EX-99.4 5 drr0598_ex99-4.htm EXHIBIT 99.4

 

Exhibit 99.4

 

S.R. Batliboi & Associates LLP

Chartered Accountants

THE SKYVIEW 10

18th Floor, "NORTH LOBBY"

Survey No. 83/1, Raidurgam

Hyderabad - 500 032, India

Tel: +91 40 6141 6000

 

Independent Auditor’s 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 Audited Consolidated Financial Results for the quarter and year ended 31 March 2024 (“Statement”) of Dr. Reddy’s Laboratories Limited (“Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), its associate and joint ventures for the quarter and year ended March 31, 2024, 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 and based on the consideration of the reports of the other auditors on separate audited financial statements of the subsidiary referred to in the Other Matters paragraph below, the Statement:

 

(i) includes the results of the following entities:

 

Holding Company:

 

1.Dr. Reddy’s Laboratories Limited

 

Subsidiaries 

 

1.Aurigene Oncology 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 Owners and Land Possessions Private Limited (Formerly 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 Pharmaceutical 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 (Beijing) Pharmaceutical Co. Limited
19.Dr. Reddy’s Laboratories Canada, Inc.
20.Dr. Reddy's Laboratories Chile SPA.
21.Dr. Reddy’s Laboratories (EU) Limited
22.Dr. Reddy’s Laboratories Inc.
23.Dr. Reddy's Laboratories Japan KK
24.Dr. Reddy’s Laboratories Kazakhstan LLP
25.Dr. Reddy’s Laboratories LLC, Ukraine
26.Dr. Reddy's Laboratories Louisiana LLC
27.Dr. Reddy’s Laboratories Malaysia Sdn. Bhd.

 

 

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

 

 28.Dr. Reddy’s Laboratories New York, LLC
29.Dr. Reddy's Laboratories Philippines Inc.
30.Dr. Reddy’s Laboratories (Proprietary) Limited
31.Dr. Reddy's Laboratories Romania S.R.L.
32.Dr. Reddy's Laboratories SAS
33.Dr. Reddy's Laboratories Taiwan Limited
34.Dr. Reddy's Laboratories (Thailand) Limited
35.Dr. Reddy’s Laboratories (UK) Limited
36.Dr. Reddy’s New Zealand Limited
37.Dr. Reddy's Research and Development B.V.
38.Dr. Reddy’s Srl
39.Dr. Reddy's Venezuela, C.A.
40.Dr. Reddy’s Laboratories LLC, Russia
41.Lacock Holdings Limited
42.Promius Pharma LLC
43.Reddy Holding GmbH
44.Reddy Netherlands B.V.
45.Reddy Pharma Iberia SAU
46.Reddy Pharma Italia S.R.L
47.Reddy Pharma SAS
48.Nimbus Health GmbH
49.Dr. Reddy’s Laboratories Jamaica Limited (effective from September 25, 2023)
50.Dr. Reddy’s Nutraceuticals Limited (effective from March 14, 2024)

 

Associate

 

1.O2 Renewable Energy IX Private Limited (effective from November 10, 2023)

 

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

 

i.are 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 consolidated net profit and other comprehensive loss and other financial information of the Group, its associate and joint ventures for the quarter and year ended March 31, 2024.

 

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, its associate and 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 associate and 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 of its associate and joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of their respective companies 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 of its associate and joint ventures are responsible for assessing the ability of their respective companies 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 companies 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 of its associate and joint ventures are also responsible for overseeing the financial reporting process of their respective companies.

 

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.
·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 associate and 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 associate and joint ventures to cease to continue as a going concern.

 

 

 

 

 

S.R. Batliboi & Associates LLP

Chartered Accountants

 

·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 Master Circular issued by the Securities Exchange Board of India under Regulation 33 (8) of the Listing Regulations, to the extent applicable.

 

Other Matters

 

1.The accompanying Statement includes the audited financial statements and other financial information, in respect of one subsidiary, whose financial statements include total assets of Rs 13,142 million as at March 31, 2024, total revenues of Rs 4,700 million and Rs 21,391 million total net profit after tax of Rs. 100 million and Rs. 1,079 million, total comprehensive income of Rs. 100 million and Rs. 1,079 million, for the quarter and year ended on that date respectively, and net cash inflows of Rs. 554 million for the year ended March 31, 2024, as considered in the Statement which have been audited by their auditors. The auditor’s report on the financial statements and other financial information of this entity has 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 this subsidiary is based solely on such audited financial statements and other financial information.

