible assets

Other intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets relating to products in development, other intangible assets not available for use and intangible assets having indefinite useful life are subject to impairment testing
at each reporting date. All other intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable. All impairment losses are
recognised immediately in the statement of profit and loss.
Amortisation
pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Intangible assets that are not available for use are amortised from the date they are
available for use.
1,114
Reddy Pharma SAS
i) Inventories
process.
j) Employee benefits
k) Provisions, contingent liabilities and contingent assets

Restructuring
Onerous contracts
Contingent assets
l) Financial instruments
Financial assets
recognition.
m) Cash and cash equivalents

n) Trade receivables
o) Trade and other payables

1,115
Reddy Pharma SAS
2.1 A Property, plant and equipment

Furniture, fixtures and office equipment 6,124 139 - 6,263 577 1,499 - 2,076 4,187
Total 6,124 139 - 6,263 577 1,499 - 2,076 4,187
Previous Year 113 6,011 - 6,124 16 561 - 577 5,547
2.1 B Other intangible assets
Gross carrying value Accumulated amortisation Net carrying value

Other intangibles - 17,983 - 17,983 - - - - 17,983
Total - 17,983 - 17,983 - - - - 17,983
Previous Year - - - - - - - - -
1,116
Reddy Pharma SAS

As at As at
31 March 2018 31 March 2017
Unsecured, considered good 8,662 -
8,662 -
2.2 B. Other non-current financial assets

As at As at
31 March 2018 31 March 2017
Security deposits 1,084 -
1,084 -
2.2 C. Cash and cash equivalents

As at As at
31 March 2018 31 March 2017
- In current accounts 9,524 10,314
9,524 10,314

As at As at
31 March 2018 31 March 2017
Balances with statutory authorities 4,779 2,885
Others - 367
6,187 4,340
2.4 Inventories
As at As at
31 March 2018 31 March 2017
Stock-in-trade 7,684 8,102
7,684 8,102
1,117
Reddy Pharma SAS
2.5 Share capital

As at As at
31 March 2018 31 March 2017
3,000,000 equity shares of EUR 1/- each (31 March 2017: 1,000,000) 222,720 72,078


167,040 72,078

31 March 2018 31 March 2017
Particulars
Amount Amount
shares shares
Number of shares outstanding at the beginning of the year 1,000,000 72,078 500,000 36,056
Add: Equity shares issued during the year 1,250,000 94,962 500,000 36,022
Number of shares outstanding at the end of the year 2,250,000 167,040 1,000,000 72,078

The Company has only one class of equity shares having a par value of EUR 1 per share. Each holder of equity shares is entitled to one vote per share.

As at As at
31 March 2018 31 March 2017
Particulars
Dr. Reddy's Laboratories SA 2,250,000 100.00 1,000,000 100.00

2.6 A. Other current financial liabilities
As at As at
31 March 2018 31 March 2017
8,282 4,255
2.6 B. Trade payables

As at As at
31 March 2018 31 March 2017
27,251 9,268

As at As at
31 March 2018 31 March 2017
Salary and bonus payable 4,058 2,254
Due to statutory authorities 2,119 -
6,177 2,254
1,118
Reddy Pharma SAS
2.8 Sales
31 March 2018 31 March 2017
Sales 9,024 -
9,024 -

31 March 2018 31 March 2017
Opening
Stock-in-trade 8,102 8,102 - -
Closing
Stock-in-trade 7,684 7,684 8,102 8,102
418 (8,102)

31 March 2018 31 March 2017
Staff welfare expenses 381 -
42,570 26,939

31 March 2018 31 March 2017
Depreciation of property, plant and equipment 1,499 561
1,499 561

31 March 2018 31 March 2017
Other selling expenses 4,153 -
Travel and conveyance 6,716 1,146
Rent 4,240 1,644
Rates and taxes 5,632 1,188
Communication 1,131 670
Foreign exchange loss, net 1,898 296
42,638 13,185
1,119
Reddy Pharma SAS
2.13 Going Concern

The accounts have been prepared on Going Concern basis, despite having accumulated losses, as the company is supported by its parent company in its activities and
financial affairs.

