Exhibit 99.2
Unaudited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter ended 30 June 2020 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
1 | Revenues | 44,175 | 44,318 | 38,435 | 174,600 | |||||||||||||
2 | Cost of revenues | 19,420 | 21,510 | 18,576 | 80,591 | |||||||||||||
3 | Gross profit (1 - 2) | 24,755 | 22,808 | 19,859 | 94,009 | |||||||||||||
4 | Selling, general and administrative expenses | 12,786 | 12,177 | 12,065 | 50,129 | |||||||||||||
5 | Research and development expenses | 3,980 | 4,190 | 3,609 | 15,410 | |||||||||||||
6 | Impairment of non current assets | - | 7 | - | 16,767 | |||||||||||||
7 | Other income, net | (118 | ) | (168 | ) | (3,759 | ) | (4,290 | ) | |||||||||
Total operating expenses | 16,648 | 16,206 | 11,915 | 78,016 | ||||||||||||||
8 | Results from operating activities [(3) - (4 + 5 + 6 + 7)] | 8,107 | 6,602 | 7,944 | 15,993 | |||||||||||||
Finance income | 838 | 665 | 690 | 2,461 | ||||||||||||||
Finance expense | (233 | ) | (230 | ) | (297 | ) | (983 | ) | ||||||||||
9 | Finance income, net | 605 | 435 | 393 | 1,478 | |||||||||||||
10 | Share of profit of equity accounted investees, net of tax | 77 | 105 | 163 | 561 | |||||||||||||
11 | Profit before tax (8 + 9 + 10) | 8,789 | 7,142 | 8,500 | 18,032 | |||||||||||||
12 | Tax expense/(benefit), net | 2,996 | (500 | ) | 1,872 | (1,466 | ) | |||||||||||
13 | Profit for the period / year (11 -12) | 5,793 | 7,642 | 6,628 | 19,498 | |||||||||||||
14 | Earnings per share: | |||||||||||||||||
Basic earnings per share of Rs.5/- each | 34.94 | 46.10 | 39.98 | 117.63 | ||||||||||||||
Diluted earnings per share of Rs.5/- each | 34.86 | 46.01 | 39.91 | 117.40 | ||||||||||||||
(Not annualised) | (Not annualised) | (Not annualised) |
Segment reporting (consolidated)
All amounts in Indian Rupees millions
Quarter ended | Year ended | |||||||||||||||||
Sl. No. | Particulars | 30.06.2020 | 31.03.2020 | 30.06.2019 | 31.03.2020 | |||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||||
Segment wise revenue and results: | ||||||||||||||||||
1 | Segment revenue: | |||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 10,090 | 8,673 | 5,933 | 31,657 | ||||||||||||||
b) Global Generics | 35,075 | 36,398 | 32,982 | 138,123 | ||||||||||||||
c) Proprietary Products | 56 | 2 | 281 | 7,949 | ||||||||||||||
d) Others | 491 | 723 | 633 | 2,781 | ||||||||||||||
Total | 45,712 | 45,796 | 39,829 | 180,510 | ||||||||||||||
Less: Inter-segment revenues | 1,537 | 1,478 | 1,394 | 5,910 | ||||||||||||||
Net revenue from operations | 44,175 | 44,318 | 38,435 | 174,600 | ||||||||||||||
2 | Segment results: | |||||||||||||||||
Gross profit from each segment | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 2,856 | 2,043 | 325 | 6,190 | ||||||||||||||
b) Global Generics | 21,526 | 20,332 | 19,007 | 78,449 | ||||||||||||||
c) Proprietary Products | 56 | (7 | ) | 207 | 7,744 | |||||||||||||
d) Others | 317 | 440 | 320 | 1,626 | ||||||||||||||
Total | 24,755 | 22,808 | 19,859 | 94,009 | ||||||||||||||
Less: Selling and other un-allocable expenditure, net of other income | 15,966 | 15,666 | 11,359 | 75,977 | ||||||||||||||
Total profit before tax | 8,789 | 7,142 | 8,500 | 18,032 |
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 unaudited results have been reviewed by the Audit Committee of the Board on 29 July 2020 and approved by the Board of Directors of the Company at their meeting held on 29 July 2020. 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 | 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. The Company is in the process of determination of the fair value of consideration transferred, assets acquired and liabilities assumed. As at 30 June 2020, the Company, on a provisional basis, recognised Rs. 373 million and Rs. 14,141 million towards property, plant and equipment and intangible assets, respectively. The acquisition pertains to the Company's Global Generics segment. |
3 | "Other income, net" for the quarter ended 30 June 2019 and year ended 31 March 2020 includes an amount of Rs. 3,457 million received from Celgene, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had 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 REVLIMID brand capsules, (Lenalidomide) pending before Health Canada. |
4 | Total impairment charge for the year ended 31 March 2020 is Rs. 16,767 million, of which Rs. 11,137 million was towards impairment of gNuvaring, Rs. 4,385 million was towards ramelteon, tobramycin and imiquimod, and the balance is towards other product related intangibles forming part of Company’s Global generics and Proprietary Products segments. |
5 | Tax benefit for the year ended 31 March 2020 was primarily due to recognition of deferred tax asset of: - Rs. 4,989 million towards MAT recoverable pursuant to enactment of Taxation Laws (Amendment) Act, 2019; - Rs. 1,264 million pursuant to a planned restructuring activity between the group Companies. |
6 | "Revenues" for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA® (sumatriptan nasal spray) 10 mg, (formerly referred to as “DFN-02”) to Upsher-Smith Laboratories, LLC. The costs associated with this transaction are Rs. 328 million. |
7 | The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. The Company based on its judgements, estimates and assumptions including sensitivity analysis 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. |
8 | 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 29 July 2020. |
9 | The figures of the quarter ended 31 March 2020 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. |
10 | The results for the quarter ended 30 June 2020 were subjected to a "Limited Review". An unqualified report was issued thereon. |
By order of the Board
For Dr. Reddy's Laboratories Limited
Place: Hyderabad | G V Prasad |
Date: 29 July 2020 | Co-Chairman & Managing Director |