Dr Reddys Laboratories Ltd 6-K, filed Jan 28, 2022
Dr Reddys Laboratories Ltd (RDY)
About this 6-K
Dr Reddys Laboratories Ltd filed this 6-K on January 28, 2022.
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
January 2022
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 nine months ended December 31, 2021.
On January 28, 2022, we announced our results of operations for the quarter and nine months ended December 31, 2021. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Unaudited Consolidated Financial Results, Ind AS Unaudited Consolidated Financial Results with Limited Review report and Ind AS Unaudited Standalone Financial Results with Limited Review report for the quarter and nine months ended December 31, 2021, a copy of which is attached to this Form 6-K as Exhibit 99.1 , 99.2 , 99.3 and 99.4 respectively.
We have also made available to the public on our web site, www.drreddys.com, the following: IFRS Unaudited Consolidated Financial Results, Ind AS Unaudited Consolidated Financial Results and Ind AS Unaudited Standalone Financial Results for the quarter and nine months ended December 31, 2021.
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: January 28, 2022 | By: | /s/ Parag Agarwal | |
| Name: | Parag Agarwal | ||
| Title: | Chief Financial Officer | ||
Exhibit 99.1
| CONTACT | ||
|
DR. REDDY'S LABORATORIES LTD. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500034. Telangana, India. |
Investor relationS | Media relationS |
| AMIT
AGARWAL amita@drreddys.com |
USHA
IYER ushaiyer@drreddys.com | |
Dr. Reddy’s Q3 & 9M FY22 Financial Results
Hyderabad, India, January 28, 2022: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter and the nine months ended December 31, 2021. The information mentioned in this release is on the basis of consolidated financial statements under International Financial Reporting Standards (IFRS).
| Q3 Performance Summary | 9M Performance Summary | |
|
Rs. 5,320 Cr Revenue* [Up: 8% YoY; Down: 8% QoQ]
53.8% Gross Margin [Q3 FY21: 53.8%; Q2 FY22: 53.4%]
Rs.1,541 Cr SGNA expenses [Up: 7% YoY; Down: 3% QoQ]
Rs. 416 Cr R&D expenses [7.8% of Revenues]
Rs. 1,266 Cr EBITDA* [23.8% of Revenues; Up: 7% YoY; Down: 19% QoQ]
Rs. 971 Cr Profit before Tax* [Up: 242% YoY; Down: 23% QoQ]
Rs. 707 Cr Profit after Tax* [Up: 3468% YoY; Down: 29% QoQ] |
Rs. 16,002 Cr Revenue [Up: 12% YoY]
53.2% Gross Margin [9M FY21: 54.6%]
Rs. 4,641 Cr SGNA expenses [Up: 15% YoY]
Rs. 1,316 Cr R&D expenses [8.2% of Revenues]
Rs. 3,842 Cr EBITDA [24.0% of Revenues; Up: 6% YoY]
Rs. 2,982 Cr Profit before Tax [Up: 47% YoY]
Rs. 2,269 Cr Profit after Tax [Up: 67% YoY] |
* QoQ: Growth impacted due to higher covid related sales and PP outlicencing deals in Q2 FY 22
Commenting on the results, Co-chairman & MD, G V Prasad said “We delivered a steady performance in Q3 with healthy EBITDA and strong cash generation, while continuing to invest in building a pipeline of products across businesses. I am pleased that our early adoption and consistency in furthering our sustainability agenda have been recognised with prestigious awards in the last few months. ESG will remain a key focus area for us.”
| 1 |
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of I USD = Rs. 74.39 |
Dr. Reddy’s Laboratories Limited and Subsidiaries
Consolidated Income Statement
| Q3 FY22 | Q3 FY21 | YoY | Q2 FY22 | QoQ | ||||||||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | Gr % | ($) | (Rs.) | Gr % | ||||||||||||||||||||||||
| Revenues | 715 | 53,197 | 663 | 49,296 | 8 | 775 | 57,632 | (8 | ) | |||||||||||||||||||||||
| Cost of Revenues | 330 | 24,585 | 306 | 22,758 | 8 | 361 | 26,846 | (8 | ) | |||||||||||||||||||||||
| Gross Profit | 385 | 28,612 | 357 | 26,538 | 8 | 414 | 30,786 | (7 | ) | |||||||||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||||||||||
| Selling, General & Administrative expenses | 207 | 15,411 | 193 | 14,387 | 7 | 214 | 15,951 | (3 | ) | |||||||||||||||||||||||
| Research and Development expenses | 56 | 4,159 | 55 | 4,108 | 1 | 60 | 4,463 | (7 | ) | |||||||||||||||||||||||
| Impairment of non-current assets | 1 | 47 | 80 | 5,972 | (99 | ) | - | - | - | |||||||||||||||||||||||
| Other operating income | (3 | ) | (240 | ) | (2 | ) | (128 | ) | 88 | (23 | ) | (1743 | ) | (86 | ) | |||||||||||||||||
| Results from operating activities | 124 | 9,235 | 30 | 2,199 | 320 | 163 | 12,115 | (24 | ) | |||||||||||||||||||||||
| Net finance income | (4 | ) | (289 | ) | (7 | ) | (493 | ) | (41 | ) | (4 | ) | (319 | ) | (9 | ) | ||||||||||||||||
| Share of profit of equity accounted investees | (2 | ) | (185 | ) | (2 | ) | (151 | ) | 23 | (3 | ) | (247 | ) | (25 | ) | |||||||||||||||||
| Profit before Income Tax | 131 | 9,709 | 38 | 2,843 | 242 | 170 | 12,681 | (23 | ) | |||||||||||||||||||||||
| Income Tax | 36 | 2,644 | 36 | 2645 | (0 | ) | 37 | 2,761 | (4 | ) | ||||||||||||||||||||||
| Profit for the period | 95 | 7,065 | 3 | 198 | 3468 | 133 | 9,920 | (29 | ) | |||||||||||||||||||||||
| Diluted Earnings Per Share (EPS) | 0.57 | 42.48 | 0.02 | 1.19 | 3480 | 0.80 | 59.65 | (29 | ) | |||||||||||||||||||||||
| As % to revenues | Q3 FY22 | Q3 FY21 | Q2 FY22 | |||||||||
| Gross Profit | 53.8 | 53.8 | 53.4 | |||||||||
| SG&A | 29.0 | 29.2 | 27.7 | |||||||||
| R&D | 7.8 | 8.3 | 7.7 | |||||||||
| EBITDA | 23.8 | 24.0 | 27.0 | |||||||||
| PBT | 18.3 | 5.8 | 22.0 | |||||||||
| PAT | 13.3 | 0.4 | 17.2 | |||||||||
EBITDA Computation
| Q3 FY22 | Q3 FY21 | Q2 FY22 | ||||||||||||||||||||||
| Particulars | ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | ||||||||||||||||||
| Profit before Income Tax | 131 | 9,709 | 38 | 2,843 | 170 | 12,681 | ||||||||||||||||||
| Interest income (net)* | (1 | ) | (72 | ) | (2 | ) | (180 | ) | (1 | ) | (93 | ) | ||||||||||||
| Depreciation | 28 | 2,066 | 29 | 2,131 | 28 | 2,075 | ||||||||||||||||||
| Amortization | 12 | 910 | 15 | 1,086 | 12 | 910 | ||||||||||||||||||
| Impairment | 1 | 47 | 80 | 5,972 | - | - | ||||||||||||||||||
| EBITDA | 170 | 12,659 | 159 | 11,851 | 209 | 15,572 | ||||||||||||||||||
* Includes income from Investments
| 2 |
| All amounts in millions, except EPS | All US dollar amounts based on convenience translation rate of I USD = Rs. 74.39 |
Key Balance Sheet Items
| Particulars | As on 31st Dec 2021 | As on 30th Sep 2021 | As on 31st Dec 2020 | |||||||||||||||||||||
| ($) | (Rs.) | ($) | (Rs.) | ($) | (Rs.) | |||||||||||||||||||
| Cash and cash equivalents and current investments | 505 | 37,557 | 379 | 28,188 | 286 | 21,282 | ||||||||||||||||||
| Trade receivables (current & non-current) | 840 | 62,507 | 923 | 68,666 | 718 | 53,408 | ||||||||||||||||||
