EX-99.4 5 drr0646_ex99-4.htm EXHIBIT 99.4

Exhibit 99.4 

 

S.R. Batliboi & Associates LLP
Chartered Accountants 

THE SKYVIEW 10
18th Floor, NORTH LOBBY
Survey No. 83/1, Raidurgam
Hyderabad - 500 032,  India

 

Tel : +91 40 6141 6000 

 

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

 

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

 

1.We have reviewed the accompanying “Statement of Unaudited Standalone Financial Results for the Quarter Ended 30 June 2024” (the “Statement”) of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter ended June 30, 2024 attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

 

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

 

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

 

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

 

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

 

per Shankar Srinivasan
Partner
Membership No.: 213271

 

UDIN: 24213271BKELHG6789

 

Place: Hyderabad

Date: July 27, 2024

 

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

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

 

 

 

 

Dr. Reddys Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN : L85195TG1984PLC004507

 

Tel      : +91 40 4900 2900

Fax     : +91 40 4900 2999

Email : mail@drreddys.com

www.drreddys.com

 

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30 JUNE 2024

 

          All amounts in Indian Rupees millions 
      Quarter ended   Year ended 

Sl.

No.

  Particulars  30.06.2024   31.03.2024   30.06.2023   31.03.2024 
      (Unaudited)   (Audited)   (Unaudited)   (Audited) 
                    
1  Revenue from operations                    
   a) Sales   58,076    50,304    54,034    192,764 
   b) License fees and service income   163    514    167    1,277 
   c) Other operating income   173    230    172    797 
   Total revenue from operations   58,412    51,048    54,373    194,838 
                        
2  Other income   2,178    2,127    2,336    8,623 
                        
   Total income (1 + 2)   60,590    53,175    56,709    203,461 
                        
3  Expenses                    
   a) Cost of materials consumed   9,111    9,077    8,139    32,915 
   b) Purchase of stock-in-trade   7,403    5,463    3,842    19,866 
   c) Changes in inventories of finished goods, work-in-progress
 and stock-in-trade		   (1,261)   (520)   (163)   (2,388)
   d) Employee benefits expense   8,559    7,795    7,402    30,857 
   e) Depreciation and amortisation expense   2,498    2,462    2,372    9,756 
   f) Impairment of non current assets, net   -    260    -    260 
   g) Finance costs   71    59    45    218 
   h) Other expenses   15,070    15,187    12,876    54,064 
                        
   Total expenses   41,451    39,783    34,513    145,548 
                        
4  Profit before tax (1 + 2 - 3)   19,139    13,392    22,196    57,913 
                        
5  Tax expense                    
   a) Current tax   4,666    2,702    5,387    13,618 
   b) Deferred tax   301    342    415    875 
                        
6  Net profit for the period / year (4 - 5)   14,172    10,348    16,394    43,420 
                        
7  Other comprehensive income / (loss)                    
   a)  (i) Items that will not be reclassified to profit or loss   -    27    1    21 
   (ii) Income tax relating to items that will not be reclassified to profit or loss   -    (7)   -    (7)
                        
   b)  (i) Items that will be reclassified subsequently to profit or loss   55    (189)   521    (446)
   (ii) Income tax relating to items that will be reclassified to  profit or loss   (14)   49    (130)   114 
                        
   Total other comprehensive income / (loss)   41    (120)   392    (318)
                        
8  Total comprehensive income (6 + 7)   14,213    10,228    16,786    43,102 
                        
9  Paid-up equity share capital (face value Rs. 5/- each)   834    834    833    834 
                        
10  Other equity                  241,574 
                        
11  Earnings per equity share (face value Rs. 5/- each)                    
                        
   Basic   85.10    62.14    98.66    260.95 
   Diluted   84.97    62.04    98.45    260.46 
        (Not annualised)      (Not annualised)      (Not annualised)       

 

See accompanying notes to the financial results.

 

 

 

 

 

 

DR. REDDY'S LABORATORIES LIMITED

 

Segment information      All amounts in Indian Rupees millions 
      Quarter ended   Year ended 

Sl.

No.

  Particulars  30.06.2024   31.03.2024   30.06.2023   31.03.2024 
      (Unaudited)   (Audited)   (Unaudited)   (Audited) 
   Segment wise revenue and results                    
1  Segment revenue                    
   a) Pharmaceutical Services and Active Ingredients   8,520    9,842    6,885    30,742 
   b) Global Generics   52,447    44,006    49,678    173,405 
   c) Others   61    353    131    678 
   Total   61,028    54,201    56,694    204,825 
                        
   Less: Inter-segment revenue   2,616    3,153    2,321    9,987 
   Total revenue from operations   58,412    51,048    54,373    194,838 
                        
2  Segment results                    
   Profit / (loss) before tax and interest from each segment                    
   a) Pharmaceutical Services and Active Ingredients   (70)   1,246    (596)   (287)
   b) Global Generics   19,667    12,172    22,492    57,670 
   c) Others   97    239    (9)   536 
   Total   19,694    13,657    21,887    57,919 
                        
