Corporate Overview Our Strategy Our Performance Statutory Reports

The key highlights FY2023 was a good year with strong Improvements in revenue and A snapshot of • Revenue from Europe was C17.6
performance across multiple parameters. billion, or a growth of 6% compared
of Dr. Reddy’s Despite an intensely competitive
EBITDA in FY2023 were mainly performance to FY2022. This was primarily due to
consolidated environment, we saw robust top-line due to the following factors: the expansion of the base business
Global Generics (GG)
growth and an increase in core operating across our European markets and
performance are given profit through our new launches and
1. Sustained performance in the
• Revenue from GG in FY2023 was new product launches, but it was
generics markets with key new
below. growth in existing categories. Like many
product launches: We witnessed
C213.8 billion, or a growth of 19% partially offset by pricing pressures
other businesses, we had to navigate compared to the previous year. This on some of our products.
decent growth in the US and Europe,
Consolidated Financial the challenges of operating in a volatile was driven by strong performances
which was driven by high value new • Revenue from Emerging Markets
macroeconomic environment. We witnessed in North America, India,
Results for FY2023 experienced an increase in costs due
product launches and base business
and the European markets.
was C45.5 billion, which remained
under IFRS traction, despite this growth being flat compared to FY2022 due to
to inflation, including higher shipping,
constrained by price erosion and • Revenue from North America the high base effect of COVID-19-
utilities, and employee benefits costs,
increased competition in some of Generics (NAG) was C101.7 billion, related products. Growth due to
and volatility in the forex market.
our products. translating to an impressive growth new product launches and forex
E245.9 billion15%
However, thanks to operating efficiencies,
of 36% over FY2022. This growth benefits was offset by a reduction in
we were able to absorb these increases, 2. Divestment of non-core brands
was supported by the launch of 25 base business volumes.
REVENUES minimise their overall impact and and strategic acquisitions: To
new products during the year. Of
demonstrate the strength and resilience grow our core businesses and - Revenue from Russia was
these, the major new launches were
of our underlying businesses. growth brands, we made the C21.2 billion, or an annual year-
Lenalidomide capsules, Sorafenib,
strategic acquisition of Cidmus to on-year growth of 2%.
D139.3 billion 22%
During the year, we focused on driving
growth and profitability through a
strengthen our presence in chronic
space in India. Simultaneously, we
and Pemetrexed Injection. It should
be noted that a healthy growth in - Revenue from other CIS
Gross Profit pragmatic mix of organic and inorganic the sales volumes of our existing countries and Romania was
divested certain non-core brands
initiatives. We strengthened our portfolio products was partly offset by pricing C8.6 billion, with an annual
in the dermatology, paediatric,
by acquiring select brands and further pressures on some of our key growth of 4%.

D73.1 billion
gynaecology, and urology segments.
consolidated our business through the products, such as Icosapent Ethyl
42% divestment of non-core brands. We are
Further, to enhance our portfolio
Capsules and Vasopressin.
- Revenue from Rest of the
EBITDA in our chosen growth markets, we World (RoW) territories was
making good progress in digitalisation,
acquired the US generic prescription In FY2023, our Company filed C15.7 billion, with an annual
in line with our aspiration to become
product portfolio of Mayne Pharma; 12 new Abbreviated New Drug decline of 5%.
one of the most efficient pharmaceutical

D57.1 billion
and some key branded and Applications (ANDAs) with the US
operations in the world. Our largest • Revenue from India was C48.9
94% manufacturing facility in Bachupally,
generic injectable products from Food and Drug Administration
billion, which represented a growth
Operating Profit Eton Pharma. (USFDA). As of March 31, 2023,
Hyderabad, joined the Global Lighthouse of 17% compared to FY2022. This
we had 86 generic filings pending
Network of the World Economic Forum. 3. Productivity improvement was attributable to an increase in
approval from the US FDA. These
The successful inclusion of our 25-year- measures: As earlier, across all the prices of our existing products,

D60.4 billion
comprise 81 ANDAs and five New
old site as a ‘Digital Lighthouse’ factory our businesses, we continued on along with additional revenues from
87% is a big milestone in our productivity our journey to trim costs through
Drug Applications (NDAs) filed
the launch of new products. During
Profit Before Taxes (PBT) under the Section 505(b)(2) route
improvement journey. improved productivity and eliminate FY2023, we launched nine new
of the US Federal Food, Drug, and
waste while creating a more efficient brands in India. The growth was also
Recognising the importance of emerging Cosmetic Act. Of the 86 ANDAs,
structure. Initiatives undertaken aided by the divestment of a few

D45.1 billion
trends in the pharma sector, we are 45 are Para IV applications, and we
to drive cost efficiencies and non-core brands during the year.
91% excited and committed to progress on
productivity improvement across
believe that 18 of these have the
our journey in two horizons. Horizon 1 ‘First to File’ status.
Profit after taxes (PAT)
continues our emphasis on ‘Growing
manufacturing, procurement, and Made strategic
R&D spending played a significant
the Core’; while Horizon 2 focuses on
part in improving the financial
Launched Lenalidomide in acquisitions and divested
D270.85
‘Building the Future’. In other words,
performance of our Company. While the US during the year non core brands in India
91% Horizon 2 prioritises beyond the core. It
focusing on productivity, we made
Diluted Earnings Per Share (EPS) includes scaling up some of our existing
significant investments to build
businesses as well as venturing into
people and digital capabilities,
new spaces.
brands, and product pipelines and,
Growth over previous year
thus keep our future growth strategy
in mind.

74 Integrated Annual Report 2022-23 75

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

Pharmaceutical Services safety, and speed. However, with reaching about $1.9 trillion. The highest Region-wise outlook
the inconsistent use of vaccines and volume growth over the next five years is
and Active Ingredients therapeutics, the next few years are not expected in Asia-Pacific, Latin America,
(PSAI) without uncertainties, especially with India, and Africa/Middle East, largely
•
the periodic emergence of infection and driven by population growth. Growth
Revenues from PSAI stood at C29.1 viral variants. in developed countries will be led by
billion, which represents a decline of 5% innovative medicines, which should offset
as compared to FY2022. This was mainly At the same time, research has been
losses due to patent expiries and loss of
on account of the base effect of the ongoing to improve the understanding
exclusivities. (Refer Table 1)
COVID-19-related portfolio being partially of the long-term complications and
offset by forex benefit. During the year, the presence of post-acute sequels of Oncology, the leading therapy area in
we filed 134 Drug Master Files (DMFs) COVID-19. Considering this, it is believed terms of global spending, is forecasted
worldwide, including 12 filings in the US. that COVID-19 will still be a major to grow at higher than earlier predicted
driver for global medicine spending in rates, with an estimated growth of 13%
Filed 134 DMFs the coming years. Global spending on to 16% CAGR as it faces limited losses of
COVID-19 is expected to touch around exclusivity in the coming years.
worldwide, including $500 billion in the seven years leading
Another key growth area for medicines is
12 filings in the US to 2027.
biotech, which is estimated to represent
Another major uncertainty will be the 35% of global spending in the next
potential impact of economic factors five years.
Global pharmaceutical on countries’ policies and budgeting.
market outlook Global economic activity is experiencing Oncology is forecasted to
a sharper-than-expected slowdown.
In the last few years, the pharma sector COVID-19, followed by geopolitical grow at 13-16% CAGR
has been sailing steadily despite the tensions, weighs heavily on the outlook,
uncertainties and turbulence caused by which depends on how government
COVID-19. With advances in information regulators across the world calibrate their
and research, the outlook for the sector monetary and fiscal policies.
is getting clearer with more predictable According to IQVIA’s recent report on
challenges ahead. The health systems medicine usage, excluding COVID-19,
have responded well by developing the global medicine market is expected US Europe China India
vaccines with significant efficacy, to grow at 3% to 6% CAGR through 2027,
Spending in the US is Europe’s biosimilar market is China, the world’s second- Considered one of the high-
expected to grow between the largest in the world. It is largest country in terms growth markets, spending
Table 1: MARKET SPENDING AND GROWTH OUTLOOK BY REGION (1%) and 2% annually over expected to grow due to the of healthcare spending, in India is expected to
the next five years. During loss of exclusivity in Europe continues to focus on its grow, boosted by volumes,
ORIGINAL BRANDED UNBRANDED
Timeline REGION OTHER TOTAL this period, more than 250 set to triple over the next five Healthy China 2030 policy at around 8% to 10% per
BRANDS GENERICS GENERICS
new active substances are years, and more than half of by expanding access to annum up to 2027. With the
CAGR Global 3–6% 5–8% 1–4% 3–6% 3–6% expected to be launched in this impact is expected to be novel drugs via the National COVID-19 pandemic and the
2023 to 2027 Developed 3–6% 5–8% (1)–2% 0.5–3.5% 2.5–5.5% the US, which will increase from biologics. The losses Reimbursement Drug List more recent Russia-Ukraine
10 Developed 3–6% 5–8% (1)–2% (0.5)–2.5% 2.5–5.5% spending on new brands. are expected to be offset by (NRDL). In recent years, with conflict impacting supply
Other developed 4–7% 5–8% 3.5–6.5% 3.5–6.5% 4–7% However, this growth is new launches, mainly from zero tolerance pandemic chains across industries,
Pharmerging countries 5–8% 5–8% 4.5–7.5% 5–8% 5–8% estimated to be offset by oncology, neurology, and policies, China’s spending many multinational pharma
Lower-income countries 4–7% 4–7% 6.5–9.5% 6–9% 4.5–7.5% higher losses of exclusivity rare diseases. pattern on healthcare has corporations are looking
in both small molecules been fluctuating heavily. In at India as an alternative
Source: IQVIA’s “Global Use of Medicines 2023” report.
and biologic products. the next five years, however, to China.
Pharmerging countries are countries with per capita GDP < $30,000/year and forecasted five-year aggregate pharma growth > $1 billion. Includes Brazil, China, India, Russia, South Africa and some
others
Furthermore, the introduction spending is estimated to
of the Inflation Reduction grow in the range of 2% to
Act, with one of its priorities 5% annually.
to reduce healthcare costs
through price negotiations
and cost caps, is expected
to significantly increase
the pressure on medicine
pricing and cost-sharing
among stakeholders.

1 The outlook and the key trends discussed in this section are primarily from ‘The Global Use of Medicines 2023’ by IQVIA Institute and from various other publicly available sources.