| Inventories | 668 | 49,675 | 668 | 49,700 | 596 | 44,309 | ||||||||||||||||||
| Property, plant and equipment | 846 | 62,971 | 810 | 60,229 | 756 | 56,263 | ||||||||||||||||||
| Goodwill and Other Intangible assets | 492 | 36,581 | 500 | 37,206 | 552 | 41,062 | ||||||||||||||||||
| Loans and borrowings (current & non-current) | 379 | 28,164 | 407 | 30,273 | 275 | 20,443 | ||||||||||||||||||
| Trade payables | 329 | 24,492 | 343 | 25,552 | 310 | 23,072 | ||||||||||||||||||
| Equity | 2,554 | 1,90,016 | 2,472 | 1,83,928 | 2,277 | 1,69,395 | ||||||||||||||||||
Revenue Mix by Segment
| Segment | Q3 FY22 | Q3 FY21 | YoY | Q2 FY22 | QoQ | |||||||||||||||
| (Rs.) | (Rs.) | Gr % | (Rs.) | Gr % | ||||||||||||||||
| Global Generics | 44,508 | 40,751 | 9 | 47,431 | (6 | ) | ||||||||||||||
| North America | 18,645 | 17,394 | 7 | 18,909 | (1 | ) | ||||||||||||||
| Europe | 4,058 | 4,143 | (2 | ) | 4,135 | (2 | ) | |||||||||||||
| India | 10,266 | 9,591 | 7 | 11,402 | (10 | ) | ||||||||||||||
| Emerging Markets | 11,539 | 9,623 | 20 | 12,985 | (11 | ) | ||||||||||||||
| Pharmaceutical Services and Active Ingredients (PSAI) | 7,271 | 7,009 | 4 | 8,372 | (13 | ) | ||||||||||||||
| Proprietary Products & Others | 1,418 | 1,536 | (8 | ) | 1,829 | (22 | ) | |||||||||||||
| Total | 53,197 | 49,296 | 8 | 57,632 | (8 | ) | ||||||||||||||
| 3 |
COVID portfolio
We continue to play our role in the fight against Covid-19 by acting proactively to bring multiple preventive and curative treatment options, including a vaccine. Our major Covid-19 products launched till now include Sputnik V vaccine, Remdesivir, Avigan® (Favipiravir), 2-deoxy-D-glucose (2-DG) and Molnupiravir. We have commercialized all these products in India and few of these products in overseas markets. We have conducted clinical trials for Sputnik Light and are also developing several other covid related drugs for treatment ranging from mild to severe conditions.
Revenue Analysis
Global Generics (GG)
Revenues from GG segment at Rs. 44.5 billion:
| Ø | Year-on-year growth of 9% was primarily driven by new product launches and higher sales volume, offset partially due to price erosion in the base business. |
| Ø | Sequential decline of 6% was due to lower volumes and price erosion in some of our products. |
North America
Revenues from North America at Rs. 18.6 billion:
| Ø | Year-on-year growth of 7%, driven by new products launches, increase in volumes of our base business and a favorable forex rate, which was partially offset by price erosion. |
| Ø | Sequential decline of 1%, primarily due to price erosion in some of our products. |
| Ø | We launched four new products in US during the quarter. These were Carmustine Injection, Ephedrine Sulphate Injection, Valsartan tablets and Venlafaxine ER tablets. |
| Ø | We filed one new ANDA during the quarter. As of 31st December 2021, cumulatively 91 generic filings are pending for approval with the USFDA (88 ANDAs and 3 NDAs under 505(b)(2) route). Out of these 91 pending filings, 45 are Para IVs and we believe 24 have ‘First to File’ status. |
Europe
Revenues from Europe at Rs. 4.1 billion:
| Ø | Year-on-year and sequential quarter decline of 2% each, which was primarily due to price erosion in some of our existing products, partially offset by volume traction in the base business and sales from new products launched. |
India
Revenues from India at Rs. 10.3 billion:
| Ø | Year-on-year growth of 7% which was on account of an increase in sales prices of some of our existing products and revenues from new products launched, offset partially by a decrease in the sales volume of covid-related products. |
| Ø | Sequential decline of 10%, primarily due to a reduction in sales volumes of covid-related products. |
| 4 |
Emerging Markets
Revenues from Emerging Markets at Rs. 11.5 billion. Year-on-year growth of 20%. Sequential decline of 11%:
| Ø | Year-on-year growth of 20% attributable to the revenues from launch of new products and volume traction in the base business. |
| Ø | Sequential decline of 11% witnessed due lower volumes and price erosion in some products and higher covid-related product sales in last quarter. The decline was offset partially by sales contribution from new product launches. |
| Ø | Revenues from Russia at Rs. 4.7 billion. Year-on-year growth of 5% was driven by revenues from new products launched, a favorable forex rate and increase in prices of some our products, offset partially by a reduction in sales volumes in our base business. Sequential decline of 17% was on account of a reduction in volumes of some of our products. |
| Ø | Revenues from other CIS countries and Romania market at Rs. 2.4 billion. Year-on-year growth of 11% driven by launch of new products, offset partially due to lower volumes in the base business. Sequential growth of 9% driven by higher sales volume in the base business. |
| Ø | Revenues from Rest of World (RoW) territories at Rs. 4.4 billion. Year-on-year growth of 50% was driven by new product launches and higher sales volume in base business, offset partially by price erosion in some of our key products. Sequential decline of 13% was due to lower Covid portfolio sales and lower volumes and price erosion in our base business, which was partially offset by sales from launch of new products. |
Pharmaceutical Services and Active Ingredients (PSAI)
Revenues from PSAI at Rs. 7.3 billion:
| Ø | Year-on-year growth of 4% was driven majorly by new product launches. |
| Ø | Sequential decline of 13% on account of lower volumes of certain products including covid-related products, offset partially due to new products launched. |
| Ø | During the quarter we filed two DMFs in the US. |
Proprietary Products (PP) & Others
Revenues from PP & Others at Rs. 1.4 billion:
| Ø | Year-on-year decline of 8% and sequential decline of 22%. The sequential decline was primarily on account of recognition of a license fee associated with the sale of our U.S. and Canada territory rights for ELYXYB® (celecoxib oral solution) 25 mg/ml, to BioDelivery Sciences International, Inc in Q2 FY22. |
| 5 |
Income Statement Highlights:
| Ø | Gross profit margin at 53.8%: |
| · | The margin has remained flat over previous year. While there has been an improvement in the margins on account of favorable product mix and reduction of procurement costs for certain products, this was offset by price erosion in the base business. |
| · | Sequentially the gross margin increased by 40 bps primarily on account of a favorable product mix which was partially offset by price erosion in the base business. |
