Dr Reddys Laboratories Ltd 6-K, filed May 10, 2023
Dr Reddys Laboratories Ltd (RDY)
About this 6-K
Dr Reddys Laboratories Ltd filed this 6-K on May 10, 2023.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
May 2023
Commission File Number 1-15182
DR. REDDY’S LABORATORIES LIMITED
(Translation of registrant’s name into English)
8-2-337, Road No. 3, Banjara Hills
Hyderabad, Telangana 500 034, India
+91-40-49002900
______________
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): 82-________.
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
We hereby furnish the United States Securities and Exchange Commission with copies of the following information about our public disclosures regarding our results of operations and financial condition for the quarter and year ended March 31, 2023.
On May 10, 2023, we announced our results of operations for the quarter and year ended March 31, 2023. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Audited Consolidated Financial Results, Ind AS Audited Consolidated Financial Results with audit report and Ind AS Audited Standalone Financial Results with audit report for the quarter and year ended March 31, 2023, a copy of which is attached to this Form 6-K as Exhibit 99.2 , 99.3 , 99.4 and 99.5 respectively.
We have also made available to the public on our web site, www.drreddys.com, the following: IFRS Audited Consolidated Financial Results, Ind AS Audited Consolidated Financial Results and Ind AS Audited Standalone Financial Results for the quarter and year ended March 31, 2023.
Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DR. REDDY’S LABORATORIES LIMITED (Registrant) | |||
| Date: May 10, 2023 | By: | /s/ K Randhir Singh | |
| Name: | K Randhir Singh | ||
| Title: | Company Secretary & Compliance Officer | ||
Exhibit 99.1
 |
Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, CIN : L85195TG1984PLC004507
Tel : +91 40 4900 2900 Fax : +91 40 4900 2999 Email : mail@drreddys.com www.drreddys.com |
May 10, 2023
National Stock Exchange of India Ltd. (Scrip Code: DRREDDY-EQ)
BSE Limited (Scrip Code: 500124)
New York Stock Exchange Inc. (Stock Code: RDY)
NSE IFSC Ltd. (Stock Code: DRREDDY)
Dear Sir/Madam,
Sub: Outcome of Board Meeting held on May 10, 2023
In furtherance to our letter dated March 23, 2023, we would like to inform you that the Board of Directors of the Company at its meeting held on May 10, 2023, has, inter alia, transacted the following businesses:
Financial Results
| A. | Approved the Audited Financial Results of the Company for the quarter and year ended March 31, 2023. In terms of the above, we are enclosing herewith the following: |
| 1. | Audited Consolidated Financial Results of the Company and its subsidiaries for the quarter and year ended March 31, 2023, as per International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB). |
| 2. | Audited Consolidated Financial Results of the Company and its subsidiaries for the quarter and year ended March 31, 2023, as per Indian Accounting Standards. |
| 3. | Audited Standalone Financial Results of the Company for the quarter and year ended March 31, 2023, as per Indian Accounting Standards. |
Pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audit Reports of the Statutory Auditors on the financial results as mentioned at serial nos. 2 & 3 are also enclosed.
We would like to confirm that the Statutory Auditors of the Company have issued Audit Reports with 'Unmodified Opinion' on the Audited Financial Statements of the Company (Standalone and Consolidated) for the year ended March 31, 2023.
Dividend
| B. | Recommended a final dividend of Rs. 40/- (800%) per equity share of Rs. 5/- each for the financial year 2022-23. The dividend will be paid on or after five days from the date of declaration of the final dividend by the shareholders at the 39th Annual General Meeting (AGM). |
The Board Meeting commenced at 02:00 PM and concluded at 04:49 PM.
This is for your information and record.
Thanking you.
Yours faithfully,
For Dr. Reddy’s Laboratories Limited
| /s/ K Randhir Singh | |
| K Randhir Singh |
Company Secretary, Compliance Officer & Head-CSR
Encl: As above
Exhibit 99.2
| CONTACT | ||
| DR. REDDY'S LABORATORIES LTD. | Investor relationS | Media relationS |
| 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500034. Telangana, India. |
RICHA PERIWAL richaperiwal@drreddys.com |
USHA IYER ushaiyer@drreddys.com |
Dr. Reddy’s Q4 & FY23 Financial Results
Hyderabad, India, May 10, 2023: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the fourth quarter and full year ended March 31, 2023. The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS).
| Q4 Performance Summary | FY23 Performance Summary | |
|
Rs. 6,297 Cr Revenue [Up: 16% YoY; Down 7% QoQ]
57.2% Gross Margin [Q4 FY22: 52.9%; Q3 FY23: 59.2%]
Rs.1,799 Cr SGNA expenses [28.6% of Revenues]
Rs. 537 Cr R&D expenses [8.5% of Revenues]
Rs. 1,631 Cr EBITDA [25.9% of Revenues; Up: 26% YoY; Down: 17% QoQ]
Rs. 1,326 Cr* Profit before Tax [Up: 434% YoY; Down: 19% QoQ]
Rs. 959 Cr Profit after Tax [Up: 996% YoY; Down: 23% QoQ] 1 |
Rs. 24,588 Cr Revenue [Up: 15% YoY]
56.7% Gross Margin [FY22: 53.1%]
Rs. 6,803 Cr SGNA expenses [27.7% of Revenues]
Rs. 1,938 Cr R&D expenses [7.9% of Revenues]
Rs. 7,308 Cr EBITDA [29.7% of Revenues; Up: 42% YoY]
Rs. 6,037 Cr* Profit before Tax [Up: 87% YoY]
Rs. 4,507 Cr Profit after Tax [Up: 91% YoY] |
* Excluding impairments in current & previous periods, Q4 FY 23 PBT is Rs. 1,380 Cr (growth of 38% YoY) and FY 23 PBT is Rs. 6,107 Cr (growth of 53% YoY)
Commenting on the results, Co-Chairman & MD, G V Prasad said: “FY 23 has been a year of record sales, profits and cash flow, driven by our performance in US Generics. We progressed well in our productivity and sustainability agenda. We will continue to deliver on our purpose, invest in growth drivers and promote a culture that is innovative and collaborative ensuring the future of our business.”
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.19 |
Dr. Reddy’s Laboratories Limited and Subsidiaries
Consolidated Income Statement
| Q4 FY23 | Q4 FY22 | YoY | Q3 FY23 | QoQ | ||||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr% | ||||||||||||||||||||||||
| Revenues | 766 | 62,968 | 661 | 54,368 | 16 | 824 | 67,700 | (7 | ) | |||||||||||||||||||||||
| Cost of Revenues | 328 | 26,971 | 312 | 25,625 | 5 | 336 | 27,607 | (2 | ) | |||||||||||||||||||||||
| Gross Profit | 438 | 35,997 | 350 | 28,743 | 25 | 488 | 40,093 | (10 | ) | |||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 219 | 17,992 | 191 | 15,674 | 15 | 219 | 17,981 | 0 | ||||||||||||||||||||||||
| Research and Development expenses | 65 | 5,366 | 53 | 4,326 | 24 | 59 | 4,821 | 11 | ||||||||||||||||||||||||
| Impairment of non-current assets | 7 | 540 | 91 | 7,515 | (93 | ) | 2 | 134 | 303 | |||||||||||||||||||||||
| Other operating (income)/expense | (3 | ) | (281 | ) | (4 | ) | (291 | ) | (3 | ) | 9 | 732 | (138 | ) | ||||||||||||||||||
| Results from operating activities | 151 | 12,380 | 18 | 1,519 | 715 | 200 | 16,425 | (25 | ) | |||||||||||||||||||||||
| Net finance (income)/expense | (10 | ) | (799 | ) | (10 | ) | (859 | ) | (7 | ) | 2 | 139 | (675 | ) | ||||||||||||||||||
| Share of profit of equity accounted investees | (1 | ) | (76 | ) | (1 | ) | (105 | ) | (28 | ) | (1 | ) | (60 | ) | 27 | |||||||||||||||||
| Profit before income tax | 161 | 13,255 | 30 | 2,483 | 434 | 199 | 16,346 | (19 | ) | |||||||||||||||||||||||
| Income tax expense | 45 | 3,663 | 20 | 1,608 | 128 | 47 | 3,875 | (5 | ) | |||||||||||||||||||||||
| Profit for the period | 117 | 9,592 | 11 | 875 | 996 | 152 | 12,471 | (23 | ) | |||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | 0.70 | 57.62 | 0.06 | 5.26 | 995 | 0.91 | 74.95 | (23 | ) | |||||||||||||||||||||||
| As % to revenues | Q4 FY23 | Q4 FY22 | Q3 FY23 | |||||||||
| Gross Profit | 57.2 | 52.9 | 59.2 | |||||||||
| SG&A | 28.6 | 28.8 | 26.6 | |||||||||
| R&D | 8.5 | 8.0 | 7.1 | |||||||||
| EBITDA | 25.9 | 23.9 | 29.0 | |||||||||
| PBT | 21.1 | 4.6 | 24.1 | |||||||||
| PAT | 15.2 | 1.6 | 18.4 | |||||||||
EBITDA Computation
| Q4 FY23 | Q4 FY22 | Q3 FY23 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Profit before Income Tax | 161 | 13,255 | 30 | 2,483 | 199 | 16,346 | ||||||||||||||||||
| Interest (income) / expense - Net* | (8 | ) | (673 | ) | 0 | 24 | (1 | ) | (93 | ) | ||||||||||||||
| Depreciation | 27 | 2,213 | 25 | 2,039 | 27 | 2,245 | ||||||||||||||||||
| Amortization | 12 | 977 | 11 | 920 | 12 | 1,026 | ||||||||||||||||||
| Impairment | 7 | 540 | 91 | 7,515 | 2 | 134 | ||||||||||||||||||
| EBITDA | 198 | 16,312 | 158 | 12,980 | 239 | 19,658 | ||||||||||||||||||
* Includes income from Investments
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.19 |
Revenue Mix by Segment
| Q4 FY23 | Q4 FY22 | YoY | Q3 FY23 | QoQ | ||||||||||||||||
| Segment | (Rs.) | (Rs.) | Gr % | (Rs.) | Gr % | |||||||||||||||
| Global Generics | 54,257 | 46,118 | 18 | 59,241 | (8 | ) | ||||||||||||||
| North America | 25,321 | 19,971 | 27 | 30,567 | (17 | ) | ||||||||||||||
| Europe | 4,960 | 4,444 | 12 | 4,303 | 15 | |||||||||||||||
| India | 12,834 | 9,689 | 32 | 11,274 | 14 | |||||||||||||||
| Emerging Markets | 11,142 | 12,013 | (7 | ) | 13,097 | (15 | ) | |||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 7,787 | 7,557 | 3 | 7,758 | 0 | |||||||||||||||
| Others | 924 | 693 | 33 | 701 | 32 | |||||||||||||||
| Total | 62,968 | 54,368 | 16 | 67,700 | (7 | ) | ||||||||||||||
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.19 |
Dr. Reddy’s Laboratories Limited and Subsidiaries
Consolidated Income Statement
| FY23 | FY22 | Gr | ||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Revenue | 2,992 | 2,45,879 | 100.0 | 2,608 | 2,14,391 | 100.0 | 15 | |||||||||||||||||||||
| Cost of revenues | 1,296 | 1,06,536 | 43.3 | 1,223 | 1,00,551 | 46.9 | 6 | |||||||||||||||||||||
| Gross profit | 1,695 | 1,39,343 | 56.7 | 1,385 | 1,13,840 | 53.1 | 22 | |||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 828 | 68,026 | 27.7 | 755 | 62,081 | 29.0 | 10 | |||||||||||||||||||||
| Research and Development expenses | 236 | 19,381 | 7.9 | 213 | 17,482 | 8.2 | 11 | |||||||||||||||||||||
