Dr Reddy Laboratories : . Reddy's BRSR 2023 24

Integrated Annual Report 2023-24

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

2024

108

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Executive Summary

Our Business Responsibility & Sustainability Report demonstrates our commitment to the nine principles of the National Guidelines on Responsible Business Conduct ("NGRBC") as well as our progress against the stated objectives across environmental, social and governance ("ESG") parameters.

Our Company's purpose of accelerating access to affordable and innovative medicines across the world provides the foundation for ushering in a healthier tomorrow for all.

A legacy spanning over forty years, our core tenets are deep science, progressive people practices and robust corporate governance.

We continue to focus on creating value for all our stakeholders and towards our goal of serving over 1.5 bn patients by 2030.

The BRSR disclosures are in terms of Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and consists of three sections:

• Section A provides a broad overview of the business, its offerings, business and operations footprint, employees, related parties, Corporate Social Responsibility (CSR) and transparency
• Section B covers management and process disclosures related to the businesses aimed at demonstrating the structures, policies and processes put in place towards adopting the NGRBC Principles and Core Elements
• Section C provides essential and leadership indicator-wise disclosures mapped to the nine principles of NGRBC

For FY2024, DNV Business Assurance India Private Limited ("DNV") has issued Independent Assurance Statement for reasonable assurance of the core indicators of BRSR. DNV has also issued the said statement for limited assurance of other than core indicators of BRSR.

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Key Highlights of BRSR FY2024

General and Management Disclosures

• Reasonable Assurance of BRSR core indicators and Limited Assurance of remaining section of BRSR
• Presence in 75 countries outside India

• 36.4% of Board members are women directors
• 0.3% of workforce are differently abled
• Turnover rate for employees and workers are 18.4% and 9.7%, respectively in FY2024

• Comprehensive disclosure of material risk and opportunities
• Sustainability and CSR Committee act as nodal Committee for ESG related matters
• Comprehensive disclosure of ESG goals and progress made during the year

Principle 1

Principle 2

Principle 3

Conduct and govern with integrity, and in a manner that is ethical, transparent and accountable

• 70% of our employees and 99% of workers received periodic training, viz., on business, business conduct and ethics, compliance regulations,
  and ESG parameter
• No disciplinary action against Directors/KMPs/Employees/ Workers by any law enforcement agencies for charges of bribery/corruption
• 0.52% of purchases are from related parties

Provide goods and services in a manner that is sustainable and safe

• We conducted Life Cycle Assessment for 3 of our API products and these have no significant social or environmental risks
• 100% of our inputs are sourced from suppliers who abide by our Supplier Code of Conduct
• 99% of our global hazardous waste are sent to industries and recyclers for co-processing and recycling
• 90% of cold boxes packaging materials are reused at CFA or stockist level

Respect and promote the well- being of all employees, including those in value chains

• 100% of our permanent employees and workers are covered under health and accident insurance, and maternity and paternity benefits
• 99.1% return to work rate and 83.6% retention rate for our permanent employees post parental leave
• 92% employees and 99.2% workers were provided skill upgradation training
• 42.5% employees and 60.7% workers were provided health and safety measures training
• 98.4% of employees have undergone career and performance development reviews
• LTIFR per one mn-person hours worked-0.14

110

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Principle 4

Respect the interests of and be responsive to all its stakeholders

• Comprehensive stakeholder engagement to understand their expectations, inform our strategy and communicate our progress
• Evolved process for considering feedback of the stakeholders on economic, environment and social topics by the Board
• Evolved process for engagement and support of the vulnerable and marginalised stakeholders group

Principle 5

Respect and promote human rights

• 72.7% of permanent employees were given training on human rights
• 100% of our employees and permanent workers are paid more than the minimum wage
• Median remuneration of male employees were ` 6 lakhs per annum and female employees were ` 9 lakhs per annum
• 100% of plant or offices were assessed for human rights issues

