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

May 2020

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 year ended March 31,2020.

On May 20, 2020, we announced our results of operations for the quarter and year ended March 31, 2020. We issued a press release announcing our results under International Financial Reporting Standards (“IFRS”), IFRS Audited Consolidated Financial Results, Ind AS Audited Consolidated Financial Results with audit report and Ind AS Audited Standalone Financial Results with audit report for the quarter and year ended March 31, 2020, 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 Audited Consolidated Financial Results, Ind AS Audited Consolidated Financial Results and Ind AS Audited Standalone Financial Results for the quarter and year ended March 31, 2020.

Exhibits

Exhibit Number	Description of Exhibits
99.1	Press Release, “Dr. Reddy’s Q4 and FY20 Financial Results”, May 20, 2020
99.2	IFRS Audited Consolidated Financial Results for the quarter and year ended March 31, 2020
99.3	Ind AS Audited Consolidated Financial Results for the quarter and year ended March 31, 2020
99.4	Ind AS Audited Standalone Financial Results for the quarter and year ended March 31, 2020

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:  May 20, 2020	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, Hyderabad - 500034. Telangana, India.	AMIT AGARWAL amita@drreddys.com   (Ph: +91-40-4900 2135)	APARNA TEKURI aparnatekuri@drreddys.com (Ph: +91-40-4900 2446)

Dr. Reddy’s Q4 & FY20 Financial Results

Hyderabad, India, May 20, 2020: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | 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 Summary	FY20 Performance Summary
Rs. 4,432 Cr Revenue [Up: 1% QoQ; Up: 10% YoY] 51.5% Gross Margin [Q3 FY20: 54.1%; Q4 FY19: 52.4%] Rs. 1,218 Cr SGNA expenses [Down: 4% QoQ, Down: 1% YoY] Rs. 419 Cr R&D expenses [9.5% of Revenues] Rs. 1,001 Cr EBITDA [Down: 7% QoQ; Up: 14% YoY] Rs. 714 Cr Profit before Tax [16.1% of Revenues]	Rs. 17,460 Cr Revenue [Up: 13% YoY] 53.8% Gross Margin [FY19: 54.2%] Rs. 5,013 Cr SGNA expenses [Up: 3% YoY] Rs. 1,541 Cr R&D expenses [8.8% of Revenues] Rs. 4,643 Cr EBITDA [Up: 36% YoY] Rs. 1,803 Cr * Profit before Tax [10.3% of Revenues]

* Excluding intangibles impairment of Rs. 1,677 Cr; Adjusted Profit before tax is Rs. 3,480 Cr (55% growth YoY)

 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 strong financial performance across our businesses”.

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 75.39

Dr. Reddy’s Laboratories Limited and Subsidiaries

Consolidated Income Statement

	Q4 FY20						Q4 FY19						YoY			Q3 FY20						QoQ
Particulars	($)			(Rs.)			($)			(Rs.)			Gr %			($)			(Rs.)			Gr%
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 expenses		162			12,177			163			12,294			(1	)		168			12,670			(4	)
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 investees		(1	)		(105	)		(2	)		(157	)		(33	)		(2	)		(176	)		(40	)
Profit before income tax		95			7,142			78			5,851			22			(70	)		(5,274	)		(235	)
Income tax		(7	)		(500	)		20			1,507			(133	)		6			423			(218	)
Profit for the period		101			7,642			58			4,344			76			(76	)		(5,697	)		(234	)
Diluted Earnings Per Share (EPS)		0.61			46.01			0.35			26.16			76			(0.46	)		(34.37	)		(234	)

As % to Revenues	Q4 FY20		Q4 FY19		Q3 FY20
Gross Profit		51.5		52.4		54.1
SG&A		27.5		30.6		28.9
R&D		9.5		9.1		9.0
EBITDA		22.6		22.0		24.5
PBT		16.1		14.6		(12.0	)
PAT		17.2		10.8		(13.0	)

EBITDA Computation

	Q4 FY20						Q4 FY19						Q3 FY20
Particulars	($)			(Rs.)			($)			(Rs.)			($)			(Rs.)
Profit before Income Tax		95			7,142			78			5,851			(70	)		(5,274	)
Interest (income) net*		(1	)		(100	)		(3	)		(215	)		(4	)		(274	)
Depreciation		28			2,080			28			2,136			28			2,130
Amortization		12			885			13			965			13			955
Impairment		0			7			1			82			175			13,200
EBITDA		133			10,013			117			8,819			142			10,737

* Includes income from Investments

2

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 75.39

Revenue Mix by Segment

	Q4 FY20		Q4 FY19		YoY			Q3 FY20		QoQ
Particulars	(Rs.)		(Rs.)		Growth %			(Rs.)		Growth %
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 Active Ingredients (PSAI)		7,195		6,765		6			6,906		4
Proprietary Products & Others		725		3,017		(76	)		1,005		(28	)
Total		44,318		40,166		10			43,838		1

3

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 75.39

Dr. Reddy’s Laboratories Limited and Subsidiaries

Consolidated Income Statement

	FY 20									FY 19									Growth
Particulars	($)			(Rs.)			%			($)			(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
Gross Profit		1,247			94,009			53.8			1,107			83,430			54.2			13
Operating Expenses
Selling, General & Administrative expenses		665			50,129			28.7			646			48,680			31.6			3
Research and Development expenses		204			15,410			8.8			207			15,607			10.1			(1	)
Impairment of non-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
Profit before income tax		239			18,032			10.3			298			22,443			14.6			(20	)
Income tax		(19	)		(1,466	)		(0.8	)		48			3,648			2.4			(140	)
Profit for the period		259			19,498			11.2			249			18,795			12.2			4
Diluted Earnings Per Share (EPS)		1.56			117.40						1.50			113.09						4

EBITDA Computation

	FY 20						FY 19
Particulars	($)			(Rs.)			($)			(Rs.)
Profit before Income Tax		239			18,032			298			22,443
Interest (income) net*		(11	)		(839	)		(9	)		(654	)
Depreciation		115			8,640			111			8,362
Amortization		51			3,832			51			3,828
Impairment		222			16,767			3			210
EBITDA		616			46,431			453			34,189
EBITDA (% to revenues)					26.6						22.2