a ) The Company had the following amounts due from / to related parties
As at As at
Particulars
31 March 2018 31 March 2017
Due from holding company and other group companies(included in trade payables and other
liabilities):
Dr. Reddy's Laboratories (UK) Limited 20,364 8,102
2.15 Income taxes

a. Current Taxes
b. Deferred Taxes



Place: Hyderabad
Date: 18 May 2018
1,120
Board's Report
Dear Members,
2018.
(Rs. in thousands)
Particulars 31 March 2018 31 March 2017
Profit/(Loss) for the period after taxation (2,042) (12)
Balance brought forward (534) (522)
Balance carried forward to Balance Sheet (2,576) (534)
Change in Objects of the Company

During the year under review, the objects clause of Memorandum of Association of the
Company was amended so as to enable the Company to carry Bio-Analytical /Clinical Research
activities.
Change in name of the Company
Pursuant to alteration in objects of the Company to venture into Bio-Analytical /Clinical
Research activities, the name of the Company has changed from Dr. Reddy’s Pharma SEZ
Limited to Regkinetics Services Limited vide fresh certificate of incorporation dated 5 March
2018 issued by the Registrar of Companies, Hyderabad.
State of Company's Affairs
The Company did not have any operations during the year.
Dividend
Your Directors do not recommend any dividend for the financial year ending 31 March 2018.
No amount is proposed to be transferred to any reserves during the year under the review.
Share Capital
During the year under review, the Authorized Share Capital of the Company increased from
1,00,00,000/- (Rupees One Crore only) divided into 10,00,000 (Ten Lakhs) equity shares of
Rs. 10/- each to Rs. 25,00,00,000/- (Rupees Twenty Five Crores only) divided into 2,50,00,000
1,121
(Two Crores Fifty Lakhs) equity shares of Rs. 10/- each by further creation of 2,40,00,000
(Two Crores Forty Lakhs) equity shares of Rs.10/- each ranking pari passu in all respect with
the existing equity shares.
Further, the Company has allotted 2,00,00,000 (Two Crores) equity shares of Rs. 10/- each
aggregating to Rs. 20,00,00,000/- (Rupees Twenty Crores Only) divided Dr. Reddy’s
Laboratories Limited (holding company). The paid up capital of the Company as on 31 March
2018 is 20,05,00,000/- (Rupees Twenty Crores and Five Lakhs Only) divided into 2,00,50,000
(Two Crores Fifty Thousand) equity shares of Rs. 10/-
Fixed Deposits
Change in the nature of business, if any
During the year under review, the Company proposed to venture into the business of Bio-
Analytical /Clinical Research.
None
The Company has not given any loans or guarantees nor made any investments during the year.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2, relating to
‘Meeting of the Board of Directors’ and ‘General Meetings’, respectively have been duly
The Company’s Board met six times during the year: 10 May 2017, 26 July 2017, 27 October
2017, 23 January 2018, 16 February 2018 and 28 March 2018.
Board of Directors and Key Managerial Personnel
Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. M V Narasimham
(DIN: 02677423), retires by rotation at the ensuing Annual General Meeting and being eligible,
seeks re-appointment. Your Directors recommend his re-appointment for approval at the
ensuing Annual General Meeting.
During the year under review, Dr. Chandrasekhar Sripada (DIN: 02813923) has resigned as
Director of the Company wef 26 July 2017. Mr. Sujit Kumar Mahato (DIN: 07599067) has
been appointed as Director wef 26 July 2017.
Mr. Saumen Chakraborty (DIN: 06471520) has resigned as Director of the Company wef 28
March 2018. Mr. Ashok Kalyan Tavva has been appointed as Director wef March 28, 2018
and has tendered his resignation wef 11 May 2018. Ms. Namrata Gill Tyagi has been appointed
as Director wef 11 May 2018.
1,122
The Board of Directors at its meeting held on 11 May 2018, appointed the following officials
as Key Managerial Personnel (KMP) of the Company, in compliance with Section 203(1) of
the Companies Act, 2013:
1. Mr. Ashok Kalyan Tavva - Chief Financial Officer (CFO)