| · | Gross profit margin for GG and PSAI business segments are at 57.8% and 22.5% respectively. |
| Ø | SG&A expenses at Rs. 15.4 billion, increased by 7% year-on-year. This increase was in line with the business growth and primarily attributable to investments in sales & marketing of our key brands and annual increments. Sequentially the SG&A expenses decreased by 3% majorly due to lower royalty on sales in this quarter. |
| Ø | R&D expenses at Rs. 4.2 billion. As % to revenues - Q3 FY22: 7.8% | Q2 FY 22: 7.7% | Q3 FY21: 8.3%. Our focus continues in building a healthy pipeline of new products across our markets. |
| Ø | Impairment charge of Rs. 47 million as compared to Rs. 6.0 billion charge in Q3 FY21 taken on intangibles pertaining to certain products. |
| Ø | Other operating income at Rs. 240 million compared to Rs. 128 million in Q3 FY21. |
| Ø | Net Finance income at Rs. 289 million compared to Rs. 493 million in Q3 FY21. |
| Ø | Profit before Tax at Rs. 9.7 billion, which is 18.3% of revenues. The profit before tax increased by 242% year-on-year and declined by 23% sequentially. |
| Ø | Profit after Tax at Rs. 7.1 billion. The effective tax rate is ~27.2% for the quarter. |
| Ø | Diluted earnings per share is at Rs. 42.48. |
Other Highlights:
| Ø | EBITDA at Rs. 12.7 billion and the EBITDA margin is 23.8% |
| Ø | Capital expenditure is at Rs. 4.1 billion. |
| Ø | Free cash-flow is at Rs. 12.7 billion. |
| Ø | Net cash surplus for the company is at Rs. 10.0 billion as on December 31, 2021. Consequently, net debt to equity ratio is (0.05). |
| Ø | ROCE for the company is 23.9% (annualized). |
| 6 |
Earnings Call Details (06:30 pm IST, 08:00 am EST, Jan 28, 2022)
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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+91 22 6280 1219 +91 22 7115 8120 |
| International Toll Free Number: |
USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448 |
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Play Back: The play back will be available after the earnings call, till February 3rd, 2022. For play back dial in phone No: +91 22 7194 5757 | +91 22 6663 5757, and Playback Code is 43411.
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, 2021. The company assumes no obligation to update any information contained herein.
| 7 |
Exhibit 99.2
 |
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
Unaudited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter and nine months ended 31 December 2021 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 | Nine months ended | Year ended | ||||||||||||||||||||||||
| 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | |||||||||||||||||||||
| Sl. No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||||||||
| 1 | Revenues | 53,197 | 57,632 | 49,296 | 160,023 | 142,438 | 189,722 | |||||||||||||||||||
| 2 | Cost of revenues | 24,585 | 26,846 | 22,758 | 74,926 | 64,736 | 86,645 | |||||||||||||||||||
| 3 | Gross profit (1 - 2) | 28,612 | 30,786 | 26,538 | 85,097 | 77,702 | 103,077 | |||||||||||||||||||
| 4 | Selling, general and administrative expenses | 15,411 | 15,951 | 14,387 | 46,407 | 40,280 | 54,650 | |||||||||||||||||||
| 5 | Research and development expenses | 4,159 | 4,463 | 4,108 | 13,156 | 12,447 | 16,541 | |||||||||||||||||||
| 6 | Impairment of non-current assets | 47 | - | 5,972 | 47 | 6,753 | 8,588 | |||||||||||||||||||
| 7 | Other income, net | (240 | ) | (1,743 | ) | (128 | ) | (2,470 | ) | (395 | ) | (982 | ) | |||||||||||||
| Total operating expenses | 19,377 | 18,671 | 24,339 | 57,140 | 59,085 | 78,797 | ||||||||||||||||||||
| 8 | Results from operating activities [(3) - (4 + 5 + 6 + 7)] | 9,235 | 12,115 | 2,199 | 27,957 | 18,617 | 24,280 | |||||||||||||||||||
| Finance income | 504 | 553 | 681 | 1,902 | 2,008 | 2,623 | ||||||||||||||||||||
| Finance expense | (215 | ) | (234 | ) | (188 | ) | (642 | ) | (673 | ) | (970 | ) | ||||||||||||||
| 9 | Finance income, net | 289 | 319 | 493 | 1,260 | 1,335 | 1,653 | |||||||||||||||||||
| 10 | Share of profit of equity accounted investees, net of tax | 185 | 247 | 151 | 598 | 301 | 480 | |||||||||||||||||||
| 11 | Profit before tax (8 + 9 + 10) | 9,709 | 12,681 | 2,843 | 29,815 | 20,253 | 26,413 | |||||||||||||||||||
| 12 | Tax expense/(benefit), net | 2,644 | 2,761 | 2,645 | 7,122 | 6,639 | 9,175 | |||||||||||||||||||
| 13 | Profit for the period/year (11 -12) | 7,065 | 9,920 | 198 | 22,693 | 13,614 | 17,238 | |||||||||||||||||||
| 14 | Earnings per share: | |||||||||||||||||||||||||
| Basic earnings per share of Rs.5/- each | 42.58 | 59.80 | 1.19 | 136.82 | 82.08 | 103.94 | ||||||||||||||||||||
| Diluted earnings per share of Rs.5/- each | 42.48 | 59.65 | 1.19 | 136.48 | 81.85 | 103.65 | ||||||||||||||||||||
| (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | ||||||||||||||||||||||
| Segment information | All amounts in Indian Rupees millions | |||||||||||||||||||||||||
| Quarter ended | Nine months ended | Year ended | ||||||||||||||||||||||||
| 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | |||||||||||||||||||||
| Sl. No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||||||||
| Segment wise revenue and results: | ||||||||||||||||||||||||||
| 1 | Segment revenue: | |||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 8,887 | 9,990 | 8,745 | 27,739 | 29,091 | 38,887 | ||||||||||||||||||||
| b) Global Generics | 44,508 | 47,431 | 40,751 | 133,052 | 115,667 | 154,404 | ||||||||||||||||||||
| c) Proprietary Products | 129 | 1,232 | 124 | 1,420 | 280 | 523 | ||||||||||||||||||||
| d) Others | 1,289 | 597 | 1,412 | 2,368 | 2,424 | 2,813 | ||||||||||||||||||||
| Total | 54,813 | 59,250 | 51,032 | 164,579 | 147,462 | 196,627 | ||||||||||||||||||||
| Less: Inter-segment revenues | 1,616 | 1,618 | 1,736 | 4,556 | 5,024 | 6,905 | ||||||||||||||||||||
| Net revenues | 53,197 | 57,632 | 49,296 | 160,023 | 142,438 | 189,722 | ||||||||||||||||||||
| 2 | Segment results: | |||||||||||||||||||||||||
| Gross profit from each segment | ||||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 1,638 | 2,166 | 1,773 | 5,434 | 6,913 | 9,426 | ||||||||||||||||||||
| b) Global Generics | 25,731 | 26,990 | 23,454 | 76,440 | 68,665 | 91,111 | ||||||||||||||||||||
| c) Proprietary Products | 129 | 1,232 | 100 | 1,406 | 244 | 482 | ||||||||||||||||||||
| d) Others | 1,114 | 398 | 1,211 | 1,817 | 1,880 | 2,058 | ||||||||||||||||||||
| Total | 28,612 | 30,786 | 26,538 | 85,097 | 77,702 | 103,077 | ||||||||||||||||||||
| Less: Selling and other un-allocable expenditure, net of other income | 18,903 | 18,105 | 23,695 | 55,282 | 57,449 | 76,664 | ||||||||||||||||||||