* Includes income from Investments

Key Balance Sheet Items

	As on 31st Mar, 2020				As on 31st Dec 2019				As on 31st Mar 2019
Particulars	($)		(Rs.)		($)		(Rs.)		($)		(Rs.)
Cash and cash equivalents and other investments		346		26,068		271		20,457		339		25,570
Trade receivables (current & non-current)		690		52,015		611		46,095		530		39,982
Inventories		465		35,066		501		37,746		445		33,579
Property, plant and equipment		694		52,332		699		52,709		717		54,088
Goodwill and Other Intangible assets		420		31,653		409		30,847		640		48,269
Loans and borrowings (current & non-current)		293		22,102		216		16,320		509		38,381
Trade payables		221		16,659		236		17,810		193		14,553
Equity		2,056		1,54,988		1,972		1,48,672		1,860		1,40,197

4

All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of I USD = Rs. 75.39

Revenue Mix by Segment [Year on year]

	FY 20						FY 19						Growth
Particulars	($)		(Rs.)		%		($)		(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				49
India				28,946						26,179				11
Emerging Markets				32,811						28,894				14
Pharmaceutical Services and Active Ingredients (PSAI)		342		25,747		14.7		320		24,140		15.7		7
Proprietary Products & Others		142		10,730		6.1		90		6,808		4.4		58
Total		2,316		1,74,600		100.0		2,041		1,53,851		100.0		13

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 and 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 to COVID-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 31^st March 2020, cumulatively 99 generic filings are pending for approval with the USFDA (97 ANDAs and 2 NDAs under 505(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 by COVID-19 lock-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 and 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 territory rights for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA TM (sumatriptan nasal spray) 10 mg, of our Neurology franchise.

· Revenues for Q4 are Rs. 2 million.

7

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

- QoQ basis 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% and QoQ decline 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% | 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 IST, 07:45 am EDT, May 20, 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:	+91 22 6280 1219
Secondary number:	+91 22 7115 8120
Local Access number:	+91 70456 71221

 (Available all over India)

International Toll Free Number	USA	1 866 746 2133
	UK	0 808 101 1573
	Singapore	800 101 2045
	Hong Kong	800 964 448

Playback of call:	+91 22 7194 5757, +91 22 6663 5757
Conference ID:	74886

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

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, (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

EX-99.2

Exhibit 99.2

Audited consolidated financial results of 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)

											All amounts in Indian Rupees millions
		Quarter ended									Year ended
Sl. No.	Particulars	31.03.2020			31.12.2019			31.03.2019			31.03.2020			31.03.2019
		(Audited)			(Unaudited)			(Audited)			(Audited)			(Audited)
1	Revenues		44,318			43,838			40,166			174,600			153,851
2	Cost of revenues		21,510			20,116			19,113			80,591			70,421
3	Gross profit (1 - 2)		22,808			23,722			21,053			94,009			83,430
4	Selling, general and administrative expenses		12,177			12,670			12,294			50,129			48,680
5	Research and development expenses		4,190			3,949			3,662			15,410			15,607
6	Impairment of non current assets		7			13,200			82			16,767			210
7	Other income, net		(168	)		(228	)		(330	)		(4,290	)		(1,955	)
	Total operating expenses		16,206			29,591			15,708			78,016			62,542
8	Results from operating activities [(3) - (4 + 5 + 6 + 7)]		6,602			(5,869	)		5,345			15,993			20,888
	Finance income		665			571			594			2,461			2,280
	Finance expense		(230	)		(152	)		(245	)		(983	)		(1,163	)
9	Finance (expense)/income, net		435			419			349			1,478			1,117
10	Share of profit of equity accounted investees, net of tax		105			176			157			561			438
11	Profit / (loss) before tax (8 + 9 + 10)		7,142			(5,274	)		5,851			18,032			22,443
12	Tax expense/(benefit), net		(500	)		423			1,507			(1,466	)		3,648
13	Profit / (loss) for the period / year (11 -12)		7,642			(5,697	)		4,344			19,498			18,795
14	Earnings per share:
	Basic earnings per share of Rs.5/- each		46.10			(34.37	)		26.20			117.63			113.28
	Diluted earnings per share of Rs.5/- each		46.01			(34.37	)		26.16			117.40			113.09
			(Not annualised)			(Not annualised)			(Not annualised)

Segment reporting (consolidated)

										All amounts in Indian Rupees millions
		Quarter ended								Year ended
Sl. No.	Particulars	31.03.2020			31.12.2019			31.03.2019		31.03.2020		31.03.2019
		(Audited)			(Unaudited)			(Audited)		(Audited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue:
	a) Pharmaceutical Services and Active Ingredients		8,673			8,549			8,141		31,657		29,925
	b) Global Generics		36,398			35,927			30,384		138,123		122,903
	c) Proprietary Products		2			241			2,513		7,949		4,750
	d) Others		723			764			504		2,781		2,058
	Total		45,796			45,481			41,542		180,510		159,636
	Less: Inter-segment revenues		1,478			1,643			1,376		5,910		5,785
	Net revenue from operations		44,318			43,838			40,166		174,600		153,851
2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		2,043			2,072			1,420		6,190		6,128
	b) Global Generics		20,332			20,910			17,008		78,449		71,924
	c) Proprietary Products		(7	)		246			2,307		7,744		4,182
	d) Others		440			494			318		1,626		1,196
	Total		22,808			23,722			21,053		94,009		83,430
	Less: Selling and other un-allocable expenditure, net of other income		15,666			28,996			15,202		75,977		60,987
	Total profit / (loss) before tax		7,142			(5,274	)		5,851		18,032		22,443

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

Notes:

1 The audited results have been reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Directors of the Company at their meeting held on 20 May 2020. The above financial results have been prepared in accordance with International Financial Reporting Standards and its interpretations (IFRS), as issued by the International Accounting Standards Board (IASB).

2 Effective 1 April 2019, the Company adopted IFRS 16, Leases, using the modified retrospective approach. IFRS 16 brings most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Upon implementation of IFRS 16, majority of leases for which the company is the lessee 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 of Rs. 1,335 million and right-of-use assets of Rs. 1,153 million (after adjustments of Rs. 182 million towards lease incentives and other items related to the lease agreement as at 31 March 2019).

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. Of these three manufacturing 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 the audit is closed. With respect to API 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 EIR from the U.S. FDA, for the API manufacturing facility at Srikakulam, indicating closure of the audit and the inspection classification of this facility is determined as "Voluntary Action Indicated" (VAI). With this, all facilities under warning letter are now determined as VAI.

4 "Revenues" for the year ended 31 March 2020 includes an amount of Rs. 7,486 million (U.S.$108.7 million) towards license fee for selling US and select territory rights for ZEMBRACE^® SYMTOUCH^® (sumatriptan injection) 3 mg and TOSYMRA^TM (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.