Principle 6

Respect and make efforts to protect and restore the environment

• 48% of total energy consumption is from renewable sources
• 7% reduction in fresh water intensity from previous financial year
• 14% absolute reduction in Scope 1 & 2 emissions from previous financial year
• 56% of electricity consumption through renewable power
• 102,582 KL of harvested rainwater consumed
• 6% absolute reduction in Scope 3 emissions from previous financial year

Principle 7

Influencing public and regulatory policy, in a responsible and transparent manner

• Associated with eight trade and industry chambers/associations to foster dialogue on industry growth drivers, innovation and shaping public policy
• Public policy advocacy on important issues such as regulatory changes, R&D and intellectual property protection, access and affordability, and marketing practices
• No adverse order/action from regulatory authorities in issues related to anti-competitive conduct

Principle 8

Promote inclusive growth and equitable development

• 45% of input materials were sourced from within India
• Job creation in terms of remuneration in Rural, Semi-urban and Urban were 3.5%, 1.6%
  and 10.2%, respectively, of total during the year
• Positively impacted 496,618 individuals through CSR initiatives

Principle 9

Engage with and provide value to the consumers in a responsible manner

• 100% of our formulation products representing 87.9% of revenue carry information about safe and responsible usage on product labelling and packaging
• No forced recalls, 22 voluntary recalls
• No data breaches found during the reporting period
• No major service disruptions

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Integrated Annual Report 2023-24

Business Responsibility and Sustainability Report (BRSR) FY2024

SECTION A GENERAL DISCLOSURE

I	Details of Listed Entities
1	Corporate Identity Number (CIN) of the	:	L85195TG1984PLC004507
	Listed Entity
2	Name of the Listed Entity	: Dr. Reddy's Laboratories Limited
3	Year of incorporation	:	1984
4	Registered office address	: 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India
5	Corporate address	: 8-2-337, Road No. 3, Banjara Hills, Hyderabad - 500 034, Telangana, India
6	E-mail	:	[e-mail]
7	Telephone	: [phone]
8	Website	:	www.drreddys.com
9	Financial year for which reporting is	:	April 1, 2023 to March 31, 2024
	being done
10	Name of the Stock Exchange(s) where	:	BSE Limited
	shares are listed		National Stock Exchange of India Limited
			New York Stock Exchange, Inc
			NSE IFSC Ltd
11	Paid-up Capital	:	` 834,091,330
12	Name and contact details (telephone,	: Mr. K Randhir Singh
	email address) of the person who may		Company Secretary, Compliance Officer & Head-CSR
	be contacted in case of any queries on		E-mailid:[e-mail]
	the BRSR report		Contact No: [phone]
13	Reporting boundary	: The disclosure under BRSR is on a consolidated basis unless otherwise specified at the
			respective section.
14	Name of Assurance provider	: DNV Business Assurance India Private Limited (DNV)
15	Type of Assurance obtained	: BRSR Core - Reasonable assurance
			Remaining part of BRSR - Limited assurance

1. Products and Services

16. Details of Business Activities (Accounting for 90% of the turnover)

Sl. No. Description of Main Activity	Description of Business Activity	% of turnover of the entity
1	Pharmaceuticals	Development, manufacturing & sale of	100
		pharmaceutical products, and services

17. Products/services sold by the entity (accounting for 90% of the entity's Turnover)

Sl. No.	Products/Service	NIC Code	% of Total Turnover Contributed
1	Development, manufacturing & sale of generic formulations including	21009	88
	biosimilars
2	Development, manufacturing & sale of active pharmaceutical	21009	11
	ingredients & custom pharmaceutical services

112

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

1. Operations

18. Number of locations where plants and/or operations/offices of the entity are situated

Location	No. of plants (Including R&D sites/operations)	No. of offices	Total
National	24	16	40
International	7	62	69

19. Markets served by the entity

a.	No. of Locations
	Locations	Numbers
	National (No. of States & Union Territories)	36
	International (No. of Countries)	75

1. What is the contribution of exports as a percentage of the total turnover of the entity
   Out of the total turnover of ` 19,276 cr (excluding service income, licence fees and other operating income) on standalone basis, the turnover of the products sold in India is ` 4,658 cr (24%) and that of other countries is ` 14,618 cr (76%).
2. A brief on types of customers
   Our customers include wholesalers, distributors, pharmacy chains and hospitals, government institutions and other pharmaceutical companies.

