6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

February 2019

Commission File Number 1-15182

DR. REDDY’S LABORATORIES LIMITED

(Translation of registrant’s name into English)

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

Hyderabad, Telangana 500 034, India

+91-40-49002900

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x                                      Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ______

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ______

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ¨                                      No x

If “Yes” is marked, indicate below the file number assigned to registrant in connection with Rule 12g3-2(b): 82-________.

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

We hereby furnish the United States Securities and Exchange Commission with copies of the following information about our public disclosures regarding our results of operations and financial condition for the quarter and nine months ended December 31,2018.

On February 01, 2019, we announced our results of operations for the quarter and nine months ended December 31, 2018. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Unaudited Consolidated Financial Results with review report, Ind AS Unaudited Consolidated Financial Results with review report and Ind AS Unaudited Standalone Financial Results with review report for the quarter and nine months ended December 31, 2018, a copy of which is attached to this Form 6-K as Exhibit 99.1 , 99.2 , 99.3 and 99.4 respectively. 

We have also made available to the public on our web site, www.drreddys.com, the following: IFRS Unaudited Consolidated Financial Results, Ind AS Unaudited Consolidated Financial Results and Ind AS Unaudited Standalone Financial Results for the quarter and nine months ended December 31, 2018.

Exhibits

Exhibit Number	Description of Exhibits
99.1	Press Release, “Dr. Reddy’s Q3 FY19 Financial Results”, February 01, 2019
99.2	IFRS Unaudited Consolidated Financial Results for the quarter and nine months ended December 31, 2018
99.3	Ind AS Unaudited Consolidated Financial Results for the quarter and nine months ended December 31, 2018
99.4	Ind AS Unaudited Standalone Financial Results for the quarter and nine months ended December 31, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DR. REDDY’S LABORATORIES LIMITED (Registrant)
Date:  February 01, 2019	By:	/s/ Sandeep Poddar
		Name:	Sandeep Poddar
		Title:	Company Secretary

EX-99.1

Exhibit 99.1

  

	CONTACT
DR. REDDY'S LABORATORIES LTD.	Investor relationS	Media relationS
8-2-337, Road No. 3, Banjara Hills,	AMIT AGARWAL	CALVIN PRINTER
Hyderabad - 500034. Telangana, India.	amita@drreddys.com	calvinprinter@drreddys.com
	(Ph: +91-40-4900 2135)	(Ph: +91-40-4900 2121)

Dr. Reddy’s Q3 FY19 Financial Results

Hyderabad, India, February 1, 2019: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the quarter ended December 31, 2018 under International Financial Reporting Standards (IFRS).

Commenting on the results, CEO and Co-chairman, G.V. Prasad said “We continued to improve our performance in the third quarter of FY 19, supported by significant growth in emerging markets and India, pickup in new product launches, and improvements in cost structure. We are on track towards delivering sustainable & profitable growth.”

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 69.58

Dr. Reddy’s Laboratories Limited and Subsidiaries

Consolidated Income Statement

	Q3 FY19						Q3 FY18						YoY			Q2 FY19						QoQ
Particulars	($)			(Rs.)			($)			(Rs.)			Gr %			($)			(Rs.)			Gr%
Revenues		553			38,500			547			38,060			1			546			37,978			1
Cost of Revenues		255			17,748			239			16,649			7			245			17,081			4
Gross Profit		298			20,752			308			21,411			(3	)		300			20,897			(1	)
Operating Expenses
Selling, General & Administrative expenses		173			12,036			173			12,048			(0	)		178			12,372			(3	)
Research and Development expenses		53			3,668			67			4,667			(21	)		59			4,120			(11	)
Other (income) / expense net		(10	)		(681	)		(4	)		(313	)		118			(9	)		(641	)		6
Results from operating activities		82			5,729			72			5,009			14			73			5,046			14
Net finance (income) / expense		0			13			(12	)		(851	)		(102	)		(9	)		(625	)		(102	)
Share of (profit) / loss of equity accounted investees, net of tax		(1	)		(89	)		(1	)		(85	)		5			(2	)		(109	)		(18	)
Profit before income tax		83			5,805			85			5,945			(2	)		83			5,780			0
Income tax expense		14			953			37			2,601	*		(63	)		11			742			28
Profit for the period		70			4,852			48			3,344			45			72			5,038			(4	)
Diluted Earnings Per Share (EPS)		0.42			29.21			0.29			20.13			45			0.44			30.31			(4	)

