Dr Reddy Laboratories : Outcome of Board Meeting – May 20, 2020

·•·

Dr.Reddy's �;•

May 20, 2020

The Secretary / Executive Director BSE Limited

National Stock Exchange ofTndia Ltd. New York Stock Exchange Inc.

Dear Sir/Madam,

Dr. Reddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN: L85195TG1984PLC004507

Tel	:[phone]
Fax	:[phone]

Email :[e-mail] www.drreddys.com

Sub:Outcome of Board Meeting - Audited Financial Results for the quarter and year ended March 31, 2020.

Further to our letters dated March 27, 2020 and April 29, 2020 we would like to inform you that the Board ofDirectors of the Company at their meeting held on May 20, 2020, have inter aliaapproved the Audited Financial Results ofthe Company for the quarter and year ended March 31, 2020.

In terms ofthe above, we are enclosing herewith the following:

1. Audited Consolidated Financial Results of the Company for the quarter and year ended March 31,

2020 as per International Financial Reporting Standards as issued by International Accounting Standards Board (IASB).

1. Press Release on Financial Results of the Company for the above period.
2. Audited Consolidated Financial Results of the Company and its subsidiaries for the quarter and year ended March 31, 2020 as per Indian Accounting Standards.
3. Audited Standalone Financial Results of the Company for the quarter and year ended March 31, 2020 as per Indian Accounting Standards.

Pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audit Report of the Statutory Auditors on the financial results as mentioned at serial Nos. 3 & 4 are also enclosed.

We would like to state that the Statutory Auditors of the Company, have issued Audit Reports with 'Unmodified Opinion' on the Audited Financial Statements of the Company (Standalone and Consolidated) for the year ended March 31, 2020.

We would also like to inform that the Board of Directors have recommended a final dividend of Rs.25/- (500%) per equity share ofRs. 5/- face value for the financial year 2019-20. The dividend will be paid on or after 5 days from the date of declaration of the final dividend by the shareholders at the 36th Annual General Meeting (AGM). In view of COVID19 situation the Company is working on an AGM date. The book closure date for the purpose of the payment of final dividend and AGM date will be announced in due course.

The Board Meeting commenced at 09.15 AM and concluded at 12.41 PM.

This is for your information and records.

With regards

San e

ar

ny Secretary

Dr. Reddy's

•·· "llllli;•

Dr. Raddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN: Ll:l5195TG19841'LC004507

Tel	:+91	40 4900 2900
Fax	:+91	40 4900 2999

Email :[e-mail] www.drreddys.com

Audited consolidated financial results or Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter and year ended 31 March 2020 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)

SI.No.	Particulars		31.03.2020
			(Audited)
I	Revenues		44,318
2	Cosl of revenues		21,5IO
3	Gross profit (1 - 2)		22,808
4	Selling, general and administrative expenses		12,177
5	Research and development expenses	.	4,190
6	Impainnent of non current assets	7
7	01.h�1 income, net	(168)
	Total operating expenses		16,206
8	Results from operating activities [(3) - (4 + 5 + 6 + 7)1		6,602
	Finance income		665
	Finance expense		(230)
9	Finance (expense)/income, net		435
10	Share of profit ofequily accounted investees, net of tax		105
11	Pro(it / (loss) before tax (8 + 9 + 10)		7,142
12	Tax expense/(benefil), net		(500)
	Profit / (loss) for the period / year (II -12)		7,642
14	Earnings per share:

Quarter ended

31.12.2019

(Unaudited)

43,838

20,116

23,722

12,670

3,949

13,200

(228)

29,591

(5,869)

571

(152)

419

176

(5,274)

423

(5,697)

All amounts m Indian Rupee, millions

	Year ended
31.03.2019	31.03.2020		31.03.2019
(Audited)	(Audited)		(Audited)
40,166	174,600		153,851
19,113	80,591		70,421
21,053	94,009		83,430
12,294	50,129		48,680
3,662	15,410		15,607
82	16,767		210
(330)	(4,290)		( ! ,955)
15,708	78,016		62,542
5,345	15,993		20,888
594	2,461	2,280
(245)	(983)	(1,163)
349	1,478	1,117
157	561	438
5,851	18,032	22,443
1,507	(1,466)	3,648
4,344	19,498	18,795

Basic earnings per share ofRs.5/- each	46.10
Diluted earnings per share ofRs,5/- each	46,01
	(Not annualised)

(34.37)	26.20	117.63	113.28
(34,37)	26.16	117.40	113.09
(Not annualised)	(Not annualised)

•··

Dr.Reddy's �;•

Segment reporting (consolidated)

Particulars

I

1. Pharmaceutical Services and Active Ingredients
2. Global Generics
3. Proprietary Products
4. Others

Total

Less: lnter-segment revenues

Net revenue from operations

Segment results:

1. Pharmaceutical Services and Active Ingredients
2. Global Generics
3. Proprietary Ptoducts
4. Others

Total

Less: Selling and other un-allocable expendilure, net ofother income

Total prolit/ (loss) before tax

(Audited)

8,673

36,398

2

723

1,478

2,043

20,332

(7)

440

15,666

Qunr(�r icndcd	All amounts in Indian Rupt.."C...,millions
		Year ended
(Unaudited)	(Audited)		(Audited)		(Audited)
8,549		8,141		31,657		29,925
35,927		30,384		138,123		122,903
241		2,513		7,949		4,750
		504		2,781		2,058
1,643		1,376		5,910		5,785
2,072				6,190		6,128
	1,420
20,910		17,008		78,449		71,924
246		2,307		7,744		4,182
494		3I 8		1,626		1,196
28,996		15,202		75,977		60,987

Global Generics segmenl includes operations of Biologics business lnter-segment revenues represenl sale from Phannaceutical Services and Active Ingredients to Global Generics at cost.

The aurlited results have been revieweci by the Audit Committee ofthe Board on 19 May 2020 and approved by the Board ofDirectors ofthe Company at their meeting held on 20 May 2020.The above financial results have been p1epared in accrndance with International Financial Repo11ing Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB).

• Effective I April 2019, the Company adopted IFRS 16,Leases,using the modilied retrospective approach IFRS 16 brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and linance leases. Upon implementation of IFRS I6, majority of!eases for which the company is the lessee became on-balance sheet liabilities with conesponding right-of-use assets also recognised on the balance sheet. Accordingly, on I April 2019, the Company recognised lease liabilities ofRs,1,335 million and right-of-use assets of Rs,I,153 million (afler adjustments of Rs. 182 million towards lease incentives and other items related to the lease agreement as at 31 March 2019).

• The Company received a warning letter, dated 5 November 2015 from the US,FDA, regarding deviations with cunent Good Manufacturing Practices at itsAPI manufacturing facilities in Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as regarding violations at its oncology fomrnlation manufacturing facility al Duvvada,Visakhapatnam, Andhra Pradesh,Of these three manufacturing facilities, two facilities (AP! manufacturing facility at Miryalaguda and Oncology manufacturing facility at Duvvada) received Establishment Inspection Reports (EIR) from the U,S FDA in the months ofJune 2017 and February 2019, respectively which indicate that the audit is closed.With respect to API manufacturing facility at Srikakulam, in Octobe1 2018, the Company was asked to carry out certain detailed investigations and analysis As part of the review of the response by the U.S FDA, certain additional follow-on queries were received by the Company. The Company responded to all queries in January 2019 to the U.S,FDA,In February 2019, the Company received certain follow on questions from theU.S. FDA and the Company responded to these questions in March 2019 The U.S. FDA. has completed the audit on January 28,2020.The Company has been issued a Fonn 483 with 5 observations and responded to the observations in February 2020.In May 2020, the Company has received the EIR from the U.S,FDA, for the API manufacluring facility at Srikakulam, indicating closure ofthe audit and the inspection classification ofthis facility is detennined as "Voluntary Action Indicated" (VAl),
  With this, all facilities under warning letter are now detennined as VAi,

• "Revenues" for the year ended 31 March 2020 includes an amount ofRs. 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.

• "Other income, net" includes an amount of Rs.3,457 millions received from Celgene during the quarter ended 30 June 2019, pursuant to a seltlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 ofthe 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.

• Impairment ofintangible assets:

During the quarter ended 31 December 2019

Total impairment charge for the quarter ended 31 December 2019 is Rs. 13,200 million, of which Rs 11,137 million is towards impainnent ofgNuvaring and the balance ofRs. 2,063 million is towards other product related intangibles,

Impairment ofgNuvaring

		There were significant changes to lhe generics market ofEthinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to Nuvaring®), one of the 8 ANDAs acquired from
		Teva in June 2016, with the launch ofa generic and authorised generic versions of the producl in the month ofDecember 2019. Due to these adverse market conditions, the
		Company recorded an impainnent loss ofRs. I 1,137 million during the quarter ended 3 I December 2019.	The carrying value of the asset after the impairment was Rs. 3,084
		million as al 31 December 2019. The said impairrnenl pertains to the Company's Global Generics segment.
		Other intangible assets
		In view of the specific triggers occurring in the quarter with respect to some of product related intangible assets fanning part of the Company's Global Generics and
		Proprietary products segments, the Company detennined that there was a decrease in the market potential of these products primarily due to higher than expected price erosion
		and increased competition leading to lower volumes.Consequently, the Company recorded an amount of Rs.2,063 million as an impainnent loss for the quarter ended 31
		December 2019.
0 R	�-	During the quarter ended 30 September 2019
.i
�--1••L	bo_.	,unscqucnlto the adverse market conditions with respect to certain ofthe Company's products fom1ing part ofthe Global Generics segment, the Company assessed the
�	•·	1oA ·overnblcamount of three product related intangibles (viz, ramelteon, tobramycin and imiquimod) and recognised an amount of Rs.3,551 million as impainnent cha1·ge
	'i]µ'ng the quarter ended 30 September 2019.The said impainnent charge is recognised under the head "impairment of non-current assets",
"1. '•lldd)'s	�,ringthe qua11er ended 30 September 2019, the Government of India promulgated the Taxation	Laws (Amendmenl) Ordinance 2019 (enacted into Taxation laws

