About
Dr Reddy's Laboratories Ltd
Dr Reddy's Laboratories Ltd (DRL) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services &Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including Active Pharmaceutical Ingredients (APIs), custom pharmaceutical services, generics, biosimilars and differentiated formulations. The company's major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets across the globe. Its major markets include - USA, India, Russia & CIS countries, and Europe.
Dr Reddy's Laboratories was incorporated in the year 1984 in Hyderabad. The company was established by Dr Anji Reddy with an initial capital outlay of Rs 25 lakh. The company made their beginning with the manufacture of Active Pharmaceutical Ingredients and Intermediates (API) and commenced operations with a single drug in a 60-tonne facility near Hyderabad, India. In the year 1986, the company shares were listed on the Bombay Stock Exchange. Also, they entered international market with exports of Methyldopa.
In the year 1987, the company obtained first USFDA approval for Ibuprofen API. In the year 1988, they acquired Benzex Laboratories Pvt Ltd to expand their Bulk Actives business. In the year 1990, they exported Norfloxacin and Ciprofloxacin to Europe and Far East. In the year 1991, they commenced formulation exports to Russia.
In the year 1993, the company established Dr. Reddy's Research Foundation and initiated drug discovery programme. In the year 1994, they finished dosages facility established to cater to highly regulated markets such as the US. In the year 1995, the company set up joint venture in Russia. In the year 1997, they filled first ANDA with the United States Food and Drug Administration for Ranitidine.
In the year 1999, the company acquired American Remedies Ltd, a pharmaceutical company based in India. In the year 2000, Cheminor Drugs Ltd, a group company merged with the company and thus the company became India's third largest pharma company. In the year 2001, the company launched Fluoxetine capsules. They became the first Indian company to win 180-day exclusivity for a generic drug in the US. Also, they launched their first generic product, Ranitidine, in the US market.
In the year 2002, the company made their first overseas acquisition of BMS Laboratories Limited and Meridian Healthcare in UK. In the year 2003, they launched Ibuprofen, first generic product to be marketed under the 'Dr. Reddy's' label in the US. In the year 2005, they acquired Roche's API Business at its manufacturing site in Mexico.
In the year 2006, the company acquired Betapharm the fourth largest generics company in Germany for a total enterprise value of Rs 480 million. In the year 2007, the company launched Reditux - the world's first biosimilar MAb - for the treatment of Non Hodgkins Lymphoma. Also, they became India's leading and most profitable pharmaceutical company.
During the year 2008-09, the company acquired DowPharma's small molecules business in UK under Chirotech Technology Ltd, BASF Corporation's manufacturing facility at Shreveport in Louisiana, USA under Dr. Reddy's Laboratories Louisiana LLC and Jet Generici SRL, a company engaged in the sale of generic finished dosages in Italy. In addition, Perlecan Pharma Pvt Ltd, Macred India Pvt Ltd and Dr. Reddy's Laboratories ILAC Ticaret also became subsidiary of the company.
During the year 2009-10, Dr. Reddy's Pharma SEZ Ltd was incorporated as a wholly-owned subsidiary of the company for the purpose of formulation manufacturing at Special Economic Zone and Perlecan Pharma Pvt Ltd was amalgamated with the company. Further, the company acquired the balance stake of 30% in Dr. Reddy's (Australia) Pty Ltd. The company filed 12 Abbreviated New Drug Applications (ANDAs) in US including six Para IV filing during the year.
During the year 2010-11, the company acquired GlaxoSmithKline's (GSK) oral penicillin manufacturing facility located in Tennessee, USA. This allows the company to enter theUS penicillin-containing antibacterial market segment through brands such as Augmentin and Amoxil, and serve the needs of customers through manufacturing and other capabilities that did not previously exist within the company. Also, they increased the stake in the South African joint venture company to 100% after acquiring the 40% stake of the partner.
During the year, the company launched Cresp in India, the first biosimilar darbepoetin alfa in the world. In March 2011, they launched Peg-grafeelTM in India in the form of an affordable pegfilgrastim, which is used to stimulate the bone marrow to produce more neutrophils to fight infection in patients undergoing chemotherapy. Peg-grafeelTM
During the year, Idea2Enterprises (India) Pvt Ltd, Dr. Reddy's Laboratories Romania SRL, I-Ven Pharma Capital Ltd, Dr. Reddy's Laboratories Tennessee LLC and Dr. Reddy's Venezuela C.A. became wholly-owned subsidiaries of the company. Further, Dr. Reddy's Laboratories (Proprietary) Ltd also became wholly-owned subsidiary by virtue of purchase of its balance 40% stake by the company. Also, Macred India Pvt Ltd ceased to be a subsidiary of the company.On 27 July 2012, Dr. Reddy's Laboratories announced that the United States Food and Drug Administration (USFDA) had lifted import alert on its chemical manufacturing facility at Cuernavaca, Mexico after inspection of the unit in March 2012. Earlier, Dr. Reddy's Mexico facility was inspected by USFDA in November 2010 and based on observations by the USFDA, a warning letter was issued to the company on 14 June 2011.On 8 October 2012, the Custom Pharmaceutical Services (CPS) business of Dr. Reddy's Laboratories Ltd. announced expansion in the areas of activated mPEG manufacturing and in the development and manufacture of NCE (New Chemical Entities) APIs for use in pre-clinical through to commercial development at its manufacturing facility in Mirfield, UK.On 14 December 2012, Dr. Reddy's Laboratories announced that it had launched the recommended public offer to acquire all the issued and outstanding shares of OctoPlus N.V., a service based specialty pharmaceutical company, at an offer price of EUR 0.52 (cum dividend) per share. Shareholders (including certain members of the Boards) holding in aggregate 63.5% of the issued and outstanding ordinary shares of OctoPlus entered into irrevocable undertakings to tender their shares under the offer. On 28 February 2013, Dr. Reddy's Laboratories announced that it had raised its stake in OctoPlus N.V, to 98.6% following a public offer for all the issued and outstanding ordinary shares in the capital of OctoPlus. OctoPlus is a leading European provider of advanced drug formulation and clinical scale manufacturing services to the pharmaceutical and biotechnology industries, with a focus on difficult-to formulate active pharmaceutical ingredients.On 19 December 2014, Dr. Reddy's Laboratories announced that it had completed the acquisition of Habitrol brand (an over-the-counter nicotine replacement therapy transdermal patch) from Novartis Consumer Health Inc. following issuance of the proposed consent order from the US Federal Trade Commission (FTC) on 26 November 2014. The company had earlier entered into an asset purchase agreement with Novartis Consumer Health Inc. to acquire the title and rights of Habitrol brand and to market the product in the US market.On 22 March 2015, Dr. Reddy's Laboratories (NYSE: RDY) announced that it had settled its claims against Nordion Inc. (formerly MDS Inc.), headquartered in Ottawa, Canada, in a case pending in the United States District Court for the District of New Jersey, for a cash payment of USD 22.5 Million by Nordion to Dr. Reddy's. The case was brought by Dr. Reddy's in April 2009 seeking damages sustained by the company caused by a claimed breach by Nordion of its Laboratory Services Agreement with Dr. Reddy's. Nordion, as a contract research organization, provided laboratory services to Dr. Reddy's, including bio-equivalency studies, to support Dr. Reddy's regulatory applications for approval of generic drugs, including Abbreviated New Drug Applications (ANDAs) filed with the United States Food and Drug Administration (the USFDA) for approval to market generic drugs in the United States. The case arose after the USFDA cited MDS with violations of good laboratory practices which caused the USFDA not to accept, without further substantiation, MDS's laboratory reports performed during the period 2000-2004.
On 23 March 2015, Dr Reddy's Laboratories announced that it has entered into an agreement with Hetero, under which Dr. Reddy's has been licensed to distribute and market Sofosbuvir 400 mg tablets , indicated in the treatment of Chronic Hepatitis C, under the brand name Resof, in India.
On 1 April 2015, Dr. Reddy's Laboratories announced that it has entered into a definitive agreement to acquire a select portfolio of the established products business of UCB, a global biopharmaceutical company, in the territories of India, Nepal, Sri Lanka and Maldives. The revenue of the acquired business stood at approximately Rs 150 crore for calendar year 2014.On 29 May 2015, Dr Reddy's Laboratories Limited and AstraZeneca Pharma India Limited entered into a distribution agreement for saxagliptin and its fixed dose combination with metformin, in Type 2 DiabetesOn 6 August 2015, Dr. Reddy's Laboratories Ltd. announced that it has entered into a strategic collaboration with Amgen, one of the world's leading independent biotechnology companies, to market and distribute three Amgen medicines in India in the areas of oncology and cardiology. On 16 September 2016, Dr. Reddy's announced that it had expanded its strategic collaboration with Amgen to market and distribute three of Amgen's medicines in India in the therapy areas of oncology and osteoporosis.
On 9 September 2015, PanTheryx Inc., a global medical nutrition company based in Boulder, Colorado, and Dr. Reddy's Laboratories Ltd. announced a multi-country supply and licensing agreement whereby Dr. Reddy's Lab got the exclusive right to market and distribute PanTheryx's breakthrough nutritional intervention, DiaResQ, for infectious diarrhea in India and Nepal and in process for Russia, Myanmar, Vietnam, Ukraine, Sri Lanka, Kazakhstan, Belarus, Jamaica, and select LATAM markets. Dr. Reddy's will market the product in India and Nepal under the Reliqua brand.
On 14 September 2015, Dr. Reddy's Laboratories announced the signing of a commercialization deal with Hatchtech, an Australian pharmaceutical company developing an innovative prescription head lice product, Xeglyze Lotion. The exclusive rights for this product are applicable for the territories of the United States, Canada, India, Russia and the CIS, Australia, New Zealand and Venezuela.
On 4 November 2015, Dr. Reddy's Laboratories entered into a strategic alliance with Biocodex, a multinational pharmaceutical company, to market and distribute Biocodex products in the Romanian market.
