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                      C R E AT I N G A




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D R . R E D D Y ’ S L A B O R AT O R I E S L I M I T E D | A N N U A L R E P O R T | 2 0 0 9 – 1 0
C ONTENTS
                     24
                     MANAGEMENT DISCUSSION
                     AND ANALYSIS



                     42
                     BOARD OF DIRECTORS




                     45                       72
                     MANAGEMENT COUNCIL       DIRECTORS’ REPORT




2                    46                       89
CHAIRMAN’S LETTER    CORPORATE GOVERNANCE     IGAAP STANDALONE
                                              FINANCIALS



4                    60                       141
KEY HIGHLIGHTS       ADDITIONAL               IGAAP CONSOLIDATED
                     SHAREHOLDERS’            FINANCIALS
                     INFORMATION


6                    70                       187
THE DNA OF           FIVE YEARS AT A GLANCE   EXTRACT OF
SUSTAINABILITY                                IFRS CONSOLIDATED
                                              FINANCIALS


14                   71                       190
HUMAN RESOURCES      RATIO ANALYSIS           STATEMENT PURSUANT
                                              TO SECTION 212 OF THE
                                              COMPANIES ACT, 1956


16                                            191
SAFETY, HEALTH AND                            INFORMATION ON
ENVIRONMENT                                   THE FINANCIALS OF
                                              SUBSIDIARY COMPANIES


18                                            192
CORPORATE SOCIAL                              NOTICE OF ANNUAL
RESPONSIBILITY                                GENERAL MEETING
2 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




 CHAIRMAN’S
 LETTER




                                              2009-10 has been a satisfactory year                            Rs. 10,158 million — thus crossing the Rs. 1,000
                                              for your Company. Let me start with                             crore landmark. This is also a ‘first’.
                                              the financial results.                                              Fourth, I am proud of what your Company
                                   Consolidated revenues for 2009-10 was                                      did on 30 September 2009. Following concerns
                                    Rs. 70,277 million. Excluding revenues from                               on the size and proportion of a few of its pills in
                                    sumatriptan — your Company’s Authorized                                   the US — an issue isolated to four products, one
                                    Generic version of Imitrex® which was                                     specific lot per product, or four lots in total — it
                                    launched in 2008-09 — revenue grew by 9%.                                 voluntarily recalled four categories of tablets. To
                                    In US dollar terms, 2009-10 revenue was                                   my mind, this is an act of courage and honesty.
                                    US$ 1.56 billion. I am happy to inform you that                           In such circumstances, the right thing to do is to
                                    the Company’s revenue has been rising at a                                take all the necessary corrective measures with
                                    CAGR of 23% over the last decade. That is a                               utmost speed and fairness. This action of your
                                    creditable performance by any standard.                                   Company has strengthened its fiduciary position
                                   Your Company’s EBITDA of Rs. 15,828 million                                vis-à-vis its US customers and the US Food and
                                    was the highest among pharmaceutical                                      Drug Administration (USFDA).
                                    companies in India.                                                          Fifth, Dr. Reddy’s had successful audits carried
                                   Return on Capital Employed (RoCE) in 2009-10                               out by the USFDA for two of its formulation
                                    was 17%, as against 14% in 2008-09. You                                   plants, one in Hyderabad and the other in
                                    may recollect that in my last year’s letter to you,                       Vishakapatnam. The USFDA follows extremely
                                    I had asked your Company to generate “Return                              stringent audit procedures, and the success
                                    on Capital Employed in middle to high teens”.                             demonstrates your Company’s commitment to
                                    It has.                                                                   producing medicines according to the highest
                                 There have been several other developments in                                international standards. The formulation plant
                                 2009-10 that I am particularly proud of.                                     at Vishakapatnam was also audited and certified
                                    The first is that in the US market, 2009 saw                               by Brazil’s National Health Surveillance Agency
                                 Dr. Reddy’s enter the list of the Top 10 generic                             (or the Agência Nacional de Vigilância Sanitária,
                                 companies. This is a red-letter event for your                               ANVISA). In addition, the chemical plants were
                                 Company. It confirms Dr. Reddy’s abilities to                                 audited and certified by the United Kingdom’s
                                 compete in the US, and strengthens its resolve                               Medicines and Health products Regulatory
                                 to becoming a leading generics player in this                                Agency (MHRA).
                                 important geography.                                                            Sixth, I am happy to inform you that Dr. Reddy’s
                                                                                                              has entered into a strategic partnership with
Your Company remains committed to building a strong generics and                                              GlaxoSmithKline plc (GSK) to develop and market
active ingredients pipeline. In 2009-10, Dr. Reddy’s filed 13 drug                                             select products across emerging markets outside
applications in North America, of which 12 Abbreviated New Drug                                               India. This partnership will expand the Company’s
                                                                                                              reach in emerging economies. The products will
Applications (ANDAs) were in the US and one in Canada. Among
                                                                                                              be manufactured by Dr. Reddy’s; and will be
these were six Para-IV filings.                                                                                licensed and supplied to GSK in markets such as
                                    The second development is in the Russian and                              Latin America, Africa, the Middle East, and Asia
                                 CIS markets. In Russia, revenues of your Company                             Pacific excluding India. Already, there has been
                                 grew by 25% in 2009-10 — versus an overall                                   more than 50 dossier filings in various markets
                                 market growth of 8% — and thus gross sales for                               under this alliance.
                                 Russia and CIS markets exceeded the US$ 200                                     Seventh, let me talk about discovery research.
                                 million mark. That is another ‘first’ for Dr. Reddy’s.                        I am satisfied with the results of the first set of
                                    Third, the Indian market saw your Company’s                               Phase III clinical trials of Balaglitazone (DRF 2593).
                                 revenues increase by 20% in 2009-10 to                                       These have shown significant reduction in HbA1c
ANNUAL RE P O RT 2 0 0 9 – 1 0 CHAIRMAN’S LETTER | 3




The global pharmaceutical business is becoming more complicated
than ever before. Older business models are being challenged by
competition; and new verticals are coming into play.




(glycosylated haemoglobin) and improved safety       environment only the rapid, clever and nimble
profile. I hope that your Company will continue       will win. The changes that are being carried out
getting successful Phase III results, and will be    across your Company are all geared to create the
able to monetize this new molecule in the future.    ‘winning infrastructure’.
   Your Company remains committed to building           For the next year, I am asking your Company to
a strong generics and active ingredients pipeline.   earn a return on capital employed between 18%
In 2009-10, Dr. Reddy’s filed 13 drug applications    to 22%, in line with the goal of reaching 25% by
in North America, of which 12 Abbreviated New        2012-13.
Drug Applications (ANDAs) were in the US and            I am confident that your Company will
one in Canada. Among these were six Para-IV          continue winning. And be the most respected
filings. The US generic pipeline now comprises        global pharmaceutical company in India
73 ANDAs pending with the USFDA, including           committed to providing affordable and innovative
11 tentative approvals. Of these, 38 are Para-IV     medicines.
filings, with 12 in the category of ‘first to file’.       Thank you for your support.
As of 31 March 2010, the Company has filed
179 cumulative drug applications in both US and        With warm regards,
Canada.
   In the Active Ingredients business, too, the
Company filed 36 Drug Master Files (DMFs) in
2009-10 —19 in the US, five in Canada, eight in         Dr. K Anji Reddy
Europe and four in other countries. As on              Chairman
31 March 2010, Dr. Reddy’s had cumulative filings
of 378 DMFs, with 156 in the US.
   We have taken all the necessary impairments
on account of our German subsidiary, betapharm.
As I wrote last year, the German generics
market has become commoditized, driven
by tenders and auctions. In such a scenario,
accounting standards dictated taking another
non-cash impairment. Your Company has
done so in 2009-10 by recording a write-down
of intangible assets of Rs. 3,323 million, and
goodwill of Rs. 5,147 million. The balance sheet
has been effectively cleansed of intangible and
goodwill on account of betapharm. With the
cost and organizational rationalizations that are
being carried out in Germany, and with much
greater supply chain support from India, I expect
betapharm to do better in the future.
   Finally, a peep into tomorrow. The global
pharmaceutical business is becoming more
complicated than ever before. Older business
models are being challenged by competition;
and new verticals are coming into play. There
will be new developments and alliances, as well
as new opportunities and challenges. In such an
4 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




  F I N A N C I A L H I G H L I G H T S ( B A S E D O N I F R S F I N A N CI A L S )



Consolidated Revenues                                               Profit After Tax                                                           Return on Capital Employed (RoCE)
Excluding revenues from sumatriptan –                               Net profit of Rs. 1,068 million in 2009-10 as                              RoCE at 17% for 2009-10 as against 14% in
Dr. Reddy’s Authorized Generic version of                           against a net loss of Rs. 5,168 million in 2008-09.                       2008-09.
Imitrex® which was launched in 2008-09, the                           Excluding impact of impairment from the                                 This increase is attributable to:
Company’s overall revenue grew by 9%. It                            current year as well as from the previous year,                             Core business growth of India, Russia and
should be noted that the Company’s revenue                          adjusted net income increased by 10% to                                     North America
has been rising at a CAGR of 23% over the last                      Rs. 9,217 million in 2009-10 from Rs. 8,355                                 Rationalization of business model and
10 years.                                                           million in 2008-09.                                                         Cost optimization and restructuring initiatives.

EBITDA                                                                                                                                        Fully diluted Earnings Per Share
Adjusted EBITDA of Rs. 15,828 million is highest                                                                                              Fully diluted earnings per share was at Rs. 6.30
among pharmaceutical companies in India.                                                                                                      in 2009-10 as against Rs. (30.69) in 2008-09.




                                                                                   CONSOLIDATED REVENUE                                                         GLOBAL GENERICS REVENUES
                                                                                              IN RS. MILLION                                                     GEOGRAPHICAL MIX, IN RS. MILLION



                                                                                                                                                                                                 North America
                                                                                                                                                                                                 40% (19,843)

                                                                                                                                                        CIS
                                                                                                                                                 4% (1,821)
                                                                                                                                                                                                           Europe
                                                                                                                                                     Russia                     2008-09
                                                                                                                                                                                                           24% (11,886)
                                                                                                                 70,277                         12% (5,803)

 HIGHLIGHTS                                                                                                                                                 Others




2009
                                                                                                                                                        4% (1,959)                              India
                                                                                                                                                                                                17% (8,478)

                                                                                  69,441                                                                                                          North America
                                                                                                                                                                                                  34% (16,817)

                                                                                                                                                         CIS




2010
                                                                                                                                                  4% (1,887)
                                                                                                                                                                                                            Europe
                                                                                                                                                       Russia                    2009-10
                                                                                                                                                                                                            20% (9,643)
                                                                                                                                                  15% (7,232)


                                                                                                                                                             Others
                                                                                                                                                         6% (2,868)                              India
                                                                                             2009       2010                                                                                     21% (10,158)




   REVENUES FROM DIFFERENT BUSINESSES



Global Generics                                                          million in 2008-09 and Rs. 2,543 million                                Revenues from Russia and CIS countries grew
  Revenues were at Rs. 48,606 million in                                 in 2009-10.                                                             by 20% to Rs. 9,119 million in 2009-10 from
  2009-10 versus Rs. 49,790 million in 2008-09.                          Excluding sumatriptan, revenues from North                              Rs. 7,623 million in 2008-09.
  Excluding revenues from sumatriptan,                                   America grew by 13% to Rs. 14,274 million                               Revenues from Europe dropped by 19% to
  Dr. Reddy’s Authorized Generic version of                              in 2009-10 from Rs. 12,655 million in                                   Rs. 9,643 million in 2009-10 from Rs. 11,886
  Imitrex® which was launched in 2008-09,                                2008-09, growth being largely driven by the                             million in 2008-09. betapharm revenues
  Global Generics revenues grew by 8%.                                   new product launches and OTC products.                                  dropped by 26% to Rs. 7,298 million in
  In 2008-09, the company was able to launch                             Revenues in India grew by 20% to Rs. 10,158                             2009-10 from Rs. 9,854 million in 2008-09.
  sumatriptan, the Authorized Generic version                            million in 2009-10 from 8,478 million in
  of Imitrex®, ahead of others. The launch of                            2008-09.
  sumatriptan in the US contributed Rs. 7,188
ANNUAL RE P O RT 2 0 0 9 – 1 0 KEY HIGHLIGHTS | 5




    A N DA s , D M F s , P R O D U C T R E G I S T R AT I O N A N D N C E s



ANDAs in North America                                DMFs                                                New Chemical Entities (NCEs)
In 2009-10, the Company filed 12 Abbreviated           Regarding Active Ingredients business, the          As on 31 March 2010, Dr. Reddy’s had six
New Drug Applications (ANDAs) in US including         Company filed 36 DMFs in 2009-10. Of these,          New Chemical Entities (NCEs), of which five are
six Para IV filings. The Company has filed 158          19 were filed in US, five in Canada, eight in         in clinical development and one in the pre-
cumulative ANDAs up to date. As on 31 March           Europe and four in other countries. As on           clinical stage.
2010, there were 73 ANDAs pending approval at         31 March 2010, the Company had cumulative
the USFDA, of which 38 are Para-IV filings, with       filings of 378 filings, with 156 in the US.
12 in the category of ‘first to file’.




