Dr Reddy Laboratories : . Reddy's Integrated Annual Report 2023 24

YEARS

OF SERVING PATIENTS

Dr. Reddy's Laboratories Limited

Integrated Annual Report 2023-24

Contents

Corporate Overview

1. 40 Years of Serving Patients
2. Our 40-Year Journey

1. Who We Are

1. Message from Chairman and Co-Chairman & MD

1. Our Global Presence

1. Key Performance Indicators

1. Highlights of the Year 14 In Pictures
   16 Awards and Recognitions

1. Board of Directors

1. Management Council

Strategy and Sustainability

1. About Our Reporting Approach

1. Our Strategy Pillars

1. Our Value Creation Model

1. Our ESG Goals
   32 Access, Affordability and Innovation for Patients
   36 Helping our People Realise Their Full Potential
   40 Empowering the Communities Around Us
   44 Commitment to Environmental Stewardship
   50 Enhancing Trust with our Stakeholders

1. Stakeholder Engagement and Materiality Assessment

1. Risk Management

Statutory Reports

66 Management Discussion and Analysis

1. Five years at a Glance and Key Financial Ratios

1. Board's Report and Annexures

1. Business Responsibility and Sustainability Report

1. Corporate Governance Report

1. Additional Shareholders' Information

Financial Statements

211 Standalone Financial Statements (Ind AS)

306 Consolidated Financial Statements (Ind AS)

06-07 Who We Are

30-59 Our ESG Progress

40 YEARS

OFSERVINGPATIENTS

419 Extract of IFRS Consolidated Financial Statements

Annexures

1. Independent Assurance Statement

1. GRI Index

1. Glossary

1. Notice of 40th Annual General Meeting

Click on any section title to go directly to that part of the document.

66-79 Management

Discussion and Analysis

For four decades, we have stood foradvancing healthcare throughaccess, affordability and innovation. Our work has been guided byour core tenets of deep science, progressive people practicesand robust governance. 'GoodHealth Can't Wait' has become a movement and call to action for all of us, and good health encompasses people, planet and patients. We are grateful

for the trust our patients and stakeholders have had in us throughout our journey.

As the pharmaceutical industry evolves, we will

continue to work on strengthening our core further and building the future of healthcare as we aim to touch the lives of over 1.5 billion patients by 2030.

Our second Integrated Report combines our Annual Report and our Sustainability Report to present a holistic view of our Company and how we create value for patients and other stakeholders.

Our40-YearJourney

Integrated Annual Report 2023-24

1992

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

2003

y We released our first Safety,

Health, Environment (SHE)

1984

Dr. Anji Reddy established Dr. Reddy's Laboratories Ltd.

1986

• We went public and were listed on the Bombay Stock Exchange
• We launched certain APIs for the first time in India
• In the 1980s, we were among the earliest Indian pharma companies to export APIs to USA at scale

We expanded our operations internationally by opening a

branch in Russia

1996

Dr. Anji Reddy founded the Dr. Reddy's Foundation (DRF) to give back

to society. Today, our Company's CSR activities include work in health, education, livelihood and environmental sustainability

2001

• We became the first pharma company in Asia outside Japan to list on the New York Stock Exchange
• We became the first Indian pharma company to obtain
  180-day marketing exclusivity from the USFDA (for Fluoxetine capsules 40 mg)
• We pioneered the concept of 'Self-Managed Teams' in Indian pharma to provide skilling and livelihood opportunities to youths around our plant sites

report. In 2004, we were

also among the earliest to

initiate annual voluntary

sustainability disclosures

y Led the way in building a Zero

Liquid Discharge (ZLD) plant

based on membrane technology

in Miryalaguda to treat and

recycle all effluents in-house

1985

Our first API factory in Bollaram, Hyderabad, commenced operation

1991

Our first mega-brand Omez (Omeprazole) was launched in India, and went on to become our first ` 1 bn brand and a leader in Indian pharma

1993

We were among the earliest in Indian pharma to initiate new drug discovery through the Dr. Reddy's Research Foundation