On 5 November 2015, the US Food and Drug Administration (USFDA) issued a warning letter to Dr. Reddy's Laboratories relating to its API manufacturing facilities at Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as Oncology Formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. This action follows the earlier inspections of these sites by the agency in November 2014, January 2015 and February 2015 respectively.
On 18 November 2015, Dr. Reddy's Laboratories announced that it had completed the purchase of worldwide exclusive intellectual property rights for Fondaparinux sodium, its generic anti-coagulant drug from its Australian partner, Alchemia Limited. Earlier, the company had signed a term sheet for this transaction in September 2015. Fondaparinux is a generic version of the anticoagulant drug Arixtra.
On 11 March 2016, Dr. Reddy's Laboratories Ltd. and TR-Pharm announced a strategic collaboration agreement for the manufacture and commercialization of a portfolio of Dr. Reddy's Laboratories' biosimilar drugs in Turkey.
On 28 March 2016, Dr. Reddy's Laboratories and XenoPort, Inc. announced that they have entered into a license agreement pursuant to which Dr. Reddy's Laboratories will be granted exclusive US rights for the development and commercialization of XenoPort's clinical stage oral new chemical entity, XP23829. Dr. Reddy's Laboratories plans to develop XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis and may potentially develop XP23829 for relapsing forms of multiple sclerosis (MS).
On 31 March 2016, Dr. Reddy's Laboratories announced that it has entered into a licensing agreement with Eisai Co., Ltd, Japan by which Dr. Reddy's will be granted exclusive worldwide development and commercialization rights (excluding Japan and Asia) for Eisai's investigational anticancer agent E7777. Eisai will be responsible for the development and marketing of E7777 in Japan and Asia, while Dr. Reddy's holds the option for rights to develop and market the agent in India.
On 25 May 2016, Dr. Reddy's Laboratories announced the acquisition of an eminent portfolio of over-the-counter (OTC) brands in the US in the cough-and-cold, pain, and dermatology categories from Ducere Pharma.
On 3 August 2016, Dr. Reddy's Laboratories announced that it successfully completed the previously announced acquisition of a portfolio of complex generic products in the US from Teva Pharmaceutical Industries Ltd. and an affiliate of Allergan plc. On 11 June 2016, Dr. Reddy's Laboratories entered into a definitive agreement with Teva Pharmaceutical Industries Ltd. and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash.
On 7 October 2016, Dr. Reddy's Laboratories announced its entry into Colombia with its portfolio of high quality and affordable medicines for Cancer patients.
On 26 October 2016, Dr. Reddy's Laboratories announced that it had entered into a strategic collaboration with Gland Pharma, a globally recognized developer and manufacturer of sterile dosage forms, to market and distribute a diverse portfolio of eight injectable Abbreviated New Drug Applications (ANDAs) in the United States.
On 8 February 2017, Dr. Reddy's Laboratories Ltd announced the expansion of its commercial operations in Europe with the introduction of its portfolio of generics in France.
On 3 March 2017, Dr. Reddy's Laboratories announced that it had completed the acquisition of 100% stake in Imperial Credit Private Limited, a Non-Banking Finance Company (NBFC), based out of Kolkata, for a consideration of Rs 2.05 crore. The company proposes to undertake the group's captive financial activities through this entity.
On 27 March 2017, Dr. Reddy's Laboratories and Integra LifeSciences Holdings Corporation, a leading global medical technology company, announced that they have entered into an exclusive distribution agreement. Under the agreement, Dr. Reddy's will market and distribute DuraGen Plus and Suturable DuraGen Dural Regeneration Matrices for use in patients in India. The DuraGen product line offers Duraplasty Solutions meant for the repair of the dura mater. Dura mater is a thick membrane that surrounds the brain and spinal cord, and contains the cerebrospinal fluid (CSF). DuraGen Plus Dural Regeneration Matrix is indicated as a dural substitute for the repair of dura mater.
On 27 July 2017, Dr Reddy's Laboratories Ltd. and CHD Bioscience Inc., a privately-held biopharmaceutical company, announced a global licensing agreement for the clinical development and commercialization of Dr. Reddy's phase III clinical trial candidate, DFA-02. It is intended to be used for the prevention of surgical site infections, following non-emergency, elective colorectal surgery. Under the terms of the agreement, Dr. Reddy's would receive equity in CHD valued at $30 million upon an IPO of CHD or a minimum of $30 million in cash within 18 months of execution of the agreement. Dr. Reddy's will also receive additional milestone payments of $40 million upon USFDA approval. In addition, CHD will pay Dr. Reddy's double-digit royalties on sales and commercial milestones.
On 22 August 2017, Dr. Reddy's Laboratories Ltd. through its wholly owned subsidiary Promius Pharma, LLC, announced that it has out-licensed the future development, manufacturing, and commercialization rights of DFD-06, a topical high potency steroid, to Encore Dermatology Inc. The drug is intended to be used for treatment of moderate to severe plaque psoriasis. Under the terms of the agreement, Encore will be responsible for the commercialization of DFD-06 in the United States. Promius Pharma is eligible to receive certain pre- and post- commercialization milestone payments of up to USD $32.5 million, followed by fixed royalty payments on net sales.
On 19 December 2017, Dr. Reddy's Laboratories Ltd. announced that its US subsidiary had reached a settlement with the US Government in a case involving packaging for five blister-packed prescription products. In a joint filing by the parties, Dr. Reddy's and the US Department of Justice agreed to the settlement of the action without any adjudication of any issue of fact or law.
In FY2018, the company filed 19 new Abbreviated New Drug Applications (ANDAs) and one New Drug Application (NDA) with the USFDA.
As of 31 March 2018, the company had 110 generic filings pending approval from the USFDA, comprising 107 ANDAs and three NDAs filed under the 505(b)(2) route of the US Federal Food, Drug and Cosmetic Act. Of the 107 ANDAs, 63 are Para IV applications.
The company had 51 subsidiaries and two joint venture companies as on 31 March 2018. During FY2018, Dr. Reddy's Laboratories Chile SpA. (in Chile), Dr. Reddy's (WUXI) Pharmaceutical Co. Limited (in China), Dr. Reddy's Laboratories Malaysia Sdn. Bhd. (in Malaysia) and Dr. Reddy's Laboratories Taiwan Limited (in Taiwan) have become subsidiary companies. DRSS Solar Power Private Limited was closed and ceased to be a joint venture company.
In FY2019, the company filed 20 new Abbreviated New Drug Applications (ANDAs) with the USFDA. As on 31 March 2019, the company had 110 generic filings pending approval from the USFDA - comprising 107 ANDAs and three New Drug Applications (NDAs).
The company had 52 subsidiaries and two joint venture companies as on 31 March 2019. During FY2019, Dr. Reddy's Laboratories (Thailand) Limited and Dr. Reddy's Laboratories Philippines Inc. have become subsidiary companies. Pursuant to sale of all the issued and outstanding membership interests in the antibiotic manufacturing facility at Tennessee, USA, Dr. Reddy's Laboratories Tennessee, LLC ceased to be a subsidiary.
During FY2019, the company launched 15 new brands in India. The company spent towards R&D expenses during FY2019 for the amount of Rs 15,607 million, or 10.1% of revenue, versus 12.9% in FY2018.
The company had 50 subsidiaries and two joint venture companies as on 31 March 2020. During FY2020, Aurigene Pharmaceutical Services Limited was incorporated as a step-down subsidiary company. Dr. Reddy's Singapore Pte. Limited and Reddy Antilles N.V. were closed and ceased to be wholly-owned subsidiaries. Dr. Reddy's Laboratories International SA ceased to be a step-down subsidiary of the company consequent to its merger with Dr. Reddy's Laboratories SA.
During FY2020, the company launched 21 new brands in India. The company also entered the nutrition segment with the launch of our diabetes nutrition drink Celevida'. The company spent towards R&D expenses during FY2020 amounting to Rs 15,410 million, or 8.8% of revenue, versus 10.1% in FY2019.
On 10 June 2020, the company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dennatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the company completed the purchase price allocation. The fair value of consideration transferred is Rs 16,115 million. The company recognised Rs 373 million, Rs 14,888 million and Rs 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment.
On 22 October 2020, the Company experienced a cybersecurity incident related to ransomware. The Company could contain the incident in a timely fashion and has also ensured that all traces of the infection are completely cleaned from the network. All affected systems were restored and brought back to normalcy in the order of priority. Based on the forensic investigation, no evidence was found of any data breaches leading to personally identifiable information. Since then, the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.
The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments.
During December 2020, the company entered into a definitive agreement with Glenmark Phannaceuticals Ltd. to acquire, certain brands in various Emerging Market countries for a total consideration of Rs 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles.
In FY 2020, Company filed 8 new Abbreviated New Drug Applications (ANDAs) with the USFDA. As on 31 March 2020, there were 99
generic filings pending approval from the USFDA, comprising 97 ANDAs and 2 New Drug Applications (NDAs).
During the year, the Company filed 20 abbreviated new drug applications (ANDAs) and 1 new drug application (NDA) in the USA. As of March 31, 2021, there were 95 generic filings awaiting approval with the US Food and Drug Administration (USFDA), comprising 92 ANDAs and 3 NDAs.
The company had 52 subsidiaries and 1 joint venture company as on March 31, 2021.
During FY 2021, Dr. Reddy's (Beijing) Pharmaceutical Company Limited in China and Dr. Reddy's Formulations Limited in India were incorporated as a step-down subsidiary company and a wholly-owned subsidiary, respectively. Pursuant to sale of the membership interests in DRANU, LLC, it ceased to be a joint venture during the year. Further, the company sold its Contract Development and Manufacturing Organization (CDMO) division of Custom Pharmaceutical Services (CPS) business to Aurigene Pharmaceutical Services Limited (APSL), a wholly-owned subsidiary, on slump sale basis, for a consideration of Rs. 5,434.5 million.