76 Integrated Annual Report 2022-23 77

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

Increased commitment towards predominate. Concerns about • Partnerships and collaborations:

financial vulnerabilities have risen, Traditionally, the life sciences
environmental, social, and including in financial institutions, industry was siloed, with
governance (ESG) housing markets, and low-income different functions such as R&D,
countries. While headline inflation manufacturing, and sales operating
The impact of health disparities due
has started declining, it remains in isolation from each other. This
to COVID-19, increasing human rights
elevated and could persist longer. has changed remarkably over the
issues, greater scrutiny on governance,
The re-opening in China is also last few years and will do so at a
and the looming global climate crisis
expected to have a positive impact faster pace in the future. New forms
have amplified the importance of ESG.
on global activity, reducing supply of collaboration will be witnessed
Investors are demanding stronger
chain pressures. However, sensitive in the pharmaceutical industry
action from companies on adopting
to macro-economic conditions, a to provide stronger accessibility
responsible business practices, fighting
compounding impact on multiple and new healthcare delivery
climate change, and demonstrating how
activities is likely on everything models to patients. Public–private
they are building resilient businesses.
from R&D and manufacturing partnerships, associations with other
Businesses today have realised that ESG
costs to drug prices and access research, and academic institutions
is not just a social license to operate, but
to medicines. will pave the way for the industry.
a powerful medium to communicate how
a company creates long-term value for its • Personalised medicine: The field • Digital healthcare delivery: The
stakeholders. It has a significant positive of personalised medicine, which spectrum of patient care has
impact on fundamental business issues arose from the concept of the widened and is no longer limited unstructured data. These tools supply chains to be more resilient significantly to the growth. Like previous
relevant to the long-term success of any customisation of therapeutics, holds exclusively to hospitals and doctors’ then transform all such information to geopolitical challenges and years, FY2023 also witnessed high price
company, fast becoming a measure of the potential for boosting the future clinics. The healthcare industry is into structured formats where natural disasters. Considering the erosion due to increased competition
business sustainability. ESG is helping of healthcare. From a ‘one-size- becoming increasingly verticalised; it can be rapidly identified and impacts of COVID-19, it will be across some of our key products.
create both financial and non-financial fits-all’ approach to graded and ie organisations at different levels analysed at each phase of the interesting to see how different However, this impact was offset by
value by providing opportunities for outcome-based targeted therapies, of the supply chain are creating safety life cycle. NLP will be critical countries’ regulators try to pass an increase in volumes for some of
market differentiation, operational the sector is making greater alliances to enhance delivery. In in enabling researchers and data reforms in shaping the future of the our base products and contribution
efficiency, talent retention, access to investments in precision medicine, this, digital health has emerged as a scientists to garner information at healthcare industry. from new product launches—the most
new revenue streams, and improved thanks to advances in technology powerful opportunity to deliver care a scale that will help provide an important ones being Lenalidomide
Disruptive technologies and
financial performance. around genomics. Recent to individuals and positively impact increasingly large treasure trove of capsules, Sorafenib, and Pemetrexed
emerging trends such as robotics,
developments in digitalisation the health of communities. ‘Digital medical intelligence to further spark Injection. Growth was further aided
The years ahead will be crucial for artificial intelligence, 3D printing,
have opened possibilities for health’ describes healthcare that is pharmaceutical innovations. by the strengthening of the US dollar
the pharma industry where we might precision medicine, or patient
R&D procedures in personalised enabled or accessed by information against the Indian rupee. Some key
witness significant changes across all • Climate change: The effects design will impact the manufacturing
medicine to be much more technology. This includes modalities developments were:
areas of pharma–from clinical trials, drug of climate change will be wide- and distribution of pharmaceuticals.
advanced. The adoption of artificial like video or virtual visits and rapid
discovery and development, digitisation, reaching and shall impact The industry will have to embrace • Filed 12 new ANDAs, comprise
intelligence (AI) by the industry and informal communication through
and innovative treatment models to new multiple industries. Healthcare new technologies and put a some complex products and across
will mature, and going forward, the electronic messaging.
people-centric approaches. Some key is no exception to that. Rising greater focus on prevention and different dosage forms.
development of new therapies and
trends that may emerge over the next few • Ageing population and lifestyle temperatures will likely accelerate digital health.
drugs can be bolstered by active • Acquired the US generic
years are given below. changes: Ageing populations, the spread of tropical diseases,
advances via AI. prescription product portfolio of
particularly an increase in life while waterborne illnesses may
• Economic Uncertainty: Geopolitical
• Medical devices facilitating expectancies, are resulting in a rise become more common with
Dr. Reddy’s market Australia-based Mayne Pharma
shocks will continue to overshadow
the world economy. Despite some
preventive healthcare: In line with in chronic illness. Lifestyle changes increased rain and storm surges performance, FY2023 Group Limited.
an uptick in personalised medicine, are also triggering an increase in contributing to flooding. Just as • Acquired a portfolio of branded and
recent improvements, the outlook
the preventive medicine market diseases. Malnutrition, unhealthy in the wake of COVID-19, the
North America Generics (NAG) generic hospital injectable products
remains fragile and downside risks
is expected to pick up pace. This diet, smoking, alcohol consumption, pharmaceutical industry may come NAG is Dr. Reddy’s largest market and from Deer Park, Illinois-based
area deals with the prevention of drug abuse, and stress, among under increasing pressure to fulfil its has crossed the $1 billion revenue mark Eton Pharmaceuticals.
a certain disease instead of its others, are the presentations public health needs. for the second consecutive year. In • Launched Lenalidomide Capsules
treatment, as it anticipates, and of an unhealthy lifestyle. These FY2023, it contributed to around 48%
• Policy changes altering pricing (a cancer drug used to treat
hence, helps prevent the disease. are putting further pressure on of our Company’s GG sales and 41% of
and reimbursements: Ever- myeloma) in the US with two of six
Wearable medical devices make it healthcare resources. overall sales.
changing government policies on strengths eligible for first-to-market,
possible to monitor and share vital
• Greater use of natural language drug approvals and drug pricing Revenue from the region for FY2023 was 180-day exclusivity.
health information, such as blood
processing tools: Increasing have long-lasting outcomes. For C101.7 billion ($1.2 billion), representing
pressure, glucose levels etc. to • Launched Sorafenib tablets, a drug
numbers of companies are tapping instance, in the US, the Inflation an impressive growth of 36% over
medical practitioners on a real-time used to treat a type of liver cancer
into the potential of Natural Reduction Act reflects an ongoing the previous year. FY2023 saw the
basis, thus facilitating early detection called hepatocellular carcinoma.
Language Processing (NLP) tools trend towards rewiring global successful launch and commercialisation
and attention.
to gain insights from troves of of Lenalidomide in the US, contributing
78 Integrated Annual Report 2022-23 79
 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

• Launched Timolol gel, an ophthalmic Emerging Markets generics and biosimilars and seeking in- The PSAI segment primarily consists based or mobile application platform Our culture results in a quality mindset.
gel forming solution used to licensing opportunities. of our business of manufacturing and provides integrated healthcare, We care greatly about what we do,
treat glaucoma. Revenue from Emerging Markets for and marketing active pharmaceutical medical, and other related services and demonstrated by a relentless focus
FY2023 was C45.5 billion and remained India ingredients and intermediates, also technology-driven solutions to promote on quality at our plants, whether it
• Gained a market share in certain key
flat compared to the previous year. known as ‘APIs’, which are the principal health and wellness. be through the number of quality
products, such as Isotretinoin and
Revenues were supported by new Revenue from India in FY2023 was C48.9 ingredients for finished pharmaceutical professionals or the rigorous levels of
Sumatriptan injection.
product launches across markets billion, or a growth of 17% compared products. APIs become finished USFDA audits: An Update testing that our finished products go
Our current priority includes accelerating and beneficial forex rates; however, to the previous year. The growth was pharmaceutical products when the through. We continuously undertake
the development and launch of new growth was impacted by a higher base aided by the divestment (` 4.9 billion) of dosages are fixed in a form ready for Our facilities are fully compliant with US operational improvements, such as
products that are difficult to make and in FY2022 owing to revenues from a few non-core brands during the year. human consumption, such as a tablet, FDA regulations. Currently, the status shop floor supervision and process
increasing the market share of existing COVID-19 products and the divestment According to IQVIA in its report for the capsule, or liquid, using additional for all our facilities is either ‘NAI’, which walks, engineering, implementation of
products through both traditional of a few of our non-core brands. 12-month period ended March 31, 2023, inactive ingredients. We also serve our means ‘No Action Indicated’ or ‘VAI’, electronic batch records, and Laboratory
marketing and digital channels. The our growth has been 2.5%. Our market customers with incremental value-added which means ‘Voluntary Action Indicated’. Information Management Systems (LIMS)
Revenue from Russia for FY2023 was
strategy is to significantly expand our rank was 10th as per Moving annual total products including semi-finished and in quality control to eliminate manual
C21.2 billion, representing an increase
portfolio and ensure the right cost (MAT) March 2023 in terms of sales value. finished formulations. This segment also Recent USFDA audits: errors and focus on the robustness of our
of 2% over the previous year. However,
structures for our products to be able Our growth in this market has been due includes our contract research services processes. Our facilities are maintained
in terms of local currency (ruble), there 1. In July 2022, our formulations
to compete sustainably in this highly to improved prices and revenues from business and our manufacture and sale to be ready for any regulator inspection.
was a decline of 9% over the previous manufacturing facility (FTO XI) at
competitive market. the launch of new products including the of APIs and steroids in accordance with We also have a global pharmacovigilance
year. This was largely attributable to the Srikakulam was audited by the US
Cidmus brand acquired during the year. specific customer requirements. programme to monitor the safety of
We will continue to focus on complex divestment of a few non-core brands FDA. Subsequently, we were issued
Growth was also aided by the revenues our products.
formulations, primarily injectable and during the previous year. Our strategy of building a sustainable two observations. We responded to
from the divestment of a few non-core
oral solid dosage forms, as well as OTC and growing business involves new the observations in July 2022, and We remain fully committed to following
brands during the year.
brands in the medium term while focusing
on biosimilars, differentiated formulations, E45.5 bn During the year, we launched nine
product launches and the ramping up
of base businesses in key geographies.
in August 2022, an Establishment
Inspection Report (EIR) was issued
high standards of quality, and we strive
towards further strengthening our quality
and other Horizon 2 businesses in the Revenue from Emerging Markets for FY2023 brands in India, including Cidmus and We will continue to leverage our by the USFDA indicating the closure management systems and processes
longer term. PrimcyV. Sixteen of our brands—Voveran, relationships with key customers by of the audit. for sustainability. Our plans to enhance
Omez, Cidmus, Atarax, Econorm, supplying materials that have value quality management systems and
Revenue from CIS countries and Romania 2. In May 2023, our API manufacturing
E101.7 bn was C8.6 billion, representing 4% growth
Omez-D, Practin, Zedex, Ketorol, Bro-
Zedex, Razo-D, Stamlo, Tryptomer,
addition instead of being ‘plain vanilla’
APIs. We aim to be a partner of choice
facility (CTO I) at Bollarum
was audited by the US FDA.
operations include improvements in the
rigour of investigations and document
Revenue from NAG for FY2023 over the previous year. The growth was Mintop, Clamp, and Nise—are among for global pharmaceutical companies and control systems, standardisation of
led by the increase in prices of certain Subsequently, we were issued
the top 300 brands of the Indian achieve global leadership through costs instrument calibrations, strengthening
products partly offset by the decrease in one observation. We are currently
pharmaceuticals market. and service. controls with respect to IT and shop-floor
base business volumes. in the process of responding to
Europe In the near term, we will continue to drive the observation.
training programmes, and simplifying