 

2.The accompanying Statement includes the unaudited financial results and other unaudited financial information, in respect of one associate and two joint ventures, whose financial results include the Group’s share of net profit of Rs. 147 million and Rs. 147 million and Group’s share of total comprehensive income of Rs. 147 million and Rs. 147 million for the quarter and year ended March 31, 2024 respectively, as considered in the Statement whose financial results have not been audited by their respective auditors. These unaudited financial results and other unaudited financial information have been approved and 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 this associate and joint venture, is based solely on such unaudited financial results and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial results are not material to the Group.

 

Our opinion on the Statement is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial results/financial information certified by the Management.

 

 

 

 

 

 

S.R. Batliboi & Associates LLP

Chartered Accountants

 

3.The Statement includes the results for the quarter ended March 31, 2024 being the balancing figures between the audited figures in respect of the full financial year ended March 31, 2024 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: 24213271BKELCI9910
 
Place: Hyderabad
Date: May 07, 2024

 

 

 

 

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 CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 2024

 

All amounts in Indian Rupees millions

       Quarter ended   Year ended 
       31.03.2024   31.12.2023   31.03.2023   31.03.2024   31.03.2023 
Sl. No.   Particulars  (Audited)   (Unaudited)   (Audited)   (Audited)   (Audited) 
                         
 1   Revenue from operations                         
     a) Sales   68,258    69,647    58,430    271,396    234,595 
     b) License fees and service income   2,572    2,501    4,539    7,768    11,284 
     c) Other operating income   308    220    183    947    818 
                               
     Total revenue from operations   71,138    72,368    63,152    280,111    246,697 
                               
 2   Other income   1,975    2,162    1,385    8,943    10,555 
                               
 3   Total income (1 + 2)   73,113    74,530    64,537    289,054    257,252 
                               
 4   Expenses                         
     a) Cost of materials consumed   10,962    11,412    10,728    44,901    42,198 
     b) Purchase of stock-in-trade   11,759    12,083    7,667    43,991    33,670 
     c) Changes in inventories of finished goods, work-in-progress and stock-in-trade   (1,800)   (1,735)   586    (6,805)   709 
     d) Employee benefits expense   12,836    12,764    12,760    50,301    46,466 
     e) Depreciation and amortisation expense   3,677    3,735    3,155    14,700    12,502 
     f) Impairment of non-current assets, net   (173)   110    540    3    699 
     g) Finance costs   593    394    354    1,711    1,428 
     h) Other expenses   19,242    17,503    15,532    68,389    59,465 
     Total expenses   57,096    56,266    51,322    217,191    197,137 
 5   Profit before tax and before share of equity accounted investees(3 - 4)   16,017    18,264    13,215    71,863    60,115 
                               
 6   Share of profit of equity accounted investees, net of tax   35    27    76    147    370 
                               
 7   Profit before tax (5+6)   16,052    18,291    13,291    72,010    60,485 
                               
 8   Tax expense/(benefit):                         
     a) Current tax   2,823    3,538    4,279    19,459    8,144 
     b) Deferred tax   131    944    (589)   (3,228)   7,268 
                               
 9   Net profit after taxes and share of profit of associates (7 - 8)   13,098    13,809    9,601    55,779    45,073 
                               
 10   Other comprehensive income/(loss)                         
     a) (i) Items that will not be reclassified subsequently to profit or loss   (44)   132    83    (28)   (660)
     (ii) Income tax relating to items that will not be reclassified to profit or loss   4    -    (12)   4    (43)
     b) (i) Items that will be reclassified subsequently to profit or loss   (565)   782    1,196    (749)   276 
     (ii) Income tax relating to items that will be reclassified to profit or loss   48    78    (342)   117    306 
     Total other comprehensive income/(loss)   (557)   992    925    (656)   (121)
                               
 11   Total comprehensive income (9 + 10)   12,541    14,801    10,526    55,123    44,952 
                               
 12   Paid-up equity share capital (face value Rs. 5/- each)   834    834    833    834    833 
                               
 13   Other equity                  281,714    232,028 
                               
 14   Earnings per equity share (face value Rs. 5/- each)                         
                               
     Basic   78.66    82.94    57.79    335.22    271.47 
     Diluted   78.53    82.81    57.68    334.59    270.90 
         (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 
       31.03.2024   31.12.2023   31.03.2023   31.03.2024   31.03.2023 
Sl. No.   Particulars  (Audited)   (Unaudited)   (Audited)   (Audited)   (Audited) 
     Segment wise revenue and results:                         
 1   Segment revenue :                         
     a) Pharmaceutical Services and Active Ingredients   11,725    10,580    10,398    41,295    37,195 
     b) Global Generics   61,289    63,124    54,297    245,673    213,953 
     c) Others   1,431    1,215    931    3,922    3,126 
     Total   74,445    74,919    65,626    290,890    254,274 
                               