                PSAI REVENUES                                   ANDA S IN NORTH AMERICA                                           DMFs
      GEOGRAPHICAL MIX, IN RS. MILLION                                                                                      GEOGRAPHICAL MIX


                               Others                                                                                                          Others
       India                                                                                                       Canada
                               34% (6,340)                                    23                                                               10
13% (2,383)                                                                                                             5




                   2008-09                                                                                                        2008-09


                                                             Non Para IV            12

     Europe                    North America                         16                                                 USA                    Europe
 33% (6,160)                    20% (3,875)                                                                              21                    19
                                                                                          Non Para IV
                               Others                                                     6                                                    Others
       India                                                                                                       Canada
                               36% (7,433)                                                                                    5                4
13% (2,646)



                                                                  Para IV                 Para IV
                   2009-10                                                                                                        2009-10
                                                                        7                 6



       Europe                  North America                                                                            USA                    Europe
 33% (6,652)                    18% (3,673)                                                                              19                    8
                                                                            2009   2010




                                                             RECOGNITIONS



Pharmaceutical Services and Active                       The year saw Dr. Reddy’s win numerous              Recruiting and Staffing Organization’ and
Ingredients (PSAI)                                       awards. Some of the key ones were:                 ‘Best Recruiting Evaluation Techniques’;
  Revenues grew by 9% to Rs. 20,404 million              “Corporate Social Responsibility Award”            ‘Organization with Innovative HR Practices’
  in 2009-10 from Rs. 18,758 million in                  at the CNBC TV18’s India Business Leader           and ‘Outstanding Contribution to the Cause
  2008-09. International revenues accounted              Awards (IBLA); “Golden Peacock Award for           of Education’ awards at the World HRD
  for 87% of PSAI revenues.                              Excellence in Corporate Governance” and            Congress and was adjudicated the best in
  2009-10 saw the company posting                        “NASSCOM CNBC IT User Award” 2009 in               the ‘Great Places to Work Survey’ in the
  significant increase primarily from Europe              the Pharmaceutical vertical for the 2nd year       pharmaceutical and biotechnology industry.
  by 8% and “Rest of the World” markets                  in a row.                                             The Company’s Annual Report was
  (i.e., all markets other than North America,              For its HR initiatives, Dr. Reddy’s won         conferred the ‘Merit Award’ for the year 2008
  Europe, Russia and other countries of the              the: Recruiting And Staffing Best In Class          in the category ‘Manufacturing Sector’ by the
  former Soviet Union and India) by 17%.                 (RASBIC) award 2009-10 for the ‘Best Overall       South Asian Federation of Accountants.
6 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                                                                                                                                               ENVIRONMENTAL
                                                                                                                                                MANAGEMENT &
                                                                                                                                               CLIMATE CHANGE




THE DNA OF
SUSTAINABILITY                                                                          SUSTAINABLE
                                                                                          SOURCING

At Dr. Reddy’s, Sustainability is a way
of life and is embedded in our purpose.
It is a broad concept which encompasses
how we value our employees, social impact
of our products, patient centric programs,
proactive safety, health and environment (SHE)
management, implementation of community
development projects and voluntary engagement
with the society to address larger social concerns
like livelihood and education.


Our awareness of sustainability originates from
the social benefits of our business. We have
come to understand the interdependence (as
against independence) of our stakeholders and
this has encouraged our simultaneous pursuit of
a people, purpose and planet approach. For our
organization to be truly sustainable, we have to
be distinctive in a few areas, while being good at
most activities that we do. We believe that our
strategy of “Leveraging industry-leading science
& technology, product offering, and customer
service with execution excellence to provide
affordable and innovative medicines for healthier
lives” will help us focus on the right areas.


In practicing sustainability, our initial efforts were
focused on environment management and safety
& health at the workplace. As our organization
evolved, so has been our sustainability thinking.                                     PRODUCT
Today, while considering issues that are of                                      RESPONSIBILITY
significance to our stakeholders as well as to
the organization, we have arrived at a robust
sustainability framework with six key focus areas–
Providing affordable and innovative medicines,
being an employer of choice, environmental
management and climate change, caring for
communities, sustainable sourcing and product
responsibility.
A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 7



                                                                                                       KEY AREAS OF FOCUS




                                                        CARING FOR
                                                        COMMUNITIES

                                                                                                         SOCIETY
                                                                                                         COMMUNITY
                                                                                                         ENVIRONMENT
                                                                                                         PUBLIC


                                                                                                         CUSTOMERS
                                                                                                         & PARTNERS
                                                                                                         USERS Patients
                                                                                                         CHANNELS Retailers, Wholesalers, Distributors,
                                                                                                         Hospitals, Government
                                                                                                         INFLUENCERS Physicians, Insurers
                                                                                                         OTHERS Partners, Vendors, Suppliers, Regulators


                                                                                                         EMPLOYEES
                                                                                                         FAMILY
                                                                                                         ALUMNI


                                                                                                         INVESTORS &
                                                                                                         SHAREHOLDERS




                                                            PROVIDING
                                                            AFFORDABLE                             To us at Dr. Reddy’s, a
                                                            & INNOVATIVE                           sustainable organization
                                                            MEDICINES
                                                                                                   is one that simultaneously
                                                                                                   pursues economic, social and
                                                                                                   environmental benefits, thereby
                                                                                                   increasing value for all its
                                                                                                   stakeholders and assuring a
                                                                                                   robust future.

BEING AN
EMPLOYER
OF CHOICE
8 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                                                   PROVIDING AFFORDABLE AND INNOVATIVE MEDICINES
                                                   At Dr. Reddy’s, a company with a significant global footprint, we
                                                   have a serious responsibility – to help reduce the burden of disease
                                                   on individuals and on the world. We achieve this by leveraging our
                                                   proficiency in science and technology to innovate at every stage of
                                                   our processes. Our Pharmaceutical Services and Active Ingredients
                                                   (PSAI) and Global Generics businesses focus on affordability by
                                                   providing lower cost, high quality alternatives while our Proprietary
                                                   Products business addresses unmet and poorly met medical needs.



» Reaching out to the rural                                                                                                                         College in Cuttack, India every
markets in India Dr. Reddy’s                                                                                                                        month. His care and treatment
forayed into the rural markets in                                                                                                                   costs are beyond the reach of
FY09 with launch of an exclusive                                                                                                                    his father, a daily wage laborer.
                                                                      GREEN (FULL)
portfolio of products targeted at                                                                                                                   He was given assistance under
                                                                      TIME TO CHANGE
the needs of people in rural India.                                   RED (EMPTY)                                                                   the Sparsh program to meet his
» Dose Counter Inhalers –                                                                                                                           treatment needs. Dr. Reddy’s
a novel device It is the first Metered                                                                                                               arranged for free medication as
Dose Inhaler in India that gives                                                                                                                    well as reimbursement of other
patients an advance indication of                                                           Satyajit Ghosh (7 yrs.) from                            treatment related expenses. He has
when the inhaler is going to be empty.                                                      Bhubaneswar, Orissa, India was                          now successfully completed 4 cycles
» Through Sparsh, the entire                                                                diagnosed with blood cancer                             of chemotherapy and is looking
range of Dr. Reddy’s oncology            across India, enabling them to                     six months ago. His treatment                           forward to getting his normal
products are routed to needy             complete planned cancer care and                   requires him to spend two to                            childhood back.
patients through patron-oncologists      treatment.                                         three weeks at the SCB Medical
A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 9




ENVIRONMENTAL MANAGEMENT & CLIMATE CHANGE
We are working towards maintaining a harmonious relationship
with the environment, which calls upon us to engage ethically
with our stakeholders and to do everything in our power to
reduce our ecological footprint. Our mandate now, is ‘every new
product should have a sensible footprint’. Efforts are on to achieve a
suitable blend of energy conservation, use of renewable sources
of energy, water conservation, control on generation, disposal of
hazardous waste and green chemistry.



                                                                                          » In FY10 a total 71 energy
                                                                                          conservation measures were
                                                                                          initiated, with an annual saving of
                                                                                          around 5.0 million kwh.
                                                                                          » Green Chemistry Dr. Reddy’s
                                                                                          “Centre of Excellence for Process
                                                                                          Engineering” contributes to
                                                                                          Sustainability through “Green
                                                                                          Chemistry”. This ensures not only
» Safe disposal of organic             compared to incineration. During                   environment friendly products and     Roundtable of the American
residue to cement industry             2009-10, we disposed 1,747 tons                    processes, but also contributes to    Chemical Society.
A positive development regarding       of organic residues to the cement                  the health and safety of employees    » Solvent Recovery Systems
disposal of our organic residues was   industry for use as feedstock in the               involved in manufacturing. In FY10    (SRS) were installed across all our
the opening up of an alternative,      cement manufacturing process.                      the Company joined the Green          Hyderabad based Chemical units in
environmentally friendly option as                                                        Chemistry Institute® Pharmaceutical   FY09 at a cost of Rs. 250 million.
10 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                                                  BEING AN EMPLOYER OF CHOICE
                                                  We believe collaboration and teamwork enhances performance
                                                  and drives innovation. We work as One Team, collectively
                                                  ideating, innovating and interacting. At Dr. Reddy’s, we offer a
                                                  conducive working environment that taps one’s potential to the
                                                  fullest while offering them the freedom to question, innovate and
                                                  find that ‘better way’. This has gone a long way in earning us the
                                                  trust of our employees and in making our employees proud to
                                                  work with us.



» Leadership Academy The                                                                                                                         » Self Managed Team (SMT)
Leadership Academy at our                                                                                                                        We were the first pharmaceutical
Bachupally campus in Hyderabad                                                                                                                   company in India to implement the
is a state-of-the-art infrastructure                                                                                                             Self Managed Teams (SMTs) concept
aimed at being a catalyst for                                                                                                                    at our manufacturing operations.
our company-wide culture of                                                                                                                      A SMT is an empowered, multi-
continuous learning and leadership                                                                                                               skilled team with operational
development. The academy                                                                                                                         decision-making authority. Turning
provides a platform for                                                                                                                          traditional thinking on its head, the
people to come together to ideate      workforce, which has led to a                       Our global employee strength                          SMT concept, implemented at our
and introspect. In FY10 a total of     greater proportion of women                      comprises of 13,000+ associates                          plants at Baddi and Yanam in India
6,068 man days of training was         employees. In FY10, almost 13%                   from over 25 nationalities. Over                         have proved to be a resounding
provided.                              of the recruits were women. Also,                2,600 associates are based outside                       success.
» Diversity There is a conscious       of all the campus hires, 31% were                India.
effort at building diversity in the    women.
A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 11




PRODUCT RESPONSIBILITY
The trust of patients and doctors is crucial to our business. We
ensure there is ‘No scope for error in anything we do’ by addressing
quality management, regulatory compliance, product safety
requirements and putting in stringent procedures for packaging
to protect patient safety. We are adopting a Quality by Design
(QbD) approach where it is no longer enough to do a quality
check at the end of the process. Our aim is to ensure that every
step in our process is done ‘first time right’.



                                   » Product packaging-                                                                   (ANVISA), UK (MHRA), Ukraine,
                                   We address counterfeiting                                                              Romania, Therapeutic Goods
                                   through:                                                                               Administration (TGA), Danish
                                                                                                                          Medicines Agency and World
                                   batch numbering, manufacturing                                                         Health Organization (WHO) among
                                   and expiry date                                                                        others.
                                                                                                                            Globally, we have eight USFDA
                                                                                                                          approved chemical plants, seven
                                                                                                                          finished dosage plants (two USFDA
                                   to safeguard products from cheap                  » Compliance Our manufacturing       approved) and one biologics
Tamper-proof package design of     counterfeits                                      facilities have been inspected and   development center.
Mitotax injection was awarded                                                        approved by leading regulatory
the AmeriStar award for            to eliminate obvious conventional                 agencies like United States Food
packaging excellence in 2005       practice among others                             and Drug Administration (USFDA),
                                                                                     Ministries of Health of Brazil
12 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                                                 SUSTAINABLE SOURCING
                                                 Our Business Partners are important stakeholders and working
                                                 with them provides us operational flexibility and cost advantage.
                                                 However, we are the ones responsible for social, economic and
                                                 environmental impacts of our entire value chain. Through
                                                 sustainable sourcing, we try to influence them to adhere to best
                                                 practices in human rights, ethics, health & safety, environment and
                                                 other related management systems. Our mantra has been ‘nurture
                                                 them, and let them grow’, as ultimately our growth is linked to theirs.