2. Ms. Sudha Jhunjhunwala - Company Secretary (CS)
Brief profiles of Mr. M V Narasimham, Mr. Sujit Kumar Mahato and Ms. Namrata Gill Tyagi
is given in the notice convening 9th Annual General Meeting for reference of the shareholders.
accounts;
the Company at the end of the financial year 2017-18 and of the loss of the Company for that
period;
5. proper and adequate systems have been devised to ensure compliance with the provisions of
all applicable laws and these systems are operating effectively.
Company as well. Identified key risks and internal control matters pertaining to the Company,
The Company does not have any transactions with related parties. Hence the relevant disclosure
provisions are not applicable to the Company.
Statutory Auditors
The Statutory Auditors of the Company M/s. A. Ramachandra Rao & Co., Chartered
Accountants, retire at the ensuing 9th Annual General Meeting. They have confirmed their
eligibility and given their consent to act as Statutory Auditors under Sections 139, 141 of the
1,123
Companies Act, 2013 and Rule 4 of the Companies (Audit and Auditors) Rules, 2014, if re-
appointed.
The Board of Directors recommend the re-appointment of M/s. A. Ramachandra Rao & Co.,
Chartered Accountants as Statutory Auditors of the Company for the financial year 2018-19
for shareholder’s approval.
Board's response on auditor's qualification, reservation or adverse remark or disclaimer
made
section 143(12) of the Companies Act, 2013
None.
Conservation of Energy, Technology Absorption, Foreign exchange earnings and outgo
Since the Company did not have any operations during the year, the particulars as prescribed
under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts)
Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange
earnings and outgo are not applicable to your Company.
‘Annexure I’ to this Report.
Acknowledgement
Sd/- Sd/-
Date: 11 May 2018 Sujit Kumar Mahato M V Narasimham
1,124
ANNEXURE I
FORM NO. MGT-9
No.
i) CIN U24233TG2009PLC064271
ii) Registration Date July 8, 2009
iii) Name of the Company Regkinetics Services Limited (formerly Dr.
Reddy’s Pharma SEZ Limited)
iv) Category/Sub-Category of the Company Public Company / Limited by Shares
v) Address of the Registered office and contact 7-1-27, Ameerpet, Hyderabad, Telangana-500016
details

Sl. Name and Description of NIC Code of the product/ % to total turnover of the
NA

Sr. Name of the Address of the CIN/GLN Holding/ % of Applicable
no. Company Company Subsidiary shares Section
/ Associate held*
1 Dr. Reddy's 8-2-337, Road no. 3, L85195TG1984PLC004507 Holding 100 2(46)
Hyderabad-500034
Shareholders Demat Physical Total % of total Demat Physical Total % of change
shares total during
share the year
s
A. PROMOTERS
(1) Indian
b) Central Govt. 0 0 0 0 0 0 0 0 0
c) State Govt(s). 0 0 0 0 0 0 0 0 0
d) Bodies Corp. 0 50,000 50,000 100 0 2,00,50,000 2,00,50,000 100 0
e) Banks/FI 0 0 0 0 0 0 0 0 0
f) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(1) 0 50,000 50,000 100 0 2,00,50,000 2,00,50,000 100 0
(2) Foreign
c) Bodies Corp. 0 0 0 0 0 0 0 0 0
d) Banks/FI 0 0 0 0 0 0 0 0 0
e) Any other 0 0 0 0 0 0 0 0 0
Sub-total (A)(2) 0 0 0 0 0 0 0 0 0
1,125
Total shareholding 0 50,000 50,000 100 0 2,00,50,000 2,00,50,000 100 0
of Promoter
(A)=(A)(1)+(A)(2)
B. PUBLIC
SHAREHOLDING
(1) Institutions
b) Banks/FI 0 0 0 0 0 0 0 0 0
c) Central Govt. 0 0 0 0 0 0 0 0 0
d) State Govt(s). 0 0 0 0 0 0 0 0 0
Funds
f) Insurance 0 0 0 0 0 0 0 0 0
Companies
g) FIIs 0 0 0 0 0 0 0 0 0
Capital funds
i) Others (specify) 0 0 0 0 0 0 0 0 0
Sub-total (B)(1) 0 0 0 0 0 0 0 0 0
a) Bodies Corp 0 0 0 0 0 0 0 0 0
i) Indian 0 0 0 0 0 0 0 0 0
ii) Overseas 0 0 0 0 0 0 0 0 0
b) Individuals 0 0 0 0 0 0 0 0 0
i) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital upto
Rs.1 lakh
ii) Individual 0 0 0 0 0 0 0 0 0
shareholders
holding nominal
share capital in
excess of Rs.1 lakh
c) Others (specify)
c-i) Trust 0 0 0 0 0 0 0 0 0
c-ii) Clearing 0 0 0 0 0 0 0 0 0
Member
c-iii) NRIs 0 0 0 0 0 0 0 0 0
c-iv) Foreign 0 0 0 0 0 0 0 0 0
Nationals
Sub-total (B)(2) 0 0 0 0 0 0 0 0 0
Total Public 0 0 0 0 0 0 0 0 0
Shareholding
(B)=(B)(1)+ (B)(2)
C. SHARES HELD 0 0 0 0 0 0 0 0 0
BY CUSTODIAN
FOR GDRS &
ADRS
Grand Total 0 50,000 50,000 100 0 2,00,50,000 2,00,50,000 (*) 100 0
(A+B+C) (*)
(*) Out of 2,00,50,000 equity shares, 6 equity shares are held by six individuals as nominee shareholders on behalf of Dr.
Reddy's Laboratories Limited, Holding Company.