1. '-!lbd.'!>l!,,.fAm011dmen1)Act 2019), announcing key changes to corporate tax rates in theIncome-taxAct, 1961. The key changes include, among others, reduction of MAT rate from��<"'21.55% to 17.47% (including surcharge and cess). As a result of this, the Company reassessed the MAT recoverability and recognised an amount of Rs. 4,989 million as
   deferred tax asset during the quarter ended 30 September 2019.
   During the quarter ended 31 March 2020, the Company recognised deferred tax benefit of Rs 1,264 million pursuant to a planned restructuring activity between the g1oup

,)7'>	rnmn,n;e, The ,eolnoclnr;no •cl;v;lv ;, evnerterl tn he cnmnleterl hv !he mm1e, enrlerl 10 lune ?O?O
_,l,J/J

•··

Dr.Reddy's ��•

8 On 15 May 2020, the Company ente1ed into a Stipulation and Ag1eement or Settlement with Lead Plaintiff the Public �mployees" Retirement System ol Mississippi in the putative securities class aclion filed against the Company in the United Slates Dishict Court fol' the District of New Je1sey.As conside1ation for the seltlement of the class action, the Company has agreed to pay Rs,681 million (U.S.$9 million),Subject lo the terms of the Stipulation, the settlement iesolves the remainder of the litigation As the Company is adequately insu1ed with 1espect to the aforesaid liability, the settlement did not have any impact on the Company"s financial resulls fo1 the yeai ended 31 Maich 2020. Amount payable to the plaintiff on account of the settlement and that 1eceivable from the insure1 have been presented under --other current assets·· and --01he1 cu1Tcnt liabilities", respectively in the consolidated statement of financial position of the Company as at 31 Ma1ch 2020 Please refer to the intimation made by the Company to the Stock exchanges on 16 May 2020 for full details ofthe settlement,

• During the quarter ended 31 March 2019, the Company ente1ed into agreement with Encore Dennatology, Inc.("Encore") fo1 sale and assignment of U.S.rights ,elating to three of its dermatology brands As all the pe1fonnance obligations are satisfied by 31 March 2019, the Company recognised Rs,1,807 million as revenue and Rs. 159 million rep1'esenting the p1ofit on sale of intangible assets after adjusting the associated costs.

IO "Other income, net" for the year ended 31 Ma,ch 2019 also includes gain of:

-Rs,423 million on sale ofAP! manufacturing business unit located in Jeedimctla, Hyderabad to Therapiva Private Limited during the quarter ended 31 December 2018;and -Rs. 423 million ofprofit on sale of intangible assets fo1111ing part ofCompany's Proprietary Products Segment during the qua11er ended 30 September 2018.

11 The Company considered 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 has also used the principles ofprudence in applyingjudgements, estimates and assumptions including sensitivity analysis and based on the current estimates, the Company expecls to fully recover the carrying amount of receivables, goodwill, intangible assets, inveslments and other assets,As the outbreak continues to evolve, the Company will continue

	to closely monitor any material changes to future economic conditions.
12	Consolidated statements of financial position
						Particulars
			ASSETS
			Current assets
			Cash and cash equivalents
			Other investments
			Trade and other receivables
			Inventories
			Derivative financial instruments
			Current tax assets
			Other current assets
			Total current assets
			Non-current assets
			Property, plant and equipment
			Goodwill
			Other intangible assets
			Trade and other receivables
			Investment in equity accounted investees
			Other investments
			Deferred tax assets
			Other non-current assets
			Total non-current assets
			Total a sset s
			LIABILITIES AND EQUITY
			Current liabilities
			Trade and other payables
			Short-tenn borrowings
			Long-term borrowings, current portion
			Provisions
			Current tax liabilities
			Derivative financial instruments
			Bank overdraft
			Other current liabilities
			Total current liabilities
			Non-current liabilities
			Long-tem1 borrowings, excluding current portion
			Deferred tax liabilities
			Provisions
			Other non-current liabilities
			Total non-current liabilities
			Total liabilities
			Equity
			Share capital
			Treasury shares
		Share premium
		Share based payment reserve
			Capitalredemption reserve
			Retained earnings
			Other components of equity
o•	Total equity
		)
			'IQiaHil!bJlitiesand equity
C}1,0Y • L.,o0-.
( •				..	- .,.
	Dr.�at•		:
't.			da.v	::
.Lo,				.:	.t:i.
	o,.11	--		•
			6lld	3_A_

All amounts m Ind'ian RUJlO.C.S.millions

	Asal	Asal
	31.03.2020		31.03.2019
	(Audited)	(Au dited)
	2,053	2,228
	23,687	22,529
	50,278	39,869
	35,066	33,579
	1,105	360
	4,379	3,400
	13.802	12,536
	130.370	114.501
	52,332	54,088
	3,994	3,902
	27,659	44,367
	1,737	113
	2,763	2,529
	328	813
	12,214	4,168
	844	946
	101,871	110,926
	232,241	225,427
	16,659	14,553
	16,441	12,125
	4,266	4,256
	3,800	4,166
	1,602	181
	68
	91	-
	29.382	24.351
	72,814	59,700
		22,000
	1,304
	275	610
	54	52
	2,806	2,868
	4,439	25,530
	77,253	85,230
	831	830
	(1,006)	(535)
	8,495	8,211
	1,233	990
	173	173
	144,247	128,646
	1.015	1.882
	154,988	140,197
	232,241	225,427

Parliculnrs

Cash generated from operating activities:

Profit for the pc, iod

Adj11stmc11ls/01_,

Income tax expense/{benefil)

Fai1 value changes and p1ofil on sale of mutual funds Depreciation and amo11ization

lmpainnent of non-cunenl assets

Allowance fot credit losses and douhlful hade 1eceivahles and olher advances

(Gain)/loss on sale or de-recognition of prope11y, plant and equipment and other inlangible assets, nel Share of profit of equily accounted investees

Foreign exchange (gain)/loss, net

Interest {income)/expense, net

Equity settled share-based payment expense

Dividends income

Changes in operating assets and liabilities:

Tiade and other receivables

Inventories

Trade and other payables

Other assets and other liabililies, net

Cnsh generated from operations

Income tax paid, net

Net cash generated from operating activities

Cash flows from/(used in) investing activities:

Expenditure on prope11y, planl and equipment

Proceeds from sale ofproperty, plant and equipment

Expenditures 011 ct:1cr intnngible as5ets Proceeds from sale ofother intangible assets Purchase of other investments

Proceeds from sale ofother investments

Dividends received fiom equity accounted investees lnte1est and dividend received

Net cash used in investing activities

All mnounls in lmfom RurlCc!li. millions

Year ended Yca1•ended

31.03.2020 31.03.2019

(Auclilecl) (Auclilecl)

19,49818,795

(1,466)3,648

1. (773)
   12,47212,190

16,767210

190420

68(1,264)

1. (438)

(2,168)(1,588)

95119

521389

(5)

(12,446)	1,797
(1,487)	(4,480)
1,576	398
4.821	4,122
36,946	33,545
(7,105)	(4,841)
29,841	28,704

(4,846)	(6,955)
131	1,265
(1,269)	(1,421)
259	885
(111,918)	(78,573)
111,704	76,291
392
624	781
(4,923)	(7,727)

Cash flows from/(used in) financing activities:

P1oceeds from issuance ofequity shares (including treasury shares) Purchase oftreasury shares

Proceeds from/(repayment of) short term borrowings, net

Repayment of long term borrowings, net

Paymenl of principal portion of lease liabilities

Dividend paid (including corporate dividend tax)

Interest paid

Net cash used in financing activities

Net increase / (decrease) in cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the beginning of the period

Cash and cash equivalents al the end of the period**

•Rounded o_flto millions

••Adj11sted/01 bank-o,·erdraftofRs 9I million for the year ended 3/ March 2020.

4
(474)	(535)
4,235	(15,126)

(22,918)

1. (56)
   (3,916)(4,002)
   (1,608)(1.607)

(25,159) (21,326)

(241)	(349)

1. 35

2,2282,542

1,962 2,228

1. The audiled results were reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Direclo1s of the Company al their meeting held on 20 May 2020.
2. The Board of Directors, at !heir meeting held on 20 May 2020, have recommended a final dividend of Rs 25 per share subject to approval of shareholders.
3. The figures of the fourth quarter are the balancing figures between audited figures in respect of lhe full financial year and the published year to date figures up to the third quarter of the relevant financial year,Also the figures uplo the end of third quarter were only reviewed and not subjected to audit,
4. The results for the quarter and year ended 31 March 2020 periods presented have been audited by the Statutory Auditors of the Company.An unqualified report has been issued by them thereon.

By order ofthe Board

For Dr. Reddy's Laboratories Limited

l/LI

Place: Hyderabad	G V Prasad
Date: 20 May 2020	Co-Chairman & Managing Diiector

Press Release				�;•
			Dr. Reddy's •··
DR. REDDY'S LABORATORIES LTD.
8-2-337, Road No. 3, Banjara Hills,	AMIT AGARWAL	APARNA TEKURI
Hyderabad - 500034. Telangana, India.
[e-mail]		[e-mail]
	(Ph: [phone])	(PH: [phone])

Dr. Reddy's Q4 & FY20 Financial Results

Hyderabad, India, May 20, 2020:Dr. Reddy's Laboratories Ltd. (BSE: 500124 I NSE: DRREDDY I NYSE: RDY) today announced its consolidated financial results for the fourth quarter and full year ended March 31, 2020 under International Financial Reporting Standards (IFRS).