» Enabling compliance Many
of our business partners are WHO
GMP certified and ISO compliant.
We evaluate their compliance
through audit and give weightage
to those who are environmentally
sensitive. A data bank has been
created on our Safety, Health and
Environment (SHE) infosite and it
triggers mail alerts to the business   improvement and systems                          processes faster, validate new                           and robust systems is crucial.
partners regarding the expiry/non-     implementation.                                  sources and technologies,                                Through a Use Test Lab, analysis is
receipt of their licenses. Periodic    » Vendor Lab and Use                             speed up implementation and                              done to ensure that our finished
safety audits are conducted at their   Test Lab We have created a                       conserve higher cost facilities.                         drugs meet regulatory standards.
facilities to check infrastructure     vendor lab, through which our                    In the pharmaceutical industry,
                                       business partners can manage                     maintaining high quality standards
A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 13




CARING FOR COMMUNITIES
‘To progress and provide for the community around us’ and ‘to benefit
individuals and society at large’ are our focus areas in sustainable
community development. Caring for communities is a part of our
values statement. We channel our wide network of social activities
through Dr. Reddy’s Foundation (DRF), address health education
needs and patient care activities through Dr. Reddy’s Foundation for
Heath Education (DRFHE) and create positive impact on communities
through Corporate Social Responsibility (CSR) teams in each location.



                                                                                                                               Management (PGCHM) and
                                                                                                                               certificate program in cancer
                                                                                                                               counseling. Students passing out
                                                                                                                               from these courses assist healthcare
                                                                                                                               professionals and doctors in
                                                                                                                               providing better care to patients.
                                                                                                                               ‘Life at Your Doorstep’ is a palliative
                                                                                                                               care initiative that helps terminally
                                                                                                                               ill patients and their families better
» Dr. Reddy’s Foundation The             replicable livelihood models through              dropouts, while improving quality   manage serious illness.
activities of Dr. Reddy’s Foundation     partnerships.                                     of education across schools.
(DRF) span two broad areas of social        Education Provide learning                     » Dr. Reddy’s Foundation for
intervention:                            opportunities for those who                       Health Education (DRFHE)
    Livelihoods Create, implement        have never been to school, or are                 Conducts programs like Post
and disseminate sustainable and                                                            Graduate Certificate in Healthcare
14 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




 HUMAN
 RESOURCES




                                As we set ourselves a target of reaching                         TA L E N T AC Q U I S I T I O N
                                $ 3 billion by FY13, we realize that it is                       During the year, around 4,100 new employees
                                our people – our biggest strength – that                         were hired, including replacements. The highlights
                    will get us there. Our employees are the engine                              of the hiring program are:
                    that drives our organization forward. We are                                   India field and manufacturing hires have
                    committed to nurture and develop the tremendous                                 contributed 25% each to the overall hiring
                    talent that exists at Dr. Reddy’s by providing our                              while 24% of the hiring was in Quality, Research
                    people a platform to achieve greater things in life.                            & Development and Engineering Services.
                        In today’s rapidly changing business                                       Critical talent was added in the areas of
                    environment, the organization that is efficient and                              Life Cycle Strategy, Formulations Scale-
                    effective wins. It means having people who fit your                              Up Development, Regulatory Strategy,
                    needs perfectly, when you need them.                                            Legal, Corporate Development & Strategic
                    Dr. Reddy’s global employee strength crossed                                    Planning, Safety Health & Environment,
                    13,000 in 2009-10, of which over 2,600 are based                                Pharmacovigilance & Clinical Development,
                    at locations outside India. There is a conscious                                Bioassay and Medical Sciences.
PARTICIPANTS        effort at building diversity in the workforce,                                 24 Management Trainees and laterals were
AT THE SENIOR       which has led to a greater proportion of women                                  recruited from prestigious B-Schools including
LEADERS PROGRAM     employees. In FY10, almost 13% of the recruits                                  IIMs, ISB, TISS and about 628 technical
WHICH WAS HOSTED    were women. Of all the campus hires, 31% were                                   trainees were recruited which includes a
BY DR. REDDY’S AT   women.                                                                          number of IIT graduates. We also ramped up
OUR LEADERSHIP
                    Our consistent pursuit to create an ever-flourishing                             our Self Managed Teams (SMTs) in Baddi and
ACADEMY IN
BACHUPALLY,         organization built on a platform of unyielding                                  Vishakapatnam.
HYDERABAD FROM      integrity and sound values has indeed, gone a long
14-19 SEPTEMBER.    way in making us an employer of choice.                                      TA L E N T M A N AG E M E N T
                                                                                                 Nominations for promotion to and within Senior
                                                                                                 Management were taken through the Talent
                                                                                                 Management Board (TMB) process for the first
                                                                                                 time on a pilot basis. The TMB process roadmap
                                                                                                 was drawn up with the top management and is
                                                                                                 slated to be executed in FY11. The deployment of
                                                                                                 this initiative will be top down with TMBs for top
                                                                                                 management being done at the Corporate and
                                                                                                 for others in the Business Units. The Company’s
                                                                                                 Management Council (MC) will lead this
                                                                                                 process to reinforce the commitment of the top
                                                                                                 management to the development of leadership in
                                                                                                 the organization.
                                                                                                    We are also partnering with a global consulting
                                                                                                 firm to work on critical interventions related to
                                                                                                 role clarification, job evaluations and competency
                                                                                                 management.

                                                                                                 LEARNING & LEADERSHIP
                                                                                                 DEVELOPMENT
                                                                                                 Leadership development across all levels and a
                                                                                                 culture of continuous learning are key to our
ANNUAL RE PO RT 2 0 0 9 – 1 0 HUMAN RESOURCES |      15




In today’s rapidly changing business environment, the
organization that is efficient and effective wins. It means having
people who fit your needs perfectly, when you need them.
Dr. Reddy’s global employee strength crossed 13,000 in 2009-10,
of which over 2,600 are based at international locations.



   *                                                   **




growth aspirations. Some of the key activities      BUILDING AN INCLUSIVE AND                            *    WOMEN’S DAY
                                                                                                              CELEBRATIONS
carried out in this area for the year were:         E N A B L I N G O R G A N I Z AT I O N
                                                                                                              AT DR. REDDY’S
  Second Leadership Summit was organized at         During the year, several new employee enabling
  Boston, USA with world class faculty sharing      policies like flexible work timings, sabbatical            PARTICIPANTS AT
  ideas on Performance & Execution, Talent &        leave, part-time work, paternity leave & adoption
                                                                                                         **   THE 2ND ANNUAL
  Leadership, and Organizational Culture.           were introduced with an aim to provide flexibility         LEADERSHIP
  Hosted the Senior Leaders Program (SLP)           and work life balance to employees.                       SUMMIT WHICH
  for cross-industry consortium. During this                                                                  WAS HELD FROM
  program, senior leaders from high powered         H R AWA R D S
                                                                                                              10-13 AUGUST AT
                                                                                                              BOSTON, USA.
  consortium companies including those from         In FY10, the Company received the following key
  Dr. Reddy’s attended a week long program at       recognitions for its HR initiatives.
  our Leadership Academy.                              Recruiting and Staffing Best in Class Award
  Coaching provided to middle and senior leaders       (RASBIC) 2009-10 for the ‘Best Overall
  based on their 360 degree feedback.                  Recruiting & Staffing Organization’ and ‘Best
  Launched several learning interventions              Recruiting Evaluation Techniques’
  focused on developing critical skill sets, soft      Employer awards at the World HRD Congress
  skills and leadership competencies. The              for ‘Organization with Innovative HR Practices’
  Company offered 6,068 man days of training.          and ‘Outstanding Contribution to the Cause of
  Increased the reach of learning through              Education’
  Learning@drreddys – an internal learning             Adjudicated the best in the ‘Great Places
  portal.                                              to Work Survey’ in the Pharma and Biotech
  399 Management, Engineering and Technical            industry.
  trainees inducted into the organization through
  an intense, systematic and well-planned
  Campus-to-Corporate induction program.
16 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




  SAFETY
  HEALTH &
  ENVIRONMENT



                              We are committed to maintaining the                                 Five new safety guidelines & six audit protocols
                              highest standards of Safety, Health and                             were released during the year.
                   Environment (SHE) by complying with the laws
                   and regulations first, and then going beyond                                 T O WA R D S B E T T E R S A F E T Y
                   the mandate to keep our planet safe for future                              AWA R E N E S S A N D E M E R G E N C Y
                   generations. Minimizing the environment impact                              P R E PA R E D N E S S
                   of our operations assumes utmost priority. Our                                 38 monthly safety campaigns were carried out
                   comprehensive SHE policy, as well as dedicated                                 on themes like emergency management, work
                   measures we have taken through specialized                                     permit system etc. across all manufacturing
                   teams, systems and programs for this purpose                                   sites. Safety week was observed in March 2010
                   are a testament of our commitment to the cause.                                across all facilities to promote a culture of
                   Reducing our existing carbon footprint and                                     safety at the work place.
                   tailoring our processes to minimize the impact on                              1,460 internal training program (equivalent
                   the environment rank high in our list of priorities.                           to 5,355 man days of training) on safety was
                   Greatest emphasis is given to safety measures for                              conducted by internal faculty. Some specialized
                   minimizing accidents. Emergency management                                     external training programs like dust explosion
                   and safety training for employees, the use of                                  hazard, tank farm & warehouse management,
                   Green Chemistry and engineering principles in                                  safe handling of chemicals were also organized
                   our product development, and incorporating                                     for 174 employees.
                   waste water recycling and Zero Liquid Discharge                                During the year, 33 mock drills, 54 fire drills and
                   (ZLD) in our plants were key features of the SHE                               23 first aid training programs were conducted.
                   program at Dr. Reddy’s.                                                        As on date 835 trained first aiders, 1,315
                      The year 2009-10 saw significant steps taken                                 trained fire fighters are available at various
                   in the direction of building a fool-proof and                                  locations.
                   robust Safety, Health & Environment system in the                              SHE support was also extended to third party
                   organization.                                                                  manufacturing facilities and 18 audits & four
                                                                                                  safety risk assessments were conducted during
                                                   S A F E T Y U P DAT E                          the year. 43 man-days of training was also
                                            During the year 124                                   organized on various topics like static-electricity
                                         safety related incidents                                 hazard and its control and work permit system.
                                         were reported across all
                                         locations out of which                                P R O C E S S S A F E T Y M A N AG E M E N T
                                         eight were Lost Time                                     Focus during the year was on embedding SHE
                                         Accidents.                                               aspects into our new product development
                                            We initiated a system                                 process. Objective of the initiative was to make
                                         of cross-unit audits of all                              our manufacturing processes safer, through a
                                         16 manufacturing units                                   comprehensive method for analyzing process
                                         and a total of 546 safety                                hazards.
                                         audit observations were                                  A SHE guideline for conducting risk analysis of
                                         noted. For 70% of audit                                  CTO manufacturing processes was put in place.
                                         observation, corrective                                  Aspects of process hazard identification, risk
                                         actions were implemented                                 analysis and measures towards risk reduction
                                         and closed as on 31st                                    were considered in the guideline.
SAFETY TRAINING
                     March 2010. In a new initiative, “Batch                                      Nine training programs including sessions by
AT ONE OF OUR
CTO UNIT IN          Chemical Safety“cards with all key safety data                               globally recognized consultants were organized
HYDERABAD, INDIA     were released for 34 products in the CTOs.
A N N U A L R E P O R T 2 0 0 9 – 1 0 S A F E T Y H E A LT H A N D E N V I R O N M E N T |   17




Minimizing the environment impact of our operations assumes
utmost priority. Our comprehensive SHE policy, as well as
dedicated measures we have taken through specialized teams,
systems and programs for this purpose are a testament of our
commitment to the cause.



  to create a knowledge base amongst our                       Two new guidelines on Environment
  technical work groups across PSAI.                           Management to ensure a uniform documented
  Two new supplementary SHE guidelines were                    system for environment management were
  released for smoother implementation of risk                 released.
  analysis procedure and a chemical database                    World Environment Day was celebrated
  listing for referral during risk analysis was                across all units. Clearance from Ministry of
  created.                                                     Environment and Forests was obtained for new
   Process risk analysis for 12 CTO products was               SEZ projects.
  completed with a detailed action plan for                    1,747 MT of organic residue from CTO units
  implementing the recommendations. A process                  was disposed as auxiliary fuel to cement plants.
  risk analysis guideline for FTO manufacturing                This constituted 50 % of the total organic
  processes was also developed.                                waste generated and the rest was sent for
  A process to identify hazardous chemicals                    incineration at TSDF facility.
  handled in our facilities was initiated to                   71 energy conservation measures were initiated
  establish measures towards risk reduction in                 this year resulting in an annual saving of 5.0
  hazardous chemical handling. This exercise has               million kwh.
  been completed in two facilities so far.
                                                            W E B B A S E D T R AC K I N G O F
O C C U PAT I O N A L H E A LT H                            S A F E T Y, H E A LT H & E N V I R O N M E N T                      ZERO LIQUID
  Occupational health surveillance was                      I N F O R M AT I O N                                                 DISCHARGE (ZLD)
  conducted at all CTO units.                               The SHE Infosite (an exhaustive information&                         UNIT AT CTO FACILITY
  Industrial hygiene qualitative risk assessment            action tracking website on the intranet) was                         IN BOLLARAM,
  was carried out at all manufacturing facilities           upgraded and deployed for use. Separate                              HYDERABAD, INDIA.
  using in-house tool based on hazard and                   workflows were created for:
  control banding concept.                                    SHE audit recommendations, SHE incident
  Basic occupational health awareness training                 reporting and status of corrective action
  was conducted for 180 shop floor operators                    implementation.
  and block-in-charges.                                       Statutory compliances of pressure vessels and
                                                               lifting tools and tackles testing
E N V I R O N M E N T M A N AG E M E N T                      Regulatory compliance tracking system for
  Post the commissioning of the Zero Liquid                    Strategic Business Partners (SBP) which supply
  Discharge Plant (ZLDP), the absolute water                   key starting material to CTO units.
  consumption at the Biologics Development                    Database for logging minutes of safety
  Center has come down by 50%.                                 committee meetings.
  Effluent treatment plant at CTO – 1 was                    Dedicated efforts continue towards resource
  upgraded by adding RO based polishing plant               conservation, strengthening safety culture and
  and one more ZLDP being commissioned in                   upgradation of physical facilities to deliver better
  FTO – 3                                                   safety and environmental performance.
  Waste minimization teams were formed at
  CTO manufacturing units to achieve significant
  effluent load reduction.


