With the losses incurred by three of its foreign subsidiaries, the consolidated profit figure of Dr Reddy's Laboratories for the year ended March 2001 as per US Gaap (generally accepted accounting practices) may come down substantially to Rs 74 crore.
The company had posted a net profit of Rs 144.47 crore for 2000-2001 as per Indian Gaap.
Dr Reddy's is in the process of filing its consoildated statement of operations for the year as per US Gaap. To comply with it, the company has to take the operational performance of eleven subsidiaries, in which it has more than 50 per cent holding as on date.
According to reliable sources, Reddy Cheminor Inc, the US subsidiary of Dr Reddy's, had incurred a loss of $4.1 million (Rs 19 crore) net loss for the year ended March 31, 2001, as against a profit of $2.52 lakh in the previous year.
The new Jersy-based subsidiary is the importer of bulk active ingredients used in the pharmaceutical industry. Its customers are primarily located throughout North America. The company had a sales of $34 million for the year ended March 2001.
Reddy US Therapeutics Inc, another company incorporated in the state of Georgia, had also incurred a loss of $1.1 million for the year ended December 2000. This was the first year of operation. It was estabilished to discover and develop novel pharmaceuticals for the purpose of selling or licensing.
Reddy Antilles NV, a subsidiary company incorporated in Netherlands Antilles to market Dr Reddy's patent rights and know-how, had also reported a loss of $1.24 million for the year ended December 31,2000.
The sources also indicated that another four subsidiaries of Dr Reddy's had incurred nominal losses during the last year."
With all these and other extra provisions that are normally required as per US Gaap, the profit figure for the year ended March 31,2001 would be affected", the sources added.