IV Employees

20. Details as at the end of the financial year

a. Employees and workers (including differently abled):

Sl.	Particulars	Total		Male		Female		Others
No.			No.	%	No.	%	No.	%
Employees
1	Permanent	26,343	21,119	80.2	5,219	19.8	5	0.0
2	Other than permanent	8,226	5,476	66.6	2,750	33.4	0	0
Total		34,569	26,595	76.9	7,969	23.1	5	0.0
Workers
1	Permanent	643	600	93.3	43	6.7	0	0
2	Other than permanent	8,657	6,936	80.1	1,721	19.9	0	0
Total		9,300	7,536	81.0	1,764	19.0	0	0

1. Differently abled employees and workers:

Sl.	Particulars	Total		Male		Female		Others
No.			No.	%	No.	%	No.	%
Differently abled Employees
1	Permanent	104	67	64.4	37	35.6	0	0
2	Other than permanent	22	13	59.1	9	40.9	0	0
Total		126	80	63.5	46	36.5	0	0
Differently abled Workers
1	Permanent	0	0	0	0	0	0	0
2	Other than permanent	21	21	100	0	0	0	0
Total		21	21	100	0	0	0	0

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Integrated Annual Report 2023-24

21. Participation/inclusion/representation of women

Particulars	Total	No. of Females	% of Females
Board of Directors	11	4	36.4
Key Management Personnel (KMPs)1	3	0	0

1 The KMP of the Company are Co-chairman and Managing Director, Chief Executive Officer, Chief Financial Officer and Company Secretary. Since Co-chairman and Managing Director is already included under heading Board of Directors, the same has not been again included under heading KMP.

22. Turnover rate for permanent employees and workers

Particulars		FY2024			FY2023			FY2022
	Male	Female	Others	Total	Male	Female	Others	Total	Male	Female	Others	Total
Permanent Employees (%)	18.2	19.0	12.5	18.4	21.1	19.2	42.9	20.8	20.5	21.4	27.3	20.6
Permanent Workers (%)	8.0	34.1	0	9.7	23.6	44.7	0.0	24.9	21.8	28.6	0.0	22.2

V Holding, Subsidiary and Associate Companies (including joint ventures)

23. Names of holding/subsidiary/associate companies/joint ventures

The details of holding/subsidiary/associate companies/joint ventures are given in Form AOC-1, as Annexure-I to the Board's Report and this forms part of the Integrated Annual Report

Do the entities indicated in above table, participate in the business responsibility initiatives of the listed entity? (Yes/No)

Yes, all the entities, wherever applicable, participate in the relevant Business Responsibility initiatives of the Company, except the joint venture companies. The specific exclusion wherever applicable has been given in the respective section in BRSR.

VI CSR Details

24. Whether CSR is applicable as per Section 135 of the Companies Act, 2013: Yes1

(i)	Turnover (` in mn)	194,838
(ii)	Net worth (` in mn)	242,408

1 As per IND AS Standalone Financial Statements

VII Transparency and Disclosures Compliances

25. Complaints/Grievances on any of the principles (Principles 1 to 9) under the National Guidelines on Responsible Business Conduct:

