EX-99.4 5 drr0560_ex99-4.htm EXHIBIT 99.4

 

Exhibit 99.4

 

S.R. Batliboi & Associates LLP

Chartered Accountants

THE SKYVIEW 10

18th Floor, "NORTH LOBBY"

Survey No. 83/1, Raidurgam

Hyderabad - 500 032, India

Tel: +91 40 6141 6000

 

Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

 

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

 

1.We have reviewed the accompanying ‘Statement of Unaudited Standalone Financial Results for the quarter and nine months ended 31 December 2023’ (the “Statement”) of Dr. Reddy’s Laboratories Limited (the “Company”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

 

2.The Company’s Management is responsible for the preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Statement has been approved by the Company’s Board of Directors. Our responsibility is to express a conclusion on the Statement based on our review.

 

3.We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

4.Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

  

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

 

per Shankar Srinivasan
Partner
Membership No.: 213271
UDIN: 24213271BKEKYI4480.
Place: Visakhapatnam
Date: January 30, 2024

 

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office: 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016

 

   

 

  

Dr. Reddy’s Laboratories Ltd.

8-2-337, Road No. 3, Banjara Hills,

Hyderabad - 500 034, Telangana,

India.

CIN : L85195TG1984PLC004507

 

Tel      :+91 40 4900 2900

Fax     :+91 40 4900 2999

Email :mail@drreddys.com

www.drreddys.com

 

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2023

 

All amounts in Indian Rupees millions 
       Quarter ended   Nine months ended   Year ended 
       31.12.2023   30.09.2023   31.12.2022   31.12.2023   31.12.2022   31.03.2023 
Sl. No.    Particulars     (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Audited) 
 1   Revenue from operations                              
     a) Net sales/income from operations   40,389    48,037    38,624    142,460    120,498    162,989 
     b) License fees and service income   442    154    172    763    3,115    6,002 
     c) Other operating income   199    196    180    567    472    634 
     Total revenue from operations   41,030    48,387    38,976    143,790    124,085    169,625 
                                    
 2   Other income   2,276    2,231    514    6,651    5,343    5,913 
                                    
     Total income (1 + 2)   43,306    50,618    39,490    150,441    129,428    175,538 
                                    
 3   Expenses                              
     a) Cost of materials consumed   8,187    7,512    8,659    23,838    23,073    31,614 
     b) Purchase of stock-in-trade   5,569    4,992    4,874    14,403    14,101    17,793 
     c) Changes in inventories of finished goods, work-in-progress
     and stock-in-trade		   (651)   (1,054)   (1,281)   (1,868)   227    1,295 
     d) Employee benefits expense   7,823    7,837    7,084    23,062    20,675    28,326 
     e) Depreciation and amortisation expense   2,464    2,458    2,388    7,294    6,865    9,232 
     f) Impairment of non-current assets   -    -    10    -    10    51 
     g) Finance costs   56    58    28    159    143    169 
     h) Selling and other expenses   13,539    12,809    12,879    39,032    35,040    48,398 
                                    
     Total expenses   36,987    34,612    34,641    105,920    100,134    136,878 
                                    
 4   Profit  before tax (1 + 2 - 3)   6,319    16,006    4,849    44,521    29,294    38,660 
                                    
 5   Tax expense/(benefit)                              
     a) Current tax   1,569    3,960    1,988    10,916    6,322    8,641 
     b) Deferred tax   (2)   120    (385)   533    3,568    3,891 
                                    
 6   Net profit for the period/year (4 - 5)   4,752    11,926    3,246    33,072    19,404    26,128 
                                    
 7   Other comprehensive income                              
     a) (i) Items that will not be reclassified to profit or loss   (8)   1    2    (6)   3    89 
                                    
     (ii) Income tax relating to items that will not be reclassified to profit or loss   -    -    (31)   -    (31)   (53)
                                    
     b) (i) Items that will be reclassified to profit or loss   24    (802)   1,296    (257)   (2,278)   (928)
                                    
     (ii) Income tax relating to items that will be reclassified to
 profit or loss		   (6)   201    (551)   65    697    358 
                                    
     Total other comprehensive income   10    (600)   716    (198)   (1,609)   (534)
                                    
 8   Total comprehensive income (6 + 7)   4,762    11,326    3,962    32,874    17,795    25,594 
                                    
 9   Paid-up equity share capital (face value Rs. 5/- each)   834    834    833    834    833    833 
                                    
 10   Other equity                            203,909 
                                    
 11   Earnings per equity share (face value Rs. 5/- each)                              
     Basic   28.55    71.68    19.54    198.81    116.88    157.37 
     Diluted   28.50    71.54    19.50    198.43    116.63    157.03 
         (Not annualised)    (Not annualised)    (Not annualised)    (Not annualised)    (Not annualised)      

 

See accompanying notes to the financial results.