     Less: Inter-segment revenue   3,307    2,551    2,474    10,779    7,577 
     Total revenue from operations   71,138    72,368    63,152    280,111    246,697 
                               
 2   Segment results:                         
     Gross profit from each segment                         
     a) Pharmaceutical Services and Active Ingredients   2,349    2,307    1,970    6,929    4,733 
     b) Global Generics   37,937    39,077    33,498    154,272    132,719 
     c) Others   1,202    823    535    2,423    1,909 
     Total   41,488    42,207    36,003    163,624    139,361 
                               
     Less: Selling and other un-allocable expenditure/(income), net   25,436    23,916    22,712    91,614    78,876 
     Total profit before tax   16,052    18,291    13,291    72,010    60,485 

 

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:

 

1The above statement of audited consolidated financial results of Dr. Reddy's Laboratories Limited ("the Company"), which have been prepared in accordance with Indian Accounting Standards ("Ind AS") prescribed under section 133 of Companies Act,2013 ("the Act") read with relevant rules issues thereunder, other accounting principles generally accepted in India and guidelines issues by the Securities and Exchange Board of India ("SEBI") were reviewed and recommended by Audit Committee and approved by the Board of Directors at their meetings held on 7 May 2024. The Statutory Auditors have issued an unqualified report thereon.

 

2License fee and service income for the year ended 31 March 2023 includes:

a. Rs. 2,640 million from sale of certain non-core dermatology brands 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“Other income” for the year ended 31 March 2024 includes :

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

b. Rs.984 million recognised pursuant to settlement of product related litigation by the Company and its affiliates in the United Kingdom. This transaction pertains to the Company's Global Generics segment.

 

4“Other income” for the year ended 31 March 2023 includes an amount of Rs.5,638 million (U.S.$71.39 discounted to present value), recognised in June 2022 towards the settlement of an ongoing litigation relating to launch of a product with Indivior Inc., Indivior UK Limited and Aquestive Therapeutics, Inc.

 

5During the quarter and year ended 31 March 2024, an amount of Rs. 810 million and Rs. 4,232 million respectively, and 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 materials consumed.

 

6"Impairment of non-current assets, net" for the year ended 31 March 2024 primarily includes:

a. Reversal of impairment loss of Rs. 226 million in March 2024, with respect to saxagliptin/metformin (generic version of Kombiglyze® - XR) and enalaprilat (generic version of Vasotec®) pursuant to launch of these two products during the year.

The company re-assessed the recoverable amount pursuant to favorable market conditions and change in circumstances that led to initial impairment during year ended 31 March 2021 by revisiting the market volumes, share and price assumptions of these two products and accordingly capitalized under Product related intangibles with corresponding reversal of impairment loss of Rs. 191 million and Rs. 35 million respectively. This impairment loss pertains to the Company’s Global Generics segment

b. Consequent to adverse market conditions with respect to certain products related intangibles and software platforms, the Company assessed the recoverable amount of certain products and recognized impairment loss of Rs. 86 million and Rs. 99 million pertaining to products and software platforms forming part of the Company’s Global Generics and Others segment, respectively.

 

  

 

 

 

 

DR. REDDY'S LABORATORIES LIMITED

 

7Consolidated Balance Sheet

 

All amounts in Indian Rupees millions
   As at   As at 
   31.03.2024   31.03.2023 
Particulars  (Audited)   (Audited) 
ASSETS          
Non-current assets          
Property, plant and equipment   62,487    56,542 
Capital work-in-progress   13,510    9,752 
Goodwill   5,501    5,474 
Other intangible assets   36,268    30,175 
Intangible assets under development   683    549 
Investment in equity accounted investees   4,196    4,702 
Financial assets          
Investments   1,059    660 
Other financial assets   1,212    727 
Deferred tax assets, net   10,578    7,052 
Tax assets, net   3,718    2,687 
Other non-current assets   1,373    276 
Total non-current assets   140,585    118,596 
Current assets          
Inventories   63,552    48,670 
Financial assets          
Investments   44,050    44,496 
Trade receivables   80,298    72,485 
Derivative financial instruments   169    1,232 
Cash and cash equivalents   7,107    5,779 
Other bank balances   10,170    11,523 
Other financial assets   22,527    4,950 
Other current assets   20,180    15,120 
Total current assets   248,053    204,255 
TOTAL ASSETS   388,638    322,851 
           
EQUITY AND LIABILITIES          
Equity          
Equity share capital   834    833 
Other equity   281,714    232,028 
Total equity   282,548    232,861 
           