* ~ Rs. 930 million impact on account of reforms in US tax laws

As % to Revenues	Q3 FY19		Q3 FY18		Q2 FY19
Gross Profit		53.9		56.3		55.0
SG&A		31.3		31.7		32.6
R&D		9.5		12.3		10.8
EBITDA		22.5		21.2		22.8
PBT		15.1		15.6		15.2
PAT		12.6		8.8		13.3

EBITDA Computation

	Q3 FY19						Q3 FY18						Q2 FY19
Particulars	($)			(Rs.)			($)			(Rs.)			($)			(Rs.)
Profit before Income Tax		83			5,805			85			5,945			83			5,780
Interest (income) net*		(4	)		(260	)		(13	)		(881	)		(2	)		(132	)
Depreciation		30			2,073			30			2,089			29			2,033
Amortization		15			1,035			13			902			14			965
EBITDA		124			8,653			116			8,055			124			8,646

* Includes income from Investments

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 69.58

Key Balance Sheet Items

	As on 31st Dec, 2018				As on 30th Sep, 2018				As on 31st Dec, 2017
Particulars	($)		(Rs.)		($)		(Rs.)		($)		(Rs.)
Cash and cash equivalents and other investments		368		25,593		299		20,837		360		25,032
Trade receivables (current & non-current)		536		37,302		666		46,317		612		42,593
Inventories		487		33,911		467		32,490		386		26,825
Property, plant and equipment		795		55,344		814		56,640		836		58,189
Goodwill and Other Intangible assets		707		49,205		737		51,290		692		48,182
Loans and borrowings (current & non-current)		630		43,836		798		55,522		789		54,911
Trade payables		229		15,939		202		14,073		209		14,575
Equity		1,950		1,35,708		1,889		1,31,446		1,778		1,23,685

Revenue Mix by Segment

	Q3 FY19		Q3 FY18		YoY			Q2 FY19		QoQ
Particulars	(Rs.)		(Rs.)		Growth %			(Rs.)		Growth %
Global Generics		31,347		30,105		4			30,536		3
North America		14,832		16,073		(8	)		14,265		4
Europe		2,030		2,006		1			1,915		6
India		6,741		6,126		10			6,864		(2	)
Emerging Markets		7,744		5,900		31			7,492		3
Pharmaceutical Services and Active Ingredients (PSAI)		5,937		5,436		9			6,029		(2	)
Proprietary Products & Others		1,216		2,519		(52	)		1,413		(14	)
Total		38,500		38,060		1			37,978		1

 

Segmental Analysis

Global Generics (GG)

Revenues from GG segment at Rs. 31.3 billion. Year-on-year growth of 4%, primarily driven by contributions from Emerging Markets, India and favorable forex. Sequentially the sales grew by 3%.

· Revenues from North America at Rs. 14.8 billion. Year-on-year decline of 8%. Sequential growth of 4%, aided by higher volume offtake, new launches and favorable forex offset by higher price erosion in some of the key molecules.

During the quarter, 10 new products were launched and we have filed 3 ANDAs with the USFDA.

As of 31^st Dec 2018, cumulatively 103 generic filings are pending for approval with the USFDA (100 ANDAs and 3 NDAs under 505(b)(2) route). Of these 100 ANDAs, 59 are Para IVs, and we believe 33 have ‘First to File’ status.

· Revenues from Emerging Markets at Rs. 7.7 billion. Year-on-year growth is 31%, primarily on account of new launches, traction in new markets and improved volume offtake in our existing markets. Sequential growth is 3%.

- Revenues from Russia at Rs. 4.1 billion. Year-on-year growth of 22%, driven by both new launches and improvement in base business, marginally offset by unfavorable forex.

- Revenues from other CIS countries and Romania market at Rs. 1.4 billion. Year-on-year growth of 45%, driven by new products and volume uptake in the base business.

- Revenues from Rest of World (RoW) territories at Rs. 2.2 billion. Year-on-year growth of 43%, primarily driven by new products, traction in new markets and volume uptake in base business.

· Revenues from India at Rs. 6.7 billion. Year-on-year growth of 10%, primarily driven by volume traction and new products. Sequentially the revenues declined by 2%.