                                                                                                                                    SAFETY TRAINING:
Note:
                                                                                                                                    A FIRE DRILL AT
CTO: Chemical Technical Operations (Manufacturing facility for Active Pharmaceutical Ingredients (APIs))                            THE CORPORATE
FTO: Formulation Technical Operations (Manufacturing facility for finished dosages / formulations)                                   HEADQUARTERS
18 |    S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




 CORPORATE
 SOCIAL
 RESPONSIBILITY



                                           A DEEP COMMITMENT                                                           in the coming years for the betterment of the
                                                         “Dr. Reddy’s Foundation (DRF) was                             marginalized sections of society.
                                                         born out of my anger”, says
                                           Dr. K Anji Reddy, Founder Chairman of                                       FLOOD RELIEF INITIATIVE
                                           Dr. Reddy’s. It was a Newsweek article which                                DRF played an active part in providing relief to
                                           commented that “some parts of India were worse                              victims of the massive floods which hit Andhra
                                           off than Sub-Saharan Africa” that triggered a call                          Pradesh, India in October 2009.
                                           for action. Dr. Reddy set out to seek an answer                                Health camps were organized to provide
                                           to the query – what can we do to improve the                                immediate health services to the needy. Free
                                           condition of our country?                                                   treatment, essential medicines and technical
                                              DRF, founded in 1996, through its pioneering                             advisers were made available by Dr. Reddy’s, while
                                           efforts in the field of livelihood creation and                              DRF carried out the community mobilization and
                                           education, has changed the lives of millions                                camp management activities. In a week-long
                                           while achieving measurable social impact. It has                            operation from 13-19 October 2009, about 5,800
                                           exemplified the change that could be brought                                 patients from over 30,000 families were treated
                                           in the lives of the underprivileged through                                 in 38 villages and 21 urban slums. The Company
                                           corporate initiatives. Past efforts have given us the                       also made a contribution of Rs. 10 million to the
                                           confidence and hope that we can do much more                                 Chief Minister’s Relief Fund and employees based
                                                                                                                       out of India contributed their one day’s basic
LABS Partnership                                                                                                       salary towards the cause.
Name of the Corporate         Partnership with                                                Livelihoods
CII Yi LABS                   CII Yi                                                                       178         D R . R E D DY ’ S F O U N DAT I O N ( D R F )
Accenture LABS                Accenture                                                                    403         DRF has made significant progress in its social
ASHA LABS                     Tata Teleservices                                                             20         development endeavor in FY10 through several
PCC LABS                      CII Yi                                                                       130         initiatives in the areas of creating Sustainable
WORLD VISION                  WORLD VISION                                                                 105         livelihoods and providing Quality education.
Total                                                                                                      836
                                                                                                                       LIVELIHOODS UPDATE
                                                                                                                       Livelihood Advancement Business School
Name of Government Bodies     Partnership with                                                Livelihoods
                                                                                                                       (LABS)
Grameen LABS – National       MoRD, Government of India                                                8,673
                                                                                                                       A total of 20,820 livelihoods were generated by
EGMM – III                    EGMM, Government of AP                                                   1,498
                                                                                                                       LABS in 2009-10 through various partnerships.
EGMM – IV                     EGMM, Government of AP                                                     795
                                                                                                                       (refer LABS Partnership table)
MEPMA                         MEPMA, Government of AP                                                  2,211
                                                                                                                          Andhra Pradesh in India accounted for 30%
MEPMA – II                    MEPMA, Government of AP                                                  1,093
                                                                                                                       of the total livelihoods generated followed by
Corporation LABS              Corporation of Chennai, Tamil Nadu                                         410
                                                                                                                       Delhi and UP which accounts for approximately
MPRLP                         MPRLP, Government of AP                                                    110           8% and 7% respectively. 68% of 20,820 youths
NABARD                        MoRD and NABARD, Uttar Pradesh                                           1,178           trained were placed with an average salary of
SHG LABS                      WBSRDA, West Bengal                                                        125           Rs. 3,618. A total income of Rs. 611,491,659
Total                                                                                                 16,093           (Rs. 611 million) was generated for the financial
                                                                                                                       year 2009-10 with 14,157 families being the
Name of International NGOs    Partnership with                                                Livelihoods              beneficiaries of this increase in income.
MSDF LABS                     Michael & Susan Dell Foundation                                           3,891
Total                                                                                                   3,891          Rural Livelihoods
                                                                                                                       The Rural Livelihoods Department of DRF
Total Livelihoods Generated                                                                           20,820           undertook two projects last year:
A N N U A L R E P O R T 2 0 0 9 – 1 0 C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y |   19




DRF, founded in 1996, through its pioneering efforts in the field of
livelihood creation and education, has changed the lives of millions
while achieving measurable social impact. It has exemplified the
change that could be brought in the lives of the underprivileged
through corporate initiatives.



1. Pilot project in 10 villages in Sadshivpet Mandal          program for rural youth in Himachal Pradesh and
   of Medak District, Andhra Pradesh, India                   Rajasthan.
2. Pilot project in 10 villages in Daund Taluka of
   Pune District, Maharashtra, India.                         » Dalmia Cements and ACC DRF signed a MoU
                                                              with Dalmia Cements to support the training of
Wage Employment                                               250 aspirants in five villages and provide them
205 youth were trained and placed in jobs in local            with livelihoods in Gulbarga District, Karnataka.
areas (without migration) with an average salary              A similar MoU has been signed with ACC for
of Rs. 3000 per month. As of 31 March 2010,                   training and providing support to 50 aspirants in
a further 173 youth were undergoing training                  Chattisgarh.
and 24, after having completed training were                                                                                           GV PRASAD AND
                                                                                                                                       SATISH REDDY
awaiting placement.                                           » Tata Power Company DRF initiated the                                   PRESENTING A
                                                              Skilling Rural India Project in Pune in association                      CHEQUE TO
Self Employment                                               with Tata Power to train 300 aspirants.                                  MR. K ROSAIAH
Apart from wage employment, 50 youth at                                                                                                (CHIEF MINISTER
Daund, Maharashtra, India have been helped                    » Ashta No Kai DRF has also signed a MoU                                 OF THE STATE OF
to gain self employment. They were provided                   with a Pune based NGO Ashta No Kai for training                          ANDHRA PRADESH,
training and linked to banks to obtain loans.                 and livelihoods support to 100 aspirants in five                          INDIA).
                                                                                                                                       DR. REDDY’S MADE
Around Rs. 18 million was mobilized as bank loan.             villages. DRF has raised sponsored projects worth
                                                                                                                                       A CONTRIBUTION
The average monthly income of youths engaged                  Rs. 4.5 million with a target of skilling 700 youth                      OF RS. 10 MILLION
in self employment is Rs. 4,000 per month.                    in the next one year.                                                    TO THE CHIEF
Youths have been assisted to set up poultry farms,                                                                                     MINISTER’S RELIEF
dairy farming, auto repair shops and other small                                                                                       FUND IN AID OF THE
establishments in the village.                                                                                                         FLOOD VICTIMS.


Capacity building of farmers
At Daund, DRF provided a grant of Rs. 50,000
to Farmer’s Club to procure good quality seeds
and conducted tours to expose them to new
technologies. This helped them improve their
farm output thus leading to increased income.
A total of 200 farmers have benefitted from this
project with an increase in income of Rs. 2,000
per farmer.

LABS PARTNERS HIP S INITIATED
TH IS YEAR
Based on the experiences and results gained in
the pilot projects, DRF has been able to sign up
for the below sponsored projects:

» Lafarge India Private Limited A MoU was
signed with Lafarge India Pvt. Ltd. for conducting
diagnostic study to access the feasibility of
initiating a skill development and employability
20 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                                      EXPL ORING NEW LIVELIHOOD                                                   » In shop Demonstrators
                                      OPTIONS                                                                     Branded electronic stores require an adept
                                      New programs were launched to meet the needs                                workforce who could answer customer queries
                                      of the deprived sections of the society and bring                           while being clear in communication.
                                      out new poverty alleviation programs.                                       DRF piloted a batch which oriented the aspirants
                                                                                                                  on electronics devices. The program, currently
                                      » Program for prisoners                                                     rolled out in Delhi and Kolkata, is planned for a
                                      In a bid to enhance the employability of convicts                           pan India launch.
                                      after their release from jail and help them get
                                      re-integrated into society, DRF launched the                                » Pharma Retail
                                      “Prisoners program” to provide technical skills                             With organized Pharma retail catching steam
                                      in two domains – automobile mechanism and                                   in India, DRF has tried to fulfill the needs of this
A MOBILE HEALTH                       refrigeration & air conditioning.                                           sector by training youth on medicines, dosage
CAMP IN AID OF                           The 92 days prisoner’s program was conducted                             forms and its selections, human anatomy and
FLOOD VICTIMS IN                      in Charlapally Jail in Hyderabad from the 27                                physiology, use of insulin pen, respiratory device
ANDHRA PRADESH,
                                      October 2009 to 27 January 2010 for 50                                      and glucometer etc.
INDIA.
                                      prisoners.
                                                                                                                  E D U C AT I O N U P DAT E
                                      » MoU with Nasscom Foundation                                               YUVA YOUTH LEARNI N G CENTERS
                                      DRF signed an MoU with NASSCOM Foundation                                   Community-based adolescent youth learning
                                      and Accenture where it would train NASCOMM                                  centers established in various urban slum areas
                                      Knowledge Network partners and associated                                   around Hyderabad help bring dropouts and
                                      NGO’s who work in similar areas of operations                               working children into the mainstream education
                                      and support these teams in terms of process,                                system. These centers help eligible students
                                      curriculum and content, life skills and other                               obtain formal academic certification, provide
                                      operational issues.                                                         career counseling and job-related training.
                                                                                                                     Six Yuva Youth Learning Centers were
                                      » Program for Home Managers                                                 established in 2009-10 with four teachers in each
                                      A comprehensive 30 day module covering life                                 centre.
                                      skills, housekeeping, first aid, cooking, child and
                                      elderly care along with practical training was                              TRANSIT EDUCATION C EN TERS
                                      provided to 22 unemployed girls / women to help                             A transit school comprises of an early childhood
                                      them become home managers.                                                  education center (crèche), a bridge course camp
                                                                                                                  and a regular primary school. In FY10, 17 Non
                                      NEW L ABS CURRICULUM                                                        residential bridge centers, with a total strength of
                                      » Retail                                                                    38 teachers provided education to 575 students.
                                      With demand for entry level skilled manpower                                Also, 360 students were taught at four Residential
                                      increasing manifold, exclusive batches of retail                            bridge centers with 20 teachers engaged in
                                      training was planned pan-India. The curriculum                              teaching them.
                                      involves store management methods, space
                                      utilization, store layout, influencing consumer                              EDUCATION RESOURC E C ENTER (ERC)
                                      behavior etc.                                                               ERC is a Resource Center set up to provide
                                                                                                                  academic support to all the Pudami Schools. ERC
                                      » Housekeeping                                                              develops curricular content, material for teachers’
                                      DRF trained aspirants on industrial housekeeping                            education and mechanisms for academic support
                                      aspects like cleaning and maintenance methods,                              to schools. To facilitate children’s shift to English
                                      floor cleaning reagents, manual and mechanical                               medium, ERC has prepared an English transition
                                      equipments, pest control mechanism etc.                                     course that aids children recover the academic
                                                                                                                  backlog in any given class.
Dr. Reddy’s extended its support to victims of the Haiti earthquake
by providing free medicines. For its contribution to relief efforts,                                              PUDAMI NEIGHBOURHO O D SCHOOLS
the company was given a special award at the ‘Americares Spirit of                                                Pudami schools address the rising demand for
                                                                                                                  English medium education from marginalized /
Humanity Awards’.
                                                                                                                  lower income communities. Four schools have
                                      » Security                                                                  been set up in Hyderabad and Ranga Reddy
                                      Trained people on inventory management,                                     district so far where 70 teachers impart education
                                      vigilance aspects, CCTV operations, fire                                     to a combined strength of over 1,400 children
                                      protection, bomb detection and evacuation                                   drawn from all sections.
                                      procedures, mock drill operations etc.
A N N U A L R E P O R T 2 0 0 9 – 1 0 C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y |   21