Q4 Performance SummaryFY20 Performance Summary

Rs. 4,432Cr	Rs. 17,460Cr
Revenue	Revenue
[Up: ·1% OoO; Up: ·10% YoY]	[Up: ·13% YoY]
51.5%	53.8%
Gross Margin	Gross Margin
[03 FY20: 54.1%; 04 FY19: 52.4%]	[FY19: 54.2%]
Rs. 1,218Cr	Rs. 5,013Cr
SGNA expenses	SGNA expenses
[Down: 4% OoO, Down: 1% YoY]	[Up: 3% YoY]
Rs. 419Cr	Rs. 1,541Cr
R&D expenses	R&D expenses
[9.5% of Revenues]	[8.8% of Revenues]
Rs. 1,001Cr	Rs. 4,643Cr
EBITDA	EBITDA
[Down: 7% OoO; Up: 14% YoY]	[Up: 36% YoY]
Rs. 714Cr	Rs. 1,803Cr *
Profit before Tax	Profit before Tax
[16.1% of Revenues]	[10.3% of Revenues]

* Excluding intangibles impairment of Rs. 1,677 Cr; Adjusted Profit before tax isRs. 3,480 Cr (55% growth Yo YJ

Commenting on the results, Co-Chairman and MD, GV Prasad said "FY 20 has been a very positive year for the company. Progress made during the year includes VAi status for CTO 6, healthy product pipeline build up, productivity improvement, and strongfinancial performance across our businesses".

All amounts in millions, exceptEPSAll US dollar amounts based on convenience translation rate ofI USO= Rs. 75.39

Dr. Reddy's Laboratories Limited and Subsidiaries

Consolidated Income Statement

	Particulars		Q4FY20			Q4FV19	YoY	Q3 FY20		QoQ
				(Rs,)		( 1�	(		s.)	G%				pts.)		Gr%
					(SJ					R			($}		,
	Revenues			588		44,318		533		40,166	10	581		43,838	1
	Cost of Revenues	285		21,510		254		19,113	13	267		20,116	7
	Gross Profit		303		22,808		279		21,053	8	315		23,722	(4)
	Operating Expenses
	Selling, General & Administrative	162		12,177		163		12,294-	(1)	168		12,670		(4)
	expenses
	Research and Development expenses	56		4,190		49		3,662	14	52		3,949		6
	Impairment of non-current assets	0		7		1			82	(91)	175		13,200		(100)
	Other operating income	(2)		(168)		(4)		(330)	(49)	(3)		(228)		(26)
	Results from operating activities		88		6,602		71		5,345	24	(78)		(5,869)		(212)
	Net finance income	(6)		(435)		(5)		(349)	25	(6)		(419)	4
	Share of profit of equity accounted	(1)'		(105)		(2)		(157)	(33)	(2)		(176)	(40)
	investees
	Profit before income tax	95		7,142		78		5,851	22	(70)		(5,274)	(235)

Income tax	(7)	(SOO)	20
Profit for the period	101	7,642	58

1,507

4,344

(133)	6	423	(218)
76	(76)	(5,697)	(234)

IDiluted Earnings Per Share (EPS)

0.61

46.01

0.35

26.16

76 1co.46) 1(34.37)

(234)

As % to Revenues

Gross Profit

SG&A

R&D

EBITDA

PBT

PAT

PaJ1ticu1ars

Profit before Income Tax

Interest (income) net* Depreciation Amortization Impairment

EBITDA

				Q4		Q4
				FY20		FY19
			51.5		52.4
			27.5		30.6
			9.5		9.1
			22.6		22.0
			16.1		14.6
			17.2		10.8
			EBITDA Computation
		Q4FY20	Q4FY19
		($)		(Rs.)	($)		(Rs.)
		95		7,142		78		5,851
		(1)		(100)		(3)		(215)
		28		2,080		28		2,136
		12		885		13		965
		0		7		1		82
		133		10,013		117		8,819

Q3

FY20

54.1

28.9

9.0

24.5

(12.0) (13.0)

Q3FY20

($)		(Rs.)
(70)		(5,274)
(4)		(274)
28		2,130
13		955
175		13,200
142		10,737

* Includes incomefrom Investments

All amounts in millions, except EPS		All US dollar amounts based on convenience translation rate ofI USD =Rs. 75.39
			Revenue Mix by Segment
	Particulars		Q4FY20	Q4FY19	YoY	Q3FY20	QoQ
					Growth
		(Rs.)	(Rs.)	Growth%	(Rs.)
			%
	Global Generics	36,398	30,384	20	35,927	1
	North America
	18,072	14,957	21	15,999	13
	Europe	3,446	1,912	80	3,093	11
	India	6,839	6,505	5	7,636	(10)
	Emerging Markets	8,042	7,010	15	9,199	(13)
	Pharmaceutical Services and
		7,195	6,765	6	6,906	4
	Active In�redients (PSAI)
	Proprietary Products &Others
		725	3,017	(76)	1,005	(28)
	Total		44,318	40,166	10	43,838	1

Q4 FY2 0 Sales Mix

2%	•North America
	•Europe
	,.India
	•Emerging Markets
	•PSAI
	•Proprietary Products
	&Others

3

All amounts in millions, except £PSAll US dollar amounts based on convenience translation rate ofI USD = Rs. 75.39

Dr. Reddy's Laboratories Limited and Subsidiaries

Consolidated Income Statement

Particulars				FY20					FY19							Growth
($)			(Rs.)	%		($)	(Rs.)		%	%
Revenues	2,316			1,74,600	100.0		2,041	1,53,851			100.0	13
Cost of Revenues	1,069			80,591	46.2		934	70,421			45.8		14
									83,430						54.2		13
Gross Profit	1,247			94,009	53.8		1,107
Operating Expenses									48,680					31.6
Selling, General & Administrative expenses	665			50,129	28.7		646						3
Research and Development expenses	204			15,410	8.8		207	15,607					10.1		(1)
Impairment ofnon-current assets	222			16,767	9.6		3	210					0.1		7884
Other operating income	(57)			(4,290)	(2.5)		(26)	(1,955)					(1.3)		119
Results from operating activities	212			15,993	9.2		277	20,888					13.6		(23)
Net finance income	(20)			(1,478)	(0.8)		(15)	(1,117)					(0.7)		32
Share of profit of equity accounted investees	(7)			(561)	(0.3)		(6)	(438)					(0.3)		28
				18,032	10.3		298	22,443				14.6		(20)
Profit before income tax	239
									3,648					2.4
Income tax	(19)			(1,466)	(0.8)		48					(140)
					11.2		249	10,795				12.2		4
Profit for the period	259			19,490
									113.09
I Diluted Earnings Per Share (EPS)	1.56			117.40			1.50							4

EBITDA Computation

Particulars		($)	FY20
			(Rs.)
Profit before Income Tax
239	18,032
Interest (income) net*	(11)			(839)
Depreciation	115			8,640
Amortization	51			3,832
Impairment		222			16,767
EBITDA			616			46,431
EBITDA	(%	to revenues		26.6
	)

* Includes incomefrom Investments

Key Balance Sheet Items

($) 298

(9)

111

51

3

453

FY19

(Rs.)

22,443

(654)

8,362

3,828

210

34,189

22.2

	Particulars	As on 31stMar,		As on 31st Dec
		2020		2019
			( )						( )
			$				(Rs.)		$					(Rs.)
Cash and cash equivalents and other investments	346			26,068		271				20,457
Trade receivables (current & non-current)	690			52,015		611				46,095
Inventories	465			35,066		501				37,746
Property, plant and equipment	694				52,332		699				52,709
Goodwill and Other Intangible assets	420			31,653		409				30,847
Loans and borrowings (current & non-current)	293		22,102	216				16,320
Trade payables	221				16,659	236				17,810
Equity			2,056			1,54,988	1,972				1,48,672

As on 31stMar 2019

($)(Rs.)

1. 25,570

1. 39,982

1. 33,579

1. 54,088

1. 48,269

1. 38,381

1. 14,553

1,8601,40,197

	Y1�		r-
	w	or	"'
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		�		o�

All amounts in millions, except EPS					All US dollar amounts based on convenience translation rate ofI USD = Rs. 75.39
		Revenue Mix by Segment [Year on year]
	Particulars					FY20					FY19			Growth
			($)	(Rs.)		%	($)		(Rs.)	%	%
	Global Generics			1,832	1,38,123		79.1	1,630		1,22,903	79.9	12
	North America					64,659					59,957		8
	Europe
					11,707					7,873
	India
					28,946					26,179		11
	Emerging Markets
					32,811					28,894		14
	Pharmaceutical Services and	342	25,747		14.7				15.7	7
		320		24,140
	Active Ingredients (PSAI)
	Proprietary Products &			142				90			4.4
			10,730		6.1		6,808	58
	Others
	Total			2,316	1,74,600		100.0	2,041		1,53,851	100.0	13

FY2 0 Sales Mix

•North America

•Europe

■ India

• EM

•PSAI

•Proprietary Products

& Others

5

Response to COVID-19

We are taking all the protective measures in terms of ensuring the health and safety of our employees by following the physical distance norms, using protective gears, and other appropriate measures. Various initiatives have been undertaken to ensure that our manufacturing related operations continue unabated enabling us to serve our patients. A few products related to COVID-19 are under development. We are using digital channels for enabling work from home and reaching out to doctors, customers an? vendors. We are also playing our part of contributing to the society by extending support through various CSR initiatives such as supporting the health care professionals and others with the PPE kits, masks, sanitizers, gloves besides providing food assistance to the marginal sections & migrant families.

Revenue Analysis [Q4 and full year FY 20]

Global Generics (GG)

• Revenues from GG segment at Rs. 138.1 billion higher by 12% over FY 19, on account of growth across all our markets. There has been double digit growth in branded markets (India, Emerging markets) and turnaround in our generics business (NAG, Europe).
• Q4 revenue at Rs. 36.4 billion, YoY growth of 20% and QoQ growth of 1%. The QoQ was driven by NAG & Europe partly offset by decline in India & Emerging Markets.