1997

We were the first Indian pharma company to out-license a novel drug to an innovator

2002

Aurigene Discovery Technologies Ltd (today, Aurigene Oncology Ltd), our subsidiary in Bengaluru, was incorporated for new drug discovery

02

03

2006

Integrated Annual Report 2023-24

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

2024

y We diversified our offerings to patients

- women's healthcare in the U.S.,

consumer healthcare and our first-ever

• We crossed US$ 1 bn in revenue
• We became the first Indian pharma company to launch
  Authorized Generics (AG) in the U.S. (finasteride 5mg, generic equivalent of Merck's Proscar tabs; and simvastatin in various strengths, generic equivalent of Merck's Zocor tabs)

2010

• We launched the world's then first­ and India's only generic of darbepoetin alfa (Cresp) in India
• We adopted 6 sustainability goals for the next decade

2019

We became the first foreign generics company to receive approval to supply an existing product (Olanzapine)

to China's public hospitals under the QCE system

2021

Our Company played its part along with the rest of the pharma industry in the fight against COVID-19

We combined our in-house efforts with an open-innovation model of partnerships to make available a portfolio that included a vaccine, and therapeutics for mild, moderate and severe COVID-19

Our focus on agility, access and affordability helped us reach over 5 mn patients during the pandemic, especially in low and middle income countries

biosimilar in the UK, and vaccines in India

y We entered into an agreement with

Nestlé India to form a joint venture to

introduce health science nutraceutical

products to consumers across India and

other agreed territories

HOME >>BRAND-MARKETING >>NESTLE-INDIA-AND-DR-REDDYS-FORM-JV-TO-BRING-NUTRACEUTICAL-BRANDS-TO-CONSUMERS-ACROSS-

Nestlé India and Dr. Reddy's form JV to bring nutraceutical brands to consumers across India

e partnership will bring together the Āell-known global range of nutritional health solutions as well as vitamin, minerals, herbals and supplements of Nestlé Health Science (NHSc) with the strong and established commercial strengths of Dr. Reddy's in India.

Printed from

Dr Reddy's to exclusively distribute Sanofi's vaccine portfolio in India

TNN | Mar 27, 2024, 08.13 PM IST

HYDERABAD: Dr Reddy's Laboratories on Wednesday informed the bourses has entered into an exclusive partnership with Sanofi Healthcare India Pvt Ltd for the distribution of the latter's vaccine portfolio in the Indian market.

As part of the agreement, while Dr Reddy's will have exclusive rights to promote and distribute Sanofi's paediatric and adult vaccine brands in India, Sanofi will continue to own, manufacture, and import these brands to the country.

These include paediatric and adult vaccine brands such as Hexaxim, Pentaxim, Tetraxim, Menactra, FluQuadri, Adacel and Avaxim 80U. These brands rang up combined sales of around Rs 426 crore (approx. US$51 million), as per IQVIA MAT February 2024.

The Hyderabad-based pharma major said the partnership is part of Dr Reddy's efforts to emerge as the partner of

2007

We launched the monoclonal antibody biosimilar of rituximab in India (Reditux)

2016

We were listed on the Dow Jones Sustainability Index 2016 for Emerging Markets for the first time

2020

We became the first pharma company in India and third in Asia to join the Science-Based targets initiative (SBTi)

2022

• Our biggest manufacturing facility in Hyderabad was recognised by the World Economic Forum as part of its Global Lighthouse Network for leadership in the use of Industry 4.0 technologies
• Dr. Reddy's Foundation received a National Award from the President of India for Empowerment of Persons with Disabilities
• We refreshed our ESG goals to make them bold, measurable, accountable and central to business strategy
• We were named by the prestigious
  Science Magazine as among the Top 20 employers globally in pharma/biotech
• We launched Lenalidomide Capsules in the U.S. with two of six strengths eligible for first-to-file,180-day exclusivity