PU DAMI ENGLIS H P RIMARIES                                  and 20 ECCE supported by Sarva Sikshya Abhiyan                           A LIVELIHOOD
To make quality English-medium education                     (SSA), a Government of India initiative, supported                       ADVANCEMENT
                                                                                                                                      BUSINESS SCHOOL
accessible to urban children from lower income               a total of 1,340 children with help from 15
                                                                                                                                      (LABS) CENTER RUN
groups, DRF set up 29 Pudami English Primaries in            teachers and 10 assistant teachers.
                                                                                                                                      BY DR. REDDY’S
Hyderabad and Ranga Reddy Districts in Andhra                                                                                         FOUNDATION
Pradesh. They have a combined strength of 4,700              BR IDGE SCHOOL AT JUVENILE HOME
students (2,491 pre-primary and 2,209 primary)               FOR GIRLS AT NIMBOLIADDA,
who are taught by 238 teachers.                              HY DERABAD, INDIA
                                                             Started in January 2010, about 84 children in
KALLAM ANJI RE D DY VIDYALAYA                                three groups — Juvenile delinquents in special
(K AR V)                                                     home, under-trials in observation home and
The Kallam Anji Reddy Vidyalaya at Hyderabad                 children who need care and protection in the
has 45 teachers providing education to about                 children home were housed in the campus. This
1,200 students in both English and Telugu                    bridge school has been set up with support from
medium.                                                      Sarva Sikshya Abhiyan (SSA).
   Kallam Anji Reddy Vocational Junior College
at Hyderabad presently offers five 2-year                     D R . R E D DY ’ S F O U N DAT I O N F O R
vocational courses at the Intermediate level –               H E A LT H E D U C AT I O N ( D R F H E )
Automobile Engineering Technician, Computer                  DRFHE aims to create professionals (health
Graphics & Animation, Computer Science &                     educators) who would work with the medical
Engineering, Hotel Operations and Multi-Purpose              fraternity to offer an integrated, multi-disciplinary
Health Worker. It has 450 students who are being             approach to good health. The programs also aim
trained by 20 teachers.                                      at building the necessary soft skill capabilities
                                                             with an objective of strengthening the healthcare
EARLY CHILDHOO D CARE &                                      delivery system for better patient care.
EDU CATION CE N TE R
Early Childhood Care & Education (ECCE) Center               EDU CATION INITIATIVES
takes care of children in the age group of 0-5               Better understanding through education
years belonging to migrant children living on                » Post Graduate Diploma in Healthcare
construction sites in urban Hyderabad, India. In             Management
FY10, ten ECCE centers funded by World Bank                  The seventh batch of the program commenced
22 |   S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T




                   from July 2009 where 16 students enrolled.                                  TRAINING INITIATIVES
                   A PGCHM certified Patient Educator would be                                  Training to deliver better patient care
                   a combination of a Physician’s Assistant, Patient                           » INNER CIRCLE
                   Counselor, Health Educator and a Physician’s                                Introduced in 2007 to impart soft skill training of
                   Associate.                                                                  doctors, 53 Inner Circle programs were conducted
                                                                                               in FY10 benefiting 1,809 doctors.
                   » Certificate Program in Cancer Counseling
                   Three training programs were conducted in                                   » ABHILASHA
STUDENTS AT A      FY10 where fifteen candidates benefited                                       Is aimed at helping nurses understand the true
YUVA LEARNING      and were placed as Case Managers under                                      importance of their work and boost their self-
CENTER IN          leading Oncologists across India.                                           confidence & motivation.
HYDERABAD, INDIA
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results
Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results

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Dr. Reddy's Laboratories Annual Report Generates Strong Financial Results

