The terms and conditions of the grants made during
the nine months ended December 31, 2022 under the above plans were as follows:
*Pursuant to approval by the Nomination, Governance
and Compensation Committee, these granted options were cancelled on October 27, 2022.
The terms and conditions of the grants made during
the nine months ended December 31, 2021 under the above plans were as follows:
The fair value of services received
in return for stock options granted to employees is measured by reference to the fair value of stock options granted. The fair value of
stock options has been measured using the Black-Scholes-Merton valuation model at the date of the grant. The expected term of an option
(its “option life”) is estimated based on the vesting term and contractual term.
The weighted average inputs used in computing the
fair value of such grants were as follows:
| |
October 28, 2021 | | |
October 28, 2021 | | |
October 28, 2021 | |
Expected volatility | |
| 29.20 | % | |
| 28.53 | % | |
| 29.04 | % |
Exercise price | |
Rs. | 4,663.00 | | |
Rs. | 5.00 | | |
Rs. | 5.00 | |
Option life | |
| 5.0 Years | | |
| 2.5 Years | | |
| 5.0 Years | |
Risk-free interest rate | |
| 5.94 | % | |
| 4.86 | % | |
| 5.99 | % |
Expected dividends | |
| 0.55 | % | |
| 0.55 | % | |
| 0.54 | % |
Grant date share price | |
Rs. | 4,570.00 | | |
Rs. | 4,570.00 | | |
Rs. | 4,570.00 | |
| |
May 13, 2021 | | |
May 13, 2021 | |
Expected volatility | |
| 29.38 | % | |
| 30.02 | % |
Exercise price | |
Rs. | 5,301.00 | | |
Rs. | 5.00 | |
Option life | |
| 5.0 Years | | |
| 2.5 Years | |
Risk-free interest rate | |
| 5.70 | % | |
| 4.64 | % |
Expected dividends | |
| 0.47 | % | |
| 0.47 | % |
Grant date share price | |
Rs. | 5,301.00 | | |
Rs. | 5,301.00 | |
Share-based payment expense
| |
For the nine months ended December 31, | | |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Equity settled share-based payment expense(1) | |
Rs. | 376 | | |
Rs. | 451 | | |
Rs. | 113 | | |
Rs. | 161 | |
Cash settled share-based payment expense(2) | |
| 182 | | |
| 144 | | |
| 67 | | |
| 42 | |
| |
Rs. | 558 | | |
Rs. | 595 | | |
Rs. | 180 | | |
Rs. | 203 | |
| (1) | As of December 31, 2022 and 2021, there was Rs.681 and Rs.862,
respectively, of total unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over
a weighted-average period of 1.95 years and 1.95 years, respectively. |
| (2) | Certain of the Company’s employees are eligible to receive
share based payment awards that are settled in cash. These awards vest only upon satisfaction of certain service conditions which range
from 1 to 4 years. These awards entitle the employees to a cash payment on the vesting date. The amount of the cash payment is determined
based on the share price of the Company at the time of vesting. As of December 31, 2022 and 2021, there was Rs.238 and Rs.149, respectively,
of total unrecognized compensation cost related to unvested awards. This cost is expected to be recognized over a weighted-average period
of 2.06 years and 1.90 years, respectively. This scheme does not involve dealing in or subscribing to or purchasing securities of the
Company, directly or indirectly. |
DR. REDDY’S LABORATORIES
LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in millions, except share and
per share data and where otherwise stated)
20. Related
parties
The Company has entered into transactions with the following related parties:
| · | Green
Park Hotel and Resorts Limited for hotel services; |
| · | Green
Park Hospitality Services Private Limited for catering and other services; |
| · | Dr. Reddy’s
Foundation towards contributions for social development; |
| · | Kunshan
Rotam Reddy Pharmaceuticals Company Limited for sales of goods and for research and development services; |
| · | Pudami
Educational Society towards contributions for social development; |
| · | Indus
Projects Private Limited for engineering services relating to civil works; |
| · | CERG
Advisory Private Limited for professional consulting services; |
| · | Dr. Reddy’s
Institute of Life Sciences for research and development services; |
| · | AverQ
Inc. for professional consulting services; |
| · | Shravya
Publications Private Limited for professional consulting services; |
| · | Samarjita
Management Consultancy Private Limited for professional consulting services; |
| · | Cancelled
Plans LLP for the sale of scrap materials; |
| · | Araku
Originals Private Limited for the purchase of coffee powder; |
| · | DRES
Energy Private Limited for the purchase of solar power; and |
| · | Stamlo
Industries Limited for hotel services. |
These are enterprises over which key management personnel
have control or significant influence. “Key management personnel” consists of the Company’s Directors and members of
the Company’s Management Council. The Company has also entered into cancellable operating lease transactions with key management
personnel and close members of their families.
Further, the Company contributes to the Dr. Reddy’s
Laboratories Gratuity Fund, which maintains the plan assets of the Company’s Gratuity Plan for the benefit of its employees. See
Note 18 of these interim financial statements for information on transactions between the Company and the Gratuity Fund.
The following is a summary of significant related
party transactions:
| |
For the nine months ended December 31, | | |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Research and development services received | |
Rs. | 87 | | |
Rs. | 88 | | |
Rs. | 31 | | |
Rs. | 36 | |
Sale of goods | |
| 61 | | |
| 102 | | |
| 61 | | |
| 89 | |
License fees | |
| | | |
| 57 | | |
| | | |
| 57 | |
Lease rentals received | |
| 1 | | |
| 1 | | |
| - | * | |
| - | * |
Lease rentals paid | |
| 29 | | |
| 28 | | |
| 10 | | |
| 10 | |
Catering expenses paid | |
| 261 | | |
| 250 | | |
| 106 | | |
| 90 | |
Hotel expenses paid | |
| 27 | | |
| 14 | | |
| 12 | | |
| 7 | |
Facility management services paid | |
| 32 | | |
| 27 | | |
| 13 | | |
| 9 | |
Purchase of Solar power | |
| 85 | | |
| 90 | | |
| 32 | | |
| 29 | |
Civil works | |
| 27 | | |
| 52 | | |
| - | | |
| 7 | |
Professional consultancy services paid | |
| 3 | | |
| 73 | | |
| 3 | | |
| 30 | |
Contributions towards social development | |
| 346 | | |
| 252 | | |
| 123 | | |
| 58 | |
Salaries to relatives of key management personnel | |
| 13 | | |
| 10 | | |
| 4 | | |
| 3 | |
| |
| | | |
| | | |
| | | |
| | |
* Rounded to the nearest million.
The Company had the following amounts due from related
parties as of the following dates:
| |
As of | |
| |
December 31, 2022 | | |
March 31, 2022 | |
Key management personnel and close members of their families | |
Rs. | 8 | | |
Rs. | 8 | |
Other related parties | |
| 1 | | |
| 1 | |
DR. REDDY’S LABORATORIES
LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in millions, except share and
per share data and where otherwise stated)
20. Related parties (continued)
The Company had the following amounts due to related parties as of the
following dates:
| |
As of | |
| |
December 31, 2022 | | |
March 31, 2022 | |
Due to related parties | |
Rs. | 16 | | |
Rs. | 10 | |
The following table describes the components of compensation
paid or payable to key management personnel for the services rendered during the applicable period:
| |
For the nine months ended December 31, | | |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Salaries and other benefits | |
Rs. | 740 | | |
Rs. | 481 | | |
Rs. | 253 | | |
Rs. | 160 | |
Contributions to defined contribution plans | |
| 23 | | |
| 24 | | |
| 8 | | |
| 8 | |
Commission to directors | |
| 309 | | |
| 282 | | |
| 103 | | |
| 94 | |
Share-based payments expense | |
| 161 | | |
| 169 | | |
| 53 | | |
| 62 | |
| |
Rs. | 1,232 | | |
Rs. | 956 | | |
Rs. | 417 | | |
Rs. | 324 | |
Some of the key management personnel of the Company
are also covered under the Company’s Gratuity Plan along with the other employees of the Company. Proportionate amounts of gratuity
accrued under the Company’s Gratuity Plan have not been separately computed or included in the above disclosure.