Revenue from Europe in FY2023 was

Revenue from our Rest of the World
markets (which includes Brazil, China,
productivity improvement and focus
on our core therapeutic areas and big
E29.1 bn 3. An audit of our formulations
and systematising standard operating
procedures and batch records on the
C17.6 billion, representing a growth of 6% Revenue from PSAI for FY2023 manufacturing facility (FTO SEZ PU shop floor.
South Africa, Australia, and certain other brands. In the medium to long term, our
over the previous year. The increase in II) at Srikakulam commenced on May
markets) was C15.7 billion, representing strategy is to build a healthy pipeline
revenues was propelled by high volume 8, 2023.
a decline of 5% over the previous year. of differentiated products in relevant
growth and new product launches Aurigene Oncology Limited
This was primarily due to a decrease in therapies including biosimilars, expand
across our major markets, which was
partially offset by price erosion in some of
revenue from COVID-19-related products our presence in areas such as OTC and (AOL)
in FY2023. This was offset by the nutraceuticals, and explore future growth
our products. AOL is our wholly-owned subsidiary
growth in base business mainly in China, businesses through our Horizon 2 focus.
Currently, Europe comprises 8% of our Columbia, Algeria, and Brazil. and is a clinical-stage biotech company
global generics sales. In the medium committed to bringing novel therapeutics
to long term, we expect it to grow by
Our focus is to improve the market share
in the chosen therapy areas through
E48.9 bn for the treatment of cancer and
inflammation. It recorded a revenue
leveraging our in-house portfolio of Revenue from India for FY2023
growth in the existing products as well as of C2.5 billion in FY2023 or a decline
generics and biosimilars, seeking in-
new product launches. of 12%. AOL is reported as part of our
licensing opportunities, entering and
scaling up business in new markets, and Our strategy for Emerging Markets is ‘others’ segment.
PSAI
exploring new business opportunities to build a healthy portfolio pipeline,
in the future growth segments through including differentiated and oncology The PSAI business recorded revenues of Svaas Wellness Limited (Svaas)
Horizon 2 businesses. products, coupled with the expansion C29.1 billion in FY2023, a decline of 5%
of biosimilars. We will focus on further compared to the previous year. This was ‘Svaas’ is in the business of providing
digital healthcare and information
E17.6 bn scaling up in our major markets, which
include Russia, China, Brazil, and South
primarily due to a reduction in volumes of
COVID-19-related products. In FY2023, technology-enabled business support
Revenue from Europe for FY2023 Africa while opening new geographies we filed 134 DMFs globally, of which 12 services. It has been enabling access to
by leveraging our in-house portfolio of were in the US. healthcare services through its web-

80 Integrated Annual Report 2022-23 81

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

Financials Revenue Selling, general, and Net finance income

Table 2 gives the abridged IFRS consolidated revenue performance of Dr. Reddy’s for FY2023 compared to FY2022. Table 3 administrative (SG&A) expenses
Total revenue grew by 15% to C245,879 The net finance income was C2,853
gives the consolidated income statement. million in FY2023. This was primarily million in FY2023 versus C2,119 million
SG&A expenses increased by 10% to
Table 2: CONSOLIDATED REVENUE MIX BY SEGMENT (MILLION)
due to the contribution of new product C68,026 million in FY2023. This was in FY2022.
launches across our businesses and largely attributable to an increase in
FY2023 FY2022
GROWTH % growth in existing and new categories, personnel costs primarily on account of Net profit
Particulars ($) (D) % ($) (D) % partially offset by price erosion in our annual increments, rupee depreciation,
Global Generics 2,601 2,13,768 86.9 2,180 1,79,170 83.6 19 GG segment’s North America (the US and increased headcount; higher Net profit increased by 91% to C45,067
North America 1,01,704 74,915 36 and Canada), Europe, and certain other investments towards brand building million in FY2023. This represents
Europe* 17,603 16,631 6 emerging markets. The growth was also and marketing activities; and an a PAT margin of 18.3% of revenues
India 48,932 41,957 17 aided by revenues from the divestment increase in travel and vehicle expenses, versus 11.0% in FY2022. In FY2023, the
of a few of our non-core brands in India, which were lower last year due to effective tax rate was lower compared
Emerging Markets# 45,529 45,666 0
while the revenue in the previous year COVID-19. It should be noted that SG&A to FY2022 largely due to changes in our
Pharmaceutical Services and
354 29,069 11.8 374 30,740 14.3 (5) was boosted by COVID-19-related accounted for 27.7% of sales in FY2023, Company’s jurisdictional mix of earnings.
Active Ingredients (PSAI)
product sales and the divestment of non- representing a decline of 130 basis
Others 37 3,042 1.2 55 4,481 2.1 (32)
core brands largely in Russia and India. points compared to last year. Liquidity and capital resources
Total 2,992 2,45,879 100 2,608 2,14,391 100 15

* Europe primarily includes Germany, the UK and out-licensing sales business, Italy, France and Spain. Gross profit The data are given in Tables 4 and 5.
# Emerging markets refer to Russia, other CIS countries, Romania and Rest of the World markets.
R&D expenses Cash generated from operating activities
Gross profit increased by 22% to R&D expenses for FY2023 were C19,381 in FY2023 was C58,875 million. Investing
Table 3: CONSOLIDATED INCOME STATEMENT (IN MILLION) C139,343 million in FY2023. This led to a million, or 7.9% of revenue, versus 8.2% activities net outflow amounting to
FY2023 FY2022 gross profit margin of 56.7% in FY2023, in FY2022. The R&D spending in FY2023 C(41,373) million in FY2023 includes net
GROWTH % representing an increase of 360 basis investment in property, plant, equipment,
Particulars ($) (D) % ($) (D) % increased by 11% over FY2022 due to
points compared to the previous year. an increase in the development activities and intangibles to build capacity and
Revenues 2,992 2,45,879 100.0 2,608 2,14,391 100.0 15
The gross profit margin for GG was relating to our biosimilars and an increase capabilities for future business growth.
Cost of Revenues 1,296 1,06,536 43.3 1,223 1,00,551 46.9 6 62.1%. This increase was on account of Cash outflow from financing activities
in the number of high-value product
Gross Profit 1,695 1,39,343 56.7 1,385 1,13,840 53.1 22 new product sales of certain products was C26,861 million. Closing cash and
pipelines.
Operating Expenses with higher gross margins, higher cash equivalents on March 31, 2023, was
Selling, General & Administrative government incentives, and favourable C5,779 million.
expenses
828 68,026 27.7 755 62,081 29.0 10
foreign exchange. The increase was
Impairment of non-current
Research and Development partly offset by the price erosion in assets
236 19,381 7.9 213 17,482 8.2 11
expenses some of the products, primarily in the US
Impairment of non-current assets 9 699 0.3 92 7,562 3.5 (91) In FY2023, there has been an impairment
and Europe. For the PSAI business, the
charge of C699 million. This mainly
Other operating (income) (72) (5,907) (2.4) (34) (2,761) (1.3) 114 gross profit margin was 16.2%. PSAI’s
pertains to a decrease in the market
Results from operating gross profit margin decreased primarily
695 57,144 23.2 359 29,476 13.7 94 potential of the medical cannabis-
activities on account of a higher percentage of
based business acquired from Nimbus
Finance (income), net (35) (2,853) (1.2) (26) (2,119) (1.0) 35 manufacturing overhead costs on a lower
Health GmbH and an impairment of the
Share of (profit) of equity sales base and the price erosion in some
company’s product-related intangibles
accounted investees, net of (5) (370) (0.2) (9) (703) (0.3) (47) of the products.
income tax due to adverse market conditions.
Profit before income tax 734 60,367 24.6 393 32,298 15.1 87
Gross profit margin Net other income
Income tax expense 186 15,300 6.2 106 8,730 4.1 75
Profit for the period 548 45,067 18.3 287 23,568 11.0 91 of 56.7% in FY2023,
The net other income was C5,907
Diluted Earnings Per Share
3.30 270.85 1.72 141.69 91
representing an increase million in FY2023 versus C2,761 million
(EPS)
of 360 basis points in FY2022. The net other income was
higher primarily on account of the
compared to the previous recognition of an income of C5,638
year. million 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.

