Dr Reddy Laboratories : General updates

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Dr. Reddy's ��•

Dr. Reddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN: LBS195TG1984PLC004507

Tel	:[phone]
Fax	;[phone]

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

May 19, 2022

National Stock Exchange of India Ltd. (Scrip Code: DRREDDY-EQ)

BSE Limited (Scrip Code: 500124)

New York Stock Exchange Inc.(Stock Code :RDY)

NSE IFSC Ltd.

Dear Sir/Madam,

Sub: Outcome of Board Meeting held on Mav 19, 2022

In furtherance to our letter dated March 29, 2022, we would like to inform you that the Board ofDirectors ofthe Company at their meeting held on May 19, 2022, has, inter alia, transacted the following businesses:

Financial Results

1. Approved the Audited Financial Results of the Company for the quarter and year ended March 31, 2022.
   In terms ofthe above, we are enclosing herewith the following:
2. 1. Audited Consolidated Financial Results ofthe Company and its subsidiaries for the quarter and year ended March 31, 2022 as per International Financial Reporting Standards (IFRS) as issued by International Accounting Standards Board (IASB).
   2. Press Release on Financial Results of the Company for the above period.
   3. Audited Consolidated Financial Results of the Company and its subsidiaries for the quarter and year ended March 31, 2022 as per Indian Accounting Standards.
   4. Audited Standalone Financial Results ofthe Company for the quarter and year ended March 31, 2022 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 confirm 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, 2022.

..,,..

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Dr.Reddy's "'lllli;•

Dividend

1. Recommended a final dividend ofRs.30/- (600%) per equity share ofRs. 5/- each for the financial year 2021-22. The dividend will be paid on or after five days from the date ofdeclaration ofthe final dividend by the shareholders at the 38th Annual General Meeting (AGM).

The Board Meeting commenced at 10.15 AM and concluded at 12.28 PM.

This is for your information and record.

Thanking you.

Yours faithfully,

K Randhir Singh

Company Secretary & Compliance Officer

Encl: As above

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Dr.Reddy's �;•

Dr. Raddy's Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,

India.

CIN: L85195TG1984PLC004507

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

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

DR. REDDY'S LABORATORIES LIMITED

Audited consolidated financial results of Dr. Reddy's Laboratories Limited and its subsidiaries for the quarter and year ended 31 March 2022 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB)

SI. No.

Particulars

• Revenues

• Cost of revenues

• Gross profit (1 - 2)

• Selling, general and administrative expenses
  5 Research and development expenses
  6 Impairment ofnon-current assets
  7 Other income, net Total operating expenses
  8 Results from operating activities 1(3) - (4 + 5 + 6 + 7)1 Finance income
  Finance expense
  9 Finance income, net

1. Share ofprofit of equity accounted investees, net oftax
2. Profit before tax (8 + 9 + 10)

1. Tax expense/(benefit), net
2. Profit for the period/year (11 -12)
3. Earnings per share:
   Basic earnings per share ofRs.5/- each Diluted earnings per share ofRs.5/- each

	Qunrlcr ended
31.03.2022	31.12.2021
(Audited)	(Unaudited)
54,368	53,197
25,625	24,585
28,743	28,612
15,674	15,411
4,326	4,159
7,515	47
(291)	(240)
27,224	19,377
1,519	9,235
1,175	504
(316)	(215)
859	289
105	185
2,483	9,709
1,608	2,644
875	7,065
5.28	42.58
5.26	42.48
(Not annualised)	(Nol annualised)

All amounts m Ind'1an Rll.(lct� mt mns

		Year ended
31.03.2021		31.03.2022	31.03.2021
(Audited)		(Audited)	(Audited)
47,284		214,391	189,722
21,909		100,551	86,645
25,375		113,840	103,077
14,370		62,081	54,650
4,094		17,482	16,541
1,835		7,562	8,588
(587)		(2,761)	(982)
19,712		84,364	78,797
5,663		29,476	24,280
615		3,077	2,623
(297)		(958)	(970)
318		2,119	1,653
179		703	480
6,160		32,298	26,413
2,536		8,730	9,175
3,624		23,568	17,238
21.86		142.08	103.94
21.80	141.69	103.65
(Nol annualised)