21. Financial
instruments
Financial instruments by category
The carrying value and fair value of financial instruments
as of December 31, 2022 and March 31, 2022 were as follows:
| |
As of December 31, 2022 | | |
As of March 31, 2022 | |
| |
Total carrying value | | |
Total fair value | | |
Total carrying value | | |
Total fair value | |
Assets: | |
| | |
| | |
| | |
| |
Cash and cash equivalents | |
Rs. | 6,259 | | |
Rs. | 6,259 | | |
Rs. | 14,852 | | |
Rs. | 14,852 | |
Other investments(1) | |
| 43,905 | | |
| 43,905 | | |
| 33,181 | | |
| 33,181 | |
Trade and other receivables | |
| 75,046 | | |
| 75,046 | | |
| 66,818 | | |
| 66,818 | |
Derivative financial assets | |
| 181 | | |
| 181 | | |
| 1,906 | | |
| 1,906 | |
Other assets(2) | |
| 4,686 | | |
| 4,686 | | |
| 2,347 | | |
| 2,347 | |
Total | |
Rs. | 130,077 | | |
Rs. | 130,077 | | |
Rs. | 119,104 | | |
Rs. | 119,104 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Trade and other payables | |
Rs. | 26,023 | | |
Rs. | 26,023 | | |
Rs. | 25,572 | | |
Rs. | 25,572 | |
Derivative financial liabilities | |
| 1,189 | | |
| 1,189 | | |
| 479 | | |
| 479 | |
Long-term borrowings | |
| 6,195 | | |
| 6,195 | | |
| 6,763 | | |
| 6,763 | |
Short-term borrowings | |
| 11,468 | | |
| 11,468 | | |
| 27,082 | | |
| 27,082 | |
Other liabilities and provisions(3) | |
| 28,283 | | |
| 28,283 | | |
| 26,238 | | |
| 26,238 | |
Total | |
Rs. | 73,158 | | |
Rs. | 73,158 | | |
Rs. | 86,134 | | |
Rs. | 86,134 | |
| (1) | Interest accrued but not due on investments is included in other
assets. |
| (2) | Other assets that are not financial assets (such as receivables
from statutory authorities, export benefit receivables, prepaid expenses, advances paid and certain other receivables) of Rs.16,287 and
Rs.12,449 as of December 31, 2022 and March 31, 2022, respectively, are not included. |
| (3) | Other liabilities and provisions that are not financial liabilities
(such as statutory dues payable, deferred revenue, advances from customers and certain other accruals) of Rs.14,376 and Rs.14,491 as
of December 31, 2022 and March 31, 2022, respectively, are not included. |
DR. REDDY’S LABORATORIES
LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in millions, except share and
per share data and where otherwise stated)
21. Financial instruments (continued)
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 - Inputs for the assets or liabilities that
are not based on observable market data (unobservable inputs).
The following table presents the fair value hierarchy
of assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:
Particulars | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
FVTPL - Financial asset - Investments in units of mutual funds | |
Rs. | 25,780 | | |
Rs. | - | | |
Rs. | - | | |
Rs. | 25,780 | |
FVTPL - Financial asset - Investment in limited liability partnership firm | |
| - | | |
| - | | |
| 378 | | |
| 378 | |
FVTPL - Financial asset - Investments in equity securities | |
| - | | |
| - | | |
| 88 | | |
| 88 | |
FVTOCI - Financial asset - Investments in equity securities | |
| 265 | | |
| - | | |
| - | | |
| 265 | |
FVTOCI - Financial asset - Investments in market linked debentures | |
| 991 | | |
| | | |
| | | |
| 991 | |
Derivative financial instruments – net (loss)/gain on outstanding foreign exchange forward, option and swap contracts and interest rate swap contracts(1) | |
| - | | |
| (1,008 | ) | |
| - | | |
| (1,008 | ) |
The following table presents the fair value hierarchy
of assets and liabilities measured at fair value on a recurring basis as of March 31, 2022:
Particulars | |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
FVTPL - Financial asset - Investments in units of mutual funds | |
Rs. | 16,751 | | |
Rs. | - | | |
Rs. | - | | |
Rs. | 16,751 | |
FVTPL - Financial asset - Investment in limited liability partnership firm | |
| - | | |
| - | | |
| 386 | | |
| 386 | |
FVTPL - Financial asset - Investments in equity securities | |
| 200 | | |
| - | | |
| 1 | | |
| 201 | |
FVTOCI - Financial asset - Investments in equity securities | |
| 999 | | |
| - | | |
| - | | |
| 999 | |
Derivative financial instruments – net gain/(loss) on outstanding foreign exchange forward, option and swap contracts and interest rate swap contracts(1) | |
| - | | |
| 1,427 | | |
| - | | |
| 1,427 | |
| (1) | The Company enters into derivative financial instruments with
various counterparties, principally financial institutions and banks. Derivatives valued using valuation techniques with market observable
inputs are mainly interest rate swaps, foreign exchange forward option and swap contracts. The most frequently applied valuation techniques
include forward pricing, swap models and Black-Scholes-Merton models (for option valuation), using present value calculations. The models
incorporate various inputs including foreign exchange forward rates, interest rate curves and forward rate curves. |
As of December 31, 2022 and March 31, 2022, the changes
in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships
and other financial instruments recognized at fair value.
Hedges of foreign currency exchange rate risks
The Company is exposed to exchange rate risk which
arises from its foreign exchange revenues and expenses (primarily in U.S. dollars, U.K. pounds sterling, Russian roubles, Brazilian reals,
Swiss francs, South African rands, Kazakhstan tenges, Romanian new leus, Australian dollars, Euros, Thai bahts, Chilean pesos, Colombian
pesos and Brazilian reals) and its foreign currency debt (in Russian roubles, Mexican pesos, and Brazilian reals).
The Company uses foreign exchange forward contracts,
option contracts and swap contracts (derivative financial instruments) to mitigate its risk of changes in foreign currency exchange rates.
The Company also uses non-derivative financial instruments as part of its foreign currency exposure risk mitigation strategy. Non-derivative
financial instruments consist of investments in mutual funds, bonds, commercial papers, equity and debt securities, trade receivables,
cash and cash equivalents, loans and borrowings, and trade payables.
DR. REDDY’S LABORATORIES
LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(in millions, except share and
per share data and where otherwise stated)
21. Financial instruments (continued)
Details of gain/(loss) recognized in respect of
derivative contracts
The following table presents details in respect of
the gain/(loss) recognized in respect of derivative contracts during the applicable period ended:
| |
For the nine months ended December 31, | | |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
2022 | | |
2021 | |
Net (loss)/gain recognized in finance costs in respect of foreign exchange derivative contracts and cross currency interest rate swaps contracts | |
Rs. | (5,317 | ) | |
Rs. | 635 | | |
Rs. | (108 | ) | |
Rs. | 623 | |
Net (loss)/gain recognized in equity in respect of hedges of highly probable forecast transactions, net of amounts reclassified from equity and recognized as component of revenue | |
| (2,269 | ) | |
| (88 | ) | |
| 1,302 | | |
| 198 | |
Net (loss)/gain reclassified from equity and recognized as component of revenue occurrence of forecasted transaction | |
| (3,669 | ) | |
| 45 | | |
| (1,387 | ) | |
| (41 | ) |
The net carrying amount of the Company’s “hedging
reserve” as a component of equity before adjusting for tax impact was a loss of Rs.985 as of December 31, 2022, as compared to a
gain of Rs.313 as of December 31, 2021 and Rs.1,284 as of March 31, 2022.
22. Contingencies
The Company is involved in disputes,
lawsuits, claims, governmental and/or regulatory inspections, inquiries, investigations and proceedings (collectively, “Legal Proceedings”),
including patent and commercial matters that arise from time to time in the ordinary course of business. Most of the claims involve complex
issues. Often, these issues are subject to uncertainties and therefore the probability of a loss, if any, being sustained and an estimate
of the amount of any loss is difficult to ascertain. Consequently, for a majority of these claims, it is not possible to make a reasonable
estimate of the expected financial effect, if any, that will result from ultimate resolution of the proceedings. This is due to a number
of factors, including: the stage of the proceedings (in many cases trial dates have not been set) and the overall length and extent of
pre-trial discovery; the entitlement of the parties to an action to appeal a decision; clarity as to theories of liability; damages and
governing law; uncertainties in timing of litigation; and the possible need for further legal proceedings to establish the appropriate
amount of damages, if any. In these cases, the Company discloses information with respect to the nature and facts of the case. The Company
also believes that disclosure of the amount sought by plaintiffs, if that is known, would not be meaningful with respect to those legal
proceedings.
Although there can be no assurance regarding the outcome
of any of the Legal Proceedings referred to in this Note, the Company does not expect them to have a materially adverse effect on its
financial position, results of operations and cash flows, as it believes that the likelihood of loss in excess of amounts accrued (if
any) is not probable. However, if one or more of such Legal Proceedings were to result in judgments against the Company, such judgments
could be material to its results of operations and cash flows in a given period.
Note 32 to the Consolidated Financial Statements in
the Company’s Annual Report on Form 20-F for the year ended March 31, 2022 contains a summary of significant Legal Proceedings.
The following is a summary, as of the date of this quarterly report, of significant developments in those proceedings as well as any new
significant proceedings commenced since the date such Annual Report on Form 20-F was filed.
DR. REDDY’S LABORATORIES LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(in millions, except share and per share data
and where otherwise stated)
22. Contingencies (continued)
Product and patent related matters
Launch of product
With regard to the patent
litigation as disclosed in Note 32 to the Consolidated Financial Statements in the Company’s Annual Report on Form 20-F for the
year ended March 31, 2022, the Company was previously a party to patent litigation with Indivior Inc. and Indivior UK Limited (collectively,
“Indivior”) and Aquestive Therapeutics, Inc. (“Aquestive”) relating to the Company’s generic buprenorphine
and naloxone sublingual film, 2 mg/0.5 mg, 4 mg/1 mg, 8 mg/2 mg, and 12 mg/3 mg dosages, a therapeutic equivalent generic version of Suboxone®
sublingual film in United States.