Stakeholder	Grievance	(If Yes, then provide		FY2024		FY2023
group from whom	redressal	web-link for grievance	No. of	No. of	Remarks	No. of	No. of Remarks
complaint is	mechanism	redressal policy)	complaints	complaints		complaints	complaints
received	in place		filed	pending		filed	pending
	(Yes/No)		during the	resolution		during the	resolution
				year	at close of
			year	at close of
					the year
				the year
Communities	Yes1	https://www.drreddys.	0	0		0	0
		com/investor#governance
Investors (other than	Yes1	https://www.drreddys.	0	0		0	0
shareholders)		com/investor#governance
Shareholders	As per	https://www.drreddys.	10	0		8	0
	applicable	com/investor#governance
	law
Employees and	Yes1	https://www.drreddys.	274	60		234	34
workers		com/investor#governance
Customers	Yes1	https://www.drreddys.	0	0		0	0
		com/investor#governance

114

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Stakeholder	Grievance	(If Yes, then provide		FY2024		FY2023
group from whom	redressal	web-link for grievance	No. of	No. of	Remarks	No. of	No. of Remarks
complaint is	mechanism	redressal policy)	complaints	complaints		complaints	complaints
received	in place		filed	pending		filed	pending
	(Yes/No)		during the	resolution		during the	resolution
				year	at close of
			year	at close of
					the year
				the year
Value chain partners	Yes1	https://www.drreddys.	49	7		25	3
		com/investor#governance
Others (please	Yes1	https://www.drreddys.	94	29		69	11
specify)		com/investor#governance

1 Some of the policies guiding the Company's conduct with all its stakeholders, including grievance mechanisms are placed on the Company's website. The hyperlink is: https://www.drreddys.com/investor#governance. In addition, there are internal policies placed on the intranet of the Company.

26. Overview of the entity's material responsible business conduct issues

Material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk

or an opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along with its financial

implications

Sl.	Material	Indicate	Rationale for identifying the risk/		In case of risk, approach to	Financial implications
No.	issue	whether	opportunity		adapt or mitigate	of the risk or
	identified	risk or				opportunity (Indicate
		opportunity				positive or negative
		(R/O)				implications)
1	Enhancing	Opportunity	A significant proportion of patients	y	We are committed to serving 1.5 bn	Positive
	availability of		in numerous low and middle-income		patients by 2030 and bring at least three
	product		countries encounter financial		innovative solutions to improve the
			limitations when attempting to obtain		standard of treatment every year from
			affordable medicines.		2027. We are working to achieve our
			As a pharmaceutical company,		goals by launching more innovative drugs
			we prioritise making life-saving		and expanding our product portfolio,
			medicines accessible, available,		increasing our go-to-market through
			and affordable for patients. Also,		diverse collaborations and licensing
			due to our role in society, we are		arrangements, and through greater
			uniquely positioned to reduce health		presence in public health
			disparities, and enable improved	y	We are partnering with multilateral and
			health outcomes.
				donor agencies to address the global

disease burden, neglected tropical diseases, and emergency disease areas. We remain deeply committed to taking a holistic approach to healthcare, running several innovative programmes, offering one-of-its-kind patient care and disease management initiatives that service patients digitally or through hybrid means. We also participate in strengthening public health delivery systems through the training and capacity building of health workers and local stakeholders

y We also offer patient assistance programmes such as Sparsh for underprivileged cancer patients in India, M-Free and Mi-Free for patients on Nerivio®, and co-pay savings programmes in the US for multiple products

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Material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk

or an opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along with its financial

