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EX-99.3 4 drr0529_ex99-3.htm EXHIBIT 99.3

Exhibit 99.3

THE SKYVIEW 10

18th Floor, “NORTH LOBBY”

Survey No. 83/1, Raidurgam

Hyderabed - 500 032, India

Tel : + 91 40 6141 6000

Independent Auditor’s Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended

Review Report to

The Board of Directors

Dr. Reddy’s Laboratories Limited

We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results for the quarter and half year ended September 30, 2023 (the “Statement”) of Dr. Reddy’s Laboratories Limited (the “Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its joint ventures attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the “Listing Regulations”).

The Holding Company’s Management is responsible for the preparation of the Statement in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) “Interim Financial Reporting” prescribed under Section 133 of the Companies Act, 2013 as amended, 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 Statement has been approved by the Holding Company’s Board of Directors . Our responsibility is to express a conclusion on the Statement based on our review.

We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We also performed procedures in accordance with the Circular No. CIR/CFD/CMD1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.

The Statement includes the results of the following entities:

Holding Company:

Dr. Reddy’s Laboratories Limited

Subsidiaries

Aurigene Oncology limited (Formerly, Aurigene Discovery Technologies Limited)

Cheminor Investments Limited

Dr. Reddy’s Bio-Sciences Limited

Dr. Reddy’s Formulations Limited

Dr. Reddy’s Farmaceutica Do Brasil Ltda.

Dr. Reddy's Laboratories SA

Idea2Enterprises (India) Private Limited

Imperial Credit Private Limited

Industrias Quimicas Falcon de Mexico, S.A.de C.V.

10.

Svaas Wellness Limited

11.

Aurigene Discovery Technologies (Malaysia) Sdn. Bhd.

12.

Aurigene Pharmaceutical Services Limited

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

13.

beta Institut gemeinnützige GmbH

14.

betapharm Arzneimittel GmbH

15.

Chirotech Technology Limited (Under the process of liquidation)

16.

DRL Impex Limited

17.

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

18.

Dr. Reddy’s (Beijing) Pharmaceutical Co. 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 Japan KK

24.

Dr. Reddy’s Laboratories Kazakhstan LLP

25.

Dr. Reddy’s Laboratories LLC, Ukraine

26.

Dr. Reddy's Laboratories Louisiana LLC

27.

Dr. Reddy’s Laboratories Malaysia Sdn. Bhd.

28.

Dr. Reddy’s Laboratories New York, LLC

29.

Dr. Reddy's Laboratories Philippines Inc.

30.

Dr. Reddy’s Laboratories (Proprietary) Limited

31.

Dr. Reddy's Laboratories Romania S.R.L.

32.

Dr. Reddy's Laboratories SAS

33.

Dr. Reddy's Laboratories Taiwan Limited

34.

Dr. Reddy's Laboratories (Thailand) Limited

35.

Dr. Reddy’s Laboratories (UK) Limited

36.

Dr. Reddy’s New Zealand Limited

37.

Dr. Reddy's Research and Development B.V.

38.

Dr. Reddy’s Srl

39.

Dr. Reddy's Venezuela, C.A.

40.

Dr. Reddy’s Laboratories LLC

41.

Lacock Holdings Limited

42.

Promius Pharma LLC

43.

Reddy Holding GmbH

44.

Reddy Netherlands B.V.

45.

Reddy Pharma Iberia SAU

46.

Reddy Pharma Italia S.R.L

47.

Reddy Pharma SAS

48.

Nimbus Health GmbH

49.

Dr. Reddy’s Laboratories Jamaica Limited (from 25 September 2023)

Joint ventures

DRES Energy Private Limited

Kunshan Rotam Reddy Pharmaceutical Company Limited

Other consolidating entities

Cheminor Employees Welfare Trust

Dr. Reddy's Employees ESOS Trust

Dr. Reddy's Research Foundation

Based on our review conducted and procedures performed as stated in paragraph 3 above, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards (‘Ind AS’) specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing Regulations, including the manner in which it is to be disclosed, or that it contains any material misstatement.