On June 23, 2022, the Company
entered into a settlement agreement with Indivior and Aquestive. Under this settlement, the Company will receive payments totaling U.S.$72
by March 31, 2024. The agreement resolves all claims between the parties relating to the Company’s generic buprenorphine and naloxone
sublingual film, 2 mg/0.5 mg, 4 mg/1 mg, 8 mg/2 mg, and 12 mg/3 mg dosages, including Indivior’s and Aquestive’s patent infringement
allegations and the Company’s antitrust counterclaims. On June 28, 2022 the U.S. District Court for the District of New Jersey dismissed
all claims and counterclaims pending in the case with prejudice, pursuant to a joint stipulation of dismissal filed by the parties.
Other product and patent related matters
Ranitidine recall and litigation
On October 1, 2019, the Company
initiated a voluntary nationwide recall (at the retail level for over-the-counter products and at the consumer level for prescription
products) of its ranitidine medications sold in the United States due to the presence of N-Nitrosodimethylamine (“NDMA”) above
levels established by the U.S. FDA. On November 1, 2019, the U.S. FDA issued a statement indicating that it had found levels of NDMA in
ranitidine from its testing generally that were “similar to the levels you would expect to be exposed to if you ate common foods
like grilled or smoked meats.” See https://www.fda.gov/news-events/press-announcements/statement-new-testing-results-including-low-levels-impurities-ranitidine-drugs.
On April 1, 2020, the U.S. FDA issued a press release announcing that it was requesting manufacturers to withdraw all prescription and
over-the-counter ranitidine drugs from the market immediately. See https://www.fda.gov/news-events/press-announcements/fda-requests-removal-all-ranitidine-products-zantac-market.
Individual federal court
personal injury lawsuits, as well as various class actions, were transferred to the In re Zantac (Ranitidine) Products Liability Litigation
Multidistrict Litigation in the Southern District of Florida, MDL-2924 (“MDL-2924”). The Company and/or one or more of its
U.S. subsidiaries have been named as a defendant in over 400 lawsuits in MDL-2924. A census registry established in MDL-2924 includes
tens of thousands of claimants who did not file complaints but preserved claims against the many pharmaceutical manufacturer, distributor
and retailer defendants in MDL-2924.In August 2022, the defendants exited all registry plaintiffs alleging non-designated cancers (i.e.
types of cancers that are not being pursued by plaintiffs’ leadership in the MDL-2924) and all registry plaintiffs alleging designated
cancers who did not commit to filing a complaint in federal court. As a result, state court filings have commenced. MDL-2924 also involves
a proposed nationwide consumer class action and a proposed nationwide class action for medical monitoring. A third-party payor class action
was dismissed without prejudice. On November 7, 2022, such dismissal was affirmed by the U.S. Court of Appeals for the Eleventh Circuit.
On December 31, 2020,
the MDL-2924 Court ruled on multiple motions to dismiss in MDL-2924 and granted the generic manufacturers’ (the Company is a
generic manufacturer) motion to dismiss based on federal preemption. The plaintiffs’ failure-to-warn and design defect claims
against the Company were dismissed with prejudice, but the Court permitted plaintiffs to attempt to replead several claims/theories.
Plaintiffs filed their amended complaints and the defendants, including the Company, filed motions to dismiss seeking dismissal of
all claims against them on March 24, 2021. On July 8, 2021, the Court dismissed the proposed nationwide consumer class action and
proposed nationwide class action for medical monitoring against the Company and other generic manufacturers with prejudice based on
federal preemption. The MDL-2924 Court’s dismissal decisions have been piecemeal appealed by plaintiffs to the U.S. Court of
Appeals for the Eleventh Circuit, resulting in three rounds of appeals. Motions to dismiss rounds two and three of plaintiffs’
appeals have been filed, but no merits briefing or oral argument has yet occurred. In addition, rounds two and three of
plaintiffs’ appeals are stayed in light of the bankruptcy proceedings involving co-defendant Par Pharmaceutical (a subsidiary
of Endo). While the generic manufacturer defendants were previously dismissed with prejudice from the MDL-2924 on federal preemption
grounds, the brand manufacturer defendants were not dismissed, and therefore have continued to litigate. Following substantial
briefing and argument, on December 6, 2022, the MDL-2924 Court entered an Omnibus Order on All Pending Daubert Motions and
Defendants’ Summary Judgment Motion. In so doing, the Court granted brand defendants’ motions to exclude
plaintiffs’ expert witnesses and entered summary judgment in favor of the brand defendants as to all claims involving bladder,
esophageal, gastric, liver, and pancreatic cancers.
DR. REDDY’S LABORATORIES LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(in millions, except share and per share data
and where otherwise stated)
22. Contingencies (continued)
Several ranitidine-related
actions are currently pending against the Company in state courts. The New Mexico State Attorney General filed suit against the Company’s
U.S. subsidiary, and multiple other manufacturers and retailers. The State of New Mexico asserted claims of statutory and common law public
nuisance and negligence against the Company. The Company joined in an effort to transfer the case from the Santa Fe County Court to MDL-2924,
but the case was remanded by the MDL-2924 Court to the Santa Fe County Court. Plaintiff filed an amended complaint on April 16, 2021.
The defendants’ motions to dismiss, including the Company’s federal preemption motion to dismiss, were denied. The case is
currently in the discovery stage. Trial has been scheduled on or after September 15, 2025. In November 2020, the City of Baltimore filed
a similar action against the Company’s U.S. subsidiary, and multiple other manufacturers and retailers. The City of Baltimore asserts
public nuisance and negligence claims against the Company. The City of Baltimore action also was transferred to MDL-2924 and subsequently
was remanded to the Circuit Court of Maryland. The City of Baltimore filed an amended complaint, which the defendants moved to dismiss.
The Company’s federal preemption motion to dismiss was granted in February 2022 and it is not currently a defendant in the case.
In January 2021, the Company was served in a Proposition 65 case filed by the Center for Environmental Health (“CFEH”) in
the Superior Court of Alameda County, California. The plaintiff purports to bring the case on behalf of the people of California and alleges
that the Company violated Proposition 65, a California law requiring manufacturers to disclose the presence of carcinogens in consumer
products. The Company and other defendants filed demurrers (motions to dismiss) in the case, and on May 7, 2021 the Court granted the
generic manufacturer defendants’ demurrers without leave to amend the pleadings. CFEH appealed that decision and appellate briefing
is completed. Oral argument has not been scheduled yet, and the Court has not ruled.
As mentioned, a large number
of claimants were exited from the MDL-2924 census registry by the defendants. As a result, more than 40 state court cases involving a
total of more than 360 plaintiffs have been filed against the Company in California, Illinois, New Jersey, New York, and Pennsylvania
state courts. More state court filings could follow. The California cases were filed in Alameda County and have now been transferred to
the existing Judicial Council Coordinated Proceedings (“JCCP”) proceedings (which has been pending for years with respect
to the brand defendants). The Illinois cases have been filed in Madison, St. Clair and Cook Counties and have been consolidated for pretrial
purposes in Cook County, with plaintiffs attempting to get trial dates established in certain cases. The Pennsylvania cases were filed
in Philadelphia County and are consolidated in the Philadelphia Complex Litigation Center. The New York cases were filed in New York and
Suffolk Counties, and the parties are seeking pretrial consolidation in New York County. The New Jersey cases were filed in Middlesex
County. Generally, they allege, among other things, failure to warn, design defect and negligence. The defendants have moved, or intend
to move, to dismiss these cases.
The Company believes that
all of the aforesaid complaints and asserted claims are without merit and it denies any wrongdoing and intends to vigorously defend itself
against the allegations. Any liability that may arise on account of these claims is unascertainable at this time. Accordingly, no provision
was made in these interim financial statements of the Company.
Internal Investigation
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 July 6, 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 current and previous fiscal year.
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 nine months ended December 31, 2022. 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 AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(in millions, except share and per share data
and where otherwise stated)
22. Contingencies (continued)
Other matters
Class Action under the
Canadian Competition Act filed in Federal Court in Toronto, Canada
On June 3, 2020, a Class
Action Statement of Claim was filed by an individual consumer in Federal Court in Toronto, Canada, against the Company’s U.S. and
Canadian subsidiaries and 52 other generic drug companies. The Statement of Claim alleges an industry-wide, overarching conspiracy to
violate Section 36 of the Canadian Competition Act by conspiring to allocate the market, fix prices, and maintain the supply of generic
drugs in Canada. The action is brought on behalf of a class of all persons, from January 1, 2012 to the present, who purchased generic
drugs in the private sector. The Statement of Claim states that it seeks damages against all defendants on a joint and several basis,
attorney’s fees and costs of investigation and prosecution. An Amended Statement of Claim was served on the Company’s U.S.
and Canadian subsidiaries on January 15, 2021 and added an additional 20 generic drug companies. The Amended Statement of Claim also removed
the identification of defendant companies with conspiracy allegations regarding specific generic drugs and alleges a conspiracy to allocate
the North America Market as to all generic drugs in Canada. A Second Fresh as Amended Statement of Claim was served on the Company's U.S.
and Canadian subsidiaries on August 24, 2022 and adds an additional 10 drug companies. The Second Fresh as Amended Statement of Claim
reinstituted the identification of defendant companies with conspiracy allegations regarding specific generic drugs.