· Revenues from Europe at Rs. 2.0 billion. Year-on-year growth of 1%, primarily on account of new products and volume uptake largely offset by higher price erosion in some of the key molecules. Sequential growth is 6%.

Pharmaceutical Services and Active Ingredients (PSAI)

· Revenues from PSAI at Rs. 5.9 billion, with year-on-year growth of 9% and sequential decline of 2%. The YoY growth is largely driven by custom pharmaceutical services business.

Proprietary Products (PP)

· Revenues from PP at Rs. 735 million, with year-on-year decline of 66% and sequential decline of 5%. The YoY decline is largely due to one-time milestone income of Rs. 1.3 billion recorded during Q3 FY18.

Income Statement Highlights:

· Gross profit margin at 53.9%.

- Declined by ~240 bps over that of previous year and by ~110 bps sequentially

- Decline in gross profit margins both year-on-year and sequentially is largely on account of price erosion in some of our key molecules in the US partly offset by favorable foreign exchange and better manufacturing overhead leverage.

- Gross profit margin for GG and PSAI business segments are at 57.6% and 30.8% respectively.

· SG&A expenses at Rs. 12.0 billion, remained flat on a year-on-year basis and declined by 3% sequentially. Spend control is largely on account of cost optimization and productivity improvement initiatives.

· R&D expenses at Rs. 3.7 billion, year-on-year decline of 21%. Decline is largely on account of timing variation in development related activities coupled with productivity improvement measures. As % to revenues- Q3 FY19: 9.5% | Q2 FY 19: 10.8% | Q3 FY18: 12.3%.

· Other (income)/expense, net includes gain of Rs. 423 million on account of sale of the API business manufacturing unit located at Jeedimetla, Hyderabad.

· Net finance expense at Rs. 13 million compared to net finance income of Rs. 851 million in Q3 FY18. The movement is largely due to higher income from investments, in the previous year.

· Profit after Tax at Rs. 4.9 billion. Effective tax rate for the quarter is 16.4%. Lower rate is primarily on account of reduction of the federal income tax rate from 35% to 21% in the United States and claim of deduction of an item in the current quarter, which was previously disallowed for tax purpose.

· Diluted earnings per share is at Rs. 29.21

· Capital expenditure is at Rs. 1.5 billion.

Earnings Call Details (06:30 pm IST, 08:00 am EST, February 1, 2019)

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

Primary number:	91 22 6280 1219
Secondary number:	91 22 7115 8120

The numbers listed above are universally accessible from all networks and all countries.

Local Access number (India): 91 70456 71221

International Toll Free Number	USA	18667462133
	UK	08081011573
	Singapore	8001012045
	Hong Kong	800964448

Playback of call:	91 22 7194 5757, 91 22 6663 5757
Conference ID:	37176

Playback will be available after the earnings call, through February 7th, 2019.

Transcript of the call will be available at www.drreddys.com.

About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 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 APIs, 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 as performance 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.

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

EX-99.3

Exhibit 99.3

  Oval Office, 18, iLabs Centre Hitech City, Madhapur Hyderabad - 500 081, India   Tel : +91 40 6141 6000

Limited Review Report – Consolidated Financial Results

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

1. We have reviewed the accompanying statement of unaudited consolidated Ind AS financial results of Dr. Reddy’s Laboratories Limited Group comprising Dr. Reddy’s Laboratories Limited (the ‘Company’) comprising its subsidiaries (together referred to as ‘the Group’), and its joint ventures, for the quarter ended December 31, 2018 and year to date from April 01, 2018 to December 31, 2018 (the “Statement”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Regulation’), read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016 (‘the Circular’).

2. The preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015, as amended, read with the Circular is the responsibility of the Company's management and has been approved by the Board of Directors of the Company. Our responsibility is to issue express a conclusion on the Statement based on our review.