 

 

   

 

 

 

 

DR. REDDY'S LABORATORIES LIMITED

 

Segment information All amounts in Indian Rupees millions 
       Quarter ended   Nine months ended   Year ended 
       31.12.2023   30.09.2023   31.12.2022   31.12.2023   31.12.2022   31.03.2023 
Sl. No.   Particulars  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Audited) 
     Segment wise revenue and results                              
 1   Segment revenue                              
     a) Pharmaceutical Services and Active Ingredients   7,658    6,357    6,357    20,900    18,785    27,896 
     b) Global Generics   35,726    43,995    34,298    129,399    109,348    147,999 
     c) Others   66    128    110    325    368    497 
     Total   43,450    50,480    40,765    150,624    128,501    176,392 
                                    
     Less: Inter-segment revenue   2,420    2,093    1,789    6,834    4,416    6,767 
     Total revenue from operations   41,030    48,387    38,976    143,790    124,085    169,625 
                                    
 2   Segment results                              
     Profit/(loss) before tax and interest from each segment                              
     a) Pharmaceutical Services and Active Ingredients   (397)   (540)   (671)   (1,533)   (1,822)   (1,336)
     b) Global Generics   6,832    16,174    7,498    45,498    37,662    46,716 
     c) Others   198    108    (97)   297    (103)   (154)
     Total   6,633    15,742    6,730    44,262    35,737    45,226 
                                    
     Less: (i) Finance costs   56    58    28    159    143    169 
     (ii) Other un-allocable expenditure/(income), net   258    (322)   1,853    (418)   6,300    6,397 
     Total profit before tax   6,319    16,006    4,849    44,521    29,294    38,660 

 

Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.

 

Segmental capital employed

 

As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.

 

Notes:

 

1The above statement of unaudited standalone financial results of Dr. Reddy's Laboratories Limited ("the Company"), which have been prepared in accordance with the Indian Accounting Standards (''Ind AS'') prescribed under Section 133 of the Companies Act, 2013 ("the Act'') read with relevant rules issued thereunder, other accounting principles generally accepted in India and guidelines issued by the Securities and Exchange Board of India ("SEBI'') were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meetings held on 30 January 2024. The Statutory Auditors have carried out a limited review on the unaudited standalone financial results and issued unmodified report thereon.

 

2License fee and service income for the year ended 31 March 2023 includes:
a. Rs. 2,640 million from sale of certain non-core dermatology brands in India to Eris Lifesciences Limited;
b. Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited; and
c. Rs. 902 million from sale of brands Z&D, Pedicloryl, Pecef and Ezinapi to J B Chemicals and Pharmaceuticals Limited;
The amounts recognised above are adjusted for expected sales returns. These transactions pertain to the Company’s Global Generics segment.

 

3“Other income” for the nine months ended 31 December 2023 includes Rs.540 million recognised in April 2023, pursuant to settlement agreement with Janssen Group, in settlement of the claim brought in the Federal Court of Canada by the Company and its affiliates for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of Zytiga®(Abiraterone).This transaction pertains to the Company's Global Generics segment.

 

4“Other income” for the nine months ended 31 December 2023 includes dividend income of Rs. 443 million declared by Kunshan Rotan Reddy Pharmaceutical Company Limited.

 

5During the quarter and nine months ended 31 December 2023, an amount of Rs. 1,142 million and Rs. 3,405 million respectively and during the quarter and nine months ended 31 December 2022, an amount of Rs. 435 million and Rs. 2,806 million respectively, representing government grants has been accounted as a reduction from cost of material consumed.

 

6The Company has considered the impact of recent tax regulations and developments, including updates to its estimate on the impact of adoption of the Taxation Laws (Amendment) Act 2019, in determining its “Tax expense/(benefit)” for the nine months ended 31 December 2023 and year ended 31 March 2023.

 

7The Company received an anonymous complaint in September 2020, alleging that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S. anti-corruption laws, specifically the U.S. Foreign Corrupt Practices Act. The Company disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. The Company engaged a U.S. law firm to conduct the investigation at the instruction of a committee of the Company’s Board of Directors. On 06 July 2021 the Company received a subpoena from the SEC for the production of related documents, which were provided to the SEC.
The Company made presentations to the SEC and the DOJ in relation to the investigation with respect to certain countries during the previous fiscal years. The Company also made a presentation to the SEC and the DOJ in relation to its Global Compliance Framework, including the ongoing enhancement initiatives, during the year ended 31 March 2023. The Company is complying with its listing obligations as it relates to updating the regulatory agencies. While the findings from the aforesaid investigations could result in government or regulatory enforcement actions against the Company in the United States and/or foreign jurisdictions, which can lead to civil and criminal sanctions under relevant laws, the outcomes including liabilities are not reasonably ascertainable at this time.

 

By order of the Board
For Dr. Reddy's Laboratories Limited
 
Place: Hyderabad G V Prasad
Date: 30 January 2024 Co-Chairman & Managing Director