| Impairment of non-current assets | 9 | 699 | 0.3 | 92 | 7,562 | 3.5 | (91 | ) | ||||||||||||||||||||
| Other operating income | (72 | ) | (5,907 | ) | (2.4 | ) | (34 | ) | (2,761 | ) | (1.3 | ) | 114 | |||||||||||||||
| Results from operating activities | 695 | 57,144 | 23.2 | 359 | 29,476 | 13.7 | 94 | |||||||||||||||||||||
| Net finance income | (35 | ) | (2,853 | ) | (1.2 | ) | (26 | ) | (2,119 | ) | (1.0 | ) | 35 | |||||||||||||||
| Share of profit of equity accounted investees | (5 | ) | (370 | ) | (0.2 | ) | (9 | ) | (703 | ) | (0.3 | ) | (47 | ) | ||||||||||||||
| Profit before income tax | 734 | 60,367 | 24.6 | 393 | 32,298 | 15.1 | 87 | |||||||||||||||||||||
| Income tax expense | 186 | 15,300 | 6.2 | 106 | 8,730 | 4.1 | 75 | |||||||||||||||||||||
| Profit for the period | 548 | 45,067 | 18.3 | 287 | 23,568 | 11.0 | 91 | |||||||||||||||||||||
| Diluted EPS | 3.30 | 270.85 | 1.72 | 141.69 | 91 | |||||||||||||||||||||||
EBITDA Computation
| FY23 | FY22 | |||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||
| Profit before Income Tax | 734 | 60,367 | 393 | 32,298 | ||||||||||||
| Interest income - Net* | (8 | ) | (621 | ) | (3 | ) | (284 | ) | ||||||||
| Depreciation | 105 | 8,614 | 99 | 8,152 | ||||||||||||
| Amortization | 49 | 4,022 | 45 | 3,672 | ||||||||||||
| Impairment | 9 | 699 | 92 | 7,562 | ||||||||||||
| EBITDA | 889 | 73,081 | 625 | 51,400 | ||||||||||||
* Includes income from Investments
Key Balance Sheet Items
| As on 31st Mar 2023 |
As on 31st Dec 2022 |
As on 31st Mar 2022 |
||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Cash and cash equivalents and other investments | 760 | 62,456 | 610 | 50,164 | 584 | 48,033 | ||||||||||||||||||
| Trade receivables (current & non-current) | 882 | 72,486 | 913 | 75,046 | 813 | 66,818 | ||||||||||||||||||
| Inventories | 592 | 48,670 | 600 | 49,326 | 619 | 50,884 | ||||||||||||||||||
| Property, plant and equipment | 809 | 66,462 | 791 | 64,996 | 756 | 62,169 | ||||||||||||||||||
| Goodwill and Other Intangible assets | 427 | 35,094 | 431 | 35,401 | 385 | 31,664 | ||||||||||||||||||
| Loans and borrowings (current & non-current) | 164 | 13,472 | 215 | 17,663 | 412 | 33,845 | ||||||||||||||||||
| Trade payables | 322 | 26,444 | 317 | 26,023 | 311 | 25,572 | ||||||||||||||||||
| Equity | 2,810 | 2,30,991 | 2,680 | 2,20,273 | 2,318 | 1,90,527 | ||||||||||||||||||
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of 1 USD = Rs. 82.19 |
Revenue Mix by Segment [year on year]
| FY23 | FY22 | Gr | ||||||||||||||||||||||||||
| Segment | ($) | (Rs.) | % | ($) | (Rs.) | % | % | |||||||||||||||||||||
| Global Generics | 2,601 | 2,13,768 | 86.9 | % | 2,180 | 1,79,170 | 83.6 | % | 19 | % | ||||||||||||||||||
| North America | 1,237 | 1,01,704 | 41.4 | % | 911 | 74,915 | 34.9 | % | 36 | % | ||||||||||||||||||
| Europe | 214 | 17,603 | 7.2 | % | 202 | 16,631 | 7.8 | % | 6 | % | ||||||||||||||||||
| India | 595 | 48,932 | 19.9 | % | 510 | 41,957 | 19.6 | % | 17 | % | ||||||||||||||||||
| Emerging Markets | 554 | 45,529 | 18.5 | % | 556 | 45,667 | 21.3 | % | 0 | % | ||||||||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 354 | 29,069 | 11.8 | % | 374 | 30,740 | 14.3 | % | -5 | % | ||||||||||||||||||
| Others | 37 | 3,042 | 1.2 | % | 55 | 4,481 | 2.1 | % | -32 | % | ||||||||||||||||||
| Total | 2,992 | 2,45,879 | 100.0 | % | 2,608 | 2,14,391 | 100.0 | % | 15 | % | ||||||||||||||||||
Revenue Analysis [Q4 FY23 and FY23]
Global Generics (GG)
| Ø | FY23 revenue for GG segment at Rs. 213.8 billion higher by 19% over FY22. This growth was driven by North America, Europe and India, while Emerging markets remained flat. |
| Ø | Q4 revenue at Rs. 54.3 billion, YoY growth of 18% and QoQ decline of 8%. YoY growth was driven by growth in North America, Europe and India markets; however, partially impacted due to a decline in revenues in Emerging Markets. QoQ decline was mainly due to decline in North America and Emerging Markets, partially offset by growth in Europe and India |
North America
| Ø | FY23 revenue from North America Generics for the year at Rs. 101.7 billion, YoY growth of 36%. The growth was contributed by new launches, scale up of existing products and favorable forex rates movement, which was partially offset by price erosion. |
| Ø | Q4 revenue at Rs. 25.3 billion, YoY growth of 27% and QoQ decline of 17%. YoY growth was primarily on account of new product launches and favorable forex rates movement, partly offset by price erosion. QoQ decline was due to fluctuation in demand for our new launches. |
| Ø | During the quarter, we launched 6 new products – Difluprednate, Lurasidone Tablets, Lubiprostone Capsules, Sunitinib Capsules, Nelarabine Injection and Timolol Gel. This takes our full year launch count to 25 products. |
| Ø | During the year, we filed 12 new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 31st March 2023, cumulatively 86 generic filings are pending for approval with the USFDA (81 ANDAs and 5 NDAs under 505(b)(2) route). Out of the pending 86 ANDAs, 45 are Para IVs, and we believe 18 have ‘First to File’ status. |
Europe
| Ø | FY23 revenue from Europe at Rs. 17.6 billion. YoY growth of 6%, driven by volume traction in base business and new product launches, which was partially offset by price erosion in some of our products. |
| Ø | Q4 revenue at Rs. 5.0 billion, YoY growth of 12% and QoQ growth of 15%. YoY growth was primarily on account of new product launches and traction in base business volumes, partly offset by price erosion in the base business. QoQ growth was driven by traction in base business volumes and favourable forex rates movement. |
India
| Ø | FY23 revenue from India at Rs. 48.9 billion. YoY growth of 17% was primarily attributable to increase in prices of our existing products, along with additional revenues from the launch of new products. The growth was also aided by divestment of a few non-core brands during the year. During the year, we launched 9 new brands in India. |
| Ø | Q4 revenue at Rs. 12.8 billion, YoY growth of 32% and QoQ growth of 14%. YoY growth primarily driven by favorable price variance, new product launches, and non-core brand divestments while QoQ growth was primarily due to divestment of a few non-core brands, partially offset by decline in volumes of some of our products. |
Emerging Markets
| Ø | FY23 revenue from Emerging Markets at Rs. 45.5 billion, remained flat over the previous year. However, this grew by 13% adjusted for the covid related product sales and divestment income realized in the last year. |
| - | Revenue from Russia for the year at Rs. 21.2 billion, YoY growth of 2% impacted due to higher base of FY 22, which included revenues from divestment of few non-core brands. The base business grew by 11% net of divestment income, driven by favorable price variance and beneficial forex rates movement, partially offset by a decrease in volumes. |
| - | Revenue from other CIS countries and Romania for the year at Rs. 8.6 billion, YoY growth of 4%. Growth was on account of favorable price variance, partly offset by a decrease in volumes of base business and adverse movement in forex rates. |
| - | Revenue from Rest of World (RoW) territories for the year at Rs. 15.7 billion, YoY decline of 5% primarily on account of revenues from covid related products in the FY 22. The revenues were also impacted by an adverse price variance, partly offset by new product launches. |
| Ø | Q4 revenue at Rs. 11.1 billion, YoY decline of 7% and QoQ decline of 15%. |
| - | Revenue for Russia for Q4 at Rs. 5.2 billion, both YoY and QoQ decline of 24%. YoY decline was mainly attributable to divestment income & higher channel inventory in Q4 of last year. QoQ decline was primarily due to reduction in base business volumes and adverse forex rates movement. |
| - | Revenue from other CIS countries and Romania for the quarter are Rs. 2.3 billion, remained flat YoY while showing an increase of 2% QoQ. Benefits from favorable price variance were set off with reduction in base business volumes. |
| - | Revenue from Rest of World (RoW) territories for Q4 at Rs. 3.7 billion, YoY growth of 28% and QoQ decline of 8%. The YoY growth was primarily driven by an increase in base business volumes, new product launches and favorable forex rates movement, partially offset by adverse price variance. QoQ decline was mainly due to adverse price variance and reduction in base business volumes. |
Pharmaceutical Services and Active Ingredients (PSAI)
| Ø | FY23 revenue from PSAI at Rs. 29.1 billion. YoY decline of 5%. The decline was mainly on account of decline in base business volumes and price erosion in some of our products, partially offset by new product launches and favorable forex rate movements. FY22 included higher contribution from sales of covid related portfolio. |
| Ø | Q4 revenue at Rs. 7.8 billion, with growth of 3% YoY, while it remained flat QoQ. YoY growth was primarily driven by new product launches and favourable forex rates movement. These were offset by a reduction in base business volumes and adverse price variance. |
| Ø | During the year, we have filed 12 DMFs in the US, of which 7 DMFs were filed in Q4FY23. |
Income Statement Highlights:
| Ø | FY 23 gross margin at 56.7%, an increase of ~360 bps over previous year. The increase was driven by new product sales of certain products with higher gross margins, higher government incentives and favourable foreign exchange. This was partially offset with price erosion in certain of our products, primarily in the United States and Europe. The gross profit margin for GG and PSAI business segments are at 62.1% and 16.2% respectively. |
Q4 gross margin at 57.2% (GG: 61.7%, PSAI: 25.2%). Gross margin increased by ~430 bps YoY, while it declined by ~210 bps QoQ. YoY increase was driven by new product sales of certain products with higher gross margins, and favourable foreign exchange, partially offset by price erosion, primarily in United States and Europe. QoQ decline was primarily due to lower government incentives and product mix, which was partly offset by income from divestment of non-core brands.