Sr. Category of No. of shares held at the beginning No. of shares held at the end of the %
no. Shareholders of the year year change
No. of % of % of Shares No. of % of % of Shares during
Shares total Pledged / Shares total Pledged / the
shares of encumbered shares of encumbered year
the to total the to total
company shares* company shares*
1 Dr. Reddy's 50,000 100 0 2,00,50,000 100 0 0
Laboratories
Limited
50,000 100 0 2,00,50,000 100 0 0
1,126
Shareholding at the Date Increase/(decrease) Reason Cumulative
beginning of the in shareholding Shareholding during
year the year
No. of % of total No. of % of
Shares shares of Shares total
the shares of
company the
company
Dr. Reddy's 50,000 100 28.03.2018 2,00,00,000 Rights 2,00,50,000 100
Laboratories Issue
Limited
ADRs)
Name Shareholding at the beginning of the Shareholding at the end of the year
year
No. of % of total shares of No. of shares % of total shares
shares the company of the company
NIL
Sr Name Date Shareholding at the Increas Reason Cumulative

. beginning of the e/ Shareholding during
n year (Decre the year
o. No. of % of total ase) in No. of % of total
Shares shares of Shareh Shares shares of
(*) the olding, the
company if any company
A. DIRECTORS*
1 Mr. Saumen 01.04.2017 1 0 0 - 1 0
Chakraborty# 28.03.2018 1 0 0 - 1 0
2 Mr. Venkata 01.04.2017 1 0 0 - 1 0
Narasimham 31.03.2018 1 0 0 - 1 0
Mannam
3 Mr. 01.04.2017 1 1 -
Chandrasekhar 26.07.2017 (1) Transfer to Nominee 0 0
Sripada## Shareholder, Mr. Sujit
Kumar Mahato
4 Mr. Sujit 26.07.2017 0 0 0 0 0
Kumar 26.07.2017 1 Transfer from Nominee 1 0
Mahato### Shareholder, Mr.
Chandrasekhar Sripada
31.03.2018 1 0 0 1 0
5 Mr. Ashok 28.03.2018 0 0 0 - 0 0
Kalyan 31.03.2018 0 0 0 - 0 0
Tavva####
B. KEY MANAGEMENT PERSONNEL (KMPs)
Nil
* Held as nominee shareholder on behalf of Dr. Reddy's Laboratories Limited, Holding Company.
#
Resigned with effect from 28 March 2018. ## Resigned with effect from 26 July 2017. ###Appointed with effect from 26
July 2017. ####Appointed with effect from 28 March 2018 and resigned with effect from May 11, 2018
1,127
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment – NIL
C) Remuneration of Key Managerial Personnel other than MD/WTD/Manager – Not applicable