   Less: (i) Finance costs   71    59    45    218 
   (ii) Other un-allocable expenditure / (income), net   484    206    (354)   (212)
   Total profit before tax   19,139    13,392    22,196    57,913 

 

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

 

Segmental capital employed

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

 

Notes:

 

1The above statement of unaudited standalone financial results of Dr. Reddy's Laboratories Limited ("the Company"), which have been prepared in accordance with the Indian Accounting Standards (''Ind AS'') prescribed under Section 133 of the Companies Act, 2013 ("the Act'') read with relevant rules issued thereunder, other accounting principles generally accepted in India and guidelines issued by the Securities and Exchange Board of India ("SEBI'') were reviewed and recommended by the Audit Committee and approved by the Board of Directors at their meetings held on 27 July 2024. The Statutory Auditors have carried out a limited review on the unaudited standalone financial results and issued unmodified report thereon.

 

2“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) Dividend income of Rs. 445 million recognised in June 2023, declared by Kunshan Rotan Reddy Pharmaceutical Company Limited, joint venture of the company.

 

3During the quarter ended 30 June 2024 and 31 March 2024, an amount of Rs. 804 million and Rs. 806 million, representing government grants has been accounted as a reduction from cost of material consumed.

 

4Agreement with Nestle:

On 25 April 2024, the Company entered into a definitive agreement with Nestlé India Limited (“Nestlé India”), for manufacturing, developing, promoting, marketing, selling, distributing, and commercializing nutraceutical products and supplements in India and other geographies as may be agreed by the parties. The aforesaid business activities shall be carried out through Dr. Reddy’s Nutraceuticals Limited (the “Nutraceuticals subsidiary”) which was incorporated on 14 March 2024. Subsequently, the Nutraceutical subsidiary’s name was changed to Dr. Reddy’s and Nestlé Health Science Limited on 13 June 2024.

The aforesaid definitive agreement is subject to certain closing conditions and is expected to become effective by the quarter ended 30 September 2024, upon infusion of funds and completion of other closing conditions.

As per terms agreed, the Company will hold 51% and the Nestlé India will hold 49% of the paid-up share capital in the Nutraceuticals subsidiary with shareholder rights to voting, dividend distribution and other economic rights as agreed in the aforesaid definitive agreement. As per agreed terms, the Company and Nestlé India will transfer license of its nutraceuticals brands to Nutraceuticals subsidiary.

Further, Nestlé India will have a call option to increase their shareholding up to 60% in the Nutraceuticals subsidiary after six years from subscription date for a payment at fair market value. However, the Company shall continue to hold at least 40% of the shareholding after Nestlé India exercises its call option.

 

 

 

 

 

 

 

Dr. Reddys Laboratories Limited.

 

5The 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.

 

6The Company received an anonymous complaint in September 2020, alleging that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S. anti-corruption laws, specifically the U.S. Foreign Corrupt Practices Act. The Company disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. The Company engaged a U.S. law firm to conduct the investigation at the instruction of a committee of the Company’s Board of Directors. On 06 July 2021 the Company received a subpoena from the SEC for the production of related documents, which were provided to the SEC.

 

The Company has continued to make presentations to the SEC and the DOJ in relation to the ongoing investigation and in relation to its Global Compliance Framework, which includes enhancement initiatives undertaken by the Company. The Company continues to respond to 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 which can lead to civil and criminal sanctions under relevant laws, the outcomes, including liabilities, are not reasonably ascertainable at this time.

 

7The Board of Directors of the Company at their meeting held on 27 July 2024, have approved the sub-division/ split of each equity share of face value of Rs.5/- (Rupees five only) each, fully paid-up, into 5 (Five) equity shares having face value of Re.1/- (Rupee one only) each, fully paid-up, by alteration of the Capital Clause of the Memorandum of Association of the Company. Further, each American Depositary Share (ADS) of the Company will continue to represent 1 (One) underlying equity share as at present and therefore, the number of ADSs held by an American Depositary Receipt holder would consequently increase in proportion to the increase in number of equity shares. The sub-division/ split will be subject to approval of the shareholders of the Company through postal ballot process. The record date for the said sub-division/ split will be intimated in due course.

 

Pending approval of the shareholders, the basic and diluted EPS disclosed above have not been adjusted to give effect to such split in accordance with requirements under Ind AS 33, Earnings per share.

 

8The figures for the quarter ended 31 March 2024 are the balancing figures between audited figures in respect of the full financial year and the published unaudited year to date figures up to the third quarter of the relevant financial year, which were subject to limited review.

 

By order of the Board

For Dr. Reddy’s Laboratories Limited

 

Place: Hyderabad G V Prasad
Date: 27 July 2024  Co-Chairman & Managing Director