The Company believes that
the asserted claims are without merit and intends to vigorously defend itself against the allegations. Any liability that may arise on
account of this claim is unascertainable. Accordingly, no provision was made in these interim financial statements.
Civil Investigative Demand
from the Office of the Attorney General, State of Texas
On or about November 10,
2014, Dr. Reddy’s Laboratories, Inc., one of the Company’s subsidiaries in the United States, received a Civil Investigative
Demand (“CID”) from the Office of the Attorney General, State of Texas (the “Texas AG”) requesting certain information,
documents and data regarding sales and price reporting practices in the U.S. marketplace for certain products (the “Covered Conduct”)
for the time-period between January 1, 1995 and the date of the CID. On or about June 23, 2021, the Texas AG contacted the Company’s
counsel to request additional information related to the Texas AG’s investigation and the Covered Conduct for the time-period of
October 1, 2003 through February 29, 2012. The Company has continued to cooperate and respond to the Texas AG’s requests for information
related to the Covered Conduct.
As on March 31, 2022, the
Company based on its best estimate, was carrying a provision of Rs.983 in this regard.
On June 1, 2022, Dr. Reddy’s
Laboratories, Inc. entered into a Settlement Agreement and Release with the Texas AG and the Texas Health & Human Services Commission
related to the Covered Conduct. Pursuant to the Settlement Agreement and Release, on July 6, 2022, Dr. Reddy’s Laboratories, Inc.
paid the total sum of U.S.$12.9 to the State of Texas as a full and final settlement of any claims being investigated by the State of
Texas in relation to the Covered Conduct. Neither Dr. Reddy’s Laboratories, Inc. nor the Company admitted to any facts or liability
in connection with this settlement. The settlement was a compromise and settlement on disputed issues of fact and law.
DR. REDDY’S LABORATORIES LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(in millions, except share and per share data
and where otherwise stated)
23. Merger
of Dr. Reddy’s Holdings Limited into Dr. Reddy’s Laboratories Limited
The
Board of Directors, at its meeting held on July 29, 2019, had approved the amalgamation of Dr. Reddy’s Holdings Limited (“DRHL”),
an entity held by the Promoter Group, which holds 24.83% of Dr. Reddy’s Laboratories Limited (the “Company”) into the
Company (the “Scheme”). This Scheme is subject to the approval of shareholders, stock exchanges, the National Company Law
Tribunal (“NCLT”) and other relevant regulators as per the provisions of Section 230 to 232 and any other applicable provisions
of the Companies Act, 2013.
The
Scheme was intended to simplify the shareholding structure and reduction of shareholding tiers. The Promoter Group cumulatively was to
continue to hold the same number of shares in the Company, pre and post the amalgamation. All costs, charges and expenses relating to
the Scheme will be borne out of the surplus assets of DRHL. Further, any expense, if exceeding the surplus assets of DRHL, will be borne
directly by the Promoter Group.
During
the fiscal year ended March 31, 2020, the Scheme was approved by the board of directors, members and unsecured creditors of the Company.
The no-observation letters from the BSE Limited and National Stock Exchange of India Limited were received on the basis of no comments
received from Securities and Exchange Board of India (“SEBI”). The petition for approval of the said Scheme was filed with
the Hon’ble NCLT, Hyderabad Bench.
The
aforementioned Scheme was approved by the NCLT, Hyderabad Bench vide its Order dated April 5, 2022. Subsequently, the Company filed the
NCLT order, with the Ministry of Company Affairs on April 8, 2022 (“Effective Date”). Pursuant to the Scheme of Amalgamation
and Arrangement as approved by the NCLT, an aggregate of 41,325,300 equity shares, face value of Rs.5 each held by DRHL in the share capital
of the Company have been cancelled and an equivalent 41,325,300 number of equity shares, face value of Rs.5 each were allotted to the
shareholders of DRHL. There was no change in the total equity shareholding (Promoter/Public Shareholding) of the Company, on account of
the allotment/cancellation of equity shares pursuant to the approved Scheme.
The
Scheme also provides that the Promoters of the Company will jointly and severally indemnify, defend and hold harmless the Company, its
directors, employees, officers, representatives, or any other person authorized by the Company (excluding the Promoters) for any liability,
claim, or demand, which may devolve upon the Company on account of this amalgamation.
24. Business Combination
Acquisition of Nimbus Health, GmbH
On
February 3, 2022, the Company entered into an agreement with Nimbus Health, GmbH (“Nimbus Health”) to acquire 100% of the
share capital of Nimbus Health along with the existing employees.
The
Company completed the acquisition effective as of February 24, 2022.
The
consideration involved an upfront payment of Rs.337, and additional performance and milestone-based earn-outs over the next four years
pursuant to fulfillment of certain conditions.
Nimbus
Health is a licensed pharmaceutical wholesaler in Germany focusing on medical cannabis-based products. The acquisition will allow the
Company to build on Nimbus Health strengths and introduce medical cannabis-based medicines as a promising treatment option for patients.
The
Company has accounted for the transaction under IFRS 3, “Business Combinations”.
During
the three months ended June 30, 2022, the Company completed the purchase price allocation. There is no change in the fair values of assets
and liabilities which was included on a provisional basis as of March 31, 2022.
DR. REDDY’S LABORATORIES LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS
(in millions, except share and per share data
and where otherwise stated)
24. Business Combination (continued)
Tabulated below
are the fair values of the assets acquired, including goodwill, and liabilities assumed on the acquisition date:
Particulars | |
Amount | |
Cash | |
| Rs.337 | |
Payment through Escrow account | |
| 84 | |
Total consideration | |
Rs. | 421 | |
Assets acquired | |
| | |
Goodwill | |
| Rs.260 | |
Property, plant and equipment | |
| 2 | |
Other intangible assets | |
| 106 | |
Inventories | |
| 144 | |
Trade receivables | |
| 45 | |
Cash and cash equivalents | |
| 11 | |
Other assets | |
| 2 | |
Deferred tax asset | |
| 2 | |
Liabilities assumed | |
| | |
Trade payables | |
| (141 | ) |
Other liabilities | |
| (10 | ) |
Total net assets | |
Rs. | 421 | |
The
total goodwill of Rs.260 consists largely of the synergies and economies of scale expected from the acquired business, together with the
value of the workforce acquired. This goodwill has been assigned to the Company’s Global Generics segment.
The
amount of revenue and loss pertaining to the acquired business was not material for the nine months ended December 31, 2022.
25. Impact of military
conflict between Russia and Ukraine
The
Company considered the uncertainty relating to the continuing military conflict between Russia and Ukraine in assessing the recoverability
of receivables, inventories, goodwill, intangible assets, investments and other assets. The outcome of the war is difficult to predict,
and it could have an adverse impact on the macroeconomic environment. Management has considered all potential impacts of the war including
adherence of global sanctions and other restrictive measures against Russia and any retaliatory actions taken by Russia. For this purpose,
the Company considered internal and external sources of information up to the date of approval of these interim financial statements.
The
Company’s supply chain has been impacted primarily in Russia and Ukraine, both in terms of higher freight costs and increase in
the lead time by suppliers. However, the Company has been able to service its customers without any significant shortages or disruptions.
The Company based on its judgments, estimates and assumptions including sensitivity analysis, expects to fully recover the carrying amounts
of receivables, inventories, goodwill, intangible assets, investments and other assets. Accordingly, during the nine months ended December
31, 2022, the impact of this conflict on the Company’s operations, cash flows and financial condition was not material. The Company
will continue to closely monitor any material changes to future economic conditions.
26.
Update on the Inspection of facilities from the U.S. FDA
Month
and year |
Unit |
Details
of observations |
July 2022 |
Formulations manufacturing facility (FTO XI)
at Srikakulam, India |
Two observations were noted
in the U.S. FDA inspection. The Company responded to the observations in July 2022. In August 2022, an Establishment Inspection Report
(“EIR”) was issued by the U.S. FDA indicating the closure of audit. |
27. Subsequent events
On
January 11, 2023, the Company entered into an agreement with Pfizer Products India Private Limited to acquire oncology brand PRIMCYV®
in India for a consideration of Rs.150.
ITEM 2. OPERATING AND FINANCIAL REVIEW, TREND INFORMATION
The following discussion
and analysis should be read in conjunction with the audited consolidated financial statements, the related notes and the “Operating
and Financial Review and Prospects” section included in our Annual Report on Form 20-F for the fiscal year ended March 31, 2022,
and the interim financial statements included in our report on Form 6-K for the three months ended June 30, 2022 and the six months ended
September 30, 2022, all of which are on file with the SEC, as well as the unaudited condensed consolidated interim financial statements
and related notes contained in this report on Form 6-K.