  • 1. ABI T AIN LI S T SU Y • • I M PA C T C R E AT I N G A TA L EN PO NM SI V RO TI E EC VI ON EN OMIC & S O CI A L D R . R E D D Y ’ S L A B O R AT O R I E S L I M I T E D | A N N U A L R E P O R T | 2 0 0 9 – 1 0
  • 2.
  • 3. C ONTENTS 24 MANAGEMENT DISCUSSION AND ANALYSIS 42 BOARD OF DIRECTORS 45 72 MANAGEMENT COUNCIL DIRECTORS’ REPORT 2 46 89 CHAIRMAN’S LETTER CORPORATE GOVERNANCE IGAAP STANDALONE FINANCIALS 4 60 141 KEY HIGHLIGHTS ADDITIONAL IGAAP CONSOLIDATED SHAREHOLDERS’ FINANCIALS INFORMATION 6 70 187 THE DNA OF FIVE YEARS AT A GLANCE EXTRACT OF SUSTAINABILITY IFRS CONSOLIDATED FINANCIALS 14 71 190 HUMAN RESOURCES RATIO ANALYSIS STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 16 191 SAFETY, HEALTH AND INFORMATION ON ENVIRONMENT THE FINANCIALS OF SUBSIDIARY COMPANIES 18 192 CORPORATE SOCIAL NOTICE OF ANNUAL RESPONSIBILITY GENERAL MEETING
  • 4. 2 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T CHAIRMAN’S LETTER 2009-10 has been a satisfactory year Rs. 10,158 million — thus crossing the Rs. 1,000 for your Company. Let me start with crore landmark. This is also a ‘first’. the financial results. Fourth, I am proud of what your Company Consolidated revenues for 2009-10 was did on 30 September 2009. Following concerns Rs. 70,277 million. Excluding revenues from on the size and proportion of a few of its pills in sumatriptan — your Company’s Authorized the US — an issue isolated to four products, one Generic version of Imitrex® which was specific lot per product, or four lots in total — it launched in 2008-09 — revenue grew by 9%. voluntarily recalled four categories of tablets. To In US dollar terms, 2009-10 revenue was my mind, this is an act of courage and honesty. US$ 1.56 billion. I am happy to inform you that In such circumstances, the right thing to do is to the Company’s revenue has been rising at a take all the necessary corrective measures with CAGR of 23% over the last decade. That is a utmost speed and fairness. This action of your creditable performance by any standard. Company has strengthened its fiduciary position Your Company’s EBITDA of Rs. 15,828 million vis-à-vis its US customers and the US Food and was the highest among pharmaceutical Drug Administration (USFDA). companies in India. Fifth, Dr. Reddy’s had successful audits carried Return on Capital Employed (RoCE) in 2009-10 out by the USFDA for two of its formulation was 17%, as against 14% in 2008-09. You plants, one in Hyderabad and the other in may recollect that in my last year’s letter to you, Vishakapatnam. The USFDA follows extremely I had asked your Company to generate “Return stringent audit procedures, and the success on Capital Employed in middle to high teens”. demonstrates your Company’s commitment to It has. producing medicines according to the highest There have been several other developments in international standards. The formulation plant 2009-10 that I am particularly proud of. at Vishakapatnam was also audited and certified The first is that in the US market, 2009 saw by Brazil’s National Health Surveillance Agency Dr. Reddy’s enter the list of the Top 10 generic (or the Agência Nacional de Vigilância Sanitária, companies. This is a red-letter event for your ANVISA). In addition, the chemical plants were Company. It confirms Dr. Reddy’s abilities to audited and certified by the United Kingdom’s compete in the US, and strengthens its resolve Medicines and Health products Regulatory to becoming a leading generics player in this Agency (MHRA). important geography. Sixth, I am happy to inform you that Dr. Reddy’s has entered into a strategic partnership with Your Company remains committed to building a strong generics and GlaxoSmithKline plc (GSK) to develop and market active ingredients pipeline. In 2009-10, Dr. Reddy’s filed 13 drug select products across emerging markets outside applications in North America, of which 12 Abbreviated New Drug India. This partnership will expand the Company’s reach in emerging economies. The products will Applications (ANDAs) were in the US and one in Canada. Among be manufactured by Dr. Reddy’s; and will be these were six Para-IV filings. licensed and supplied to GSK in markets such as The second development is in the Russian and Latin America, Africa, the Middle East, and Asia CIS markets. In Russia, revenues of your Company Pacific excluding India. Already, there has been grew by 25% in 2009-10 — versus an overall more than 50 dossier filings in various markets market growth of 8% — and thus gross sales for under this alliance. Russia and CIS markets exceeded the US$ 200 Seventh, let me talk about discovery research. million mark. That is another ‘first’ for Dr. Reddy’s. I am satisfied with the results of the first set of Third, the Indian market saw your Company’s Phase III clinical trials of Balaglitazone (DRF 2593). revenues increase by 20% in 2009-10 to These have shown significant reduction in HbA1c
  • 5. ANNUAL RE P O RT 2 0 0 9 – 1 0 CHAIRMAN’S LETTER | 3 The global pharmaceutical business is becoming more complicated than ever before. Older business models are being challenged by competition; and new verticals are coming into play. (glycosylated haemoglobin) and improved safety environment only the rapid, clever and nimble profile. I hope that your Company will continue will win. The changes that are being carried out getting successful Phase III results, and will be across your Company are all geared to create the able to monetize this new molecule in the future. ‘winning infrastructure’. Your Company remains committed to building For the next year, I am asking your Company to a strong generics and active ingredients pipeline. earn a return on capital employed between 18% In 2009-10, Dr. Reddy’s filed 13 drug applications to 22%, in line with the goal of reaching 25% by in North America, of which 12 Abbreviated New 2012-13. Drug Applications (ANDAs) were in the US and I am confident that your Company will one in Canada. Among these were six Para-IV continue winning. And be the most respected filings. The US generic pipeline now comprises global pharmaceutical company in India 73 ANDAs pending with the USFDA, including committed to providing affordable and innovative 11 tentative approvals. Of these, 38 are Para-IV medicines. filings, with 12 in the category of ‘first to file’. Thank you for your support. As of 31 March 2010, the Company has filed 179 cumulative drug applications in both US and With warm regards, Canada. In the Active Ingredients business, too, the Company filed 36 Drug Master Files (DMFs) in 2009-10 —19 in the US, five in Canada, eight in Dr. K Anji Reddy Europe and four in other countries. As on Chairman 31 March 2010, Dr. Reddy’s had cumulative filings of 378 DMFs, with 156 in the US. We have taken all the necessary impairments on account of our German subsidiary, betapharm. As I wrote last year, the German generics market has become commoditized, driven by tenders and auctions. In such a scenario, accounting standards dictated taking another non-cash impairment. Your Company has done so in 2009-10 by recording a write-down of intangible assets of Rs. 3,323 million, and goodwill of Rs. 5,147 million. The balance sheet has been effectively cleansed of intangible and goodwill on account of betapharm. With the cost and organizational rationalizations that are being carried out in Germany, and with much greater supply chain support from India, I expect betapharm to do better in the future. Finally, a peep into tomorrow. The global pharmaceutical business is becoming more complicated than ever before. Older business models are being challenged by competition; and new verticals are coming into play. There will be new developments and alliances, as well as new opportunities and challenges. In such an
  • 6. 4 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T F I N A N C I A L H I G H L I G H T S ( B A S E D O N I F R S F I N A N CI A L S ) Consolidated Revenues Profit After Tax Return on Capital Employed (RoCE) Excluding revenues from sumatriptan – Net profit of Rs. 1,068 million in 2009-10 as RoCE at 17% for 2009-10 as against 14% in Dr. Reddy’s Authorized Generic version of against a net loss of Rs. 5,168 million in 2008-09. 2008-09. Imitrex® which was launched in 2008-09, the Excluding impact of impairment from the This increase is attributable to: Company’s overall revenue grew by 9%. It current year as well as from the previous year, Core business growth of India, Russia and should be noted that the Company’s revenue adjusted net income increased by 10% to North America has been rising at a CAGR of 23% over the last Rs. 9,217 million in 2009-10 from Rs. 8,355 Rationalization of business model and 10 years. million in 2008-09. Cost optimization and restructuring initiatives. EBITDA Fully diluted Earnings Per Share Adjusted EBITDA of Rs. 15,828 million is highest Fully diluted earnings per share was at Rs. 6.30 among pharmaceutical companies in India. in 2009-10 as against Rs. (30.69) in 2008-09. CONSOLIDATED REVENUE GLOBAL GENERICS REVENUES IN RS. MILLION GEOGRAPHICAL MIX, IN RS. MILLION North America 40% (19,843) CIS 4% (1,821) Europe Russia 2008-09 24% (11,886) 70,277 12% (5,803) HIGHLIGHTS Others 2009 4% (1,959) India 17% (8,478) 69,441 North America 34% (16,817) CIS 2010 4% (1,887) Europe Russia 2009-10 20% (9,643) 15% (7,232) Others 6% (2,868) India 2009 2010 21% (10,158) REVENUES FROM DIFFERENT BUSINESSES Global Generics million in 2008-09 and Rs. 2,543 million Revenues from Russia and CIS countries grew Revenues were at Rs. 48,606 million in in 2009-10. by 20% to Rs. 9,119 million in 2009-10 from 2009-10 versus Rs. 49,790 million in 2008-09. Excluding sumatriptan, revenues from North Rs. 7,623 million in 2008-09. Excluding revenues from sumatriptan, America grew by 13% to Rs. 14,274 million Revenues from Europe dropped by 19% to Dr. Reddy’s Authorized Generic version of in 2009-10 from Rs. 12,655 million in Rs. 9,643 million in 2009-10 from Rs. 11,886 Imitrex® which was launched in 2008-09, 2008-09, growth being largely driven by the million in 2008-09. betapharm revenues Global Generics revenues grew by 8%. new product launches and OTC products. dropped by 26% to Rs. 7,298 million in In 2008-09, the company was able to launch Revenues in India grew by 20% to Rs. 10,158 2009-10 from Rs. 9,854 million in 2008-09. sumatriptan, the Authorized Generic version million in 2009-10 from 8,478 million in of Imitrex®, ahead of others. The launch of 2008-09. sumatriptan in the US contributed Rs. 7,188
  • 7. ANNUAL RE P O RT 2 0 0 9 – 1 0 KEY HIGHLIGHTS | 5 A N DA s , D M F s , P R O D U C T R E G I S T R AT I O N A N D N C E s ANDAs in North America DMFs New Chemical Entities (NCEs) In 2009-10, the Company filed 12 Abbreviated Regarding Active Ingredients business, the As on 31 March 2010, Dr. Reddy’s had six New Drug Applications (ANDAs) in US including Company filed 36 DMFs in 2009-10. Of these, New Chemical Entities (NCEs), of which five are six Para IV filings. The Company has filed 158 19 were filed in US, five in Canada, eight in in clinical development and one in the pre- cumulative ANDAs up to date. As on 31 March Europe and four in other countries. As on clinical stage. 2010, there were 73 ANDAs pending approval at 31 March 2010, the Company had cumulative the USFDA, of which 38 are Para-IV filings, with filings of 378 filings, with 156 in the US. 12 in the category of ‘first to file’. PSAI REVENUES ANDA S IN NORTH AMERICA DMFs GEOGRAPHICAL MIX, IN RS. MILLION GEOGRAPHICAL MIX Others Others India Canada 34% (6,340) 23 10 13% (2,383) 5 2008-09 2008-09 Non Para IV 12 Europe North America 16 USA Europe 33% (6,160) 20% (3,875) 21 19 Non Para IV Others 6 Others India Canada 36% (7,433) 5 4 13% (2,646) Para IV Para IV 2009-10 2009-10 7 6 Europe North America USA Europe 33% (6,652) 18% (3,673) 19 8 2009 2010 RECOGNITIONS Pharmaceutical Services and Active The year saw Dr. Reddy’s win numerous Recruiting and Staffing Organization’ and Ingredients (PSAI) awards. Some of the key ones were: ‘Best Recruiting Evaluation Techniques’; Revenues grew by 9% to Rs. 20,404 million “Corporate Social Responsibility Award” ‘Organization with Innovative HR Practices’ in 2009-10 from Rs. 18,758 million in at the CNBC TV18’s India Business Leader and ‘Outstanding Contribution to the Cause 2008-09. International revenues accounted Awards (IBLA); “Golden Peacock Award for of Education’ awards at the World HRD for 87% of PSAI revenues. Excellence in Corporate Governance” and Congress and was adjudicated the best in 2009-10 saw the company posting “NASSCOM CNBC IT User Award” 2009 in the ‘Great Places to Work Survey’ in the significant increase primarily from Europe the Pharmaceutical vertical for the 2nd year pharmaceutical and biotechnology industry. by 8% and “Rest of the World” markets in a row. The Company’s Annual Report was (i.e., all markets other than North America, For its HR initiatives, Dr. Reddy’s won conferred the ‘Merit Award’ for the year 2008 Europe, Russia and other countries of the the: Recruiting And Staffing Best In Class in the category ‘Manufacturing Sector’ by the former Soviet Union and India) by 17%. (RASBIC) award 2009-10 for the ‘Best Overall South Asian Federation of Accountants.
  • 8. 6 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T ENVIRONMENTAL MANAGEMENT & CLIMATE CHANGE THE DNA OF SUSTAINABILITY SUSTAINABLE SOURCING At Dr. Reddy’s, Sustainability is a way of life and is embedded in our purpose. It is a broad concept which encompasses how we value our employees, social impact of our products, patient centric programs, proactive safety, health and environment (SHE) management, implementation of community development projects and voluntary engagement with the society to address larger social concerns like livelihood and education. Our awareness of sustainability originates from the social benefits of our business. We have come to understand the interdependence (as against independence) of our stakeholders and this has encouraged our simultaneous pursuit of a people, purpose and planet approach. For our organization to be truly sustainable, we have to be distinctive in a few areas, while being good at most activities that we do. We believe that our strategy of “Leveraging industry-leading science & technology, product offering, and customer service with execution excellence to provide affordable and innovative medicines for healthier lives” will help us focus on the right areas. In practicing sustainability, our initial efforts were focused on environment management and safety & health at the workplace. As our organization evolved, so has been our sustainability thinking. PRODUCT Today, while considering issues that are of RESPONSIBILITY significance to our stakeholders as well as to the organization, we have arrived at a robust sustainability framework with six key focus areas– Providing affordable and innovative medicines, being an employer of choice, environmental management and climate change, caring for communities, sustainable sourcing and product responsibility.
  • 9. A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 7 KEY AREAS OF FOCUS CARING FOR COMMUNITIES SOCIETY COMMUNITY ENVIRONMENT PUBLIC CUSTOMERS & PARTNERS USERS Patients CHANNELS Retailers, Wholesalers, Distributors, Hospitals, Government INFLUENCERS Physicians, Insurers OTHERS Partners, Vendors, Suppliers, Regulators EMPLOYEES FAMILY ALUMNI INVESTORS & SHAREHOLDERS PROVIDING AFFORDABLE To us at Dr. Reddy’s, a & INNOVATIVE sustainable organization MEDICINES is one that simultaneously pursues economic, social and environmental benefits, thereby increasing value for all its stakeholders and assuring a robust future. BEING AN EMPLOYER OF CHOICE
  • 10. 8 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T PROVIDING AFFORDABLE AND INNOVATIVE MEDICINES At Dr. Reddy’s, a company with a significant global footprint, we have a serious responsibility – to help reduce the burden of disease on individuals and on the world. We achieve this by leveraging our proficiency in science and technology to innovate at every stage of our processes. Our Pharmaceutical Services and Active Ingredients (PSAI) and Global Generics businesses focus on affordability by providing lower cost, high quality alternatives while our Proprietary Products business addresses unmet and poorly met medical needs. » Reaching out to the rural College in Cuttack, India every markets in India Dr. Reddy’s month. His care and treatment forayed into the rural markets in costs are beyond the reach of FY09 with launch of an exclusive his father, a daily wage laborer. GREEN (FULL) portfolio of products targeted at He was given assistance under TIME TO CHANGE the needs of people in rural India. RED (EMPTY) the Sparsh program to meet his » Dose Counter Inhalers – treatment needs. Dr. Reddy’s a novel device It is the first Metered arranged for free medication as Dose Inhaler in India that gives well as reimbursement of other patients an advance indication of Satyajit Ghosh (7 yrs.) from treatment related expenses. He has when the inhaler is going to be empty. Bhubaneswar, Orissa, India was now successfully completed 4 cycles » Through Sparsh, the entire diagnosed with blood cancer of chemotherapy and is looking range of Dr. Reddy’s oncology across India, enabling them to six months ago. His treatment forward to getting his normal products are routed to needy complete planned cancer care and requires him to spend two to childhood back. patients through patron-oncologists treatment. three weeks at the SCB Medical