| Total profit before tax | 9,709 | 12,681 | 2,843 | 29,815 | 20,253 | 26,413 | ||||||||||||||||||||
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). |
| 2 | In September 2021, the Company completed the sale of its U.S. and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. An amount of Rs. 1,084 million is included under the head "Revenues" and this pertains to the Company’s Proprietary Products segment. |
| 3 | Included in "Other income, net" for the quarter ended 30 September 2021 is Rs. 1,064 million representing the profit on sale of intangible asset, E7777 (anti-cancer agent) to Citius Pharmaceuticals, Inc. This transaction pertains to the Company’s Proprietary Products segment. |
| 4 | On 14 June 2021, the Company received the arbitration decision and award in favour of Hatchtech Pty Limited regarding the Civil Litigation and Arbitration relating to the acquisition of the product Xeglyze®. The award required the Company to pay an amount of Rs. 3,382 million (U.S.$ 46.25 million) towards milestone payments, interest, and fees. The Company was carrying Rs. 1,471 million (U.S.$ 20 million) as the provision towards this litigation. As this constitutes an adjusting subsequent event, the consolidated financial results for the quarter and year ended 31 March 2021 were adjusted to reflect the impact of this event by recognizing the balance amount of Rs. 1,911 million (U.S.$ 26.25 million) in the financial results. Of the total amount, Rs. 1,820 million (U.S.$ 25 million) was recognised under heading "Impairment of non-current assets" and the balance Rs. 91 million (U.S.$ 1.25 million) was recognised under the heading "Selling, general and administrative expenses". The said expense forms part of the Company’s Proprietary Products segment. |
| 5 | During the year ended 31 March 2021, 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 the launch by competitor of generic version of the product, decrease in the market potential of products primarily due to higher than expected price erosion and increased competition, and higher than expected value erosion. Due to these adverse market developments, the Company recorded an impairment loss of: |
- Rs. 3,291 million relating to Xeglyze®;
- Rs. 3,180 million relating to ethinyl estradiol / ethenogestral vaginal ring (a generic equivalent to NuvaRing®);
- Rs. 1,587 million relating to saxagliptin and metformin (generic version of Kombiglyze-XR) and phentermine and topiramate (generic version of Qsymia®);
- Rs. 484 million relating to other intangible assets.
Further, an amount of Rs. 46 million has been recognised as impairment of property, plant and equipment.
| 6 | Tax expense for the year ended 31 March 2021 includes the following: |
- Rs. 1,012 million of benefit, in the quarter ended 30 September 2020, on account of recognition of deferred tax asset consequent to a planned restructuring activity between the Group companies; and
- Rs. 627 million of expense, in the quarter ended 31 March 2021, on account of de-recognition of deferred tax asset due to non-availability of depreciation on goodwill pursuant to an amendment to section 2(11) of the Income Tax Act in the Finance Act, 2021.
| 7 | During the quarter ended 31 December 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Limited to acquire, certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles and pertains to Company's Global Generics segment. |
| 8 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment. |
| 9 | The Company has commenced a detailed investigation into an anonymous complaint received in September 2020. The complaint alleges 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. A U.S. law firm is conducting the investigation at the instruction of a committee of the Company’s Board of Directors. The Company has disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. On 6 July 2021 the Company received a subpoena from the SEC for the production of documents pertaining to certain CIS geographies, and the Company has been responding to the same. |
During the quarter ended 30 September 2021, the Company shared the report with respect to one jurisdiction with the SEC/DOJ. In the current quarter the Company finalized the reports with respect to certain other countries which will be presented to the SEC/DOJ in due course. The investigation is ongoing, and 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 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 outcome are not reasonably ascertainable at this time. The Company is also in the process of reviewing its Compliance Program including controls in relation to compliance and implement appropriate enhancements, if any.
| 10 | India’s Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which this Code will come into effect has not been announced. The Company will assess the impact of this Code and the rules thereunder when they come into effect. |
| 11 | The Company considered the uncertainty relating to the COVID-19 pandemic 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 interim 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.
| 12 | The unaudited results were reviewed by the Audit Committee of the Board at their meeting held on 27 January 2022 and approved by the Board of Directors of the Company at their meeting held on 28 January 2022. |
| 13 | The results for the quarter and nine months ended 31 December 2021 were subject to a "Limited Review" by the Independent Auditors of the Company. An unqualified report has been issued by them thereon. |
|
Place: Hyderabad Date: 28 January 2022
|
 |
By order of the Board For Dr. Reddy's Laboratories Limited
G V Prasad Co-Chairman & Managing Director
|
Exhibit 99.3
| S.R. Batliboi & Associates
LLP Chartered Accountants |
THE SKYVIEW 10 18th Floor, "NORTH LOBBY" Survey No. 83/1, Raidurgam Hyderabad – 500 032, India
Tel: +91 40 6141 6000 |
Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
Review Report to
The Board of Directors
Dr. Reddy’s Laboratories Limited
| 1. | We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of Dr. Reddy’s Laboratories Limited (the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), and joint ventures for the quarter and nine months ended December 31, 2021 (the “Statement”) attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”). |
| 2. | The Holding Company’s Management is responsible for the preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Statement has been approved by the Holding Company’s Board of Directors. Our responsibility is to express a conclusion on the Statement based on our review. |
| 3. | We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.