3. We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

4. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement of unaudited consolidated Ind AS financial results prepared in accordance with recognition and measurement principles laid down in the applicable Indian Accounting Standards specified under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of the Regulation, read with the Circular, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

 

per S Balasubrahmanyam Partner Membership No.: 053315 Place: Hyderabad Date: February 01, 2019  

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office : 22, Camac Street, Block 'B', 3rd Floor, Kolkata-700 016

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2018

								All amounts in Indian Rupees millions
		Quarter ended									Nine months ended						Year ended
Sl.		31.12.2018			30.09.2018			31.12.2017			31.12.2018			31.12.2017			31.03.2018
No.	Particulars	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		37,861			36,866			36,164			111,234			103,558			138,022
	b) License fees and service income		639			1,112			1,896			2,451			3,121			4,006
	c) Other operating income		146			197			281			501			592			782
	Total revenue from operations		38,646			38,175			38,341			114,186			107,271			142,810
2	Other income		1,023			1,282			430			2,542			1,103			1,552
3	Total income (1 + 2)		39,669			39,457			38,771			116,728			108,374			144,362
4	Expenses
	a) Cost of materials consumed		7,354			6,786			6,378			21,534			19,004			26,309
	b) Purchase of stock-in-trade		5,418			4,567			3,906			14,415			10,013			14,501
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		(1,014	)		(836	)		83			(3,625	)		1,311			(415	)
	d) Employee benefits expense		8,054			8,722			8,181			25,147			24,144			32,149
	e) Depreciation and amortisation expense		2,903			2,786			2,715			8,476			8,009			10,772
	f) Finance costs		241			208			172			644			610			788
	g) Selling and other expenses		10,788			11,343			11,866			33,122			34,923			46,754
	Total expenses		33,744			33,576			33,301			99,713			98,014			130,858
5	Profit before tax (3 - 4)		5,925			5,881			5,470			17,015			10,360			13,504
6	Tax expense:
	a) Current tax		610			1,288			653			3,294			1,569			1,753
	b) Deferred tax		401			(481	)		1,875			(944	)		2,319			2,627
7	Net profit for the period before share of profit of equity accounted investees (5 - 6)		4,914			5,074			2,942			14,665			6,472			9,124
8	Share of profit of equity accounted investees, net of tax		89			109			85			281			275			344
9	Net profit after taxes and share of profit of associates (7 + 8)		5,003			5,183			3,027			14,946			6,747			9,468
10	Other comprehensive income
	a) (i) Items that will not be reclassified subsequently to profit or loss		(438	)		66			(1,430	)		(886	)		(3,704	)		(3,710	)
	(ii) Income tax relating to items that will not be reclassified subsequently to profit or loss		103			(16	)		331			227			875			874
	b) (i) Items that will be reclassified subsequently to profit or loss		199			(60	)		(103	)		(207	)		(209	)		(23	)
	(ii) Income tax relating to items that will be reclassified subsequently to profit or loss		(230	)		113			16			1			4			23
	Total other comprehensive income		(366	)		103			(1,186	)		(865	)		(3,034	)		(2,836	)
11	Total comprehensive income (9 + 10)		4,637			5,286			1,841			14,081			3,713			6,632
12	Paid-up equity share capital (face value Rs. 5/- each)		830			830			829			830			829			830
13	Other equity																	124,886
14	Earnings per equity share (face value Rs. 5/- each)
	Basic		30.16			31.22			18.25			90.07			40.69			57.08
	Diluted		30.12			31.18			18.22			89.96			40.61			56.96
			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)

See accompanying notes to the financial results

Segment Information						All amounts in Indian Rupees millions
		Quarter ended						Nine months ended				Year ended
		31.12.2018		30.09.2018		31.12.2017		31.12.2018		31.12.2017		31.03.2018
Sl. No.	Particulars	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue :
	a) Pharmaceutical Services and Active Ingredients		7,355		7,787		6,895		22,162		20,077		27,930
	b) Global Generics		31,369		30,609		30,270		92,641		86,424		114,282
	c) Proprietary Products		735		772		2,136		2,237		3,403		4,250
	d) Others		482		635		389		1,555		1,411		1,840
	Total		39,941		39,803		39,690		118,595		111,315		148,302
	Less: Inter-segment revenue		1,295		1,628		1,349		4,409		4,044		5,492
	Total revenue from operations		38,646		38,175		38,341		114,186		107,271		142,810
2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		1,833		1,705		1,302		4,730		2,960		4,477
	b) Global Generics		18,049		18,111		17,912		54,916		50,684		67,190
	c) Proprietary Products		628		653		2,022		1,875		3,073		3,799
	d) Others		249		436		181		878		716		869
	Total		20,759		20,905		21,417		62,399		57,433		76,335
	Less: Selling and other un-allocable expenditure / (income), net		14,834		15,024		15,947		45,384		47,073		62,831
	Total profit before tax		5,925		5,881		5,470		17,015		10,360		13,504

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

Segmental Capital employed

As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.