  • 11. A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 9 ENVIRONMENTAL MANAGEMENT & CLIMATE CHANGE We are working towards maintaining a harmonious relationship with the environment, which calls upon us to engage ethically with our stakeholders and to do everything in our power to reduce our ecological footprint. Our mandate now, is ‘every new product should have a sensible footprint’. Efforts are on to achieve a suitable blend of energy conservation, use of renewable sources of energy, water conservation, control on generation, disposal of hazardous waste and green chemistry. » In FY10 a total 71 energy conservation measures were initiated, with an annual saving of around 5.0 million kwh. » Green Chemistry Dr. Reddy’s “Centre of Excellence for Process Engineering” contributes to Sustainability through “Green Chemistry”. This ensures not only » Safe disposal of organic compared to incineration. During environment friendly products and Roundtable of the American residue to cement industry 2009-10, we disposed 1,747 tons processes, but also contributes to Chemical Society. A positive development regarding of organic residues to the cement the health and safety of employees » Solvent Recovery Systems disposal of our organic residues was industry for use as feedstock in the involved in manufacturing. In FY10 (SRS) were installed across all our the opening up of an alternative, cement manufacturing process. the Company joined the Green Hyderabad based Chemical units in environmentally friendly option as Chemistry Institute® Pharmaceutical FY09 at a cost of Rs. 250 million.
  • 12. 10 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T BEING AN EMPLOYER OF CHOICE We believe collaboration and teamwork enhances performance and drives innovation. We work as One Team, collectively ideating, innovating and interacting. At Dr. Reddy’s, we offer a conducive working environment that taps one’s potential to the fullest while offering them the freedom to question, innovate and find that ‘better way’. This has gone a long way in earning us the trust of our employees and in making our employees proud to work with us. » Leadership Academy The » Self Managed Team (SMT) Leadership Academy at our We were the first pharmaceutical Bachupally campus in Hyderabad company in India to implement the is a state-of-the-art infrastructure Self Managed Teams (SMTs) concept aimed at being a catalyst for at our manufacturing operations. our company-wide culture of A SMT is an empowered, multi- continuous learning and leadership skilled team with operational development. The academy decision-making authority. Turning provides a platform for traditional thinking on its head, the people to come together to ideate workforce, which has led to a Our global employee strength SMT concept, implemented at our and introspect. In FY10 a total of greater proportion of women comprises of 13,000+ associates plants at Baddi and Yanam in India 6,068 man days of training was employees. In FY10, almost 13% from over 25 nationalities. Over have proved to be a resounding provided. of the recruits were women. Also, 2,600 associates are based outside success. » Diversity There is a conscious of all the campus hires, 31% were India. effort at building diversity in the women.
  • 13. A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 11 PRODUCT RESPONSIBILITY The trust of patients and doctors is crucial to our business. We ensure there is ‘No scope for error in anything we do’ by addressing quality management, regulatory compliance, product safety requirements and putting in stringent procedures for packaging to protect patient safety. We are adopting a Quality by Design (QbD) approach where it is no longer enough to do a quality check at the end of the process. Our aim is to ensure that every step in our process is done ‘first time right’. » Product packaging- (ANVISA), UK (MHRA), Ukraine, We address counterfeiting Romania, Therapeutic Goods through: Administration (TGA), Danish Medicines Agency and World batch numbering, manufacturing Health Organization (WHO) among and expiry date others. Globally, we have eight USFDA approved chemical plants, seven finished dosage plants (two USFDA to safeguard products from cheap » Compliance Our manufacturing approved) and one biologics Tamper-proof package design of counterfeits facilities have been inspected and development center. Mitotax injection was awarded approved by leading regulatory the AmeriStar award for to eliminate obvious conventional agencies like United States Food packaging excellence in 2005 practice among others and Drug Administration (USFDA), Ministries of Health of Brazil
  • 14. 12 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T SUSTAINABLE SOURCING Our Business Partners are important stakeholders and working with them provides us operational flexibility and cost advantage. However, we are the ones responsible for social, economic and environmental impacts of our entire value chain. Through sustainable sourcing, we try to influence them to adhere to best practices in human rights, ethics, health & safety, environment and other related management systems. Our mantra has been ‘nurture them, and let them grow’, as ultimately our growth is linked to theirs. » Enabling compliance Many of our business partners are WHO GMP certified and ISO compliant. We evaluate their compliance through audit and give weightage to those who are environmentally sensitive. A data bank has been created on our Safety, Health and Environment (SHE) infosite and it triggers mail alerts to the business improvement and systems processes faster, validate new and robust systems is crucial. partners regarding the expiry/non- implementation. sources and technologies, Through a Use Test Lab, analysis is receipt of their licenses. Periodic » Vendor Lab and Use speed up implementation and done to ensure that our finished safety audits are conducted at their Test Lab We have created a conserve higher cost facilities. drugs meet regulatory standards. facilities to check infrastructure vendor lab, through which our In the pharmaceutical industry, business partners can manage maintaining high quality standards
  • 15. A N N U A L R E P O R T 2 0 0 9 – 1 0 T H E D N A O F S U S TA I N A B I L I T Y | 13 CARING FOR COMMUNITIES ‘To progress and provide for the community around us’ and ‘to benefit individuals and society at large’ are our focus areas in sustainable community development. Caring for communities is a part of our values statement. We channel our wide network of social activities through Dr. Reddy’s Foundation (DRF), address health education needs and patient care activities through Dr. Reddy’s Foundation for Heath Education (DRFHE) and create positive impact on communities through Corporate Social Responsibility (CSR) teams in each location. Management (PGCHM) and certificate program in cancer counseling. Students passing out from these courses assist healthcare professionals and doctors in providing better care to patients. ‘Life at Your Doorstep’ is a palliative care initiative that helps terminally ill patients and their families better » Dr. Reddy’s Foundation The replicable livelihood models through dropouts, while improving quality manage serious illness. activities of Dr. Reddy’s Foundation partnerships. of education across schools. (DRF) span two broad areas of social Education Provide learning » Dr. Reddy’s Foundation for intervention: opportunities for those who Health Education (DRFHE) Livelihoods Create, implement have never been to school, or are Conducts programs like Post and disseminate sustainable and Graduate Certificate in Healthcare
  • 16. 14 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T HUMAN RESOURCES As we set ourselves a target of reaching TA L E N T AC Q U I S I T I O N $ 3 billion by FY13, we realize that it is During the year, around 4,100 new employees our people – our biggest strength – that were hired, including replacements. The highlights will get us there. Our employees are the engine of the hiring program are: that drives our organization forward. We are India field and manufacturing hires have committed to nurture and develop the tremendous contributed 25% each to the overall hiring talent that exists at Dr. Reddy’s by providing our while 24% of the hiring was in Quality, Research people a platform to achieve greater things in life. & Development and Engineering Services. In today’s rapidly changing business Critical talent was added in the areas of environment, the organization that is efficient and Life Cycle Strategy, Formulations Scale- effective wins. It means having people who fit your Up Development, Regulatory Strategy, needs perfectly, when you need them. Legal, Corporate Development & Strategic Dr. Reddy’s global employee strength crossed Planning, Safety Health & Environment, 13,000 in 2009-10, of which over 2,600 are based Pharmacovigilance & Clinical Development, at locations outside India. There is a conscious Bioassay and Medical Sciences. PARTICIPANTS effort at building diversity in the workforce, 24 Management Trainees and laterals were AT THE SENIOR which has led to a greater proportion of women recruited from prestigious B-Schools including LEADERS PROGRAM employees. In FY10, almost 13% of the recruits IIMs, ISB, TISS and about 628 technical WHICH WAS HOSTED were women. Of all the campus hires, 31% were trainees were recruited which includes a BY DR. REDDY’S AT women. number of IIT graduates. We also ramped up OUR LEADERSHIP Our consistent pursuit to create an ever-flourishing our Self Managed Teams (SMTs) in Baddi and ACADEMY IN BACHUPALLY, organization built on a platform of unyielding Vishakapatnam. HYDERABAD FROM integrity and sound values has indeed, gone a long 14-19 SEPTEMBER. way in making us an employer of choice. TA L E N T M A N AG E M E N T Nominations for promotion to and within Senior Management were taken through the Talent Management Board (TMB) process for the first time on a pilot basis. The TMB process roadmap was drawn up with the top management and is slated to be executed in FY11. The deployment of this initiative will be top down with TMBs for top management being done at the Corporate and for others in the Business Units. The Company’s Management Council (MC) will lead this process to reinforce the commitment of the top management to the development of leadership in the organization. We are also partnering with a global consulting firm to work on critical interventions related to role clarification, job evaluations and competency management. LEARNING & LEADERSHIP DEVELOPMENT Leadership development across all levels and a culture of continuous learning are key to our
  • 17. ANNUAL RE PO RT 2 0 0 9 – 1 0 HUMAN RESOURCES | 15 In today’s rapidly changing business environment, the organization that is efficient and effective wins. It means having people who fit your needs perfectly, when you need them. Dr. Reddy’s global employee strength crossed 13,000 in 2009-10, of which over 2,600 are based at international locations. * ** growth aspirations. Some of the key activities BUILDING AN INCLUSIVE AND * WOMEN’S DAY CELEBRATIONS carried out in this area for the year were: E N A B L I N G O R G A N I Z AT I O N AT DR. REDDY’S Second Leadership Summit was organized at During the year, several new employee enabling Boston, USA with world class faculty sharing policies like flexible work timings, sabbatical PARTICIPANTS AT ideas on Performance & Execution, Talent & leave, part-time work, paternity leave & adoption ** THE 2ND ANNUAL Leadership, and Organizational Culture. were introduced with an aim to provide flexibility LEADERSHIP Hosted the Senior Leaders Program (SLP) and work life balance to employees. SUMMIT WHICH for cross-industry consortium. During this WAS HELD FROM program, senior leaders from high powered H R AWA R D S 10-13 AUGUST AT BOSTON, USA. consortium companies including those from In FY10, the Company received the following key Dr. Reddy’s attended a week long program at recognitions for its HR initiatives. our Leadership Academy. Recruiting and Staffing Best in Class Award Coaching provided to middle and senior leaders (RASBIC) 2009-10 for the ‘Best Overall based on their 360 degree feedback. Recruiting & Staffing Organization’ and ‘Best Launched several learning interventions Recruiting Evaluation Techniques’ focused on developing critical skill sets, soft Employer awards at the World HRD Congress skills and leadership competencies. The for ‘Organization with Innovative HR Practices’ Company offered 6,068 man days of training. and ‘Outstanding Contribution to the Cause of Increased the reach of learning through Education’ Learning@drreddys – an internal learning Adjudicated the best in the ‘Great Places portal. to Work Survey’ in the Pharma and Biotech 399 Management, Engineering and Technical industry. trainees inducted into the organization through an intense, systematic and well-planned Campus-to-Corporate induction program.
  • 18. 16 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T SAFETY HEALTH & ENVIRONMENT We are committed to maintaining the Five new safety guidelines & six audit protocols highest standards of Safety, Health and were released during the year. Environment (SHE) by complying with the laws and regulations first, and then going beyond T O WA R D S B E T T E R S A F E T Y the mandate to keep our planet safe for future AWA R E N E S S A N D E M E R G E N C Y generations. Minimizing the environment impact P R E PA R E D N E S S of our operations assumes utmost priority. Our 38 monthly safety campaigns were carried out comprehensive SHE policy, as well as dedicated on themes like emergency management, work measures we have taken through specialized permit system etc. across all manufacturing teams, systems and programs for this purpose sites. Safety week was observed in March 2010 are a testament of our commitment to the cause. across all facilities to promote a culture of Reducing our existing carbon footprint and safety at the work place. tailoring our processes to minimize the impact on 1,460 internal training program (equivalent the environment rank high in our list of priorities. to 5,355 man days of training) on safety was Greatest emphasis is given to safety measures for conducted by internal faculty. Some specialized minimizing accidents. Emergency management external training programs like dust explosion and safety training for employees, the use of hazard, tank farm & warehouse management, Green Chemistry and engineering principles in safe handling of chemicals were also organized our product development, and incorporating for 174 employees. waste water recycling and Zero Liquid Discharge During the year, 33 mock drills, 54 fire drills and (ZLD) in our plants were key features of the SHE 23 first aid training programs were conducted. program at Dr. Reddy’s. As on date 835 trained first aiders, 1,315 The year 2009-10 saw significant steps taken trained fire fighters are available at various in the direction of building a fool-proof and locations. robust Safety, Health & Environment system in the SHE support was also extended to third party organization. manufacturing facilities and 18 audits & four safety risk assessments were conducted during S A F E T Y U P DAT E the year. 43 man-days of training was also During the year 124 organized on various topics like static-electricity safety related incidents hazard and its control and work permit system. were reported across all locations out of which P R O C E S S S A F E T Y M A N AG E M E N T eight were Lost Time Focus during the year was on embedding SHE Accidents. aspects into our new product development We initiated a system process. Objective of the initiative was to make of cross-unit audits of all our manufacturing processes safer, through a 16 manufacturing units comprehensive method for analyzing process and a total of 546 safety hazards. audit observations were A SHE guideline for conducting risk analysis of noted. For 70% of audit CTO manufacturing processes was put in place. observation, corrective Aspects of process hazard identification, risk actions were implemented analysis and measures towards risk reduction and closed as on 31st were considered in the guideline. SAFETY TRAINING March 2010. In a new initiative, “Batch Nine training programs including sessions by AT ONE OF OUR CTO UNIT IN Chemical Safety“cards with all key safety data globally recognized consultants were organized HYDERABAD, INDIA were released for 34 products in the CTOs.
