Exhibit 99.4
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 of Dr. Reddy’s Laboratories Limited (the “Company”) for the quarter ended June 30, 2020 (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. | This Statement, which is the responsibility of the Company’s Management and approved by the Company’s Board of Directors, has been prepared 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. 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 Balasubrahmanyam
Partner
Membership No.: 053315
UDIN: 20053315AAAACB8197
Place: Chennai
Date: July 29, 2020
![]() | 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 2020
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 | Revenue from operations | |||||||||||||||||
a) Net sales / income from operations | 32,264 | 28,195 | 24,827 | 109,925 | ||||||||||||||
b) License fees and service income | 104 | 184 | 149 | 8,105 | ||||||||||||||
c) Other operating income | 76 | 138 | 111 | 474 | ||||||||||||||
Total revenue from operations | 32,444 | 28,517 | 25,087 | 118,504 | ||||||||||||||
2 | Other income | 6,447 | 1,274 | 4,714 | 7,432 | |||||||||||||
Total income (1 + 2) | 38,891 | 29,791 | 29,801 | 125,936 | ||||||||||||||
3 | Expenses | |||||||||||||||||
a) Cost of materials consumed | 7,882 | 6,543 | 5,839 | 25,565 | ||||||||||||||
b) Purchase of stock-in-trade | 3,003 | 2,261 | 2,479 | 11,172 | ||||||||||||||
c) Changes in inventories of finished goods, work-in-progress and stock-in-trade | (1,929 | ) | 672 | (675 | ) | (999 | ) | |||||||||||
d) Employee benefits expense | 5,450 | 5,166 | 4,996 | 20,302 | ||||||||||||||
e) Depreciation and amortisation expense | 1,977 | 1,923 | 1,970 | 7,892 | ||||||||||||||
f) Finance costs | 140 | 118 | 121 | 478 | ||||||||||||||
g) Selling and other expenses | 8,751 | 8,667 | 8,141 | 33,768 | ||||||||||||||
Total expenses | 25,274 | 25,350 | 22,871 | 98,178 | ||||||||||||||
4 | Profit before tax (1 + 2 - 3) | 13,617 | 4,441 | 6,930 | 27,758 | |||||||||||||
5 | Tax expense / (benefit) | |||||||||||||||||
a) Current tax | 2,391 | 690 | 1,528 | 4,839 | ||||||||||||||
b) Deferred tax | 1,724 | (1,277 | ) | (79 | ) | (6,458 | ) | |||||||||||
6 | Net profit for the period / year (4 - 5) | 9,502 | 5,028 | 5,481 | 29,377 | |||||||||||||
7 | Other comprehensive income | |||||||||||||||||
a) (i) Items that will not be reclassified to profit or loss | (1 | ) | 85 | 4 | 88 | |||||||||||||
(ii) Income tax relating to items that will not be reclassified to profit or loss | - | (33 | ) | - | (33 | ) | ||||||||||||
b) (i) Items that will be reclassified to profit or loss | 360 | (464 | ) | (64 | ) | (750 | ) | |||||||||||
(ii) Income tax relating to items that will be reclassified to profit or loss | (128 | ) | 161 | 20 | 259 | |||||||||||||
Total other comprehensive income | 231 | (251 | ) | (40 | ) | (436 | ) | |||||||||||
8 | Total comprehensive income (6 + 7) | 9,733 | 4,777 | 5,441 | 28,941 | |||||||||||||
9 | Paid-up equity share capital (face value Rs. 5/- each) | 831 | 831 | 831 | 831 | |||||||||||||
10 | Other equity | 151,088 | ||||||||||||||||
11 | Earnings per equity share (face value Rs. 5/- each) | |||||||||||||||||
Basic | 57.31 | 30.34 | 33.06 | 177.23 | ||||||||||||||
Diluted | 57.18 | 30.28 | 33.01 | 176.88 | ||||||||||||||
(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 | 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 | 8,706 | 7,373 | 5,617 | 26,996 | ||||||||||||||
b) Global Generics | 25,241 | 22,606 | 20,828 | 89,774 | ||||||||||||||
c) Proprietary Products | 34 | 16 | 36 | 7,644 | ||||||||||||||
Total | 33,981 | 29,995 | 26,481 | 124,414 | ||||||||||||||
Less: Inter-segment revenue | 1,537 | 1,478 | 1,394 | 5,910 | ||||||||||||||
Total revenue from operations | 32,444 | 28,517 | 25,087 | 118,504 | ||||||||||||||
2 | Segment results | |||||||||||||||||
Profit / (loss) before tax and interest from each segment | ||||||||||||||||||
a) Pharmaceutical Services and Active Ingredients | 5,686 | 438 | (424 | ) | 1,465 | |||||||||||||
b) Global Generics | 8,242 | 4,203 | 7,810 | 22,116 | ||||||||||||||
c) Proprietary Products | (174 | ) | (97 | ) | (277 | ) | 6,525 | |||||||||||
Total | 13,754 | 4,544 | 7,109 | 30,106 | ||||||||||||||
Less: (i) Finance costs | 140 | 118 | 121 | 478 | ||||||||||||||
(ii) Other un-allocable expenditure / (income), net | (3 | ) | (15 | ) | 58 | 1,870 | ||||||||||||
Total profit before tax | 13,617 | 4,441 | 6,930 | 27,758 |
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 | "Other income" for the quarter ended 30 June 2020 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.
- Rs. 516 million received of preference dividend declared by Dr. Reddy's Laboratories S.A. during the quarter.
3 | 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. |
4 | "Other income" for the quarter ended 30 June 2019 includes dividend income of Rs. 392 million declared by Kunshan Rotam Reddy Pharmaceutical Company Limited during the quarter. |
5 | "Other income" 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. |
6 | 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
7 | "Revenue from operations" 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. |
8 | The Company continues to consider the uncertainty relating to the 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. |
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 29 July 2020. |
10 | 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. |
11 | The results for the quarter ended 30 June 2020 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
![]() | ![]() | ![]() |
Place: Hyderabad | G V Prasad |
Date: 29 July 2020 | Co-Chairman & Managing Director |