2023

• We became the first Indian pharma company to debut on the Dow Jones Sustainability World Index
• We launched Nerivio® in India for migraine management, marking our foray into digital therapeutics
• We entered into strategic collaborations for novel molecules - with the U.S.-based Coya Therapeutics for a novel combination biologic for ALS; with China-based Junshi Biosciences for Toripalimab; and with Jiangsu Hengrui for Pyrotinib
• We were included in the Bloomberg Gender-Equality Index for the 6th year in a row

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Integrated Annual Report 2023-24

Who We Are

Our Purpose

We accelerate access to affordable and innovative medicines because Good Health Can'tWait

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Our Values

In pursuit of our purpose of providingaffordable and innovative medicines for healthier lives, we will create an environment of innovation and learning while continually reaching for higher levels of excellence

Our Promises

Bringing	Addressing	Helping	Working	Enabling
expensive	unmet patient	patients manage	with partners	and helping our partners
medicines	needs	disease better	to help them	ensure that our medicines
within reach			succeed	are available where needed

Integrity and Transparency

We will uphold the highest standards of integrity and transparency in all our transactions

Respect for the Individual

We are committed to creating a work environment that encourages diverse perspectives and upholds the dignity of work and of individuals

Safety	Quality	Productivity
We are committed to providing	We are dedicated	We strive to achieve
safe working environments	to designing quality	more with less through
through continuous improvement	into our products and	a culture of innovation,
of our infrastructure, work	processes to delight	continuous improvement
practices and behaviours	our stakeholders	and a substantial focus
		on elimination of waste

Collaboration and Teamwork	Sustainability
We will leverage expertise and	We will create value for our stakeholders
resources from across our	in a manner that respects our natural
global network to create greater	environment and serves the best
value for our stakeholders	interests of the communities in which
	we live and work

Our Leadership Behaviours

Our Principles

Empathy	Dynamism
We understand	We solve challenges that
the needs of our	only a few can, and do
patients and partners	this with agility
better than others

06

Aspirational Growth Mindset

We target industry-leading growth through innovation, cost leadership and taking risks

Innovation

We drive patient and customer-focussed innovation in all areas using cutting-edge science, technology and tools

Speed and Rigour in Execution

We act with agility; we are disciplined and rigorous in execution

Results Driven

We take responsibility for outcomes and own end results for our patients

People Leadership

We inspire people to reach their full potential through work and continuous learning

Excellence Focus

We excel by combining deep professional expertise and disciplined execution

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Integrated Annual Report 2023-24

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Message from Chairman and Co-Chairman & MD

customers, partners, and all other stakeholders. Our people are our pride, and nothing gives us more joy than to see our people realise their full potential in the company, and to see several of our alumni lead the industry forward.

There is still a long way to go.

No company can afford to rest on its past laurels. The pharma landscape continues to evolve constantly and remains extremely competitive.

Our approach is to ensure that we continue to do the basics well in our core businesses of API, generics, branded generics, biosimilars

and OTC. On the other hand, as demographics, disease patterns, business models evolve, it is important to anticipate healthcare trends of the future. We have started investing in areas that we think could be future growth drivers - novel molecules (NCEs, NBEs, CAR-T), digital therapeutics (wearables, apps), and consumer healthcare (nutrition and OTC wellness). These are relatively new and long-gestation areas requiring companies to think and do things differently through strong partnerships, investment in newer capabilities,

among vaccine players in India.

Our collaboration with Bayer in India, to market their second brand of the molecule Vericiguat, helps us make this new class of drugs in heart failure management available to patients in India, in and beyond metros in tier-I and tier-II towns. It also bolsters our heart failure management portfolio as we look to strengthen our play in the chronic segment. Our collaboration with Pharmazz Inc. enables us to market the first-in-class molecule Centhaquine in India, a potential add-on drug in the management of hypovolemic shock.