North America Generics (NAG)

• Revenues from North America Generics for the year at Rs. 64.7 billion, YoY growth of 8%. The year was benefited by new launches, scale up of existing products and a favorable forex rate, which was partially offset by price erosion.
• Revenues for Q4 at Rs. 18.1 billion, YoY growth of 21% and QoQ growth of 13%, supported by contribution from new product launches and increase in volumes for existing products. The volumes were higher partially due toCOVID-19 related stocking up. During this quarter, we launched 5 new products - major ones being Naproxen and Esomeprazole Magnesium delayed-release tablets (gVimovo), Pyrimethamine Tablets (gDaraprim) and Naloxone HCL Injection (with CGT exclusivity).
• As of 31stMarch 2020, cumulatively 99 generic filings are pending for approval with the USFDA (97 ANDAs and 2 NDAs under S0S(b)(2) route). Out of the pending ANDAs, 54 are Para IVs, and we believe 30 have 'First to File' status.

India

• Revenues from India for the year at Rs. 28.9 billion.Year-on-year growth of 11%, driven by improved realizations in base business, volume traction and new products launched during the year.
• Revenues for Q4 at Rs. 6.8 billion, YoY growth of 5%, QoQ decline of 10%. The Q4 revenues were partially impacted due to logistics related disruptions caused byCOVID-19lock-downs.

6

Emerging Markets (EM)

• Revenues from Emerging Markets for the year at Rs. 32.8 billion, growth of 14%.

Revenues from Russia for the year at Rs. 16.9 billion, YoY growth of 10%. Growth was majorly driven by increase in volumes and improvement in realizations for some of our key molecules.

Revenues from other CIS countries and Romania for the year at Rs. 6.5 billion, YoY growth of 23%. Growth was on account of increase in volumes and new launches.

Revenues from Rest of World (RoW) territories for the year at Rs. 9.4 billion, YoY growth of 13%. Growth primarily on account of new launches and volume traction in key products, partially impacted by price erosion in certain markets.

• Revenues for the quarter are Rs. 8.0 billion, YoY growth of 15%, QoQ decline of 13%.

Revenues for Russia for the Q4 at Rs. 3.9 billion, YoY growth of 8%, QoQ decline of 20%.

Revenues from other CIS countries an·d Romania for the quarter are Rs. 1.8 billion, YoY growth of 51%, QoQ decline of 2%.

Revenues from Rest of World (RoW) territories for this quarter are Rs. 2.3 billion, YoY growth of 6%, QoQ decline of 5%.

Europe

• Revenues from Europe for the year at Rs. 11.7 billion. YoY growth of 49%, primarily on account of volume traction in base business and new product launches across our markets, including newer markets of France, Italy and Spain, which was partially offset by price erosion.
• Revenues for Q4 at Rs. 3.4 billion, YoY growth of 80% and QoQ growth of 11%.

Pharmaceutical Services and Active Ingredients (PSAI)

• Revenues from PSAI at Rs. 25.7 billion.Year-on-year growth of 7% largely driven by increase in volumes of key products of API business and favorable forex.
• Revenues for Q4 at Rs. 7.2 billion, YoY growth of 6% and QoQ growth of 4%.
• During the year, we have filed 10 DMFs in the US.

Proprietary Products (PP)

• Revenues from PP for the year at Rs. 7.9 billion, YoY growth of 67%. During the year, we sold our US and select territoryrights for ZEMBRACE® SYMTOUCH® (sumatriptaninjection) 3 mg and TOSYMRA TM (sumatriptan nasal spray) 10 mg, of our Neurology franchise.
• Revenues for Q4 are Rs. 2 million.

Income Statement Highlights:

• Gross profit margin for the year at 53.8%, declined by ~40 bps over previous year primarily on account of price erosions in the US, Europe and certain emerging markets and region mix. The decline was partially offset due to revenue recognized on the sale of rights for two PP Neuro products. Gross profit margin for GG and PSAI business segments are at 56.8% and 24.1% respectively.
• Gross profit margin for the Q4 at 51.5% (GG: 55.9%, PSAI: 28.4%).

YoY basis the gross margin declined by ~90 bps, as in Q4 FY 19 we recognized revenue from sale of rights for three products of our PP Derma business

QoQbasis the gross margin declined by ~260 bps, primarily on account of (a) change in the business mix, (b) increase in inventory provisions / write-offs, and (c) impact of price erosion.

• SG&A expenses for FY 20 at Rs. 50.1 billion, an increase of 3% on a YoY basis. SG&A expenses for Q4 at Rs. 12.2 billion, YoY decline of 1% andQoQdecline of 4%. SG&A as a % to sales for the full year improved by 290 bps as compared to FY19. Our focus on cost optimization and productivity improvement continue to yield positive results.
• Impairment charge at Rs. 16.8 billion in FY 20, which were taken considering the triggers which occurred during the year.
• Research & development (R&D) expenses at Rs. 15.4 billion. As % to Revenues - FY20: 8.8% I FY 19: 10.1%. Focus continues on building complex generics,bio-similars and differentiated products pipeline. R&D expenses for Q4 at Rs. 4.2 billion, as % to revenues stood at 9.5%.
• Other operating income for the year at Rs. 4.3 billion compared to Rs. 2.0 billion in FY19. The increase is primarily on account of Rs. 3.5 billion received from Celgene pursuant to a settlement agreement in Canada.
• Net Finance income for the year at Rs. 1.5 billion compared to Rs. 1.1 billion in FY19. The increase is primarily on account of higher foreign exchange gain in current year as compared to FY19. Net finance income in Q4 is Rs. 0.4 billion.
• Profit before Tax for the year at Rs. 18.0 billion, impacted by Rs. 16.8 billion of impairment charge.Adjusted for it, the profit before tax is at Rs. 34.8 billion. Profit before Tax for Q4 is at Rs. 7.1 billion.
• Profit after Tax for the year at Rs. 19.5 billion and for Q4 at Rs. 7.6 billion, which are higher than profit before tax, majorly due to recognition of MAT credit and creation of deferred tax assets, in line with the requirements of accounting standards.
• Diluted earnings per share for the year is at Rs. 117.4. Diluted earnings per share for Q4 is at Rs. 46.0
• Capital expenditure for FY20 is at Rs. 4.8 billion. Capital expenditure for Q4 FY20 is at Rs. 1.5 billion.
• The Board has recommended payment of a dividend of Rs. 25 per equity share of face value Rs 5/- each (500% of face value) for the year ended March 31, 2020 subject to approval of members.

8

Earnings Call Details (05:15 pm 1ST, 07:45 am EDT, May Z0, 2020)

The Company will host an earnings call to discuss the performance and answer any questions from participants.

Audio conference Participants can dial-in on the numbers below:

Universal Access Number:		[phone]
Secondary number:		[phone]
Local Access number:		[phone]
(Available all over India)
International Toll Free Number USA	186674 62133
	UK	0 808101157 3
	Singapore	80 0 1012 04 5
	Hong Kong	80 0 9 64 448
Playback of call:	[phone], [phone]
Conference ID:	74886

Transcript ofthe event will be available at www.drreddys.com. The play back will be available after the earnings call, till May 27th,2020.

About Dr. Reddy's:Dr. Reddy's Laboratories Ltd. (SSE: 500124, NSE: DRREDDY, NYSE: RDY) is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products - Dr,Reddy's offers a portfolio of products and services including APls, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets across the globe. Our major markets include - USA, India, Russia & CIS countries, and Europe. For more information, log on to: www.drreddys.com

Disclaimer:This press release may include statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, {i) general economic conditions such asperformance of financial markets, credit defaults , currency exchange rates , interest rates , persistency levels and frequency / severity of insured loss events (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, {iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganisation , including related integration issues, (vi) the susceptibility of our industry and the markets addressed by our, and our customers', products and services to economic downturns as a result of natural disasters. epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2019.The company assumes no obligation to update any information contained herein.

The company assumes no obligation to update any information contained herein.

9

S.RBATL/801 &ASSOCIATES LLP	6111 HxA' ·A Block
R<11iv Gandt SalBI
	Tidlll Par, No 4
ChJrt�red AccounIants	Taran an Chcnr111' -600113,lnd,a
	1�1 +91 4'1 r,117 800(1

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 ofquarterly and year to date consolidated financial results of Dr. Reddy's Laboratories Limited ("Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group"), and its joint ventures for the quarter and year ended March 31, 2020 ("Statement"), attached herewith, being submitted by the Holding Company pursuant to the requirement of Regulation 33 of the SEBl (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations").

ln our opinion and to the best of our information and according to the explanations given to us, the Statement:

includes the results of the following entities:

SL.No Name of the Company

Subsidiaries

1. Aurigene Discovery Technologies Limited
2. Cheminor investments Limited
3. Dr. Reddy'sBio-Sciences Limited
4. Dr. Reddy's faITTJaceutica Do Brasil Ltda.
5. Dr. Reddy's Laboratories SA
6. ldea2Enterprises (India) Private Limited
7. Imperial Credit Private Limited
8. Industrias Quimicas Falcon de Mexico, S.A.de C.V.
9. Reddy Antilles N.V. (Liquidated during the year)

l 0.Regkinetics Services Limited (formerly Dr. Reddy's Pharma SEZLimited)

1. Aurigene Discovery Technologies (Malaysia) SDN BHD
2. Aurigene Discovery Technologies rnc.
3. Aurigene Pharmaceuticals Services Limited (from 16 September 2019)
4. beta Institut gemeinniitzige GmbH

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S.R.BATLIBOI &ASSOCIATES LLP

ChJrtt:ri,d Accountant:.