This discussion contains
forward-looking statements that involve risks and uncertainties. When used in this discussion, the words “anticipate”, “believe”,
“estimate”, “intend”, “will” and “expect” and other similar expressions as they relate
to us or our business are intended to identify such forward-looking statements. Actual results, performances or achievements could differ
materially from those expressed or implied in such forward-looking statements. Factors that could cause or contribute to such differences
include those described under the heading “Risk Factors” in our Form 20-F. Readers are cautioned not to place reliance on
these forward-looking statements which reflect management’s analysis and assumptions only as of the date hereof. We undertake no
obligation to publicly update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise.
Section A:
Three months ended December 31, 2022 compared to the three months
ended December 31, 2021
The following table sets
forth, for the periods indicated, financial data along with respective percentages to total revenues and the increase (or decrease) by
item as a percentage of the amount over the comparable period in the previous year.
| |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
| |
| |
Rs. in millions | | |
% of Revenues | | |
Rs. in millions | | |
% of Revenues | | |
Increase/ (Decrease) | |
Revenues | |
Rs. | 67,700 | | |
| 100.0 | % | |
Rs. | 53,197 | | |
| 100.0 | % | |
| 27 | % |
Gross profit | |
| 40,093 | | |
| 59.2 | % | |
| 28,612 | | |
| 53.8 | % | |
| 40 | % |
Selling, general and administrative expenses | |
| 17,981 | | |
| 26.6 | % | |
| 15,411 | | |
| 29.0 | % | |
| 17 | % |
Research and development expenses | |
| 4,821 | | |
| 7.1 | % | |
| 4,159 | | |
| 7.8 | % | |
| 16 | % |
Impairment of non-current assets | |
| 134 | | |
| 0.2 | % | |
| 47 | | |
| 0.1 | % | |
| 185 | % |
Other expense/(income), net | |
| 732 | | |
| 1.1 | % | |
| (240 | ) | |
| (0.5 | %) | |
| - | |
Results from operating activities | |
| 16,425 | | |
| 24.3 | % | |
| 9,235 | | |
| 17.4 | % | |
| 78 | % |
Finance (expense)/income, net | |
| (139 | ) | |
| (0.2 | %) | |
| 289 | | |
| 0.5 | % | |
| - | |
Share of profit of equity accounted investees, net of tax | |
| 60 | | |
| 0.1 | % | |
| 185 | | |
| 0.3 | % | |
| (68 | %) |
Profit before tax | |
| 16,346 | | |
| 24.1 | % | |
| 9,709 | | |
| 18.3 | % | |
| 68 | % |
Tax expense, net | |
| 3,875 | | |
| 5.7 | % | |
| 2,644 | | |
| 5.0 | % | |
| 47 | % |
Profit for the period | |
Rs. | 12,471 | | |
| 18.4 | % | |
Rs. | 7,065 | | |
| 13.3 | % | |
| 77 | % |
Revenues
Our overall consolidated
revenues were Rs.67,700 million for the three months ended December 31, 2022, an increase of 27% as compared to Rs.53,197 million for
the three months ended December 31, 2021.
The following table sets
forth, for the periods indicated, our consolidated revenues by segment:
| |
For the three months ended December 31, | |
| |
2022 | | |
2021 | | |
| |
| |
Rs. in
millions | | |
Revenues %
of Total | | |
Rs. in
millions | | |
Revenues %
of Total | | |
Increase/
(Decrease) | |
Global Generics | |
Rs. | 59,241 | | |
| 88 | % | |
Rs. | 44,508 | | |
| 84 | % | |
| 33 | % |
Pharmaceutical Services and Active Ingredients (PSAI) | |
| 7,758 | | |
| 11 | % | |
| 7,271 | | |
| 14 | % | |
| 7 | % |
Others | |
| 701 | | |
| 1 | % | |
| 1,418 | | |
| 2 | % | |
| (51 | %) |
Total | |
Rs. | 67,700 | | |
| 100 | % | |
Rs. | 53,197 | | |
| 100 | % | |
| 27 | % |
Segment Analysis
Global Generics
Revenues from our Global
Generics segment were Rs.59,241 million for the three months ended December 31, 2022, an increase of 33% as compared to Rs.44,508 million
for the three months ended December 31, 2021. The revenue increase was in all of the four business geographies of this segment: North
America (the United States and Canada), Europe, India, and “Emerging Markets” (which is comprised of Russia, other countries
of the former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including South Africa,
China, Brazil and Australia).
The foregoing increase in
revenues of this segment was attributable to the following factors:
| · | an increase of approximately 33% resulting from
new products launched during the period; |
| · | an increase of approximately 4% resulting from
foreign exchange rate gains; |
| · | an increase of approximately 3% resulting from
a net increase in the sales volumes of existing products in this segment; and |
| · | the foregoing was partially offset by a decrease
of approximately 7% resulting from the net impact of changes in sales prices of the products in this segment. |
North America (the United
States and Canada): Our Global Generics segment’s revenues from North America (the United States and Canada) were Rs.30,567
million for the three months ended December 31, 2022, an increase of 64% as compared to Rs.18,645 million for the three months ended December
31, 2021. In U.S. dollar absolute currency terms (i.e., U.S. dollars without taking into account the effect of currency exchange rates),
such revenues, increased by 51% in the three months ended December 31, 2022 as compared to the three months ended December 31, 2021.
This increase in revenues
was largely attributable to new product launches between January 1, 2022 and December 31, 2022 (such as lenalidomide capsules and sorafenib
tablets) and an increase in volumes of certain of our existing products, which was partly offset by price erosion in certain of our existing
products.
During the three months ended
December 31, 2022, we launched five new products in the United States, which were desmopressin MDV, OTC guaifenesin ER, fingolimod capsules,
thiotepa 100 mg injection and biorphen injection.
During the three months ended
December 31, 2022, we made one new ANDA filing with the U.S. FDA. As of December 31, 2022, we had 78 filings pending approval with the
U.S. FDA, which includes 75 ANDAs and three NDAs filed under section 505(b)(2). Out of these 78 ANDA filings, 41 are Paragraph IV filings
and we believe we are the first to file with respect to 21 of these filings.
Europe: Our Global
Generics segment’s revenues from Europe are primarily derived from Germany, the United Kingdom, Italy, France and Spain. Such revenues
were Rs.4,303 million for the three months ended December 31, 2022, an increase of 6% as compared to Rs.4,058 million for the three months
ended December 31, 2021. This increase was primarily on account of an increase in the sales volumes of some of our existing products and
new products launched between January 1, 2022 and December 31, 2022, partly offset by price erosion in certain of our existing products
and adverse foreign exchange rates.
India: Our Global
Generics segment’s revenues from India for the three months ended December 31, 2022 were Rs.11,274 million, an increase of 10% as
compared to Rs.10,266 million for the three months ended December 31, 2021. This increase was attributable to revenues from new products
launched between January 1, 2022 and December 31, 2022 and an increase in sales prices of some of our existing products, which
was partially offset by a decrease in sales volumes of some of our existing products. During the three months ended December 31, 2022,
we launched two new brands in India.
According to IQVIA in its
report for the three months ended December 31, 2022, our secondary sales in India grew by 4.4% during such period, as compared to the
India pharmaceutical market’s growth of 10.0%.
Emerging Markets:
Our Global Generics segment’s revenues from “Emerging Markets” (which is comprised of Russia, other countries of the
former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including South Africa, China,
Brazil and Australia) for the three months ended December 31, 2022 were Rs.13,097 million, an increase of 14% as compared to Rs.11,539
million for the three months ended December 31, 2021.
Russia: Our Global
Generics segment’s revenues from Russia for the three months ended December 31, 2022 were Rs.6,875 million, an increase of 45% as
compared to Rs.4,746 million for the three months ended December 31, 2021. In Russian rouble absolute currency terms (i.e., Russian roubles
without taking into account the effect of currency exchange rates), such revenues increased by 29%. The increase in revenues was primarily
on account of an increase in sales prices of certain of our existing products and increase in volumes of certain of our existing products.
Our over-the-counter (“OTC”) division’s revenues from Russia for the three months ended December 31, 2022 were 48% of
our total revenues from Russia.
According to IQVIA, as per
its report for the two months ended November 30, 2022, our sales value (in Russian roubles) growth and volume growth from Russia, as compared
to the Russian pharmaceutical market sales value (in Russian roubles) growth and volume growth was as follows:
| |
For the two months ended November 30, 2022 | |
| |
| Dr. Reddy's Laboratories Ltd. | | |
| Russian pharmaceutical market | |
| |
| Sales value | | |
| Volume | | |
| Sales value | | |
| Volume | |
Prescription (Rx) | |
| 1.0 | % | |
| (2.8 | %) | |
| 3.0 | % | |
| (2.7 | %) |
Over-the-counter (OTC) | |
| 6.1 | % | |
| (4.7 | %) | |
| (2.3 | %) | |
| (8.0 | %) |
Total (Rx + OTC) | |
| 3.6 | % | |
| (4.1 | %) | |
| 0.2 | % | |
| (6.6 | %) |
Other countries of the
former Soviet Union and Romania: Our Global Generics segment’s revenues from other countries of the former Soviet Union and
Romania were Rs.2,239 million for the three months ended December 31, 2022, a decrease of 6% as compared to Rs.2,375 million for the three
months ended December 31, 2021. This decrease was attributable to a decrease in sales volumes of certain of our existing products and
adverse foreign exchange rates, partially offset by an increase in sales prices of certain of our existing products and by additional
revenues from new products launched between January 1, 2022 and December 31, 2022.