82 Integrated Annual Report 2022-23 83

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

Table 4: CONSOLIDATED CASH FLOW, IFRS ( MN) Enterprise-wide risk These include (i) updates on the progress
of mitigation of key risks and (ii) specific
Particulars FY2023 FY2022
management (ERM) risk-related initiatives carried out during
Opening Cash and Cash Equivalents 14,852 14,820
Our ERM function operates with the the year.
Cash flows from:
(a) operating activities 58,875 28,108 following objectives:
(b) investing activities (41,373) (26,387) • Proactively identify and highlight
During FY2023, risk
(c) financing activities (26,861) (2,422) risks to relevant stakeholders; mitigation efforts
Effect of exchange rate changes 286 733 • Facilitate discussions around risk included the review of
Closing Cash and Cash Equivalents 5,779 14,852 prioritisation and mitigation;
risks and mitigations
• Provide a framework to
Table 5: CONSOLIDATED WORKING CAPITAL, IFRS ( MN) assess appetite;
related to cyber
AS ON AS ON
CHANGE • Develop systems to warn when the
security, data privacy,
Particulars 31 MARCH 2022
31 MARCH 2023
appetite is being breached; and ethics and compliance
Trade Receivables (A) 72,485 66,764 5,721
Inventories (B) 48,670 50,884 (2,214) • Provide an analysis of residual risk. risk, quality, supply
Trade Payables (C) 26,444 25,572 872 The ERM team connects with our chain management,
Working Capital (A+B-C) 94,711 92,076 2,635 business units and functions, which are
the primary sources for risk identification.
geopolitical risks and
Other Current Assets (D) 85,785 64,208 21,577
Total Current Assets (A+B+D) 2,06,940 1,81,856 25,084 It also monitors external trends on business continuity,
liabilities and risks reported by peers governance, and financial performance journeys are being undertaken to cover
Short & Long-term loans and
in the industry. The team collaborates
foreign exchange risk, in an ESG context, we produced our business-critical skill gaps through
borrowings, current portion 12,194 28,099 (15,905)
(E) with quality assurance, compliance, pharmacovigilance, and first integrated report in FY2023. To certifications of our employees to ensure
Other Current Liabilities (F) 47,207 40,344 6,863 information security, safety, HR, internal read more about our detailed ESG better delivery of business.
audit, and other assurance teams to
environmental risk (with performance and initiatives, please refer
Total Current Liabilities We have sought to unlock productivity
(C+E+F)
85,845 94,015 -8,170
identify and mitigate the risks of business a focus on water risk). to page 38 of our integrated report and
by leveraging the new-age tool, Digital
units, including risks relating to cyber page 114 for our Business Responsibility
Ninja - our flagship digital capability-
security and the environment. and Sustainability Report.
Debt-equity building programme. Launched earlier,

In FY2023, long-term borrowings, including the current and non-current portion,

Our ERM function focuses on the ESG In 2022, we made ESG
it had over 36,000-course completions
identification of key sectoral, business, on LinkedIn. We have succeeded in
decreased by C681 million as compared to FY2022. On March 31, 2023, our In 2022, we made ESG central to our
Company’s debt-to-equity ratio was 0.06, which is lower than that on March 31, 2022,
operational and strategic risks. These are
purpose and business strategy and
central to our purpose developing over 2,850 new Digital
carried out through quarterly assurance Ninjas in the organisation. To embed the
which was at 0.16. The net debt-to-equity position was at (0.21) versus (0.08) last year.
meetings, structured interviews, on-call
announced our ESG vision for 2030 to and business strategy Dr. Reddy’s way of execution excellence,
Table 6 gives the data. maximise positive social impact. We
discussions, and reviews of incidents.
set up a strong governance structure
and announced our the simplified SDP way of governance
continues to be followed across the
Table 6: DEBT AND EQUITY POSITION, IFRS
AS ON AS ON
( MN)
Risks are aggregated at the unit, through a Board-level committee on ESG vision for 2030 to organisation while focusing on lean daily
CHANGE function, and organisation levels and sustainability to provide ESG guidance,
Particulars 31 MARCH 2023 31 MARCH 2022
are categorised by risk groups. Our formed a sustainability council chaired
maximise positive social management and reducing the number
Total Shareholder’s Equity 2,30,991 1,90,527 40,464 of reviews across levels. Kaizen optimiser
response framework categorises these by leadership to drive the progress on impact. continues to be leveraged as a digital
Long-term debt (current risks into (i) internal (preventable), (ii) our ESG goals, and nominated ESG
4,804 1,017 3,787 tool for the same purpose.
portion)
internal (strategic), and (iii) external champions across our Company to
Long-term debt (non-current For a winning product strategy, we have
portion)
1,278 5,746 (4,468) risks. The integrated assurance forum
and the executive risk management
advance our sustainability agenda.
We continue to embed and integrate
Human Resources (HR) carried out appropriate staffing of the
Short-term borrowings 7,390 27,082 (19,692) central portfolio organisation and product
committee are management-level sustainability into our decision-making In FY2023, the focus has been
Total Debt 13,472 33,845 (20,373) strategy dissemination to the relevant
committees that help the ERM function and strategy, defining key performance on improving people productivity
to prioritise organisation-wide risks and indicators to evaluate our performance across the organisation, for which we populations across the different business
steer mitigation efforts in line with our and setting up targets and tangible leveraged automation and digitalisation units. To effectively execute a winning
risk appetite. actions with defined timelines to measure of processes leading to reduced product strategy, we have covered
our progress. ESG is integrated into our human intervention. We are working to over 90% of our target population
Mitigation work carried out by the via six training modules through the
overall ERM programme, identifying develop autonomous work areas and
ERM team is regularly reviewed, and Specialisation2Commercialisation
ESG-related risks, evaluating likely lighthouse factories of the future by
the progress of key risks is discussed initiative. To bring necessary focus
impact scenarios and risk exposure, and building appropriate capabilities in the
with the Executive Risk Management to Products That Matter (PTM), 100%
developing mitigation plans to better organisation. We are closely tracking
Committee and senior management, staffing of PTM projects is being ensured.
manage these risks. To better report per-person productivity metrics across
as well as at the Risk Management
on the linkages between our strategy, business units, and personalised learning
Committee of the Board of Directors.
84 Integrated Annual Report 2022-23 85
 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

We continue to take proactive steps expected to help employees understand to help set ambitious targets. A matrix and connection. We have worked on Digital transformation Cautionary Statement
to retain the right talent and ensure their fit for a particular role even manager (dotted line reporting) feature providing hygiene kits, increasing
continuity of delivery. Some interventions before applying. was also enabled to ensure that we out-station allowance, arranging boot Digital transformation has sped up, The management of Dr. Reddy’s has
that have helped us are predictive accurately reflect the reality of our camps for campus hires in sales roles, and we are using it to unlock the prepared and is responsible for the
With eased restrictions after COVID-19, potential of data. We are also innovating financial statements that appear in
analytics, which focuses on hotspots organisation and the cross-functional and establishing regular connects to
we revamped ways of working in the our processes with the use of new this report. These are in conformity
of attrition and the profiling of talent work that our colleagues undertake proactively address the challenges.
organisation along the lines of Future technologies. You can refer to the with International Financial Reporting
that must stay and managers that we across geographies and BUs.
of Work. This centralised induction Taking into view other areas of workforce initiatives that we have undertaken Standards (IFRS), as issued by the
should retain. We are also incentivising
programme includes both ‘in-person’ To create a workplace where employees diversity, structured workshops on in more detail on pages 44 and 45 of International Accounting Standards
lateral moves, and ring-fencing key
and ‘digital’ components to move away can unleash their full potential, we have working with differently-abled people this report. Board, and accounting principles
talent through market benchmarking
from the remote approach adopted launched employee experience journeys were also conducted to sensitise over generally accepted in India and,
and structured communication and
during the COVID-19 outbreak. This across the organisation. As a step to 70 people managers and enable them to therefore, include amounts based on
engagement with employees. We have
‘Phygital’ induction model allows all non- enhance employee experience, we take a ‘people-first’ approach that looks Outlook informed judgments and estimates. The
been able to retain critical talent to
Hyderabad-based recruits a seamless are attempting to make it connected, at all employees in terms of skills and FY2023 has been a good year in terms management also accepts responsibility
ensure business continuity and support
and virtual induction experience while efficient, and joyful across all touchpoints, strengths. We also organised a workshop of financial and operational performance for the preparation of other financial
our growth agenda.
catering to the preferences of most impacting employees’ work every day. on recruiting differently-abled people across the various businesses. We have information that is included in this report.
To facilitate growth opportunities for Hyderabad-based joiners to avail the for HRBPs and the talent acquisition a strong foundation, and our diversified This write-up includes some forward-
We have revamped our recognition
employees through lateral movements benefits of an ‘in-person’ experience. team, where we identified 10 roles geographical presence allows us to looking statements, within the meaning
platform, ‘Spark’. It is now based on a
and cross-BU movements and to create across BUs for hiring differently-abled. suitably respond to opportunities and of section 27A of the US Securities Act
Several developmental journeys have simplified recognition framework linked
a well-rounded talent pool with strong In February 2023, we conducted three threats while delivering long-term value of 1933, as amended and section 21E of
been launched for top teams across to ASPIRE and strategic moves linked
succession benches, we launched the LGBTQIA+ related sensitisation sessions for our stakeholders. the US Securities Exchange Act of 1934,
the organisation. These involve a to the scorecard. This has made on-the-
first-ever career development week at for 150 employees and contract staff and as amended.
combination of forum, coaching, and spot recognition easier for managers We have a strategy that will drive growth
Dr. Reddy’s - called Propel - in October onboarded two transgender women in
systemic levers; and bring about multiple and enabled peer-to-peer recognition and, most importantly, one that should The management has based these
2022. We also launched the Propel our organisation.
benefits - the most important being (a) through e-cards that can be posted on keep increasing access to medicines forward-looking statements on its current
platform, which works as an internal talent
coherent teams with improved ways the platform. The process of creating a We kicked off our annual flagship event for people who need these the most. expectations and projections about
marketplace, connecting employees to
of working and (b) a renewed ‘set-up’ culture of recognition will be an ongoing Celebration of Excellence on October 12, While we continue our focus on our future events. Such statements involve
new opportunities and hiring managers to
that brings about a common definition one with a focus on communication with 2022. This culminated in the Excellence core (Horizon 1) businesses, we are known and unknown risks, uncertainties,
the best-fit talent across the organisation.
of outcomes. employees, inducting new employees, Awards in January 2023. The theme of reasonably optimistic that our Horizon and other factors that may cause actual
It should promote new ways of working
and educating first-time managers. the celebrations was ‘Excel in Horizon 2 initiatives will help improve the lives results to differ materially. These factors
with short-term projects and gigs and To strengthen the culture of aspirational
1, Build Horizon 2’. The celebrations cut of patients by addressing unmet and include but are not limited to, changes
create a ready pool of internal talent to thinking in the organisation, Moonshot We continue to focus on holistic
across hierarchy and geography, covered unarticulated needs through affordable in local and global economic conditions,
take on various business critical projects Goals have been introduced this year in well-being at the organisation level
all sites and locations and touched some and innovative solutions. changes in government regulations,
in the future. AI-based skill matching is the performance enablement process through workshops, daily wellness
15,000 employees. Various activities like ability to successfully implement the
sessions covering meditation, yoga, We have shown excellent financial
quizzes, sports, musical performances, strategy, manufacturing or quality
and pranayama, and platforms to allow discipline with a strong balance sheet
talent hunts, alumni meets, and control outcomes, ability to achieve
employees access to counselling for their and robust cash generation in FY2023.
employee stories on living the purpose expected results from investments in
mental well-being. We are strengthening While the strong balance sheet provides
were carried on for three months of fun, our product pipeline, change in market
our focus on condition management financial flexibility to support future
collaboration, and camaraderie. dynamics, technological change,
through the MyHealth Index (MHI), growth, we will follow a disciplined
which tracks the health parameters of currency fluctuations, and exposure to
approach to cash management and
employees who are enrolled on a year- In FY2023, the focus acquisitions. We will continue to bolster
various market risks. By their nature,
these expectations and projections are
long journey of health improvement. MHI has been on improving operating efficiency, drive productivity,
only estimates and could be materially
is currently operating for around 8,100 improve operations and processes to
employees in FTO 2 and 3, FTO HO, FTO people productivity increase efficiency and responsiveness,
different from actual results in the future.
Readers are cautioned not to place
7 and 9, Biologics, and IPDO. across the organisation, enhance quality systems, strengthen our
undue reliance on these forward-looking
R&D, and invest in digital initiatives to
Taking forward our agenda of increasing for which we leveraged get closer to customers. We maintain our
statements, which reflect management’s
diversity representation and developing analysis and assumptions only as of the
an inclusive culture in the organisation, automation and unwavering commitment to quality and to
date hereof. In addition, readers should
building a portfolio that anticipates future
our focus has been on dedicated digitalisation of health needs.
carefully review the other information
diversity hiring in entry-level roles and in this annual report and in our periodic
regularly connecting with women to processes leading reports and other documents filed with
address their challenges. We have to reduced human all the stock exchanges.
raised the representation of women in
leadership roles to 16%. Our efforts in intervention.
increasing the diversity in the salesforce
are focused on three pillars: care, career,