5 "Other income, net" includes an amount of Rs. 3,457 millions received from Celgene during the quarter ended 30 June 2019, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

6 Impairment of intangible 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 impairment of gNuvaring and the balance of Rs. 2,063 million is towards other product related intangibles.

Impairment of gNuvaring

There were significant changes to the generics market of Ethinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to Nuvaring®), one of the 8 ANDAs acquired from Teva in June 2016, with the launch of a generic and authorised generic versions of the product in the month of December 2019. Due to these adverse market conditions, the Company recorded an impairment loss of Rs.11,137 million during the quarter ended 31 December 2019. The carrying value of the asset after the impairment was Rs. 3,084 million as at 31 December 2019. The said impairment 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 forming part of the Company's Global Generics and Proprietary products segments, the Company determined 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 impairment loss for the quarter ended 31 December 2019.

During the quarter ended 30 September 2019

Consequent to the adverse market conditions with respect to certain of the Company’s products forming part of the Global Generics segment, the Company assessed the recoverable amount of three product related intangibles (viz., ramelteon, tobramycin and imiquimod) and recognised an amount of Rs. 3,551 million as impairment charge during the quarter ended 30 September 2019. The said impairment charge is recognised under the head “impairment of non-current assets”.

7 During the quarter ended 30 September 2019, the Government of India promulgated the Taxation Laws (Amendment) Ordinance 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 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 group companies. The restructuring activity is expected to be completed by the quarter ended 30 June 2020.

8 On 15 May 2020, the Company entered into a Stipulation and Agreement of Settlement with Lead Plaintiff the Public Employees’ Retirement System of Mississippi in the putative securities class action filed against the Company in the United States District Court for the District of New Jersey. As consideration for the settlement of the class action, the Company has agreed to pay Rs.681 million (U.S.$9 million). Subject to the terms of the Stipulation, the settlement resolves the remainder of the litigation. As the Company is adequately insured with respect to the aforesaid liability, the settlement did not have any impact on the Company’s financial results for the year ended 31 March 2020. Amount payable to the plaintiff on account of the settlement and that receivable from the insurer have been presented under “other current assets” and “other current liabilities”, respectively in the consolidated statement of financial position 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 for full details of the settlement.

9 During the quarter ended 31 March 2019, the Company entered into agreement with Encore Dermatology, Inc. (“Encore”) for sale and assignment of U.S. rights relating to three of its dermatology brands. As all the performance obligations are satisfied by 31 March 2019, the Company recognised Rs.1,807 million as revenue and Rs. 159 million representing the profit on sale of intangible assets after adjusting the associated costs.

10 "Other income, net" for the year ended 31 March 2019 also includes gain of:

-Rs. 423 million on sale of API manufacturing business unit located in Jeedimetla, Hyderabad to Therapiva Private Limited during the quarter ended 31 December 2018;and

-Rs. 423 million of profit on sale of intangible assets forming part of Company’s Proprietary Products Segment during the quarter 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 of prudence 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 outbreak continues to evolve, the Company will continue to closely monitor any material changes to future economic conditions.

12 Consolidated statements of financial position

	All amounts in Indian Rupees millions
	As at			As at
Particulars	31.03.2020			31.03.2019
	(Audited)			(Audited)
ASSETS
Current assets
Cash and cash equivalents		2,053			2,228
Other investments		23,687			22,529
Trade and other receivables		50,278			39,869
Inventories		35,066			33,579
Derivative financial instruments		1,105			360
Current tax assets		4,379			3,400
Other current assets		13,802			12,536
Total current assets		130,370			114,501
Non-current assets
Property, plant and equipment		52,332			54,088
Goodwill		3,994			3,902
Other intangible assets		27,659			44,367
Trade and other receivables		1,737			113
Investment in equity accounted investees		2,763			2,529
Other investments		328			813
Deferred tax assets		12,214			4,168
Other non-current assets		844			946
Total non-current assets		101,871			110,926
Total assets		232,241			225,427
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		16,659			14,553
Short-term borrowings		16,441			12,125
Long-term borrowings, current portion		4,266			4,256
Provisions		3,800			4,166
Current tax liabilities		573			181
Derivative financial instruments		1,602			68
Bank overdraft		91			-
Other current liabilities		29,382			24,351
Total current liabilities		72,814			59,700
Non-current liabilities
Long-term borrowings, excluding current portion		1,304			22,000
Deferred tax liabilities		275			610
Provisions		54			52
Other non-current liabilities		2,806			2,868
Total non-current liabilities		4,439			25,530
Total liabilities		77,253			85,230
Equity
Share capital		831			830
Treasury shares		(1,006	)		(535	)
Share premium		8,495			8,211
Share based payment reserve		1,233			990
Capital redemption reserve		173			173
Retained earnings		144,247			128,646
Other components of equity		1,015			1,882
Total equity		154,988			140,197
Total liabilities and equity		232,241			225,427

13 Consolidated statements of cash flows

	All amounts in Indian Rupees millions
	Year ended			Year ended
Particulars	31.03.2020			31.03.2019
	(Audited)			(Audited)
Cash generated from operating activities:
Profit for the period		19,498			18,795
Adjustments for:
Income tax expense/(benefit)		(1,466	)		3,648
Fair value changes and profit on sale of mutual funds		(929	)		(773	)
Depreciation and amortization		12,472			12,190
Impairment of non-current assets		16,767			210
Allowance for credit losses and doubtful trade receivables and other advances		190			420
(Gain)/loss on sale or de-recognition of property, plant and equipment and other intangible assets, net		68			(1,264	)
Share of profit of equity accounted investees		(561	)		(438	)
Foreign exchange (gain)/loss, net		(2,168	)		(1,588	)
Interest (income)/expense, net		95			119
Equity settled share-based payment expense		521			389
Dividends income		(5	)		-
Changes in operating assets and liabilities:
Trade and other receivables		(12,446	)		1,797
Inventories		(1,487	)		(4,480	)
Trade and other payables		1,576			398
Other assets and other liabilities, net		4,821			4,122
Cash generated from operations		36,946			33,545
Income tax paid, net		(7,105	)		(4,841	)
Net cash generated from operating activities		29,841			28,704
Cash flows from/(used in) investing activities:
Expenditure on property, plant and equipment		(4,846	)		(6,955	)
Proceeds from sale of property, plant and equipment		131			1,265
Expenditures on other intangible assets		(1,269	)		(1,421	)
Proceeds from sale of other intangible assets		259			885
Purchase of other investments		(111,918	)		(78,573	)
Proceeds from sale of other investments		111,704			76,291
Dividends received from equity accounted investees		392			-
Interest and dividend received		624			781
Net cash used in investing activities		(4,923	)		(7,727	)
Cash flows from/(used in) financing activities:
Proceeds from issuance of equity shares (including treasury shares)		4			-	*
Purchase of treasury shares		(474	)		(535	)
Proceeds from/(repayment of) short term borrowings, net		4,235			(15,126	)
Repayment of long term borrowings, net		(22,918	)		-
Payment of principal portion of lease liabilities		(482	)		(56	)
Dividend paid (including corporate dividend tax)		(3,916	)		(4,002	)
Interest paid		(1,608	)		(1,607	)
Net cash used in financing activities		(25,159	)		(21,326	)
Net increase / (decrease) in cash and cash equivalents		(241	)		(349	)
Effect of exchange rate changes on cash and cash equivalents		(25	)		35
Cash and cash equivalents at the beginning of the period		2,228			2,542
Cash and cash equivalents at the end of the period**		1,962			2,228