Notes:

¹ These results have been prepared in accordance with the Ind AS notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

² Post implementation of Goods and Services Tax (“GST”) in India with effect from 1 July 2017, revenues are disclosed net of GST. Revenues for the period prior to 1 July 2017 included excise duty which is now subsumed in the GST. Accordingly, revenues for the nine months ended 31 December 2017 and year ended 31 March 2018 are not comparable with those of the other periods presented.

³ The Company received a warning letter, dated 5 November 2015 from the U.S. FDA, regarding deviations with current Good Manufacturing Practices at its API manufacturing facilities in Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as regarding violations at its oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. The Company submitted its response to the warning letter on 7 December 2015. The Company has provided an update to the U.S. FDA on the progress of remediation in January 2016, March 2016, May 2016 and August 2016. The U.S. FDA completed the reinspection of the aforementioned facilities in March and April 2017. The Company has responded to the observations identified by the U.S. FDA. The Company received Establishment Inspection Report ("EIR") from the U.S. FDA for API manufacturing facility at Miryalaguda in June 2017 which indicates that the audit is closed. With regard to the Oncology manufacturing facility at Duvvada and API manufacturing facility at Srikakulam, the Company received EIRs from the U.S. FDA in November 2017 and February 2018, respectively, which indicates that the status remains unchanged. In June 2018, the Company requested the U.S. FDA to schedule an inspection of the oncology formulation manufacturing facility at Duvvada. In October 2018, the re-inspection was completed and the U.S.FDA issued Form 483 with eight observations. The Company responded to these observations identified by U.S. FDA in November 2018 and awaiting to hear from agency. With respect to API manufacturing facility at Srikakulam, the Company was asked to carry out certain detailed investigations and analyses. In response, the Company submitted the results of the investigations and analyses in October 2018. As part of the review of the response by the U.S. FDA, certain additional follow on queries have been received by the Company. The Company responded to all queries in January 2019 to U.S. FDA and awaiting re-inspection by the U.S. FDA.

⁴ Ind AS 115, Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after 1 April 2018, replaces existing revenue recognition requirements. Under the modified retrospective approach, there were no significant adjustments required to the retained earnings as at 1 April 2018. Also, the application of Ind AS 115 did not have any significant impact on recognition and measurement of revenue and related items in the financial results of the Company.

⁵ During the three months ended 31 December 2018, the Company sold one of its API manufacturing business units located in Jeedimetla, Hyderabad to Therapiva Private Limited.  This sale was done by way of slump sale including all related property, plant and equipment, current assets, current liabilities, and transfer of employees. An amount of Rs. 423 million representing the profit on sale of such business unit was included under the head “other income”.

⁶ "Other income" for the three months ended 30 September 2018 and nine months ended 31 December 2018 includes gain of Rs. 460 million on account of sale of rights relating to an intangible asset forming part of Company’s Proprietary Products Segment and sale of membership interest in Dr. Reddy’s Laboratories Tennessee, LLC.

⁷ In the United States of America, The Tax Cuts and Jobs Act of 2017 was approved and enacted in to law on 22 December 2017 which resulted in a reduction of the federal income tax rate from 35% to 21%.
Consequent to this enactment, the Company has re-measured its U.S. deferred tax assets and liabilities based on the new tax law and this resulted in a charge of Rs. 873 million for the three months ended 31 December 2017.

⁸ The unaudited results have been reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 1 February 2019.

⁹ The results for the quarter and nine months ended 31 December 2018 were subject to a "Limited Review" by the Statutory Auditors of the Company. An unqualified report has been issued by them thereon.

By order of the Board

For Dr. Reddy's Laboratories Limited 

Place: Hyderabad	G V Prasad
Date: 1 February 2019	Co-Chairman & Chief Executive Officer

EX-99.4

Exhibit 99.4

  Oval Office, 18, iLabs Centre Hitech City, Madhapur Hyderabad - 500 081, India   Tel : +91 40 6141 6000

Limited Review Report –Standalone Financial Results

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

1. We have reviewed the accompanying statement of unaudited standalone Ind AS financial results of Dr. Reddy’s Laboratories Limited (the ‘Company’) for the quarter ended December 31, 2018 and year to date from April 01, 2018 to December 31, 2018 (the “Statement”) attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Regulation’), read with SEBI Circular No. CIR/CFD/FAC/62/2016 dated July 5, 2016 (‘the Circular’).