1. betapharm Arzneimittel GmbH
2. Chirotech Technology Limited
3. DRL Impex Limited
4. Dr. Reddy's Laboratories (Australia) Pty. Limited
5. Dr. Reddy's Laboratories Canada, Inc.
6. Dr. Reddy's Laboratories Chile SPA.
7. Dr. Reddy's Laboratories (EU) Limited
8. Dr. Reddy's Laboratories Inc.
9. Dr. Reddy's Laboratories International SA (merged with Dr.Reddy's Laboratories SA w.e.f I January 2019)
10. Dr. Reddy's Laboratories Japan KK
11. Dr. Reddy's Laboratories Kazakhstan LLP

26.Dr. Reddy's Laboratories LLC

1. Dr. Reddy's Laboratories Louisiana LLC
2. Dr. Reddy's Laboratories Malaysia Sdn. Bhd.
3. Dr. Reddy's Laboratories New York, Inc.
4. Dr. Reddy's Laboratories PhilippinesJnc. (from 9 May 2018)
5. Dr. Reddy's Laboratories(Proprietary) Limited
6. Dr. Reddy's Laboratories Romania S.R.L.
7. Dr. Reddy's Laboratories SAS
8. Dr. Reddy's Laboratories Taiwan Limited
9. Dr. Reddy's Laboratories Tennessee, LLC (till I October 2018)
10. Dr. Reddy's Laboratories (Thailand) Limited (from 13 June 2018)
11. Dr. Reddy's Laboratories (UK) Limited
12. Dr. Reddy's Research and Development B.V.
13. Dr. Reddy's Singapore PTE Limited (liquidated during the year)
14. Dr. Reddy's Sri
15. Dr. Reddy's New Zealand Limited
16. Dr. Reddy's (WUXJ) Pharmaceutical Co.Limited
17. Dr. Reddy's Venezuela, C.A.
18. Eurobridgc Consulting B.V.
19. Lacock Holdings Limited
20. 000 Dr. Reddy's Laboratories Limited
21. 000 DRS LLC
22. Promius Pharma LLC
23. Reddy Holding GmbH
24. Reddy Netherlands B.V.
25. Reddy Pharma Iberia SA
26. Reddy Pharma Italia S.R.L

53.Reddy Pharma SAS

Joint ventures

1. DRANULLC
2. DRES Energy Private Limited

S.R.BATLIBOI &ASSOCIATES LLP

Chartered Accouniant�

3. Kunshan Rotam Reddy Pharmaceutical Company Limited

Other consolidating entities

1. Cheminor Employees Welfare Trust
2. Dr. Reddy's Employees ESOS Trust (from 27 July 2018)
3. Dr. Reddy's Research Foundation

11.are presented in accordance with the requirements of the Listing Regulations in this regard; and

1. 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 for the quarter and year ended March 31. 2020.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditlng (SAs), as specified under Section 143(10) ofthe 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 ow· report. We are independent of the Group, and its joint ventures in accordance with the 'Codeof Ethics' issued by the Institute of Chartered Accountants oflndia together with the ethical requirements that arc 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 responsibilitiesin accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

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 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 Tndia and in compliance with Regulation 33 of the Listing Regulations. The respective Board of Directors of the companies included in the Group and its joint venturesare responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and its joint ventures and for preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that wen::operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation am! presentation of the Statement that give a true and fair view and are free from material misstatement, whether due to

S.R.BATLIBOI &ASSOCIATES LLP

ChDrtu1 ed Accountant':>

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 its joint ventures arc responsible for assessing the ability of the Group and its joint ventures 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 Group 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 its joint ventures are also responsible for overseeing the financial reporting process of the Group and its joint ventures.

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 rree 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 alwaysdetect a material misstatement when it exists. Misstatements can arise from rraud or error and are considered material it: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 scepticism 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 proceduresresponsive 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 involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understandingof internal control relevant to the audit in order to design audit procedures that arc 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 adequateinternal 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, hased 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 joint ventures to continue as a going concern. If we conclude that a material unce1:tainty exists, we are required to draw attention in our auditor's report to the related

S.R.BATLIBOI &ASSOCIATES LLP

Chai Wred Accountil11l�

disclosures in the Statement or, ifsuch disclosures are inadequate, to modify our opinion. Our conclusions arc 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 joint ventures to cease to contiuenas a going concern.

• 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 ofthe entities within the Group ofwhich 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 ofthe financial information of such entities included in the Statement of which we are the independent auditors. 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 ofthe 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 safoguards.

We also performed procedures in accordance with the Circular No. CTR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities Exchange Board of India underRegulation 33 (8) ofthe ListingRegulations, to the extent applicable.

Other Matter

The accompanying Statement includes the audited financial results/statements and other financial information, in respect of:

• Two subsidiaries,whose financial results/statements include total assets of Rs 16,259 million as at March 31, 2020, total revenues of Rs 6,417 million andRs 24,383 million, total net loss after tax of Rs. 486 million and Rs. 1,120 million, total comprehensive income of Rs.480 million and Rs.340 million, for the quarter and the year ended on that date respectively, and net cash (inflows) ofRs.158 million for the year ended March 31, 2020,as considered in the Statement which have been audited by their respective independent auditors.

The independent auditor'sreport on the financial statements/financial results/financial information of these entities have been furnished to us by the Management and our opinion on the St�tement in so far as it relates to the amounts and disclosures included in respect of these

S.R.BATLIBOI &ASSOCIATES LLP

Chartered Accountants

subsidiaries is based solely on the reports ofsuch auditors and the procedures performed by us as
stated in paragraph above.
These subsidiariesare located outside India whose financial results/financial statements and other
financial information have been prepared in accordance with accounting principles generally
accepted in their respective countries and which have been audited by other auditors under
generally accepted auditing standards applicable in their respective countries. The Holding
Company'smanagement has converted the financial results /financial statements of such
subsidiaries located outside India from accounting principlesgenerally accepted in their
respective countries to accounting principles generally accepted in India. We have audited these
conversion adjustments made by the Holding Company's management. Our opinion in so far as
it relates to the balances and affairs of such subsidiaries located outside India is based on the
report of other auditors and the conversion adjustments prepared by the management of the
Holding Company and audited by us.
The Statement includes the results for the quarter ended March 31, 2020 being the balanci11g
figures between the audited figures in respect of the full financial year ended March 31, 2020 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
	�==---
	'
!:;	Chennao ��
per S Balasubrahmanyam	.......�:P
Partner
Membership No.: 053315
20053315AAAAAZ6745
Chennai
May 20, 2020

•··

Dr.Reddy's �;•

Dr. Raddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN: L85195TG1984PLC004507

Tel	:[phone]
Fax	:[phone]

Email:mail@drreddys .com www.drreddys.com

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED JI MARCH 2020

SI.

Quarter ended

All�lll(!Unlj 'm IIILIIMU RJU�1n1II,r�HIYeAr ended

No.	Particulars	31.03.2020
			(Audited)

• Revenue from operations

	a) Net sales/ income from operalions	43,361
	b} License fees and service income	957
	c) Other operating income	171
2	Tolal revenue from operations		44,489
Other income		736
3	Total income (l+ 2)	45,225

• Expenses

		a) Cost of materials consumed	7,453
		b) Purchase ofstock-in-trade	5,875
		c) Changes in inventories of finished goods, work-in-progress	1,983
		and stock-in-trade
		d) Employee benefits expense		8,555
		e) Depreciation and amo1iisalionexpense		2,741
		f) Impairment ofnon-cuffenl assets		7
		g) Finance costs		230
		h) Selling and olher expenses		11,124
5		Total expenses		37,968
	Profit/ (loss) before tax aud before share of equity accounted		7,257
		investees(3 -4)
6		Share of profit of equity accounted investees, net of tax	105
7		Profit/ (loss) before tax (5+6)	7,362
8		Tax expense/ (benefit):
		a) Current tax	417
		b) Defen ed tax	(866)
9		Net profit/ (loss) arter taxes and share of profit of associates (7 - 8)	7,811

10Other comprehensive income

	a) (i)Items that will not be reclassified subsequently to profit or loss		(326)
	(ii)Income tax relating to items that will not be reclassified		(22)
	to profit or loss
	b) (i) Items that will be reclassified subsequently 10 profit or loss			(1,011)
	(ii) Income tax relating to items that will be reclassified to profit or loss			96
	Total other comprehensive income			(1,263)
11Total comprehensive Income (9 + 10)			6,548
12Paid-up equity share capital (face value Rs. 5/- each)		831
13	Other equity

14Earnings per equity share (face value Rs. 5/- each)

Basic	47.12
Diluled	47.03
		(Nol annualised)
See	ac;comprmym_g notes to the hru:mc;fol results

31.12.2019

(Unaudited)

42,607

1,231

133

43,971

673

44,644

7,528

8,426

(1,801)

8,377

2,869

13,200

152

11,128

49,879

(5,235)

176

(5,059)

1,736

(1,411)

(5,384)

(200)

-

606

48

454

(4,930)

831

(32.48)

(32.48)

(Not annualised)

31.03.2019

(Audited)

37,472

2,694

130

40,296

833

41,129

7,360

4,393

871

8,415

2,872

82

245

10,986

35,224

5,905

157

6,062

1,413

95

4,554

507

(900)

226 (55)

(222)

4,332

830

27.45

27.41

(Nol annualised)

31.03.2020

(Audited)

163,574

11,026

570

175,170

6,206

181,376

29,848

25,459

237

33,802

11,631

16,767

983

44,353

163,080

18,296

561

18,857

6,616

(8,019)

20,260

(413)

(22)

(448)

232

(650)

19,610

831

155,157

122.22

121 99

31.03.2019

(Audited)

148,706

5,145

631

154,482

3,375

157,857

28,894

18,808

(2,754)

33,562

• li,348
  116

889

44,074

134,937

22,920

438

23,358

4,707

(849)

19,500

(379)

(673)

19

(54)

(1,087)