*Rounded off to millions

**Adjusted for bank-overdraft of Rs. 91 million for the year ended 31 March 2020.

14 The audited results were reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Directors of the Company at their meeting held on 20 May 2020.

15 The Board of Directors, at their meeting held on 20 May 2020, have recommended a final dividend of Rs. 25 per share subject to approval of shareholders.

16 The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit.

17 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 of the Board
	For Dr. Reddy's Laboratories Limited
Place: Hyderabad	G V Prasad
Date:  20 May 2020	Co-Chairman & Managing Director

EX-99.3

Exhibit 99.3

S.R. Batliboi & Associates LLP Chartered Accountants 6th Floor – “A” Block Tidel Park, No. 4, Rajiv Gandhi Salai Taramani, Chennai – 600 113, India Tel: + 91 44 6117 900

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 of quarterly 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“Listing Regulations”).

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

i. 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’s Bio-Sciences Limited

4. Dr. Reddy’s Farmaceutica Do Brasil Ltda.

5. Dr. Reddy’s Laboratories SA

6. Idea2Enterprises (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)

10. Regkinetics Services Limited (formerly Dr. Reddy’s Pharma SEZ Limited)

11. Aurigene Discovery Technologies (Malaysia) SDN BHD

12. Aurigene Discovery Technologies Inc.

13. Aurigene Pharmaceuticals Services Limited (from 16 September 2019)

14. beta Institut gemeinnützige GmbH

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

Regd. Office 22, Camac Street, Black ‘B’, 3rd floor, Kolkata 700 016

S.R. Batliboi & Associates LLP

Chartered Accountants

15. betapharm Arzneimittel GmbH

16. Chirotech Technology Limited

17. DRL Impex Limited

18. Dr. Reddy’s Laboratories (Australia) Pty. Limited

19. Dr. Reddy’s Laboratories Canada, Inc.

20. Dr. Reddy’s Laboratories Chile SPA.

21. Dr. Reddy’s Laboratories (EU) Limited

22. Dr. Reddy’s Laboratories Inc.

23. Dr. Reddy’s Laboratories International SA (merged with Dr. Reddy’s Laboratories SA w.e.f 1 January 2019)

24. Dr. Reddy’s Laboratories Japan KK

25. Dr. Reddy’s Laboratories Kazakhstan LLP

26. Dr. Reddy’s Laboratories LLC

27. Dr. Reddy’s Laboratories Louisiana LLC

28. Dr. Reddy’s Laboratories Malaysia Sdn. Bhd.

29. Dr. Reddy’s Laboratories New York, Inc.

30. Dr. Reddy’s Laboratories Philippines Inc. (from 9 May 2018)

31. Dr. Reddy’s Laboratories (Proprietary) Limited

32. Dr. Reddy’s Laboratories Romania S.R.L.

33. Dr. Reddy’s Laboratories SAS

34. Dr. Reddy’s Laboratories Taiwan Limited

35. Dr. Reddy’s Laboratories Tennessee, LLC (till 1 October 2018)

36. Dr. Reddy’s Laboratories (Thailand) Limited (from 13 June 2018)

37. Dr. Reddy’s Laboratories (UK) Limited

38. Dr. Reddy’s Research and Development B.V.

39. Dr. Reddy’s Singapore PTE Limited (liquidated during the year)

40. Dr. Reddy’s Srl

41. Dr. Reddy’s New Zealand Limited

42. Dr. Reddy’s (WUXI) Pharmaceutical Co. Limited

43. Dr. Reddy’s Venezuela, C.A.

44. Eurobridge Consulting B.V.

45. Lacock Holdings Limited

46. OOO Dr. Reddy’s Laboratories Limited

47. OOO DRS LLC

48. Promius Pharma LLC

49. Reddy Holding GmbH

50. Reddy Netherlands B.V.

51. Reddy Pharma Iberia SA

52. Reddy Pharma Italia S.R.L

53. Reddy Pharma SAS

Joint ventures

1 DRANU LLC

2 DRES Energy Private Limited

S.R. Batliboi & Associates LLP

Chartered Accountants

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

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

iii. 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 Auditing (SAs), as specified under Section 143(10) of the 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 our report. We are independent of the Group, and its joint ventures in accordance with the ‘Code of Ethics’ issued by the Institute 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 Rules thereunder, and we have fulfilled 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 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 India 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 ventures are 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 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, relevant to the preparation and presentation of the Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Statement by the Directors of the Holding Company, as aforesaid.

S.R. Batliboi & Associates LLP

Chartered Accountants

In preparing the Statement, the respective Board of Directors of the companies included in the Group and its joint ventures are 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 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 are 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 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 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.

· Conclude on the appropriateness of the Board of Directors’ 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 ability of the Group and its joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are 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 continue as a going concern.

S.R. Batliboi & Associates LLP

Chartered Accountants

· 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 of the entities within the Group of which 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 of the 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 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.

We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities Exchange Board of India under Regulation 33 (8) of the Listing Regulations, 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 and Rs 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) of Rs.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’s report on the financial statements/financial results/financial information of these entities have been furnished to us by the Management and our opinion on the Statement in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the reports of such auditors and the procedures performed by us as stated in paragraph above.