| Ø | Selling, general & administrative (SG&A) expenses for FY23 at Rs. 68.0 billion, an increase of 10% on a YoY basis. SG&A as a % to sales for FY23 was 27.7%, a decline of 130 basis points over FY22. SG&A expenses for Q4 at Rs. 18.0 billion, YoY increase of 15% and remained flat QoQ. The SG&A spend increase is largely on account of investments in sales & marketing and adverse impact of forex rates. |
| Ø | Impairment charge for FY23 at Rs. 0.7 billion and for Q4 at Rs. 0.5 billion. This is mainly due to decrease in market potential of products acquired from Nimbus Health GmbH and certain other product-related intangibles due to adverse market conditions. |
| Ø | Research & development (R&D) expenses in FY23 at Rs. 19.4 billion. As % to Revenues – FY23: 7.9% | FY22: 8.2%. Q4 R&D expenses at Rs. 5.4 billion, 8.5% of revenue. We continue our focus on investing in R&D to build a healthy pipeline of new products across our markets for both small molecules and biosimilars. |
| Ø | Other operating income for FY23 at Rs. 5.9 billion compared to Rs. 2.8 billion in FY22. The net other income was higher primarily on account of recognition of income of Rs. 5.6 billion from a settlement agreement, with Indivior Inc., Indivior UK Limited, and Aquestive Therapeutics, Inc., resolving all claims between the parties relating to the Company’s generic buprenorphine and naloxone sublingual film. Other operating income for Q4 was Rs. 0.3 billion. |
| Ø | Net Finance income for FY23 at Rs. 2.9 billion compared to Rs. 2.1 billion in FY22. The increase is primarily on account of higher foreign exchange gain in current year as compared to FY22 and increase in profit on sale of mutual funds compared to FY22. Net finance income in Q4 was Rs. 0.8 billion. |
| Ø | Profit before Tax for FY23 at Rs. 60.4 billion, YoY growth of 87%. Profit before Tax for Q4 is at Rs. 13.3 billion. |
| Ø | Profit after Tax for FY23 at Rs. 45.1 billion and for Q4 at Rs. 9.6 billion. The effective tax rate for the year has been 25.3% as compared to 27.0% in FY22, due to changes in the Company’s jurisdictional mix of earnings. The effective tax rate for the quarter has been at 27.6% as compared to 64.8% in Q4FY22. The previous year ETR was higher due to impairment charge impact. |
| Ø | Diluted earnings per share for FY23 is Rs. 270.9. Diluted earnings per share for Q4 is Rs. 57.6. |
Other Highlights:
| Ø | EBITDA for FY23 at Rs. 73.1 billion and the EBITDA margin is 29.7%. EBITDA for Q4 at 16.3 billion and the EBITDA margin at 25.9%. |
| Ø | Capital expenditure for FY23 at Rs. 11.3 billion. Capital expenditure for Q4 at Rs. 2.6 billion. |
| Ø | Free cash-flow for FY23 at Rs. 40.1 billion and for Q4 it at Rs. 16.0 billion. |
| Ø | Net cash surplus for the company at Rs. 50.5 billion as on March 31, 2023. |
| Ø | The Board has recommended payment of a dividend of Rs. 40 per equity share of face value Rs 5/- each (800% of face value) for the year ended March 31, 2023 subject to approval of the members of the company. |
All amounts in millions, except EPS
About key metrics and non-GAAP Financial Measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical performance, financial position or cash flows that are adjusted to exclude or include amounts, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS. Our non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.
For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please refer to "Reconciliation of GAAP to Non-GAAP Results" table in this press release.
All amounts in millions, except EPS
Reconciliation of GAAP measures to Non-GAAP measures
Free Cash Flow
| Three months Ended March 31, 2023 | Year Ended March 31, 2023 | |||||||
| Net cash generated from operating activities | 23,376 | 69,587 | ||||||
| Less: | ||||||||
| Taxes | (3,697 | ) | (10,714 | ) | ||||
| Investments in PPE and Intangibles | (3,722 | ) | (18,782 | ) | ||||
| Free Cash Flow | 15,957 | 40,091 | ||||||
Operating working capital
Year Ended March 31, 2023 | ||||
| Inventories | 48,670 | |||
| Trade Receivables | 72,485 | |||
| Less: | ||||
| Trade Payables | 26,444 | |||
| Operating Working Capital | 94,711 | |||
Net cash surplus
Year Ended March 31, 2023 | ||||
| Cash and cash equivalents | 5,779 | |||
| Investments | 56,678 | |||
| Short-term borrowings | (7,390 | ) | ||
| Long-term borrowings, current portion | (4,804 | ) | ||
| Less: | ||||
| Restricted cash balance | 89 | |||
| Lease liabilities (included in Long-term borrowings, current portion) | (1,004 | ) | ||
| Equity Investments (included in Investments) | 716 | |||
| Net Cash Surplus | 50,462 | |||
All amounts in millions, except EPS
Computation of Return on Capital Employed
Year Ended March 31, 2023 | ||||
| Profit before tax | 60,367 | |||
| Less: | ||||
| Interest and Investment Income (Excluding forex gain/loss) | 627 | |||
| Earnings Before Interest and taxes [A] | 59,740 | |||
| Average Capital Employed [B] | 1,72,602 | |||
| Return on Capital Employed (A/B) (Ratio) | 34.6 | % | ||
Computation of capital employed
| Year Ended March 31, 2023 | Year Ended March 31, 2022 | |||||||
| Property Plant and Equipment | 66,462 | 62,169 | ||||||
| Intangibles | 30,849 | 27,246 | ||||||
| Goodwill | 4,245 | 4,418 | ||||||
| Investment in equity accounted associates | 4,702 | 4,318 | ||||||
| Other Current Assets | 20,069 | 13,902 | ||||||
| Other investments | 660 | 3,668 | ||||||
| Other non-current assets | 800 | 894 | ||||||
| Inventories | 48,670 | 50,884 | ||||||
| Trade Receivables | 72,485 | 66,818 | ||||||
| Derivative Financial Instruments | 1,095 | 1,427 | ||||||
| Less: | ||||||||
| Other Liabilities | 42,320 | 36,414 | ||||||
| Provisions | 5,513 | 4,315 | ||||||
| Trade payables | 26,444 | 25,572 | ||||||
| Operating Capital Employed | 1,75,760 | 1,69,443 | ||||||
| Average Capital Employed | 1,72,602 | |||||||
Computation of EBITDA
Refer page no. 2 and 4 for EBITDA computations.
Earnings Call Details (07:30 pm IST, 10:00 am EDT, May 10, 2023)
The management of the Company will host an earnings call to discuss the Company’s financial performance and answer any questions from the participants.
| Conference Joining Information |
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| Option 2: Join through below Dial-In Numbers | |
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Universal Access Number:
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| International Toll Free Number: |
USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448 |
No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call.
Play Back: The play back will be available after the earnings call, till May 17th, 2023. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 65827.
Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com
About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY) is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its businesses, Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr Reddy’s operates in markets across the globe. Our Major markets include – USA, India, Russia & CIS countries, and Europe. For more information, log on to: www.drreddys.com
Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management’s current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults , currency exchange rates , interest rates, persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization, including related integration issues, (vi) the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2022. The company assumes no obligation to update any information contained herein.”
Exhibit 99.3
 |
Dr. Reddys Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, CIN : L85195TG1984PLC004507
Tel : +91 40 4900 2900 Fax : +91 40 4900 2999 Email : mail@drreddys.com www.drreddys.com |
DR. REDDY'S LABORATORIES LIMITED
Audited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter and year ended 31 March 2023 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)
| All amounts in Indian Rupees millions | ||||||||||||||||||||||||
| Quarter ended | Year ended | |||||||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | ||||||||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||||||
| 1 | Revenues | 62,968 | 67,700 | 54,368 | 245,879 | 214,391 | ||||||||||||||||||
| 2 | Cost of revenues | 26,971 | 27,607 | 25,625 | 106,536 | 100,551 | ||||||||||||||||||
| 3 | Gross profit (1 - 2) | 35,997 | 40,093 | 28,743 | 139,343 | 113,840 | ||||||||||||||||||
| 4 | Selling, general and administrative expenses | 17,992 | 17,981 | 15,674 | 68,026 | 62,081 | ||||||||||||||||||
| 5 | Research and development expenses | 5,366 | 4,821 | 4,326 | 19,381 | 17,482 | ||||||||||||||||||
| 6 | Impairment of non-current assets | 540 | 134 | 7,515 | 699 | 7,562 | ||||||||||||||||||
| 7 | Other (income)/expense, net | (281 | ) | 732 | (291 | ) | (5,907 | ) | (2,761 | ) | ||||||||||||||
| Total operating expenses | 23,617 | 23,668 | 27,224 | 82,199 | 84,364 | |||||||||||||||||||
| 8 | Results from operating activities [(3) - (4 + 5 + 6 + 7)] | 12,380 | 16,425 | 1,519 | 57,144 | 29,476 | ||||||||||||||||||
| Finance income | 1,153 | 279 | 1,175 | 4,281 | 3,077 | |||||||||||||||||||
| Finance expense | (354 | ) | (418 | ) | (316 | ) | (1,428 | ) | (958 | ) | ||||||||||||||
| 9 | Finance (expense)/income, net | 799 | (139 | ) | 859 | 2,853 | 2,119 | |||||||||||||||||
| 10 | Share of profit of equity accounted investees, net of tax | 76 | 60 | 105 | 370 | 703 | ||||||||||||||||||
| 11 | Profit before tax (8 + 9 + 10) | 13,255 | 16,346 | 2,483 | 60,367 | 32,298 | ||||||||||||||||||
| 12 | Tax expense, net | 3,663 | 3,875 | 1,608 | 15,300 | 8,730 | ||||||||||||||||||
| 13 | Profit for the period/year (11 -12) | 9,592 | 12,471 | 875 | 45,067 | 23,568 | ||||||||||||||||||
| 14 | Earnings per share: | |||||||||||||||||||||||
| Basic earnings per share of Rs.5/- each | 57.74 | 75.09 | 5.28 | 271.43 | 142.08 | |||||||||||||||||||
| Diluted earnings per share of Rs.5/- each | 57.62 | 74.95 | 5.26 | 270.85 | 141.69 | |||||||||||||||||||
| (Not annualised) | (Not annualised) | (Not annualised) | ||||||||||||||||||||||
| Segment information | All amounts in Indian Rupees millions | |||||||||||||||||||||||
| Quarter ended | Year ended | |||||||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | ||||||||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||||||
| Segment wise revenue and results: | ||||||||||||||||||||||||
| 1 | Segment revenue: | |||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 10,261 | 10,142 | 9,256 | 36,646 | 36,995 | |||||||||||||||||||
| b) Global Generics | 54,257 | 59,241 | 46,118 | 213,768 | 179,170 | |||||||||||||||||||
| c) Others | 924 | 701 | 693 | 3,042 | 4,481 | |||||||||||||||||||
| Total | 65,442 | 70,084 | 56,067 | 253,456 | 220,646 | |||||||||||||||||||
| Less: Inter-segment revenues | 2,474 | 2,384 | 1,699 | 7,577 | 6,255 | |||||||||||||||||||
| Net revenues | 62,968 | 67,700 | 54,368 | 245,879 | 214,391 | |||||||||||||||||||
| 2 | Segment results: | |||||||||||||||||||||||
| Gross profit from each segment | ||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 1,963 | 1,409 | 1,387 | 4,715 | 6,821 | |||||||||||||||||||
| b) Global Generics | 33,498 | 38,255 | 26,830 | 132,719 | 103,270 | |||||||||||||||||||
| c) Others | 536 | 429 | 526 | 1,909 | 3,749 | |||||||||||||||||||
| Total | 35,997 | 40,093 | 28,743 | 139,343 | 113,840 | |||||||||||||||||||
| Less: Selling and other un-allocable expenditure, net of other income | 22,742 | 23,747 | 26,260 | 78,976 | 81,542 | |||||||||||||||||||
| Total profit before tax | 13,255 | 16,346 | 2,483 | 60,367 | 32,298 | |||||||||||||||||||
Global Generics segment includes operations of Biologics business. Inter-segment revenues represent sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.