During year 2022, Company filed 7 Abbreviated New Drug Applications (ANDAs) in the USA. As of March 31, 2022, there were 90 generic filings awaiting approval with the US Food and Drug Administration (USFDA), comprising 87 ANDAs and 3 NDAs.
The Hon'ble National Company Law Tribunal (NCLT), Hyderabad Bench, vide order dated April 5, 2022, has approved the Scheme of Amalgamation and Arrangement for the merger of Dr. Reddy's Holdings Limited (the DRHL/ Amalgamating Company) with the Company, filed by both companies with the Registrar of Companies, Hyderabad, on April 8, 2022. Therefore, the merger became effective on April 8, 2022 with Appointed date of the Scheme, April 1, 2019.
The Company has 42 overseas subsidiary companies (including step-down subsidiaries), 9 subsidiary companies in India and 1 joint venture Company as on March 31, 2022.
Dr. Reddy's (WUXI) Pharmaceutical Co. Limited in China ceased to be a step-down subsidiary of the Company with effect from December 13, 2021, consequent to its liquidation. Aurigene Discovery Technologies Inc. in USA, ceased to be a step-down subsidiary of the Company with effect from March 23, 2022, consequent to its liquidation. Further, the Company acquired Nimbus Health GmbH (Nimbus) as a step-down subsidiary, on February 24, 2022.
During the year 2022-23, Dr. Reddy's Holdings Limited (the DRHL/ Amalgamating Company) got merged with Dr Reddy's Laboratories Ltd. (the Amalgamated Company) through the Scheme of Amalgamation and hence, the merger became effective on April 8, 2022.
Consequent to the merger with Dr. Reddy's Laboratories LLC, Russia, DRS LLC in Russia ceased to be a step down subsidiary of the Company with effect from July 1, 2022. Dr. Reddy's Laboratories B.V. in Netherlands, has ceased to be a step-down subsidiary of the Company with effect from January 25, 2023.
During the year 2023, the Company launched the generic version of Lenalidomide Capsules, a cancer drug used to treat myeloma in the United States; launched Sorafenib tablets, a drug used to treat a type of liver cancer called hepatocellular carcinoma; launched Timolol gel, an ophthalmic gel forming solution used to treat glaucoma.
Dr Reddy's Laboratories Ltd
Company History
Dr Reddy's Laboratories Ltd (DRL) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services &Active Ingredients, Global Generics and Proprietary Products - Dr. Reddy's offers a portfolio of products and services including Active Pharmaceutical Ingredients (APIs), custom pharmaceutical services, generics, biosimilars and differentiated formulations. The company's major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Dr. Reddy's operates in markets across the globe. Its major markets include - USA, India, Russia & CIS countries, and Europe.
Dr Reddy's Laboratories was incorporated in the year 1984 in Hyderabad. The company was established by Dr Anji Reddy with an initial capital outlay of Rs 25 lakh. The company made their beginning with the manufacture of Active Pharmaceutical Ingredients and Intermediates (API) and commenced operations with a single drug in a 60-tonne facility near Hyderabad, India. In the year 1986, the company shares were listed on the Bombay Stock Exchange. Also, they entered international market with exports of Methyldopa.
In the year 1987, the company obtained first USFDA approval for Ibuprofen API. In the year 1988, they acquired Benzex Laboratories Pvt Ltd to expand their Bulk Actives business. In the year 1990, they exported Norfloxacin and Ciprofloxacin to Europe and Far East. In the year 1991, they commenced formulation exports to Russia.
In the year 1993, the company established Dr. Reddy's Research Foundation and initiated drug discovery programme. In the year 1994, they finished dosages facility established to cater to highly regulated markets such as the US. In the year 1995, the company set up joint venture in Russia. In the year 1997, they filled first ANDA with the United States Food and Drug Administration for Ranitidine.
In the year 1999, the company acquired American Remedies Ltd, a pharmaceutical company based in India. In the year 2000, Cheminor Drugs Ltd, a group company merged with the company and thus the company became India's third largest pharma company. In the year 2001, the company launched Fluoxetine capsules. They became the first Indian company to win 180-day exclusivity for a generic drug in the US. Also, they launched their first generic product, Ranitidine, in the US market.
In the year 2002, the company made their first overseas acquisition of BMS Laboratories Limited and Meridian Healthcare in UK. In the year 2003, they launched Ibuprofen, first generic product to be marketed under the 'Dr. Reddy's' label in the US. In the year 2005, they acquired Roche's API Business at its manufacturing site in Mexico.
In the year 2006, the company acquired Betapharm the fourth largest generics company in Germany for a total enterprise value of Rs 480 million. In the year 2007, the company launched Reditux - the world's first biosimilar MAb - for the treatment of Non Hodgkins Lymphoma. Also, they became India's leading and most profitable pharmaceutical company.
During the year 2008-09, the company acquired DowPharma's small molecules business in UK under Chirotech Technology Ltd, BASF Corporation's manufacturing facility at Shreveport in Louisiana, USA under Dr. Reddy's Laboratories Louisiana LLC and Jet Generici SRL, a company engaged in the sale of generic finished dosages in Italy. In addition, Perlecan Pharma Pvt Ltd, Macred India Pvt Ltd and Dr. Reddy's Laboratories ILAC Ticaret also became subsidiary of the company.
During the year 2009-10, Dr. Reddy's Pharma SEZ Ltd was incorporated as a wholly-owned subsidiary of the company for the purpose of formulation manufacturing at Special Economic Zone and Perlecan Pharma Pvt Ltd was amalgamated with the company. Further, the company acquired the balance stake of 30% in Dr. Reddy's (Australia) Pty Ltd. The company filed 12 Abbreviated New Drug Applications (ANDAs) in US including six Para IV filing during the year.
During the year 2010-11, the company acquired GlaxoSmithKline's (GSK) oral penicillin manufacturing facility located in Tennessee, USA. This allows the company to enter theUS penicillin-containing antibacterial market segment through brands such as Augmentin and Amoxil, and serve the needs of customers through manufacturing and other capabilities that did not previously exist within the company. Also, they increased the stake in the South African joint venture company to 100% after acquiring the 40% stake of the partner.
During the year, the company launched Cresp in India, the first biosimilar darbepoetin alfa in the world. In March 2011, they launched Peg-grafeelTM in India in the form of an affordable pegfilgrastim, which is used to stimulate the bone marrow to produce more neutrophils to fight infection in patients undergoing chemotherapy. Peg-grafeelTM
During the year, Idea2Enterprises (India) Pvt Ltd, Dr. Reddy's Laboratories Romania SRL, I-Ven Pharma Capital Ltd, Dr. Reddy's Laboratories Tennessee LLC and Dr. Reddy's Venezuela C.A. became wholly-owned subsidiaries of the company. Further, Dr. Reddy's Laboratories (Proprietary) Ltd also became wholly-owned subsidiary by virtue of purchase of its balance 40% stake by the company. Also, Macred India Pvt Ltd ceased to be a subsidiary of the company.On 27 July 2012, Dr. Reddy's Laboratories announced that the United States Food and Drug Administration (USFDA) had lifted import alert on its chemical manufacturing facility at Cuernavaca, Mexico after inspection of the unit in March 2012. Earlier, Dr. Reddy's Mexico facility was inspected by USFDA in November 2010 and based on observations by the USFDA, a warning letter was issued to the company on 14 June 2011.On 8 October 2012, the Custom Pharmaceutical Services (CPS) business of Dr. Reddy's Laboratories Ltd. announced expansion in the areas of activated mPEG manufacturing and in the development and manufacture of NCE (New Chemical Entities) APIs for use in pre-clinical through to commercial development at its manufacturing facility in Mirfield, UK.On 14 December 2012, Dr. Reddy's Laboratories announced that it had launched the recommended public offer to acquire all the issued and outstanding shares of OctoPlus N.V., a service based specialty pharmaceutical company, at an offer price of EUR 0.52 (cum dividend) per share. Shareholders (including certain members of the Boards) holding in aggregate 63.5% of the issued and outstanding ordinary shares of OctoPlus entered into irrevocable undertakings to tender their shares under the offer. On 28 February 2013, Dr. Reddy's Laboratories announced that it had raised its stake in OctoPlus N.V, to 98.6% following a public offer for all the issued and outstanding ordinary shares in the capital of OctoPlus. OctoPlus is a leading European provider of advanced drug formulation and clinical scale manufacturing services to the pharmaceutical and biotechnology industries, with a focus on difficult-to formulate active pharmaceutical ingredients.On 19 December 2014, Dr. Reddy's Laboratories announced that it had completed the acquisition of Habitrol brand (an over-the-counter nicotine replacement therapy transdermal patch) from Novartis Consumer Health Inc. following issuance of the proposed consent order from the US Federal Trade Commission (FTC) on 26 November 2014. The company had earlier entered into an asset purchase agreement with Novartis Consumer Health Inc. to acquire the title and rights of Habitrol brand and to market the product in the US market.On 22 March 2015, Dr. Reddy's Laboratories (NYSE: RDY) announced that it had settled its claims against Nordion Inc. (formerly MDS Inc.), headquartered in Ottawa, Canada, in a case pending in the United States District Court for the District of New Jersey, for a cash payment of USD 22.5 Million by Nordion to Dr. Reddy's. The case was brought by Dr. Reddy's in April 2009 seeking damages sustained by the company caused by a claimed breach by Nordion of its Laboratory Services Agreement with Dr. Reddy's. Nordion, as a contract research organization, provided laboratory services to Dr. Reddy's, including bio-equivalency studies, to support Dr. Reddy's regulatory applications for approval of generic drugs, including Abbreviated New Drug Applications (ANDAs) filed with the United States Food and Drug Administration (the USFDA) for approval to market generic drugs in the United States. The case arose after the USFDA cited MDS with violations of good laboratory practices which caused the USFDA not to accept, without further substantiation, MDS's laboratory reports performed during the period 2000-2004.
