Divi’s Laboratories Limited, a leading pharmaceutical company, has disclosed that it has been penalized by the Office of the Joint Director, Directorate of Enforcement for a procedural delay in submitting the Annual Performance Reports (APRs) concerning its overseas subsidiaries, Divi’s Laboratories Europe AG and Divi’s Laboratories (USA) Inc. The penalty, amounting to ₹6 lakh each, has been levied under Section 13(1) of FEMA, 1999 for the years 2005-06 to 2010-11, 2013-14, and 2014-15.

Violation and Details of the Penalty:

The Directorate of Enforcement, Hyderabad Zonal Office, issued the penalty via Order No. Adj/Hyzo/71/2024 dated November 19, 2024, citing delays in the submission of APRs, which are required under the Foreign Exchange Management Act (FEMA), 1999. The penalty was imposed on both the company and its Chief Executive Officer due to non-compliance with the procedural timelines for filing these reports.

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The penalty amount of ₹6 lakh for each of the entities—Divi’s Laboratories and its CEO—has been acknowledged by the company, which has stated that the penalty will be paid within the prescribed time limit. Despite the penalty, Divi’s Laboratories confirmed that the delay will have no impact on its financials, operations, or overall business activities. The company emphasized that the matter is procedural in nature and does not affect the performance or future prospects of the company.

Impact on the Company:

The company assured its investors and stakeholders that the penalty would not have any financial or operational impact. The company’s financial performance remains unaffected, and the issue is strictly related to compliance with procedural timelines for submitting reports about its overseas investments.

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) regulations, Divi’s Laboratories has disclosed the details of the penalty and the violation in accordance with Regulation 30 of SEBI LODR, ensuring full transparency and timely communication with the exchanges.

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