“Rest of the World”
Markets: We refer to all markets of this segment other than North America (the United States and Canada), Europe, Russia and other
countries of the former Soviet Union, Romania and India as our “Rest of the World” markets. Our Global Generics segment’s
revenues from our “Rest of the World” markets were Rs.3,983 million for the three months ended December 31, 2022, a decrease
of 10% as compared to Rs.4,418 million for the three months ended December 31, 2021. This decrease was largely attributable to a decrease
in the sales volumes of certain of our existing products and a decrease in prices of certain of our existing products, partly offset by
additional revenues from new products launched between January 1, 2022 and December 31, 2022 and favourable foreign exchange rates.
Pharmaceutical Services
and Active Ingredients (“PSAI”)
Our PSAI segment’s
revenues for the three months ended December 31, 2022 were Rs.7,758 million, an increase of 7% as compared to Rs.7,271 million for the
three months ended December 31, 2021. In U.S. dollar absolute currency terms (i.e., U.S. dollars without taking into account the effect
of currency exchange rates), such revenues decreased by 2% in the three months ended December 31, 2022 as compared to the three months
ended December 31, 2021. This decrease was largely attributable to the decrease in prices of certain of our existing products.
Gross Profit
Our total gross profit was
Rs.40,093 million for the three months ended December 31, 2022, representing 59.2% of our revenues for that period, as compared to Rs.28,612
million for the three months ended December 31, 2021, representing 53.8% of our revenues for that period.
The following table sets forth, for
the period indicated, our gross profits by segment:
| |
For
the three months ended December 31, | |
| |
2022 | | |
2021 | |
| |
(Rs.
in millions) | |
| |
Gross
Profit | | |
%
of Segment Revenue | | |
Gross
Profit | | |
%
of Segment Revenue | |
Global Generics | |
Rs. | 38,255 | | |
| 64.6 | % | |
Rs. | 25,731 | | |
| 57.8 | % |
PSAI | |
| 1,409 | | |
| 18.2 | % | |
| 1,638 | | |
| 22.5 | % |
Others | |
| 429 | | |
| 61.1 | % | |
| 1,243 | | |
| 87.7 | % |
Total | |
Rs. | 40,093 | | |
| 59.2 | % | |
Rs. | 28,612 | | |
| 53.8 | % |
The gross profit margin from
our Global Generics segment increased to 64.6% of this segment’s revenues for the three months ended December 31, 2022 from 57.8%
for the three months ended December 31, 2021. This increase was on account of an increase in contributions from new products having higher
gross margins, an increase in the proportion of sales of certain products with higher gross margins and favourable foreign exchange rates.
This increase was partially offset by price erosion in certain of our products, primarily in the United States and Europe.
The gross profit margin from
our PSAI segment decreased to 18.2% of this segment’s revenues for the three months ended December 31, 2022, from 22.5% for the
three months ended December 31, 2021. This decrease was primarily on account of a higher percentage of manufacturing overhead costs on
lower sales base and adverse changes in our product mix.
Selling, general and administrative expenses
Our selling, general and
administrative expenses were Rs.17,981 million for the three months ended December 31, 2022, an increase of 17% as compared to Rs.15,411
million for the three months ended December 31, 2021. After taking into account the impact of exchange rate fluctuations of the Indian
rupee against multiple currencies in the markets in which we operate, this increase was largely attributable to the following:
| · | a 9% increase due to higher personnel costs,
primarily on account of annual raises and foreign exchange rates; |
| · | a 3% increase due to higher sales and marketing
expenses; |
| · | a 2% increase due to higher travel and vehicle
expenses; and |
| · | a 3% increase due to higher other costs |
As a proportion of our total revenues, our selling, general and administrative
expenses decreased to 26.6% for the three months ended December 31, 2022 from 29.0% for the three months ended December 31, 2021.
Impairment of non-current assets
Our impairment of non-current
assets charge were Rs.134 million for the three months ended December 31, 2022 as compared to a charge of Rs.47 million for the three
months December 31, 2021 (Refer to Note 8 and Note 10 of the interim financial statements in this report for further details).
Research and development expenses
Our research and development
expenses were Rs.4,821 million for the three months ended December 31, 2022, an increase of 16% as compared to Rs.4,159 million for the
three months ended December 31, 2021. This increase was primarily on account of higher developmental expenditures on certain projects
in our Global Generics and PSAI segments.
As a proportion of our total
revenues, our research and development expenses was at 7.1% for the three months ended December 31, 2022, as compared to 7.8% for the
three months ended December 31, 2021.
Other income, net
Our net other expense was
Rs.732 million for the three months ended December 31, 2022, as compared to net other income of Rs.240 million for the three months ended
December 31, 2021. Net other expense during the three months ended December 31, 2022, included an amount of Rs.991 million (EUR11.36 million)
representing the loss on sale of assets, pursuant to an agreement with Delpharm Development Leiden B.V for the transfer of certain assets,
liabilities and employees at its site at Leiden, Netherlands.
Finance income, net
Our net finance expense was
Rs.139 million for the three months ended December 31, 2022, as compared to net finance income of Rs.289 million for the three months
ended December 31, 2021. This decrease in net finance income was due to the following:
| · | profit on sale of investments, and unrealized
gains on investments recorded at fair value through profit and loss, of Rs.245 million for the three months ended December 31, 2022, as
compared to profit on sale of investments of Rs.26 million for the three months ended December 31, 2021; |
| · | net interest expense of Rs.145 million for the
three months ended December 31, 2022, as compared to net interest income of Rs.47 million for the three months ended December 31, 2021;
and |
| · | net foreign exchange loss of Rs.239 million for
the three months ended December 31, 2022, as compared to net foreign exchange gain of Rs.216 million for the three months ended December
31, 2021. |
Profit before tax
As a result of the above,
our profit before tax was Rs.16,346 million for the three months ended December 31, 2022, as compared to Rs.9,709 million for the three
months ended December 31, 2021.
Tax expense
Our consolidated weighted
average tax rate was 23.7% for the three months ended December 31, 2022, as compared to 27.1% for the three months ended December 31,
2021.
The
effective rate of tax for the three months ended December 31, 2022 was lower primarily on account of the changes in our jurisdictional
mix of earnings (i.e., an increase in the proportion of our profits from lower tax jurisdictions and decrease in proportion of our profits
from higher tax jurisdictions).
Our tax expense was Rs.3,875
million for the three months ended December 31, 2022 as compared to Rs.2,644 million for the three months ended December 31, 2021.
Profit for the period
As a result of the above,
our net profit was Rs.12,471 million for the three months ended December 31, 2022, representing 18.4% of our total revenues for such period,
as compared to Rs.7,065 million for the three months ended December 31, 2021, representing 13.3% of our total revenues for such period.
Section B:
Nine months ended December
31, 2022 compared to the nine months ended December 31, 2021
The following table sets
forth, for the periods indicated, financial data along with respective percentages to total revenues and the increase (or decrease) by
item as a percentage of the amount over the comparable period in the previous year.
| |
For the nine months ended December 31, | |
| |
2022 | | |
2021 | | |
| |
| |
Rs. in
millions | | |
% of
Revenues | | |
Rs. in
millions | | |
% of
Revenues | | |
Increase/
(Decrease) | |
Revenues | |
Rs. | 182,911 | | |
| 100.0 | % | |
Rs. | 160,023 | | |
| 100.0 | % | |
| 14 | % |
Gross profit | |
| 103,346 | | |
| 56.5 | % | |
| 85,097 | | |
| 53.2 | % | |
| 21 | % |
Selling, general and administrative expenses | |
| 50,034 | | |
| 27.4 | % | |
| 46,407 | | |
| 29.0 | % | |
| 8 | % |
Research and development expenses | |
| 14,015 | | |
| 7.7 | % | |
| 13,156 | | |
| 8.2 | % | |
| 7 | % |
Impairment of non-current assets | |
| 159 | | |
| 0.1 | % | |
| 47 | | |
| 0.0 | % | |
| 238 | % |
Other income, net | |
| (5,626 | ) | |
| (3.1 | %) | |
| (2,470 | ) | |
| (1.5 | %) | |
| 128 | % |
Results from operating activities | |
| 44,764 | | |
| 24.5 | % | |
| 27,957 | | |
| 17.5 | % | |
| 60 | % |
Finance income, net | |
| 2,054 | | |
| 1.1 | % | |
| 1,260 | | |
| 0.8 | % | |
| 63 | % |
Share of profit of equity accounted investees, net of tax | |
| 294 | | |
| 0.2 | % | |
| 598 | | |
| 0.4 | % | |
| (51 | %) |
Profit before tax | |
| 47,112 | | |
| 25.8 | % | |
| 29,815 | | |
| 18.6 | % | |
| 58 | % |
Tax expense, net | |
| 11,637 | | |
| 6.4 | % | |
| 7,122 | | |
| 4.5 | % | |
| 63 | % |
Profit for the period | |
| 35,475 | | |
| 19.4 | % | |
Rs. | 22,693 | | |
| 14.2 | % | |
| 56 | % |
Revenues
Our overall consolidated
revenues were Rs.182,911 million for the nine months ended December 31, 2022, an increase of 14% as compared to Rs.160,023 million for
the nine months ended December 31, 2021.