| 4. | The Statement includes the results of the following entities: |
| S. No | Name of the Company Subsidiaries | |
| 1 | Aurigene Discovery Technologies Limited | |
| 2 | Cheminor Investments Limited | |
| 3 | Dr. Reddy’s Bio-Sciences Limited | |
| 4 | Dr. Reddy’s Farmaceutica Do Brasil Ltda. | |
| 5 | Dr. Reddy's Laboratories SA | |
| 6 | Idea2Enterprises (India) Private Limited | |
| 7 | Imperial Credit Private Limited | |
| 8 | Industrias Quimicas Falcon de Mexico, S.A.de C.V. | |
| 9 | Svaas Wellness Limited |
 |
|
S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295 Regd. Office: 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016 |
| S.R. Batliboi & Associates
LLP Chartered Accountants |
| S. No | Name of the Company Subsidiaries | |
| 10 | Aurigene Discovery Technologies (Malaysia) SDN BHD | |
| 11 | Aurigene Discovery Technologies Inc. | |
| 12 | Aurigene Pharmaceuticals Services Limited | |
| 13 | beta Institut gemeinnützige GmbH | |
| 14 | betapharm Arzneimittel GmbH | |
| 15 | Chirotech Technology Limited | |
| 16 | DRL Impex Limited | |
| 17 | Dr. Reddy’s Laboratories (Australia) Pty. Limited | |
| 18 | Dr. Reddy’s Laboratories Canada, Inc. | |
| 19 | Dr. Reddy's Laboratories Chile SPA. | |
| 20 | Dr. Reddy’s Laboratories (EU) Limited | |
| 21 | Dr. Reddy’s Laboratories Inc. | |
| 22 | Dr. Reddy's Laboratories Japan KK | |
| 23 | Dr. Reddy’s Laboratories Kazakhstan LLP | |
| 24 | Dr. Reddy’s Laboratories LLC | |
| 25 | Dr. Reddy's Laboratories Louisiana LLC | |
| 26 | Dr. Reddy’s Laboratories Malaysia Sdn. Bhd. | |
| 27 | Dr. Reddy’s Laboratories New York, LLC | |
| 28 | Dr. Reddy's Laboratories Philippines Inc. | |
| 29 | Dr. Reddy’s Laboratories (Proprietary) Limited | |
| 30 | Dr. Reddy's Laboratories Romania S.R.L. | |
| 31 | Dr. Reddy's Laboratories SAS | |
| 32 | Dr. Reddy's Laboratories Taiwan Limited | |
| 33 | Dr. Reddy's Laboratories (Thailand) Limited | |
| 34 | Dr. Reddy’s Laboratories (UK) Limited | |
| 35 | Dr. Reddy's Research and Development B.V. | |
| 36 | Dr. Reddy’s Srl | |
| 37 | Dr. Reddy’s New Zealand Limited | |
| 38 | Dr. Reddy's Venezuela, C.A. | |
| 39 | Dr. Reddy's Laboratories B.V. (Formerly Eurobridge Consulting B.V.) | |
| 40 | Lacock Holdings Limited | |
| 41 | OOO Dr. Reddy’s Laboratories Limited | |
| 42 | OOO DRS LLC | |
| 43 | Promius Pharma LLC | |
| 44 | Reddy Holding GmbH | |
| 45 | Reddy Netherlands B.V. | |
| 46 | Reddy Pharma Iberia SAU | |
| 47 | Reddy Pharma Italia S.R.L. | |
| 48 | Reddy Pharma SAS | |
| 49 | Dr. Reddy’s (Beijing) Pharmaceutical Co. Limited (from August 19, 2020) | |
| 50 | Dr. Reddy’s Formulations Limited (from March 11, 2021) | |
| 51 | Dr. Reddy’s (WUXI) Pharmaceutical Company Limited (liquidated w.e.f. December 13, 2021) | |
| 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 Employees ESOS Trust | |
| 3 | Dr. Reddy's Research Foundation | |
| S.R. Batliboi & Associates
LLP Chartered Accountants |
| 5. | Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement. |
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
| /s/ Shankar Srinivasan |  |
| per Shankar Srinivasan | |
| Partner | |
| Membership No.: 213271 | |
| UDIN: 22213271AAAAAQ3817 | |
|
Place: Hyderabad Date: January 28, 2022 |
 |
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 |
DR. REDDY'S LABORATORIES LIMITED
STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2021
| All amounts in Indian Rupees millions | |||||||||||||||||||||||||||
| Quarter ended | Nine months ended | Year ended | |||||||||||||||||||||||||
| Sl. | 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | |||||||||||||||||||||
| No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||||||
| 1 | Revenue from operations | ||||||||||||||||||||||||||
| a) Net sales/income from operations | 51,031 | 55,167 | 47,109 | 154,460 | 138,119 | 184,202 | |||||||||||||||||||||
| b) License fees and service income | 2,166 | 2,465 | 2,187 | 5,563 | 4,319 | 5,520 | |||||||||||||||||||||
| c) Other operating income | 186 | 237 | 123 | 680 | 355 | 753 | |||||||||||||||||||||
| Total revenue from operations | 53,383 | 57,869 | 49,419 | 160,703 | 142,793 | 190,475 | |||||||||||||||||||||
| 2 | Other income | 558 | 2,055 | 705 | 3,692 | 2,088 | 2,914 | ||||||||||||||||||||
| 3 | Total income (1 + 2) | 53,941 | 59,924 | 50,124 | 164,395 | 144,881 | 193,389 | ||||||||||||||||||||
| 4 | Expenses | ||||||||||||||||||||||||||
| a) Cost of materials consumed | 7,605 | 8,232 | 11,773 | 26,976 | 32,697 | 42,958 | |||||||||||||||||||||
| b) Purchase of stock-in-trade | 10,819 | 10,314 | 6,803 | 30,868 | 18,968 | 25,736 | |||||||||||||||||||||
| c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | (277 | ) | 1,730 | (2,199 | ) | (2,400 | ) | (6,291 | ) | (7,905 | ) | ||||||||||||||||
| d) Employee benefits expense | 9,563 | 10,104 | 9,157 | 29,132 | 27,369 | 36,299 | |||||||||||||||||||||
| e) Depreciation and amortisation expense | 2,942 | 2,941 | 3,112 | 8,722 | 9,200 | 12,288 | |||||||||||||||||||||
| f) Impairment of non-current assets | 47 | - | 5,972 | 1,885 | 6,753 | 6,768 | |||||||||||||||||||||
| g) Finance costs | 216 | 234 | 188 | 643 | 673 | 970 | |||||||||||||||||||||
| h) Selling and other expenses | 13,469 | 13,891 | 12,520 | 41,142 | 35,130 | 47,920 | |||||||||||||||||||||
| Total expenses | 44,384 | 47,446 | 47,326 | 136,968 | 124,499 | 165,034 | |||||||||||||||||||||
| 5 | Profit before tax and before share of equity accounted investees(3 - 4) | 9,557 | 12,478 | 2,798 | 27,427 | 20,382 | 28,355 | ||||||||||||||||||||
| 6 | Share of profit of equity accounted investees, net of tax | 185 | 247 | 151 | 598 | 301 | 480 | ||||||||||||||||||||
| 7 | Profit before tax (5+6) | 9,742 | 12,725 | 2,949 | 28,025 | 20,683 | 28,835 | ||||||||||||||||||||
| 8 | Tax expense/(benefit): | ||||||||||||||||||||||||||
| a) Current tax | 1,914 | 1,668 | 1,902 | 4,949 | 6,792 | 8,172 | |||||||||||||||||||||