S.R. Batliboi & Associates LLP

Chartered Accountants

These subsidiaries are 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’s management has converted the financial results / financial statements of such subsidiaries located outside India from accounting principles generally 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 balancing 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

per S Balasubrahmanyam

Partner

Membership No.: 053315

UDIN: 20053315AAAAAZ6754

Chennai

May 20, 2020

Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507   Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com

DR. REDDY’S LABORATORIES LIMITED

STATEMENT OF AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 2020

											All amounts in Indian Rupees millions
Sl.		Quarter ended									Year ended
No.	Particulars	31.03.2020			31.12.2019			31.03.2019			31.03.2020			31.03.2019
		(Audited)			(Unaudited)			(Audited)			(Audited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		43,361			42,607			37,472			163,574			148,706
	b) License fees and service income		957			1,231			2,694			11,026			5,145
	c) Other operating income		171			133			130			570			631
	Total revenue from operations		44,489			43,971			40,296			175,170			154,482
2	Other income		736			673			833			6,206			3,375
3	Total income (1 + 2)		45,225			44,644			41,129			181,376			157,857
4	Expenses
	a) Cost of materials consumed		7,453			7,528			7,360			29,848			28,894
	b) Purchase of stock-in-trade		5,875			8,426			4,393			25,459			18,808
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		1,983			(1,801	)		871			237			(2,754	)
	d) Employee benefits expense		8,555			8,377			8,415			33,802			33,562
	e) Depreciation and amortisation expense		2,741			2,869			2,872			11,631			11,348
	f) Impairment of non-current assets		7			13,200			82			16,767			116
	g) Finance costs		230			152			245			983			889
	h) Selling and other expenses		11,124			11,128			10,986			44,353			44,074
	Total expenses		37,968			49,879			35,224			163,080			134,937
5	Profit / (loss) before tax and before share of equity accounted investees(3 - 4)		7,257			(5,235	)		5,905			18,296			22,920
6	Share of profit of equity accounted investees, net of tax		105			176			157			561			438
7	Profit / (loss) before tax (5+6)		7,362			(5,059	)		6,062			18,857			23,358
8	Tax expense / (benefit):
	a) Current tax		417			1,736			1,413			6,616			4,707
	b) Deferred tax		(866	)		(1,411	)		95			(8,019	)		(849	)
9	Net profit / (loss) after taxes and share of profit of associates (7 - 8)		7,811			(5,384	)		4,554			20,260			19,500
10	Other comprehensive income
	a) (i) Items that will not be reclassified subsequently to profit or loss		(326	)		(200	)		507			(412	)		(379	)
	(ii) Income tax relating to items that will not be reclassified to profit or loss		(22	)		-			(900	)		(22	)		(673	)
	b) (i) Items that will be reclassified subsequently to profit or loss		(1,011	)		606			226			(448	)		19
	(ii) Income tax relating to items that will be reclassified to profit or loss		96			48			(55	)		232			(54	)
	Total other comprehensive income		(1,263	)		454			(222	)		(650	)		(1,087	)
11	Total comprehensive income (9 + 10)		6,548			(4,930	)		4,332			19,610			18,413
12	Paid-up equity share capital (face value Rs. 5/- each)		831			831			830			831			830
13	Other equity											155,157			139,406
14	Earnings per equity share (face value Rs. 5/- each)
	Basic		47.12			(32.48	)		27.45			122.22			117.53
	Diluted		47.03			(32.48	)		27.41			121.99			117.33
			(Not annualised)			(Not annualised)			(Not annualised)
	See accompanying notes to the financial results

DR. REDDY’S LABORATORIES LIMITED

Segment Information										All amounts in Indian Rupees millions
		Quarter ended								Year ended
Sl. No.	Particulars	31.03.2020			31.12.2019			31.03.2019		31.03.2020		31.03.2019
		(Audited)			(Unaudited)			(Audited)		(Audited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue :
	a) Pharmaceutical Services and Active Ingredients		8,782			8,654			8,241		32,086		30,403
	b) Global Generics		36,460			35,956			30,415		138,264		123,056
	c) Proprietary Products		2			241			2,513		7,949		4,750
	d) Others		723			763			503		2,781		2,058
	Total		45,967			45,614			41,672		181,080		160,267
	Less: Inter-segment revenue		1,478			1,643			1,376		5,910		5,785
	Total revenue from operations		44,489			43,971			40,296		175,170		154,482
2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		2,050			2,079			1,428		6,219		6,158
	b) Global Generics		20,332			20,910			17,008		78,449		71,924
	c) Proprietary Products		(7	)		246			2,307		7,744		4,182
	d) Others		442			492			318		1,626		1,196
	Total		22,817			23,727			21,061		94,038		83,460
	Less: Selling and other un-allocable expenditure / (income), net		15,455			28,786			14,999		75,181		60,102
	Total profit / (loss) before tax		7,362			(5,059	)		6,062		18,857		23,358

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

Segmental Capital employed

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

Notes:

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

2 Effective 1 April 2019, the Company adopted Ind AS 116, Leases, using the modified retrospective approach. Ind AS 116 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 lessee 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 of Rs. 1,335 million and right-of-use assets of Rs. 1,153 million (after adjustments of Rs. 182 million towards lease incentives and other items related to the lease agreement as at 31 March 2019).

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. Of these three manufacturing 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 the audit is closed. With respect to API 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 EIR from the U.S. FDA, for the API manufacturing facility at Srikakulam, indicating closure of the audit and the inspection classification of this facility is determined as “Voluntary Action Indicated” (VAI).
With this, all facilities under warning letter are now determined 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 TOSYMRA^TM (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.

5 “Other income” includes an amount of Rs. 3,457 millions received from Celgene during the quarter ended 30 June 2019, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

6 Impairment of intangible 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 impairment of gNuvaring and the balance of Rs. 2,063 million is towards other product related intangibles.

Impairment of gNuvaring

There were significant changes to the generics market of Ethinyl estradiol / Ethenogestral vaginal ring (a generic equivalent to Nuvaring®), one of the 8 ANDAs acquired from Teva in June 2016, with the launch of a generic and authorised generic versions of the product in the month of December 2019. Due to these adverse market conditions, the Company recorded an impairment loss of Rs.11,137 million during the quarter ended 31 December 2019. The carrying value of the asset after the impairment was Rs. 3,084 million as at 31 December 2019. The said impairment 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 forming part of the Company’s Global Generics and Proprietary products segments, the Company determined 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 impairment loss for the quarter ended 31 December 2019.

During the quarter ended 30 Sepetmber 2019

Consequent to the adverse market conditions with respect to certain of the Company’s products forming part of the Global Generics segment, the Company assessed the recoverable amount of three product related intangibles (viz., ramelteon, tobramycin and imiquimod) and recognised an amount of Rs. 3,551 million as impairment charge during the quarter ended 30 September 2019. The said impairment charge is recognised under the head “impairment of non-current assets”.

7 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 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 group companies. The restructuring activity is expected to be completed by the quarter ended 30 June 2020.