We continue to advance our work in the identified future growth spaces of access to novel molecules, digital therapeutics, and consumer healthcare. Our regulatory work in India on Toripalimab, for which we partnered with Junshi Biosciences, has moved forward. We have taken early steps in the area of digital therapeutics, with the launch of the drug-free migraine management device Nerivio®, and a digital integrated care plan to manage Irritable Bowel Syndrome (IBS). Consumer healthcare is a fast-growing segment. In recent years, we have acquired several well-known brands

names in over 30 countries outside of the U.S. We see this acquisition as an ideal anchor platform to grow our consumer healthcare business.

Through all of the above, our aim is to meet unmet needs of patients and to enhance standard of care wherever possible. We also continue our efforts to be viewed as the partner of choice for our commercial strengths and footprint, our governance, ESG and progressive practices, and

our discipline.

While our people put in every effort to ensure we meet our business targets and ESG goals, there are always challenges along the way. Our record financial performance in the last two years has been led by a blockbuster product in the U.S. We are working hard to ensure that our current investments and diversified business model approach help us maintain sustained growth in the upcoming years. As part of the usual course of business, we faced several regulatory inspections at our manufacturing sites in FY2024. Our all-time readiness approach stood us in good stead but we continue our state of constant vigilance in Quality compliance.

an initiative within our India business for working mothers from the pre-natal care stage to support in various ways until their children attain 18 years of age, thereby enabling more women to stay in the workforce and succeed in their careers. In partnership with Dr. Reddy's Foundation, we upgraded several primary healthcare centres in Srikakulam. We also completed

a pond rejuvenation community project in Baddi, and funded a rare disease research centre at the

Dr. Reddy's Institute of Life Sciences.

Over 40 years, our company has evolved from an API player to formulations, finished drugs, biosimilars, and newer healthcare segments. Amidst the evolution, what has remained unchanged is our endeavour to keep access, affordability, innovation at the heart of everything we do. And we continue to be guided by our core tenets of deep science, progressive people practices, and robust governance.

Once again, deep gratitude to all those who have supported and contributed to our journey of 40 years. It is an important milestone, but as our founder Dr. Anji Reddy often remarked, we

Dear Shareholders,

FY2024 was an exciting and eventful year. We grew our core, invested in our future, and continued to serve our stakeholders. We also observed 40 years of our company's journey. Through this second edition of our integrated report, we bring you a brief overview of our journey, important highlights of the year, and the work we do for patients, people and planet.

40 Years of Creating Value

In February 2024, we marked our 40th year of serving patients, with a legacy of access, affordability, innovation, and sustainability. Our company was founded in 1984 to enable patients to access life-saving medicines, and to use science and innovation to open new avenues to meet unmet medical needs. This pioneering spirit and quest for excellence drove us to achieve significant

industry-firsts such as investment in drug discovery in the 1990s, expansion into international markets and first-to-market launches in several countries, the first 180-day exclusivity granted to Indian pharma by the USFDA, listing on the NYSE, and adoption of voluntary disclosures and science-based commitments in sustainability.

Giving back to society was instilled into the ethos of the company from its early days.

We also learnt several lessons along the way from a myriad of challenges

• from acquisitions that did not work well, to a period of Quality compliance issues, and several geo-political crises.

We are grateful that through all the thick and thin, we had constant support and trust from our patients, the medical fraternity, shareholders and investors,

and an appetite for risk. In FY2024, we made good progress in some of these areas.

Highlights of FY2024

Overall, we delivered strong financial results in FY2024. We had double digit revenue growth at 14%, reported EBITDA margin for the year at 29.7%, and ROCE of over 35%. Our growth and profitability were driven by our performance in the U.S.