implications

Sl.	Material	Indicate	Rationale for identifying the risk/	In case of risk, approach to	Financial implications
No.	issue	whether	opportunity	adapt or mitigate	of the risk or
	identified	risk or			opportunity (Indicate
		opportunity			positive or negative
		(R/O)			implications)
2	Regulatory	Risk	Regulatory guidelines and	y We are fully dedicated to quality and	Negative
	compliance		requirements heavily regulate the	have robust quality processes and
			manufacturing of our products,	systems in place at our developmental
			including manufacturing quality	and manufacturing facilities to ensure that
			every product is safe and of high quality
			standards. Periodic inspections are
			conducted on our manufacturing	y We have integrated "Quality by Design"
			sites, and if the regulatory and	to build quality into all processes and use
			quality standards and systems are	quality tools to minimise process risks
			not found adequate, it could result in	y We continue to spend significant
			observations. This might impact our	time, money and effort in the areas
			ability to meet patient demand and	of production and quality testing to
			generate value for our stakeholders.	help ensure full compliance with
				cGMP regulations
				y We leverage information technology
				to digitise and enhance our quality
				assurance and quality control processes
				y Our suppliers are subjected to periodic
				evaluation processes that prioritise quality
				parameters and ensure compliance with
				current Good Manufacturing Practice
				requirements. We along with our CFA
				warehousing facilities comply with GDP
				(Good Distribution Practices)
				y We are continuously focussed on
				improving our quality culture across
				the organisation
3	Pharma-	Risk	Our patients health may be impacted	y We have a mature system in place to	Negative
	covigilance		if we are not able to monitor and	continuously monitor the benefit-risk
	(PV)		prevent the adverse side effects	profile of our products to ensure benefits
			caused by our drugs.	overweigh the product-related safety
			risks for patients
				y Our pharmacovigilance standards are in line
				with globally recognised safety benchmarks,
				and we maintain compliance with region/
				country-specific legislative requirements
				y All employees go through an annual
				mandatory pharmacovigilance training

116

Corporate Overview

Strategic Review

Statutory Reports

Financial Statements

Material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk

or an opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along with its financial

implications

Sl.	Material	Indicate	Rationale for identifying the risk/	In case of risk, approach to	Financial implications
No.	issue	whether	opportunity	adapt or mitigate	of the risk or
	identified	risk or			opportunity (Indicate
		opportunity			positive or negative
		(R/O)			implications)
4	Water	Risk/	The potential risks to water and	y Water risks are assessed as part of an	Negative/Positive
	Management	Opportunity	sanitation services posed by	established enterprise risk management
			climate change include damage to	framework periodically. We conducted
	Waste		infrastructure, leading to the loss of	thorough water risk and evaluation
		studies in all of our watersheds to identify
	Management		services, and deterioration in water
		alternative rich water resources
			quality - impacts that all increase
			y Our water management strategy involves
			risks to health. Water is a critical
			input into the manufacturing of	key focus areas including water efficiency
			medicines, used as a raw material	and optimisation, identifying alternate water
			in the production, processing and	sources for water security, and creating
			freshwater potential beyond the fence.
			formulation of APIs, intermediates
			Since FY2023, we are a water positive
			and finished pharmaceutical
			company. We do not discharge any water to
			products (FPP), in the preparation
			the surface, ground, or sea, and therefore
			of solvents and reagents, and for
			do not emit any substance or pollutants to
			cleaning (e.g. washing and rinsing).	any form of water
				y We have waste management systems in
				place at all our facilities. We do not dispose
				any non-hazardous waste through landfill
				or incineration. Our non-hazardous waste
				is either recycled, reused, or recovered
				through other means
5	Energy and	Risk	The close relationship between	y We are committed to leading the energy	Negative
	emissions		health and climate is undeniable,	transition with a goal to be 100%
	management		as illustrated by the consequences	powered by renewable sources by 2030,
			of extreme weather events on food	and to be a carbon neutral company in
			our direct operations by 2030
			security, the harmful air pollution
			resulting from wildfires, and the	y Our decarbonisation strategy
			rising prevalence of infectious	focusses on energy mix, conservation,
			diseases. As a pharmaceutical	performance, transition, and eventually
			company, the bulk of direct	carbon sequestration with meaningful
			emissions come from running	investments in afforestation and
			sustainable agriculture. This includes
			boilers and indirect emissions from
			reducing our energy consumption
			purchased electricity.
			with energy-efficient technologies and
				processes, adopting low or no carbon
				fuels, substituting fossil fuels in boilers
				with alternate biomass fuel sources such
				as rice husk and sawdust briquettes,
				purchasing energy from renewable
				sources, and realigning our business
				operations to lower emissions

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