 

DR. REDDY’S LABORATORIES LIMITED

8 On 15 May 2020, the Company entered into a Stipulation and Agreement of Settlement with Lead Plaintiff the Public Employees’ Retirement System of Mississippi in the putative securities class action filed against the Company in the United States District Court for the District of New Jersey. As consideration for the settlement of the class action, the Company has agreed to pay Rs.681 million (U.S.$9 million). Subject to the terms of the Stipulation, the settlement resolves the remainder of the litigation. As the Company is adequately insured with respect to the aforesaid liability, the settlement did not have any impact on the Company’s financial results for the year ended 31 March 2020. Amount payable to the plaintiff on account of the settlement and that receivable from the insurer have been presented under “other current financial assets” and “other current financial liabilities”, respectively in the consolidated 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 for full details of the settlement.

9 During the quarter ended 31 March 2019, the Company entered into agreement with Encore Dermatology, Inc. (“Encore”) for sale and assignment of U.S. rights relating to three of its dermatology brands. As all the performance obligations are satisfied by 31 March 2019, the Company recognised Rs.1,807 million as revenue and Rs. 159 million representing the profit on sale of intangible assets after adjusting the associated costs.

10 “Other income” for the year ended 31 March 2019 also includes gain of:

- Rs. 423 million on sale of API manufacturing business unit located in Jeedimetla, Hyderabad to Therapiva Private Limited during the quarter ended 31 December 2018; and

- Rs. 423 million of profit on sale of intangible assets forming part of Company’s Proprietary Products Segment during the quarter 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 of prudence 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 outbreak continues to evolve, the Company will continue to closely monitor any material changes to future economic conditions.

12 Consolidated Balance Sheet

All amounts in Indian Rupees millions
Particulars	As at		As at
	31.03.2020		31.03.2019
	(Audited)		(Audited)
ASSETS
Non-current assets
Property, plant and equipment		47,779		49,127
Capital work-in-progress		4,364		4,725
Goodwill		4,913		4,659
Other intangible assets		15,811		18,124
Intangible assets under development		10,987		24,610
Investment in equity accounted investees		2,763		2,529
Financial assets
Investments		328		813
Trade receivables		1,737		113
Other financial assets		793		731
Deferred tax assets, net		12,199		4,317
Tax assets, net		4,379		3,400
Other non-current assets		209		407
Total non-current assets		106,262		113,555
Current assets
Inventories		35,067		33,579
Financial assets
Investments		23,687		22,529
Trade receivables		50,278		39,869
Derivative instruments		1,105		360
Cash and cash equivalents		2,053		2,228
Other financial assets		3,377		2,112
Other current assets		10,424		10,424
Total current assets		125,991		111,101
TOTAL ASSETS		232,253		224,656
EQUITY AND LIABILITIES
Equity
Equity share capital		831		830
Other equity		155,157		139,406
Total equity		155,988		140,236
Liabilities
Non-current liabilities
Financial liabilities
Borrowings		1,304		22,000
Other financial liabilities		-		102
Provisions		745		793
Deferred tax liabilities, net		20		473
Other non-current liabilities		2,055		2,079
Total non-current liabilities		4,124		25,447
Current liabilities
Financial liabilities
Borrowings		16,532		12,125
Trade payables
Total outstanding dues of micro enterprises and small enterprises		55		77
Total outstanding dues of creditors other than micro enterprises and small enterprises		15,193		13,594
Derivative instruments		1,602		68
Other financial liabilities		27,006		22,670
Liabilities for current tax, net		572		181
Provisions		4,669		4,789
Other current liabilities		6,512		5,469
Total current liabilities		72,141		58,973
TOTAL EQUITY AND LIABILITIES		232,253		224,656

DR. REDDY’S LABORATORIES LIMITED

13 Consolidated statement of cashflows

	All amounts in Indian Rupees millions
Particulars	Year ended			Year ended
	31.03.2020			31.03.2019
	(Audited)			(Audited)
Cash flows from / (used in) operating activities
Profit before tax		18,857			23,358
Adjustments for:
Depreciation and amortisation expense		11,631			11,348
Share of profit of equity accounted investees		(561	)		(438	)
Impairment loss on goodwill and other intangible assets		16,767			116
Equity settled share-based payment expense		521			389
Fair value changes and profit on sale of mutual funds, net		(929	)		(773	)
Foreign exchange loss / (gain), net		(2,152	)		(1,574	)
(Gain) / loss on sale or de-recognition of property , plant and equipment and other intangible assets, net		68			(1,257	)
Interest income		(888	)		(770	)
Finance costs		983			889
Dividend income		(5	)		-
Allowance for credit loss and doubtful trade and other advances		190			420
Changes in operating assets and liabilities:
Trade receivables		(12,446	)		5,389
Inventories		(1,487	)		(4,480	)
Trade payables		1,576			398
Other assets and other liabilities, net		4,821			530
Cash generated from operations		36,946			33,545
Income tax paid, net		(7,105	)		(4,841	)
Net cash from operating activities		29,841			28,704
Cash flows from / (used in) investing activities
Proceeds from sale of property, plant and equipment		131			1,265
Proceeds from sale of other intangible assets		259			885
Expenditures on property, plant and equipment		(4,846	)		(6,955	)
Expenditures on  other intangible assets		(1,269	)		(1,421	)
Purchase of other investments		(111,918	)		(78,573	)
Proceeds from sale of other investments		111,704			76,291
Dividends received from equity accounted investees		392			-
Interest and dividend received		624			781
Net cash used in investing activities		(4,923	)		(7,727	)
Cash flows from / (used in) financing activities
Proceeds from issuance of equity shares (including treasury shares)		4			-	*
Purchase of treasury shares		(474	)		(535	)
Proceeds from / (repayment of ) short-term loans and borrowings, net		4,235			(15,126	)
Repayment of long-term loans and borrowings, net		(22,918	)		(56	)
Payment of principal portion of lease liabilities		(482	)		-
Dividends paid (including corporate dividend tax)		(3,916	)		(4,002	)
Interest paid		(1,608	)		(1,607	)
Net cash used in financing activities		(25,159	)		(21,326	)
Net increase / (decrease) in cash and cash equivalents		(241	)		(349	)
Effect of exchange rate changes on cash and cash equivalents		(25	)		35
Cash and cash equivalents at the beginning of the year		2,228			2,542
Cash and cash equivalents at the end of the year**		1,962			2,228

	*Rounded off to millions.
	**Adjusted for bank-overdraft of Rs. 91 million for the year ended 31 March 2020.
14	The audited results were reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Directors of the Company at their meeting held on 20 May 2020.

15 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.

16 The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and published year to date figures upto the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit.

17 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.