Liabilities          
Non-current liabilities          
Financial liabilities          
Borrowings   3,800    - 
Lease liabilities   2,190    1,278 
Provisions   239    199 
Deferred tax liabilities, net   841    760 
Other non-current liabilities   3,140    2,032 
Total non-current liabilities   10,210    4,269 
Current liabilities          
Financial liabilities          
Borrowings   12,723    11,190 
Lease liabilities   1,307    1,004 
Trade payables   -    - 
Total outstanding dues of micro enterprises and small enterprises   282    83 
Total outstanding dues of creditors other than micro enterprises and small enterprises   25,862    22,601 
Derivative financial instruments   468    137 
Other financial liabilities   34,540    29,175 
Liabilities for current tax, net   2,341    2,143 
Provisions   6,920    6,525 
Other current liabilities   11,437    12,863 
Total current liabilities   95,880    85,721 
TOTAL EQUITY AND LIABILITIES   388,638    322,851 

 

 

 

 

 

 

DR. REDDY'S LABORATORIES LIMITED

 

8Consolidated statement of cashflows

 

All amounts in Indian Rupees millions
   Year ended   Year ended 
   31.03.2024   31.03.2023 
Particulars  (Audited)   (Audited) 
Cash flows from/(used in) operating activities :          
Profit before tax   72,010    60,485 
Adjustments for:          
Fair value changes and profit on sale of financial instruments measured at FVTPL**, net   (3,149)   (876)
Depreciation and amortisation expense   14,700    12,502 
Impairment of non-current assets   3    699 
Allowance for credit losses (on trade receivables and other advances)   275    205 
(Profit)/Loss on sale or de-recognition of non-current assets, net   (900)   208 
Share of profit of equity accounted investees   (147)   (370)
Unrealized exchange (gain)/loss, net   (533)   (925)
Interest income   (2,278)   (1,180)
Finance costs   1,711    1,428 
Equity settled share-based payment expense   407    397 
Inventories write-down   3,563    4,869 
Dividend income   -*   -*
Changes in operating assets and liabilities:          
Trade receivables   (8,054)   (5,752)
Inventories   (18,445)   (2,654)
Trade payables   3,460    23 
Other assets and other liabilities, net   2,857    528 
Cash generated from operations   65,480    69,587 
Income tax paid, net   (20,047)   (10,714)
Net cash from operating activities   45,433    58,873 
Cash flows from/(used in) investing activities :          
Purchase of property, plant and equipment   (16,403)   (11,323)
Proceeds from sale of property, plant and equipment   1,064    82 
Purchase of other intangible assets   (11,032)   (7,541)
Proceeds from sale of other intangible assets   21    - 
Investment in associates   (12)   - 
Purchase of investments (including bank deposits)   (145,488)   (136,171)
Proceeds from sale of investments (including bank deposits)   129,784    112,805 
Dividend received from equity accounted investees   445    - 
Interest and dividend received   1,338    777 
Net cash used in investing activities   (40,283)   (41,371)
Cash flows from/(used in) financing activities :          
Proceeds from issuance of equity shares (including treasury shares)   805    157 
Proceeds from sale of treasury shares   -    211 
Proceeds from/(Repayment of) from short-term loans and borrowings, net   5,493    (19,382)
Repayment of long-term loans and borrowings   (3,800)   - 
Proceeds from long term borrowings   3,800    - 
Payment of principal portion of lease liabilities   (1,147)   (1,015)
Dividend paid   (6,648)   (4,979)
Interest paid   (2,266)   (1,853)
Net cash used in financing activities   (3,763)   (26,861)
         
Net increase/(decrease) in cash and cash equivalents   1,387    (9,359)
Effect of exchange rate changes on cash and cash equivalents   (59)   286 
Cash and cash equivalents at the beginning of the year   5,779    14,852 
Cash and cash equivalents at the end of the year   7,107    5,779 

 

*Roundedoff to million.
**FVTPL(fair value through profit or loss)

 

 

 

 

 

 

DR. REDDY'S LABORATORIES LIMITED

 

9During 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.

 

10Included in “Other expenses” for the year ended 31 March 2023, is an amount of Rs. 991 million representing the Loss on sale of Assets recognised in December 2022, pursuant to agreement 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.

 

11The 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.

 

During the previous years, the Company made presentations to the SEC and the DOJ in relation to the investigation in the aforementioned countries, and in relation to its Global Compliance Framework, which includes enhancement initiatives undertaken by the Company. The Company continues to respond to the requests made by the SEC and the DOJ and 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 and can also lead to civil and criminal sanctions under relevant laws, the outcomes, including liabilities, are not reasonably ascertainable at this time.

 

12The Company considered the uncertainties relating to the escalation of conflict in the middle east, and duration of 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.

 

13The Board of Directors, at their meeting held on 7 May 2024, have recommended a final dividend of Rs.40 per share subject to approval of shareholders.

 

14The 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: 7 May 2024 Co-Chairman & Managing Director