| b) Deferred tax | 735 | 1,099 | 768 | 2,221 | (52 | ) | 1,147 | ||||||||||||||||||||
| 9 | Net profit after taxes and share of profit of associates (7 - 8) | 7,093 | 9,958 | 279 | 20,855 | 13,943 | 19,516 | ||||||||||||||||||||
| 10 | Other comprehensive income | ||||||||||||||||||||||||||
| a) (i) Items that will not be reclassified subsequently to profit or loss | (1,243 | ) | (101 | ) | 2,803 | (2,587 | ) | 2,984 | 4,026 | ||||||||||||||||||
| (ii) Income tax relating to items that will not be reclassified to profit or loss | - | - | - | 293 | - | (220 | ) | ||||||||||||||||||||
| b) (i) Items that will be reclassified subsequently to profit or loss | 62 | (137 | ) | 930 | (143 | ) | 1,919 | 1,913 | |||||||||||||||||||
| (ii) Income tax relating to items that will be reclassified to profit or loss | (57 | ) | (77 | ) | (1 | ) | 39 | (295 | ) | (319 | ) | ||||||||||||||||
| Total other comprehensive income | (1,238 | ) | (315 | ) | 3,732 | (2,398 | ) | 4,608 | 5,400 | ||||||||||||||||||
| 11 | Total comprehensive income (9 + 10) | 5,855 | 9,643 | 4,011 | 18,457 | 18,551 | 24,916 | ||||||||||||||||||||
| 12 | Paid-up equity share capital (face value Rs. 5/- each) | 832 | 832 | 831 | 832 | 831 | 832 | ||||||||||||||||||||
| 13 | Other equity | 175,585 | |||||||||||||||||||||||||
| 14 | Earnings per equity share (face value Rs. 5/- each) | ||||||||||||||||||||||||||
| Basic | 42.75 | 60.03 | 1.68 | 125.74 | 84.07 | 117.67 | |||||||||||||||||||||
| Diluted | 42.65 | 59.88 | 1.67 | 125.43 | 83.83 | 117.34 | |||||||||||||||||||||
| (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | |||||||||||||||||||||||
See accompanying notes to the financial results
 |
 |
| DR. REDDY'S LABORATORIES LIMITED |
| Segment information | All amounts in Indian Rupees millions | ||||||||||||||||||||||||||
| Quarter ended | Nine months ended | Year ended | |||||||||||||||||||||||||
| Sl. | 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | |||||||||||||||||||||
| No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | ||||||||||||||||||||
| Segment wise revenue and results: | |||||||||||||||||||||||||||
| 1 | Segment revenue : | ||||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 9,016 | 10,187 | 8,841 | 28,183 | 29,361 | 39,284 | |||||||||||||||||||||
| b) Global Generics | 44,565 | 47,472 | 40,778 | 133,288 | 115,752 | 154,759 | |||||||||||||||||||||
| c) Proprietary Products | 129 | 1,232 | 124 | 1,420 | 280 | 523 | |||||||||||||||||||||
| d) Others | 1,289 | 596 | 1,412 | 2,368 | 2,424 | 2,814 | |||||||||||||||||||||
| Total | 54,999 | 59,487 | 51,155 | 165,259 | 147,817 | 197,380 | |||||||||||||||||||||
| Less: Inter-segment revenue | 1,616 | 1,618 | 1,736 | 4,556 | 5,024 | 6,905 | |||||||||||||||||||||
| Total revenue from operations | 53,383 | 57,869 | 49,419 | 160,703 | 142,793 | 190,475 | |||||||||||||||||||||
| 2 | Segment results: | ||||||||||||||||||||||||||
| Gross profit from each segment | |||||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 1,641 | 2,169 | 1,776 | 5,444 | 6,927 | 9,444 | |||||||||||||||||||||
| b) Global Generics | 25,732 | 26,990 | 23,454 | 76,440 | 68,665 | 91,111 | |||||||||||||||||||||
| c) Proprietary Products | 129 | 1,232 | 100 | 1,406 | 244 | 482 | |||||||||||||||||||||
| d) Others | 1,114 | 397 | 1,211 | 1,817 | 1,880 | 2,058 | |||||||||||||||||||||
| Total | 28,616 | 30,788 | 26,541 | 85,107 | 77,716 | 103,095 | |||||||||||||||||||||
| Less: Selling and other un-allocable expenditure/(income), net | 18,874 | 18,063 | 23,592 | 57,082 | 57,033 | 74,260 | |||||||||||||||||||||
| Total profit before tax | 9,742 | 12,725 | 2,949 | 28,025 | 20,683 | 28,835 | |||||||||||||||||||||
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 have been 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. |
| 2 | In September 2021, the Company completed the sale of its U.S. and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. An amount of Rs. 1,084 million is included under the head “License fee and service income” and this pertains to the Company’s Proprietary Products segment. |
| 3 | Included in "Other income" for the quarter ended 30 September 2021 is Rs. 1,064 million representing the profit on sale of intangible asset, E7777 (anti-cancer agent) to Citius Pharmaceuticals, Inc. This transaction pertains to the Company’s Proprietary Products segment. |
| 4 | On 14 June 2021, the Company received the arbitration decision and award in favour of Hatchtech Pty Limited regarding the Civil Litigation and Arbitration relating to the acquisition of the product Xeglyze®. The award required the Company to pay an amount of Rs. 3,401 million (U.S.$ 46.25 million) towards milestone payments, interest, and fees. As the Company was carrying only Rs. 1,471 million (U.S.$ 20 million) as the provision towards this litigation, an additional expense of Rs. 1,930 million (U.S.$ 26.25 million) [Rs. 1,838 million (U.S.$ 25 million) as "Impairment of non-current assets" and Rs. 92 million (U.S.$ 1.25 million) as "selling and other expenses"] was recognized during the quarter ended 30 June 2021. The said expense forms part of the Company’s Proprietary Products segment. |
| 5 | During the year ended 31 March 2021, 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 the launch by competitor of generic version of the product, decrease in the market potential of products primarily due to higher than expected price erosion and increased competition, and higher than expected value erosion. Due to these adverse market developments, the Company recorded an impairment loss of: |
- Rs. 3,180 million relating to ethinyl estradiol / ethenogestral vaginal ring (a generic equivalent to NuvaRing®);
- Rs. 1,587 million relating to saxagliptin and metformin (generic version of Kombiglyze-XR) and phentermine and topiramate (generic version of Qsymia®);
- Rs. 1,471 million relating to Xeglyze®;
- Rs. 484 million relating to other intangible assets.