For S.R. BATLIBOI & ASSOCIATES LLP

Chartered Accountants

ICAI Firm registration number: 101049W/E300004


per Shankar Srinivasan Partner Membership No.: 213271

UDIN: 23213271BGSEQU2517

Place: Hyderabad
Date: October 27, 2023.

Dr. Reddys Laboratories Ltd.

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

Hyderabad - 500 034, Telangana,
India.

CIN : L85195TG1984PLC004507

Tel : +91 40 4900 2900

Fax : +91 40 4900 2999

Email : mail@drreddys.com

www.drreddys.com

DR. REDDY'S LABORATORIES LIMITED

STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED 30 SEPTEMBER 2023

All amounts in Indian Rupees millions

		Quarter ended									Half year ended						Year ended
Sl. No.	Particulars	30.09.2023			30.06.2023			30.09.2022			30.09.2023			30.09.2022			31.03.2023
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Audited)

1	Revenue from operations
	a) Net sales/income from operations		67,348			66,143			61,632			133,491			109,812			234,595
	b) License fees and service income		1,454			1,241			1,425			2,695			5,399			11,284
	c) Other operating income		224			195			261			419			436			818

	Total revenue from operations		69,026			67,579			63,318			136,605			115,647			246,697

2	Other income		3,150			1,740			408			4,890			8,825			10,555

3	Total income (1 + 2)		72,176			69,319			63,726			141,495			124,472			257,252

4	Expenses
	a) Cost of materials consumed		9,559			12,968			6,688			22,527			18,579			42,198
	b) Purchase of stock-in-trade		11,378			8,771			8,089			20,149			16,844			33,670
	c) Changes in inventories of finished goods, work-in-progress and stock-in-trade		(907	)		(2,363	)		3,693			(3,270	)		2,160			709
	d) Employee benefits expense		12,803			11,897			11,517			24,700			21,974			46,466
	e) Depreciation and amortisation expense		3,755			3,533			3,092			7,288			6,110			12,502
	f) Impairment of non-current assets		55			11			25			66			25			699
	g) Finance costs		353			371			309			724			656			1,428
	h) Selling and other expenses		16,055			15,674			14,317			31,729			27,542			59,465

	Total expenses		53,051			50,862			47,730			103,913			93,890			197,137

5	Profit before tax and before share of equity accounted investees(3 - 4)		19,125			18,457			15,996			37,582			30,582			60,115

6	Share of profit of equity accounted investees, net of tax		42			43			140			85			234			370

7	Profit before tax (5+6)		19,167			18,500			16,136			37,667			30,816			60,485

8	Tax expense/(benefit):
	a) Current tax		5,901			7,197			3,674			13,098			769			8,144
	b) Deferred tax		(1,556	)		(2,747	)		1,320			(4,303	)		7,015			7,268

9	Net profit after taxes and share of profit of associates (7 - 8)		14,822			14,050			11,142			28,872			23,032			45,073

10	Other comprehensive income
	a) (i) Items that will not be reclassified subsequently to profit or loss		(222	)		106			(112	)		(116	)		(674	)		(660	)
	(ii) Income tax relating to items that will not be reclassified to profit or loss		-			-			-			-			-			(43	)
	b) (i) Items that will be reclassified subsequently to profit or loss		(1,113	)		147			(189	)		(966	)		(3,324	)		276
	(ii) Income tax relating to items that will be reclassified to profit or loss		201			(210	)		(320	)		(9	)		1,248			306
	Total other comprehensive (loss)/income		(1,134	)		43			(621	)		(1,091	)		(2,750	)		(121	)