18,413

830 I 39,406

117.53

117.33

		•••
Dr. Reddy's ��•
		DR. REDDY'S LABORA10RIES LIMITED
	.SC,!111c11t lnfonnation				Al	amounts in Ind'ian Rtnu:ClmHHtllUi
	SI. No.	Particulars			Quarter ended		Year ended
				(Audited)	(Unaudited)	(Audited)	(Audited)	(Audited)
	I	Segment wise revenue and results:
	Segment revenue:		8,782		8,241	32,086	30,403
		a) Phannaceutical Services and Active Ingredients
		b) Global Generics		36,460	35,956	30,415	138,264	123,056
		c) P1op1ie1a1y P1oducls			241	2,513	7,949	4,750
		d) O1hers		723	763	503	2,781	2,058
		Total		1,478	1,643		5,910	5,785
		Less: lnte1-segment 1evenue		1,376
		Total revenue from operations
		Segment results:
		G1oss ptofit fiom each segmenl
		a) Phannaceutical Se1vices and Activelng1edients		2,050	2,079	1,428	6,219	6,158
		b) Global Gene,ics		20,332	20,910	17,008	78,449	71,924
		c) P1oprietary P1oducts		(7)	246	2,307	7,744	4,182
		d) Others		442	492	3I 8	1,626	1,196
		Total
		Less: Selling and other un-allocable expenditu1e / (income), net		15,455		14,999	75,181	60,102
		Total profit I (loss) before tax

Global Generics includes operations orBiologics business lnler-segmenl revenue represents sale from Pharmaceutical Services and Active ln�redienls lo Global Generics al cost

Stgmcnlal Capilal employed

As certain assets ofthe Company including manufacturing facilities, development facilities and IIeasuiy assets and liabilities are often deployed inte1changeably across segments, it is imp1actical to allocate these assets and liabilities to each ,;egment. Hence, lhe details f0r C'?.pital c,,mployed have not been disclosed in the above table

Notes:

These results have been prepared in acco1dance with the Indian Accounting Standa1ds (Ind AS) notified unde1 Section 133 of the Companies Act, 2013, 1ead with the Companies (Indian Accounting Standa1ds) Rules 2015 as amended.

• Effective I April 2019, the Company adopted Ind AS 116,Leases,usin�the modified retrospective approach,Ind AS 116 brings most leases on-balance sheet for lessees unde1 a single model, eliminating the distinction between operating and finance leases1Upon implementation ofInd AS 116, majmity of leases for which the company is the lessee became on-balance sheet liabilities with corresponding right-of-use assets also 1ecognised on the balance sheel. Accordingly, on I April 2019, the Company 1ecognised lease liabilities of Rs,l,335 million and light-of-use assets ofRs. l,153 million (afte1 adjustments of Rs. 182 million towa1ds lease incentives and othe1 items ,elated lo the lease agieement as al 31 March 2019).
  The Company 1eceived a waming lcller, dated 5November 2015 from the U.S. FDA, regarding deviations wilh cunent Good Manufacturing P1actices at its API manufacturing facilities in Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as regarding violations at its oncology fo1mulation manufacturing facility at Duwada, Visakhapatnam, Andhra Pradesh. Of these three manufacturin�facilities, two facilities (API manufacturing facility at Miryalaguda and Oncology manufacturing facility at Duvvada) received Establishment Inspection Reports (EIR) from the U.S FDA in the months of June 2017 and February 2019, respectively which indicate that theaudit is closed,With respect to API manufacturing facility at Srikakulam, in October 2018, the Company was asked to cany out ce11ain detailed investigations and analysis. As part of the review of the response by the U.S. FDA, certain additional follow-on queries we1e received by the Company. The Company responded to all queries in January2019 to the U,S,FDA. InFebruary 2019, the Company received certain follow on questions from the U.S,FDA and the Company responded to these questions in March 2019. The U,S,FDA. has completed theaudit on January 28, 2020,The Company has been issued a Fonn 483 with 5observations and responded to the obse1valions in Febrnary 2020. In Ma)' 2020, the Company has received the EIR from the U S FDA, for the API manufacturing facility at Srikakulam, indicaling closure ofthe audit and the inspection classification ofthis facility is detennined as 11Volunta1y Action Indicated" (VAi).
  With this, all facilities under warning letter are now detennined as VAi.

• 11Revenue from operations11for 1he year ended 31 March 2020 includes an amount ofRs.7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE•· SYMTOUCH�(sumalriplan injection) 3 mg and TOSYMRA™(sumat,iplan nasal spray) 10 mg, (formerly 1efened lo as "DFN-02") to Upsher-Smith Laborntories, LLC. The costs associated with this transaction are Rs. 328 million.
  "Other income" includes an amount ofRs. 3,457 millions i-eceived from Celgene during the quarter ended 30 June 2019, pursuant to a settlement agreement entered in April 2019. The agreemenl effectively settles any claim the Company or its affiliates may have had f01 damages under section 8 of lhe Canadian Patented Medicines (Notice of Compliance) Regulations in regard lo the Company's ANDS for a generic version ofREVLIMID brand capsules, (Lenalidomide) pending before Health Canada.
  Impairment of intangible assels:
  During the quarter ended 31 December 2019
  Total impaiiment charge for the quarter ended 31 December 2019 is Rs,13,200 million, ofwhich Rs. 11,137 million is towa1ds impainnent of gNuvaring and the balance of Rs. 2,063 million is towards other product related intangibles.
  Impairment ofgNuvaring
  There were significant changes to the generics market of Ethinyl estradiol / Ethenogestral vaginal Jing (a generic equivalent to Nuvaring®), one of the 8 ANDAs acquired from Teva in June 2016, with the launch of a generic and authorised genelic versions of the p1oduct in the month of December 2019.Due to these adverse markel conditions, 1he Company recorded an impai1ment loss of Rs.11,137 million during the qua11er ended 31 December 2019. The carrying value of the asset after the impainnent was Rs. 3,084 million as at 31 December 2019. The said impainnent pe11ains to the Company's Global Generics segment.
  Other intangible assets
  In view of the specific trigge1s occurring in the qua11er with respect to some of product related intangible assets forming part of the Company's Global Generics and Proprietary products segments, the Company detennined that there was a decrease in the market potential of these products primarily due to higher than expected price erosion and increased competition leading to lower volumes.Consequently, the Company recorded an amount of Rs.2,063 million as an impainnenl loss for the qua11er ended 31 December 2019.
  During the quarter ended 30 Sepetmbcr 2019
  Consequent to the adverse market conditions with respect to certain of the Company's products forming part of the Global Gene1ics segment, the Company assessed the recoverable amount ofthree product 1elated intangibles (viz., ramelteon, tobramycin and imiquimod) and 1ecognised an amounl ofRs. 3,551 million as impairment charge during the quarter ended 30 September 2019. The said impainnent charge is recognised unde1 the head "impainnent of non-current assets".
  During the quarter ended 30 September 2019, the Government of India promulgated the Taxation Laws (Amendment) Ordinence 2019 (enacted into Taxation laws (Amendment) Act 2019), announcing key changes to corporate tax rates in the Income-tax Act, 1961. The key changes include, among others, reduction ofMAT rate from 21.55% to 17.47% (including surcharge and cess). As a result of this, the Company reassessed the MAT recove1ability and 1ecognised an amount of Rs. 4,989 million as defe1rnd tax asset during the quarte1 ended 30 September 2019.
  During the quaiter ended 31 March 2020, the Company recognised defened tax benefit ofRs.1,264 million pursuant to a planned restructuring activity between the grnup

companies The 1estructuring activity is expected to be completed by the qua1ter ended 30 June 2020

•••

Dr.Reddy's �;•

DR. REDDY'S LABORATORIES LIMITED

		As
C			ItuJJC-cs mIIUons
un.s-ol , :Hed IaIilllC'�
Particulars

-	'",�..�
,•·
	5	0
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...	f
or.R�dd'

�/..,,,.

-

5577

5 469

2228

19 May 2020 and approved by lhe Board ofDireclors ofthe Company at their meeling held on

(25)

2.228

35

2.542

(2.5 t59)

(535)

(15,126)

(56)

(4,002)

(1.607)

4

(474)

4,235

(22,918)

(482) (3,916) (1.608)

1,265

885

(6,955)

(1,421)

(78,573)

76,291

781

(7,727)

(12,446)

(1,487)

1,576

4,821

36,946

(7,105)

131

259

(4,846)

(1,269)

(111,918)

111,704

392

624

420

5,389

(4,480)

398

530

33,545

(4.l!41)

28.704

983

(5) 190

11,348 (438) 116 389

(1,574)

(1,257)

(770)

889

11,631 (561)

16,767

521

(929)

(2,152)

68

l11pffilmilliM5Year C.Hth•rl31.03.2019(Audited)

23,358

111�m,wn11111lndon11Year ended31.03.2020 (Audited)

·•·

Dr.Reddy's �;•

DR. REDDY'S LABORATORIES LIMITED

13 Consolidated statement ofcashflows Particulars

Cash flows from/ (used in) operating activities

Profit before tax

Adjustmentsfor:

Depreciation and amortisation expense Sha1e of profit ofequity accounted investees [mpainnenl loss on goodwill and o1he1 intangible assets Equity settled share-based payment expense

Fair value changes and p1ofit on sale ofmutual funds, net Foreign exchange loss I (gain), nel

(Gain)/ loss on sale or de-recognition ofprope11y , plant and equipment and other inlangible assets, net Interest income

Finance costs Dividend income

Allowance for credit loss and doubtful trade and other advances

Changes in operating assets and liabilities:

Trade receivables

Inventories

Trade payables

Other assets and other liabilities, net

Cash generated from operations

Income tax paid, net

Net cash from operaliog activities

Cash flows from/ (used in) investing activities

P1oceeds from sale of property, plant and equipment

Proceeds from sale ofothe1 intangible assets

Expenditures on property, plant and equipment

Expenditures on other intangible assets

Purchase ofo1he1 investments

Proceeds fi om sale ofother invesbnents

Dividends received from equity accounted investees

Interest and dividend received

Net cash used in investing activities

Cash flows from/ (used in) financing activities

Proceeds from issuance ofequity shares (including treasury shares)

Purchase oftreasury shares

Proceeds from/ (repayment of) short-tenn loans and borrowings, net

Repayment oflong-tenn loans and bo1Towings, net

Payment ofprincipal portion ofJease liabilities

Dividends paid (including corporale dividend tax)

Interest paid

Net cash used in financing activities

Net increase/ (decrease) in cash and cash equivalents Effect ofexchange rate changes on cash and cash equivalents Cash and cash equivalents at the beginning ofthe year

Cash and cash equivalents at the end of the vear** •Rounded offto millions.