Notes:
| 1 | The above financial results have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB) and are reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 10 May 2023. The Independent Auditors have issued an unqualified report thereon. |
| 2 | Revenues for the year ended 31 March 2023 includes : a) Rs. 2,640 million from sale of certain non-core dermatology brands to Eris Lifesciences Limited for the quarter ended 31 March 2023; b) Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited; 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 Company’s Global Generics segment. |
| 3 | During the quarter and year ended 31 March 2023, an amount of Rs. 305 million and Rs. 3,111 million respectively, representing government grants has been accounted for as a reduction from cost of revenues. |
| 4 | During the quarter ended 31 March 2023, Company considered a total
impairment of Rs. 540 million towards: a. The Company assessed performance of business acquired from Nimbus Health GmbH against the initial estimates and performance of the products. Basis the assessment, the Company has recorded an impairment charge of the carrying values amounting to Rs. 375 million ( Goodwill- Rs. 272 million and Other intangibles- Rs. 103 million). The said impairment charge pertains to the Company’s Global Generics segment. b. Consequent to adverse market conditions with respect to certain of the Company’s products related intangibles forming part of the company’s Global Generics and Pharmaceutical Services and Active Ingredients segments, the Company assessed the recoverable amount of these products and recognised an amount of Rs. 165 million as impairment charge during the quarter ended 31 March 2023. |
| 5 | Included in “Other income/(expense), net” for the year ended 31 March 2023, is an amount of Rs. 991 million representing the Loss on sale of Assets, pursuant to agreement dated 16 December 2022 with Delpharm Development Leiden B.V (Delpharm) for transfer of its certain assets, liabilities and employees at its site at Leiden, Netherlands.This transaction pertains to Company’s Global Generics segment. |
| 6 | On 23 June 2022, the Company entered into a settlement agreement with Indivior Inc., Indivior UK Limited and Aquestive Therapeutics, Inc. Pursuant to the agreement, the Company will receive payments totaling U.S.$ 72 million by 31 March 2024. The said agreement resolves all claims between the parties relating to the Company’s generic buprenorphine and naloxone sublingual film including Indivior’s and Aquestive’s patent infringement allegations and the Company’s antitrust counterclaims. On 28 June 2022 the U.S. Court dismissed all claims and counterclaims pending in the case with prejudice, pursuant to a joint stipulation of dismissal filed by the parties. The Company recognised the present value of the amount receivable at Rs.5,638 million (U.S.$ 71.39 million) on the date of the settlement as ‘Other income, net’ in the consolidated financial results of the Company. The aforesaid transaction pertain to Company’s Global Generics segment. |
| 7 | Revenues for the quarter and year ended 31 March 2022 includes: a) Rs. 1,774 million towards the sale of territorial rights relating to two of the Company's anti-bacterial brands (Ciprolet® and Levolet®) in Russia and CIS region to Alium JSC; b) Rs. 390 million towards the sale of two of the Company's Brands (Daffy bar and Combihale) in India to Mankind Pharma Limited; c) Rs. 1,084 million towards sale of its U.S. and Canada territory rights for ELYXYBTM (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. The aforesaid transactions pertain to Company’s Global Generics Segment. |
| 8 | During the year ended 31 March 2022, there were significant changes
to the market conditions for certain of the products forming part of Company’s Global Generics and Proprietary Products segments.
The changes include, decrease in the market potential of products, increased competition leading to lower volumes, and revenues not being
in line with projections. Due to these adverse market developments, the Company recorded an impairment loss of Rs. 7,562 million
on various non-current assets. The said impairment loss includes: a) Rs. 4,337 million relating to PPC-06 (Tepilamide Fumarate Extended Release Tablets) in-process research and development asset; b) Rs. 3,051 million pertaining to Shreveport Cash Generating Unit (“CGU”) comprising of Property, plant and equipment and Goodwill; c) Rs. 174 million relating to other intangible assets. |
| 9 | The Company has been in litigation with Teva, principally over claims relating to the manufacturing of the commercial batches for VeraRing. Both the parties had claimed damages and all other remedies available under the law for the breach of the supply agreement entered between the parties. During the quarter ended 31 March 2023, the company had entered into a Settlement Agreement pursuant to which, all claims between the parties have been dismissed with prejudice and without any admission of liability by any of the parties. |
| 10 | The 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 6 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 current and previous fiscal year. 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. |
| 11 | The 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, net” for the quarter and year ended 31 March 2023. |
| 12 | As the revenues and gross profits of the Proprietary Products segment are considerably lower than the quantitative thresholds mentioned in IFRS 8, “Operating Segments”, the Company believes that Proprietary Products segment no longer qualifies to be a reportable segment and consequently, effective 1 April 2022, the Company included the financial information relating to Proprietary Products segment in “Others”. The corresponding information relating to Proprietary Products segment for earlier periods has been restated to reflect the aforementioned change. |
| 13 | During the quarter and year ended 31 March 2022, pursuant to a change in the U.S. Income tax regulations relating to the timing of recognition of certain sales based accruals, the Company recognised current tax liability of Rs. 4,602 million with a corresponding increase in the deferred tax asset. |
| 14 | The Company considered the uncertainties relating to the military conflict between Russia and Ukraine, in assessing the recoverability of receivables, goodwill, intangible assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. Based on its judgments, estimates and assumptions, including sensitivity analysis, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions. |
| 15 | On 5 April 2022 the Company received approval from the Honorable National Company Law Tribunal, Hyderabad Bench (“NCLT”) for the merger of Dr. Reddy's Holding Limited into Dr. Reddy's Laboratories Limited. Subsequently, the Company has filed the NCLT order, with the Ministry of Company Affairs on 8 April 2022 (‘Effective Date’). Consequently, Dr. Reddy's Holding Limited has been merged with the company. |
| 16 | Consolidated statements of financial position |
| All amounts in Indian Rupees millions | ||||||||
| As at | As at | |||||||
| Particulars | 31.03.2023 | 31.03.2022 | ||||||
| (Audited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 5,779 | 14,852 | ||||||
| Other investments | 56,018 | 29,513 | ||||||
| Trade and other receivables | 72,485 | 66,764 | ||||||
| Inventories | 48,670 | 50,884 | ||||||
| Derivative financial instruments | 1,232 | 1,906 | ||||||
| Tax assets | 2,687 | 4,035 | ||||||
| Other current assets | 20,069 | 13,902 | ||||||
| Total current assets | 206,940 | 181,856 | ||||||
| Non-current assets | ||||||||
| Property, plant and equipment | 66,462 | 62,169 | ||||||
| Goodwill | 4,245 | 4,418 | ||||||
| Other intangible assets | 30,849 | 27,246 | ||||||
| Trade and other receivables | - | 54 | ||||||
| Investment in equity accounted investees | 4,702 | 4,318 | ||||||
| Other investments | 660 | 3,668 | ||||||
| Deferred tax assets | 7,196 | 8,204 | ||||||
| Other non-current assets | 800 | 894 | ||||||
| Total non-current assets | 114,914 | 110,971 | ||||||
| Total assets | 321,854 | 292,827 | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Trade and other payables | 26,444 | 25,572 | ||||||
| Short-term borrowings | 7,390 | 27,082 | ||||||
| Long-term borrowings, current portion | 4,804 | 1,017 | ||||||
| Provisions | 5,454 | 4,258 | ||||||
| Tax liabilities | 2,144 | 1,615 | ||||||
| Derivative financial instruments | 137 | 479 | ||||||
| Other current liabilities | 39,472 | 33,992 | ||||||
| Total current liabilities | 85,845 | 94,015 | ||||||
| Non-current liabilities | ||||||||
| Long-term borrowings | 1,278 | 5,746 | ||||||
| Deferred tax liabilities | 833 | 60 | ||||||
| Provisions | 59 | 57 | ||||||
| Other non-current liabilities | 2,848 | 2,422 | ||||||
| Total non-current liabilities | 5,018 | 8,285 | ||||||
| Total liabilities | 90,863 | 102,300 | ||||||
| Equity | ||||||||
| Share capital | 833 | 832 | ||||||
| Treasury shares | (1,269 | ) | (1,601 | ) | ||||
| Share premium | 9,688 | 9,280 | ||||||
| Share based payment reserve | 1,652 | 1,628 | ||||||
| Capital redemption reserve | 173 | 173 | ||||||
| Debenture redemption reserve | 380 | 304 | ||||||
| Special economic zone re-investment reserve | 886 | 755 | ||||||
| Retained earnings | 215,593 | 175,712 | ||||||
| Other components of equity | 3,055 | 3,444 | ||||||
| Total equity | 230,991 | 190,527 | ||||||
| Total liabilities and equity | 321,854 | 292,827 | ||||||
| 17 | Consolidated statements of cash flows |
| All amounts in Indian Rupees millions | ||||||||
| Year ended | ||||||||
| Particulars | 31.03.2023 | 31.03.2022 | ||||||
| (Audited) | (Audited) | |||||||
| Cash flows from/(used in) operating activities : | ||||||||
| Profit for the period | 45,067 | 23,568 | ||||||
| Adjustments for: | ||||||||
| Tax expense/(benefit), net | 15,300 | 8,730 | ||||||
| Fair value changes and profit on sale of financial instruments measured at FVTPL**, net | (876 | ) | (277 | ) | ||||
| Depreciation and amortization | 12,636 | 11,824 | ||||||
| Impairment of non-current assets | 699 | 7,562 | ||||||
| Allowance for credit losses (on trade receivables and other advances) | 205 | 55 | ||||||
| Loss/(gain) on sale or de-recognition of non-current assets, net | 208 | (1,119 | ) | |||||
| Share of profit of equity accounted investees | (370 | ) | (703 | ) | ||||
| Foreign exchange (gain)/loss, net | (939 | ) | (766 | ) | ||||
| Interest (income)/expense, net | 248 | (7 | ) | |||||
| Inventories write-down | 4,869 | 4,584 | ||||||
| Equity settled share-based payment expense | 397 | 592 | ||||||
| Dividend income | - | * | - | * | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | (5,752 | ) | (17,012 | ) | ||||
| Inventories | (2,654 | ) | (9,912 | ) | ||||
| Trade and other payables | 23 | 4,412 | ||||||
| Other assets and other liabilities, net | 528 | 4,014 | ||||||
| Cash generated from operations | 69,589 | 35,545 | ||||||
| Income tax paid, net | (10,714 | ) | (7,437 | ) | ||||
| Net cash generated from operating activities | 58,875 | 28,108 | ||||||
| Cash flows from/(used in) investing activities : | ||||||||
| Expenditures on property, plant and equipment | (11,323 | ) | (14,660 | ) | ||||
| Proceeds from sale of property, plant and equipment | 82 | 370 | ||||||
| Expenditures on other intangible assets | (7,543 | ) | (4,389 | ) | ||||
| Proceeds from sale of other intangible assets | - | 2,946 | ||||||
| Payment for acquisition of business, net of cash acquired(1) | - | (326 | ) | |||||
| Purchase of other investments | (136,171 | ) | (88,972 | ) | ||||
| Proceeds from sale of other investments | 112,805 | 77,771 | ||||||
| Interest and dividend received | 777 | 873 | ||||||
| Net cash used in investing activities | (41,373 | ) | (26,387 | ) | ||||
| Cash flows from/(used in) financing activities : | ||||||||
| Proceeds from issuance of equity shares (including treasury shares) | 157 | 334 | ||||||
| Proceeds from sale of treasury shares | 211 | - | ||||||
| (Repayment of)/Proceeds from short-term loans and borrowings, net | (19,382 | ) | 3,520 | |||||
| Payment of principal portion of lease liabilities | (1,015 | ) | (785 | ) | ||||
| Dividend paid | (4,979 | ) | (4,146 | ) | ||||
| Interest paid | (1,853 | ) | (1,345 | ) | ||||
| Net cash used in financing activities | (26,861 | ) | (2,422 | ) | ||||
| Net (decrease)/increase in cash and cash equivalents | (9,359 | ) | (700 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 286 | 733 | ||||||
| Cash and cash equivalents at the beginning of the period(2) | 14,852 | 14,820 | ||||||
| Cash and cash equivalents at the end of the period | 5,779 | 14,852 | ||||||
*Rounded off to million.
**FVTPL (fair value through profit or loss)
(1)Cash and cash equivalents acquired under business combination Rs. Nil and Rs. 11 million for the periods ended 31 March 2023 and 31 March 2022, respectively.