Sd/- Sd/-
Date: May 11, 2018 Sujit Kumar Mahato M V Narasimham
1,128
To
Members
Regkinetics Services Limited
(Formerly Dr. Reddy’s Pharma SEZ Limited)
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Regkinetics Services Limited
(Formerly Dr. Reddy’s Pharma SEZ Limited), which comprise the Balance Sheet as at 31st March 2018, and the
Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the
Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true
and fair view of the state of affairs (financial position), profit or loss (financial performance including other
comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting
principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under
section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which
are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind
AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the
standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including
the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant
to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in
order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made
1,129
by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
standalone Ind AS financial statements give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India including the
Ind AS, of the financial position of the Company as at 31st March, 2018, and its financial performance including
other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government
in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in
Equity dealt with by this Report are in agreement with the books of account
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March 2018 taken on record
by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a
director in terms of Section 164(2) of the Act.
f) As required under clause (i), a separate report on the internal financial controls is annexed in Annexure-B
herewith.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to
the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position
1,130
ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund.
.
P S R V V Surya Rao
Partner
Hyderabad
Date: 11th May 2018
1,131
ANNEXURE TO THE AUDITORS’ REPORT
Regkinetics Services Limited (Formerly Dr. Reddy’s Pharma SEZ Limited)
(Of even date referred to in Para 1 of our Report)
(i) The Company does not have any fixed assets and hence clause 3(i) of the order are not applicable to
the Company for the reporting period.
(ii) As explained and information given to us, the company does not have any inventory and hence para
3(ii) of the Order is not applicable to the Company for the period under audit.
(iii) Based on the information provided to us, the Company has not granted any loans, secured or unsecured
to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained
under section 189 of the Companies Act, 2013 hence, in our opinion, the Clause 3(iii)(a), 3(iii)(b) and
3(iii)(c) are not applicable to the Company for the year.
(iv) Based on the information provided to us, the Company has not given any loan, guarantee, nor provided
any security in connection with a loan and not acquired any security during the year and hence, in our
opinion, the clause 3(iv) is not applicable to the Company during the year.
(v) Based on the information provided to us, the Company has not accepted any deposits during the year
and hence, in our opinion, the Clause 3(v) is not applicable to the Company for the year.
(vi) Based on the explanations given to us, the Company is not required to maintain cost Records under
Section 148 of the Companies Act, 2013 and hence the clause 3(vi) of the order is not applicable to the
Company for the period under audit.
(vii) (a) According to the records of the Company, the Company is regular in depositing the undisputed
statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess with the appropriate authorities;
According to the information and explanations given to us, no undisputed amounts payable in respect
of Provident Fund, Employees’ State Insurance, Income-tax, Sales tax, Wealth tax, Service tax, Duty of
Customs, Duty of Excise, Value added tax and other material statutory dues were in arrears as at 31
March 2017 for a period of more than six months from the date they became payable
(b) According to the information and explanations given to us, there are no dues of VAT, income tax,
customs duty, excise duty, service tax, cess to be deposited on account of any dispute and hence, clause
3(vii)(b) of the Order is not applicable to the Company during the year.
(viii) Based on the information provided and explanation given to us, the Company has not taken any loans
from Banks / Financial Institutions / Government / due to Debenture Holders and hence clause 3(viii)
of the Order is not applicable to the Company for the period under audit.
1,132
(ix) According to the information and explanations given to us, the Company has raised monies by way of
further public offer and since the monies were against the FPO were received only in the last week of
the March 2018 they were parked in Fixed Deposit in the Bank.
(x) In our opinion and according to the information provided and explanations offered to us, no fraud on
or by the Company has been noticed or reported during the year.
(xi) In our opinion, the provisions of section 197 read with Schedule V to the Companies Act,2013 the
Company has not paid any managerial remuneration during the year and hence clause 3(xi) of the Order
is not applicable to the Company for the period under audit.
(xii) Based on the explanations given to us, in our opinion, the Company is not a Nidhi Company as per
section 406 of the Companies Act,2013 and hence clause 3(xii) is not applicable to the Company.
(xiii) Based on the information provided and explanation given to us, in our opinion, all transactions with the
related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable
and the details have been disclosed in the Financial Statements etc., as required by the applicable
accounting standards;
(xiv) Based on the information provided to us, the Company has not made any preferential allotment of
shares during the year and during the year under review and hence, clause 3(xiv) is not applicable to
the Company during the year.
(xv) As per the information given to us, the Company has not entered into any non-cash transactions with
directors or persons connected with them during the year under review and hence, clause 3(xv) is not
applicable to the Company during the year.
(xvi) Based on the information provided to us, in our opinion, the Company is not required to be registered
under section 45-IA of the Reserve Bank of India Act, 1934 and hence, clause (xvi) is not applicable to
this Company.

