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 June 30, 2022 (the “Statement”) of Dr. Reddy’s Laboratories Limited (the “Company”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”). |
2. | The Company’s Management is responsible for the preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Statement has been approved by the Company’s Board of Directors. Our responsibility is to express a conclusion on the Statement based on our review. |
3. | We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. |
4. | Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement. |
For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants
ICAI Firm registration number: 101049W/E300004
per Shankar Srinivasan Partner Membership No.: 213271
UDIN: 22213271ANTTFS9552
Place: Hyderabad Date: July 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, | |
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 2022
All amounts in Indian Rupees millions
Quarter ended | Year ended | ||||||||||||||||||
Sl. No. | Particulars | 30.06.2022 | 31.03.2022 | 30.06.2021 | 31.03.2022 | ||||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | ||||||||||||||||
1 | Revenue from operations | ||||||||||||||||||
a) Net sales / income from operations | 33,399 | 33,829 | 34,001 | 138,864 | |||||||||||||||
b) License fees and service income | 2,757 | 2,490 | 100 | 4,289 | |||||||||||||||
c) Other operating income | 150 | 368 | 234 | 899 | |||||||||||||||
Total revenue from operations | 36,306 | 36,687 | 34,335 | 144,052 | |||||||||||||||
2 | Other income | 4,034 | 1,147 | 1,862 | 4,820 | ||||||||||||||
Total income (1 + 2) | 40,340 | 37,834 | 36,197 | 148,872 | |||||||||||||||
3 | Expenses | ||||||||||||||||||
a) Cost of materials consumed | 8,047 | 10,149 | 8,707 | 33,784 | |||||||||||||||
b) Purchase of stock-in-trade | 4,836 | 3,354 | 6,235 | 20,571 | |||||||||||||||
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | 172 | (557 | ) | (3,025 | ) | (3,896 | ) | ||||||||||||
d) Employee benefits expense | 6,490 | 6,089 | 5,865 | 24,346 | |||||||||||||||
e) Depreciation and amortisation expense | 2,215 | 2,052 | 1,971 | 8,143 | |||||||||||||||
f) Impairment | - | 98 | - | 98 | |||||||||||||||
g) Finance costs | 98 | 127 | 65 | 380 | |||||||||||||||
h) Selling and other expenses | 10,966 | 10,855 | 10,934 | 43,208 | |||||||||||||||
Total expenses | 32,824 | 32,167 | 30,752 | 126,634 | |||||||||||||||
4 | Profit before tax (1 + 2 - 3) | 7,516 | 5,667 | 5,445 | 22,238 | ||||||||||||||
5 | Tax expense / (benefit) | ||||||||||||||||||
a) Current tax | 1,358 | 974 | 984 | 3,926 | |||||||||||||||
b) Deferred tax | 1,163 | 496 | 327 | 2,080 | |||||||||||||||
6 | Net profit for the period / year (4 - 5) | 4,995 | 4,197 | 4,134 | 16,232 | ||||||||||||||
7 | Other comprehensive income | ||||||||||||||||||
a) (i) Items that will not be reclassified to profit or loss | (1 | ) | (47 | ) | 1 | (45 | ) | ||||||||||||
(ii) Income tax relating to items that will not be reclassified to profit or loss | - | 17 | - | 17 | |||||||||||||||
b) (i) Items that will be reclassified to profit or loss | (4,486 | ) | 955 | (531 | ) | 832 | |||||||||||||
(ii) Income tax relating to items that will be reclassified to profit or loss | 1,568 | (335 | ) | 186 | (291 | ) | |||||||||||||
Total other comprehensive (loss)/income | (2,919 | ) | 590 | (344 | ) | 513 | |||||||||||||
8 | Total comprehensive income (6 + 7) | 2,076 | 4,787 | 3,790 | 16,745 | ||||||||||||||
9 | Paid-up equity share capital (face value Rs. 5/- each) | 832 | 832 | 832 | 832 | ||||||||||||||
10 | Other equity | 182,530 | |||||||||||||||||
11 | Earnings per equity share (face value Rs. 5/- each) | ||||||||||||||||||
Basic | 30.10 | 25.29 | 24.94 | 97.85 | |||||||||||||||
Diluted | 30.03 | 25.24 | 24.87 | 97.58 | |||||||||||||||
(Not annualised) | (Not annualised) | (Not annualised) |
See accompanying notes to the financial results.