On 23 March 2015, Dr Reddy's Laboratories announced that it has entered into an agreement with Hetero, under which Dr. Reddy's has been licensed to distribute and market Sofosbuvir 400 mg tablets , indicated in the treatment of Chronic Hepatitis C, under the brand name Resof, in India.
On 1 April 2015, Dr. Reddy's Laboratories announced that it has entered into a definitive agreement to acquire a select portfolio of the established products business of UCB, a global biopharmaceutical company, in the territories of India, Nepal, Sri Lanka and Maldives. The revenue of the acquired business stood at approximately Rs 150 crore for calendar year 2014.On 29 May 2015, Dr Reddy's Laboratories Limited and AstraZeneca Pharma India Limited entered into a distribution agreement for saxagliptin and its fixed dose combination with metformin, in Type 2 DiabetesOn 6 August 2015, Dr. Reddy's Laboratories Ltd. announced that it has entered into a strategic collaboration with Amgen, one of the world's leading independent biotechnology companies, to market and distribute three Amgen medicines in India in the areas of oncology and cardiology. On 16 September 2016, Dr. Reddy's announced that it had expanded its strategic collaboration with Amgen to market and distribute three of Amgen's medicines in India in the therapy areas of oncology and osteoporosis.
On 9 September 2015, PanTheryx Inc., a global medical nutrition company based in Boulder, Colorado, and Dr. Reddy's Laboratories Ltd. announced a multi-country supply and licensing agreement whereby Dr. Reddy's Lab got the exclusive right to market and distribute PanTheryx's breakthrough nutritional intervention, DiaResQ, for infectious diarrhea in India and Nepal and in process for Russia, Myanmar, Vietnam, Ukraine, Sri Lanka, Kazakhstan, Belarus, Jamaica, and select LATAM markets. Dr. Reddy's will market the product in India and Nepal under the Reliqua brand.
On 14 September 2015, Dr. Reddy's Laboratories announced the signing of a commercialization deal with Hatchtech, an Australian pharmaceutical company developing an innovative prescription head lice product, Xeglyze Lotion. The exclusive rights for this product are applicable for the territories of the United States, Canada, India, Russia and the CIS, Australia, New Zealand and Venezuela.
On 4 November 2015, Dr. Reddy's Laboratories entered into a strategic alliance with Biocodex, a multinational pharmaceutical company, to market and distribute Biocodex products in the Romanian market.
On 5 November 2015, the US Food and Drug Administration (USFDA) issued a warning letter to Dr. Reddy's Laboratories relating to its API manufacturing facilities at Srikakulam, Andhra Pradesh and Miryalaguda, Telangana, as well as Oncology Formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh. This action follows the earlier inspections of these sites by the agency in November 2014, January 2015 and February 2015 respectively.
On 18 November 2015, Dr. Reddy's Laboratories announced that it had completed the purchase of worldwide exclusive intellectual property rights for Fondaparinux sodium, its generic anti-coagulant drug from its Australian partner, Alchemia Limited. Earlier, the company had signed a term sheet for this transaction in September 2015. Fondaparinux is a generic version of the anticoagulant drug Arixtra.
On 11 March 2016, Dr. Reddy's Laboratories Ltd. and TR-Pharm announced a strategic collaboration agreement for the manufacture and commercialization of a portfolio of Dr. Reddy's Laboratories' biosimilar drugs in Turkey.
On 28 March 2016, Dr. Reddy's Laboratories and XenoPort, Inc. announced that they have entered into a license agreement pursuant to which Dr. Reddy's Laboratories will be granted exclusive US rights for the development and commercialization of XenoPort's clinical stage oral new chemical entity, XP23829. Dr. Reddy's Laboratories plans to develop XP23829 as a potential treatment for moderate-to-severe chronic plaque psoriasis and may potentially develop XP23829 for relapsing forms of multiple sclerosis (MS).
On 31 March 2016, Dr. Reddy's Laboratories announced that it has entered into a licensing agreement with Eisai Co., Ltd, Japan by which Dr. Reddy's will be granted exclusive worldwide development and commercialization rights (excluding Japan and Asia) for Eisai's investigational anticancer agent E7777. Eisai will be responsible for the development and marketing of E7777 in Japan and Asia, while Dr. Reddy's holds the option for rights to develop and market the agent in India.
On 25 May 2016, Dr. Reddy's Laboratories announced the acquisition of an eminent portfolio of over-the-counter (OTC) brands in the US in the cough-and-cold, pain, and dermatology categories from Ducere Pharma.
On 3 August 2016, Dr. Reddy's Laboratories announced that it successfully completed the previously announced acquisition of a portfolio of complex generic products in the US from Teva Pharmaceutical Industries Ltd. and an affiliate of Allergan plc. On 11 June 2016, Dr. Reddy's Laboratories entered into a definitive agreement with Teva Pharmaceutical Industries Ltd. and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash.
On 7 October 2016, Dr. Reddy's Laboratories announced its entry into Colombia with its portfolio of high quality and affordable medicines for Cancer patients.
On 26 October 2016, Dr. Reddy's Laboratories announced that it had entered into a strategic collaboration with Gland Pharma, a globally recognized developer and manufacturer of sterile dosage forms, to market and distribute a diverse portfolio of eight injectable Abbreviated New Drug Applications (ANDAs) in the United States.
On 8 February 2017, Dr. Reddy's Laboratories Ltd announced the expansion of its commercial operations in Europe with the introduction of its portfolio of generics in France.
On 3 March 2017, Dr. Reddy's Laboratories announced that it had completed the acquisition of 100% stake in Imperial Credit Private Limited, a Non-Banking Finance Company (NBFC), based out of Kolkata, for a consideration of Rs 2.05 crore. The company proposes to undertake the group's captive financial activities through this entity.
On 27 March 2017, Dr. Reddy's Laboratories and Integra LifeSciences Holdings Corporation, a leading global medical technology company, announced that they have entered into an exclusive distribution agreement. Under the agreement, Dr. Reddy's will market and distribute DuraGen Plus and Suturable DuraGen Dural Regeneration Matrices for use in patients in India. The DuraGen product line offers Duraplasty Solutions meant for the repair of the dura mater. Dura mater is a thick membrane that surrounds the brain and spinal cord, and contains the cerebrospinal fluid (CSF). DuraGen Plus Dural Regeneration Matrix is indicated as a dural substitute for the repair of dura mater.
On 27 July 2017, Dr Reddy's Laboratories Ltd. and CHD Bioscience Inc., a privately-held biopharmaceutical company, announced a global licensing agreement for the clinical development and commercialization of Dr. Reddy's phase III clinical trial candidate, DFA-02. It is intended to be used for the prevention of surgical site infections, following non-emergency, elective colorectal surgery. Under the terms of the agreement, Dr. Reddy's would receive equity in CHD valued at $30 million upon an IPO of CHD or a minimum of $30 million in cash within 18 months of execution of the agreement. Dr. Reddy's will also receive additional milestone payments of $40 million upon USFDA approval. In addition, CHD will pay Dr. Reddy's double-digit royalties on sales and commercial milestones.
On 22 August 2017, Dr. Reddy's Laboratories Ltd. through its wholly owned subsidiary Promius Pharma, LLC, announced that it has out-licensed the future development, manufacturing, and commercialization rights of DFD-06, a topical high potency steroid, to Encore Dermatology Inc. The drug is intended to be used for treatment of moderate to severe plaque psoriasis. Under the terms of the agreement, Encore will be responsible for the commercialization of DFD-06 in the United States. Promius Pharma is eligible to receive certain pre- and post- commercialization milestone payments of up to USD $32.5 million, followed by fixed royalty payments on net sales.
On 19 December 2017, Dr. Reddy's Laboratories Ltd. announced that its US subsidiary had reached a settlement with the US Government in a case involving packaging for five blister-packed prescription products. In a joint filing by the parties, Dr. Reddy's and the US Department of Justice agreed to the settlement of the action without any adjudication of any issue of fact or law.
In FY2018, the company filed 19 new Abbreviated New Drug Applications (ANDAs) and one New Drug Application (NDA) with the USFDA.
As of 31 March 2018, the company had 110 generic filings pending approval from the USFDA, comprising 107 ANDAs and three NDAs filed under the 505(b)(2) route of the US Federal Food, Drug and Cosmetic Act. Of the 107 ANDAs, 63 are Para IV applications.
The company had 51 subsidiaries and two joint venture companies as on 31 March 2018. During FY2018, Dr. Reddy's Laboratories Chile SpA. (in Chile), Dr. Reddy's (WUXI) Pharmaceutical Co. Limited (in China), Dr. Reddy's Laboratories Malaysia Sdn. Bhd. (in Malaysia) and Dr. Reddy's Laboratories Taiwan Limited (in Taiwan) have become subsidiary companies. DRSS Solar Power Private Limited was closed and ceased to be a joint venture company.
In FY2019, the company filed 20 new Abbreviated New Drug Applications (ANDAs) with the USFDA. As on 31 March 2019, the company had 110 generic filings pending approval from the USFDA - comprising 107 ANDAs and three New Drug Applications (NDAs).
The company had 52 subsidiaries and two joint venture companies as on 31 March 2019. During FY2019, Dr. Reddy's Laboratories (Thailand) Limited and Dr. Reddy's Laboratories Philippines Inc. have become subsidiary companies. Pursuant to sale of all the issued and outstanding membership interests in the antibiotic manufacturing facility at Tennessee, USA, Dr. Reddy's Laboratories Tennessee, LLC ceased to be a subsidiary.
During FY2019, the company launched 15 new brands in India. The company spent towards R&D expenses during FY2019 for the amount of Rs 15,607 million, or 10.1% of revenue, versus 12.9% in FY2018.
The company had 50 subsidiaries and two joint venture companies as on 31 March 2020. During FY2020, Aurigene Pharmaceutical Services Limited was incorporated as a step-down subsidiary company. Dr. Reddy's Singapore Pte. Limited and Reddy Antilles N.V. were closed and ceased to be wholly-owned subsidiaries. Dr. Reddy's Laboratories International SA ceased to be a step-down subsidiary of the company consequent to its merger with Dr. Reddy's Laboratories SA.