11	Total comprehensive income (9 + 10)		13,688			14,093			10,521			27,781			20,282			44,952

12	Paid-up equity share capital (face value Rs. 5/- each)		834			833			832			834			832			833

13	Other equity																	232,028

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

	Basic		89.09			84.55			67.13			173.64			138.77			271.47
	Diluted		88.91			84.36			66.98			173.27			138.47			270.90
			(Not annualised)			(Not annualised)			(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						Half year ended				Year ended
Sl. No.	Particulars	30.09.2023		30.06.2023		30.09.2022		30.09.2023		30.09.2022		31.03.2023
		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		(Audited)
	Segment wise revenue and results:
1	Segment revenue :
	a) Pharmaceutical Services and Active Ingredients		9,625		9,365		8,230		18,990		16,493		37,195
	b) Global Generics		61,130		60,130		56,009		121,260		100,380		213,953
	c) Others		683		593		755		1,276		1,493		3,126
	Total		71,438		70,088		64,994		141,526		118,366		254,274
	Less: Inter-segment revenue		2,412		2,509		1,676		4,921		2,719		7,577
	Total revenue from operations		69,026		67,579		63,318		136,605		115,647		246,697

2	Segment results:
	Gross profit from each segment
	a) Pharmaceutical Services and Active Ingredients		1,260		1,013		235		2,273		1,350		4,733
	b) Global Generics		38,872		38,386		36,568		77,258		60,967		132,719
	c) Others		242		156		447		398		944		1,909
	Total		40,374		39,555		37,250		79,929		63,261		139,361
	Less: Selling and other un-allocable expenditure/(income), net		21,207		21,055		21,114		42,262		32,445		78,876
	Total profit before tax		19,167		18,500		16,136		37,667		30,816		60,485

Global Generics includes operations of Biologics business. Inter-segment revenue represents sale from Pharmaceutical Services and Active Ingredients to Global Generics and others 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	The above statement of unaudited consolidated financial results of Dr. Reddy's Laboratories Limited ("the Company"), which have been prepared in accordance with Indian Accounting Standards ("Ind AS") prescribed under section 133 of Companies Act,2013 ("the Act") read with relevant rules issues thereunder, other accounting principles generally accepted in India and guidelines issues by the Securities and Exchange Board of India ("SEBI") were reviewed and recommended by Audit Committee and approved by the Board of Directors at their meetings held on 27 October 2023. The Statutory Auditors have carried out a limited review on the unaudited consolidated financial results and issued an unmodified report thereon.
2	“Other income” for the quarter ended 30 September 2023 includes Rs.984 million recognized pursuant to settlement of product related litigation by the Company and its affiliates in the United Kingdom. This transaction pertains to the Company's Global Generics segment.
3	"Other income" for the quarter ended 30 June 2023 includes Rs.540 million recognised pursuant to settlement agreement with Janssen Group, in settlement of the claim brought in the Federal Court of Canada by the Company and its affiliates 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 Zytiga®(Abiraterone).This transaction pertains to the Company's Global Generics segment.
4	During the half year and quarter ended 30 September 2023, an amount of Rs.2,274 million and Rs.1,598 million, respectively, representing government grants has been accounted as a reduction from cost of revenues.
5	During the quarter ended 30 September 2022 Rs.1,933 million, representing government grants has been accounted as a reduction from cost of revenues.
6	License fee and service income for the year ended 31 March 2023 includes: a. Rs. 2,640 million from sale of certain non-core dermatology brands to Eris Lifesciences Limited; b. Rs. 1,399 million from sale of brands Styptovit-E, Finast, Finast-T and Dynapres to Torrent Pharmaceuticals Limited; c. Rs. 902 million from sale of brands Z&D, Pedicloryl, Pecef and Ezinapi to J B Chemicals and Pharmaceuticals Limited. The amounts recognised above are adjusted for expected sales returns. These transactions pertain to Company’s Global Generics segment.
7	During the year ended 31 March 2023, Company considered a total impairment of Rs. 540 million towards: a. The Company assessed performance of business acquired from Nimbus Health GmbH against the initial estimates and performance of the products. Basis the assessment, the Company has recorded an impairment charge of the carrying values amounting to Rs. 375 million (Goodwill- Rs. 272 million and Other intangibles- Rs. 103 million). The said impairment charge pertains to the Company’s Global Generics segment. b. Consequent to adverse market conditions with respect to certain of the Company’s products related intangibles forming part of the Company’s Global Generics and Pharmaceutical Services and Active Ingredients segments, the Company assessed the recoverable amount of these products and recognised an amount of Rs. 165 million as impairment charge.
8	Included in “Selling and other expenses” for the year ended 31 March 2023, is an amount of Rs. 991 million representing the Loss on sale of Assets, pursuant to agreement dated 16 December 2022 with Delpharm Development Leiden B.V (Delpharm) for transfer of its certain assets, liabilities and employees at its site at Leiden, Netherlands.This transaction pertains to Company’s Global Generics segment.
9	The Company has considered the impact of recent tax regulations and developments, including updates to its estimate on the impact of adoption of the Taxation Laws (Amendment) Act 2019, in determining its “Tax expense/(benefit)” for the half year ended 30 September 2023 and year ended 31 March 2023.
10	"Other income" for the half year ended 30 September 2022 includes an amount of Rs.5,638 million (U.S.$71.39 million discounted to present value) towards the settlement of an ongoing litigation relating to launch of a product with Indivior Inc., Indivior UK Limited and Aquestive Therapeutics, Inc.
11	The Company received an anonymous complaint in September 2020, alleging that healthcare professionals in Ukraine and potentially in other countries were provided with improper payments by or on behalf of the Company in violation of U.S. anti-corruption laws, specifically the U.S. Foreign Corrupt Practices Act. The Company disclosed the matter to the U.S. Department of Justice (“DOJ”), Securities and Exchange Commission (“SEC”) and Securities Exchange Board of India. The Company engaged a U.S. law firm to conduct the investigation at the instruction of a committee of the Company’s Board of Directors. On 06 July 2021 the Company received a subpoena from the SEC for the production of related documents, which were provided to the SEC. The Company made presentations to the SEC and the DOJ in relation to the investigation with respect to certain countries during the previous fiscal years. The Company also made a presentation to the SEC and the DOJ in relation to its Global Compliance Framework, including the ongoing enhancement initiatives, during the year ended 31 March 2023. The Company is complying with its listing obligations as it relates to updating the regulatory agencies. While the findings from the aforesaid investigations could result in government or regulatory enforcement actions against the Company in the United States and/or foreign jurisdictions, which can lead to civil and criminal sanctions under relevant laws, the outcomes including liabilities are not reasonably ascertainable at this time.