DR. REDDY'S LABORATORIES LIMITED
Segment information | All amounts in Indian Rupees millions
|
Quarter ended | Year ended | ||||||||||||||||||
Sl. No. | Particulars | 30.06.2022 | 31.03.2022 | 30.06.2021 | 31.03.2022 | ||||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | ||||||||||||||||
Segment wise revenue and results | |||||||||||||||||||
1 | Segment revenue | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 5,976 | 7,932 | 7,392 | 31,718 | |||||||||||||||
b) Global Generics | 31,221 | 30,255 | 28,199 | 116,999 | |||||||||||||||
c) Others | 152 | 199 | 66 | 1,590 | |||||||||||||||
Total | 37,349 | 38,386 | 35,657 | 150,307 | |||||||||||||||
Less: Inter-segment revenue | 1,043 | 1,699 | 1,322 | 6,255 | |||||||||||||||
Total revenue from operations | 36,306 | 36,687 | 34,335 | 144,052 | |||||||||||||||
2 | Segment results | ||||||||||||||||||
Profit / (loss) before tax and interest from each segment | |||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | (282 | ) | (322 | ) | 207 | 384 | |||||||||||||
b) Global Generics | 11,124 | 5,944 | 5,724 | 21,871 | |||||||||||||||
c) Others | 22 | 129 | (44 | ) | 1,160 | ||||||||||||||
Total | 10,864 | 5,751 | 5,887 | 23,415 | |||||||||||||||
Less: (i) Finance costs | 98 | 127 | 65 | 380 | |||||||||||||||
(ii) Other un-allocable expenditure / (income), net | 3,250 | (43 | ) | 377 | 797 | ||||||||||||||
Total profit before tax | 7,516 | 5,667 | 5,445 | 22,238 |
Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics at cost.
Segmental capital employed
As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.
Notes:
1 | These results 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 | License fee and service income for the quarter ended 30 June 2022 includes: a. Rs. 902 million from sale of brands Z&D, Pedicloryl, Pecef and Ezinapi to J B Chemicals and Pharmaceuticals Limited; b. Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited. These transactions pertain to Company’s Global Generics segment. | |
3 | On 5 April 2022 the Company received approval from the Honorable National Company Law Tribunal, Hyderabad Bench (“NCLT”) for the merger of Dr. Reddy’s Holding Limited into Dr. Reddy's Laboratories Limited. Subsequently, the Company has filed the NCLT order, with the Ministry of Company Affairs on 8 April 2022 (‘Effective Date’). Consequently, Dr. Reddy’s Holding Limited has been merged with the Company. | |
4 | As the revenues and gross profits of the Proprietary Products segment are considerably lower than the quantitative thresholds mentioned in IND AS 108, “Operating Segments”, the Company believes that Proprietary Products segment no longer qualifies to be a reportable segment and consequently, effective 1 April 2022, the Company included the financial information relating to Proprietary Products segment in “Others”. The corresponding information relating to Proprietary Products segment for earlier periods has been restated to reflect the aforementioned change. | |
5 | License fee and service income for the year ended 31 March 2022 includes: a) Rs. 1,774 million towards the sale of territorial rights relating to two of the Company’s anti-bacterial brands (Ciprolet® and Levolet®) in Russia and CIS region to Alium JSC; b) Rs. 390 million towards the sale of two of the Company’s Brands (Daffy bar and Combihale) in India to Mankind Pharma Limited; c) Rs. 1,084 million towards the sale of U.S. and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc. The aforesaid transactions pertain to Company’s Global Generics and Others segment. | |
6 | 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. |
DR. REDDY'S LABORATORIES LIMITED
7 | The Company received an anonymous complaint in September 2020, alleging that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S. anti-corruption laws, specifically the U.S. Foreign Corrupt Practices Act. The Company disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. The Company engaged a U.S. law firm to conduct the investigation at the instruction of a committee of the Company’s Board of Directors. On 6 July 2021 the Company received a subpoena from the SEC for the production of related documents, which were provided to the SEC.
The Company made presentations to the SEC and the DOJ in relation to the investigation with respect to certain countries during the current and previous year. The Company also made a presentation to SEC and DOJ in relation to its Global Compliance Framework including the ongoing enhancement initiatives during the three months ended June 30, 2022. 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 regulatory enforcement actions against the Company in the United States and/or foreign jurisdictions, including civil and criminal sanctions under relevant laws, the outcomes including liabilities are not reasonably ascertainable at this time. | |
8 | The Company considered the uncertainties relating to the COVID-19 pandemic and 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. | |
9 | The unaudited results were reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 28 July 2022. | |
10 | The figures of the quarter ended 31 March 2022 are the balancing number 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 are subject to limited review. | |
11 | The results for the quarter ended 30 June 2022 presented were subjected to a “Limited review” by the Statutory Auditors of the Company. An unqualified report was issued by them thereon. |
By order of the Board
For Dr. Reddy’s Laboratories Limited
G V Prasad
Co-Chairman & Managing Director
Place: Hyderabad
Date: 28 July 2022