86 Integrated Annual Report 2022-23 87

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

FIVE YEARS AT A GLANCE KEY FINANCIAL RATIOS

(H million)
Year ending March 31 2023 2022 2021 2020 2019 Year ending March 31 2023 2022 2021 2020 2019

Income Statement Data Profitability Ratios

Revenues 2,45,879 2,14,391 1,89,722 1,74,600 1,53,851 EBITDA margin % 30% 24% 25% 27% 22%
Cost of revenues* 1,06,536 1,00,551 86,645 80,591 70,421 Gross Margin % 57% 53% 54% 54% 54%
Gross profit 1,39,343 1,13,840 1,03,077 94,009 83,430 Global Generics 62% 58% 59% 57% 59%
as a % of revenues 56.7 53.1 54.3 53.8 54.2 PSAI 16% 22% 29% 24% 25%
Operating Expenses: * Adjusted PAT* margin (%) 19% 15% 14% 21% 12%
Selling, general and administrative expenses 68,026 62,081 54,650 50,129 48,680 Net Profit Margin (%) 18.3% 11.0% 9.1% 11.2% 12.2%
Research and development expenses 19,381 17,482 16,541 15,410 15,607 Return on Net Worth (%) 20% 12% 10% 13% 13%
Impairment of non-current assets 699 7,562 8,588 16,767 210 Asset Productivity Ratios
Other Operating (income) / expenses, net (5,907) (2,761) (982) (4,290) (1,955) Fixed Asset Turnover 3.8 3.6 3.5 3.3 2.7
Total operating expenses 82,199 84,364 78,797 78,016 62,542 Total Assets Turnover 0.8 0.8 0.8 0.8 0.7
Operating income 57,144 29,476 24,280 15,993 20,888 Working Capital Ratios
as a % of revenues 23.2 13.7 12.8 9.2 13.6 Working Capital Days 182 214 188 188 180
Finance Costs, net: Inventory Days 163 184 177 154 163
Finance income 4,281 3,077 2,623 2,461 2,280 Debtors Days 103 108 91 100 90
Finance expenses (1,428) (958) (970) (983) (1,163) Creditor Days 84 79 80 67 73
Finance (expense) / income, net 2,853 2,119 1,653 1,478 1,117 Gearing Ratios
Share of profit of equity accounted investees, Net Debt/Equity^ (0.21) (0.08) (0.04) (0.03) 0.09
370 703 480 561 438
net of income tax Interest Coverage 40.3 31.5 25.5 16.8 18.3
Profit before income tax 60,367 32,298 26,413 18,032 22,443 Current Ratio 2.4 1.9 1.8 1.8 1.9
Income tax benefit/(expense) (15,300) (8,730) (9,175) 1,466 (3,648) Valuation Ratios
Profit for the year 45,067 23,568 17,238 19,498 18,795 Earnings per share (₹) 270.9 141.7 103.6 117.4 113.1
as a % of revenues 18.3 11.0 9.1 11.2 12.2 Book Value per share (₹) 1,388 1,145 1,041 933 844
Earnings per share (₹) Dividend Payout 15% 21% 24% 21% 18%
Basic 271 142 104 118 113 Trailing Price/Earnings Ratio 17.1 30.3 43.6 26.6 24.6
Diluted 271 142 104 117 113
Dividend declared per share for the year (₹) 40 30 25 25 20 (1) Fixed Asset Turnover: Net Sales / Avg Net Fixed Assets (Property, plant and equipment)
Balance Sheet Data (2) Total Asset Turnover: Net Sales / Avg Total Assets
Cash and cash equivalents, net of bank overdraft 5,779 14,852 14,820 1,962 2,228 (3) Working Capital Days: Inventory Days + Receivable Days – Payable Days
Operating working capital** 94,711 92,076 71,309 68,685 58,895 (4) Inventory Days: (Average of closing Inventory - as on end of September and March) / (Cost of Revenue during last 6 months) * 182
Total assets 3,21,854 2,92,827 2,65,491 2,32,241 2,25,427
(5) Receivable Days: outstanding receivables netted-off with the daily average sales; starting from the latest month
Total long-term debt, excluding current portion 1,278 5,746 6,299 1,304 22,000
(6) Payable Days: (Average of closing Payables - as on end of December and March) / (Material cost during last 3 months) * 90
Total stockholders’ equity 2,30,991 1,90,527 1,73,062 1,54,988 1,40,197
Additional data (7) Book Value per share: Equity/Outstanding equity shares
Net cash provided by / (used in): (8) Dividend Payout: DPS/EPS
Operating activities 58,875 28,108 35,703 29,841 28,704 (9) Trailing price: Closing share price on the last working day of March
Investing activities (41,373) (26,387) (22,660) (4,923) (7,727) * PAT adjusted for impairment of non-current assets
Financing activities (26,861) (2,422) (298) (25,159) (21,326)
^ FY2021 onwards, Net debt/equity computation excludes lease liabilities
Effect of exchange rate changes on cash 286 733 113 (25) 35
Expenditure on property, plant and equipment & (18,864) (19,049) (12,561) (6,115) (8,376)
Intangibles

* Figures are restated for previous years

** Operating working capital = Trade receivables + Inventories - Trade payables

88 Integrated Annual Report 2022-23 89

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

BOARD’S REPORT
Dear Member, up by 18% over the previous year. PBT generic filings awaiting approval with
was C38.7 billion, which was higher by the US Food and Drug Administration
Your Directors are pleased to present the
74% over the previous year. (USFDA), comprising 81 ANDAs and 5
39th Annual Report of the Company for
NDAs filed under Section 505(b)(2) of the
the year ended March 31, 2023. Revenues from lines of business and
Federal Food, Drug and Cosmetic Act.
geographies given below are from
FINANCIAL HIGHLIGHTS AND the Company’s IFRS results. Revenues from India stood at C48.9
COMPANY AFFAIRS billion, showing a year-on-year growth
Revenues from Global Generics were up
Table 1 gives the consolidated and of 17%.
by 19% and stood at C213.8 billion. There
standalone financial highlights of the was growth across businesses of North Revenues from Emerging Markets were
Company based on Indian Accounting America Generics, Europe and India. C45.5 billion, which remained flat year-
Standards (Ind AS) for FY2023 (i.e. on-year.
from April 1, 2022 to March 31, 2023) Revenues from North America stood at
compared to the previous financial year. C101.7 billion, registering a strong year Revenues from Europe were C17.6 billion,
on year growth of 36%. This was largely a year-on-year growth of 6%.
The Company’s consolidated total on account of revenue contribution from
income for the year was C257.3 billion, Revenues from Pharmaceutical Services
new products launched, increase in
which was up by 17% over the previous and Active Ingredients (PSAI) stood at
volumes for some of our base products
year. Profit before tax (PBT) was C60.5 C29.1 billion, which was lower by 5%
and favorable forex rates movement,
billion, representing an increase of 98% compared to previous year. During the
partly offset by high price erosions in
over the previous year. year, the Company filed 134 Drug Master
some of our products. During the year,
Files (DMFs) worldwide, including
The Company’s standalone total income the Company filed 12 Abbreviated New
12 filings in the US.
for the year was C175.5 billion, which was Drug Applications (ANDAs) in the USA.
As of March 31, 2023, there were 86

TABLE 1 FINANCIAL HIGHLIGHTS (H MILLION)

CONSOLIDATED STANDALONE
PARTICULARS
FY2023 FY2022 FY2023 FY2022
Total income 2,57,252 2,20,296 175,538 1,48,872
Profit before depreciation, amortization, impairment and tax 73,316 50,867 47,943 30,479
Depreciation and amortization 12,502 11,652 9,232 8,143
Impairment of non-current assets 699 9,304 51 98
Profit before tax and before share of equity accounted investees 60,115 29,911 38,660 22,238
Share of profit of equity accounted investees, net of tax 370 703 - -
Profit before tax 60,485 30,614 38,660 22,238
Tax expense 15,412 8,789 12,532 6,006
Net profit for the year 45,073 21,825 26,128 16,232
Opening balance of retained earnings 1,60,341 1,42,395 154,030 1,41,373
Net profit for the year 45,073 21,825 26,128 16,232
Other comprehensive income/(loss) - - -
Dividend paid during the year (4,979) (4,146) (4,979) (4,146)
Transfer to SEZ re-investment Reserve, net (131) 571 (131) 571
Transfer to Debenture Redemption Reserve (76) (304) - -

BOARD’S Closing balance of retained earnings 2,00,228 1,60,341 175,048

Note: FY2023 represents fiscal year 2022-23, from April 1, 2022 to March 31, 2023, and analogously for FY2022 and other such labelled years.