••Adjusted for bank-overdrafi ofRs 91 mi/Jionfor the year ended 31 March 2020.

14 The audited resulls were reviewed by the Audii Committee ofthe Boa, d on 20 May 2020.

1. The Board ofDirectors, al their meeting held on 20 May 2020, have recommended a final dividend ofRs. 25 per share subject lo lhe approval ofshareholders.
2. The figures ofthe fourth quarter are the balancing figures between audited figures in respect ofthe full financial year and published year to date figures upto the third qua11er ofthe relevant financial year. Also the figures upto the end ofthird quarter we1e only reviewed and not subjected to audit.
3. The results for the quarter and year ended 31 March 2020 periods presenled have been audited by lhe Stalutory Auditors oflhe Company. An unqualified report has been issued by them thereon.

By order oflhe Board

For Dr. Roddy's Laboratories Limited

Place: Hyderabad
Dale: 20 May 2020	Co-Chai1TI1an & Managing Director

S.R.BATLIBOI &ASSOCIATES LLP	6t11 Floor~ 'A Olock
Tid;;I Par�. No.4
Ra11v Ga11dh1 Sal,u
Chartered Accountants	Tarnrnanl Chem,a, - 600 113, India
	Tel. •91 44 6117 9000

Independent Auditor's Report on the Quarterly and Year to Date Audited StandaloneFinancial 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 Standalone Finaacial Results

Opinion

We have audited the accompanying statement of quarterly and year to date standalone financial results of Dr. Reddy's Laboratories Limited (the '•Company") for the quarter and the year ended March 31, 2020 ("Statement"),attached herewith, being submitted by the Company pursuant to the requirement ofRegulation 33 ofthe SEBT (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").

ln our opinion and to the best ofour information and according to the explanations given to us, the Statement:

is presented in accordance with the requirements ofthe Listing Regulations in this regard; and

gives a true and fair view in conformity with the applicable accounting standards and other accounting principles generally accepted in India, of the net profit and other comprehensiveloss and other financial information of the Company for the quarter and the year ended March 31, 2020.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) ofthe Companies Act, 2013, as amended ("the Act"). Ow- responsibilities under those Standards are fu1ther described in the "Auditor's Responsibilities for the Audit of the Standalone Financial Results" section of our repo1t.We are independent of the Company in accordance with the Code of Ethics issued by the lnstitute 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 Rulesthereunder, and we have folfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.

Management's Responsibilities for the Standalone Financial Results

The Statement has been prepared on the basis ofthe standalone annual financial statements. The Board of Directors of the Company are responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive loss of the Comp,,.·s��ny_and other financial information in accordance with the applicable accounting standards

�: •·�t.

o: ,,>-- /.:	Sh!.Bi1tlll.i(Jl�A-,:•,1)(1,..11'-':i-LU,a llmitt'(/ Uat,!1 ty P11ttnt.'f'Sh l'Wllh LLr ldcNH·tNu.Af8 ,1295
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S.R.BATL/801 & ASSOCIATES LLP

Ch�1tered Account.inb

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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company 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, elevant to the preparation ond presentation of the Statement that givea true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Statement, the Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Results

Our objectives are to obtain reasonable assuranceabout 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 arc 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 theaudit. 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.

S.R.BATLIBOI '-fr.. ASSOCIATES LLP

Chu, 11,re<.I Accountanb

• Conclude on the appropriateness ofthe Board ofDirectors' 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 Company's ability to continue as a going concem If we conclud�that amaterial uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial results or, if such disclosuresare inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluatethe overall presentation, structure and content of the State1111::nt,including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance 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.

Other Matter

The Statement includesthe results for the quarter ended March 31, 2020 being the balancing figure between the audited figures in respect ofthe full financial year ended March 31,2020 and the published unaudited year-to-date figures up to the third quarter ofthe 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: 1010�9W/E300004

Y"i

per S Balasubrahmanyam Partner

Membership No.: 053315

20053315AAAAAY9936 Place: Chennai

Date: May 20,2020

•··

Dr. Reddy's �;•

Dr. Raddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN:L85195TG1984PLC004507

Tel	:[phone]
Fax	:[phone]

Email :[e-mail] www.drreddys.com

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF AUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 20ZO

No.Particulars

Revenue from operations

1. Net sales/ income from operations
2. License fees and service income
3. Other operating income

Total revenue from operations

• Other income
  Total income (l + 2)
  Expenses
• 1. Cost ofmaterials consumed
  2. Pmchase ofstock-in-trade
  3. Changes in inventories of finished goods,work-in-progressandstock-in-trade
  4. Employee benefits expense
  5. Depreciation and amortisation expense

O Finance costs

1. Selling and other expenses
   Total expenses

• Profit before lax (1 + 2 - 3)

• Tax expense/ (benet11)
• 1. Current tax
  2. Deferred tax

• Net profit for the period/ year (4 - 5)

Quarter ended

31.03.2020 31.12.2019

(Audited)(Unaudited)

28,195 29,864

1. 458

1. I 18

28,517 30,440

1,274693

29,791 31,133

6,543 6,730

2,261 3,461

672(1,001)

5,166 5,112

1,923 1,958

118117

8,667 8,581

25,350 24,958

4,441 6,175

6901,092

(1,277)(134)

5,028 5,217

Allamounls in Indian Ruriei!l< millions

31.03.2019		Year ended
	31.03.2020	31.03.2019
(Aullited)	(Audited)	(Audited)
26,084			104,667
	109,925
263		8,105	1,062
105		474	526
26,452		118,504	106,255
727		7,432	2,384
27,179		125,936	108,639
5,233		25,565	21,032
2,365		11,172	8,686
1,063		(999)	660
4,900		20,302	19,319
2,042		7,892	7,806
87		478	568
	33,768
8,525		33,561
24,215		98,178	91,632
2,964		27,758	17,007
657
	4,839	2,818
279
	(6,458)	1,416
2,028		29,377	12,773

• Other comprehensive income
• 1. (i) Items that will not be reclassified to profit or loss
  2. 1. Income tax relating to items that will not be reclassified to profit or loss
  3. (i) Items that will be reclassified to profit or loss
  4. 1. Income tax relating to items that will be reclassified toprofit or loss

Total other comprehensive income

• Total comprehensive income (6 + 7)

• Paid-upequity share capital (face value Rs. 5/- each)

10Other equity

llEarnings per equity share (face value Rs. 5/- each)

Basic

Diluted

See accompanymg notes to the financial results.

85		4	(14)		88		(I}
(33)			6		(33)		3
(464)		(33)	168		(750)		209
161		12	(59)		259		(73)
(251)		(17)	101		(436)		138
4,777		5,200	2,129		28,941		12,9ll
831		831	830		831		830
30,34		31.47	12.22		151,088		126,01 I
	177.23	76.98
30.28		31.42	12.21	176.88	76.85
(Not a111111a/ised)		(Nol a111111alised)	(Nol on11110/ised)

•••

Dr.Reddy's �;•

DR.REDDY'S LAllORATORlllS LIMITED

St•�n1cnl information
SI.	Parliculars
No.

Segment wise revenue and results

• Segment revenue
• 1. Phannaceutical Services and Active Ingredients
  2. GlobaI Generics
  3. Proprietary Products

Total

Less: Inter-segment revenue

Total revenue from operations

• Segment results
  Profit/ (loss) before tax and interest from each segment
• 1. Phannaceutical Services and Active Ingredients
  2. Global Generics
  3. Proprietary Products

Total

Less: (i) Finance costs

1. Otherun-allocable expenditure/ (income), net
   Total profit before tax

Quarter ended

31.03.2020 31.12.2019

(Audited)(Unaudited)

7,373	7,106
22,606	24,680

16 296

29,995 32,082

1,478 1,642

28,517 30,440

438	957
4,203	6,193

1. 92

4,544 7,242

118 117

1. 950

4,441 6,175

All amounts in Indian llupco:smillions

		Year ended
31.03.2019		31.03.2020		31.03.2019
(Audited)	(Audited)		(Audited)
6,941
	26,996
		25,802
20,739		89,774		85,936
149		7,644		303
27,829		124,414		112,041
1,377		5,910		5,786
26,452		llS,504		106,255
32		1,465		2,156
4,022		22,116		20,852
(619)	6,525		(2,252)
3,435		30,106		20,756
87		478		568
384		1,870		3,181
2,964		27,758		17,007

Global Generics includes operations of Biologics business. lnler-segment revenue represents sale from Phannaceutical Services and Active lngredienls to Global Generics at cost.