Dr. Reddy's Laboratories Limited

Consolidated Balance Sheet

	All amounts in Indian Rupees millions
	As at
	30.09.2023		31.03.2023
Particulars	(Unaudited)		(Audited)
ASSETS
Non-current assets
Property, plant and equipment		58,496		56,542
Capital work-in-progress		11,514		9,752
Goodwill		5,410		5,474
Other intangible assets		36,384		30,175
Intangible assets under development		609		549
Investment in equity accounted investees		4,069		4,702
Financial assets
Investments		1,855		660
Other financial assets		738		727
Deferred tax assets, net		10,732		7,052
Tax assets, net		298		2,687
Other non-current assets		592		276
Total non-current assets		130,697		118,596

Current assets
Inventories		56,592		48,670
Financial assets
Investments		38,650		44,496
Trade receivables		69,722		72,485
Derivative financial instruments		731		1,232
Cash and cash equivalents		13,539		5,779
Other bank balances		15,740		11,523
Other financial assets		4,582		4,950
Other current assets		17,841		15,120
Total current assets		217,397		204,255
TOTAL ASSETS		348,094		322,851

EQUITY AND LIABILITIES
Equity
Equity share capital		834		833
Other equity		254,134		232,028
Total equity		254,968		232,861

Liabilities
Non-current liabilities
Financial liabilities
Borrowings		3,800		-
Lease liabilities		2,243		1,278
Provisions		194		199
Deferred tax liabilities, net		100		760
Other non-current liabilities		2,724		2,032
Total non-current liabilities		9,061		4,269