(2)Adjusted for bank-overdraft of Rs. Nil and Rs. 9 million for the periods ended 31 March 2023 and 31 March 2022, respectively.
| 18 | The Board of Directors, at their meeting held on 10 May 2023, have recommended a final dividend of Rs.40 per share subject to approval of shareholders. |
| 19 | The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit. |
| By order of the Board | |
| For Dr. Reddy's Laboratories Limited |
| |
 |
| Place: Hyderabad | G V Prasad |
| Date: 10 May 2023 | Co-Chairman & Managing Director |
Exhibit 99.4
|
S.R. Batliboi & Associates LLP Chartered Accountants |
THE SKYVIEW 10 18th Floor, NORTH LOBBY Survey No. 83/1, Raidurgam Hyderabed - 500 032, India
Tel : + 91 40 6141 6000 |
Independent Auditor’s Report on the Quarterly and Year to Date Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
To
The Board of Directors of
Dr. Reddy’s Laboratories Limited
Report on the audit of the Consolidated Financial Results
Opinion
We have audited the accompanying statement of quarterly and year to date consolidated financial results of Dr. Reddy’s Laboratories Limited (“Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its joint ventures for the quarter and year ended March 31, 2023 (“Statement”), attached herewith, being submitted by the Holding Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”)
In our opinion and to the best of our information and according to the explanations given to us, the Statement:
| i. | includes the results of the following entities |
Holding Company
| 1. | Dr. Reddy’s Laboratiories Limited |
| Subsidiaries | ||
| 1. | Aurigene Oncology limited (Formerly, Aurigene Discovery Technologies Limited) | |
| 2. | Cheminor Investments Limited | |
| 3. | Dr. Reddy’s Bio-Sciences Limited | |
| 4. | Dr. Reddy’s Formulations Limited | |
| 5. | Dr. Reddy’s Farmaceutica Do Brasil Ltda | |
| 6. | Dr. Reddy's Laboratories SA | |
| 7. | Idea2Enterprises (India) Private Limited | |
| 8. | Imperial Credit Private Limited | |
| 9. | Industrias Quimicas Falcon de Mexico, S.A.de C.V. | |
| 10. | Svaas Wellness Limited | |
| 11. | Aurigene Discovery Technologies (Malaysia) Sdn. Bhd. | |
| 12. | Aurigene Discovery Technologies Inc.(liquidated on 23 March 2022) | |
| 13. | Aurigene Pharmaceutical Services Limited | |
| 14. | beta Institut gemeinnützige GmbH | |
| 15. | betapharm Arzneimittel GmbH | |
| 16. | Chirotech Technology Limited | |
| 17. | DRL Impex Limited | |
| 18. | Dr. Reddy’s Laboratories (Australia) Pty. Limited | |
| 19. | Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited | |
| 20. | Dr. Reddy’s Laboratories B.V. (merged with Reddy Netherlands B.V., Netherlands effective 25 January 2023) | |
| 21. | Dr. Reddy’s Laboratories Canada, Inc. | |
| 22. | Dr. Reddy's Laboratories Chile SPA | |
| 23. | Dr. Reddy’s Laboratories (EU) Limited | |
S.R. Batliboi& Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295
Regd. Office 22, Camac Street, Black B, 3rd floor, Kolkata 700 016
S.R. Batliboi & Associates LLP
Chartered Accountants
| 24. | Dr. Reddy’s Laboratories Inc. | |
| 25. | Dr. Reddy's Laboratories Japan KK | |
| 26. | Dr. Reddy’s Laboratories Kazakhstan LLP | |
| 27. | Dr. Reddy’s Laboratories LLC, Ukraine | |
| 28. | Dr. Reddy's Laboratories Louisiana LLC | |
| 29. | Dr. Reddy’s Laboratories Malaysia Sdn. Bhd. | |
| 30. | Dr. Reddy’s Laboratories New York, LLC | |
| 31. | Dr. Reddy's Laboratories Philippines Inc. | |
| 32. | Dr. Reddy’s Laboratories (Proprietary) Limited | |
| 33. | Dr. Reddy's Laboratories Romania S.R.L. | |
| 34. | Dr. Reddy's Laboratories SAS | |
| 35. | Dr. Reddy's Laboratories Taiwan Limited | |
| 36. | Dr. Reddy's Laboratories (Thailand) Limited | |
| 37. | Dr. Reddy’s Laboratories (UK) Limited | |
| 38. | Dr. Reddy’s New Zealand Limited | |
| 39. | Dr. Reddy’s (WUXI) Pharmaceutical Co. Ltd (liquidated on 13 December 2021) | |
| 40. | Dr. Reddy's Research and Development B.V. | |
| 41. | Dr. Reddy’s Srl | |
| 42. | Dr. Reddy's Venezuela, C.A. | |
| 43. | Dr. Reddy’s Laboratories LLC, Russia | |
| 44. | DRS LLC (merged with Dr. Reddy's Laboratories LLC, Russia effective 01 July 2022) | |
| 45. | Lacock Holdings Limited | |
| 46. | Promius Pharma LLC | |
| 47. | Reddy Holding GmbH | |
| 48. | Reddy Netherlands B.V. | |
| 49. | Reddy Pharma Iberia SAU | |
| 50. | Reddy Pharma Italia S.R.L | |
| 51. | Reddy Pharma SAS | |
| 52. | Nimbus Health GmbH (from 24 February 2022) | |
| Joint ventures | ||
| 1. | DRES Energy Private Limited | |
| 2. | Kunshan Rotam Reddy Pharmaceutical Company Limited | |
| Other consolidating entities | ||
| 1. | Cheminor Employees Welfare Trust | |
| 2. | Dr. Reddy's Research Foundation | |
| ii. | are presented in accordance with the requirements of the Listing Regulations in this regard; and | |
| iii. | gives a true and fair view in conformity with the applicable accounting standards, and other accounting principles generally accepted in India, of the consolidated net profit and other comprehensive loss and other financial information of the Group for the quarter and year ended March 31, 2023. |
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs), as specified under Section 143(10) of the Companies Act, 2013, as amended (“the Act”). Our responsibilities under those Standards are further described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Results” section of our report. We are independent of the Group and its joint ventures in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in “Other Matter” paragraph below, is sufficient and appropriate to provide a basis for our opinion.
S.R. Batliboi & Associates LLP
Chartered Accountants
Management’s Responsibilities for the Consolidated Financial Results
The Statement has been prepared on the basis of the consolidated annual financial statements. The Holding Company’s Board of Directors are responsible for the preparation and presentation of the Statement that give a true and fair view of the net profit and other comprehensive loss and other financial information of the Group including its joint ventures in accordance with the applicable accounting standards prescribed under section 133 of the Act 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 respective Board of Directors of the companies included in the Group and its joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and its joint ventures 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 the 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 Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Statement by the Directors of the Holding Company, as aforesaid.
In preparing the Statement, the respective Board of Directors of the companies included in the Group and its joint ventures are responsible for assessing the ability of the Group and its joint ventures to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and its joint ventures are also responsible for overseeing the financial reporting process of the Group and its joint ventures.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Results
Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Statement.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
| ● | Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, 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 error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls. |
S.R. Batliboi & Associates LLP
Chartered Accountants
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. |
| ● | Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and its joint ventures to cease to continue as a going concern. |
| ● | Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represent the underlying transactions and events in a manner that achieves fair presentation. |
| ● | Obtain sufficient appropriate audit evidence regarding the financial results/financial information of the entities within the Group of which we are the independent auditors and whose financial information we have audited, to express an opinion on the Statement. We are responsible for the direction, supervision and performance of the audit of the financial information of such entities included in the Statement of which we are the independent auditors. For the other entities included in the Statement, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. |
We communicate with those charged with governance of the Holding Company and such other entities included in the Statement of which we are the independent auditors regarding, among other matters, 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. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities Exchange Board of India under Regulation 33 (8) of the Listing Regulations, to the extent applicable.
Other Matter
The accompanying Statement includes the audited financial results and other financial information, in respect of: two subsidiaries, whose financial results/statements include total assets of Rs 29,445 million as at March 31, 2023, total revenues of Rs. 7,902 million and Rs. 33,087 million, total net profit after tax of Rs. 510 million and Rs. 2,534 million, total comprehensive income of Rs. 510 million and Rs. 2,534 million, for the quarter and the year ended on that date respectively, and net cash outflows of Rs. 18 million for the year ended March 31, 2023, as considered in the Statement which have been audited by their respective independent auditors.
The independent auditor’s report on the financial statements and other financial information of these entities have been furnished to us by the Management and our opinion on the Statement in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the reports of such auditors.
S.R. Batliboi & Associates LLP
Chartered Accountants
These subsidiaries are located outside India whose financial statements and other financial information have been prepared in accordance with the accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company’s management has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Holding Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us.
The Statement includes the results for the quarter ended March 31, 2023 being the balancing figures between the audited figures in respect of the full financial year ended March 31, 2023 and the published unaudited year-to-date figures up to the end of the third quarter of the current financial year, which were subjected to a limited review by us, as required under the Listing Regulations.