2. The preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS) 34 “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015, as amended, read with the Circular is the responsibility of the Company's management and has been approved by the Board of Directors of the Company. Our responsibility is to express a conclusion on the Statement based on our review.

3. We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion.

4. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles laid down in the applicable Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of the Regulation, read with the Circular, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004

 

per S Balasubrahmanyam Partner Membership No.: 053315  Place: Hyderabad Date: February 01, 2019  

S.R. Batliboi & Associates LLP, a Limited Liability Partnership with LLP Identity No. AAB-4295

Regd. Office : 22, Camac Street, Block 'B', 3rd Floor, Kolkata-700 016

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31 DECEMBER 2018

		All amounts in Indian Rupees millions
		Quarter ended									Nine months ended						Year ended
Sl.		31.12.2018			30.09.2018			31.12.2017			31.12.2018			31.12.2017			31.03.2018
No.	Particulars	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		27,037			25,725			24,873			78,583			67,974			92,468
	b) License fees and service income		145			436			140			799			286			558
	c) Other operating income		135			149			217			421			410			567
	Total revenue from operations		27,317			26,310			25,230			79,803			68,670			93,593
2	Other income		928			748			477			1,657			1,309			2,040
	Total income (1 + 2)		28,245			27,058			25,707			81,460			69,979			95,633
3	Expenses
	a) Cost of materials consumed		5,461			4,799			4,968			15,799			14,370			20,110
	b) Purchase of stock-in-trade		2,575			1,935			1,686			6,321			4,570			6,716
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		(251	)		327			(185	)		(403	)		(127	)		(516	)
	d) Employee benefits expense		4,719			5,030			4,767			14,419			13,797			18,430
	e) Depreciation and amortisation expense		1,935			1,908			1,983			5,764			5,841			7,741
	f) Finance costs		158			158			133			481			487			628
	g) Selling and other expenses		7,944			8,573			8,639			25,036			26,025			35,554
	Total expenses		22,541			22,730			21,991			67,417			64,963			88,663
4	Profit before tax (1 + 2 - 3)		5,704			4,328			3,716			14,043			5,016			6,970
5	Tax expense
	a) Current tax		434			942			598			2,161			924			1,381
	b) Deferred tax		1,276			(76	)		149			1,137			189			(80	)
6	Net profit for the period / year (4 - 5)		3,994			3,462			2,969			10,745			3,903			5,669
7	Other comprehensive income
	a) (i) Items that will not be reclassified to profit or loss		4			8			7			13			2			43
	(ii) Income tax relating to items that will not be reclassified to profit or loss		-			(3	)		-			(3	)		-			(16	)
	b) (i) Items that will be reclassified to profit or loss		669			(327	)		108			41			76			(133	)
	(ii) Income tax relating to items that will be reclassified to profit or loss		(234	)		114			(37	)		(14	)		(26	)		46
	Total other comprehensive income		439			(208	)		78			37			52			(60	)
8	Total comprehensive income (6 + 7)		4,433			3,254			3,047			10,782			3,955			5,609
9	Paid-up equity share capital (face value Rs. 5/- each)		830			830			829			830			829			830
10	Other equity																	117,248
11	Earnings per equity share (face value Rs. 5/- each)
	Basic		24.08			20.86			17.90			64.75			23.54			34.19
	Diluted		24.05			20.83			17.87			64.67			23.49			34.12
			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)			(Not annualised)

See accompanying notes to the financial results.