DIVIDEND
Your Directors are pleased to
Accounting Standards (IND-AS). The
recommended dividend is in line with the
in a pay-out of 11.4% of the consolidated
cash profit for the financial year ended
1,54,030

REPORT
recommend a dividend of C40 (800%) provision of the said policy. March 31, 2023. Such dividend will be
for FY2023, on every equity share of taxable in the hands of the members, in
The dividend, if approved at the 39th
C5/-. As per the Dividend Distribution terms of the provisions of the Income Tax
Annual General Meeting (“AGM”) will be
Policy of the Company, the amount of Act, 1961.
paid to those members whose names
maximum dividend payout (including appear on the register of members of the In terms of Regulation 43A of the SEBI
interim dividend) can be up to 20% of the Company as of end of the day on July (Listing Obligations and Disclosure
cash profit under consolidated financial 11, 2023. The total dividend pay-out will Requirements) Regulations, 2015 (“SEBI
statement prepared under Indian be approximately C666 crores, resulting Listing Regulations”), the Dividend

90 Integrated Annual Report 2022-23 91

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

Distribution Policy, is available on the PUBLIC DEPOSITS Hence, the consolidated financial subsequent to the resignation of Mr. Arun M Kumar (DIN: 09665138), as details are provided in the chapter on
Company’s website on https://www. The Company has not accepted any statements of the Company and all its Dr. Bruce L A Carter (DIN:02331774). an Independent Director of the Company Corporate Governance.
drreddys.com/cms/cms/sites/default/ deposits covered under Chapter V of the subsidiaries and associates, prepared through Postal Ballot, with effect from
Mr. Sridar Iyengar (DIN: 00278512),
files/2021-12/htmlCode%20%284%29.pdf Companies Act, 2013 (the “Act”). in accordance with Ind AS 110 and August 1, 2022. The Board opined CHANGES IN KEY MANAGERIAL
Independent Director of the Company,
111 as specified in the Companies that the above Independent Director PERSONNEL (KMP)
is a Director on the Board of Dr. Reddy’s
TRANSFER TO RESERVES CHANGE IN THE NATURE OF (Indian Accounting Standards) Rules, possessed requisite experience and During the year under review, there
Laboratories SA (Switzerland).
The Company has not proposed to BUSINESS, IF ANY 2015, forms part of the Integrated expertise (including the proficiency). were no changes in the Key Managerial
transfer any amount to the general Annual Report. Moreover, a statement Personnel of the Company. As on the
During the year, there was no change in PARTICULARS OF LOANS,
reserve for the year ended March containing the salient features of the RETIREMENT AND RESIGNATION date of this report, the Company has the
the nature of business of the Company. GUARANTEES OR INVESTMENTS
31, 2023. financial statements of the Company’s Dr. Bruce L A Carter (DIN: 02331774) following Key Managerial Personnel as
Further, there was no significant change The Company makes investments
subsidiaries and joint ventures in the and Mr. Prasad R Menon (DIN: per Sections 2(51) and 203 of the Act:
in the nature of business carried on by or extends loans/ guarantees to its
SHARE CAPITAL prescribed Form AOC-1, is attached as 00005078) completed their terms as
its subsidiaries. wholly-owned subsidiaries for their
Annexure I to this Board’s Report. This Independent Directors of the Company S. NO. NAME OF KMP DESIGNATION
The paid-up share capital of your business purposes.
statement also provides details of the on July 30, 2022, and October 29,
Company increased by C0.51 million MATERIAL CHANGES AND 1 Mr. G V Prasad Co-Chairman and
performance and financial position of Details of loans, guarantees and 2022, respectively. Managing Director
from C832.13 million to C832.64 million COMMITMENTS AFFECTING THE
each subsidiary and joint venture. investments covered under Section 2 Mr. Erez Israeli Chief Executive
in FY2023 due to allotment of 102,027 FINANCIAL POSITION BETWEEN Mr. Allan Grant Oberman (DIN:
186 of the Act, along with the purpose Officer
equity shares of C5 each, on exercise THE END OF THE FINANCIAL YEAR In accordance with Section 136 of the 08393837) tendered his resignation as
for which such loan or guarantee was 3 Mr. Parag Agarwal Chief Financial
of stock options by eligible employees AND DATE OF THE REPORT Act, the audited financial statements and an Independent Director of the Company Officer
through the ‘Dr. Reddy’s Employees related information of the Company and proposed to be utilized by the recipient,
There have been no material changes with effect from close of business hours 4 Mr. K Randhir Singh Company Secretary,
Stock Option Scheme, 2002’ and its subsidiaries, wherever applicable, form part of the notes to the financial
and commitments affecting the financial on January 6, 2023, as he was moving to Compliance Officer
‘Dr. Reddy’s Employees ADR Stock are available on the Company’s website: statements provided in this Integrated & Head-CSR
position of the Company which have a commitment outside the Company that
Option Scheme, 2007’. The equity shares www.drreddys.com. These are also Annual Report.
occurred between the end of the will not allow him to be able to devote
issued pursuant to the above Employee financial year of the Company to which available for inspection during regular sufficient time for his responsibilities DECLARATION BY INDEPENDENT
Stock Option Schemes rank pari- passu business hours at our registered CORPORATE GOVERNANCE AND
the financial statements relate and the as an Independent Director of DIRECTORS
with the existing equity shares of office in Hyderabad, India and/or in ADDITIONAL SHAREHOLDERS’
date of this report. the Company. In accordance with Section 149(7) of
the Company electronic mode. INFORMATION
The Board placed on record its sense the Act, each Independent Director has
SUBSIDIARIES AND ASSOCIATES A detailed report on the Corporate
of deep appreciation for the services confirmed to the Company that he or
SCHEME OF AMALGAMATION MATERIAL SUBSIDIARIES Governance systems and practices of
The Company has 40 overseas rendered by the above Independent she meets the criteria of independence
The Hon’ble National Company Law In terms of Regulation 16(1)(c) of the the Company is given in a separate
subsidiary companies (including step- Directors to the Company. laid down in Section 149(6) of the
Tribunal (the “NCLT”), Hyderabad Bench, SEBI Listing Regulations, Material chapter of this Integrated Annual
down subsidiaries), nine subsidiary Act, and is in compliance with Rule
vide order dated April 5, 2022, has Subsidiary shall mean a subsidiary, Report. Similarly, other information for
companies (including step-down RETIREMENT BY ROTATION 6(3) of the Companies (Appointment
approved the Scheme of Amalgamation whose income or net worth exceeds ten shareholders is provided in the chapter
subsidiary) in India and one joint venture and Qualifications of Directors) Rules,
and Arrangement (the “Scheme”) for the percent of the consolidated income or on Additional Shareholders’ Information. Mr. G V Prasad (DIN:00057433) is liable
company as on March 31, 2023. 2014 and Regulation 16(1)(b) of the
merger of Dr. Reddy’s Holdings Limited net worth, respectively, of the Company The Company has also formulated a to retire by rotation at the forthcoming
SEBI Listing Regulations. Further, each
(the “DRHL/ Amalgamating Company”) DRS LLC in Russia ceased to be a step- and its subsidiaries in the immediately Group Governance Policy to monitor 39th AGM and being eligible, seeks
Independent Director has affirmed
with the Company (the “Amalgamated down subsidiary of the Company with preceding accounting year. Accordingly, governance of its unlisted subsidiaries re-appointment. For reference of
compliance to the Code of Conduct for
Company”). The order of the Hon’ble effect from July 1, 2022, consequent to the Company has four material overseas across the globe. members, a brief profile of Mr. G V
Independent Directors as prescribed in
NCLT was filed by both the companies its merger with Dr. Reddy's Laboratories subsidiary companies as on March 31, Prasad (DIN:00057433) is given in the
A certificate from M/s. S.R. Batliboi & Schedule IV of the Act. The Board has
with the Registrar of Companies, LLC, Russia. 2023, namely, Dr. Reddy’s Laboratories Chapter on Corporate Governance and
Associates LLP, Statutory Auditors of taken on record such declarations after
Hyderabad, on April 8, 2022. Therefore, Inc. (USA), Dr. Reddy’s Laboratories SA in the Notice convening the 39th AGM.
Dr. Reddy’s Laboratories B.V. in the Company, confirming compliance due assessment of their veracity.
the merger became effective on April 8, Netherlands, ceased to be a step-down (Switzerland), Dr. Reddy’s Laboratories with the conditions of corporate
2022. The appointed date of the Scheme LLC (Russia) and Reddy Holding GmbH RE-APPOINTMENT OF WHOLE-
subsidiary of the Company with effect governance is attached to the chapter on BOARD EVALUATION
was April 1, 2019. (Germany). TIME DIRECTOR
from January 25, 2023, consequent Corporate Governance. Pursuant to the provisions of the Act, and
to its merger with Reddy Netherlands During the year, the members of the
Pursuant to the Scheme, 41,325,300 Further, in terms of Regulation 24(1) the SEBI Listing Regulations, the Board
B.V., Netherlands. MANAGEMENT DISCUSSION AND Company at its AGM held on July 29,
equity shares held by the Amalgamating of the SEBI Listing Regulations, at has carried out performance evaluation
ANALYSIS 2022, approved the re-appointment of
Company in the Company stands Section 129(3) of the Act, states that least one Independent Director on of its own performance, the Directors
Mr. K Satish Reddy (DIN: 00129701) as
cancelled and the equal number of where the Company has one or more the Board of the Company shall be a A detailed report on the Management (including the Chairman) individually,
a Whole-time Director of the Company,
shares were issued and allotted by subsidiaries or associate companies, Director on the Board of an unlisted Discussion and Analysis in terms of as well as the evaluation of the working
designated as the Chairman, for a period
the Company, on April 22, 2022, to it shall, in addition to its financial material subsidiary, i.e. a subsidiary, Regulation 34 of the SEBI Listing of the Committees. An independent
of five years, with effect from October
the shareholders of Amalgamating statements, prepare a consolidated whose income or net worth exceeds Regulations is provided as a separate external agency, EgonZehnder,
1, 2022.
Company, in aggregate, in proportion to financial statements of the Company twenty percent of the consolidated chapter in the Integrated Annual Report. a leadership advisory firm on board
their shareholding in the Amalgamating and of all subsidiaries and associate income or net worth respectively, of None of the Directors is disqualified matters, was engaged to conduct the
Company. Effectively, there is no change companies in the same form and manner the Company and its subsidiaries in the BOARD OF DIRECTORS AND KEY under Section 164 of the Act. They are Board evaluation for FY2023. The
in the total issued and paid-up share as that of its own and also attach along immediately preceding accounting year. MANAGERIAL PERSONNEL not debarred from holding the office recommendations were discussed with
capital of the Company pursuant to the with its financial statements, a separate In compliance with the said provisions, APPOINTMENTS of Director pursuant to any order of the Board and individual feedback
said Scheme, as equal number of shares statement containing the salient Mr. Arun M Kumar (DIN: 09665138), SEBI or any other authority. Further was provided.
During the year, the members of the
were cancelled, as well as issued and features of the financial statements of its Independent Director of the Company,
Company approved the appointment of
allotted by the Company. subsidiaries and associates. was appointed as a Director on the
Board of Dr. Reddy’s Laboratories
Inc. (USA) w.e.f. September 21, 2022,