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Dr. Reddy's �;•

	Scg1M11t information							All amounts in Indian Rupcc.s millions
					Quarter ended				Year ended
	SI. No.	Particulars
	31.03.2022		31.12.2021		31.03.2021		31.03.2022		31.03.2021
			(Audited)	(Unaudited)	(Audited)		(Audited)	(Audited)
	1	Segment wise revenue and results:
	Segment revenue:	9,256		8,887		9,796		36,995		38,887
		a) Pharmaceutical Services and Active lngredients
		b) Global Generics	46,118		44,508		38,737		179,170		154,404
		c) Proprietary Products	191		129		243		1,611		523
		d) Others	502		1,289		389		2,870		2,813
		Total	56,067		54,813		49,165		220,646		196,627
		Less: lnter-segment revenues	1,699		1,616		1,881		6,255		6,905
		Net revenues	54,368		53,197		47,284		214,391		189,722
	2	Segment results:
		Gross profit from each segment			1,638		2,513		6,821		9,426
		a) Pharmaceutical Services and Active Ingredients	1,387
		b) Global Generics	26,830		25,731		22,446		103,270		91,111
		c) Proprietary Products	184		129		238		1,590		482
		d) Others	342		1,114		178		2,159		2,058
		Total	28,743		28,612		25,375		113,840		103,077
		Less: Selling and other un-allocableexpenditure, net of other	26,260		18,903		19,215		81,542		76,664
		income
		Total profit before tax	2,483		9,709		6,160		32,298		26,413

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

Notes:

The above financial results have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB).

• Revenues for the quarter and year ended 31 March 2022 includes:
• 1. Rs. 1,774 million towards the sale of territorial rights relating to two of the Company's anti-bacterial brands (Ciprolet® and Levolet®) in Russia and CJS region to

AliumJSC;

1. Rs. 390 million towards the sale of two of the Company's Brands (Daffy bar and Combihale) in India to Mankind Pharma Limited. The aforesaid transactions pertain to Company's Global Generics Segment.

• During the quarter and year ended 31 March 2022, there were significant changes to the market conditions for certain of the products forming part of Company's Global Generics and Proprietary Products segments. The changes include, decrease in the market potential of products, increased competition leading to lower volumes, and revenues not being in line with projections, Due to these adverse market developments, the Company recorded an impairment loss of Rs. 7,562 million on various non­ current assets, The said impairment loss includes:
• 1. Rs. 4,337 million relating to PPC-06 (Tepilamide Fumarate Extended Release Tablets) in-process research and development asset;
  2. Rs. 3,051 million pertaining to Shreveport Cash Generating Unit ("CGU") comprising of Property, plant and equipment and Goodwill;
  3. Rs. 174 million relating to other intangible assets.

• On 3 February 2022, the Company entered into an agreement with Nimbus Health GmbH to acquire I00% of its share capital along with the existing employees for an upfront payment of Rs. 421 million (EUR 5 million) plus performance and milestone-basedearn-outs over the next four years. As at 31 March 2022 the Company, on a provisional basis, recognised Rs. 161 million and Rs. 260 million towards the fair value of assets acquired and goodwill, respectively. The acquisition pertains to the Company's Global Generic segment.

• Included in "Selling, general and administrative expenses" for the quarter ended 31 March 2022, an amount of Rs. 983 million representing the probable outflow with respect to an ongoing Civil Investigative Demand ("CID") matter with the State of Texas.

• During the quarter and year ended 31 March 2022, pursuant to a change in the U.S. Income tax regulations relating to the timing of recognition of certain sales based accruals, the Company recognised current tax liability of Rs. 4,602 million with a corresponding increase in the deferred tax asset.

• On 5 April 2022 the Company received approval from the Honorable National Company Law Tribunal, Hyderabad Bench ("NCLT'') for the merger of Dr. Reddy's Holding Limited into Dr. Reddy's Laboratories Limited. Subsequently, the Company has filed the NCLT order, with the Ministry of Company Affairs on 8 April 2022 ('Effective Date').
  In September 2021, the Company completed the sale of its U,S, and Canada territory rights for ELYXYB (celecoxib oral solution) 25 mg/mL, to BioDelivery Sciences International, Inc, An amount of Rs. 1,084 million is included under the head "Revenues". This pertains to the Company's Proprietary Products segment.