Segment information											All amounts in Indian Rupees millions
		Quarter ended									Nine months ended						Year ended
Sl.		31.12.2018			30.09.2018			31.12.2017			31.12.2018			31.12.2017			31.03.2018
No.	Particulars	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)
	Segment wise revenue and results
1	Segment revenue
	a) Pharmaceutical Services and Active Ingredients		6,661			6,548			5,605			18,861			16,473			22,741
	b) Global Generics		21,924			21,294			20,929			65,197			56,082			76,150
	c) Proprietary Products		27			96			26			154			82			109
	Total		28,612			27,938			26,560			84,212			72,637			99,000
	Less: Inter-segment revenue		1,295			1,628			1,330			4,409			3,967			5,407
	Total revenue from operations		27,317			26,310			25,230			79,803			68,670			93,593
2	Segment results
	Profit / (loss) before tax and interest from each segment
	a) Pharmaceutical Services and Active Ingredients		1,230			968			56			2,124			(386	)		(3	)
	b) Global Generics		3,457			6,690			3,828			16,830			8,474			11,956
	c) Proprietary Products		(395	)		(609	)		(701	)		(1,633	)		(2,623	)		(3,464	)
	Total		4,292			7,049			3,183			17,321			5,465			8,489
	Less:   (i) Finance costs		158			158			133			481			487			628
	(ii) Other un-allocable expenditure / (income), net		(1,570	)		2,563			(666	)		2,797			(38	)		891
	Total profit before tax		5,704			4,328			3,716			14,043			5,016			6,970

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

Segmental capital employed

As certain assets of the Company including manufacturing facilities, development facilities and treasury assets and liabilities are often deployed interchangeably across segments, it is impractical to allocate these assets and liabilities to each segment. Hence, the details for capital employed have not been disclosed in the above table.

Notes:

¹ These results have been prepared in accordance with the Ind AS notified under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

² Post implementation of Goods and Services Tax (“GST”) in India with effect from 1 July 2017, revenues are disclosed net of GST. Revenues for the period prior to 1 July 2017 included excise duty which is now subsumed in the GST. Accordingly, revenues for the nine months ended 31 December 2017 and year ended 31 March 2018 are not comparable with those of the other periods presented.

³ The Company received a warning letter, dated 5 November 2015 from the U.S. FDA, regarding deviations with current Good Manufacturing Practices at its API manufacturing facilities in Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as regarding violations at its oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. The Company submitted its response to the warning letter on 7 December 2015. The Company has provided an update to the U.S. FDA on the progress of remediation in January 2016, March 2016, May 2016 and August 2016. The U.S. FDA completed the reinspection of the aforementioned facilities in March and April 2017. The Company has responded to the observations identified by the U.S. FDA. The Company received Establishment Inspection Report ("EIR") from the U.S. FDA for API manufacturing facility at Miryalaguda in June 2017 which indicates that the audit is closed. With regard to the Oncology manufacturing facility at Duvvada and API manufacturing facility at Srikakulam, the Company received EIRs from the U.S. FDA in November 2017 and February 2018, respectively, which indicates that the status remains unchanged. In June 2018, the Company requested the U.S. FDA to schedule an inspection of the oncology formulation manufacturing facility at Duvvada. In October 2018, the re-inspection was completed and the U.S.FDA issued Form 483 with eight observations. The Company responded to these observations identified by U.S. FDA in November 2018 and awaiting to hear from agency. With respect to API manufacturing facility at Srikakulam, the Company was asked to carry out certain detailed investigations and analyses. In response, the Company submitted the results of the investigations and analyses in October 2018. As part of the review of the response by the U.S. FDA, certain additional follow on queries have been received by the Company. The Company responded to all queries in January 2019 to U.S. FDA and awaiting re-inspection by the U.S. FDA.

⁴ Ind AS 115, Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after 1 April 2018, replaces existing revenue recognition requirements. Under the modified retrospective approach, there were no significant adjustments required to the retained earnings as at 1 April 2018. Also, the application of Ind AS 115 did not have any significant impact on recognition and measurement of revenue and related items in the financial results of the Company.

⁵ During the three months ended 31 December 2018, the Company sold one of its API manufacturing business units located in Jeedimetla, Hyderabad to Therapiva Private Limited.  This sale was done by way of slump sale including all related property, plant and equipment, current assets, current liabilities, and transfer of employees. An amount of Rs. 423 million representing the profit on sale of such business unit was included under the head “other income”.

⁶ The unaudited results were reviewed by the Audit Committee of the Board and approved by the Board of Directors of the Company at their meeting held on 1 February 2019.

⁷ The results for the quarter and nine months ended 31 December 2018 were subjected to a “Limited review” by the Statutory Auditors of the Company. An unqualified report was issued by them thereon.

By order of the Board

For Dr. Reddy's Laboratories Limited

Place: Hyderabad	G V Prasad
Date: 1 February 2019	Co-Chairman & Chief Executive Officer