Segmental capital employed

As certain assets of the Company includinn manufacturing facilities, rlevelopment facilities and lreasury assets and liabilities are often deployed interchangeably across segments, ii 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:

• These results have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 ofthe Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

• Effective 1 April 2019, the Company adopted Ind As 1I6,Leases,using the modified retrospective approach.Ind AS 1I 6 brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Upon implementation of Ind AS 116, majority of leases for which the company is the Jessee became on-balance sheet liabilities with corresponding right-of-use assets also recognised on the balance sheet,Accordingly, on 1 April 2019, the Company recognised lease liabilities ofRs. 332 million and right-of-use assets ofRs. 332 million,

• The Company received a warning letter, dated 5 November 2015 from the U.S. FDA, regarding deviations with current Good Manufacturing Practices at its AP! manufacturing facilities in Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as regarding violations al its oncology fonnulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. Of these three manufacturing facilities, two facilities (AP! manufacturing facility at Miryalaguda and Oncology manufacturing facility at Duvvada) received Establishment Inspection Reports (EIR) from the U.S. FDA in the months of June 2017 and February 2019, respectively which indicate that the audit is closed. With respect to AP! manufacturing facility at Srikakulam, in October 2018, the Company was asked to carry out certain detailed investigations and analysis. As part of the review of the response by the U.S. FDA, certain additional follow-on queries were received by the Company.The Company responded to all queries in January 2019 to the U.S. FDA,In February 2019, the Company received certain follow on questions from the U.S. FDA and the Company responded to these questions in March 2019.The U.S. FDA.has completed the audit on January 28, 2020. The Company has been issued a Form 483 with 5 observations and responded to the observations in February 2020.In May 2020, the Company has received the ElR from the U.S. FDA, for the AP! manufacturing facility at Srikakulam, indicating closure of the audit and the inspection classification ofthis facility is detennined as "Voluntary Action Indicated" (VAl).
  With this, a11 facilities underwarningletter are now detennined as VAI.

4 "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 TOSYMRA1'M (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

• "Other income" includes an amount of Rs.3,457 millions received from Celgene during the quarter ended 30 June 2019, pursuant lo a selllemenl 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.

• "Other income" includes dividend income of Rs.392 million declared by Kunshan Rotam Reddy Phannaceutical Company Limited during the quarter ended 30 June 2019.

• During the quarter ended 30 September 2019, the Government ofIndia promulgated the Taxation Laws (Amendment) Ordinance 2019 (enacted into Taxation Jaws (Amendment) Act 2019), announcing key changes to corporate tax rates in theIncome-tax Act, 1961. The key changes include, among others, reduction ofMAT rate from 21.55% to 17.47% (including surcharge and cess). As a result ofthis, the Company reassessed the MAT recoverability and recognised an amount ofRs. 4,989 million as deferred tax asset during the quarter ended 30 September 2019.
  During the quarter ended 31 March 2020, the Company recognised deferred tax benefit of Rs.1,264 million pursuant lo a planned restructuring activity between the group companies. The restructuring activity is expected to be completed by the quarter ended 30 June 2020.

Dr.
Reddy's �;•	UH. IUillllY'�LAUUl�LIMI 11!.U
•··

• On I�May 70:,ll, tlw rnmpany e111c1erl inln a Stip11lalinn anrl Ae1cc111c111 nr Seltkmenl with I.earl Plaintifflhc Public Employees· Reliremcnl System or Mississippi in the putative secu,ities class action filed against the C'o111pa11y in the United Stales Dis!licl C'ou11 fo, the District of New Je,sey As

consideration for the seltlement of the class action, the Company has ag,eed to pay Rs.68I million (U.S.$9 million). Subject to the tem1s or the Stipulation, the settlement 1esolves the remainder of the litigation As the Company is adequately insured with 1espect to the aforesaid liability, the settlement did not have any impact on the Company's financial results for the year ended 31 Mmch 2020. Amount payable to the plaintiff on account of the settlement and that ,eceivable from the insnrc, have been p1esented under "other cunent financial assets" and "other current financial liabilities", respectively in the balance sheet of the Company as at 31 March 2020. Please refer to the intimation made by the Company to the Stock exchanges on 16 May 2020 fo, foll details of the seltlement,

• During the year ended 31 March 2019, the Company sold one ofits API manufacturing business units located in Jeedimetla, Hyderabad lo Therapiva Private Limited.This sale was done by way of slump sale including all related property, plant and equipment, current assets. cu1,ent liabilities, and transfe, of employees.An amount of Rs. 423 million representing the profit on sale ofsuch business unit was included under the head "other income".

IO 171e Company considered 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 inforniation up to the date of approval of these financial results,The Company has also used the principles ofprudence in applying judgements, estimates and assumptions including sensitivity analysis and based on the current estimates, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets As the outb1eak continues to evolve, the Company will continue to closely monitor any material changes to future economicconditions,

1113alance s 1eet

Particulars

ASSETS

Non-current asse1s

Property, plant and equipment Capital work-in-progress Goodwill

Other intangible assets

lnlangihlt: as�dstinder til.!vclop1nc11t Financial assets

Investments Trade receivables Loans

Other financial assets Deferred tax assets, net

Tax assets, net

Other non-current assets

Total non-current assets

Current assets lnve11tories

Investments

Trade receivables

Cash and cash equivalents

Other financial assets

Other current assets

Total current assets

TOTAL ASSETS

EQUITY AND LIA131LITIES

Equity

Equity share capital

Other equity

Total Equity

Liabilities

Non-current liabilities

Financial liabilities

Borrowings

Deferred tax liabilities, net

Other non-current liabilities

Total non-current liabilities

		Current liabilities
		Financial liabilities
�'-		Trade payables
�<.:J;,.		Total outstanding dues ofmicro enterprises and small enterprises
••=•	"-.I�	l	Total outstanding dues ofcreditors other than micro enterprises and small enterprises
,i'
IJ	Other financial liabilities
�.;	o	!::1,	rovi ions
	'Other current liabilities

• Total current liabilities

TOTAL EQUITY AND LIA131LITIES

All amounts in Indian Rupees millions

As at	As at
31.03.2020	31.03.2019
(Audited)	(Audited)

37,698 39,504

3,841 4,001

323 323

6,3I 8	7,000
277	.
33,671	18,191
1,737	113

12 332

474 447

6,129

3,073 3,106

138 126

93.691 73.143

21,904	20,156
21,184	21,144
46,387	37,177
783	335
392	1,132
1,888	692
R 529	R.696
101,067	89.332
194,758
162.475
831	830
151,088	126.01 I
151.919	126,841

1933,454

545 547

555

296 285

1.034 4.841

I 0,436

5,463

5577

10,629 10,239

1,524 45

13,928 10,160

2,073 1,847

3.160 2.962

41.805 30.793

194,758 162,475

•••

Dr. Reddy's �;•

DR. REDllY'S LABORATORIES LIMITED

12 Statement of cashflows

Particulars

Cash flows from/(used in) operating activities

Profit before taxation

Adjustments for:

Depreciation and ammiisation expense lmpainnenl loss on other intangible assets Equity settled share-based payment expense

Fair value changes and profit on sale ofmulual funds, nel Foreign exchange loss / (gain), net

(Gain)/loss on sale/disposal ofproperty , plant and equipment and other intangible assets, net lnterest income

Finance costs

Allowances for credit losses and doubtfiil advances, net Dividend income

Provision/(reversal of provision) relating to non-current investments Cha11ges i11 operating assets mid liabilities:

Trade receivables Inventories Trade payables

Other assets and other liabilities, net

Cash generated from operations

Income taxes paid, net

Net cash generated from operating. activities

Cash flows from/(used in) investing activities

Proceeds from sale ofproperty, plant and equipment

Expenditures on property, plant and equipment

Expenditures on other intangible assets

Purchase of investments

Proceeds from sale of investments

Loans and advances (given) /repaid by subsidiaries

Dividend income received

Interest income received

Net cash used in investing activities

Cash flows from/(used in) financing activities

Proceeds from issuance ofequity shares (including treasury shares)

Proceeds from/(repayment of) short-tenn loans and borrowings, net

Repayment oflong-tenn loans and borrowings, net

Payment ofprincipal portion oflease liabilities

Dividends paid (including corporate dividend tax)

Purchases oftreasury shares

Interest paid

Net cash used in financing activities

Allamounts m lndianltopc.i.t;S1111l11011s

Year ended Year ended

31.03.2020 31.03.2019

(Audited) (Audited)

27,758	17,007
7,892	7,806
521	24
389
(821)
(669)
(229)
2,455
135	(400)
(856)	(812)
478	568
95	(139)
(397)
	359
(10,927)	4,547
(1,748)	(1,588)
368	(201)
892	663
23,161	30,009
(4.769)	(2.388)
18.392	27.621
58	879
(4,262)	(5,775)
(476)	(753)
(122,726)	(77,267)
109,186	74,786
343	1,800
397
588	R2.l
(16.892)	/5.509)
4	.•
4,630	(17,049)
(1,805)
(155)
(3,914)	(4,002)
(474)	(535)
(527)	(645)
(2 241)	(22.231)

Net increase/ (decrease) in cash and cash equivalents	(741)	44
Effect ofexchange rate changes on cash and cash equivalents
Cash and cash equivalents at the beginning ofthe year	1,132	1207
Cash and cash equivalents at the end of the vear••	391	1.132

•Rounded ofj'to mi/lio11s

..Adjustedfor ba11k overd, af/ �f'Rs.1 millio11foryear e11ded 31 Mm cl, 2020.

1. The audited results were reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Directors ofthe Company at their meeting held on 20 May 2020.
2. The Board of Directors, at their meeting held on 20 May 2020, have recommended a final dividend of Rs. 25 per share subject to the approval of shareholders.
3. The figures ofthe fourth quarter are the balancing figures between audited figures in respect ofthe full financial year and published year to date figures upto the third quarter ofthe relevant financial year. Also the figures upto the end ofthird quarter were only reviewed and not subjected to audit.
4. The results for the quarter and year ended 31 March 2020 periods presented have been audited by the Statutory Auditors ofthe Company. An unqualified report has been issued by them thereon.

By order ofthe Board

For Dr. Reddy's Laboratories Limited

Place: Hyderabad	Co-Chainnan&Managing Director
Date: 20 May 2020