• Included in "Other income, net" for the quarter ended 30 September 2021, is Rs. 1,064 million representing the profit on sale of intangible asset, E7777 (anti-cancer agent) to Citius Pharmaceuticals, Inc. This transaction pertains to the Company's Proprietary Products segment.

IO On 14June 2021, the Company received the arbitration decision and award in favour of Hatchtech Pty Limited regarding the Civil Litigation and Arbitration relating to the acquisition of the product Xeglyze®. The award required the Company to pay an amount of Rs. 3,382 million (U.S,$ 46 25 million) towards milestone payments, interest, and fees. The Company was carrying Rs. 1,471 million (U.S.$ 20 million) as the provision towards this litigation. As this constitutes an adjusting subsequent event, the consolidated financial results for the quarter and year ended 31 March 2021 were adjusted to reflect the impact of this event by recognizing the balance amount of Rs. 1,911 million (U.S.$ 26.25 million) in the financial results, Of the total amount, Rs. r,820 million (U.S,$ 25 million) was recognised under heading "Impairment of non-current assets" and the balance Rs. 91 million (U.S.$ I 25 million) was recognised under the heading "Selling, general and administrative expenses". The said expense forms part of the Company's Proprietary Products segment.

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Dr. Reddy's �;•

11 During the year ended 31 March 2021, there were significant changes to the market conditions for certain of the products forming part of Company's Global Generics an

• Rs. 3,291 million relating to Xeglyze®;
• Rs 3,180 million relating to ethinyl estradiol / ethenogestral vaginal ring (a generic equivalent to NuvaRing®);
• Rs l,587 million relating to saxagliptin and metformin (generic version ofKombiglyze-XR) and phentem1ine and topiramate (generic version ofQsymia®);
• Rs. 484 million relating to other intangible assets.

Further, an amount of Rs. 46 million has been recognised as impairment of property, plant and equipment.

12 Consolidated statements of financial position
		All amounts in Indian			Rupccs millions
	Particulars						As at			As at
						31.03.2022			31.03.2021
							(Audited)				(Audited)
	ASSETS
	Current assets
	Cash and cash equivalents						14,852		14,829
	Other investments						29,513		19,744
	Trade and other receivables						66,764		49,641
	Derivative financial instruments						50,884		45,412
						1,906		1,218
	Tax assets						3,285		2,745
	Other current assets						13,902		14.509
	Total current assets before assets held for sale						181,106		148,098
	Assets held for sale						.		151
	Total current assets						181,106		148,249
	Non-current assets
	Property, plant and equipment						62,169		57,111
	Goodwill						4,418		4,568
	Other intangible assets						27,246		35,648
	Trade and other receivables						54		118
	Investment in equity accountedinvestees						4,318
	Other investments						3,668		4,958
	Deferred tax assets				12,781		10,630
	Other non-current assets				894		834
	Total non-current assets				115,548		117,242
	Total assets				296,654		265,491
	LIABILITIES AND EQUITY
	Current liabilities
	Trade and other payables				25,572		23,744
	Short-term borrowings				27,082		23,136
	Long-term borrowings, current portion				1,017		864
	Provisions				4,258		3,435
	Tax liabilities				5,442		1,389
	Derivative financial instruments				479		326
	Bank overdraft				-		9
	Other current liabilities				33,992		30,488
	Total current liabilities				97,842		83,391
	Non-current liabilities
	Long-term borrowings				5,746		6,299
	Deferred tax liabilities				60		338
	Other non-current liabilities				57		58
				2,422		2,343
	Total non-current liabilities					8,285			9,038
	Total liabilities					106,127		92,429
	Equity
	Share capital				832		832
	Treasury shares				(1,601)		(1,967)
	Share premium				9,280		8,887
	Share based payment reserve				1,628		1,461
	Capital redemption reserve				173		173
	Debentureredemption reserve				304		-
	Retained earnings				755		1,326
				175,712		156,023
	Other components of equity				3,444		6,327
	Total equity					190,527		173,062
	Total liabilities and equity					296,654		265,491