92 Integrated Annual Report 2022-23 93

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

The Board evaluation process was provided by comparable companies needs, the overall principles remain the vi) Science, Technology and records and the preparation of reliable that proper reporting, approval and
completed for FY2023. Further details of are considered. same across all the models. Operations Committee; and financial statements. disclosure processes are in place for all
Board evaluation are given in the chapter transactions between the Company and
Pay practices at companies with Performance evaluation of Management vii) Banking and
on Corporate Governance. ENTERPRISE RISK MANAGEMENT related parties.
which Dr. Reddy’s competes for talent, Council (“MC”) member’s focuses Authorisations Committee
(“ERM”)
including those engaged in similar on achievement of MC Scorecard. In accordance with Section 134(3)(h) of
APPOINTMENT OF DIRECTORS All the recommendations made by The Company has a Risk Management
activities are reviewed from time to time. Individual MC evaluation focusses on the Act, and Rule 8(2) of the Companies
AND REMUNERATION POLICY the Board committees, including the Committee of the Board, consisting
achievement of: (Accounts) Rules, 2014, the particulars
Assessment and appointment of We believe that information regarding Audit Committee, were accepted by entirely of Independent Directors. of the contracts or arrangements with
members to the Board are based on pay practices at other companies is • the BU (Business Unit) scorecard the Board. The details of the above Details of the Committee and its terms of related parties referred to in Section
a combination of criteria that includes useful to assess the reasonableness for the year that contributes Committees are given in the Chapter on reference are set out in the chapter on 188(1) of the Act, in Form AOC-2 is
ethics, personal and professional stature, and competitiveness of our own. Our to the delivery of the overall Corporate Governance. Corporate Governance. attached as Annexure II to this Board’s
domain expertise, gender diversity approach is to be market aware on pay Company’s strategy.
The Audit Committee and Risk Report. All related party transactions
and specific qualifications required for levels and not entirely market driven. DIRECTORS’ RESPONSIBILITY
• demonstration of desired Management Committee review key risk and subsequent modifications are
the position. For appointment of an STATEMENT
We generally position target executive behaviours which measures the elements of the Company’s business, placed before the Audit Committee for
Independent Director, the independence pay at the top quartile of pay packages commitment to sustainable growth In terms of Section 134(5) of the Act, review and approval. Prior omnibus
finance, operations and compliance, and
criteria defined in Section 149(6) of the for executives in similar positions, by focussing on performance on your Directors state that: approval is obtained for related party
their respective mitigation strategies.
Act, and Regulation 16(1)(b) of the SEBI responsibilities and/or experience in non-financial parameters centered transactions on a quarterly basis for
1. Applicable accounting standards The Risk Management Committee
Listing Regulations are also considered. similar companies of comparable size. around the Company’s leadership transactions which are of repetitive
have been followed in the reviews strategic, business, compliance
In accordance with Section 178(3) of the behaviours. Also considered is the preparation of the annual accounts and operational risks whereas the Audit nature and/ or entered in the ordinary
We identify certain roles that are
Act, Regulation 19(4) of the SEBI Listing contribution of the individual to the and that no material departures Committee reviews issues around ethics course of business and are at arm’s
fungible across multiple industries
Regulations and on recommendation of wider enterprise agenda. have been made from the same; and fraud, internal control over financial length. All contracts and arrangements
and our comparative pool may not be
the Company’s Nomination, Governance reporting (ICOFR), as well as process with related parties were at arm’s length
limited to peer generic pharmaceutical 2. Accounting policies have been
and Compensation Committee, the NUMBER OF BOARD MEETINGS risks and their mitigation and in the ordinary course of business
organisations. In such cases – a wider selected and applied consistently.
Board adopted a Remuneration Policy The Board of Directors met eight times of the Company. Details of related party
sample is selected comprising of Judgments and estimates made are The Company’s Executive Risk
for Directors, KMP, senior management during the year. In addition, an annual disclosures form part of the notes to
non-pharma marquee organisations reasonable and prudent, so as to Management Committee operates under
and other employees that outlines Board retreat was held to discuss the financial statements provided in the
operating in the country with whom give a true and fair view of the state the Company’s Risk Management Policy
the guidelines related to performance strategic matters. The intervening gap Integrated Annual Report.
Dr. Reddy’s competes for talent. of affairs of the Company at the end and focuses on risks associated with the
evaluation of Directors, remuneration between the meetings was within the
Executive compensation is reviewed of the FY2023 and of the profit of Company’s business and compliance VIGIL MECHANISM/ WHISTLE-
principles and Board diversity. The period prescribed under the Act and the
annually. In general executive increment the Company for that period; matters. This Committee periodically BLOWER/ OMBUDSPERSON
Policy forms part of the chapter on SEBI Listing Regulations. Details of Board
percentages are lesser than the average reviews matters pertaining to risk POLICY
Corporate Governance. meetings and the Board retreat are given 3. Proper and sufficient care
with the frontline receiving the highest management. Additionally, the Enterprise
in the chapter on Corporate Governance. has been taken to maintain The Company has an Ombudsperson
Our executive compensation program increase. A higher increase may be made wide Risk Management (ERM) function
adequate accounting records in Policy (Whistle-Blower/Vigil mechanism)
supports attracting, motivating, and in the event of a role change, promotion, helps the Board and the Management to
SEPARATE MEETING OF accordance with the provisions to report concerns. Reporting channels
encouraging continuity of experienced or in exceptional circumstances. The prioritize, review and measure business
INDEPENDENT DIRECTORS of the Act for safeguarding the under the vigil mechanism include
and well-qualified executive officers Company’s performance, affordability risks against a pre-determined risk
In terms of requirements under Schedule assets of the Company and for an independent hotline, a web based
who advance our critical business and individual performance are appetite, and their suitable response,
IV of the Act and Regulation 25(3) of the preventing and detecting fraud and reporting site (drreddys.ethicspoint.
objectives and promote the creation of other considerations, while deciding depending on whether such risks are
SEBI Listing Regulations, four separate other irregularities; com) and a dedicated e-mail to Chief
shareholders’ value over the long-term. on compensation. internal, strategic or external.
meetings of the Independent Directors Compliance Officer. The Ombudsperson
The key tenets of our philosophy are 4. Annual accounts have been
Our current performance management were held during FY2023. Further During FY2023, focus areas of Risk Policy also safeguards against retaliation
designed to: prepared on a going concern basis;
follows a balanced scorecard details are mentioned in the chapter on Management Committee included review of those who use this mechanism. The
a) Attract highly talented individuals approach comprising of current Corporate Governance. 5. Adequate internal financial controls of risks and mitigations related to cyber Audit Committee Chairperson is the
from within and across industries business performance, future business for the Company to follow have security, data privacy, data governance, Chief Ombudsperson. The Policy also
drawing from a diverse pool of performance, ESG, digital, people, COMMITTEES OF THE BOARD been laid down and these are ethics and compliance risk, quality, provides for raising concerns directly to
global talent. compliance and safety related metrics. operating effectively; and supply chain management, geo-political the Chief Ombudsperson. Details of the
As on March 31, 2023, the Board has the
risks and business continuity, foreign Policy are available on the Company’s
b) Provide long term and short-term Each parameter is devised into a metric, following Committees: 6. Proper and adequate systems have
exchange risk, pharmacovigilance website: https://www.drreddys.com/
incentives that advance the financial or otherwise and is measured been devised to ensure compliance
i) Audit Committee; and environmental risk with focus on investor#governance#ombudsperson-
interests of shareholders and throughout the performance year. Non- with the provisions of all applicable
water risk. policy.
deliver levels of pay commensurate financial parameters have a cap of 100% ii) Stakeholders’ laws and these systems are
with performance. achievement while financial parameters Relationship Committee; operating effectively.
RELATED PARTY TRANSACTIONS STATUTORY AUDITORS
The three principal components of the are scored based on a predetermined iii) Nomination, Governance and
ADEQUACY OF INTERNAL In line with the requirements of the Act M/s. S.R. Batliboi & Associates LLP,
compensation package include, base grid. Additional considerations such as Compensation Committee;
FINANCIAL CONTROL SYSTEMS and the SEBI Listing Regulations, your Chartered Accountants (Firm Registration
salary, annual variable pay, and equity- wind-falls, impairments and one-offs are
iv) Sustainability and Corporate Social Company has a Policy on Materiality of No. 101049W/E300004) were re-
based long-term incentives. In making measured separately. The Company has in place adequate
Responsibility Committee; Related Party Transactions and Dealing appointed as Statutory Auditors of the
decisions with respect to each element internal financial controls with
Our performance management process with Related Party Transactions, which is Company at the 37th AGM held on July
of compensation, the competitive market v) Risk Management Committee; reference to its financial statements.
is specifically adapted to different also available on the Company’s website 28, 2021, for a period of five years till the
for executives and compensation levels These controls ensure the accuracy
employee cohorts based on their specific at https://www.drreddys.com/investors/ conclusion of the 42nd AGM to be held in
and completeness of the accounting
governance/#governance#policies-and- the year 2026.
documents. The Policy intends to ensure

94 Integrated Annual Report 2022-23 95

 Corporate Overview Our Strategy Our Performance Statutory Reports Financial Statements Annexures