Further, an amount of Rs. 46 million has been recognised as impairment of property, plant and equipment.
| 6 | Tax expense for the year ended 31 March 2021 includes the following: |
- Rs. 1,012 million of benefit, in the quarter ended 30 Septmeber 2020, on account of recognition of deferred tax asset consequent to a planned restructuring activity between the Group companies; and
- Rs. 627 million of expense, in the quarter ended 31 March 2021, on account of de recognition of deferred tax asset due to non-availability of depreciation on goodwill pursuant to an amendment to section 2(11) of the Income Tax Act in the Finance Act, 2021.
| 7 | During the quarter ended 31 December 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Limited to acquire, certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles, and pertains to Company's Global Generics segment. |
| 8 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment. |
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| DR. REDDY'S LABORATORIES LIMITED |
| 9 | The Company has commenced a detailed investigation into an anonymous complaint received in September 2020. The complaint alleges 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. A U.S. law firm is conducting the investigation at the instruction of a committee of the Company’s Board of Directors. The Company has disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. On 6 July 2021 the Company received a subpoena from the SEC for the production of documents pertaining to certain CIS geographies, and the Company has been responding to the same. |
During the quarter ended 30 September 2021, the Company shared the report with respect to one jurisdiction with the SEC/DOJ. In the current quarter the Company finalized the reports with respect to certain other countries which will be presented to the SEC/DOJ in due course. The investigation is ongoing, and 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 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 outcome are not reasonably ascertainable at this time. The Company is also in the process of reviewing its Compliance Program including controls in relation to compliance and implement appropriate enhancements, if any.
| 10 | India’s Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which this Code will come into effect has not been announced. The Company will assess the impact of this Code and the rules thereunder when they come into effect. |
| 11 | The Company considered the uncertainty relating to the COVID-19 pandemic 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 interim 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.
| 12 | The unaudited results were reviewed by the Audit Committee of the Board on 27 January 2022 and approved by the Board of Directors of the Company at their meeting held on 28 January 2022. |
| 13 | The results for the quarter and nine months ended 31 December 2021 were subject to a "Limited Review" by the Statutory Auditors of the Company. An unqualified report has been issued by them thereon. |
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Place: Hyderabad Date: 28 January 2022
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By order of the Board For Dr. Reddy's Laboratories Limited
G V Prasad Co-Chairman & Managing Director
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Exhibit 99.4
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S.R. Batliboi & Associates LLP Chartered Accountants |
THE SKYVIEW 10 18th Floor, "NORTH LOBBY" Survey No. 83/1, Raidurgam Hyderabad – 500 032, India Tel: +91 40 6141 6000 |
Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Standalone Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
Review Report to
The Board of Directors
Dr. Reddy’s Laboratories Limited
| 1. | We have reviewed the accompanying statement of unaudited standalone financial results of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter and nine months ended December 31, 2021 (the “Statement”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”). |
| 2. | The Company’s Management is responsible for the preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Statement has been approved by the Company’s Board of Directors. Our responsibility is to express a conclusion on the Statement based on our review. |
| 3. | We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
| 4. | Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement. |
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
| /s/ Shankar Srinivasan |  |
|
per Shankar Srinivasan Partner Membership No.: 213271
UDIN: 22213271AAAAAR5988 |
Place: Hyderabad
Date: January 28, 2022
S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295
Regd. Office: 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016
 |
Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, CIN : L85195TG1984PLC004507
Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com |
DR. REDDY'S LABORATORIES LIMITED
STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2021
| All amounts in Indian Rupees millions | ||||||||||||||||||||||||||
| Quarter ended | Nine months ended | Year ended | ||||||||||||||||||||||||
| Sl. | 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | ||||||||||||||||||||
| No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||||||||
| 1 | Revenue from operations | |||||||||||||||||||||||||
| a) Net sales / income from operations | 34,303 | 36,731 | 33,818 | 105,035 | 99,315 | 132,094 | ||||||||||||||||||||
| b) License fees and service income | 335 | 1,364 | 157 | 1,799 | 364 | 720 | ||||||||||||||||||||
| c) Other operating income | 158 | 139 | 107 | 531 | 305 | 677 | ||||||||||||||||||||
| Total revenue from operations | 34,796 | 38,234 | 34,082 | 107,365 | 99,984 | 133,491 | ||||||||||||||||||||
| 2 | Other income | 630 | 1,181 | 628 | 3,673 | 7,195 | 8,011 | |||||||||||||||||||
| Total income (1 + 2) | 35,426 | 39,415 | 34,710 | 111,038 | 107,179 | 141,502 | ||||||||||||||||||||
| 3 | Expenses | |||||||||||||||||||||||||
| a) Cost of materials consumed | 5,078 | 6,732 | 8,453 | 20,517 | 24,500 | 32,663 | ||||||||||||||||||||
| b) Purchase of stock-in-trade | 7,538 | 6,562 | 3,211 | 20,335 | 9,257 | 12,523 | ||||||||||||||||||||
| c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | (566 | ) | 252 | (877 | ) | (3,339 | ) | (4,164 | ) | (3,956 | ) | |||||||||||||||
| d) Employee benefits expense | 6,040 | 6,352 | 5,715 | 18,257 | 17,245 | 22,701 | ||||||||||||||||||||
| e) Depreciation and amortisation expense | 2,054 | 2,066 | 2,124 | 6,091 | 6,243 | 8,350 | ||||||||||||||||||||
| f) Impairment of non-current assets | - | - | - | - | - | 150 | ||||||||||||||||||||
| g) Finance costs | 77 | 111 | 65 | 253 | 298 | 467 | ||||||||||||||||||||
| h) Selling and other expenses | 10,566 | 10,853 | 9,840 | 32,353 | 27,807 | 38,042 | ||||||||||||||||||||
| Total expenses | 30,787 | 32,928 | 28,531 | 94,467 | 81,186 | 110,940 | ||||||||||||||||||||
| 4 | Profit before tax (1 + 2 - 3) | 4,639 | 6,487 | 6,179 | 16,571 | 25,993 | 30,562 | |||||||||||||||||||
| 5 | Tax expense / (benefit) | |||||||||||||||||||||||||
| a) Current tax | 812 | 1,156 | 1,108 | 2,952 | 4,613 | 5,401 | ||||||||||||||||||||
| b) Deferred tax | 416 | 841 | 634 | 1,584 | 2,631 | 3,297 | ||||||||||||||||||||
| 6 | Net profit for the period / year (4 - 5) | 3,411 | 4,490 | 4,437 | 12,035 | 18,749 | 21,864 | |||||||||||||||||||
| 7 | Other comprehensive income | |||||||||||||||||||||||||
| a) (i) Items that will not be reclassified to profit or loss | - | 1 | 6 | 2 | 5 | (169 | ) | |||||||||||||||||||
| (ii) Income tax relating to items that will not be reclassified to profit or loss | - | - | - | - | - | 62 | ||||||||||||||||||||
| b) (i) Items that will be reclassified to profit or loss | 201 | 207 | 136 | (123 | ) | 916 | 994 | |||||||||||||||||||
| (ii) Income tax relating to items that will be reclassified to profit or loss | (69 | ) | (73 | ) | (33 | ) | 44 | (318 | ) | (346 | ) | |||||||||||||||
| Total other comprehensive income | 132 | 135 | 109 | (77 | ) | 603 | 541 | |||||||||||||||||||
| 8 | Total comprehensive income (6 + 7) | 3,543 | 4,625 | 4,546 | 11,958 | 19,352 | 22,405 | |||||||||||||||||||
| 9 | Paid-up equity share capital (face value Rs. 5/- each) | 832 | 832 | 831 | 832 | 831 | 832 | |||||||||||||||||||
| 10 | Other equity | 169,005 | ||||||||||||||||||||||||
| 11 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||||||||||
| Basic | 20.55 | 27.07 | 26.74 | 72.56 | 113.05 | 131.84 | ||||||||||||||||||||
| Diluted | 20.51 | 27.00 | 26.66 | 72.38 | 112.73 | 131.46 | ||||||||||||||||||||
| (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | (Not annualised) | ||||||||||||||||||||||
See accompanying notes to the financial results.