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Shankar Srinivasan Partner Membership No.: 213271
UDIN: 23213271BGSEIC9292 |
 |
Place: Hyderabad
Date: May 10, 2023
 |
Dr. Reddys Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, 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 AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 2023
| All amounts in Indian Rupees millions | ||||||||||||||||||||||||
| Quarter ended | Year ended | |||||||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | ||||||||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||||||
| 1 | Revenue from operations | |||||||||||||||||||||||
| a) Net sales/income from operations | 58,430 | 66,353 | 50,684 | 234,595 | 205,144 | |||||||||||||||||||
| b) License fees and service income | 4,539 | 1,346 | 3,684 | 11,284 | 9,247 | |||||||||||||||||||
| c) Other operating income | 183 | 199 | 381 | 818 | 1,061 | |||||||||||||||||||
| Total revenue from operations | 63,152 | 67,898 | 54,749 | 246,697 | 215,452 | |||||||||||||||||||
| 2 | Other income | 1,385 | 587 | 1,219 | 10,555 | 4,844 | ||||||||||||||||||
| 3 | Total income (1 + 2) | 64,537 | 68,485 | 55,968 | 257,252 | 220,296 | ||||||||||||||||||
| 4 | Expenses | |||||||||||||||||||||||
| a) Cost of materials consumed | 10,728 | 12,891 | 13,030 | 42,198 | 43,124 | |||||||||||||||||||
| b) Purchase of stock-in-trade | 7,667 | 9,160 | 7,087 | 33,670 | 34,837 | |||||||||||||||||||
| c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | 586 | (2,037 | ) | (1,139 | ) | 709 | (3,539 | ) | ||||||||||||||||
| d) Employee benefits expense | 12,760 | 11,732 | 9,726 | 46,466 | 38,858 | |||||||||||||||||||
| e) Depreciation and amortisation expense | 3,155 | 3,237 | 2,930 | 12,502 | 11,652 | |||||||||||||||||||
| f) Impairment of non-current assets | 540 | 134 | 7,419 | 699 | 9,304 | |||||||||||||||||||
| g) Finance costs | 354 | 418 | 315 | 1,428 | 958 | |||||||||||||||||||
| h) Selling and other expenses | 15,532 | 16,633 | 14,116 | 59,465 | 55,191 | |||||||||||||||||||
| Total expenses | 51,322 | 52,168 | 53,484 | 197,137 | 190,385 | |||||||||||||||||||
| 5 | Profit before tax and share of equity accounted investees(3 - 4) | 13,215 | 16,317 | 2,484 | 60,115 | 29,911 | ||||||||||||||||||
| 6 | Share of profit of equity accounted investees, net of tax | 76 | 60 | 105 | 370 | 703 | ||||||||||||||||||
| 7 | Profit before tax (5+6) | 13,291 | 16,377 | 2,589 | 60,485 | 30,614 | ||||||||||||||||||
| 8 | Tax expense/(benefit): | |||||||||||||||||||||||
| a) Current tax | 4,279 | 3,096 | 6,064 | 8,144 | 11,013 | |||||||||||||||||||
| b) Deferred tax | (589 | ) | 842 | (4,445 | ) | 7,268 | (2,224 | ) | ||||||||||||||||
| 9 | Net profit after taxes and share of profit of associates (7 - 8) | 9,601 | 12,439 | 970 | 45,073 | 21,825 | ||||||||||||||||||
| 10 | Other comprehensive income | |||||||||||||||||||||||
| a) (i) Items that will not be reclassified subsequently to profit or loss | 83 | (69 | ) | (981 | ) | (660 | ) | (3,568 | ) | |||||||||||||||
| (ii) Income tax relating to items that will not be reclassified to profit or loss | (12 | ) | (31 | ) | 12 | (43 | ) | 305 | ||||||||||||||||
| b) (i) Items that will be reclassified subsequently to profit or loss | 1,196 | 2,404 | 796 | 276 | 653 | |||||||||||||||||||
| (ii) Income tax relating to items that will be reclassified to profit or loss | (342 | ) | (600 | ) | (327 | ) | 306 | (288 | ) | |||||||||||||||
| Total other comprehensive income | 925 | 1,704 | (500 | ) | (121 | ) | (2,898 | ) | ||||||||||||||||
| 11 | Total comprehensive income (9 + 10) | 10,526 | 14,143 | 470 | 44,952 | 18,927 | ||||||||||||||||||
| 12 | Paid-up equity share capital (face value Rs. 5/- each) | 833 | 833 | 832 | 833 | 832 | ||||||||||||||||||
| 13 | Other equity | 232,028 | 191,292 | |||||||||||||||||||||
| 14 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||||||||
| Basic | 57.79 | 74.91 | 5.84 | 271.47 | 131.57 | |||||||||||||||||||
| Diluted | 57.68 | 74.76 | 5.83 | 270.90 | 131.21 | |||||||||||||||||||
| (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 | Year ended | ||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | |||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | |||||||||||||||
| Segment wise revenue and results: | |||||||||||||||||||
| 1 | Segment revenue : | ||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 10,398 | 10,304 | 9,316 | 37,195 | 37,499 | ||||||||||||||
| b) Global Generics | 54,297 | 59,276 | 46,359 | 213,953 | 179,647 | ||||||||||||||
| c) Others | 931 | 702 | 773 | 3,126 | 4,561 | ||||||||||||||
| Total | 65,626 | 70,282 | 56,448 | 254,274 | 221,707 | ||||||||||||||
| Less: Inter-segment revenue | 2,474 | 2,384 | 1,699 | 7,577 | 6,255 | ||||||||||||||
| Total revenue from operations | 63,152 | 67,898 | 54,749 | 246,697 | 215,452 | ||||||||||||||
| 2 | Segment results: | ||||||||||||||||||
| Gross profit from each segment | |||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 1,970 | 1,413 | 1,390 | 4,733 | 6,834 | ||||||||||||||
| b) Global Generics | 33,498 | 38,254 | 26,830 | 132,719 | 103,270 | ||||||||||||||
| c) Others | 535 | 430 | 526 | 1,909 | 3,749 | ||||||||||||||
| Total | 36,003 | 40,097 | 28,746 | 139,361 | 113,853 | ||||||||||||||
| Less: Selling and other un-allocable expenditure/(income), net | 22,712 | 23,721 | 26,157 | 78,876 | 83,239 | ||||||||||||||
| Total profit before tax | 13,291 | 16,377 | 2,589 | 60,485 | 30,614 | ||||||||||||||
Global Generics includes operations of Biologics business. Inter-segment revenue represents sales from Pharmaceutical Services and Active Ingredients to Global Generics and Others 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:
| 1 | These results are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended and are reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 10 May 2023. The Statutory Auditors have issued an unqualified report thereon. |
| 2 | License 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 to Eris Lifesciences Limited for the quarter ended 31 March 2023; b. Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited; 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 Company’s Global Generics segment. |
| 3 | During the quarter and year ended 31 March 2023, an amount of Rs. 305 million and Rs. 3,111 million respectively representing government grants has been accounted for as a reduction from cost of material consumed. |
| 4 | During the quarter ended 31 March 2023, Company considered a
total impairment of Rs. 540 million towards: a. The Company assessed performance of business acquired from Nimbus Health GmbH against the initial estimates and performance of the products. Basis the assessment, the Company has recorded an impairment charge of the carrying values amounting to Rs. 375 million (Goodwill- Rs. 272 million and Other intangibles- Rs. 103 million). The said impairment charge pertains to the Company’s Global Generics segment. b. Consequent to adverse market conditions with respect to certain of the Company’s products related intangibles forming part of the Company’s Global Generics and Pharmaceutical Services and Active Ingredients segments, the Company assessed the recoverable amount of these products and recognised an amount of Rs. 165 million as impairment charge. |
| 5 | Included in “Selling and other expenses” for the year ended 31 March 2023, is an amount of Rs. 991 million representing the Loss on sale of Assets, pursuant to agreement dated 16 December 2022 with Delpharm Development Leiden B.V (Delpharm) for transfer of its certain assets, liabilities and employees at its site at Leiden, Netherlands.This transaction pertains to Company’s Global Generics segment. |
| 6 | On 23 June 2022, the Company entered into a Settlement Agreement with Indivior Inc., Indivior UK Limited and Aquestive Therapeutics, Inc. Pursuant to the agreement, the Company will receive payments totaling U.S.$ 72 million by 31 March 2024. The said agreement resolves all claims between the parties relating to the Company’s generic buprenorphine and naloxone sublingual film including Indivior’s and Aquestive’s patent infringement allegations and the Company’s antitrust counterclaims. On 28 June 2022 the U.S. Court dismissed all claims and counterclaims pending in the case with prejudice, pursuant to a joint stipulation of dismissal filed by the parties. The Company recognised the present value of the amount receivable at Rs.5,638 million (U.S.$ 71.39 million) on the date of the settlement as ‘Other income’ in the consolidated financial results of the Company. The aforesaid transaction pertain to Company’s Global Generics segment. |
| |
|
DR. REDDY'S LABORATORIES LIMITED
| 7 | License fee and service income for the year ended 31 March 2022
includes: a) Rs. 1,774 million towards the sale of territorial rights relating to two of the Company’s anti-bacterial brands (Ciprolet® and Levolet®) in Russia and CIS region to Alium JSC; b) Rs. 390 million towards the sale of two of the Company’s Brands (Daffy bar and Combihale) in India to Mankind Pharma Limited; c) Rs. 1,084 million towards sale of its U.S. and Canada territory rights for ELYXYBTM (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. The aforesaid transactions pertain to Company’s Global Generics and Others segment. |
| 8 | During the year ended 31 March 2022, there were significant
changes to the market conditions for certain of the products forming part of Company’s Global Generics and Others segment. The
changes include, decrease in the market potential of products, and increased competition leading to lower volumes and revenues not being
in line with projections. Due to these adverse market developments, the Company recorded an impairment loss of Rs. 9,304 million on various
non-current assets. The said impairment loss includes: a) Rs. 4,337 million relating to PPC-06 (Tepilamide Fumarate Extended Release Tablets) intangible assets under development; b) Rs. 2,955 million pertaining to Shreveport Cash Generating Unit (“CGU”) comprising of Property, plant and equipment and Goodwill; c) Rs. 174 million relating to other intangible assets. |
| 9 | The Company has been in litigation with Teva, principally over claims relating to the manufacturing of the commercial batches for VeraRing. Both the parties had claimed damages and all other remedies available under the law for the breach of the supply agreement entered between the parties. During the quarter ended 31 March 2023, the company had entered into a Settlement Agreement pursuant to which, all claims between the parties have been dismissed with prejudice and without any admission of liability by any of the parties. |
| 10 | The 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 year ended 31 March 2023. |
| 11 | As the revenues and gross profits of the Proprietary Products segment are considerably lower than the quantitative thresholds mentioned in IND AS 108, “Operating Segments”, the Company believes that Proprietary Products segment no longer qualifies to be a reportable segment and consequently, effective 1 April 2022, the Company included the financial information relating to Proprietary Products Segment in “Others”. The corresponding information relating to Proprietary Products segment for earlier periods has been restated to reflect the aforementioned change. |
| 12 | During the quarter and year ended 31 March 2022, pursuant to a change in the U.S. Income tax regulations relating to the timing of recognition of certain sales based accruals, the Company recognised current tax liability of Rs. 4,602 million with a corresponding increase in the deferred tax asset. |
| 13 | On 5 April 2022 the Company received approval from the Honorable National Company Law Tribunal, Hyderabad Bench (“NCLT”) for the merger of Dr. Reddy's Holding Limited into Dr. Reddy's Laboratories Limited. Subsequently, the Company has filed the NCLT order, with the Ministry of Company Affairs on 8 April 2022 (‘Effective Date’). |
| 14 | The 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 6 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 current and previous fiscal year. 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. |
| 15 | The Company considered the uncertainties relating to the military conflict between Russia and Ukraine, in assessing the recoverability of receivables, goodwill, intangible assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. Based on its judgments, estimates and assumptions, including sensitivity analysis, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions. |
| |
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DR. REDDY'S LABORATORIES LIMITED
| 16 | Consolidated Balance Sheet |
| All amounts in Indian Rupees millions | ||||||||
| As at | As at | |||||||