During FY2020, the company launched 21 new brands in India. The company also entered the nutrition segment with the launch of our diabetes nutrition drink Celevida'. The company spent towards R&D expenses during FY2020 amounting to Rs 15,410 million, or 8.8% of revenue, versus 10.1% in FY2019.
On 10 June 2020, the company completed the acquisition of select divisions of Wockhardt Limited's branded generics business in India and the territories of Nepal, Sri Lanka, Bhutan and Maldives. The business comprises a portfolio of 62 brands in multiple therapy areas, such as respiratory, neurology, venous malformations, dennatology, gastroenterology, pain, and vaccines. This entire portfolio has been transferred to the Company, along with related sales and marketing teams, the manufacturing plant located in Baddi, Himachal Pradesh, and employees. During the quarter ended 30 September 2020, the company completed the purchase price allocation. The fair value of consideration transferred is Rs 16,115 million. The company recognised Rs 373 million, Rs 14,888 million and Rs 530 million towards property, plant and equipment, intangible assets, and goodwill, respectively. The acquisition pertains to Company's Global Generics segment.
On 22 October 2020, the Company experienced a cybersecurity incident related to ransomware. The Company could contain the incident in a timely fashion and has also ensured that all traces of the infection are completely cleaned from the network. All affected systems were restored and brought back to normalcy in the order of priority. Based on the forensic investigation, no evidence was found of any data breaches leading to personally identifiable information. Since then, the Company has also been focused on implementing significant improvements to its cyber and data security systems to safeguard from such risks in the future.
The Company continues to consider the impact of COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, and certain investments.
During December 2020, the company entered into a definitive agreement with Glenmark Phannaceuticals Ltd. to acquire, certain brands in various Emerging Market countries for a total consideration of Rs 1,516 million. The said transaction was accounted for as an acquisition of product related intangibles.
In FY 2020, Company filed 8 new Abbreviated New Drug Applications (ANDAs) with the USFDA. As on 31 March 2020, there were 99
generic filings pending approval from the USFDA, comprising 97 ANDAs and 2 New Drug Applications (NDAs).
During the year, the Company filed 20 abbreviated new drug applications (ANDAs) and 1 new drug application (NDA) in the USA. As of March 31, 2021, there were 95 generic filings awaiting approval with the US Food and Drug Administration (USFDA), comprising 92 ANDAs and 3 NDAs.
The company had 52 subsidiaries and 1 joint venture company as on March 31, 2021.
During FY 2021, Dr. Reddy's (Beijing) Pharmaceutical Company Limited in China and Dr. Reddy's Formulations Limited in India were incorporated as a step-down subsidiary company and a wholly-owned subsidiary, respectively. Pursuant to sale of the membership interests in DRANU, LLC, it ceased to be a joint venture during the year. Further, the company sold its Contract Development and Manufacturing Organization (CDMO) division of Custom Pharmaceutical Services (CPS) business to Aurigene Pharmaceutical Services Limited (APSL), a wholly-owned subsidiary, on slump sale basis, for a consideration of Rs. 5,434.5 million.
During year 2022, Company filed 7 Abbreviated New Drug Applications (ANDAs) in the USA. As of March 31, 2022, there were 90 generic filings awaiting approval with the US Food and Drug Administration (USFDA), comprising 87 ANDAs and 3 NDAs.
The Hon'ble National Company Law Tribunal (NCLT), Hyderabad Bench, vide order dated April 5, 2022, has approved the Scheme of Amalgamation and Arrangement for the merger of Dr. Reddy's Holdings Limited (the DRHL/ Amalgamating Company) with the Company, filed by both companies with the Registrar of Companies, Hyderabad, on April 8, 2022. Therefore, the merger became effective on April 8, 2022 with Appointed date of the Scheme, April 1, 2019.
The Company has 42 overseas subsidiary companies (including step-down subsidiaries), 9 subsidiary companies in India and 1 joint venture Company as on March 31, 2022.
Dr. Reddy's (WUXI) Pharmaceutical Co. Limited in China ceased to be a step-down subsidiary of the Company with effect from December 13, 2021, consequent to its liquidation. Aurigene Discovery Technologies Inc. in USA, ceased to be a step-down subsidiary of the Company with effect from March 23, 2022, consequent to its liquidation. Further, the Company acquired Nimbus Health GmbH (Nimbus) as a step-down subsidiary, on February 24, 2022.
During the year 2022-23, Dr. Reddy's Holdings Limited (the DRHL/ Amalgamating Company) got merged with Dr Reddy's Laboratories Ltd. (the Amalgamated Company) through the Scheme of Amalgamation and hence, the merger became effective on April 8, 2022.
Consequent to the merger with Dr. Reddy's Laboratories LLC, Russia, DRS LLC in Russia ceased to be a step down subsidiary of the Company with effect from July 1, 2022. Dr. Reddy's Laboratories B.V. in Netherlands, has ceased to be a step-down subsidiary of the Company with effect from January 25, 2023.
During the year 2023, the Company launched the generic version of Lenalidomide Capsules, a cancer drug used to treat myeloma in the United States; launched Sorafenib tablets, a drug used to treat a type of liver cancer called hepatocellular carcinoma; launched Timolol gel, an ophthalmic gel forming solution used to treat glaucoma.
Dr Reddy's Laboratories Ltd
Directors Reports
Dear Member,
Your Directors are pleased to present the 39th Annual Report of the Company for the
year ended March 31,2023.
FINANCIAL HIGHLIGHTS AND COMPANY AFFAIRS
Table 1 gives the consolidated and standalone financial highlights of the Company based
on Indian Accounting Standards (Ind AS) for FY2023 (i.e. from April 1, 2022 to March
31,2023) compared to the previous financial year.
The Company's consolidated total income for the year was C257.3 billion, which was up
by 17% over the previous year. Profit before tax (PBT) was C60.5 billion, representing an
increase of 98% over the previous year.
The Company's standalone total income for the year was C175.5 billion, which was up by
18% over the previous year. PBT was C38.7 billion, which was higher by 74% over the
previous year.
Revenues from lines of business and geographies given below are from the Company's IFRS
results.
Revenues from Global Generics were up by 19% and stood at C213.8 billion. There was
growth across businesses of North America Generics, Europe and India.
Revenues from North America stood at C101.7 billion, registering a strong year on year
growth of 36%. This was largely on account of revenue contribution from new products
launched, increase in volumes for some of our base products and favorable forex rates
movement, partly offset by high price erosions in some of our products. During the year,
the Company filed 12 Abbreviated New Drug Applications (ANDAs) in the USA. As of March 31,
2023, there were 86
generic filings awaiting approval with the US Food and Drug Administration (USFDA),
comprising 81 ANDAs and 5 NDAs filed under Section 505(b)(2) of the Federal Food, Drug and
Cosmetic Act.
Revenues from India stood at C48.9 billion, showing a year-on-year growth of 17%.
Revenues from Emerging Markets were C45.5 billion, which remained flat year- on-year.
Revenues from Europe were C17.6 billion, a year-on-year growth of 6%.
Revenues from Pharmaceutical Services and Active Ingredients (PSAI) stood at C29.1
billion, which was lower by 5% compared to previous year. During the year, the Company
filed 134 Drug Master Files (DMFs) worldwide, including 12 filings in the US.
TABLE 1 FINANCIAL HIGHLIGHTS
(H MILLION)
PARTICULARS |
CONSOLIDATED |
|
STANDALONE |
|
| |
FY2023 |
FY2022 |
FY2023 |
FY2022 |
| Total income |
2,57,252 |
2,20,296 |
175,538 |
1,48,872 |
| Profit before depreciation, amortization, impairment and tax |
73,316 |
50,867 |
47,943 |
30,479 |
| Depreciation and amortization |
12,502 |
11,652 |
9,232 |
8,143 |
| Impairment of non-current assets |
699 |
9,304 |
51 |
98 |
| Profit before tax and before share of equity accounted investees |
60,115 |
29,911 |
38,660 |
22,238 |
| Share of profit of equity accounted investees, net of tax |
370 |
703 |
- |
- |
| Profit before tax |
60,485 |
30,614 |
38,660 |
22,238 |
| Tax expense |
15,412 |
8,789 |
12,532 |
6,006 |
Net profit for the year |
45,073 |
21,825 |
26,128 |
16,232 |
| Opening balance of retained earnings |
1,60,341 |
1,42,395 |
154,030 |
1,41,373 |
| Net profit for the year |
45,073 |
21,825 |
26,128 |
16,232 |
| Other comprehensive income/(loss) |
- |
- |
|
- |
| Dividend paid during the year |
(4,979) |
(4,146) |
(4,979) |
(4,146) |
| Transfer to SEZ re-investment Reserve, net |
(131) |
571 |
(131) |
571 |
| Transfer to Debenture Redemption Reserve |
(76) |
(304) |
- |
- |
Closing balance of retained earnings |
2,00,228 |
1,60,341 |
175,048 |
1,54,030 |
Note: FY2023 represents fiscal year 2022-23, from April 1, 2022 to March 31,
2023, and analogously for FY2022 and other such labelled years.
DIVIDEND
Your Directors are pleased to recommend a dividend of C40 (800%) for FY2023, on every
equity share of C5/-. As per the Dividend Distribution Policy of the Company, the amount
of maximum dividend payout (including interim dividend) can be up to 20% of the cash
profit under consolidated financial statement prepared under Indian
Accounting Standards (IND-AS). The recommended dividend is in line with the provision
of the said policy.
The dividend, if approved at the 39th Annual General Meeting (“AGM”) will be
paid to those members whose names appear on the register of members of the Company as of
end of the day on July 11,2023. The total dividend pay-out will be approximately C666
crores, resulting
in a pay-out of 11.4% of the consolidated cash profit for the financial year ended
March 31, 2023. Such dividend will be taxable in the hands of the members, in terms of the
provisions of the Income Tax Act, 1961.