  • 19. A N N U A L R E P O R T 2 0 0 9 – 1 0 S A F E T Y H E A LT H A N D E N V I R O N M E N T | 17 Minimizing the environment impact of our operations assumes utmost priority. Our comprehensive SHE policy, as well as dedicated measures we have taken through specialized teams, systems and programs for this purpose are a testament of our commitment to the cause. to create a knowledge base amongst our Two new guidelines on Environment technical work groups across PSAI. Management to ensure a uniform documented Two new supplementary SHE guidelines were system for environment management were released for smoother implementation of risk released. analysis procedure and a chemical database World Environment Day was celebrated listing for referral during risk analysis was across all units. Clearance from Ministry of created. Environment and Forests was obtained for new Process risk analysis for 12 CTO products was SEZ projects. completed with a detailed action plan for 1,747 MT of organic residue from CTO units implementing the recommendations. A process was disposed as auxiliary fuel to cement plants. risk analysis guideline for FTO manufacturing This constituted 50 % of the total organic processes was also developed. waste generated and the rest was sent for A process to identify hazardous chemicals incineration at TSDF facility. handled in our facilities was initiated to 71 energy conservation measures were initiated establish measures towards risk reduction in this year resulting in an annual saving of 5.0 hazardous chemical handling. This exercise has million kwh. been completed in two facilities so far. W E B B A S E D T R AC K I N G O F O C C U PAT I O N A L H E A LT H S A F E T Y, H E A LT H & E N V I R O N M E N T ZERO LIQUID Occupational health surveillance was I N F O R M AT I O N DISCHARGE (ZLD) conducted at all CTO units. The SHE Infosite (an exhaustive information& UNIT AT CTO FACILITY Industrial hygiene qualitative risk assessment action tracking website on the intranet) was IN BOLLARAM, was carried out at all manufacturing facilities upgraded and deployed for use. Separate HYDERABAD, INDIA. using in-house tool based on hazard and workflows were created for: control banding concept. SHE audit recommendations, SHE incident Basic occupational health awareness training reporting and status of corrective action was conducted for 180 shop floor operators implementation. and block-in-charges. Statutory compliances of pressure vessels and lifting tools and tackles testing E N V I R O N M E N T M A N AG E M E N T Regulatory compliance tracking system for Post the commissioning of the Zero Liquid Strategic Business Partners (SBP) which supply Discharge Plant (ZLDP), the absolute water key starting material to CTO units. consumption at the Biologics Development Database for logging minutes of safety Center has come down by 50%. committee meetings. Effluent treatment plant at CTO – 1 was Dedicated efforts continue towards resource upgraded by adding RO based polishing plant conservation, strengthening safety culture and and one more ZLDP being commissioned in upgradation of physical facilities to deliver better FTO – 3 safety and environmental performance. Waste minimization teams were formed at CTO manufacturing units to achieve significant effluent load reduction. SAFETY TRAINING: Note: A FIRE DRILL AT CTO: Chemical Technical Operations (Manufacturing facility for Active Pharmaceutical Ingredients (APIs)) THE CORPORATE FTO: Formulation Technical Operations (Manufacturing facility for finished dosages / formulations) HEADQUARTERS
  • 20. 18 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T CORPORATE SOCIAL RESPONSIBILITY A DEEP COMMITMENT in the coming years for the betterment of the “Dr. Reddy’s Foundation (DRF) was marginalized sections of society. born out of my anger”, says Dr. K Anji Reddy, Founder Chairman of FLOOD RELIEF INITIATIVE Dr. Reddy’s. It was a Newsweek article which DRF played an active part in providing relief to commented that “some parts of India were worse victims of the massive floods which hit Andhra off than Sub-Saharan Africa” that triggered a call Pradesh, India in October 2009. for action. Dr. Reddy set out to seek an answer Health camps were organized to provide to the query – what can we do to improve the immediate health services to the needy. Free condition of our country? treatment, essential medicines and technical DRF, founded in 1996, through its pioneering advisers were made available by Dr. Reddy’s, while efforts in the field of livelihood creation and DRF carried out the community mobilization and education, has changed the lives of millions camp management activities. In a week-long while achieving measurable social impact. It has operation from 13-19 October 2009, about 5,800 exemplified the change that could be brought patients from over 30,000 families were treated in the lives of the underprivileged through in 38 villages and 21 urban slums. The Company corporate initiatives. Past efforts have given us the also made a contribution of Rs. 10 million to the confidence and hope that we can do much more Chief Minister’s Relief Fund and employees based out of India contributed their one day’s basic LABS Partnership salary towards the cause. Name of the Corporate Partnership with Livelihoods CII Yi LABS CII Yi 178 D R . R E D DY ’ S F O U N DAT I O N ( D R F ) Accenture LABS Accenture 403 DRF has made significant progress in its social ASHA LABS Tata Teleservices 20 development endeavor in FY10 through several PCC LABS CII Yi 130 initiatives in the areas of creating Sustainable WORLD VISION WORLD VISION 105 livelihoods and providing Quality education. Total 836 LIVELIHOODS UPDATE Livelihood Advancement Business School Name of Government Bodies Partnership with Livelihoods (LABS) Grameen LABS – National MoRD, Government of India 8,673 A total of 20,820 livelihoods were generated by EGMM – III EGMM, Government of AP 1,498 LABS in 2009-10 through various partnerships. EGMM – IV EGMM, Government of AP 795 (refer LABS Partnership table) MEPMA MEPMA, Government of AP 2,211 Andhra Pradesh in India accounted for 30% MEPMA – II MEPMA, Government of AP 1,093 of the total livelihoods generated followed by Corporation LABS Corporation of Chennai, Tamil Nadu 410 Delhi and UP which accounts for approximately MPRLP MPRLP, Government of AP 110 8% and 7% respectively. 68% of 20,820 youths NABARD MoRD and NABARD, Uttar Pradesh 1,178 trained were placed with an average salary of SHG LABS WBSRDA, West Bengal 125 Rs. 3,618. A total income of Rs. 611,491,659 Total 16,093 (Rs. 611 million) was generated for the financial year 2009-10 with 14,157 families being the Name of International NGOs Partnership with Livelihoods beneficiaries of this increase in income. MSDF LABS Michael & Susan Dell Foundation 3,891 Total 3,891 Rural Livelihoods The Rural Livelihoods Department of DRF Total Livelihoods Generated 20,820 undertook two projects last year:
  • 21. A N N U A L R E P O R T 2 0 0 9 – 1 0 C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y | 19 DRF, founded in 1996, through its pioneering efforts in the field of livelihood creation and education, has changed the lives of millions while achieving measurable social impact. It has exemplified the change that could be brought in the lives of the underprivileged through corporate initiatives. 1. Pilot project in 10 villages in Sadshivpet Mandal program for rural youth in Himachal Pradesh and of Medak District, Andhra Pradesh, India Rajasthan. 2. Pilot project in 10 villages in Daund Taluka of Pune District, Maharashtra, India. » Dalmia Cements and ACC DRF signed a MoU with Dalmia Cements to support the training of Wage Employment 250 aspirants in five villages and provide them 205 youth were trained and placed in jobs in local with livelihoods in Gulbarga District, Karnataka. areas (without migration) with an average salary A similar MoU has been signed with ACC for of Rs. 3000 per month. As of 31 March 2010, training and providing support to 50 aspirants in a further 173 youth were undergoing training Chattisgarh. and 24, after having completed training were GV PRASAD AND SATISH REDDY awaiting placement. » Tata Power Company DRF initiated the PRESENTING A Skilling Rural India Project in Pune in association CHEQUE TO Self Employment with Tata Power to train 300 aspirants. MR. K ROSAIAH Apart from wage employment, 50 youth at (CHIEF MINISTER Daund, Maharashtra, India have been helped » Ashta No Kai DRF has also signed a MoU OF THE STATE OF to gain self employment. They were provided with a Pune based NGO Ashta No Kai for training ANDHRA PRADESH, training and linked to banks to obtain loans. and livelihoods support to 100 aspirants in five INDIA). DR. REDDY’S MADE Around Rs. 18 million was mobilized as bank loan. villages. DRF has raised sponsored projects worth A CONTRIBUTION The average monthly income of youths engaged Rs. 4.5 million with a target of skilling 700 youth OF RS. 10 MILLION in self employment is Rs. 4,000 per month. in the next one year. TO THE CHIEF Youths have been assisted to set up poultry farms, MINISTER’S RELIEF dairy farming, auto repair shops and other small FUND IN AID OF THE establishments in the village. FLOOD VICTIMS. Capacity building of farmers At Daund, DRF provided a grant of Rs. 50,000 to Farmer’s Club to procure good quality seeds and conducted tours to expose them to new technologies. This helped them improve their farm output thus leading to increased income. A total of 200 farmers have benefitted from this project with an increase in income of Rs. 2,000 per farmer. LABS PARTNERS HIP S INITIATED TH IS YEAR Based on the experiences and results gained in the pilot projects, DRF has been able to sign up for the below sponsored projects: » Lafarge India Private Limited A MoU was signed with Lafarge India Pvt. Ltd. for conducting diagnostic study to access the feasibility of initiating a skill development and employability
  • 22. 20 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T EXPL ORING NEW LIVELIHOOD » In shop Demonstrators OPTIONS Branded electronic stores require an adept New programs were launched to meet the needs workforce who could answer customer queries of the deprived sections of the society and bring while being clear in communication. out new poverty alleviation programs. DRF piloted a batch which oriented the aspirants on electronics devices. The program, currently » Program for prisoners rolled out in Delhi and Kolkata, is planned for a In a bid to enhance the employability of convicts pan India launch. after their release from jail and help them get re-integrated into society, DRF launched the » Pharma Retail “Prisoners program” to provide technical skills With organized Pharma retail catching steam in two domains – automobile mechanism and in India, DRF has tried to fulfill the needs of this A MOBILE HEALTH refrigeration & air conditioning. sector by training youth on medicines, dosage CAMP IN AID OF The 92 days prisoner’s program was conducted forms and its selections, human anatomy and FLOOD VICTIMS IN in Charlapally Jail in Hyderabad from the 27 physiology, use of insulin pen, respiratory device ANDHRA PRADESH, October 2009 to 27 January 2010 for 50 and glucometer etc. INDIA. prisoners. E D U C AT I O N U P DAT E » MoU with Nasscom Foundation YUVA YOUTH LEARNI N G CENTERS DRF signed an MoU with NASSCOM Foundation Community-based adolescent youth learning and Accenture where it would train NASCOMM centers established in various urban slum areas Knowledge Network partners and associated around Hyderabad help bring dropouts and NGO’s who work in similar areas of operations working children into the mainstream education and support these teams in terms of process, system. These centers help eligible students curriculum and content, life skills and other obtain formal academic certification, provide operational issues. career counseling and job-related training. Six Yuva Youth Learning Centers were » Program for Home Managers established in 2009-10 with four teachers in each A comprehensive 30 day module covering life centre. skills, housekeeping, first aid, cooking, child and elderly care along with practical training was TRANSIT EDUCATION C EN TERS provided to 22 unemployed girls / women to help A transit school comprises of an early childhood them become home managers. education center (crèche), a bridge course camp and a regular primary school. In FY10, 17 Non NEW L ABS CURRICULUM residential bridge centers, with a total strength of » Retail 38 teachers provided education to 575 students. With demand for entry level skilled manpower Also, 360 students were taught at four Residential increasing manifold, exclusive batches of retail bridge centers with 20 teachers engaged in training was planned pan-India. The curriculum teaching them. involves store management methods, space utilization, store layout, influencing consumer EDUCATION RESOURC E C ENTER (ERC) behavior etc. ERC is a Resource Center set up to provide academic support to all the Pudami Schools. ERC » Housekeeping develops curricular content, material for teachers’ DRF trained aspirants on industrial housekeeping education and mechanisms for academic support aspects like cleaning and maintenance methods, to schools. To facilitate children’s shift to English floor cleaning reagents, manual and mechanical medium, ERC has prepared an English transition equipments, pest control mechanism etc. course that aids children recover the academic backlog in any given class. Dr. Reddy’s extended its support to victims of the Haiti earthquake by providing free medicines. For its contribution to relief efforts, PUDAMI NEIGHBOURHO O D SCHOOLS the company was given a special award at the ‘Americares Spirit of Pudami schools address the rising demand for English medium education from marginalized / Humanity Awards’. lower income communities. Four schools have » Security been set up in Hyderabad and Ranga Reddy Trained people on inventory management, district so far where 70 teachers impart education vigilance aspects, CCTV operations, fire to a combined strength of over 1,400 children protection, bomb detection and evacuation drawn from all sections. procedures, mock drill operations etc.
  • 23. A N N U A L R E P O R T 2 0 0 9 – 1 0 C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y | 21 PU DAMI ENGLIS H P RIMARIES and 20 ECCE supported by Sarva Sikshya Abhiyan A LIVELIHOOD To make quality English-medium education (SSA), a Government of India initiative, supported ADVANCEMENT BUSINESS SCHOOL accessible to urban children from lower income a total of 1,340 children with help from 15 (LABS) CENTER RUN groups, DRF set up 29 Pudami English Primaries in teachers and 10 assistant teachers. BY DR. REDDY’S Hyderabad and Ranga Reddy Districts in Andhra FOUNDATION Pradesh. They have a combined strength of 4,700 BR IDGE SCHOOL AT JUVENILE HOME students (2,491 pre-primary and 2,209 primary) FOR GIRLS AT NIMBOLIADDA, who are taught by 238 teachers. HY DERABAD, INDIA Started in January 2010, about 84 children in KALLAM ANJI RE D DY VIDYALAYA three groups — Juvenile delinquents in special (K AR V) home, under-trials in observation home and The Kallam Anji Reddy Vidyalaya at Hyderabad children who need care and protection in the has 45 teachers providing education to about children home were housed in the campus. This 1,200 students in both English and Telugu bridge school has been set up with support from medium. Sarva Sikshya Abhiyan (SSA). Kallam Anji Reddy Vocational Junior College at Hyderabad presently offers five 2-year D R . R E D DY ’ S F O U N DAT I O N F O R vocational courses at the Intermediate level – H E A LT H E D U C AT I O N ( D R F H E ) Automobile Engineering Technician, Computer DRFHE aims to create professionals (health Graphics & Animation, Computer Science & educators) who would work with the medical Engineering, Hotel Operations and Multi-Purpose fraternity to offer an integrated, multi-disciplinary Health Worker. It has 450 students who are being approach to good health. The programs also aim trained by 20 teachers. at building the necessary soft skill capabilities with an objective of strengthening the healthcare EARLY CHILDHOO D CARE & delivery system for better patient care. EDU CATION CE N TE R Early Childhood Care & Education (ECCE) Center EDU CATION INITIATIVES takes care of children in the age group of 0-5 Better understanding through education years belonging to migrant children living on » Post Graduate Diploma in Healthcare construction sites in urban Hyderabad, India. In Management FY10, ten ECCE centers funded by World Bank The seventh batch of the program commenced
  • 24. 22 | S U S TA I N A B I L I T Y — C R E AT I N G A P O S I T I V E E C O N O M I C , S O C I A L A N D E N V I R O N M E N TA L I M PA C T from July 2009 where 16 students enrolled. TRAINING INITIATIVES A PGCHM certified Patient Educator would be Training to deliver better patient care a combination of a Physician’s Assistant, Patient » INNER CIRCLE Counselor, Health Educator and a Physician’s Introduced in 2007 to impart soft skill training of Associate. doctors, 53 Inner Circle programs were conducted in FY10 benefiting 1,809 doctors. » Certificate Program in Cancer Counseling Three training programs were conducted in » ABHILASHA STUDENTS AT A FY10 where fifteen candidates benefited Is aimed at helping nurses understand the true YUVA LEARNING and were placed as Case Managers under importance of their work and boost their self- CENTER IN leading Oncologists across India. confidence & motivation. HYDERABAD, INDIA