Place: Hyderabad Date: 20 May 2020 By order of the Board For Dr. Reddy’s Laboratories Limited     G V Prasad Co-Chairman & Managing Director

 

EX-99.4

Exhibit 99.4

S.R. Batliboi & Associates LLP Chartered Accountants 6th Floor – “A” Block Tidel Park, No. 4, Rajiv Gandhi Salai Taramani, Chennai – 600 113, India   Tel: + 91 44 6117 900

Independent Auditor’s Report on the Quarterly and Year to Date Audited Standalone 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 Standalone Financial 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 of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

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

i. is presented in accordance with the requirements of the Listing Regulations in this regard; and

ii. 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 comprehensive loss 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) of the 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 Standalone Financial Results” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute 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 Rules thereunder, and we have fulfilled 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 of the 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 Company and other financial information 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 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 of the 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, relevant to the preparation and presentation of the Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

Regd. Office 22, Camac Street, Black ‘B’, 3rd floor, Kolkata 700 016

S.R. Batliboi & Associates LLP

Chartered Accountants

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 assurance about 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 are 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 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 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 & Associates LLP

Chartered Accountants

· Conclude on the appropriateness of the Board of Directors’ 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 concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on 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.

· Evaluate the overall presentation, structure and content of the Statement, 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 includes the results for the quarter ended March 31, 2020 being the balancing figure 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 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

per S Balasubrahmanyam

Partner

Membership No.: 053315

UDIN: 20053315AAAAAY9936

Place: Chennai

Date: May 20,2020

Dr. Reddy’s Laboratories Ltd. 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India. CIN : L85195TG1984PLC004507   Tel :+91 40 4900 2900 Fax :+91 40 4900 2999 Email :mail@drreddys.com www.drreddys.com

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF AUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31 MARCH 2020

											All amounts in Indian Rupees millions
Sl.		Quarter ended									Year ended
No.	Particulars	31.03.2020			31.12.2019			31.03.2019			31.03.2020			31.03.2019
		(Audited)			(Unaudited)			(Audited)			(Audited)			(Audited)
1	Revenue from operations
	a) Net sales / income from operations		28,195			29,864			26,084			109,925			104,667
	b) License fees and service income		184			458			263			8,105			1,062
	c) Other operating income		138			118			105			474			526
	Total revenue from operations		28,517			30,440			26,452			118,504			106,255
2	Other income		1,274			693			727			7,432			2,384
	Total income (1 + 2)		29,791			31,133			27,179			125,936			108,639
3	Expenses
	a) Cost of materials consumed		6,543			6,730			5,233			25,565			21,032
	b) Purchase of stock-in-trade		2,261			3,461			2,365			11,172			8,686
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		672			(1,001	)		1,063			(999	)		660
	d) Employee benefits expense		5,166			5,112			4,900			20,302			19,319
	e) Depreciation and amortisation expense		1,923			1,958			2,042			7,892			7,806
	f) Finance costs		118			117			87			478			568
	g) Selling and other expenses		8,667			8,581			8,525			33,768			33,561
	Total expenses		25,350			24,958			24,215			98,178			91,632
4	Profit  before tax (1 + 2 - 3)		4,441			6,175			2,964			27,758			17,007
5	Tax expense / (benefit)
	a) Current tax		690			1,092			657			4,839			2,818
	b) Deferred tax		(1,277	)		(134	)		279			(6,458	)		1,416
6	Net profit for the period / year (4 - 5)		5,028			5,217			2,028			29,377			12,773
7	Other comprehensive income
	a)    (i) Items that will not be reclassified to profit or loss		85			4			(14	)		88			(1	)
	(ii) Income tax relating to items that will not be reclassified to profit or loss		(33	)		-			6			(33	)		3
	b)   (i) Items that will be reclassified to profit or loss		(464	)		(33	)		168			(750	)		209
	(ii) Income tax relating to items that will be reclassified to profit or loss		161			12			(59	)		259			(73	)
	Total other comprehensive income		(251	)		(17	)		101			(436	)		138
8	Total comprehensive income (6 + 7)		4,777			5,200			2,129			28,941			12,911
9	Paid-up equity share capital (face value Rs. 5/- each)		831			831			830			831			830
10	Other equity											151,088			126,011
11	Earnings per equity share (face value Rs. 5/- each)
	Basic		30.34			31.47			12.22			177.23			76.98
	Diluted		30.28			31.42			12.21			176.88			76.85
			(Not annualised)			(Not annualised)			(Not annualised)
	See accompanying notes to the financial results.

DR. REDDY’S LABORATORIES LIMITED

Segment information										All amounts in Indian Rupees millions
Sl.		Quarter ended								Year ended
No.	Particulars	31.03.2020			31.12.2019		31.03.2019			31.03.2020		31.03.2019
		(Audited)			(Unaudited)		(Audited)			(Audited)		(Audited)
	Segment wise revenue and results
1	Segment revenue
	a) Pharmaceutical Services and Active Ingredients		7,373			7,106		6,941			26,996		25,802
	b) Global Generics		22,606			24,680		20,739			89,774		85,936
	c) Proprietary Products		16			296		149			7,644		303
	Total		29,995			32,082		27,829			124,414		112,041
	Less: Inter-segment revenue		1,478			1,642		1,377			5,910		5,786
	Total revenue from operations		28,517			30,440		26,452			118,504		106,255
2	Segment results
	Profit / (loss) before tax and interest from each segment
	a) Pharmaceutical Services and Active Ingredients		438			957		32			1,465		2,156
	b) Global Generics		4,203			6,193		4,022			22,116		20,852
	c) Proprietary Products		(97	)		92		(619	)		6,525		(2,252	)
	Total		4,544			7,242		3,435			30,106		20,756
	Less: (i) Finance costs		118			117		87			478		568
	(ii) Other un-allocable expenditure / (income), net		(15	)		950		384			1,870		3,181
	Total profit before tax		4,441			6,175		2,964			27,758		17,007

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

Segmental capital employed

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

Notes:

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

2 Effective 1 April 2019, the Company adopted Ind As 116, Leases, using the modified retrospective approach. Ind AS 116 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 lessee 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 of Rs. 332 million and right-of-use assets of Rs. 332 million.

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. Of these three manufacturing 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 the audit is closed. With respect to API 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 EIR from the U.S. FDA, for the API manufacturing facility at Srikakulam, indicating closure of the audit and the inspection classification of this facility is determined as "Voluntary Action Indicated" (VAI).
With this, all facilities under warning letter are now determined 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 TOSYMRA^TM (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.