Strategic collaborations played an important role in helping us introduce the latest generation of treatments to patients in India, both in our current core business as well as future growth drivers. We signed a partnership with Sanofi in India to take their well-establishedand trusted vaccines portfolio to more people all over India. With combined sales of over ` 426 crore (as per IQVIA MAT February 2024), the vaccine portfolio also propels us to the second position

in the U.S. in Nicotine Replacement Therapy (NRT), pain-relief, and women's health. In India, we have a portfolio of OTC products in the hydration, cough-cold-allergy, and skin care categories. The recent announcement of a joint venture with Nestlé India to bring the well-known global range of nutritional health solutions as well as vitamin, minerals, herbals and supplements of Nestlé Health Science (NHSc) to India, is another significant move to strengthen our nutrition and OTC business in India. In Emerging Markets, we have

• long-establishedand sizeable
  OTC business with market-leading products in the allergy, pain relief, gastro-intestinal and women's health categories. We also entered the UK consumer health market with the launch of the OTC allergy medication Histallay this year. A few days ago, we announced the acquisition of the global consumer healthcare brand Nicotinell and its various market-leading brand

Our dossier for our proposed rituximab biosimilar candidate received a Complete Response Letter from the USFDA. We will continue to work closely with the USFDA to address and resolve all concerns within stipulated timelines in order to make this biosimilar rituximab available

to patients in the U.S. as soon as possible. Similarly, the bold and ambitious nature of our ESG goals means that it is challenging to succeed equally in every goal every year.

However, our commitment remains undeterred. By the end of FY2024, we had served over 700 million patients and continue our endeavour to reach over 1.5 billion patients globally by 2030. Our progress was recognised in our ascent to the Dow Jones Sustainability World Index, improved position in the S&P Global Sustainability Yearbook, and Gold Medal status by EcoVadis. In FY2024, we also launched Womb to the World,

would like to build an organisation that will last 500 years.

K Satish Reddy	G V Prasad
Chairman	Co-Chairman and
	Managing Director

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09

Integrated Annual Report 2023-24

Our Global Presence

A global snapshot of our capabilities - through our presence in research, sales and manufacturing around the world, products in 76 countries, and employees representing

53 nationalities, we are able to process, manufacture and take products to patients globally.

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Sales and Other Offices

76 53

CountriesNationalities (Workforce)

US$ 3.35 bn

Revenue

241

Dossiers Filed, including

17 ANDAs + 2 NDAs

Cumulative ANDAs: 325

As of March 31, 2024, 86 filings are pending approval (81 ANDAs and 5 NDAs). Of these, 50 are Para IVs and we believe 24 have 'First-to-File' status.

29.7%	26,000+
			EBITDA			Employees Globally
133
			DMFs Filed, including

11 DMFs in the U.S.

Cumulative global DMFs: 1,537 including 251 in the U.S.

Research and Development Centres

Manufacturing Facilities

Headquarters

Note: The map is not to scale and is an artistic representation.

All information as of FY2024

181	20	42		106	13
Launches				NAG			Europe				Emerging Markets				India

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Integrated Annual Report 2023-24

Key Performance Indicators

Key Financial Performance Indicators

Corporate Overview Strategic Review Statutory Reports Financial Statements

Key Non-Financial Performance Indicators

Revenue						Gross Profit							EBITDA
(` Mn)						(` Mn)							(` Mn)
FY2024							FY2024								FY2024
	279,164						163,607						83,013
FY2023							FY2023								FY2023
	245,879						139,343						73,081
FY2022							FY2022								FY2022
	214,391						113,840						51,400
FY2021							FY2021								FY2021
	189,722						103,077						47,386
FY2020							FY2020								FY2020
	174,600						94,009						46,432

PBT							PAT							Net Worth
(` Mn)							(` Mn)							(` Mn)
FY2024							FY2024							FY2024
71,870		55,684			280,550
FY2023							FY2023							FY2023
60,367		45,067			230,991
FY2022							FY2022							FY2022
32,298		23,568			190,527
FY2021							FY2021							FY2021
26,413		17,238			173,062
FY2020							FY2020							FY2020
18,032		19,498			154,988

ROCE				EPS					Net Debt to Equity Ratio*
(%)					(`)
FY2024					FY2024					FY2024
	35.5			334.0		(0.23)
FY2023					FY2023					FY2023
	34.6			270.9		(0.21)
FY2022					FY2022					FY2022
	19.6			141.7		(0.08)

Dossiers Filed

Including ANDAs

(Nos.)