P S R V V Surya Rao
Partner
Hyderabad
Date: 11th May 2018
1,133
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF
Regkinetics Services Limited (Formerly Dr. Reddy’s Pharma SEZ Limited)
[Re : Clause 2(f) of the independent auditors report]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Regkinetics Services Limited
(Formerly Dr. Reddy’s Pharma SEZ Limited) , as of March 31, 2018 in conjunction with our audit of the
standalone financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on,
the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
Auditors’ Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed
under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial
controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered
Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting was established and maintained and if such controls operated effectively in all
material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the
internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial controls over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion on the Company’s internal financial controls system over financial
reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A Company's internal financial control
over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
1,134
the Company are being made only in accordance with authorisations of management and directors of the
Company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the Company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility
of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control over financial reporting may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were operating effectively as at
March 31, 2018, based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Place : Hyderabad For M/s A Ramachandra Rao & Co

Date: Chartered Accountants
ICAI Firm Regn No. 002857S
P S R V V Surya Rao
Partner
Membership No.202367
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SUBSIDIARY COMPANIES FINANCIALS

Report of the Statutory Auditor

Report of the Statutory Auditor to the General Meeting of Shareholders of

Dr. Reddy's Laboratories Ltd, Basel

Report of the Statutory Auditor on the Financial Statements

Board of Directors’ Responsibility

Report on Other Legal Requirements

Martin Rohrbach Norman Dittes

Basel, 19 April 2018

USD USD CHF CHF

Cash and cash equivalents 408'796 27'272'804 398'361 27'718'823

159'461'885 227'671'251 155'391'620 231'394'587

Financial assets 189'845 697'594 184'999 709'001

876'962'042 866'655'340 854'577'585 880'828'621

1'036'423'927 1'094'326'591 1'009'969'205 1'112'223'208

USD USD CHF CHF

Trade accounts payable

184'781'040 496'836'120 180'064'505 504'961'376

Long-term interest-bearing liabilities 2.5 250'000'000 - 243'618'750 -

434'781'040 496'836'120 423'683'255 504'961'376

Share capital 108'339'522 108'339'522 105'640'410 105'640'410

601'642'887 597'490'471 586'285'950 3'607'261'832

1'036'423'927 1'094'326'591 1'009'969'205 1'112'223'208

Income statement Notes 2017 2016 2017 2016

USD USD CHF CHF

Total operating income 240'644'540 151'187'212 234'502'089 153'659'728

Raw materials and supplies -137'738'246 -87'540'633 -134'222'479 -88'972'273

Total operating expenses -226'754'778 -153'115'857 -220'966'863 -155'619'913

Operating result 13'889'762 -1'928'645 13'535'226 -1'960'186

Financial income 1'168'569 1'372'091 1'138'742 1'394'530

Direct taxes -710'407 444'912 -692'274 452'188

Profit or loss for the year 4'152'416 -6'531'440 4'046'426 -6'638'254

1.1 General aspects

1.2 Inventories and non-invoiced services

1.3 Securities and financial assets

1.4 Property, plant and equipment

1.5 Intangible Assets

Intangible assets are capitalized if they meet the following conditions

1.6 Revenue from sale of goods and services

USD CHF USD CHF

2.1 Inventories and non-invoiced services

Raw materials 11'607'811 11'311'521 4'750'000 4'827'682

13'341'952 13'001'398 7'944'080 8'073'998

2.2 Intangible assets

Product related Intangibles 62'660'275 61'060'872 59'196'083 60'164'176

487'283'447 474'845'537 484'787'452 492'715'666

Dr. Reddy's New Zealand Ltd New Zealand 1 1 1 1 100% 100%

Dr. Reddy's Laboratories (Australia) Pty

Dr. Reddy’s Laboratories Kazakhstan

Dr. Reddy’s (WUXI) Pharmaceutical Co.

Dr. Reddy’s Laboratories Chile SPA. Chile 500'000 487'238 100%

Dr.Reddy's Laboratories Malaysia SD Malaysia 500'000 487'238 100%

Reddy Pharma Iberia S.A Spain 3'459'792 3'371'481 100%

Total investments in subsidiaries 389'468'649 379'527'461 381'150'098 387'383'427

2.4 Share capital and reserves from capital contributions

2.5 Interest-bearing liabilities

3.1 Full-time equivalents

3.2 Audit Fees

Audit services 43'176 42'074 37'253 37'862

43'176 42'074 37'576 38'191

3.3 Relevant currency for the business

USD USD CHF CHF

Retained earnings brought forward 344'714'245 351'245'684 360'783'136 342'494'938