In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“SEBI Listing Regulations”), the Dividend
Distribution Policy, is available on the Company's website on https://www.
drreddys.com/cms/cms/sites/default/ files/2021-12/htmlCode%20%284%29.pdf
TRANSFER TO RESERVES
The Company has not proposed to transfer any amount to the general reserve for the year
ended March 31, 2023.
SHARE CAPITAL
The paid-up share capital of your Company increased by C0.51 million from C832.13
million to C832.64 million in FY2023 due to allotment of 102,027 equity shares of C5 each,
on exercise of stock options by eligible employees through the ‘Dr. Reddy's Employees
Stock Option Scheme, 2002' and ‘Dr. Reddy's Employees ADR Stock Option Scheme, 2007'.
The equity shares issued pursuant to the above Employee Stock Option Schemes rank pari-
passu with the existing equity shares of the Company
SCHEME OF AMALGAMATION
The Hon'ble National Company Law Tribunal (the “NCLT”), Hyderabad Bench, vide
order dated April 5, 2022, has approved the Scheme of Amalgamation and Arrangement (the
“Scheme”) for the merger of Dr. Reddy's Holdings Limited (the “DRHL/
Amalgamating Company”) with the Company (the “Amalgamated Company”). The
order of the Hon'ble NCLT was filed by both the companies with the Registrar of Companies,
Hyderabad, on April 8, 2022. Therefore, the merger became effective on April 8, 2022. The
appointed date of the Scheme was April 1, 2019.
Pursuant to the Scheme, 41,325,300 equity shares held by the Amalgamating Company in
the Company stands cancelled and the equal number of shares were issued and allotted by
the Company, on April 22, 2022, to the shareholders of Amalgamating Company, in aggregate,
in proportion to their shareholding in the Amalgamating Company. Effectively, there is no
change in the total issued and paid-up share capital of the Company pursuant to the said
Scheme, as equal number of shares were cancelled, as well as issued and allotted by the
Company.
PUBLIC DEPOSITS
The Company has not accepted any deposits covered under Chapter V of the Companies Act,
2013 (the “Act”).
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year, there was no change in the nature of business of the Company. Further,
there was no significant change in the nature of business carried on by its subsidiaries.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF
THE FINANCIAL YEAR AND DATE OF THE REPORT There have been no material changes and
commitments affecting the financial position of the Company which have occurred between
the end of the financial year of the Company to which the financial statements relate and
the date of this report.
SUBSIDIARIES AND ASSOCIATES
The Company has 40 overseas subsidiary companies (including step- down subsidiaries),
nine subsidiary companies (including step-down subsidiary) in India and one joint venture
company as on March 31, 2023.
DRS LLC in Russia ceased to be a step- down subsidiary of the Company with effect from
July 1,2022, consequent to its merger with Dr. Reddy's Laboratories LLC, Russia.
Dr. Reddy's Laboratories B.V. in Netherlands, ceased to be a step-down subsidiary of
the Company with effect from January 25, 2023, consequent to its merger with Reddy
Netherlands B.V., Netherlands.
Section 129(3) of the Act, states that where the Company has one or more subsidiaries
or associate companies, it shall, in addition to its financial statements, prepare a
consolidated financial statements of the Company and of all subsidiaries and associate
companies in the same form and manner as that of its own and also attach along with its
financial statements, a separate statement containing the salient features of the
financial statements of its subsidiaries and associates.
Hence, the consolidated financial statements of the Company and all its subsidiaries
and associates, prepared in accordance with Ind AS 110 and 111 as specified in the
Companies (Indian Accounting Standards) Rules, 2015, forms part of the Integrated Annual
Report. Moreover, a statement containing the salient features of the financial statements
of the Company's subsidiaries and joint ventures in the prescribed Form AOC-1, is attached
as Annexure I to this Board's Report. This statement also provides details of the
performance and financial position of each subsidiary and joint venture.
In accordance with Section 136 of the Act, the audited financial statements and related
information of the Company and its subsidiaries, wherever applicable, are available on the
Company's website: www.drreddys.com. These are also available for inspection during
regular business hours at our registered office in Hyderabad, India and/or in electronic
mode.
MATERIAL SUBSIDIARIES
In terms of Regulation 16(1)(c) of the SEBI Listing Regulations, Material Subsidiary
shall mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated
income or net worth, respectively, of the Company and its subsidiaries in the immediately
preceding accounting year. Accordingly, the Company has four material overseas subsidiary
companies as on March 31, 2023, namely, Dr. Reddy's Laboratories Inc. (USA), Dr. Reddy's
Laboratories SA (Switzerland), Dr. Reddy's Laboratories LLC (Russia) and Reddy Holding
GmbH (Germany).
Further, in terms of Regulation 24(1) of the SEBI Listing Regulations, at least one
Independent Director on the Board of the Company shall be a Director on the Board of an
unlisted material subsidiary, i.e. a subsidiary, whose income or net worth exceeds twenty
percent of the consolidated income or net worth respectively, of the Company and its
subsidiaries in the immediately preceding accounting year. In compliance with the said
provisions, Mr. Arun M Kumar (DIN: 09665138), Independent Director of the Company, was
appointed as a Director on the Board of Dr. Reddy's Laboratories Inc. (USA) w.e.f.
September 21,2022,
subsequent to the resignation of Dr. Bruce L A Carter (DIN:02331774).
Mr. Sridar Iyengar (DIN: 00278512), Independent Director of the Company, is a Director
on the Board of Dr. Reddy's Laboratories SA (Switzerland).
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company makes investments or extends loans/ guarantees to its wholly-owned
subsidiaries for their business purposes.
Details of loans, guarantees and investments covered under Section 186 of the Act,
along with the purpose for which such loan or guarantee was proposed to be utilized by the
recipient, form part of the notes to the financial statements provided in this Integrated
Annual Report.
CORPORATE GOVERNANCE AND ADDITIONAL SHAREHOLDERS' INFORMATION
A detailed report on the Corporate Governance systems and practices of the
Company is given in a separate chapter of this Integrated Annual Report. Similarly, other
information for shareholders is provided in the chapter on Additional Shareholders'
Information. The Company has also formulated a Group Governance Policy to monitor
governance of its unlisted subsidiaries across the globe.
A certificate from M/s. S.R. Batliboi & Associates LLP, Statutory Auditors of the
Company, confirming compliance with the conditions of corporate governance is attached to
the chapter on Corporate Governance.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on the Management Discussion and Analysis in terms of
Regulation 34 of the SEBI Listing Regulations is provided as a separate chapter in the
Integrated Annual Report.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
APPOINTMENTS
During the year, the members of the Company approved the appointment of
Mr. Arun M Kumar (DIN: 09665138), as an Independent Director of the Company through
Postal Ballot, with effect from August 1, 2022. The Board opined that the above
Independent Director possessed requisite experience and expertise (including the
proficiency).
RETIREMENT AND RESIGNATION
Dr. Bruce L A Carter (DIN: 02331774) and Mr. Prasad R Menon (DIN:
00005078) completed their terms as Independent Directors of the Company on July 30,
2022, and October 29, 2022, respectively.
Mr. Allan Grant Oberman (DIN: 08393837) tendered his resignation as an Independent
Director of the Company with effect from close of business hours on January 6, 2023, as he
was moving to a commitment outside the Company that will not allow him to be able to
devote sufficient time for his responsibilities as an Independent Director of the Company.
The Board placed on record its sense of deep appreciation for the services rendered by
the above Independent Directors to the Company.
RETIREMENT BY ROTATION
Mr. G V Prasad (DIN:00057433) is liable to retire by rotation at the forthcoming 39th
AGM and being eligible, seeks re-appointment. For reference of members, a brief profile of
Mr. G V Prasad (DIN:00057433) is given in the Chapter on Corporate Governance and
in the Notice convening the 39th AGM.
RE-APPOINTMENT OF WHOLETIME DIRECTOR
During the year, the members of the Company at its AGM held on July 29, 2022, approved
the re-appointment of Mr. K Satish Reddy (DIN: 00129701) as a Whole-time Director of the
Company, designated as the Chairman, for a period of five years, with effect from October
1,2022.
None of the Directors is disqualified under Section 164 of the Act. They are not
debarred from holding the office of Director pursuant to any order of SEBI or any other
authority. Further
details are provided in the chapter on Corporate Governance.
CHANGES IN KEY MANAGERIAL PERSONNEL (KMP)
During the year under review, there were no changes in the Key Managerial Personnel of
the Company. As on the date of this report, the Company has the following Key Managerial
Personnel as per Sections 2(51) and 203 of the Act:
S. NO. NAME OF KMP |
DESIGNATION |
| 1 Mr. G V Prasad |
Co-Chairman and Managing Director |
| 2 Mr. Erez Israeli |
Chief Executive Officer |
| 3 Mr. Parag Agarwal |
Chief Financial Officer |
| 4 Mr. K Randhir Singh |
Company Secretary, Compliance Officer & Head-CSR |
DECLARATION BY INDEPENDENT DIRECTORS
In accordance with Section 149(7) of the Act, each Independent Director has confirmed
to the Company that he or she meets the criteria of independence laid down in Section
149(6) of the Act, and is in compliance with Rule 6(3) of the Companies (Appointment and
Qualifications of Directors) Rules, 2014 and Regulation 16(1 )(b) of the SEBI Listing
Regulations. Further, each Independent Director has affirmed compliance to the Code of
Conduct for Independent Directors as prescribed in Schedule IV of the Act. The Board has
taken on record such declarations after due assessment of their veracity.
BOARD EVALUATION
Pursuant to the provisions of the Act, and the SEBI Listing Regulations, the Board has
carried out performance evaluation of its own performance, the Directors (including the
Chairman) individually, as well as the evaluation of the working of the Committees. An
independent external agency, EgonZehnder, a leadership advisory firm on board matters, was
engaged to conduct the Board evaluation for FY2023. The recommendations were discussed
with the Board and individual feedback was provided.