FY2024241

FY2023

195

Patients Reached

(Mn)

FY2024~704

FY2023

~689

CarbonNeutrality

(%)

FY2024
48
FY2023
30

Gender Diversity

DrugMaster File (DMF)

(Nos.)

FY2024

133

FY2023

134

Beneficiaries

underCSR activities

(Nos.)

FY2024 ~497,000

FY2023 ~330,000

Renewable Power

(%)

FY202456

FY2023

42

Board Independence

FY2021			FY2021				FY2021
17.8	103.6	(0.04)
FY2020			FY2020				FY2020
12.2	117.4	(0.03)

*Net debt/equity computation excludes lease liabilities, FY2021 onwards.

(%)

FY2024

FY2023

21

18

(%)

FY2024

FY2023

82

78

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Integrated Annual Report 2023-24

Highlights of the Year - in Pictures

1

2

5

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

3

4

6

7

8

9

1) Second annual	2) Our strategic	3) Our China team's	4) Our Community	5) Our Brazil team,
Dr. Anji Reddy Memorial	collaboration with Alvotech	debut at the sixth	Health Intervention	on the launch of
Lecture delivered by	for AVT03 (denosumab)	China International	Programme (CHIP) in	Lenangio® (Lenalidomide)
Nobel Laureate		Import Expo (CIIE)	Laveru, Andhra Pradesh
Prof. Jack W. Szostak

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1. Launch of our Condition Management programme 'DailyBloom™ IBS', India's first-ever digital integrated care plan to manage Irritable Bowel Syndrome (IBS)

1. Launch of our Digital Performance Marketing programme, 'Performance X', in collaboration with Indian School of Business (ISB)

1. Our CRDMO arm, Aurigene Pharmaceutical Services, opened a new biologics manufacturing facility in Genome Valley, Hyderabad

1. Team India ran a Breast Cancer Awareness Month campaign

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Integrated Annual Report 2023-24

Highlights of the Year -

Awards and Recognitions

	Received Gold		Recognised as one of the Top
			First Indian pharma company to
Medal status from		20 Employers among pharma/		be included in the Dow Jones
	EcoVadis in 2023		biotech globally for the second year		Sustainability World Index 2023
				in a row in 2023

Included in S&P Global's	Awarded Excellence in Rural Health	First Indian Pharma
Sustainability Yearbook 2024	Initiative at the - 2023 Economic	to receive "A-"in Climate
in the Top 10% category	Times India Pharmaworld Awards	Change & Water Security by CDP

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Asia-Pacific

Climate Leader 2024

Technology Strategy Impact	Named by Financial Times	Recognised as 'Company of
Award 2023 for Asia Pacific	(London) and Statista - as	the Year - Americas' at
(APAP) by Forrester	Asia-Pacific Climate Leader 2024	the Global Generics &
	for the second year in a row	Biosimilars Awards 2023

						ТОП-20
						2023 год
						Dr. Reddy's	00
								О 10
								ЧЕЛ
								ОВ
						Привлекательный и открытый	ИИ
						ПМ
								НА
						работодатель, успешно развивающий	ОК Е
						HR-процессы и имидж компании
							h.ru/
Recognised in the 'Leadership'		Recognised as Top Employer in	CSR Excellence Award 2023 by
category at the - 2023 Institutional		Russia in HeadHunter's Best	the Institute of Company
Investor Advisory Services (IiAS)		Employer Ranking for 2023	Secretaries of India (ICSI)
	Governance Award

Best Patient Support	Great Place to Work Certification	Golden Peacock Award 2023 in the	Recognised at the India Risk
Programme at the - 2023	2023 - in Colombia, Brazil, China,	pharmaceutical sector - For Excellence in	Management Award 2024 as Masters
Silver Feather Awards	Malaysia, Thailand, India, Myanmar	Corporate Governance and for Corporate	of Risk - Healthcare and Pharma
		Social Responsibility

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