 |
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DR. REDDY'S LABORATORIES LIMITED
| Segment information | All amounts in Indian Rupees millions | |||||||||||||||||||||||||
| Quarter ended | Nine months ended | Year ended | ||||||||||||||||||||||||
| Sl. | 31.12.2021 | 30.09.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | 31.03.2021 | ||||||||||||||||||||
| No. | Particulars | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |||||||||||||||||||
| Segment wise revenue and results | ||||||||||||||||||||||||||
| 1 | Segment revenue | |||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | 7,305 | 9,089 | 7,763 | 23,786 | 24,465 | 33,458 | ||||||||||||||||||||
| b) Global Generics | 28,997 | 29,548 | 27,970 | 86,744 | 80,323 | 106,467 | ||||||||||||||||||||
| c) Proprietary Products | 110 | 1,215 | 85 | 1,391 | 220 | 471 | ||||||||||||||||||||
| Total | 36,412 | 39,852 | 35,818 | 111,921 | 105,008 | 140,396 | ||||||||||||||||||||
| Less: Inter-segment revenue | 1,616 | 1,618 | 1,736 | 4,556 | 5,024 | 6,905 | ||||||||||||||||||||
| Total revenue from operations | 34,796 | 38,234 | 34,082 | 107,365 | 99,984 | 133,491 | ||||||||||||||||||||
| 2 | Segment results | |||||||||||||||||||||||||
| Profit / (loss) before tax and interest from each segment | ||||||||||||||||||||||||||
| a) Pharmaceutical Services and Active Ingredients | (226 | ) | 725 | 428 | 706 | 6,259 | 7,486 | |||||||||||||||||||
| b) Global Generics | 5,312 | 4,891 | 6,447 | 15,927 | 20,363 | 23,928 | ||||||||||||||||||||
| c) Proprietary Products | 36 | 1,039 | (220 | ) | 1,031 | (675 | ) | (631 | ) | |||||||||||||||||
| Total | 5,122 | 6,655 | 6,655 | 17,664 | 25,947 | 30,783 | ||||||||||||||||||||
| Less: (i) Finance costs | 77 | 111 | 65 | 253 | 298 | 467 | ||||||||||||||||||||
| (ii) Other un-allocable expenditure / (income), net | 406 | 57 | 411 | 840 | (344 | ) | (246 | ) | ||||||||||||||||||
| Total profit before tax | 4,639 | 6,487 | 6,179 | 16,571 | 25,993 | 30,562 | ||||||||||||||||||||
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 have been 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. |
| 2 | During the three months ended 30 September, 2021, the Company completed the sale of its U.S. and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. An amount of Rs. 1,084 million is included under the head “License fee and service income” and this pertains to the Company’s Proprietary Products segment. |
| 3 | During the year ended 31 March 2021, the Company recorded a total impairment loss of Rs.150 million the details of which are as under: |
- Rs.97 million in the quarter ended 31 December 2020 on account of decreased market potential of certain products, forming part of the Company’s Global Generics segment, primarily due to higher than expected price erosion, increased competition, and higher than expected value erosion.
- Rs. 53 million in the quarter ended 30 September 2020 on account of the Company’s decision to discontinue the development of certain product related intangibles in the Company’s Global Generics segment.
| 4 | "Other income" for the year ended 31 March 2021 includes Rs. 4,772 million received from Aurigene Pharmaceutical Services limited (APSL) during the quarter ended 30 June 2020, pursuant to sale of the contract development and manufacturing organisation (CDMO) division of the Custom Pharmaceutical Services (CPS) business of the Company. |
| 5 | During the quarter ended 31 December 2020, the Company entered into a definitive agreement with Glenmark Pharmaceuticals Limited to acquire certain brands in various Emerging Market countries for a total consideration of Rs. 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles, and pertains to Company's Global Generics segment. |
| 6 | On 10 June 2020, the Company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dermatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the Company completed the purchase price allocation. The fair value of consideration transferred is Rs.16,115 million. The Company recognised Rs. 373 million, Rs. 14,888 million and Rs. 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment. |
| 7 | The Company has commenced a detailed investigation into an anonymous complaint received in September 2020. The complaint alleges 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. A U.S. law firm is conducting the investigation at the instruction of a committee of the Company’s Board of Directors. The Company has disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. On 6 July 2021 the Company received a subpoena from the SEC for the production of documents pertaining to certain CIS geographies, and the Company has been responding to the same. |
During the quarter ended 30 September 2021, the Company shared the report with respect to one jurisdiction with the SEC/DOJ. In the current quarter the Company finalized the reports with respect to certain other countries which will be presented to the SEC/DOJ in due course. The investigation is ongoing, and 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 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 outcome are not reasonably ascertainable at this time. The Company is also in the process of reviewing its Compliance Program including controls in relation to compliance and implement appropriate enhancements, if any.
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DR. REDDY'S LABORATORIES LIMITED
| 8 | India’s Code on Social Security, 2020, which aims to consolidate, codify and revise certain existing social security laws, received Presidential assent in September 2020 and has been published in the Gazette of India. However, the related final rules have not yet been issued and the date on which this Code will come into effect has not been announced. The Company will assess the impact of this Code and the rules thereunder when they come into effect. |
| 9 | The Company considered the uncertainty relating to the COVID-19 pandemic 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 interim 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.
| 10 | The unaudited results were reviewed by the Audit Committee of the Board at their meeting held on 27 January 2022 and approved by the Board of Directors of the Company at their meeting held on 28 January 2022. |
| 11 | The results for the quarter and nine months ended 31 December 2021 presented were subjected to a “Limited review” by the Statutory Auditors of the Company. An unqualified report was issued by them thereon. |
|
Place: Hyderabad Date: 28 January 2022
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 |
 |
By order of the Board For Dr. Reddy's Laboratories Limited
G V Prasad Co-Chairman & Managing Director
|