| 31.03.2023 | 31.03.2022 | |||||||
| Particulars | (Audited) | (Audited) | ||||||
| ASSETS | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment | 56,542 | 48,869 | ||||||
| Capital work-in-progress | 9,752 | 12,796 | ||||||
| Goodwill | 5,474 | 5,473 | ||||||
| Other intangible assets | 30,175 | 26,873 | ||||||
| Intangible assets under development | 549 | 138 | ||||||
| Investment in equity accounted investees | 4,702 | 4,318 | ||||||
| Financial assets | ||||||||
| Investments | 660 | 1,668 | ||||||
| Trade receivables | - | 54 | ||||||
| Other financial assets | 727 | 2,773 | ||||||
| Deferred tax assets, net | 7,052 | 12,770 | ||||||
| Tax assets, net | 2,687 | 3,285 | ||||||
| Other non-current assets | 276 | 629 | ||||||
| Total non-current assets | 118,596 | 119,646 | ||||||
| Current assets | ||||||||
| Inventories | 48,670 | 50,884 | ||||||
| Financial assets | ||||||||
| Investments | 44,496 | 20,173 | ||||||
| Trade receivables | 72,485 | 66,764 | ||||||
| Derivative financial instruments | 1,232 | 1,906 | ||||||
| Cash and cash equivalents | 5,779 | 14,852 | ||||||
| Other bank balances | 11,523 | 9,340 | ||||||
| Other financial assets | 4,950 | 1,574 | ||||||
| Other current assets | 15,120 | 12,330 | ||||||
| Total current assets | 204,255 | 177,823 | ||||||
| TOTAL ASSETS | 322,851 | 297,469 | ||||||
| EQUITY AND LIABILITIES | ||||||||
| Equity | ||||||||
| Equity share capital | 833 | 832 | ||||||
| Other equity | 232,028 | 191,292 | ||||||
| Total equity | 232,861 | 192,124 | ||||||
| Liabilities | ||||||||
| Non-current liabilities | ||||||||
| Financial liabilities | ||||||||
| Borrowings | - | 3,800 | ||||||
| Lease liabilities | 1,278 | 1,946 | ||||||
| Provisions | 199 | 258 | ||||||
| Deferred tax liabilities, net | 760 | 14 | ||||||
| Other non-current liabilities | 2,032 | 1,669 | ||||||
| Total non-current liabilities | 4,269 | 7,687 | ||||||
| Current liabilities | ||||||||
| Financial liabilities | ||||||||
| Borrowings | 11,190 | 27,082 | ||||||
| Lease liabilities | 1,004 | 1,017 | ||||||
| Trade payables | ||||||||
| Total outstanding dues of micro enterprises and small enterprises | 83 | 125 | ||||||
| Total outstanding dues of creditors other than micro enterprises and small enterprises | 22,601 | 22,537 | ||||||
| Derivative financial instruments | 137 | 479 | ||||||
| Other financial liabilities | 29,175 | 24,832 | ||||||
| Liabilities for current tax, net | 2,143 | 5,442 | ||||||
| Provisions | 6,525 | 5,866 | ||||||
| Other current liabilities | 12,863 | 10,278 | ||||||
| Total current liabilities | 85,721 | 97,658 | ||||||
| TOTAL EQUITY AND LIABILITIES | 322,851 | 297,469 | ||||||
| |
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DR. REDDY'S LABORATORIES LIMITED
| 17 | Consolidated statement of cashflows |
All amounts in Indian Rupees millions
| Year ended | Year ended | |||||||
| 31.03.2023 | 31.03.2022 | |||||||
| Particulars | (Audited) | (Audited) | ||||||
| Cash flows from/(used in) operating activities : | ||||||||
| Profit before tax | 60,485 | 30,614 | ||||||
| Adjustments for: | ||||||||
| Fair value changes and profit on sale of financial instruments measured at FVTPL**, net | (876 | ) | (277 | ) | ||||
| Depreciation and amortisation expense | 12,502 | 11,652 | ||||||
| Impairment of non-current assets | 699 | 9,304 | ||||||
| Allowance for credit losses (on trade receivables and other advances) | 205 | 70 | ||||||
| Loss/(Profit) on sale or de-recognition of non-current assets, net | 208 | (1,119 | ) | |||||
| Share of profit of equity accounted investees | (370 | ) | (703 | ) | ||||
| Foreign exchange (gain)/loss, net | (925 | ) | (758 | ) | ||||
| Interest income | (1,180 | ) | (965 | ) | ||||
| Finance costs | 1,428 | 958 | ||||||
| Equity settled share-based payment expense | 397 | 592 | ||||||
| Inventories write-down | 4,869 | 4,584 | ||||||
| Dividend income | - | * | - | * | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade and other receivables | (5,752 | ) | (17,012 | ) | ||||
| Inventories | (2,654 | ) | (9,912 | ) | ||||
| Trade and other payables | 23 | 4,412 | ||||||
| Other assets and other liabilities, net | 528 | 4,105 | ||||||
| Cash generated from operations | 69,587 | 35,545 | ||||||
| Income tax paid, net | (10,714 | ) | (7,437 | ) | ||||
| Net cash from operating activities | 58,873 | 28,108 | ||||||
| Cash flows from/(used in) investing activities : | ||||||||
| Expenditures on property, plant and equipment | (11,323 | ) | (14,660 | ) | ||||
| Proceeds from sale of property, plant and equipment | 82 | 370 | ||||||
| Expenditures on other intangible assets | (7,541 | ) | (4,389 | ) | ||||
| Proceeds from sale of other intangible assets | - | 2,946 | ||||||
| Payment for acquisition of business, net of cash acquired(1) | - | (326 | ) | |||||
| Purchase of investments | (136,171 | ) | (88,972 | ) | ||||
| Proceeds from sale of investments | 112,805 | 77,771 | ||||||
| Interest and dividend received | 777 | 873 | ||||||
| Net cash used in investing activities | (41,371 | ) | (26,387 | ) | ||||
| Cash flows from/(used in) financing activities : | ||||||||
| Proceeds from issuance of equity shares (including treasury shares) | 157 | 334 | ||||||
| Proceeds from sale of treasury shares | 211 | - | ||||||
| (Repayment of)/Proceeds from short-term loans and borrowings, net | (19,382 | ) | 3,520 | |||||
| Payment of principal portion of lease liabilities | (1,015 | ) | (785 | ) | ||||
| Dividend paid | (4,979 | ) | (4,146 | ) | ||||
| Interest paid | (1,853 | ) | (1,345 | ) | ||||
| Net cash used in financing activities | (26,861 | ) | (2,422 | ) | ||||
| Net (decrease)/increase in cash and cash equivalents | (9,359 | ) | (701 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 286 | 733 | ||||||
| Cash and cash equivalents at the beginning of the period(2) | 14,852 | 14,820 | ||||||
| Cash and cash equivalents at the end of the period | 5,779 | 14,852 | ||||||
| * | Rounded off to million. |
| ** | FVTPL (fair value through profit or loss) |
| (1) | Cash and cash equivalents acquired under business combination Rs. Nil and Rs.11 million for the periods ended 31 March 2023 and 31 March 2022, respectively. |
| (2) | Adjusted for bank-overdraft of Rs. Nil and Rs. 9 million for the periods ended 31 March 2023 and 31 March 2022, respectively. |
| |
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DR. REDDY'S LABORATORIES LIMITED
| 18 | The Board of Directors, at their meeting held on 10 May 2023, have recommended a final dividend of Rs.40 per share subject to approval of shareholders. |
| 19 | The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit. |
By order of the Board
For Dr. Reddy's Laboratories Limited
| |
 |
|
Place: Hyderabad Date: 10 May 2023 |
|
G V Prasad Co-Chairman & Managing Director |
Exhibit 99.5
|
S.R. Batliboi & Associates LLP Chartered Accountants |
THE SKYVIEW 10 18th Floor, “NORTH LOBBY” Survey No. 83/1, Raidurgam Hyderabed - 500 032, India
Tel : + 91 40 6141 6000 |
Independent Auditor’s Report on the Quarterly and Year to Date Audited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
To
The Board of Directors of
Dr. Reddy’s Laboratories Limited
Report on the audit of the Standalone Financial Results
Opinion
We have audited the accompanying statement of quarterly and year to date standalone financial results of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter and year ended March 31, 2023 (“Statement”), attached herewith, being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).
In our opinion and to the best of our information and according to the explanations given to us, the Statement:
| i. | is presented in accordance with the requirements of the Listing Regulations in this regard; and |
| ii. | gives a true and fair view in conformity with the applicable accounting standards and other accounting principles generally accepted in India, of the net profit and other comprehensive income and other financial information of the Company for the quarter and year ended March 31, 2023. |
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013, as amended (“the Act”). Our responsibilities under those Standards are further described in the “Auditor’s Responsibilities for the Audit of the Standalone Financial Results” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.
Management’s Responsibilities for the Standalone Financial Results
The Statement has been prepared on the basis of the standalone annual financial statements. The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive income of the Company and other financial information in accordance with the applicable accounting standards prescribed under Section 133 of the Act read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the 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 Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
S.R. Batliboi& Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295
Regd. Office 22, Camac Street, Black ‘B’, 3rd floor, Kolkata 700 016
S.R. Batliboi & Associates LLP
Chartered Accountants
In preparing the Statement, the Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Results
Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Statement.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
| · | Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, 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 error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. |
| · | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls. |
| · | Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. |
| · | Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. |
| · | Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation. |
We communicate with those charged with governance regarding, among other matters, 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.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
S.R. Batliboi & Associates LLP
Chartered Accountants
Other Matter
The Statement includes the results for the quarter ended March 31, 2023 being the balancing figure between the audited figures in respect of the full financial year ended March 31, 2023 and the published unaudited year-to-date figures up to the third quarter of the current financial year, which were subjected to a limited review by us, as required under the Listing Regulations.
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Shankar Srinivasan Partner Membership No.: 213271
UDIN: 233213271BGSEID4242 |
|
Place: Hyderabad
Date: May 10,2023
 |
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 AUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 2023
All amounts in Indian Rupees millions
| Quarter ended | Year ended | |||||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | ||||||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||||
| 1 | Revenue from operations | |||||||||||||||||||||
| a) Net sales / income from operations | 42,491 | 38,624 | 33,829 | 162,989 | 138,864 | |||||||||||||||||
| b) License fees and service income | 2,887 | 172 | 2,490 | 6,002 | 4,289 | |||||||||||||||||
| c) Other operating income | 162 | 180 | 368 | 634 | 899 | |||||||||||||||||
| Total revenue from operations | 45,540 | 38,976 | 36,687 | 169,625 | 144,052 | |||||||||||||||||
| 2 | Other income | 1,148 | 514 | 1,147 | 5,913 | 4,820 | ||||||||||||||||
| Total income (1 + 2) | 46,688 | 39,490 | 37,834 | 175,538 | 148,872 | |||||||||||||||||
| 3 | Expenses | |||||||||||||||||||||
| a) Cost of materials consumed | 8,541 | 8,659 | 10,149 | 31,614 | 33,784 | |||||||||||||||||
| b) Purchase of stock-in-trade | 3,692 | 4,874 | 3,354 | 17,793 | 20,571 | |||||||||||||||||
| c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | 1,068 | (1,281 | ) | (557 | ) | 1,295 | (3,896 | ) | ||||||||||||||
| d) Employee benefits expense | 7,651 | 7,084 | 6,089 | 28,326 | 24,346 | |||||||||||||||||
| e) Depreciation and amortisation expense | 2,367 | 2,388 | 2,052 | 9,232 | 8,143 | |||||||||||||||||
| f) Impairment of non current assets | 41 | 10 | 98 | 51 | 98 | |||||||||||||||||
| g) Finance costs | 26 | 28 | 127 | 169 | 380 | |||||||||||||||||
| h) Selling and other expenses | 13,936 | 12,879 | 10,855 | 48,398 | 43,208 | |||||||||||||||||
| Total expenses | 37,322 | 34,641 | 32,167 | 136,878 | 126,634 | |||||||||||||||||
| 4 | Profit before tax (1 + 2 - 3) | 9,366 | 4,849 | 5,667 | 38,660 | 22,238 | ||||||||||||||||
| 5 | Tax expense | |||||||||||||||||||||
| a) Current tax | 2,319 | 1,988 | 974 | 8,641 | 3,926 | |||||||||||||||||
| b) Deferred tax | 323 | (385 | ) | 496 | 3,891 | 2,080 | ||||||||||||||||
| 6 | Net profit for the period / year (4 - 5) | 6,724 | 3,246 | 4,197 | 26,128 | 16,232 | ||||||||||||||||
| 7 | Other comprehensive income | |||||||||||||||||||||