The following table sets
forth, for the periods indicated, our consolidated revenues by segment:
| |
For the nine months ended December 31, | |
| |
2022 | | |
2021 | | |
| |
| |
Rs. in
millions | | |
Revenues %
of Total | | |
Rs. in
millions | | |
Revenues %
of Total | | |
Increase/
(Decrease) | |
Global Generics | |
Rs. | 159,511 | | |
| 87 | % | |
Rs. | 133,052 | | |
| 83 | % | |
| 20 | % |
PSAI | |
| 21,282 | | |
| 12 | % | |
| 23,183 | | |
| 14 | % | |
| (8 | %) |
Others | |
| 2,118 | | |
| 1 | % | |
| 3,788 | | |
| 3 | % | |
| (44 | %) |
Total | |
Rs. | 182,911 | | |
| 100 | % | |
Rs. | 160,023 | | |
| 100 | % | |
| 14 | % |
Segment Analysis
Global Generics
Revenues from our Global
Generics segment were Rs.159,511 million for the nine months ended December 31, 2022, an increase of 20% as compared to Rs.133,052 million
for the nine months ended December 31, 2021. The revenue increase was in all of the four business geographies of this segment: North America
(the United States and Canada), Europe, India, and “Emerging Markets” (which is comprised of Russia, other countries of the
former Soviet Union, Romania and certain other countries from our “Rest of the World” markets, including South Africa, China,
Brazil and Australia).
The foregoing increase in
revenues of this segment was attributable to the following factors:
| · | an increase of approximately 25% resulting from
new products launched during the period; |
| · | an increase of approximately 3% resulting from
foreign exchange rate gains; |
| · | an increase of approximately 1% resulting from
a net increase in the sales volumes of existing products in this segment; and |
| · | the foregoing was partially offset by a decrease
of approximately 8% resulting from the net impact of changes in sales prices of the products in this segment. |
North America (the United
States and Canada): Our Global Generics segment’s revenues from North America (the United States and Canada) were Rs.76,383
million for the nine months ended December 31, 2022, an increase of 39% as compared to Rs.54,944 million for the nine months ended December
31, 2021. In U.S. dollar absolute currency terms (i.e., U.S. dollars without taking into account the effect of currency exchange rates),
such revenues increased by 30% in the nine months ended December 31, 2022 as compared to the nine months ended December 31, 2021.
During the nine months ended
December 31, 2022, we launched 19 new products in North America (the United States and Canada). We launched 17 new products in the United
States, which are ketorolac, OTC nicotine lozenges original, methylprednisolone sodium succinate, pemetrexed injection, posaconazole tablet,
sorafenib, lenalidomide capsules, fesoterodine fumarate tablets, bortezomib inj 3.5mg, neostigmine PFS, potassium chloride UD, fexofenadine
HCl + pseudoephedrine HCl ER tablets, desmopressin MDV, OTC guaifenesin ER, fingolimod capsules, thiotepa 100 mg injection and biorphen
injection. We also launched two new products in Canada, which are pemetrexed and oxaliplatin.
Europe: Our Global
Generics segment’s revenues from Europe were Rs.12,644 million for the nine months ended December 31, 2022, an increase of
4% as compared to Rs.12,187 million for the nine months ended December 31, 2021. After taking into account the impact of exchange rate
fluctuations of the Indian rupee against the European Euro and Great Britain’s Pound sterling, this increase was largely attributable
to an increase in the sales volumes of certain of our existing products and to certain new products launched, partly offset by a decrease
in prices of certain of our existing products.
India: Our Global
Generics segment’s revenues from India were Rs.36,113 million for the nine months ended December 31, 2022, an increase
of 12% as compared to Rs.32,268 million for the nine months ended December 31, 2021. During the nine months ended December 31, 2022, we
launched nine new brands in India.
According to IQVIA in its
Moving Annual Total report for the twelve months ended December 31, 2022, our secondary sales in India grew by 2.5% during such period,
as compared to the India pharmaceutical market’s growth of 6.5%.
Emerging Markets:
Our Global Generics segment’s revenues from “Emerging Markets” (which is comprised of Russia, other countries of the
former Soviet Union, Romania and certain other countries which we refer to as our “Rest of the World” markets, primarily South
Africa, China, Brazil and Australia) for the nine months ended December 31, 2022 were Rs.34,371 million, an increase of 2% as compared
to Rs.33,653 million for the nine months ended December 31, 2021.
Russia: Our Global
Generics segment’s revenues from Russia for the nine months ended December 31, 2022 were Rs.16,036 million, an increase of
14% as compared to Rs.14,015 million for the nine months ended December 31, 2021. In Russian rouble absolute currency terms (i.e., Russian
roubles without taking into account the effect of currency exchange rates), such revenues increased by 5%. Our OTC division’s revenues
from Russia for the nine months ended December 31, 2022 were 49% of our total revenues from Russia.
According to IQVIA, as per
its report for the eight months ended November 30, 2022, our sales value growth (in Russian roubles) and volume growth from Russia, as
compared to the Russian pharmaceutical market, was as follows:
| |
For the eight months ended November 30, 2022 | |
| |
Dr. Reddy's Laboratories Ltd. | | |
Russian pharmaceutical market | |
| |
Sales value | | |
Volume | | |
Sales value | | |
Volume | |
Prescription (Rx) | |
| 2.6 | % | |
| (3.3 | %) | |
| 6.0 | % | |
| (1.2 | %) |
Over-the-counter (OTC) | |
| 9.8 | % | |
| 1.2 | % | |
| 3.9 | % | |
| (4.3 | %) |
Total (Rx + OTC) | |
| 6.1 | % | |
| (0.3 | %) | |
| 4.9 | % | |
| (3.4 | %) |
Other Countries of former
Soviet Union and Romania: Our Global Generics segment’s revenues from other countries of the former Soviet Union and Romania
were Rs.6,315 million for the nine months ended December 31, 2022, an increase of 5% as compared to Rs.5,987 million for the nine months
ended December 31, 2021.
“Rest of the World”
Markets: We refer to all markets of this segment other than North America (the United States and Canada), Europe, Russia and other
countries of the former Soviet Union, Romania and India as our “Rest of the World” markets. Our Global Generics segment’s
revenues from our “Rest of the World” markets were Rs.12,020 million for the nine months ended December 31, 2022, a decrease
of 12% as compared to Rs.13,651 million for the nine months ended December 31, 2021.
Pharmaceutical Services and Active Ingredients
(“PSAI”)
Our PSAI segment’s
revenues for the nine months ended December 31, 2022 were Rs.21,282 million, a decrease of 8% as compared to Rs.23,183 million for the
nine months ended December 31, 2021. After taking into account the impact of exchange rate fluctuations of the Indian rupee against multiple
currencies in the markets in which we operate, this decrease was largely attributable to a decrease in sales volumes and prices of some
our existing products, partially offset by the contribution from new products launched.
Gross Profit
Our total gross profit was
Rs.103,347 million for the nine months ended December 31, 2022, representing 56.5% of our revenues for that period, as compared to Rs.85,097
million for the nine months ended December 31, 2021, representing 53.2% of our revenues for that period.
| |
For
the nine months ended December 31, | |
| |
2022 | | |
2021 | |
| |
(Rs.
in millions) | |
| |
Gross
Profit | | |
%
of Segment Revenue | | |
Gross
Profit | | |
%
of Segment Revenue | |
Global Generics | |
Rs. | 99,221 | | |
| 62.2 | % | |
Rs. | 76,440 | | |
| 57.5 | % |
Pharmaceutical Services and Active Ingredients (PSAI) | |
| 2,752 | | |
| 12.9 | % | |
| 5,434 | | |
| 23.4 | % |
Others | |
| 1,373 | | |
| 64.8 | % | |
| 3,223 | | |
| 85.1 | % |
Total | |
Rs. | 103,346 | | |
| 56.5 | % | |
Rs. | 85,097 | | |
| 53.2 | % |
After taking into account
the impact of the exchange rate fluctuations of the Indian rupee against multiple currencies in the markets in which we operate, the gross
profit margin from our Global Generics segment increased to 62.2% of this segment’s revenues for the nine months ended December
31, 2022, from 57.5% for the nine months ended December 31, 2021. This increase was on account of increase in the proportion of certain
new product sales with higher gross margins, manufacturing incentives and favorable changes in our product mix. This increase was partially
offset by price erosion in certain of our products, primarily in our generic markets.