Current liabilities
Financial liabilities
Borrowings		5,851		11,190
Lease liabilities		1,336		1,004
Trade payables
Total outstanding dues of micro enterprises and small enterprises		89		83
Total outstanding dues of creditors other than micro enterprises and small enterprises		27,163		22,601
Derivative financial instruments		542		137
Other financial liabilities		28,390		29,175
Liabilities for current tax, net		3,985		2,143
Provisions		6,305		6,525
Other current liabilities		10,404		12,863
Total current liabilities		84,065		85,721
TOTAL EQUITY AND LIABILITIES		348,094		322,851

Dr. Reddy's Laboratories Limited

Consolidated statement of cashflows

	All amounts in Indian Rupees millions
	Half year ended
	30.09.2023			30.09.2022
Particulars	(Unaudited)			(Unaudited)
Cash flows from/(used in) operating activities :
Profit before tax		37,667			30,816
Adjustments for:
Fair value changes and profit on sale of financial instruments measured at FVTPL**, net		(1,527	)		(78	)
Depreciation and amortisation expense		7,288			6,110
Impairment of non-current assets		66			25
Allowance for credit losses (on trade receivables and other advances)		137			69
(Profit)/loss on sale or de-recognition of non-current assets, net		(445	)		68
Share of profit of equity accounted investees		(85	)		(234	)
Foreign exchange (gain), net		(1,179	)		(329	)
Interest income		(1,048	)		(433	)
Finance costs		724			656
Equity settled share-based payment expense		211			263
Inventories write-down		1,418			2,732
Dividend income		-			-	*
Changes in operating assets and liabilities:
Trade and other receivables		2,689			(10,150	)
Inventories		(9,340	)		(890	)
Trade and other payables		4,568			(2,356	)
Other assets and other liabilities, net		(3,482	)		(5,693	)
Cash generated from operations		37,662			20,576
Income tax paid, net		(8,486	)		(4,640	)
Net cash from operating activities		29,176			15,936
Cash flows (used in)/from investing activities :
Expenditures on property, plant and equipment		(7,323	)		(5,816	)
Proceeds from sale of property, plant and equipment		487			48
Expenditures on other intangible assets		(8,787	)		(6,203	)
Proceeds from sale of other intangible assets		21			-
Purchase of investments		(70,008	)		(47,008	)
Proceeds from sale of investments		71,815			59,395
Interest and dividend received		597			394
Dividend received from equity accounted investees		445			-
Net cash (used in)/from investing activities		(12,753	)		810

Cash flows (used in) financing activities :
Proceeds from issuance of equity shares (including treasury shares)		765			66
Repayment of short-term borrowings, net		(1,054	)		(16,862	)
Repayment of long-term loans and borrowings		(3,800	)		-
Proceeds from long term borrowings		3,800			-
Payment of principal portion of lease liabilities		(524	)		(499	)
Dividend paid		(6,648	)		(4,979	)
Interest paid		(1,051	)		(872	)
Net cash used in financing activities		(8,512	)		(23,146	)

Net increase/(decrease) in cash and cash equivalents		7,911			(6,400	)
Effect of exchange rate changes on cash and cash equivalents		(155	)		641
Cash and cash equivalents at the beginning of the period		5,779			14,852
Cash and cash equivalents at the end of the period⁽¹⁾		13,535			9,093

* Rounded off to million.

** FVTPL (fair value through profit or loss)

⁽¹⁾Adjusted for bank-overdraft of Rs. 4 million and Rs. 3 million for the half year ended 30 September 2023 and 30 September 2022, respectively.

The Company considered the uncertainties relating to the military conflict between Russia and Ukraine, in assessing the recoverability of receivables, goodwill, intangible assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial results. Based on its judgments, estimates and assumptions, including sensitivity analysis, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets. The Company will continue to closely monitor any material changes to future economic conditions.

			By order of the Board
			For Dr. Reddy’s Laboratories Limited


Place: Hyderabad			G V Prasad
Date: 27 October 2023			Co-Chairman & Managing Director