The Board evaluation process was completed for FY2023. Further details of Board
evaluation are given in the chapter on Corporate Governance.
APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
Assessment and appointment of members to the Board are based on a combination of
criteria that includes ethics, personal and professional stature, domain expertise, gender
diversity and specific qualifications required for the position. For appointment of an
Independent Director, the independence criteria defined in Section 149(6) of the Act, and
Regulation 16(1 )(b) of the SEBI Listing Regulations are also considered.
In accordance with Section 178(3) of the Act, Regulation 19(4) of the SEBI Listing
Regulations and on recommendation of the Company's Nomination, Governance and Compensation
Committee, the Board adopted a Remuneration Policy for Directors, KMP, senior management
and other employees that outlines the guidelines related to performance evaluation of
Directors, remuneration principles and Board diversity. The Policy forms part of the
chapter on Corporate Governance.
Our executive compensation program supports attracting, motivating, and encouraging
continuity of experienced and well-qualified executive officers who advance our critical
business objectives and promote the creation of shareholders' value over the long-term.
The key tenets of our philosophy are designed to:
a) Attract highly talented individuals from within and across industries drawing from a
diverse pool of global talent.
b) Provide long term and short-term incentives that advance the interests of
shareholders and deliver levels of pay commensurate with performance.
The three principal components of the compensation package include, base salary, annual
variable pay, and equity- based long-term incentives. In making decisions with respect to
each element of compensation, the competitive market for executives and compensation
levels provided by comparable companies are considered.
Pay practices at companies with which Dr. Reddy's competes for talent, including those
engaged in similar activities are reviewed from time to time.
We believe that information regarding pay practices at other companies is useful to
assess the reasonableness and competitiveness of our own. Our approach is to be market
aware on pay levels and not entirely market driven.
We generally position target executive pay at the top quartile of pay packages for
executives in similar positions, responsibilities and/or experience in similar companies
of comparable size.
We identify certain roles that are fungible across multiple industries and our
comparative pool may not be limited to peer generic pharmaceutical organisations. In such
cases - a wider sample is selected comprising of non-pharma marquee organisations
operating in the country with whom Dr. Reddy's competes for talent.
Executive compensation is reviewed annually. In general executive increment percentages
are lesser than the average with the frontline receiving the highest increase. A higher
increase may be made in the event of a role change, promotion, or in exceptional
circumstances. The Company's performance, affordability and individual performance are
other considerations, while deciding on compensation.
Our current performance management follows a balanced scorecard approach comprising of
current business performance, future business performance, ESG, digital, people,
compliance and safety related metrics.
Each parameter is devised into a metric, financial or otherwise and is measured
throughout the performance year. Nonfinancial parameters have a cap of 100% achievement
while financial parameters are scored based on a predetermined grid. Additional
considerations such as wind-falls, impairments and one-offs are measured separately.
Our performance management process is specifically adapted to different employee
cohorts based on their specific needs, the overall principles remain the same across all
the models.
Performance evaluation of Management Council (“MC”) member's focuses on
achievement of MC Scorecard. Individual MC evaluation focusses on achievement of:
• the BU (Business Unit) scorecard for the year that contributes to the delivery
of the overall Company's strategy.
• demonstration of desired behaviours which measures the commitment to sustainable
growth by focussing on performance on non-financial parameters centered around the
Company's leadership behaviours. Also considered is the contribution of the individual to
the wider enterprise agenda.
NUMBER OF BOARD MEETINGS
The Board of Directors met eight times during the year. In addition, an annual Board
retreat was held to discuss strategic matters. The intervening gap between the meetings
was within the period prescribed under the Act and the SEBI Listing Regulations. Details
of Board meetings and the Board retreat are given in the chapter on Corporate
Governance.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
In terms of requirements under Schedule IV of the Act and Regulation 25(3) of the SEBI
Listing Regulations, four separate meetings of the Independent Directors were held during
FY2023. Further details are mentioned in the chapter on Corporate Governance.
COMMITTEES OF THE BOARD
As on March 31, 2023, the Board has the following Committees:
i) Audit Committee;
ii) Stakeholders'
Relationship Committee;
iii) Nomination, Governance and Compensation Committee;
iv) Sustainability and Corporate Social Responsibility Committee;
v) Risk Management Committee;
vi) Science, Technology and Operations Committee; and
vii) Banking and Authorisations Committee
All the recommendations made by the Board committees, including the Audit Committee,
were accepted by the Board. The details of the above Committees are given in the Chapter
on Corporate Governance.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act, your Directors state that:
1. Applicable accounting standards have been followed in the preparation of the annual
accounts and that no material departures have been made from the same;
2. Accounting policies have been selected and applied consistently. Judgments and
estimates made are reasonable and prudent, so as to give a true and fair view of the state
of affairs of the Company at the end of the FY2023 and of the profit of the Company for
that period;
3. Proper and sufficient care has been taken to maintain adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
4. Annual accounts have been prepared on a going concern basis;
5. Adequate internal financial controls for the Company to follow have been laid down
and these are operating effectively; and
6. Proper and adequate systems have been devised to ensure compliance with the
provisions of all applicable laws and these systems are operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has in place adequate internal financial controls with reference to its
financial statements. These controls ensure the accuracy and completeness of the
accounting
records and the preparation of reliable financial statements.
ENTERPRISE RISK MANAGEMENT (“ERM”)
The Company has a Risk Management Committee of the Board, consisting entirely of
Independent Directors.
Details of the Committee and its terms of reference are set out in the chapter on Corporate
Governance.
The Audit Committee and Risk Management Committee review key risk elements of the
Company's business, finance, operations and compliance, and their respective mitigation
strategies.
The Risk Management Committee reviews strategic, business, compliance and operational
risks whereas the Audit Committee reviews issues around ethics and fraud, internal control
over financial reporting (ICOFR), as well as process risks and their mitigation
The Company's Executive Risk Management Committee operates under the Company's Risk
Management Policy and focuses on risks associated with the Company's business and
compliance matters. This Committee periodically reviews matters pertaining to risk
management. Additionally, the Enterprise wide Risk Management (ERM) function helps the
Board and the Management to prioritize, review and measure business risks against a
pre-determined risk appetite, and their suitable response, depending on whether such risks
are internal, strategic or external.
During FY2023, focus areas of Risk Management Committee included review of risks and
mitigations related to cyber security, data privacy, data governance, ethics and
compliance risk, quality, supply chain management, geo-political risks and business
continuity, foreign exchange risk, pharmacovigilance and environmental risk with focus on
water risk.
RELATED PARTY TRANSACTIONS
In line with the requirements of the Act and the SEBI Listing Regulations, your Company
has a Policy on Materiality of Related Party Transactions and Dealing with Related Party
Transactions, which is also available on the Company's website at https://www.drreddys.com/investors/
governance/#governance#policies-and- documents. The Policy intends to ensure
that proper reporting, approval and disclosure processes are in place for all
transactions between the Company and related parties.
In accordance with Section 134(3)(h) of the Act, and Rule 8(2) of the Companies
(Accounts) Rules, 2014, the particulars of the contracts or arrangements with related
parties referred to in Section 188(1) of the Act, in Form AOC-2 is attached as Annexure
II to this Board's Report. All related party transactions and subsequent modifications
are placed before the Audit Committee for review and approval. Prior omnibus approval is
obtained for related party transactions on a quarterly basis for transactions which are of
repetitive nature and/ or entered in the ordinary course of business and are at arm's
length. All contracts and arrangements with related parties were at arm's length and in
the ordinary course of business of the Company. Details of related party disclosures form
part of the notes to the financial statements provided in the Integrated Annual Report.
VIGIL MECHANISM/ WHISTLEBLOWER/ OMBUDSPERSON POLICY
The Company has an Ombudsperson Policy (Whistle-Blower/Vigil mechanism) to report
concerns. Reporting channels under the vigil mechanism include an independent hotline, a
web based reporting site (drreddys.ethicspoint. com) and a dedicated e-mail to Chief
Compliance Officer. The Ombudsperson Policy also safeguards against retaliation of those
who use this mechanism. The Audit Committee Chairperson is the Chief Ombudsperson. The
Policy also provides for raising concerns directly to the Chief Ombudsperson. Details of
the Policy are available on the Company's website: https://www.drreddys.com/
investor#governance#ombudsperson- policy.
STATUTORY AUDITORS
M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No.
101049W/E300004) were reappointed as Statutory Auditors of the Company at the 37th AGM
held on July 28, 2021, for a period of five years till the conclusion of the 42nd AGM to
be held in the year 2026.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Act, and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, M/s. Makarand M. Joshi & Co., Practicing Company
Secretaries (Certificate of Practice No. 3662), Mumbai, India, were appointed as
Secretarial Auditors of the Company for FY2023. The Secretarial Audit Report for FY2023 is
annexed as Annexure III to this Report.
Further, in compliance with Regulation 24A of the SEBI Listing Regulations, the Annual
Secretarial Compliance Report issued by the Secretarial Auditor, will be submitted to the
stock exchanges within the statutory timelines.
Based on the consent received from M/s. Makarand M. Joshi & Co., Practicing Company
Secretaries (Certificate of Practice No. 3662), Mumbai, India and on the recommendation of
the Audit Committee, the Board has approved their appointment as the Secretarial Auditor
of the Company for FY2024. They have confirmed their eligibility for the said
reappointment.
COST AUDITOR
Pursuant to Section 148(1) of the Act, read with the relevant Rules made thereunder,
the Company maintains the cost records in respect of its ‘pharmaceuticals' business.