The gross profit margin from
our PSAI segment decreased to 12.9% of this segment’s revenues for the nine months ended December 31, 2022, from 23.4% for the nine
months ended December 31, 2021. This decrease was primarily on account of certain inventory write-down provisions, higher percentage of
manufacturing overhead costs on a lower sales base and adverse changes in our product mix.
Selling, general and administrative expenses
Our selling, general and
administrative expenses were Rs.50,034 million for the nine months ended December 31, 2022, an increase of 8% as compared to Rs.46,407
million for the nine months ended December 31, 2021. After taking into account the impact of exchange rate fluctuations of the Indian
rupee against multiple currencies in the markets in which we operate, this increase was largely attributable to the following:
| · | a 7% increase due to higher personnel costs,
primarily on account of annual raises and foreign exchange rates; |
| · | a 2% increase due to higher sales and marketing
expenses; |
| · | a 2% increase due to higher travel and vehicle
expenses; |
| · | a 2% increase due to higher freight costs; and |
| · | the foregoing was partly offset by: |
| o | a 3% decrease due to lower royalty fees; and |
| o | a 2% decrease due to lower legal and professional expenses. |
As a proportion of our total
revenues, our selling, general and administrative expenses were 27.4% for the nine months ended December 31, 2022, as compared to 29.0%
for the nine months ended December 31, 2021.
Impairment of non-current assets
Our impairment of non-current assets expense charge
were Rs.159 million for the nine months ended December 31, 2022 as compared to a charge of Rs.47 million for the nine months December
31, 2021. (Refer to Note 8 and Note 10 of the interim financial statements in this report for further details).
Research and development expenses
Our research and development
costs were Rs.14,015 million for the nine months ended December 31, 2022, an increase of 7% as compared to Rs.13,156 million for the nine
months ended December 31, 2021. This increase was primarily on account of higher developmental expenditure on certain projects for our
biosimilars, generics and new chemical entities (“NCEs”) pipeline.
As a proportion of our total
revenues, our research and development expenses was at 7.7% for the nine months ended December 31, 2022, as compared to 8.2% for the nine
months ended December 31, 2021.
Other income, net
Our net other income was
Rs.5,626 million for the nine months ended December 31, 2022, as compared to net other income of Rs.2,470 million for the nine months
ended December 31, 2021. The other income was higher for the nine months ended December 31, 2022 primarily on account of recognition of
income of Rs. 5,638 million (U.S.$ 71.39 million discounted to present value) from a settlement agreement, with Indivior Inc., Indivior
UK Limited, and Aquestive Therapeutics, Inc., resolving all claims between the parties relating to the generic buprenorphine and naloxone
sublingual film, 2 mg/0.5 mg, 4 mg/1 mg, 8 mg/2 mg, and 12 mg/3 mg dosages. Other income for nine months ended December 31, 2021 included
recognition of an income of Rs.1,064 million towards the sale of all of our rights relating to our anti-cancer agent E7777 (denileukin
diftitox) to Citius Pharmaceuticals, Inc.
Finance income, net
Our net finance income was
Rs.2,054 million for the nine months ended December 31, 2022, as compared to Rs.1,260 million for the nine months ended December 31, 2021.
This increase in net finance income was due to the following:
| · | profit on sale of investments, and unrealized
gains on investments recorded at fair value through profit and loss, of Rs.323 million for the nine months ended December 31, 2022, as
compared to profit on sale of investments of Rs.243 million for the nine months ended December 31, 2021; |
| · | net interest expense of Rs.368 million for the
nine months ended December 31, 2022, as compared to net interest income of Rs.66 million for the nine months ended December 31, 2021;
and |
| · | net foreign exchange gain of Rs.2,099 million
for the nine months ended December 31, 2022, as compared to net foreign exchange gain of Rs.951 million for the nine months ended December
31, 2021. |
Profit before tax
As a result of the above,
our profit before tax was Rs.47,112 million for the nine months ended December 31, 2022, an increase of 58% as compared to Rs.29,815 million
for the nine months ended December 31, 2021.
Tax expense
Our consolidated weighted
average tax rate was 24.7% for the nine months ended December 31, 2022, as compared to 23.9% for the nine months ended December 31, 2021.
Our tax expense was Rs.11,637 million for the nine months ended December 31, 2022 as compared to Rs.7,122 million for the nine months
ended December 31, 2021.
Profit for the period
As a result of the above,
our net profit was Rs.35,475 million for the nine months ended December 31, 2022, representing 19.4% of our total revenues for such period,
as compared to Rs.22,693 million for the nine months ended December 31, 2021, representing 14.2% of our total revenues for such period.
ITEM 3. LIQUIDITY AND CAPITAL RESOURCES
We have primarily financed
our operations through cash flows generated from operations and a mix of long-term and short-term borrowings. Our principal liquidity
and capital needs are for the purchase of property, plant and equipment, regular business operations and research and development.
Our principal sources of
short-term liquidity are internally generated funds and short-term borrowings, which we believe are sufficient to meet our working capital
requirements.
Principal Debt Obligations
The following table provides
a list of our principal debt obligations (excluding lease obligations) outstanding as of December 31, 2022:
| |
Amount (Rs. in millions) | | |
Currency(1) | | |
Interest Rate(2) | |
Pre-shipment credit | |
Rs. | 3,000 | | |
| INR | | |
| 3 Months T-bill + 20 bps | |
Other working capital borrowings | |
| 8,468 | | |
| RUB | | |
| 9.80% to 14.10% | |
| |
| | | |
| MXN | | |
| TIIE + 1.15% | |
| |
| | | |
| BRL | | |
| CDI + 1.20% | |
| |
| | | |
| INR | | |
| 8.64 | % |
Long-term Non-convertible debentures | |
| 3,800 | | |
| INR | | |
| 6.77 | % |
| (1) | “INR” means Indian rupees, “RUB” means Russian roubles, “MXN” means
Mexican pesos, and “BRL” means Brazilian reals. |
| (2) | “TIIE” means the Equilibrium Inter-banking Interest Rate (Tasa de Interés Interbancaria
de Equilibrio), “T-bill” means the India Treasury bill interest rate, “CDI” means the Brazilian interbank deposit
rate (Certificado de Depósito Interbancário) |
Summary of statements of cash flows
The following table summarizes our statements
of cash flows for the periods presented:
| |
For
the nine months ended December 31, | |
| |
2022 | | |
2021 | |
| |
(Rs.
in millions) | |
Net cash from/(used in): | |
| | | |
| | |
Operating activities | |
Rs. | 39,196 | | |
Rs. | 18,989 | |
Investing activities | |
| (25,600 | ) | |
| (4,399 | ) |
Financing activities | |
| (22,563 | ) | |
| (7,519 | ) |
Net (decrease)/increase in cash
and cash equivalents | |
Rs. | (8,967) | | |
Rs. | 7,071 | |
In addition to cash, inventory
and accounts receivable, our unused sources of liquidity included Rs.61,709 million available in credit under revolving credit facilities
with banks as of December 31, 2022.
Cash Flows from Operating Activities
The result of operating activities
was a net cash inflow of Rs.39,136 million for the nine months ended December 31, 2022, as compared to a cash inflow of Rs. 18,989 million
for the nine months ended December 31, 2021.
The increase in net cash
inflow of Rs.20,207 million was primarily due to an increase in our profit after tax and working capital requirements.
Our average days’ sales
outstanding (“DSO”) as of December 31, 2022, March 31, 2022 and December 31, 2021 were 99 days, 108 days and 104 days, respectively.
Cash Flows used in Investing Activities
Our investing activities
resulted in net cash outflows of Rs.25,600 million and Rs. 4,399 million for the nine months ended December 31, 2022 and 2021, respectively.
The increase in net cash inflow was primarily on account of the following:
| · | net purchases of other investments of Rs.11,093
million for the nine months ended December 31, 2022, as compared to net proceeds from sales of other investments of Rs. 6,814 million
for the nine months ended December 31, 2021; and |
| · | the acquisition of property, plant and equipment,
and other intangible assets, net of dispositions, of Rs.15,062 million for the nine months ended December 31, 2022, as compared to Rs.
11,885 million for the nine months ended December 31, 2021. |
Cash Flows from
Financing Activities
Our financing activities
resulted in net cash outflows of Rs. 22,563 million and Rs. 7,519 million for the nine months ended December 31, 2022 and 2021, respectively.
The increase in net cash outflow was primarily on account of the following:
| · | net repayment of short-term borrowings of Rs.15,569
million for the nine months ended December 31, 2022, as compared to net repayment from short-term borrowings of Rs.2,083 million for the
nine months ended December 31, 2021; |
| · | payments of dividends of Rs.4,979 million for
the nine months ended December 31, 2022, as compared to payments of dividends of Rs.4,146 million for the nine months ended December 31,2021; |
| · | interest payments of Rs. 1,464 million for the
nine months ended December 31, 2022, as compared to interest payments of Rs. 1,032 million for the nine months ended December 31, 2021;
and |
| · | payments of the principal portion of lease liabilities
of Rs.698 million for the nine months ended December 31, 2022, as compared to payments of the principal portion of lease liabilities of
Rs.584 million for the nine months ended December 31, 2021. |
None