5 "Other income" includes an amount of Rs. 3,457 millions received from Celgene during the quarter ended 30 June 2019, pursuant to a settlement agreement entered in April 2019. The agreement effectively settles any claim the Company or its affiliates may have had for damages under section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations in regard to the Company’s ANDS for a generic version of REVLIMID brand capsules, (Lenalidomide) pending before Health Canada.

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

7 During the quarter ended 30 September 2019, the Government of India promulgated the Taxation Laws (Amendment) Ordinance 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 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 group companies. The restructuring activity is expected to be completed by the quarter ended 30 June 2020.

DR. REDDY’S LABORATORIES LIMITED

8 On 15 May 2020, the Company entered into a Stipulation and Agreement of Settlement with Lead Plaintiff the Public Employees’ Retirement System of Mississippi in the putative securities class action filed against the Company in the United States District Court for the District of New Jersey. As consideration for the settlement of the class action, the Company has agreed to pay Rs.681 million (U.S.$9 million). Subject to the terms of the Stipulation, the settlement resolves the remainder of the litigation. As the Company is adequately insured with respect to the aforesaid liability, the settlement did not have any impact on the Company’s financial results for the year ended 31 March 2020. Amount payable to the plaintiff on account of the settlement and that receivable from the insurer have been presented under “other current 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 for full details of the settlement.

9 During the year ended 31 March 2019, 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”.

10 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 of prudence 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 outbreak continues to evolve, the Company will continue to closely monitor any material changes to future economic conditions.

11 Balance sheet

	All amounts in Indian Rupees millions
	As at		As at
Particulars	31.03.2020		31.03.2019
	(Audited)		(Audited)
ASSETS
Non-current assets
Property, plant and equipment		37,698		39,504
Capital work-in-progress		3,841		4,001
Goodwill		323		323
Other intangible assets		6,318		7,000
Intangible assets under development		277		-
Financial assets
Investments		33,671		18,191
Trade receivables		1,737		113
Loans		12		332
Other financial assets		474		447
Deferred tax assets, net		6,129		-
Tax assets, net		3,073		3,106
Other non-current assets		138		126
Total non-current assets		93,691		73,143
Current assets
Inventories		21,904		20,156
Financial assets
Investments		21,184		21,144
Trade receivables		46,387		37,177
Derivative instruments		783		335
Cash and cash equivalents		392		1,132
Other financial assets		1,888		692
Other current assets		8,529		8,696
Total current assets		101,067		89,332
TOTAL ASSETS		194,758		162,475
EQUITY AND LIABILITIES
Equity
Equity share capital		831		830
Other equity		151,088		126,011
Total Equity		151,919		126,841
Liabilities
Non-current liabilities
Financial liabilities
Borrowings		193		3,454
Provisions		545		547
Deferred tax liabilities, net		-		555
Other non-current liabilities		296		285
Total non-current liabilities		1,034		4,841
Current liabilities
Financial liabilities
Borrowings		10,436		5,463
Trade payables
Total outstanding dues of micro enterprises and small enterprises		55		77
Total outstanding dues of creditors other than micro enterprises and small enterprises		10,629		10,239
Derivative instruments		1,524		45
Other financial liabilities		13,928		10,160
Provisions		2,073		1,847
Other current liabilities		3,160		2,962
Total current liabilities		41,805		30,793
TOTAL EQUITY AND LIABILITIES		194,758		162,475

DR. REDDY’S LABORATORIES LIMITED

12 Statement of cashflows

	All amounts in Indian Rupees millions
	Year ended			Year ended
Particulars	31.03.2020			31.03.2019
	(Audited)			(Audited)
Cash flows from/(used in) operating activities
Profit before taxation		27,758			17,007
Adjustments for:
Depreciation and amortisation expense		7,892			7,806
Impairment loss on other intangible assets		-			24
Equity settled share-based payment expense		521			389
Fair value changes and profit on sale of mutual funds, net		(821	)		(669	)
Foreign exchange loss / (gain), net		(229	)		2,455
(Gain)/loss on sale/disposal of property , plant and equipment and other intangible assets, net		135			(400	)
Interest income		(856	)		(812	)
Finance costs		478			568
Allowances for credit losses and doubtful advances, net		95			(139	)
Dividend income		(397	)		-
Provision/(reversal of provision) relating to non-current investments		-			359
Changes in operating assets and liabilities:
Trade receivables		(10,927	)		4,547
Inventories		(1,748	)		(1,588	)
Trade payables		368			(201	)
Other assets and other liabilities, net		892			663
Cash generated from operations		23,161			30,009
Income taxes paid, net		(4,769	)		(2,388	)
Net cash generated from operating activities		18,392			27,621
Cash flows from/(used in) investing activities
Proceeds from sale of property, plant and equipment		58			879
Expenditures on property, plant and equipment		(4,262	)		(5,775	)
Expenditures on other intangible assets		(476	)		(753	)
Purchase of investments		(122,726	)		(77,267	)
Proceeds from sale of investments		109,186			74,786
Loans and advances (given) /repaid by subsidiaries		343			1,800
Dividend income received		397			-
Interest income received		588			821
Net cash used in investing activities		(16,892	)		(5,509	)
Cash flows from/(used in) financing activities
Proceeds from issuance of equity shares (including treasury shares)		4			-	*
Proceeds from/(repayment of ) short-term loans and borrowings, net		4,630			(17,049	)
Repayment of long-term loans and borrowings, net		(1,805	)		-
Payment of principal portion of lease liabilities		(155	)		-
Dividends paid (including corporate dividend tax)		(3,914	)		(4,002	)
Purchases of treasury shares		(474	)		(535	)
Interest paid		(527	)		(645	)
Net cash used in financing activities		(2,241	)		(22,231	)
Net increase / (decrease) in cash and cash equivalents		(741	)		(119	)
Effect of exchange rate changes on cash and cash equivalents		-			44
Cash and cash equivalents at the beginning of the year		1,132			1,207
Cash and cash equivalents at the end of the year**		391			1,132

*Rounded off to millions

**Adjusted for bank overdraft of Rs. 1 million for year ended 31 March 2020.

13 The audited results were reviewed by the Audit Committee of the Board on 19 May 2020 and approved by the Board of Directors of the Company at their meeting held on 20 May 2020.

14 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.

15 The figures of the fourth quarter are the balancing figures between audited figures in respect of the full financial year and published year to date figures upto the third quarter of the relevant financial year. Also the figures upto the end of third quarter were only reviewed and not subjected to audit.

16 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.

Place: Hyderabad Date: 20 May 2020 By order of the Board For Dr. Reddy's Laboratories Limited       G V Prasad Co-Chairman & Managing Director