On the recommendation of the Audit Committee, the Board has appointed M/s. Sagar &
Associates,
Cost Accountants (Firm Registration No. 000118) as Cost Auditor of the Company for
FY2024 at a remuneration of C900,000 (Rupees Nine Lakhs only) plus reimbursement of
out-of-pocket expenses at actuals and applicable taxes. M/s. Sagar & Associates have
confirmed that they are free from disqualification specified under Section 141(3) and
proviso to Section 148(3) read with Section 141(4) of the Act and that the appointment
meets the requirements of the Act. They have further confirmed their independent status
and an arm's length relationship with the Company.
The provisions of the Act also require that the remuneration of the Cost Auditors be
ratified by the members and therefore, the same is recommended for approval of the members
at the
forthcoming 39th AGM. As a matter of record, relevant Cost Audit Reports for FY2022
were filed with the Central Government on August 26, 2022, within the stipulated timeline.
The Cost Audit Report for FY2023 will also be filed within the timeline.
AUDITORS' QUALIFICATIONS, RESERVATIONS, ADVERSE REMARKS OR DISCLAIMERS
There are no qualifications, reservations, adverse remarks or disclaimers by the
Statutory Auditors in their report, or by the Practicing Company Secretary in the
Secretarial Audit Report. During the year, there were no instances of frauds reported by
Auditors under Section 143(12) of the Act.
SECRETARIAL STANDARDS
In terms of Section 118(10) of the Act, the Company complies with Secretarial Standards
1 and 2, relating to the ‘Meetings of the Board of Directors' and ‘General
Meetings', respectively as issued by the Institute of Company Secretaries of India
(“ICSI”) and approved by the Central Government. The Company has also
voluntarily adopted the recommendatory Secretarial Standards 3 on ‘Dividend' and
Secretarial Standards 4 on ‘Report of the Board of Directors' issued by the ICSI.
SIGNIFICANT/MATERIAL ORDERS PASSED BY COURTS/ REGULATORS/TRIBUNALS
Settlement with the State of Texas: In
November 2014, the State of Texas commenced a formal inquiry into the Company's
marketing, sales, pricing and price reporting for its generic drugs dispensed in this
State. The Company cooperated with this inquiry. On June 1,2022, the Company entered into
a Settlement Agreement with the State of Texas. Pursuant to this settlement, on July 6,
2022, payment in the full amount of $12,900,000 was made to the State of Texas, with no
admission of liability.
Veraring Litigation: A Complaint was filed on November 15, 2021, in the Supreme
Court of the State of New York, County of New York (trial court level) by Teva
Pharmaceutical Industries Ltd. (“Teva”) against Dr. Reddy's Laboratories, S.A.
(Case Index No. 656499/2021). This Complaint was subsequently amended by
Teva on January 26, 2022. In its amended Complaint, Teva alleges that the Company
breached the supply agreements between the parties relating to Veraring, failed to pay
carrying costs, and breached the implied covenant of good faith and fair dealing, seeking
monetary damages and all other remedies available under law. On January 6, 2022, the
Company asserted counterclaims against Teva, asserting that Teva breached its contractual
obligations to the Company by, among other things, failing to adhere to cGMP and producing
product unfit for human use, seeking monetary damages and all other remedies available
under law. On March 15, 2023, Dr. Reddy's Laboratories, S.A., on behalf of itself and
affiliates, entered into a Settlement Agreement with Teva, on behalf of itself and
affiliates, relating to the Veraring Litigation and Veraring. Pursuant to the Settlement
Agreement, all claims between the parties have been dismissed with prejudice and without
any admission of liability by any of the parties.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has a Policy to ensure prevention, prohibition and redressal of sexual
harassment at the workplace. It has an Apex Committee and an Internal Complaints Committee
in compliance with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, which operate under a defined framework
for complaints pertaining to sexual harassment at workplace. The details are available in
the Principle 5 of the Business Responsibility and Sustainability Report as well as
in the Corporate Governance Report forming part of this Integrated Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
As per Section 135 of the Act, the Company has a Board-level Committee, namely,
Sustainability and Corporate Social Responsibility (SCSR) Committee. During the year, the
name of the CSR Committee has been changed to SCSR Committee to act as nodal committee on
overall sustainability goals and progress apart from CSR terms of reference. As on March
31, 2023, the Committee consists of Dr. K P Krishnan (Chairman), Ms. Kalpana Morparia, Mr.
G V Prasad and Mr. K Satish Reddy. Based on the recommendation of the said Committee, the
Board has adopted a CSR policy that provides guiding principles for selection,
implementation and monitoring of CSR activities and formulation of the annual action plan.
During the year, the Committee monitored the CSR activities undertaken by the Company
including the expenditure incurred thereon as well as implementation and adherence to the
CSR policy. An impact assessment of the eligible projects has been carried by an
independent agency and the report of such impact assessment was noted by the SCSR
Committee and the Board. Details of the CSR Policy and initiatives taken by the Company
during the year are available on the Company's website: www.drreddys.com. The
report on CSR activities as well as executive summary of the impact assessment report are
attached as Annexure IV to this Board's Report.
INTEGRATED REPORT
Your Company has voluntarily adopted the Integrated Annual Report for FY2023, which
includes both financial and non-financial information. The reporting weaves together our
purpose, values, strategy, governance, performance and future outlook, all of which
influence the material aspects of our business.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The SEBI, vide its circular dated May 10, 2021, made Business Responsibility and
Sustainability Report (BRSR) mandatory for the top 1,000 listed companies (by market
capitalization) from FY2023, while disclosure was voluntary for FY2022.
The Company had voluntarily published its first BRSR for FY2022 to provide enhanced
disclosures on ESG practices and priorities of the Company.
The Business Responsibility and Sustainability Report for FY2023 as mentioned
under Regulation 34 of the SEBI Listing Regulations, is given as a separate chapter in
this Integrated Annual Report.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Providing cures and reducing the disease burden are central to our purpose as a leading
pharma company. We believe that society and the environment are interdependent, and truly
being sustainable supports human health and well-being, a sustainable planet, and a
well-integrated society. In 2022, building on our incremental work in sustainability, we
launched our sustainability vision for 2030 and published our renewed ESG goals and
targets. Our sustainability goals span across diverse areas we care about - from
environmental and social sustainability to stronger governance, from greater access and
affordability of medicines to public health issues, from greater economic equity and
accountability to acceptance of greater social parity. They reveal our bold vision for the
future and what we collectively strive to achieve every day.
The Company has a Board Committee, namely, Sustainability and Corporate Social
Responsibility (SCSR) Committee, as the nodal committee to review the ESG and
sustainability goals of the Company, its implementation, progress and other related
matters as per its terms of reference.
The ESG details are available in the initial section and Business Responsibility and
Sustainability Report of this Integrated Annual Report.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND
(IEPF)
Pursuant to the provisions of the Act, read with IEPF Authority (Accounting, Audit,
Transfer and Refund) Rules,
2016, as amended, declared dividends which remained unpaid or unclaimed for a period of
seven years have been transferred by the Company to the IEPF, which has been established
by the Central Government.
The above Rules also mandate transfer of shares on which dividends are lying unpaid and
unclaimed for a period of seven consecutive years to IEPF. The Company has issued
individual notices to the members whose dividend is unclaimed and unpaid and advising them
to claim their dividend. The details of transfer of unpaid and unclaimed amounts to IEPF
are given in the chapter on Additional Shareholders Information.
EMPLOYEES STOCK OPTION SCHEMES
The Company has three employee stock option schemes namely, ‘Dr. Reddy's Employees
Stock Option Scheme, 2002', ‘Dr. Reddy's Employees ADR Stock Option Scheme, 2007',
and ‘Dr. Reddy's Employees Stock Option Scheme, 2018' (the “Schemes”). The
term of Dr. Reddy's Employees Stock Option Scheme, 2002, ended on January 28, 2022.
However, the options already granted under the 2002 Scheme are eligible for exercise, in
terms of the Scheme. There are no other changes in the said schemes during the year. The
Schemes are in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021.
The details of Company's stock option Schemes as required under Regulation 14 of the
SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are available on
the Company's website: https://www.drreddys.com/ investors/governance/policies-and-
documents/#governance#policies- anddocuments
Your Company's Secretarial Auditors, M/s. Makarand M. Joshi & Co., Practising
Company Secretaries, have certified that the Employee Stock Option Schemes of your Company
have been implemented in accordance with the Regulations and the resolutions passed by the
Members in this regard.
The details also form part of note 2.25 of the notes to accounts of the standalone
financial statements.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are attached as Annexure V to this Board's
Report.
In terms of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing
the
names and other particulars of the employees drawing remuneration in excess of limits
set out in the said rules forms part of the Integrated Annual Report.
Considering the provisions of Section 136 of the Act, the Integrated Annual Report,
excluding the aforesaid information, is being sent to the members of the Company and
others entitled thereto. The said information is available for inspection at the
registered office of the Company or through electronic mode, during business hours on
working days up to the date of the forthcoming 39th AGM, by members. Any member interested
in obtaining a copy thereof may write to the Company Secretary in this regard.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars as prescribed under Section 134(3)(m) of the Act, read with Rule 8(3) of
the Companies (Accounts) Rules, 2014, are attached as Annexure VI to this Board's
Report.
ANNUAL RETURN
The Annual Return of the Company as on March 31, 2023, in terms of the provisions of
Section 134(3)(a) of the Act, is available on the Company's website: https://www.drreddys.com/investors/
reports-and-filings/annual-reports/
ACKNOWLEDGMENT
Your Directors place on record their sincere appreciation for the significant
contribution made by your Company's employees through their dedication, hard work and
commitment, as also for the trust reposed in your Company by the medical fraternity and
patients. The Board of Directors also acknowledges the support extended by the analysts,
bankers, Government of India and various countries and other government agencies, media,
customers, business partners, members and investors at large.
The Board looks forward to your continued support in the Company's endeavor to
accelerate access to innovative and affordable medicines, because Good Health Can't Wait.
For and on behalf of the Board of Directors
K Satish Reddy
Chairman DIN: 00129701
Place: Hyderabad Date: May 10, 2023