| a) (i) Items that will not be reclassified to profit or loss | 86 | 2 | (47 | ) | 89 | (45 | ) | |||||||||||||||
| (ii) Income tax relating to items that will not be reclassified to profit or loss | (22 | ) | (31 | ) | 17 | (53 | ) | 17 | ||||||||||||||
| b) (i) Items that will be reclassified to profit or loss | 1,350 | 1,296 | 955 | (928 | ) | 832 | ||||||||||||||||
| (ii) Income tax relating to items that will be reclassified to profit or loss | (339 | ) | (551 | ) | (335 | ) | 358 | (291 | ) | |||||||||||||
| Total other comprehensive income | 1,075 | 716 | 590 | (534 | ) | 513 | ||||||||||||||||
| 8 | Total comprehensive income (6 + 7) | 7,799 | 3,962 | 4,787 | 25,594 | 16,745 | ||||||||||||||||
| 9 | Paid-up equity share capital (face value Rs. 5/- each) | 833 | 833 | 832 | 833 | 832 | ||||||||||||||||
| 10 | Other equity | 203,909 | 182,530 | |||||||||||||||||||
| 11 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||||||
| Basic | 40.49 | 19.54 | 25.29 | 157.37 | 97.85 | |||||||||||||||||
| Diluted | 40.41 | 19.50 | 25.24 | 157.03 | 97.58 | |||||||||||||||||
| (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 | Year ended | |||||||||||||||||||||
| Sl. No. | Particulars | 31.03.2023 | 31.12.2022 | 31.03.2022 | 31.03.2023 | 31.03.2022 | ||||||||||||||||
| (Audited) | (Unaudited) | (Audited) | (Audited) | (Audited) | ||||||||||||||||||
| Segment wise revenue and results | ||||||||||||||||||||||
| 1 | Segment revenue | |||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 9,111 | 6,357 | 7,932 | 27,896 | 31,718 | |||||||||||||||||
| b) Global Generics | 38,651 | 34,298 | 30,255 | 147,999 | 116,999 | |||||||||||||||||
| c) Others | 129 | 110 | 199 | 497 | 1,590 | |||||||||||||||||
| Total | 47,891 | 40,765 | 38,386 | 176,392 | 150,307 | |||||||||||||||||
| Less: Inter-segment revenue | 2,351 | 1,789 | 1,699 | 6,767 | 6,255 | |||||||||||||||||
| Total revenue from operations | 45,540 | 38,976 | 36,687 | 169,625 | 144,052 | |||||||||||||||||
| 2 | Segment results | |||||||||||||||||||||
| Profit / (loss) before tax and interest from each segment | ||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 486 | (671 | ) | (322 | ) | (1,336 | ) | 384 | ||||||||||||||
| b) Global Generics | 9,054 | 7,498 | 5,944 | 46,716 | 21,871 | |||||||||||||||||
| c) Others | (51 | ) | (97 | ) | 129 | (154 | ) | 1,160 | ||||||||||||||
| Total | 9,489 | 6,730 | 5,751 | 45,226 | 23,415 | |||||||||||||||||
| Less: (i) Finance costs | 26 | 28 | 127 | 169 | 380 | |||||||||||||||||
| (ii) Other un-allocable expenditure / (income), net | 97 | 1,853 | (43 | ) | 6,397 | 797 | ||||||||||||||||
| Total profit before tax | 9,366 | 4,849 | 5,667 | 38,660 | 22,238 | |||||||||||||||||
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:
| 1 | These results are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended and are reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 10 May 2023. The Statutory Auditors have issued an unqualified report thereon. |
| 2 | License 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 for the quarter ended 31 March 2023; b. Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited; 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 | During the quarter and year ended 31 March 2023, an amount of Rs. 305 million and Rs. 3,111 million respectively, representing government grants has been accounted for as a reduction from cost of material consumed. |
| 4 | Consequent to adverse market conditions with respect to certain of the Company’s products related intangibles forming part of the company’s Global Generics and Pharmaceutical Services and Active Ingredients segments, the Company assessed the recoverable amount of these products and recognised an amount of Rs. 41 million as impairment of non current assets during the quarter ended 31 March 2023. |
| 5 | On 5 April 2022 the Company received approval from the Honorable National Company Law Tribunal, Hyderabad Bench (“NCLT”) for the merger of Dr. Reddy’s Holding Limited into Dr. Reddy's Laboratories Limited. Subsequently, the Company has filed the NCLT order, with the Ministry of Company Affairs on 8 April 2022 (‘Effective Date’). Consequently, Dr. Reddy’s Holding Limited has been merged with the Company. |
| 6 | As the revenues and gross profits of the Proprietary Products segment are considerably lower than the quantitative thresholds mentioned in IND AS 108, “Operating Segments”, the Company believes that Proprietary Products segment no longer qualifies to be a reportable segment and consequently, effective 1 April 2022, the Company included the financial information relating to Proprietary Products segment in “Others”. The corresponding information relating to Proprietary Products segment for earlier periods has been restated to reflect the aforementioned change. |
| |
|
DR. REDDY’S LABORATORIES LIMITED
| 7 | The 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 year ended 31 March 2023. |
| 8 | License fee and service income for the quarter and year ended 31 March 2022 includes: a) Rs. 1,774 million towards the sale of territorial rights relating to two of the Company's anti-bacterial brands (Ciprolet® and Levolet®) in Russia and CIS region to Alium JSC; b) Rs. 390 million towards the sale of two of the Company's Brands (Daffy bar and Combihale) in India to Mankind Pharma Limited. The aforesaid transactions pertain to Company’s Global Generics Segment. |
| 9 | The 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 July 6, 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 current and previous fiscal year. 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. |
| 10 | The Company considered the uncertainties relating to the military conflict between Russia and Ukraine, in assessing the recoverability of receivables, goodwill, intangible assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. Based on its judgments, estimates and assumptions, including sensitivity analysis, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions. |
DR. REDDY’S LABORATORIES LIMITED
| 11 | Balance sheet |
All amounts in Indian Rupees millions
| As at | As at | |||||||
| Particulars | 31.03.2023 | 31.03.2022 | ||||||
| (Audited) | (Audited) | |||||||
| ASSETS | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment | 47,379 | 40,240 | ||||||
| Capital work-in-progress | 8,991 | 11,864 | ||||||
| Goodwill | 853 | 853 | ||||||
| Other intangible assets | 23,835 | 20,412 | ||||||
| Intangible assets under development | 139 | 139 | ||||||
| Financial assets | ||||||||
| Investments | 31,422 | 30,243 | ||||||
| Trade receivables | - | 54 | ||||||
| Loans | 11 | 12 | ||||||
| Other financial assets | 533 | 2,514 | ||||||
| Deferred tax assets, net | - | 194 | ||||||
| Tax assets, net | 2,546 | 3,115 | ||||||
| Other non-current assets | 156 | 403 | ||||||
| Total non-current assets | 115,865 | 110,043 | ||||||
| Current assets | ||||||||
| Inventories | 30,430 | 33,478 | ||||||
| Financial assets | ||||||||
| Investments | 42,978 | 19,124 | ||||||
| Trade receivables | 42,889 | 49,454 | ||||||
| Derivative financial instruments | 715 | 1,903 | ||||||
| Cash and cash equivalents | 1,123 | 11,595 | ||||||
| Other bank balances | 5,335 | 8,710 | ||||||
| Other financial assets | 2,224 | 642 | ||||||
| Other current assets | 12,189 | 9,981 | ||||||
| Total current assets before assets held for sale | 137,883 | 134,887 | ||||||
| Assets held for sale | - | 26 | ||||||
| Total current assets | 137,883 | 134,913 | ||||||
| TOTAL ASSETS | 253,748 | 244,956 | ||||||
| EQUITY AND LIABILITIES | ||||||||
| Equity | ||||||||
| Equity share capital | 833 | 832 | ||||||
| Other equity | 203,909 | 182,530 | ||||||
| Total Equity | 204,742 | 183,362 | ||||||
| Liabilities | ||||||||
| Non-current liabilities | ||||||||
| Financial liabilities | ||||||||
| Lease liabilities | 286 | 197 | ||||||
| Provisions | 79 | 104 | ||||||
| Deferred tax liabilities, net | 3,392 | - | ||||||
| Other non-current liabilities | 852 | 842 | ||||||
| Total non-current liabilities | 4,609 | 1,143 | ||||||
| Current liabilities | ||||||||
| Financial liabilities | ||||||||
| Borrowings | 6 | 21,711 | ||||||
| Lease liabilities | 216 | 146 | ||||||
| Trade payables | ||||||||
| Total outstanding dues of micro enterprises and small enterprises | 72 | 120 | ||||||
| Total outstanding dues of creditors other than micro enterprises and small enterprises | 17,573 | 16,542 | ||||||
| Derivative financial instruments | 135 | 472 | ||||||
| Other financial liabilities | 15,369 | 12,153 | ||||||
| Provisions | 3,052 | 3,222 | ||||||
| Other current liabilities | 7,974 | 6,085 | ||||||
| Total current liabilities | 44,397 | 60,451 | ||||||
| TOTAL EQUITY AND LIABILITIES | 253,748 | 244,956 | ||||||
| |
|
| 12 | Statement of cashflows |
All amounts in Indian Rupees millions
| Year ended | Year ended | |||||||
| Particulars | 31.03.2023 | 31.03.2022 | ||||||
| (Audited) | (Audited) | |||||||
| Cash flows from/(used in) operating activities | ||||||||
| Profit before taxation | 38,660 | 22,238 | ||||||
| Adjustments for: | ||||||||
| Fair value changes and profit on sale of financial instruments measured at FVTPL**, net | (798 | ) | (233 | ) | ||||
| Depreciation and amortisation expense | 9,232 | 8,143 | ||||||
| Impairment of non-current assets | 51 | 98 | ||||||
| Allowance for credit losses (on trade receivables and other advances) | 161 | 65 | ||||||
| Loss/(Profit) on sale/disposal of property , plant and equipment and other intangible assets, net | 233 | 78 | ||||||
| Foreign exchange loss / (gain), net | (1,656 | ) | (1,623 | ) | ||||
| Interest income | (1,300 | ) | (1,669 | ) | ||||
| Finance costs | 169 | 380 | ||||||
| Equity settled share-based payment expense | 318 | 592 | ||||||
| Inventory write-down | 4,048 | 2,620 | ||||||
| Dividend income | - | * | - | * | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | 6,568 | (8,655 | ) | |||||
| Inventories | (1,000 | ) | (7,901 | ) | ||||
| Trade payables | 983 | 3,298 | ||||||
| Other assets and other liabilities, net | 2,687 | 844 | ||||||
| Cash generated from operations | 58,356 | 18,275 | ||||||
| Income taxes paid, net | (7,827 | ) | (4,888 | ) | ||||
| Net cash generated from operating activities | 50,529 | 13,387 | ||||||
| Cash flows from/(used in) investing activities | ||||||||
| Expenditures on property, plant and equipment | (10,002 | ) | (13,113 | ) | ||||
| Proceeds from sale of property, plant and equipment | 247 | 94 | ||||||
| Expenditures on other intangible assets | (5,711 | ) | (543 | ) | ||||
| Proceeds from redemption of preference shares | - | 16,878 | ||||||
| Purchase of investments | (120,320 | ) | (91,118 | ) | ||||
| Proceeds from sale of investments | 100,769 | 65,848 | ||||||
| Equity investments in subsidiary | (459 | ) | - | |||||
| Dividends received | - | * | - | * | ||||
| Interest income and dividend received | 1,000 | 1,574 | ||||||
| Net cash used in investing activities | (34,476 | ) | (20,380 | ) | ||||
| Cash flows from/(used in) financing activities | ||||||||
| Proceeds from issuance of equity shares (including treasury shares) | 157 | 334 | ||||||
| Proceeds from sale of treasury shares | 211 | - | ||||||
| (Repayment of)/Proceeds from short-term loans and borrowings, net | (21,705 | ) | 9,683 | |||||
| Payment of principal portion of lease liabilities | (195 | ) | (172 | ) | ||||
| Dividend paid | (4,979 | ) | (4,146 | ) | ||||
| Interest paid | (458 | ) | (644 | ) | ||||
| Net cash from/(used in) financing activities | (26,969 | ) | 5,055 | |||||
| Net increase / (decrease) in cash and cash equivalents | (10,916 | ) | (1,938 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 445 | 479 | ||||||
| Cash and cash equivalents at the beginning of the year (1) | 11,595 | 13,054 | ||||||
| Cash and cash equivalents at the end of the year | 1,123 | 11,595 | ||||||
*Rounded off to million.
**FVTPL (fair value through profit or loss)
(1)Adjusted for bank overdraft of Rs.Nil million and Rs. 9 million for the years ended 31 March 2023 and year ended 31 March 2022 respectively.
(2)Adjusted for bank overdraft of Rs. Nil and Rs. Nil for the years ended 31 March 2023 and year ended 31 March 2022 respectively.
| 13 | Amounts for previous year have been regrouped / reclassified wherever considered necessary. |
| 14 | The Board of Directors, at their meeting held on 10 May 2023, have recommended a final dividend of Rs.40 per share subject to the approval of shareholders. |
| 15 | The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and published year to date figures upto the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit. |
By order of the Board
For Dr. Reddy's Laboratories Limited
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Place:Hyderabad Date:10 May 2023 |
G V Prasad Co-Chairman & Managing Director |