SECRETARIAL AUDITOR forthcoming 39th AGM. As a matter Teva on January 26, 2022. In its amended consists of Dr. K P Krishnan (Chairman), ENVIRONMENTAL, SOCIAL AND them to claim their dividend. The details
Pursuant to Section 204 of the Act, of record, relevant Cost Audit Reports Complaint, Teva alleges that the Company Ms. Kalpana Morparia, Mr. G V Prasad GOVERNANCE (ESG) of transfer of unpaid and unclaimed
and the Companies (Appointment and for FY2022 were filed with the Central breached the supply agreements and Mr. K Satish Reddy. Based on the Providing cures and reducing the disease amounts to IEPF are given in the chapter
Remuneration of Managerial Personnel) Government on August 26, 2022, within between the parties relating to Veraring, recommendation of the said Committee, burden are central to our purpose as a on Additional Shareholders Information.
Rules, 2014, M/s. Makarand M. Joshi & the stipulated timeline. The Cost Audit failed to pay carrying costs, and breached the Board has adopted a CSR policy that leading pharma company. We believe
Co., Practicing Company Secretaries Report for FY2023 will also be filed the implied covenant of good faith and fair provides guiding principles for selection, that society and the environment EMPLOYEES STOCK OPTION
(Certificate of Practice No. 3662), within the timeline. dealing, seeking monetary damages and implementation and monitoring of are interdependent, and truly being SCHEMES
Mumbai, India, were appointed as all other remedies available under law. On CSR activities and formulation of the sustainable supports human health and The Company has three employee stock
Secretarial Auditors of the Company for AUDITORS’ QUALIFICATIONS, January 6, 2022, the Company asserted annual action plan. During the year, the well-being, a sustainable planet, and a option schemes namely, ‘Dr. Reddy’s
FY2023. The Secretarial Audit Report RESERVATIONS, ADVERSE counterclaims against Teva, asserting that Committee monitored the CSR activities well-integrated society. In 2022, building Employees Stock Option Scheme, 2002’,
for FY2023 is annexed as Annexure III to REMARKS OR DISCLAIMERS Teva breached its contractual obligations undertaken by the Company including on our incremental work in sustainability, ‘Dr. Reddy’s Employees ADR Stock
this Report. There are no qualifications, reservations, to the Company by, among other the expenditure incurred thereon as well we launched our sustainability vision for Option Scheme, 2007’, and ‘Dr. Reddy’s
adverse remarks or disclaimers by the things, failing to adhere to cGMP and as implementation and adherence to 2030 and published our renewed ESG Employees Stock Option Scheme, 2018’
Further, in compliance with Regulation producing product unfit for human use, the CSR policy. An impact assessment
Statutory Auditors in their report, or by goals and targets. Our sustainability (the “Schemes”). The term of Dr. Reddy’s
24A of the SEBI Listing Regulations, the seeking monetary damages and all other of the eligible projects has been carried
the Practicing Company Secretary in goals span across diverse areas we care Employees Stock Option Scheme, 2002,
Annual Secretarial Compliance Report remedies available under law. On March by an independent agency and the
the Secretarial Audit Report. During the about - from environmental and social ended on January 28, 2022. However,
issued by the Secretarial Auditor, will be 15, 2023, Dr. Reddy’s Laboratories, S.A., report of such impact assessment was
year, there were no instances of frauds sustainability to stronger governance, the options already granted under the
submitted to the stock exchanges within on behalf of itself and affiliates, entered noted by the SCSR Committee and the
reported by Auditors under Section from greater access and affordability 2002 Scheme are eligible for exercise, in
the statutory timelines. into a Settlement Agreement with Teva, Board. Details of the CSR Policy and
143(12) of the Act. of medicines to public health issues, terms of the Scheme. There are no other
Based on the consent received from on behalf of itself and affiliates, relating initiatives taken by the Company during from greater economic equity and changes in the said schemes during the
M/s. Makarand M. Joshi & Co., Practicing SECRETARIAL STANDARDS to the Veraring Litigation and Veraring. the year are available on the Company’s accountability to acceptance of greater year. The Schemes are in compliance with
Company Secretaries (Certificate of Pursuant to the Settlement Agreement, website: www.drreddys.com. The report social parity. They reveal our bold vision the SEBI (Share Based Employee Benefits
In terms of Section 118(10) of the Act,
Practice No. 3662), Mumbai, India and all claims between the parties have been on CSR activities as well as executive for the future and what we collectively and Sweat Equity) Regulations, 2021.
the Company complies with Secretarial
on the recommendation of the Audit dismissed with prejudice and without any summary of the impact assessment strive to achieve every day. The details of Company’s stock option
Standards 1 and 2, relating to the
Committee, the Board has approved their admission of liability by any of the parties. report are attached as Annexure IV to Schemes as required under Regulation
‘Meetings of the Board of Directors’ The Company has a Board Committee,
appointment as the Secretarial Auditor this Board’s Report. 14 of the SEBI (Share Based Employee
and ‘General Meetings’, respectively namely, Sustainability and Corporate
of the Company for FY2024. They have INFORMATION REQUIRED UNDER Benefits and Sweat Equity) Regulations,
as issued by the Institute of Company Social Responsibility (SCSR) Committee,
confirmed their eligibility for the said re- SEXUAL HARASSMENT OF WOMEN INTEGRATED REPORT 2021, are available on the Company’s
Secretaries of India (“ICSI”) and as the nodal committee to review the
appointment. AT WORKPLACE (PREVENTION, Your Company has voluntarily adopted website: https://www.drreddys.com/
approved by the Central Government. ESG and sustainability goals of the
PROHIBITION AND REDRESSAL) the Integrated Annual Report for investors/governance/policies-and-
The Company has also voluntarily Company, its implementation, progress
COST AUDITOR ACT, 2013 FY2023, which includes both financial documents/#governance#policies-
adopted the recommendatory Secretarial and other related matters as per its terms
Pursuant to Section 148(1) of the Act, Standards 3 on ‘Dividend’ and The Company has a Policy to ensure and non-financial information. The anddocuments
of reference.
read with the relevant Rules made Secretarial Standards 4 on ‘Report of the prevention, prohibition and redressal of reporting weaves together our
Your Company’s Secretarial Auditors,
thereunder, the Company maintains Board of Directors’ issued by the ICSI. sexual harassment at the workplace. It purpose, values, strategy, governance, The ESG details are available in the initial
M/s. Makarand M. Joshi & Co., Practising
the cost records in respect of its has an Apex Committee and an Internal performance and future outlook, all of section and Business Responsibility and
Company Secretaries, have certified that
‘pharmaceuticals’ business. SIGNIFICANT/MATERIAL Complaints Committee in compliance which influence the material aspects of Sustainability Report of this Integrated
the Employee Stock Option Schemes of
ORDERS PASSED BY COURTS/ with the provisions of the Sexual our business. Annual Report.
On the recommendation of the your Company have been implemented
REGULATORS/TRIBUNALS Harassment of Women at Workplace
Audit Committee, the Board has in accordance with the Regulations and
(Prevention, Prohibition and Redressal) BUSINESS RESPONSIBILITY AND TRANSFER OF UNPAID AND
appointed M/s. Sagar & Associates, Settlement with the State of Texas: In the resolutions passed by the Members
Act, 2013, which operate under a defined SUSTAINABILITY REPORT (BRSR) UNCLAIMED AMOUNTS TO THE
Cost Accountants (Firm Registration November 2014, the State of Texas in this regard.
framework for complaints pertaining to The SEBI, vide its circular dated May 10, INVESTOR EDUCATION AND
No. 000118) as Cost Auditor of the commenced a formal inquiry into the
sexual harassment at workplace. The 2021, made Business Responsibility and PROTECTION FUND (IEPF) The details also form part of note 2.25 of
Company for FY2024 at a remuneration Company’s marketing, sales, pricing
details are available in the Principle Sustainability Report (BRSR) mandatory Pursuant to the provisions of the Act, the notes to accounts of the standalone
of C900,000 (Rupees Nine Lakhs only) and price reporting for its generic drugs
5 of the Business Responsibility and for the top 1,000 listed companies (by read with IEPF Authority (Accounting, financial statements.
plus reimbursement of out-of-pocket dispensed in this State. The Company
Sustainability Report as well as in the market capitalization) from FY2023, while Audit, Transfer and Refund) Rules,
expenses at actuals and applicable cooperated with this inquiry. On June
Corporate Governance Report forming disclosure was voluntary for FY2022. 2016, as amended, declared dividends PARTICULARS OF EMPLOYEES
taxes. M/s. Sagar & Associates have 1, 2022, the Company entered into a
part of this Integrated Annual Report. which remained unpaid or unclaimed Disclosures pertaining to remuneration
confirmed that they are free from Settlement Agreement with the State of The Company had voluntarily published
Texas. Pursuant to this settlement, on for a period of seven years have been and other details as required under
disqualification specified under Section CORPORATE SOCIAL its first BRSR for FY2022 to provide
July 6, 2022, payment in the full amount transferred by the Company to the IEPF, Section 197(12) of the Act, read with Rule
141(3) and proviso to Section 148(3) read RESPONSIBILITY (CSR) INITIATIVES enhanced disclosures on ESG practices
of $12,900,000 was made to the State of which has been established by the 5(1) of the Companies (Appointment and
with Section 141(4) of the Act and that and priorities of the Company.
Texas, with no admission of liability. As per Section 135 of the Act, the Central Government. Remuneration of Managerial Personnel)
the appointment meets the requirements
Company has a Board-level Committee, The Business Responsibility and Rules, 2014, are attached as Annexure V
of the Act. They have further confirmed Veraring Litigation: A Complaint was filed The above Rules also mandate transfer
namely, Sustainability and Corporate Sustainability Report for FY2023 as to this Board’s Report.
their independent status and an arm’s on November 15, 2021, in the Supreme of shares on which dividends are lying
Social Responsibility (SCSR) Committee. mentioned under Regulation 34 of the
length relationship with the Company. Court of the State of New York, County unpaid and unclaimed for a period of In terms of Section 197(12) of the
During the year, the name of the CSR SEBI Listing Regulations, is given as
of New York (trial court level) by Teva seven consecutive years to IEPF. The Act, read with Rule 5(2) and 5(3) of
The provisions of the Act also require Committee has been changed to SCSR a separate chapter in this Integrated
Pharmaceutical Industries Ltd. (“Teva”) Company has issued individual notices the Companies (Appointment and
that the remuneration of the Cost Committee to act as nodal committee on Annual Report.
against Dr. Reddy’s Laboratories, S.A. to the members whose dividend is Remuneration of Managerial Personnel)
Auditors be ratified by the members and overall sustainability goals and progress
(Case Index No. 656499/2021). This unclaimed and unpaid and advising Rules, 2014, a statement showing the
therefore, the same is recommended apart from CSR terms of reference. As
for approval of the members at the Complaint was subsequently amended by on March 31, 2023, the Committee

96 Integrated Annual Report 2022-23 97